BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1046 (Cogdill) Hearing Date: 05/03/2010 Amended: 04/07/2010 Consultant: Jacqueline Wong-HernandezPolicy Vote: Education 7-0, Judiciary 4-0 _________________________________________________________________ ____ BILL SUMMARY: This bill would remove the California State University (CSU) from the jurisdiction of the Victim Compensation and Government Claims Board (VCGCB) and allow the CSU to process its own tort claims. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund CSU processes claims *Minor revenue loss to VCGCB* General *Likely minor savings to CSU* _________________________________________________________________ ____ STAFF COMMENTS: The existing Government Tort Claims Act (TCA) establishes the procedures for filing a claim against a public agency, and provides that the VCGCB may collect a 15% surcharge on each claim (Government Code Section 810 et seq). Unless a state agency is exempt from TCA, its claimed are filed with and processed by the VCGCB. This bill would exempt CSU from having its claims under VCGCB jurisdiction, but would otherwise still require CSU to maintain internal claim processing rules that are consistent with the TCA. CSU tort claims are currently filed with the VCGCB. It is then transmitted to the Risk Management Department of CSU for investigation and determination of whether to settle the claim or allow it to go to litigation. When CSU decides to settle a claim, it must be approved by VCGCB, which then collects a 15% surcharge from CSU on the amount of the claim. When a claim is denied, the VCGCB notifies the claimant that he or she has six months to initiate court action against CSU; VCGCB is no longer involved. By allowing CSU to fully process its own tort claims (on which it already does substantial work), CSU would avoid the 15% surcharge it pays to the VCGCB on each approved claim. To the extent that CSU could fully process its own claims within existing staff resources, this would be a direct savings to CSU. The total amount of savings to CSU, and revenue loss to VCGCB, would be minor - likely less than $10,000 annually. In fiscal year 2007-08, 118 claims were filed against CSU and 19 claims were approved for a total of $89,893 paid to claimants. The surcharge on these claims was $9,176. In fiscal year 2008-09, 70 claims were filed against CSU and 16 claims were approved for a total of $36,048 paid to claimants. The surcharge on these claims was $3,988. VCGCB's workload would also decrease with the loss revenue, because it would no longer be processing CSU tort claims.