Under existing law, if parties to pending litigation settle the matter, the court may enter judgment pursuant to the terms of the settlement and, upon stipulation by the settling parties, dismiss the settling parties without prejudice while retaining jurisdiction over the parties to enforce the settlement.

This bill would permit the enforcement, pursuant to the above provision and under specified conditions, of a settlement agreement that resolves a tort claim against a local public entity that is eligible for payment from a victims compensation fund or other victim-related financial assistance program, as specified.

This bill would declare that it is to take effect immediately as an urgency statute.

Under existing law, if parties to pending litigation settle the matter, the court may enter judgment pursuant to the terms of the settlement and, upon stipulation by the settling parties, dismiss the settling parties without prejudice while retaining jurisdiction over the parties to enforce the settlement.

This bill would permit the enforcement, pursuant to the above provision and under specified conditions, of a settlement agreement that resolves a tort claim against a local public entity that is eligible for payment from a victims compensation fund or other victim-related financial assistance program, as specified.

This bill would declare that it is to take effect immediately as an urgency statute.

Under existing law, if parties to pending litigation settle the matter, the court may enter judgment pursuant to the terms of the settlement and, upon stipulation by the settling parties, dismiss the settling parties without prejudice while retaining jurisdiction over the parties to enforce the settlement.

This bill would permit the enforcement, pursuant to the above provision and under specified conditions, of a settlement agreement that resolves a tort claim against a local public entity that is eligible for payment from a victims compensation fund or other victim-related financial assistance program, as specified.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law imposes various time limits for the commencement of civil actions other than for the recovery of real property, as specified. Under existing law, a civil action for relief on specified grounds, including libel and slander, must be commenced within one year.

This bill would make a technical, nonsubstantive change to the latter provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1908

Author:(McKinnor)

As Amended Ver:June 3, 2026

2/3 vote. Urgency

SUMMARY

Clarifies the existing law related to settlement agreements in civil actions to permit a court to deem obligations paid by a victims' compensation fund as a valid means of settling the civil action.

Major Provisions

1. Provides that the existing law regarding the settlement of tort actions applies to a settlement agreement resolving a tort claim against a local public entity if both of the following conditions are satisfied:
   1. A civil action arising from the tort claim has not yet been filed or has been voluntarily withdrawn by the plaintiff; and
   2. The claim is eligible for payment from a victims' compensation fund or other victim-related financial assistance program established by the local public entity.
2. Authorizes the enforcement of settlements entered into pursuant to 1).
3. Defines a "local public entity" to include a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state, but does not include the Regents of the University of California and does not include the state or any office, officer, department, division, bureau, board, commission or agency of the state claims against which are paid by warrants drawn by the Controller.

Senate Amendments

1. Move provisions of the bill a victim's compensation fund into a different provision of the Code of Civil Procedure.
2. Revise and recast the victim's compensation fund provisions to clarify how fund payments are related to the settlement of a civil action.
3. Adopt an urgency clause.

COMMENTS

The County of Los Angeles faces at least $4 billion in liability stemming from the county's systematic failure to prevent childhood sexual assault from occurring at several county-run youth facilities. One avenue Los Angeles County is exploring to address this massive liability is the establishment of a victims' compensation fund. This bill would clarify that payments from a county administered victim's compensation fund may be utilized to settle civil lawsuits related to childhood sexual assaults filed against local public entities.

According to reports and numerous lawsuits, Los Angeles County permitted decades of abuse to occur at the MacLaren Children's Center. Originally constructed as a temporary home for foster youth, Los Angeles County's MacLaren Children's Center devolved into an overcrowded youth detention facility handling minors with a history of mental illness, criminal behavior, and a history of prior physical abuse. (Sue Fox, County Closes Center for Troubled Children, Los Angeles Times (Mar. 11, 2003) available at: https://www.latimes.com/archives/la-xpm-2003-mar-11-me-mac11-story.html.) Unfortunately, it soon came to light that overcrowded living conditions and inadequate medical services provided at the facility were the least of the problems. Following the enactment of AB 218 (Gonzalez) Chap. 861, Stats. 2018, a flurry of lawsuits arose alleging horrific acts of sexual abuse at the facility committed by facility staff employed by Los Angeles County. Thousands of claims, some dating back to 1961, forced the County of Los Angeles to enter into a record $4 billion settlement with victims in April of 2025. (LA County Reaches $4 Billion Tentative Settlement in Thousands of Sexual Abuse Cases, LA County Office of Public Information (Apr. 4, 2025) available at: https://lacounty.gov/2025/04/04/la-county-reaches-4-billion-tentative-settlement-in-thousands-of-sexual-abuse-cases/.) While the $4 billion settlement total is unprecedented, so was the decades long failure of Los Angeles County to police its own staff and protect children placed in the county's care.

As reported by the Los Angeles Times, and detailed in a 2022 lawsuit against the county, children at the facility described being "assaulted, drugged and forced to perform sex acts on MacLaren employees." (James Queally, Decades later, former foster children allege abuse at MacLaren Children's Center, Los Angeles Times (May 17, 2022) available at: https://www.latimes.com/california/story/2022-05-17/abuse-allegations-maclaren.) One victim noted that county staff would climb into bed with her on a near-nightly basis. Another victim reported the abuse began when he was five years old. Yet another victim, a 13-year-old girl, reported being beaten by MacLaren staff when she reported another employee's sexual abuse. (Ibid.) A 2001 Los Angeles County civil grand jury report noted that facility managers were not conducting background checks on potential employees leading to the hiring of at least 17 staff members despite having convictions that should have disqualified them from employment. (Ibid.) Indeed, reporting by the BBC noted that MacLaren hired convicted "burglars and drug traffickers" to care for children at the facility, many of whom were not fully aware of the scope of the abuse due to medical conditions and the medication being provided to the children in the facility's care. (Regan Morris & Danai Nesta Kupemba, LA approves $4bn to settle 'horrific' child abuse claims, BBC (April 30, 2025) available at: https://www.bbc.com/news/articles/clyqe9e6gjeo.)

In addition to the settlement, in anticipation of more potential claims, the County of Los Angeles now seeks to establish a fund to compensate victims. The County aims to craft a fund that will function like other victims' compensation funds created after other scandals or disasters elsewhere in the county.

