BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                     AB 6|
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                                 THIRD READING


          Bill No:  AB 6
          Author:   Fuentes (D), et al.
          Amended:  8/30/11 in Senate
          Vote:     21

           
           SENATE HUMAN SERVICES COMMITTEE  :  4-0, 06/28/11
          AYES:  Liu, Hancock, Wright, Yee
          NO VOTE RECORDED:  Emmerson, Berryhill, Strickland

           SENATE APPROPRIATIONS COMMITTEE  :  6-3, 08/25/11
          AYES:  Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
          NOES:  Walters, Emmerson, Runner

           ASSEMBLY FLOOR  :  49-27, 06/01/11 - See last page for vote


           SUBJECT  :    CalWORKs and CalFresh

           SOURCE  :     Author


           DIGEST  :    This bill changes policies relating to the 
          administration of the California Work Opportunity and 
          Responsibility to Kids (CalWORKs) and CalFresh programs. 

           ANALYSIS  :    Existing law:

          1.Establishes the CalWORKs program, which requires each 
            county to provide cash assistance and services to needy 
            families using federal Temporary Assistance to Needy 
            Families (TANF) block grants, as well as state and county 
            funds.
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          2.Establishes the CalFresh program to administer 
            California's allocation of federal funds under the 
            Supplemental Nutrition Assistance Program (SNAP), 
            formerly called food stamps.  Counties distribute 
            CalFresh benefits to eligible participants. 

          3.Requires that the Department of Social Services (DSS) and 
            the Health and Welfare Data Center maintain a statewide 
            fingerprint imaging system to use as a part of the 
            application process under the CalWORKs and CalFresh 
            programs and requires applicants, as a condition of 
            eligibility, to submit their fingerprints.

          4.Requires counties to re-determine eligibility for 
            CalWORKs benefits and grant amounts on a quarterly basis 
            and to determine prospectively the grant amount that a 
            recipient is entitled to receive for each month of the 
            quarterly reporting period.

          5.Directs DSS to use the CalWORKs quarterly reporting 
            system in its administration of CalFresh.

          6.Requires that participants of both programs submit 
            quarterly reports in order to maintain their eligibility.

          7.Establishes that DSS is responsible for administering 
            CalFresh benefits and that the Department of Community 
            Services and Development is responsible for administering 
            the federal Low-Income Energy Assistance Program block 
            grant.

          This bill:

          1.Requires counties to convert from a quarterly to a 
            semi-annual reporting (SAR) system for the CalWORKs and 
            CalFresh programs no later than January 1, 2013.

          2.Eliminates the Statewide Fingerprint Imaging System 
            (SFIS) requirement for CalWORKs and CalFresh.

          3.Creates a "Heat and Eat" program jointly with DSS and the 
            Department of Community Services Development (CSD) by 
            January 1, 2013.

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          4.Retains fingerprint imaging for the CalWORKs program, 
            thereby removing potential increased CalWORKs grant costs 
            of up to $65 million annually.

          5.Lowers the income reporting threshold under SAR to 55 
            percent of the federal poverty level for a family of 
            three, thereby substantially reducing increased ongoing 
            CalWORKs grant costs.

          6.Specifies that administrative savings that may be 
            reflected in the budget due to the implementation of SAR 
            shall not exceed the amount necessary to fund the net 
            General Fund costs of the SAR provisions of the bill. 
            Possible additional savings in excess of this amount may 
            only be reflected to the extent that they are based on 
            actual savings related to the change to SAR calculated 
            based on data developed in consultation with California 
            Welfare Directors Association (CWDA).

          7.Removes the provision of the bill allowing counties to 
            implement SAR on a staggered basis, and would extend the 
            operative date to April 1, 2013, with full implementation 
            no later than October 1, 2013.

          8.Makes various technical changes.

           Background
           
           California participation is low
           Half of eligible Californians receive CalFresh, according 
          to reports by the United States Department of Agriculture.  
          The state ranked second to last in 2008 among states in use 
          of benefits by eligible residents, and California ranked 
          last in use of benefits among eligible working poor 
          families, according to the USDA.  USDA lists California 
          among traditionally poor performing states.  California's 
          low participation has been a concern of the federal 
          government, which provides 100 percent of the funding for 
          CalFresh benefits. 

