County counsel warns that charging interest on intra-county transfer may raise Government Code issues

Oct 8, 2026

County Counsel told the Lake County Board that labeling additional repayment amounts as 'interest' could trigger Government Code preemption questions and recommended staff further review; the board instead amended the draft to avoid explicit interest charges.

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County Counsel told the Lake County Board of Supervisors that the proposed amendment to require interest on a general-fund loan to Behavioral Health could raise legal questions under the Government Code and may be preempted if the statute does not expressly authorize the practice. "There is a potential legal issue here on, as it relates to preemption under the government code where the question of whether or not, interest payments can be, made," counsel said.

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