BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 898
                                                                  Page  1

          Date of Hearing:  May 3, 2011
          Counsel:       Sandy Uribe


                         ASSEMBLY COMMITTEE ON PUBLIC SAFETY
                                 Tom Ammiano, Chair

                     AB 898 (Alejo) - As Amended:  April 25, 2011


           SUMMARY  :  Amends existing provisions of law pertaining to 
          criminal restitution fines.  Specifically,  this bill  :  

          1)Increases the restitution fine for felony offenses from a 
            minimum of $200 to $400, and a maximum of $10,000 to not more 
            than $20,000.

          2)Increases the restitution fine for misdemeanor offenses from a 
            minimum of $100 to $200, and a maximum of $1000 to not more 
            than $2,000.

          3)Modifies the existing formula the court may use to set the 
            amount of the fine to:  the product of $400 multiplied by the 
            number of years of imprisonment the defendant is ordered to 
            serve, multiplied by the number of felony counts of 
            conviction.

           EXISTING LAW  :

          1)States that, in addition to any other penalty provided or 
            imposed under the law, the court shall order the defendant to 
            pay both a restitution fine and restitution to the victim or 
            victims, if any.  ÝPenal Code Section 1202.4(a)(3).]

          2)Gives the court the discretion to set the amount of the 
            restitution fine commensurate with the seriousness of the 
            offense and other factors, as specified.  ÝPenal Code Section 
            1202.4(b)(1) and (d).]

          3)Mandates the restitution fine for felony offenses shall not be 
            less than $200 and not more than $10,000.  ÝPenal Code Section 
            1202.4(b)(1).]

          4)Mandates the restitution fine for misdemeanor offenses shall 
            not be less than $100 and not more than $1,000.  ÝPenal Code 








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            Section 1202.4(b)(1).]

          5)Permits the court to set the amount of the fine as the product 
            of $200 multiplied by the number of years of imprisonment the 
            defendant is ordered to serve, multiplied by the number of 
            felony counts of conviction.  ÝPenal Code Section 
            1202.4(b)(2).]

          6)Requires the trial court to impose the restitution fine unless 
            it finds compelling and extraordinary reasons for not doing 
            so, and states those reasons on the record.  ÝPenal Code 
            Section 1202.4(c).]

          7)Declares that inability to pay is not a compelling reason for 
            declining to impose the fine, but that inability to pay can be 
            considered as a factor in setting the fine above the statutory 
            minimum.  ÝPenal Code Section 1202.4(c).]

          8)Requires the court to assess an additional 
            probation-revocation restitution fine in the same amount as 
            that imposed for the restitution fine.  This additional fine 
            becomes effective upon the revocation of probation, and shall 
            not be waived or reduced by the court, absent compelling and 
            extraordinary reasons stated on record. Probation-revocation 
            restitution fines shall be deposited in the Restitution Fund.  
            (Penal Code Section 1202.44.)

          9)Requires the court to assess an additional parole-revocation 
            restitution fine in the same amount as that imposed for the 
            restitution fine.  This additional fine is suspended unless 
            parole is revoked.  The parole-revocation restitution fines 
            shall be deposited in the Restitution Fund.  (Penal Code 
            Section 1202.45.)

          10)Declares the restitution fine is not subject to penalty 
            assessments.  ÝPenal Code Section 1202.4(e).]

          11)Provides that when a defendant is sentenced to state prison, 
            the California Department of Corrections and Rehabilitation 
            may deduct 20 to 50% of the fine from the prisoner's wages.  
            ÝPenal Code Section 2085.5(a).]

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   








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           1)Author's Statement  :  According to the author, "AB 898 
            preserves the California Victim Compensation Program (CalVCP) 
            by updating restitution fines for the first time in nearly two 
            decades.  Since Fiscal Year (FY) 2004-05, payouts to victims 
            or their families, which often include medical and mental 
            health treatment, and funeral expenses, have been increasing 
            faster than revenues.

          "All money comes from restitution fines imposed on convicted 
            defendants; nothing is paid out of the General Fund or 
            revenues from taxes and fees.

          "AB 898 updates restitution fines based on inflationary changes, 
            ensuring that the CalVCP is a lasting resource for crime 
            victims.

          "Since January, the board that operates CalVCP has approved 
            several cuts in disbursements in an attempt to prevent 
            insolvency.  These cuts directly affect victims' ability to 
            access quality health and mental services and to recover from 
            violent crime. 

          "This bill is needed to ensure that crime victims have this 
            excellent resource for years to come." 

