BILL ANALYSIS �
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2013-2014 Regular Session B
8
4
7
SB 847 (Block)
As Amended March 24, 2014
Hearing date: April 8, 2014
Government Code
JM:mc
VICTIM COMPENSATION
ELDERLY AND DEPENDENT ADULT VICTIMS OF FRAUD
HISTORY
Source: California Commission on Aging
Prior Legislation: SB 60 (Wright) - Ch. 147, Stats. 2013
Support: American Association of Retired Persons; Congress of
California Seniors; California Senior Legislature;
Elder Financial Protections Network; California
Assisted Living Association; Crime Victims United of
California; Consumer Federation of California;
California Advocates for Nursing Home Reform; County
Welfare Directors Association of California; Office of
the State Long-Term Care Ombudsman; California
Association for Health Services at Home; Association of
California Caregiver Resource Centers; California Crime
Victims Assistance Association; California Police
Chiefs Association; The Arc and United Cerebral Palsy
California Collaboration; Retired Judge Julie Conger
(Alameda County)
Opposition:Taxpayers for Improving Public Safety
(More)
SB 847 (Block)
PageB
KEY ISSUE
SHOULD AN ELDERLY OR DEPENDENT ADULT VICTIM OF FRAUD BE ELIGIBLE FOR
REIMBURSEMENT OF UP TO $2,000 FROM THE VICTIMS COMPENSATION FUND FOR
FINANCIAL AND MENTAL HEALTH COUNSELING?
PURPOSE
The purpose of this bill is to provide that where an elderly
person or dependent adult is the victim of a specified financial
crime, the victim may seek reimbursement for mental health and
financial counseling in an amount not to exceed $2,000 from the
Victims of Crime Fund.
Restitution Orders, Restitution Fines and the Victims of Crime
Reimbursement Program
Existing provisions in the California Constitution state that
all persons who suffer losses as a result of criminal activity
shall have the right to restitution from the perpetrators.
(Cal. Const. Art. 1 � 28(b).)
Existing law directs a sentencing court to order a defendant to
make restitution to the victim or victims of the defendant's
crime. (Pen. Code � 1202.4, subds. (a) and (f).)
Existing law requires the court to impose on each convicted
criminal defendant a restitution fine:
For a felony, the fine ranges from $300 to $10,000. The
misdemeanor fine ranges from $150 to $1,000.
Penalty assessments and state surcharges are not applied to
restitution fines.
The fines are deposited in the Victims of Crime Fund in the
State Treasury. (Pen. Code � 1202.4, subds. (b)-(g).)
(More)
SB 847 (Block)
PageC
Existing law includes the Victims of Crime Program, administered
by the California Victim Compensation and Government Claims
Board (board), 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 board for these purposes.
(Gov. Code �� 13950-13968.)
Existing law (Gov. Code � 13951) defines the following terms:
"Crime" is a crime or public offense, wherever it occurs,
which would be a misdemeanor or a felony if the crime had been
committed in California by a competent adult.
"Crime" includes an act of terrorism, committed against a
resident of the state, whether or not the act occurs within
California.
"Victim" is a person who sustains injury or death as a direct
result of a crime.
"Derivative victim" is one who suffers pecuniary loss as a
result of injury or death to a victim.
"Pecuniary loss" is an economic loss or expense resulting from
an injury or death to a victim of crime that has not been and
will not be reimbursed from any other source.
Existing law authorizes reimbursement to a victim for his or her
"medical or medical related expenses ?" (Gov. Code 13957, subd.
(a)(1).)
Existing law provides that the total award to, or on behalf of,
each victim or derivative victim<1>, may not exceed $35,000,
except that this amount may be increased to $70,000 if federal
funds for that increase are available. (Gov. Code � 13957,
subd. (b).)
Existing law (Gov. Code � 13957, subd. (a)) provides that the
Victims Compensation and Government Claims Board (VCBCB or
board) may grant a crime victim's claim for pecuniary loss for
---------------------------
<1> For purposes of brevity, the term "victim" includes a
"derivative victim" in this analysis where a distinction between
these terms is unnecessary.
