BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 543  


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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 543  
          (Wolk) - As Amended August 1, 2016


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          |Policy       |Veterans Affairs               |Vote:|8 - 0        |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:




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












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          1)Adopt regulations related to, among other things, administer  
            the Funds and the process by which veterans homes submit and  
            receive budget allocations.




          2)Determine annually the total amount for disbursement from the  
            Fund. 




          3)Report annually to specified entities regarding moneys  
            deposited into the MWR Fund and expenditure of those funds.




           FISCAL EFFECT:


          1)Redirection of approximately $11 million from the veterans  
            homes to the newly created, and continuously-appropriated, MWR  
            Fund (Special Fund).



          2)First-year costs of approximately $113,000 for implementation  
            and $107,000 on going, which include one position.



          COMMENTS:


          1)Background:  Existing law authorizes the creation of a  
            Veterans' Morale, Welfare and Recreations Fund (MWR) at each  
            of the eight veterans home.  The MWR Fund was established in  








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            1999 by SB 281 (Chesbro), when there were only two homes. The  
            Legislature intended to provide veteran home administrators  
            with an additional funding tool to provide for the general  
            welfare of residents beyond their medical and housing needs.  
            Revenue to the MWR 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  
            golf course green fees and range ball fees, donations,  
            interest earned on invested funds, and funds derived from the  
            estates of deceased members.  


            Current law also provides that 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.   


            Existing law also specifies how funds may be used.   Home  
            administrators, at the direction of the Secretary of the  
            Department of Veteran Affairs (CalVet), have discretion over  
            how monies within the fund are spent.  However, home  
            administrators have historically been granted sole authority  
            over decision making regarding the use of the fund.





            In October 2013, the California State Auditor released an  
            investigative report (i2011-0837) entitled, "Wastefulness,  
            Failure to Comply With State Contracting Requirements, and  
            Inexcusable Neglect of Duty." The report revealed that over a  
            two-year period from January 2010 to December 2011, the  








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            Yountville Veterans Home administrator executed two contracts  
            using MWR funds without consulting CalVet executive office  
            officials, appropriate legal counsel, or residents of the  
            Home. 





            Also, over time, there has been a great disparity in MWR Fund  
            balances between the homes, with Redding and West Los Angeles  
            having less than $100,000, and Yountville with over $6  
            million.  





          2)Purpose.  SB 543 creates a single system-wide MWR Fund that  
            consolidates existing and future MWR moneys generated by each  
            of the eight veterans home campuses, and establishes  
            procedures for and restrictions on the budgeting and spending  
            of moneys in the Fund. 



          Analysis Prepared by:Pedro R. Reyes / APPR. / (916)  
          319-2081



















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