BILL ANALYSIS Ó
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 412
A
AUTHOR: Williams
B
AMENDED: May 27, 2011
HEARING DATE: June 29, 2011
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REFERRAL: Public Safety
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CONSULTANT:
2
Tadeo
SUBJECT
Emergency medical services
SUMMARY
Reenacts, until January 1, 2014, provisions that sunset on
January 1, 2011, authorizing Santa Barbara County to
collect a penalty of $5 for every $10 in base fines imposed
on criminal offenses and specified vehicle code offenses to
be deposited in a Maddy Emergency Services Fund (Maddy EMS
Fund), for the purpose of supporting emergency medical
services (EMS).
CHANGES TO EXISTING LAW
Existing law:
Authorizes counties to establish a Maddy EMS Fund, funded
by specified revenue penalties, and specifies a
distribution formula for the funds, including reimbursement
to physicians and hospitals for patients when payment is
not otherwise made for those services, pediatric trauma
centers, administrative expenses and other local EMS
purposes.
Requires any county that establishes a Maddy EMS Fund to
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deposit $2 for every $7 of penalties imposed by the courts
for criminal offenses into the fund.
Establishes an additional EMS penalty assessment of $2 for
every $10 on every fine, penalty, forfeiture or criminal
offense and all offenses dealing with the Vehicle Code
except parking offenses, for local Maddy EMS Funds.
Until January 1, 2011, authorized Santa Barbara County, for
purposes of supporting EMS in the county, to collect an
additional specified penalty assessment on every fine,
penalty, or forfeiture collected for all criminal offenses,
except as specified, if the Santa Barbara County Board of
Supervisors adopts a resolution stating that implementation
of this provision is necessary to the county for purposes
of providing payment for EMS.
Until January 1, 2011, required, upon the establishment of
a Maddy EMS Fund in Santa Barbara County, that the amount
that would have been collected as penalty assessments be
deposited in the Maddy EMS Fund established by the county.
Establishes various other penalty assessments on specified
fines, penalties and offenses for distribution to funds
established by local governments, including, but not
limited to the Courthouse Construction Fund, Criminal
Justice Facilities Construction Fund, Maddy EMS Funds;
state portions of these penalty assessments include, but
are not limited to the Fish and Game Preservation Fund,
Peace Officers Training Fund, Corrections Training Fund,
Traumatic Brain Injury Fund, and General Fund.
Establishes a $4 EMS penalty assessment on every conviction
of a violation of the Vehicle Code, or a local ordinance
adopted pursuant to the Vehicle Code, except parking
offenses, to augment emergency medical air transportation
reimbursement payments made through the Medi-Cal program
and to offset the state portion of the Medi-Cal
reimbursement rate for emergency medical air transportation
services.
This bill:
Reenacts provisions that sunset on January 1, 2011,
authorizing Santa Barbara County to impose a penalty of $5
for every $10, or part of $10, on fines, penalties, and
forfeitures collected for all criminal offenses and
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specified vehicle code offenses related to driving under
the influence (DUI), to be deposited in a Maddy Fund,
established by the county, for the purpose of supporting
EMS, until January 1, 2014.
Requires the proceeds of the penalty assessment to be
payable for the same purposes as prior EMS assessment
revenue.
Conditions implementation of this bill upon adoption of a
resolution of necessity by the Santa Barbara County Board
of Supervisors.
Requires the Santa Barbara County Board of Supervisors to
report to the Legislature on the actions taken to implement
alternative local sources of funding for EMS.
Exempts restitution fines, specified penalties, and parking
offenses from imposition of the additional penalty
calculation.
FISCAL IMPACT
According to the Assembly Appropriations Committee analysis
of AB 412, this bill would result in revenue of
approximately $700,000 annually from penalty assessments to
Santa Barbara County, upon the Board of Supervisors'
approval.
The analysis adds that increasing assessments may result in
diminishing returns to existing assessments. As current
penalty assessments quadruple the base fine, increasing
fines and assessments may have the unintended consequence
of reduced fine collections. The analysis also states that
judges may reduce base fines, or 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 governments receive
fewer penalty funds.
