BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC SAFETY Senator Loni Hancock, Chair S 2013-2014 Regular Session B 1 1 9 7 SB 1197 (Pavley) As Amended: April 10, 2014 Hearing date: April 22, 2014 Penal Code JM:sl RESTITUTION AND RESTITUTION FINES: POST RELEASE AND MANDATORY SUPERVISION HISTORY Source: Los Angeles County District Attorney Prior Legislation: SB 432 (Runner) Ch. 49. Stats. 2009 Support: California Law Enforcement Association of Records Supervisors, Inc.; California Police Chiefs Association; Chief Probation Officers of California Opposition:Taxpayers for Improving Public Safety KEY ISSUE SHOULD COUNTIES BE AUTHORIZED TO COLLECT RESTITUTION ORDERS AND RESTITUTION FINES FROM ANY PERSON ON POST RELEASE COMMUNITY SUPERVISION OR MANDATORY SUPERVISION FOLLOWING RELEASE FROM PRISON OR A FELONY JAIL TERM? PURPOSE (More) SB 1197 (Pavley) PageB The purpose of this bill is to authorize counties to collect restitution orders and restitution fines from persons on post release community supervision after a prison term and on mandatory supervision after the custody portion of a split felony jail term. Existing provisions in the California Constitution state that all crime victims have the right to seek and secure restitution from the perpetrators of these crimes. Restitution must be ordered in every case without exception. Where a defendant has been ordered to pay restitution, all money, or property collected from the defendant must be first applied to satisfy restitution orders. (Cal. Const. Art. 1 § 28, subd. (b)(13)(A)-(C).) Existing law provides for restitution orders - enforceable as a civil judgment - to ensure that a victim of a crime who incurs any economic loss shall receive restitution directly from any defendant convicted of that crime. If a restitution order is made, the defendant has the right to a hearing before the court to dispute the determination of the amount of the order. A restitution order may be modified upon motion of the district attorney, the victim or victims, or the defendant. (Pen. Code § 1202.4, subds. (f) and (i).)<1> Existing law provides that if the amount of restitution cannot be determined at the time of sentencing, the order shall state that the specific amount of restitution shall be "determined at the direction of the court" in a reasonable manner in the discretion of the court. (Pen. Code § 1202.4, subd. (f).) Existing law provides that a restitution order shall be prepared by the court and identify each victim and each loss. (Pen. Code § 1202.4, subd. (f)(3).) Existing law provides that a criminal restitution order shall be enforceable as though it were a civil judgment. (Pen. Code § --------------------------- <1> Penal Code § 1202.4 (f)(2) further specifies that a restitution order may also be paid directly to the Restitution Fund to the extent that the victim has received assistance from the Victims of Crime Program. (More) SB 1197 (Pavley) PageC 1202.4, subd. (i).) Existing law provides in every case where a person is convicted of a crime, the court shall impose a separate and additional restitution fine unless the court finds compelling and extraordinary reasons for not doing so and states those reasons on the record. The restitution fine for a misdemeanor shall be no less than $150 and no more than $1,000. The restitution fine for a felony shall be no less than $300 and no more than $10,000. Where a defendant is committed to prison, the court may set the restitution fine as the product of the number of years of imprisonment and $300. Restitution fines are not subject to penalty assessments. (Pen. Code § 1202.4, subd. (b).) Existing law requires the court to assess an additional probation-revocation restitution fine or parole-revocation restitution in the same amount as that imposed for the restitution fine. This additional fine is stayed unless probation or parole is revoked. (Pen. Code §§ 1202.44 and 12022.45.) Existing law provides that a prison inmate who is a high-risk sex offender, sentenced under the Three Strikes law (as second or third strike) or imprisoned for a serious or violent crime must serve a period of parole upon release. A person sentenced to prison for any other offense is subject to post release community supervision. A defendant sentenced for jail felony with a split term (Pen. Code §1170, subd. (h)(5)) must serve a portion of the sentence under mandatory supervision in the community. (Pen. Code §§ 1170, subd. (h); 3000.08, 3450-3456.) Existing law provides that where a defendant's sentence includes a period of post release community supervision (PRCS) or mandatory supervision, the sentencing court must impose a parole-revocation or supervision restitution fine in the same amount as that imposed for the restitution fine. The parole or supervision fine is suspended unless parole or supervision is revoked. (Pen. Code § 1202.45.) Existing law provides a restitution fine is not subject to (More) SB 1197 (Pavley) PageD penalty assessments.