BILL ANALYSIS �
SB 522
Page 1
Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
SB 522 (Hueso) - As Amended: August 5, 2013
SENATE VOTE : 39-0
SUBJECT : Foster care: Supplemental Security Income (SSI)
benefits and the Foster Family Home and Small Family Home
Insurance Fund (Fund).
SUMMARY : Clarifies liability coverage of the Fund and places
requirements on county welfare agencies (CWAs) to include SSI
benefits information in a foster youth's supplemental report to
the juvenile court. Specifically, this bill :
1)Limits the Fund liability exclusions to only those criminal or
intentional acts committed by a foster parent.
2)For purposes of limiting the liability of the Fund, requires
that multiple incidences of a general course of conduct to be
considered one "occurrence," regardless of the period of time
during which the acts occurred.
3)Prohibits the Fund from being liable for any loss arising out
of the dishonest, fraudulent, criminal, or intentional act of
any person if the date of the loss is prior to July 1, 2013.
4)Restricts the Fund's liability to only once for damages
arising from one occurrence.
5)Requires that a county's supplemental report to the court
include a factual discussion regarding whether the county has
applied to become the child's representative payee for SSI
benefits and whether the county, or any other individual known
to the county, has been appointed to serve as the
representative payee for a child in foster care.
EXISTING LAW
1)Establishes the Foster Family Homes and Small Family Home
Insurance Fund (Fund), administered by the Department of
Social Services (DSS) to pay for damages to foster children,
their parents, or guardians on behalf of foster family homes
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and small family homes, that result from claims related to the
provision of foster care services. (HSC 1527-1527.8)
2)Requires the Fund to pay for all valid claims of bodily or
personal injuries that result from the activities of the
foster parent(s) during the time which the child lived in the
foster family home. (HSC 1527.5)
3)Defines "foster parent" for the purposes of the Fund as the
person, along with his or her spouse, providing care to a
foster child placed in a licensed foster family home. (HSC
1527)
4)Exempts the Fund from liability as follows:
a) Any loss resulting from a dishonest, fraudulent,
criminal or intentional act;
b) Any occurrence unrelated to the foster care
relationship;
c) Bodily injury cases involving a motor vehicle,
aircraft or watercraft owned or operated by the foster
parent;
d) Losses resulting from licentious, immoral, or sexual
behavior committed by a foster parent intended to lead
to, or culminating in, a sexual act;
e) Any allegation of alienation of affection against a
foster parent;
f) Any loss or damage for an occurrence prior to
October 1, 1986;
g) Exemplary damages; and
h) Any liability resulting from the failure on the part
of the foster parent to obtain insurance pursuant to
Section 676.2 of the Insurance Code. (HSC 1527.3)
1)Limits the liability of the fund to $300,000 for any single
foster family home for total claims filed in a single calendar
year. (HSC 1527.4)
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2)Defines an "occurrence" as an accident, including continuous
or repeated exposure to conditions, which results in bodily or
personal injury neither expected nor intended by the foster
parent.
3)Provides that homeowner's or tenant's insurance may not be
cancelled or denied based solely on the policyholder or
applicant's operation of a licensed foster family home or
small family home. (INS 676.7(a))
4)States that it is against public policy for a homeowner's or
tenant's insurance policy to provide liability coverage for
claims payable through the Fund. (INS 676.7(c))
5)Provides for the payment of (SSI), under Title XVI of the
Social Security Act (Act) for certain disabled children from
families with low incomes and minimal assets.
6)Provides for the payment of Social Security benefits, under
Title II of the Act to the children of workers who have
retired, become disabled, or died.