           2)Restitution Fines  :  A convicted defendant must pay a 
            restitution fine.  The amount varies in the trial court's 
            discretion, ranging from a minimum of $200 to a maximum of 
            $10,000, and may be calculated by multiplying $200 by the 
            years of imprisonment imposed and then multiplying by the 
            number of counts.  ÝPeople v. Hanson (2000) 23 Cal.4th 355, 
            362.]

          Imposition of the mandatory restitution fine actually results in 
            automatic imposition of two, and possibly three, fines.   If a 
            defendant is granted probation, the court is required to 
            impose and suspended a probation-revocation restitution fine 
            in this same amount.  This amount becomes due if the 
            defendant's probation is revoked.  (Penal Code Section 
            1202.44.)  When a defendant is sentenced to prison, instead of 
            probation, the court is mandated to impose and suspend a 
            parole-revocation restitution fine in the same amount as the 
            restitution fine.  The stay on the parole-revocation fine is 
            lifted if the parolee violates probation.  (Penal Code Section 








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            1202.45.)

          Thus, in a situation where a defendant is granted probation, 
            subsequently violates probation, and is then sentenced to 
            state prison, that defendant actually faces three fines in the 
            same amount as the restitution fine.  Given the recidivism 
            rates of offenders, this is a very common scenario.  The money 
            from all of three fines, not just the restitution fund fine, 
            is deposited in the restitution fund.

           3)Judicial Council Evaluating Penalty Assessments  :  The Judicial 
            Council was authorized to convene a task force to identify and 
            evaluate all fees, fines, forfeitures, penalties, and 
            assessments currently in place.  The funding for this task 
            force was authorized by SB 857 (Committee on Budget and Fiscal 
            Review), Statutes of 2010, Chapter 720.  This task force is 
            expected to present recommendations to Judicial Council and 
            the Legislature by June 30, 2011.  

           4)Calculation of Fines and Fees Has Become Burdensome and 
            Complex  :  "However laudable these charges may be, the 
            patchwork nature of the ever-growing financial penalties in 
            criminal actions has created a system that begins to match the 
            complexity of the federal income tax.  . . .  It is doubtful 
            that criminal trial lawyers and trial court judges have the 
            ability to keep track of the myriad of charges that now attach 
            to criminal convictions."  ÝPeople v. Castellanos (2009) 175 
            Cal.App.4th 1524, 1533, J. KRIEGLER, concurring.]

          "From the institutional viewpoint of the criminal justice 
            system, the current approach is problematic.  The penalties in 
            a criminal action, including any financial penalties, should 
            be easily identifiable.  Prosecutors should be able to clearly 
            determine the financial consequences of a case when assessing 
            punishment and negotiating case settlements.  Defense counsel 
            should be able to clearly and concisely explain the possible 
            financial charges to the client to ensure that when a guilty 
            or no contest plea is entered, the defendant does so with full 
            knowledge of its economic consequences.  And trial courts 
            should not have to search the Penal, Government, or Health and 
            Safety Codes in an attempt to identify mandatory fines, fees, 
            or penalties, some of which may have no logical connection to 
            a pending case.  This is not a trifling matter. This court 
            deals with issues surrounding the imposition of financial 
            charges on a regular basis. Undoubtedly, the trial courts 








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            expend precious resources in attempting to properly impose the 
            mandated penalties. The expansive criminal justice system in 
            California generates large amounts of revenue for the state 
            and local governments. It ought to do so in a more 
            straightforward manner.  There is one final note to add. As 
            the Legislature grapples with the budget deficit, there is 
            talk of new and additional fines, fees, and assessments in 
            criminal cases. The system, as it exists, is likely to only 
            become more complicated in the immediate future."   ÝPeople v. 
            Castellanos, supra, 175 Cal.App.4th at pp. 1533-1534.]

           5)California Victim Compensation and Government Claims Board 
            (VCGCB)  :  According to the VCGCB's Web site 
            (), VCGCB administers CalVCP.  This 
            program provides compensation for victims of violent crime and 
            reimburses many crime-related expenses.  CalVCP funding comes 
            from restitution fines, penalty assessments, and federal 
            matching funds.

           6)California Bureau of State Audits Report  :  The California 
            Bureau of State Audits reviewed the efficacy of the VCGCB in 
            December 2008 and made several findings as to how the VCGCB 
            paid claims over the last several years:

          "Although the VCGCB's compensation payments significantly 
            declined from their level in fiscal year 2001-02, program 
            support costs have increased.  These program support costs 
            account for a significant portion of the board's Restitution 
            Fund disbursements-ranging from 26 percent to 42 percent 
            during the seven-year period we reviewed.  Although the board 
            does not set a goal that focuses on the correlation between 
            compensation payments and program support costs, nor does it 
            set other similar goals, such goals could ensure that the 
            board is providing the highest possible level of assistance to 
            victims and their families.  Compensation payments declined 
            sharply after fiscal year 2001-02.  In that fiscal year, 
            compensation payments totaled $123.9 million.  By fiscal year 
            2003-04, payments had plummeted to $66.5 million, before 
            bottoming out at $61.6 million in fiscal year 2004-05.  This 
            represents a 50 percent decrease in compensation payments. 

