Bill Text: CA SB1504 | 2011-2012 | Regular Session | Chaptered
Bill Title: Claims and judgments against the state: interest.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2012-06-15 - Chaptered by Secretary of State. Chapter 19, Statutes of 2012. [SB1504 Detail]
Download: California-2011-SB1504-Chaptered.html
BILL NUMBER: SB 1504 CHAPTERED
BILL TEXT
CHAPTER 19
FILED WITH SECRETARY OF STATE JUNE 15, 2012
APPROVED BY GOVERNOR JUNE 15, 2012
PASSED THE SENATE APRIL 26, 2012
PASSED THE ASSEMBLY MAY 31, 2012
AMENDED IN SENATE APRIL 17, 2012
INTRODUCED BY Senator Kehoe
(Principal coauthor: Assembly Member Fuentes)
FEBRUARY 24, 2012
An act to amend Sections 906, 965, and 965.5 of the Government
Code, relating to governmental liability, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 1504, Kehoe. Claims and judgments against the state: interest.
(1) Existing law bars a suit for money or damages against a public
entity on a cause of action for which a claim is required to be
presented, until a written claim has been presented to the public
entity and acted upon by the California Victim Compensation and
Government Claims Board, the governing body of a local public entity,
the Judicial Council, or the Trustees of the California State
University, as applicable, or has been deemed to have been rejected,
except as specified. Existing law provides that no interest is
payable on the amount allowed by the public entity on the claim if
payment of the claim is subject to approval of an appropriation by
the Legislature. However, if the appropriation is made, interest on
the amount appropriated for the payment of the claim commences to
accrue 30 days after the effective date of the law by which the
appropriation is enacted. Interest on the amount allowed on the
claim, if payment of the claim is not subject to approval of an
appropriation by the Legislature, commences to accrue 30 days after
the claimant accepts in writing the amount allowed on the claim in
settlement of the entire claim. Existing law provides that interest
accrues at the rate provided for judgments until paid. Existing law
permits these terms to be varied upon written agreement of the public
entity and the claimant.
This bill, instead, would provide that no interest is payable on
the amount allowed by the California Victim Compensation and
Government Claims Board on the claim if payment of the claim is
subject to approval of an appropriation by the Legislature. However,
if an appropriation is made for the payment of a claim, interest
would commence to accrue on the amount appropriated for the payment
of the claim 180 days after the effective date of the act by which
the appropriation is made. The bill would delete the above-described
provisions requiring the accrual of interest on the amount
appropriated for the payment of a claim and on a claim that is not
subject to approval of an appropriation by the Legislature, setting
the rate of interest, and authorizing these terms to be varied by
written agreement.
(2) Under existing law, if there is no sufficient appropriation
for the payment of claims, settlements, or judgments against the
state arising from an action in which the state is represented by the
Attorney General, the Attorney General is required to report the
claims, settlements, and judgments to the chairperson of either the
Senate Committee on Appropriations or the Assembly Committee on
Budget, who shall cause to be introduced legislation appropriating
funds for the payment of the claims, settlements, or judgments.
This bill would require that report to be made to the chairperson
of either the Senate Committee on Appropriations or the Assembly
Committee on Appropriations. The bill would make other conforming
changes.
(3) The California Constitution requires the Legislature to set
the rate of interest upon a judgment rendered in any court of this
state at not more than 10% per annum. Existing law provides that
interest accrues at the rate of 10% per annum on the principal amount
of a money judgment remaining unsatisfied. Under existing law, this
provision does not apply to a judgment for the payment of money
against the state. In the absence of the setting of such a rate by
the Legislature, the California Constitution provides that the rate
of interest on any judgment rendered in a court is 7% per annum.
This bill would provide that interest shall commence to accrue on
the amount of a judgment or settlement for the payment of money
against the state 180 days from the date of the final judgment or
settlement.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 906 of the Government Code is amended to read:
906. (a) As used in this section, "amount allowed on the claim"
means the amount allowed by the California Victim Compensation and
Government Claims Board on a claim allowed, in whole or in part, or
the amount offered by the board to settle or compromise a claim.
