BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 543 (Wolk) - Veterans:  Veterans' Home of California
          
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          |Version: May 5, 2015            |Policy Vote: V.A. 5 - 0         |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 28, 2015      |Consultant: Maureen Ortiz       |
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          SUSPENSE FILE.




          Bill  
          Summary:  SB 543 consolidates the individual Veterans' Morale,  
          Welfare and Recreation Funds at each veterans' home into one  
          statewide fund that will be administered by the Department of  
          Veterans' Affairs, but allows each home to establish a separate  
          account for purposes of receiving donations.


          Fiscal  
          Impact:  

           Redirection of approximately $11.5 million from individual  
            accounts to the newly created state fund (Special Fund)

           First year costs of approximately $418,000, and ongoing of  
            $396,000 annually to the Department of Veterans Affairs  
            (General Fund)








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          The Department of Veterans' Affairs estimates the need for four  
          positions: 3 AGPA's and 1 Business Services Assistant, to  
          promulgate rules and regulations, administer the new fund, and  
          comply with the reporting requirements.


          Background:  Existing law authorizes the creation of a Veterans' Morale,  
          Welfare and Recreations Fund (MWR) at each veterans home.   
          Revenue to the Veterans' Morale, Welfare and Recreations Fund is  
          derived from many sources including proceeds from the California  
          Veterans Homes Fund, operations of a canteen, revenue derived  
          from the issuance of prisoner-of-war special license plates,  
          monies collected from gold course green fees and range ball  
          fees, donations, interest earned on invested funds, and funds  
          derived from the estates of deceased members.

          Existing law authorizes the MWR funds to be used for the  
          following purposes:

          a)  Operating the Veterans' Home Exchange store, hobby shop,  
          motion picture theater, library and band, as well as any other  
          function that is operated for the morale, welfare, and  
          recreation of the members of the homes.

          b)  Paying for newspapers, chapel expenses, welfare and  
          entertainment expenses, sport activities, celebrations, and any  
          other activity that is for the moral, welfare, and recreation of  
          the veterans. 

          Existing law prohibits the use of the MWR funds for the  
          following purposes:

          a)  Medical or any related treatment.

          b)  Maintenance of the home's physical plant.

          c)  Any function, operation, or activity not directly related to  
          the morale, welfare, or recreation of the veterans.

          Current law also provides that certain portions of the estates  
          of deceased veteran residents may be recovered by the department  
          for obligations owed for costs of the veterans care that are in  
          excess of the reimbursements made by the USDVA.  Any recovered  
          funds are deposited in the MWR account at the home where the  








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          veteran had resided.


          Proposed Law:  
            SB 543 creates the Veterans' Home Morale, Welfare, and  
          Recreation Fund (MWR Fund) and continuously appropriates the  
          money in the fund.  Additionally, the bill does the following:
             a)   Requires the administrator of each veterans' home to  
               deposit the balance of funds (as of January 1, 2015) in  
               each homes' existing MWR Fund into the newly created  
               statewide MWR Fund.


             b)   Provides that all future moneys collected as a result of  
               unreimbursed costs of care determinations are state funds  
               and shall be deposited in the MWR Fund.


             c)   Requires the Department of Veterans' Affairs (CDVA) to  
               adopt regulations, in consultation with the resident  
               council at each home, which will govern the process by  
               which a home may make an annual request for a disbursement  
               as well as the process for the CDVA to review the request.


             d)   Requires the department to annually determine the total  
               amount for disbursement from the MWR Fund to the home  
               proportionally by each home's relative share of the total  
               population of the entire veterans home system; but states  
               that any moneys derived from golf course green fees, range  
               ball fees, and operations of activities specifically at the  
               Veterans' Home at Yountville will be credited to the MWR  
               Fund allocation for that home.


             e)   Authorizes the department to allocate an additional one  
               time allocation of up to 5 percent of the home's annual  
               disbursement for a special project if the home's  
               administrator shows good cause for the allocation.


             f)   Authorizes the department to increase the allocation  
               from the MWR to the Veterans' Home at Yountville, as  
               specified.








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             g)   Allows the California Veterans' Board to review any  
               special allocation as specified. 


             h)   Authorizes monies in the MWR fund to be used to operate  
               a canteen, hobby shop, theater, library, bank, newspapers,  
               chapel expenses, entertainment expenses, sports activities,  
               celebrations, or any other function or activity that is  
               related to the morale, welfare and recreation of the  
               residents that would not otherwise be paid for from the  
               General Fund.


             i)   Prohibits the use of the funds for medical treatments,  
               maintenance of the home, or any function, operation, or  
               activity that is not directly related to the morale,  
               welfare, or recreation of the residents of the home.


             j)   Provides that appropriations from the General Fund may  
               not be decreased due to the department's special  
               disbursement of MWR funds to the Yountville Home.


             aa)  Requires the CDVA to report annually on deposits to, and  
               expenditures from, the MWR Fund.


             bb)  Requires the department to maintain a reserve in the MWR  
               Fund of $2 million.


             cc)  Authorizes the department to transfer funds to the  
               Surplus Money Investment Fund as specified.


             dd)  Authorizes a home administrator to enter into an  
               agreement with the Veterans' Home Allied Council that  
               authorizes the council to operate facilities and engage in  
               activities for the general welfare of the residents of the  
               home.









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          Staff  
          Comments:  There are currently eight state veterans' homes which  
          are located in Barstow, Chula Vista, Fresno, Lancaster, Redding,  
          Ventura, West Los Angeles, and Yountville with a combined total  
          of nearly 2,000 residents.  Certain portions of the estates of  
          deceased veteran residents may be recovered by the department  
          for obligations for costs of a veteran's care that are in excess  
          of the reimbursements received by the U. S. Department of  
          Veterans Affairs.  These recovered funds are not currently  
          returned to the state General Fund, but are instead deposited  
          into the MWR account at the home where the veteran resided at  
          death.
          Other sources of revenue include:


               a.     The estates of deceased residents, who die without  
                 heirs or owing money to the home for the cost of their  
                 care;

               b.     Donations from taxpayers when filing their state tax  
                 returns (this provision ended in 2006);

               c.     Revenues from the issuance of prisonerofwar license  
                 plates;

               d.     Other private donations;

               e.     Interest earned from investments made with MWR Fund  
                 moneys; and

               f.     Revenues from businesses operated using the MWR  
                 Fund.



          A 2013 report by the State Auditor identified inappropriate use  
          of the MWR funds.  SB 543 will provide CDVA oversight over the  
          collection and disbursement of the moneys.











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          Recommended  
          Amendments:  Staff recommends deleting the continuous  
          appropriation in order to provide the Legislature with continued  
          oversight of the funds through the annual Budget Act.


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