BILL NUMBER: AB 1400	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 8, 2011

INTRODUCED BY   Committee on Human Services (Beall (Chair), Ammiano,
Hall, and Portantino)

                        MARCH 1, 2011

   An act to amend Sections 8499.5 and 49561 of the Education Code,
to amend Sections 17508 and 17600 of the Family Code, to amend
Sections 6276.08, 6276.18, 16265.2, and 16367.5 of the Government
Code, to amend Sections 104585, 104601, 123310, and 123325 of the
Health and Safety Code, to amend Sections 396.5 and 1203.049 of the
Penal Code, to amend Sections 6373, 17053.34, 17053.46, 17053.74,
23622.7, 23634, and 23646 of the Revenue and Taxation Code, to amend
Section 9802 of the Unemployment Insurance Code, to amend Sections
10069, 10072,  10544.317,  10614, 10618.5, 10790, 10791,
10823, 10824, 10830, 10840, 10842, 10850.31, 10980, 11006.6, 11023.5,
11053.2, 11104.1, 11155, 11155.3, 11265.1, 11265.5, 11265.6,
11265.7, 11266, 11266.5, 11322.6, 11372, 11390, 11450, 11450.9,
 11453.1,   11453, 11453.1, 11462,  11486,
12200.5, 14005.37, 14011.1, 14011.2, 14107.12,  14154,
 15125, 15204.4, 15204.5, 15525, 18900, 18901.3, 18901.4,
18901.5, 18901.6, 18901.7, 18901.8, 18904.1, 18904.25, 18904.3,
18904.35, 18905, 18906, 18906.5, 18906.55, 18907, 18908, 18910,
18911, 18914, 18915, 18918, 18923, 18925, 18926, 18930, and 18931 of,
to amend the heading of Chapter 10 (commencing with Section 18900)
of Part 6 of Division 9 of,  and  to add Section
18900.2 to,  and to repeal Sections 11521 and 11521.7 of, 
the Welfare and Institutions Code, relating to public social
services.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1400, as amended, Committee on Human Services. 
CalFresh.   Public social service   s. 

   Existing federal law provides for the federal Supplemental
Nutrition Assistance Program (SNAP), formerly the Food Stamp Program,
under which nutrition assistance benefits, formerly referred to as
food stamps, are allocated to each state by the federal government.
Under existing state law, pursuant to the Food Stamp program,
California's federal allocation is distributed to eligible
individuals by each county.  
   Existing law required the State Department of Social Services to
propose a new name for the Food Stamp program in California by July
1, 2009, with the new name to reflect one or more designated concepts
relating to the operation and significance of the program. Pursuant
to this statutory authorization, the department has renamed the Food
Stamp program in California as CalFresh.  
   This bill would delete statutory references to the Food Stamp
program and instead refer to CalFresh, and also make conforming
changes.  
   Existing law provides for public social services programs, such as
the CalWORKs program, the Medi-Cal program, Aid to Families with
Dependent Children-Foster Care (AFDC-FC), and CalFresh.  
   This bill would delete various obsolete reporting requirements,
and would make other corrections and technical changes to provisions
relating to public social services. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The United States Congress passed the Food, Conservation, and
Energy Act of 2008 (Public Law 110-246), that included a provision
that renamed the federal Food Stamp Program as the Supplemental
Nutrition Assistance Program, also known as SNAP.
   (b) States could use this federal name or choose another.
California, like many other states, chose to explore other naming
options. In 2008, the Legislature passed Assembly Bill 433 (Chapter
625 of the Statutes of 2008), that required the State Department of
Social Services, with the assistance of stakeholders, to develop a
name for the Food Stamp program in California. As a result, in 2010,
the department changed the name of the program to CalFresh.
   (c) It is the purpose of this act to modify state statutes to
reflect the name change in the program made by the department.
  SEC. 2.  Section 8499.5 of the Education Code is amended to read:
   8499.5.  (a) The department shall allocate child care funding
pursuant to Chapter 2 (commencing with Section 8200) based on the
amount of state and federal funding that is available.
   (b) By May 30 of each year, upon approval by the county board of
supervisors and the county superintendent of schools, each local
planning council shall submit to the department the local priorities
it has identified that reflect all child care needs in the county. To
accomplish this, each local planning council shall do all of the
following:
   (1) Conduct an assessment of child care needs in the county no
less than once every five years. The department shall define and
prescribe data elements to be included in the needs assessment and
shall specify the format for the data reporting. The needs assessment
shall also include all factors deemed appropriate by the local
planning council in order to obtain an accurate picture of the
comprehensive child care needs in the county. The factors include,
but are not limited to, all of the following:
   (A) The needs of families eligible for subsidized child care.
   (B) The needs of families not eligible for subsidized child care.
   (C) The waiting lists for programs funded by the department and
the State Department of Social Services.
   (D) The need for child care for children determined by the child
protective services agency to be neglected, abused, or exploited, or
at risk of being neglected, abused, or exploited.
   (E) The number of children in families receiving public
assistance, including CalFresh benefits, housing support, and
Medi-Cal, and assistance from the Healthy Families Program and the
Temporary Assistance to Needy Families (TANF) program.
   (F) Family income among families with preschool or schoolage
children.
   (G) The number of children in migrant agricultural families who
move from place to place for work or who are currently dependent for
their income on agricultural employment in accordance with
subdivision (a) of, and paragraphs (1) and (2) of subdivision (b) of,
Section 8231.
   (H) The number of children who have been determined by a regional
center to require services pursuant to an individualized family
service plan, or by a local educational agency to require services
pursuant to an individualized education program or an individualized
family service plan.
   (I) The number of children in the county by primary language
spoken pursuant to the department's language survey.
   (J) Special needs based on geographic considerations, including
rural areas.
   (K) The number of children needing child care services by age
cohort.
   (2) Document information gathered during the needs assessment
which shall include, but need not be limited to, data on supply,
demand, cost, and market rates for each category of child care in the
county.
   (3) Encourage public input in the development of the priorities.
Opportunities for public input shall include at least one public
hearing during which members of the public can comment on the
proposed priorities.
   (4) Prepare a comprehensive countywide child care plan designed to
mobilize public and private resources to address identified needs.
   (5) Conduct a periodic review of child care programs funded by the
department and the Department of Social Services to determine if
identified priorities are being met.
   (6) Collaborate with subsidized and nonsubsidized child care
providers, county welfare departments, human service agencies,
regional centers, job training programs, employers, integrated child
and family service councils, local and state children and families
commissions, parent organizations, early start family resource
centers, family empowerment centers on disability, local child care
resource and referral programs, and other interested parties to
foster partnerships designed to meet local child care needs.
   (7) Design a system to consolidate local child care waiting lists,
if a centralized eligibility list is not already in existence.
   (8) Coordinate part-day programs, including state preschool and
Head Start, with other child care and development services to provide
full-day child care.
   (9) Submit the results of the needs assessment and the local
priorities identified by the local planning council to the board of
supervisors and the county superintendent of schools for approval
before submitting them to the department.
   (10) Identify at least one, but not more than two, members to
serve as part of the department team that reviews and scores
proposals for the provision of services funded through contracts with
the department. Local planning council representatives may not
review and score proposals from the geographic area covered by their
own local planning council. The department shall notify each local
planning council whenever this opportunity is available.
   (c) The department shall, in conjunction with the Department of
Social Services and all appropriate statewide agencies and
associations, develop guidelines for use by local planning councils
to assist them in conducting needs assessments that are reliable and
accurate. The guidelines shall include acceptable sources of
demographic and child care data, and methodologies for assessing
child care supply and demand.
   (d) The department shall allocate funding within each county in
accordance with the priorities identified by the local planning
council of that county and submitted to the department pursuant to
this section, unless the priorities do not meet the requirements of
state or federal law.
  SEC. 3.  Section 49561 of the Education Code is amended to read:
   49561.  (a) The department shall create a computerized
data-matching system using existing databases from the department and
the State Department of Health Care Services to directly certify
recipients of CalFresh, the California Work Opportunity and
Responsibility to Kids program (the CalWORKs program) (Chapter 2
(commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code), and other programs authorized for
direct certification under federal law, for enrollment in the
National School Lunch and School Breakfast Programs.
   (b) The department shall design a process using an existing agency
database that will conform with data from the State Department of
Health Care Services to meet the direct certification requirements of
the National School Lunch Act, as amended, pursuant to Chapter 13
(commencing with Section 1751) of Title 42 of the United States Code,
and the federal Child Nutrition Act of 1966, as amended, pursuant to
Chapter 13A (commencing with Section 1771) of Title 42 of the United
States Code.
   (c) The department shall design a process using computerized data
pursuant to subdivision (a) that will maximize enrollment in school
meal programs and improve program integrity while ensuring that pupil
privacy safeguards remain in place. The State Department of Health
Care Services shall conduct the data match of local school records
and return a list to the department, including only the data fields
submitted by the department and an indicator of program eligibility,
as required by federal law.
   (d) (1) Each state agency identified in subdivision (a) is
responsible for the maintenance and protection of data received by
their respective agency. The state agency that possesses the data
shall follow privacy and confidentiality procedures consistent with
all applicable state and federal law. To the extent permitted by
state and federal law, the department and the State Department of
Health Care Services may review the data only for the purposes of
improving the effectiveness of the data matches made pursuant to this
section and Section 49562.
   (2) Notwithstanding Section 10850 of the Welfare and Institutions
Code, data that identify applicants for, or recipients of, public
social services, may be transferred from existing databases
maintained by the State Department of Health Care Services, in order
to directly certify recipients of CalFresh, the CalWORKs program, and
other programs authorized for direct certification under federal
law, in compliance with subdivision (a). The Legislature hereby finds
and declares that this paragraph is declaratory of existing law.
   (e) The department shall determine the availability of and request
or apply for, as appropriate, federal funds to assist the state in
implementing new direct certification requirements mandated by
federal law.
   (f) This section shall become operative upon receipt of federal
funds to assist the state in implementing new direct certification
requirements mandated by federal law.
  SEC. 4.  Section 17508 of the Family Code is amended to read:
   17508.  (a) The Employment Development Department shall, when
requested by the Department of Child Support Services local child
support agency, or, the Franchise Tax Board for purposes of
administering Article 5 (commencing with Section 19271) of Chapter 5
of Part 10.2 of Division 2 of the Revenue and Taxation Code, the
federal Parent Locator Service, or the California Parent Locator
Service, provide access to information collected pursuant to Division
1 (commencing with Section  100   100)  of
the Unemployment Insurance Code to the requesting department or
agency for purposes of administering the child support enforcement
program, and for purposes of verifying employment of applicants and
recipients of aid under this chapter or CalFresh under Chapter 10
(commencing with Section 18900) of Part 6 of Division 9 of the
Welfare and Institutions Code.
   (b) (1) To the extent possible, the Employment Development
Department shall share information collected under Sections 1088.5
and 1088.8 of the Unemployment Insurance Code immediately upon
receipt. This sharing of information may include electronic means.
   (2) This subdivision shall not authorize the Employment
Development Department to share confidential information with any
individuals not otherwise permitted by law to receive the information
or preclude batch runs or comparisons of data.
  SEC. 5.  Section 17600 of the Family Code is amended to read:
   17600.  (a) The Legislature finds and declares all of the
following:
   (1) The Legislative Analyst has found that county child support
enforcement programs provide a net increase in revenues to the state.

   (2) The state has a fiscal interest in ensuring that county child
support enforcement programs perform efficiently.
   (3) The state does not provide information to counties on child
support enforcement programs, based on common denominators that would
facilitate comparison of program performance.
   (4) Providing this information would allow county officials to
monitor program performance and to make appropriate modifications to
improve program efficiency.
   (5) This information is required for effective management of the
child support program.
   (b) Except as provided in this subdivision commencing with the
1998-99 fiscal year, and for each fiscal year thereafter, each county
that is participating in the state incentive program described in
Section 17704 shall provide to the department, and the department
shall compile from this county child support information, monthly and
annually, all of the following performance-based data, as
established by the federal incentive funding system, provided that
the department may revise the data required by this paragraph in
order to conform to the final federal incentive system data
definitions:
   (1) One of the following data relating to paternity establishment,
as required by the department, provided that the department shall
require all counties to report on the same measurement:
   (A) The total number of children in the caseload governed by Part
D (commencing with Section 451) of Title IV of the federal Social
Security Act (42 U.S.C. Sec. 651 et seq.), as of the end of the
federal fiscal year, who were born to unmarried parents for whom
paternity was established or acknowledged, and the total number of
children in that caseload, as of the end of the preceding federal
fiscal year, who were born to unmarried parents.
   (B) The total number of minor children who were born in the state
to unmarried parents for whom paternity was established or
acknowledged during a federal fiscal year, and the total number of
children in the state born to unmarried parents during the preceding
calendar year.
   (2) The number of cases governed by Part D (commencing with
Section 451) of Title IV of the federal Social Security Act (42
U.S.C. Sec. 651 et seq.) during the federal fiscal year and the total
number of those cases with support orders.
   (3) The total dollars collected during the federal fiscal year for
current support in cases governed by Part D (commencing with Section
451) of Title IV of the federal Social Security Act (42 U.S.C. Sec.
651 et seq.) and the total number of dollars owing for current
support during that federal fiscal year in cases governed by those
provisions.
   (4) The total number of cases for the federal fiscal year governed
by Part D (commencing with Section 451) of Title IV of the federal
Social Security Act (42 U.S.C. Sec. 651 et seq.) in which payment was
being made toward child support arrearages and the total number of
cases for that fiscal year governed by these federal provisions that
had child support arrearages.
   (5) The total number of dollars collected and expended during a
federal fiscal year in cases governed by Part D (commencing with
Section 451) of Title IV of the federal Social Security Act (42
U.S.C. Sec. 651 et seq.).
   (6) The total amount of child support dollars collected during a
federal fiscal year, and, if and when required by federal law, the
amount of these collections broken down by collections distributed on
behalf of current recipients of federal Temporary Assistance for
Needy Families block grant funds or federal foster care funds, on
behalf of former recipients of federal Temporary Assistance for Needy
Families block grant funds or federal foster care funds, or on
behalf of persons who have never been recipients of these federal
funds.
   (c) In addition to the information required by subdivision (b),
the department shall collect, on a monthly basis, from each county
that is participating in the state incentive program described in
Section 17704, information on the local child support agency for each
federal fiscal year, and shall report semiannually on all of the
following performance measurements:
   (1) The percentage of cases with collections of current support.
This percentage shall be calculated by dividing the number of cases
with an order for current support by the number of those cases with
collections of current support. The number of cases with support
collected shall include only the number of cases actually receiving a
collection, not the number of payments received. Cases with a
medical support order that do not have an order for current support
may not be counted.
   (2) The average amount collected per case for all cases with
collections.
   (3) The percentage of cases that had a support order established
during the period. A support order shall be counted as established
only when the appropriate court has issued an order for child
support, including an order for temporary child support, or an order
for medical support.
   (4) The total cost of administering the local child support
agency, including the federal, state, and county share of the costs,
and the federal and state incentives received by each county. The
total cost of administering the program shall be broken down by the
following:
   (A) The direct costs of the program, broken down further by total
employee salaries and benefits, a list of the number of employees
broken down into at least the following categories: attorneys,
administrators, caseworkers, investigators, and clerical support;
contractor costs; space charges; and payments to other county
agencies. Employee salaries and numbers need only be reported in the
annual report.
   (B) The indirect costs, showing all overhead charges.
   (5) In addition, the local child support agency shall report
monthly on measurements developed by the department that provide data
on the following:
   (A) Locating obligors.
   (B) Obtaining and enforcing medical support.
   (C) Providing customer service.
   (D) Any other measurements that the director determines to be an
appropriate determination of a local child support agency's
performance.
   (6) A county may apply for an exemption from any or all of the
reporting requirements of this subdivision for a fiscal year by
submitting an application for the exemption to the department at
least three months prior to the commencement of the fiscal year or
quarter for which the exemption is sought. A county shall provide a
separate justification for each data element under this subdivision
for which the county is seeking an exemption and the cost to the
county of providing the data. The department may not grant an
exemption for more than one year. The department may grant a single
exemption only if both of the following conditions are met:
   (A) The county cannot compile the data being sought through its
existing automated system or systems.
   (B) The county cannot compile the data being sought through manual
means or through an enhanced automated system or systems without
significantly harming the child support collection efforts of the
county.
   (d) After implementation of the statewide automated system, in
addition to the information required by subdivision (b), the
Department of Child Support Services shall collect, on a monthly
basis, from each county that is participating in the state incentive
program described in Section 17704, information on the county child
support enforcement program beginning with the 1998-99 fiscal year or
a later fiscal year, as appropriate, and for each subsequent fiscal
year, and shall report semiannually on all of the following
measurements:
   (1) For each of the following support collection categories, the
number of cases with support collected shall include only the number
of cases actually receiving a collection, not the number of payments
received.
   (A) (i) The number of cases with collections for current support.
   (ii) The number of cases with arrears collections only.
   (iii) The number of cases with both current support and arrears
collections.
   (B) For cases with current support only due:
   (i) The number of cases in which the full amount of current
support owed was collected.
   (ii) The number of cases in which some amount of current support,
but less than the full amount of support owed, was collected.
   (iii) The number of cases in which no amount of support owed was
collected.
   (C) For cases in which arrears only were owed:
   (i) The number of cases in which all arrears owed were collected.
   (ii) The number of cases in which some amount of arrears, but less
than the full amount of arrears owed, were collected.
   (iii) The number of cases in which no amount of arrears owed were
collected.
   (D) For cases in which both current support and arrears are owed:
   (i) The number of cases in which the full amount of current
support and arrears owed were collected.
   (ii) The number of cases in which some amount of current support
and arrears, but less than the full amount of support owed, were
collected.
   (iii) The number of cases in which no amount of support owed was
collected.
   (E) The total number of cases in which an amount was due for
current support only.
   (F) The total number of cases in which an amount was due for both
current support and arrears.
   (G) The total number of cases in which an amount was due for
arrears only.
   (H) For cases with current support due, the number of cases
without orders for medical support and the number of cases with an
order for medical support.
   (2) The number of alleged fathers or obligors who were served with
a summons and complaint to establish paternity or a support order,
and the number of alleged fathers or obligors for whom it is required
that paternity or a support order be established. In order to be
counted under this paragraph, the alleged father or obligor shall be
successfully served with process. An alleged father shall be counted
under this paragraph only once if he is served with process
simultaneously for both a paternity and a support order proceeding
for the same child or children. For purposes of this paragraph, a
support order shall include a medical support order.
   (3) The number of new asset seizures or successful initial
collections on a wage assignment for purposes of child support
collection. For purposes of this paragraph, a collection made on a
wage assignment shall be counted only once for each wage assignment
issued.
   (4) The number of children requiring paternity establishment and
the number of children for whom paternity has been established during
the period. Paternity may only be established once for each child.
Any child for whom paternity is not at issue shall not be counted in
the number of children for whom paternity has been established. For
this purpose, paternity is not at issue if the parents were married
and neither parent challenges paternity or a voluntary paternity
declaration has been executed by the parents prior to the local child
support agency obtaining the case and neither parent challenges
paternity.
   (5) The number of cases requiring that a support order be
established and the number of cases that had a support order
established during the period. A support order shall be counted as
established only when the appropriate court has issued an order for
child support, including an order for temporary child support, or an
order for medical support.
   (6) The total cost of administering the local child support
agency, including the federal, state, and county share of the costs
and the federal and state incentives received by each county. The
total cost of administering the program shall be broken down by the
following:
   (A) The direct costs of the program, broken down further by total
employee salaries and benefits, a list of the number of employees
broken down into at least the following categories: attorneys,
administrators, caseworkers, investigators, and clerical support;
contractor costs; space charges; and payments to other county
agencies. Employee salaries and numbers need only be reported in the
annual report.
   (B) The indirect costs, showing all overhead charges.
   (7) The total child support collections due, broken down by
current support, interest on arrears, and principal, and the total
child support collections that have been collected, broken down by
current support, interest on arrears, and principal.
   (8) The actual case status for all cases in the county child
support enforcement program. Each case shall be reported in one case
status only. If a case falls within more than one status category, it
shall be counted in the first status category of the list set forth
below in which it qualifies. The following shall be the case status
choices:
   (A) No support order, location of obligor parent required.
   (B) No support order, alleged obligor parent located and paternity
required.
   (C) No support order, location and paternity not at issue but
support order must be established.
   (D) Support order established with current support obligation and
obligor is in compliance with support obligation.
   (E) Support order established with current support obligation,
obligor is in arrears, and location of obligor is necessary.
   (F) Support order established with current support obligation,
obligor is in arrears, and location of obligor's assets is necessary.

   (G) Support order established with current support obligation,
obligor is in arrears, and no location of obligor or obligor's assets
is necessary.
   (H) Support order established with current support obligation,
obligor is in arrears, the obligor is located, but the local child
support agency has established satisfactorily that the obligor has no
income or assets and no ability to earn.
   (I) Support order established with current support obligation and
arrears, obligor is paying the current support and is paying some or
all of the interest on the arrears, but is paying no principal.
   (J) Support order established for arrears only and obligor is
current in repayment obligation.
   (K) Support order established for arrears only, obligor is not
current in arrears repayment schedule, and location of obligor is
required.
   (L) Support order established for arrears only, obligor is not
current in arrears repayment schedule, and location of obligor's
assets is required.
   (M) Support order established for arrears only, obligor is not
current in arrears repayment schedule, and no location of obligor or
obligor's assets is required.
   (N) Support order established for arrears only, obligor is not
current in arrears repayment, and the obligor is located, but the
local child support agency has established satisfactorily that the
obligor has no income or assets and no ability to earn.
   (O) Support order established for arrears only and obligor is
repaying some or all of the interest, but no principal.
   (P) Other, if necessary, to be defined in the regulations
promulgated under subdivision (e).
   (e) Upon implementation of the statewide automated system, or at
the time that the department determines that compliance with this
subdivision is possible, whichever is earlier, each county that is
participating in the state incentive program described in Section
17704 shall collect and report, and the department shall compile for
each participating county, information on the county child support
program in each fiscal year, all of the
                     following data, in a manner that facilitates
comparison of counties and the entire state, except that the
department may eliminate or modify the requirement to report any data
mandated to be reported pursuant to this subdivision if the
department determines that the local child support agencies are
unable to accurately collect and report the information or that
collecting and reporting of the data by the local child support
agencies will be onerous:
   (1) The number of alleged obligors or fathers who receive CalWORKs
benefits, CalFresh benefits, and Medi-Cal benefits.
   (2) The number of obligors or alleged fathers who are in state
prison or county jail.
   (3) The number of obligors or alleged fathers who do not have a
social security number.
   (4) The number of obligors or alleged fathers whose address is
unknown.
   (5) The number of obligors or alleged fathers whose complete name,
consisting of at least a first and last name, is not known by the
local child support agency.
   (6) The number of obligors or alleged fathers who filed a tax
return with the Franchise Tax Board in the last year for which a data
match is available.
   (7) The number of obligors or alleged fathers who have no income
reported to the Employment Development Department during the third
quarter of the fiscal year.
   (8) The number of obligors or alleged fathers who have income
between one dollar ($1) and five hundred dollars ($500) reported to
the Employment Development Department during the third quarter of the
fiscal year.
   (9) The number of obligors or alleged fathers who have income
between five hundred one dollars ($501) and one thousand five hundred
dollars ($1,500) reported to the Employment Development Department
during the third quarter of the fiscal year.
   (10) The number of obligors or alleged fathers who have income
between one thousand five hundred one dollars ($1,501) and two
thousand five hundred dollars ($2,500) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (11) The number of obligors or alleged fathers who have income
between two thousand five hundred one dollars ($2,501) and three
thousand five hundred dollars ($3,500) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (12) The number of obligors or alleged fathers who have income
between three thousand five hundred one dollars ($3,501) and four
thousand five hundred dollars ($4,500) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (13) The number of obligors or alleged fathers who have income
between four thousand five hundred one dollars ($4,501) and five
thousand five hundred dollars ($5,500) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (14) The number of obligors or alleged fathers who have income
between five thousand five hundred one dollars ($5,501) and six
thousand five hundred dollars ($6,500) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (15) The number of obligors or alleged fathers who have income
between six thousand five hundred one dollars ($6,501) and seven
thousand five hundred dollars ($7,500) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (16) The number of obligors or alleged fathers who have income
between seven thousand five hundred one dollars ($7,501) and nine
thousand dollars ($9,000) reported to the Employment Development
Department during the third quarter of the fiscal year.
   (17) The number of obligors or alleged fathers who have income
exceeding nine thousand dollars ($9,000) reported to the Employment
Development Department during the third quarter of the fiscal year.
   (18) The number of obligors or alleged fathers who have two or
more employers reporting earned income to the Employment Development
Department during the third quarter of the fiscal year.
   (19) The number of obligors or alleged fathers who receive
unemployment benefits during the third quarter of the fiscal year.
   (20) The number of obligors or alleged fathers who receive state
disability benefits during the third quarter of the fiscal year.
   (21) The number of obligors or alleged fathers who receive workers'
compensation benefits during the third quarter of the fiscal year.
   (22) The number of obligors or alleged fathers who receive Social
Security Disability Insurance benefits during the third quarter of
the fiscal year.
   (23) The number of obligors or alleged fathers who receive
Supplemental Security Income/State Supplementary Program for the
Aged, Blind and Disabled benefits during the third quarter of the
fiscal year.
   (f) The department, in consultation with the Legislative Analyst's
Office, the Judicial Council, the California Family Support Council,
and child support advocates, shall develop regulations to ensure
that all local child support agencies report the data required by
this section uniformly and consistently throughout California.
   (g) For each federal fiscal year, the department shall provide the
information for all participating counties to each member of a
county board of supervisors, county executive officer, local child
support agency, and the appropriate policy committees and fiscal
committees of the Legislature on or before June 30, of each fiscal
year. The department shall provide data semiannually, based on the
federal fiscal year, on or before December 31, of each year. The
department shall present the information in a manner that facilitates
comparison of county performance.
   (h) For purposes of this section, "case" means a noncustodial
parent, whether mother, father, or putative father, who is, or
eventually may be, obligated under law for support of a child or
children. For purposes of this definition, a noncustodial parent
shall be counted once for each family that has a dependent child he
or she may be obligated to support.
   (i) This section shall be operative only for as long as Section
17704 requires participating counties to report data to the
department.
  SEC. 6.  Section 6276.08 of the Government Code is amended to read:

   6276.08.  Cable television subscriber information, confidentiality
of, Section 637.5, Penal Code.
   CalFresh, disclosure of information, Section 18909, Welfare and
Institutions Code.
   California AIDS Program, personal data, confidentiality, Section
120820, Health and Safety Code.
   California Apple Commission, confidentiality of lists of persons,
Section 75598, Food and Agricultural Code.
   California Apple Commission, confidentiality of proprietary
information from producers or handlers, Section 75633, Food and
Agricultural Code.
   California Asparagus Commission, confidentiality of lists of
producers, Section 78262, Food and Agricultural Code.
   California Asparagus Commission, confidentiality of proprietary
information from producers, Section 78288, Food and Agricultural
Code.
   California Avocado Commission, confidentiality of information from
handlers, Section 67094, Food and Agricultural Code.
   California Avocado Commission, confidentiality of proprietary
information from handlers, Section 67104, Food and Agricultural Code.

   California Cherry Commission, confidentiality of proprietary
information from producers, processors, shippers, or grower-handlers,
Section 76144, Food and Agricultural Code.
   California Children's Services Program, confidentiality of factor
replacement therapy contracts, Section 123853, Health and Safety
Code.
   California Cut Flower Commission, confidentiality of lists of
producers, Section 77963, Food and Agricultural Code.
   California Cut Flower Commission, confidentiality of proprietary
information from producers, Section 77988, Food and Agricultural
Code.
   California Date Commission, confidentiality of proprietary
information from producers and grower-handlers, Section 77843, Food
and Agricultural Code.
   California Egg Commission, confidentiality of proprietary
information from handlers or distributors, Section 75134, Food and
Agricultural Code.
   California Forest Products Commission, confidentiality of lists of
persons, Section 77589, Food and Agricultural Code.
   California Forest Products Commission, confidentiality of
proprietary information from producers, Section 77624, Food and
Agricultural Code.
   California Iceberg Lettuce Commission, confidentiality of
information from handlers, Section 66624, Food and Agricultural Code.

