BILL ANALYSIS �
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2011-2012 Regular Session B
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0
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SB 208 (Alquist)
As Amended March 31 2011
Hearing date: April 12, 2011
Penal Code (URGENCY)
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RESTITUTION:
IDENTITY THEFT AND RESTITUTION COLLECTION
HISTORY
Source: Attorney General
Prior Legislation: SB 1087 (Alquist) - 2010, Chaptered out
SB 432 (Runner) - Ch. 49, Stats. 2009
AB 2928 (Spitzer) - Ch. 752, Stats. 2008
SB 612 (Simitian) - Ch. 47, Stats. 2008
AB 367 (De Le�n) - Ch. 132, Stats. of 2007
AB 1505 (La Suer) - Ch. 555, Stats. 2006
SB 246 (Escutia) - Ch. 380, Stats. 2004
AB 1773 (Wayne) - Ch. 908, Stats. 2002
SB 1254 (Alpert) - Ch. 254, Stats. 2002
SB 245 (Wyland) - Ch. 478, Stats. 2001
SB 125 (Alpert) - Ch. 493, Stats. 2001
SB 168 (Bowen) - Ch. 720, Stats. 2001
AB 1897 (Davis) - Ch. 956, Stats. 2000
AB 1862 (Torlakson) - Ch. 632, Stats. 2000
AB 156 (Murray) - Ch. 768, Stats. 1997
AB 3343 (Hannigan) - Ch. 1242, Stats. 1994
Support: Riverside Sheriffs' Association; Los Angeles County
Probation Officers Union; California Chamber of
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Commerce; California Retailers Association; CoreLogic;
First American Corporation; Personal Insurance
Federation of California; Reed Elsevier, Inc.;
TransUnion; Association for Los Angeles Deputy
Sheriffs; American Federation of State County and
Municipal Employees; Consumer Federation of California
Opposition:None known
KEY ISSUES
IN AN IDENTITY THEFT CASE, SHOULD RESTITUTION INCLUDE EXPENSES FOR A
REASONABLE PERIOD OF TIME TO REPAIR A VICTIM'S CREDIT AND MONITOR
THE VICTIM'S CREDIT REPORT?
UNLESS THE VICTIM OBJECTS, SHOULD A COUNTY FORWARD A RESTITUTION
ORDER TO THE FRANCHISE TAX BOARD (FTB) FOR PARTIAL COLLECTION OF THE
ORDER FROM A CURRENT OR FORMER PROBATIONER USING METHODS FTB EMPLOYS
TO COLLECT DELINQUENT TAXES?
PURPOSE
The purposes of this bill are to 1) specifically provide that
restitution in an identity theft case shall include, for a
reasonable period of time, the costs of repairing the victim's
credit and monitoring the victim's credit report; and 2) provide
that the county shall, unless a victim objects, refer a
restitution order to the Franchise Tax Board ("FTB") for
collection of the order through methods used by FTB to collect
delinquent taxes.
Identity Theft and Related Statutes
Existing law provides that it is an alternative
felony-misdemeanor for a person to willfully obtain the personal
identifying information of another person and to use such
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information to obtain, or attempt to obtain, credit, goods, or
services in the name of the other person without consent. (Pen.
Code � 530.5, subd. (a).)
Existing law provides that every person who, with the intent
to defraud, acquires or retains possession of the personal
identifying information of another person, and who has
previously been convicted of a violation of provisions
proscribing identity theft, or who, with the intent to
defraud, acquires or retains possession of the personal
identifying information of 10 or more other persons, shall be
punished by a fine, by imprisonment in a county jail not to
exceed one year, or by both a fine and imprisonment, or by
imprisonment in the state prison. (Pen. Code � 530.5, subd.
(b)(3).)
Existing law provides that any person who, with intent to
defraud, sells, transfers, or conveys the personal identifying
information of another person shall be punished by a fine, by
imprisonment in a county jail not to exceed one year, or by both
a fine and imprisonment, or by imprisonment in the state prison.
Further, any person who, with actual knowledge that the
personal identifying information of a specific person will be
used in violation of identity theft provisions who sells,
transfers, or conveys that personal identifying information
shall be punished by a fine or by both a fine and imprisonment,
or by imprisonment in the state prison. (Pen. Code � 530.5,
subd. (d).)
