BILL ANALYSIS �
AB 1157
Page 1
Date of Hearing: January 10, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1157 (Nielsen) - As Amended: March 31, 2011
SUBJECT : PUBLIC ENTITY LIABILITY: PAYMENT OF CLAIMS
KEY ISSUE : SHOULD THE VICTIMS COMPENSATION AND GOVERNMENT
CLAIMS BOARD BE REQUIRED TO NOTIFY THE LEGISLATIVE BUDGET
COMMITTEES PRIOR TO ALLOWING PAYMENT FOR CERTAIN CLAIMS
EXCEEDING HALF A MILLION DOLLARS ($500,000), AS SPECIFIED?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill seeks to require the Victims Compensation and
Government Claims Board to notify the chairpersons of the
Appropriations and Budget Committees in both houses, and the
Chairperson of the Joint Legislative Budget Committee, at least
15 days prior to allowing either (1) the use of a current year
appropriation to pay claims for prior year costs of $500,000 or
more; or (2) claims from a single provider of goods or services
with respect to a single department that exceeds $500,000.
According to the author, the Vice Chair of the Assembly Budget
Committee, this bill is intended to keep the Legislature
informed about how certain government agencies, specifically the
VCGCB, are spending limited taxpayer dollars and to ensure the
budget process is not being circumvented through the
appropriation of funds through the Board. The notification
requirement called for in this bill was briefly part of
California law in 2011, having been enacted in one budget
trailer bill (SB 80) but later repealed by a subsequent budget
bill (AB 119). It has not previously been voted on as a
stand-alone proposition by any policy committee. There is no
registered support or opposition to this bill.
SUMMARY : Requires the Victims Compensation and Government
Claims Board (board) to notify the Legislature prior to allowing
payment of certain claims exceeding $500,000, as specified.
Specifically, this bill requires the board to notify the
chairpersons of the Appropriations and Budget Committees in both
houses, and the Chairperson of the Joint Legislative Budget
Committee, at least 15 days prior to allowing either (1) the use
AB 1157
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of a current year appropriation to pay claims for prior year
costs of $500,000 or more; or (2) claims from a single provider
of goods or services with respect to a single department that
exceeds $500,000.
EXISTING LAW :
1)Provides that, upon the allowance by the California Victim
Compensation and Government Claims Board (board) of all or
part of a claim for which the Director of Finance certifies
that a sufficient appropriation for the payment of the claim
exists, and the execution and presentation of documents the
board may require which discharge the state of all liability
under the claim, the board shall designate the fund from which
the claim is to be paid and the state agency concerned shall
pay the claim from that fund. (Government Code Section
965(a). Unless otherwise stated, all further statutory
references are to that code.)
2)Provides that if there is no sufficient appropriation for the
payment available, the board shall report to the Legislature
in accordance with Section 912.8. In addition, authorizes
payment of claims arising out of the activities of the State
Department of Transportation if either the Director of
Transportation or the Director of Finance certifies that a
sufficient appropriation for the payment of the claim exists.
(Section 965(a).)
3)Requires the board, in the case of claims against the state,
to act on those claims in accordance with that procedure as
the board, by rule, may prescribe, and permits the board to
hear evidence for and against the claims and, with the
approval of the Governor, report to the Legislature those
facts and recommendations concerning the claims as it deems
proper. (Section 912.8.)
4)Provides that, if there is no sufficient appropriation for the
payment of claims, settlements, or judgments against the state
arising from an action in which the state is represented by
the Attorney General, the Attorney General shall report the
claims, settlements, and judgments to the Chairperson of
either the Senate Committee on Appropriations or the Assembly
Committee on Budget, who shall cause to be introduced
legislation appropriating funds for the payment of the claims,
settlements, or judgments. (Section 965(b).)
AB 1157
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COMMENTS : This bill seeks to require the Victims Compensation
and Government Claims Board to notify the chairpersons of the
Appropriations and Budget Committees in both houses, and the
Chairperson of the Joint Legislative Budget Committee, at least
15 days prior to allowing either (1) the use of a current year
appropriation to pay claims for prior year costs of $500,000 or
more; or (2) claims from a single provider of goods or services
with respect to a single department that exceeds $500,000.
According to the author, this bill is intended to keep the
Legislature informed about how certain government agencies,
specifically the VCGCB, are spending limited taxpayer dollars
and to ensure the budget process is not being circumvented
through the appropriation of funds through the Board.