<2> (Pen. Code §§ 1202.45 and 1464, subd. (a)(2)A).) Existing law specifies that restitution fine proceeds shall be deposited in the Restitution Fund. (Pen. Code § 1202.4, subd. (e).) Existing law creates the Victims of Crime Program, administered by the California Victim Compensation and Government Claims Board<3> (VCGCB), 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 VCGCB. Restitution fines are deposited into the fund. (Gov. Code §§ 13950-13968.) Existing law provides that any part of a restitution fine that remains unsatisfied after a defendant is no longer on PRCS or mandatory supervision is enforceable by the VCGCB and the victim. (Pen. Code §1214, subds. (a) and (b).) Existing law provides that local collection programs may continue to enforce victim restitution orders once a defendant is no longer on probation, PRCS, or mandatory supervision. (Pen. Code §1214, subd. (c).) Existing law provides that the period for enforcement of judgments found in the Code of Civil Procedure Sections 683.010 et seq. does not apply to court-ordered fines, forfeitures, penalties, fees, or assessments. (Pen. Code §1214, subd. (d).) --------------------------- <2> Various penalty assessments are imposed on criminal fines and effectively quadruple the fine amount stated in the statute defining each crime. (Pen. Code §1464.) <3> This entity was formerly known as the State Board of Control. (Govt. Code § 13900 amended by AB 2491 - Ch. 1016, Stats. 2000.) Hereinafter, references to "the board" ar7576e references to the VCGCB. (More) SB 1197 (Pavley) PageE Existing law authorizes the California Department of Corrections and Rehabilitation (CDCR) to collect restitution fines and restitution orders from prisoners. (Pen. Code § 2085.5.) Existing law provides that when a prisoner owes a restitution fine, the Secretary of CDCR shall deduct 20 to 50% from the prisoner's wages and trust-account deposits, and transfer that amount to the VCGCB for deposit in the restitution fund. (Pen. Code § 2085.5, subd. (a).) Existing law requires CDCR to withhold an administrative fee from the prisoner's earnings to be held in a special deposit account for the purposes of reimbursing administrative and support costs of the restitution program. (Pen. Code § 2085.5, subd. (e).) Existing law directs CDCR to collect the restitution order first when a prisoner or parolee owes both a restitution fine and a restitution order. (Pen. Code § 2085.5, subds. (g) and (h).] Existing law provides for the enforcement of fines, including restitution fines, and provides that any portion of a restitution order that remains unsatisfied after a defendant is no longer on probation or parole is enforceable by the victim as a civil judgment. (Pen. Code §§ 1202.4, subd. (i) and 1214.) Existing law provides that when a prisoner owes victim restitution, the Secretary of CDCR shall deduct 20% to 50% of the fine from the prisoner's wages and trust-account deposits, and transfer that amount to the VCGCB for direct payment to the victim, or payment to the restitution fund to the extent that the victim received assistance under that program. (Pen. Code § 2085.5, subd. (b).) (More) SB 1197 (Pavley) PageF Existing law allows CDCR to collect money from parolees with an outstanding balance on a restitution order or fine. (Pen. Code § 2085.5, subd. (g)-(h).) Existing law provides that the agency designated by the board of supervisors in the county of incarceration to deduct 20% to 50% from the wages and trust account deposits of an inmate serving a felony jail sentence (Pen. Code § 1170, subd. (h)) and owing a restitution fine, and to transfer that amount to the VCGCB for deposit in the restitution fund. (Pen. Code § 2085.5, subd. (d).) Existing law provides that the sentencing court shall be provided a record of payments made to the crime victim and to the restitution fund. (Pen. Code § 2085.5, subds (a)-(d) and (g)-(h).) Existing law allows the agency designated by the board of supervisors in the county of incarceration to withhold an administrative fee to be held in a special deposit account for the purposes of reimbursing administrative and support costs of the restitution program, as specified. (Pen. Code § 2085.5, subds. (f) and (i).) Existing law provides that the local agency designated by the board of supervisors to collect the restitution order first when a county-jail inmate serving a sentence under realignment owes both a restitution fine and a restitution order. (Pen. Code § 2085.5, subd. (k).) Existing law requires that any compensatory or punitive damages awarded to a defendant placed on PRCS or on mandatory supervision in connection with a civil action brought against any federal, state, or