(More)
SB 847 (Block)
PageD
the following purposes:
Reimbursement for the amount of medical or medical-related
expenses incurred by the victim.
Reimbursement for the amount of out-patient psychiatric,
psychological or other mental health counseling-related
expenses incurred by the victim, as specified. The victim may
be reimbursed for the expense of his or her out-patient mental
health counseling in an amount not to exceed $10,000. Victims
who are not eligible for up to $10,000 of reimbursement may be
eligible to be reimbursed for the expense of their out-patient
mental health counseling in an amount not to exceed $3,000.
Reimbursement for the expenses of non-medical remedial care
and treatment rendered in accordance with a religious method
of healing recognized by state law.
Compensation equal to the loss of income or loss of support,
or both, that a victim incurs as a direct result of the
victim's injury or the victim's death.
Cash payment to, or on behalf of, the victim for job
retraining or similar employment-oriented services.
Reimbursement for the expense of installing or increasing
residential security, not to exceed $1,000, with respect to a
crime that occurred in the victim's residence, upon
verification by law enforcement to be necessary for the
personal safety of the victim or by a mental health treatment
provider to be necessary for the emotional well-being of the
victim.
Reimbursement for renovating or retrofitting a victim's
residence or a vehicle to make them accessible or operational,
if that is medically necessary.
Cash payment or reimbursement not to exceed $2,000 for
expenses incurred in relocating if the expenses are determined
by law enforcement to be necessary for the personal safety or
by a mental health treatment provider to be necessary for the
emotional well-being.
The board, under compelling circumstances, may allow
reimbursement for moving expenses to the same victim for a
second crime if both of the following conditions are met:
� the crime occurs more than three years from the date
of the crime giving rise to the initial relocation cash
(More)
SB 847 (Block)
PageE
payment or reimbursement; and
� the crime does not involve the same offender.
Existing law authorizes the board to "establish maximum rates
and service limitations for medical and medical-related
services, and for mental health and counseling services ?" (Gov.
Code � 13957.2.)
Existing law allows the following victims to be reimbursed for
outpatient mental health counseling in an amount not to exceed
$5,000. (Gov. Code � 13957, subd. (a)(2)(B)):
a derivative victim not eligible for reimbursement in the
category allowing up to $10,000;
a direct victim of the crime of unlawful sexual intercourse,
where the victim is under 16 years old and the defendant is
over 21 years old; and
a minor who is not eligible for reimbursement of the costs of
outpatient mental health counseling under any other provision.
To be eligible for reimbursement under this clause, the minor
must have been in close proximity to the victim when he or she
witnessed the crime.
Existing law provides that the total award to, or on behalf of,
each victim may not exceed $35,000, except that this amount may
be increased to $70,000 if federal funds for that increase are
available. (Gov. Code � 13957, subd. (b).)
Existing law defines a "dependent adult" as any person who is
between the ages of 18 and 64, who has physical or mental
limitations which restrict his or her ability to carry out
normal activities or to protect his or her rights, including,
but not limited to, persons who have physical or developmental
disabilities or whose physical or mental abilities have
diminished because of age. (Pen. Code � 368, subd. (h).)
Existing law defines "elder" as any person who is 65 years of
age or older. (Penal Code � 368, subd. (g).)
Existing law establishes fines and other punishment for theft,
(More)
SB 847 (Block)
PageF
embezzlement, forgery, fraud, and identity theft against an
elder or dependent adult, as follows:
Where the defendant is not a caretaker and knows or reasonably
should know that the victim is an elder or a dependent adult,
and the value of the property, labor or services does not
exceed $950, the defendant may be punished by a fine not
exceeding $1,000, by imprisonment in a county jail not
exceeding one year, or both. (Pen. Code � 368, subd. (d).)
Where the defendant is not a caretaker and knows or reasonably
should know that the victim is an elder or a dependent adult,
and the value of the property, labor or services exceeds $950,
the defendant may be punished by imprisonment of up one year
in a county jail and a fine of up to $1,000, or by felony
imprisonment 2, 3 or 4 years in state prison or the county
jail pursuant to Penal Code Section 1170, subdivision (h).
(Pen. Code � 368, subd. (d).)