(b) Except as otherwise provided in this subdivision, no interest
is payable on the amount allowed on the claim if payment of the claim
is subject to approval of an appropriation by the Legislature. If an
appropriation is made for the payment of a claim described in this
subdivision, interest on the amount appropriated for the payment of
the claim commences to accrue 180 days after the effective date of
the act by which the appropriation is enacted.
SEC. 2. Section 965 of the Government Code is amended to read:
965. (a) Upon the allowance by the California Victim Compensation
and Government Claims Board of all or part of a claim for which the
Director of Finance certifies that a sufficient appropriation for the
payment of the claim exists, and the execution and presentation of
documents the board may require that discharge the state of all
liability under the claim, the board shall designate the fund from
which the claim is to be paid, and the state agency concerned shall
pay the claim from that fund. If there is no sufficient appropriation
for the payment available, the board shall report to the Legislature
in accordance with Section 912.8. Claims arising out of the
activities of the State Department of Transportation may be paid if
either the Director of Transportation or the Director of Finance
certifies that a sufficient appropriation for the payment of the
claim exists.
(b) Notwithstanding subdivision (a), if there is no sufficient
appropriation for the payment of claims, settlements, or judgments
against the state arising from an action in which the state is
represented by the Attorney General, the Attorney General shall
report the claims, settlements, and judgments to the chairperson of
either the Senate Committee on Appropriations or the Assembly
Committee on Appropriations, who shall cause to be introduced
legislation appropriating funds for the payment of the claims,
settlements, or judgments.
(c) Notwithstanding subdivision (a) or (b), claims, settlements,
or judgments arising out of the activities of a judicial branch
entity, as defined by Sections 900.3 and 940.3, or a judge thereof
may be paid if the Judicial Council authorizes payment and the
Administrative Director of the Courts certifies that sufficient funds
for that payment exist from funds allocated to settlement,
adjustment, and compromise of actions and claims. If sufficient funds
for payment of settlements or judgments do not exist, the
Administrative Director of the Courts shall report the settlements
and judgments to the chairperson of either the Senate Committee on
Appropriations or the Assembly Committee on Appropriations, who shall
cause to be introduced legislation appropriating funds for the
payment of the settlements or judgments. If sufficient funds for
payment of claims do not exist, the Administrative Director of the
Courts shall report the claims to the California Victim Compensation
and Government Claims Board, which shall have 90 days to object to
payment. The Administrative Director of the Courts shall confer with
the Chairperson of the California Victim Compensation and Government
Claims Board regarding any objection received during the 90-day
period. If the California Victim Compensation and Government Claims
Board withdraws the objection, or if no objection was received, the
Administrative Director of the Courts shall report the claims to the
chairperson of either the Senate Committee on Appropriations or the
Assembly Committee on Appropriations, who shall cause to be
introduced legislation appropriating funds for the payment of the
claims. The Judicial Council may authorize any committee of the
Judicial Council or any employee of the Administrative Office of the
Courts to perform the functions of the Judicial Council under this
section. The Administrative Director of the Courts may designate an
executive staff member of the Administrative Office of the Courts to
perform the functions of the Administrative Director of the Courts
under this section.
SEC. 3. Section 965.5 of the Government Code is amended to read:
965.5. (a) A judgment for the payment of money against the state
or a state agency is enforceable until 10 years after the time the
judgment becomes final or, if the judgment is payable in
installments, until 10 years after the final installment becomes due.
(b) A judgment for the payment of money against the state or a
state agency is not enforceable under Title 9 (commencing with
Section 680.010) of Part 2 of the Code of Civil Procedure, but is
enforceable under this chapter.
(c) Interest on the amount of a judgment or settlement for the
payment of money against the state shall commence to accrue 180 days
from the date of the final judgment or settlement. This subdivision
does not apply to any claim approved by the California Victim
Compensation and Government Claims Board.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order for the provisions of this act to be applicable as soon
as possible for the 2012-13 fiscal year, and thereby facilitate the
orderly administration of state government at the earliest time
possible, it is necessary that this act take effect immediately.