local jail or prison be first applied to outstanding restitution orders or fines. (Pen. Code § 2085.5, subd. (n).) (More) SB 1197 (Pavley) PageG Existing law allows a victim who does not timely provide a current address to the VCGCB to provide documentation to the local agency designated by the board of supervisors which in turn may verify that money was in fact collected by VCGCB on the victim's behalf. Upon receipt of verified information, the VCGCB shall transmit restitution revenues to the victim. (Pen. Code § 2085.5, subd. (o)(3)(B).) Existing law provides where an order is made for payment of restitution, reimbursement for legal assistance, the costs of probation, the cost of jail or confinement, or any reimbursable cost, the court or county financial officer - after determining the amount of any fine and penalty assessments - shall apply the following priorities: If full payment is made, the court shall apportion the money. If installment payments are made, or money is collected by the Franchise Tax Board collection service, disbursement shall be made in the following order: o Direct restitution. o State surcharges of 20% on top of penalty assessments added to fines. o Fines, penalty assessments and restitution fines - disbursed proportionately. o Any other reimbursable costs. (Pen. Code § 1203.1d.) Existing law provides: "Whenever a person who has been ordered to pay restitution to a victim is also sentenced to a term of imprisonment in state prison, the court and the counties may provide to the CDCR the victim's contact information, when available, along with the restitution order, for the purposes of the department distributing the restitution collected on behalf of the victim." (Pen. Code § 1203c.) This bill authorizes counties to collect direct restitution orders and restitution fines from persons released from prison on post release community supervision (PRCS) and persons released from a jail felony split sentence on mandatory (More) SB 1197 (Pavley) PageH supervision. This bill provides that the determination of whether a county will collect restitution and restitution fines from persons on PRCS and mandatory supervision shall be made by board of supervisors, which shall designate the agency to do the collections. This bill provides a discretionary process for counties to collect restitution orders and restitution fines that is parallel to the process or system for collection of restitution and restitution fines from prison inmates, parolees, and persons serving jail sentences in Penal Code Section 2085.5. Where a person on PRCS or mandatory supervision owes direct restitution and a restitution fine, the direct restitution order shall be collected first. Any portion of a restitution fine still owing at the end of PRCS or mandatory supervision shall be collectible by the VCGCB, as specified. A local collection program may continue to collect the debt. Any amount of a direct restitution order still owing at the end of PRCS or MS shall be collectible by the victim as though a civil judgment, as specified, and by the VCGCB. This bill provides that payment of direct restitution and a restitution fine shall be a condition of PRCS or mandatory supervision. 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. (More) SB 1197 (Pavley) PageI 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 that created a new felony, expanded the scope or penalty of an existing felony, or otherwise increased 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. 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 requiring the state to reduce its prison population to 137.5 percent of design capacity. The State submitted 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 opposed the state's motion, arguing 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 % inmate population cap by December 31, 2013. The Three-Judge Court then ordered, on April 11, 2013, the state of California to "immediately take all steps necessary to comply with this Court's . . . Order . . . requiring defendants to reduce overall prison population to 137.5% design capacity by December 31, 2013." On September 16, 2013, the State asked the Court to extend that deadline to December 31, 2016. In response, the Court extended the deadline first to January 27, 2014 and then February 24, 2014, and ordered the parties to enter into a meet-and-confer process to "explore how defendants (More) SB 1197 (Pavley) PageJ can comply with this Court's June 20, 2013 Order, including means and dates by which such compliance can be expedited or accomplished and how this Court can ensure a durable solution to the prison crowding problem." The parties were not able to reach an agreement during the meet-and-confer process. As a result, the Court ordered briefing on the State's requested extension and, on February 