          "The deputy executive officer for the program (program officer) 
            attributed the decrease in compensation payments after fiscal 
            year 2001-02 to actions that the board members took as they 
            attempted to ensure that the Restitution Fund, the fund from 








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            which the board makes disbursements for the program, remained 
            financially viable.  Effective September 2002, the board 
            members reduced the reimbursement rates for certain bills in 
            anticipation of the Restitution Fund becoming insolvent.  For 
            example, rates for medical bills, which generally had been 
            paid at workers' compensation rates, were reduced to Medicare 
            levels.

          "Also, hourly rates for mental health services were decreased by 
            type of service.  For example, the board members reduced the 
            hourly rate for clinical social workers and counselors from 
            $90 to $70 and reduced the hourly rate for psychiatrists from 
            $130 to $90.  However, in early 2003 the board did not have 
            enough money to pay all the bills it approved, so the board 
            members again reduced the reimbursement rates for medical 
            payments and delayed paying bills from providers for four 
            months.  The rates, which had been at Medicare levels, were 
            reduced to 20 percent less than Medicare.  The board members 
            also imposed limits on the number of sessions for mental 
            health services.

          "The board members' actions had a chilling effect on the number 
            of applications submitted for the program.  In fiscal year 
            2001-02, the board received 63,200 applications.  By fiscal 
            year 2003-04, the number of applications submitted had 
            decreased significantly, to 49,700, reaching a low point of 
            46,900 in fiscal year 2005-06.  The program officer indicated 
            that the decrease in applications and the related reduction in 
            payments were likely the result of several factors stemming 
            from the board members' attempts to maintain the solvency of 
            the Restitution Fund.  He stated that the board members' 
            actions of cutting rates and delaying provider payments 
            reduced providers' desire to work with the program.  As a 
            result, providers were probably less likely to tell victims to 
            apply for reimbursement.  The program officer also stated that 
            victim advocates were less likely to promote the program as a 
            source of reimbursement to cover a victim's costs.  Finally, 
            he noted that as the fund experienced difficulties, outreach 
            efforts were curtailed, which reduced knowledge of the 
            program, especially among providers and first responders.

          "While the board's compensation payments significantly declined 
            from the levels reached in fiscal year 2001-02, its program 
            support costs, such as those listed in the text box, 
            increased.  As shown in Table 2, program support costs 








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            increased from $44.4 million in fiscal year 2001-02 to $51.4 
            million in fiscal year 2007-08.  Much of the increase did not 
            occur until after fiscal year 2005-06.  Board staff pointed to 
            several reasons for the increase.  For example, in fiscal year 
            2006-07 a significant portion of the implementation of the 
            CaRES ÝCompensation Restitution System] took place.  Thus, the 
            board incurred administrative costs for added personnel and 
            information technology supplies.  The board also incurred 
            costs for a scan facility that receives all new documents for 
            applications and bills and uploads them to CaRES.  Another 
            factor that led to the increase is a greater number of 
            contracts with counties related to restitution and recovery 
            activities that support the program.

          "Program support costs accounted for between 26 percent and 42 
            percent of the board's total disbursements during fiscal years 
            2001-02 through 2007-08.  According to the deputy executive 
            officer for fiscal services (fiscal services officer), several 
            factors contribute to the board's program support costs making 
            up such a substantial portion of its total disbursements.  One 
            factor is that the board is a stand-alone entity that shares 
            no administrative or overhead costs with other entities.  As a 
            result, costs for all the management functions required for a 
            state entity, such as human resources, business services, and 
            information technology, are absorbed primarily by the 
            Restitution Fund."

          The BSA also made several recommendations:

          "The board should establish a complementary set of goals 
            designed to measure its success in maximizing assistance to 
            victims and their families.  These goals should include one 
            that focuses on the correlation of compensation payments to 
            program support costs and one that establishes a target fund 
            balance.

          "To improve its processing time for making decisions on 
            applications and for paying bills, the board should identify 
            the primary problems leading to delays and take action to 
            resolve them.  As part of its efforts, it should develop 
            specific procedures for staff to use when following up with 
            verifying entities, and it should continue its outreach 
            efforts to communicate to verifying entities the importance of 
            responding promptly to requests for information.









