BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 304 (Lara) - State claims ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: February 23, 2015 |Policy Vote: N/A | | | | |--------------------------------+--------------------------------| | | | |Urgency: Yes |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: July 13, 2015 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill does not meet the criteria for referral to the Suspense File. Pursuant to the Committee's rules, the Suspense File rule does not apply to this bill as claims are considered valid obligations of the state. Additionally, claims may have time sensitivity. Bill Summary: SB 304, an urgency measure, would appropriate $3,276,623.90 from specified funds to the California Victim Compensation and Government Claims Board (board) for the payment of 199 state claims. Fiscal Impact: Stale-dated warrants : General Fund appropriations in the amount of $621,535.15 to pay 171 claims, and appropriations from specific budget items in the amount of $44,897.31 to pay 26 claims (various funds). All of these claims are for reissuance of stale-dated warrants (expired checks). The individual claim amounts range from $50 to $93,758.06. SB 304 (Lara) Page 1 of ? Captial Outlay appropriations : Bond fund appropriations in the amount of $2,610,709.44 to pay two claims to the Los Angeles Community College District for expenditures that were previously approved, but for which the original bond fund allocations had reverted. (Community College Capital Outlay Bond Fund - Fund 6049) Board Surcharges : Shift of $110,025.69 in funds from the Community College Capital Outlay Bond Fund to the General Fund for surcharges related to the Capital Outlay claims that support of the board's activities. Background: The State Board of Control was established in 1945. It was revised and renamed the Victim Compensation and Government Claims Board by Chapter 1016/2000 (AB 2491, Jackson). Government Code 13928 requires the board to ensure that all claims that have been approved by the board, and for which no legally available appropriation exists, are submitted for legislative approval at least twice during each calendar year. In general, the board will approve claims in November and 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. Government Code 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 re-issuance of stale-dated warrants is the most prevalent claim approved by the board. For stale-dated warrants, the Controller must confirm that (1) the check was not cashed and has not been issued and (2) more than three years have elapsed since the check was issued and the monies have reverted to the General Fund or to the relevant special fund. For these warrants an appropriation is needed to reissue the payment. This category also may include state treasury bonds that have not been redeemed within ten years of their maturity date (there are no such claims in this bill), but the majority of warrants are payroll or tax refund checks. Existing law authorizes the board to assess a surcharge on a state entity against which an approved claim is filed, in an SB 304 (Lara) Page 2 of ? amount not to exceed 15 percent of the total approved claim. These surcharges support the board's activities, but do not apply to approved claims to reissue expired warrants. Proposed Law: SB 304, an urgency measure, appropriates $3,276,623.90 in various state funds, including $621,535.15 from the General Fund, to the board for the payment of 197 state claims for reissuance of stale-dated warrants. The bill also appropriates $2,610,709.44 in capital outlay bond funds to reissue payments for Los Angeles Community College District projects that previously received an allocation, but the funds reverted. Related Legislation: AB 165 (Gomez), Ch. 7/2015, an urgency measure, appropriates $504,743.99 in various state funds, including $227,308.96 from the General Fund, to the board for the payment of 110 state claims for reissuance of stale-dated warrants. The bill also appropriates $968,400 to the board for payment of three specified erroneous conviction claims. AB 139 (Fuentes), Ch. 194/2011 appropriated various funds to the board for the payment of state claims. The claims for the Los Angeles Community College District that are in this bill were also included in AB 139, but were never paid because the funding source was not identified correctly in the bill and was considered invalid. Staff Comments: Electronic claims were submitted for grants from the 2006 Budget Act Community College Capital Outlay Bond Fund (Fund 6049) for contract costs incurred by the Los Angeles Community College District. These claims were denied because the appropriation was thought to have reverted. As noted above, these eligible claims were previously approved in AB 139 (Fuentes) in 2011, but could not be paid because the funding source was identified as a specific 2011 Budget Act item (6870-303-6049), which was invalid. This bill would appropriate funds directly from Fund 6049 to the board for payment of the LACCD claims. SB 304 (Lara) Page 3 of ? The bill also requires the Controller to transfer specified surcharges on claims for the support of the board, pursuant to provisions in existing law. -- END --