This bill clarifies that a victims' compensation fund may be utilized to settle civil lawsuits. Due to the massive scope of the liability facing the County of Los Angeles, the county will have to use bonding and other forms of debt financing to assist victims while still maintaining county services. To that end, this bill clarifies that payments from a victims' compensation fund may be utilized to provide payments to settle lawsuits against the county, and other similarly situated local governments.

Although this bill clarifies the status of the applicable uses of a victims' compensation fund, it does not create the fund itself. This bill clarifies how a victim's compensation fund may be utilized to finance settlement agreements between local agencies and the survivors of sexual assault. However, the bill does not create the fund itself and leaves that authority to the Board of Supervisors of Los Angeles County or other impacted local agencies. This approach appears prudent as it enables Los Angeles County and other impacted local agencies to engage with local stakeholders and tailor a program to the needs of the residents of the local jurisdiction. This approach also appears prudent as it permits local governments and school districts who may face similar liability to create their own programs for addressing the needs of local victims.

According to the Author

AB 1908 establishes a locally funded Victims Compensation Fund so that survivors of abuse by former employees of Los Angeles County can have access to justice and receive timely and responsible compensation for past abuse, while ensuring that Los Angeles County can continue to provide essential public safety and fire services, safety net healthcare services, foster care services and other critical public services that over 10 million residents rely upon every day.

Arguments in Support

This bill is sponsored by the County of Los Angeles. In support of the bill the County writes:

Public entities are facing growing legal exposure and rising costs for civil claims. As a result, funding these claims has become increasingly difficult. One option that many jurisdictions, including Los Angeles, have explored is the establishment of a self-funded victims' compensation program, which can provide fair compensation to claimants more quickly than litigation. The challenge, however, is financing such a fund when the public entity lacks sufficient available cash for it.

This is where judgment obligation bonds can be instrumental. Judgment obligation bonds are recognized in the California Code of Civil Procedure as a common mechanism for public entities to pay civil awards from bench and jury trials as well as court-approved settlements. Current law, however, limits the use of judgment obligation bonds to these types of legal obligations. We seek to extend the same framework to victims' compensation funds. AB 1908 would create the legal mechanism to do exactly that.

Arguments in Opposition

None on file

FISCAL COMMENTS

None

VOTES:

ASM JUDICIARY: 12-0-0

YES: Kalra, Macedo, Bauer-Kahan, Bryan, Connolly, Dixon, Harabedian, Pacheco, Papan, Sanchez, Stefani, Zbur

ASSEMBLY FLOOR: 77-0-3

YES: Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wilson, Zbur, Rivas

ABS, ABST OR NV: Addis, Celeste Rodriguez, Wicks

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

UPDATED

VERSION: June 3, 2026

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0003732

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1908

Author:(McKinnor)

As Amended Ver:June 3, 2026

2/3 vote. Urgency

SUMMARY

Clarifies the existing law related to settlement agreements in civil actions to permit a court to deem obligations paid by a victims' compensation fund as a valid means of settling the civil action.

Major Provisions

1. Provides that the existing law regarding the settlement of tort actions applies to a settlement agreement resolving a tort claim against a local public entity if both of the following conditions are satisfied:
   1. A civil action arising from the tort claim has not yet been filed or has been voluntarily withdrawn by the plaintiff; and
   2. The claim is eligible for payment from a victims' compensation fund or other victim-related financial assistance program established by the local public entity.
2. Authorizes the enforcement of settlements entered into pursuant to 1).
3. Defines a "local public entity" to include a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state, but does not include the Regents of the University of California and does not include the state or any office, officer, department, division, bureau, board, commission or agency of the state claims against which are paid by warrants drawn by the Controller.

Senate Amendments

1. Move provisions of the bill a victim's compensation fund into a different provision of the Code of Civil Procedure.
2. Revise and recast the victim's compensation fund provisions to clarify how fund payments are related to the settlement of a civil action.
3. Adopt an urgency clause.

COMMENTS

The County of Los Angeles faces at least $4 billion in liability stemming from the county's systematic failure to prevent childhood sexual assault from occurring at several county-run youth facilities. One avenue Los Angeles County is exploring to address this massive liability is the establishment of a victims' compensation fund. This bill would clarify that payments from a county administered victim's compensation fund may be utilized to settle civil lawsuits related to childhood sexual assaults filed against local public entities.

According to reports and numerous lawsuits, Los Angeles County permitted decades of abuse to occur at the MacLaren Children's Center. Originally constructed as a temporary home for foster youth, Los Angeles County's MacLaren Children's Center devolved into an overcrowded youth detention facility handling minors with a history of mental illness, criminal behavior, and a history of prior physical abuse. (Sue Fox, County Closes Center for Troubled Children, Los Angeles Times (Mar. 11, 2003) available at: https://www.latimes.com/archives/la-xpm-2003-mar-11-me-mac11-story.html.) Unfortunately, it soon came to light that overcrowded living conditions and inadequate medical services provided at the facility were the least of the problems. Following the enactment of AB 218 (Gonzalez) Chap. 861, Stats. 2018, a flurry of lawsuits arose alleging horrific acts of sexual abuse at the facility committed by facility staff employed by Los Angeles County. Thousands of claims, some dating back to 1961, forced the County of Los Angeles to enter into a record $4 billion settlement with victims in April of 2025. (LA County Reaches $4 Billion Tentative Settlement in Thousands of Sexual Abuse Cases, LA County Office of Public Information (Apr. 4, 2025) available at: https://lacounty.gov/2025/04/04/la-county-reaches-4-billion-tentative-settlement-in-thousands-of-sexual-abuse-cases/.) While the $4 billion settlement total is unprecedented, so was the decades long failure of Los Angeles County to police its own staff and protect children placed in the county's care.

