BILL ANALYSIS AB 2173 Page 1 Date of Hearing: April 28, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2173 (Beall) - As Amended: April 5, 2010 Policy Committee: HealthVote:15-2 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This bill establishes the Emergency Air Medical Transportation Act, which would create a $3 penalty assessment on all Vehicle Code violations (except parking offenses) to provide a funding source to augment Medi-Cal reimbursement for air ambulance services. Specifically, this bill: 1)Adds $3 to every fine, penalty, or forfeiture imposed and collected by the courts for all offenses involving a violation of the Vehicle Code or a local ordinance adopted pursuant to the Vehicle Code, except specified parking offenses. The county board of supervisors shall establish in the county treasury a special fund into which the $3 assessment will be deposited prior to monthly transfer to the State Controller for credit to the Emergency Air Medical Transportation Act Fund, created by this bill, under the State Department of Health Care Services (DHCS) to augment Medi-Cal emergency air medical transportation reimbursements. 2)Requires DHCS to seek federal matching funds by the Emergency Air Medical Transportation Act Fund to augment Medi-Cal reimbursements for air ambulance service. FISCAL EFFECT 1)Potential increased revenue in the range of $40 million . Extrapolating from the 7,248,217 court abstracts with AB 2173 Page 2 convictions for typically multiple Vehicle Code violations, which average about two per abstract, between March 2008 and March 2009, a $3 penalty assessment on each traffic fine would result in increased revenue of about $43.5 million, assuming no diminishing returns as a result of changes in judicial behavior, collections, or ability to pay. 2)Proliferation of assessments and charges has driven fines upward . For example, a $500 criminal fine with current maximum assessments would be $1,995, shocking defendants who think $500 means $500. 3)Increasing assessments may result in diminishing returns . Judges do have the discretion to reduce the base fine, which then reduces revenue to state and local governments, as well as to assessments. As current penalty assessments can almost triple the base fine, increasing fines and assessments may have the unintended consequence of reduced fine collections. Indigent defendants facing ever-increasing fees may simply choose to spend time in jail in lieu of paying the fine, causing taxpayers to pay the jail costs while state and local government receive fewer penalty funds. Moreover, county jail population caps may provide additional incentives to opt for jail time over fines, as the time served for nonviolent offenders may be minimal. As noted by the California Research Bureau (CRB) in its 2006 review of penalty assessments, "High penalty assessments may result in higher rates of default by the guilty parties. Some offenders may spend time in jail, or plea for community service, rather than pay the fine and penalty assessment. The end result may be that a substantial amount of fines, fees and revenue is not collected." COMMENTS 1)Rationale . The author states that air ambulance services are a crucial, cost-effective component of the emergency medical system that is significantly undercompensated by Medi-Cal. The purpose of this bill is to create a funding source to increase AB 2173 Page 3 Medi-Cal reimbursents for air ambulances. According to the author, "Air ambulance services provide life-saving emergency transportation for the most critical patients from accident scenes directly to trauma centers. Emergency helicopter air ambulance providers maintain a critical link between rural areas and urban tertiary care hospitals (trauma centers, heart/stroke centers, burn units, etc.). "They are an essential part of the Statewide EMS system and play a key role in disaster response and homeland security. The Medi-Cal program pays air ambulance services far below the cost of providing emergency air transportation, and pays nothing if the patient is indigent and not eligible for Medi-Cal. Current Medi-Cal base rates for helicopter services are only 40% of the average Medicare rates in California, which are similarly inadequate to cover costs. In rural areas this can fall below 35% of the cost of the transport." 2)Existing Penalty Assessments . Existing law provides for a series of intertwined and complex penalty assessments. As noted by the CRB, "California now has dedicated funding streams for over 269 separate court fines, fees, forfeitures, surcharges and penalty assessments that may be levied on offenders and violators." The major assessments include: a) A state penalty assessment of $10 for every $10 on every fine, penalty or forfeiture imposed and collected by the courts for all criminal offenses, including vehicle offenses except parking fines. Of the funds collected, 70% goes to the state and 30% to the county. The state portion is distributed as follows: i) Fish and Game Preservation Fund: .33% ii) Restitution Fund: 32.02% iii) Peace Officers Training Fund: 23.99% iv) Driver Training Penalty Assessment Fund: 25.70% v) Corrections Training Fund: 7.88% vi) Local Public Prosecutors and Public Defenders AB 2173 Page 4 Fund: .78%, not to exceed $850,000 vii) Victim-Witness Assistance Fund: 8.64% viii) Traumatic Brain Injury Fund: .66%. b) A county penalty assessment of $7 for every $10 on every fine, penalty, or forfeiture imposed and collected by the courts for criminal offenses, including vehicle offenses, except parking fines. Proceeds are distributed to funds established by county boards of supervisors: Courthouse Construction, Criminal Justice Facilities Construction, Automated Fingerprint Identification, Emergency Medical Services, DNA. c) A state surcharge of 20% on every base fine collected by the court, deposited in the GF. d) A State Court Facilities Construction penalty assessment of up to $5 for every $10 upon every fine, penalty or forfeiture collected by the courts for criminal offenses. e) A court security fee of $30 on every conviction for a criminal offense for court security. f) Proposition 69 levied a $1 penalty assessment on every $10 in fines and forfeitures resulting from criminal and traffic offenses and dedicates these revenues to state and local governments for DNA databank implementation purposes. g) The EMS Fund provides supplemental financing for local emergency services via a $2 penalty assessment for each $10 of traffic fines. h) An additional 20% assessment of $2 for every $10 on every fine, penalty, forfeiture or criminal offenses and all offenses dealing with the Vehicle Code except parking offenses for emergency medical services, in addition to the EMS Fund. AB 2173 Page 5 i) An additional $30 for every felony or misdemeanor criminal conviction and $35 for every criminal infraction, including traffic offenses, but not including parking offenses, for the Immediate and Critical Needs Account (ICNA) within the existing State Court Facilities Construction Fund (SCFCF). j) The CRB found that 86% of penalty assessments are paid by Vehicle Code violators . Criminal defendants who committed more serious offenses are less likely to have the ability to pay any fines assessed in addition to other punishments such as county jail or state prison sentences 3)Support . The California Chapter of the Association of Air Ambulance Medical Services (CAL-AAMS) states that air ambulances provide an essential service and provide emergency transports to many trauma and cardiac patients without any form of health insurance. The Regional Council of Rural Counties states that given the vast distances between hospital or trauma facilities and the range of geographic barriers for land-based transportation, access to air ambulance services is often a matter of life or death in rural areas. 4)Opposition . The Automobile Club of Southern California and the AAA of Northern California states that 70% to 80% of penalty assessment revenue is generated from Vehicle Code moving violations. The AAA contends that while air medical transportation is a laudable program, increasing program funding via Vehicle Code assessments places a disproportionate burden upon the motoring public. The California Teamsters Public Affairs Council notes the cost of citations has increased dramatically in recent years as an alternative means of funding services. As a result, citations are now unaffordable for many Californians and often fall on commercial drivers. 5)Previous Legislation . This bill is essentially the same as the author's AB 1153, which was held on this committee's Suspense File last year. Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081 AB 2173 Page 6