           Fingerprinting and USDA concerns
           California is one of three states and one city that require 
          fingerprinting as a condition of eligibility.  By 

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          fingerprinting applicants, counties are able to determine 
          whether the same applicant receives duplicate benefits in 
          another county or under another name.

          A 2003 Bureau of State Audits report,  Statewide Fingerprint 
          Imaging System:  The State Must Weigh Factors Other Than 
          Need and Cost-Effectiveness When Determining Future Funding 
          for the System  , concluded that the state "was remiss" in 
          implementing the system before determining the extent of 
          duplicate aid fraud.  It noted that other computer checks 
          are in place to ensure that duplication and other forms of 
          fraud are identified.  It said that in 1998, the USDA had 
          expressed concern about the ability of DSS to identify the 
          extent of duplicate-aid fraud throughout the state. 

               The primary benefits that the State derives from 
               continuing to use SFIS are the proven effectiveness of 
               fingerprint imaging technology to identify duplicate 
               fingerprints and its ability to identify applicants 
               who may travel from county to county seeking duplicate 
               aid.  On the other hand, most of the matches that SFIS 
               identified have turned out to be administrative errors 
               made by county staff, and the level of detected 
               duplicate-aid fraud has been small.

          The USDA notes that states with finger imaging requirements 
          have an average seven percent lower participation rate when 
          compared to similar states, and USDA is concerned enough 
          about the deterrent factor that it has prohibited other 
          states from requiring applicants to be fingerprinted.

          In a May 7, 2010 letter to the director of DSS, the 
          undersecretary of USDA's Food, Nutrition and Consumer 
          services branch emphasized the agency's serious concerns 
          that finger imaging requirements may be a barrier to 
          participation and encouraged DSS to "actively consider" 
          more cost-effective alternatives to finger imaging.  In a 
          letter to the author sent in May of 2011, the USDA Under 
          Secretary noted, "There are serious concerns that finger 
          imaging requirements may be a barrier to participation 
          among many of the hard to reach eligible populations who 
          wish to enroll in the program?.  We must ensure that we are 
          not creating unnecessary barriers in the application 
          process."  

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          The counties also use a computerized Income and Eligibility 
          Verification System currently to detect other types of 
          fraud.  This system also is employed by the counties for 
          use in tracking fraud in their general assistance programs.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)

           Major Provisions               2011-12     2012-13    
           2013-14   Fund
           Conversion to SAR*
            Automation        $19,000 ($14,000 TANF/GF) 
          one-timeFed/TANF/GF
            Limited-term staffing                      $2,700 ($700 
          GF) over four years                               
          Fed/General
            CalWORKs grants             $0             
          ($375)$12,900TANF/GF
            CFAP grants            $0        $650      $2,000General
            Potential admin savings**        $0                  
          ($8,700)                 ($33,100)           General
          Elimination of SFIS - CalFresh
            Automation        $1,600         $3,200         
          $3,200TANF/GF
            CalFresh administration     $1,600         $6,300    
          $6,000                   General
            CFAP grants            $400      $1,500         
          $3,000General 
          "Heat and Eat" Program
            CSD programming                                      $500 
          to $1,000 one-time, $120 ongoing                       
          General
            HEAP benefit                               Unknown; up to 
          $3,000 annually                                   Federal
            CalFresh admin         $0        $0   $500      General
            CFAP grants            $0   $1,200$2,800General
          Increased CalFresh benefitsPotentially in excess of 
          $775,000 annually        Federal
          Total annual cost        $4,700                   

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          $26,900$30,800 TANF/GF
          Admin savings to fund SAR*         $0                  
          ($8,700)                 ($15,100)           TANF/GF
          Potential tax revenue         ($675)                   
          ($7,100)            ($15,800)      General

            *Conversion to SAR will preclude the State from incurring 
            one-time upfront costs to implement federal pure 
            quarterly reporting of $5 million and ongoing costs of 
            $13 million General Fund annually.

