BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2013-2014 Regular Session B
6
0
SB 60 (Wright)
As Amended March 18, 2013
Hearing date: April 2, 2013
Government Code
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VICTIMS OF CRIME FUND
HISTORY
Source: California Commission on Aging
Prior Legislation: None
Support: AARP; Alzheimer's Association; Association of California
Caregiver Resource Centers; California Advocates for
Nursing Home Reform; California Association of Area
Agencies on Aging; California Partnership to End
Domestic Violence; California Senior Legislature; County
Welfare Directors Association of California; Congress of
California Seniors; Consumer Federation of California;
Elder Financial Protection Network; Elder Abuse
Prevention Institute on Aging; Office of the State
Long-Term Care Ombudsman; Law Offices of Steven Riess;
Senior Community Centers; California Police Chiefs
Association; AFSCME, AFL-CIO; Area Agency on Aging
Advisory Council; California Police Chiefs Association
Opposition:None known
KEY ISSUES
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SHOULD A VICTIM OF THEFT FROM AN ELDER OR DEPENDENT ADULT WHO
SUFFERS EMOTIONAL INJURY BE ELIGIBLE FOR COMPENSATION FROM THE
VICTIMS OF CRIME PROGRAM, AND SHOULD SUCH A VICTIM BE ELIGIBLE
FOR REIMBURSEMENT FOR FINANCIAL COUNSELING?
SHOULD A HUMAN TRAFFICKING VICTIM WHO SUFFERS EMOTIONAL INJURY
BE ELIGIBLE FOR COMPENSATION THROUGH THE VICTIMS OF CRIME
PROGRAM?
PURPOSE
The purpose of this bill is to provide that where a victim
experiences emotional injury from either the crime of theft from
an elder or dependent adult or the crime of human trafficking,
he or she may seek compensation from the Victims of Crime Fund.
Existing provisions in the California Constitution state that
all persons who suffer losses as a result of criminal activity
shall have the right to restitution from the perpetrators.
(Cal. Const. Art. 1 § 28(b).)
Existing law directs a sentencing court to order a defendant to
make restitution to the victim or victims of the defendant's
crime. (Pen. Code § 1202.4, subd. (f).)
Existing law includes the Victims of Crime Program, administered
by the California Victim Compensation and Government Claims
Board, to reimburse victims of crime for the pecuniary losses
they suffer as a direct result of criminal acts.
Indemnification is made from the Restitution Fund, which is
continuously appropriated to the California Victim Compensation
and Government Claims Board for these purposes. (Gov. Code §§
13950-13968.)
Existing law (Gov. Code § 13951) defines the following terms:
"Crime" is a crime or public offense, wherever it
occurs, which would be a misdemeanor or a felony if the
crime had been committed in California by a competent
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adult.
"Crime" includes an act of terrorism, committed against
a resident of the state, whether or not the act occurs
within California.
"Derivative victim" is one who suffers pecuniary loss as
a result of injury or death to a victim.
"Pecuniary loss" is an economic loss or expense
resulting from an injury or death to a victim of crime that
has not been and will not be reimbursed from any other
source.
"Victim" is a person who sustains injury or death as a
direct result of a crime.
Existing law authorizes reimbursement to a victim for "[t]he
medical or medical related expenses incurred by the victim ..."
(Gov. Code 13957, subd. (a)(1).)
Existing law provides that the total award to, or on behalf of,
each victim or derivative victim<1>, may not exceed $35,000,
except that this amount may be increased to $70,000 if federal
funds for that increase are available. (Gov. Code § 13957,
subd. (b).)
Existing law (Gov. Code § 13957, subd. (a)) provides that the
Victims Compensation and Government Claims Board (VCBCB - board)
may grant a crime victim's claim for pecuniary loss for the
following purposes:
Reimbursement for the amount of medical or medical-related
expenses incurred by the victim.
Reimbursement for the amount of out-patient psychiatric,
psychological or other mental health counseling-related
expenses incurred by the victim, as specified. The victim may
be reimbursed for the expense of his or her out-patient mental
health counseling in an amount not to exceed $10,000. Victims
who are not eligible for up to $10,000 of reimbursement may be
eligible to be reimbursed for the expense of their out-patient
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<1> For purposes of brevity, the term "victim" includes a
"derivative victim" in this analysis where a distinction between
these terms is unnecessary.
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mental health counseling in an amount not to exceed $3,000.