Restitution and Related Statutes
The California Constitution provides that all persons who suffer
losses as a result of criminal activity shall have the right to
restitution from the perpetrators of these crimes. Restitution
shall be ordered in every case unless compelling and
extraordinary reasons exist to the contrary. (Cal. Const. Art.
1 � 28(b).)
Existing law directs the court to order full restitution for the
losses caused by the defendant's crime unless the court finds
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and states compelling and extraordinary reasons for not doing
so. (Pen. Code � 1202.4, subd. (f).)
Existing decisional law provides that restitution must be
determined from the losses actually caused by the defendant's
crime. (People v. Lyon (1996) 49 Cal.App.4th 1521.) With the
exception of lewd conduct cases, compensable losses are limited
to economic losses. (People v. Giordano (2007) 42 Cal.4th 644.
Existing decisional law provides that the restitution "ensures
that amends . . . be made to society for the breach of the law,
enables people who suffer loss as a result of criminal activity
�to] be compensated ? acts as a deterrent to future criminality .
. . and to rehabilitate the criminal." (People v. Crow (1993) 6
Cal.4th 952, 958, internal quotation marks omitted.) Restitution
orders in probation cases can be somewhat broader than in cases
where probation is denied. (People v. Giordano, supra, 42
Cal.4th 644, 653; Pen. Code � 1203.1.)
Existing law provides that restitution orders are 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 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 "when the economic losses of a victim
cannot be ascertained at the time of sentencing pursuant to
subdivision (f) of Section 1202.4, the court shall retain
---------------------------
<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.
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jurisdiction over a person subject to a restitution order for
purposes of imposing or modifying restitution until such time as
the losses may be determined." (Pen. Code � 1202.46, subd.
(f).)
This bill provides that restitution shall include "expenses for
a period of time reasonably necessary to make the victim whole,
for the costs to monitor the credit report of, and for the costs
to repair the credit of, a victim of identity theft, as defined
in Section 530.5."
Referral of Restitution Orders to the Franchise Tax Board (FTB)
Existing law provides that that fines, penalties, forfeitures,
restitution orders or other amounts imposed by a superior court
that are due and payable in an amount totaling no less than $100
for criminal offenses shall, no sooner than 90 days after
delinquency, be referred by the court, county, or the state to
FTB for collection under FTB guidelines. (Rev. Tax. Code �
19280, subd. (a)(1).)
Existing law provides that the amounts referred by the superior
court, the county, or state under this section may include an
amounts that a government entity may add to the court-imposed
obligation as a result of the underlying offense, trial, or
conviction. Such amounts shall be deemed to be imposed by the
court. (Rev. � Tax. Code � 19280, subd. (a)(2)(A).)
Existing law necessitates that restitution orders may be
referred to the FTB only by a government entity, as agreed upon
by the FTB, provided that all of the following apply:
a) The government entity has the authority to collect on
behalf of the state or the victim.
b) The entity shall be responsible for distributing the
restitution order collections.
c) The entity shall ensure, in making referrals and
distributions, that it coordinates with any other related
collection activities that may occur by courts, counties,
or state agencies.
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d) The entity shall ensure compliance with laws relating to
the reimbursement of the State Restitution Fund. (Rev.
Tax. Code � 19280, sudb. (a)(2)(B).)
Existing law directs FTB to establish criteria for referral,
including a minimum dollar amount subject to referral and
collection. (Rev. � Tax. Code � 19280, subd. (a)(2)(C).)
Existing law provides that upon written notice to the debtor
from the FTB, any amount referred to the FTB and any interest
thereon shall be treated as final and due and payable and shall
be collected from the debtor by the FTB in any manner authorized
for collection of a delinquent income tax liability, including
issuance of an order and levy in the manner provided for
withholding orders for taxes. (Rev. � Tax. Code � 19280, subd.
(c).)
Existing law provides that the CDCR may refer restitution awards
to FTB for persons under the control of the CDCR, including
those currently incarcerated and on parole. The victim of the
crime for which the court ordered the restitution may notify
CDCR not to refer the order to FTB. (Rev. � Tax. Code � 19280,
subd. (a)(1)(A).)
This bill provides that a county probation department may,
unless the victim objects, refer a direct restitution order to
the Franchise Tax Board for collection of the order from any
income tax refund owed to a current or former probationer.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation.
