text:
(a) A taxpayer who has a tax liability, including any liability for periodic estimated tax payments, with respect to personal income taxes or bank and corporation taxes, and who is a payee named in a registered warrant as defined in Section 17221 which is received in payment of an obligation of the State of California to the taxpayer, may pay any tax liability specified above, in whole or in part, by a check in an amount not to exceed the amount of the registered warrant, exclusive of any interest thereon. That check shall not be presented for payment by the state or paid by the bank on which it is drawn until the registered warrant payable to the taxpayer is payable upon its presentation to the Treasurer. The provisions of this section shall be applicable only if the taxpayer’s check in payment of a tax liability pursuant to this section is accompanied by a copy of the registered warrant, as specified above, which clearly discloses the name of the payee, the amount to be paid, the number of the warrant, and the completed and signed legend as provided for in subdivision (d).

(b) Any taxpayer submitting a check for the payment of taxes pursuant to subdivision (a) shall be precluded from receiving interest on his or her registered warrant from the date the check for the payment of taxes is submitted.

(c) In the event that a taxpayer who submits a check for the payment of taxes pursuant to subdivision (a) presents his or her registered warrant to a bank or other institution for payment, the taxpayer shall make a declaration upon presentment that he or she is ineligible pursuant to subdivision (b) to receive interest from the date he or she submitted the check.

(d) To facilitate the taxpayer in making the declaration required by subdivision (c), all registered warrants issued shall bear a legend on the reverse side in substantially the following form:“In endorsing this warrant, I declare that I have ◻ or have not ◻ (check one) submitted a check on (date) for the payment of tax liability in an amount not to exceed the amount of this warrant. I further declare that by submitting that check, I am ineligible for the receipt of interest on this warrant after the above date.”

history: (History: Added by Stats. 1983, Ch. 1211, Sec. 3.)

article: 4. Payment


kind: section

code: GOV

text: In the event a tax liability is paid, in whole or in part, with a registered warrant which is redeemable at the time the tax liability is paid, interest as specified in this article, shall be credited to the taxpayer’s account.

history: (History: Added by Stats. 1983, Ch. 1211, Sec. 4.)

division: 4. FISCAL AFFAIRS

chapter: 2. Registered Warrants

article: 4. Payment

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 2. Registered Warrants > 4. Payment


text:
(a) If a registered warrant, as defined in Section 17221, is issued for payment of any principal or interest due and payable on a state bond that is held in book entry form by a securities settlement system, the beneficial owner of the state bond may offset the portion of the principal amount of the registered warrant (exclusive of interest thereon) that is attributable to that beneficial owner’s beneficial interest in the state bond against an existing tax liability, as defined in subdivision (a) of Section 17280.1, of that beneficial owner, in accordance with Sections 17280.1 and 17280.2, or otherwise in accordance with procedures established by the Controller, notwithstanding that the securities settlement system, or its nominee, is the registered owner of the state bond or the named payee of the registered warrant. The amount of that beneficial owner’s tax liability that may be offset pursuant to this section shall not exceed the portion of the principal amount of the registered warrant, exclusive of interest thereon, that is attributable to the taxpayer’s beneficial ownership of the state bond. Any beneficial owner who exercises the offset right set forth in this section in payment of an existing tax liability shall not be entitled to receive payment of any interest accruing on the portion of the registered warrant attributable to that beneficial owner’s beneficial interest in the state bond after the date on which the beneficial owner exercises the offset right in accordance with the applicable procedures, and the beneficial owner shall be required to promptly repay to the state any interest accruing on the registered warrant after that date that may be paid to or ultimately received by the beneficial owner, if any. The preceding sentence shall apply even if the portion of the principal amount of the registered warrant that is attributable to the beneficial owner’s ownership interest in the state bond is larger than the amount of the tax liability offset by the beneficial owner with that registered warrant. Upon exercising the right of offset pursuant to this subdivision, the beneficial owner shall not be permitted to sell, transfer, or assign his or her beneficial ownership of the applicable state bond until the applicable registered warrant has been redeemed by the state and the beneficial owner has repaid any interest received on his or her portion of that registered warrant attributable to the period after that beneficial owner’s exercise of the right of offset as provided in this subdivision. For purposes of this subdivision and subdivision (b), “state bond” means any general obligation bond or revenue anticipation note issued by the state.

(b) No state entity shall take any action that would materially adversely impair, limit, or restrict the rights of a beneficial owner of a state bond, as set forth in this section, Section 17280.1, or Section 17280.2, or any successor provisions, as those provisions were in effect when the person or party became a beneficial owner of the state bond, until the state bond is fully paid and discharged.

history: (History: Amended by Stats. 2012, Ch. 162, Sec. 63. (SB 1171) Effective January 1, 2013.)

title: 2. GOVERNMENT OF THE STATE OF CALIFORNIA

article: 4. Payment


text: It is the intent of the Legislature, in enacting this article, to provide assurances to the persons who invest in the state’s registered reimbursement warrants that funds will be set aside in the Warrant Payment Fund and will be used to retire the registered reimbursement warrants at maturity.

history: (History: Added by Stats. 1994, Ch. 136, Sec. 2. Effective July 5, 1994. Repealed on or after July 1, 1996, as prescribed by Section 17296.5.)

article: 6. Warrant Payment Fund

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 2. Registered Warrants > 6. Warrant Payment Fund


text:
(a) The Warrant Payment Fund is hereby created in the State Treasury for the purpose of setting aside unapplied moneys in the General Fund for the payment and redemption of registered reimbursement warrants issued during the 1994–95 fiscal year and maturing in the 1995–96 fiscal year. The Warrant Payment Fund shall consist of all funds deposited therein pursuant to this article. Except as provided in Section 17296.4, the moneys in the Warrant Payment Fund shall only be available for transfer to the General Fund to redeem registered reimbursement warrants.

(b) Notwithstanding Section 13340, the Warrant Payment Fund is continuously appropriated, without regard to fiscal years, for the purposes specified in this article.

article: 6. Warrant Payment Fund


text: The Controller shall transfer from unapplied moneys in the General Fund to the Warrant Payment Fund the total amount of four billion dollars ($4,000,000,000) plus interest necessary to redeem the warrants identified in subdivision (a) of Section 17296.1, to be transferred in four equal installments on or before each of the following dates: September 30, 1995, November 30, 1995, January 31, 1996, and April 24, 1996.

article: 6. Warrant Payment Fund


text: The Controller shall transfer funds from the Warrant Payment Fund to the General Fund to pay and redeem registered reimbursement warrants at maturity.

article: 6. Warrant Payment Fund


text: Moneys in the Warrant Payment Fund shall be available for transfer to the General Fund pursuant to Section 16310.

article: 6. Warrant Payment Fund


text: Unless registered reimbursement warrants remain outstanding, this article shall be in effect only until July 1, 1996, and as of that date is repealed. If registered reimbursement warrants remain outstanding July 1, 1996, this article shall continue in effect until the warrants are paid. Any balance in the Warrant Payment Fund as of the date of repeal of this article shall be transferred to the General Fund.

history: (History: Added by Stats. 1994, Ch. 136, Sec. 2. Effective July 5, 1994. Repealed on or after July 1, 1996, by its own provisions. Note: Repeal affects Article 6, commencing with Section 17296.)

article: 6. Warrant Payment Fund


text: Whenever the Controller determines that moneys in the General Fund are, or are expected to be, insufficient for the payment of all appropriations by the Legislature which are required to be paid in the then current fiscal year out of the General Fund, the Controller, based upon his or her estimate of the probable income to the General Fund during the then current fiscal year and the probable dates of receipt thereof, may draw a demand or demands against appropriations made from the General Fund to be paid in the then current fiscal year prior to the receipt of the income, and deliver the demand or demands to the Treasurer. The Treasurer shall register the demand or demands for nonpayment and may issue notes by resolution pursuant to Section 17302.

history: (History: Amended by Stats. 1991, Ch. 185, Sec. 1.)

part: 5. STATE OF CALIFORNIA NOTES

article: 6. Warrant Payment Fund

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 2. Registered Warrants > 6. Warrant Payment Fund > 5. STATE OF CALIFORNIA NOTES


text: Notes authorized to be issued may be sold by the Treasurer from time to time on a negotiated or a competitive bid basis as the Treasurer shall deem advisable. The Treasurer shall pay the notes and the interest thereon from moneys in the General Fund.

history: (History: Amended by Stats. 1984, Ch. 1648, Sec. 3. Effective September 30, 1984.)

article: 6. Warrant Payment Fund


text:
Notes shall be issued pursuant to this part only to raise funds in an amount sufficient to satisfy the Controller’s registered demand or demands. Proceeds of notes may also be used for the payments described in Section 17311 to the extent that those payments are not included within the appropriations comprising the demand or demands. The principal amount of the issuance of notes shall equal the amount of the demand or the portion of the demand that is satisfied by the issuance. The issuance of any notes pursuant to this part shall be authorized by a resolution adopted by the Treasurer with the approval of the Controller and the Director of Finance.