Reimbursement for the expenses of non-medical remedial care
and treatment rendered in accordance with a religious method
of healing recognized by state law.
Compensation equal to the loss of income or loss of support,
or both, that a victim incurs as a direct result of the
victim's injury or the victim's death.
Cash payment to, or on behalf of, the victim for job
retraining or similar employment-oriented services.
Reimbursement for the expense of installing or increasing
residential security, not to exceed $1,000, with respect to a
crime that occurred in the victim's residence, upon
verification by law enforcement to be necessary for the
personal safety of the victim or by a mental health treatment
provider to be necessary for the emotional well-being of the
victim.
Reimbursement for renovating or retrofitting a victim's
residence or a vehicle to make them accessible or operational,
if that is medically necessary.
Cash payment or reimbursement not to exceed $2,000 for
expenses incurred in relocating if the expenses are determined
by law enforcement to be necessary for the personal safety or
by a mental health treatment provider to be necessary for the
emotional well-being.
The board, under compelling circumstances, may allow
reimbursement for moving expenses to the same victim for a
second crime if both of the following conditions are met:
§ the crime occurs more than three years from the date
of the crime giving rise to the initial relocation cash
payment or reimbursement; and
§ the crime does not involve the same offender.
Existing law authorizes the board to "establish maximum rates
and service limitations for medical and medical-related
services, and for mental health and counseling services ?"
(Gov. Code § 13957.2.)
Existing law allows the following victims to be reimbursed for
outpatient mental health counseling in an amount not to exceed
$5,000. (Gov. Code § 13957, subd. (a)(2)(B)):
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a derivative victim not eligible for reimbursement in
the category allowing up to $10,000;
a direct victim of the crime of unlawful sexual
intercourse, where the victim is under 16 years old and the
defendant is over 21 years old; and
a minor who suffers emotional injury as a direct result
of witnessing a violent crime and who is not eligible for
reimbursement of the costs of outpatient mental health
counseling. To be eligible for reimbursement under this
clause, the minor must have been in close proximity to the
victim when he or she witnessed the crime.
Existing law provides that the total award to, or on behalf of,
each victim may not exceed $35,000, except that this amount may
be increased to $70,000 if federal funds for that increase are
available. (Gov. Code § 13957, subd. (b).)
Existing law provides that the board shall grant a hearing to an
applicant who believes he or she is entitled to compensation, to
contest a staff recommendation to deny compensation. (Gov. Code
§ 13959, subd. (a).)
Existing law provides that compensation made pursuant to this
chapter may be on a one-time or periodic basis. If periodic,
the board may increase, reduce, or terminate the amount of
compensation according to the applicant's need, subject to the
maximum limits provided in this chapter. (Gov. Code § 13957.7,
subd. (b).)
This bill adds theft from an elder or dependent adult in which
the victim suffered emotional injury to the list of crimes for
which a victim can seek compensation from the Victims of Crime
Fund.
This bill provides that a victim of theft from an elder or
dependent adult can seek reimbursement for financial counseling:
The bill sets maximum reimbursement for financial
counseling at $2,000.
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The combined reimbursement for mental health counseling
and financial counseling may not exceed $10,000.
The financial counseling must be provided by a certified
financial counselor or advisor.
This bill provides that a victim of human trafficking who
suffers emotional injury<2> may seek compensation from the
Victims of Crime Fund.
This bill includes legislative findings about the extent of
financial abuse of the elderly and the response of other
legislative bodies to the problem.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation
relating to conditions of confinement. On May 23, 2011, the
United States Supreme Court ordered California to reduce its
prison population to 137.5 percent of design capacity within two
years from the date of its ruling, subject to the right of the
state to seek modifications in appropriate circumstances.
Beginning in early 2007, Senate leadership initiated a policy to
hold legislative proposals which could further aggravate the
prison overcrowding crisis through new or expanded felony
prosecutions. Under the resulting policy known as "ROCA" (which
stands for "Receivership/ Overcrowding Crisis Aggravation"), the
Committee held measures which created a new felony, expanded the
scope or penalty of an existing felony, or otherwise increased
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<2> A victim of human trafficking who suffers a physical injury
may seek compensation under existing law. (See, Gov. Code §
13956, subd. (b)(1) - a human trafficking victim's claim for
compensation for injuries cannot be denied solely because the
person did not submit a police report.)