BACKGROUND AND DISCUSSION
The author argues that AB 412 is necessary to reenact the
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authorization for Santa Barbara County to impose additional
penalty assessments to provide funding for the county's
Maddy EMS Fund. The author states that at the time of the
enactment of the penalty assessment for the county's Maddy
EMS Fund, Santa Barbara County did not have a trauma center
and elected to use the funding for its court facilities
instead. The author adds that counties do not have the
authority to raise penalty assessments at the local level,
making it necessary to ask the state for such authority.
Local EMS funds
In 1987, the Legislature concluded that EMS providers bore
higher costs for their services than did providers of other
medical services, but often received only partial or no
payment from patients. The state enacted a series of bills
to compensate physicians and medical facilities for EMS
provided to patients who do not have health insurance and
cannot pay for their medical care.
Funds from penalty assessments must be used to reimburse
physicians and hospitals for patients who do not make
payment for EMS services and have no third-party or
government source of payment. Fifty-eight percent of these
funds, after administrative costs, must be distributed to
physicians for emergency services, 25 percent to hospitals
providing disproportionate levels of trauma and EMS, and 17
percent to other EMS purposes as determined by each county,
including regional poison centers. Physicians can be
reimbursed for up to 50 percent of the losses submitted.
According to a March 2004 California State Auditor Report
on County Maddy EMS Funds, as of November 2003, 49 counties
had established Maddy EMS Funds, 40 of which were
established prior to June 1, 1991.
Penalty assessments
The Legislature has increasingly turned to penalty
assessments on criminal and traffic offenses as a method of
raising revenue for various projects. The state now has
over 269 programs or services that rely on court fines,
fees, forfeitures, surcharges and penalty assessments that
are levied on offenders and violators. The current
assessment is almost quadruple the base fine on individuals
who commit traffic violations. A study conducted by the
California Research Bureau (CRB) in February 2006 found, in
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counties in which the data was available, that the majority
of penalties and assessments collected were from Vehicle
Code violations. Many criminal defendants who commit more
serious offenses under the Penal Code are unlikely to have
the ability to pay any fines assessed, in addition to other
punishments such as county jail or state prison sentences.
Judges 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 quadruple the base fine, increasing fines and
assessments may have the unintended consequence of reducing
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. The 2006 CRB report also noted that high penalty
assessments may result in higher rates of default by the
guilty parties.
Santa Barbara County
In November of 1991, the Santa Barbara County Board of
Supervisors allocated all county penalty assessment revenue
evenly between the Courthouse Construction Fund and the
Criminal Justice Facilities Construction Fund. In 2001,
the Santa Barbara County Board of Supervisors issued a
Certificate of Participation for $40 million for
construction of courthouse and criminal justice facilities.
This debt is serviced by the Criminal Justice Facilities
Construction Fund and the Courthouse Construction Fund
until 2021 including the penalty assessments that would
have otherwise been used to establish a Maddy EMS Fund.
In 2004, the Legislature granted authority to increase
penalty assessments only for the purposes of establishing a
Maddy EMS Fund, with the intent that the assessment would
sunset in 2007 and a permanent local funding source would
be secured. Through subsequent legislation, the sunset was
extended until 2009, and again until January 1, 2011.
In a 2006 report to the Legislature, Santa Barbara County
stated that it could not put funding for the Maddy EMS Fund
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on the ballot for November 2006 because of competing ballot
measures. According to the report, an extension of the
sunset would give the county time to increase critical
awareness of the need for emergency room/trauma center
funding and coordinate the development of ballot measures.
The report states that there has been an increased need for
a Maddy EMS Fund in Santa Barbara County due to a dramatic
rise in the in the rates of uninsured in the local
emergency departments (EDs), a decrease in payments from
government programs such as Medicare, and the costs of
seismic retrofit and nurse staffing- ratio requirements.
