BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 911 (Kehoe) Hearing Date: 4/26/2010 Amended: 4/12/2010 Consultant: Bob Franzoia Policy Vote: None _________________________________________________________________ ____ BILL SUMMARY: SB 911, an urgency measure, would appropriate $840,000 from the General Fund to the Department of Justice to pay settlements in Huntsman v. California Department of Forestry ($623,000) and California School Board Association v. State of California ($217,000). Any funds appropriated in excess of the amount required for the payment of these claims shall revert to the General Fund. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Appropriation $840 General _________________________________________________________________ ____ STAFF COMMENTS: Pursuant to the committee's rules, the Suspense File rule does not apply to the provisions of this bill as judgments and settlements are considered valid obligations of the state. Additionally, judgments and settlements may have time sensitivity. Huntsman v. California Department of Forestry and Fire Protection Fresno County Superior Court Case No. 08 CE CG 02671 This case involved discrimination claims against the California Department of Forestry and Fire Protection (CDFFP), including disability discrimination, age discrimination, failure to provide reasonable accommodation, and retaliation. The case was settled following mediation on August 5, 2009. Under the settlement, CDFFP agreed to pay the plaintiff $585,000. In exchange, the plaintiff has released all claims against the CDFFP. Following an evaluation at the mediation of the evidence that would be produced at trial, CDFFP and the Department of Justice concluded that the settlement reflects a reasonable compromise that serves the public interest. California School Boards Association v. State of California Sacramento Superior Court Case No. 06CS01335 The California Constitution, Article XIII B, Section 6, requires that the state reimburse local governmental agencies for the costs of complying with mandates established through legislation or executive order. (Mandates arising from federal law, or established via a voter approved initiative, are not reimbursable.) Over the years, the Commission on State Mandates has handed down many decisions drawing the line between reimbursable and non-reimbursable mandates. Over time, a question emerged regarding whether legislation merely "related to" a ballot proposition is also exempt from state reimbursement. Page 2 SB 911 (Kehoe) On July 19, 2005, Assembly Bill 138 (Budget Committee), Chapter 72/2005, made a number of changes to California mandate law, including an amendment to Government Code Section 17556 (f) to apply expressly the reimbursement exception to legislation "related to" ballot measures. In light of these amendments, the Legislature directed the Commission to reconsider the School Accountability Report Card and Mandate Reimbursement test claims, and to set aside the Open Meetings Act and Brown Act Reform test claims. In response, the Commission reconsidered claims it had previously found to have required reimbursement under Article XIII B, Section 6 and, interpreting AB 138, found these claims were no longer reimbursable mandates under Article XIII B, Section 6. In this case the California School Boards Association successfully challenged the constitutionality of AB 138 and the authority of the Legislature to order the reconsideration of prior mandate decisions. The Court of Appeal found that the Legislature's actions violated separation of powers principles. The Court also held that expanding the scope of the statewide ballot reimbursement exception to laws merely "related to" the ballot measures was over-broad, and invalid. The parties entered into a stipulated order for an award of attorney's fees in the amount of $200,000, and costs in the amount of $2,423.28. The appropriate of $217,000 includes an estimate of anticipated interest. As noted above, any funds appropriated in excess of the amount required for payment of the settlement and any interest (estimated daily accrual rate of $38.82 times 12 months) due at the time of payment will revert to the General Fund on June 30, 2011.