BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 1046 (Cogdill)
As Amended April 7, 2010
Hearing Date: April 20, 2010
Fiscal: Yes
Urgency: No
KB:jd
SUBJECT
Government Tort Claims: California State University
DESCRIPTION
This bill, sponsored by the California State University (CSU),
would remove the CSU from the jurisdiction of the Victim
Compensation and Government Claims Board (VCGCB) and allow the
CSU to process its own claims pursuant to the Government Tort
Claims Act.
BACKGROUND
The California State University System (CSU) was enacted by the
Donahoe Higher Education Act (Act), which authorized the Board
of Trustees to set policy, and adopt its own rules and
procedures for the operation of the public university system.
The Act declared the Board of Trustees to be an independent
entity that, while bound to follow all of the laws pertaining to
its mandate to provide higher education to Californians, may in
all cases be exempt from being treated like a state agency.
The California Victim Compensation and Government Claims Board
(VCGCB) consists of three members: the Director of General
Services who serves as the chair; the State Controller; and a
public member appointed by the Governor. The primary functions
of the Board are to: (1) compensate victims of violent crime and
eligible family members for certain crime-related financial
losses; (2) consider and settle all civil claims against the
state; (3) provide equitable travel allowances to certain
government officials; (4) respond to bid protests against the
state alleging improper or unfair acts of agencies in the
(more)
SB 1046 (Cogdill)
Page 2 of ?
procurement of supplies and equipment; and (5) provide
reimbursement to counties for special elections expenditures.
The Government Tort Claims Act specifies that a claim against
the state must be filed with the VCGCB, unless the claim is
against a judicial branch or a judge, in which case the claim is
filed with the Judicial Council. The University of California
is exempt from the Tort Claims Act. In addition, the VCGCB is
authorized to charge a fee equal to 15 percent of the total for
any claim it approves for settlement.
This bill, sponsored by the California State University (CSU),
would remove the CSU from the jurisdiction of the Victim
Compensation and Government Claims Board (VCGCB) and allow the
CSU to process its own claims pursuant to the Government Tort
Claims Act.
This bill was approved by the Senate Education Committee on
March 23, 2010 by a vote of 7-0.
CHANGES TO EXISTING LAW
Existing law , the Donahoe Higher Education Act (Act),
establishes the California State University System. The Act
authorized the Board of Trustees to set policy and adopt its own
rules and procedures for the operation of that public system.
(Ed. Code Sec. 66000.)
Existing law provides that CSU is not a state agency and is
exempt from such treatment, unless a statute explicitly provides
that it applies to the university. (Gov. Code Sec. 11000.)
Existing law further clarifies legislative intent that (a)
before legislation may be applied to CSU, the legislation should
be compatible with the mission and functions of CSU, and (b) CSU
is not governed by any statute enacted after January 1, 1997,
that does not amend the previously applicable act and that
applies generally to the state or state agencies, departments,
or boards, unless the statute expressly provides that the CSU is
to be governed by that statute. (Ed. Code Sec. 66606.2.)
Existing law , the Government Torts Claim Act (TCA), establishes
the procedures for filing a claim against a state public agency.
(Gov. Code Sec. 810 et seq.) The TCA specifies that a claim
against the state must be filed with the Victim Compensation and
Government Claims Board (VCGCB), unless the claim is against a
SB 1046 (Cogdill)
Page 3 of ?
judicial branch or a judge, in which case the claim is filed
with the Judicial Council. The University of California is
exempt from the Tort Claims Act. (Gov. Code Sec. 905.6.) In
addition, the VCGCB is authorized to charge a fee equal to 15
percent of the total for any claim it approves for settlement.
(Gov. Code Sec. 905.2 (f).)
This bill would designate the California State University as a
"public entity" for the purposes of the Tort Claims Act.
This bill would provide that all claims against the CSU for
money or damages based upon an express contract or for an injury
for which CSU is liable must be presented in accordance with the
Tort Claims Act.
This bill would require the Trustees of the CSU to act on a
claim against the CSU in accordance with the procedure that the
Trustees provide by rule.
This bill would provide that the CSU is not authorized to adopt
any rule that is inconsistent with the Tort Claims Act.
This bill would provide that if a claim for money or damages
against the CSU is mistakenly presented to the VCGCB, the board
shall immediately notify the claimant of the error and shall
include information on proper filing of the claim.
This bill would specify that claims and actions shall be
presented by delivering or mailing the claim to, or serving the
action on, the Office of Risk Management at the Chancellor's
Office of the CSU.
