The settlement was clearly a move to head off a possibly more expensive damage award had a jury decided the payment.
According to the bill analysis, the Department of Justice recommended the amount because Dugard and her two daughters fathered by her accused kidnapper will require counseling for the rest of their lives.
"It's a real recognition and acknowledgement of what a terrible, terrible situation the family finds itself in and hopefully this will go towards counseling, healthcare, education, everything that's going to be necessary, clearly for a lifetime, to try and mitigate the harm that was done," Assm. Felipe Fuentes, D-Los Angeles, said.
Dugard was only 11 years old when she was snatched from her South Lake Tahoe neighborhood. She was found alive nearly two decades later in the Bay Area.
The California Department of Corrections came under fire for its poor supervision of Dugard's alleged kidnapper and rapist, Phillip Garrido. He was a convicted sex offender, and parole agents missed several opportunities to find the backyard compound where Dugard was living.
Assm. Joel Anderson,R-El Cajon, voted against the settlement because a trial would have forced Corrections to produce records on what went wrong.
"See, if they go to court, there's going to be subpoenas. And we're going to get to the bottom of it. There's not going to be any hiding in the bureaucracy," he said. "I want to stop this in the future. I'm more interested in protecting children than the bureaucracy."
Corrections wouldn't comment but says it has taken steps to make sure this doesn't happen again, including better property searches of sex offenders and GPS monitoring of all sex offenders on parole, regardless of risk.
Critics warn it's not enough.
"One of the misnomers in GPS tracking is they're watching sex offenders 24 hours a day, and they're not. It's not real time," Christine Ward from Crime Victims Action Alliance said.
Governor Arnold Schwarzenegger has indicated he will sign the settlement, but it could be awhile until Dugard gets her money. Checks cannot be cut as long as there's a budget stalemate.