BILL ANALYSIS �
SB 16
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
SB 16 (Gaines) - As Amended: June 17, 2014
SENATE VOTE : 34-0
SUBJECT : Administration of justice: county costs: nonhomicide
criminal trials.
SUMMARY : Allows counties to apply to the State Controller
(Controller) for reimbursement
of costs incurred in defending a non-homicide case when the
Attorney General (AG) is handling the investigation and
prosecution of the crime, subject to Legislative appropriation.
Specifically, this bill :
1)Allows a county that is responsible for the defense costs of a
trial or trials or any hearing
of a person for the offense of a non-homicide crime to apply to
the Controller for reimbursement of the costs incurred by the
county. This provision is subject to appropriation by the
Legislature, and applies only when the AG is handling the
investigation and prosecution of a non-homicide crime in a
county, as specified in 2), below.
2)Provides that the county authorization in 1), above, shall
apply to any non-homicide criminal trial or trials or any
hearing commencing on or after January 1, 2012. The
authorization shall apply only to a trial or trials when the
AG is handling investigation and prosecution of a non-homicide
crime due to the scope and complexity of the case, and not
when the AG is handling the prosecution of a non-homicide
crime because a district attorney has been recused solely to
avoid a conflict of interest or for any other reason unrelated
to the scope and complexity of the case.
3)Prohibits the Controller from reimbursing any county for costs
that exceed the California Victim Compensation and Government
Claims Board's standards for travel and per diem expenses.
The Controller may reimburse extraordinary costs in unusual
cases if the county provides sufficient justification of the
need for these expenditures. This provision shall not permit
the reimbursement of costs for travel in excess of 1,000 miles
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on any single round trip, without the prior approval of the
AG.
4)Provides that, subject to appropriation by the Legislature,
reimbursement funds appropriated pursuant to this section
shall be available for three fiscal years from the date of the
appropriation. After three fiscal years, any unused funds
shall revert back to the General Fund.
5)Defines "costs incurred by the county" to mean all costs,
except normal salaries and expenses, incurred by the county in
defending at trial or trials, including the trial or trials
of a person or persons for the offense of a non-homicide crime,
including costs, except normal salaries and expenses, incurred
by the public defender in investigation and defense. Trial
defense costs shall also include all pre-trials, hearings, and
post-conviction proceedings, if any.
6)Requires, if the venue for trial of a non-homicide criminal
case has been changed from the county that is eligible for
reimbursement under the provisions of 1) through 4), above, to
another county, and the public defender of that county has
entered into a contract with an attorney to try the case or an
investigator to assist in the trial of the case, the
Controller to, upon appropriation by the Legislature,
reimburse the county for the actual defense costs of the
attorney or investigator under this provision, at an hourly
rate not to exceed the hourly rate charged to state agencies
by the AG for similar attorney services or investigators,
without a further showing of justification. This provision
shall not permit the reimbursement of costs for travel in
excess of 1,000 miles on any single round trip, without the
prior approval of the AG.
7)Provides, if the county meets the conditions described in the
provisions of 1) through 4), above, and applies to the
Controller for reimbursement pursuant to those provisions, and
the Controller determines that the reimbursement meets the
definition in 5), above, the Controller shall request that the
Director of Finance include any amounts necessary to fulfill
the purposes of the provisions of 1) through 4), above,
annually in a request for a deficiency appropriation in
augmentation of the emergency fund.
8)Allows the Controller to adopt rules and regulations to carry
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out the purposes of this bill subject to the rulemaking
provisions of the Administrative Procedure Act.
9)Makes the following legislative declarations:
a) The uniform administration of justice throughout the
state is a matter of statewide interest;
b) The defense and conduct of trials of persons accused of
non-homicide crimes should not be hampered or delayed by
any lack of funds available to the counties for these
purposes;
c) A county should not be required to bear the entire
defense costs of a trial involving a non-homicide crime if
these costs will seriously impair the finances of the
county; and,
d) It is the intention of the Legislature in enacting this
chapter to provide for state assistance to counties in
these emergency situations.
10)Declares that this bill is an urgency statute necessary for
the immediate preservation of the public peace, health, or
safety within the meaning of Article IV of the Constitution
and shall go into immediate effect. The facts constituting
the necessity are: In order to authorize a county that is
responsible for the defense costs of a trial or trials or any
hearing of a person for the offense of a non-homicide crime,
when the AG is handling the prosecution of a non-homicide
crime in the county, to apply to the Controller for
reimbursement of the defense costs incurred by the county, it
is necessary that this act take effect immediately.