Author's Statement. According to the author, who is the
Vice-Chair of the Assembly Budget Committee, certain
transactions of the board that occurred in FY 2010 provided the
genesis to conceive and introduce this unsponsored bill on his
own. The author contends this bill is needed to ensure the
Legislature is informed about how VCGCB moneys are being spent,
and explains:
One of the roles of the Legislature is oversight of
the money spent by government departments and
agencies. In times with serious budget deficits, it
becomes even more important for the Legislature to
know how government agencies are spending our limited
dollars. However it has come to the attention of
those on the Budget Committee that certain departments
and agencies in California have circumvented the
appropriate budgetary process and have used the
Victims Compensation and Government Claims Board to
transfer funds. As Vice-Chair of the Assembly Budget
Committee, I feel that this is not the appropriate
venue for such a transfer, as these requests should be
made through and by the Legislature. It may turn out
the money appropriated by the Board to these
departments was used correctly, but there is no
question that blindly approving such a large claim to
a department without any questions asked is a serious
breach of the Budget process.
AB 1157 does not state that the VCGCB needs
legislative approval before making any appropriation.
AB 1157
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It simply states that any claim made by a department
or agency to the VCGCB that is greater than $500,000,
must also notify the chairpersons of the
Appropriations and Budget Committees, and the Chair of
the Joint Legislative Budget Committee. The
Legislature deserves to know exactly how this money is
being spent.
Examples of claims which trigger the notification requirement.
Under this bill, the VCGCB is required to notify specified
Legislative chairpersons before allowing two different types of
claims that exceed $500,000. First, the notification
requirement applies to a request to use a current year
appropriation to pay claims for prior year costs of $500,000 or
more. For example, the notification requirement would apply if
a department applied to the board seeking an appropriation in FY
2012 to pay costs of $500,000 or more that were incurred in FY
2011 or earlier. Second, notification would also be required
for claims from a single provider of goods or services with
respect to a single department exceeding $500,000 within one
year. In other words, if a particular vendor has provided goods
or performed services for a particular department valued at
$500,000 or more, aggregated over a period of one year, then
under this bill any claim to the VCGCB seeking payment for those
goods and services would trigger the notification requirement to
the Legislative budget committees, as specified. According to
the author, this bill is intended to keep legislators informed
of precisely these types of claims to the VCGCB by departments
and their vendors.
This bill requires legislative notice but not legislative
approval for specified claims. It should be noted that this
bill requires the VCGCB to notify the appropriate officials in
the Legislative budget committees (including the Joint
Legislative Budget Committee) prior to allowing payment for
certain claims, but the bill does not require subsequent
Legislative approval for payment of those claims. In that
respect, the modest notification required by this bill is
advisory in nature, allowing the board to carry out its work,
but also creating a timely opportunity for the Budget Committees
to make inquiries about and follow up certain claims at their
discretion.
According to staff at VCGCB, the practice of legislative
notification for claims exceeding $500,000 was implemented,
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pursuant to SB 80, during the three month period this
requirement was in effect before being repealed. In addition,
according to staff, the vast majority of claims made to the
board do not fall into the specified types of claims exceeding
$500,000 covered by this bill. However, it remains difficult to
estimate with any certainty how many claims of that magnitude,
if any, might be made to the board to trigger the notification
requirement if this bill were to become law.
Legislative history of this provision. Keen observers will note
that the sole provision of this bill, the notification
requirement, was previously chaptered into law in late March
2011 having been incorporated into SB 80, a budget trailer bill
on state government. In late June 2011, however, the Governor
signed into law another budget bill, AB 119, which repealed this
provision from the Government Code. This bill, which has been
resting in this Committee in its current form since March 31,
2011, represents the author's renewed effort to put this
language back into California law independent of budget
negotiations.
PRIOR RELATED LEGISLATION : SB 80 (Committee on Budget), Chapter
11, Stats. 2011, identical language to this bill, required the
board to notify the chairpersons of the Appropriations and
Budget Committees in both houses, and the Chairperson of the
Joint Legislative Budget Committee, at least 15 days prior to
allowing the use of a current year appropriation to pay either:
(1) claims for prior year costs of $500,000 or more; or (2)
claims from a single provider of goods or services with respect
to a single department that exceeds $500,000.
AB 119 (Committee on Budget), Chapter 31, Stats. 2011, repealed
the above provision that had been chaptered into law by SB 80
(2011) three months earlier.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
AB 1157
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Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334