BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1754 (Waldron) - Crime victim compensation:  elder or  
          dependent adult financial abuse
          
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          |Version: May 31, 2016           |Policy Vote: PUB. S. 7 - 0      |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 1, 2016    |Consultant: Jolie Onodera       |
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          This bill meets the criteria for referral to the Suspense File. 

          Bill  
          Summary:  AB 1754 would establish a three-year pilot program in  
          San Diego County permitting the Victims of Crime Program  
          (CalVCP) to reimburse victims of elder and dependent adult  
          financial abuse for costs of financial and mental health  
          counseling.


          Fiscal  
          Impact:  
            CalVCP payments  :  Up to $1 million (Special Fund*) in program  
            payments to victims of elder or dependent adult financial  
            abuse for financial and mental health counseling services.
            Board workload  :  One-time workload costs of $35,000 to $50,000  
            (Special Fund*) to the Board for programming changes to the  
            automated claims management system, updating internal  
            policies, training staff, processing additional claims for  
            review during the pilot period, and staff time to prepare and  
            submit the legislative report.
            Pilot program impact  :  Potential major future cost pressure in  
            the millions of dollars (Special Fund*) to expand the pilot  







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            program statewide, as well as to compensate non-elderly  
            dependent/adult victims of financial crimes who are not  
            similarly compensated for financial crimes.
            Federal VOCA funding  :  Potential future increase in annual  
            federal VOCA grant funds (Federal Funds) of 60 percent  
            reimbursement for state funds used to compensate victims. As  
            VOCA grant awards are based on prior years of state  
            expenditures, the potential increases to the VOCA grant award  
            would not be received until 2017-18 and beyond.

          *Restitution Fund - staff notes the Restitution Fund is  
          structurally imbalanced, with the fund potentially reaching  
          insolvency in FY 2018-19 at its current operating level.  


          Background:  The CalVCP, which is administered by the California Victim  
          Compensation Board (Board), provides compensation for victims  
          and derivative victims (including spouses, domestic partners,  
          children, parents, legal guardians, siblings, grandparents, and  
          grandchildren) 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) funds. VOCA funds  
          come from penalties paid by offenders convicted of federal  
          crimes. 

           Elder and Dependent Adult Financial Abuse
           
          The Department of Social Services (DSS) administers oversight of  
          the Adult Protective Services (APS) program, which provides  
          assistance to elder (65 years and older) and dependent adults  
          (18-64 years of age who are disabled), who are unable to meet  
          their own needs, or are victims of abuse, neglect, or  








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          exploitation. SB 2199 (Lockyer) Chapter 946/1998 established a  
          statewide mandated APS program and provided funds for expanded  
          APS activities. It required the reporting of elder or dependent  
          adult abuse on a 24-hour emergency response basis, the  
          completion of investigation and needs assessments, and the  
          provision of case management services.

          County APS agencies investigate reports of abuse of elder and  
          dependent adults who live in private homes and hotels, or  
          hospitals and health clinics when the alleged abuser is not a  
          staff member. County APS staff evaluate abuse cases and arrange  
          for services such as advocacy, counseling, financial management,  
          out-of-home placement, or conservatorship. 

          Under existing law, victims of elder or dependent adult  
          financial abuse who suffer emotional injury are not eligible to  
          seek reimbursement for crime-related expenses through the  
          CalVCP. This bill would expand eligibility for compensation  
          through the CalVCP to include victims of elder or dependent  
          adult financial abuse who have suffered emotional injury, and  
          would expand the list of crime-related reimbursable expenses for  
          these victims to include financial counseling.


          Proposed Law:  
           This bill would establish the San Diego County Elder or  
          Dependent Adult Financial Abuse Crime Victim Compensation Pilot  
          Program, as follows:
           Provides that a person who meets the requirements of being a  
            victim under the CalVCP, regardless of whether the victim is a  
            resident of this state, shall be eligible for compensation  
            under the pilot program if he or she was a victim of elder or  
            dependent adult financial abuse (PC § 368(d) or (e)), and the  
            crime occurred in the County of San Diego.
           Provides that a person shall not be eligible for compensation  
            if he or she is a derivative victim and the only crime the  
            victim suffered is elder or dependent adult financial abuse.
           Authorizes the Board to grant for pecuniary loss, upon  
            appropriation by the Legislature before January 1, 2019, if  
            the Board determines it will best aid the person seeking  
            compensation to reimburse the expense of financial counseling,  
            mental health counseling, or supportive services for a victim  
            of elder or dependent adult financial abuse or financial abuse  
            as defined by Section 15610.30 of the Welfare and Institutions  