As these cases have progressed, prison conditions have
continued to be assailed, and the scrutiny of the federal courts
over California's prisons has intensified.
On June 30, 2005, in a class action lawsuit filed four years
earlier, the United States District Court for the Northern
District of California established a Receivership to take
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control of the delivery of medical services to all California
state prisoners confined by the California Department of
Corrections and Rehabilitation ("CDCR"). In December of 2006,
plaintiffs in two federal lawsuits against CDCR sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
three-judge federal panel issued an order requiring California
to reduce its inmate population to 137.5 percent of design
capacity -- a reduction at that time of roughly 40,000 inmates
-- within two years. The court stayed implementation of its
ruling pending the state's appeal to the U.S. Supreme Court.
On Monday, June 14, 2010, the U.S. Supreme Court agreed to hear
the state's appeal of this order and, on Tuesday, November 30,
2010, the Court heard oral arguments. A decision is expected as
early as this spring.
In response to the unresolved prison capacity crisis, in early
2007 the Senate Committee on Public Safety began holding
legislative proposals which could further exacerbate prison
overcrowding through new or expanded felony prosecutions.
This bill does not appear to aggravate the prison overcrowding
crisis described above.
COMMENTS
1. Need for This Bill
According to the author:
Every year more Californians become victims of
identity theft. With changes in technology,
increasing amounts of personal identifying information
available electronically, and a souring economy,
identity theft has become lucrative and sophisticated
crime. We have more victims and more extensive
victimization.
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Victims of identity theft often suffer for years.
Victims' information is distributed for use among many
identity thieves. Even where the initial criminal is
caught, victimization may not end. Victims must
monitor and correct their credit histories for years
after the crime occurred.
Victims deserve to have a specific right to
restitution for credit monitoring and repair.
Restitution for credit repair costs and credit
monitoring for a reasonable period of time necessary
to make the victim whole should be mandated as part of
restitution to all identity theft victims.
This bill also concerns collection of restitution
orders from former probationers. The Revenue and Tax
Code gives Department of Corrections and
Rehabilitation (CDCR) the ability to refer a
restitution order to the Franchise Tax Board (FTB) for
collection, for any person "who is or has been" under
the jurisdiction of CDCR. (Cal. Rev. & Tax Code �
19280, subd. (a)(1).) Counties, however, do not have
this authority with respect to former probationers.
So, when an individual completes probation, counties
have no means to continue collection of restitution.
This bill will allow county probation departments to
refer restitution orders to the FTB for any
probationers that have been under their jurisdiction.
2. Prior Legislation Inadvertently Chaptered-Out
In 2010, SB 1087 (Alquist), was identical to the portion of this
bill concerning restitution for identity theft victims.
Although signed by the governor, SB 1087 was inadvertently
chaptered out by very late amendments to AB 819 (Calderon) Ch.
351, Stats. 2010. SB 1087 passed this Committee on a vote of
7-0 on April 20, 2010.
3. Background on Statutory Restitution
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California law directs a court to determine a victim's losses
from a crime and to order the perpetrator to pay restitution.
(Pen. Code � 1202.4.) Where the full amount of restitution
cannot be calculated by the date the defendant is sentenced, the
court will direct the probation office to determine the
appropriate amount at a later time. The court will then order
the defendant to pay that amount of restitution. If the
defendant challenges the restitution order, the court shall hold
a hearing on the issue. (Pen. Code � 1203c.)
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4. Problems Encountered by Victims in Repairing a Damaged Credit
Rating
One of the most daunting and frustrating problems encountered by
identify theft victims is the damage to their credit. As the
current recession, particularly the crash of the real estate
market demonstrates, good credit is essential to financial
stability. An identity theft victim may well face months of
work and substantial expense repairing his or her credit.
Companies market credit repair services. Credit card companies
compete for business, in part, by including credit monitoring
and repair in a credit account.
5. Calculating Restitution over a Period of Time
Existing law recognizes that courts may find it difficult to
adequately compensate a victim as of the date of sentencing.
Penal Code Section 1204.46 explicitly provides that where the
specific amount or restitution cannot be determined on the date
of sentencing, the court retains jurisdiction to determine
restitution at a later date. Restitution can even be determined
after a defendant has served his or her sentence. (People v.
