BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 806|
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                              UNFINISHED BUSINESS


          Bill No:  SB 806
          Author:   Senate Veterans Affairs Committee
          Amended:  9/1/11
          Vote:     27 - Urgency

           
           SENATE VETERANS AFFAIRS COMMITTEE  :  7-0, 06/14/11
          AYES:  Correa, Cannella, Berryhill, Negrete McLeod, Rubio, 
            Runner, Lieu
          NO VOTE RECORDED:  Calderon

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SENATE FLOOR  :  37-0, 07/11/11 (Consent)  
          AYES:  Alquist, Anderson, Berryhill, Blakeslee, Cannella, 
            Correa, De León, DeSaulnier, Dutton, Emmerson, Evans, 
            Fuller, Gaines, Hancock, Harman, Hernandez, Huff, Kehoe, 
            La Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod, 
            Padilla, Price, Rubio, Runner, Simitian, Steinberg, 
            Strickland, Vargas, Walters, Wolk, Wright, Wyland, Yee
          NO VOTE RECORDED:  Calderon, Corbett, Pavley

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    State employees:  military leave:  salary 
          overpayment

           SOURCE  :     Author


           DIGEST  :    This bill extends, until January 1, 2015, the 
          statute of limitations for the recovery of overpayments 
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          made to a state employee on a leave of absence for active 
          military duty as a member of the California National Guard 
          from three years to six years from the date of overpayment. 


           Assembly Amendments  (1) make provision applicable to any 
          overpayment made up to 6 years prior to the operative date 
          of this bill, (2) extend the statute of limitation until 
          January 1, 2015, (3) clarify the circumstances under which 
          the state must initiate administrative action to recover an 
          overpayment to an employee of the state on leave of absence 
          for active military duty as a member of the California 
          National Guard, (4) establish that the state is not 
          mandated to recover such an overpayment should various 
          conditions apply, as specified, and (5) clarify 
          administrative action to recover overpayment shall be 
          initiated within six years from the date of overpayment, 
          unless all of the following conditions exist: (a) the 
          employee currently holds the military pay grade of E-1 to 
          E-5, inclusive, (b) overpayment was not due to fraud, 
          misrepresentation, or willful nondisclosure on the part of 
          the employee, (c) overpayment was received without fault on 
          the part of the employee, and (d) recovery of the 
          overpayment from the employee would be against equity and 
          good conscience.

           ANALYSIS  :    Existing law allows for the state to recover 
          overpayment of funds to guard personnel as long as the 
          proceedings are initiated within three years.

          Existing law provides that a state employee who is granted 
          a military leave of absence for active duty, whose 
          continuous state service is not broken by a permanent 
          separation, shall be entitled to receive his or her salary 
          for a period not to exceed 30 calendar days in any one 
          fiscal year.

          This bill:

          1.Determines, until January 1, 2015, if the state finds, 
            that an overpayment of compensation has been made to a 
            state employee on a leave of absence for active military 
            duty as a member of the California National Guard. 








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          2.States that if #1 above is determined then administrative 
            action to recover salary overpayment must be initiated 
            within six years from the date of overpayment, 
            notwithstanding existing law.

          3.Establishes that the state is not mandated to recover 
            such an overpayment if all of the following conditions 
            apply: 

             A.   The recipient currently holds the military pay 
               grade of E-1 through 
               E-5, inclusive; 
             B.   The overpayment was not due to fraud, 
               misrepresentation or willful nondisclosure on the part 
               of the recipient; 
             C.   The overpayment was received without fault on the 
               part of the recipient, and, 
             D.   Recovery of the overpayment would be against equity 
               and good conscience. 

           Background
           
          Overpayments to guard personnel have been well documented 
          over the last 9 months and investigations by the Senate 
          Veterans Affairs Committee continue to find more 
          discrepancies with state military pay.  Many of the 
          documented discrepancies date to at least 2008.

          The new Adjutant General has only been recently appointed 
          and is still investigating these records with the help of 
          his staff.  At this point, even if he finds something, it 
          is likely he will find it too late to do anything about it. 

           
           According to the author's office, this bill could not be 
          simpler.  If this bill is not passed, then the state loses 
          its ability to recover improperly paid compensation on a 
          price tag that is still unknown but could easily reach over 
          $100 million.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Assembly Appropriations Committee, minor 







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          absorbable administrative costs, particularly to the State 
          Controller's Office.  Costs will be offset to an unknown 
          degree by recovering overpayments. 


          RM:nl  9/8/11   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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