(a) Any note (1) may be negotiable, (2) may be payable to order or to bearer, (3) may be in any denomination, (4) shall be payable not later than 120 days after the end of the fiscal year in which the note has been issued and shall not be renewable beyond that date, (5) may bear fixed or variable interest at a rate or rates to be determined as provided by the resolution and payable as provided therein, (6) may be payable on a fixed date or upon demand of the holder of the note, (7) may be made subject to prepayment or redemption at the option of the state or at the option of the holder, and (8) may have a term not exceeding 12 months.

(b) In lieu of issuing notes pursuant to subdivision (a), the resolution may provide for the issuance of notes in the form of commercial paper. This commercial paper may be issued and renewed from time to time, in amounts, subject to the requirements of this subdivision, as the Treasurer shall determine, from the date of initial issuance until the final maturity date, which shall not be more than 12 months, and shall occur not more than 120 days after the end of the fiscal year in which the commercial paper was first issued, and shall not be renewed beyond that date. The maximum principal amount of commercial paper outstanding at any one time shall be stated in the resolution, and shall not be greater than the amount of the Controller’s demand. The resolution may also provide that the commercial paper (1) may be negotiable, (2) may be payable to order or to bearer, (3) may be in any denomination, (4) may bear fixed or variable interest at a rate or rates to be determined as provided in the resolution and payable as provided therein, (5) may be payable on a fixed date or upon demand of the holder of the commercial paper, (6) may be made subject to prepayment or redemption at the option of the state or of the holder, and (7) may contain any other provision necessary or appropriate to carry out the program of commercial paper.

history: (History: Amended by Stats. 2009, 3rd Ex. Sess., Ch. 9, Sec. 9. Effective February 20, 2009.)

article: 6. Warrant Payment Fund


text: Upon receipt of the purchase price of the notes, the Treasurer shall notify the Controller that funds for the payment of all or part of the registered demand or demands are in the State Treasury and available for the payment of claims represented by the registered demand or demands. The Controller may thereupon proceed to draw warrants against appropriations lawfully made by the Legislature to be paid in the fiscal year and represented by the registered demand or demands. Upon the payment in full of the notes representing the registered demand or demands, or the portion of the demand or demands as set forth in Section 17302, the appropriate portion of the registered demand or demands shall be canceled.

history: (History: Amended by Stats. 2009, 3rd Ex. Sess., Ch. 9, Sec. 10. Effective February 20, 2009.)

article: 6. Warrant Payment Fund


text: Any revenues in the General Fund are available for the payment of all notes and the interest thereon until the notes and the interest thereon shall be fully paid and discharged. The notes, together with the interest thereon, shall be payable exclusively from moneys in the General Fund , but not excepting recourse to internal borrowing from other funds in the event insufficient moneys are available from the General Fund.

history: (History: Amended by Stats. 1991, Ch. 185, Sec. 3.)

article: 6. Warrant Payment Fund


text:
All notes issued pursuant to this part by the state are legal investments for any of the following:

(a) Trust funds.

(b) Funds of insurers.

(c) Funds of savings and loan associations.

(d) Funds of banks.

(e) Funds of state agencies, cities, counties, cities and counties or other public agencies or corporations.

history: (History: Added by Stats. 1983, 1st Ex. Sess., Ch. 10, Sec. 5. Effective February 17, 1983.)

article: 6. Warrant Payment Fund


text: Notes issued under this part are acceptable and may be used as security for the faithful performance of any public or private trust or obligation or for the performance of any act, including the use of notes by banks as security for deposits of funds of the state and its agencies, or of any city, county, city and county, or other public agency or corporation.

article: 6. Warrant Payment Fund


text: Any state or local agency that is authorized to invest funds in its treasury in securities which are legal investments for savings banks may invest the funds in notes of the state issued under this part.

article: 6. Warrant Payment Fund


text: Whenever the Treasurer deems that it will increase the salability of the notes to obtain, prior to or after sale, a legal opinion as to the validity of the notes from attorneys other than the Attorney General, the Treasurer may obtain a legal opinion elsewhere.

article: 6. Warrant Payment Fund


text:
(a) Notwithstanding Section 13340, there is hereby appropriated from the General Fund any unapplied money, as defined in subdivision (a) of Section 17220, in any amounts necessary to pay the interest on, and the principal of, any notes issued pursuant to this part, as the interest on and the principal of the notes become due and payable.

(b) When any payment on a note or any payment to the provider of a credit enhancement or liquidity facility for a note is due, that payment shall be made subject only to prior payment of the following:

(1) Payments required by law to be paid before the note or provider payment.

(2) Payments that by the terms of the note or credit enhancement or liquidity agreement are permitted to be paid before the note or provider payment.

history: (History: Amended by Stats. 2009, 3rd Ex. Sess., Ch. 9, Sec. 11. Effective February 20, 2009.)

article: 6. Warrant Payment Fund


text:
(a) There is hereby appropriated from the General Fund without regard to fiscal years two hundred fifty thousand dollars ($250,000), which shall be set aside in a special account entitled State Notes Expense Account, and shall be used to pay expenses incurred by the Treasurer, Controller, or the Department of Finance in providing for the preparation, sale, issuance, advertising, legal services, or any other act which, in the discretion of the Treasurer or the Department of Finance, is necessary to carry out the purposes of this part. This account shall operate as a revolving fund and whenever notes are sold, out of the first money realized from their sale, any remaining expenses shall be paid and then there shall be redeposited in the account any amounts that have been expended for the above purposes, which amounts may be used for the same purposes and repaid in the same manner whenever additional sales are made. Without limiting Section 17300, a demand drawn under Section 17300 may include the expenses described in this subdivision. In the alternative, all or a portion of the expenses described in this subdivision may be paid by causing the notes to bear interest at a rate that results in payment by the purchaser of the notes of a premium sufficient to pay these expenses.

(b) Any premium received upon the sale of an issuance of notes shall be applied to expenses described in subdivision (a) or shall be credited to the General Fund and applied to the payment of interest on notes.

history: (History: Amended by Stats. 2009, 3rd Ex. Sess., Ch. 9, Sec. 12. Effective February 20, 2009.)

article: 6. Warrant Payment Fund


text: It is the intent of the Legislature that this part shall, in all respects, fall within the procedures validated by, and meet the requirements for constitutionality set forth in, the California Supreme Court cases of Riley v. Johnson, (1933), 219 Cal. 513, Riley v. Johnson, (1936), 6 Cal. 2d 529, and Flournoy v. Priest, (1971), 5 Cal. 3d 350.

history: (History: Added by Stats. 1984, Ch. 268, Sec. 27.07. Effective June 29, 1984.)

article: 6. Warrant Payment Fund


text: The State Treasurer may promulgate regulations as to the redemption of state warrants and agency checks.

history: (History: Added by Stats. 1977, Ch. 622.)

chapter: 1. General

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 1. General


text: The State Treasurer may examine warrants and checks presented for redemption and refuse payment of any item and shall have a reasonable time to make such examination.


text: The presenting bank and the endorsers of a state warrant or check presented to the Treasurer for redemption are deemed to guarantee that all prior endorsements are genuine, whether or not an express guaranty is placed on the item. When the first endorsement has been made by one other than the payee personally, the presenting bank and the endorsers are deemed to guarantee to the Treasurer, in addition to other warranties, that the person who so endorsed had unqualified capacity and authority to endorse the item on behalf of the payee.


text: In any case in which the Treasurer redeems or gives credit for a warrant or check, he or she may revoke the payment or credit given by returning the warrant or check to the presenting financial institution if, upon further examination, the item is found to bear a forged, erroneous, or unauthorized endorsement or to contain any material defect or alteration. Upon this revocation, the Treasurer may deduct the amount of the item from any amount that is due or may become due to the presenting financial institution or to obtain a refund from the financial institution. This right is subject only to the requirements that the item in question be returned at the time of offset or collection and that no more than three years has elapsed since the time that the instrument was presented to the financial institution.

history: (History: Amended by Stats. 1997, Ch. 920, Sec. 8. Effective October 12, 1997.)


text: Upon notification from the State Treasurer that a forged or erroneously endorsed state warrant has been charged back to the presenting financial institution, the State Controller may process a claim schedule directing payment to the original payee.

history: (History: Amended by Stats. 1997, Ch. 920, Sec. 9. Effective October 12, 1997.)


text:
The Legislature finds and declares that the existing system for reimbursing local agencies and school districts for the costs of state-mandated local programs has not provided for the effective determination of the state’s responsibilities under Section 6 of Article XIIIB of the California Constitution. The Legislature finds and declares that the failure of the existing process to adequately and consistently resolve the complex legal questions involved in the determination of state-mandated costs has led to an increasing reliance by local agencies and school districts on the judiciary and, therefore, in order to relieve unnecessary congestion of the judicial system, it is necessary to create a mechanism which is capable of rendering sound quasi-judicial decisions and providing an effective means of resolving disputes over the existence of state-mandated local programs.