   California Kiwifruit Commission, confidentiality of proprietary
information from producers or handlers, Section 68104, Food and
Agricultural Code.
   California Navel Orange Commission, confidentiality of proprietary
information from producers or handlers and lists of producers and
handlers, Section 73257, Food and Agricultural Code.
   California Pepper Commission, confidentiality of lists of
producers and handlers, Section 77298, Food and Agricultural Code.
   California Pepper Commission, confidentiality of proprietary
information from producers or handlers, Section 77334, Food and
Agricultural Code.
   California Pistachio Commission, confidentiality of proprietary
information from producers or processors, Section 69045, Food and
Agricultural Code.
   California Salmon Commission, confidentiality of fee transactions
records, Section 76901.5, Food and Agricultural Code.
   California Salmon Commission, confidentiality of request for list
of commercial salmon vessel operators, Section 76950, Food and
Agricultural Code.
   California Seafood Council, confidentiality of fee transaction
records, Section 78553, Food and Agricultural Code.
   California Seafood Council, confidentiality of information on
volume of fish landed, Section 78575, Food and Agricultural Code.
   California Sheep Commission, confidentiality of proprietary
information from producers or handlers and lists of producers,
Section 76343, Food and Agricultural Code.
   California State University contract law, bids, questionnaires and
financial statements, Section 10763, Public Contract Code.
   California State University Investigation of Reported Improper
Governmental Activities Act, confidentiality of investigative audits
completed pursuant to the act, Section 89574, Education Code.
   California Table Grape Commission, confidentiality of information
from shippers, Section 65603, Food and Agricultural Code.
   California Tomato Commission, confidentiality of lists of
producers, handlers, and others, Section 78679, Food and Agricultural
Code.
   California Tomato Commission, confidentiality of proprietary
information, Section 78704, Food and Agricultural Code.
   California Tourism Marketing Act, confidentiality of information
pertaining to businesses paying the assessment under the act, Section
13995.54.
   California Victim Compensation and Government Claims Board,
disclosure not required of records relating to assistance requests
under Article 1 (commencing with Section 13950) of Chapter 5 of Part
4 of Division 3 of Title 2, Section 6254.17.
   California Walnut Commission, confidentiality of lists of
producers, Section 77101, Food and Agricultural Code.
   California Walnut Commission, confidentiality of proprietary
information from producers or handlers, Section 77154, Food and
Agricultural Code.
   California Wheat Commission, confidentiality of proprietary
information from handlers and lists of producers, Section 72104, Food
and Agricultural Code.
   California Wheat Commission, confidentiality of requests for
assessment refund, Section 72109, Food and Agricultural Code.
   California Wine Commission, confidentiality of proprietary
information from producers or vintners, Section 74655, Food and
Agricultural Code.
   California Wine Grape Commission, confidentiality of proprietary
information from producers and vintners, Section 74955, Food and
Agricultural Code.
  SEC. 7.  Section 6276.18 of the Government Code, as amended by
Section 10 of Chapter 584 of the Statutes of 2009, is amended to
read:
   6276.18.  Family Court, records, Section 1818, Family Law Code.
   Farm product processor license, confidentiality of financial
statements, Section 55523.6, Food and Agricultural Code.
   Farm product processor licensee, confidentiality of grape
purchases, Section 55601.5, Food and Agricultural Code.
   Fee payer information, prohibition against disclosure by Board of
Equalization and others, Section 55381, Revenue and Taxation Code.
   Financial institutions, issuance of securities, reports and
records of state agencies, subdivision (d), Section 6254.
   Financial statements of insurers, confidentiality of information
received, Section 925.3, Insurance Code.
   Financial statements and questionnaires, of prospective bidders
for the state, confidentiality of, Section 10165, Public Contract
Code.
   Financial statements and questionnaires, of prospective bidders
for California State University contracts, confidentiality of,
Section 10763, Public Contract Code.
   Firearms, centralized list of exempted federal firearms licensees,
disclosure of information compiled from, Section 12083, Penal Code.
   Firearms, centralized list of dealers and licensees, disclosure of
information compiled from, Section 12071, Penal Code.
   Firearm license applications, subdivision (u), Section 6254.
   Firearm sale or transfer, confidentiality of records, Section
12082, Penal Code.
   Fishing and hunting licenses, confidentiality of names and
addresses contained in records submitted to the Department of Fish
and Game to obtain recreational fishing and hunting licenses, Section
1050.6, Fish and Game Code.
   Foreign marketing of agricultural products, confidentiality of
financial information, Section 58577, Food and Agricultural Code.
   Forest fires, anonymity of informants, Section 4417, Public
Resources Code.
   Foster homes, identifying information, Section 1536, Health and
Safety Code.
   Franchise Tax Board, access to Franchise Tax Board information by
the State Department of Social Services, Section 11025, Welfare and
Institutions Code.
   Franchise Tax Board, auditing, confidentiality of, Section 90005.
   Franchises, applications, and reports filed with Commissioner of
Corporations, disclosure and withholding from public inspection,
Section 31504, Corporations Code.
   Fur dealer licensee, confidentiality of records, Section 4041,
Fish and Game Code.
  SEC. 8.  Section 6276.18 of the Government Code, as amended by
Section 34 of Chapter 178 of the Statutes of 2010, is amended to
read:
   6276.18.  Family Court, records, Section 1818, Family Code.
   Farm product processor license, confidentiality of financial
statements, Section 55523.6, Food and Agricultural Code.
   Farm product processor licensee, confidentiality of grape
purchases, Section 55601.5, Food and Agricultural Code.
   Fee payer information, prohibition against disclosure by Board of
Equalization and others, Section 55381, Revenue and Taxation Code.
   Financial institutions, issuance of securities, reports and
records of state agencies, subdivision (d), Section 6254.
   Financial statements of insurers, confidentiality of information
received, Section 925.3, Insurance Code.
   Financial statements and questionnaires, of prospective bidders
for the state, confidentiality of, Section 10165, Public Contract
Code.
   Financial statements and questionnaires, of prospective bidders
for California State University contracts, confidentiality of,
Section 10763, Public Contract Code.
   Firearms, centralized list of exempted federal firearms licensees,
disclosure of information compiled from, Sections 24850 to 24890,
inclusive, Penal Code.
   Firearms, centralized list of dealers and licensees, disclosure of
information compiled from, Sections 26700 to 26915, inclusive, Penal
Code.
   Firearm license applications, subdivision (u), Section 6254.
   Firearm sale or transfer, confidentiality of records, Chapter 5
(commencing with Section 28050) of Division 6 of Title 4 of Part 6,
Penal Code.
   Fishing and hunting licenses, confidentiality of names and
addresses contained in records submitted to the Department of Fish
and Game to obtain recreational fishing and hunting licenses, Section
1050.6, Fish and Game Code.
   Foreign marketing of agricultural products, confidentiality of
financial information, Section 58577, Food and Agricultural Code.
   Forest fires, anonymity of informants, Section 4417, Public
Resources Code.
   Foster homes, identifying information, Section 1536, Health and
Safety Code.
   Franchise Tax Board, access to Franchise Tax Board information by
the State Department of Social Services, Section 11025, Welfare and
Institutions Code.
   Franchise Tax Board, auditing, confidentiality of, Section 90005.
   Franchises, applications, and reports filed with Commissioner of
Corporations, disclosure and withholding from public inspection,
Section 31504, Corporations Code.
   Fur dealer licensee, confidentiality of records, Section 4041,
Fish and Game Code.
  SEC. 9.  Section 16265.2 of the Government Code is amended to read:

   16265.2.  As used in this chapter:
   (a) "County" means a county and a city and county.
   (b) "County costs of eligible programs" means the amount of money
other than federal and state funds, as reported by the State
Department of Social Services to the Department of Finance or as
derived from the Controller's "Annual Report of Financial
Transactions Concerning Counties of California," that each county
spends for each of the following:
   (1) The Aid to Families with Dependent Children for Family Group
and Unemployed Parents programs plus county administrative costs for
each program minus the county's share of child support collections
for each program, as described in Sections 10100, 10101, and 11250
of, and subdivisions (a) and (b) of Section 15200 of, the Welfare and
Institutions Code.
   (2) The county share of the cost of service provided for the
In-Home Supportive Services Program, as described in Sections 10100,
10101, and 12306 of the Welfare and Institutions Code.
   (3) The community mental health program, as described in Section
5705 of the Welfare and Institutions Code.
   (4) The county share of CalFresh, as described in Section 18906.5
of the Welfare and Institutions Code.
   (c) "General purpose revenues" means revenues received by a county
whose purpose is not restricted by state law to a particular purpose
or program, as reported in the Controller's "Annual Report of
Financial Transactions Concerning Counties of California." "General
purpose revenues" are limited to all of the following:
   (1) Property tax revenues, exclusive of those revenues dedicated
to repay voter-approved indebtedness, received pursuant to Part 0.5
(commencing with Section 50) of Division 1 of the Revenue and
Taxation Code, or received pursuant to Section 33401 of the Health
and Safety Code.
   (2) Sales tax revenues received pursuant to Part 1 (commencing
with Section 6001) of Division 2 of the Revenue and Taxation Code.
   (3) Any other taxes levied by a county.
   (4) Fines and forfeitures.
   (5) Licenses, permits, and franchises.
   (6) Revenue derived from the use of money and property.
   (7) Vehicle license fees received pursuant to Section 11005 of the
Revenue and Taxation Code.
   (8) Revenues from cigarette taxes received pursuant to Part 13
(commencing with Section 30001) of Division 2 of the Revenue and
Taxation Code.
   (9) Revenue received as open-space subventions pursuant to Chapter
3 (commencing with Section 16140) of Part 1.
   (10) Revenue received as homeowners' property tax exemption
subventions pursuant to Chapter 2 (commencing with Section 16120) of
Part 1.
   (11) General revenue sharing funds received from the federal
government.
   "General purpose revenues" does not include revenues received by a
county pursuant to Chapter 3 (commencing with Section 15200) of Part
6 of Division 3.
  SEC. 10.  Section 16367.5 of the Government Code is amended to
read:
   16367.5.  The Department of Community Services and Development
shall receive and administer the federal Low-Income Home Energy
Assistance Program Block Grant, provided for pursuant to the
Low-Income Home Energy Assistance Act of 1981, as amended (42 U.S.C.
Sec. 8621 et seq.). The department shall afford local service
providers maximum flexibility and control, within the parameters of
federal and state law, in the planning, administration, and delivery
of Low-Income Home Energy Assistance Program Block Grant services.
Local service providers shall be defined as private, nonprofit, and
public agencies designated in accordance with Public Law 97-35, as
amended. The formation of service regions beyond those that were in
place in 1995, or those that were in place in Los Angeles County in
January 1997, shall occur only with the concurrence of service
providers within the proposed regions. The department shall allocate
funds received as follows:
   (a) For federal fiscal year 1998, up to 7.3 percent of the state's
total federal allocation for the Low-Income Home Energy Assistance
Program shall be retained by the Department of Community Services and
Development for purposes of overall planning and administration. The
department shall spend at least 2.3 percent of this 7.3 percent on
activities to improve the administrative efficiency of the program.
At least 2.7 percent of the state's total federal allocation of the
Low-Income Home Energy Assistance Program shall be allocated to local
service providers for purposes of planning and administration.
   For federal fiscal year 1999, up to 6 percent of the state's total
federal allocation of the Low-Income Home Energy Assistance Program
shall be retained by the Department of Community Services and
Development for purposes of overall planning and administration. The
department shall spend at least 1 percent of this 6 percent on
activities to improve the administrative efficiency of the program.
At least 4 percent of the state's total federal allocation for the
Low-Income Home Energy Assistance Program shall be allocated to local
service providers for purposes of planning and administration.
   Beginning in federal fiscal year 2000, up to 5 percent of the
state's total federal allocation for the Low-Income Home Energy
Assistance Program shall be retained by the Department of Community
Services and Development for purposes of overall planning and
administration. At least 5 percent of the state's total federal
allocation for the Low-Income Home Energy Assistance Program shall be
allocated to local service providers for purposes of planning and
administration.
   Upon achievement of administrative efficiencies, or no later than
June 30, 2001, the department and the local service providers
committee established pursuant to subdivision (j) shall examine the
appropriate split of administrative funding between the state and
local services providers necessary to achieve the intent of federal
law regarding the Low-Income Home Energy Assistance Program. The
department shall not retain more than 5 percent of the state's total
federal allocation for the Low-Income Home Energy Assistance Program.

   (b) Services under this section shall be available to households
in which one or more individuals are receiving:
   (1) Temporary Assistance for Needy Families under the state's plan
approved under Public Law 104-193, the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, and Chapter 2
(commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code.
   (2) Supplemental Security Income payments under Title XVI of the
federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter
3 (commencing with Section 12000) of Part 3 of Division 9 of the
Welfare and Institutions Code.
   (3) County general assistance under Part 5 (commencing with
Section 17000) of Division 9 of the Welfare and Institutions Code.
   (4) CalFresh benefits received under the federal Supplemental
Nutrition Assistance Program of the federal Food and Nutrition Act of
2008 pursuant to Chapter 10 (commencing with Section 18900) of Part
6 of Division 9 of the Welfare and Institutions Code.
   (5) Payments under Section 415, 521, 541, or 542 of Title 38 of
the United States Code, or under Section 306 of the Veterans' and
Survivors' Pension Improvement Act of 1978.
   (6) Households with incomes that do not exceed the greater of:
   (A) An amount equal to 150 percent of the poverty level for this
state.
   (B) An amount equal to 60 percent of the state median income,
except that no household may be excluded from eligibility solely on
the basis of household income if that income is less than 110 percent
of the poverty level for this state, but priority may be given to
those households with the highest home energy costs or needs in
relation to household income.
   (c) An amount of not less than 15 percent and up to the maximum
allowed by federal law of the total federal allocation shall be
allocated for weatherization services for eligible individuals. For
each program year, to the extent that the state is eligible, the
Department of Community Services and Development shall apply to the
appropriate federal agencies for any waivers that may be necessary to
ensure that the amount available for the purposes of this
subdivision will be the maximum amount allowable under federal law.
For the purposes of this subdivision, weatherization shall include
all energy conservation measures and energy efficient appliances that
are  cost-effective   cost effective  and
improve energy efficiency. The department shall allocate 5 percent of
the weatherization program allocation to local service providers for
outreach and related activities.
   (d) At the discretion of local service providers, the state shall
allocate the maximum amount allowable under federal law to local
service providers to provide services that encourage and enable
households to reduce their home energy needs, thus reducing the need
for energy assistance, including needs assessments, counseling, and
assistance with energy vendors, in accordance with Section 2605(b)
(16) of Public Law 97-35, as amended.
   (e) Based on data from prior years, a reasonable amount of
available funds, as determined jointly by the department and the
local service providers, shall be reserved until March 15 of each
program year for the Energy Crisis Intervention Program. Local
service providers shall submit proposed funding levels with
supporting data to the department in a timely manner for inclusion in
the state plan. The department shall approve local funding requests
that are determined to be in compliance with federal law. These funds
shall                                             only be used for
emergency assistance to eligible individuals for programs specified
in this subdivision, who give evidence of one or more of the
following conditions:
   (1) Proof of utility shutoff notice.
   (2) Proof of energy termination.
   (3) Insufficient funds to establish a new energy account.
   (4) Insufficient funds to pay a delinquent utility bill.
   (5) Insufficient funds to pay the cost of space heating devices
where no alternative source of space heating is reasonably available.

   (6) Insufficient funds to pay for essential firewood, oil, or
propane.
   (7) Insufficient funds to pay for the cost of emergency repairs to
heating and cooling units, the emergency replacement of heating and
cooling units, or both.
   (8) Insufficient funds to pay energy costs for a household where a
household member's medical condition requires use of life support or
climate and temperature control systems.
   (9) Other conditions that may be included in the state plan.
   The energy crisis intervention program shall not include advocacy,
community mobilization, or community planning. After March 15 of
each program year, local administrative agencies shall have the
option of continuing to offer energy crisis intervention services or
of reallocating a portion of or all unspent energy crisis
intervention funds into direct assistance payment services.
   The department shall allocate 5 percent of the energy crisis
intervention program allocation to the local service providers for
outreach and related services.
   The Department of Community Services and Development shall retain
all funds associated with Energy Crisis Intervention Program payments
for gas and electric utility service, and shall make payments for
eligible households' gas or electric service accounts directly to the
utilities. The department may use alternative payment methods when
direct payments to the utilities have not been arranged.
   (f) The remainder of the total federal allocation shall be
utilized for aid for home energy costs for direct assistance
payments. The department shall retain all funds associated with Home
Energy Assistance Program direct assistance payments for gas and
electric utility service, and shall make payments for eligible
households' gas or electric service accounts directly to the
utilities. The department may use alternative payment methods when
direct payments to the utilities have not been arranged.
   (g) The Department of Community Services and Development shall
contract with local public or private nonprofit agencies, or both, to
provide outreach, intake, and other activities to enroll eligible
individuals in the program components prescribed by this section.
   (h) The program components provided for in this section shall
include activities to enroll households that have the highest home
energy needs as determined by taking into account both the energy
burden of these households, and the unique situation of these
households that results from having members of vulnerable
populations, including very young children, individuals with
disabilities, and frail older individuals, as provided for by Section
2603(3) of Public Law 97-35, as amended, and to educate recipients
about general energy conservation practices and about the
availability of state and utility programs for free weatherization of
low-income homes.
   (i) The department shall allocate 5 percent of the direct
assistance payment funds to the local service providers for outreach
and related services in operating the direct home energy assistance
payment program.
   (j) The department shall establish a local service providers
committee to act in an advisory capacity in the development of the
annual Low-Income Home Energy Assistance Program state plan. The
membership of the committee shall include one voting representative
chosen by each local service provider that has a Low-Income Home
Energy Assistance Program contract with the state and one
representative of each interested utility company. Each local service
provider may, at its option, assign its vote in writing to another
entity, such as a provider association, to represent its interests.
   (k) By June 30, 1998, the Department of Community Services and
Development shall submit a plan to the California Health and Human
Services Agency to reduce state administrative costs by January 1,
2000, to no more than 5 percent of the total federal allocation for
the Low-Income Home Energy Assistance Program. This plan shall be
developed in consultation with the local service providers committee
and shall include measurable objectives, milestones, and timelines.
   It shall also include, among other strategies, a plan to automate
a substantial portion of the Low-Income Home Energy Assistance
Program by no later than January 1, 2001. The department shall
consult with the Department of Finance and the Health and Welfare
Data Center in developing this automation technology.
   The Department of Community Services and Development shall provide
quarterly status updates to the California Health and Human Services
Agency and the local service providers committee established
pursuant to subdivision (j) on progress made in implementing the
plans and achieving the objectives and milestones specified in this
subdivision. On an annual basis, from the year 1999 to the year 2001,
the department shall appear before the Legislature and provide a
status report on its efforts to achieve increased administrative
efficiency.
  SEC. 11.  Section 104585 of the Health and Safety Code is amended
to read:
   104585.  (a) The department shall assess the availability and
adequacy of existing state and local food and nutrition data systems.
All state departments and agencies that are required to provide data
pursuant to this article are encouraged to participate to the
fullest extent possible in all aspects of this program and to make
their data available to counties upon request.
   (b) The state departments from which existing data shall be
provided for project purposes shall include the State Departments of
Public Health, Aging, Education, and Social Services. Upon request of
the department, these departments shall provide existing
nutrition-related data collection forms, documentation, and reports,
including, but not limited to, the following programs:
   (1) In the Department of Aging: Congregate Nutrition Services,
Home Delivered Nutrition Services, and the Brown Bag Network.
   (2) In the State Department of Education: National School Lunch
Program, the National School Breakfast Program, the Child Care Food
Program, the Special Milk Program, the Nutrition Education and
Training Program, and the various commodities programs.
   (3) In the department: Special Supplemental Food Program for
Women, Infants and Children (WIC), the Comprehensive Perinatal Care
Program, the Genetics Disease Program, the Child Health and
Disability Prevention Program, California Children's Services, County
Health Services, Primary Health Services Development, Indian Health
Program, Medical Care Services (Medi-Cal), Adult Health, and Vital
Statistics.
   (4) In the State Department of Social Services: CalFresh.
   (c) The department may require any other state agency, department,
board, or commission, with the exception of the University of
California, to provide existing nutrition-related data, as described
in this article. The department may request the University of
California to provide this data in the case of the University of
California Cooperative Extension Program, the Home Economics Program,
and the Expanded Food and Nutrition Education Program. Additionally,
other programs in local government and the private sector, such as
local public health and social services departments, food banks,
pantries, and meal programs, voluntary health organizations, and
charitable social service agencies shall be encouraged to provide
available nutrition monitoring information.
  SEC. 12.  Section 104601 of the Health and Safety Code is amended
to read:
   104601.  (a) The department, in consultation with the Department
of Food and Agriculture, shall develop a "Healthy Food Purchase"
pilot program to increase the sale and purchase of fresh fruits and
vegetables in low-income communities.
   (b) The total number of counties included in the pilot program
shall not exceed seven.
   (c) The department, in consultation with the Department of Food
and Agriculture, shall design the program to include the following
two components:
   (1) Strategies aimed at small grocers in targeted low-income
neighborhoods to increase the offerings of fresh fruits and
vegetables in those communities. In selected pilot program
communities, the department shall provide targeted food retailers
with support or assistance to obtain refrigerated produce display
cases through the assessment of the feasibility of a variety of
financing methods, including, but not limited to, leasing, lending,
small business and economic development support, and other
time-limited strategies. The department shall also provide technical
assistance to targeted retailers on the purchase, storage, marketing,
and display of fresh produce. The department shall use available
federal funds for this technical assistance, where appropriate.
   (2) Strategies aimed at CalFresh recipients to increase their
purchase of fresh fruits and vegetables by making those products more
affordable, including the development and implementation of
financial incentives. The department, in consultation with the State
Department of Social Services, shall seek any necessary federal
government approvals to allow use of the CalFresh Electronic Benefits
Card, as provided in Chapter 3 (commencing with Section 10065) of
Part 1 of Division 9 of the Welfare and Institutions Code, to provide
those incentives, and to implement the pilot program.
   (d) In developing the pilot program, the department shall include
all of the following:
   (1) At least one county that is above the CalFresh average county
participation.
   (2) At least one county that is below the CalFresh average county
participation.
   (3) At least one county with high above-average rates of poverty,
food insecurity, or obesity.
   (4) At least one urban county.
   (5) At least one rural county.
   (e) The department shall consider all of the following in choosing
counties to participate in the program:
   (1) The level of need in the community.
   (2) The size of the CalFresh population.
   (3) The need for geographic diversity.
   (4) The availability of technology in targeted food retailers to
collect the data necessary to evaluate the pilot program.
   (f) The department shall seek all necessary approvals to establish
the pilot program, and shall apply for available federal matching
funds to support the work of the pilot program.
   (g) The department shall develop, in consultation with the United
States Department of Agriculture's Economic Research Service, a
process for evaluating the effectiveness of the pilot program. The
evaluation shall examine the impact of the various strategies
employed in the pilot program on the purchase of fresh produce and on
any increase in retailer space devoted to the sale of fresh fruits
and vegetables, and the effect this has on retailer profitability.
The evaluation also shall test alternatives to the reliance on
uniform product codes for identification of fresh produce deemed
eligible for financial incentives. The department shall contract with
an independent external evaluator to conduct this evaluation. The
department shall make recommendations to the Legislature regarding
the continuation of the pilot program, and any state and federal
policy changes needed to support the goals of the pilot program.
   (h) The department may, on or after July 1, 2009, implement this
article to the extent that the Department of Finance determines that
there are sufficient funds available for that purpose from any
source, including state funds, federal funds, excluding federal block
grant funds awarded to California pursuant to the Specialty Crops
Competitiveness Act of 2004 (Public Law 108-465), and future awards
of block grant funds intended to improve the competitiveness of the
specialty crop industry, or funds from grants or private donations.
   (i) Notwithstanding any other provision of law, no General Fund
moneys shall be used to fund the program.
   (j) This article shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
  SEC. 13.  Section 123310 of the Health and Safety Code is amended
to read:
   123310.  The department, under any program established pursuant to
this article, shall authorize retail food vendors, by written
agreement, to accept nutrition coupons and reimbursement according to
the system developed by the department. The department shall
authorize an appropriate number and distribution of food vendors in
order to  assure  ensure  adequate
participant convenience and access and to  assure 
 ensure  that state or local officials can effectively
manage review of authorized food vendors in their jurisdictions. The
department shall establish criteria to limit the number of retail
food vendors with which the department enters into agreements. The
criteria, at a minimum, shall include:
   (a)  The prices the vendor charges for foods in relation to other
vendors in its peer group. For purposes of this subdivision, "peer
group" means a group of vendors with similar characteristics that may
include, but shall not be limited to, any or all of the following:
   (1)  Geographic location of the store.
   (2)  Store size.
   (3)  Type of store.
   (4)  Number of cash registers.
   (5)  Sales volume relating to any program established pursuant to
this article.
   (6)  Gross sales volume.
   (7)  Inventory.
   (8)  Other vendor characteristics established by the department.
   (b)  The ability of the department to ensure that authorized
supplemental foods will be provided through in-store compliance
purchases.
   (c)  The adequacy of the shelf stock of the authorized
supplemental foods.
   (d)  Past performance of the vendor in compliance with this
article and with CalFresh.
  SEC. 14.  Section 123325 of the Health and Safety Code is amended
to read:
   123325.  A retail food vendor or any other person who knowingly
redeems coupons in excess of the price charged other customers for
identical foods, or who provides anything of value other than the
specified foods, or who fails to provide inventory records to
substantiate purchases for resale of authorized supplemental foods is
subject to all sanctions set forth in federal regulation for the
Special Supplemental Food Program for Women, Infants, and Children,
that is provided for in Section 246 and following of Title 7 of the
Code of Federal Regulations. The department may disqualify a food
vendor who is currently disqualified from CalFresh.
  SEC. 15.  Section 396.5 of the Penal Code is amended to read:
   396.5.  It shall be unlawful for any retail food store or
wholesale food concern, as defined in Section 3(k) of the federal
Food and Nutrition Act of 2008 (Public Law 95-113) (7 U.S.C. Sec.
2012(k)), or any person, to sell, furnish or give away any goods or
services, other than those items authorized by the Food Stamp Act of
1964, as amended (Public Law 88-525) (Chapter 51 (commencing with
Section 2011) of Title 7 of the United States Code), in exchange for
CalFresh benefits issued pursuant to Chapter 10 (commencing with
Section 18900), Part 6, Division 9 of the Welfare and Institutions
Code.
   Any violator of this section is guilty of a misdemeanor and shall
be punished by a fine of not more than five thousand dollars ($5,000)
or by imprisonment in the county jail not exceeding 90 days, or by
both that fine and imprisonment.
  SEC. 16.  Section 1203.049 of the Penal Code is amended to read:
   1203.049.  (a) Except in unusual cases where the interest of
justice would best be served if the person is granted probation,
probation shall not be granted to any person who violates subdivision
(f) or (g) of Section 10980 of the Welfare and Institutions Code,
when the violation has been committed by means of the electronic
transfer of CalFresh benefits, and the amount of the electronically
transferred CalFresh benefits exceeds one hundred thousand dollars
($100,000).
   (b) The fact that the violation was committed by means of an
electronic transfer of CalFresh benefits and the amount of the
electronically transferred CalFresh benefits exceeds one hundred
thousand dollars ($100,000) shall be alleged in the accusatory
pleading, and either admitted by the defendant in open court, or
found to be true by the jury trying the issue of guilt or by the
court where guilt is established by a plea of guilty or nolo
contendere or by trial by the court sitting without a jury.
   (c) If probation is granted, the court shall specify on the record
and shall enter on the minutes the circumstances indicating that the
interests of justice would best be served by that disposition of the
case.
  SEC. 17.  Section 6373 of the Revenue and Taxation Code is amended
to read:
   6373.  (a) There are exempted from the taxes imposed by this part
the gross receipts from the sale of, and the storage, use, or other
consumption in this state of tangible personal property the gross
receipts of which are received in the form of CalFresh benefits
acquired by the purchaser pursuant to the federal Food and Nutrition
Act of 2008 (Chapter 51 (commencing with Section 2011) of Title 7 of
the United States Code), including subsequent amendments thereto.
   (b) When the gross receipts from a sale of tangible personal
property are received partly in the form of cash and partly in the
form of CalFresh benefits, the amount of the CalFresh benefits shall
be attributed first to gross receipts which would have been subject
to the taxes imposed by this part if payment were not received in the
form of CalFresh benefits.
   (c) A retailer shall not add to the sale price of tangible
personal property any amount designated as sales tax, use tax, or
sales tax reimbursement when the sale is exempt pursuant to this
section.
   (d) In lieu of separately accounting for gross receipts which are
exempt pursuant to this section and taking a deduction on sales tax
returns for the exact amount of those gross receipts, the board may
provide, for the efficient administration of this part, an
alternative method that retailers may use to compute the allowable
deduction for the total amount of CalFresh benefits redeemed during
the period for which the return is filed, provided that method
results in a deduction the amount of which is at least equal to 2
percent of the total amount of CalFresh benefits redeemed.
   (e) This section is repealed on the first day of the first
calendar month immediately following the effective date of any
federal act which repeals those provisions which prohibit the state
from participating in the federal Supplemental Nutrition Assistance
Program if sales taxes are imposed within the state on purchases made
with CalFresh benefits.
  SEC. 18.  Section 17053.34 of the Revenue and Taxation Code is
amended to read:
   17053.34.  (a) For each taxable year beginning on or after January
1, 1998, there shall be allowed a credit against the "net tax" (as
defined in Section 17039) to a qualified taxpayer who employs a
qualified employee in a targeted tax area during the taxable year.
The credit shall be equal to the sum of each of the following:
   (1) Fifty percent of qualified wages in the first year of
employment.
   (2) Forty percent of qualified wages in the second year of
employment.
   (3) Thirty percent of qualified wages in the third year of
employment.
   (4) Twenty percent of qualified wages in the fourth year of
employment.
   (5) Ten percent of qualified wages in the fifth year of
employment.
   (b) For purposes of this section:
   (1) "Qualified wages" means:
   (A) That portion of wages paid or incurred by the qualified
taxpayer during the taxable year to qualified employees that does not
exceed 150 percent of the minimum wage.
   (B) Wages received during the 60-month period beginning with the
first day the employee commences employment with the qualified
taxpayer. Reemployment in connection with any increase, including a
regularly occurring seasonal increase, in the trade or business
operations of the qualified taxpayer does not constitute commencement
of employment for purposes of this section.
   (C) Qualified wages do not include any wages paid or incurred by
the qualified taxpayer on or after the targeted tax area expiration
date. However, wages paid or incurred with respect to qualified
employees who are employed by the qualified taxpayer within the
targeted tax area within the 60-month period prior to the targeted
tax area expiration date shall continue to qualify for the credit
under this section after the targeted tax area expiration date, in
accordance with all provisions of this section applied as if the
targeted tax area designation were still in existence and binding.
   (2) "Minimum wage" means the wage established by the Industrial
Welfare Commission as provided for in Chapter 1 (commencing with
Section 1171) of Part 4 of Division 2 of the Labor Code.
   (3) "Targeted tax area expiration date" means the date the
targeted tax area designation expires, is revoked, is no longer
binding, or becomes inoperative.
   (4) (A) "Qualified employee" means an individual who meets all of
the following requirements:
   (i) At least 90 percent of his or her services for the qualified
taxpayer during the taxable year are directly related to the conduct
of the qualified taxpayer's trade or business located in a targeted
tax area.
   (ii) Performs at least 50 percent of his or her services for the
qualified taxpayer during the taxable year in a targeted tax area.
   (iii) Is hired by the qualified taxpayer after the date of
original designation of the area in which services were performed as
a targeted tax area.
   (iv) Is any of the following:
   (I) Immediately preceding the qualified employee's commencement of
employment with the qualified taxpayer, was a person eligible for
services under the federal Job Training Partnership Act (29 U.S.C.
Sec. 1501 et seq.), or its successor, who is receiving, or is
eligible to receive, subsidized employment, training, or services
funded by the federal Job Training Partnership Act, or its successor.

   (II) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a person eligible to
be a voluntary or mandatory registrant under the Greater Avenues for
Independence Act of 1985 (GAIN) provided for pursuant to Article 3.2
(commencing with Section 11320) of Chapter 2 of Part 3 of Division 9
of the Welfare and Institutions Code, or its successor.
   (III) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was an economically
disadvantaged individual 14 years of age or older.
   (IV) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a dislocated worker
who meets any of the following:
   (aa) Has been terminated or laid off or who has received a notice
of termination or layoff from employment, is eligible for or has
exhausted entitlement to unemployment insurance benefits, and is
unlikely to return to his or her previous industry or occupation.
   (bb) Has been terminated or has received a notice of termination
of employment as a result of any permanent closure or any substantial
layoff at a plant, facility, or enterprise, including an individual
who has not received written notification but whose employer has made
a public announcement of the closure or layoff.
   (cc) Is long-term unemployed and has limited opportunities for
employment or reemployment in the same or a similar occupation in the
area in which the individual resides, including an individual 55
years of age or older who may have substantial barriers to employment
by reason of age.
   (dd) Was self-employed (including farmers and ranchers) and is
unemployed as a result of general economic conditions in the
community in which he or she resides or because of natural disasters.

