Reimbursement of State Mandated Costs: Administrative Memo A-3

ADMINISTRATIVE MEMORANDUM

COUNTY OF SAN MATEO

NUMBER: A-3

SUBJECT: Reimbursement of State Mandated Costs

RESPONSIBLE DEPARTMENT: Controller

DATE: May 10, 1994

Background

This Administrative Memorandum defines the departmental responsibility for preparation of claims for reimbursement of State mandated costs under SB 90, and outlines the procedure for submitting claims to the Controller’s Office. SB 90 (Chapter 3 Section 2200 et seq of the Revenue and Taxation Code), outlines the procedure for submitting claims for State reimbursement when new legislation, court decisions, and State administrative regulations fail to recognize all or part of the mandated cost.

Identification of Mandates

The constitutional definition of a reimbursable program was modified by two Supreme Court cases. These important cases are the Los Angeles County v. State Workers Compensation case, and the second City of Sacramento v. State suit on the Unemployment Insurance mandate. Essentially these cases stated that to be reimbursable a law must either provide a program of benefit to citizens or be unique to government.  These cases severely limited the scope of what local agencies had previously believed to be covered by the Constitution.

Departments should review draft State legislation and advise the Controller and County Manager immediately of any potential mandated local costs. The Controller, County Manager, and department will work together to develop cost estimates and a lobbying effort.

Departments should also notify the Controller and County Manager upon receipt of any State administrative regulations and court orders with potential local costs.

Preparation of Claims for Reimbursement

Departments shall compile all necessary estimated and actual cost data for claims and maintain accurate cost records as directed by the Controller. The Controller will assist departments by recommending the format for cost information, maintaining a log of the mandates, and advising departments of deadlines for continuing claims. The Controller will also review, sign, ‘and send the final claim to the State. Reimbursement from the State is to be forwarded to the Controller for deposit to departmental Revenue Account #9479. The Controller should be contacted for advice as to whether a cost is allowable pursuant to the Revenue and Taxation Code. Should the Controller require legal interpretation(s) he will contact County Counsel for guidance/assistance

Important Statutory Deadlines

The following is an outline of the mandated cost claiming procedure:

  1. First Time Claims (Initial Filing)
    Mandates newly funded by the Legislature are due 120 days after the State Controller releases the claiming instructions
  2. Annual Recurring Claim Filing
    Following the completion of a fiscal year, the department assembles actual costs for the previous fiscal year and estimated costs for the current fiscal year for each mandated cost to be claimed and forwards this information to the Controller. The Controller submits actual and estimated cost claims to the State on or before November 30.

    1. Late Penalty Filing:
      10% of claim amount or $1,000, whichever is less

APPROXIMATE TIMETABLE FOR SB 90 CLAIMS PREPARATION

Ongoing Mandates Due Date Action
Controller Continuous Maintains log of all bills mandating local costs
Departments February Include estimated mandated ,cost reimbursement revenue in budget request (Revenue Account #9479)
Controller August Reviews estimated revenues for mandated cost for new fiscal year
Controller October 1 Request departments to submit a previous year actual cost data and estimated costs for, current fiscal year for claim. Provides advice regarding claim format and detail required, based on instructions received from State Controller
Departments October 30 Submits actual cost claim data to Controller and estimated cost for new fiscal year for filing claim with State Controller
Controller November 30* Reviews department’s proposed claim data, prepares and sends claim to State Controller before November 30

* Claims that are not filed with the State by the due date are subject to a 10% penalty or $1,000, whichever is lessv 

APPROXIMATE TIMETAIBILE F0R SB 90 CLAIMS PREPARATION

New Mandates Due Date Action
Departments Continuous In reviewing new State administrative regulations or proposed legislation, determines mandated local costs. If so, analysis is sent to the Controller and County Manager
Controller As Received Sets up files of proposed bills with mandated costs
Departments When bill signed Advises Controller of passage.  Updates cost estimates.
Controller Enters in log. If bill provides an appropriation, determines deadline for filing claim. Advises department and provides assistance as needed
Departments Submit cost claim estimates.
Controller Reviews estimated cost. Files claim with State or confers with County Manager on strategy for filing claim (if no appropriation provided) and appeal to Commission on State Mandates, if necessary

These changes were derived from the SB 90 manual for Local Government, 3rd edition