As reported by the Los Angeles Times, and detailed in a 2022 lawsuit against the county, children at the facility described being "assaulted, drugged and forced to perform sex acts on MacLaren employees." (James Queally, Decades later, former foster children allege abuse at MacLaren Children's Center, Los Angeles Times (May 17, 2022) available at: https://www.latimes.com/california/story/2022-05-17/abuse-allegations-maclaren.) One victim noted that county staff would climb into bed with her on a near-nightly basis. Another victim reported the abuse began when he was five years old. Yet another victim, a 13-year-old girl, reported being beaten by MacLaren staff when she reported another employee's sexual abuse. (Ibid.) A 2001 Los Angeles County civil grand jury report noted that facility managers were not conducting background checks on potential employees leading to the hiring of at least 17 staff members despite having convictions that should have disqualified them from employment. (Ibid.) Indeed, reporting by the BBC noted that MacLaren hired convicted "burglars and drug traffickers" to care for children at the facility, many of whom were not fully aware of the scope of the abuse due to medical conditions and the medication being provided to the children in the facility's care. (Regan Morris & Danai Nesta Kupemba, LA approves $4bn to settle 'horrific' child abuse claims, BBC (April 30, 2025) available at: https://www.bbc.com/news/articles/clyqe9e6gjeo.)

In addition to the settlement, in anticipation of more potential claims, the County of Los Angeles now seeks to establish a fund to compensate victims. The County aims to craft a fund that will function like other victims' compensation funds created after other scandals or disasters elsewhere in the county.

This bill clarifies that a victims' compensation fund may be utilized to settle civil lawsuits. Due to the massive scope of the liability facing the County of Los Angeles, the county will have to use bonding and other forms of debt financing to assist victims while still maintaining county services. To that end, this bill clarifies that payments from a victims' compensation fund may be utilized to provide payments to settle lawsuits against the county, and other similarly situated local governments.

Although this bill clarifies the status of the applicable uses of a victims' compensation fund, it does not create the fund itself. This bill clarifies how a victim's compensation fund may be utilized to finance settlement agreements between local agencies and the survivors of sexual assault. However, the bill does not create the fund itself and leaves that authority to the Board of Supervisors of Los Angeles County or other impacted local agencies. This approach appears prudent as it enables Los Angeles County and other impacted local agencies to engage with local stakeholders and tailor a program to the needs of the residents of the local jurisdiction. This approach also appears prudent as it permits local governments and school districts who may face similar liability to create their own programs for addressing the needs of local victims.

According to the Author

AB 1908 establishes a locally funded Victims Compensation Fund so that survivors of abuse by former employees of Los Angeles County can have access to justice and receive timely and responsible compensation for past abuse, while ensuring that Los Angeles County can continue to provide essential public safety and fire services, safety net healthcare services, foster care services and other critical public services that over 10 million residents rely upon every day.

Arguments in Support

This bill is sponsored by the County of Los Angeles. In support of the bill the County writes:

Public entities are facing growing legal exposure and rising costs for civil claims. As a result, funding these claims has become increasingly difficult. One option that many jurisdictions, including Los Angeles, have explored is the establishment of a self-funded victims' compensation program, which can provide fair compensation to claimants more quickly than litigation. The challenge, however, is financing such a fund when the public entity lacks sufficient available cash for it.

This is where judgment obligation bonds can be instrumental. Judgment obligation bonds are recognized in the California Code of Civil Procedure as a common mechanism for public entities to pay civil awards from bench and jury trials as well as court-approved settlements. Current law, however, limits the use of judgment obligation bonds to these types of legal obligations. We seek to extend the same framework to victims' compensation funds. AB 1908 would create the legal mechanism to do exactly that.

Arguments in Opposition

None on file

FISCAL COMMENTS

None

VOTES:

ASM JUDICIARY: 12-0-0

YES: Kalra, Macedo, Bauer-Kahan, Bryan, Connolly, Dixon, Harabedian, Pacheco, Papan, Sanchez, Stefani, Zbur

ASSEMBLY FLOOR: 77-0-3

YES: Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wilson, Zbur, Rivas

ABS, ABST OR NV: Addis, Celeste Rodriguez, Wicks

UPDATED

VERSION: June 3, 2026

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0003732

 THIRD READING 

Bill No: AB 1908

Author: McKinnor (D), et al.

Amended: 6/3/26 in Senate

Vote: 27 - Urgency

SENATE JUDICIARY COMMITTEE: 13-0, 6/23/26

AYES: Umberg, Niello, Allen, Ashby, Caballero, Durazo, Laird, Reyes, Stern, Valladares, Wahab, Weber Pierson, Wiener

ASSEMBLY FLOOR: 77-0, 4/23/26 - See last page for vote

SUBJECT: Settlement agreements: victims’ compensation funding

SOURCE: County of Los Angeles

DIGEST:

This bill applies Code of Civil Procedure (Code Civ. Proc.) Section 664.6 to specified settlement agreements resolving tort claims against a local public entity.

ANALYSIS:

Existing law:

1. Provides that if parties to pending litigation settle the matter, the court may enter judgment pursuant to the terms of the settlement and, upon stipulation by the settling parties, dismiss the settling parties without prejudice while retaining jurisdiction over the parties to enforce the settlement. (Code Civ. Proc. § 664.6.)
2. Defines “local public entity” as a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state, but does not include the Regents of the University of California and does not include the state or any office, officer, department, division, bureau, board, commission or agency of the state claims against which are paid by warrants drawn by the Controller. (Government (Gov.) Code § 970.)

This bill:

1. Provides that paragraph 2), below, applies to a settlement agreement resolving a tort claim against a local public entity if:

a) a civil action arising from the tort claim has not yet been filed or has been voluntarily withdrawn by the plaintiff; and

b) the claim is eligible for payment from a victims’ compensation fund or other victim-related financial assistance program established by the local public entity.

1. Provides that a settlement agreement that meets the requirements of paragraph 1) may be enforced in a subsequent action under Code Civ. Proc. Section 664.6 if both of the following conditions are satisfied:

a) the agreement is in a writing signed by the claimant and the local public entity or its authorized representatives; and

b) the agreement expressly states that it is enforceable pursuant to Code Civ. Proc. Section 664.6.

Comments

According to the author:

Public agencies have an obligation to provide essential services that Californians rely upon. AB 1908 allows public agencies to resolve legitimate claims in a financially responsible way while preserving essential safety net services.

