BILL ANALYSIS �
SB 106
Page 1
Date of Hearing: June 4, 2013
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Al Muratsuchi, Chair
SB 106 (Monning) - As Amended: May 16, 2013
SENATE VOTE : 37-0
SUBJECT : California Central Coast State Veterans Cemetery at
Fort Ord Endowment Fund.
SUMMARY : This bill clarifies that any so-called cash advances
to the Fort Ord Endowment Fund (Endowment Fund) are not
obligations of the General Fund and requires the Department of
Veterans Affairs (Department) to develop and submit a State
Veterans Cemetery Grant Program application under certain
conditions as specified. Specifically, this bill :
1)States that the Department may enter into any financial
agreement to receive cash advances in the Endowment Fund,
provided that the agreement does not require the state to
repay or make payments on cash advances and the agreement is
reviewed and approved by the Department of Finance.
2)Mandates that upon the determination of the Controller, after
consultation with the Secretary of Veterans Affairs, that the
Endowment Fund has adequate principal to yield sufficient
investment earnings in each year for the next 10 years, from
the date of the determination, to fully fund the respective
year's administrative and oversight costs, net of all other
estimated revenue sources, and to fund the estimated costs of
developing and submitting the State Veterans Cemetery Grant
Program application, the Department shall develop and submit a
State Veterans Cemetery Grant Program application to the
United States Department of Veterans Affairs for the
establishment of a veterans cemetery.
3)Directs the Department to consider cash flow needs when
providing estimates to the Controller in making this
determination.
4)Contains an urgency clause, directing that this bill go into
effect immediately.
5)Declares that the reason for the urgency clause is to meet the
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deadline of July 1, 2013, established by the United States
Department of Veterans Affairs as a result of federal
sequestration, which requires the California Department of
Veterans Affairs to submit its application for millions of
dollars in federal funds to cover the cost of building the
California Central Coast State Veterans Cemetery at Fort Ord.
EXISTING LAW : Creates the Endowment Fund in the State Treasury.
Moneys in the Endowment Fund shall be allocated, upon
appropriation by the Legislature, to the Department for the
annual administrative and oversight costs of the veterans
cemetery and to generate funding through interest for the
veterans cemetery.
Directs that Moneys in the Endowment Fund shall first be
invested with the goal of achieving capital appreciation to
create a balance sufficient to generate ongoing earnings to
cover the estimated annual oversight and maintenance costs
associated with the veterans cemetery.
Directs that upon the determination of the Controller that the
Endowment Fund balance has attained the goal of generating
ongoing earnings to cover the estimated annual oversight and
maintenance costs associated with the veterans cemetery, moneys
in the Endowment Fund shall be invested to generate earnings to
fund annual oversight and maintenance costs associated with the
veterans cemetery.
Specifies that the Endowment Fund may consist of donations from
public and private entities, partnerships between public and
private entities, fees, cash advances, and transfers from the
state General Fund as may be specified by law.
Authorizes the Department to enter into any financial agreement
to receive cash advances in the Endowment Fund, provided that no
obligations of repayment are made to the state and the agreement
is reviewed and performed in consultation with the Department of
Finance.
Directs that to the extent possible, donations made in-kind to
the Endowment Fund shall be monetized so as to offset the
ongoing administrative and oversight costs.
Specifies that earnings generated by the Endowment Fund shall be
retained by it.
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Clarifies that moneys deposited in the Endowment Fund are exempt
from the requirements of Sections 11270 through 11277 of the
Government Code.
Directs the Treasurer to invest money in the Endowment Fund
after consultation with the Department in a manner that best
meets the goals of the Endowment Fund.
Specifies that if, through changes in state or federal law,
additional revenues are identified for the administration and
oversight of the cemetery, including increases in federal burial
allowances, so that the amount of annual revenue exceeds the
annual administrative and oversight costs, the excess revenues
shall be deposited in the Endowment Fund
FISCAL EFFECT : Senate Appropriations Committee determined that
there was either no cost to the state or minimal costs, pursuant
to Rule 28.8.
COMMENTS :
In 1991 the federal Base Realignment and Closure Commission
(BRAC) recommended that the United States Army post at Ford Ord
be inactivated. The fort was closed in 1994. Part of the Base
Reuse Plan includes building a veterans' cemetery.
Traditionally, veterans' cemeteries have been federal
responsibilities, but as the last century came to a close the
federal government enacted a cost saving measure by offering to
build cemeteries but let states pay the maintenance costs in
perpetuity as was done with the now completed Redding cemetery,
California's first.
The federal government has proposed the same agreement for the
California Central Coast State Veterans Cemetery at Fort Ord,
saying the federal veterans' cemetery at Gustine in the Central
Valley is close enough and has enough room to relieve Washington
of any obligation to build a federal cemetery on the central
coast.
