BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1046
                                                                  Page  1

          Date of Hearing:   June 22, 2010

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                                 Marty Block, Chair
                    SB 1046 (Cogdill) - As Amended:  April 7, 2010

           SUBJECT :   Government tort claims: California State University

           SUMMARY  :  Removes the California State University (CSU) from the  
          jurisdiction of the Victims Compensation and Government Claims  
          Board (VCGCB).  Specifically,  this bill  :  

          1)Designates CSU as a "public entity" for the purposes of the  
            Tort Claims Act.

          2)Provides that all claims against 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.

          3)Requires the CSU Board of Trustees (Trustees) to act on a  
            claim against CSU in accordance with the procedure that the  
            Trustees provide by rule, provides that CSU may not adopt any  
            rule inconsistent with the Tort Claims Act, and provides that  
            if a claim for money or damages against CSU is mistakenly  
            presented to the VCGCB, the VCGCB shall immediately notify the  
            claimant of the error and include information on proper filing  
            of the claim.

          4)Specifies 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 CSU Chancellor's Office.

          5)Provides that the CSU Trustees may adjust and pay any claim  
            arising out of the activities of CSU and that the CSU Trustees  
            may, by rule, authorize the Office of Risk Management at the  
            CSU Chancellor's Office to perform the functions of the CSU  
            Trustees under this section.

           EXISTING LAW  lays out the Torts Claim Act, which establishes the  
          procedures for filing a claim against a state public agency.   
          The 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 (UC) is exempt from the  








                                                                  SB 1046
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          Tort Claims Act.  The VCGCB is authorized to charge a fee equal  
          to 15% of the total for any claim it approves for settlement.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, allowing CSU to fully process its own tort claims  
          would allow CSU to avoid the 15% surcharge it currently 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.

           COMMENTS  :   Double-referral  :  This bill has been referred to the  
          Committees on Higher Education and Judiciary.  

           Background  :  The VCGCB, formerly known as the Board of Control,  
          has been authorized to act on tort claims filed against a state  
          agency since 1963.  Despite statutory intent supporting CSU's  
          governing independence, CSU was defined as a state agency until  
          2006, and thus fell within the jurisdiction of the VCGCB.   
          Responding to concerns that legislation applying to state  
          agencies often limited CSU's ability to meet its educational  
          mission, AB 3132 (Firestone), Chapter 938, Statutes of 1996, was  
          enacted to exclude CSU from the definition of "state agency".   
          The bill, however, applied prospectively, not retrospectively,  
          thus if CSU wishes to be removed from the qualification of  
          "state agency" in previous law, legislation is necessary to make  
          that amendment. 

           Purpose of this bill  :  The CSU Trustees, the sponsor of this  
          bill, under the procedure outlined in current law the VCGCB  
          performs only an administrative function of collecting fees and  
          assigning claim numbers for tort claims filed against CSU but  
          does not perform any investigation.  While CSU performs the  
          legal work, the CSU system still incurs the cost of the 15%  
          surcharge fee to the VCGCB on top of any settlement paid to the  
          plaintiff.  CSU is seeking independence from VCGCB to allow tort  
          claims to be filed directly with the CSU's Office of Risk  
          Management in a process similar to that already underway at UC,  
          the community colleges, and other public entities with  
          claim-filing independence.  CSU believes that this change will  
          allow the system to be more cost-efficient and productive in  
          operations.  

           Claims against CSU  :  In fiscal year 2007-08, 118 claims were  








                                                                  SB 1046
                                                                  Page  3

          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. 
           
           Prior legislation:  AB 3132 (Firestone), Chapter 938, Statutes  
          of 1996, was enacted to exclude CSU from the definition of  
          "state agency".  AB 2321 (Hertzberg), Chapter 1007, Statutes of  
          2002, established the Judicial Council, rather than VCGCB, as  
          the governing body authorized to at on claims against a judicial  
          branch.  SB 1102 (Committee on Budget and Fiscal Review),  
          Chapter 227, Statutes of 2004, required a filing fee be charged  
          to claimants for the VCGCB program and a surcharge of up to 15%  
          be implemented to support the expense of administering the VCGCB  
          program.  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.
           
          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California State University, Office of the Chancellor

           Opposition 
           
          None on File
           
          Analysis Prepared by  :    Laura Metune / HIGHER ED. / (916)  
          319-3960