The author provides the following background:

Issues with setting up a self-funded victims’ compensation fund arise when a public entity doesn’t have the cash on hand to finance the fund, and, instead, seeks to finance such a fund with judgment obligation bonds. While court judgements and settlements can be financed with judgement obligation bonds under the code, current law fails to contemplate utilizing judgement obligation bonds to finance a victims’ compensation fund. Los Angeles County is sponsoring AB 1908 to create that legal mechanism, which will permit public entities to finance victims’ funds with obligation bonds by ensuring that such funds are considered enforceable obligations under the law, which will permit a public entity to finance a victims’ compensation fund without violating the Constitutional debt limit.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 6/25/26)

County of Los Angeles (source)

Urban Counties of California

California State Association of Counties

OPPOSITION: (Verified 6/25/26)

None received

ARGUMENTS IN SUPPORT:

The County of Los Angeles writes the following as sponsors of this bill:

Public entities are facing growing legal exposure and rising costs for civil claims. As a result, funding these claims has become increasingly difficult. One option that many jurisdictions, including Los Angeles, have explored is the establishment of a self-funded victims’ compensation program, which can provide fair compensation to claimants more quickly than litigation. The challenge, however, is financing such a fund when the public entity lacks sufficient available cash for it.

This is where judgment obligation bonds can be instrumental. Judgment obligation bonds are recognized in the California Code of Civil Procedure as a common mechanism for public entities to pay civil awards from bench and jury trials as well as court-approved settlements. Current law, however, limits the use of judgment obligation bonds to these types of legal obligations. We seek to extend the same framework to victims’ compensation funds. AB 1908 would create the legal mechanism to do exactly that.

The Urban Counties of California and the California State Association of Counties write the following in support of this bill:

As you are keenly aware, counties, as well as other local agencies, are facing significant legal exposure and considerable costs for civil claims. As a result, funding these claims has become especially difficult. Los Angeles County, for example, faces many billions of dollars in liability stemming from claims of childhood sexual assaults occurring at several county-run youth facilities. One avenue to help facilitate payments to claimants is a self-funded victims’ compensation fund. The challenge, however, is financing the fund when cash is not readily available. Obligation bonds are commonly used to pay awards from bench and jury trials, as well as court-approved settlements. Current law, however, limits their use to these types of legal obligations. The Code of Civil Procedure does not allow obligation bonds to finance a victims’ fund. AB 1908 provides the legal mechanism to do exactly that.

AB 1908 addresses a statutory gap by giving counties the flexibility to consider creating a victims’ fund to cover civil liabilities that are so large as to necessitate the use of obligation bonds.

ASSEMBLY FLOOR: 77-0, 4/23/26

AYES: Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wilson, Zbur, Rivas

NO VOTE RECORDED: Addis, Celeste Rodriguez, Wicks

Prepared by: Margie Estrada / JUD. / (916) 651-4113

6/26/26 13:09:14

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2025-2026 Regular Session

Bill No: AB 1908 (Author:McKinnor)

Version: June 3, 2026

Hearing Date: June 23, 2026

Fiscal: No

Urgency: Yes

Consultant: ME

SUBJECT

Settlement agreements: victims’ compensation funding

DIGEST

This bill applies Code of Civil Procedure Section 664.6 to specified settlement agreements resolving tort claims against a local public entity.

EXECUTIVE SUMMARY

This bill is brought in an effort to aid public entities in paying tort claim settlements through obligation bonds without violating the constitutional debt limit. According to the authors and sponsor, the amendment to Code of Civil Procedure Section 664.6 is necessary to allow obligation bonds to be used to pay settlements.

This bill is sponsored by the County of Los Angeles and is supported by the Urban Counties of California and the California State Association of Counties. The Committee has received no opposition to this bill. Should this bill pass out of this Committee, it will then be referred to the Senate Local Government Committee.

PROPOSED CHANGES TO THE LAW

Existing law:

1. If parties to pending litigation settle the matter, the court may enter judgment pursuant to the terms of the settlement and, upon stipulation by the settling parties, dismiss the settling parties without prejudice while retaining jurisdiction over the parties to enforce the settlement. (Code Civ. Proc. § 664.6.)
2. Defines “local public entity” as a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state, but does not include the Regents of the University of California and does not include the state or any office, officer, department, division, bureau, board, commission or agency of the state claims against which are paid by warrants drawn by the Controller. (Gov. Code § 970.)

This bill:

1. Provides that paragraph 2), below, applies to a settlement agreement resolving a tort claim against a local public entity if: a) a civil action arising from the tort claim has not yet been filed or has been voluntarily withdrawn by the plaintiff; and b) the claim is eligible for payment from a victims’ compensation fund or other victim-related financial assistance program established by the local public entity.
2. Provides that a settlement agreement that meets the requirements of paragraph 1) may be enforced in a subsequent action under Code of Civil Procedure Section 664.6 if both of the following conditions are satisfied: a) the agreement is in a writing signed by the claimant and the local public entity or its authorized representatives; and b) the agreement expressly states that it is enforceable pursuant to Code of Civil Procedure Section 664.6.

COMMENTS

1. Stated need for the bill

According to the author:

Public agencies have an obligation to provide essential services that Californians rely upon. AB 1908 allows public agencies to resolve legitimate claims in a financially responsible way while preserving essential safety net services.

The author provides the following background:

Issues with setting up a self-funded victims’ compensation fund arise when a public entity doesn’t have the cash on hand to finance the fund, and, instead, seeks to finance such a fund with judgment obligation bonds. While court judgements and settlements can be financed with judgement obligation bonds under the code, current law fails to contemplate utilizing judgement obligation bonds to finance a victims’ compensation fund. Los Angeles County is sponsoring AB 1908 to create that legal mechanism, which will permit public entities to finance victims’ funds with obligation bonds by ensuring that such funds are considered enforceable obligations under the law, which will permit a public entity to finance a victims’ compensation fund without violating the Constitutional debt limit.

2. Support

The County of Los Angeles writes the following as sponsors of this bill:

Public entities are facing growing legal exposure and rising costs for civil claims. As a result, funding these claims has become increasingly difficult. One option that many jurisdictions, including Los Angeles, have explored is the establishment of a self-funded victims’ compensation program, which can provide fair compensation to claimants more quickly than litigation. The challenge, however, is financing such a fund when the public entity lacks sufficient available cash for it.

This is where judgment obligation bonds can be instrumental. Judgment obligation bonds are recognized in the California Code of Civil Procedure as a common mechanism for public entities to pay civil awards from bench and jury trials as well as court-approved settlements. Current law, however, limits the use of judgment obligation bonds to these types of legal obligations. We seek to extend the same framework to victims’ compensation funds. AB 1908 would create the legal mechanism to do exactly that.

