BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 619|
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THIRD READING
Bill No: AB 619
Author: Garcia (D)
Amended: As introduced
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-0, 6/18/13
AYES: Evans, Walters, Corbett, Jackson, Leno, Monning
NO VOTE RECORDED: Anderson
ASSEMBLY FLOOR : 75-0, 4/8/13 (Consent) - See last page for vote
SUBJECT : Court facilities
SOURCE : Judicial Council
State Association of County Auditors
DIGEST : This bill provides that penalty payments on the
delinquent transfer of court fees to the State Facilities Court
Construction Fund be made by the entity (county, city and
county, or court) responsible for the error or other action that
caused the failure to pay, as determined by the State Controller
(Controller) in notice given to the responsible entity. This
bill also recalculates the penalty on a delinquent payment, and
authorizes the Controller to permit the entity to pay the
interest or penalty amounts under a payment schedule if the
interest or penalty amount causes hardship to the entity, and
applies these changes to all delinquent payments for which the
Controller has not issued a final audit before January 1, 2014.
ANALYSIS :
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Existing law:
1.Provides that the state has sole responsibility for funding
court operations, as defined, and each county must remit to
the state certain statutorily specified amounts for funding
court operations.
2.Establishes the State Court Facilities Construction Fund
(SCFCF) for the improvement of court facilities to further
reasonable access to the courts and judicial process
throughout the state. SCFCF is funded by various civil and
criminal fees, fines, penalties, and surcharges. SCFCF
proceeds may be used in the planning, design, construction,
rehabilitation, leasing or acquisition of court facilities.
3.Establishes the Immediate and Critical Needs Account (ICNA) of
the SCFCF, the proceeds of which can be used only for any of
the following:
A. The planning, design, construction, rehabilitation,
renovation, replacement or acquisition of court facilities;
B. Repayment for monies appropriated for lease of court
facilities pursuant to the issuance of lease-revenue bonds;
and
C. Payment for lease or rental of court facilities or
payment of service contracts, including those made for
facilities in which one or more private sector participants
undertake some of the risks associated with the financing,
design, construction, or operation of the facility.
1.Requires a county to transmit the fees and penalties collected
for SCFCF or ICNA to the Controller no later than 45 days
after the end of the month in which they were collected.
2.Requires the Controller, upon receipt of a delinquent payment,
to calculate a penalty on the delinquent payment by
multiplying the amount of the delinquent payment at a daily
rate equivalent to 1.5 percent per month for the number of
days the payment is delinquent. Penalties calculated on
delinquent payments must be paid to the Controller no later
than 45 days after the end of the month in which the penalty
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was calculated.
3.Requires the Controller to deposit delinquent payment
penalties in the SCFCF.
4. Requires a court to reimburse a county general fund in an
amount equal to the delinquent payment penalty, if the
penalty imposed resulted from a court's failure to deposit
money with the county treasurer in a timely manner.
5. Establishes the Trial Court Trust Fund (TCTF), funded
primarily from court fees, to support trial court operations
and other specified purposes.
This bill:
1.Provides that any interest or penalty payments on any
delinquent transfer of court fees to the SCFCF and ICNA be
made by the entity (county, city and county, or court)
responsible for the error or other action that caused the
failure to pay, as determined by the Controller, accompanied
by a remittance advice identifying the collection month and
the account to which the payment shall be made.
2.Provides that the party responsible for the error or other
action that caused the failure to pay may include, but is not
limited to, the party that collected the funds who is not the
party responsible for remitting the funds to the SCFCF or the
ICNA, if the collecting party failed to provide or delayed
providing the remitting party with sufficient information
needed by the remitting party to distribute the funds.
3.Requires the Controller upon receipt of a delinquent payment
to:
A. Calculate interest on the delinquent payment by
multiplying the delinquent interest rate, calculated based
on the daily return rate for funds deposited in the Local
Agency Investment Fund (LAIF), from the date payment was
originally due to either (1) 30 days after the Controller
issues the final audit report concerning the failure to
pay, or (2) the date of the payment by the responsible
entity, whichever comes first; in calculating the interest
rate, the Controller must apply the average monthly LAIF
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rate over the period of delinquency; and
B. Calculate the penalty at a daily rate equal to 1.5
percent per month from the day 30 days after the date of
issuance by the Controller of the final audit report
concerning the failure to pay.
1.Permits a court to pay any penalty or interest imposed due to
an error or other action by the court from money received from
the TCTF. This bill allows the Controller to permit a county,
city and county, or court to pay the penalty amounts according
to a payment schedule in the event that a large penalty amount
causes hardship to the paying entity.
2.Provides that the above changes apply to all delinquent
payments for which the Controller has not issued a final audit
before January 1, 2014.
Background
The Lockyer-Isenberg Trial Court Funding Act of 1997 spearheaded
an era of significant restructuring of the state court system.
The act, among other things, shifted sole responsibility for
funding court operations to the state, and required each county
to remit to the state certain statutorily specified amounts for
funding court operations.
The Trial Court Facilities Act of 2002 established the SCFCF,
which supports, among other things, the construction,
renovation, and facility modifications for state courts. SCFCF
is funded by fines and fees collected within the judicial
branch, with a limited amount of county reimbursements. In
2008, SB 1407 (Perata, Chapter 311, Statutes of 2008)
established the ICNA of the SCFCF which, among other things,
supports the most critically needed construction and renovation
of courthouses and provides limited funding for facility
modifications. ICNA is funded by fines and fees established by
SB 1407.
Various statutory provisions govern the transfer of funds
collected by the counties and courts to support SCFCF and ICNA.
These provisions establish specified penalties for delinquent
payment of the required funds to SCFCF and ICNA. The delinquent
payments are uncovered in periodic audits by the Controller - in
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some smaller counties these audits are performed every five to
seven years.
In 2007, SB 539 (Margett, Chapter 435, Statutes of 2007) was
enacted to require the Controller to give notice to the entity
responsible for delinquent payments of fees to be deposited in
the Trial Court Trust Fund, recalculate the penalty on a
delinquent payment, and authorize the Controller to permit
payment of the penalty according to a payment schedule if the
penalty amount causes a hardship to the paying entity. This
bill would apply those same provisions for delinquent payments
to delinquent payments to the SCFCF and ICNA.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/18/13)
Judicial Council (co-source)
State Association of County Auditors (co-source)
California State Association of Counties
ARGUMENTS IN SUPPORT : The State Association of County
Auditors, co-source of the bill, states that, "[t]his bill will
give small to medium-sized entities an opportunity to correct
underpayments to the State Trial Court Construction Fund when
brought to their attention, without 18 [percent] annual accrued
interest as a penalty. Small to medium-sized counties are
audited on a multi-year schedule, some only as often as one
every 5-7 years. If the underpayment took place early in the
cycle, the interest will accrue to an unmanageable amount over
time until it is uncovered in an audit. As with obligations to
other funds, the entities will continue to be responsible to pay
interest on the balance (calculated with the LAIF rate)."
ASSEMBLY FLOOR : 75-0, 4/8/13
AYES: Achadjian, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Medina,
Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian,
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Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez,
Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting,
Torres, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Alejo, Conway, Lowenthal, Mansoor, Vacancy
AL:nl 6/25/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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