BILL NUMBER: ABX3 6 CHAPTERED 02/16/08 CHAPTER 4 FILED WITH SECRETARY OF STATE FEBRUARY 16, 2008 APPROVED BY GOVERNOR FEBRUARY 16, 2008 PASSED THE SENATE FEBRUARY 15, 2008 PASSED THE ASSEMBLY FEBRUARY 15, 2008 AMENDED IN ASSEMBLY FEBRUARY 15, 2008 AMENDED IN ASSEMBLY FEBRUARY 7, 2008 INTRODUCED BY Committee on Budget (Laird (Chair), Arambula, Beall, Berg, Brownley, De La Torre, Evans, Feuer, Hayashi, Hernandez, Jones, Krekorian, Mullin, Ruskin, Swanson, and Wolk) FEBRUARY 4, 2008 An act to amend Sections 11453, 12201, and 15153 of the Welfare and Institutions Code, relating to human services, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 6, Committee on Budget. Human services. Existing federal law provides for allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families. Existing law continuously appropriates moneys from the General Fund to defray a portion of county aid grant costs under the CalWORKs program. Existing law, with certain exceptions, requires an annual cost-of-living adjustment to be made in maximum aid payments provided to needy families under the CalWORKs program. This bill would provide that the adjustment to the maximum aid payment for the 2008-09 fiscal year would be effective October 1, 2008, and that the adjustment for the 2009-10 fiscal year would be effective July 1, 2009. Existing law provides for the State Supplementary Program for the Aged, Blind and Disabled (SSP), which requires the State Department of Social Services to contract with the United States Secretary of Health and Human Services to make payments to SSP recipients to supplement Supplemental Security Income (SSI) payments made available pursuant to the federal Social Security Act. Under existing law, benefit payments under the SSP are calculated by establishing the maximum level of nonexempt income and federal SSI and state SSP benefits for each category of eligible recipient. The state SSP payment is the amount, when added to the nonexempt income and SSI benefits available to the recipient, which would be required to provide the maximum benefit payment. Existing state law provides, except in certain calendar years, for the annual adjustment of the total level of combined state and federal benefits as established by statutory schedule to reflect changes in the cost of living, as defined. Existing law provides that, commencing with the 2008 calendar year and thereafter, the annual adjustment would be effective on June 1 of that calendar year. This bill would, instead, provide that the annual adjustment for the 2008 calendar year would be effective October 1, 2008, and that commencing with the 2009 calendar year, and in subsequent calendar years, the adjustment would be effective June 1 of that calendar year. Existing law specifies the manner in which state and federal funds are to be advanced to counties each month for certain public assistance programs. This bill would suspend the monthly advance of state general funds to counties for benefits or aid grants, administration, and employment and supportive services, for July and August of 2008 and would require the advances to resume on September 1, 2008, as specified. The bill would exempt from this suspension advances for the In-Home Supportive Services (IHSS) program and the Supplemental Security Income/State Supplemental Payment Program for the Aged, Blind and Disabled (SSI/SSP). The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on January 10, 2008. This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on January 10, 2008, pursuant to the California Constitution. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 11453 of the Welfare and Institutions Code is amended to read: 11453. (a) Except as provided in subdivision (c), the amounts set forth in Section 11452 and subdivision (a) of Section 11450 shall be adjusted annually by the department to reflect any increases or decreases in the cost of living. These adjustments shall become effective July 1 of each year, unless otherwise specified by the Legislature. For the 2000-01 fiscal year to the 2003-04 fiscal year, inclusive, these adjustments shall become effective October 1 of each year. The cost-of-living adjustment shall be calculated by the Department of Finance based on the changes in the California Necessities Index, which as used in this section means the weighted average changes for food, clothing, fuel, utilities, rent, and transportation for low-income consumers. The computation of annual adjustments in the California Necessities Index shall be made in accordance with the following steps: (1) The base period expenditure amounts for each expenditure category within the California Necessities Index used to compute the annual grant adjustment are: Food............................... $ 3,027 Clothing (apparel and upkeep)...... 406 Fuel and other utilities........... 529 Rent, residential.................. 4,883 Transportation..................... 1,757 Total............................ $10,602 (2) Based on the appropriate components of the Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, Bureau of Labor Statistics, the percentage change shall be determined for the 12-month period ending with the December preceding the year for which the cost-of-living adjustment will take effect, for each expenditure category specified in subdivision (a) within the following geographical areas: Los Angeles-Long Beach-Anaheim, San Francisco-Oakland, San Diego, and, to the extent statistically valid information is available from the Bureau of Labor Statistics, additional geographical areas within the state which include not less than 80 percent of recipients of aid under this chapter. (3) Calculate a weighted percentage change for each of the expenditure categories specified in subdivision (a) using the applicable weighting factors for each area used by the State Department of Industrial