SB 1504

Bill Subjects

Abstract

(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 California 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. However, if an appropriation is made for the payment of a claim, interest would commence to accrue on the amount appropriated for the payment of the claim 180 days after the effective date of the act by which the appropriation is made. 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 commence to accrue on the amount of a judgment or settlement for the payment of money against the state 180 days from the date of the final judgment or settlement. (4) This bill would declare that it is to take effect immediately as an urgency statute.