BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 959 (Jones) Hearing Date: 08/25/2011 Amended: 08/15/2011 Consultant: Jolie Onodera Policy Vote: Human Services 7-0 ___________________________________________________________________ __ BILL SUMMARY: AB 959 would provide a one-month extension to participants in the CalWORKs and CalFresh programs for filing required reports in order to avoid re-application. This bill provides that its provisions will not be implemented until the Department of Social Services (DSS) obtains all necessary federal approvals. ___________________________________________________________________ __ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund One-month reporting Unknown; potentially significant Fed/Gen/Loc extension administrative cost savings in the hundreds of thousands of dollars annually CalWORKs benefit One-time grant shift of up to $495 in theFed/General impact initial year of implementation ___________________________________________________________________ __ STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED. Existing law requires CalWORKs and CalFresh recipients to report current and prospective income, as well as any changes to personal information on a quarterly basis in order for counties to redetermine recipient eligibility and grant amounts. Under current law, if a recipient fails to turn in his or her quarterly report form by the 11th day of the third month of the reporting period, the recipient receives notice that benefits will be terminated at the end of the third month if the form is not received. If a county receives a completed report by the first working day of the next reporting period, the county must rescind the discontinuance notice and benefits continue. Should a recipient fail to turn in the form as specified, benefits are terminated, and a recipient who wishes to continue benefits is required to reapply, a process which includes an in-person interview, fingerprinting, and submission of a new application. This bill would extend the amount of time provided to a recipient to submit his or her completed form by one month, providing that if a recipient submits a completed report form within the month following the discontinuance of benefits, the county shall restore AB 959 (Jones) Page 3 benefits to the household without requiring a new application or interview, and shall prorate benefits from the date that the household provides the completed form. The provisions of this bill would be contingent upon obtaining all necessary federal approvals from the federal Food and Nutrition Service (FNS). Absent such a waiver, reapplications to CalFresh and CalWORKs for late reporting would continue as under existing law. Providing an additional month to submit the form and alleviating the requirement to re-apply and interview will result in county administrative workload relief of an unknown but potentially significant amount. Information from San Diego County indicates approximately 90 re-applications per month (5 percent) are received within 30 days of discontinuance. Extrapolating the five percent statewide results in approximately 1,100 recipients statewide per month who file late reports within 30 days of discontinuance and who could potentially be impacted by the provisions of this bill. The administrative cost to restore benefits is unknown but would likely be significantly less than intake cost of $198 per case for CalWORKs and $51 per case for CalFresh ($274,000 per 1,100 cases). Counties receive a single allocation to administer their CalWORKs programs. Currently, this work is underfunded, and counties have sustained hundreds of millions of dollars in cuts over the past several years. While this bill will save time and reduce workload for county eligibility workers, the state will only achieve actual savings if a county's single allocation is further reduced. This action is unlikely given the recent reductions county welfare departments have sustained over the past several years, including the $375 million reduction to the single allocation as approved by the Legislature for 2011-12. However, the aggregate amount of time saved by eligibility workers could reduce county workload sufficiently to allow the redirection of resources to other services. In addition to the administrative efficiencies resulting from the one-month grace period, this bill could result in a shift of CalWORKs grant costs of up to one month sooner than under existing law as the approval for restoration of benefits under the current re-application process can take additional time. Although the amount of time will vary by county, information from San Diego County indicates the current re-application approval process can take up to 45 days. This would not necessarily result in a net increase in grant costs over time but rather a shift in receipt of AB 959 (Jones) Page 4 the benefits sooner after reapplication/rentry to the program, resulting in a shift of grant costs for the impacted cases sooner in the initial year of implementation. Assuming 1,100 cases statewide per month are impacted by the provisions of this bill, restoration of benefits up to one month sooner could result in a shift of up to $495,000 (TANF/GF), assuming an average CalWORKs grant cost of $451.43, in the first year of implementation of the process. The fiscal impact could be greater to the extent benefits are restored after a longer period of time under current law, but less to the extent benefits would be prorated based on the date of receipt of the completed report. As CalFresh recipients would otherwise have been in receipt of transitional CalFresh benefits in the absence of the provisions of this bill, there will not be an estimated increase in CalFresh benefits. Under existing law, when a recipient is removed from CalWORKs eligibility, he or she is automatically enrolled in a five-month transitional CalFresh benefit program. In order to avoid a recipient from receiving both a transitional and pro-rated CalFresh benefit in the same month, the bill specifies that a recipient of pro-rated CalFresh benefits shall not receive transitional CalFresh benefits during the same month. Staff recommends a technical amendment to delete the word 'quarterly' from the provisions of this bill to be consistent with a broader reference in the bill to the 'report form.' The proposed amendments delay implementation to July 1, 2012, and make other technical changes.