The Urban Counties of California and the California State Association of Counties write the following in support of this bill:

As you are keenly aware, counties, as well as other local agencies, are facing significant legal exposure and considerable costs for civil claims. As a result, funding these claims has become especially difficult. Los Angeles County, for example, faces many billions of dollars in liability stemming from claims of childhood sexual assaults occurring at several county-run youth facilities. One avenue to help facilitate payments to claimants is a self-funded victims’ compensation fund. The challenge, however, is financing the fund when cash is not readily available. Obligation bonds are commonly used to pay awards from bench and jury trials, as well as court-approved settlements. Current law, however, limits their use to these types of legal obligations. The Code of Civil Procedure does not allow obligation bonds to finance a victims’ fund. AB 1908 provides the legal mechanism to do exactly that.

AB 1908 addresses a statutory gap by giving counties the flexibility to consider creating a victims’ fund to cover civil liabilities that are so large as to necessitate the use of obligation bonds.

SUPPORT

County of Los Angeles (sponsor)

Urban Counties of California

California State Association of Counties

OPPOSITION

None known

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation: None known.

PRIOR VOTES:

Assembly Floor (Ayes 77, Noes 0)

Assembly Judiciary Committee (Ayes 12, Noes 0)

**************

ASSEMBLY THIRD READING

ATR Bill Id:AB 1908

Author:(McKinnor)

As Amended Ver:March 16, 2026

Majority vote

SUMMARY

Clarifies the existing law related to validation actions to specify that bonds and other forms of debt financing necessary to satisfy the obligations of a victims' compensation fund is authorized as of the date the establishment of such a fund via the adoption of a resolution or ordinance by a county board of supervisors.

Major Provisions

1. Provides that a tort action judgment or settlement agreement, or victim's compensation fund and the related bonds, bond related documents, credit reimbursement, or other agreement are to be deemed to be in existence as of the date of adoption by a public agency's governing body of a resolution or ordinance.
2. Provides that the obligations specified in 1) are valid on the date specified in 1) notwithstanding any of the following:
   1. The date on which a party files a tort action or the court enters a final judgment therein;
   2. The date on which the public agency enters into a settlement agreement;
   3. Whether the effectiveness of a settlement agreement entered into by the public agency is contingent on any condition precedent; or
   4. Whether the victims' compensation fund claim period has expired, or whether the fund has issued all compensation or made all other applicable claim determinations.
3. Clarifies that the provisions of 1) apply when determining either of the following:
   1. The validity of any issuance or proposed issuance of refunding bonds to finance or refinance one or more of a tort action judgment or settlement, or victims' compensation fund; or
   2. The validity of any proceeding taken or proposed to be taken in a resolution or ordinance adopted by a public agency's governing body for the authorization, issuance, sale, and delivery of a bond, including any contracts or agreements providing for the issuance, security or payment of a bond, or the use of the proceeds of a bond, and any credit reimbursement or other agreement entered into or to be entered into in connection therewith.
4. Provides that the provisions of 1) apply to validation actions brought to determine the validity of any issuance or proposed issuance of bonds to finance or refinance any of the following:
   1. One or more tort judgments that have not yet been entered against the public agency by the applicable court;
   2. One or more tort settlement agreements that have not yet been entered into by the public agency;
   3. One or more tort settlement agreements entered into by the public agency whose effectiveness is contingent on any condition precedent;
   4. A victims' compensation fund established by a county.
5. Defines the following terms:
   1. A "victims' compensation fund" means a fund established to address payments to settle or pay awards to victims of childhood sexual assault, including to compensate victims pursuant to the operation of the fund; and
   2. A "tort action judgment or settlement" means a judgment entered against a public agency by one or more state or federal courts, or a tort action settlement agreement entered into by a public agency.

COMMENTS

The County of Los Angeles faces at least $4 billion in liability stemming from the county's systematic failure to prevent childhood sexual assault from occurring at several county-run youth facilities. One avenue Los Angeles County is exploring to address this massive liability is the establishment of a victims' compensation fund. This bill would clarify that, for the purpose of validating government actions, all bonds, bond related documents, credit reimbursement, or other agreements are deemed to be in existence as of the date on which the public agency adopts a resolution or ordinance approving the above-described obligations.

Validation actions are designed to give local agencies finality for some important decisions. Recognizing that some government actions need finality in order to be effective, existing law authorizes a government agency to "validate" their action by bringing an action in court. (Code of Civil Procedure Section 860 et seq.) In a validation action, the government agency essentially sues itself and then invites interested parties to intervene to challenge the agency's decision making in court. If a court upholds the agency's decision it is "validated" and therefore becomes binding and conclusive. Members of the public can also file "reserve validation" actions and force the validation proceedings as a means of contesting a governmental decision.

Like other litigation reviewing agency decision making, validation actions adopt a substantial evidence standard. (Community Youth Athletic Association v. National City (2013) 220 Cal.App.4th 1385, 1408.) Utilizing the substantial evidence standard of review, the court is directed to resolve all "reasonable doubts and inferences" in the administrative record in favor of the agency. Based on this standard, if the court determines by a preponderance of the evidence that the substantial evidence on the record supports the agency, the agency's decision is to be validated. (Ibid.) These actions are typically taken when a public agency approves new utility rates or municipal fees in order to permit the fee to be adjudicated and then quickly then go into effect. By validating the action, the agency can assure that the anticipated revenues from the validated act will be realized. While the existing law specifies that a validation action can be utilized to support the issuance of bonds, warrants, contracts, obligations, and evidences of indebtedness, it is not entirely clear how the existing law would apply to obligations arising from, or related to, litigation and settlements.