   (ee) Was a civilian employee of the Department of Defense employed
at a military installation being closed or realigned under the
Defense Base Closure and Realignment Act of 1990.
   (ff) Was an active member of the Armed Forces or National Guard as
of September 30, 1990, and was either involuntarily separated or
separated pursuant to a special benefits program.
   (gg) Is a seasonal or migrant worker who experiences chronic
seasonal unemployment and underemployment in the agriculture
industry, aggravated by continual advancements in technology and
mechanization.
   (hh) Has been terminated or laid off, or has received a notice of
termination or layoff, as a consequence of compliance with the Clean
Air Act.
   (V) Immediately preceding the qualified employee's commencement of
employment with the qualified taxpayer, was a disabled individual
who is eligible for or enrolled in, or has completed a state
rehabilitation plan or is a service-connected disabled veteran,
veteran of the Vietnam era, or veteran who is recently separated from
military service.
   (VI) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was an ex-offender. An
individual shall be treated as convicted if he or she was placed on
probation by a state court without a finding of guilty.
   (VII) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a person eligible for
or a recipient of any of the following:
   (aa) Federal Supplemental Security Income benefits.
   (bb) Aid to Families with Dependent Children.
   (cc) CalFresh benefits.
   (dd) State and local general assistance.
   (VIII) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a member of a
federally recognized Indian tribe, band, or other group of Native
American descent.
   (IX) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a resident of a
targeted tax area.
   (X) Immediately preceding the qualified employee's commencement of
employment with the taxpayer, was a member of a targeted group as
defined in Section 51(d) of the Internal Revenue Code, or its
successor.
   (B) Priority for employment shall be provided to an individual who
is enrolled in a qualified program under the federal Job
                                    Training Partnership Act or the
Greater Avenues for Independence Act of 1985 or who is eligible as a
member of a targeted group under the Work Opportunity Tax Credit
(Section 51 of the Internal Revenue Code), or its successor.
   (5) (A) "Qualified taxpayer" means a person or entity that meets
both of the following:
   (i) Is engaged in a trade or business within a targeted tax area
designated pursuant to Chapter 12.93 (commencing with Section 7097)
of Division 7 of Title 1 of the Government Code.
   (ii) Is engaged in those lines of business described in Codes 2000
to 2099, inclusive; 2200 to 3999, inclusive; 4200 to 4299,
inclusive; 4500 to 4599, inclusive; and 4700 to 5199, inclusive, of
the Standard Industrial Classification (SIC) Manual published by the
United States Office of Management and Budget, 1987 edition.
   (B) In the case of any passthrough entity, the determination of
whether a taxpayer is a qualified taxpayer under this section shall
be made at the entity level and any credit under this section or
Section 23634 shall be allowed to the passthrough entity and passed
through to the partners or shareholders in accordance with applicable
provisions of this part or Part 11 (commencing with Section 23001).
For purposes of this subdivision, the term "passthrough entity" means
any partnership or S corporation.
   (6) "Seasonal employment" means employment by a qualified taxpayer
that has regular and predictable substantial reductions in trade or
business operations.
   (c) If the qualified taxpayer is allowed a credit for qualified
wages pursuant to this section, only one credit shall be allowed to
the taxpayer under this part with respect to those qualified wages.
   (d) The qualified taxpayer shall do both of the following:
   (1) Obtain from the Employment Development Department, as
permitted by federal law, the local county or city Job Training
Partnership Act administrative entity, the local county GAIN office
or social services agency, or the local government administering the
targeted tax area, a certification that provides that a qualified
employee meets the eligibility requirements specified in clause (iv)
of subparagraph (A) of paragraph (4) of subdivision (b). The
Employment Development Department may provide preliminary screening
and referral to a certifying agency. The Department of Housing and
Community Development shall develop regulations governing the
issuance of certificates pursuant to subdivision (g) of Section 7097
of the Government Code, and shall develop forms for this purpose.
   (2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
   (e) (1) For purposes of this section:
   (A) All employees of trades or businesses, which are not
incorporated, that are under common control shall be treated as
employed by a single taxpayer.
   (B) The credit, if any, allowable by this section with respect to
each trade or business shall be determined by reference to its
proportionate share of the expense of the qualified wages giving rise
to the credit, and shall be allocated in that manner.
   (C) Principles that apply in the case of controlled groups of
corporations, as specified in subdivision (d) of Section 23634, shall
apply with respect to determining employment.
   (2) If an employer acquires the major portion of a trade or
business of another employer (hereinafter in this paragraph referred
to as the "predecessor") or the major portion of a separate unit of a
trade or business of a predecessor, then, for purposes of applying
this section (other than subdivision (f)) for any calendar year
ending after that acquisition, the employment relationship between a
qualified employee and an employer shall not be treated as terminated
if the employee continues to be employed in that trade or business.
   (f) (1) (A) If the employment, other than seasonal employment, of
any qualified employee, with respect to whom qualified wages are
taken into account under subdivision (a) is terminated by the
qualified taxpayer at any time during the first 270 days of that
employment (whether or not consecutive) or before the close of the
270th calendar day after the day in which that employee completes 90
days of employment with the qualified taxpayer, the tax imposed by
this part for the taxable year in which that employment is terminated
shall be increased by an amount equal to the credit allowed under
subdivision (a) for that taxable year and all prior taxable years
attributable to qualified wages paid or incurred with respect to that
employee.
   (B) If the seasonal employment of any qualified employee, with
respect to whom qualified wages are taken into account under
subdivision (a) is not continued by the qualified taxpayer for a
period of 270 days of employment during the 60-month period beginning
with the day the qualified employee commences seasonal employment
with the qualified taxpayer, the tax imposed by this part, for the
taxable year that includes the 60th month following the month in
which the qualified employee commences seasonal employment with the
qualified taxpayer, shall be increased by an amount equal to the
credit allowed under subdivision (a) for that taxable year and all
prior taxable years attributable to qualified wages paid or incurred
with respect to that qualified employee.
   (2) (A) Subparagraph (A) of paragraph (1) shall not apply to any
of the following:
   (i) A termination of employment of a qualified employee who
voluntarily leaves the employment of the qualified taxpayer.
   (ii) A termination of employment of a qualified employee who,
before the close of the period referred to in subparagraph (A) of
paragraph (1), becomes disabled and unable to perform the services of
that employment, unless that disability is removed before the close
of that period and the qualified taxpayer fails to offer reemployment
to that employee.
   (iii) A termination of employment of a qualified employee, if it
is determined that the termination was due to the misconduct (as
defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that employee.
   (iv) A termination of employment of a qualified employee due to a
substantial reduction in the trade or business operations of the
qualified taxpayer.
   (v) A termination of employment of a qualified employee, if that
employee is replaced by other qualified employees so as to create a
net increase in both the number of employees and the hours of
employment.
   (B) Subparagraph (B) of paragraph (1) shall not apply to any of
the following:
   (i) A failure to continue the seasonal employment of a qualified
employee who voluntarily fails to return to the seasonal employment
of the qualified taxpayer.
   (ii) A failure to continue the seasonal employment of a qualified
employee who, before the close of the period referred to in
subparagraph (B) of paragraph (1), becomes disabled and unable to
perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
qualified taxpayer fails to offer seasonal employment to that
qualified employee.
   (iii) A failure to continue the seasonal employment of a qualified
employee, if it is determined that the failure to continue the
seasonal employment was due to the misconduct (as defined in Sections
1256-30 to 1256-43, inclusive, of Title 22 of the California Code of
Regulations) of that qualified employee.
   (iv) A failure to continue seasonal employment of a qualified
employee due to a substantial reduction in the regular seasonal trade
or business operations of the qualified taxpayer.
   (v) A failure to continue the seasonal employment of a qualified
employee, if that qualified employee is replaced by other qualified
employees so as to create a net increase in both the number of
seasonal employees and the hours of seasonal employment.
   (C) For purposes of paragraph (1), the employment relationship
between the qualified taxpayer and a qualified employee shall not be
treated as terminated by reason of a mere change in the form of
conducting the trade or business of the qualified taxpayer, if the
qualified employee continues to be employed in that trade or business
and the qualified taxpayer retains a substantial interest in that
trade or business.
   (3) Any increase in tax under paragraph (1) shall not be treated
as tax imposed by this part for purposes of determining the amount of
any credit allowable under this part.
   (g) In the case of an estate or trust, both of the following
apply:
   (1) The qualified wages for any taxable year shall be apportioned
between the estate or trust and the beneficiaries on the basis of the
income of the estate or trust allocable to each.
   (2) Any beneficiary to whom any qualified wages have been
apportioned under paragraph (1) shall be treated, for purposes of
this part, as the employer with respect to those wages.
   (h) For purposes of this section, "targeted tax area" means an
area designated pursuant to Chapter 12.93 (commencing with Section
7097) of Division 7 of Title 1 of the Government Code.
   (i) In the case where the credit otherwise allowed under this
section exceeds the "net tax" for the taxable year, that portion of
the credit that exceeds the "net tax" may be carried over and added
to the credit, if any, in succeeding taxable years, until the credit
is exhausted. The credit shall be applied first to the earliest
taxable years possible.
   (j) (1) The amount of the credit otherwise allowed under this
section and Section 17053.33, including any credit carryover from
prior years, that may reduce the "net tax" for the taxable year shall
not exceed the amount of tax that would be imposed on the qualified
taxpayer's business income attributable to the targeted tax area
determined as if that attributable income represented all of the
income of the qualified taxpayer subject to tax under this part.
   (2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the targeted
tax area. For that purpose, the taxpayer's business income
attributable to sources in this state first shall be determined in
accordance with Chapter 17 (commencing with Section 25101) of Part
11. That business income shall be further apportioned to the targeted
tax area in accordance with Article 2 (commencing with Section
25120) of Chapter 17 of Part 11, modified for purposes of this
section in accordance with paragraph (3).
   (3) Business income shall be apportioned to the targeted tax area
by multiplying the total California business income of the taxpayer
by a fraction, the numerator of which is the property factor plus the
payroll factor, and the denominator of which is two. For purposes of
this paragraph:
   (A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the targeted tax area during the
taxable year, and the denominator of which is the average value of
all the taxpayer's real and tangible personal property owned or
rented and used in this state during the taxable year.
   (B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the targeted tax area during
the taxable year for compensation, and the denominator of which is
the total compensation paid by the taxpayer in this state during the
taxable year.
   (4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "net tax" for the
taxable year, as provided in subdivision (h).
   (5) In the event that a credit carryover is allowable under
subdivision (h) for any taxable year after the targeted tax area
expiration date, the targeted tax area shall be deemed to remain in
existence for purposes of computing the limitation specified in this
subdivision.
  SEC. 19.  Section 17053.46 of the Revenue and Taxation Code is
amended to read:
   17053.46.  (a) For each taxable year beginning on or after January
1, 1995, there shall be allowed as a credit against the "net tax"
(as defined in Section 17039) to a qualified taxpayer for hiring a
qualified disadvantaged individual or a qualified displaced employee
during the taxable year for employment in the LAMBRA. The credit
shall be equal to the sum of each of the following:
   (1) Fifty percent of the qualified wages in the first year of
employment.
   (2) Forty percent of the qualified wages in the second year of
employment.
   (3) Thirty percent of the qualified wages in the third year of
employment.
   (4) Twenty percent of the qualified wages in the fourth year of
employment.
   (5) Ten percent of the qualified wages in the fifth year of
employment.
   (b) For purposes of this section:
   (1) "Qualified wages" means:
   (A) That portion of wages paid or incurred by the employer during
the taxable year to qualified disadvantaged individuals or qualified
displaced employees that does not exceed 150 percent of the minimum
wage.
   (B) The total amount of qualified wages which may be taken into
account for purposes of claiming the credit allowed under this
section shall not exceed two million dollars ($2,000,000) per taxable
year.
   (C) Wages received during the 60-month period beginning with the
first day the individual commences employment with the taxpayer.
Reemployment in connection with any increase, including a regularly
occurring seasonal increase, in the trade or business operations of
the qualified taxpayer does not constitute commencement of employment
for purposes of this section.
   (D) Qualified wages do not include any wages paid or incurred by
the qualified taxpayer on or after the LAMBRA expiration date.
However, wages paid or incurred with respect to qualified
disadvantaged individuals or qualified displaced employees who are
employed by the qualified taxpayer within the LAMBRA within the
60-month period prior to the LAMBRA expiration date shall continue to
qualify for the credit under this section after the LAMBRA
expiration date, in accordance with all provisions of this section
applied as if the LAMBRA designation were still in existence and
binding.
   (2) "Minimum wage" means the wage established by the Industrial
Welfare Commission as provided for in Chapter 1 (commencing with
Section 1171) of Part 4 of Division 2 of the Labor Code.
   (3) "LAMBRA" means a local agency military base recovery area
designated in accordance with Section 7114 of the Government Code.
   (4) "Qualified disadvantaged individual" means an individual who
satisfies all of the following requirements:
   (A) (i) At least 90 percent of whose services for the taxpayer
during the taxable year are directly related to the conduct of the
taxpayer's trade or business located in a LAMBRA.
   (ii) Who performs at least 50 percent of his or her services for
the taxpayer during the taxable year in the LAMBRA.
   (B) Who is hired by the employer after the designation of the area
as a LAMBRA in which the individual's services were primarily
performed.
   (C) Who is any of the following immediately preceding the
individual's commencement of employment with the taxpayer:
   (i) An individual who has been determined eligible for services
under the federal Job Training Partnership Act (29 U.S.C. Sec. 1501
et seq.).
   (ii) Any voluntary or mandatory registrant under the Greater
Avenues for Independence Act of 1985 as provided pursuant to Article
3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of
Division 9 of the Welfare and Institutions Code.
   (iii) An economically disadvantaged individual age 16 years or
older.
   (iv) A dislocated worker who meets any of the following
conditions:
   (I) Has been terminated or laid off or who has received a notice
of termination or layoff from employment, is eligible for or has
exhausted entitlement to unemployment insurance benefits, and is
unlikely to return to his or her previous industry or occupation.
   (II) Has been terminated or has received a notice of termination
of employment as a result of any permanent closure or any substantial
layoff at a plant, facility, or enterprise, including an individual
who has not received written notification but whose employer has made
a public announcement of the closure or layoff.
   (III) Is long-term unemployed and has limited opportunities for
employment or reemployment in the same or a similar occupation in the
area in which the individual resides, including an individual 55
years of age or older who may have substantial barriers to employment
by reason of age.
   (IV) Was self-employed (including farmers and ranchers) and is
unemployed as a result of general economic conditions in the
community in which he or she resides or because of natural disasters.

   (V) Was a civilian employee of the Department of Defense employed
at a military installation being closed or realigned under the
Defense Base Closure and Realignment Act of 1990.
   (VI) Was an active member of the Armed Forces or National Guard as
of September 30, 1990, and was either involuntarily separated or
separated pursuant to a special benefits program.
   (VII) Experiences chronic seasonal unemployment and
underemployment in the agriculture industry, aggravated by continual
advancements in technology and mechanization.
   (VIII) Has been terminated or laid off or has received a notice of
termination or layoff as a consequence of compliance with the Clean
Air Act.
   (v) An individual who is enrolled in or has completed a state
rehabilitation plan or is a service-connected disabled veteran,
veteran of the Vietnam era, or veteran who is recently separated from
military service.
   (vi) An ex-offender. An individual shall be treated as convicted
if he or she was placed on probation by a state court without a
finding of guilty.
   (vii) A recipient of:
   (I) Federal Supplemental Security Income benefits.
   (II) Aid to Families with Dependent Children.
   (III) CalFresh benefits.
   (IV) State and local general assistance.
   (viii) Is a member of a federally recognized Indian tribe, band,
or other group of Native American descent.
   (5) "Qualified taxpayer" means a taxpayer or partnership that
conducts a trade or business within a LAMBRA and, for the first two
taxable years, has a net increase in jobs (defined as 2,000 paid
hours per employee per year) of one or more employees in the LAMBRA.
   (A) The net increase in the number of jobs shall be determined by
subtracting the total number of full-time employees (defined as 2,000
paid hours per employee per year) the taxpayer employed in this
state in the taxable year prior to commencing business operations in
the LAMBRA from the total number of full-time employees the taxpayer
employed in this state during the second taxable year after
commencing business operations in the LAMBRA. For taxpayers who
commence doing business in this state with their LAMBRA business
operation, the number of employees for the taxable year prior to
commencing business operations in the LAMBRA shall be zero. If the
taxpayer has a net increase in jobs in the state, the credit shall be
allowed only if one or more full-time employees is employed within
the LAMBRA.
   (B) The total number of employees employed in the LAMBRA shall
equal the sum of both of the following:
   (i) The total number of hours worked in the LAMBRA for the
taxpayer by employees (not to exceed 2,000 hours per employee) who
are paid an hourly wage divided by 2,000.
   (ii) The total number of months worked in the LAMBRA for the
taxpayer by employees who are salaried employees divided by 12.
   (C) In the case of a taxpayer who first commences doing business
in the LAMBRA during the taxable year, for purposes of clauses (i)
and (ii), respectively, of subparagraph (B), the divisors "2,000" and
"12" shall be multiplied by a fraction, the numerator of which is
the number of months of the taxable year that the taxpayer was doing
business in the LAMBRA and the denominator of which is 12.
   (6) "Qualified displaced employee" means an individual who
satisfies all of the following requirements:
   (A) Any civilian or military employee of a base or former base who
has been displaced as a result of a federal base closure act.
   (B) (i) At least 90 percent of whose services for the taxpayer
during the taxable year are directly related to the conduct of the
taxpayer's trade or business located in a LAMBRA.
   (ii) Who performs at least 50 percent of his or her services for
the taxpayer during the taxable year in a LAMBRA.
   (C) Who is hired by the employer after the designation of the area
in which services were performed as a LAMBRA.
   (7) "Seasonal employment" means employment by a qualified taxpayer
that has regular and predictable substantial reductions in trade or
business operations.
   (8) "LAMBRA expiration date" means the date the LAMBRA designation
expires, is no longer binding, or becomes inoperative.
   (c) For qualified disadvantaged individuals or qualified displaced
employees hired on or after January 1, 2001, the taxpayer shall do
both of the following:
   (1) Obtain from the Employment Development Department, as
permitted by federal law, the local county or city Job Training
Partnership Act administrative entity, the local county GAIN office
or social services agency, or the local government administering the
LAMBRA, a certification that provides that a qualified disadvantaged
individual or qualified displaced employee meets the eligibility
requirements specified in subparagraph (C) of paragraph (4) of
subdivision (b) or subparagraph (A) of paragraph (6) of subdivision
(b). The Employment Development Department may provide preliminary
screening and referral to a certifying agency. The Department of
Housing and Community Development shall develop regulations governing
the issuance of certificates pursuant to Section 7114.2 of the
Government Code and shall develop forms for this purpose.
   (2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
   (d) (1) For purposes of this section, both of the following apply:

   (A) All employees of trades or businesses that are under common
control shall be treated as employed by a single employer.
   (B) The credit (if any) allowable by this section with respect to
each trade or business shall be determined by reference to its
proportionate share of the qualified wages giving rise to the credit.

   The regulations prescribed under this paragraph shall be based on
principles similar to the principles that apply in the case of
controlled groups of corporations as specified in subdivision (e) of
Section 23622.
   (2) If an employer acquires the major portion of a trade or
business of another employer (hereinafter in this paragraph referred
to as the "predecessor") or the major portion of a separate unit of a
trade or business of a predecessor, then, for purposes of applying
this section (other than subdivision (d)) for any calendar year
ending after that acquisition, the employment relationship between an
employee and an employer shall not be treated as terminated if the
employee continues to be employed in that trade or business.
   (e) (1) (A) If the employment, other than seasonal employment, of
any employee, with respect to whom qualified wages are taken into
account under subdivision (a)  ,  is terminated by the
taxpayer at any time during the first 270 days of that employment
(whether or not consecutive) or before the close of the 270th
calendar day after the day in which that employee completes 90 days
of employment with the taxpayer, the tax imposed by this part for the
taxable year in which that employment is terminated shall be
increased by an amount (determined under those regulations) equal to
the credit allowed under subdivision (a) for that taxable year and
all prior taxable years attributable to qualified wages paid or
incurred with respect to that employee.
   (B) If the seasonal employment of any qualified disadvantaged
individual, with respect to whom qualified wages are taken into
account under subdivision (a) ,  is not continued by the
qualified taxpayer for a period of 270 days of employment during the
60-month period beginning with the day the qualified disadvantaged
individual commences seasonal employment with the qualified taxpayer,
the tax imposed by this part, for the taxable year that includes the
60th month following the month in which the qualified disadvantaged
individual commences seasonal employment with the qualified taxpayer,
shall be increased by an amount equal to the credit allowed under
subdivision (a) for that taxable year and all prior taxable years
attributable to qualified wages paid or incurred with respect to that
qualified disadvantaged individual.
   (2) (A) Subparagraph (A) of paragraph (1) shall not apply to any
of the following:
   (i) A termination of employment of an employee who voluntarily
leaves the employment of the taxpayer.
   (ii) A termination of employment of an individual who, before the
close of the period referred to in subparagraph (A) of paragraph (1),
becomes disabled to perform the services of that employment, unless
that disability is removed before the close of that period and the
taxpayer fails to offer reemployment to that individual.
   (iii) A termination of employment of an individual, if it is
determined that the termination was due to the misconduct (as defined
in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that individual.
   (iv) A termination of employment of an individual due to a
substantial reduction in the trade or business operations of the
taxpayer.
   (v) A termination of employment of an individual, if that
individual is replaced by other qualified employees so as to create a
net increase in both the number of employees and the hours of
employment.
   (B) Subparagraph (B) of paragraph (1) shall not apply to any of
the following:
   (i) A failure to continue the seasonal employment of a qualified
disadvantaged individual who voluntarily fails to return to the
seasonal employment of the qualified taxpayer.
   (ii) A failure to continue the seasonal employment of a qualified
disadvantaged individual who, before the close of the period referred
to in subparagraph (B) of paragraph (1), becomes disabled and unable
to perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
qualified taxpayer fails to offer seasonal employment to that
individual.
            (iii) A failure to continue the seasonal employment of a
qualified disadvantaged individual, if it is determined that the
failure to continue the seasonal employment was due to the misconduct
(as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22
of the California Code of Regulations) of that qualified
disadvantaged individual.
   (iv) A failure to continue seasonal employment of a qualified
disadvantaged individual due to a substantial reduction in the
regular seasonal trade or business operations of the qualified
taxpayer.
   (v) A failure to continue the seasonal employment of a qualified
disadvantaged individual, if that individual is replaced by other
qualified displaced employees so as to create a net increase in both
the number of seasonal employees and the hours of seasonal
employment.
   (C) For purposes of paragraph (1), the employment relationship
between the taxpayer and an employee shall not be treated as
terminated by reason of a mere change in the form of conducting the
trade or business of the taxpayer, if the employee continues to be
employed in that trade or business and the taxpayer retains a
substantial interest in that trade or business.
   (3) Any increase in tax under paragraph (1) shall not be treated
as tax imposed by this part for purposes of determining the amount of
any credit allowable under this part.
   (4) At the close of the second taxable year, if the taxpayer has
not increased the number of its employees as determined by paragraph
(5) of subdivision (b), then the amount of the credit previously
claimed shall be added to the taxpayer's net tax for the taxpayer's
second taxable year.
   (f) In the case of an estate or trust, both of the following
apply:
   (1) The qualified wages for any taxable year shall be apportioned
between the estate or trust and the beneficiaries on the basis of the
income of the estate or trust allocable to each.
   (2) Any beneficiary to whom any qualified wages have been
apportioned under paragraph (1) shall be treated (for purposes of
this part) as the employer with respect to those wages.
   (g) The credit shall be reduced by the credit allowed under
Section 17053.7. The credit shall also be reduced by the federal
credit allowed under Section 51 of the Internal Revenue Code.
   In addition, any deduction otherwise allowed under this part for
the wages or salaries paid or incurred by the taxpayer upon which the
credit is based shall be reduced by the amount of the credit, prior
to any reduction required by subdivision (h) or (i).
   (h) In the case where the credit otherwise allowed under this
section exceeds the "net tax" for the taxable year, that portion of
the credit that exceeds the "net tax" may be carried over and added
to the credit, if any, in succeeding years, until the credit is
exhausted. The credit shall be applied first to the earliest taxable
years possible.
   (i) (1) The amount of credit otherwise allowed under this section
and Section 17053.45, including prior year credit carryovers, that
may reduce the "net tax" for the taxable year shall not exceed the
amount of tax that would be imposed on the taxpayer's business income
attributed to a LAMBRA determined as if that attributed income
represented all of the net income of the taxpayer subject to tax
under this part.
   (2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the LAMBRA.
For that purpose, the taxpayer's business income that is attributable
to sources in this state first shall be determined in accordance
with Chapter 17 (commencing with Section 25101) of Part 11. That
business income shall be further apportioned to the LAMBRA in
accordance with Article 2 (commencing with Section 25120) of Chapter
17 of Part 11, modified for purposes of this section in accordance
with paragraph (3).
   (3) Income shall be apportioned to a LAMBRA by multiplying the
total California business income of the taxpayer by a fraction, the
numerator of which is the property factor plus the payroll factor,
and the denominator of which is two. For purposes of this paragraph:
   (A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the LAMBRA during the taxable
year, and the denominator of which is the average value of all the
taxpayer's real and tangible personal property owned or rented and
used in this state during the taxable year.
   (B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the LAMBRA during the
taxable year for compensation, and the denominator of which is the
total compensation paid by the taxpayer in this state during the
taxable year.
   (4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "net tax" for the
taxable year, as provided in subdivision (h).
   (j) If the taxpayer is allowed a credit pursuant to this section
for qualified wages paid or incurred, only one credit shall be
allowed to the taxpayer under this part with respect to any wage
consisting in whole or in part of those qualified wages.
  SEC. 20.  Section 17053.74 of the Revenue and Taxation Code is
amended to read:
   17053.74.  (a) There shall be allowed a credit against the "net
tax" (as defined in Section 17039) to a taxpayer who employs a
qualified employee in an enterprise zone during the taxable year. The
credit shall be equal to the sum of each of the following:
   (1) Fifty percent of qualified wages in the first year of
employment.
   (2) Forty percent of qualified wages in the second year of
employment.
   (3) Thirty percent of qualified wages in the third year of
employment.
   (4) Twenty percent of qualified wages in the fourth year of
employment.
   (5) Ten percent of qualified wages in the fifth year of
employment.
   (b) For purposes of this section:
   (1) "Qualified wages" means:
   (A) (i) Except as provided in clause (ii), that portion of wages
paid or incurred by the taxpayer during the taxable year to qualified
employees that does not exceed 150 percent of the minimum wage.
   (ii) For up to 1,350 qualified employees who are employed by the
taxpayer in the Long Beach Enterprise Zone in aircraft manufacturing
activities described in Codes 3721 to 3728, inclusive, and Code 3812
of the Standard Industrial Classification (SIC) Manual published by
the United States Office of Management and Budget, 1987 edition,
"qualified wages" means that portion of hourly wages that does not
exceed 202 percent of the minimum wage.
   (B) Wages received during the 60-month period beginning with the
first day the employee commences employment with the taxpayer.
Reemployment in connection with any increase, including a regularly
occurring seasonal increase, in the trade or business operations of
the taxpayer does not constitute commencement of employment for
purposes of this section.
   (C) Qualified wages do not include any wages paid or incurred by
the taxpayer on or after the zone expiration date. However, wages
paid or incurred with respect to qualified employees who are employed
by the taxpayer within the enterprise zone within the 60-month
period prior to the zone expiration date shall continue to qualify
for the credit under this section after the zone expiration date, in
accordance with all provisions of this section applied as if the
enterprise zone designation were still in existence and binding.
   (2) "Minimum wage" means the wage established by the Industrial
Welfare Commission as provided for in Chapter 1 (commencing with
Section 1171) of Part 4 of Division 2 of the Labor Code.
   (3) "Zone expiration date" means the date the enterprise zone
designation expires, is no longer binding, or becomes inoperative.
   (4) (A) "Qualified employee" means an individual who meets all of
the following requirements:
   (i) At least 90 percent of whose services for the taxpayer during
the taxable year are directly related to the conduct of the taxpayer'
s trade or business located in an enterprise zone.
   (ii) Performs at least 50 percent of his or her services for the
taxpayer during the taxable year in an enterprise zone.
   (iii) Is hired by the taxpayer after the date of original
designation of the area in which services were performed as an
enterprise zone.
   (iv) Is any of the following:
   (I) Immediately preceding the qualified employee's commencement of
employment with the taxpayer, was a person eligible for services
under the federal Job Training Partnership Act (29 U.S.C. Sec. 1501
et seq.), or its successor, who is receiving, or is eligible to
receive, subsidized employment, training, or services funded by the
federal Job Training Partnership Act, or its successor.
   (II) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a person eligible to be a
voluntary or mandatory registrant under the Greater Avenues for
Independence Act of 1985 (GAIN) provided for pursuant to Article 3.2
(commencing with Section 11320) of Chapter 2 of Part 3 of Division 9
of the Welfare and Institutions Code, or its successor.
   (III) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was an economically disadvantaged
individual 14 years of age or older.
   (IV) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a dislocated worker who meets
any of the following:
   (aa) Has been terminated or laid off or who has received a notice
of termination or layoff from employment, is eligible for or has
exhausted entitlement to unemployment insurance benefits, and is
unlikely to return to his or her previous industry or occupation.
   (bb) Has been terminated or has received a notice of termination
of employment as a result of any permanent closure or any substantial
layoff at a plant, facility, or enterprise, including an individual
who has not received written notification but whose employer has made
a public announcement of the closure or layoff.
   (cc) Is long-term unemployed and has limited opportunities for
employment or reemployment in the same or a similar occupation in the
area in which the individual resides, including an individual 55
years of age or older who may have substantial barriers to employment
by reason of age.
   (dd) Was self-employed (including farmers and ranchers) and is
unemployed as a result of general economic conditions in the
community in which he or she resides or because of natural disasters.

