BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1504|
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THIRD READING
Bill No: SB 1504
Author: Kehoe (D)
Amended: 4/17/12
Vote: 27 - Urgency
SENATE APPROPRIATIONS COMMITTEE : 7-0, 04/12/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
SUBJECT : Claims and judgments against the state:
interest
SOURCE : Author
DIGEST : This bill provides that no interest is payable
on the amount allowed by the California Victim Compensation
and Government Claims Board (Board) on a claim if payment
of the claim is subject to approval of an appropriation by
the Legislature. However, if an appropriation is made for
the payment of a claim, interest on the amount appropriated
commences to accrue 180 days after the effective date of
the law by which the appropriation is enacted. This bill
deletes provisions requiring the accrual of interest on the
amount appropriated for the payment of a claim and on a
claim that is not subject to approval of an appropriation
by the Legislature, setting the rate of interest, and
authorizing these terms to be varied by written agreement.
This bill provides that interest shall commence to accrue
on the amount of a judgment or settlement commencing 180
days from the date of the final judgment or settlement.
CONTINUED
SB 1504
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2
This bill makes a minor reporting change.
ANALYSIS : The State Board of Control was established in
1945. It was revised and renamed the Victim Compensation
and Government Claims Board by AB 2491 (Jackson), Chapter
1016, Statutes of 2000. Government Code Section 13928
requires the Board to ensure that all claims have been
approved by the Board, and for which there exists no
legally available appropriation, are submitted for
legislative approval at least twice during each calendar
year. In general, the Board will approve claims in
November and in February. Those claims are reported to the
chairs of the Appropriations Committees who introduce bills
appropriating General Funds and special funds to pay the
claims. These bills may appropriate funds in amounts to
the penny for tens to hundreds of claims, usually stale
dated warrants. Government Code Section 906 provides for
the payment of interest on claims approved by the Board for
which an appropriation has been made beginning 30 days
after the effective date of the law by which the
appropriation is enacted.
The Department of Justice will generally request two bills
each year of the legislative session to pay judgments and
settlement awards which may be approved in state or federal
court at any time during the calendar year.
Government Code Section 965.5 (a) provides that a judgment
for the payment of money against the state or a state
agency is enforceable until ten years after the time the
judgment becomes final or, if the judgment is payable in
installments, until ten years after the final installment
becomes due.
According to the Senate Appropriations Committee analysis,
because judgments and settlements may be approved at any
time during the calendar year, the Legislature is limited
in how quickly it can respond with legislation to
appropriate the necessary funds. Recently, one claim
incurred approximately $45,000 in interest costs while the
Legislature was in recess and another approximately $60,000
by the time the bill appropriating funds for the settlement
award was chaptered.
SB 1504
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Minor, if any, interest savings on claims approved by the
Board. Unknown interest savings on future judgments and
settlements.
DLW:nl 4/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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