Additionally, Santa Barbara County was the only county in
the state with a Level II Trauma Center that did not
receive Maddy EMS funds. The report also states that the
revenue from the EMS Fund that was due to sunset was
anticipated to be $137,000 monthly or $1.6 million
annually. The report added that, contrary to the assertion
of opponents, the increase in the fines had not led to
diminishing revenues to the other penalty assessment funds
in Santa Barbara County. The report also found that while
the promised tax had not been placed on the ballot, the
county had identified other actions to implement
alternative sources of funding such as:
Establishment of a local Maddy Committee to
strategize for securing permanent funding;
Seeking increased Medicare reimbursement at the
federal level;
Public opinion polling in anticipation of a local
sales tax increase on the ballot;
Public education;
Committing tobacco settlement funds;
Efforts to reduce inappropriate use of the ED;
Improved ability to identify sources of
reimbursement;
Efficiencies and cost savings in the emergency
medical system; and
Injury prevention and reduction.
The county argued at that time that local hospitals were
losing an estimated $8 million annually for provision of
uncompensated emergency and trauma care, and that the
closing of two hospitals in the past seven years left only
five hospitals to serve the area. The county also argued
that it was home to the only Level II Trauma Center between
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Los Angeles and San Jose. According to the county, the
trauma center at Cottage Hospital had the only
around-the-clock physician on-call panel on the Central
Coast, the only pediatric ICU on the Central Coast, and
supported facilities throughout the tri-counties region.
After the submission of the 2006 report, Santa Barbara
County successfully sought another extension of the EMS
assessment authority from January 1, 2007, to January 1,
2009. At the time the Legislature approved the extension,
it made findings that the county required additional time
to develop an appropriate local measure, and expressed
intent that the county place a proposed county tax
ordinance on the November 2008 ballot.
According to a 2010 report to the Legislature, the Santa
Barbara County Board of Supervisors voted to place a parcel
tax measure on the ballot to fund emergency medical and
trauma care services in 2008. The measure received 46
percent of the vote, failing the required two-thirds
majority vote to pass. At the time, the loss of revenue
due to the sunset was estimated to be approximately
$700,000 per year. The 2010 report identifies additional
measures the county had taken to provide alternative
funding, including the use of Intergovernmental Transfers
(IGTs) to match local funds with federal funds in the
Medi-Cal program. The 2010 report concluded that even with
this additional revenue, it still fears a shortfall, at
least until comprehensive coverage is implemented through
the Patient Protection and Affordable Care Act in 2014.
Additionally, the Santa Barbara County LEMSA reports adds
that the IGT process has the potential to generate $900,000
in additional revenue to support Santa Barbara County
hospitals for FY 2010-11 with the possibility of $200,000
in additional revenue to support emergency room physician
groups. The Santa Barbara County LEMSA also states that
the Board of Supervisors' allocation of 100 percent of
local tobacco settlement funds to health needs resulted in
over $4.1 million allocated to hospitals, emergency room
physicians, and primary care providers for care to the
uninsured last year.
Prior legislation
AB 1900 (Nava), Chapter 323, Statutes of 2008, extends the
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sunset date from January 1, 2009 to January 1, 2011,
authorizing Santa Barbara County to collect additional
penalty assessments of $5 for every $10 in base fines, to
be imposed on every fine, penalty, or forfeiture collected
for criminal offenses, and restricted Vehicle Code
violations to specified DUI violations for purposes of
providing payment for EMS.
SB 1236 (Padilla), Chapter 60, Statutes of 2008, extends
the sunset date from January 1, 2009 to January 1, 2014,
authorizing a county board of supervisors to elect to levy
an additional penalty in the amount of $2 for every $10,
upon fines, penalties, and forfeitures collected for
criminal offenses, and requires 15 percent of the funds
collected pursuant to that additional penalty to be
expended for pediatric trauma centers.
AB 2265 (Nava), Chapter 768, Statutes of 2006, authorizes
Santa Barbara County, until January 1, 2009, to collect
additional penalty assessments of $5 for every $10 in base
fines, to be imposed on every fine, penalty, or forfeiture
collected for criminal offenses, including all offenses
involving a violation of the Vehicle Code or any local
ordinance adopted pursuant to the Vehicle Code, except
specified parking offenses for purposes of providing
payment for EMS.
