BILL ANALYSIS
SB 1046
Page 1
Date of Hearing: June 22, 2010
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Marty Block, Chair
SB 1046 (Cogdill) - As Amended: April 7, 2010
SUBJECT : Government tort claims: California State University
SUMMARY : Removes the California State University (CSU) from the
jurisdiction of the Victims Compensation and Government Claims
Board (VCGCB). Specifically, this bill :
1)Designates CSU as a "public entity" for the purposes of the
Tort Claims Act.
2)Provides that all claims against CSU for money or damages
based upon an express contract or for an injury for which CSU
is liable must be presented in accordance with the Tort Claims
Act.
3)Requires the CSU Board of Trustees (Trustees) to act on a
claim against CSU in accordance with the procedure that the
Trustees provide by rule, provides that CSU may not adopt any
rule inconsistent with the Tort Claims Act, and provides that
if a claim for money or damages against CSU is mistakenly
presented to the VCGCB, the VCGCB shall immediately notify the
claimant of the error and include information on proper filing
of the claim.
4)Specifies that claims and actions shall be presented by
delivering or mailing the claim to, or serving the action on,
the Office of Risk Management at the CSU Chancellor's Office.
5)Provides that the CSU Trustees may adjust and pay any claim
arising out of the activities of CSU and that the CSU Trustees
may, by rule, authorize the Office of Risk Management at the
CSU Chancellor's Office to perform the functions of the CSU
Trustees under this section.
EXISTING LAW lays out the Torts Claim Act, which establishes the
procedures for filing a claim against a state public agency.
The Act specifies that a claim against the state must be filed
with the VCGCB, unless the claim is against a judicial branch or
a judge, in which case the claim is filed with the Judicial
Council. The University of California (UC) is exempt from the
SB 1046
Page 2
Tort Claims Act. The VCGCB is authorized to charge a fee equal
to 15% of the total for any claim it approves for settlement.
FISCAL EFFECT : According to the Senate Appropriations
Committee, allowing CSU to fully process its own tort claims
would allow CSU to avoid the 15% surcharge it currently pays to
the VCGCB on each approved claim. To the extent that CSU could
fully process its own claims within existing staff resources,
this would be a direct savings to CSU. The total amount of
savings to CSU, and revenue loss to VCGCB, would be minor,
likely less than $10,000 annually.
COMMENTS : Double-referral : This bill has been referred to the
Committees on Higher Education and Judiciary.
Background : The VCGCB, formerly known as the Board of Control,
has been authorized to act on tort claims filed against a state
agency since 1963. Despite statutory intent supporting CSU's
governing independence, CSU was defined as a state agency until
2006, and thus fell within the jurisdiction of the VCGCB.
Responding to concerns that legislation applying to state
agencies often limited CSU's ability to meet its educational
mission, AB 3132 (Firestone), Chapter 938, Statutes of 1996, was
enacted to exclude CSU from the definition of "state agency".
The bill, however, applied prospectively, not retrospectively,
thus if CSU wishes to be removed from the qualification of
"state agency" in previous law, legislation is necessary to make
that amendment.
Purpose of this bill : The CSU Trustees, the sponsor of this
bill, under the procedure outlined in current law the VCGCB
performs only an administrative function of collecting fees and
assigning claim numbers for tort claims filed against CSU but
does not perform any investigation. While CSU performs the
legal work, the CSU system still incurs the cost of the 15%
surcharge fee to the VCGCB on top of any settlement paid to the
plaintiff. CSU is seeking independence from VCGCB to allow tort
claims to be filed directly with the CSU's Office of Risk
Management in a process similar to that already underway at UC,
the community colleges, and other public entities with
claim-filing independence. CSU believes that this change will
allow the system to be more cost-efficient and productive in
operations.
Claims against CSU : In fiscal year 2007-08, 118 claims were
SB 1046
Page 3
filed against CSU, and 19 claims were approved for a total of
$89,893 paid to claimants. The surcharge on these claims was
$9,176. In fiscal year 2008-09, 70 claims were filed against
CSU, and 16 claims were approved for a total of $36,048 paid to
claimants. The surcharge on these claims was $3,988.
Prior legislation: AB 3132 (Firestone), Chapter 938, Statutes
of 1996, was enacted to exclude CSU from the definition of
"state agency". AB 2321 (Hertzberg), Chapter 1007, Statutes of
2002, established the Judicial Council, rather than VCGCB, as
the governing body authorized to at on claims against a judicial
branch. SB 1102 (Committee on Budget and Fiscal Review),
Chapter 227, Statutes of 2004, required a filing fee be charged
to claimants for the VCGCB program and a surcharge of up to 15%
be implemented to support the expense of administering the VCGCB
program. SB 1724 (Runner) Chapter 453, Statutes of 2005,
originally included various changes requested by the CSU
including similar changes as provided in SB 1046. However,
prior to final passage of SB 1724, the provisions related to the
torts claims were amended out of the measure.
REGISTERED SUPPORT / OPPOSITION :
Support
California State University, Office of the Chancellor
Opposition
None on File
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960