Relations to calculate the California Consumer Price Index (CCPI). (4) Calculate a category adjustment factor for each expenditure category in subdivision (a) by (1) adding 100 to the applicable weighted percentage change as determined in paragraph (2) and (2) dividing the sum by 100. (5) Determine the expenditure amounts for the current year by multiplying each expenditure amount determined for the prior year by the applicable category adjustment factor determined in paragraph (4). (6) Determine the overall adjustment factor by dividing (1) the sum of the expenditure amounts as determined in paragraph (4) for the current year by (2) the sum of the expenditure amounts as determined in subdivision (d) for the prior year. (b) The overall adjustment factor determined by the preceding computation steps shall be multiplied by the schedules established pursuant to Section 11452 and subdivision (a) of Section 11450 as are in effect during the month of June preceding the fiscal year in which the adjustments are to occur and the product rounded to the nearest dollar. The resultant amounts shall constitute the new schedules which shall be filed with the Secretary of State. (c) (1) No adjustment to the maximum aid payment set forth in subdivision (a) of Section 11450 shall be made under this section for the purpose of increasing the benefits under this chapter for the 1990-91, 1991-92, 1992-93, 1993-94, 1994-95, 1995-96, 1996-97, and 1997-98 fiscal years, and through October 31, 1998, to reflect any change in the cost of living. For the 1998-99 fiscal year, the cost of living adjustment that would have been provided on July 1, 1998, pursuant to subdivision (a) shall be made on November 1, 1998. No adjustment to the maximum aid payment set forth in subdivision (a) of Section 11450 shall be made under this section for the purpose of increasing the benefits under this chapter for the 2005-06 and 2006-07 fiscal years to reflect any change in the cost-of-living. Elimination of the cost-of-living adjustment pursuant to this paragraph shall satisfy the requirements of Section 11453.05, and no further reduction shall be made pursuant to that section. (2) No adjustment to the minimum basic standard of adequate care set forth in Section 11452 shall be made under this section for the purpose of increasing the benefits under this chapter for the 1990-91 and 1991-92 fiscal years to reflect any change in the cost of living. (3) In any fiscal year commencing with the 2000-01 fiscal year to the 2003-04 fiscal year, inclusive, when there is any increase in tax relief pursuant to the applicable paragraph of subdivision (a) of Section 10754 of the Revenue and Taxation Code, then the increase pursuant to subdivision (a) of this section shall occur. In any fiscal year commencing with the 2000-01 fiscal year to the 2003-04 fiscal year, inclusive, when there is no increase in tax relief pursuant to the applicable paragraph of subdivision (a) of Section 10754 of the Revenue and Taxation Code, then any increase pursuant to subdivision (a) of this section shall be suspended. (4) Notwithstanding paragraph (3), an adjustment to the maximum aid payments set forth in subdivision (a) of Section 11450 shall be made under this section for the 2002-03 fiscal year, but the adjustment shall become effective June 1, 2003. (5) No adjustment to the maximum aid payment set forth in subdivision (a) of Section 11450 shall be made under this section for the purpose of increasing benefits under this chapter for the 2007-08 fiscal year. (d) For the 2004-05 fiscal year, the adjustment to the maximum aid payment set forth in subdivision (a) shall be suspended for three months commencing on the first day of the first month following the effective date of the act adding this subdivision. (e) For the 2008-09 fiscal year, the adjustment to the maximum aid payment set forth in subdivision (a) shall be effective October 1, 2008. For the 2009-10 fiscal year, the adjustment to the maximum aid payment set forth in subdivision (a) shall take effect on July 1, 2009. (f) Adjustments for subsequent fiscal years pursuant to this section shall not include any adjustments for any fiscal year in which the cost of living was suspended pursuant to subdivision (c). SEC. 2. Section 12201 of the Welfare and Institutions Code is amended to read: 12201. (a) Except as provided in subdivision (d), the payment schedules set forth in Section 12200 shall be adjusted annually to reflect any increases or decreases in the cost of living. Except as provided in subdivision (e), these adjustments shall become effective January 1 of each year. The cost-of-living adjustment shall be based on the changes in the California Necessities Index, which as used in this section shall be the weighted average of changes for food, clothing, fuel, utilities, rent, and transportation for low-income consumers. The computation of annual adjustments in the California Necessities Index shall be made in accordance with the following steps: (1) The base period expenditure amounts for each expenditure category within the California Necessities Index used to compute the annual grant adjustment are: Food............................... $ 3,027 Clothing (apparel and upkeep)...... 406 Fuel and other utilities........... 529 Rent, residential.................. 4,883 Transportation..................... 1,757 ----------- Total............................ $10,602 (2) Based on the appropriate components of the Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, Bureau of Labor Statistics, the percentage change shall be determined for the 12-month period which ends 12 months prior to the January in which the cost-of-living adjustment will take effect, for each expenditure category specified in paragraph (1) within the following geographical areas: Los Angeles-Long Beach-Anaheim, San Francisco-Oakland, San Diego, and, to the extent statistically valid information is available from the Bureau of Labor Statistics, additional geographical areas within the state which include not less than 80 percent of recipients of aid under this chapter. (3) Calculate a weighted percentage change for each of the expenditure categories specified in subdivision (a) using the applicable weighting factors for each area used by the State Department of Industrial Relations to calculate the California Consumer Price Index (CCPI). (4) Calculate a category adjustment factor for each expenditure category in paragraph (1) by (1) adding 100 to the applicable weighted percentage change as determined in paragraph (2) and (2) dividing the sum by 100. (5) Determine the expenditure amounts for the current year by multiplying each expenditure amount determined for the prior year by the applicable category adjustment factor determined in paragraph (4). (6) Determine the overall adjustment factor by dividing (1) the sum of the expenditure amounts as determined in paragraph (4) for the current year by (2) the sum of the expenditure amounts as determined in paragraph (4) for the prior year. (b) The overall adjustment factor determined by the preceding computational steps shall be multiplied by the payment schedules established pursuant to Section 12200 as are in effect during the month of December preceding the calendar year in which the adjustments are to occur, and the product rounded to the nearest dollar. The resultant amounts shall constitute the new schedules for the categories given under subdivisions (a), (b), (c), (d), (e), (f), and (g) of Section 12200, and shall be filed with the Secretary of State. The amount as set forth in subdivision (h) of Section 12200 shall be adjusted annually pursuant to this section in the event that the secretary agrees to administer payment under that subdivision. The payment schedule for subdivision (i) of Section 12200 shall be computed as specified, based on the new payment schedules for subdivisions (a), (b), (c), and (d) of Section 12200. (c) The department shall adjust any amounts of aid under this chapter to insure that the minimum level required by the Social Security Act in order to maintain eligibility for funds under Title XIX of that act is met. (d) (1) No adjustment shall be made under this section for the 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 2004, 2006 and 2007 calendar years to reflect any change in the cost of living. Elimination of the cost-of-living adjustment pursuant to this paragraph shall satisfy the requirements of Section 12201.05, and no further reduction shall be made pursuant to that section. (2) Any cost-of-living adjustment granted under this section for any calendar year shall not include adjustments for any calendar year in which the cost of living was suspended pursuant to paragraph (1). (e) For the 2003 calendar year, the adjustment required by this section shall become effective June 1, 2003. (f) For the 2005 calendar year, the adjustment required by this section shall become effective April 1, 2005. (g) (1) For the 2008 calendar year, the annual adjustment required by this section shall be effective October 1, 2008. (2) Commencing with the 2009 calendar year and in each calendar year thereafter, annual adjustment required by this section shall be effective June 1 of that calendar year. (3) Notwithstanding paragraph (2), the pass along of federal benefits provided for in Section 12201.05 shall be effective on January 1 of each calendar year. SEC. 3. Section 15153 of the Welfare and Institutions Code is amended to read: 15153. Notwithstanding the provisions of any other section of this code, the method of computing and advancing funds to counties, both as to state funds and funds made available by the United States government, shall be as follows: 1. The department, prior to the beginning of each month, shall estimate the amount to be paid for the month to each county under this part. 2. The department shall then certify to the State Controller the amounts so estimated by it for each county, adjusted by any sum by which it finds that its estimate for any prior period was greater or less than the amount which should have been paid. 3. The State Controller shall thereupon draw the necessary warrants, and prior to audit or settlement by the department and the State Controller, the State Treasurer shall pay to the treasurer of each county the amount so certified. 4. Moneys may be advanced by or on behalf of any county to a corporation or association in accordance with the provisions of a contract executed between the county and the corporation or association pursuant to Section 14052 or 14556. 5. The monthly advance of state general funds to counties for benefits or aid grants, administration, and for employment and supportive services, shall be temporarily suspended for the months of July and August 2008. The advance of funds for these two months shall resume on September 1, 2008. In addition to the advance for the month of September, counties shall be paid for the advances that would have been made in July and August 2008 no later than September 30, 2008. Advances for the Supplemental Security Income/State Supplementary Payment Program for the Aged, Blind and Disabled (Chapter 3 (commencing with Section 12000)) and the In-Home Supportive Services program (Article 7 (commencing with Section 12300) of Chapter 3) shall not be affected by this temporary suspension. SEC. 4. This act addresses the fiscal emergency declared by the Governor by proclamation on January 10, 2008, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution. SEC. 5. This act 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 ensure the fiscal integrity of essential social services programs, at the earliest possible time, it is necessary for this act to take effect immediately.