EXISTING LAW allows counties to apply to the Controller for
reimbursement of homicide investigation and trial costs that
exceed the monetary amount that would be derived by a tax of
0.0125 of 1% of the full value of assessed property in the
county.
FISCAL EFFECT : According to the Senate Appropriations
Committee analysis of this bill as amended on May 21, 2014:
1)Unknown, potentially significant General Fund costs in a given
fiscal year in which an authorized claim is received. It is
likely that claims will be intermittent and would not exceed
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hundreds of thousands in costs in a given year. Costs would
depend upon the number of cases investigated and prosecuted by
the AG that result in significant indigent defense costs for
an affected county that exceed the threshold for reimbursement
(see below for discussion related to Nevada County).
2)Minor and absorbable costs to the State Controller's Office
(SCO), assuming very few claims are submitted annually by
eligible counties.*
*Note: This bill has since been amended to remove a statutory
formula governing reimbursements, which will likely change this
bill's fiscal impact.
COMMENTS :
1)Background . In September of 2012, four suspects were arrested
in Nevada County and charged with securities fraud,
conspiracy, and elder abuse for operating a Ponzi scheme that
allegedly defrauded dozens of investors of more than $2.3
million. The State Department of Justice's Special Crimes
Unit (SCU) conducted the investigation that led to the
arrests. The SCU coordinates the investigation and
prosecution of crimes involving large-scale investment and
financial frauds, public corruption cases, and high-tech
crimes where the scope and complexity of offenses exceed the
investigative and prosecutorial resources of local law
enforcement and other state agencies. The criminal case is
being prosecuted by the AG's Mortgage Fraud Strike Force.
2)Purpose of this bill . This bill seeks a reimbursement
mechanism for Nevada County by allowing all counties to apply
to the Controller for reimbursement of costs incurred in
defending a non-homicide case when the AG is handling the
investigation and prosecution
of the crime. Although the bill specifies that the
reimbursement would be subject to Legislative appropriation,
it does not subject the reimbursement to the reimbursement
formula under existing law that governs counties' authority to
seek reimbursement for costs of homicide trials. This bill is
sponsored by Nevada County.
3)Author's statement . According to the author, "In Nevada
County, the Lester et. al case is a major real estate fraud
case. The case is being prosecuted by the State Attorney
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General, and the defense is being provided by the County's
indigent defense fund for three of the defendants. It is
estimated that the defense costs of these three individuals to
the County's general fund may be in excess of $600,000
annually. Current statute provides no dispensation for small
counties defending the indigent in non-homicide cases.
Providing legal counsel against all of the resources of the
State's Attorney General is a daunting fiscal task and may
result in severe impacts to Nevada County's general fund."
4)Right to counsel . The U.S. Supreme Court's opinion in Gideon
v. Wainwright (1963) held that the United States
Constitution's 6th Amendment guarantee of counsel is a
fundamental right that applies to all state criminal
prosecutions. California law requires that counsel must be
provided, at public expense, to an indigent defendant charged
with any felony or misdemeanor.
5)County prosecution and defense costs . Counties are generally
responsible for the costs
of investigations conducted by their sheriff and district
attorney offices, as well as costs related to court-ordered
public defenders, pre-trial and post-trial proceedings,
witness fees, and transcript preparation. In the case of
high-cost homicide trials, however, the Controller is
authorized to reimburse counties for costs above a specified
threshold amount, which is determined by a statutory formula
based on a county's size and property tax base. The formulas
have generally become more restrictive since January 1, 2005.
A county is eligible for reimbursement once aggregated costs
exceed a threshold of .0125 of 1% of the full assessed value
of property in that county.
The Legislature adopted the policy of reimbursing counties for
extraordinary costs related to homicide trials in 1961 in
order to provide uniform administration of justice throughout
the state, prevent homicide trials from being hampered or
delayed due to lack of funds available to counties for such
purposes, prevent serious impairment of county finances by
homicide trials, and provide state assistance in emergency
situations. According to the Controller's Office, five
counties have qualified for more than $1 million in
reimbursements from the General Fund over the past three
fiscal years for costs associated with 10 homicide trials.
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6)Nevada County's financial challenge . Nevada County has a very
small public defender's office with limited resources. County
officials indicate that costs to provide counsel for indigent
defendants in such a major and complex real estate fraud case
could have a severe impact on the County's finances. In order
to assist Nevada County with these costs, this bill allows a
county that is responsible for the defense costs of a trial or
hearing of a person charged with a non-homicide crime to apply
to the Controller for reimbursement of the costs incurred by
the county, without reference to the statutory amounts in
place for county reimbursement of homicide trials. This
authority is subject to an appropriation by the Legislature,
and applies only to trials beginning on or after January 1,
2012, for which the AG is handling the prosecution of a
non-homicide crime.
