2005 California Government Code Sections 17550-17572 Article 1. Commission Procedure

17550.  Reimbursement of local agencies and school districts for
costs mandated by the state shall be provided pursuant to this
chapter.
17551.  (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) 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.
17552.  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.
17553.  (a) The commission shall adopt procedures for receiving
claims pursuant to this article 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 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
Board of Control or the Commission on State Mandates that may be
related to the alleged mandate.
   (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.
   (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 Board of Control and
the Commission on State Mandates 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 or 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.
17554.  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.
17555.  (a) Not later than 30 days after hearing and deciding upon a
test claim pursuant to subdivision (a) of Section 17551, 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.
17556.  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 that:
   (a) The claim is submitted by a local agency or school district
that 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
paragraph.
   (b) The statute or executive order affirmed for the state a
mandate that had been declared existing law or regulation by action
of the courts.
   (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.
   (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.
   (f) The statute or executive order imposes duties that are
necessary to implement, reasonably within the scope of, or 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.
17557.  (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.  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 may not specify in the parameters and guidelines any
fiscal year for which payment could be provided in the annual Budget
Act.
   (d) A local agency, school district, or the state may file a
written request with the commission to amend, modify, or supplement
the parameters or guidelines.  The commission may, after public
notice and hearing, amend, modify, or supplement 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 January 15 following a fiscal year, shall
establish reimbursement eligibility for that fiscal year.
   (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.
17558.  (a) The commission shall submit the adopted parameters and
guidelines to the Controller.  All claims relating to a statute or
executive order that are filed after the adoption or amendment of
parameters and guidelines pursuant to Section 17557 shall be
transferred to the Controller who shall pay and audit the claims from
funds made available for that purpose.
   (b) Not later than 60 days after receiving the adopted parameters
and guidelines from the commission, 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 parameters and guidelines adopted by the commission.
   (c) The Controller shall, within 60 days after receiving revised
adopted parameters and guidelines 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 or after any decision or order of
the commission pursuant to Section 17551.  In preparing revised
claiming instructions, the Controller may request the assistance of
other state agencies.
17558.5.  (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.
17558.6.  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.
17559.  (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.
17560.  Reimbursement for state-mandated costs may be claimed as
follows:
   (a) A local agency or school district may file an estimated
reimbursement claim by January 15 of the fiscal year in which costs
are to be incurred, and, by January 15 following that fiscal year
shall file an annual reimbursement claim that details the costs
actually incurred for that fiscal year; or it may comply with the
provisions of subdivision (b).
   (b) A local agency or school district may, by January 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.
   (c) In the event revised claiming instructions are issued by the
Controller pursuant to subdivision (c) of Section 17558 between
October 15 and January 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.
17561.  (a) The state shall reimburse each local agency and school
district for all "costs mandated by the state," as defined in Section
17514.
   (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 which 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 subsequent to the enactment of the local government
claims bill pursuant to Section 17600 that includes the amounts
awarded relating to these chaptered bills or executive orders.
   (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 within 60 days after the filing deadline for claims for
reimbursement or 15 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.
   (A) When claiming instructions are issued by the Controller
pursuant to Section 17558 for each mandate determined pursuant to
Section 17551 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, provided
that the Controller (i) may audit the records of any local agency or
school district to verify the actual amount of the mandated costs,
and (ii) may 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,
provided that the Controller (A) may audit the records of any local
agency or school district to verify the actual amount of the mandated
costs, (B) may reduce any claim that the Controller determines is
excessive or unreasonable, and (C) shall adjust the payment to
correct for any underpayments or overpayments which 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 contained in a claims bill.
17561.5.  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 or, in the case of payment of a subsequent claim relating to
that same statute or executive order, if payment is being made more
than 60 days after the filing deadline for, or the actual date of
receipt of, the subsequent claim, whichever is later.  In those
instances, interest shall begin to accrue as of the 366th day after
adoption of the statewide cost estimate for an initial claim and as
of the 61st day after the filing deadline for, or actual date of
receipt of, the subsequent claim, whichever is later.
17561.6.  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.
17562.  (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) The Controller shall submit a report to the Joint Legislative
Budget Committee and fiscal committees by January 1 of each 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.  The report shall compare the annual
cost of each mandate to the statewide cost estimate adopted by the
commission.
   (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 identify mandates that significantly exceed the
statewide cost estimate adopted by the commission.  The Legislative
Analyst shall 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.
   (3) The Department of Finance shall review all statutes enacted
each year that contain provisions making inoperative Section 17561 or
Section 17565 that have resulted in costs or revenue losses mandated
by the state that were not identified when the statute was enacted.