Where the defendant is a caretaker and the value of the
property, labor or services does not exceed $950, the
defendant may be punished by a fine not exceeding $1,000,
imprisonment in a county jail not exceeding one year, or
both. (Pen. Code � 368, subd. (e).)
Where the defendant is a caretaker, and the value of the
labor, goods, services, funds, or real and/or personal
property taken exceeds $950, he or she may be punished by up
to one year in a county jail or 2, 3 or 4 years in state
prison. (Pen. Code � 368, subd. (e).)
Existing law defines a "dependent adult" as any person who is
between the ages of 18 and 64, who has physical or mental
limitations which restrict his or her ability to carry out
normal activities or to protect his or her rights, including,
but not limited to, persons who have physical or developmental
disabilities or whose physical or mental abilities have
diminished because of age. (Pen. Code � 368, subd. (h).)
Existing law defines "elder" as any person who is 65 years of
age or older. (Penal Code � 368, subd. (g).)
Existing law establishes fines and other punishment for theft,
(More)
SB 847 (Block)
PageG
embezzlement, forgery, fraud, and identity theft against an
elder or dependent adult, as follows:
Where the defendant is not a caretaker and knows or reasonably
should know that the victim is an elder or a dependent adult,
and the value of the property, labor or services does not
exceed $950, the defendant may be punished by a fine not
exceeding $1,000, by imprisonment in a county jail not
exceeding one year, or both. (Pen. Code � 368 (d).)
Where the defendant is not a caretaker and knows or reasonably
should know that the victim is an elder or a dependent adult,
and the value of the property, labor or services exceeds $950,
the defendant may be punished by imprisonment of up one year
in a county jail and a fine of up to $1,000, or by felony
imprisonment 2, 3 or 4 years in state prison or the county
jail pursuant to Penal Code Section 1170, subdivision (h).
(Pen. Code � 368, subd. (d).)
Where the defendant is a caretaker and the value of the
property, labor or services does not exceed $950, the
defendant may be punished by a fine not exceeding $1,000,
imprisonment in a county jail not exceeding one year, or
both. (Pen. Code � 368, subd. (e).)
A person who is a caretaker, and the value of the labor,
goods, services, funds, or real and/or personal property taken
exceeds $950 may be punished by up to one year in a county
jail or 2, 3 or 4 years in state prison. (Pen. Code � 368,
subd. (e).)
This bill includes legislative findings about the extent of
financial abuse of the elderly and the response of other
legislative bodies to the problem.
This bill provides that an elderly or dependent adult victim of
fraud, as prosecuted under a special statute for crimes against
such victims is eligible for limited reimbursement for mental
health and financial counseling from the Victims of Crime Fund.
This bill sets a maximum total reimbursement of $2,000, with a
$1,000 maximum for financial counseling, and sets standards for
reimbursable financial counseling.
(More)
SB 847 (Block)
PageH
This bill provides that a derivative victim of fraud against an
elder or dependent adult is not eligible for compensation.
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.
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
(More)
SB 847 (Block)
PageI
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
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.
(More)
SB 847 (Block)
PageJ
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
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:
California has the highest number of aging adults in
the nation with 4.2 million individuals over the age
of 65 years. Financial exploitation of these elderly
and dependent adults has dramatically increased with
(More)
SB 847 (Block)
PageK
the growing population.
Elders and dependent adults are targeted by financial
predators who seek to take advantage of victims who
can easily fall prey to scams which may result in the
loss of a home, pension, or savings. For these elders
who have spent their entire lives working hard to save
money for retirement, losing their financial stability
and independence is devastating. Due to their
advancing age, most seniors are unable to make up for
the loss by going back to work or starting a new
business. Their financial loss is permanent and
cannot be fixed, and they must adjust. For too many
victims, this loss results in depression, emotional
distress, and in some instances, suicide. According
to a report by the Journal of the American Medical
Association, elders victimized by financial abuse have
a decreased projected lifespan compared to elders who
have not suffered any exploitation.
