BILL NUMBER: SB 1504	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Kehoe
   (Principal coauthor: Assembly Member Fuentes)

                        FEBRUARY 24, 2012

   An act to amend Sections 906, 965, and 965.5 of the Government
Code, relating to governmental liability.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1504, as introduced, Kehoe. Claims and judgments against the
state: interest.
   (1) Existing law bars a suit for money or damages against a public
entity on a cause of action for which a claim is required to be
presented, until a written claim has been presented to the public
entity and acted upon by the Victim Compensation and Government
Claims Board, the governing body of a local public entity, the
Judicial Council, or the Trustees of the California State University,
as applicable, or has been deemed to have been rejected, except as
specified. Existing law provides that no interest is payable on the
amount allowed by the public entity on the claim if payment of the
claim is subject to approval of an appropriation by the Legislature.
However, if the appropriation is made, interest on the amount
appropriated for the payment of the claim commences to accrue 30 days
after the effective date of the law by which the appropriation is
enacted. Interest on the amount allowed on the claim, if payment of
the claim is not subject to approval of an appropriation by the
Legislature, commences to accrue 30 days after the claimant accepts
in writing the amount allowed on the claim in settlement of the
entire claim. Existing law provides that interest accrues at the rate
provided for judgments until paid. Existing law permits these terms
to be varied upon written agreement of the public entity and the
claimant.
   This bill, instead, would provide that no interest is payable on
the amount allowed by the California Victim Compensation and
Government Claims Board on the claim if payment of the claim is
subject to approval of an appropriation by the Legislature. If the
Legislature fails to approve an appropriation for payment of a claim,
interest would accrue on the amount allowed by the board on the
claim at no more than the average Pooled Money Investment Account
rate for the previous fiscal year, but no more than 5% per annum,
commencing one year from the date the claim was submitted by the
board to the Legislature. The bill would delete the above-described
provisions requiring the accrual of interest on the amount
appropriated for the payment of a claim and on a claim that is not
subject to approval of an appropriation by the Legislature, setting
the rate of interest, and authorizing these terms to be varied by
written agreement.
   (2) Under existing law, 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 is required to 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.
   This bill would require that report to be made to the chairperson
of either the Senate Committee on Appropriations or the Assembly
Committee on Appropriations. The bill would make other conforming
changes.
   (3) The California Constitution requires the Legislature to set
the rate of interest upon a judgment rendered in any court of this
state at not more than 10% per annum. Existing law provides that
interest accrues at the rate of 10% per annum on the principal amount
of a money judgment remaining unsatisfied. Under existing law, this
provision does not apply to a judgment for the payment of money
against the state. In the absence of the setting of such a rate by
the Legislature, the California Constitution provides that the rate
of interest on any judgment rendered in a court is 7% per annum.
   This bill would provide that interest shall accrue on the amount
of a judgment or settlement for the payment of money against the
state at no more than the average Pooled Money Investment Account
rate for the previous fiscal year, but no more than 5% per annum,
commencing one year from the date of the final judgment or
settlement.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 906 of the Government Code is amended to read:
   906.  (a) As used in this section, "amount allowed on the claim"
means the amount allowed by the  public entity  
California Victim Compensation and Government Claims Board  on
a claim allowed  ,  in whole or in part  ,  or the
amount offered by the  public entity   board
 to settle or compromise a claim. 
   (b) Except as provided in subdivision (c):  
   (1) No 
    (b)     No  interest is payable on the
amount allowed on the claim if payment of the claim is subject to
approval of an appropriation by the Legislature  ; but, if an
appropriation is made for the payment of a claim described in this
paragraph, interest on the amount appropriated for the payment of the
claim commences to accrue 30 days after the effective date of the
law by which the appropriation is enacted   . If the
Legislature fails to approve an appropriation for payment of a claim,
interest shall accrue on the amount allowed on the claim at no more
than the average Pooled Money Investment Account rate for the
previous fiscal year, but no more than 5 percent per annum,
commencing one year from the date the claim was submitted by the
board to the Legislature  . 
   (2) Interest on the amount allowed on the claim, other than a
claim described in paragraph (1), commences to accrue 30 days after
the claimant accepts in writing the amount allowed on the claim in
settlement of the entire claim.  
   (3) Interest on the amount allowed on the claim accrues at the
rate provided for judgments until paid.  
   (c) The public entity and the claimant may agree in writing to
vary the terms prescribed by subdivision (b), including but not
limited to, any one or more of the following:  
   (1) An agreement that no interest will be payable on the amount
allowed on the claim.  
   (2) An agreement that interest on the amount allowed on the claim
will commence to accrue at a time other than the time specified in
paragraph (1) or (2) of subdivision (b).  
   (3) An agreement that interest on the amount allowed on the claim
will accrue at a different rate than is specified in paragraph (3) of
subdivision (b).  
   (d) The public entity may allow a claim in whole or in part, or
may offer to settle or compromise a claim, upon the condition that
the claimant agree in writing to a provision that varies the terms
prescribed in subdivision (b). The acceptance by the claimant in
writing of the amount allowed on the claim in settlement of the
entire claim subject to such condition creates a written agreement
that satisfies the requirements of subdivision (c). 