According to reports and numerous lawsuits, Los Angeles County permitted decades of abuse to occur at the MacLaren Children's Center. Originally constructed as a temporary home for foster youth, Los Angeles County's MacLaren Children's Center devolved into an overcrowded youth detention facility handling minors with a history of mental illness, criminal behavior, and a history of prior physical abuse. (Sue Fox, County Closes Center for Troubled Children, Los Angeles Times (Mar. 11, 2003) available at: https://www.latimes.com/archives/la-xpm-2003-mar-11-me-mac11-story.html.) Unfortunately, it soon came to light that overcrowded living conditions and inadequate medical services provided at the facility were the least of the problems. Following the enactment of AB 218 (Gonzalez) Chap. 861, Stats. 2018, a flurry of lawsuits arose alleging horrific acts of sexual abuse at the facility committed by facility staff employed by Los Angeles County. Thousands of claims, some dating back to 1961, forced the County of Los Angeles to enter into a record $4 billion settlement with victims in April of 2025. (LA County Reaches $4 Billion Tentative Settlement in Thousands of Sexual Abuse Cases, LA County Office of Public Information (Apr. 4, 2025) available at: https://lacounty.gov/2025/04/04/la-county-reaches-4-billion-tentative-settlement-in-thousands-of-sexual-abuse-cases/.) While the $4 billion settlement total is unprecedented, so was the decades long failure of Los Angeles County to police its own staff and protect children placed in the county's care.

As reported by the Los Angeles Times, and detailed in a 2022 lawsuit against the county, children at the facility described being "assaulted, drugged and forced to perform sex acts on MacLaren employees." (James Queally, Decades later, former foster children allege abuse at MacLaren Children's Center, Los Angeles Times (May 17, 2022) available at: https://www.latimes.com/california/story/2022-05-17/abuse-allegations-maclaren.) One victim noted that county staff would climb into bed with her on a near-nightly basis. Another victim reported the abuse began when he was five years old. Yet another victim, a 13-year-old girl, reported being beaten by MacLaren staff when she reported another employee's sexual abuse. (Ibid.) A 2001 Los Angeles County civil grand jury report noted that facility managers were not conducting background checks on potential employees leading to the hiring of at least 17 staff members despite having convictions that should have disqualified them from employment. (Ibid.) Indeed, reporting by the BBC noted that MacLaren hired convicted "burglars and drug traffickers" to care for children at the facility, many of whom were not fully aware of the scope of the abuse due to medical conditions and the medication being provided to the children in the facility's care. (Regan Morris & Danai Nesta Kupemba, LA approves $4bn to settle 'horrific' child abuse claims, BBC (Apr. 30, 2025) available at: https://www.bbc.com/news/articles/clyqe9e6gjeo.)

In addition to the settlement, in anticipation of more potential claims, the County of Los Angeles now seeks to establish a fund to compensate victims. The County aims to craft a fund that will function like other victims' compensation funds created after other scandals or disasters elsewhere in the county.

This bill clarifies that the debt obligations necessary to seed a victims' compensation are in existence when the governing body of a public agency establishes the fund. Due to the massive scope of the liability facing the County of Los Angeles, the county will have to use bonding and other forms of debt financing to assist victims while still maintaining county services. To that end, this bill clarifies when the debt obligations for victims' compensation funds becomes operative for the purposes of filing a subsequent validation action to validate the issuance of the debt. Unlike a simple utility rate increase or the issuance of general obligation bonds, the "obligation" for a victims' fund can have several triggers. To clarify the law, this bill specifies that the obligation becomes authorized upon the public agency approving a victims' compensation fund.

To provide additional clarity to the validation action timelines, the bill explicitly states that an obligation is not authorized upon the rendering of a judgment or agreement on a potential settlement. Finally, the bill adopts several definitions, including defining a victims' compensation fund as a "fund established to address payments to settle or pay awards to victims of childhood sexual assault, including to compensate victims pursuant to the operation of the fund."

Although this bill clarifies the status of the government debt needed to finance a victims' compensation fund, it does not create the fund itself. This bill clarifies how the validation process for the creation of a victims' compensation fund would operate. However, the bill does not create the fund itself and leaves that authority to the Board of Supervisors of Los Angeles County. This approach appears prudent as it enables Los Angeles County to engage with local stakeholders and tailor a program to the needs of the residents of Los Angeles County. This approach also appears prudent as it permits local governments and school districts who may face similar liability to create their own programs for addressing the needs of local victims.

According to the Author

AB 1908 establishes a locally funded Victims Compensation Fund so that survivors of abuse by former employees of Los Angeles County can have access to justice and receive timely and responsible compensation for past abuse, while ensuring that Los Angeles County can continue to provide essential public safety and fire services, safety net healthcare services, foster care services and other critical public services that over 10 million residents rely upon every day.

Arguments in Support

This bill is sponsored by the County of Los Angeles. In support of the bill the County writes:

Counties are facing growing legal exposure and rising costs for civil claims. As a result, funding these claims has become increasingly difficult. One option that the County has explored is a self-funded victims' compensation fund, which can provide fair compensation to claimants more quickly than litigation. The challenge, however, is financing the fund when cash is not readily available.

Obligation bonds are commonly used to pay awards from bench and jury trials, as well as court-approved settlements. Current law, however, limits their use to these types of legal obligations. The Code of Civil Procedure does not allow obligation bonds to finance a victims' fund. AB 1908 would create the legal mechanism to do exactly that.

Until recently, L.A. County had no need for a mechanism to issue bonds for a victims' fund, and the use of obligation bonds for this purpose was never contemplated. Rising high-dollar awards and increasing mass tort claims are changing that landscape, making it critical to ensure timely and fair payment to those who have been harmed. AB 1908 addresses this gap by giving counties the flexibility to consider creating a victims' fund to cover civil liability, particularly when it can be financed and validated through obligation bonds.

Arguments in Opposition

None on file

FISCAL COMMENTS

None

VOTES

ASM JUDICIARY: 12-0-0

YES: Kalra, Macedo, Bauer-Kahan, Bryan, Connolly, Dixon, Harabedian, Pacheco, Papan, Sanchez, Stefani, Zbur

UPDATED

VERSION: March 16, 2026

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0002361

Date of Hearing: April 14, 2026

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

ABPCA Bill Id:AB 1908

Author:(McKinnor) – As Amended Ver:March 16, 2026

SUBJECT: Civil actions: victims’ compensation funding: validating proceedings

KEY ISSUE: should the validation action statute be revised to clarify the effective date of obligations issued to pay for a victims’ compensation fund?

SYNOPSIS

In recent years, the County of Los Angeles has been held to account for permitting decades of sexual abuse to occur within the county’s juvenile justice and youth services systems. The liability stemming from the County’s repeated failures to prevent sexual assault of children within its care is now more than $4 billion and appears to be growing. The County is searching for solutions to grapple with this liability while trying to maintain public services and provide just compensation to victims of these assaults.

