Honorable John T. Smithee, Chair, House Committee on Insurance
FROM:
John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:
HB3376 by Taylor (Relating to criminal offenses involving theft and fraud, to the statutes of limitation for those offenses, and to the effect of the commission of those offenses on certain license holders and applicants.), As Introduced
The bill would amend the Penal Code by creating a state jail felony offense for money laundering if the value of the funds involved in a transaction is less than $3,000. Currently, the lowest offense level for money laundering is a felony of the third degree when the value of the funds is $3,000 or more but less than $20,000. The bill would also create a state jail felony offense if a person, in support of an application for an insurance policy, recklessly prepares or causes a statement to be prepared that contains false or misleading information that is presented to an insurer or presents or causes to be presented false or misleading information to an insurer. The bill would also amend the Penal Code by including the offense of insurance fraud as an offense eligible to be prosecuted as engaging in organized criminal activity, and possibly resulting in an enhancement to the offense level by one category higher than the most serious offense that was committed.
A state jail felony is punishable by confinement in a state jail for any term of not more than two years or less than 180 days, or in addition to confinement, a fine not to exceed $10,000.
A third degree felony is punishable by imprisonment in the institutional division for any term of not more than 10 years or less than 2 years, or in addition to confinement, a fine not to exceed $10,000.
Increasing the penalty for any criminal offense is expected to result in increased demands upon the correctional resources of counties or of the State due to longer terms of probation or longer terms of confinement in county jails or prison. Due to the small number of prison and state jail admissions for the offenses of money laundering and insurance fraud (23 total in fiscal year 2004), in the case of this bill the increased workload and demand for State resources would probably not be substantial.