Settlements, conditions, or orders when an agency of the executive branch is a party.

(1) In any civil action in which a state executive branch agency or officer is a party in state or federal court, the officer, agent, official, or attorney who represents or is acting on behalf of such agency or officer may not settle such action, consent to any condition, or agree to any order in connection therewith, if the settlement, condition, or order requires the expenditure of or the obligation to expend any state funds or other state resources exceeding $1 million, the refund or future loss of state revenues exceeding $10 million, or the establishment of any new program, unless:

(a) The expenditure is provided for by an existing appropriation or program established by law.

(b) At the time settlement negotiations have begun in earnest, written notification is given to the President of the Senate, the Speaker of the House of Representatives, the Senate and House of Representatives minority leaders, the chairs of the appropriations committees of the Legislature, and the Attorney General.

(c) Prior written notification is given at least 5 business days, or as soon thereafter as practicable, before the date the settlement or presettlement agreement or order is to be made final to the President of the Senate, the Speaker of the House of Representatives, the Senate and House of Representatives minority leaders, the chairs of the appropriations committees of the Legislature, and the Attorney General. Such notification shall specify how the agency involved will address the costs in future years within the limits of current appropriations.

1. The Division of Risk Management need not give the notification required by this paragraph when settling any claim covered by the state self-insurance program for an amount less than $250,000.

2. The notification specified in this paragraph is not required if:

a. The only settlement obligation of the state resulting from the claim is to pay court costs in an amount less than $10,000;

b. Notification would preclude the state’s participation in multistate litigation;

c. Notification is precluded by federal law or regulation;

d. Notification is precluded by court rule or sanction;

e. The head of the primary state agency involved in the litigation certifies to the President of the Senate and the Speaker of the House of Representatives, in writing within 5 days after the settlement, the specific reasons prior notification could not be provided;

f. Settlement or presettlement negotiations are being conducted with fewer than all of the opposing parties; or

g. The President of the Senate and the Speaker of the House of Representatives or the chairs of the appropriations committees of the Legislature, acting in the best interest of the state, waive notification.

(2) The state executive branch agency or officer shall negotiate a closure date as soon as possible for the civil action.

(3) The state executive branch agency or officer may not pledge any current or future action of another branch of state government as a condition for settling the civil action.

(4) Any settlement that commits the state to spending in excess of current appropriations or to policy changes inconsistent with current state law shall be contingent upon and subject to legislative appropriation or statutory amendment. The state agency or officer may agree to use all efforts to procure legislative funding or statutory amendment.

(5) When a state agency or officer settles an action or legal claim in which the state asserted a right to recover money, all moneys paid to the state by a party in full or partial exchange for a release of the state’s claim shall be placed into the General Revenue Fund or the appropriate trust fund.

(6) State executive branch agencies and officers shall report to each substantive and fiscal committee of the Legislature having jurisdiction over the reporting agency on all potential settlements that may commit the state to:

(a) Spend in excess of current appropriations; or

(b) Make policy changes inconsistent with current state law.

The state executive branch agency or officer shall provide periodic updates to the appropriate legislative committees on these issues during the settlement process.