BILL ANALYSIS �
SB 806
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Date of Hearing: August 22, 2011
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Paul J. Cook, Chair
SB 806 (Correa) - As Amended: August 15, 2011
SENATE VOTE : 37-0
SUBJECT : State employees: military leave: salary overpayment
SUMMARY : This bill extends the statute of limitations for
salary overpayments to state employees on leave for duty with
the National Guard. Specifically:
1. If the state determines that an overpayment of
compensation has been made to a state employee on a leave
of absence for active military duty as a member of the
California National Guard, then
2. Administrative action to recover salary overpayment must
be initiated within 6 years from the date of overpayment,
notwithstanding existing law.
EXISTING LAW: Gov. Code section 19775.2 provides that a state
employee who is granted a military leave of absence for active
duty, whose continuous state service is not broken by a
permanent separation, shall be entitled to receive his or her
salary for a period not to exceed thirty calendar days in any
one fiscal year.
Gov. Code section 19838 allows for the state to recover
overpayment of funds to personnel as long as the proceedings are
initiated within three years from the date of the overpayment.
Code of Civil Procedure section 312 states that, "Civil actions,
without exception, can only be commenced within the periods
prescribed in this title, after the cause of action shall have
accrued, unless where, in special cases, a different limitation
is prescribed by statute."
Code of Civil Procedure section 338 provides a three year
statute of limitations for civil actions based on fraud or
mistake. The cause of action in that case is not deemed to have
accrued until the discovery, by the aggrieved party, of the
facts constituting the fraud or mistake.
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Code of Civil Procedure section 343 provides that a civil action
for relief not otherwise provided for must be commenced within
four years after the cause of action accrues.
FISCAL EFFECT : Unknown at this time.
COMMENTS :
GENESIS OF MEASURE: This measure is in response to a series of
articles in the Sacramento Bee and other media alleging salary
overpayment to California National Guard ("Guard") members, in
particular former top officials at the Guard. According to the
Guard, two top former officers have been notified of
overpayments one of approximately $35,000 and one of
approximately $85,000. Both officers have disputed the
overpayment, though one has paid the alleged overpayment amount,
pending resolution of the matter. According to the Guard it is
broadly auditing its pay records and some small additional
overpayments have been discovered, but thus far nothing of the
size previously found with the two top former officials.
MEASURE DOES NOT ADDRESS STUDENT LOAN REPAYMENT PROGRAM
ALLEGATIONS: It is important to note that this bill will not
address alleged overpayments or fraud in connection with Student
Loan Repayment Program funds, overpayments which have also been
the subject of media reports. Those funds were not paid as
salary; moreover, they were purely federal funds, they were not
overpayments made by the state.
EXTENDING THE STATUTE OF LIMITATIONS: EQUITIES
There is in most cases equity in, at some point in the passing
of time, disallowing claims. "Statutes of limitation are passed
to prevent the production of stale claims when, from the lapse
of time, it has become difficult or impossible to furnish the
requisite proof to defeat them."<1> However, there are some
claims for which there is no statute of limitations, for
example, the crime of murder, because we as a society agree that
it is never too late for the court system to take up such
claims.
The measure presents a balancing of equities question for the
members: How long after the date of overpayment is it fair to
attempt to recover funds from employees? The measure proposes
---------------------------
<1> CA Code of Civil Procedure Section 312, Note 4.
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to move that date back three years, from three to six years post
overpayment. If funds were paid to an employee to which the
employee was not entitled, it might be argued that there should
be no time limit at all on when the recovery might occur, after
all, the funds should never have gone to the employee in the
first place. Particularly in cases of large overpayments, one
could argue that the employee should've known he or she was
being over paid.
However, considering the opposing equities and not including
cases of fraud, it may be very difficult for employees,
particularly enlisted members at more junior ranks, to confirm
or refute a notice of overpayment after six years. Six years is
a long time to keep records for many people. Servicemembers are
likely to have gone through multiple deployments during that
time. Moreover, after such a long time it may be extremely
difficult for rank and file Guard members to repay even a modest
amount overpaid paid to them.
Government Code section 19838 as written balances these equities
at three years. This time period is also aligned with the
three-year Code of Civil Procedure statute of limitations for
fraud or mistake. In addition, the more general "catch all"
limitations period in Code of Civil Procedure section 343 is
four years. If the bill passes as drafted, there will be a six
year statute of limitations only for state employees overpaid
for leaves of absence for duty with the Guard. All other state
employees will be subject to the general three-year rule. Is
the equitable balance so different for members of the Guard that
they should be subjected to a statute of limitations double that
of other state employees?
Finally, the bill treats Guard members differently than members
of other military services. Inconsistently, members of military
services other than the Guard who take a leave of absence and
are overpaid are still subject to the three year statute.
ACCRUAL OF THE STATUTE OF LIMITATIONS:
If parallel interpretations would be made from the civil to the
administrative arena, the civil statute of limitations for fraud
or mistake, as set forth above, may be found in Code of Civil
Procedure section 338. It provides a three year statute of
limitations for civil actions based on fraud or mistake. The
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statue is interpreted to begin to run only after alleged fraud
or mistake has been discovered or in the exercise of reasonable
diligence should have been discovered. Thus in this case, if
the facts regarding overpayments were not known or within the
scope of reasonable diligence, the cause of action did not begin
to run and an extension of the statute of limitations might not
be necessary.
REGISTERED SUPPORT / OPPOSITION :
Support
None
Opposition
None.
Analysis Prepared by : John Spangler / V. A. / (916) 319-3550