State Government.

Senators Laird and Allen propose comprehensive reforms to California's civil litigation procedures and public entity financial management through legislation that modifies how courts handle bad-faith litigation, childhood sexual assault claims, and educational institution emergency funding. The bill establishes new standards for cases against public entities while restructuring financial mechanisms for school districts facing fiscal challenges.

For civil actions filed after January 1, 2026, the legislation eliminates the 21-day safe harbor period during which parties can withdraw potentially sanctionable filings against public entities. Public entities must first attempt to resolve issues through consultation with opposing counsel and provide supporting documentation before seeking sanctions. The bill also modifies statutes of limitations for childhood sexual assault claims occurring before January 1, 2024, reducing the discovery period from five to three years after identifying psychological injuries.

The measure creates additional requirements for cases involving the MacLaren Children's Center and certain Los Angeles County juvenile facilities, mandating that claims be filed by January 1, 2026. These cases must include certificates of merit reviewed by court-appointed special masters before settlement funds can be disbursed. For plaintiffs over 40 filing against public entities after April 15, 2025, the legislation requires proof of gross negligence rather than ordinary negligence.

Regarding educational institution financing, the bill extends the maximum repayment period for emergency apportionments from 20 to 30 years. School districts must now consult with county superintendents and the County Office Fiscal Crisis and Management Assistance Team when developing repayment schedules. The Department of Finance assumes responsibility for approving these schedules, replacing the current Superintendent of Public Instruction approval requirement.

The legislation also establishes an intercept program allowing educational entities to designate state and local funding sources for public debt obligations. This system requires specific notice procedures and enables the Controller or county treasurer to redirect designated funds toward debt payments according to predetermined schedules.