BILL ANALYSIS �
SB 806
Page A
SENATE THIRD READING
SB 806 ( Veterans Affairs Committee)
As Amended August 15, 2011
2/3 vote. Urgency
SENATE VOTE :37-0
PUBLIC EMPLOYMENT 5-0 VETERANS AFFAIRS
9-0
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|Ayes:|Furutani, Mansoor, Allen, |Ayes:|Cook, Pan, Atkins, Block, |
| |Ma, Wieckowski | |Nielsen, |
| | | |V. Manuel P�rez, |
| | | |Williams, Yamada, Beth |
| | | |Gaines |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Hall, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : This bill extends the statute of limitations for
salary overpayments to state employees on leave for duty with
the National Guard. Specifically:
1)Determines, if the state finds, 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 (Guard).
2)States that if 1) above is determined then administrative
action to recover salary overpayment must be initiated within
six years from the date of overpayment, notwithstanding
SB 806
Page B
existing law.
3)Contains an urgency clause.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable administrative costs, particularly
to the State Controller's Office. Costs will be offset to an
unknown degree by recovering overpayments.
COMMENTS:
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.
This bill 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? This bill proposes 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 have 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. Service members
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 mistakenly overpaid paid to them.
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<1> CA Code of Civil Procedure Section 312, Note 4.
SB 806
Page C
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
statute 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.
Analysis Prepared by : John Spangler / V. A. / (916) 319-3550
FN:
0002502