It is the intent of the Legislature in enacting this part to provide for the implementation of Section 6 of Article XIIIB of the California Constitution. Further, the Legislature intends that the Commission on State Mandates, as a quasi-judicial body, will act in a deliberative manner in accordance with the requirements of Section 6 of Article XIIIB of the California Constitution.

history: (History: Amended by Stats. 2004, Ch. 890, Sec. 2. Effective January 1, 2005.)

chapter: 1. Legislative Intent

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 1. Legislative Intent


text: Unless the context otherwise requires, the definitions contained in this chapter govern the construction of this part. The definition of a word applies to any variants thereof and the singular tense of a word includes the plural.

history: (History: Added by Stats. 1984, Ch. 1459, Sec. 1.)

chapter: 2. General Provisions

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 2. General Provisions


text: “City” means any city whether general law or charter, except a city and county.


text: “Commission” means the Commission on State Mandates.


text: “Costs mandated by the federal government” means any increased costs incurred by a local agency or school district after January 1, 1973, in order to comply with the requirements of a federal statute or regulation. “Costs mandated by the federal government” includes costs resulting from enactment of a state law or regulation where failure to enact that law or regulation to meet specific federal program or service requirements imposed upon the state would result in substantial monetary penalties or loss of funds to public or private persons in the state whether the federal law was enacted before or after the enactment of the state law, regulation, or executive order. “Costs mandated by the federal government” does not include costs which are specifically reimbursed or funded by the federal or state government or programs or services which may be implemented at the option of the state, local agency, or school district.

history: (History: Amended by Stats. 2004, Ch. 890, Sec. 3. Effective January 1, 2005.)


text: “Costs mandated by the state” means any increased costs which a local agency or school district is required to incur after July 1, 1980, as a result of any statute enacted on or after January 1, 1975, or any executive order implementing any statute enacted on or after January 1, 1975, which mandates a new program or higher level of service of an existing program within the meaning of Section 6 of Article XIIIB of the California Constitution.


text: “County” means any chartered or general law county. “County” includes a city and county.


text:
“Executive order” means an order, plan, requirement, rule, or regulation issued by any of the following:

(a) The Governor.

(b) An officer or official serving at the pleasure of the Governor.

(c) An agency, department, board, or commission of state government.

history: (History: Amended by Stats. 2010, Ch. 288, Sec. 1. (SB 1169) Effective January 1, 2011.)


text: “Cost savings authorized by the state” means any decreased costs that a local agency or school district realizes as a result of any statute enacted or any executive order adopted that permits or requires the discontinuance of or a reduction in the level of service of an existing program that was mandated before January 1, 1975.

history: (History: Added by Stats. 2004, Ch. 890, Sec. 5. Effective January 1, 2005.)


text: “Local agency” means any city, county, special district, authority, or other political subdivision of the state.


text:
(a) “Reasonable reimbursement methodology” means a formula for reimbursing local agencies and school districts for costs mandated by the state, as defined in Section 17514.

(b) A reasonable reimbursement methodology shall be based on cost information from a representative sample of eligible claimants, information provided by associations of local agencies and school districts, or other projections of local costs.

(c) A reasonable reimbursement methodology shall consider the variation in costs among local agencies and school districts to implement the mandate in a cost-efficient manner.

(d) Whenever possible, a reasonable reimbursement methodology shall be based on general allocation formulas, uniform cost allowances, and other approximations of local costs mandated by the state, rather than detailed documentation of actual local costs. In cases when local agencies and school districts are projected to incur costs to implement a mandate over a period of more than one fiscal year, the determination of a reasonable reimbursement methodology may consider local costs and state reimbursements over a period of greater than one fiscal year, but not exceeding 10 years.

(e) A reasonable reimbursement methodology may be developed by any of the following:

(1) The Department of Finance.

(2) The Controller.

(3) An affected state agency.

(4) A claimant.

(5) An interested party.

(f) This section shall become operative on July 1, 2019.

history: (History: Repealed (in Sec. 144) and added by Stats. 2016, Ch. 31, Sec. 145. (SB 836) Effective June 27, 2016. Section operative July 1, 2019, by its own provisions.)


text: “School district” means any school district, community college district, or county superintendent of schools.


text:
“Special district” means any agency of the state that performs governmental or proprietary functions within limited boundaries. “Special district” includes a county service area, a maintenance district or area, an improvement district or improvement zone, or any other zone or area. “Special district” does not include a city, a county, a school district, or a community college district.

County free libraries established pursuant to Chapter 6 (commencing with Section 19100 of Part 11 of the Education Code, areas receiving county fire protection services pursuant to Section 25643 of the Government Code, and county road districts established pursuant to Chapter 7 (commencing with Section 1550) of Division 2 of the Streets and Highways Code shall be considered “special districts” for all purposes of this part.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 277. Effective January 1, 2007.)


text: “Test claim” means the first claim filed with the commission alleging that a particular statute or executive order imposes costs mandated by the state, and includes a claim filed pursuant to Section 17574.

history: (History: Amended by Stats. 2007, Ch. 329, Sec. 1.5. Effective January 1, 2008.)


text: “Legislatively determined mandate” means the provisions of a statute or executive order that the Legislature, pursuant to Article 1.5, has declared by statute to be a mandate for which reimbursement is required by Section 6 of Article XIIIB of the California Constitution.

history: (History: Added by Stats. 2007, Ch. 329, Sec. 2. Effective January 1, 2008.)


text:
(a) “Initial reimbursement claim” means a claim filed with the Controller by a local agency or school district for costs to be reimbursed for the fiscal years specified in the first claiming instructions issued by the Controller pursuant to subdivision (b) of Section 17558.

(b) “Annual reimbursement claim” means a claim for actual costs incurred in a prior fiscal year filed with the Controller by a local agency or school district for which appropriations are made to the Controller for this purpose.

(c) “Entitlement claim” means a claim filed by a local agency or school district with the Controller for the purpose of establishing or adjusting a base year entitlement. All entitlement claims are subject to Section 17616.

history: (History: Amended by Stats. 2008, 3rd Ex. Sess., Ch. 6, Sec. 2. Effective February 16, 2008.)


text: “Deflator” means the Implicit Price Deflator for the Costs of Goods and Services to Governmental Agencies, as determined by the Department of Finance.

history: (History: Added by Stats. 1985, Ch. 1534, Sec. 2. Effective October 2, 1985.)


text: “Base year entitlement” means that amount determined to be the average for the approved reimbursement claims of each local agency or school district for the three preceding fiscal years adjusted by the change in the deflator. A base year entitlement shall not include any nonrecurring or initial startup costs incurred by a local agency or school district in any of those three fiscal years. For those mandates which become operative on January 1 of any year, the amount of the “approved reimbursement claim” for the first of the three years may be computed by annualizing the amount claimed for the six-month period of January through June in that first year, excluding nonrecurring or startup costs.

history: (History: Added by Stats. 1985, Ch. 1534, Sec. 3. Effective October 2, 1985.)


text:
(a) There is hereby created the Commission on State Mandates, which shall consist of seven members as follows:

(1) The Controller.

(2) The Treasurer.

(3) The Director of Finance.

(4) The Director of the Office of Planning and Research.

(5) A public member with experience in public finance, appointed by the Governor and approved by the Senate.

(6) Two members from the following three categories appointed by the Governor and approved by the Senate, provided that no more than one member shall come from the same category:

(A) A city council member.

(B) A member of a county or city and county board of supervisors.

(C) A governing board member of a school district as defined in Section 17519.

(b) Each member appointed pursuant to paragraph (5) or (6) of subdivision (a) shall be subject to both of the following:

(1) The member shall serve for a term of four years subject to renewal.

(2) The member shall receive per diem of one hundred dollars ($100) for each day actually spent in the discharge of official duties and shall be reimbursed for any actual and necessary expenses incurred in connection with the performance of duties as a member of the commission.

history: (History: Amended by Stats. 1996, Ch. 154, Sec. 1. Effective January 1, 1997.)

chapter: 3. Commission on State Mandates

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 3. Commission on State Mandates


text:
(a) All meetings of the commission shall be open to the public, except that the commission may meet in executive session to consider the appointment or dismissal of officers or employees of the commission or to hear complaints or charges brought against a member, officer, or employee of the commission.

(b) The commission shall meet at least once every two months.