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            Code, that occurred in the County of San Diego, as follows, up  
            to a total of not more than $3,000 per person:
               o      The cost of not more than 10 sessions of financial  
                 counseling provided by a financial counselor, as  
                 specified, or an adviser providing services such as  
                 analysis of a victim's financial situation, including  
                 income-producing capacity and crime-related financial  
                 obligations, assistance with restructuring budget and  
                 debt, assistance in accessing insurance, public  
                 assistance, and other benefits, and assistance in  
                 completing the financial aspects of victim impact  
                 statements.
               o      The cost of not more than 10 sessions of mental  
                 health counseling.
           Provides that compensation shall not exceed an aggregate total  
            of $1 million for all persons compensated pursuant to the San  
            Diego County Elder or Dependent Adult Financial Abuse Crime  
            Victim Compensation Pilot Program.
           Sunsets the pilot program on January 1, 2020.
           Requires the Board to, on or before July 1, 2020, report to  
            the Legislature and Governor all of the following:
               1)     The number of victims who received payments pursuant  
                 to this article.
               2)     The number of victims who received mental health  
                 counseling.
               3)     The average payment for mental health counseling per  
                 recipient.
               4)     The number of victims who received financial  
                 counseling.
               5)     The average payment for financial counseling per  
                 recipient.
               6)     Any other data on the pilot program that the Board  
                 wishes to include.
           Sunsets the bill's provisions on January 1, 2021.
           Provides that the Legislature finds and declares that a  
            special law is necessary and that a general law cannot be made  
            applicable because of the unique circumstances in the County  
            of San Diego where a high number of reported elder and  
            dependent adult financial abuse crimes occur. The County of  
            San Diego is well-suited for a pilot program that would allow  
            the Legislature to gather data on the demand for victim  
            services, including mental health and financial counseling, by  
            elderly and dependent adult victims of financial crimes so as  
            to effectively develop policies and resources for this  








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            underserved population.


          Prior  
          Legislation:  AB 1140 (Bonta) Chapter 569/2015 revised various  
          rules governing the CalVCP, including expanded and revised  
          eligibility criteria related to lack of cooperation with law  
          enforcement.
          SB 519 (Hancock) 2015, as introduced, would have expanded  
          eligibility under the CalVCP to victims of elder financial abuse  
          and raised the funeral burial limit amount. This bill was  
          ultimately rewritten to address the issue of youthful offender  
          parole hearings.


          SB 60 (Wright) Chapter 147/2013 expanded eligibility for  
          compensation from the CalVCP to include human trafficking  
          victims who have suffered emotional injury. Early versions of  
          the bill contained provisions expanding eligibility for  
          compensation from the CalVCP to victims of elder or dependent  
          adult financial abuse, however, those provisions were amended  
          out of the bill by this Committee. 




          Staff  
          Comments:  By expanding eligibility and benefits provided under  
          the CalVCP in the pilot county of San Diego for three years, the  
          provisions of this bill will increase submissions of  
          applications and program payments from the Restitution Fund to  
          victims of elder or dependent adult financial abuse.
           Elder/Dependent Adult Financial Abuse
           
          Expanding victim reimbursement to victims of elder and dependent  
          financial abuse could significantly increase reimbursements paid  
          annually from the Restitution Fund, up to a maximum of $1  
          million as capped under the provisions of this measure. 

          Pilot projects generally create future cost pressure to expand  
          the operation of the program statewide. According to the DSS  
          report (SOC 242 - APS Monthly Statistical Report), nearly  
          133,000 reports of elder and dependent adult abuse were filed in  
          2012 statewide, and close to 10,000 reports of financial abuse  








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          were filed independently by financial institutions.  
          Additionally, investigations of over 24,350 cases of elder or  
          dependent adult financial abuse were completed in 2012  
          statewide. It is unknown what percentage of cases investigated  
          would potentially seek reimbursement and result in an eligible  
          claim if the pilot were to be expanded statewide, but for every  
          10 percent of victims that ultimately receive compensation,  
          annual payments could increase by over $6.5 million (Restitution  
          Fund). Consequently, the future cost pressure on the Restitution  
          Fund resulting from the operation of the pilot program is  
          substantial.

          Staff notes the Restitution Fund is structurally imbalanced with  
          an estimated FY 2016-17 ending reserve balance of $36.2 million.  
          At the current level of annual expenditures ($117.5 million) and  
          revenues ($93.7 million), the Fund is projected to be insolvent  
          by FY 2018-19. 

          The expanded eligibility and benefit classifications will also  
          increase administrative costs to the Board. The Board estimates  
          minor workload will be required to complete the programming  
          changes to the automated claims processing system. The  
          additional workload impact to update internal policies, train  
          staff, process additional claims for review during the pilot  
          period, and prepare/submit the legislative report are likewise  
          estimated to be minor and absorbable within the Board's existing  
          resources. The costs for these administrative activities are  
          projected to cost in the range of $35,000 to $50,000 of staff  
          time. 

          To the extent victims, regardless of age, of financial crimes  
          arguably suffer emotional injury, and this type of injury is not  
          exclusive to elder/dependent adults, staff notes that expanding  
          compensation for expenses related to non-violent financial  
          crimes could create future cost pressure on the Restitution Fund  
          to compensate non-elderly/dependent adults who have similarly  
          suffered as victims of financial crimes.



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