10, 2014, issued an order extending the deadline to reduce the in-state adult institution population to 137.5% design capacity to February 28, 2016. The order requires the state to meet the following interim and final population reduction benchmarks: 143% of design bed capacity by June 30, 2014; 141.5% of design bed capacity by February 28, 2015; and, 137.5% of design bed capacity by February 28, 2016. If a benchmark is missed the Compliance Officer (a position created by the February 10, 2016 order) can order the release of inmates to bring the State into compliance with that benchmark. In a status report to the Court dated February 18, 2014, the state reported that as of February 12, 2014, California's 33 prisons were at 144.3 percent capacity, with 117,686 inmates. 8,768 inmates were housed in out-of-state facilities. The ongoing prison overcrowding litigation indicates that prison capacity and related issues concerning conditions of confinement remain unresolved. While real gains in reducing the prison population have been made, even greater reductions may be required to meet the orders of the federal court. Therefore, the Committee's consideration of ROCA bills -bills that may impact the prison population - will be informed by the following questions: Whether a measure erodes realignment and impacts the prison population; 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 (More) SB 1197 (Pavley) PageK 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: SB 1197 provides for the collection and distribution of restitution and restitution fines when a defendant is released on post release community supervision (PRCS) community supervision, or mandatory supervision. Restitution is a constitutionally protected right to ensure that the victim is repaid for the harm that has occurred due to the commission of a crime. According to California's Realignment Plan of 2011, certain inmates must be released to PRCS, community supervision, or mandatory supervision provided by county agencies. Currently when this occurs there are no provisions for county officials to collect and distribute unpaid amounts of restitution and restitution fines. AB 1197 is needed to correct this oversight allowing each county to designate an "agency" for the collection sand distribution of unpaid restitution and restitution fines. Since restitution is a constitutional mandate the requirement of which was inadvertently thwarted by the Realignment of 2011, this proposal corrects the oversight and puts in place a county option to collect restitution and restitution orders. Without this reform, crime victims will be forced to attempt to collect their restitution through civil collection provision. (More) SB 1197 (Pavley) PageL Some of the offenders who are being shifted from the prisons to the counties, have committed various types of non-violent felonies, among them grand theft, elder financial abuse and other forms of consumer fraud. Anecdotally, victims of crime are calling district attorney offices asking for assistance in collection from individuals committed in the county. Absent statutory authority, the only alternative for a victim to receive restitution is civil enforcement. Victims are not well-equipped to enforce these restitution judgments. In addition, they must locate the convicted individual to enforce the judgment as a lien. Convicted individuals are most reachable when they are under supervision. They are more likely to pay when they are constructively in custody than when they are not supervised. Legislative reform is a superior alternative. The Victim's Compensation Government Claims Board (VCGCB) has publicly expressed concerns about the loss of money from uncollected fines. In order to maintain a robust victim assistance system, which fines support, it is necessary to enact the reforms of AB 1197. District Attorneys get grants from the VCGCB to assist victims - those grants are threatened by the loss of fine revenue 2. Clear Constitutional and Statutory Requirement that a Defendant Pay Direct Restitution to the Victim and a Restitution Fine to Fund the Victims of Crime Program The California Constitution unequivocally provides that a criminal defendant shall pay restitution to his or her victim. (Cal. Const. Art. 1 § 28, subd. (b).) Penal Code Section 1202.4 implements this requirement, specifically providing that a restitution order shall cover all economic losses suffered by a victim. (Pen. Code § 1202.4, subd. (f).) Restitution provides a measure of a remedy for victims and rehabilitation for defendants, rather than punishment alone, in the criminal law. (People v. Crow (1993) 6 Cal.4th 952, 958.) Similarly, the purpose of a restitution fine appears to assist (More) SB 1197 (Pavley) PageM all crime victims in recovering economic losses, even a victim who has little prospect