The Senate Appropriations Committee analysis of this bill as
amended on May 21, 2013, states that, "According to the SCO's
Assessed Valuation Annual Report for Fiscal Year 2012-13, the
net total assessed valuation of property in Nevada County was
$15.1 billion. Based on the threshold for reimbursement in
the bill, the county must incur aggregate defense costs of
$1.89 million before it is eligible for reimbursement from the
state. Nevada County had only incurred $92,000 in costs by
the end of the 2012-13 fiscal year, but anticipates that
defense costs in the pending real estate fraud trial case may
reach a level of over $600,000 annually. The County
anticipates that its quarterly costs will escalate as the
trial date approaches and increase further once it begins.
Once the County incurs eligible costs that exceed the
statutory threshold, all costs associated with the trial would
be reimbursable by the state."
7)Policy considerations .
a) Reimbursement for homicide vs. non-homicide cases . This
bill was amended June 17, 2014, to remove the reimbursement
formula that matches statutory language governing
reimbursement for counties for homicide cases. As such,
this formula would not govern reimbursements to counties
for non-homicide cases under the provisions of this bill.
Nevada County (and any other county) could apply for
reimbursement of all costs of non-homicide trials, not just
costs that exceed a specified amount based on the
reimbursement formula in existing law pertaining to
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homicide cases. While this bill does contain parameters by
requiring a legislative appropriation and limiting
eligibility for reimbursement to cases that are prosecuted
by the AG, the Committee may wish to consider whether it
wishes to advance a more generous policy for county
reimbursements for non-homicide trials than the existing
policy governing reimbursements to counties for homicide
cases.
b) Nevada County fix only ? The stated need for this bill
is to provide financial relief for one county. No other
county appears to meet the criteria for reimbursement under
the provisions of this bill, not does it appear that any
other county needs the assistance offered by this bill.
The Committee may wish to consider whether this bill's
authority should be granted to all counties statewide,
given the apparent need in only one county, or whether the
bill should be narrowed to small counties or to Nevada
County only.
c) Precedent . According to the Senate Governance and
Finance Committee's analysis of this bill, "For more than
four decades, the state's responsibility to reimburse
counties' extraordinary trial costs has been limited to
costs associated with homicide trials. This policy
reflects the uniquely serious nature of murder charges,
which require that the state make every effort to ensure
that fiscal constraints impair neither the prosecution nor
the defense. By making a county's defense costs
reimbursable regardless of the type of criminal charges
involved, SB 16 departs from long-standing policy and
invites other proposals to expand the state's
responsibilities for reimbursing trial costs. For example,
why shouldn't counties seek state reimbursement for their
extraordinary non-homicide trial costs regardless of
whether the Attorney General's office is involved? The
Committee may wish to consider whether SB 16 establishes a
precedent for further expansions of the state's trial cost
reimbursement obligations."
d) Broader discussion on state reimbursement for counties .
Also according to the Senate Governance and Finance
Committee's analysis of this bill, "Rather than providing a
patchwork of state reimbursements for some counties'
extraordinary criminal trial costs, the state may benefit
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from more systematic changes to the funding and conduct of
criminal trials. To seek a long-term solution to the
chronic fiscal problems that have confronted state and
county budgets in recent years, Governor Brown and the
Legislature have begun to restructure the state's
programmatic and fiscal relationship with its counties.
These "realignment" efforts shifted the responsibility for
funding and administering some criminal justice, health,
and social services from the state to the counties to save
costs and improve service delivery by allowing greater
local discretion and innovation. As a part of this ongoing
process, legislators may wish to consider whether
realigning responsibilities for funding and conducting
criminal trials will help prevent counties' disparate
fiscal and human resources from impairing the uniform
administration of justice in criminal cases."
8)Arguments in support . Nevada County, the sponsor of this
bill, states, "The County fully supports enforcement of all
laws and compliance with the Constitution's provisions
regarding rights to a fair trial. However, this unusual
circumstance of the Attorney General bringing a criminal case
against three Nevada County indigent residents has placed the
County in uncharted fiscal territory, and SB 16 is intended to
provide fiscal relief."
9)Arguments in opposition . None on file.
10)Urgency clause . This bill contains an urgency clause and
will require a two-thirds vote on the Assembly Floor.
REGISTERED SUPPORT / OPPOSITION :
Support
Nevada County [SPONSOR]
California State Association of Counties
Rural County Representatives of California
Opposition
None on file
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958
SB 16
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