7)Permits, upon a determination by the Commissioner of Social
Security, payments to be made to another individual, or an
organization. (42 U.S.C. �1383 (2)(A)(ii)(I))
8)Requires that in most cases the Social Security Administration
(SSA) select and assign a representative payee, such as an
individual, organization, or a government entity, to manage
SSI and Social Security payments for children, including those
in foster care. (42 U.S.C. �1007)
9)Requires a CWA, when determining eligibility for Aid to
Families with Dependent Children-Foster Care (AFDC-FC)
payments, to determine whether the child is currently in
receipt of benefits pursuant to Title II or Title XVI of the
Act. If so, requires the CWA to apply to become the child's
representative payee, as appropriate, during the time the
child is placed in foster care. (WIC 11401.6)
10)Requires a CWA, when a foster youth in receipt of SSI
payments is approaching his or her 18th birthday, to provide
information to the youth regarding the continuation of his or
her disability status in order to retain SSI eligibility, and
regarding the process for becoming his or her own payee, or
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designating an appropriate representative payee, as specified.
(WIC 13753)
11)Permits a nonminor dependent who receives SSI to serve as his
or her own payee, if permitted by SSA, even when he or she
remains in the state's care as a nonminor dependent. (WIC
13754)
12)Requires that every youth between the ages of 16 and 17
be screened by the county for potential SSI eligibility and,
if possible, the application shall be timed to allow for a
determination of eligibility to occur prior to the youth's
emancipation from care. (WIC 13757)
FISCAL EFFECT : Unknown
COMMENTS :
Foster Family Homes and Small Family Home Insurance Fund
background : The Fund was created by the Legislature in 1986 to
provide gap liability coverage to licensed foster family homes
and small family homes. Prior to the creation of the Fund,
licensed foster family home operators cited they were routinely
denied homeowner's and other types of insurance based on their
status as foster parents or related activities. The Fund, along
with companion changes in policy governing insurance coverage
(INS 676.7), allowed foster family homes indemnification for
liability incurred during the course of providing related
services. This effort was aimed at ensuring the state could
recruit and retain qualified foster family providers.
Once licensed, a foster family home is covered by the Fund for
claims totaling up to $300,000 in a single year for valid claims
submitted by foster children, or their parents or guardians,
which occur as a result of the activities of the foster parent,
while the child resides in the home. The original $300,000 cap
was enacted in 1986 and has not changed in the over twenty years
since. According to DSS, in fiscal year 2008-2009, there were
22 new claims submitted to the Fund, of which $346,999 were paid
in claim settlements. In 2009-2010 there was a balance of
$5,391,000 in unspent funds, although the current Fund balance
is at $2,391,000. The Fund averages 30-35 claim requests per
year.
Following the Fund's creation in 1986, DSS issued an All County
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Letter (ACL No. 86-102) providing guidance to county welfare
directors in which the department stated, regarding applicable
exclusions, "In addition, certain acts are not covered, such as
losses arising out of a criminal act on the part of the foster
parent or bodily injury arising out of the operation or use of a
motor vehicle, aircraft or watercraft." [Emphasis added.]
The statutory language creating the Fund lists several
exclusions, including, "any loss arising out of a dishonest,
fraudulent, criminal, or intentional act." This bill would
narrow the existing exclusions by clarifying that those criminal
or intentional acts must be committed by the foster parent,
consistent with exclusions enumerated in current law. This
change would result in a requirement that the Fund pay damages
for claims arising out of injury to foster children as a result
of intentional or criminal acts committed by third parties.
Brandon S. v. The State of California: This bill seeks to amend
existing law following an Appeals Court ruling which upheld the
lower court's decision for the defendant in the case of Brandon
S. v. The State of California ex rel. Foster Family Home and
Small Family Home Insurance Fund ((2009) 174 Cal.App.4th 815).
The case pertained to a foster child who was sexually abused by
the minor stepson of his licensed foster parent. The child,
Brandon S., filed a claim with the Fund seeking damages for
emotional and physical injuries, but because the stepson
admitted to the molestation charge, Brandon's claim was denied
on the basis that all criminal and intentional acts are excluded
from coverage in statute.