(c) The time and place of meetings may be set by resolution of the commission, by written petition of a majority of the members, or by written call of the chairperson. The chairperson may, for good cause, change the starting time or place, reschedule, or cancel any meeting.

history: (History: Amended by Stats. 2004, Ch. 890, Sec. 10. Effective January 1, 2005.)


text:
In carrying out its duties and responsibilities, the commission shall have the following powers:

(a) To examine any document, report, or data, including computer programs and data files, held by any local agency or school district.

(b) To meet at times and places as it may deem proper.

(c) As a body or, on the authorization of the commission, as a committee composed of one or more members, to hold hearings at any time and place it may deem proper.

(d) Upon a majority vote of the commission, to issue subpoenas to compel the attendance of witnesses and the production of books, records, papers, accounts, reports, and documents.

(e) To administer oaths.

(f) To contract with other agencies or individuals, public or private, as it deems necessary, to provide or prepare services, facilities, studies, and reports to the commission as will assist it in carrying out its duties and responsibilities.

(g) To adopt, promulgate, amend, and rescind rules and regulations, which shall not be subject to the review and approval of the Office of Administrative Law pursuant to the provisions of the Administrative Procedure Act provided for in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2.

(h) To do any and all other actions necessary or convenient to enable it fully and adequately to perform its duties and to exercise the powers expressly granted to it.


text: The members of the commission shall elect a chairperson and a vice chairperson of the commission.


text:
The commission may appoint as attorney to the commission an attorney at law of this state, who shall hold office at the pleasure of the commission. The attorney shall represent and appear for the commission in all actions and proceedings involving any question under this part or under any order or act of the commission.

The attorney shall advise the commission and each member of the commission, when so requested, in regard to all matters in connection with the powers and duties of the commission and the members thereof. The attorney shall generally perform all duties and services as attorney to the commission which the commission may require.


text: The commission shall appoint an executive director, who shall be exempt from civil service and shall hold office at the pleasure of the commission. The executive director shall be responsible for the executive and administrative duties of the commission and shall organize, coordinate, supervise, and direct the operations and affairs of the commission and expedite all matters within the jurisdiction of the commission. The executive director shall keep a full and true record of all proceedings of the commission, issue all necessary process, writs, warrants, and notices, and perform other duties as the commission prescribes.


text: The executive director may employ those officers, examiners, experts, statisticians, accountants, inspectors, clerks, and employees as the executive director deems necessary to carry out the provisions of this part or to perform the duties and exercise the powers conferred upon the commission by law.


text: A majority of the commissioners shall constitute a quorum for the transaction of any business, for the performance of any duty, or for the exercise of any power of the commission. Any investigation, inquiry, or hearing which the commission has power to undertake or to hold may be undertaken or held by or before any commissioner or commissioners designated for the purpose by the commission. The evidence in any investigation, inquiry, or hearing may be taken by the commissioner or commissioners to whom the investigation, inquiry, or hearing has been assigned or, in his or her or their behalf, by an examiner designated for that purpose. Every finding, opinion, and order made by the commissioner or commissioners so designated, pursuant to the investigation, inquiry, or hearing, when approved or confirmed by the commission and ordered filed in its office, shall be deemed to be the finding, opinion, and order of the commission.


text: Notwithstanding Section 11425.10, Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 does not apply to a hearing by the commission under this part.

history: (History: Added by Stats. 1995, Ch. 938, Sec. 55. Effective January 1, 1996. Operative July 1, 1997, by Sec. 98 of Ch. 938.)


text: Reimbursement of local agencies and school districts for costs mandated by the state shall be provided pursuant to this chapter.

article: 1. Commission Procedure

path: 2. GOVERNMENT OF THE STATE OF CALIFORNIA > 4. FISCAL AFFAIRS > 4. Identification and Payment of Costs Mandated by the State > 1. Commission Procedure


text:
(a) The commission, pursuant to the provisions of this chapter, shall hear and decide upon a claim by a local agency or school district that the local agency or school district is entitled to be reimbursed by the state for costs mandated by the state as required by Section 6 of Article XIIIB of the California Constitution.

(b) Except as provided in Sections 17573 and 17574, commission review of claims may be had pursuant to subdivision (a) only if the test claim is filed within the time limits specified in this section.

(c) Local agency and school district test claims shall be filed not later than 12 months following the effective date of a statute or executive order, or within 12 months of incurring increased costs as a result of a statute or executive order, whichever is later.

(d) The commission, pursuant to the provisions of this chapter, shall hear and decide upon a claim by a local agency or school district filed on or after January 1, 1985, that the Controller has incorrectly reduced payments to the local agency or school district pursuant to paragraph (2) of subdivision (d) of Section 17561.

history: (History: Amended by Stats. 2007, Ch. 329, Sec. 3. Effective January 1, 2008.)

chapter: 4. Identification and Payment of Costs Mandated by the State

article: 1. Commission Procedure


text: This chapter shall provide the sole and exclusive procedure by which a local agency or school district may claim reimbursement for costs mandated by the state as required by Section 6 of Article XIIIB of the California Constitution.

history: (History: Amended by Stats. 1986, Ch. 879, Sec. 3.)

article: 1. Commission Procedure


text:
(a) The commission shall adopt procedures for receiving claims filed pursuant to this article and Section 17574 and for providing a hearing on those claims. The procedures shall do all of the following:

(1) Provide for presentation of evidence by the claimant, the Department of Finance, and any other affected department or agency, and any other interested person.

(2) Ensure that a statewide cost estimate is adopted within 12 months after receipt of a test claim, when a determination is made by the commission that a mandate exists. This deadline may be extended for up to six months upon the request of either the claimant or the commission.

(3) Permit the hearing of a claim to be postponed at the request of the claimant, without prejudice, until the next scheduled hearing.

(b) All test claims shall be filed on a form prescribed by the commission and shall contain at least the following elements and documents:

(1) A written narrative that identifies the specific sections of statutes or executive orders and the effective date and register number of regulations alleged to contain a mandate and shall include all of the following:

(A) A detailed description of the new activities and costs that arise from the mandate.

(B) A detailed description of existing activities and costs that are modified by the mandate.

(C) The actual increased costs incurred by the claimant during the fiscal year for which the claim was filed to implement the alleged mandate.

(D) The actual or estimated annual costs that will be incurred by the claimant to implement the alleged mandate during the fiscal year immediately following the fiscal year for which the claim was filed.

(E) A statewide cost estimate of increased costs that all local agencies or school districts will incur to implement the alleged mandate during the fiscal year immediately following the fiscal year for which the claim was filed.

(F) Identification of all of the following:

(i) Dedicated state funds appropriated for this program.

(ii) Dedicated federal funds appropriated for this program.

(iii) Other nonlocal agency funds dedicated for this program.

(iv) The local agency’s general purpose funds for this program.

(v) Fee authority to offset the costs of this program.

(G) Identification of prior mandate determinations made by the Commission on State Mandates or a predecessor agency that may be related to the alleged mandate.

(H) Identification of a legislatively determined mandate pursuant to Section 17573 that is on the same statute or executive order.

(2) The written narrative shall be supported with declarations under penalty of perjury, based on the declarant’s personal knowledge, information, or belief, and signed by persons who are authorized and competent to do so, as follows:

(A) Declarations of actual or estimated increased costs that will be incurred by the claimant to implement the alleged mandate.

(B) Declarations identifying all local, state, or federal funds, or fee authority that may be used to offset the increased costs that will be incurred by the claimant to implement the alleged mandate, including direct and indirect costs.

(C) Declarations describing new activities performed to implement specified provisions of the new statute or executive order alleged to impose a reimbursable state-mandated program. Specific references shall be made to chapters, articles, sections, or page numbers alleged to impose a reimbursable state-mandated program.

(D) If applicable, declarations describing the period of reimbursement and payments received for full reimbursement of costs for a legislatively determined mandate pursuant to Section 17573, and the authority to file a test claim pursuant to paragraph (1) of subdivision (c) of Section 17574.

(3) (A) The written narrative shall be supported with copies of all of the following:

(i) The test claim statute that includes the bill number or executive order, alleged to impose or impact a mandate.

(ii) Relevant portions of state constitutional provisions, federal statutes, and executive orders that may impact the alleged mandate.

(iii) Administrative decisions and court decisions cited in the narrative.

(B) State mandate determinations made by the Commission on State Mandates or a predecessor agency and published court decisions on state mandate determinations made by the Commission on State Mandates are exempt from this requirement.

(4) A test claim shall be signed at the end of the document, under penalty of perjury by the claimant or its authorized representative, with the declaration that the test claim is true and complete to the best of the declarant’s personal knowledge, information, or belief. The date of signing, the declarant’s title, address, telephone number, facsimile machine telephone number, and electronic mail address shall be included.