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the application of a felony in a manner which could exacerbate
the prison overcrowding crisis. Under these principles, ROCA
was applied as a content-neutral, provisional measure necessary
to ensure that the Legislature did not erode progress towards
reducing prison overcrowding by passing legislation which would
increase the prison population. ROCA necessitated many hard and
difficult decisions for the Committee.
In January of 2013, just over a year after the enactment of the
historic Public Safety Realignment Act of 2011, the State of
California filed court documents seeking to vacate or modify the
federal court order to reduce the state's prison population to
137.5 percent of design capacity. The State submitted in part
that the, ". . . population in the State's 33 prisons has been
reduced by over 24,000 inmates since October 2011 when public
safety realignment went into effect, by more than 36,000 inmates
compared to the 2008 population . . . , and by nearly 42,000
inmates since 2006 . . . ." Plaintiffs, who oppose the state's
motion, argue in part that, "California prisons, which currently
average 150% of capacity, and reach as high as 185% of capacity
at one prison, continue to deliver health care that is
constitutionally deficient."
In an order dated January 29, 2013, the federal court granted
the state a six-month extension to achieve the 137.5 % prisoner
population cap by December 31st of this year.
The ongoing litigation indicates that prison capacity and
related issues concerning conditions of confinement remain
unsettled. However, in light of the real gains in reducing the
prison population that have been made, although even greater
reductions are required by the court, the Committee will review
each ROCA bill with more flexible consideration. The following
questions will inform this consideration:
whether a measure erodes realignment;
whether a measure addresses a crime which is directly
dangerous to the physical safety of others for which there
is no other reasonably appropriate sanction;
whether a bill corrects a constitutional infirmity or
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legislative drafting error; whether a measure proposes
penalties which are proportionate, and cannot be achieved
through any other reasonably appropriate remedy; and
whether a bill addresses a major area of public safety
or criminal activity for which there is no other
reasonable, appropriate remedy.
COMMENTS
1. Need for This Bill
According to the author:
Financial exploitation of elderly and dependent adults
is increasing. Financial predators may take advantage
of their victims' loneliness, isolation, and
vulnerability. This population often falls prey to
scams, undue influence, and fraud that can result in
the loss of a home, pension income or a life's
savings. The Department of Social Services reports
that as many as 1,600 reports of elder and dependent
adult financial abuse are under investigation in a
given month by Adult Protective Services statewide.
Economic hardship combined with the growing population
of vulnerable adults means the number of financial
crimes will continue to escalate in coming years.
Federal law allows the use of Victim's Compensation
Funds (VCF) to compensate victims of financial crimes,
and Federal guidelines identify elders and dependent
adults as underserved groups. California does not
assist these victims, despite their need for services
such as mental health counseling, legal
representation, or transportation to and from court
appearances. Many states provide assistance to
victims of financial crimes, including Colorado,
Florida, Idaho, New Jersey, New York, Oklahoma,
Vermont, Pennsylvania and Wyoming. Services include
payment for counseling, assistance with travel to
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court, and restoration of lost income.
VCF funds come from fines and penalties paid by
persons convicted of criminal activity. A substantial
proportion of those dollars come from perpetrators of
financial crimes, yet California does not use the
money to assist those who are victims of these same
crimes.
2. Compensation Issues for Elderly and Dependent Victims of Theft
and Fraud
Many elderly persons have minimal, fixed incomes. A loss of
savings or assets could severely limit an elderly person's
ability to pay for basic needs, such as utility bills and rent.
Elderly persons who are the victims of theft or fraud may have
difficulty dealing with the stress of
victimization. Further, recent research<3> has found changes in
the brains of an elderly person render them less able to
recognize a fraudulent scheme or scam. A dependent adult who
has a limited ability to care for himself or herself may also be
especially vulnerable to thieves and perpetrators of fraudulent
schemes.
3. Compensation Issues of Human Trafficking Victims
Human trafficking victims may have limited ability to recover
from being exploited. By its very nature, the crime involves
control of the victim by the perpetrator and isolation from
others. A human trafficking victim may have no savings or
assets. He or she will likely have little or no family support
and few trusted friends and benefactors. A human trafficking
victim's family members and friends may well be victims of the
same trafficking scheme. A human trafficking victim may have
difficulty obtaining restitution from the perpetrator, as
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<3> Why It's Easier to Scam the Elderly, NPR Morning Edition,
December 6, 2012:
http://www.npr.org/blogs/health/2012/12/06/166609270/why-its-easi
er-to-scam-the-elderly
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restitution may be difficult to calculate and the perpetrator
may hide or dissipate his or her assets.