One of the solutions the County of Los Angeles is considering is the creation of a victims’ compensation fund. While the mechanics of the fund will be established by County officials, this bill clarifies the state’s validation process to support the debt financing needed to establish the fund. This bill specifies that the debt obligations needed to finance a victims’ compensation fund become authorized when the fund is created by a local agency. This in turn triggers the timeline for instituting a validation action to ensure the bonds cannot be challenged years later. Given the nature of victims’ compensation funds, the bill also clarifies that no other litigation timelines impact the timing of the validation proceeding.

This bill is sponsored by the County of Los Angeles who highlight the County’s need for flexibility in meeting its legal obligations to assault survivors. This bill has no registered opposition.

SUMMARY: Clarifies the existing law related to validation actions to specify that bonds and other forms of debt financing necessary to satisfy the obligations of a victims’ compensation fund is authorized as of the date the establishment of such a fund via the adoption of a resolution or ordinance by a county board of supervisors. Specifically, this bill:

1. Provides that a tort action judgment or settlement agreement, or victim’s compensation fund and the related bonds, bond related documents, credit reimbursement, or other agreement are to be deemed to be in existence as of the date of adoption by a public agency’s governing body of a resolution or ordinance.
2. Provides that the obligations specified in 1) are valid on the date specified in 1) notwithstanding any of the following:
   1. The date on which a party files a tort action or the court enters a final judgment therein;
   2. The date on which the public agency enters into a settlement agreement;
   3. Whether the effectiveness of a settlement agreement entered into by the public agency is contingent on any condition precedent; or
   4. Whether the victims’ compensation fund claim period has expired, or whether the fund has issued all compensation or made all other applicable claim determinations.
3. Clarifies that the provisions of 1) apply when determining either of the following:
   1. The validity of any issuance or proposed issuance of refunding bonds to finance or refinance one or more of a tort action judgment or settlement, or victims’ compensation fund; or
   2. The validity of any proceeding taken or proposed to be taken in a resolution or ordinance adopted by a public agency’s governing body for the authorization, issuance, sale, and delivery of a bond, including any contracts or agreements providing for the issuance, security or payment of a bond, or the use of the proceeds of a bond, and any credit reimbursement or other agreement entered into or to be entered into in connection therewith.
4. Provides that the provisions of 1) apply to validation actions brought to determine the validity of any issuance or proposed issuance of bonds to finance or refinance any of the following:
   1. One or more tort judgments that have not yet been entered against the public agency by the applicable court;
   2. One or more tort settlement agreements that have not yet been entered into by the public agency;
   3. One or more tort settlement agreements entered into by the public agency whose effectiveness is contingent on any condition precedent;
   4. A victims’ compensation fund established by a county.
5. Defines the following terms:
   1. A “victims’ compensation fund” means a fund established to address payments to settle or pay awards to victims of childhood sexual assault, including to compensate victims pursuant to the operation of the fund; and
   2. A “tort action judgment or settlement” means a judgment entered against a public agency by one or more state or federal courts, or a tort action settlement agreement entered into by a public agency.

EXISTING LAW:

1. Permits a public agency upon taking an action for which validation is permitted by law, and for 60 days thereafter, to bring an action in the superior court of the county in which the principal office of the public agency is located to determine the validity of such matter, and clarifies that the action is in the nature of a proceeding in rem. (Code of Civil Procedure Section 860.)
2. Provides that jurisdiction of all interested parties in a validation action authorized by 1) may be had by publication of summons in a newspaper of general circulation designated by the court, published in the county where the action is pending and whenever possible within the boundaries of the public agency, and in such other counties as may be ordered by the court, and if there be no such newspaper in any such county or counties then in some adjoining county. (Code of Civil Procedure Section 861.)
3. Provides that for the purpose of a validation action authorized by 1) bonds, warrants, contracts, obligations, and evidences of indebtedness are to be deemed to be in existence upon their authorization. Bonds and warrants are to be deemed authorized as of the date of adoption by the governing body of the public agency of a resolution or ordinance authorizing their issuance, and contracts are to be deemed authorized as of the date of adoption by the governing body of the public agency of a resolution or ordinance approving the contract and authorizing its execution. (Code of Civil Procedure Section 864.)
4. Requires any validations actions concerning similar contests which may be brought to challenge a public agency’s actions be consolidated for trial. (Code of Civil Procedure Section 865.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: The County of Los Angeles faces at least $4 billion in liability stemming from the county’s systematic failure to prevent childhood sexual assault from occurring at several county-run youth facilities. One avenue Los Angeles County is exploring to address this massive liability is the establishment of a victims’ compensation fund. This bill would clarify that, for the purpose of validating government actions, all bonds, bond related documents, credit reimbursement, or other agreements are deemed to be in existence as of the date on which the public agency adopts a resolution or ordinance approving the above-described obligations. In support of this bill, the author states:

AB 1908 establishes a locally funded Victims Compensation Fund so that survivors of abuse by former employees of Los Angeles County can have access to justice and receive timely and responsible compensation for past abuse, while ensuring that Los Angeles County can continue to provide essential public safety and fire services, safety net healthcare services, foster care services and other critical public services that over 10 million residents rely upon every day

Validation actions are designed to give local agencies finality for some important decisions. Recognizing that some government actions need finality in order to be effective, existing law authorizes a government agency to “validate” their action by bringing an action in court. (Code of Civil Procedure Section 860 et seq.) In a validation action, the government agency essentially sues itself and then invites interested parties to intervene to challenge the agency’s decision making in court. If a court upholds the agency’s decision it is “validated” and therefore becomes binding and conclusive. Members of the public can also file “reserve validation” actions and force the validation proceedings as a means of contesting a governmental decision.

Like other litigation reviewing agency decision making, validation actions adopt a substantial evidence standard. (Community Youth Athletic Association v. National City (2013) 220 Cal.App.4th 1385, 1408.) Utilizing the substantial evidence standard of review, the court is directed to resolve all “reasonable doubts and inferences” in the administrative record in favor of the agency. Based on this standard, if the court determines by a preponderance of the evidence that the substantial evidence on the record supports the agency, the agency’s decision is to be validated. (Ibid.) These actions are typically taken when a public agency approves new utility rates or municipal fees in order to permit the fee to be adjudicated and then quickly then go into effect. By validating the action, the agency can assure that the anticipated revenues from the validated act will be realized. While the existing law specifies that a validation action can be utilized to support the issuance of bonds, warrants, contracts, obligations, and evidences of indebtedness, it is not entirely clear how the existing law would apply to obligations arising from, or related to, litigation and settlements.