(c) If a completed test claim is not received by the commission within 30 calendar days from the date that an incomplete test claim was returned by the commission, the original test claim filing date may be disallowed, and a new test claim may be accepted on the same statute or executive order.

(d) In addition, the commission shall determine whether an incorrect reduction claim is complete within 10 days after the date that the incorrect reduction claim is filed. If the commission determines that an incorrect reduction claim is not complete, the commission shall notify the local agency and school district that filed the claim stating the reasons that the claim is not complete. The local agency or school district shall have 30 days to complete the claim. The commission shall serve a copy of the complete incorrect reduction claim on the Controller. The Controller shall have no more than 90 days after the date the claim is delivered or mailed to file any rebuttal to an incorrect reduction claim. The failure of the Controller to file a rebuttal to an incorrect reduction claim shall not serve to delay the consideration of the claim by the commission.

history: (History: Amended by Stats. 2007, Ch. 329, Sec. 4. Effective January 1, 2008.)

article: 1. Commission Procedure


text: With the agreement of all parties to the claim, the commission may waive the application of any procedural requirement imposed by this chapter or pursuant to Section 17553. The authority granted by this section includes the consolidation of claims and the shortening of time periods.

history: (History: Amended by Stats. 2004, Ch. 890, Sec. 13. Effective January 1, 2005.)

article: 1. Commission Procedure


text:
(a) Not later than 30 days after hearing and deciding upon a test claim pursuant to subdivision (a) of Section 17551, and determining the amount to be subvened to local agencies and school districts for reimbursement pursuant to subdivision (a) of Section 17557, the commission shall notify the appropriate Senate and Assembly policy and fiscal committees, the Legislative Analyst, the Department of Finance, and the Controller of that decision.

(b) For purposes of this section, the “appropriate policy committee” means the policy committee that has jurisdiction over the subject matter of the statute, regulation, or executive order, and in which bills relating to that subject matter would have been heard.

history: (History: Amended by Stats. 2007, Ch. 179, Sec. 13. Effective August 24, 2007.)

article: 1. Commission Procedure


text:
The commission shall not find costs mandated by the state, as defined in Section 17514, in any claim submitted by a local agency or school district, if, after a hearing, the commission finds any one of the following:

(a) The claim is submitted by a local agency or school district that requests or previously requested legislative authority for that local agency or school district to implement the program specified in the statute, and that statute imposes costs upon that local agency or school district requesting the legislative authority. A resolution from the governing body or a letter from a delegated representative of the governing body of a local agency or school district that requests authorization for that local agency or school district to implement a given program shall constitute a request within the meaning of this subdivision. This subdivision applies regardless of whether the resolution from the governing body or a letter from a delegated representative of the governing body was adopted or sent prior to or after the date on which the statute or executive order was enacted or issued.

(b) The statute or executive order affirmed for the state a mandate that has been declared existing law or regulation by action of the courts. This subdivision applies regardless of whether the action of the courts occurred prior to or after the date on which the statute or executive order was enacted or issued.

(c) The statute or executive order imposes a requirement that is mandated by a federal law or regulation and results in costs mandated by the federal government, unless the statute or executive order mandates costs that exceed the mandate in that federal law or regulation. This subdivision applies regardless of whether the federal law or regulation was enacted or adopted prior to or after the date on which the state statute or executive order was enacted or issued.

(d) The local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the mandated program or increased level of service. This subdivision applies regardless of whether the authority to levy charges, fees, or assessments was enacted or adopted prior to or after the date on which the statute or executive order was enacted or issued.

(e) The statute, executive order, or an appropriation in a Budget Act or other bill provides for offsetting savings to local agencies or school districts that result in no net costs to the local agencies or school districts, or includes additional revenue that was specifically intended to fund the costs of the state mandate in an amount sufficient to fund the cost of the state mandate. This subdivision applies regardless of whether a statute, executive order, or appropriation in the Budget Act or other bill that either provides for offsetting savings that result in no net costs or provides for additional revenue specifically intended to fund the costs of the state mandate in an amount sufficient to fund the cost of the state mandate was enacted or adopted prior to or after the date on which the statute or executive order was enacted or issued.

(f) The statute or executive order imposes duties that are necessary to implement, or are expressly included in, a ballot measure approved by the voters in a statewide or local election. This subdivision applies regardless of whether the statute or executive order was enacted or adopted before or after the date on which the ballot measure was approved by the voters.

(g) The statute created a new crime or infraction, eliminated a crime or infraction, or changed the penalty for a crime or infraction, but only for that portion of the statute relating directly to the enforcement of the crime or infraction.

history: (History: Amended by Stats. 2010, Ch. 719, Sec. 31. (SB 856) Effective October 19, 2010.)

article: 1. Commission Procedure


text:
(a) If the commission determines there are costs mandated by the state pursuant to Section 17551, it shall determine the amount to be subvened to local agencies and school districts for reimbursement. In so doing it shall adopt parameters and guidelines for reimbursement of any claims relating to the statute or executive order. The successful test claimants shall submit proposed parameters and guidelines within 30 days of adoption of a statement of decision on a test claim. The proposed parameters and guidelines may include proposed reimbursable activities that are reasonably necessary for the performance of the state-mandated program. At the request of a successful test claimant, the commission may provide for one or more extensions of this 30-day period at any time prior to its adoption of the parameters and guidelines. If proposed parameters and guidelines are not submitted within the 30-day period and the commission has not granted an extension, then the commission shall notify the test claimant that the amount of reimbursement the test claimant is entitled to for the first 12 months of incurred costs will be reduced by 20 percent, unless the test claimant can demonstrate to the commission why an extension of the 30-day period is justified.

(b) In adopting parameters and guidelines, the commission may adopt a reasonable reimbursement methodology.

(c) The parameters and guidelines adopted by the commission shall specify the fiscal years for which local agencies and school districts shall be reimbursed for costs incurred. However, the commission shall not specify in the parameters and guidelines any fiscal year for which payment could be provided in the annual Budget Act.

(d) (1) A local agency, school district, or the state may file a written request with the commission to amend the parameters or guidelines. The commission may, after public notice and hearing, amend the parameters and guidelines. A parameters and guidelines amendment submitted within 90 days of the claiming deadline for initial claims, as specified in the claiming instructions pursuant to Section 17561, shall apply to all years eligible for reimbursement as defined in the original parameters and guidelines. A parameters and guidelines amendment filed more than 90 days after the claiming deadline for initial claims, as specified in the claiming instructions pursuant to Section 17561, and on or before the claiming deadline following a fiscal year, shall establish reimbursement eligibility for that fiscal year.

(2) For purposes of this subdivision, the request to amend parameters and guidelines may be filed to make any of the following changes to parameters and guidelines, consistent with the statement of decision:

(A) Delete any reimbursable activity that has been repealed by statute or executive order after the adoption of the original or last amended parameters and guidelines.

(B) Update offsetting revenues and offsetting savings that apply to the mandated program and do not require a new legal finding that there are no costs mandated by the state pursuant to subdivision (e) of Section 17556.

(C) Include a reasonable reimbursement methodology for all or some of the reimbursable activities.

(D) Clarify what constitutes reimbursable activities.

(E) Add new reimbursable activities that are reasonably necessary for the performance of the state-mandated program.

(F) Define what activities are not reimbursable.

(G) Consolidate the parameters and guidelines for two or more programs.

(H) Amend the boilerplate language. For purposes of this section, “boilerplate language” means the language in the parameters and guidelines that is not unique to the state-mandated program that is the subject of the parameters and guidelines. Any amendment that does not increase or decrease reimbursable costs shall limit the eligible filing period commencing with the fiscal year in which the amended parameters and guidelines were adopted.

(e) A test claim shall be submitted on or before June 30 following a fiscal year in order to establish eligibility for reimbursement for that fiscal year. The claimant may thereafter amend the test claim at any time, but before the test claim is set for a hearing, without affecting the original filing date as long as the amendment substantially relates to the original test claim.

(f) In adopting parameters and guidelines, the commission shall consult with the Department of Finance, the affected state agency, the Controller, the fiscal and policy committees of the Assembly and Senate, the Legislative Analyst, and the claimants to consider a reasonable reimbursement methodology that balances accuracy with simplicity.

history: (History: Amended by Stats. 2011, Ch. 144, Sec. 1. (SB 112) Effective January 1, 2012.)

article: 1. Commission Procedure


text:
(a) Notwithstanding any other provision of this part, within 30 days of the commission’s adoption of a statement of decision on a test claim, the test claimant and the Department of Finance may notify the executive director of the commission in writing of their intent to follow the process described in this section to develop a reasonable reimbursement methodology and statewide estimate of costs for the initial claiming period and budget year for reimbursement of costs mandated by the state in accordance with the statement of decision. The letter of intent shall include the date on which the test claimant and the Department of Finance will submit a plan to ensure that costs from a representative sample of eligible local agency or school district claimants are considered in the development of a reasonable reimbursement methodology.