4. Audit of the Victims of Crime Program
December 2008, the California State Auditor Report on the Victim
Compensation Program
The report included the following highlights:
From fiscal years 2001-02 through 2004-05, program
compensation payments decreased from $123.9 million to $61.6
million-a 50 percent decline.
Despite the significant decline in payments, the costs to
support the program have increased.
These costs make up a significant portion of the Restitution
Fund disbursements-ranging from 26 percent to 42 percent
annually.
The program did not always process applications and bills as
promptly or efficiently as it could have. We noted staff
took longer than 180 days to process applications in two
instances out of 49, and longer than 90 days to pay bills for
23 of 77 paid bills we examined.
The program's numerous problems with the transition to a new
application and bill processing system led to a reported
increase in complaints regarding delays in processing
applications and bills.
Some payments in CaRES appeared to be erroneous. Although
board staff provided explanations for the payments when we
brought the matter to their attention, the fact that they
were unaware of these items indicates an absence of controls
that would prevent erroneous payments.
The board lacks the necessary system documentation for
CaRES.
There are no benchmarks, performance measures, or formal
written procedures for workload management.
Despite the board's efforts to increase awareness of the
program, several victim witness assistance centers do not
think the public is generally aware of program services.
Further, the board has not established a comprehensive
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outreach plan.
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Victim Compensation and Government Claims Board Response to the
Audit
In a response letter to the audit report by the California State
Auditor, the board stated:
The audit finds, and we agree, the [board] can make
improvements in processing time for applications and
payments, developing specific verification procedures,
and maintaining documentation.
The [board] concurs with the recommendation to develop
written procedures and time frames for the appeals
process. A new procedure manual, as discussed below,
will include this subject.
The board's ability to process applications and pay
bills in a timely manner is dependent upon the timely
submittal of key information from verifying entities.
To improve [receipt of] such information, the [board]
plans to develop a new procedure manual, [with]
specific direction to staff for processing
applications and bills in CaRES. The manual will
include specific time frames for follow up with
non-responsive verifying entities. ? [T]he [board]
has [told] ? service providers the importance of
prompt submittal of requested information to the board
so that [payments can be timely processed].
Similarly, we are reaching out to law enforcement
during our numerous law enforcement outreach seminars.
(Victim Compensation and Government Claims Board: It
Has Begun Improving the Victim Compensation Program,
but More Remains to Be Done. California State Auditor
Report 2008-113 at 70, 71 (December 2008).)
5. Fund Balance Issues
Disagreements about the condition of the Victims of Crime Fund
are common. Some of the confusion or disagreement about the
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fund can be traced to the fact that the cash balance in the fund
does not reflect the payments the board has approved but not
made, and payments and expense that the board anticipates it
will need to pay over the months ahead.
The Legislative Analyst (LAO) has noted in an e-mail to
interested parties in 2012 "that there is a significant
difference between the fund balance reported in the budget
($28.4 million at the end of 10-11, $19.3 million projected for
the end of 11-12) and the cash balance reported by the
Controller ($62.2 million as of 3/8/12). This was apparently
due, at least in part, to an accounting error by DGS<4>, [with]
whom the Board contracts with for accounting services. DGS has
reviewed everything and has accounted for most if not all of the
discrepancy."
The Legislative Analyst has noted in March of 2013 that the
Department of Finance (DOF) performed a reconciliation of the
Restitution Fund balance in the summer of 2012. DOF adjusted
the fund balance "upward by about $29 million due to an
accounting error and unliquidated grant funds that were not
unencumbered. The 2013/2014 budget projects the fund balance at
$55 million at the end of fiscal year 2012/2013 and $40 million
at the end of fiscal year 2013/2014."
Given the difficulty of estimating the number and value of
claims, it is possible for the fund balance to be lower or
higher than projected by the board. Anticipating reduced
revenues, the board voted in 2010/2011 to reduce payments to
victims and providers. In 2011/2012 the board spent about $27
million for administrative costs and paid $91 million in victim
claims through direct payment to victims of $73.6 million and
$13.4 million through compacts with local agencies. The board
provided $4.2 million to counties for collection services.
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<4> Department of General Services.
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