BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 580 (Leno) - Crime victims: trauma recovery center grants. Amended: April 17, 2013 Policy Vote: Public Safety 7-0 Urgency: No Mandate: No Hearing Date: May 23, 2013 Consultant: Jolie Onodera SUSPENSE FILE. Bill Summary: SB 580 would authorize the California Victim Compensation and Government Claims Board (VCGCB) to administer a grant program to award, upon appropriation of the Legislature, up to $2 million annually to trauma recovery centers (TRCs), as defined. This bill also contains codified legislative findings and declarations. Fiscal Impact: Annual costs of up to $2 million from the Restitution Fund (Special Fund), subject to appropriation by the Legislature and specific Restitution Fund reserve thresholds, for grants to be awarded to TRCs. Increased administrative workload to VCGCB to develop criteria for granting awards, monitor the use of grant funds, and facilitate applications for federal matching grants. Background: The California Victim Compensation Program (CalVCP), administered by the VCGCB, provides compensation for victims who suffer physical or emotional injury, or the threat of physical injury, as a direct result of a violent crime. Crimes covered by the program include domestic violence, child abuse, sexual and physical assault, homicide, human trafficking, robbery, and vehicular manslaughter. Subject to specified eligibility criteria, CalVCP compensates eligible victims for various crime-related expenses that are not covered by other sources. Services covered include medical and dental care, mental health services, income loss, funeral expenses, home security, rehabilitation and relocation. Funding for the program is provided by the Restitution Fund, which derives its revenue from restitution fines and orders, diversion fees, and penalty assessments levied on persons convicted of crimes and traffic offenses. CalVCP also receives federal grant monies from the Victims of Crime Act (VOCA). SB 580 (Leno) Page 1 In order to receive compensation, victims must apply and provide specified documentation. The waiting period to receive indication of application for compensation has been documented to take up to three months or more to receive. The TRC treatment model was developed in 2001 and utilizes a multidisciplinary staff to provide direct mental health services and treatment to victims while coordinating services with law enforcement and other social service agencies at the center. AB 50 (Leno) Chapter 884/2006 appropriated $1.3 million from the Restitution Fund in FY 2006-07 for the TRC at San Francisco General Hospital. Proposed Law: This bill would authorize the VCGCB to administer a program to evaluate applications and award grants to TRCs, as follows: Upon appropriation by the Legislature, authorizes VCGCB to award grants of up to $2 million annually and specifies grants must be funded solely from the Restitution Fund. Provides that grant awards to TRCs must demonstrate that they serve as a community resource by providing services, including making presentations and providing training to law enforcement, community-based agencies, and other health care providers on the identification and effects of violent crime, as well as any other related criteria required by the board. Authorizes VCGCB to award a grant providing funding for up to a maximum period of three years, with any unexpended funds after the specified grant period reverting to the Restitution Fund. Prohibits TRCs from receiving more than one grant for any period of time. Provides that the VCGCB shall not receive, evaluate, or approve applications for TRC grants in a fiscal year unless the Restitution Fund is projected to have a year-end fund reserve equal to, or greater than, 25 percent of total budgeted expenditures for the fund, as projected in the January Governor's budget. Provides that grants awarded to TRCs shall not result in a year-end balance to the Restitution Fund of less than 25 percent of total budgeted expenditures for the fund, as projected in the January Governor's budget. Requires TRCs awarded grants to report to VCGCB annually on how grant funds were spent, and in order to ensure federal SB 580 (Leno) Page 2 compliance governing federal matching funds for victims' services, each TRC must submit forms and data as requested to allow the VCGCB to receive the 60 percent federal matching funds for eligible victim services and allowable expenses. Defines a "trauma recovery center" as a center that provides all of the following resources, treatments, and recovery services to crime victims: (1) Mental health services. (2) Assertive community-based outreach and clinical case management. (3) Coordination of care among medical and mental health care providers, law enforcement agencies, and other social services. (4) Services to family members and loved ones of homicide victims. (5) A multidisciplinary staff of clinicians that includes psychiatrists, psychologists, and social workers. Related Legislation: SB 733 (Leno) 2010 was substantially similar to this measure. This bill was vetoed by the Governor with the following message: I am returning Senate Bill 733 without my signature. While the model of service supported by this bill has proven effective at the San Francisco Trauma Recovery Center, the Restitution Fund is an inappropriate ongoing source of funding for this type of program. The Restitution Fund is the funding source of the Victim Compensation Program, which was designated to pay for certain out-of-pocket expenses to specific victims of crime. The use of the Restitution Fund to support programs of this type presents a significant concern to its ongoing ability to support the compensation of crime victims for which it was established. For these reasons, I am unable to sign this bill. AB 1669 (Leno) 2007 was similar to SB 733 noted above, and was also vetoed. AB 50 (Leno) Chapter 884/2006 reauthorized an interagency agreement between the VCGCB and the University of California, San Francisco, and appropriated $1.3 million from the Restitution Fund in FY 2006-07 to provide services at the San Francisco TRC. SB 580 (Leno) Page 3 Staff Comments: This bill requires the VCGCB to administer a grant program for TRCs subject to a Legislative appropriation and specific Restitution Fund reserve thresholds. The VCGCB would receive applications and award grants totaling no more than $2 million to one or more TRCs. This bill makes a substantial appropriation, but to the extent the TRCs receiving grants are successful, the state could potentially incur some level of cost savings. These cost savings would, however, be somewhat offset by an increased number of victims served under this program. TRCs that would be eligible for the grants described in this bill would be very similar to the San Francisco TRC in terms of services provided. The San Francisco TRC has been very successful at providing victim's services more cost effectively than individual reimbursements to victims for seeking their own mental health and medical services. In addition to the cost containment for each individual victim that occurs when TRC as the provider is paid by VCGCB (because it seeks to serve as many people as possible, as opposed to a victim potentially incurring more expensive services elsewhere), the TRC has served many more victims in need of mental health services than the entire panel of San Francisco fee-for-service providers. The TRC provides services more efficiently, and is able to reach more people (which often mitigate cost savings). If these services are needed, however, there may be additional long term savings by providing them to victims who would not otherwise seek them and would have experienced an extended recovery period. The $2 million appropriation that will fund the grant program may only come from the Restitution Fund, which is designed to fund victims' services. The current system largely relies on individual victims seeking mental health and medical services, and subsequently applying to the VCGCB for reimbursement, which can take an extended period of time. Requiring the VCGCB to administer the grant program will increase existing workload. Additional administrative workload would include developing criteria for grant awards, evaluating grant applications from TRCs, monitoring the use of grant funds, and facilitating applications for federal matching grants. A Bureau of State Audits (BSA) report from December 2008 reported that the administrative costs to support the program made up a significant portion of the Restitution Fund disbursements for SB 580 (Leno) Page 4 services and reported issues with the efficiency of reimbursement processing and outreach efforts. The most recent BSA report on Recommendations Not Fully Implemented After One Year (January 2013 Report 2012-041), indicates an estimated completion date of December 2013 for addressing structural/operational issues and an as yet unknown date by which VCGCB will define specific procedures to accomplish action strategies for outreach and establish quantitative measures to evaluate the effectiveness of its outreach efforts. Staff notes that SB 1299 (Wright) Chapter 870/2012 became effective on January 1, 2013, and made changes to streamline the VCGCB guidelines for processing claims. In FY 2011-12, $91million in victim's claims were paid through direct payment to victims of $73.6 million and $13.4 million through compacts with local agencies. The Governor's Budget projects a Restitution Fund reserve balance of $55 million for FY 2012-13 and $40 million for FY 2013-14. The provisions of this bill provide that the VCGCB shall not receive, evaluate, or approve applications for TRC grants in a fiscal year unless the Restitution Fund is projected to have a year-end fund reserve equal to, or greater than, 25 percent of total budgeted expenditures for the fund, as projected in the January Governor's budget. Further, this bill provides that grants awarded to TRCs shall not result in a year-end balance to the Restitution Fund of less than 25 percent of total budgeted expenditures for the fund, as projected in the January Governor's budget. Based on the 2013-14 Governor's Budget, total estimated expenditures for the Restitution Fund are $120.5 million. Twenty-five percent of budgeted expenditures would equate to $30.1 million, within the allowance provisions of this bill. Projections for the FY 2014-15 budget will not available until January 2014, subsequent to the potential enactment date of this measure. It should be noted that despite the current reserve balance, the Restitution Fund has a structural imbalance with expenditures exceeding revenues by approximately $15 million per year. Extrapolating the operating deficit of $15 million to FY 2014-15, the estimated reserve would decline to $25 million, below the threshold authorized for the VCGCB to accept and approve applications for TRC grants. SB 580 (Leno) Page 5 Staff notes the VCGCB voted in FY 2011-12 to adopt a number of reductions in the rates paid for specific types of services provided. Due to the significant uncertainty of revenue projections resulting from the implementation of 2011 Public Safety Realignment, it was recommended at the January 2013 VCGCB board meeting that no restorations to the rate reductions be made at that time. Additionally, the full impact on the Restitution Fund due to enactment of SB 1299 (Wright), which tripled the time period allowed for crime victims to apply for financial assistance for crime-related expenses, has yet to occur, as the bill's provisions recently became effective on January 1, 2013.