BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 2537 (Silva) Hearing Date: 8/12/2010 Amended: 8/2/2010 Consultant: Bob Franzoia Policy Vote: G O 6-0 _________________________________________________________________ ____ BILL SUMMARY: AB 2537 would require agencies that conduct an adjudicative proceeding provide by regulation for preemptory challenge of the presiding officer in cases where the presiding officer is an administrative law judge (ALJ), and authorize those agencies to provide by regulation for peremptory challenge of a presiding officer who is not an ALJ. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Peremptory challenge ofUnknown, likely significant costs ongoing; General/ presiding officer in potentially major penalty costs where re-Special adjudicative proceedings assignment results in hearing not completed within statutory timelines. _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. Currently, Government Code 11425.40 (a) provides for the disqualification of the presiding officer for bias, prejudice, or interest in the proceeding. Government Code 11425.40 (d) provides that agency that conducts an adjudicative proceeding may provide by regulation for peremptory challenge of a presiding officer. This bill would require affected agencies to adopt regulations to provide for preemptory challenges of presiding officers. This bill would require a peremptory challenge of presiding officers who are administrative law judges and make optional the regulation of peremptory challenge of presiding officers who are not administrative law judges. This bill may have a significant impact on the Department of Health Care Services as Welfare and Institutions Code 14171 impose financial penalties for certain cases not heard or decided within statutorily set timeframes. The current penalty is ten percent of the recovery or demand for every 30 day period, or part thereof, that the deadline is missed. These cases are routinely worth tens of millions of dollars. This bill could present a significant workload problem for the Department of Alcoholic Beverage Control as the Alcoholic Beverage Control Act requires the department to hold administrative hearings in the counties where the premises or licensees are located. With 50 counties and fewer than ten administrative law judges assigned to 700 to 1,000 (below the new threshold set by the 8/2/2010 amendment), prior notification for peremptory challenge would make scheduling extremely difficult, cause delays, and increase costs. Some departments, for example, the Department of Social Services with an estimated 14,000 proceeding annually, would be exempt from the provisions of the bill.