   (ee) Was a civilian employee of the Department of Defense employed
at a military installation being closed or realigned under the
Defense Base Closure and Realignment Act of 1990.
   (ff) Was an active member of the armed forces or National Guard as
of September 30, 1990, and was either involuntarily separated or
separated pursuant to a special benefits program.
   (gg) Is a seasonal or migrant worker who experiences chronic
seasonal unemployment and underemployment in the agriculture
industry, aggravated by continual advancements in technology and
mechanization.
   (hh) Has been terminated or laid off, or has received a notice of
termination or layoff, as a consequence of compliance with the Clean
Air Act.
   (V) Immediately preceding the qualified employee's commencement of
employment with the taxpayer, was a disabled individual who is
eligible for or enrolled in, or has completed a state rehabilitation
plan or is a service-connected disabled veteran, veteran of the
Vietnam era, or veteran who is recently separated from military
service.
   (VI) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was an ex-offender. An individual
shall be treated as convicted if he or she was placed on probation by
a state court without a finding of guilt.
   (VII) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a person eligible for or a
recipient of any of the following:
   (aa) Federal Supplemental Security Income benefits.
   (bb) Aid to Families with Dependent Children.
   (cc) CalFresh benefits.
   (dd) State and local general assistance.
   (VIII) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a member of a federally
recognized Indian tribe, band, or other group of Native American
descent.
   (IX) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a resident of a targeted
employment area, as defined in Section 7072 of the Government Code.
   (X) An employee who qualified the taxpayer for the enterprise zone
hiring credit under former Section 17053.8 or the program area
hiring credit under former Section 17053.11.
   (XI) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a member of a targeted group, as
defined in Section 51(d) of the Internal Revenue Code, or its
successor.
   (B) Priority for employment shall be provided to an individual who
is enrolled in a qualified program under the federal Job Training
Partnership Act or the Greater Avenues for Independence Act of 1985
or who is eligible as a member of a targeted group under the Work
Opportunity Tax Credit (Section 51 of the Internal Revenue Code), or
its successor.
   (5) "Taxpayer" means a person or entity engaged in a trade or
business within an enterprise zone designated pursuant to Chapter
12.8 (commencing with Section 7070) of the Government Code.
   (6) "Seasonal employment" means employment by a taxpayer that has
regular and predictable substantial reductions in trade or business
operations.
   (c) The taxpayer shall do both of the following:
   (1) Obtain from the Employment Development Department, as
permitted by federal law, the local county or city Job Training
Partnership Act administrative entity, the local county GAIN office
or social services agency, or the local government administering the
enterprise zone, a certification which provides that a qualified
employee meets the eligibility requirements specified in clause (iv)
of subparagraph (A) of paragraph (4) of subdivision (b). The
Employment Development Department may provide preliminary screening
and referral to a certifying agency. The Employment Development
Department shall develop a form for this purpose. The Department of
Housing and Community Development shall develop regulations governing
the issuance of certificates by local governments pursuant to
subdivision (a) of Section 7086 of the Government Code.
   (2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
   (d) (1) For purposes of this section:
   (A) All employees of trades or businesses, which are not
incorporated, that are under common control shall be treated as
employed by a single taxpayer.
   (B) The credit, if any, allowable by this section with respect to
each trade or business shall be determined by reference to its
proportionate share of the expense of the qualified wages giving rise
to the credit, and shall be allocated in that manner.
   (C) Principles that apply in the case of controlled groups of
corporations, as specified in subdivision (d) of Section 23622.7,
shall apply with respect to determining employment.
   (2) If an employer acquires the major portion of a trade or
business of another employer (hereinafter in this paragraph referred
to as the "predecessor") or the major portion of a separate unit of a
trade or business of a predecessor, then, for purposes of applying
this section (other than subdivision (e)) for any calendar year
ending after that acquisition, the employment relationship between a
qualified employee and an employer shall not be treated as terminated
if the employee continues to be employed in that trade or business.
   (e) (1) (A) If the employment, other than seasonal employment, of
any qualified employee, with respect to whom qualified wages are
taken into account under subdivision (a)  ,  is terminated
by the taxpayer at any time during the first 270 days of that
employment (whether or not consecutive) or before the close of the
270th calendar day after the day in which that employee completes 90
days of employment with the taxpayer, the tax imposed by this part
for the taxable year in which that employment is terminated shall be
increased by an amount equal to the credit allowed under subdivision
(a) for that taxable year and all prior taxable years attributable to
qualified wages paid or incurred with respect to that employee.
   (B) If the seasonal employment of any qualified employee, with
respect to whom qualified wages are taken into account under
subdivision (a)  ,  is not continued by the taxpayer for a
period of 270 days of employment during the 60-month period beginning
with the day the qualified employee commences seasonal employment
with the taxpayer, the tax imposed by this part, for the taxable year
that includes the 60th month following the month in which the
qualified employee commences seasonal employment with the taxpayer,
shall be increased by an amount equal to the credit allowed under
subdivision (a) for that taxable year and all prior taxable years
attributable to qualified wages paid or incurred with respect to that
qualified employee.
   (2) (A) Subparagraph (A) of paragraph (1) shall not apply to any
of the following:
   (i) A termination of employment of a qualified employee who
voluntarily leaves the employment of the taxpayer.
   (ii) A termination of employment of a qualified employee who,
before the close of the period referred to in paragraph (1), becomes
disabled and unable to perform the services of that employment,
unless that disability is removed before the close of that period and
the taxpayer fails to offer reemployment to that employee.
   (iii) A termination of employment of a qualified employee, if it
is determined that the termination was due to the misconduct (as
defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that employee.
   (iv) A termination of employment of a qualified employee due to a
substantial reduction in the trade or business operations of the
taxpayer.
   (v) A termination of employment of a qualified employee, if that
employee is replaced by other qualified employees so as to create a
net increase in both the number of employees and the hours of
employment.
   (B) Subparagraph (B) of paragraph (1) shall not apply to any of
the following:
   (i) A failure to continue the seasonal employment of a qualified
employee who voluntarily fails to return to the seasonal employment
of the taxpayer.
   (ii) A failure to continue the seasonal employment of a qualified
employee who, before the close of the period referred to in
subparagraph (B) of paragraph (1), becomes disabled and unable to
perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
taxpayer fails to offer seasonal employment to that qualified
employee.
   (iii) A failure to continue the seasonal employment of a qualified
employee, if it is determined that the failure to continue the
seasonal employment was due to the misconduct (as defined in Sections
1256-30 to 1256-43, inclusive, of Title 22 of the California Code of
Regulations) of that qualified employee.
   (iv) A failure to continue seasonal employment of a qualified
employee due to a substantial reduction in the regular seasonal trade
or business operations of the taxpayer.
   (v) A failure to continue the seasonal employment of a qualified
employee, if that qualified employee is replaced by other qualified
employees so as to create a net increase in both the number of
seasonal employees and the hours of seasonal employment.
   (C) For purposes of paragraph (1), the employment relationship
between the taxpayer and a qualified employee shall not be treated as
terminated by reason of a mere change in the form of conducting the
trade or business of the taxpayer, if the qualified employee
continues to be employed in that trade or business and the taxpayer
retains a substantial interest in that trade or business.
   (3) Any increase in tax under paragraph (1) shall not be treated
as tax imposed by this part for purposes of determining the amount of
any credit allowable under this part.
   (f) In the case of an estate or trust, both of the following
apply:
   (1) The qualified wages for any taxable year shall be apportioned
between the estate or trust and the beneficiaries on the basis of the
income of the estate or trust allocable to each.
   (2) Any beneficiary to whom any qualified wages have been
apportioned under paragraph (1) shall be treated, for purposes of
this part, as the employer with respect to those wages.
   (g) For purposes of this section, "enterprise zone" means an area
designated as an enterprise zone pursuant to Chapter 12.8 (commencing
with Section 7070) of Division 7 of Title 1 of the Government Code.
   (h) The credit allowable under this section shall be reduced by
the credit allowed under Sections 17053.10, 17053.17  ,  and
17053.46 claimed for the same employee. The credit shall also be
reduced by the federal credit allowed under Section 51 of the
Internal Revenue Code.
   In addition, any deduction otherwise allowed under this part for
the wages or salaries paid or incurred by the taxpayer upon which the
credit is based shall be reduced by the amount of the credit, prior
to any reduction required by subdivision (i) or (j).
   (i) In the case where the credit otherwise allowed under this
section exceeds the "net tax" for the taxable year, that portion of
the credit that exceeds the "net tax" may be carried over and added
to the credit, if any, in succeeding taxable years, until the credit
is exhausted. The credit shall be applied first to the earliest
taxable years possible.
   (j) (1) The amount of the credit otherwise allowed under this
section and Section 17053.70, including any credit carryover from
prior years, that may reduce the "net tax" for the taxable year shall
not exceed the amount of tax which would be imposed on the taxpayer'
s business income attributable to the enterprise zone determined as
if that attributable income represented all of the income of the
taxpayer subject to tax under this part.
   (2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the
enterprise zone. For that purpose, the taxpayer's business income
attributable to sources in this state first shall be determined in
accordance with Chapter 17 (commencing with Section 25101) of Part
11. That business income shall be further apportioned to the
enterprise zone in accordance with Article 2 (commencing with Section
25120) of Chapter 17 of Part 11, modified for purposes of this
section in accordance with paragraph (3).
   (3) Business income shall be apportioned to the enterprise zone by
multiplying the total California business income of the taxpayer by
a fraction, the numerator of which is the property factor plus the
payroll factor, and the denominator of which is two. For purposes of
this paragraph:
   (A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the enterprise zone during the
taxable year, and the denominator of which is the average value of
all the taxpayer's real and tangible personal property owned or
rented and used in this state during the taxable year.
   (B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the enterprise zone during
the taxable year for compensation, and the denominator of which is
the total compensation paid by the taxpayer in this state during the
taxable year.
   (4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "net tax" for the
taxable year, as provided in subdivision (i).
   (k) The changes made to this section by the act adding this
subdivision shall apply to taxable years beginning on or after
January 1, 1997.
  SEC. 21.  Section 23622.7 of the Revenue and Taxation Code is
amended to read:
   23622.7.  (a) There shall be allowed a credit against the "tax"
(as defined by Section 23036) to a taxpayer who employs a qualified
employee in an enterprise zone during the taxable year. The credit
shall be equal to the sum of each of the following:
   (1) Fifty percent of qualified wages in the first year of
employment.
   (2) Forty percent of qualified wages in the second year of
employment.
   (3) Thirty percent of qualified wages in the third year of
employment.
   (4) Twenty percent of qualified wages in the fourth year of
employment.
   (5) Ten percent of qualified wages in the fifth year of
employment.
   (b) For purposes of this section:
   (1) "Qualified wages" means:
   (A) (i) Except as provided in clause (ii), that portion of wages
paid or incurred by the taxpayer during the taxable year to qualified
employees that does not exceed 150 percent of the minimum wage.
   (ii) For up to 1,350 qualified employees who are employed by the
taxpayer in the Long Beach Enterprise Zone in aircraft manufacturing
activities described in Codes 3721 to 3728, inclusive, and Code 3812
of the Standard Industrial Classification (SIC) Manual published by
the United States Office of Management and Budget, 1987 edition,
"qualified wages" means that portion of hourly wages that does not
exceed 202 percent of the minimum wage.
   (B) Wages received during the 60-month period beginning with the
first day the employee commences employment with the taxpayer.
Reemployment in connection with any increase, including a regularly
occurring seasonal increase, in the trade or business operations of
the taxpayer does not constitute commencement of employment for
purposes of this section.
   (C) Qualified wages do not include any wages paid or incurred by
the taxpayer on or after the zone expiration date. However, wages
paid or incurred with respect to qualified employees who are employed
by the taxpayer within the enterprise zone within the 60-month
period prior to the zone expiration date shall continue to qualify
for the credit under this section after the zone expiration date, in
accordance with all provisions of this section applied as if the
enterprise zone designation were still in existence and binding.
   (2) "Minimum wage" means the wage established by the Industrial
Welfare Commission as provided for in Chapter 1 (commencing
                                      with Section 1171) of Part 4 of
Division 2 of the Labor Code.
   (3) "Zone expiration date" means the date the enterprise zone
designation expires, is no longer binding, or becomes inoperative.
   (4) (A) "Qualified employee" means an individual who meets all of
the following requirements:
   (i) At least 90 percent of whose services for the taxpayer during
the taxable year are directly related to the conduct of the taxpayer'
s trade or business located in an enterprise zone.
   (ii) Performs at least 50 percent of his or her services for the
taxpayer during the taxable year in an enterprise zone.
   (iii) Is hired by the taxpayer after the date of original
designation of the area in which services were performed as an
enterprise zone.
   (iv) Is any of the following:
   (I) Immediately preceding the qualified employee's commencement of
employment with the taxpayer, was a person eligible for services
under the federal Job Training Partnership Act (29 U.S.C. Sec. 1501
et seq.), or its successor, who is receiving, or is eligible to
receive, subsidized employment, training, or services funded by the
federal Job Training Partnership Act, or its successor.
   (II) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a person eligible to be a
voluntary or mandatory registrant under the Greater Avenues for
Independence Act of 1985 (GAIN) provided for pursuant to Article 3.2
(commencing with Section 11320) of Chapter 2 of Part 3 of Division 9
of the Welfare and Institutions Code, or its successor.
   (III) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was an economically disadvantaged
individual 14 years of age or older.
   (IV) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a dislocated worker who meets
any of the following:
   (aa) Has been terminated or laid off or who has received a notice
of termination or layoff from employment, is eligible for or has
exhausted entitlement to unemployment insurance benefits, and is
unlikely to return to his or her previous industry or occupation.
   (bb) Has been terminated or has received a notice of termination
of employment as a result of any permanent closure or any substantial
layoff at a plant, facility, or enterprise, including an individual
who has not received written notification but whose employer has made
a public announcement of the closure or layoff.
   (cc) Is long-term unemployed and has limited opportunities for
employment or reemployment in the same or a similar occupation in the
area in which the individual resides, including an individual 55
years of age or older who may have substantial barriers to employment
by reason of age.
   (dd) Was self-employed (including farmers and ranchers) and is
unemployed as a result of general economic conditions in the
community in which he or she resides or because of natural disasters.

   (ee) Was a civilian employee of the Department of Defense employed
at a military installation being closed or realigned under the
Defense Base Closure and Realignment Act of 1990.
   (ff) Was an active member of the armed forces or National Guard as
of September 30, 1990, and was either involuntarily separated or
separated pursuant to a special benefits program.
   (gg) Is a seasonal or migrant worker who experiences chronic
seasonal unemployment and underemployment in the agriculture
industry, aggravated by continual advancements in technology and
mechanization.
   (hh) Has been terminated or laid off, or has received a notice of
termination or layoff, as a consequence of compliance with the Clean
Air Act.
   (V) Immediately preceding the qualified employee's commencement of
employment with the taxpayer, was a disabled individual who is
eligible for or enrolled in, or has completed a state rehabilitation
plan or is a service-connected disabled veteran, veteran of the
Vietnam era, or veteran who is recently separated from military
service.
   (VI) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was an ex-offender. An individual
shall be treated as convicted if he or she was placed on probation by
a state court without a finding of guilt.
   (VII) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a person eligible for or a
recipient of any of the following:
   (aa) Federal Supplemental Security Income benefits.
   (bb) Aid to Families with Dependent Children.
   (cc) CalFresh benefits.
   (dd) State and local general assistance.
   (VIII) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a member of a federally
recognized Indian tribe, band, or other group of Native American
descent.
   (IX) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a resident of a targeted
employment area (as defined in Section 7072 of the Government Code).
   (X) An employee who qualified the taxpayer for the enterprise zone
hiring credit under former Section 23622 or the program area hiring
credit under former Section 23623.
   (XI) Immediately preceding the qualified employee's commencement
of employment with the taxpayer, was a member of a targeted group, as
defined in Section 51(d) of the Internal Revenue Code, or its
successor.
   (B) Priority for employment shall be provided to an individual who
is enrolled in a qualified program under the federal Job Training
Partnership Act or the Greater Avenues for Independence Act of 1985
or who is eligible as a member of a targeted group under the Work
Opportunity Tax Credit (Section 51 of the Internal Revenue Code), or
its successor.
   (5) "Taxpayer" means a corporation engaged in a trade or business
within an enterprise zone designated pursuant to Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code.
   (6) "Seasonal employment" means employment by a taxpayer that has
regular and predictable substantial reductions in trade or business
operations.
   (c) The taxpayer shall do both of the following:
   (1) Obtain from the Employment Development Department, as
permitted by federal law, the local county or city Job Training
Partnership Act administrative entity, the local county GAIN office
or social services agency, or the local government administering the
enterprise zone, a certification that provides that a qualified
employee meets the eligibility requirements specified in clause (iv)
of subparagraph (A) of paragraph (4) of subdivision (b). The
Employment Development Department may provide preliminary screening
and referral to a certifying agency. The Employment Development
Department shall develop a form for this purpose. The Department of
Housing and Community Development shall develop regulations governing
the issuance of certificates by local governments pursuant to
subdivision (a) of Section 7086 of the Government Code.
   (2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
   (d) (1) For purposes of this section:
   (A) All employees of all corporations which are members of the
same controlled group of corporations shall be treated as employed by
a single taxpayer.
   (B) The credit, if any, allowable by this section to each member
shall be determined by reference to its proportionate share of the
expense of the qualified wages giving rise to the credit, and shall
be allocated in that manner.
   (C) For purposes of this subdivision, "controlled group of
corporations" means "controlled group of corporations" as defined in
Section 1563(a) of the Internal Revenue Code, except that:
   (i) "More than 50 percent" shall be substituted for "at least 80
percent" each place it appears in Section 1563(a)(1) of the Internal
Revenue Code.
   (ii) The determination shall be made without regard to subsections
(a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.
   (2) If an employer acquires the major portion of a trade or
business of another employer (hereinafter in this paragraph referred
to as the "predecessor") or the major portion of a separate unit of a
trade or business of a predecessor, then, for purposes of applying
this section (other than subdivision (e)) for any calendar year
ending after that acquisition, the employment relationship between a
qualified employee and an employer shall not be treated as terminated
if the employee continues to be employed in that trade or business.
   (e) (1) (A) If the employment, other than seasonal employment, of
any qualified employee with respect to whom qualified wages are taken
into account under subdivision (a) is terminated by the taxpayer at
any time during the first 270 days of that employment, whether or not
consecutive, or before the close of the 270th calendar day after the
day in which that employee completes 90 days of employment with the
taxpayer, the tax imposed by this part for the taxable year in which
that employment is terminated shall be increased by an amount equal
to the credit allowed under subdivision (a) for that taxable year and
all prior taxable years attributable to qualified wages paid or
incurred with respect to that employee.
   (B) If the seasonal employment of any qualified employee, with
respect to whom qualified wages are taken into account under
subdivision (a) is not continued by the taxpayer for a period of 270
days of employment during the 60-month period beginning with the day
the qualified employee commences seasonal employment with the
taxpayer, the tax imposed by this part, for the taxable year that
includes the 60th month following the month in which the qualified
employee commences seasonal employment with the taxpayer, shall be
increased by an amount equal to the credit allowed under subdivision
(a) for that taxable year and all prior taxable years attributable to
qualified wages paid or incurred with respect to that qualified
employee.
   (2) (A) Subparagraph (A) of paragraph (1) shall not apply to any
of the following:
   (i) A termination of employment of a qualified employee who
voluntarily leaves the employment of the taxpayer.
   (ii) A termination of employment of a qualified employee who,
before the close of the period referred to in subparagraph (A) of
paragraph (1), becomes disabled and unable to perform the services of
that employment, unless that disability is removed before the close
of that period and the taxpayer fails to offer reemployment to that
employee.
   (iii) A termination of employment of a qualified employee, if it
is determined that the termination was due to the misconduct (as
defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that employee.
   (iv) A termination of employment of a qualified employee due to a
substantial reduction in the trade or business operations of the
taxpayer.
   (v) A termination of employment of a qualified employee, if that
employee is replaced by other qualified employees so as to create a
net increase in both the number of employees and the hours of
employment.
   (B) Subparagraph (B) of paragraph (1) shall not apply to any of
the following:
   (i) A failure to continue the seasonal employment of a qualified
employee who voluntarily fails to return to the seasonal employment
of the taxpayer.
   (ii) A failure to continue the seasonal employment of a qualified
employee who, before the close of the period referred to in
subparagraph (B) of paragraph (1), becomes disabled and unable to
perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
taxpayer fails to offer seasonal employment to that qualified
employee.
   (iii) A failure to continue the seasonal employment of a qualified
employee, if it is determined that the failure to continue the
seasonal employment was due to the misconduct (as defined in Sections
1256-30 to 1256-43, inclusive, of Title 22 of the California Code of
Regulations) of that qualified employee.
   (iv) A failure to continue seasonal employment of a qualified
employee due to a substantial reduction in the regular seasonal trade
or business operations of the taxpayer.
   (v) A failure to continue the seasonal employment of a qualified
employee, if that qualified employee is replaced by other qualified
employees so as to create a net increase in both the number of
seasonal employees and the hours of seasonal employment.
   (C) For purposes of paragraph (1), the employment relationship
between the taxpayer and a qualified employee shall not be treated as
terminated by either of the following:
   (i) By a transaction to which Section 381(a) of the Internal
Revenue Code applies, if the qualified employee continues to be
employed by the acquiring corporation.
   (ii) By reason of a mere change in the form of conducting the
trade or business of the taxpayer, if the qualified employee
continues to be employed in that trade or business and the taxpayer
retains a substantial interest in that trade or business.
   (3) Any increase in tax under paragraph (1) shall not be treated
as tax imposed by this part for purposes of determining the amount of
any credit allowable under this part.
   (f) Rules similar to the rules provided in Section 46(e) and (h)
of the Internal Revenue Code shall apply to both of the following:
   (1) An organization to which Section 593 of the Internal Revenue
Code applies.
   (2) A regulated investment company or a real estate investment
trust subject to taxation under this part.
   (g) For purposes of this section, "enterprise zone" means an area
designated as an enterprise zone pursuant to Chapter 12.8 (commencing
with Section 7070) of Division 7 of Title 1 of the Government Code.
   (h) The credit allowable under this section shall be reduced by
the credit allowed under Sections 23623.5, 23625, and 23646 claimed
for the same employee. The credit shall also be reduced by the
federal credit allowed under Section 51 of the Internal Revenue Code.

   In addition, any deduction otherwise allowed under this part for
the wages or salaries paid or incurred by the taxpayer upon which the
credit is based shall be reduced by the amount of the credit, prior
to any reduction required by subdivision (i) or (j).
   (i) In the case where the credit otherwise allowed under this
section exceeds the "tax" for the taxable year, that portion of the
credit that exceeds the "tax" may be carried over and added to the
credit, if any, in succeeding taxable years, until the credit is
exhausted. The credit shall be applied first to the earliest taxable
years possible.
   (j) (1) The amount of the credit otherwise allowed under this
section and Section 23612.2, including any credit carryover from
prior years, that may reduce the "tax" for the taxable year shall not
exceed the amount of tax which would be imposed on the taxpayer's
business income attributable to the enterprise zone determined as if
that attributable income represented all of the income of the
taxpayer subject to tax under this part.
   (2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the
enterprise zone. For that purpose, the taxpayer's business
attributable to sources in this state first shall be determined in
accordance with Chapter 17 (commencing with Section 25101). That
business income shall be further apportioned to the enterprise zone
in accordance with Article 2 (commencing with Section 25120) of
Chapter 17, modified for purposes of this section in accordance with
paragraph (3).
   (3) Business income shall be apportioned to the enterprise zone by
multiplying the total California business income of the taxpayer by
a fraction, the numerator of which is the property factor plus the
payroll factor, and the denominator of which is two. For purposes of
this paragraph:
   (A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the enterprise zone during the
income year, and the denominator of which is the average value of all
the taxpayer's real and tangible personal property owned or rented
and used in this state during the income year.
   (B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the enterprise zone during
the income year for compensation, and the denominator of which is the
total compensation paid by the taxpayer in this state during the
income year.
   (4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "tax" for the taxable
year, as provided in subdivision (i).
   (k) The changes made to this section by the act adding this
subdivision shall apply to taxable years on or after January 1, 1997.

  SEC. 22.  Section 23634 of the Revenue and Taxation Code is amended
to read:
   23634.  (a) For each taxable year beginning on or after January 1,
1998, there shall be allowed a credit against the "tax" (as defined
by Section 23036) to a qualified taxpayer who employs a qualified
employee in a targeted tax area during the taxable year. The credit
shall be equal to the sum of each of the following:
   (1) Fifty percent of qualified wages in the first year of
employment.
   (2) Forty percent of qualified wages in the second year of
employment.
   (3) Thirty percent of qualified wages in the third year of
employment.
   (4) Twenty percent of qualified wages in the fourth year of
employment.
   (5) Ten percent of qualified wages in the fifth year of
employment.
   (b) For purposes of this section:
   (1) "Qualified wages" means:
   (A) That portion of wages paid or incurred by the qualified
taxpayer during the taxable year to qualified employees that does not
exceed 150 percent of the minimum wage.
   (B) Wages received during the 60-month period beginning with the
first day the employee commences employment with the qualified
taxpayer. Reemployment in connection with any increase, including a
regularly occurring seasonal increase, in the trade or business
operations of the qualified taxpayer does not constitute commencement
of employment for purposes of this section.
   (C) Qualified wages do not include any wages paid or incurred by
the qualified taxpayer on or after the targeted tax area expiration
date. However, wages paid or incurred with respect to qualified
employees who are employed by the qualified taxpayer within the
targeted tax area within the 60-month period prior to the targeted
tax area expiration date shall continue to qualify for the credit
under this section after the targeted tax area expiration date, in
accordance with all provisions of this section applied as if the
targeted tax area designation were still in existence and binding.
   (2) "Minimum wage" means the wage established by the Industrial
Welfare Commission as provided for in Chapter 1 (commencing with
Section 1171) of Part 4 of Division 2 of the Labor Code.
   (3) "Targeted tax area expiration date" means the date the
targeted tax area designation expires, is revoked, is no longer
binding, or becomes inoperative.
   (4) (A) "Qualified employee" means an individual who meets all of
the following requirements:
   (i) At least 90 percent of his or her services for the qualified
taxpayer during the taxable year are directly related to the conduct
of the qualified taxpayer's trade or business located in a targeted
tax area.
   (ii) Performs at least 50 percent of his or her services for the
qualified taxpayer during the taxable year in a targeted tax area.
   (iii) Is hired by the qualified taxpayer after the date of
original designation of the area in which services were performed as
a targeted tax area.
   (iv) Is any of the following:
   (I) Immediately preceding the qualified employee's commencement of
employment with the qualified taxpayer, was a person eligible for
services under the federal Job Training Partnership Act (29 U.S.C.
Sec. 1501 et seq.), or its successor, who is receiving, or is
eligible to receive, subsidized employment, training, or services
funded by the federal Job Training Partnership Act, or its successor.

   (II) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a person eligible to
be a voluntary or mandatory registrant under the Greater Avenues for
Independence Act of 1985 (GAIN) provided for pursuant to Article 3.2
(commencing with Section 11320) of Chapter 2 of Part 3 of Division 9
of the Welfare and Institutions Code, or its successor.
   (III) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was an economically
disadvantaged individual 14 years of age or older.
   (IV) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a dislocated worker
who meets any of the following:
   (aa) Has been terminated or laid off or who has received a notice
of termination or layoff from employment, is eligible for or has
exhausted entitlement to unemployment insurance benefits, and is
unlikely to return to his or her previous industry or occupation.
   (bb) Has been terminated or has received a notice of termination
of employment as a result of any permanent closure or any substantial
layoff at a plant, facility, or enterprise, including an individual
who has not received written notification but whose employer has made
a public announcement of the closure or layoff.
   (cc) Is long-term unemployed and has limited opportunities for
employment or reemployment in the same or a similar occupation in the
area in which the individual resides, including an individual 55
years of age or older who may have substantial barriers to employment
by reason of age.
   (dd) Was self-employed (including farmers and ranchers) and is
unemployed as a result of general economic conditions in the
community in which he or she resides or because of natural disasters.

   (ee) Was a civilian employee of the Department of Defense employed
at a military installation being closed or realigned under the
Defense Base Closure and Realignment Act of 1990.
   (ff) Was an active member of the Armed Forces or National Guard as
of September 30, 1990, and was either involuntarily separated or
separated pursuant to a special benefits program.
   (gg) Is a seasonal or migrant worker who experiences chronic
seasonal unemployment and underemployment in the agriculture
industry, aggravated by continual advancements in technology and
mechanization.
   (hh) Has been terminated or laid off, or has received a notice of
termination or layoff, as a consequence of compliance with the Clean
Air Act.
   (V) Immediately preceding the qualified employee's commencement of
employment with the qualified taxpayer, was a disabled individual
who is eligible for or enrolled in, or has completed a state
rehabilitation plan or is a service-connected disabled veteran,
veteran of the Vietnam era, or veteran who is recently separated from
military service.
   (VI) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was an ex-offender. An
individual shall be treated as convicted if he or she was placed on
probation by a state court without a finding of guilt.
   (VII) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a person eligible for
or a recipient of any of the following:
   (aa) Federal Supplemental Security Income benefits.
   (bb) Aid to Families with Dependent Children.
   (cc) CalFresh benefits.
   (dd) State and local general assistance.
   (VIII) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a member of a
federally recognized Indian tribe, band, or other group of Native
American descent.
   (IX) Immediately preceding the qualified employee's commencement
of employment with the qualified taxpayer, was a resident of a
targeted tax area.
   (X) Immediately preceding the qualified employee's commencement of
employment with the taxpayer, was a member of a targeted group, as
defined in Section 51(d) of the Internal Revenue Code, or its
successor.
   (B) Priority for employment shall be provided to an individual who
is enrolled in a qualified program under the federal Job Training
Partnership Act or the Greater Avenues for Independence Act of 1985
or who is eligible as a member of a targeted group under the Work
Opportunity Tax Credit (Section 51 of the Internal Revenue Code), or
its successor.
   (5) (A) "Qualified taxpayer" means a person or entity that meets
both of the following:
   (i) Is engaged in a trade or business within a targeted tax area
designated pursuant to Chapter 12.93 (commencing with Section 7097)
of Division 7 of Title 1 of the Government Code.
   (ii) Is engaged in those lines of business described in Codes 2000
to 2099, inclusive; 2200 to 3999, inclusive; 4200 to 4299,
inclusive; 4500 to 4599, inclusive; and 4700 to 5199, inclusive, of
the Standard Industrial Classification (SIC) Manual published by the
United States Office of Management and Budget, 1987 edition.
   (B) In the case of any passthrough entity, the determination of
whether a taxpayer is a qualified taxpayer under this section shall
be made at the entity level and any credit under this section or
Section 17053.34 shall be allowed to the passthrough entity and
passed through to the partners or shareholders in accordance with
applicable provisions of this part or Part 10 (commencing with
Section 17001). For purposes of this subparagraph, the term
"passthrough entity" means any partnership or S corporation.
   (6) "Seasonal employment" means employment by a qualified taxpayer
that has regular and predictable substantial reductions in trade or
business operations.
   (c) If the qualified taxpayer is allowed a credit for qualified
wages pursuant to this section, only one credit shall be allowed to
the taxpayer under this part with respect to those qualified wages.
   (d) The qualified taxpayer shall do both of the following:
   (1) Obtain from the Employment Development Department, as
permitted by federal law, the local county or city Job Training
Partnership Act administrative entity, the local county GAIN office
or social services agency, or the local government administering the
targeted tax area, a certification that provides that a qualified
employee meets the eligibility requirements specified in clause (iv)
of subparagraph (A) of paragraph (4) of subdivision (b). The
Employment Development Department may provide
                         preliminary screening and referral to a
certifying agency. The Department of Housing and Community
Development shall develop regulations for the issuance of
certificates pursuant to subdivision (g) of Section 7097 of the
Government Code, and shall develop forms for this purpose.
   (2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
   (e) (1) For purposes of this section:
   (A) All employees of all corporations that are members of the same
controlled group of corporations shall be treated as employed by a
single taxpayer.
   (B) The credit, if any, allowable by this section to each member
shall be determined by reference to its proportionate share of the
expense of the qualified wages giving rise to the credit, and shall
be allocated in that manner.
   (C) For purposes of this subdivision, "controlled group of
corporations" means "controlled group of corporations" as defined in
Section 1563(a) of the Internal Revenue Code, except that:
   (i) "More than 50 percent" shall be substituted for "at least 80
percent" each place it appears in Section 1563(a)(1) of the Internal
Revenue Code.
   (ii) The determination shall be made without regard to subsections
(a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.
   (2) If an employer acquires the major portion of a trade or
business of another employer (hereinafter in this paragraph referred
to as the "predecessor") or the major portion of a separate unit of a
trade or business of a predecessor, then, for purposes of applying
this section (other than subdivision (f)) for any calendar year
ending after that acquisition, the employment relationship between a
qualified employee and an employer shall not be treated as terminated
if the employee continues to be employed in that trade or business.
   (f) (1) (A) If the employment, other than seasonal employment, of
any qualified employee with respect to whom qualified wages are taken
into account under subdivision (a) is terminated by the qualified
taxpayer at any time during the first 270 days of that employment
(whether or not consecutive) or before the close of the 270th
calendar day after the day in which that employee completes 90 days
of employment with the qualified taxpayer, the tax imposed by this
part for the taxable year in which that employment is terminated
shall be increased by an amount equal to the credit allowed under
subdivision (a) for that taxable year and all prior taxable years
attributable to qualified wages paid or incurred with respect to that
employee.
   (B) If the seasonal employment of any qualified employee, with
respect to whom qualified wages are taken into account under
subdivision (a) is not continued by the qualified taxpayer for a
period of 270 days of employment during the 60-month period beginning
with the day the qualified employee commences seasonal employment
with the qualified taxpayer, the tax imposed by this part, for the
taxable year that includes the 60th month following the month in
which the qualified employee commences seasonal employment with the
qualified taxpayer, shall be increased by an amount equal to the
credit allowed under subdivision (a) for that taxable year and all
prior taxable years attributable to qualified wages paid or incurred
with respect to that qualified employee.
   (2) (A) Subparagraph (A) of paragraph (1) shall not apply to any
of the following:
   (i) A termination of employment of a qualified employee who
voluntarily leaves the employment of the qualified taxpayer.
   (ii) A termination of employment of a qualified employee who,
before the close of the period referred to in subparagraph (A) of
paragraph (1), becomes disabled and unable to perform the services of
that employment, unless that disability is removed before the close
of that period and the qualified taxpayer fails to offer reemployment
to that employee.
   (iii) A termination of employment of a qualified employee, if it
is determined that the termination was due to the misconduct (as
defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that employee.
   (iv) A termination of employment of a qualified employee due to a
substantial reduction in the trade or business operations of the
taxpayer.
   (v) A termination of employment of a qualified employee, if that
employee is replaced by other qualified employees so as to create a
net increase in both the number of employees and the hours of
employment.
   (B) Subparagraph (B) of paragraph (1) shall not apply to any of
the following:
   (i) A failure to continue the seasonal employment of a qualified
employee who voluntarily fails to return to the seasonal employment
of the qualified taxpayer.
   (ii) A failure to continue the seasonal employment of a qualified
employee who, before the close of the period referred to in
subparagraph (B) of paragraph (1), becomes disabled and unable to
perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
qualified taxpayer fails to offer seasonal employment to that
qualified employee.
   (iii) A failure to continue the seasonal employment of a qualified
employee, if it is determined that the failure to continue the
seasonal employment was due to the misconduct (as defined in Sections
1256-30 to 1256-43, inclusive, of Title 22 of the California Code of
Regulations) of that qualified employee.
   (iv) A failure to continue seasonal employment of a qualified
employee due to a substantial reduction in the regular seasonal trade
or business operations of the qualified taxpayer.
   (v) A failure to continue the seasonal employment of a qualified
employee, if that qualified employee is replaced by other qualified
employees so as to create a net increase in both the number of
seasonal employees and the hours of seasonal employment.
   (C) For purposes of paragraph (1), the employment relationship
between the qualified taxpayer and a qualified employee shall not be
treated as terminated by either of the following:
   (i) By a transaction to which Section 381(a) of the Internal
Revenue Code applies, if the qualified employee continues to be
employed by the acquiring corporation.
   (ii) By reason of a mere change in the form of conducting the
trade or business of the qualified taxpayer, if the qualified
employee continues to be employed in that trade or business and the
qualified taxpayer retains a substantial interest in that trade or
business.
   (3) Any increase in tax under paragraph (1) shall not be treated
as tax imposed by this part for purposes of determining the amount of
any credit allowable under this part.
   (g) Rules similar to the rules provided in Sections 46(e) and (h)
of the Internal Revenue Code shall apply to both of the following:
   (1) An organization to which Section 593 of the Internal Revenue
Code applies.
   (2) A regulated investment company or a real estate investment
trust subject to taxation under this part.
   (h) For purposes of this section, "targeted tax area" means an
area designated pursuant to Chapter 12.93 (commencing with Section
7097) of Division 7 of Title 1 of the Government Code.
   (i) In the case where the credit otherwise allowed under this
section exceeds the "tax" for the taxable year, that portion of the
credit that exceeds the "tax" may be carried over and added to the
credit, if any, in succeeding taxable years, until the credit is
exhausted. The credit shall be applied first to the earliest taxable
years possible.
   (j) (1) The amount of the credit otherwise allowed under this
section and Section 23633, including any credit carryover from prior
years, that may reduce the "tax" for the taxable year shall not
exceed the amount of tax that would be imposed on the qualified
taxpayer's business income attributable to the targeted tax area
determined as if that attributable income represented all of the
income of the qualified taxpayer subject to tax under this part.
   (2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the targeted
tax area. For that purpose, the taxpayer's business income
attributable to sources in this state first shall be determined in
accordance with Chapter 17 (commencing with Section 25101). That
business income shall be further apportioned to the targeted tax area
in accordance with Article 2 (commencing with Section 25120) of
Chapter 17, modified for purposes of this section in accordance with
paragraph (3).
   (3) Business income shall be apportioned to the targeted tax area
by multiplying the total California business income of the taxpayer
by a fraction, the numerator of which is the property factor plus the
payroll factor, and the denominator of which is two. For purposes of
this paragraph:
   (A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the targeted tax area during the
taxable year, and the denominator of which is the average value of
all the taxpayer's real and tangible personal property owned or
rented and used in this state during the taxable year.
   (B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the targeted tax area during
the taxable year for compensation, and the denominator of which is
the total compensation paid by the taxpayer in this state during the
taxable year.
   (4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "tax" for the taxable
year, as provided in subdivision (h).
   (5) In the event that a credit carryover is allowable under
subdivision (h) for any taxable year after the targeted tax area
designation has expired or been revoked, the targeted tax area shall
be deemed to remain in existence for purposes of computing the
limitation specified in this subdivision.
  SEC. 23.  Section 23646 of the Revenue and Taxation Code is amended
to read:
   23646.  (a) For each taxable year beginning on or after January 1,
1995, there shall be allowed as a credit against the "tax" (as
defined in Section 23036) to a qualified taxpayer for hiring a
qualified disadvantaged individual or a qualified displaced employee
during the taxable year for employment in the LAMBRA. The credit
shall be equal to the sum of each of the following:
   (1) Fifty percent of the qualified wages in the first year of
employment.
   (2) Forty percent of the qualified wages in the second year of
employment.
   (3) Thirty percent of the qualified wages in the third year of
employment.
   (4) Twenty percent of the qualified wages in the fourth year of
employment.
   (5) Ten percent of the qualified wages in the fifth year of
employment.
   (b) For purposes of this section:
   (1) "Qualified wages" means:
   (A) That portion of wages paid or incurred by the employer during
the taxable year to qualified disadvantaged individuals or qualified
displaced employees that does not exceed 150 percent of the minimum
wage.
   (B) The total amount of qualified wages which may be taken into
account for purposes of claiming the credit allowed under this
section shall not exceed two million dollars ($2,000,000) per taxable
year.
   (C) Wages received during the 60-month period beginning with the
first day the individual commences employment with the taxpayer.
Reemployment in connection with any increase, including a regularly
occurring seasonal increase, in the trade or business operation of
the qualified taxpayer does not constitute commencement of employment
for purposes of this section.
   (D) Qualified wages do not include any wages paid or incurred by
the qualified taxpayer on or after the LAMBRA expiration date.
However, wages paid or incurred with respect to qualified
disadvantaged individuals or qualified displaced employees who are
employed by the qualified taxpayer within the LAMBRA within the
60-month period prior to the LAMBRA expiration date shall continue to
qualify for the credit under this section after the LAMBRA
expiration date, in accordance with all provisions of this section
applied as if the LAMBRA designation were still in existence and
binding.
   (2) "Minimum wage" means the wage established by the Industrial
Welfare Commission as provided for in Chapter 1 (commencing with
Section 1171) of Part 4 of Division 2 of the Labor Code.
   (3) "LAMBRA" means a local agency military base recovery area
designated in accordance with the provisions of Section 7114 of the
Government Code.
   (4) "Qualified disadvantaged individual" means an individual who
satisfies all of the following requirements:
   (A) (i) At least 90 percent of whose services for the taxpayer
during the taxable year are directly related to the conduct of the
taxpayer's trade or business located in a LAMBRA.
   (ii) Who performs at least 50 percent of his or her services for
the taxpayer during the taxable year in the LAMBRA.
   (B) Who is hired by the employer after the designation of the area
as a LAMBRA in which the individual's services were primarily
performed.
   (C) Who is any of the following immediately preceding the
individual's commencement of employment with the taxpayer:
   (i) An individual who has been determined eligible for services
under the federal Job Training Partnership Act (29 U.S.C. Sec. 1501
et seq.), or its successor.
   (ii) Any voluntary or mandatory registrant under the Greater
Avenues for Independence Act of 1985 provided for pursuant to Article
3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of
Division 9 of the Welfare and Institutions Code.
   (iii) An economically disadvantaged individual  age 16
years   16 years of age  or older.
   (iv) A dislocated worker who meets any of the following
conditions:
   (I) Has been terminated or laid off or who has received a notice
of termination or layoff from employment, is eligible for or has
exhausted entitlement to unemployment insurance benefits, and is
unlikely to return to his or her previous industry or occupation.
   (II) Has been terminated or has received a notice of termination
of employment as a result of any permanent closure or any substantial
layoff at a plant, facility, or enterprise, including an individual
who has not received written notification but whose employer has made
a public announcement of the closure or layoff.
   (III) Is long-term unemployed and has limited opportunities for
employment or reemployment in the same or a similar occupation in the
area in which the individual resides, including an individual 55
years of age or older who may have substantial barriers to employment
by reason of age.
   (IV) Was self-employed (including farmers and ranchers) and is
unemployed as a result of general economic conditions in the
community in which he or she resides or because of natural disasters.