(b) This plan shall also include all of the following information:

(1) The date on which the test claimant and Department of Finance will provide to the executive director an informational update regarding their progress in developing the reasonable reimbursement methodology.

(2) The date on which the test claimant and Department of Finance will submit to the executive director the draft reasonable reimbursement methodology and proposed statewide estimate of costs for the initial claiming period and budget year. This date shall be no later than 180 days after the date the letter of intent is sent by the test claimant and Department of Finance to the executive director.

(c) At the request of the test claimant and Department of Finance, the executive director may provide for up to four extensions of this 180-day period.

(d) The test claimant or Department of Finance may notify the executive director at any time that the claimant or Department of Finance no longer intends to develop a reasonable reimbursement methodology pursuant to this section. In this case, paragraph (2) of subdivision (a) of Section 17553 and Section 17557 shall apply to the test claim. Upon receipt of this notification, the executive director shall notify the test claimant of the duty to submit proposed parameters and guidelines within 30 days under subdivision (a) of Section 17557.

history: (History: Added by Stats. 2007, Ch. 329, Sec. 5. Effective January 1, 2008.)

article: 1. Commission Procedure


text:
(a) A reasonable reimbursement methodology developed pursuant to Section 17557.1 or a joint request for early termination of a reasonable reimbursement methodology shall have broad support from a wide range of local agencies or school districts. The test claimant and Department of Finance may demonstrate broad support from a wide range of local agencies or school districts in different ways, including, but not limited to, obtaining endorsement by one or more statewide associations of local agencies or school districts and securing letters of approval from local agencies or school districts.

(b) No later than 60 days before a commission hearing, the test claimant and Department of Finance shall submit to the commission a joint proposal that shall include all of the following:

(1) The draft reasonable reimbursement methodology.

(2) The proposed statewide estimate of costs for the initial claiming period and budget year.

(3) A description of the steps the test claimant and the Department of Finance undertook to determine the level of support by local agencies or school districts for the draft reasonable reimbursement methodology.

(4) An agreement that the reasonable reimbursement methodology developed and approved under this section shall be in effect for a period of five years unless a different term is approved by the commission, or upon submission to the commission of a letter indicating the Department of Finance and test claimant’s joint interest in early termination of the reasonable reimbursement methodology.

(5) An agreement that, at the conclusion of the period established in paragraph (4), the Department of Finance and the test claimant will consider jointly whether amendments to the methodology are necessary.

(c) The commission shall approve the draft reasonable reimbursement methodology if review of the information submitted pursuant to Section 17557.1 and subdivision (b) of this section demonstrates that the draft reasonable reimbursement methodology and statewide estimate of costs for the initial claiming period and budget year have been developed in accordance with Section 17557.1 and meet the requirements of subdivision (a). The commission thereafter shall adopt the proposed statewide estimate of costs for the initial claiming period and budget year. Statewide cost estimates adopted under this section shall be included in the report to the Legislature required under Section 17600 and shall be reported by the commission to the appropriate Senate and Assembly policy and fiscal committees, the Legislative Analyst, and the Department of Finance not later than 30 days after adoption.

(d) Unless amendments are proposed pursuant to this subdivision, the reasonable reimbursement methodology approved by the commission pursuant to this section shall expire after either five years, any other term approved by the commission, or upon submission to the commission of a letter indicating the Department of Finance’s and test claimant’s joint interest in early termination of the reasonable reimbursement methodology.

(e) The commission shall approve a joint request for early termination of a reasonable reimbursement methodology if the request meets the requirements of subdivision (a). If the commission approves a joint request for early termination, the commission shall notify the test claimant of the duty to submit proposed parameters and guidelines to the commission pursuant to subdivision (a) of Section 17557.

(f) At least one year before the expiration of a reasonable reimbursement methodology, the commission shall notify the Department of Finance and the test claimant that they may do one of the following:

(1) Jointly propose amendments to the reasonable reimbursement methodology by submitting the information described in paragraphs (1), (3), and (4) of subdivision (b), and providing an estimate of the mandate’s annual cost for the subsequent budget year.

(2) Jointly propose that the reasonable reimbursement methodology remain in effect.

(3) Allow the reasonable reimbursement methodology to expire and notify the commission that the test claimant will submit proposed parameters and guidelines to the commission pursuant to subdivision (a) of Section 17557 to replace the reasonable reimbursement methodology.

(g) The commission shall either approve the continuation of the reasonable reimbursement methodology or approve the jointly proposed amendments to the reasonable reimbursement methodology if the information submitted in accordance with paragraph (1) of subdivision (d) demonstrates that the proposed amendments were developed in accordance with Section 17557.1 and meet the requirements of subdivision (a) of this section.

history: (History: Added by Stats. 2007, Ch. 329, Sec. 6. Effective January 1, 2008.)

article: 1. Commission Procedure


text:
(a) The commission shall submit the adopted parameters and guidelines or a reasonable reimbursement methodology approved pursuant to Section 17557.2 to the Controller. As used in this chapter, a “reasonable reimbursement methodology” approved pursuant to Section 17557.2 includes all amendments to the reasonable reimbursement methodology. When the Legislature declares a legislatively determined mandate in accordance with Section 17573 in which claiming instructions are necessary, the Department of Finance shall notify the Controller.

(b) Not later than 90 days after receiving the adopted parameters and guidelines, a reasonable reimbursement methodology from the commission, or notification from the Department of Finance, the Controller shall issue claiming instructions for each mandate that requires state reimbursement, to assist local agencies and school districts in claiming costs to be reimbursed. In preparing claiming instructions, the Controller shall request assistance from the Department of Finance and may request the assistance of other state agencies. The claiming instructions shall be derived from the test claim decision and the adopted parameters and guidelines, reasonable reimbursement methodology, or statute declaring a legislatively determined mandate.

(c) The Controller shall, within 90 days after receiving amended parameters and guidelines, an amended reasonable reimbursement methodology from the commission or other information necessitating a revision of the claiming instructions, prepare and issue revised claiming instructions for mandates that require state reimbursement that have been established by commission action pursuant to Section 17557, Section 17557.2, or after any decision or order of the commission pursuant to Section 17559, or after any action by the Legislature pursuant to Section 17573. In preparing revised claiming instructions, the Controller may request the assistance of other state agencies.

history: (History: Amended by Stats. 2011, Ch. 144, Sec. 2. (SB 112) Effective January 1, 2012.)

article: 1. Commission Procedure


text:
(a) A reimbursement claim for actual costs filed by a local agency or school district pursuant to this chapter is subject to the initiation of an audit by the Controller no later than three years after the date that the actual reimbursement claim is filed or last amended, whichever is later. However, if no funds are appropriated or no payment is made to a claimant for the program for the fiscal year for which the claim is filed, the time for the Controller to initiate an audit shall commence to run from the date of initial payment of the claim. In any case, an audit shall be completed not later than two years after the date that the audit is commenced.

(b) The Controller may conduct a field review of any claim after the claim has been submitted, prior to the reimbursement of the claim.

(c) The Controller shall notify the claimant in writing within 30 days after issuance of a remittance advice of any adjustment to a claim for reimbursement that results from an audit or review. The notification shall specify the claim components adjusted, the amounts adjusted, interest charges on claims adjusted to reduce the overall reimbursement to the local agency or school district, and the reason for the adjustment. Remittance advices and other notices of payment action shall not constitute notice of adjustment from an audit or review.

(d) The interest rate charged by the Controller on reduced claims shall be set at the Pooled Money Investment Account rate and shall be imposed on the dollar amount of the overpaid claim from the time the claim was paid until overpayment is satisfied.

(e) Nothing in this section shall be construed to limit the adjustment of payments when inaccuracies are determined to be the result of the intent to defraud, or when a delay in the completion of an audit is the result of willful acts by the claimant or inability to reach agreement on terms of final settlement.

history: (History: Amended by Stats. 2004, Ch. 890, Sec. 18. Effective January 1, 2005.)

article: 1. Commission Procedure


text: It is the intent of the Legislature that the Commission on State Mandates review its process by which local agencies may appeal the reduction of reimbursement claims on the basis that the reduction is incorrect in order to provide for a more expeditious and less costly process.

history: (History: Added by Stats. 1998, Ch. 681, Sec. 3. Effective September 22, 1998.)

article: 1. Commission Procedure


text:
(a) If the Controller reduces a claim approved by the commission, the claimant may file with the commission an incorrect reduction claim pursuant to regulations adopted by the commission.

(b) A claimant eligible to file an incorrect reduction claim may file a consolidated incorrect reduction claim on behalf of other claimants whose claims for reimbursement under the same mandate are alleged to have been incorrectly reduced if all of the following apply:

(1) The method, act, or practice that the claimant alleges led to the reduction has led to similar reductions of other parties’ claims, and all of the claims involve common questions of law or fact.

