Added by Stats. 1971, Ch. 1148.
There is in the State Treasury the Litigation Deposits Fund, hereafter referred to as “the fund,” which is hereby appropriated for the purposes of this article.
Article 9 - Litigation Deposits Fund
California Government Code — §§ 16425-16428
Sections (4)
Added by Stats. 1971, Ch. 1148.
The fund consists of all money received as litigation deposits where the State of California is a party to the litigation and no other state statutes specifically provide for both of the following:
(1)Handling and investing such money.
(2)Crediting any interest accrued thereto to such deposits.
Amended by Stats. 2023, Ch. 45, Sec. 40. (AB 127) Effective July 10, 2023.
(a)For purposes of this article, “department” means the Department of Justice.
(b)The fund is under the control of the department. The department shall maintain accounting records pertaining to the fund, including subsidiary records of individual litigation deposits and the disbursements from the fund.
(c)The department shall file a claim with the Controller to pay out money in the fund to whomever and at the time the department directs. However, notwithstanding Section 13340, if a sum of money in the fund was deposited pursuant to order or direction of the court, that sum shall be paid to whomever and at the time the court directs. The department may
expend revenue transferred from the fund to the Legal Services Revolving Fund only upon approval by the Department of Finance. The department shall submit a written application to the Department of Finance to request approval for the expenditure. The request shall be deemed approved if the Department of Finance neither approves nor disapproves the request within 30 days of receipt of the application.
(d)Commencing July 1, 2023, the department shall transfer deposited funds to the General Fund or a state special fund subject to legislative oversight no later than three months after the receipt of funds, a final settlement agreement is signed by all involved parties, a court judgment has been entered, or all appeals have been exhausted, whichever is latest. This requirement does not apply to moneys specifically designated by settlement agreement or court judgment
for specific claimants as direct restitution or compensation to address the impacts of the alleged offending behavior.
(e)The department shall transfer funds deposited prior to July 1, 2023, for which a final settlement agreement has been signed by all involved parties, a court judgment has been entered, or for which all appeals have been exhausted by January 1, 2024.
(f)Any residue remaining in a deposit account after satisfaction of all court-directed claims, or payment of
departmental expenditures for that account shall be transferred no later than July 1 of each fiscal year to the General Fund.
(g)The department shall prepare and submit to the chairperson of the Joint Legislative Budget Committee, the chairpersons of the fiscal committees of the Senate and the Assembly, and the Director of Finance quarterly reports concerning the activity of the fund
and include the following information:
(1)The number of new deposits received as of the prior report and the amount of each deposit, the case associated with each deposit, the specific legal section or sections of the department pursuing the case, the date each case was initiated and closed, the estimated litigation costs associated with each case, whether the department specifically sought reasonable attorney’s fees and costs and the amount awarded for these purposes, and the fiscal terms and statewide benefits associated with each case. To the extent prior deposits were received for a case, the total amount of funding received to date shall also be reported.
(2)The number of disbursements made as of the prior report and the amount of each disbursement by case and recipient and the date each disbursement was made. To the extent a disbursement does not include the total amount deposited for a particular case, the total amount remaining shall also be reported. For the purposes of this reporting language, disbursements shall include any payment or transfer from the fund to any recipient, including, but not limited to, claimants, the General Fund, a department-administered special fund, or any other state special fund.
(3)A listing of each case for which litigation proceeds remain in the fund after disbursements are made for the quarter, including all previously reported information pursuant to paragraph (1). The fiscal terms associated with each case shall include, but shall not be
limited to, reporting on the anticipated recipient or recipients and the amount due to each recipient; whether the case was resolved through settlement or trial; the amount of the funds that are restricted, unrestricted, unavailable, or designated for claimant restitution; and a brief description for why the proceeds remain in the fund. The brief descriptions shall include whether funds are restricted by the special fund to which moneys will be transferred, the settlement agreement or court ruling designating use for clearly specified purposes, or any other reasons. The information may roll over from prior reports until all litigation proceeds associated with a case are disbursed. However, all changes to previously reported information shall be clearly highlighted and a brief description shall be provided for each substantive change.
(4)The receipt of any interest income and the amount attributable to each case.
Amended by Stats. 2023, Ch. 45, Sec. 41. (AB 127) Effective July 10, 2023.
Money in the fund may be invested and reinvested in any securities described in Section 16430 or deposited in banks as provided in Chapter 4 (commencing with Section 16500) of this part or deposited in savings and loan associations as provided in Chapter 4.5 (commencing with Section 16600) of this part. The department shall determine the amount of money available for investment or deposit and shall so arrange the investment or deposit program that funds will be available for the immediate payment of any court order or decree. The Treasurer shall invest or make deposits in accordance with these determinations.
All revenues earned from investment or deposit of fund moneys shall be deposited in the fund. After first deducting therefrom the amount payable to the Treasurer for investment services rendered and
the amount payable to the department for administrative services rendered, the department shall apportion as of June 30 and December 31 of each year the remainder of such revenues earned and deposited in the fund during the six calendar months ending with such dates. There shall be apportioned and credited to each litigation deposit in the fund during such six-month period, an amount directly proportionate to the total deposits in the fund and the length of time such deposits remained therein. The amounts so apportioned shall be paid to the party receiving the deposit. The cost of administrative services rendered shall be determined by the department in a manner approved by the Department of Finance. The amounts payable to the department and to the Treasurer shall be transferred to the General Fund and accounted as reimbursements to their respective appropriations.
Notwithstanding any other provision of law, the Controller may use money in the fund for cashflow
loans to the General Fund as provided in Sections 16310 and 16381.
Notwithstanding any other law, the Department of Finance may authorize budgetary loans from the fund to the General Fund pursuant to the annual budget process. This section does not authorize any transfer that will interfere with the object for which this fund was created.