BILL ANALYSIS �
SB 106
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Date of Hearing: June 10, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 106 (Monning) - As Amended: May 16, 2013
Policy Committee: Veterans
AffairsVote: 10-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
As proposed to be amended, this bill:
1)Makes minor clarifications to current law authorizing the
California Department of Veterans Affairs (CalVet) to enter
into financial agreements to receive cash advances to the
California Central Coast State Veterans Cemetery at Fort Ord
Endowment Fund (fund) for the purpose of funding initial
planning and design and submitting a grant proposal to the
U.S. Department of Veterans Affairs (USDVA).
2)Makes minor clarifications to the fund regarding the
maintenance and operation of the cemetery, specifically, that
the Endowment Fund is adequate to cover each year's costs for
the next 10 years, rather than for the 10-year period in
total.
3)Specifies that funds contributed to the Endowment Fund shall
be returned to the donor if the cemetery is not funded by the
USDVA.
FISCAL EFFECT
No direct state cost. The endowment fund is currently authorized
to accept a funding advance or loan to help the state complete
its initial planning and application required by the federal
government (at a cost of about $2 million) for a grant that
would cover plans and full construction (an estimated $26
million). There are virtually no funds in the endowment fund,
however, though potential donations of about $200,000 are in the
offing, pending the state's application to the USDVA.
SB 106
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Current law explicitly states there is no liability on the part
of the state for an advance or a loan, should the federal grant
fail to materialize. This bill makes that intention extra
explicit.
(The state's future fiscal exposure for a veterans' cemetery is
limited to maintenance and operational costs, which would likely
be in the range of $500,000 annually, more than half of which
would likely be covered by burial fees, with the balance covered
by the GF and endowment fund contributions.)
While this bill seeks to safeguard the GF, at the time this
analysis was prepared, the Senate version of the 2013-14 budget
bill contained $2.5 million (GF) for preliminary planning for
the cemetery. The budget proposal requires this amount to be
repaid within two years, presumably if and when USDVA funds are
approved. It is not clear, however, whether the state would be
repaid in full, as federal reimbursement procedures cover up to
100% of the loan, and may not cover all expenditures.
The budget augmentation and the existing authorization to accept
an advance or loan to complete the federal application and begin
preliminary plans are parallel components of a two-prong plan to
commence cemetery construction. The advance/loan plan is fading,
as no funding is forthcoming in the shape of a loan or advance.
GF budget augmentation is now the goal. In either case, the
state's application to the USDVA must be submitted by July 1.
COMMENTS
1)Rationale . AB 1842 (Monning), Statutes of 2012, authorized
CDVA to enter into financial agreements to receive cash
advances to the California Central Coast State Veterans
Cemetery at Fort Ord Endowment Fund to fund initial planning
and design and to submit a grant proposal to the USDVA. Any
such agreement requires Department of Finance review, with no
state repayment exposure.
According to the author, this bill responds to a request from
the Governor's Office for minor clarifying amendments to make
it abundantly clear the state is not required to make any
payment on the authorized cash advances or loans. This bill
also clarifies the requirement that the Endowment Fund have
sufficient income for each of the next 10 years, and adds "net
SB 106
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of all other revenue sources" to the requirement.
2)Background . In 1991, Fort Ord was announced for closure by the
United States Base Realignment and Closure Commission. Prior
to closure, FORA set aside 204 acres for a veterans' cemetery.
Legislation enacted in 2006 created an endowment fund to
support cemetery planning and design. When the endowment is
sufficiently funded to design and plan the cemetery, CDVA can
apply to the USDVA for a cemetery grant, which will cover the
costs of construction and any planning and design work.
3)Author's amendments specify that funds contributed to the
Endowment Fund shall be returned to the donor if the cemetery
is not funded by the USDVA.
4)Prior Legislation .
a) AB 629 (Monning), Statutes of 2011, authorizes CalVet
to contract with the Fort Ord Reuse Authority (FORA),
rather than the Department of General Services (DGS), for
design and construction of a state-owned and operated
veterans' cemetery at Fort Ord.
b) AB 1757 (Monning), Statutes of 2010, requires CalVet to
design and construct a state-owned and operated veterans
cemetery at Ford Ord. The design and construction of the
cemetery may not move forward until a determination was
made that 100% of the funds necessary for planning and
design were raised.
c) AB 3035 (Laird), Statutes of 2006, established the
California Central Coast State Veterans Cemetery at Fort
Ord Endowment Fund for the receipt of donations of personal
property, including cash or other gifts, to be used for
maintenance of the cemetery.
Analysis Prepared by : Geoff Long / APPR. / (916)
319-2081