According to reports and numerous lawsuits, Los Angeles County permitted decades of abuse to occur at the MacLaren Children’s Center. Originally constructed as a temporary home for foster youth, Los Angeles County’s MacLaren Children’s Center devolved into an overcrowded youth detention facility handling minors with a history of mental illness, criminal behavior, and a history of prior physical abuse. (Sue Fox, County Closes Center for Troubled Children, Los Angeles Times (Mar. 11, 2003) available at: https://www.latimes.com/archives/la-xpm-2003-mar-11-me-mac11-story.html.) Unfortunately, it soon came to light that overcrowded living conditions and inadequate medical services provided at the facility were the least of the problems. Following the enactment of AB 218 (Gonzalez) Chap. 861, Stats. 2018, a flurry of lawsuits arose alleging horrific acts of sexual abuse at the facility committed by facility staff employed by Los Angeles County. Thousands of claims, some dating back to 1961, forced the County of Los Angeles to enter into a record $4 billion settlement with victims in April of 2025. (LA County Reaches $4 Billion Tentative Settlement in Thousands of Sexual Abuse Cases, LA County Office of Public Information (Apr. 4, 2025) available at: https://lacounty.gov/2025/04/04/la-county-reaches-4-billion-tentative-settlement-in-thousands-of-sexual-abuse-cases/.) While the $4 billion settlement total is unprecedented, so was the decades long failure of Los Angeles County to police its own staff and protect children placed in the county’s care.

As reported by the Los Angeles Time, and detailed in a 2022 lawsuit against the county, children at the facility described being “assaulted, drugged and forced to perform sex acts on MacLaren employees.” (James Queally, Decades later, former foster children allege abuse at MacLaren Children’s Center, Los Angeles Times (May 17, 2022) available at: https://www.latimes.com/california/story/2022-05-17/abuse-allegations-maclaren.) One victim noted that county staff would climb into bed with her on a near-nightly basis. Another victim reported the abuse began when he was five years old. Yet another victim, a 13-year-old girl, reported being beaten by MacLaren staff when she reported another employee’s sexual abuse. (Ibid.) A 2001 Los Angeles County civil grand jury report noted that facility managers were not conducting background checks on potential employees leading to the hiring of at least 17 staff members despite having convictions that should have disqualified them from employment. (Ibid.) Indeed, reporting by the BBC noted that MacLaren hired convicted “burglars and drug traffickers” to care for children at the facility, many of whom were not fully aware of the scope of the abuse due to medical conditions and the medication being provided to the children in the facility’s care. (Regan Morris & Danai Nesta Kupemba, LA approves $4bn to settle 'horrific' child abuse claims, BBC (Apr. 30, 2025) available at: https://www.bbc.com/news/articles/clyqe9e6gjeo.)

In addition to the settlement, in anticipation of more potential claims, the County of Los Angeles now seeks to establish a fund to compensate victims. The County aims to craft a fund that will function like other victims’ compensation funds created after other scandals or disasters elsewhere in the county.

This bill clarifies that the debt obligations necessary to seed a victims’ compensation are in existence when the governing body of a public agency establishes the fund. Due to the massive scope of the liability facing the County of Los Angeles, the county will have to use bonding and other forms of debt financing to assist victims while still maintaining county services. To that end, this bill clarifies when the debt obligations for victims’ compensation funds becomes operative for the purposes of filing a subsequent validation action to validate the issuance of the debt. Unlike a simple utility rate increase or the issuance of general obligation bonds, the “obligation” for a victims’ fund can have several triggers. To clarify the law, this bill specifies that the obligation becomes authorized upon the public agency approving a victims’ compensation fund.

To provide additional clarity to the validation action timelines, the bill explicitly states that an obligation is not authorized upon the rendering of a judgment or agreement on a potential settlement. Finally, the bill adopts several definitions, including defining a victims’ compensation fund as a “fund established to address payments to settle or pay awards to victims of childhood sexual assault, including to compensate victims pursuant to the operation of the fund.” It should be noted that by limiting the definition in the bill, this measure only applies to funds to compensate for childhood sexual assault. While this definition is perfectly understood in the context of Los Angeles County’s liability, the author may wish to consider removing references to childhood sexual assault, thereby permitting this new authority to apply to any victims’ compensation fund established by a local jurisdiction in the state, regardless of the triggering cause for creating the fund.

Although this bill clarifies the status of the government debt needed to finance a victims’ compensation fund, it does not create the fund itself. This bill clarifies how the validation process for the creation of a victims’ compensation fund would operate. However, the bill does not create the fund itself and leaves that authority to the Board of Supervisors of Los Angeles County. This approach appears prudent as it enables Los Angeles County to engage with local stakeholders and tailor a program to the needs of the residents of Los Angeles County. This approach also appears prudent as it permits local governments and school districts who may face similar liability to create their own programs for addressing the needs of local victims.

ARGUMENTS IN SUPPORT: This bill is sponsored by the County of Los Angeles. In support of the bill the County writes:

Counties are facing growing legal exposure and rising costs for civil claims. As a result, funding these claims has become increasingly difficult. One option that the County has explored is a self-funded victims’ compensation fund, which can provide fair compensation to claimants more quickly than litigation. The challenge, however, is financing the fund when cash is not readily available.

Obligation bonds are commonly used to pay awards from bench and jury trials, as well as court-approved settlements. Current law, however, limits their use to these types of legal obligations. The Code of Civil Procedure does not allow obligation bonds to finance a victims’ fund. AB 1908 would create the legal mechanism to do exactly that.

Until recently, L.A. County had no need for a mechanism to issue bonds for a victims’ fund, and the use of obligation bonds for this purpose was never contemplated. Rising high-dollar awards and increasing mass tort claims are changing that landscape, making it critical to ensure timely and fair payment to those who have been harmed. AB 1908 addresses this gap by giving counties the flexibility to consider creating a victims’ fund to cover civil liability, particularly when it can be financed and validated through obligation bonds.

REGISTERED SUPPORT / OPPOSITION:

Support

County of Los Angeles

Opposition

None on file

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334