Under the federal Veterans Affairs State Cemetery Grants
Program, the federal government will fund up to 100% of the cost
of establishing, expanding, or improving state veterans'
cemeteries, including the acquisition of initial operating
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equipment, if the state agrees to cover the administrative and
oversight costs in perpetuity.
Once completed, the cemetery will serve all veterans, but will
be most convenient for the approximately 100,000 veterans and
their families living within the 75-mile radius, an area that
includes the counties of Monterey, Santa Cruz, San Benito and
half of Santa Clara.
The estimated interment needs of that area's veteran population
are 5,600 burial and crypt sites for the initial 10 years. The
actual interment sites to be provided in this initial phase will
be approximately 2,800 burial and crypt sites.
The Phase I plan will develop 26 acres of the site. At a
minimum, the cemetery will provide approximately 11,500
gravesites in its 20-year build-out.
A federal grant program provides funds to build both initial and
follow-on phases, but the State of California is responsible for
maintaining the cemetery, using moneys from an endowment fund.
AB 3035 (Laird, 2006) established an endowment to cover
maintenance costs, prior to applying for grant funding for
construction. The Endowment Fund goal is $3.4 million.
The strategy has been to raise funds privately and/or sell the
Endowment Parcel, land designated by FORA, the City of Seaside
and the County of Monterey, to provide the required funding to
meet federal obligations. However, according to the author due
to the impact of sequestration, the USDVA has imposed a deadline
of July 1, 2013 for the Department to submit its pre-application
to the Veterans State Cemetery Grants Program to maintain its
position on the priority list for the cemetery grant.
Furthermore, the author states that if this deadline is not met,
it is likely that California will not secure a position on the
priority list for upcoming years. This is the basis for the
urgency clause in the bill.
The author states that the second section of the bill, "?
contains language requested by the [Department of Finance] DOF
to clarify the principle amount required to be retained in the
Central Coast State Veterans Cemetery Endowment Fund in order to
pay for the annual operations and maintenance costs of the
Cemetery."
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Related Legislation:
AB 1842 (Monning, Ch. 745, Stats. 2012)
(1) Authorizes the California Department of Veterans Affairs to
enter into a financial agreement to receive cash advances in the
existing Endowment Fund previously created to help the proposed
California Central Coast State Veterans Cemetery at Fort Ord.
(2) Provides such agreements are permissible so long as no
obligations of repayment are made to the state, and each
agreement is reviewed and performed in consultation with the
Department of Finance. (3) Authorizes CDVA to use money
received from the prospective federal grant, which is
transferred to the Fund, to reimburse the costs of developing
and submitting the grant application, to reimburse any cash
advances made to the Fund. Senate 37-0; Assembly 74-0.
AB 629 (Monning, Ch. 267, Stats. 2011)
Prior law required CDVA, in voluntary cooperation with the
Monterey County Board of Supervisors, the City of Seaside, the
Fort Ord Reuse Authority (FORA), and local agencies to design,
develop, and construct the California Central Coast Veterans
Cemetery at Fort Ord, as specified. The State Contract Act
requires projects that are not under the jurisdiction of
specified departments to be under the charge and control of the
Department of General Services (DGS). This bill authorizes CDVA,
rather than DGS, to enter into an agreement with the FORA for
the veterans cemetery project to be under the sole charge and
direct control of the FORA.
AB 1757 (Monning, Ch. 450 Stats. 2010)
(1) Requires the California Department of Veterans Affairs
(CDVA), in voluntary consultation with local governments and
stakeholders, to construct the California Central Coast Veterans
Cemetery at Ford Ord. (2) Authorizes CDVA to design, develop,
and construct the cemetery in phases. (3) Requires the
regulations established regarding burial eligibility to apply to
all state-operated veterans cemeteries, and limits burial to
dependent children of honorably discharged veterans.
AB 3035 (Laird, Ch. 291 Stats. 2006)
Creates the California Central Coast State Veterans Cemetery at
Fort Ord Endowment Fund in the State Treasury and directs that
moneys in the Endowment Fund shall be allocated, upon
appropriation, to the Department of Veterans Affairs for annual
administrative and oversight costs of the cemetery.
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SB 1815 (McPherson, Ch. 771, Stats. 2000)
Ordered the development of the Central Coast Veterans Cemetery
Master Plan and appropriated $140,000 for the creation of a
Central Coast Veterans Cemetery Master Development Fund.
REGISTERED SUPPORT / OPPOSITION :
Support
American Legion- Department of California
AMVETS- Department of California
California Association of County Veterans Service Officers
California State Commanders Veterans Council
Fort Ord Reuse Authority
Monterey County Board of Supervisors
Veterans of Foreign Wars - Department of California
Vietnam Veterans of America- California State Council
Opposition
None on file.
Analysis Prepared by : John Spangler / V. A. / (916) 319-3550