BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 6| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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. CONTINUED AB 6 Page 2 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. CONTINUED AB 6 Page 3 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 CONTINUED AB 6 Page 4 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." CONTINUED AB 6 Page 5 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 CONTINUED AB 6 Page 6 $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 CONTINUED AB 6 Page 7 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 CONTINUED AB 6 Page 8 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 **** END **** CONTINUED