BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 522
Author: Hueso (D)
Amended: 9/3/13
Vote: 21
PRIOR SENATE VOTES NOT RELEVANT
SENATE HUMAN SERVICES COMMITTEE : 6-0, 09/11/13
(pursuant to Senate Rule 29.10)
AYES: Yee, Berryhill, Emmerson, Evans, Liu, Wright
ASSEMBLY FLOOR : 58-15, 9/9/13 - See last page for vote
SUBJECT : Foster Family Home and Small Family Home Insurance
Fund
SOURCE : Author
DIGEST : This bill clarifies liability coverage of the Foster
Family Homes and Small Family Home Insurance Fund (Fund).
Assembly Amendments delete the Senate version of this bill which
required a foster youths periodic review to include a
supplemental report with information regarding whether a county
has applied to be a representative payee for Supplemental
Security Income (SSI) benefits for a foster child and instead
clarify liability coverage of the Fund.
ANALYSIS :
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Existing law
1.Establishes within the Department of Social Services, the Fund
for the purposes of paying, on behalf of foster family homes
and small family homes, as defined, claims of foster children,
their parents, guardians, or guardians ad litem resulting from
occurrences peculiar to the foster care relationship and the
provision of foster care services.
2.Provides that the Fund is not liable for any loss arising out
of a dishonest, fraudulent, criminal, or intentional act of
any person, or for damages of more than $300,000 for any
single foster family home or small family home for all claims
arising due to one or more occurrences during a single
calendar year.
This bill:
1.Limits the Fund liability exclusions to only those criminal or
intentional acts committed by a foster parent.
2.Requires, for purposes of limiting the liability of the Fund,
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.
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
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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 20 years
since. According to DSS, in fiscal year 2008-09, there were 22
new claims submitted to the Fund, of which $346,999 were paid in
claim settlements. In 2009-10 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
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
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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."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee:
The defendant in the Brandon S. v. The State of California
lawsuit that drove previous bills on the subject of limiting
liability for foster parents was asking for $250,000 in damages.
Under this bill, it is likely that he would have received those
damages from the fund. Depending on how many similar cases are
brought forward, it could cost the fund in excess of $250,000
per case (Fund).
ASSEMBLY FLOOR : 58-15, 09/09/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hall, Roger Hern�ndez, Holden, Jones-Sawyer,
Levine, Lowenthal, Medina, Mitchell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Perea, V. Manuel P�rez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Bigelow, Ch�vez, Conway, Dahle, Donnelly, Beth Gaines,
Harkey, Jones, Logue, Maienschein, Melendez, Morrell,
Patterson, Wagner, Waldron
NO VOTE RECORDED: Allen, Hagman, Linder, Mansoor, Wilk, Vacancy,
Vacancy
JL:RM:nl 9/11/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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