Judge Willhite wrote in the majority opinion for the Brandon S.
case, "Although legitimate policy questions are raised by the
legislative decision to exclude coverage for a claim like
Brandon's, we decline to rewrite the statutory language and
depart from governing principles of statutory construction to
reach the result Brandon seeks. That is a task for the
Legislature."
This bill is substantially similar to AB 2206 (Hill), 2010,
which was held on the Assembly Appropriations suspense file. In
July 2010, Assembly Member Hill requested an audit to focus on
the administration of the Fund and to assess the feasibility of
expanding the Fund's coverage to Foster Family Agencies as well
as the Kinship Guardian Assistance Payment program. The
California Bureau of State Audits issued the report in September
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2011.
Supplemental Security Income/State Supplemental Payments
(SSI/SSP) for children in foster care background : SSI/SSP
benefits are monetary income support benefits provided to
individuals who are 65 years of age or older, blind or disabled,
or blind or disabled children to help meet basic needs for food,
clothing and shelter. California, like most states, supplements
SSI with a SSP. In order to be eligible, youth may not have
more than $2,000 worth of assets and may not participate in
gainful activities worth more than $1,000 per month. Considered
a basic yet integral component of the social safety net, SSI/SSP
benefits provide $830 per month for individuals. This amount is
a ceiling not a floor and is offset dollar for dollar for
"income based on need," which includes public benefits payment.
In the case of children in foster care, if receiving SSI/SSP,
their SSI/SSP benefits are reduced by a dollar for each dollar
they receive through other public benefits, including any
federal or state foster care money they may receive to cover
room and board and other daily living needs. Additionally,
SSI/SSP benefits are required to be expended for the use and
benefit of the child and for a purpose determined by the CWA to
be in the child's best interest.
According to a Congressional Research Service report entitled
Child Welfare: Social Security and Supplemental Security Income
Benefits for Children in Foster Care, it is estimated that on
average about six percent of children in foster care receive SSI
or other similar benefits. In cases where a minor, such as a
foster youth is eligible and receiving SSI benefits, there are
certain requirements conditioned on the how the money is
provided to the youth. Under SSI/SSP requirements, a minor is
restricted from receiving SSI/SSP payments directly. Rather,
the Social Security Administration (SSA) is required to identify
a representative payee based upon a list of preferred
relationships to the child. For children in foster care, first
priority is given to the biological or adoptive parents,
followed in order by a noncustodial natural or adoptive parent,
a custodial relative or stepparent, a noncustodial relative or
stepparent, a noncustodial relative or close friend, and then
finally an authorized CWA.
Under current law, however, CWAs can apply to become the
representative payee for a SSI/SSP foster youth, and use the
payments to cover the cost of providing care and supervision for
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the foster youth. Although a priority list of individuals is
supposed to developed to identify the preferable individual to
act on a foster youth's behalf, oftentimes it is the CWA that
recommends to the SSA that it becomes the representative payee
and the frequently the SSA concurs.
Concerns have been raised that this is a conflict of interest
for the CWA due to the dual role it plays; recommending and
coordinating "care, custody and control" over the youth and
performing as the representative payee. Because the CWA is both
the coordinator of care and representative payee, it can create
instances where other individuals involved in providing for the
oversight and services to the minor or nonminor, such as the
youth's legal counsel, the juvenile court judge and the youth's
biological or custodial parent, may never be made aware that the
youth is eligible and is receiving SSI/SSP benefits.
Foster Youth's Supplemental Report : After a minor or nonminor
is deemed a dependent of the court, the court is required to
hold regular hearings every six months to evaluate, assess and
make judgments in the best interest of the minor or nonminor.
As a part of this process to evaluate and assess the minor or
nonminor, the CWA is required to submit a supplemental report to
the court, which includes, among other things, whether the minor
or nonminor should return to the home, continue in dependency,
and receive needed supportive services.
This measure seeks to add to the elements required to be
included in the report whether the CWA has applied to become the
minor or nonminor's representative payee for SSI/SSP benefits
and whether the CWA or any other individual has been appointed
by the SSA to act as the representative payee for the youth.