Federal law allows states to use Victims of Crime Act
(VOCA) funding to compensate victims for financial
losses caused by specified crimes, including victims
of financial crimes. In California however, the
California Victims of Crime Program does not serve
victims of elder financial abuse. Many states,
including Colorado, Florida, Oklahoma, Idaho, New
Jersey, New York, Pennsylvania, Vermont, and Wyoming
have already begun providing assistance to elderly
victims of financial crimes.
SB 847 will give limited but crucial assistance to
victims of this horrendous crime by authorizing them
to receive up to $2,000 for financial and/or mental
counseling.
2. Compensation Issues for Elderly and Dependent Victims of Theft
and Fraud
Many elderly persons have fixed, minimal incomes. A loss of
income or assets could severely limit an elderly person's
(More)
SB 847 (Block)
PageL
ability to pay for basic needs, such as utilities and rent.
Elderly persons who are the victims of theft or fraud may have
difficulty dealing with the stress of victimization. Further,
recent research<2> has found that changes in the brains of the
elderly render them less able to recognize a fraudulent scheme
or scam. A dependent adult who has a limited ability to care
for himself or herself, or who has an intellectual disability,
may also be especially vulnerable to thieves and perpetrators of
fraudulent schemes.
SB 60 (Wright) Ch. 147, Stats. 2013, was originally drafted to
extend compensation to dependent adult and elderly victims of
financial abuse. The bill was amended to only extend
eligibility to victims of human trafficking.
Two major issues or objections have been raised to an extension
of compensation to elderly and dependent adult victims of
financial fraud. One concern was that compensation through the
fund has always been limited to victims of violent crime.
Supporters of SB 60 argued that the physical and mental harm
experienced by elderly and dependent adult victims of financial
fraud can be similar or equivalent to the harm suffered by
victims of crimes covered by the program.
Further, supporters of both this bill and SB 60 have noted that
federal law authorizes compensation to victims of financial
crimes and that the state would receive federal matching funds
for reimbursement of elderly fraud victims. The 2001 Federal
Register<3> on victim compensation notes: "States may choose to
broaden the range of compensable crimes to include those
involving threats of injury or economic crime where victims are
traumatized but not physically injured." The Final Program
Guidelines issued by the Department of Justice, Office for
---------------------------
<2> Why It's Easier to Scam the Elderly, NPR Morning Edition,
December 6, 2012:
http://www.npr.org/blogs/health/2012/12/06/166609270/why-its-easi
er-to-scam-the-elderly
<3> http://ojp.gov/ovc/voca/pdftxt/voca_guidelines2001.pdf
(More)
SB 847 (Block)
PageM
Victims of Crime<4> explains: "Although VOCA-funded programs
cannot restore the financial losses suffered by victims of
fraud, victims are eligible for the counseling, criminal justice
advocacy, and other support services offered by VOCA-funded
victim assistance programs."
The second major concern was that the fund is chronically low on
reserves or heading toward a deficit. However, it has been
noted that the compensation program has long been criticized for
overspending on administrative costs. Further, the program has
been criticized for being inefficient in evaluating and
processing claims. Arguably, changes in the program could allow
extension of compensation to the victims covered by this bill.
SHOULD COMPENSATION FROM THE VICTIMS OF CRIME FUND BE LIMITED TO
VICTIMS OF SPECIFIED VIOLENT CRIMES?
SHOULD ELDERLY AND DEPENDENT ADULT VICTIMS OF FINANCIAL FRAUD BE
REIMBURSED FOR MENTAL HEALTH AND FINANCIAL COUNSELING?
DOES THE VICTIMS OF CRIME PROGRAM HAVE RESOURCES TO REIMBURSE
THESE ELDERLY AND DEPENDENT ADULT VICTIMS?
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
---------------------------
<4> http://ojp.gov/ovc/voca/vaguide.htm
(More)
SB 847 (Block)
PageN
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.
(More)
Payments to Victims in Recent Years
In fiscal years 2006-07 and 2007-08, the board paid victims
between $72 million and $79 million.<5> 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
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
--------------------------
<5> These dollar amounts are approximated or rounded to the
nearest million.
(More)
SB 847 (Block)
PageP
applications and bills.
Some payments in CaRES<6> 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.
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 completed 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
---------------------------
<6> Claim review computer system.
SB 847 (Block)
PageQ
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. The 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?
***************