Buford (2007) 146 Cal.App.4th 966.)
The initial version of SB 1087 - heard last year and similar to
the bill now before the Committee - specifically allowed
restitution to identity theft victims for the cost of repairing
credit and correcting credit reports limited for a period of
three years. However, harm to an identity theft victim's credit
status and credit report can occur over a relatively long period
of time. As SB 1087 was amended in this Committee in 2010, this
bill allows the court to order restitution for a period of time
reasonably necessary to make the victim whole.
DO IDENTITY THEFT VICTIMS SUFFER COSTLY, FRUSTRATING AND
TIME-CONSUMING DAMAGE TO THEIR CREDIT STATUS?
SHOULD RESTITUTION IN AN IDENTITY THEFT CASE INCLUDE THE COSTS
OVER A REASONABLE AMOUNT OF TIME FOR CREDIT REPAIR AND
MONITORING OR CREDIT REPORTS?
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6.Prior Legislation on FTB Collection of Criminal Fines and
Restitution
In the past two decades a number of bills have considered the
use of the Franchise Tax Board (FTB) as essentially a collection
agency for court-ordered fines, fees and restitution. (FTB has
an in-house collection process for delinquent taxes.) Those
bills include the following:
AB 3343 (Hannigan), Ch. 1242, Stats. 1994, authorized
FTB to collect fines, penalties or forfeitures in excess of
$250 imposed by any court.
AB 367 (De Le�n), Ch. 132, Stats. 2007, lowered the
threshold amount for FTB referral for collection from $250
to $100. AB 367 also expanded the Vehicle Code violations
included by the FTB's Court Ordered Debt Collection Program
to include parking, registration, pedestrian, or bicyclist
offenses.
AB 2928 (Spitzer) Ch. 752, Stats. 2008, formalized in
statute the ability of CDCR to refer restitution awards to
FTB for persons who are who have been under the control of
the CDCR. The bill provided that the victim of the crime
for which the court ordered the restitution may notify CDCR
not to refer the order to FTB.
1.Collection by FTB of Restitution owed by Parolees and Former
Parolees - Extension to Probationers and former Probationers
Existing law allows CDCR to refer to FTB cases in which a
parolee or former parolee owes restitution to a crime victim.
FTB would then, as prescribed in statute and regulations,
collect the restitution from the former parolee with the
methods FTB uses to collect delinquent income taxes.
Essentially, FTB acts as a collection agency for the state.
FTB uses wage assignments, attachment of property and other
methods to collect restitution. FTB can charge up to 15% of
the collection amount for administrative costs.
Similar authority does not exist for county probation offices
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to refer restitution collection matters involving current or
former probationers to FTB for collection. This bill would
provide that authority. Arguably, a person who has been on
probation would be at least likely to have earned wages while
on probation and after probation ended. Because it is often
difficult for victims to collect restitution - as restitution
is essentially treated as a civil judgment - this bill could
significantly increase restitution collection.
The FTB Website describes the court collection program as
follows:
California courts impose fines, state or local
penalties, bail, forfeitures, restitution fines and
orders, vehicle code violations, or any other amounts
upon a person for criminal offenses.
The Legislature authorized us to collect court-ordered
debt for participating courts and agencies. The
participating courts and agencies fund our
administrative costs, which do not exceed 15 percent
of the amount we collect. Due to our continued
success, the legislature made COD permanent and
expanded it to accept cases from all 58 counties.
(California Revenue and Taxation Code Sections 19280 -
19282)
We only collect debt on behalf of the referring court
or agency. If you have case specific questions, need
details about your debt, or you dispute the amount
due, you must contact the referring court or agency
that imposed the debt.
SHOULD PROBATION DEPARTMENTS BE SPECIFICALLY AUTHORIZED TO REFER
RESTITUTION COLLECTION TO FTB FOR PERSONS WHO ARE OR HAVE BEEN
UNDER THE JURISDICTION OF COUNTY PROBATION?
8. Request for Re-Referral
The Senate Rules Committee has directed that a due pass motion
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on this bill be back to Rules Committee so that it may consider
the request of the Senate Committee on Governance and Finance
for a re-referral so that it may consider the FTB provisions
recently amended into the bill.
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