This change would be in the state's best interest, as it would
allow for increased transparency and the sharing of information
for the individuals involved in providing for the best interests
of the minor or nonminor through the lens of the court's
proceedings.
Need for the bill : Writing as the sponsor of the measure, the
Children's Advocacy Institute (CAI) states:
[SB 522] will fix a drafting error and restore the Foster
Family Home and Small Home Insurance Fund (Fund) liability
insurance coverage for foster parents to its full and
originally intended purpose, thereby increasing coverage
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and protection for foster parents (the least expensive
placement option for foster children and the placement most
likely to lead to adoption), promoting the recruitment of
quality foster parents with assets to protect, and ensuring
that a foster child - already abused and neglected by their
own parents who is accidentally harmed by their foster
parents - will be able to receive compensation from the
Fund for their tragic injuries, as intended when the Fund
was enacted.
CAI further states:
This bill simply requires that the supplemental report
required as part of a foster youth's periodic review also
include information regarding whether the county has
applied to be a representative payee for SSI benefits for a
foster child, and whether the county - or any individual
known to the county - has been appointed to serve as the
representative payee for a child who is receiving SSI
benefits while in the county's custody. Such modest notice
will ensure that all parties - the child especially - can
be part of the discussion as to who should serve as the
payee and how these benefits should be used to serve the
best interests of the child as required by both state and
federal law.
PRIOR RELATED LEGISLATION:
AB 863 (Bonilla of 2011) was substantially similar to AB 2206
(Hill of 2010) and held on the Assembly Appropriations Committee
suspense file.
AB 2206 (Hill of 2010) would have limited the Foster Family Home
and Small Family Home Insurance Fund liability exclusions to
only those criminal or intentional acts committed by a foster
parent. This bill was held on the Assembly Appropriations
Committee suspense file.
SB 706 (Florez of 2004) was a DSS-sponsored bill that would have
narrowed the scope of the Fund and would have, among other
provisions, specified that losses arising from criminal,
intentional or fraudulent acts by a foster parent or a person
residing in the home were excluded from liability, even if there
was a related allegation of negligence. This bill died in the
Assembly Judiciary Committee.
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AB 1467 (Alby of 1997) clarified the scope of coverage of the
fund by, among other things, including members of the foster
parent's household under the exclusion of liability for Fund for
immoral or sexual behavior. This bill died in the Senate Health
and Human Services Committee.
SB 470 (Royce, Chapter 195, Statutes of 1988) removed the sunset
date, allowing for continuation of the Fund.
SB 1159 (Royce, Chapter 1330, Statutes of 1986) established the
Fund.
AB 1110 (Lara, 2011) would have required social workers to
include in their supplemental reports to the court, specified
information about a foster youth's SSI benefits and would have
required a county to provide written notice to the child's
counsel 30 days in advance of the county filing to be appointed
as the representative payee of a foster child. It would have
also authorized a child's counsel to request an accounting of
how a foster child's SSI benefits are being expended if the
county is the child's representative payee and would have
required a child's status review to make certain determinations
regarding a child welfare agency's actions pertaining to a
child's SSI benefits. The bill was held in the Assembly
Appropriations Committee.
AB 1331 (Evans, Chapter 465, Statutes of 2007) requires counties
to screen all youth between the ages of 16 and 17 for SSI
eligibility.
AB 1633 (Evans, Chapter 641, Statutes of 2006) required DSS to
convene a workgroup to develop best-practice guidelines for
county welfare departments pertaining to the SSI benefits of
foster youth. Requires counties to assist in the application
process for an eligible child, to apply to become the
representative payee, if no other appropriate party is available
to serve, and requires a county to establish a maintenance
account for each child to contain SSI payments.
REGISTERED SUPPORT / OPPOSITION :
Support
Children's Advocacy Institute
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National Center for Youth Law
Personal Insurance Federation of California
Public Counsel
Opposition
None on file.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089