BILL NUMBER: AB 2652 CHAPTERED 08/28/06 CHAPTER 168 FILED WITH SECRETARY OF STATE AUGUST 28, 2006 APPROVED BY GOVERNOR AUGUST 28, 2006 PASSED THE SENATE AUGUST 10, 2006 PASSED THE ASSEMBLY MAY 18, 2006 AMENDED IN ASSEMBLY APRIL 18, 2006 AMENDED IN ASSEMBLY APRIL 6, 2006 INTRODUCED BY Assembly Member Laird FEBRUARY 24, 2006 An act to add Sections 17558.7, 17558.8, and 17602 to the Government Code, relating to state mandates. LEGISLATIVE COUNSEL'S DIGEST AB 2652, Laird Commission on State Mandates: claim reductions. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. These procedures require the Controller to pay claims approved by the Commission on State Mandates, authorize the Controller to reduce claims in specified circumstances, and authorize a claimant to challenge a reduction by filing an incorrect reduction claim with the commission. Existing law declares the intent of the Legislature that the commission review its processes by which local agencies may appeal the reduction of reimbursement claims for state-mandated local programs. This bill would provide for the consolidation of claims alleging an incorrect reduction at the initiative of an individual claimant or the commission if the claims involve common questions of law or fact that predominate over any matter affecting only an individual claim and the consolidation would result in consistent decisionmaking by the commission. In the case of an individual claimant seeking to consolidate claims, the bill would require the Controller to provide the commission and the claimant with a list of claimants who have filed similar incorrect reduction claims under the same mandate. It also would require the commission, on or before January 15, 2007, and on or before each January 15 thereafter, to report to the Legislature the number of individual and consolidated incorrect reduction claims decided during the preceding calendar year and whether and why the reduction was upheld or overturned. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 17558.7 is added to the Government Code, to read: 17558.7. (a) If the Controller reduces a claim approved by the commission, the claimant may file with the commission an incorrect reduction claim pursuant to regulations adopted by the commission. (b) A claimant eligible to file an incorrect reduction claim may file a consolidated incorrect reduction claim on behalf of other claimants whose claims for reimbursement under the same mandate are alleged to have been incorrectly reduced if all of the following apply: (1) The method, act, or practice that the claimant alleges led to the reduction has led to similar reductions of other parties' claims, and all of the claims involve common questions of law or fact. (2) The common questions of law or fact among the claims predominate over any matter affecting only an individual claim. (3) The consolidation of similar claims by individual claimants would result in consistent decisionmaking by the commission. (4) The claimant filing the consolidated claim would fairly and adequately protect the interests of the other claimants. (c) A claimant that seeks to file a consolidated incorrect reduction claim shall, at the time it files an incorrect reduction claim, on a form provided by the commission, notify the commission of its intent to file a consolidated incorrect reduction claim. (d) Within 10 days after receipt of an incorrect reduction claim and notice of intent to consolidate, the commission shall request that the Controller provide the commission and the claimant with a list of claimants for whom the Controller has reduced similar claims under the same mandate. Upon receipt of this list from the Controller, the claimant may notify the claimants on the list and other interested parties of its intent to file a consolidated incorrect reduction claim. (e) Within 30 days of receipt of the notice of intent to consolidate from the original claimant, on a form provided by the commission, any other eligible claimant shall file with the commission its notice of intent to join the consolidated incorrect reduction claim, which shall include a copy of the remittance advice or other notice from the Controller of the claim reduction, and one copy of the reimbursement claims for which an incorrect reduction is alleged. (f) The commission shall notify each claimant that files an intent to join the consolidated incorrect reduction claim that it may opt out of the consolidated claim and not be bound by any determination made on that consolidated claim. A claimant may opt out of a consolidated claim no later than 15 days after the state agency files comments on the consolidated claim. A claimant that opts out of the consolidated claim, in order to preserve its right to challenge a reduction made by the Controller on that same mandate, shall file an individual incorrect reduction claim pursuant to commission requirements, no later than one year after opting out or within the statute of limitations under the commission's regulations. (g) The commission shall adopt regulations establishing procedures for receiving a consolidated incorrect reduction claim pursuant to this section and for providing a hearing on a consolidated claim. SEC. 2. Section 17558.8 is added to the Government Code, to read: 17558.8. (a) The commission may, on its own initiative, consolidate incorrect reduction claims filed with the commission by different claimants under the same mandate if all of the following apply: (1) The same method, act, or practice is alleged to have led to the reduction in each claim, and all of the claims involve common questions of law or fact. (2) The common questions of law or fact among the claims predominate over any matter affecting only an individual claim. (3) The consolidation of similar claims by individual claimants would result in consistent decisionmaking by the commission. (b) The commission shall adopt regulations establishing procedures for consolidation of incorrect reduction claim pursuant to this section and for providing a hearing on a consolidated claim. SEC. 3. Section 17602 is added to the Government Code, to read: 17602. On or before January 15, 2007, and on or before each January 15 thereafter, the commission shall report to the Legislature the number of individual and consolidated incorrect reduction claims decided during the preceding calendar year and whether and why the reduction was upheld or overturned.