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 ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 31, 2016 |Policy Vote: PUB. S. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Jolie Onodera | | | | ----------------------------------------------------------------- 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 AB 1754 (Waldron) Page 1 of ? 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 AB 1754 (Waldron) Page 2 of ? 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 AB 1754 (Waldron) Page 3 of ? 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 AB 1754 (Waldron) Page 4 of ? 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 AB 1754 (Waldron) Page 5 of ? 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. -- END -- AB 1754 (Waldron) Page 6 of ?