California Senate Bill SB1117 Introduced / Bill

 BILL NUMBER: SB 1117INTRODUCED BILL TEXT INTRODUCED BY Senator Walters FEBRUARY 17, 2010 An act to amend Section 3291 of the Civil Code, to amend Section 685.010 of the Code of Civil Procedure, and to amend Section 970.1 of the Government Code, relating to judgments. LEGISLATIVE COUNSEL'S DIGEST SB 1117, as introduced, Walters. Judgments: interest. The California Constitution provides that the rate of interest on a judgment rendered in any court of this state shall be set by the Legislature at not more than 10% per annum. Existing law provides that interest accrues at the rate of 10% per annum on the principal amount of a money judgment remaining unsatisfied. Under existing law, if the plaintiff makes an offer that the defendant does not accept prior to trial or within 30 days, whichever occurs first, and the plaintiff obtains a more favorable judgment, the judgment shall bear interest at the legal rate of 10% per annum calculated from the date of the plaintiff's first offer that is exceeded by the judgment. Existing law also provides that a judgment is enforceable until 10 years after the time the judgment becomes final or until 10 years after the final installment becomes due. This bill would instead provide that interest accrues at the federal short-term rate plus 2%, except as otherwise provided in a written contract, not to exceed 10% per annum on those judgments, as specified. The bill would require the Controller to annually establish the interest rate, as specified, and notify the auditor in each county of that rate. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 3291 of the Civil Code is amended to read: 3291.  (a)    In any action brought to recover damages for personal injury sustained by any person resulting from or occasioned by the tort of any other person, corporation, association, or partnership, whether by negligence or by willful intent of the other person, corporation, association, or partnership, and whether the injury was fatal or otherwise, it is lawful for the plaintiff in the complaint to claim interest on the damages alleged as provided in this section.  If   (b)     If  the plaintiff makes an offer pursuant to Section 998 of the Code of Civil Procedure  which   that  the defendant does not accept prior to trial or within 30 days, whichever occurs first, and the plaintiff obtains a more favorable judgment, the judgment shall bear interest at the  rate determined annually by the Controller pursuant to subdivision (c), except as otherwise provided in a written contract, not to exceed   legal rate of  10 percent per annum calculated from the date of the plaintiff's first offer pursuant to Section 998 of the Code of Civil Procedure  which   that  is exceeded by the judgment, and interest shall accrue until the satisfaction of judgment.  (c) On the 15th day of October of each year, the Controller shall ascertain the current federal short-term rate. For purposes of any section requiring interest to be computed at the rate per annum required by this section, the federal short-term rate as ascertained by the Controller, rounded to the nearest whole number percent, plus 2 percent, in a total amount not to exceed 10 percent, shall be the interest rate per annum used in making the computation for interest that accrues during the following year. Within 10 days after the interest rate per annum is determined under this section, the Controller shall notify the auditor of each county in writing of that rate of interest.   (d) As used in this section, "federal short-term rate" means the rate of the average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of three years or less, as determined under Section 1274 of the Internal Revenue Code of 1986 (26 U.S.C. 1274), for July of the current year.   This section shall not apply to a public entity, or to a public employee for an act or omission within the scope of employment, and neither the public entity nor the public employee shall be liable, directly or indirectly, to any person for any interest imposed by this section.  SEC. 2. Section 685.010 of the Code of Civil Procedure is amended to read: 685.010. (a) Interest accrues at the  rate of   rate determined annually by the Controller pursuant to subdivision (b), except as otherwise provided in a written contract, not to exceed  10 percent per annum on the principal amount of a money judgment remaining unsatisfied.  (b) The Legislature reserves the right to change the rate of interest provided in subdivision (a) at any time to a rate of less than 10 percent per annum, regardless of the date of entry of the judgment or the date any obligation upon which the judgment is based was incurred. A change in the rate of interest may be made applicable only to the interest that accrues after the operative date of the statute that changes the rate.   (b) On the 15th day of October of each year, the Controller shall ascertain the current federal short-term rate. For purposes of any section requiring interest to be computed at the rate per annum required by this section, the federal short-term rate as ascertained by the Controller, rounded to the nearest whole number percent, plus 2 percent, in a total amount not to exceed 10 percent, shall be the interest rate per annum used in making the computation for interest that accrues during the following year. Within 10 days after the interest rate per annum is determined under this section, the Controller shall notify the auditor of each county in writing of that rate of interest.   (c) As used in this section, "federal short-term rate" means the rate of the average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of three years or less, as determined under Section 1274 of the Internal Revenue Code of 1986 (26 U.S.C. 1274), for July of the current year.  SEC. 3. Section 970.1 of the Government Code is amended to read: 970.1. (a) A judgment is enforceable until 10 years after the time the judgment becomes final or, if the judgment is payable in installments, until 10 years after the final installment becomes due. (b) A judgment, whether or not final, is not enforceable under Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure but is enforceable under this article after it becomes final.  However, interest accrues pursuant to Section 681.010 of the Code of Civil Procedure, at the rate determined annually by the Controller pursuant to subdivision (b) of Section 681.010, except as otherwise provided in a written contract, not to exceed 10   percent per annum on the principal amount of a money judgment remaining unsati   sfied.