BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 304 (Lara) - State claims
          
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          |Version: February 23, 2015      |Policy Vote:  N/A               |
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          |Urgency: Yes                    |Mandate: No                     |
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          |Hearing Date: July 13, 2015     |Consultant: Mark McKenzie       |
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          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.








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            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  








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          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.








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          The bill also requires the Controller to transfer specified  
          surcharges on claims for the support of the board, pursuant to  
          provisions in existing law.


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