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Last Updated: 3/1/2013
Budget Issue: Newly Identified Mandate: Identity Theft Reports and Investigations
Program: Commission on State Mandates
Finding or Recommendation: Reject Governor's January budget proposal to suspend a mandate that local law enforcement agencies take police reports and begin investigations when a person reports suspected identity theft. Instead, we recommend that the law make these activities optional, consistent with the authority local law enforcement has related to other alleged criminal violations.
Further Detail

Identity Theft Investigations

Chapter 956, Statutes of 2000 (AB 1897, Davis), made several statutory changes designed to make it easier for victims of identity theft to clear their names. The law permits individuals who believe they are victims of identity theft to initiate a criminal investigation by filing a report with their local law enforcement agency, as well as seek an expedited judicial process certifying their innocence when their identity was falsely used in a crime. Committee analyses of the bill indicate that the Legislature expected these provisions to be state-reimbursable mandates but that the costs would be minor.

Mandate Decision. In March 2009, the Commission on State Mandates found that local law enforcement costs associated with two elements of Chapter 956—requirements to take police reports on cases of suspected identity theft and begin subsequent investigations—are reimbursable. In September 2012, the commission adopted a statewide cost estimate of $67.7 million based on claims submitted by about 200 cities and counties for the years 2002-03 through 2010-11.

Governor’s Budget. The Governor’s budget proposes to suspend this mandate in 2013-14. According to the administration, local law enforcement entities have inherent reasons to continue these activities even without state reimbursement. Suspending the mandate would make local compliance with the requirements of Chapter 956 optional in 2013-14. It also would allow the state to defer to a future date its obligation to pay the $67.7 million owed to local agencies. Under the State Constitution, the state must fully fund a mandate in the budget, unless the Legislature suspends or repeals it. This provision has been interpreted to mean that the Legislature may defer payment of prior-year costs for suspended or repealed mandates.


We recommend the Legislature eliminate future state costs for this mandate by amending the requirements that local law enforcement agencies take a police report and begin an investigation when a person residing in their jurisdiction reports suspected identity theft. Specifically, we recommend that these local law enforcement activities be optional. In our view, taking police reports for and beginning investigations of alleged crimes—including identity theft—are basic responsibilities of local law enforcement agencies, and the associated costs should be borne by local governments and not the state. Based on conversations with organizations representing identify theft victims, we understand that there is a concern that suspending or repealing this mandate could lead to confusion among law enforcement agencies over who is responsible for creating police reports and initiating investigations when identity theft crimes involve victims and perpetrators located in different jurisdictions. Under our recommended approach, the Legislature could avoid such confusion by amending existing law to clarify its intent that these responsibilities should lie with the agency with jurisdiction where the victim resides even when the suspected perpetrator resides in a different jurisdiction. Also, current law already states that in cases where the identity theft occurred in a different jurisdiction, local law enforcement agencies may refer the matter to the law enforcement agency where the suspected crime was committed for further investigation.