BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 847 (Block) - Crime victim compensation: financial
elder/dependent adult abuse.
Amended: March 24, 2014 Policy Vote: Public Safety 7-0
Urgency: No Mandate: No
Hearing Date: April 28, 2014
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 847 would expand eligibility for compensation
from the Victim Compensation Program (CalVCP) to victims who
have suffered emotional injury resulting from the crime of
financial abuse of an elder or dependent adult. This bill would
also provide for reimbursement for financial counseling for
victims of financial crimes against elderly or dependent adults,
as specified.
Fiscal Impact:
Potential increase in annual program payments to victims of
elder/dependent financial abuse of $5.3 million to $13.2
million (Restitution Fund) for every 10 percent to 25
percent of financial elder abuse cases investigated
annually.
Potential future cost pressure (Restitution Fund) to
compensate non-elderly dependent/adult victims of financial
crimes who are not similarly covered.
One-time costs to VCGCB for resource needs potentially in
excess of $150,000 (Restitution Fund) for programming
changes necessary to the automated claims processing system.
Ongoing increased administrative workload for claims
processing of increased applications.
Potential future increases in annual federal Victims of
Crime Act (VOCA) grant funds of 60 percent reimbursement for
state funds used to compensate victims to the extent the
annual cap on VOCA fund obligations is adequately raised or
removed. Additionally, VOCA grant awards are based on state
expenditures from prior years, so any potential increases to
the VOCA grant award would not be received until 2017-18.
Background: The CalVCP, which is administered by the California
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Victim Compensation and Government Claims Board (VCGCB),
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). 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
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
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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 adds financial abuse of an elder or
dependent adult to the list of crimes for which a victim or
derivative victim who has suffered emotional injury may seek
compensation from CalVCP. Additionally, this bill:
Specifies a derivative victim is ineligible for
compensation if the only crime the victim suffered is
financial abuse of an elder or dependent adult.
Authorizes VCGCB to reimburse the cost of financial
counseling for a victim of elder or dependent adult
financial abuse in an amount not to exceed $1,000.
Specifies the combined reimbursement to a victim who
receives both mental health counseling and financial
counseling may not exceed $2,000, with a maximum of $1,000
apportioned for financial counseling.
Requires financial counseling to be provided by a certified
financial counselor or advisor, as specified, in order to be
eligible for reimbursement.
Contains Legislative findings and declarations regarding
the extent of elder and dependent adult financial abuse in
the state.
Prior Legislation: SB 60 (Wright) Chapter 147/2013 would have
expanded eligibility for compensation from the CalVCP to victims
who have suffered emotional injury resulting from the crimes of
human trafficking or theft from an elder/dependent adult. This
bill would have provided for reimbursement of up to $2,000 for
financial counseling for victims of financial crimes against
elderly/dependent adults. This bill was significantly amended to
remove the provisions related to compensation for
elder/dependent adult financial abuse.
SB 1299 (Wright) Chapter 870/2012 extended the time period
allowed for victims of crime to file an application for
compensation for crime-related expenses from one year to three
years. This bill made other changes to the CalVCP including but
not limited to modifying the reasons for good cause and
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authorizing social workers to represent a child or an elder
abuse victim if unable to file on his or her own behalf. This
bill's provisions became effective January 1, 2013.
Staff Comments: By expanding eligibility and benefits provided
under the CalVCP, the provisions of this bill will increase
submissions of applications and program payments from the
Restitution Fund to victims of the specified crimes in cases
where violence did not occur.
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. According to the DSS report
(SOC 242 - APS Monthly Statistical Report), over 137,000 reports
of elder and dependent adult abuse were filed in 2013, and over
10,200 reports of financial abuse were filed independently by
financial institutions. Additionally, investigations of nearly
26,500 cases of elder/dependent adult financial abuse were
completed in 2013.
It is unknown what percentage of those cases investigated would
potentially seek reimbursement and result in an eligible claim,
but for every ten percent to 25 percent of investigations of
elder financial abuse that result in victims who ultimately
receive compensation, annual payments could increase by $5.3
million to $13.2 million (Restitution Fund), assuming
reimbursement for financial and mental health counseling of
$2,000 per victim (it should be noted the average CalVCP claim
reimbursement amount is $2,250).
The expanded eligibility and benefit classifications will
increase administrative costs. The VCGCB estimates limited-term
staffing will be required to complete significant programming
changes to the automated claims processing system. Additionally,
claims processing resources may be required to accommodate the
increased number of applications. Program applications and
outreach material would also need to be revised and reprinted.
According to the VCGCB, the CalVCP has always statutorily been
specific to compensation for violent crimes. As the provisions
of this measure would extend compensation to victims of
non-violent crime, to the extent victims, regardless of age, of
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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.
In FY 2012-13, of the $83.4 million in claims paid out to
victims, $65.8 million was paid through direct payments to
victims and $13.4 million was paid through compacts with local
agencies. The Governor's Budget projects a Restitution Fund
balance of $71.6 million for FY 2013-14 and $61.7 million for FY
2014-15. Staff notes that while the Fund is projected to have a
considerable balance, the Fund continues to operate at a deficit
due to declining penalty assessment revenues and increasing
administrative costs.
Staff notes the VCGCB voted in FY 2011-12 to adopt a number of
reductions in the rates paid for specific types of services
provided. Among other reductions, the reimbursement rates for
funeral/burial expenses and the maximum benefit cap of $70,000
were reduced. It appears these benefit reductions have resulted
in a decrease in claim payments, as $73.6 million in direct
victims of crime claim payments was paid in FY 2011-12, or $7.8
million more than paid in FY 2012-13.
Due to the significant uncertainty of revenue projections
resulting from the implementation of 2011 Public Safety
Realignment, it was recommended at the January 2013 VCGCB board
meeting that no restorations to the rate reductions be made at
this time. Additionally, the full impact on the Restitution Fund
due to enactment of SB 1299 (Wright) Chapter 870/2012, which
tripled the time period allowed for crime victims to apply for
financial assistance for crime-related expenses, has yet to
occur as the bill's provisions recently became effective last
year. To the extent reimbursement rates are adjusted back to the
pre-Realignment levels and/or the full impact of SB 1299 results
in a significant increase in claims submitted and paid could
result in additional cost pressure on the Restitution Fund.
To the extent the provisions of this bill result in additional
compensation paid to victims of elder or dependent adult
financial abuse from the CalVCP, could potentially result in
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future increases in federal VOCA grants to the extent the
Congressional cap on annual VOCA obligations is adequately
raised or removed in future years. After mandated transfers and
set-asides for federal victim services programs are allocated,
remaining VOCA funds are allocated to states for crime victim
compensation grants and victim assistance grants. States are
eligible for federal reimbursement of 60 percent of state funds
used to compensate victims. As annual VOCA grant awards are
based on state expenditures from prior years, any potential
increases to the VOCA grant award would not be received until
2017-18.
Staff notes the FFY 2014 Omnibus Appropriations Act enacted by
Congress and signed by the President sets the VOCA cap at $745
million. Unless the annual cap on total VOCA spending is set
high enough, grants to states for direct victim assistance are
reduced as funding for other VOCA programs increase or other
costs or set asides are added. Even in years when Congress
raises the total VOCA cap, state assistance grants could and
have been reduced. Starting in 2012, Congress directed the U.S.
DOJ to take its grant management and administrative costs (M&A)
from VOCA program funds. As a result, the amount available under
the VOCA cap was cut by $55.6 million in 2012 and $52.6 million
in 2013. M&A costs are projected to be $60 million in 2014.