of collecting restitution from the person who committed a crime against him or her. (Pen. Code § 1202.4, subd. (b).) Unless compelling and extraordinary circumstances are shown, all persons convicted of crimes must pay a restitution fine to make amends to society in a way that helps crime victims. Inability to pay does not constitute compelling and extraordinary circumstances excusing payment of a restitution fine. Inability to pay only affects the calculation of the amount of any fine greater than the minimum fine. (Pen. Code § 1202.4, subd. (c).) Arguably, the purpose of the restitution fine is defeated if the defendant simply serves a term of incarceration instead paying a monetary penalty that goes to victims. (More) 3. Condition of the Victims of Crime Fund and Payments Condition of the Restitution Fund and Reserves The balance and reserve of the Restitution Fund can fluctuate widely. The reserve for fiscal year 2011-2012 was $28.5 million, rising to $70 million in 2012-2013. By the beginning of 2013-2014 the fund had a reserve of $80 million. The board now projects a structural deficit - defined as a shrinking reserve - for the next two fiscal years. The fund projects a reserve of $71.5 million for the beginning of fiscal 2014-2015, dropping to an estimated $61.7 at the beginning of 2015-2016. However, the board's prior projected reserve for 2013-14 of $55 million significantly under-projected the reserve, as the actual reserve amount was $80 million. Board representatives explained that payments to victims and administrative costs were $20 million and $5 million lower than projected respectively. Payments to Victims in Recent Years In fiscal years 2006-07 and 2007-08, the board paid victims between $72 million and $79 million.<4> Victim payments for 2008-09 through 2010-2011 rose to $95 million per year. In fiscal year 2011-2012 the amount fell to approximately $70.5 million. In fiscal year 2012-2013, the board paid victims $64 million. In 2011, the board reduced maximum payments and payment rates for some categories of reimbursement, including funeral expenses and mental health services. 4. Audit of the Victims of Crime Program 2008 California State Auditor Report on the Victim Compensation Program The Bureau of State Audit (BSA) report in 2008 included the following highlights: From fiscal years 2001-02 through 2004-05, program -------------------------- <4> These dollar amounts are approximated or rounded to the nearest million. (More) SB 1197 (Pavley) PageO 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 increased. Administrative 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. Board 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. The board did not adequately investigate alternative sources of funding for victim reimbursement, such as insurance and public aid. 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<5> appeared to be erroneous. Although board staff provided explanations for the erroneous payments, the fact that they were unaware of these items indicated 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. 2010 Update and Progress Report In 2010, BSA found that the program had partially corrected five of the problems noted in the audit and corrected five others. The BSA urged the board to continue correcting the problems noted in the report. For example: The board reduced administrative costs, but processing times for claims had increased. The board increased collections, but it had not determined whether outreach programs had been successful and satisfaction with the program had increased. ------------------------- <5> Claim review computer system. SB 1197 (Pavley) PageP The board implemented better training program for employees who examined claims submitted by crime victims. The board developed an inventory monitoring system and set performance benchmarks. The monitoring should improve identification and understanding of eligibility requirements. Board training includes an emphasis on alternative funding sources. The board did complete a chapter on appeals of denials in its manual. The board did improve its use of the CaRES computer system. However, claims were still more quickly processed in the local agencies with which the board contracts. It appears that the BSA has not issued a progress report or update on the program since 2010. It is not clear what the board has done to address the issues raised in the BSA audit since that time. Many, if not most, of these issues affect the ability of the board to timely and adequately compensate victims, including the ability to compensate elderly and dependent adult victims of fraud. These issues will also be addressed in the Appropriations Committee. HAS THE VICTIM COMPENSATION PROGRAM CONTINUED TO ADDRESS ISSUES RAISED IN THE 2008 REPORT BY THE STATE AUDITOR? ***************