(2) The common questions of law or fact among the claims predominate over any matter affecting only an individual claim.

(3) The consolidation of similar claims by individual claimants would result in consistent decisionmaking by the commission.

(4) The claimant filing the consolidated claim would fairly and adequately protect the interests of the other claimants.

(c) A claimant that seeks to file a consolidated incorrect reduction claim shall, at the time it files an incorrect reduction claim, on a form provided by the commission, notify the commission of its intent to file a consolidated incorrect reduction claim.

(d) Within 10 days after receipt of an incorrect reduction claim and notice of intent to consolidate, the commission shall request that the Controller provide the commission and the claimant with a list of claimants for whom the Controller has reduced similar claims under the same mandate. Upon receipt of this list from the Controller, the claimant may notify the claimants on the list and other interested parties of its intent to file a consolidated incorrect reduction claim.

(e) Within 30 days of receipt of the notice of intent to consolidate from the original claimant, on a form provided by the commission, any other eligible claimant shall file with the commission its notice of intent to join the consolidated incorrect reduction claim, which shall include a copy of the remittance advice or other notice from the Controller of the claim reduction, and one copy of the reimbursement claims for which an incorrect reduction is alleged.

(f) The commission shall notify each claimant that files an intent to join the consolidated incorrect reduction claim that it may opt out of the consolidated claim and not be bound by any determination made on that consolidated claim. A claimant may opt out of a consolidated claim no later than 15 days after the state agency files comments on the consolidated claim. A claimant that opts out of the consolidated claim, in order to preserve its right to challenge a reduction made by the Controller on that same mandate, shall file an individual incorrect reduction claim pursuant to commission requirements, no later than one year after opting out or within the statute of limitations under the commission’s regulations.

(g) The commission shall adopt regulations establishing procedures for receiving a consolidated incorrect reduction claim pursuant to this section and for providing a hearing on a consolidated claim.

history: (History: Added by Stats. 2006, Ch. 168, Sec. 1. Effective January 1, 2007.)

article: 1. Commission Procedure


text:
(a) The commission may, on its own initiative, consolidate incorrect reduction claims filed with the commission by different claimants under the same mandate if all of the following apply:

(1) The same method, act, or practice is alleged to have led to the reduction in each claim, and all of the claims involve common questions of law or fact.

(2) The common questions of law or fact among the claims predominate over any matter affecting only an individual claim.

(3) The consolidation of similar claims by individual claimants would result in consistent decisionmaking by the commission.

(b) The commission shall adopt regulations establishing procedures for consolidation of incorrect reduction claims pursuant to this section and for providing a hearing on a consolidated claim.

history: (History: Amended by Stats. 2007, Ch. 130, Sec. 119. Effective January 1, 2008.)

article: 1. Commission Procedure


text:
(a) The commission may order a reconsideration of all or part of a test claim or incorrect reduction claim on petition of any party. The power to order a reconsideration or amend a test claim decision shall expire 30 days after the statement of decision is delivered or mailed to the claimant. If additional time is needed to evaluate a petition for reconsideration filed prior to the expiration of the 30-day period, the commission may grant a stay of that expiration for no more than 30 days, solely for the purpose of considering the petition. If no action is taken on a petition within the time allowed for ordering reconsideration, the petition shall be deemed denied.

(b) A claimant or the state may commence a proceeding in accordance with the provisions of Section 1094.5 of the Code of Civil Procedure to set aside a decision of the commission on the ground that the commission’s decision is not supported by substantial evidence. The court may order the commission to hold another hearing regarding the claim and may direct the commission on what basis the claim is to receive a rehearing.

history: (History: Amended by Stats. 1999, Ch. 643, Sec. 4. Effective January 1, 2000.)

article: 1. Commission Procedure


text:
Reimbursement for state-mandated costs may be claimed as follows:

(a) A local agency or school district may, by February 15 following the fiscal year in which costs are incurred, file an annual reimbursement claim that details the costs actually incurred for that fiscal year.

(b) In the event revised claiming instructions are issued by the Controller pursuant to subdivision (c) of Section 17558 between November 15 and February 15, a local agency or school district filing an annual reimbursement claim shall have 120 days following the issuance date of the revised claiming instructions to file a claim.

history: (History: Amended by Stats. 2008, 3rd Ex. Sess., Ch. 6, Sec. 3. Effective February 16, 2008.)

article: 1. Commission Procedure


text:
(a) The state shall reimburse each local agency and school district for all “costs mandated by the state,” as defined in Section 17514 and for legislatively determined mandates in accordance with Section 17573.

(b) (1) For the initial fiscal year during which these costs are incurred, reimbursement funds shall be provided as follows:

(A) Any statute mandating these costs shall provide an appropriation therefor.

(B) Any executive order mandating these costs shall be accompanied by a bill appropriating the funds therefor, or alternatively, an appropriation for these costs shall be included in the Budget Bill for the next succeeding fiscal year. The executive order shall cite that item of appropriation in the Budget Bill or that appropriation in any other bill that is intended to serve as the source from which the Controller may pay the claims of local agencies and school districts.

(2) In subsequent fiscal years appropriations for these costs shall be included in the annual Governor’s Budget and in the accompanying Budget Bill. In addition, appropriations to reimburse local agencies and school districts for continuing costs resulting from chaptered bills or executive orders for which claims have been awarded pursuant to subdivision (a) of Section 17551 shall be included in the annual Governor’s Budget and in the accompanying Budget Bill.

(c) The amount appropriated to reimburse local agencies and school districts for costs mandated by the state shall be appropriated to the Controller for disbursement.

(d) The Controller shall pay any eligible claim pursuant to this section by October 15 or 60 days after the date the appropriation for the claim is effective, whichever is later. The Controller shall disburse reimbursement funds to local agencies or school districts if the costs of these mandates are not payable to state agencies, or to state agencies that would otherwise collect the costs of these mandates from local agencies or school districts in the form of fees, premiums, or payments. When disbursing reimbursement funds to local agencies or school districts, the Controller shall disburse them as follows:

(1) For initial reimbursement claims, the Controller shall issue claiming instructions to the relevant local agencies and school districts pursuant to Section 17558. Issuance of the claiming instructions shall constitute a notice of the right of the local agencies and school districts to file reimbursement claims, based upon parameters and guidelines adopted by the commission, the reasonable reimbursement methodology approved by the commission pursuant to Section 17557.2, or statutory declaration of a legislatively determined mandate and reimbursement methodology pursuant to Section 17573.

(A) When claiming instructions are issued by the Controller pursuant to Section 17558 for each mandate determined pursuant to Section 17551 or 17573 that requires state reimbursement, each local agency or school district to which the mandate is applicable shall submit claims for initial fiscal year costs to the Controller within 120 days of the issuance date for the claiming instructions.

(B) When the commission is requested to review the claiming instructions pursuant to Section 17571, each local agency or school district to which the mandate is applicable shall submit a claim for reimbursement within 120 days after the commission reviews the claiming instructions for reimbursement issued by the Controller.

(C) If the local agency or school district does not submit a claim for reimbursement within the 120-day period, or submits a claim pursuant to revised claiming instructions, it may submit its claim for reimbursement as specified in Section 17560. The Controller shall pay these claims from the funds appropriated therefor, except the Controller may take either of the following actions:

(i) Audit the records of any local agency or school district to verify the actual amount of the mandated costs, the application of a reasonable reimbursement methodology, or application of a legislatively enacted reimbursement methodology under Section 17573.

(ii) Reduce any claim that the Controller determines is excessive or unreasonable.

(2) In subsequent fiscal years each local agency or school district shall submit its claims as specified in Section 17560. The Controller shall pay these claims from funds appropriated therefor except as follows:

(A) The Controller may audit any of the following:

(i) Records of any local agency or school district to verify the actual amount of the mandated costs.

(ii) The application of a reasonable reimbursement methodology.

(iii) The application of a legislatively enacted reimbursement methodology under Section 17573.

(B) The Controller may reduce any claim that the Controller determines is excessive or unreasonable.

(C) The Controller shall adjust the payment to correct for any underpayments or overpayments that occurred in previous fiscal years.

(3) When paying a timely filed claim for initial reimbursement, the Controller shall withhold 20 percent of the amount of the claim until the claim is audited to verify the actual amount of the mandated costs. All initial reimbursement claims for all fiscal years required to be filed on their initial filing date for a state-mandated local program shall be considered as one claim for the purpose of computing any late claim penalty. Any claim for initial reimbursement filed after the filing deadline shall be reduced by 10 percent of the amount that would have been allowed had the claim been timely filed. The Controller may withhold payment of any late claim for initial reimbursement until the next deadline for funded claims unless sufficient funds are available to pay the claim after all timely filed claims have been paid. In no case may a reimbursement claim be paid if submitted more than one year after the filing deadline specified in the Controller’s claiming instructions on funded mandates.