           **Savings may be taken in the Budget Act up to the amount 
            necessary to fund the net General Fund costs of the SAR 
            provisions. Additional savings in excess of this amount 
            to be based on data developed in consultation with the 
            CWDA.

           SUPPORT  :   (Verified  8/29/11)

          AARP California 
          Alameda County Community Food Bank
          California Alliance for Retired Americans
          California Association of Food Banks
          California Association of Retailers
          California Catholic Conference
          California Chamber of Commerce
          California Communities United
          California Farm Bureau Federation 
          California Grocers Association
          California Hunger Action Coalition
          California Immigrant Policy Group
          California/Nevada Community Action Partnership
          California Restaurant Association 
          California WIC Association 
          Catholic Charities of California
          Catholic Charities Diocese of San Diego
          Children's Defense Fund- California
          City of Los Angeles
          City and County of San Francisco
          Coalition of California Welfare Rights Organizations
          Congregation Emanu-El
          Feeding America
          First Five Los Angeles 
          Food Bank of Contra Costa and Solano

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          Food Bank of Santa Barbara County
          Food for People-Humboldt Counter 
          Food Share-Ventura
          JERICHO
          Hunger Action Los Angeles
          Jewish Family Services of San Diego 
          Jewish Family Services of Los Angeles
          Los Angeles County Domestic Violence Council 
          Los Angeles Regional Food Bank
          MAZON:  A Jewish Response to Hunger 
          National Association of Social Workers - California Chapter
          New America Foundation
          Orange County Food Bank
          Orange County Food Access Coalition
          Sacramento Hunger Coalition 
          San Diego Food Bank
          San Diego Hunger Action Coalition
          Santa Cruz County Board of Supervisors
          Second Harvest Food Bank, Santa Cruz County
          Silicon Valley Community Foundation
          St. Anthony's Foundation-San Francisco
          The Jewish Federation of Greater Los Angeles 
          United Way of Silicon Valley
          Yolo County Board of Supervisors
          Western Center on Law and Poverty 

           OPPOSITION  :    (Verified  8/29/11)

          Los Angeles County Board of Supervisors
          California District Attorneys' Association

           ARGUMENTS IN SUPPORT  :    Supporters also believe the bill 
          will lead to increased senior enrollment in CalFresh, 
          research shows that CalFresh is underutilized among 
          seniors, and that higher participation in the program would 
          result in better nutrition for older Californians.

           ARGUMENTS IN OPPOSITION  :    Los Angeles County opposes the 
          bill unless amended, arguing that elimination of the finger 
          imaging system would remove an important anti-fraud tool 
          which increases public confidence in the integrity of the 
          welfare system and costs 37 cents per $100 of CalWORKs 
          costs.  Maintaining the fingerprint system is also 
          critical, says the county, to its cross check of General 

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          Assistance applicants against CalWORKs and CalFresh cases.  
          The county is, however, amenable to dropping the imaging 
          requirement for CalFresh-only cases, and does support the 
          move to semiannual reporting.  
           
           ASSEMBLY FLOOR  :  49-27, 06/01/11
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Block, 
            Blumenfield, Bonilla, Bradford, Brownley, Buchanan, 
            Charles Calderon, Campos, Carter, Cedillo, Chesbro, 
            Davis, Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, 
            Galgiani, Gordon, Hall, Hayashi, Roger Hernández, Hill, 
            Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, 
            Mendoza, Mitchell, Monning, Pan, Perea, Portantino, 
            Skinner, Solorio, Swanson, Torres, Wieckowski, Williams, 
            Yamada, John A. Pérez
          NOES:  Achadjian, Conway, Cook, Donnelly, Fletcher, Beth 
            Gaines, Garrick, Gatto, Grove, Hagman, Halderman, Harkey, 
            Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell, 
            Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Valadao, 
            Wagner
          NO VOTE RECORDED:  Bill Berryhill, Butler, Gorell, V. 
            Manuel Pérez
          CTW:nl  8/30/11   Senate Floor Analyses 


                         SUPPORT/OPPOSITION:  SEE ABOVE

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