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          "The board should ensure that staff consistently verifies and 
            document that bills received could not be paid from other 
            reimbursable sources.  Additionally, the board should 
            consistently maintain documentation of its formal approval of 
            applications and bills.

          "To ensure that it maximizes its use of the Compensation 
            Restitution System (CaRES), the board should continue 
            correcting problems as they arise and develop goals, 
            objectives, and benchmarks related to the functions it carries 
            out under CaRES that will allow it to measure its progress in 
            providing prompt, high-quality service.  Additionally, it 
            should develop and maintain system documentation sufficient to 
            allow staff to address modifications and questions about the 
            system more efficiently and effectively.

          "The board should develop written procedures for managing its 
            workload and should implement the reporting function in CaRES 
            as soon as possible.  Further, it should establish benchmarks 
            and performance measures to evaluate whether it is effectively 
            managing its workload.

          "To ensure that the board appropriately carries out its outreach 
            efforts, it should develop a comprehensive plan that 
            prioritizes its efforts and focuses on those in need of 
            program services, and it should consider demographic and crime 
            statistics information when planning outreach strategies.  
            Additionally, the board should seek input from key 
            stakeholders such as assistance centers, JP units, and other 
            advocacy groups and associations to gain insight regarding 
            underserved and vulnerable populations.  Further, it should 
            establish quantitative measures to evaluate the effectiveness 
            of its outreach efforts."  ÝCalifornia State Auditor (December 
            2008) (hereinafter BSA Report) Victim Compensation and 
            Government Claims Board:  "It Has Begun Improving the Victim 
            Compensation Program, but More Remains to be Done" Report 
            2008-113, pgs. 1-6.]

           7)Restitution Fund Condition  :  According to the VCGCB, the 
            projected fiscal condition of the  restitution fund (as of 
            February 17, 2011) is:

                                             Proposed Governor's Budget 
                                             With
                                                    Adopted Board Actions








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                                   2009-10   2010-11   2011-12   2012-13

               Beginning Balance                      45.8                
          45.8                    29.8    23.0
               Prior Year Adjustments         6.0                 0.0      
           0.0                      0.0

               Adjusted Beginning Balance        51.8           45.8    
          29.8          23.0

               Revenue               117.3          113.3          112.3  
          111.7

               Expenditures
               Restitution Fund    
               State Operations                  31.7                33.7  
            34.9                       34.9
                 (Savings)                                 (3.5)          
          (2.2)                   (2.2)
               Other Expenditures                15.2                15.4  
            15.4                       15.5

               Claims (State Share -
                 Excludes VOCA)                  58.2                65.2  
            53.4                       55.4
               Local Assistance                  14.1                14.1  
            13.4                       13.4
               Ten Percent Rebate                  4.2                 4.2 
               4.2                       4.2

               Total Expenditures         123.4          129.3       119.1 
           121.2

               Reserve                      45.8                29.8      
          23.0          13.5

           8)Argument in Support  :  According to the  California Coalition 
            Against Sexual Assault  (the sponsor of this bill),  
            "Unfortunately the State Restitution Fund is projected to be 
            insolvent by FY 2012-2013 without any long term reforms.  
            Recently, the Board approved cuts and lowered payment caps to 
            many Victim Compensation Programs, directly affecting victims, 
            their next of kin and their ability to recover from violent 
            crime.








                                                                  AB 898
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          "We strongly believe this minor update to the restitution fine 
            will adjust the fine limits to 2010 levels and allow for the 
            Board to collect at the rates originally intended by the 
            Legislature."

           9)Argument in Opposition  :  According to the  California Public 
            Defenders Association  , "In addition to restitution fines, 
            public defender clients are already required to pay a host of 
            other fines and fees, many of which have penalty assessments 
            attached.  . . . 

          "The increase in the minimum and maximum restitution fines is 
            being proposed regardless of the type of crime committed, 
            whether any victim was involved, and is just an attempt to 
            make up for lost revenue benefitting the criminal justice 
            system."

           10)Prior Legislation  :  SB 586 (Yee), of the 2009-10 Legislative 
            Session, would have increased the minimum victim restitution 
            fine in felony cases from $200 to $300.  SB 586 was never 
            heard by the Assembly Committee on Appropriations.


           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Coalition Against Sexual Assault (Sponsor)
          Crime Victims Action Alliance
          Crime Victims United of California

           Opposition 
           
          California Public Defenders Association  


          Analysis Prepared by  :    Sandy Uribe / PUB. S. / (916) 319-3744