SB 1773 (Alarcon), Chapter 841, Statutes of 2006,
authorizes counties, until January 1, 2009, to collect an
additional $2 penalty assessment for every $10 in base
fines for purposes of providing payment for EMS, and
requires revenue generated from the assessment to be
deposited into the Maddy EMS Fund, with 15 percent
designated for pediatric trauma centers.
SB 57 (Alarcon) of 2005 would have authorized counties to
collect an additional $2 penalty assessment for every $10
in base fines for purposes of providing payment for
EMS. Would have required revenue generated from the
assessment to be deposited into the Maddy EMS Fund, with 15
percent designated for pediatric trauma centers. This bill
was vetoed by the Governor.
SB 635 (Dunn), Chapter 524, Statutes of 2004, authorizes
for purposes of supporting EMS through a Maddy EMS Fund in
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Santa Barbara County, an additional penalty of $5 for every
$10 in base fines, to be imposed on every fine, penalty, or
forfeiture collected for criminal offenses, including all
offenses involving a violation of the Vehicle Code or any
local ordinance adopted pursuant to the Vehicle Code,
except specified parking offenses, until January 1, 2007.
SB 807 (Dunn) of 2002 would have provided for an additional
$200 assessment on specified moving violations to be
deposited into the county Maddy EMS Fund and allocated in a
specified manner. This bill was vetoed by the Governor.
SB 12 (Maddy, Chapter 1240, Statutes of 1987, allows
counties to establish a Maddy EMS Fund through a $1 penalty
assessment on fines, forfeitures, and penalties associated
with certain criminal and traffic violations, and a portion
of the fees from people attending traffic violator schools
for purposes of supporting EMS.
Arguments in support
The California Chapter of the American College of Emergency
Physicians (CAL/ACEP), the sponsor of AB 412, states that
Santa Barbara County is home to five hospitals serving the
large Central Coast area. According to CAL/ACEP, the
number of ED visits to these 5 hospitals has doubled from
61,500 visits in 2005 to over 131,000 visits in 2009.
CAL/ACEP further argues that California's emergency rooms
have become the health care safety net and are the front
line of any public health emergency. CAL/ACEP contends
that while the Maddy EMS funds only reimburse a small
portion of the cost of care, they are nevertheless a
critical source of funding helping to preserve the
emergency care safety net.
Santa Barbara County states that continuing its Maddy EMS
Fund will maintain some relief for physicians and hospitals
locally and will benefit residents of other counties
because the Level II Trauma Center, Cottage Hospital,
serves as a tertiary care hospital for some of the most
seriously injured patients in the region.
The California Medical Association adds that, due to the
economic downturn, more Californians have lost health
insurance coverage, putting even more pressure on the
state's trauma system and AB 412 is needed to provide
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funding for the only trauma center on the Central Coast
between Los Angeles and San Jose.
PRIOR ACTIONS
Assembly Health: 15- 0
Assembly Local Government:9- 0
Assembly Appropriations: 17- 0
Assembly Floor: 72- 0
COMMENTS
1. Double referral. This bill will also be referred to
Public Safety.
2. Permanent funding source for trauma center and EMS in
Santa Barbara County still to be identified. Santa Barbara
County has not been able to secure a permanent local
funding mechanism to ensure the continuation of trauma care
in the region since the inception of its authority to levy
an additional penalty assessment for the purpose of
supporting EMS in the county. In the previous bill that
extended the sunset date for Santa Barbara County to impose
a penalty assessment to fund EMS, AB 1900 (Nava),
legislative findings and declarations stated that that it
was the third time that the County of Santa Barbara had
sought extraordinary assistance from the Legislature and it
was the only county in the state receiving this unique
funding. AB 1900 also stated the intent of that Santa
Barbara County secure a permanent local funding mechanism
to ensure the continuation of trauma care in the region.
AB 412 would be the fourth extension of this penalty
assessment authority for Santa Barbara County.
3. Should the sunset simply be eliminated? AB 412 marks
the fourth time a bill is introduced to extend this sunset.
POSITIONS
Support: American College of Emergency Physicians,
California Chapter (sponsor)
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California Medical Association
Santa Barbara County Board of Supervisors
Oppose:None received
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