   (e) Nothing in this section limits the rights of a claimant to
interest on a judgment obtained against a public entity. 
  SEC. 2.  Section 965 of the Government Code is amended to read:
   965.  (a) Upon the allowance by the California Victim Compensation
and Government Claims 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   that
 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. If there is no sufficient appropriation for the payment
available, the board shall report to the Legislature in accordance
with Section 912.8. Claims arising out of the activities of the State
Department of Transportation may be paid if either the Director of
Transportation or the Director of Finance certifies that a sufficient
appropriation for the payment of the claim exists.
   (b) Notwithstanding subdivision (a), 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   Appropriations  ,
who shall cause to be introduced legislation appropriating funds for
the payment of the claims, settlements, or judgments.
   (c) Notwithstanding subdivision (a) or (b), claims, settlements,
or judgments arising out of the activities of a judicial branch
entity, as defined by Sections 900.3 and 940.3, or a judge thereof
may be paid if the Judicial Council authorizes payment and the
Administrative Director of the Courts certifies that sufficient funds
for that payment exist from funds allocated to settlement,
adjustment, and compromise of actions and claims. If sufficient funds
for payment of settlements or judgments do not exist, the
Administrative Director of the Courts shall report the settlements
and judgments to the Chairperson of either the Senate Committee on
Appropriations or the Assembly Committee on  Budget 
 Appropriations  , who shall cause to be introduced
legislation appropriating funds for the payment of the settlements or
judgments. If sufficient funds for payment of claims do not exist,
the Administrative Director of the Courts shall report the claims to
the California Victim Compensation and Government Claims Board, which
shall have 90 days to object to payment. The Administrative Director
of the Courts shall confer with the chairperson of the California
Victim Compensation and Government Claims Board regarding any
objection received during the 90-day period. If the California Victim
Compensation and Government Claims Board withdraws the objection, or
if no objection was received, the Administrative Director of the
Courts shall report the claims to the Chairperson of either the
Senate Committee on Appropriations or the Assembly Committee on
 the Budget   Appropriations  , who shall
cause to be introduced legislation appropriating funds for the
payment of the claims. The Judicial Council may authorize any
committee of the Judicial Council or any employee of the
Administrative Office of the Courts to perform the functions of the
Judicial Council under this section. The Administrative Director of
the Courts may designate an executive staff member of the
Administrative Office of the Courts to perform the functions of the
Administrative Director of the Courts under this section.
  SEC. 3.  Section 965.5 of the Government Code is amended to read:
   965.5.  (a) A judgment for the payment of money against the state
or a state agency is enforceable until 10 years after the time the
judgment becomes final or, if the judgment is payable in
installments, until 10 years after the final installment becomes due.

   (b) A judgment for the payment of money against the state or a
state agency is not enforceable under Title 9 (commencing with
Section 680.010) of Part 2 of the Code of Civil Procedure  ,
 but is enforceable under this chapter. 
   (c) Interest shall accrue on the amount of a judgment or
settlement for the payment of money against the state at no more than
the average Pooled Money Investment Account rate for the previous
fiscal year, but no more than 5 percent per annum, commencing one
year from the date of the final judgment or settlement. This
subdivision does not apply to any claim approved by the California
Victim Compensation and Government Claims Board.