   (V) Was a civilian employee of the Department of Defense employed
at a military installation being closed or realigned under the
Defense Base Closure and Realignment Act of 1990.
   (VI) Was an active member of the Armed Forces or National Guard as
of September 30, 1990, and was either involuntarily separated or
separated pursuant to a special benefits program.
   (VII) Experiences chronic seasonal unemployment and
underemployment in the agriculture industry, aggravated by continual
advancements in technology and mechanization.
   (VIII) Has been terminated or laid off or has received a notice of
termination or layoff as a consequence of compliance with the Clean
Air Act.
   (v) An individual who is enrolled in or has completed a state
rehabilitation plan or is a service-connected disabled veteran,
veteran of the Vietnam era, or veteran who is recently separated from
military service.
   (vi) An ex-offender. An individual shall be treated as convicted
if he or she was placed on probation by a state court without a
finding of guilty.
   (vii) A recipient of:
   (I) Federal Supplemental Security Income benefits.
   (II) Aid to Families with Dependent Children.
   (III) CalFresh benefits.
   (IV) State and local general assistance.
   (viii) Is a member of a federally recognized Indian tribe, band,
or other group of Native American descent.
   (5) "Qualified taxpayer" means a corporation that conducts a trade
or business within a LAMBRA and, for the first two taxable years,
has a net increase in jobs (defined as 2,000 paid hours per employee
per year) of one or more employees as determined below in the LAMBRA.

   (A) The net increase in the number of jobs shall be determined by
subtracting the total number of full-time employees (defined as 2,000
paid hours per employee per year) the taxpayer employed in this
state in the taxable year prior to commencing business operations in
the LAMBRA from the total number of full-time employees the taxpayer
employed in this state during the second taxable year after
commencing business operations in the LAMBRA. For taxpayers who
commence doing business in this state with their LAMBRA business
operation, the number of employees for the taxable year prior to
commencing business operations in the LAMBRA shall be zero. If the
taxpayer has a net increase in jobs in the state, the credit shall be
allowed only if one or more full-time employees is employed within
the LAMBRA.
   (B) The total number of employees employed in the LAMBRA shall
equal the sum of both of the following:
   (i) The total number of hours worked in the LAMBRA for the
taxpayer by employees (not to exceed 2,000 hours per employee) who
are paid an hourly wage divided by 2,000.
   (ii) The total number of months worked in the LAMBRA for the
taxpayer by employees who are salaried employees divided by 12.
   (C) In the case of a qualified taxpayer that first commences doing
business in the LAMBRA during the taxable year, for purposes of
clauses (i) and (ii), respectively, of subparagraph (B) the divisors
"2,000" and "12" shall be multiplied by a fraction, the numerator of
which is the number of months of the taxable year that the taxpayer
was doing business in the LAMBRA and the denominator of which is 12.
   (6) "Qualified displaced employee" means an individual who
satisfies all of the following requirements:
   (A) Any civilian or military employee of a base or former base
that has been displaced as a result of a federal base closure act.
   (B) (i) At least 90 percent of whose services for the taxpayer
during the taxable year are directly related to the conduct of the
taxpayer's trade or business located in a LAMBRA.
   (ii) Who performs at least 50 percent of his or her services for
the taxpayer during the taxable year in a LAMBRA.
   (C) Who is hired by the employer after the designation of the area
in which services were performed as a LAMBRA.
   (7) "Seasonal employment" means employment by a qualified taxpayer
that has regular and predictable substantial reductions in trade or
business operations.
   (8) "LAMBRA expiration date" means the date the LAMBRA designation
expires, is no longer binding, or becomes inoperative.
   (c) For qualified disadvantaged individuals or qualified displaced
employees hired on or after January 1, 2001, the taxpayer shall do
both of the following:
   (1) Obtain from the Employment Development Department, as
permitted by federal law, the administrative entity of the local
county or city for the federal Job Training Partnership Act, or its
successor, the local county GAIN office or social services agency, or
the local government administering the LAMBRA, a certification that
provides that a qualified disadvantaged individual or qualified
displaced employee meets the eligibility requirements specified in
subparagraph (C) of paragraph (4) of subdivision (b) or subparagraph
(A) of paragraph (6) of subdivision (b). The Employment Development
Department may provide preliminary screening and referral to a
certifying agency. The Department of Housing and Community
Development shall develop regulations governing the issuance of
certificates pursuant to Section 7114.2 of the Government Code and
shall develop forms for this purpose.
   (2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
   (d) (1) For purposes of this section, both of the following apply:

   (A) All employees of all corporations that are members of the same
controlled group of corporations shall be treated as employed by a
single employer.
   (B) The credit (if any) allowable by this section to each member
shall be determined by reference to its proportionate share of the
qualified wages giving rise to the credit.
   (2) For purposes of this subdivision, "controlled group of
corporations" has the meaning given to that term by Section 1563(a)
of the Internal Revenue Code, except that both of the following
apply:
   (A) "More than 50 percent" shall be substituted for "at least 80
percent" each place it appears in Section 1563(a)(1) of the Internal
Revenue Code.
   (B) The determination shall be made without regard to Section 1563
(a)(4) and Section 1563(e)(3)(C) of the Internal Revenue Code.
   (3) If an employer acquires the major portion of a trade or
business of another employer (hereinafter in this paragraph referred
to as the "predecessor") or the major portion of a separate unit of a
trade or business of a predecessor, then, for purposes of applying
this section (other than subdivision (e)) for any calendar year
ending after that acquisition, the employment relationship between an
employee and an employer shall not be treated as terminated if the
employee continues to be employed in that trade or business.
   (e) (1) (A) If the employment of any employee, other than seasonal
employment, with respect to whom qualified wages are taken into
account under subdivision (a) is terminated by the taxpayer at any
time during the first 270 days of that employment (whether or not
consecutive) or before the close of the 270th calendar day after the
day in which that employee completes 90 days of employment with the
taxpayer, the tax imposed by this part for the taxable year in which
that employment is terminated shall be increased by an amount equal
to the credit allowed under subdivision (a) for that taxable year and
all prior income years attributable to qualified wages paid or
incurred with respect to that employee.
   (B) If the seasonal employment of any qualified disadvantaged
individual, with respect to whom qualified wages are taken into
account under subdivision (a) is not continued by the qualified
taxpayer for a period of 270 days of employment during the 60-month
period beginning with the day the qualified disadvantaged individual
commences seasonal employment with the qualified taxpayer, the tax
imposed by this part, for the taxable year that includes the 60th
month following the month in which the qualified disadvantaged
individual commences seasonal employment with the qualified taxpayer,
shall be increased by an amount equal to the credit allowed under
subdivision (a) for that taxable year and all prior taxable years
attributable to qualified wages paid or incurred with respect to that
qualified disadvantaged individual.
   (2) (A) Subparagraph (A) of paragraph (1) shall not apply to any
of the following:
   (i) A termination of employment of an employee who voluntarily
leaves the employment of the taxpayer.
   (ii) A termination of employment of an individual who, before the
close of the period referred to in paragraph (1), becomes disabled to
perform the services of that employment, unless that disability is
removed before the close of that period and the taxpayer fails to
offer reemployment to that individual.
   (iii) A termination of employment of an individual, if it is
determined that the termination was due to the misconduct (as defined
in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that individual.
   (iv) A termination of employment of an individual due to a
substantial reduction in the trade or business operations of the
taxpayer.
   (v) A termination of employment of an individual, if that
individual is replaced by other qualified employees so as to create a
net increase in both the number of employees and the hours of
employment.
   (B) Subparagraph (B) of paragraph (1) shall not apply to any of
the following:
   (i) A failure to continue the seasonal employment of a qualified
disadvantaged individual who voluntarily fails to return to the
seasonal employment of the qualified taxpayer.
   (ii) A failure to continue the seasonal employment of a qualified
disadvantaged individual who, before the close of the period referred
to in subparagraph (B) of paragraph (1), becomes disabled and unable
to perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
qualified taxpayer fails to offer seasonal employment to that
qualified disadvantaged individual.
   (iii) A failure to continue the seasonal employment of a qualified
disadvantaged individual, if it is determined that the failure to
continue the seasonal employment was due to the misconduct (as
defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the
California Code of Regulations) of that individual.
   (iv) A failure to continue seasonal employment of a qualified
disadvantaged individual due to a substantial reduction in the
regular seasonal trade or business operations of the qualified
taxpayer.
   (v) A failure to continue the seasonal employment of a qualified
disadvantaged individual, if that individual is replaced by other
qualified disadvantaged individuals so as to create a net increase in
both the number of seasonal employees and the hours of seasonal
employment.
   (C) For purposes of paragraph (1), the employment relationship
between the taxpayer and an employee shall not be treated as
terminated by either of the following:
   (i) A transaction to which Section 381(a) of the Internal Revenue
Code applies, if the employee continues to be employed by the
acquiring corporation.
   (ii) A mere change in the form of conducting the trade or business
of the taxpayer, if the employee continues to be employed in that
trade or business and the taxpayer retains a substantial interest in
that trade or business.
   (3) Any increase in tax under paragraph (1) shall not be treated
as tax imposed by this part for purposes of determining the amount of
any credit allowable under this part.
   (4) At the close of the second taxable year, if the taxpayer has
not increased the number of its employees as determined by paragraph
(5) of subdivision (b), then the amount of the credit
                              previously claimed shall be added to
the taxpayer's tax for the taxpayer's second taxable year.
   (f) In the case of an organization to which Section 593 of the
Internal Revenue Code applies, and a regulated investment company or
a real estate investment trust subject to taxation under this part,
rules similar to the rules provided in Section 46(e) and Section 46
(h) of the Internal Revenue Code shall apply.
   (g) The credit shall be reduced by the credit allowed under
Section 23621. The credit shall also be reduced by the federal credit
allowed under Section 51 of the Internal Revenue Code.
   In addition, any deduction otherwise allowed under this part for
the wages or salaries paid or incurred by the taxpayer upon which the
credit is based shall be reduced by the amount of the credit, prior
to any reduction required by subdivision (h) or (i).
   (h) In the case where the credit otherwise allowed under this
section exceeds the "tax" for the taxable year, that portion of the
credit that exceeds the "tax" may be carried over and added to the
credit, if any, in succeeding years, until the credit is exhausted.
The credit shall be applied first to the earliest taxable years
possible.
   (i) (1) The amount of credit otherwise allowed under this section
and Section 23645, including any prior year carryovers, that may
reduce the "tax" for the taxable year shall not exceed the amount of
tax that would be imposed on the taxpayer's business income
attributed to a LAMBRA determined as if that attributed income
represented all of the income of the taxpayer subject to tax under
this part.
   (2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the LAMBRA.
For that purpose, the taxpayer's business income that is attributable
to sources in this state first shall be determined in accordance
with Chapter 17 (commencing with Section 25101). That business income
shall be further apportioned to the LAMBRA in accordance with
Article 2 (commencing with Section 25120) of Chapter 17, modified for
purposes of this section in accordance with paragraph (3).
   (3) Income shall be apportioned to a LAMBRA by multiplying the
total California business income of the taxpayer by a fraction, the
numerator of which is the property factor plus the payroll factor,
and the denominator of which is two. For purposes of this paragraph:
   (A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the LAMBRA during the taxable
year, and the denominator of which is the average value of all the
taxpayer's real and tangible personal property owned or rented and
used in this state during the taxable year.
   (B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the LAMBRA during the
taxable year for compensation, and the denominator of which is the
total compensation paid by the taxpayer in this state during the
taxable year.
   (4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "tax" for the taxable
year, as provided in subdivision (h).
   (j) If the taxpayer is allowed a credit pursuant to this section
for qualified wages paid or incurred, only one credit shall be
allowed to the taxpayer under this part with respect to any wage
consisting in whole or in part of those qualified wages.
  SEC. 24.  Section 9802 of the Unemployment Insurance Code is
amended to read:
   9802.  Programs shall provide, at a minimum, all of the following
services:
   (a) (1) Acquisition, rehabilitation, acquisition and
rehabilitation, or construction of housing and related facilities to
be used for the purpose of providing home ownership for disadvantaged
persons, residential housing for homeless individuals and very low
income families, or transitional housing for persons who are
homeless, ill, deinstitutionalized, or who have disabilities or
special needs.
   (2) Rehabilitation or construction of community facilities owned
by public agencies or nonprofit entities.
   (b) (1) Integrated education and job training services and
activities or an equally divided basis, with 50 percent of
participants' time spent in classroom-based instruction, counseling,
and leadership development instruction, and 50 percent of
participants' time spent in experiential training on the construction
site.
   (2) The education component described in paragraph (1) shall
include basic skills instruction, secondary education services, and
other activities designed to lead to the attainment of a high school
diploma or its equivalent. The curriculum for this component shall
include math, language arts, vocational education, life skills
training, social studies related to the cultural and community
history of the participants, leadership skills, and other topics at
the discretion of the program. Bilingual services shall be available
for individuals with limited-English proficiency. A program shall
have a goal of a minimum teacher-to-participant ratio of one teacher
for every 18 participants.
   (3) The job training component described in paragraph (1) shall
involve work experience and skills training apprenticeships related
to construction and rehabilitation activities described in
subdivision (a). The process of construction shall be coupled with
skills training and with close onsite supervision by experienced
trainers. The curriculum for this component shall contain a set of
locally agreed upon skills and competencies that are systematically
taught, with participants' mastery assessed individually on a
regular, ongoing basis. Safety skills shall be taught at the outset.
A program shall have a goal of a minimum trainer-to-participant ratio
of one trainer for every seven participants. This component shall be
coordinated to the maximum extent feasible with preapprenticeship
and apprenticeship opportunities.
   (4) Assistance in attaining postsecondary education and in
obtaining financial aid shall be made available to participants prior
to graduation from the program.
   (c) Counseling services designed to assist participants in
positively participating in society, including all of the following,
as necessary: outreach, assessment, and orientation; individual and
peer counseling; life skills training, drug and alcohol abuse
education and prevention; and referral to appropriate drug
rehabilitation, medical, mental health, legal, housing, and other
community services and resources. A program shall have a goal of a
minimum counselor-to-participant ratio of one counselor for every 28
participants.
   (d) (1) Leadership development training that provides participants
with meaningful opportunities to develop leadership skills,
including decisionmaking, problem solving, and negotiating. A program
shall encourage participants to develop strong peer group ties that
support their mutual pursuit of skills and values.
   (2) Each program shall establish a youth council in which
participants are afforded opportunities to develop public speaking
and negotiating skills, and management and policymaking participation
in specific aspects of the program.
   (e) Each participant shall be provided with a training subsidy,
living allowance, or stipend of not less than eight dollars ($8) per
hour for the time spent at the worksite in construction training. For
those participants who receive public assistance, this training
subsidy, living allowance, or stipend shall not affect housing
benefits, medical benefits, child care benefits, or CalFresh
benefits, to the extent consistent with federal law. The training
subsidy, living allowance, or stipend may be distributed in a manner
that offers incentives for good performance.
   (f) Full-time participation in a program shall be offered for a
period of not less than 6 months and not more than 24 months.
   (g) A concentrated effort shall be made to find construction,
construction-related, or nonconstruction jobs for all graduates of
the program who have performed well. The job training curriculum
shall provide participants with basic preparation for seeking and
maintaining a job. Followup counseling and assistance in job seeking
shall also be provided to participants for a period of 12 months
following graduation from the program.
   (h) A program serving 20 or more participants is required to have
a full-time director responsible for the coordination of the
requirements of this article.
  SEC. 25.  Section 10069 of the Welfare and Institutions Code is
amended to read:
   10069.  The committee shall advise the department on the
development and implementation of a statewide electronic benefits
transfer system, and shall provide advice concerning the request for
proposal. The system shall have the capability to deliver CalFresh
benefits and, upon the election of the county, benefits under Chapter
2 (commencing with Section 11200) of Part 3. The system may also be
used, with the approval of the department, for the distribution of
other benefits. Any electronic benefits transfer processor shall be
capable of implementing systems within nine months of contracting for
services.
  SEC. 26.  Section 10072 of the Welfare and Institutions Code is
amended to read:
   10072.  The electronic benefits transfer system required by this
chapter shall be designed to do, but not be limited to, all of the
following:
   (a) To the extent permitted by federal law and the rules of the
program providing the benefits, recipients who are required to
receive their benefits using an electronic benefits transfer system
shall be permitted to gain access to the benefits in any part of the
state where electronic benefits transfers are accepted. All
electronic benefits transfer systems in this state shall be designed
to allow recipients to gain access to their benefits by using every
other electronic benefits transfer system.
   (b) To the maximum extent feasible, electronic benefits transfer
systems shall be designed to be compatible with the electronic
benefits transfer systems in other states.
   (c) All reasonable measures shall be taken in order to ensure that
recipients have access to electronically issued benefits through
systems such as automated teller machines, point-of-sale devices, or
other devices that accept electronic benefits transfer transactions.
Benefits provided under Chapter 2 (commencing with Section 11200) of
Part 3 shall be staggered over a period of three calendar days,
unless a county requests a waiver from the department and the waiver
is approved, or in cases of hardship pursuant to subdivision (  l
 ).
   (d) The system shall provide for reasonable access to benefits to
recipients who demonstrate an inability to  use, 
 use  an electronic benefits transfer card or other aspect
of the system because of disability, language, lack of access, or
other barrier. These alternative methods shall conform to the
requirements of the Americans with Disabilities Act (42 U.S.C. Sec.
12101, et seq.), including reasonable accommodations for recipients
who, because of physical or mental disabilities, are unable to
operate or otherwise make effective use of the electronic benefits
transfer system.
   (e) The system shall permit a recipient the option to choose a
personal identification number, also known as a "pin" number, to
assist the recipient to remember his or her number in order to allow
access to benefits. Whenever an institution, authorized
representative, or other third party not part of the recipient
household or assistance unit has been issued an electronic benefits
transfer card, either in lieu of, or in addition to, the recipient,
the third party shall have a separate card and personal
identification number. At the option of the recipient, he or she may
designate whether restrictions apply to the third party's access to
the recipient's benefits. At the option of the recipient head of
household or assistance unit, the county shall provide one electronic
benefits transfer card to each adult member to enable them to access
benefits.
   (f) The system shall have a 24-hour per day toll-free telephone
hotline for the reporting of lost or stolen cards and that will
provide recipients with information on how to have the card and
personal identification number replaced.
   (g) A recipient shall not incur any loss of electronic benefits
after reporting  that  his or her electronic benefits
transfer card or personal identification number has been lost or
stolen. The system shall provide for the prompt replacement of lost
or stolen electronic benefits transfer cards and personal
identification numbers. Electronic benefits for which the case was
determined eligible and that were not withdrawn by transactions using
an authorized personal identification number for the account shall
also be promptly replaced.
   (h) Electronic benefits transfer system consumers shall be
informed on how to use electronic benefits transfer cards and how to
protect them from misuse.
   (i) Procedures shall be developed for error resolution.
   (j) No fee shall be charged by the state, a county, or an
electronic benefits processor certified by the state to retailers
participating in the electronic benefits transfer system.
   (k) Except for CalFresh transactions, a recipient may be charged a
fee, not to exceed the amount allowed by applicable state and
federal law and customarily charged to other customers, for cash
withdrawal transactions that exceed four per month.
   (  l  ) A county shall exempt an individual from the
three-day staggering requirement under subdivision (c) on a
case-by-case basis for hardship. Hardship includes, but is not
limited to, the incurrence of late charges on an individual's housing
payments. 
   (m) No later than May 1, 2000, the department shall prepare and
submit a report to the Senate Health and Human Services Committee and
the Assembly Committee on Human Services. The report shall contain
estimates of the number of counties that may opt to issue cash
benefits provided under Chapter 2 (commencing with Section 11200) of
Part 3 by electronics benefits transfer and the amount of interest
payments that would accrue to the counties pursuant to the three-day
staggering requirement of subdivision (c). 
   SEC. 26.5.    Section 10544.317 of the  
Welfare and Institutions Code  is amended to read: 
   10544.317.  (a) There is hereby created a welfare reform steering
committee comprised of a representative of the  California 
Health and  Welfare   Human Services 
Agency, who shall chair the committee, the Department of Finance, the
State Department of Social Services, the California State
Association of Counties, the County Welfare Directors Association of
California, representatives of the Legislature appointed by the
Speaker of the Assembly, the President pro Tempore of the Senate, the
minority leader of the Assembly, and the minority leader of the
Senate, and two public members appointed by the Secretary of 
the   California  Health and  Welfare
Agency   Human Services  .
   (b) The steering committee shall:
   (1) Provide advice and consultation on implementation issues
related to welfare reform. 
   (2) Review alternative ways to budget for, and allocate funds for,
the administration of the program and report its findings to the
appropriate committees of the Legislature in a timely manner that
will enable the Legislature to incorporate the recommended changes in
the Budget Act of 1998 and related statutes.  
   (3) 
    (   2)  Perform other duties as described
elsewhere in this division.
  SEC. 27.  Section 10614 of the Welfare and Institutions Code is
amended to read:
   10614.  (a) The department shall annually submit by September 10
of each year and March 1 of the following year, to the Department of
Finance for its approval, all assumptions underlying all estimates
related to all of the following:
   (1) Average monthly caseload for each of the categorical aid
programs.
   (2) Average grant for each of the categorical aid programs.
   (3) Total estimated expenditures for each of the categorical aid
programs.
   (4) Savings or costs associated with all regulatory or statutory
changes.
   (b) The Department of Finance shall approve or modify the
assumptions underlying all estimates within 15 working days of their
submission. If the Department of Finance does not approve or modify
the assumptions by such date, the assumptions as presented by the
submitting department shall be deemed to be accepted by the
Department of Finance as of that date.
   (c) Assumptions shall be released to the legislative fiscal
committees immediately following approval or modification by the
Department of Finance. The department shall identify those premises
to which either of the following apply:
   (1) Have been discontinued since the previous estimate was
submitted.
   (2) Have been placed in the basic cost line of the estimate
package.
   (d) The department shall submit an estimate of expenditures for
each of the categorical aid programs to the Department of Finance by
November 1 of each year and April 20 of the following year. Each
estimate shall contain a concise statement identifying applicable
estimate components, such as caseload, unit cost, implementation
date, whether it is a new or continuing premise, and other
assumptions necessary to support the estimate. The submittal shall
include a projection of the fiscal impact of each of the approved
assumptions related to a regulatory, statutory, or policy change; a
detailed explanation of any changes to the base estimate projections
from the previous estimate; and a projection of the fiscal impact of
such change to the base estimate.
   (e) (1) The department shall submit to the Department of Finance,
as part of the estimates compiled November 1 each year, a brief
narrative description of the methodological steps employed in
arriving at all of the following:
   (A) The basic grant costs for the Aid to Families with Dependent
Children program and State Supplementary Program.
   (B) The basic administrative costs for the Aid to Families with
Dependent Children program and CalFresh.
   (C) All cost estimates for the In-Home Supportive Services
program.
   (D) Any cost estimate for new regulations or legislation which
exceeds 2 percent of the total cost of the affected program.
   (2) These methodological discussions shall be forwarded to the
Joint Legislative Budget Committee and the fiscal committees along
with the November 1 annual estimates of expenditures. In addition,
the department shall, upon request, develop and make available brief
written narratives of the steps taken to arrive at specified
estimates. Copies of the written narratives, working papers, and data
employed in the construction of any estimate used to prepare the
Governor's Budget shall be made available by the State Department of
Social Services upon request to the Joint Legislative Budget
Committee or the Department of Finance.
   (f) In the event that the methodological steps employed in
arriving at those estimates in May differ from those used in November
of the preceding year, the department shall submit a brief narrative
description of the revised methodology to the Department of Finance,
the Joint Legislative Budget Committee, and the fiscal committees,
along with other materials included in the annual May Revision of
expenditure estimates.
   (g) The estimates of average monthly caseloads, average monthly
grants, total estimated expenditures (including administrative
expenditures and savings or costs associated with all regulatory or
statutory changes), as well as all supporting data provided by the
department or developed independently by the Department of Finance,
shall be made available to the Joint Legislative Budget Committee
immediately following approval by the Department of Finance. These
departmental estimates, assumptions, and other supporting data as
have been prepared shall, however, be forwarded annually to the Joint
Legislative Budget Committee not later than January 10 and May 15 by
the department if this information has not been released earlier by
the Department of Finance.
  SEC. 28.  Section 10618.5 of the Welfare and Institutions Code is
amended to read:
   10618.5.  (a) The county welfare department shall send any
CalFresh applicant who is determined to be eligible for CalFresh
benefits and who does not indicate on his or her application an
interest in enrolling in the Medi-Cal program a copy of the notice
developed pursuant to subdivision (b).
   (b) (1) Each county welfare department shall develop a notice
informing individuals identified pursuant to subdivision (a) that
they may be entitled to receive Medi-Cal benefits and requesting
their permission to use the information in the CalFresh recipient's
case file to make a determination of eligibility for the Medi-Cal
program.
   (2) The notice shall also include a request for permission to
forward the information in the CalFresh recipient's case file to the
Healthy Families Program administrator for eligibility determination
if the individual is determined to be eligible to participate in the
Medi-Cal program with a share of cost, or is determined to be
ineligible for Medi-Cal.
   (3) To apply for medical assistance under the Medi-Cal program,
the CalFresh recipient shall sign, date, and return the notice
requesting that an eligibility determination be made.
   (4) Upon receipt of the notice, the county welfare department
shall make an eligibility determination by utilizing the information
in the CalFresh recipient's case file or paper application. The
Medi-Cal application date shall be the date the notice is received by
the county welfare department.
   (5) If the CalFresh case file does not include sufficient
information to establish Medi-Cal program eligibility, the county
welfare department shall request, either orally or in writing,
additional information from the CalFresh recipient.
   (6) The notice shall be written in culturally and linguistically
appropriate language and at an appropriate literacy level. The notice
shall include information on the Medi-Cal program and the Healthy
Families Program, a telephone number that CalFresh recipients may
call for additional information, and a prepaid means of returning the
notice to the county welfare department to begin the eligibility
determination process.
   (c) If an individual identified in subdivision (a) or (b) is
determined to be eligible to participate in the Medi-Cal program with
a share of cost, or is determined to be ineligible for Medi-Cal,
information pertinent to the CalFresh recipient's eligibility for the
Healthy Families Program shall be forwarded by the county welfare
department to the Healthy Families Program statewide administrator
for immediate processing. If there is insufficient information to
establish Healthy Families Program eligibility, the administrator
shall request, either orally or in writing, additional information
from the CalFresh recipient.
   (d) Counties shall include the cost of implementing this section
in their annual administrative budget requests to the State
Department of Health  Care  Services.
  SEC. 29.  Section 10790 of the Welfare and Institutions Code is
amended to read:
   10790.  (a) The director, in consultation with the County Welfare
Directors Association and at least one advocate for welfare
recipients, shall establish, within the Aid to Families with
Dependent Children (AFDC) program (Chapter 2 (commencing with Section
11200) of Part 3), and CalFresh (Chapter 10 (commencing with Section
18900) of Part 6), the Consolidated Public Assistance Eligibility
Determination Demonstration Project.
   (b) (1) The director shall, by formal order, waive the enforcement
of those regulations and standards necessary to implement the
project with federal approval, in order to implement the
demonstration project.
   (2) The order establishing the waiver authorized by paragraph (1)
shall meet all of the following requirements:
   (A) It shall provide alternative methods and procedures of
eligibility administration.
   (B) It shall not conflict with the basic purposes or coverage
provided by law.
   (C) The director shall determine, based on estimates, the impact
of the proposed changes on AFDC and CalFresh recipients. The order
shall be implemented only if no more than 5 percent of the recipients
are expected to experience a net benefit reduction.
   (D) Applications for, and restorations of, aid shall be processed
in the shorter of the time periods required for the AFDC and CalFresh
programs, when differences exist between the two programs.
   (E) It shall not be general in scope and shall apply only to the
project authorized by this section.
   (3) The order establishing the waiver authorized by paragraph (1)
shall take effect only if the appropriate federal agencies have
agreed to approve the demonstration project and to waive those
federal requirements that are necessary for waiver under the project.