(e) (1) Except as specified in paragraph (2), for the purposes of determining the state’s payment obligation under paragraph (1) of subdivision (b) of Section 6 of Article XIIIB of the Constitution, a mandate that is “determined in a preceding fiscal year to be payable by the state” means any mandate for which the commission adopted a statewide cost estimate pursuant to this part during a previous fiscal year or that were identified as mandates by a predecessor agency to the commission, or that the Legislature declared by statute to be a legislatively determined mandate, unless the mandate has been repealed or otherwise eliminated.

(2) If the commission adopts a statewide cost estimate for a mandate during the months of April, May, or June, the state’s payment obligation under subdivision (b) of Section 6 of Article XIIIB shall commence one year after the time specified in paragraph (1).

history: (History: Amended by Stats. 2009, 3rd Ex. Sess., Ch. 4, Sec. 4. Effective February 20, 2009.)

article: 1. Commission Procedure


text: The payment of an initial reimbursement claim by the Controller shall include accrued interest at the Pooled Money Investment Account rate, if the payment is being made more than 365 days after adoption of the statewide cost estimate for an initial claim. Interest shall begin to accrue as of the 366th day after adoption of the statewide cost estimate for the initial claim. Payment of a subsequent claim that was reported to the Legislature pursuant to paragraph (2) of subdivision (b) of Section 17562 shall include accrued interest at the Pooled Money Investment Account rate for any unpaid amount remaining on August 15 following the filing deadline. Interest shall begin to accrue on August 16 following the filing deadline.

history: (History: Amended by Stats. 2007, Ch. 179, Sec. 17. Effective August 24, 2007.)

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text: A budget act item or appropriation pursuant to this part for reimbursement of claims shall include an amount necessary to reimburse any interest due pursuant to Section 17561.5.

history: (History: Amended by Stats. 2004, Ch. 890, Sec. 21. Effective January 1, 2005.)

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text:
(a) The Legislature hereby finds and declares that the increasing revenue constraints on state and local government and the increasing costs of financing state-mandated local programs make evaluation of state-mandated local programs imperative. Accordingly, it is the intent of the Legislature to increase information regarding state mandates and establish a method for regularly reviewing the costs and benefits of state-mandated local programs.

(b) (1) The Controller shall submit a report to the Joint Legislative Budget Committee and fiscal committees by October 31 of each fiscal year beginning with the 2007–08 fiscal year. This report shall summarize, by state mandate, the total amount of claims paid per fiscal year and the amount, if any, of mandate deficiencies or surpluses. This report shall be made available in an electronic spreadsheet format.

(2) The Controller shall submit a report to the Joint Legislative Budget Committee, the applicable fiscal committees, and the Director of Finance by April 30 of each fiscal year. This report shall summarize, by state mandate, the total amount of unpaid claims by fiscal year that were submitted before April 1 of that fiscal year. The report shall also summarize any mandate deficiencies or surpluses. It shall be made available in an electronic spreadsheet, and shall be used for the purpose of determining the state’s payment obligation under paragraph (1) of subdivision (b) of Section 6 of Article XIIIB of the California Constitution.

(c) After the commission submits its second semiannual report to the Legislature pursuant to Section 17600, the Legislative Analyst shall submit a report to the Joint Legislative Budget Committee and legislative fiscal committees on the mandates included in the commission’s reports. The report shall make recommendations as to whether the mandate should be repealed, funded, suspended, or modified.

(d) In its annual analysis of the Budget Bill and based on information provided pursuant to subdivision (b), the Legislative Analyst shall report total annual state costs for mandated programs and, as appropriate, provide an analysis of specific mandates and make recommendations on whether the mandate should be repealed, funded, suspended, or modified.

(e) (1) A statewide association of local agencies or school districts or a Member of the Legislature may submit a proposal to the Legislature recommending the elimination or modification of a state-mandated local program. To make such a proposal, the association or member shall submit a letter to the Chairs of the Assembly Committee on Education or the Assembly Committee on Local Government, as the case may be, and the Senate Committee on Education or the Senate Committee on Local Government, as the case may be, specifying the mandate and the concerns and recommendations regarding the mandate. The association or member shall include in the proposal all information relevant to the conclusions. If the chairs of the committees desire additional analysis of the submitted proposal, the chairs may refer the proposal to the Legislative Analyst for review and comment. The chairs of the committees may refer up to a total of 10 of these proposals to the Legislative Analyst for review in any year. Referrals shall be submitted to the Legislative Analyst by December 1 of each year.

(2) The Legislative Analyst shall review and report to the Legislature with regard to each proposal that is referred to the office pursuant to paragraph (1). The Legislative Analyst shall recommend that the Legislature adopt, reject, or modify the proposal. The report and recommendations shall be submitted annually to the Legislature by March 1 of the year subsequent to the year in which referrals are submitted to the Legislative Analyst.

(f) It is the intent of the Legislature that the Assembly Committee on Local Government and the Senate Committee on Local Government hold a joint hearing each year regarding the following:

(1) The reports and recommendations submitted pursuant to subdivision (e).

(2) The reports submitted pursuant to Sections 17570, 17600, and 17601.

(3) Legislation to continue, eliminate, or modify any provision of law reviewed pursuant to this subdivision. The legislation may be by subject area or by year or years of enactment.

history: (History: Amended by Stats. 2012, Ch. 728, Sec. 72. (SB 71) Effective January 1, 2013.)

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text: Any funds received by a local agency or school district pursuant to the provisions of this chapter may be used for any public purpose.

history: (History: Added by Stats. 1986, Ch. 879, Sec. 8.)

article: 1. Commission Procedure


text:
(a) No claim shall be made pursuant to Sections 17551, 17561, or 17573, nor shall any payment be made on claims submitted pursuant to Sections 17551 or 17561, or pursuant to a legislative determination under Section 17573, unless these claims exceed one thousand dollars ($1,000). However, a county superintendent of schools or county may submit a combined claim on behalf of school districts, direct service districts, or special districts within their county if the combined claim exceeds one thousand dollars ($1,000) even if the individual school district’s, direct service district’s, or special district’s claims do not each exceed one thousand dollars ($1,000). The county superintendent of schools or the county shall determine if the submission of the combined claim is economically feasible and shall be responsible for disbursing the funds to each school, direct service, or special district. These combined claims may be filed only when the county superintendent of schools or the county is the fiscal agent for the districts. All subsequent claims based upon the same mandate shall only be filed in the combined form unless a school district, direct service district, or special district provides to the county superintendent of schools or county and to the Controller, at least 180 days prior to the deadline for filing the claim, a written notice of its intent to file a separate claim.

(b) Claims for direct and indirect costs filed pursuant to Section 17561 shall be filed in the manner prescribed in the parameters and guidelines or reasonable reimbursement methodology and claiming instructions.

(c) Claims for direct and indirect costs filed pursuant to a legislatively determined mandate pursuant to Section 17573 shall be filed and paid in the manner prescribed in the Budget Act or other bill, or claiming instructions, if applicable.

history: (History: Amended by Stats. 2007, Ch. 329, Sec. 9. Effective January 1, 2008.)

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text: If a local agency or a school district, at its option, has been incurring costs which are subsequently mandated by the state, the state shall reimburse the local agency or school district for those costs incurred after the operative date of the mandate.

history: (History: Added by Stats. 1986, Ch. 879, Sec. 10.)

article: 1. Commission Procedure


text: In the event that the amount appropriated for reimbursement purposes pursuant to Section 17561 is not sufficient to pay all of the claims approved by the Controller, the Controller shall prorate claims in proportion to the dollar amount of approved claims timely filed and on hand at the time of proration. The Controller shall adjust prorated claims if supplementary funds are appropriated for this purpose. Notwithstanding any other law, if one thousand dollars ($1,000) or less is appropriated for a program, the Controller shall determine the most cost-effective allocation method.

history: (History: Amended by Stats. 2013, Ch. 77, Sec. 1. (AB 392) Effective January 1, 2014.)

article: 1. Commission Procedure


text: If a local agency or school district submits an otherwise valid reimbursement claim to the Controller after the deadline specified in Section 17560, the Controller shall reduce the reimbursement claim in an amount equal to 10 percent of the amount that would have been allowed had the reimbursement claim been timely filed, provided that the amount of this reduction shall not exceed ten thousand dollars ($10,000). In no case shall a reimbursement claim be paid that is submitted more than one year after the deadline specified in Section 17560.

history: (History: Amended by Stats. 2008, 3rd Ex. Sess., Ch. 6, Sec. 4. Effective February 16, 2008.)

article: 1. Commission Procedure