SAN FRANCISCO - California officials appear to have received at least a temporary reprieve from the full scope of a federal court motion demanding $8 billion to implement a state prison hospital construction program.

Even as the state's lawyers received a stern lecture from the judge in the case yesterday, the court-appointed receiver in the case was essentially offering the state a short-term, $250 million solution.

Yesterday's hearing stemmed from a motion by the federal receiver, J. Clark Kelso, to hold Gov. Arnold Schwarzenegger and state Controller John Chiang in contempt of court for failing to deliver $8 billion in capital funding, including about $3.5 billion in the current fiscal year.

Legislation to provide that funding through lease-revenue bonds failed in the Legislature this year.

Kelso was appointed by U.S. District Judge Thelton Henderson, who assigned him broad powers to implement a settlement agreement the state government accepted in 2002 in a case that argued that health care services provided to inmates were so inadequate they violated prisoners' constitutional rights.

The receiver is willing to hold off on the contempt process for now if the state provides $250 million appropriated in a separate 2007 lease-revenue bond authorization that was approved by the Legislature, the receiver's counsel for the contempt case, James Brosnahan, told the court.

"The $250 million gets us through this year into early next year," Kelso told reporters after the hearing.

That would give the Legislature that convenes next January a chance to revisit the issue.

"Contempt of the governor is something to be done carefully," Brosnahan said after the hearing.

Before the hearing, California Attorney General Jerry Brown submitted a motion arguing that the federal court does not have the legal power to mandate state prison construction and that the receiver has failed to adequately justify the amount of money he is seeking.

Henderson, during the hearing, made it clear that the state would have a hard time getting such arguments across. The state already accepted the consent order, and the proceedings are to ensure that it is fulfilled, he said; the state therefore has already consented to the finding that capital improvements are needed to provide adequate health care, and the time has passed to argue otherwise.

"If defendants now so contend, you will have a steep path ahead," he said.

Daniel Powell, a deputy attorney general representing the state, told the judge that a project of the scope demanded by the receiver requires bond financing, which requires the Legislature to act.

"The state simply does not have the funds to finance the receiver's construction plan on a pay-as-you-go basis," he said. He also noted the state is already facing challenges borrowing the money it needs this month to pay for its ongoing operations.

Henderson said he would hold another hearing on the matter on Oct. 20, and would issue a written order this week explaining what he expects from the state at that hearing.

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