   (c) Applicants and recipients under this chapter shall be entitled
to the same rights and fair hearings and appeals as those to which
they would otherwise be entitled under the AFDC program (Chapter 2
(commencing with Section 11200) of Part 3) and CalFresh (Chapter 10
(commencing with Section 18900) of Part 6).
   (d) The director shall include in the request for any waivers
necessary for the implementation of this demonstration project the
declaration that if any of the specific elements, pursuant to Section
10791, are deemed unwaivable or are not granted, the other elements
may be considered independently and waived as permitted under federal
law.
   (e) The director may exclude from the request for waivers any
specific element, pursuant to subparagraph (D) of paragraph (2) of
subdivision (b) of this section or Section 10791, determined to be
not cost effective due to significant General Fund costs.
  SEC. 30.  Section 10791 of the Welfare and Institutions Code is
amended to read:
   10791.  The demonstration program provided for in Section 10790
shall, at a minimum, include the following elements:
   (a) Uniform 30 percent disregard from gross earned income and
waiver of the 100-hour limit on employment for AFDC-Unemployed
recipient eligibility.
   (b) Uniform definition of allowable child care disregards for
full- or part-time care.
   (c) It shall not be presumed that any transfer of property made
within three months prior to the time the application was made for
purposes of becoming eligible for
        CalFresh.
   (d) Exemption of personal loans as property where a reasonable
repayment plan is in place. A reasonable repayment plan shall be
defined as a statement from the lender specifying that the money
shall be paid back at a future point in time when the individual is
able to do so.
   (e) Use of standard shelter allowances based on local housing
prices without verification in lieu of verified shelter costs.
   (f) Exclusion from income financial aid and work study payments
that are computed based on need consistent with Section 11008.10.
   (g) Application of good cause determinations related to late
submission of monthly income reports for CalFresh recipients who also
receive AFDC benefits.
   (h) Qualification as categorically eligible for CalFresh any
individual who is apparently eligible for or has been granted AFDC
benefits.
   (i) Disregarding as income, for CalFresh, the first fifty dollars
($50) of child support received, as currently provided for under the
AFDC program, to the extent federal funding is available.
   (j) Uniform treatment of room and board income, consistent with
AFDC program regulations.
   (k) Requirement for signatures on monthly income reports,
consistent with AFDC program regulations.
   (  l  ) Standard deduction for expenses related to
self-employment income.
   (m) Both programs shall exempt one motor vehicle from property to
be considered in determining eligibility.
   (n) Both programs shall compute the value of any motor vehicle not
exempt from consideration in determining eligibility by subtracting
the amount of encumbrances from the fair market value. If an
applicant, a recipient, or a county does not agree with the value of
a vehicle arrived at through this methodology, the applicant or
recipient shall be entitled to the use of either of the following
methods for evaluating the motor vehicle:
   (1) Submit three appraisals. An appraisal may be made under this
paragraph by a car dealer, insurance adjuster, or a personal property
appraiser. The average of the three independent appraisals shall be
used by the county in evaluating the motor vehicle.
   (2) Obtain an appraisal from a county-appointed appraiser.
   (o) Adoption of an exclusion from income for both the AFDC and
CalFresh programs of one hundred dollars ($100) per quarter, in lieu
of the AFDC nonrecurring gift exclusion and the federal Supplemental
Nutrition Assistance Program irregular or infrequent income
exclusion.
   (p) Standardization of county retention percentages for collection
of erroneous payments.
   (q) Upon receipt of federal approval of this demonstration project
the department, in consultation with the Department of Finance, may
delay implementation of any elements determined to be not cost
effective until funds are appropriated by the Legislature. The
department shall report to the Legislature within that year on the
reasons for the determination of non-cost-effectiveness and the
changes necessary to make the element cost effective.
  SEC. 31.  Section 10823 of the Welfare and Institutions Code, as
amended by Section 13 of Chapter 4 of the 4th Extraordinary Session
of the Statutes of 2009, is amended to read:
   10823.  (a) (1) The Office of Systems Integration shall implement
a statewide automated welfare system for the following public
assistance programs:
   (A) The CalWORKs program.
   (B) CalFresh.
   (C) The Medi-Cal program.
   (D) The foster care program.
   (E) The refugee program.
   (F) County medical services programs.
   (2) Statewide implementation of the statewide automated welfare
system for the programs listed in paragraph (1) shall be achieved
through no more than four county consortia, including the Interim
Statewide Automated Welfare System Consortium, and the Los Angeles
Eligibility, Automated Determination, Evaluation, and Reporting
System.
   (3) Notwithstanding paragraph (2), the Office of Systems
Integration shall migrate the 35 counties that currently use the
Interim Statewide Automated Welfare System into the C-IV system
within the following timeline:
   (A) Complete Migration System Test and begin User Acceptance
Testing on or before June 30, 2009.
   (B) Complete implementation in at least five counties by February
28, 2010.
   (C) Complete implementation in at least 14 additional counties on
or before May 31, 2010.
   (D) Complete implementation in all 35 counties on or before August
31, 2010.
   (E) Decommission the Interim Statewide Automated Welfare System on
or before January 31, 2011.
   (b) Nothing in subdivision (a) transfers program policy
responsibilities related to the public assistance programs specified
in subdivision (a) from the State Department of Social Services or
the State Department of Health Services to the Office of Systems
Integration.
   (c) On February 1 of each year, the Office of Systems Integration
shall provide an annual report to the appropriate committees of the
Legislature on the statewide automated welfare system implemented
under this section. The report shall address the progress of state
and consortia activities and any significant schedule, budget, or
functionality changes in the project.
   (d) Notwithstanding any other law, the Statewide Automated Welfare
System consortia shall have the authority to expend within approved
annual state budgets for each system as follows:
   (1) Make changes within any line item, provided that the change
does not create additional project costs in the current or in a
future budget year.
   (2) Make a change of up to one hundred thousand dollars ($100,000)
or 10 percent of the total for the line item from which the funds
are derived, whichever is greater, between line items with notice to
the Office of Systems Integration, provided that the change does not
create additional project costs in the current or in a future budget
year.
   (3) Make requests to the Office of Systems Integration for changes
between line items of greater than one hundred thousand dollars
($100,000) or 10 percent of the total for the line item from which
the funds are derived, which do not increase the total cost in the
current or a future budget year. The Office of Systems Integration
shall take action to approve or deny the request within 10 days.
  SEC. 32.  Section 10824 of the Welfare and Institutions Code is
amended to read:
   10824.  (a) The counties not participating in the Interim
Statewide Automated Welfare System Consortium or the Los Angeles
Eligibility, Automated Determination, Evaluation, and Reporting
Consortium shall collectively pay 5 percent of the total application
development costs of the Statewide Automated Welfare System
consortium to which they belong. The proportion of the 5 percent of
total application development costs paid by a participating county
shall be the same proportion that the county's caseload bears to the
total consortium caseload for the fiscal year in which the contract
for application development is executed. "Caseload" for purposes of
this section, means the actual average annual duplicated case counts
for the programs included in each consortia's application. A county
subject to this section may pay its proportion of application
development costs during development of its consortium's system, or,
by agreement with the department, may pay its proportion after its
consortium's system in production, but within four years after the
start of production in a county.
   (b) The department shall pay the county share of all other
Statewide Automated Welfare System development and implementation
costs approved by the Department of Finance and the federal funding
agencies for the counties participating in each consortium, except
the Los Angeles Eligibility, Automated Determination, Evaluation, and
Reporting Consortium.
   (c) The department shall pay the county share of maintenance and
operations costs for the first 12 months of production of the
Statewide Automated Welfare System for the counties participating in
each consortium, except the Los Angeles Eligibility, Automated
Determination, Evaluation, and Reporting Consortium.
   (d) For purposes of this section, "production" means the first
conversion of a county case to the Statewide Automated Welfare System
application used by the county's consortium, or the first processing
of an intake case using the county's Statewide Automated Welfare
System consortium application, whichever occurs first.
   (e) The department shall pay all Statewide Automated Welfare
System maintenance and operations costs for specified counties as
defined in this subdivision. A county qualified for Statewide
Automated Welfare System maintenance and operations funding is
defined as one having an average monthly, duplicated continuing case
count below 3,700 cases for the CalWORKs, nonassistance CalFresh,
public assistance CalFresh, Medi-Cal, foster care, refugee, and
county medical services programs. The department shall make its
determination based on actual case counts for the most current full
fiscal year. The department shall provide funding for the county
share-of-costs for those counties that annually meet this definition
until June 30, 2001.
   (f) Beginning October 1, 1998, the original 14 Interim Statewide
Automated System counties shall pay the county share of Statewide
Automated Welfare System maintenance and operations costs at the
county administrative cost sharing ratios otherwise provided by law.
Counties described in subdivision (e) shall not be subject to this
requirement.
   (g) The department shall pay the county share of Napa County's
Interim Statewide Automated Welfare System's application maintenance
costs through September 30, 1998. Beginning October 1, 1998, Napa
County shall pay the county share of the Interim Statewide Welfare
System application maintenance costs at the county administrative
cost sharing ratios otherwise provided by law.
   (h) (1) The county shall secure the prior approval of the
department for any use of Statewide Automated Welfare System
equipment, software or resources for activities and program
administration not eligible for federal financial participation.
   (2) The county shall allocate Statewide Automated Welfare System
costs to the respective programs eligible for federal financial
participation in accordance with the cost allocation requirements of
each program.
   (3) The county shall allocate as Statewide Automated Welfare
System costs only for activities and program administration eligible
for federal financial participation.
   (i) If a county uses Statewide Automated Welfare System equipment,
software, or resources for activities and program administration not
eligible for federal financial participation, and fails to comply
with provisions specified in subdivision (h), the county shall be
liable to the department for any disallowance due to that use by the
county of Statewide Automated Welfare System equipment, software, or
resources. In the event of such a loss, the department may recover
the loss by reducing funds otherwise due the county as state
participation in programs administered by the county under the
supervision of the department.
   (j) The department shall fund each county's share of the Central
Data Base for the Medi-Cal Eligibility Data System until the end of
the 12th month after Statewide Automated Welfare System production
begins, as defined in subdivision (d).
  SEC. 33.  Section 10830 of the Welfare and Institutions Code, as
amended by Section 241 of Chapter 179 of the Statutes of 2008, is
amended to read:
   10830.  (a) The department and the Health and Welfare Data Center
shall design, implement, and maintain a statewide fingerprint imaging
system for use in connection with the determination of eligibility
for benefits under the California Work Opportunity and Responsibility
to Kids Act (CalWORKs) program under Chapter 2 (commencing with
Section 11200) of Part 3 excluding Aid to Families with Dependent
Children-Foster Care (AFDC-FC), and CalFresh under Chapter 10
(commencing with Section 18900) of Part 6.
   (b) (1) Every applicant for, or recipient of, aid under Chapter 2
(commencing with Section 11200) of Part 3, excluding the AFDC-FC
program and Chapter 10 (commencing with Section 18900) of Part 6,
other than dependent children or persons who are physically unable to
be fingerprint imaged, shall, as a condition of eligibility for
assistance, be required to be fingerprint imaged.
   (2) A person subject to paragraph (1) shall not be eligible for
the CalWORKs program or CalFresh until fingerprint images are
provided, except as provided in subdivision (e). Ineligibility may
extend to an entire case of a person who refuses to provide
fingerprint images.
   (c) The department may adopt emergency regulations to implement
this section specifying the statewide fingerprint imaging
requirements and exemptions to the requirements in accordance with
the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code). The initial adoption of any emergency regulations implementing
this section, as added during the 1996 portion of the 1995-96
Regular Session, shall be deemed to be an emergency and necessary for
the immediate preservation of the public peace, health and safety,
or general welfare. Emergency regulations adopted pursuant to this
subdivision shall remain in effect for no more than 180 days.
   (d) Persons required to be fingerprint imaged pursuant to this
section shall be informed that fingerprint images obtained pursuant
to this section shall be used only for the purpose of verifying
eligibility and preventing multiple enrollments in the CalWORKs
program or CalFresh. The department, county welfare agencies, and all
others shall not use or disclose the data collected and maintained
for any purpose other than the prevention or prosecution of fraud.
Fingerprint imaging information obtained pursuant to this section
shall be confidential under Section 10850.
   (e) (1) Except as provided in paragraph (2), the fingerprint
imaging required under this chapter shall be scheduled only during
the application appointment or other regularly scheduled
appointments. No other special appointment shall be required. No
otherwise eligible individual shall be ineligible to receive benefits
under this chapter due to a technical problem occurring in the
fingerprint imaging system or as long as the person consents to and
is available for fingerprint imaging at a mutually agreed-upon time,
not later than 60 days from the initial attempt to complete
fingerprint imaging.
   (2) During the first nine months following implementation,
recipients may be scheduled for separate appointments to complete the
fingerprint imaging required by this section. Notice shall be mailed
first class by the department to recipients at least 10 days prior
to the appointment, and shall include procedures for the recipient to
reschedule the scheduled appointment within 30 days.
   (f) If the fingerprint image of an applicant or recipient of aid
to which this section applies matches another fingerprint image on
file, the county shall notify the applicant or recipient. In the
event that a match is appealed, the fingerprint image match shall be
verified by a trained individual and any matching case files reviewed
prior to the denial of benefits. Upon confirmation that the
applicant or recipient is receiving or attempting to receive multiple
CalWORKs program checks, a county fraud investigator shall be
notified.
  SEC. 34.  Section 10840 of the Welfare and Institutions Code is
amended to read:
   10840.  (a) The director and the Director of Health Care Services
shall implement a comprehensive program for the simplification of
administration of the Aid to Families with Dependent Children,
Medi-Cal, and CalFresh programs, which shall include the elements
identified in Section 10841. The director shall prepare appropriate
amendments in the state plan for these programs and waiver requests
of federal requirements that are necessary for the implementation of
this chapter.
   (b) The director and the Director of Health Care Services shall,
by formal order, waive the enforcement of those regulations and
standards necessary to implement the project with federal approval,
in order to implement the demonstration project.
  SEC. 35.  Section 10842 of the Welfare and Institutions Code is
amended to read:
   10842.  (a) The State Department of Social Services and the State
Department of Health Care Services shall jointly, in consultation
with the County Welfare Directors Association, establish a
consolidated county administrative performance system that shall
establish state subventions for county administrative costs for the
Aid to Families with Dependent Children program, Medi-Cal, and
CalFresh.
   (b) Subventions shall be based on actual caseload for each
program, including intake and continuing cases, experienced by each
county. Reimbursement per case shall be uniform for similar size
counties and shall be based on standards for workload performance, or
cases per worker, overhead rates, and salary levels for welfare
department personnel.
   (c) Administrative standards shall be based on actual performance
in the most recent fiscal year for which appropriate data is
available.
   (d) Allocation of costs among welfare programs shall, to the
extent feasible, be based on ongoing random moment studies. Sampling
rates shall be high enough to provide reasonably accurate and
statistically valid updates of prior allocation ratios.
   (e) This performance system shall be implemented in each county
upon the establishment of a statewide automated welfare system.
  SEC. 36.  Section 10850.31 of the Welfare and Institutions Code is
amended to read:
   10850.31.  (a) For the CalWORKs program and CalFresh only,
notwithstanding any other provision of law, the address, social
security number, and, if available, photograph of any applicant or
recipient shall be made available, on request, to any federal, state,
or local law enforcement officer if the officer furnishes the county
welfare department with the name of the applicant or recipient and
notifies the county welfare department that the following apply:
   (1) Any one of the following applies:
   (A) The applicant or recipient is fleeing to avoid prosecution,
custody, or confinement after conviction, for a crime that, under the
law of the place the applicant is fleeing, is a felony, or, in the
case of New Jersey, a high misdemeanor.
   (B) The applicant or recipient is violating a condition of
probation or parole imposed under state or federal law.
   (C) The applicant or recipient has information that is necessary
for the officer to conduct an official duty related to those issues
stated in paragraph (1) or (2).
   (2) Locating or apprehending the applicant or recipient is an
official duty of the law enforcement officer.
   (3) The request is being made in the proper exercise of an
official duty.
   (b) This section shall not authorize the release of a general list
identifying individuals applying for or receiving public social
services under the CalWORKs program or CalFresh.
   (c) This section shall be implemented only to the extent permitted
by federal law. 
  SEC. 37.    Section 10980 of the Welfare and
Institutions Code is amended to read:
   10980.  (a) Any person who, willfully and knowingly, with the
intent to deceive, makes a false statement or representation or
knowingly fails to disclose a material fact in order to obtain aid
under the provisions of this division or who, knowing he or she is
not entitled thereto, attempts to obtain aid or to continue to
receive aid to which he or she is not entitled, or to receive a
larger amount than that to which he or she is legally entitled, is
guilty of a misdemeanor, punishable by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine.
   (b) Any person who knowingly makes more than one application for
aid under the provisions of this division with the intent of
establishing multiple entitlements for any person for the same period
or who makes an application for that aid for a fictitious or
nonexistent person or by claiming a false identity for any person is
guilty of a felony, punishable by imprisonment in the state prison
for a period of 16 months, two years, or three years, by a fine of
not more than five thousand dollars ($5,000), or by both that
imprisonment and fine; or by imprisonment in the county jail for a
period of not more than one year, or by a fine of not more than one
thousand dollars ($1,000), or by both imprisonment and fine.
   (c) Whenever any person has, willfully and knowingly, with the
intent to deceive, by means of false statement or representation, or
by failing to disclose a material fact, or by impersonation or other
fraudulent device, obtained or retained aid under the provisions of
this division for himself or herself or for a child not in fact
entitled thereto, the person obtaining this aid shall be punished as
follows:
   (1) If the total amount of the aid obtained or retained is nine
hundred fifty dollars ($950) or less, by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine.
   (2) If the total amount of the aid obtained or retained is more
than nine hundred fifty dollars ($950), by imprisonment in the state
prison for a period of 16 months, two years, or three years, by a
fine of not more than five thousand dollars ($5,000), or by both that
imprisonment and fine; or by imprisonment in the county jail for a
period of not more than one year, by a fine of not more than one
thousand dollars ($1,000), or by both imprisonment and fine.
   (d) Any person who knowingly uses, transfers, acquires, or
possesses blank authorizations to participate in the federal
Supplemental Nutrition Assistance Program in any manner not
authorized by Chapter 10 (commencing with Section 18900) of Part 6
with the intent to defraud is guilty of a felony, punishable by
imprisonment in the state prison for a period of 16 months, two
years, or three years, by a fine of not more than five thousand
dollars ($5,000), or by both that imprisonment and fine.
   (e) Any person who counterfeits or alters or knowingly uses,
transfers, acquires, or possesses counterfeited or altered
authorizations to participate in the federal Supplemental Nutrition
Assistance Program or to receive CalFresh benefits or electronically
transferred benefits in any manner not authorized by the federal Food
Stamp Act of 1964 (Public Law 88-525 and all amendments thereto) or
the federal Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2011 et
seq.) or the federal regulations pursuant to the act is guilty of
forgery.
   (f) Any person who fraudulently appropriates CalFresh benefits,
electronically transferred benefits, or authorizations to participate
in the federal Supplemental Nutrition Assistance Program with which
he or she has been entrusted pursuant to his or her duties as a
public employee is guilty of embezzlement of public funds.
   (g) Any person who knowingly uses, transfers, sells, purchases, or
possesses CalFresh benefits, electronically transferred benefits, or
authorizations to participate in the federal Supplemental Nutrition
Assistance Program in any manner not authorized by Chapter 10
(commencing with Section 18900), of Part 6, or by the federal Food
Stamp Act of 1977 (Public Law 95-113 and all amendments thereto) or
the Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2011 et seq.) (1)
is guilty of a misdemeanor if the face value of the CalFresh benefits
or the authorizations to participate is nine hundred fifty dollars
($950) or less, and shall be punished by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine,
or (2) is guilty of a felony if the face value of the CalFresh
benefits or the authorizations to participate exceeds nine hundred
fifty dollars ($950), and shall be punished by imprisonment in the
state prison for a period of 16 months, two years, or three years, by
a fine of not more than five thousand dollars ($5,000), or by both
that imprisonment and fine, or by imprisonment in the county jail for
a period of not more than one year, or by a fine of not more than
one thousand dollars ($1,000), or by both imprisonment and fine.
   (h) (1) If the violation of subdivision (f) or (g) is committed by
means of an electronic transfer of benefits, in addition and
consecutive to the penalties for the violation, or attempted
violation, of those subdivisions, the court shall impose the
following punishment:
   (A) If the electronic transfer of benefits exceeds fifty thousand
dollars ($50,000), an additional term of one year in state prison.
   (B) If the electronic transfer of benefits exceeds one hundred
fifty thousand dollars ($150,000), an additional term of two years in
state prison.
   (C) If the electronic transfer of benefits exceeds one million
dollars ($1,000,000), an additional term of three years in state
prison.
   (D) If the electronic transfer of benefits exceeds two million
five hundred thousand dollars ($2,500,000), an additional term of
four years.
   (2) In any accusatory pleading involving multiple charges of
violations of subdivision (f) or (g), or both, committed by means of
an electronic transfer of benefits, the additional terms provided in
paragraph (1) may be imposed if the aggregate losses to the victims
from all violations exceed the amounts specified in this
                              paragraph and arise from a common
scheme or plan.
   (i) A person who is punished by an additional term of imprisonment
under another provision of law for a violation of subdivision (f) or
(g) shall not receive an additional term of imprisonment under
subdivision (h). 
   SEC. 37.    Section 10980 of the   Welfare
and Institutions Code   , as amended by Section 56 of
Chapter 28 of the Third Extraordinary Session of the Statutes of
2009, is amended to   read: 
   10980.  (a) Any person who, willfully and knowingly, with the
intent to deceive, makes a false statement or representation or
knowingly fails to disclose a material fact in order to obtain aid
under the provisions of this division or who, knowing he or she is
not entitled thereto, attempts to obtain aid or to continue to
receive aid to which he or she is not entitled, or to receive a
larger amount than that to which he or she is legally entitled, is
guilty of a misdemeanor, punishable by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine.
   (b) Any person who knowingly makes more than one application for
aid under the provisions of this division with the intent of
establishing multiple entitlements for any person for the same period
or who makes an application for that aid for a fictitious or
nonexistent person or by claiming a false identity for any person is
guilty of a felony, punishable by imprisonment in the state prison
for a period of 16 months, two years, or three years, by a fine of
not more than five thousand dollars ($5,000), or by both that
imprisonment and fine; or by imprisonment in the county jail for a
period of not more than one year, or by a fine of not more than one
thousand dollars ($1,000), or by both imprisonment and fine.
   (c) Whenever any person has, willfully and knowingly, with the
intent to deceive, by means of false statement or representation, or
by failing to disclose a material fact, or by impersonation or other
fraudulent device, obtained or retained aid under the provisions of
this division for himself or herself or for a child not in fact
entitled thereto, the person obtaining this aid shall be punished as
follows:
   (1) If the total amount of the aid obtained or retained is nine
hundred fifty dollars ($950) or less, by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine.
   (2) If the total amount of the aid obtained or retained is more
than nine hundred fifty dollars ($950), by imprisonment in the state
prison for a period of 16 months, two years, or three years, by a
fine of not more than five thousand dollars ($5,000), or by both that
imprisonment and fine; or by imprisonment in the county jail for a
period of not more than one year, by a fine of not more than one
thousand dollars ($1,000), or by both imprisonment and fine.
   (d) Any person who knowingly uses, transfers, acquires, or
possesses blank authorizations to participate in the federal
Supplemental Nutrition Assistance Program in any manner not
authorized by Chapter 10 (commencing with Section 18900) of Part 6
with the intent to defraud is guilty of a felony, punishable by
imprisonment in the state prison for a period of 16 months, two
years, or three years, by a fine of not more than five thousand
dollars ($5,000), or by both that imprisonment and fine.
   (e) Any person who counterfeits or alters or knowingly uses,
transfers, acquires, or possesses counterfeited or altered
authorizations to participate in the federal Supplemental Nutrition
Assistance Program or to receive  food stamps  
CalFresh benefits  or electronically transferred benefits in any
manner not authorized by the  federal  Food Stamp Act of
1964 (Public Law 88-525 and all amendments thereto) or the 
federal  Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2011 et
seq.) or the federal regulations pursuant to the act is guilty of
forgery.
   (f) Any person who fraudulently appropriates  food stamps
  CalFresh benefits  , electronically transferred
benefits, or authorizations to participate in the federal
Supplemental Nutrition Assistance Program with which he or she has
been entrusted pursuant to his or her duties as a public employee is
guilty of embezzlement of public funds.
   (g) Any person who knowingly uses, transfers, sells, purchases, or
possesses  food stamps   CalFresh benefits
 , electronically transferred benefits, or authorizations to
participate in the federal Supplemental Nutrition Assistance Program
in any manner not authorized by Chapter 10 (commencing with Section
18900), of Part 6, or by the federal Food Stamp Act of 1977 (Public
Law 95-113 and all amendments thereto) or the Food and Nutrition Act
of 2008 (7 U.S.C. Sec. 2011 et seq.) (1) is guilty of a misdemeanor
if the face value of the  food stamp   CalFresh
 benefits or the authorizations to participate is nine hundred
fifty dollars ($950) or less, and shall be punished by imprisonment
in the county jail for a period of not more than six months, by a
fine of not more than five hundred dollars ($500), or by both
imprisonment and fine, or (2) is guilty of a felony if the face value
of the  food stamps   CalFresh benefits 
or the authorizations to participate exceeds nine hundred fifty
dollars ($950), and shall be punished by imprisonment in the state
prison for a period of 16 months, two years, or three years, by a
fine of not more than five thousand dollars ($5,000), or by both that
imprisonment and fine, or by imprisonment in the county jail for a
period of not more than one year, or by a fine of not more than one
thousand dollars ($1,000), or by both imprisonment and fine.
   (h) (1) If the violation of subdivision (f) or (g) is committed by
means of an electronic transfer of benefits, in addition and
consecutive to the penalties for the violation, or attempted
violation, of those subdivisions, the court shall impose the
following punishment:
   (A) If the electronic transfer of benefits exceeds fifty thousand
dollars ($50,000), an additional term of one year in state prison.
   (B) If the electronic transfer of benefits exceeds one hundred
fifty thousand dollars ($150,000), an additional term of two years in
state prison.
   (C) If the electronic transfer of benefits exceeds one million
dollars ($1,000,000), an additional term of three years in state
prison.
   (D) If the electronic transfer of benefits exceeds two million
five hundred thousand dollars ($2,500,000), an additional term of
four years.
   (2) In any accusatory pleading involving multiple charges of
violations of subdivision (f) or (g), or both, committed by means of
an electronic transfer of benefits, the additional terms provided in
paragraph (1) may be imposed if the aggregate losses to the victims
from all violations exceed the amounts specified in this paragraph
and arise from a common scheme or plan.
   (i) A person who is punished by an additional term of imprisonment
under another provision of law for a violation of subdivision (f) or
(g) shall not receive an additional term of imprisonment under
subdivision (h).
   SEC. 37.5.    Section 10980 of the   Welfare
and Institutions Code   , as amended by Section 629 of
Chapter 15 of the Statutes of 2011, is amended to read: 
   10980.  (a) Any person who, willfully and knowingly, with the
intent to deceive, makes a false statement or representation or
knowingly fails to disclose a material fact in order to obtain aid
under the provisions of this division or who, knowing he or she is
not entitled thereto, attempts to obtain aid or to continue to
receive aid to which he or she is not entitled, or to receive a
larger amount than that to which he or she is legally entitled, is
guilty of a misdemeanor, punishable by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine.
   (b) Any person who knowingly makes more than one application for
aid under the provisions of this division with the intent of
establishing multiple entitlements for any person for the same period
or who makes an application for that aid for a fictitious or
nonexistent person or by claiming a false identity for any person is
guilty of a felony, punishable by imprisonment pursuant to
subdivision (h) of Section 1170 of the Penal Code for a period of 16
months, two years, or three years, by a fine of not more than five
thousand dollars ($5,000), or by both that imprisonment and fine; or
by imprisonment in the county jail for a period of not more than one
year, or by a fine of not more than one thousand dollars ($1,000), or
by both imprisonment and fine.
   (c) Whenever any person has, willfully and knowingly, with the
intent to deceive, by means of false statement or representation, or
by failing to disclose a material fact, or by impersonation or other
fraudulent device, obtained or retained aid under the provisions of
this division for himself or herself or for a child not in fact
entitled thereto, the person obtaining this aid shall be punished as
follows:
   (1) If the total amount of the aid obtained or retained is nine
hundred fifty dollars ($950) or less, by imprisonment in the county
jail for a period of not more than six months, by a fine of not more
than five hundred dollars ($500), or by both imprisonment and fine.
   (2) If the total amount of the aid obtained or retained is more
than nine hundred fifty dollars ($950), by imprisonment pursuant to
subdivision (h) of Section 1170 of the Penal Code for a period of 16
months, two years, or three years, by a fine of not more than five
thousand dollars ($5,000), or by both that imprisonment and fine; or
by imprisonment in the county jail for a period of not more than one
year, by a fine of not more than one thousand dollars ($1,000), or by
both imprisonment and fine.
   (d) Any person who knowingly uses, transfers, acquires, or
possesses blank authorizations to participate in the federal
Supplemental Nutrition Assistance Program in any manner not
authorized by Chapter 10 (commencing with Section 18900) of Part 6
with the intent to defraud is guilty of a felony, punishable by
imprisonment pursuant to subdivision (h) of Section 1170 of the Penal
Code for a period of 16 months, two years, or three years, by a fine
of not more than five thousand dollars ($5,000), or by both that
imprisonment and fine.
   (e) Any person who counterfeits or alters or knowingly uses,
transfers, acquires, or possesses counterfeited or altered
authorizations to participate in the federal Supplemental Nutrition
Assistance Program or to receive  food stamps  
CalFresh benefits  or electronically transferred benefits in any
manner not authorized by the  federal  Food Stamp Act of
1964 (Public Law 88-525 and all amendments thereto) or the
federal  Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2011
et seq.) or the federal regulations pursuant to the act is guilty of
forgery.
   (f) Any person who fraudulently appropriates  food stamps
  CalFresh benefits  , electronically transferred
benefits, or authorizations to participate in the federal
Supplemental Nutrition Assistance Program with which he or she has
been entrusted pursuant to his or her duties as a public employee is
guilty of embezzlement of public funds.
   (g) Any person who knowingly uses, transfers, sells, purchases, or
possesses  food stamps   CalFresh benefits
 , electronically transferred benefits, or authorizations to
participate in the federal Supplemental Nutrition Assistance Program
in any manner not authorized by Chapter 10 (commencing with Section
18900), of Part 6, or by the federal Food Stamp Act of 1977 (Public
Law 95-113 and all amendments thereto) or the Food and Nutrition Act
of 2008 (7 U.S.C. Sec. 2011 et seq.) (1) is guilty of a misdemeanor
if the face value of the food stamp benefits or the authorizations to
participate is nine hundred fifty dollars ($950) or less, and shall
be punished by imprisonment in the county jail for a period of not
more than six months, by a fine of not more than five hundred dollars
($500), or by both imprisonment and fine, or (2) is guilty of a
felony if the face value of the  food stamps  
CalFresh benefits  or the authorizations to participate exceeds
nine hundred fifty dollars ($950), and shall be punished by
imprisonment pursuant to subdivision (h) of Section 1170 of the Penal
Code for a period of 16 months, two years, or three years, by a fine
of not more than five thousand dollars ($5,000), or by both that
imprisonment and fine, or by imprisonment in the county jail for a
period of not more than one year, or by a fine of not more than one
thousand dollars ($1,000), or by both imprisonment and fine.
   (h) (1) If the violation of subdivision (f) or (g) is committed by
means of an electronic transfer of benefits, in addition and
consecutive to the penalties for the violation, or attempted
violation, of those subdivisions, the court shall impose the
following punishment:
   (A) If the electronic transfer of benefits exceeds fifty thousand
dollars ($50,000), an additional term pursuant to subdivision (h) of
Section 1170 of the Penal Code of one year.
   (B) If the electronic transfer of benefits exceeds one hundred
fifty thousand dollars ($150,000), an additional term pursuant to
subdivision (h) of Section 1170 of the Penal Code of two years.
   (C) If the electronic transfer of benefits exceeds one million
dollars ($1,000,000), an additional term pursuant to subdivision (h)
of Section 1170 of the Penal Code of three years.
   (D) If the electronic transfer of benefits exceeds two million
five hundred thousand dollars ($2,500,000), an additional term of
four years.
   (2) In any accusatory pleading involving multiple charges of
violations of subdivision (f) or (g), or both, committed by means of
an electronic transfer of benefits, the additional terms provided in
paragraph (1) may be imposed if the aggregate losses to the victims
from all violations exceed the amounts specified in this paragraph
and arise from a common scheme or plan.
   (i) A person who is punished by an additional term of imprisonment
under another provision of law for a violation of subdivision (f) or
(g) shall not receive an additional term of imprisonment under
subdivision (h).
  SEC. 38.  Section 11006.6 of the Welfare and Institutions Code is
amended to read:
   11006.6.  (a) The department may establish and operate a central
benefit issuance system in one or more counties whereby grants in aid
paid pursuant to this part or any other program administered by the
department and cash payments under CalFresh may be issued directly to
the recipient by the Controller. Warrants representing payments
under this system shall be drawn on the Central Benefit Issuance
Fund. In counties where the central benefit issuance system is in
operation, Sections 15150, 15150.5, 15151, and 15153, and any other
related section shall not apply with respect to benefits.
   (b) (1) In a case of emergency or immediate need by a recipient
that cannot be addressed in a timely manner, as set forth in existing
law, by issuance of a Controller's warrant, those counties, acting
as agents for the department, shall authorize payment to be issued by
the Central Benefit Issuance System directly to recipients from a
department account designated for that purpose.
   (2) Any check issued pursuant to paragraph (1) that remains unpaid
for 180 days after it becomes payable shall be void and shall be
canceled by the department and redeposited to the account from which
it is drawn. The department shall cause to be printed prominently on
the face of any check issued pursuant to paragraph (1) a notice of
the requirements of this paragraph.
   (c) The department shall ensure that aid issued through a central
benefit issuance system is delivered timely and that the system does
not reduce the accessibility of benefits and services to the
recipient.
  SEC. 39.  Section 11023.5 of the Welfare and Institutions Code is
amended to read:
   11023.5.  (a) Any applicant or recipient of benefits under the Aid
to Families with Dependent Children, CalFresh, and Medi-Cal
programs, who delivers a document which has been requested by the
county welfare department shall, upon the applicant's or recipient's
request, be provided with a written receipt indicating that the
county welfare department has received the document. A notice which
explains an applicant's and recipient's right to receipts upon
request shall be prominently posted by the county welfare department
at the location where the document is to be delivered. The receipt
shall be issued at the time the document is delivered.
   (1) A county which maintains a system of logging hand delivered
documents is exempt from the requirements of this subdivision.
   (2) County welfare departments which provide receipts for all hand
delivered documents without a request by an applicant or recipient
shall be exempt from the notice posting requirement.
   (b) The county welfare department shall only provide receipts for
documents which have been delivered in person to a county welfare
department employee other than the applicant's or recipient's
regularly assigned caseworker and to the location in which or through
which the caseworker conducts his or her business. Only one receipt
is required for monthly income reports and their supporting documents
which are hand delivered. Monthly income reports and other requested
documents which have been mailed shall not be subject to the
requirements of this section.
   (c) In consultation with the County Welfare Directors Association
and the Coalition of California Welfare Rights Organizations, the
department shall develop the notice which informs applicants and
recipients of the right to receipts for hand delivered documents and
shall develop minimum guidelines for county receipt forms.
   (d) As used in this section, "applicant or recipient" means an
applicant or recipient of benefits under the Aid to Families with
Dependent Children, CalFresh, and Medi-Cal programs.
  SEC. 40.  Section 11053.2 of the Welfare and Institutions Code is
amended to read:
   11053.2.  (a) Notwithstanding any other law, the department shall
establish a process of intercounty transfer of eligibility for
CalFresh benefits provided under Chapter 10 (commencing with Section
18900) of Part 6 when a recipient changes residence from one county
to another within the state. The intercounty transfer process shall
facilitate a recipient's move from one county to another without a
break in benefits and without requiring a new application to be
submitted to the new county of residence.
   (b) (1) For CalFresh recipients who are receiving CalWORKs
benefits pursuant to Chapter 2 (commencing with Section 11200), the
intercounty transfer process utilized for CalWORKs shall be used.
   (2) For CalFresh recipients who are receiving Medi-Cal benefits
pursuant to Chapter 7 (commencing with Section 14000), but are not
receiving CalWORKs benefits pursuant to Chapter 2 (commencing with
Section 11200), the intercounty transfer process utilized for the
Medi-Cal program shall be used.
   (3) This subdivision shall be implemented no later than April 1,
2011.
   (c) For CalFresh recipients who are not receiving CalWORKs or
Medi-Cal benefits as described in paragraphs (1) and (2) of
subdivision (b), an intercounty transfer process shall be developed,
in consultation with representatives of county human services
departments and advocates for recipients. To the greatest extent
possible, the process shall be simple, client friendly, ensure the
client does not need to provide copies of documents that were
previously provided to the prior county of residence, build on
existing processes for the programs described in paragraphs (1) and
(2) of subdivision (b), and minimize workload for county eligibility
operations. The process developed pursuant to this subdivision shall
be implemented no later than July 1, 2011.
   (d) Upon the implementation of the intercounty transfer procedures
set forth in this section, it shall be the responsibility of a
recipient changing residence from one county to another within the
state to notify his or her prior county of residence of his or her
move. The prior county of residence shall notify the new county of
the recipient's move as soon as the recipient's location in the new
county is known. The new county of residence shall be responsible for
determining the recipient's continued eligibility for payment of
CalFresh benefits. To the extent permitted by federal law, the new
county of residence shall not be required to interview persons in the
CalFresh household to determine continued eligibility until the next
scheduled recertification or other regularly scheduled interview.
   (e) Notwithstanding the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department may implement this section
through all-county letters, or similar instructions from the director
no later than April 1, 2011, with respect to subdivision (b), and no
later than July 1, 2011, with respect to subdivision (c).
   (f) The department shall adopt regulations as otherwise necessary
to implement this section no later than July 1, 2012. Emergency
regulations adopted for implementation of this section may be adopted
by the director in accordance with the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code). The adoption of emergency
regulations shall be deemed to be an emergency and necessary for
immediate preservation of the public peace, health and safety, or
general welfare. The emergency regulations shall be exempt from
review by the Office of Administrative Law. The emergency regulations
authorized by this section shall be submitted to the Office of
Administrative Law for filing with the Secretary of State and shall
remain in effect for no more than 180 days.
  SEC. 41.  Section 11104.1 of the Welfare and Institutions Code is
amended to read:
   11104.1.  The State Department of Social Services and the State
Department of Health Care Services shall not take any compliance,
disallowance, penalty, or other regulatory action against a county,
as long as the United States Department of Health and Human Services
has not taken any compliance, disallowance, penalty, or other action
against the state, with respect to any error in the county's
determination to make an individual eligible for benefits under the
Aid to Families with Dependent Children, CalFresh, and Medi-Cal
programs based on citizenship or immigration status, under any of the
following circumstances:
   (a) The county has determined the eligibility based on a
verification of satisfactory immigration status by the Immigration
and Naturalization Service.
   (b) The county was required by federal law to provide the
applicant or recipient a reasonable opportunity to submit
documentation.
   (c) The county was required by federal law to wait for the
response of the Immigration and Naturalization Service to the county'
s request for official verification of the immigration status of the
individual.
   (d) A fair hearing process was required pursuant to federal law.
  SEC. 42.  Section 11155 of the Welfare and Institutions Code is
amended to read:
   11155.  (a) Notwithstanding Section 11257, in addition to the
personal property or resources permitted by other provisions of this
part, and to the extent permitted by federal law, an applicant or
recipient for aid under this chapter including an applicant or
recipient under Chapter 2 (commencing with Section 11200) may retain
countable resources in an amount equal to the amount permitted under
federal law for qualification for the federal Supplemental Nutrition
Assistance Program, administered in California as CalFresh.
   (b) The county shall determine the value of exempt personal
property other than motor vehicles in conformance with methods
established under CalFresh.
   (c) (1) The value of licensed vehicles shall be the greater of the
fair market value as provided in paragraph (3) or the equity value,
as provided in paragraph (5), unless an exemption as provided in
paragraph (2) applies.
   (2) The entire value of any licensed vehicle shall be exempt if
any of the following apply:
   (A) It is used primarily for income-producing purposes.
   (B) It annually produces income that is consistent with its fair
market value, even if used on a seasonal basis.
   (C) It is necessary for long distance travel, other than daily
commuting, that is essential for the employment of a family member.
   (D) It is used as the family's residence.
   (E) It is necessary to transport a physically disabled family
member, including an excluded disabled family member, regardless of
the purpose of the transportation.
   (F) It would be exempted under any of subparagraphs (A) to (D),
inclusive, but the vehicle is not in use because of temporary
unemployment.
   (G) It is used to carry fuel for heating for home use, when the
transported fuel or water is the primary source of fuel or water for
the family.
   (H) The equity value of the vehicle is one thousand five hundred
one dollars ($1,501) or less.
   (3) Each licensed vehicle that is not exempted under paragraph (2)
shall be individually evaluated for fair market value, and any
portion of the value that exceeds four thousand six hundred fifty
dollars ($4,650) shall be attributed in full market value toward the
family's resource level, regardless of any encumbrances on the
vehicle, the amount of the family's investment in the vehicle, and
whether the vehicle is used to transport family members to and from
employment.
   (4) Any licensed vehicle that is evaluated for fair market value
shall also be evaluated for its equity value, except for the
following:
   (A) One licensed vehicle per adult family member, regardless of
the use of the vehicle.
   (B) Any licensed vehicle, other than those to which subparagraph
(A) applies, that is driven by a family member under 18 years of age
to commute to, and return from his or her place of employment or
place of training or education that is preparatory to employment, or
to seek employment. This subparagraph applies only to vehicles used
during a temporary period of unemployment.
   (5) For purposes of this section, the equity value of a licensed
vehicle is the fair market value less encumbrances.
   (d) The value of any unlicensed vehicle shall be the fair market
                                          value less encumbrances,
unless an exemption applies under paragraph (2).
  SEC. 43.  Section 11155.3 of the Welfare and Institutions Code is
amended to read:
   11155.3.  (a) It is the intent of the Legislature in enacting this
section to provide counties and recipients of aid under Chapter 2
(commencing with Section 11200) with increased flexibility to
determine allowable business expenses and income reporting periods in
order to facilitate local microenterprise development, maximize
opportunities for a family to become self-sufficient, and reduce
unnecessary paperwork processing by county staff.
   (b) Self-employment net income shall be used in computing the aid
grant under Chapter 2 (commencing with Section 11200).
   (c) For purposes of determining the self-employment net income for
applicants and recipients of aid under Chapter 2 (commencing with
Section 11200), applicants and recipients may choose to deduct a
standard deduction of 40 percent of gross income or verified actual
self-employment expenses to the same extent allowed in CalFresh
pursuant to Chapter 10 (commencing with Section 18900) of Part 6.
Applicants and recipients may change the method of deduction only
when a redetermination of eligibility is conducted by the county or
every six months, whichever occurs first.
  SEC. 44.  Section 11265.1 of the Welfare and Institutions Code, as
added by Section 30 of Chapter 1022 of the Statutes of 2002, is
amended to read:
   11265.1.  (a) In addition to the requirement for an annual
redetermination of eligibility, counties shall redetermine recipient
eligibility and grant amounts on a quarterly basis using prospective
budgeting. Counties shall use the information reported on a recipient'
s quarterly report form to prospectively determine eligibility and
grant amount for the following quarterly reporting period.
   (b) A quarterly reporting period shall be three consecutive
calendar months. The recipient shall submit one quarterly report form
for each quarterly reporting period. Counties shall provide a
quarterly report form to recipients at the end of the second month of
the quarterly reporting period, and recipients shall return the
completed quarterly report form with required verification to the
county by the 11th day of the third month of the quarterly reporting
period.
   (c) Counties may establish staggered quarterly reporting cycles
based on factors established or approved by the department,
including, but not limited to, application date or case number.
   (d) The quarterly report form shall be signed under penalty of
perjury, and shall include only information necessary to determine
CalWORKs and CalFresh eligibility and calculate the CalWORKs grant
amount and CalFresh allotment, as specified by the department. The
form shall be as comprehensible as possible for recipients and shall
require recipients to provide the following:
   (1) Information about income received during the second month of
the quarterly reporting period.
   (2) Information about income that the recipient anticipates
receiving during the following quarterly reporting period.
   (3) Any other changes to facts required to be reported, together
with any changes to those facts that the recipient anticipates will
occur. The recipient shall provide verification as specified by the
department with the quarterly report form.
   (e) A quarterly report form shall be considered complete if the
following requirements, as specified by the department, are met:
   (1) The form is signed no earlier than the first day of the third
month of the quarterly reporting period by the persons specified by
the department.
   (2) All questions and items pertaining to CalWORKs and CalFresh
eligibility and grant amount are answered.
   (3) Verification required by the department is provided.
   (f) If a recipient fails to submit a complete quarterly report
form, as defined in subdivision (e), by the 11th day of the third
month of the quarterly reporting period, the county shall provide the
recipient with a notice that the county will terminate benefits at
the end of the month. Prior to terminating benefits, the county shall
attempt to make personal contact to remind the recipient that a
completed report is due, or, if contact is not made, shall send a
reminder notice to the recipient no later than five days prior to the
end of the month. Any discontinuance notice shall be rescinded if a
complete report is received by the first working day of the first
month of the following quarterly reporting period.
   (g) The county may determine, at any time prior to the last day of
the calendar month following discontinuance for nonsubmission of a
quarterly report form, that a recipient had good cause for failing to
submit a complete quarterly report form, as defined in subdivision
(e), by the first working day of the month following discontinuance.
If the county finds a recipient had good cause, as defined by the
department, it shall rescind the discontinuance notice. Good cause
exists only when the recipient cannot reasonably be expected to
fulfill his or her reporting responsibilities due to factors outside
of the recipient's control.
  SEC. 45.  Section 11265.5 of the Welfare and Institutions Code is
amended to read:
   11265.5.  (a) (1) The department may, subject to the requirements
of federal regulations and Section 18204, conduct three pilot
projects, to be located in the Counties of Los Angeles, Merced, and
Santa Clara, upon approval of the department and the participating
counties. The pilot projects shall test the reporting systems
described in subparagraphs (A), (B), and (C) of paragraph (4).
   (2) (A) The pilot project conducted in Los Angeles County shall
test one or both reporting systems described in subparagraphs (A) and
(B) of paragraph (4). The pilot project population for each test
shall be limited to 10,000 cases.
   (B) The pilot projects in the other counties shall test one of the
reporting systems described in subparagraph (A) or (C) of paragraph
(4) and shall be limited to 2,000 cases per project.
   (3) (A) The pilot projects shall be designed and conducted
according to standard scientific principles, and shall be in effect
for a period of 24 months.
   (B) The projects may be extended an additional year upon the
approval of the department.
   (C) The projects shall be designed to compare the monthly
reporting system with alternatives described in paragraph (4) as to
all of the following phenomena:
   (i) Administrative savings resulting from reduced worker time
spent in reviewing monthly reports.
   (ii) The amount of cash assistance paid to families.
   (iii) The rate of administrative errors in cases and payments.
   (iv) The incidence of underpayments and overpayments and the costs
to recipients and the administering agencies of making corrective
payments and collecting overpayments.
   (v) Rates at which recipients lose eligibility for brief periods
due to failure to submit a monthly report but file new applications
for aid and thereafter are returned to eligible status.
   (vi) Cumulative benefits and costs to each level of government and
to aid recipients resulting from each reporting system.
   (vii) The incidence of, and ability to, prosecute fraud.
   (viii) Ease of use by clients.
   (ix) Case errors and potential sanction costs associated with
those errors.
   (4) The pilot projects shall adopt reporting systems providing for
one or more of the following:
   (A) A reporting system that requires families with no income or
whose only income is comprised of old age, survivors, or disability
insurance benefits administered pursuant to Subchapter 2 (commencing
with Section 401) of Chapter 7 of Title 42 of the United States Code,
and with no recent work history to report changes in circumstances
that affect eligibility and grant amount as changes occur. These
changes shall be reported directly to the county welfare department
in person, in writing, or by telephone. In all cases in which monthly
reporting is not required, a form advising recipients of what
changes must be reported, and how they may be reported shall be
provided to recipients of aid along with benefit payments each month.

