BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           2537 (Silva)
          
          Hearing Date:  8/12/2010        Amended: 8/2/2010
          Consultant:  Bob Franzoia       Policy Vote:  G O 6-0
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          ____
          BILL SUMMARY: AB 2537 would require agencies that conduct an  
          adjudicative proceeding provide by regulation for preemptory  
          challenge of the presiding officer in cases where the presiding  
          officer is an administrative law judge (ALJ), and authorize  
          those agencies to provide by regulation for peremptory challenge  
          of a presiding officer who is not an ALJ.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions        2010-11      2011-12       2012-13     Fund
           Peremptory challenge ofUnknown, likely significant costs  
          ongoing;               General/
          presiding officer in   potentially major penalty costs where  
          re-Special
          adjudicative proceedings          assignment results in hearing  
          not completed
                                 within statutory timelines.
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          ____
          STAFF COMMENTS: SUSPENSE FILE.
          
          Currently, Government Code 11425.40 (a) provides for the  
          disqualification of the presiding officer for bias, prejudice,  
          or interest in the proceeding.  Government Code 11425.40 (d)  
          provides that agency that conducts an adjudicative proceeding  
          may provide by regulation for peremptory challenge of a  
          presiding officer.  This bill would require affected agencies to  
          adopt regulations to provide for preemptory challenges of  
          presiding officers.  This bill would require a peremptory  
          challenge of presiding officers who are administrative law  
          judges and make optional the regulation of peremptory challenge  
          of presiding officers who are not administrative law judges.  

          This bill may have a significant impact on the Department of  
          Health Care Services as Welfare and Institutions Code 14171  
          impose financial penalties for certain cases not heard or  










          decided within statutorily set timeframes.  The current penalty  
          is ten percent of the recovery or demand for every 30 day  
          period, or part thereof, that the deadline is missed.  These  
          cases are routinely worth tens of millions of dollars.

          This bill could present a significant workload problem for the  
          Department of Alcoholic Beverage Control as the Alcoholic  
          Beverage Control Act requires the department to hold  
          administrative hearings in the counties where the premises or  
          licensees are located.  With 50 counties and fewer than ten  
          administrative law judges assigned to 700 to 1,000 (below the  
          new threshold set by the 8/2/2010 amendment), prior notification  
          for peremptory challenge would make scheduling extremely  
          difficult, cause delays, and increase costs.

          Some departments, for example, the Department of Social Services  
          with an estimated 14,000 proceeding annually, would be exempt  
          from the provisions of the bill.