COMMENT
1. Stated need for the bill
The sponsor states:
Over the past several years, CSU and its third-party
administrator, Alliant Insurance, have struggled with the
handling of claims against CSU. The additional layer that is
the result of being under VCGCB's jurisdiction has created
several issues including failed transmission of claims in a
timely manner. These delays have sometimes resulted in CSU
losing the claim because the statute of limitations had
expired and therefore did not act within the deadlines
SB 1046 (Cogdill)
Page 4 of ?
established by law. Another complicating factor is that the
Office of the Attorney General recently decided to give legal
opinions or recommendations on late-claim applications because
it cannot charge back to the university for that work, and
this task has now fallen to the CSU's internal General
Counsel. In light of the recent state budget cuts to higher
education and the increased costs of these settlements, CSU
would like to modify the existing procedures in order to
retain some cost savings and at the same time simplify the
process for tort claims. These modifications would also align
the CSU with the University of California, the community
colleges and other public entities who already work under this
same claim-filing independence.
2. Bill would authorize the CSU to process its own claims
pursuant to the TCA
The Tort Claims Act provides for the filing of claims against
public entities for harm caused to any person, and establishes
liability and immunity of the public entity for those acts. The
timeline and procedures for presentation of the claim and the
public entity's action on that claim are specified in the TCA.
The purpose of the statutory requirements for presenting claims
is to give the entity notice and provide an opportunity for
investigating, and possibly settling the claim, without need of
costly litigation. If the entity decides not to settle, or if
the claimant is not satisfied with the settlement offered, then
the claimant may initiate a lawsuit to recover damages.
Pursuant to the TCA, claims against local public entities are
filed with the entity's governing body, while claims against the
state are filed with the VCGCB. (Gov. Code Sec. 900.) The VCGCB
was created in 2004 by a budget trailer bill (SB 1102 (Committee
on Budget and Fiscal Review) Chapter 227, Statutes of 2004) to
take over the functions of the former victims' compensation
board. SB 1102 also authorized the VCGCB to assess a charge of
up to fifteen percent of the total approved claim for handling a
tort claim. The CSU was captured in these provisions and thus
considered a "state agency" under the TCA. Accordingly, all
claims against the CSU must first formally be filed with the
VCGCB. The CSU is also subject to the fifteen percent surcharge
assessed by the VCGCB.
CSU has historically investigated and handled claims through its
own Risk Management Department. Although the claim must be
formally filed with the VCGCB, that board then transmits the
SB 1046 (Cogdill)
Page 5 of ?
claim to the CSU Risk Management Department for an investigation
and a determination on whether to settle the claim or face a
lawsuit. The VCGCB must ultimately approve CSU's recommended
determination. According to the CSU, the additional
administrative layer which results from being subject to the
VCGCB's jurisdiction has caused significant delays in the
resolution of claims. In a few instances, the claims were
reportedly not processed by the VCGCB to the CSU Claims
Administrator for over one year. These delays have been to the
detriment of both the claimants and the CSU; claimants are not
getting their claims resolved in a timely manner and the CSU
cannot always act within the prescribed statute of limitations.
The state's ongoing budget crisis has also led to reduction in
the VCGCB's staff which has exacerbated the delays in
processing.
This bill would remove the CSU from the jurisdiction of the
VCGCB and allow the CSU to process its own claims pursuant to
the Government Tort Claims Act. By allowing the CSU to process
its own claims, this bill would arguably help to ensure that the
TCA has its intended effect of facilitating the resolution of
claims without litigation. The CSU would still be bound by the
parameters of the TCA, but would be authorized to receive claims
directly, and thus resolve them more expeditiously. Committee
staff notes that this bill would more closely align the CSU with
the University of California and Community College Districts,
who are exempt from the VCGCB claims process.
3. Recent amendments address concerns
In response to concerns that the CSU would be authorized to
adopt claims processing rules that run afoul of or are less
protective of claimants than the Tort Claims Act, this bill was
recently amended to specifically provide that the CSU may not
adopt a rule that is inconsistent with the TCA. Furthermore,
this bill was also amended to provide that if a claim for money
or damages against the CSU is mistakenly provided to the VCGCB,
the board shall immediately notify the claimant of the error and
provide the claimant with information on proper filing of the
claim. This will ensure that claimants are informed of the
proper procedure for CSU claims so that they are not lost in
error.
Support : None Known
SB 1046 (Cogdill)
Page 6 of ?
Opposition : None Known
HISTORY
Source : The California State University
Related Pending Legislation : None Known
Prior Legislation :
SB 1724 (Runner, Chapter 453, Statutes of 2005) originally
included various changes
requested by the CSU including similar changes as provided in SB
1046. However, prior to final passage of SB 1724, the
provisions related to the torts claims were amended out of the
measure.
AB 2321 (Hertzberg, Chapter 1007, Statutes of 2002) provided
that the Judicial Council, rather than the VCGCB, would act on
any claims against the courts, judges, or agencies within the
judicial branch.
Prior Vote : Senate Education Committee (Ayes 7, Noes 0)
(Consent)
**************