   (B) A reporting system that permits families with no income or
whose only income is comprised of old age, survivors, or disability
insurance benefits administered pursuant to Subchapter 2 (commencing
with Section 401) of Chapter 7 of Title 42 of the United States Code,
and with no changes in eligibility criteria, to report
electronically monthly, using either an audio response or the
CalFresh online issuance and recording system, or a combination of
both. Adequate instruction and training shall be provided to county
welfare department staff and to recipients who choose to use this
system prior to its implementation.
   (C) A reporting system that requires all families to report
changes in circumstances that affect eligibility and grant amount as
changes occur. The changes shall be reported directly to the county
welfare department in person, in writing, or by telephone. In all
cases in which monthly reporting is not required, a form advising
recipients of what changes must be reported, and how they may be
reported, shall be provided to recipients of aid along with benefit
payments each month.
   (b) (1) The participating counties shall be responsible for
preparing federal demonstration project proposals, to be submitted by
the department, upon the department's review and approval of the
proposals, to the federal agency on the counties' behalf. The
development, operation, and evaluation of the pilot projects shall
not result in an increase in the state allocation of county
administrative funds.
   (1.5) Each pilot county shall prepare and submit quarterly
reports, annual reports, and a final report to the department.
   (2) Each quarterly report shall be submitted no later than 30
calendar days after the end of the quarter.
   (3) Each annual report shall be submitted no later than 45 days
after the end of the year.
   (4) (A) Each pilot county shall submit a final report not later
than 90 days following completion of the pilot projects required by
this section.
   (B) (i) As part of the final report, the pilot counties shall
prepare and submit evaluations of the pilot projects to the
department.
   (ii) Each evaluation shall include, but not be limited to, an
analysis of the factors set forth in paragraph (3) of subdivision (a)
compared to each other and the current reporting systems in both the
AFDC program and CalFresh. The final evaluations shall be prepared
by an independent consultant or consultants contracted with for that
purpose prior to the commencement of the projects.
   (C) The department shall review and approve the evaluations
submitted by the pilot counties and shall submit them to the
appropriate policy and fiscal committees of the Legislature.
   (c) The department may terminate any or all of the pilot projects
implemented pursuant to this section after a period of six months of
operation if one or more of the pilot counties submits data to the
department, or information is otherwise received, indicating that the
pilot project or projects are not cost-effective or adversely impact
recipients or county or state operations based on the factors set
forth in subparagraph (C) of paragraph (3) of subdivision (a).
   (d) The pilot projects shall be implemented only upon receipt of
the appropriate federal waivers.
  SEC. 46.  Section 11265.6 of the Welfare and Institutions Code is
amended to read:
   11265.6.  (a) The department may conduct up to five demonstrations
of alternatives to the current monthly reporting system, CalFresh
recertification, and AFDC redeterminations. These demonstrations
shall be designed to reduce paperwork, achieve administrative
savings, and maintain or enhance program integrity. The department,
in consultation with the counties that request designation as a
demonstration county, shall determine the scope of the
demonstrations.
   (b) The director may waive, with federal approval, the enforcement
of specific federal Supplemental Nutrition Assistance Program
requirements, regulations, and standards necessary to conduct these
demonstrations.
  SEC. 47.  Section 11265.7 of the Welfare and Institutions Code is
amended to read:
   11265.7.  (a) The department may conduct a demonstration in up to
three counties of alternatives to the current monthly reporting
system, CalFresh recertification, and AFDC redeterminations for
recipients of alternative assistance. This demonstration shall be
designed to reduce paperwork, achieve administrative savings, and
maintain or enhance program integrity. The department, in
consultation with the counties which request designation as a
demonstration county shall determine the scope of the demonstrations.

   (b) The director may waive, with federal approval, the enforcement
of specific federal Supplemental Nutrition Assistance Program
requirements, regulations, and standards necessary to conduct these
demonstrations.
  SEC. 48.  Section 11266 of the Welfare and Institutions Code is
amended to read:
   11266.  (a) At the time of application, the county shall determine
whether the applicant needs immediate assistance because the
applicant does not have sufficient resources to meet his or her
emergency needs, and shall determine whether the applicant is
apparently eligible for aid under this chapter.
   (1) The county shall determine that the applicant needs immediate
assistance if the family's total available liquid resources, both
nonexempt and exempt, are less than one hundred dollars ($100) and
there is an emergency situation, whether foreseeable or not. Examples
of emergency situations include, but are not limited to, lack of
housing, lack of food, notice of termination or loss of utility
service, lack of essential clothing (including diapers), and
inability to meet essential transportation needs.
   (2) Apparent eligibility exists when evidence presented by the
applicant or which is otherwise available to the county welfare
department and the information provided on the application documents
indicate that there would be eligibility for aid under this chapter
if the evidence and information were verified. An alien applicant who
does not provide verification of his or her eligible alien status,
or a woman with no eligible children who does not provide medical
verification of pregnancy, shall not be considered to be apparently
eligible under this subdivision.
   (b) If an applicant needs immediate assistance, and is apparently
eligible for aid as defined in subdivision (a), the county shall pay
the applicant two hundred dollars ($200) or the maximum amount for
which that applicant is eligible, whichever is less. The advance
payment shall be made by the end of the first working day following
the request for that aid. The county shall verify the applicant's
eligibility for aid within 15 working days of the date that immediate
need is requested, and advance payments made under this section
shall be offset against the first grant payment made to the
recipient.
   (c) An applicant's receipt of a notice of eviction, including a
three-day notice to pay or quit, shall constitute an emergency
situation under subdivision (a), irrespective of the one hundred
dollar ($100) resource test, if the applicant has insufficient income
or resources to pay the rent owing. In those cases, the county shall
give the applicant the option of receiving an immediate advance on
the grant as described in subdivision (b), or an expedited
determination of eligibility for aid. Before an applicant decides
between these two options, the county shall fully apprise the
applicant, in writing, of all information necessary to establish
eligibility for aid. If an applicant requests expedited determination
of eligibility for aid, the county shall complete the determination
of eligibility for aid under this chapter, and, if the applicant is
determined to be eligible, issue payment of the full prorated grant
no more than three working days from the request for immediate need.
If the eligibility determination is not made within this three-day
period, the county shall immediately pay the applicant two hundred
dollars ($200) or the maximum amount for which the applicant is
eligible, whichever is less, as specified in subdivisions (a) and
(b). The county shall verify the applicant's eligibility within 15
working days of the date of the request for immediate assistance, and
advance payments made under this subdivision shall be offset against
the first grant payment made to the recipient.
   (d) (1) The county may deny an immediate advance payment if the
applicant's only immediate need is homelessness and this need will be
met by issuance of nonrecurring special needs payment in accordance
with subdivision (f) of Section 11450, or if the applicant's only
immediate need is lack of food and this need will be met by issuance
of CalFresh benefits within one working day of the request therefor.
With regard to all other immediate needs, an advance payment may be
denied and the applicant referred to another public or private
program or resource, if all of the following conditions are met:
   (A) Not more than one referral is made and the referral, when
made, is to meet no more than one need.
   (B) The county has verified in advance that the specific need can
be satisfactorily addressed by the other program or resource
immediately.
   (C) Travel to the other program or resource will not impose a
hardship on the applicant.
   (2) If, for any reason, the other program or resource does not
satisfactorily meet the applicant's need, the applicant shall be
immediately issued an advance payment, as specified in subdivision
(b).
   (3) Except in the case of an applicant whose only need is lack of
food and the need is met with the issuance of CalFresh benefits
within one working day of the request, where an applicant's immediate
need is met by an alternative program or resource authorized in this
subdivision, the county shall verify the applicant's eligibility for
aid within 15 working days of the date of request.
   (e) A denial of an immediate need application shall not constitute
a denial of the application for aid unless it is based upon the
failure to meet relevant eligibility requirements. 
  SEC. 49.    Section 11266.5 of the Welfare and
Institutions Code is amended to read:
   11266.5.  (a) Every applicant for aid under this chapter shall be
informed of the availability of lump-sum diversion services to
resolve the circumstances that require the family to apply for
assistance prior to the family's approval for aid.
   (b) When an applicant is determined to be eligible for assistance
under this chapter, the county shall assess whether the applicant
would benefit from the lump-sum diversion program. The county shall
make this determination in its sole discretion. In making this
determination, the county shall consider whether the applicant is
likely to be able to avoid the need for extended assistance beyond
the diversion period if the family was provided one-time assistance.
In making this determination, the county may consider any of the
following:
   (1) The applicant's employment history.
   (2) The likelihood of the applicant obtaining immediate full-time
employment.
   (3) The applicant's general prospect for obtaining full-time
employment.
   (4) The applicant's need for cash assistance to pay for housing or
substantial and unforseen expenses or work-related expenses.
   (5) Housing stability.
   (6) The adequacy of the applicant's child care arrangements, if
applicable.
   (c) If the county determines, pursuant to subdivision (b), that an
applicant could benefit from a lump-sum diversion payment, the
county shall inform the applicant of its determination.
   (d) An applicant for aid under this chapter may either participate
in the lump-sum diversion program or decline participation in
diversion and, instead, receive aid as otherwise provided for in this
chapter.
   (e) Lump-sum diversion services provided under this section may
include any cash or noncash payment and shall be negotiated by the
county and the applicant in order to assist the applicant in avoiding
the need for aid under this chapter.
   (f) If, after accepting a diversion payment pursuant to this
section, the individual reapplies for aid under this chapter within
the amount of time that corresponds with the number of months of aid
that would have been received under this chapter that was received as
a diversion payment, excluding a partial month, and he or she is
determined to be eligible for aid, the county shall, at the option of
the recipient, either recoup from the recipient's grant, over a
period of time to be determined by the county, the amount of the
diversion payment that the recipient received, or count the period of
time that corresponds to the number of months of aid that would have
been received, excluding a partial month of aid, towards the
60-month time limit on aid specified in subdivision (b) of Section
11454.
   (g) To the extent permitted by federal law, lump-sum diversion
payments shall not be considered income for the purpose of
determining eligibility for CalFresh benefits.
   (h) Any child support collected by the applicant or recovered by
the county shall not be used to offset the diversion payment.
   (i) During the period of the diversion, the applicant family shall
be eligible for Medi-Cal and child care assistance pursuant to
Article 15.5 (commencing with Section 8350) of Chapter 2 of Part 6 of
the Education Code, if otherwise eligible. 
   SEC. 49.    Section 11266.5 of the   Welfare
and Institutions Code   , as amended by Section 6 of
Chapter 8 of the Statutes of   2011, is amended to read:

   11266.5.  (a) Every applicant for aid under this chapter shall be
informed of the availability of lump-sum diversion services to
resolve the circumstances that require the family to apply for
assistance prior to the family's approval for aid.
   (b) When an applicant is determined to be eligible for assistance
under this chapter, the county shall assess whether the applicant
would benefit from the lump-sum diversion program. The county shall
make this determination in its sole discretion. In making this
determination, the county shall consider whether the applicant is
likely to be able to avoid the need for extended assistance beyond
the diversion period if the family was provided one-time assistance.
In making this determination, the county may consider any of the
following:
   (1) The applicant's employment history.
   (2) The likelihood of the applicant obtaining immediate full-time
employment.
   (3) The applicant's general prospect for obtaining full-time
employment.
   (4) The applicant's need for cash assistance to pay for housing or
substantial and unforseen expenses or work-related expenses.
   (5) Housing stability.
   (6) The adequacy of the applicant's child care arrangements, if
applicable.
   (c) If the county determines, pursuant to subdivision (b), that an
applicant could benefit from a lump-sum diversion payment, the
county shall inform the applicant of its determination.
   (d) An applicant for aid under this chapter may either participate
in the lump-sum diversion program or decline participation in
diversion and, instead, receive aid as otherwise provided for in this
chapter.
   (e) Lump-sum diversion services provided under this section may
include any cash or noncash payment and shall be negotiated by the
county and the applicant in order to assist the applicant in avoiding
the need for aid under this chapter.
   (f) If, after accepting a diversion payment pursuant to this
section, the individual reapplies for aid under this chapter within
the amount of time that corresponds with the number of months of aid
that would have been received under this chapter that was received as
a diversion payment, excluding a partial month, and he or she is
determined to be eligible for aid, the county shall, at the option of
the recipient, either recoup from the recipient's grant, over a
period of time to be determined by the county, the amount of the
diversion payment that the recipient received, or count the period of
time that corresponds to the number of months of aid that would have
been received, excluding a partial month of aid, towards the time
limits on aid specified in subdivision (a) of Section 11454.
   (g) To the extent permitted by federal law, lump-sum diversion
payments shall not be considered income for the purpose of
determining eligibility for  food stamps  
CalFresh benefits  .
   (h) Any child support collected by the applicant or recovered by
the county shall not be used to offset the diversion payment.
   (i) During the period of the diversion, the applicant family shall
be eligible for Medi-Cal and child care assistance pursuant to
Article 15.5 (commencing with Section 8350) of Chapter 2 of Part 6 of
the Education Code, if otherwise eligible.
  SEC. 50.  Section 11322.6 of the Welfare and Institutions Code is
amended to read:
   11322.6.  The welfare-to-work plan developed by the county welfare
department and the participant pursuant to this article shall
provide for welfare-to-work activities. Welfare-to-work activities
may include, but are not limited to, any of the following:
   (a) Unsubsidized employment.
   (b) Subsidized private sector employment.
   (c) Subsidized public sector employment.
   (d) Work experience, which means public or private sector work
that shall help provide basic job skills, enhance existing job skills
in a position related to the participant's experience, or provide a
needed community service that will lead to employment. Unpaid work
experience shall be limited to 12 months, unless the county welfare
department and the recipient agree to extend this period by an
amendment to the welfare-to-work plan. The county welfare department
shall review the work experience assignment as appropriate and make
revisions as necessary to ensure that it continues to be consistent
with the participant's plan and effective in preparing the
participant to attain employment.
                               (e) On-the-job training.
   (f) (1) Grant-based on-the-job training, which means public or
private sector employment or on-the-job training in which the
recipient's cash grant, or a portion thereof, or the aid grant
savings resulting from employment, or both, is diverted to the
employer as a wage subsidy to partially or wholly offset the payment
of wages to the participant, so long as the total amount diverted
does not exceed the family's maximum aid payment.
   (2) A county shall not assign a participant to grant-based
on-the-job training unless and until the participant has voluntarily
agreed to participate in grant-based on-the-job training by executing
a voluntary agreement form, which shall be developed by the
department. The agreement shall include, but not be limited to,
information on the following:
   (A) How job termination or another event will not result in loss
of the recipient's grant funds, pursuant to department regulations.
   (B) (i) How to obtain the federal Earned Income Tax Credit (EITC),
including the Advance EITC, and increased CalFresh benefits, which
may become available due to increased earned income.
   (ii) This subparagraph shall only become operative when and to the
extent that the department determines that it reflects current
federal law and Internal Revenue Service regulations.
   (C) How these financial supports should increase the participant's
current income and how increasing earned income should increase the
recipient's future social security income.
   (3) Grant-based on-the-job training shall include community
service positions pursuant to Section 11322.9.
   (4) Any portion of a wage from employment that is funded by the
diversion of a recipient's cash grant, or the grant savings from
employment pursuant to this subdivision, or both, shall not be exempt
under Section 11451.5 from the calculation of the income of the
family for purposes of subdivision (a) of Section 11450.
   (g) Supported work or transitional employment, which means forms
of grant-based on-the-job training in which the recipient's cash
grant, or a portion thereof, or the aid grant savings from
employment, is diverted to an intermediary service provider, to
partially or wholly offset the payment of wages to the participant.
   (h) Workstudy.
   (i) Self-employment.
   (j) Community service.
   (k) Adult basic education, which shall include reading, writing,
arithmetic, high school proficiency, or general educational
development certificate of instruction, and English as a second
language. Participants under this subdivision shall be referred to
appropriate service providers that include, but are not limited to,
educational programs operated by school districts or county offices
of education that have contracted with the Superintendent of Public
Instruction to provide services to participants pursuant to Section
33117.5 of the Education Code.
   (  l  ) Job skills training directly related to
employment.
   (m) Vocational education and training, including, but not limited
to, college and community college education, adult education,
regional occupational centers, and regional occupational programs.
   (n) Job search and job readiness assistance, which means providing
the recipient with training to learn job seeking and interviewing
skills, to understand employer expectations, and learn skills
designed to enhance an individual's capacity to move toward
self-sufficiency, including financial management education.
   (o) Education directly related to employment.
   (p) Satisfactory progress in secondary school or in a course of
study leading to a certificate of general educational development, in
the case of a recipient who has not completed secondary school or
received such a certificate.
   (q) Mental health, substance abuse, and domestic violence
services, described in Sections 11325.7 and 11325.8, and Article 7.5
(commencing with Section 11495), that are necessary to obtain and
retain employment.
   (r) Other activities necessary to assist an individual in
obtaining unsubsidized employment.
   Assignment to an educational activity identified in subdivisions
(k), (m), (o), and (p) is limited to those situations in which the
education is needed to become employed.
  SEC. 51.  Section 11372 of the Welfare and Institutions Code is
amended to read:
   11372.  (a) Notwithstanding any other provision of law, the
Kinship Guardianship Assistance Payment Program implemented under
this article is exempt from the provisions of Chapter 2 (commencing
with Section 11200) of Part 3, except Sections 11253.5, and 11265.8,
as long as these exemptions would not jeopardize federal financial
participation in the payment.
   (b) A person who is a kinship guardian under this article, and who
has met the requirements of Section 361.4, shall be exempt from
Chapter 4.6 (commencing with Section 10830) of Part 2 governing the
statewide fingerprint imaging system. A guardian who is also an
applicant for or a recipient of benefits under the CalWORKs program,
Chapter 2 (commencing with Section 11200) of Part 3, or CalFresh,
Chapter 10 (commencing with Section 18900) of Part 6 shall comply
with the statewide fingerprint imaging system requirements applicable
to those programs.
   (c) Any exemptions exercised pursuant to this section shall be
implemented in accordance with Section 11369.
  SEC. 52.  Section 11372 of the Welfare and Institutions Code, as
added by section 34 of Chapter 559 of the Statutes of 2010, is
amended to read:
   11372.  (a) Notwithstanding any other provision of law, the
state-funded Kinship Guardianship Assistance Payment Program
implemented under this article is exempt from the provisions of
Chapter 2 (commencing with Section 11200) of Part 3.
   (b) A person who is a kinship guardian under this article, and who
has met the requirements of Section 361.4, shall be exempt from
Chapter 4.6 (commencing with Section 10830) of Part 2 governing the
statewide fingerprint imaging system. A guardian who is also an
applicant for or a recipient of benefits under the CalWORKs program,
Chapter 2 (commencing with Section 11200) of Part 3, or CalFresh,
Chapter 10 (commencing with Section 18900) of Part 6 shall comply
with the statewide fingerprint imaging system requirements applicable
to those programs.
   (c) Any exemptions exercised pursuant to this section shall be
implemented in accordance with Section 11369.
  SEC. 53.  Section 11390 of the Welfare and Institutions Code, as
added by Section 37 of Chapter 559 of the Statutes of 2010, is
amended to read:
   11390.  (a) A person who is a kinship guardian under this article,
and who has met the requirements of Section 361.4, shall be exempt
from Chapter 4.6 (commencing with Section 10830) of Part 2 governing
the statewide fingerprint imaging system. A guardian who is also an
applicant for or a recipient of benefits under the CalWORKS program,
Chapter 2 (commencing with Section 11200) of Part 3, CalFresh,
Chapter 10 (commencing with Section 18900) of Part 6 shall comply
with the statewide fingerprint imaging system requirements applicable
to those programs.
   (b) Any exemptions exercised pursuant to this section shall be
implemented in accordance with Section 11393.
   (c) Income to the child, including the Kin-GAP payment, shall not
be considered income to the kinship guardian for purposes of
determining the kinship guardian's eligibility for any other aid
program, unless required by federal law as a condition of the receipt
of federal financial participation.
   (d) Each county that formally had court-ordered jurisdiction under
Section 300 or Section 601 or 602 over a child receiving benefits
under the Kin-GAP Program shall be responsible for paying the child's
aid regardless of where the child actually resides.
   (e) Notwithstanding any other provision of law, when a child
receiving benefits under the AFDC-FC foster care program becomes
eligible for benefits under the Kin-GAP Program during any month, the
child shall continue to receive benefits under the AFDC-FC foster
care program, as appropriate, to the end of that calendar month, and
Kin-GAP payments shall begin the first day of the following month.
   (f) All of the following shall apply to any child or nonminor in
receipt of Kin-GAP benefits:
   (1) He or she is eligible to request and receive independent
living services pursuant to Section 10609.3.
   (2) He or she may retain cash savings, not to exceed ten thousand
dollars ($10,000), including interest, pursuant to Section 11155.5.
   (3) He or she shall have earned income disregarded pursuant to
Section 11008.15. 
  SEC. 54.    Section 11450 of the Welfare and
Institutions Code is amended to read:
   11450.  (a) (1) Aid shall be paid for each needy family, which
shall include all eligible brothers and sisters of each eligible
applicant or recipient child and the parents of the children, but
shall not include unborn children, or recipients of aid under Chapter
3 (commencing with Section 12000), qualified for aid under this
chapter. In determining the amount of aid paid, and notwithstanding
the minimum basic standards of adequate care specified in Section
11452, the family's income, exclusive of any amounts considered
exempt as income or paid pursuant to subdivision (e) or Section
11453.1, averaged for the prospective quarter pursuant to Sections
11265.2 and 11265.3, and then calculated pursuant to Section 11451.5,
shall be deducted from the sum specified in the following table, as
adjusted for cost-of-living increases pursuant to Section 11453 and
paragraph (2). In no case shall the amount of aid paid for each month
exceed the sum specified in the following table, as adjusted for
cost-of-living increases pursuant to Section 11453 and paragraph (2),
plus any special needs, as specified in subdivisions (c), (e), and
(f):
  Number
of
eligible
needy
persons
in                                     Maximum
the same home                            aid
    1..............................      $ 326
    2..............................        535
    3..............................        663
    4..............................        788
    5..............................        899
    6..............................       1,010
    7..............................       1,109
    8..............................       1,209
    9..............................       1,306
   10 or more......................       1,403