The review shall identify the costs or revenue losses involved in
complying with the statutes.  The Department of Finance shall also
review all statutes enacted each year that may result in cost savings
authorized by the state.  The Department of Finance shall submit an
annual report of the review required by this subdivision, together
with the recommendations as it may deem appropriate, by December 1 of
each year.
   (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.
17563.  Any funds received by a local agency or school district
pursuant to the provisions of this chapter may be used for any public
purpose.
17564.  (a) No claim shall be made pursuant to Sections 17551 and
17561, nor shall any payment be made on claims submitted pursuant to
Sections 17551 and 17561, unless these claims exceed one thousand
dollars ($1,000), provided that 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 and claiming instructions.
17565.  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.
17567.  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.
   In the event that the Controller finds it necessary to prorate
claims as provided by this section, the Controller shall immediately
report this action to the Department of Finance, the Chairperson of
the Joint Legislative Budget Committee, and the Chairperson of the
respective committee in each house of the Legislature which considers
appropriations in order to assure appropriation of these funds in
the Budget Act.  If these funds cannot be appropriated on a timely
basis in the Budget Act, the Controller shall transmit this
information to the commission which shall include these amounts in
its report to the Legislature pursuant to Section 17600 to assure
that an appropriation sufficient to pay the claims is included in the
local government claims bills or other appropriation bills.  If the
local government claims bills required by Section 17612 have been
introduced in the Legislature, the Controller shall report directly
to the chairperson of the respective committee in each house of the
Legislature which considers appropriations to assure inclusion of a
sufficient appropriation in the claims bills.
17568.  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
which would have been allowed had the reimbursement claim been timely
filed, provided that the amount of this reduction shall not exceed
one thousand dollars ($1,000).  In no case shall a reimbursement
claim be paid which is submitted more than one year after the
deadline specified in Section 17560.  Estimated claims which were
filed by the deadline specified in that section shall be paid in full
before payments are made on estimated claims filed after the
deadline.  In the event the amount appropriated to the Controller for
reimbursement purposes is not sufficient to pay the estimated claims
approved by the Controller, the Controller shall prorate those
claims in proportion to the dollar amount of approved claims filed
after the deadline and shall report to the commission or the
Legislature in the same manner as described in Section 17566 in order
to assure appropriation of funds sufficient to pay those claims.
17570.  The Legislative Analyst shall review each unfunded statutory
or regulatory mandate for which claims have been approved by the
Legislature pursuant to a claims bill during the preceding fiscal
year.  Any recommendations by the Legislative Analyst to eliminate or
modify the mandates shall be contained in the annual analysis of the
Budget Bill prepared by the Legislative Analyst.
17571.  The commission, upon request of a local agency or school
district, shall review the claiming instructions issued by the
Controller or any other authorized state agency for reimbursement of
mandated costs.  If the commission determines that the claiming
instructions do not conform to the parameters and guidelines, the
commission shall direct the Controller to modify the claiming
instructions and the Controller shall modify the claiming
instructions to conform to the parameters and guidelines as directed
by the commission.
17572.  (a) The commission shall amend the parameters and guidelines
for the state-mandated local program contained in Chapter 752 of the
Statutes of 1998, known as the Animal Adoption mandate (Case No.
98-TC-11), as specified below:
   (1) Amend the formula for determining the reimbursable portion of
acquiring or building additional shelter space that is larger than
needed to comply with the increased holding period to specify that
costs incurred to address preexisting shelter overcrowding or animal
population growth are not reimbursable.
   (2) Clarify how the costs for care and maintenance shall be
calculated.
   (3) Detail the documentation necessary to support reimbursement
claims under this mandate, in consultation with the Bureau of State
Audits and the Controller's office.
   (b) The parameters and guidelines, as amended pursuant to this
section, shall apply to claims for costs incurred in fiscal years
commencing with the 2005-06 fiscal year in which Chapter 752 of the
Statutes of 1998 is not suspended pursuant to Section 17581.
   (c) Before funds are appropriated to reimburse local agencies for
claims related to costs incurred in fiscal years commencing with the
2005-06 fiscal year pursuant to Sections 1834 and 1846 of the Civil
Code, and Sections 31108, 31752, 31752.5, 31753, 32001, and 32003 of
the Food and Agricultural Code, known as the Animal Adoption mandate,
local agencies shall file reimbursement claims pursuant to the
parameters and guidelines amended pursuant to this section, and the
Controller's revised claiming instructions.