   If, when, and during those times that the United States government
increases or decreases its contributions in assistance of needy
children in this state above or below the amount paid on July 1,
1972, the amounts specified in the above table shall be increased or
decreased by an amount equal to that increase or decrease by the
United States government, provided that no increase or decrease shall
be subject to subsequent adjustment pursuant to Section 11453.
   (2) The sums specified in paragraph (1) shall not be adjusted for
cost of living 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, nor shall that amount be included in the base for calculating
any cost-of-living increases for any fiscal year thereafter.
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.
   (b) When the family does not include a needy child qualified for
aid under this chapter, aid shall be paid to a pregnant mother for
the month in which the birth is anticipated and for the three-month
period immediately prior to the month in which the birth is
anticipated in the amount that would otherwise be paid to one person,
as specified in subdivision (a), if the mother, and child, if born,
would have qualified for aid under this chapter. Verification of
pregnancy shall be required as a condition of eligibility for aid
under this subdivision. Aid shall also be paid to a pregnant woman
with no other children in the amount which would otherwise be paid to
one person under subdivision (a) at any time after verification of
pregnancy if the pregnant woman is also eligible for the Cal-Learn
Program described in Article 3.5 (commencing with Section 11331) and
if the mother, and child, if born, would have qualified for aid under
this chapter.
   (c) The amount of forty-seven dollars ($47) per month shall be
paid to pregnant mothers qualified for aid under subdivision (a) or
(b) to meet special needs resulting from pregnancy if the mother, and
child, if born, would have qualified for aid under this chapter.
County welfare departments shall refer all recipients of aid under
this subdivision to a local provider of the Women, Infants and
Children program. If that payment to pregnant mothers qualified for
aid under subdivision (a) is considered income under federal law in
the first five months of pregnancy, payments under this subdivision
shall not apply to persons eligible under subdivision (a), except for
the month in which birth is anticipated and for the three-month
period immediately prior to the month in which delivery is
anticipated, if the mother, and the child, if born, would have
qualified for aid under this chapter.
   (d) For children receiving AFDC-FC under this chapter, there shall
be paid, exclusive of any amount considered exempt as income, an
amount of aid each month which, when added to the child's income, is
equal to the rate specified in Section 11460, 11461, 11462, 11462.1,
or 11463. In addition, the child shall be eligible for special needs,
as specified in departmental regulations.
   (e) In addition to the amounts payable under subdivision (a) and
Section 11453.1, a family shall be entitled to receive an allowance
for recurring special needs not common to a majority of recipients.
These recurring special needs shall include, but not be limited to,
special diets upon the recommendation of a physician for
circumstances other than pregnancy, and unusual costs of
transportation, laundry, housekeeping services, telephone, and
utilities. The recurring special needs allowance for each family per
month shall not exceed that amount resulting from multiplying the sum
of ten dollars ($10) by the number of recipients in the family who
are eligible for assistance.
   (f) After a family has used all available liquid resources, both
exempt and nonexempt, in excess of one hundred dollars ($100), with
the exception of funds deposited in a restricted account described in
subdivision (a) of Section 11155.2, the family shall also be
entitled to receive an allowance for nonrecurring special needs.
   (1) An allowance for nonrecurring special needs shall be granted
for replacement of clothing and household equipment and for emergency
housing needs other than those needs addressed by paragraph (2).
These needs shall be caused by sudden and unusual circumstances
beyond the control of the needy family. The department shall
establish the allowance for each of the nonrecurring special need
items. The sum of all nonrecurring special needs provided by this
subdivision shall not exceed six hundred dollars ($600) per event.
   (2) Homeless assistance is available to a homeless family seeking
shelter when the family is eligible for aid under this chapter.
Homeless assistance for temporary shelter is also available to
homeless families which are apparently eligible for aid under this
chapter. Apparent eligibility exists when evidence presented by the
applicant, or which is otherwise available to the county welfare
department, and the information provided on the application documents
indicate that there would be eligibility for aid under this chapter
if the evidence and information were verified. However, an alien
applicant who does not provide verification of his or her eligible
alien status, or a woman with no eligible children who does not
provide medical verification of pregnancy, is not apparently eligible
for purposes of this section.
   A family is considered homeless, for the purpose of this section,
when the family lacks a fixed and regular nighttime residence; or the
family has a primary nighttime residence that is a supervised
publicly or privately operated shelter designed to provide temporary
living accommodations; or the family is residing in a public or
private place not designed for, or ordinarily used as, a regular
sleeping accommodation for human beings. A family is also considered
homeless for the purpose of this section if the family has received a
notice to pay rent or quit. The family shall demonstrate that the
eviction is the result of a verified financial hardship as a result
of extraordinary circumstances beyond their control, and not other
lease or rental violations, and that the family is experiencing a
financial crisis that could result in homelessness if preventative
assistance is not provided.
   (A) (i) A nonrecurring special need of sixty-five dollars ($65) a
day shall be available to families of up to four members for the
costs of temporary shelter, subject to the requirements of this
paragraph. The fifth and additional members of the family shall each
receive fifteen dollars ($15) per day, up to a daily maximum of one
hundred twenty-five dollars ($125). County welfare departments may
increase the daily amount available for temporary shelter as
necessary to secure the additional bedspace needed by the family.
   (ii) This special need shall be granted or denied immediately upon
the family's application for homeless assistance, and benefits shall
be available for up to three working days. The county welfare
department shall verify the family's homelessness within the first
three working days and if the family meets the criteria of
questionable homelessness established by the department, the county
welfare department shall refer the family to its early fraud
prevention and detection unit, if the county has such a unit, for
assistance in the verification of homelessness within this period.
   (iii) After homelessness has been verified, the three-day limit
shall be extended for a period of time which, when added to the
initial benefits provided, does not exceed a total of 16 calendar
days. This extension of benefits shall be done in increments of one
week and shall be based upon searching for permanent housing which
shall be documented on a housing search form; good cause; or other
circumstances defined by the department. Documentation of a housing
search shall be required for the initial extension of benefits beyond
the three-day limit and on a weekly basis thereafter as long as the
family is receiving temporary shelter benefits. Good cause shall
include, but is not limited to, situations in which the county
welfare department has determined that the family, to the extent it
is capable, has made a good faith but unsuccessful effort to secure
permanent housing while receiving temporary shelter benefits.
   (B) A nonrecurring special need for permanent housing assistance
is available to pay for last month's rent and security deposits when
these payments are reasonable conditions of securing a residence, or
to pay for up to two months of rent arrearages, when these payments
are a reasonable condition of preventing eviction.
   The last month's rent or monthly arrearage portion of the payment
(i) shall not exceed 80 percent of the family's total monthly
household income without the value of CalFresh benefits or special
needs for a family of that size and (ii) shall only be made to
families that have found permanent housing costing no more than 80
percent of the family's total monthly household income without the
value of CalFresh benefits or special needs for a family of that
size.
   However, if the county welfare department determines that a family
intends to reside with individuals who will be sharing housing
costs, the county welfare department shall, in appropriate
circumstances, set aside the condition specified in clause (ii) of
the preceding paragraph.
   (C) The nonrecurring special need for permanent housing assistance
is also available to cover the standard costs of deposits for
utilities which are necessary for the health and safety of the
family.
   (D) A payment for or denial of permanent housing assistance shall
be issued no later than one working day from the time that a family
presents evidence of the availability of permanent housing. If an
applicant family provides evidence of the availability of permanent
housing before the county welfare department has established
eligibility for aid under this chapter, the county welfare department
shall complete the eligibility determination so that the denial of
or payment for permanent housing assistance is issued within one
working day from the submission of evidence of the availability of
permanent housing, unless the family has failed to provide all of the
verification necessary to establish eligibility for aid under this
chapter.
   (E) (i) Except as provided in clauses (ii) and (iii), eligibility
for the temporary shelter assistance and the permanent housing
assistance pursuant to this paragraph shall be limited to one period
of up to 16 consecutive calendar days of temporary assistance and one
payment of permanent assistance. Any family that includes a parent
or nonparent caretaker relative living in the home who has previously
received temporary or permanent homeless assistance at any time on
behalf of an eligible child shall not be eligible for further
homeless assistance. Any person who applies for homeless assistance
benefits shall be informed that the temporary shelter benefit of up
to 16 consecutive days is available only once in a lifetime, with
certain exceptions, and that a break in the consecutive use of the
benefit constitutes permanent exhaustion of the temporary benefit.
   (ii) A family that becomes homeless as a direct and primary result
of a state or federally declared natural disaster shall be eligible
for temporary and permanent homeless assistance.
   (iii) A family shall be eligible for temporary and permanent
homeless assistance when homelessness is a direct result of domestic
violence by a spouse, partner, or roommate; physical or mental
illness that is medically verified that shall not include a diagnosis
of alcoholism, drug addiction, or psychological stress; or, the
uninhabitability of the former residence caused by sudden and unusual
circumstances beyond the control of the family including natural
catastrophe, fire, or condemnation. These circumstances shall be
verified by a third-party governmental or private health and human
services agency, except that domestic violence may also be verified
by a sworn statement by the victim, as provided under Section
11495.25. Homeless assistance payments based on these specific
circumstances may not be received more often than once in any
12-month period. In addition, if the domestic violence is verified by
a sworn statement by the victim, the homeless assistance payments
shall be limited to two periods of not more than 16 consecutive
calendar days of temporary assistance and two payments of permanent
assistance. A county may require that a recipient of homeless
assistance benefits who qualifies under this paragraph for a second
time in a 24-month period participate in a homelessness avoidance
case plan as a condition of eligibility for homeless assistance
benefits. The county welfare department shall immediately inform
recipients who verify domestic violence by a sworn statement pursuant
to clause (iii) of the availability of domestic violence counseling
and services, and refer those recipients to services upon request.
   (iv) If a county requires a recipient who verifies domestic
violence by a sworn statement to participate in a homelessness
avoidance case plan pursuant to clause (iii), the plan shall include
the provision of domestic violence services, if appropriate.
   (v) If a recipient seeking homeless assistance based on domestic
violence pursuant to clause (iii) has previously received homeless
avoidance services based on domestic violence, the county shall
review whether services were offered to the recipient and consider
what additional services would assist the recipient in leaving the
domestic violence situation.
   (vi) The county welfare department shall report to the department
through a statewide homeless assistance payment indicator system,
                                           necessary data, as
requested by the department, regarding all recipients of aid under
this paragraph.
   (F) The county welfare departments, and all other entities
participating in the costs of the AFDC program, have the right in
their share to any refunds resulting from payment of the permanent
housing. However, if an emergency requires the family to move within
the 12-month period specified in subparagraph (E), the family shall
be allowed to use any refunds received from its deposits to meet the
costs of moving to another residence.
   (G) Payments to providers for temporary shelter and permanent
housing and utilities shall be made on behalf of families requesting
these payments.
   (H) The daily amount for the temporary shelter special need for
homeless assistance may be increased if authorized by the current
year's Budget Act by specifying a different daily allowance and
appropriating the funds therefor.
   (I) No payment shall be made pursuant to this paragraph unless the
provider of housing is a commercial establishment, shelter, or
person in the business of renting properties who has a history of
renting properties.
   (g) The department shall establish rules and regulations ensuring
the uniform application statewide of this subdivision.
   (h) The department shall notify all applicants and recipients of
aid through the standardized application form that these benefits are
available and shall provide an opportunity for recipients to apply
for the funds quickly and efficiently.
   (i) Except for the purposes of Section 15200, the amounts payable
to recipients pursuant to Section 11453.1 shall not constitute part
of the payment schedule set forth in subdivision (a).
   The amounts payable to recipients pursuant to Section 11453.1
shall not constitute income to recipients of aid under this section.
   (j) For children receiving Kin-GAP pursuant to Article 4.5
(commencing with Section 11360) of Chapter 2, there shall be paid,
exclusive of any amount considered exempt as income, an amount of aid
each month, which, when added to the child's income, is equal to the
rate specified in Section 11364. 
   SEC. 54.    Section 11450 of the   Welfare
and Institutions Code   is amended to read: 
   11450.  (a) (1) Aid shall be paid for each needy family, which
shall include all eligible brothers and sisters of each eligible
applicant or recipient child and the parents of the children, but
shall not include unborn children, or recipients of aid under Chapter
3 (commencing with Section 12000), qualified for aid under this
chapter. In determining the amount of aid paid, and notwithstanding
the minimum basic standards of adequate care specified in Section
11452, the family's income, exclusive of any amounts considered
exempt as income or paid pursuant to subdivision (e) or Section
11453.1, averaged for the prospective quarter pursuant to Sections
11265.2 and 11265.3, and then calculated pursuant to Section 11451.5,
shall be deducted from the sum specified in the following table, as
adjusted for cost-of-living increases pursuant to Section 11453 and
paragraph (2). In no case shall the amount of aid paid for each month
exceed the sum specified in the following table, as adjusted for
cost-of-living increases pursuant to Section 11453 and paragraph (2),
plus any special needs, as specified in subdivisions (c), (e), and
(f):
  Number
of
eligible
needy
persons
in                                     Maximum
the same home                            aid
    1..............................      $ 326
    2..............................        535
    3..............................        663
    4..............................        788
    5..............................        899
    6..............................       1,010
    7..............................       1,109
    8..............................       1,209
    9..............................       1,306
   10 or more......................       1,403


   If, when, and during those times that the United States government
increases or decreases its contributions in assistance of needy
children in this state above or below the amount paid on July 1,
1972, the amounts specified in the above table shall be increased or
decreased by an amount equal to that increase or decrease by the
United States government, provided that no increase or decrease shall
be subject to subsequent adjustment pursuant to Section 11453.
   (2) The sums specified in paragraph (1) shall not be adjusted for
cost of living 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, nor shall that amount be included in the base for calculating
any cost-of-living increases for any fiscal year thereafter.
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.
   (b) When the family does not include a needy child qualified for
aid under this chapter, aid shall be paid to a pregnant mother for
the month in which the birth is anticipated and for the three-month
period immediately prior to the month in which the birth is
anticipated in the amount that would otherwise be paid to one person,
as specified in subdivision (a), if the mother, and child, if born,
would have qualified for aid under this chapter. Verification of
pregnancy shall be required as a condition of eligibility for aid
under this subdivision.
   (1) Aid shall also be paid to a pregnant woman with no other
children in the amount which would otherwise be paid to one person
under subdivision (a) at any time after verification of pregnancy if
the pregnant woman is also eligible for the Cal-Learn Program
described in Article 3.5 (commencing with Section 11331) and if the
mother, and child, if born, would have qualified for aid under this
chapter.
   (2) Paragraph (1) shall apply only when the Cal-Learn Program is
operative.
   (c) The amount of forty-seven dollars ($47) per month shall be
paid to pregnant mothers qualified for aid under subdivision (a) or
(b) to meet special needs resulting from pregnancy if the mother, and
child, if born, would have qualified for aid under this chapter.
County welfare departments shall refer all recipients of aid under
this subdivision to a local provider of the Women, Infants and
Children program. If that payment to pregnant mothers qualified for
aid under subdivision (a) is considered income under federal law in
the first five months of pregnancy, payments under this subdivision
shall not apply to persons eligible under subdivision (a), except for
the month in which birth is anticipated and for the three-month
period immediately prior to the month in which delivery is
anticipated, if the mother, and the child, if born, would have
qualified for aid under this chapter.
   (d) For children receiving AFDC-FC under this chapter, there shall
be paid, exclusive of any amount considered exempt as income, an
amount of aid each month which, when added to the child's income, is
equal to the rate specified in Section 11460, 11461, 11462, 11462.1,
or 11463. In addition, the child shall be eligible for special needs,
as specified in departmental regulations.
   (e) In addition to the amounts payable under subdivision (a) and
Section 11453.1, a family shall be entitled to receive an allowance
for recurring special needs not common to a majority of recipients.
These recurring special needs shall include, but not be limited to,
special diets upon the recommendation of a physician for
circumstances other than pregnancy, and unusual costs of
transportation, laundry, housekeeping services, telephone, and
utilities. The recurring special needs allowance for each family per
month shall not exceed that amount resulting from multiplying the sum
of ten dollars ($10) by the number of recipients in the family who
are eligible for assistance.
   (f) After a family has used all available liquid resources, both
exempt and nonexempt, in excess of one hundred dollars ($100), with
the exception of funds deposited in a restricted account described in
subdivision (a) of Section 11155.2, the family shall also be
entitled to receive an allowance for nonrecurring special needs.
   (1) An allowance for nonrecurring special needs shall be granted
for replacement of clothing and household equipment and for emergency
housing needs other than those needs addressed by paragraph (2).
These needs shall be caused by sudden and unusual circumstances
beyond the control of the needy family. The department shall
establish the allowance for each of the nonrecurring special need
items. The sum of all nonrecurring special needs provided by this
subdivision shall not exceed six hundred dollars ($600) per event.
   (2) Homeless assistance is available to a homeless family seeking
shelter when the family is eligible for aid under this chapter.
Homeless assistance for temporary shelter is also available to
homeless families which are apparently eligible for aid under this
chapter. Apparent eligibility exists when evidence presented by the
applicant, or which is otherwise available to the county welfare
department, and the information provided on the application documents
indicate that there would be eligibility for aid under this chapter
if the evidence and information were verified. However, an alien
applicant who does not provide verification of his or her eligible
alien status, or a woman with no eligible children who does not
provide medical verification of pregnancy, is not apparently eligible
for purposes of this section.
   A family is considered homeless, for the purpose of this section,
when the family lacks a fixed and regular nighttime residence; or the
family has a primary nighttime residence that is a supervised
publicly or privately operated shelter designed to provide temporary
living accommodations; or the family is residing in a public or
private place not designed for, or ordinarily used as, a regular
sleeping accommodation for human beings. A family is also considered
homeless for the purpose of this section if the family has received a
notice to pay rent or quit. The family shall demonstrate that the
eviction is the result of a verified financial hardship as a result
of extraordinary circumstances beyond their control, and not other
lease or rental violations, and that the family is experiencing a
financial crisis that could result in homelessness if preventative
assistance is not provided.
   (A) (i) A nonrecurring special need of sixty-five dollars ($65) a
day shall be available to families of up to four members for the
costs of temporary shelter, subject to the requirements of this
paragraph. The fifth and additional members of the family shall each
receive fifteen dollars ($15) per day, up to a daily maximum of one
hundred twenty-five dollars ($125). County welfare departments may
increase the daily amount available for temporary shelter as
necessary to secure the additional bedspace needed by the family.
   (ii) This special need shall be granted or denied immediately upon
the family's application for homeless assistance, and benefits shall
be available for up to three working days. The county welfare
department shall verify the family's homelessness within the first
three working days and if the family meets the criteria of
questionable homelessness established by the department, the county
welfare department shall refer the family to its early fraud
prevention and detection unit, if the county has such a unit, for
assistance in the verification of homelessness within this period.
   (iii) After homelessness has been verified, the three-day limit
shall be extended for a period of time which, when added to the
initial benefits provided, does not exceed a total of 16 calendar
days. This extension of benefits shall be done in increments of one
week and shall be based upon searching for permanent housing which
shall be documented on a housing search form; good cause; or other
circumstances defined by the department. Documentation of a housing
search shall be required for the initial extension of benefits beyond
the three-day limit and on a weekly basis thereafter as long as the
family is receiving temporary shelter benefits. Good cause shall
include, but is not limited to, situations in which the county
welfare department has determined that the family, to the extent it
is capable, has made a good faith but unsuccessful effort to secure
permanent housing while receiving temporary shelter benefits.
   (B) A nonrecurring special need for permanent housing assistance
is available to pay for last month's rent and security deposits when
these payments are reasonable conditions of securing a residence, or
to pay for up to two months of rent arrearages, when these payments
are a reasonable condition of preventing eviction.
   The last month's rent or monthly arrearage portion of the payment
(i) shall not exceed 80 percent of the family's total monthly
household income without the value of  food stamps 
 CalFresh benefits  or special needs for a family of that
size and (ii) shall only be made to families that have found
permanent housing costing no more than 80 percent of the family's
total monthly household income without the value of  food
stamps   CalFresh benefits  or special needs for a
family of that size.
   However, if the county welfare department determines that a family
intends to reside with individuals who will be sharing housing
costs, the county welfare department shall, in appropriate
circumstances, set aside the condition specified in clause (ii) of
the preceding paragraph.
   (C) The nonrecurring special need for permanent housing assistance
is also available to cover the standard costs of deposits for
utilities which are necessary for the health and safety of the
family.
   (D) A payment for or denial of permanent housing assistance shall
be issued no later than one working day from the time that a family
presents evidence of the availability of permanent housing. If an
applicant family provides evidence of the availability of permanent
housing before the county welfare department has established
eligibility for aid under this chapter, the county welfare department
shall complete the eligibility determination so that the denial of
or payment for permanent housing assistance is issued within one
working day from the submission of evidence of the availability of
permanent housing, unless the family has failed to provide all of the
verification necessary to establish eligibility for aid under this
chapter.
   (E) (i) Except as provided in clauses (ii) and (iii), eligibility
for the temporary shelter assistance and the permanent housing
assistance pursuant to this paragraph shall be limited to one period
of up to 16 consecutive calendar days of temporary assistance and one
payment of permanent assistance. Any family that includes a parent
or nonparent caretaker relative living in the home who has previously
received temporary or permanent homeless assistance at any time on
behalf of an eligible child shall not be eligible for further
homeless assistance. Any person who applies for homeless assistance
benefits shall be informed that the temporary shelter benefit of up
to 16 consecutive days is available only once in a lifetime, with
certain exceptions, and that a break in the consecutive use of the
benefit constitutes permanent exhaustion of the temporary benefit.
   (ii) A family that becomes homeless as a direct and primary result
of a state or federally declared natural disaster shall be eligible
for temporary and permanent homeless assistance.
   (iii) A family shall be eligible for temporary and permanent
homeless assistance when homelessness is a direct result of domestic
violence by a spouse, partner, or roommate; physical or mental
illness that is medically verified that shall not include a diagnosis
of alcoholism, drug addiction, or psychological stress; or, the
uninhabitability of the former residence caused by sudden and unusual
circumstances beyond the control of the family including natural
catastrophe, fire, or condemnation. These circumstances shall be
verified by a third-party governmental or private health and human
services agency, except that domestic violence may also be verified
by a sworn statement by the victim, as provided under Section
11495.25. Homeless assistance payments based on these specific
circumstances may not be received more often than once in any
12-month period. In addition, if the domestic violence is verified by
a sworn statement by the victim, the homeless assistance payments
shall be limited to two periods of not more than 16 consecutive
calendar days of temporary assistance and two payments of permanent
assistance. A county may require that a recipient of homeless
assistance benefits who qualifies under this paragraph for a second
time in a 24-month period participate in a homelessness avoidance
case plan as a condition of eligibility for homeless assistance
benefits. The county welfare department shall immediately inform
recipients who verify domestic violence by a sworn statement pursuant
to clause (iii) of the availability of domestic violence counseling
and services, and refer those recipients to services upon request.
   (iv) If a county requires a recipient who verifies domestic
violence by a sworn statement to participate in a homelessness
avoidance case plan pursuant to clause (iii), the plan shall include
the provision of domestic violence services, if appropriate.
   (v) If a recipient seeking homeless assistance based on domestic
violence pursuant to clause (iii) has previously received homeless
avoidance services based on domestic violence, the county shall
review whether services were offered to the recipient and consider
what additional services would assist the recipient in leaving the
domestic violence situation.
   (vi) The county welfare department shall report to the department
through a statewide homeless assistance payment indicator system,
necessary data, as requested by the department, regarding all
recipients of aid under this paragraph.
   (F) The county welfare departments, and all other entities
participating in the costs of the AFDC program, have the right in
their share to any refunds resulting from payment of the permanent
housing. However, if an emergency requires the family to move within
the 12-month period specified in subparagraph (E), the family shall
be allowed to use any refunds received from its deposits to meet the
costs of moving to another residence.
   (G) Payments to providers for temporary shelter and permanent
housing and utilities shall be made on behalf of families requesting
these payments.
   (H) The daily amount for the temporary shelter special need for
homeless assistance may be increased if authorized by the current
year's Budget Act by specifying a different daily allowance and
appropriating the funds therefor.
   (I)  No payment   Payment  shall be made
pursuant to this paragraph unless   only if
 the provider of housing is a commercial establishment, shelter,
or person in the business of renting properties who has a history of
renting properties.
   (g) The department shall establish rules and regulations ensuring
the uniform application statewide of this subdivision.
   (h) The department shall notify all applicants and recipients of
aid through the standardized application form that these benefits are
available and shall provide an opportunity for recipients to apply
for the funds quickly and efficiently.
   (i) Except for the purposes of Section 15200, the amounts payable
to recipients pursuant to Section 11453.1 shall not constitute part
of the payment schedule set forth in subdivision (a).
   The amounts payable to recipients pursuant to Section 11453.1
shall not constitute income to recipients of aid under this section.
   (j) For children receiving Kin-GAP pursuant to Article 4.5
(commencing with Section 11360) or Article 4.7 (commencing with
Section 11385) there shall be paid, exclusive of any amount
considered exempt as income, an amount of aid each month, which, when
added to the child's income, is equal to the rate specified in
Sections 11364 and 11387.
  SEC. 55.  Section 11450.9 of the Welfare and Institutions Code is
amended to read:
   11450.9.  (a) (1) The department shall designate as energy
assistance payments any increase in the maximum aid payments provided
pursuant to Section 11450 made on or after the first day of the
first session of the Legislature which is convened after the
effective date of this section.
   (2) Increases subject to paragraph (1) shall include any increase
provided pursuant to Sections 11453 and 11453.05.
   (b) The designation required by subdivision (a) shall be made to
the extent allowed by federal law to increase CalFresh allotments to
recipients of assistance under this chapter.
   (c) The department shall notify the federal government of the
designation made pursuant to subdivision (a) no later than 60 days
after it has submitted a report on the study required by subdivision
(d).
   (d) It is the intent of the Legislature that the department
designate the maximum amount of aid payments made under this chapter
as energy assistance payments to the extent allowed under federal law
to increase CalFresh allotments to recipients of assistance under
this chapter.
   SEC. 55.5.    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, 2008-09, and 2009-10 fiscal years.
   (6) For the 2010-11 fiscal year and each fiscal year thereafter,
no adjustment to the maximum aid payment set forth in subdivision (a)
of Section 11450 shall be made under this section unless otherwise
specified by statute. 
   (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) 
    (   d)  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. 56.  Section 11453.1 of the Welfare and Institutions Code is
amended to read:
   11453.1.  (a) It is the intent of this section to assure that the
food purchasing power provided by benefits available from CalFresh
under the federal Supplemental Nutrition Assistance Program (Chapter
51 (commencing with Section 2011), Title 7, United States Code) shall
continue to be available to recipients of aid under this chapter,
if, when and during such times as federal law is amended to preclude
CalFresh benefits to such recipients, but does expressly permit the
equivalent of such benefits to be provided as cash benefits to such
recipients.
   (b) It is the further intent of this section to protect the
financial interest of the state and counties by accomplishing the
conversion of CalFresh benefits in such a manner that the conversion
does not result in state and county costs of aid exceeding the costs
in the base year, as hereinafter defined in this section.
   (c) If federal law is amended to preclude the provision of
CalFresh benefits pursuant to the federal Supplemental Nutrition
Assistance Program to applicants or recipients of aid under this
chapter, when such federal law becomes operative, such of the
following provisions for converting CalFresh benefits to cash
benefits as is consistent with the intent of this section shall
become operative immediately:
   (1) The bonus value of CalFresh benefits shall be paid in addition
to the amounts payable pursuant to subdivision (a) of Section 11450,
provided that aggregate state and county expenditures pursuant to
that section and this section do not thereby exceed the base-year
costs.
   (2) If aggregate state and county expenditures pursuant to
subdivision (a) of Section 11450 and this section in any fiscal year
would, by virtue of the operation of  subsection 
 paragraph  (1) of subdivision (c) of this section, result
in an increase over the aggregate of such expenditures in the base
year, the bonus value of CalFresh benefits paid pursuant to this
section shall be reduced, on a pro rata basis, by such amount as will
reduce aggregate state and county expenditures under that section
and this section to an amount equal to the aggregate state and county
expenditures in the base year.
   (d) For the purposes of this section, "base year" means that year
designated by federal law as the year fixing the limit on nonfederal
expenditures for programs established to implement programs under
Part A of Title 4 of the Social Security Act.
   (e) For purposes of this section, "bonus value of CalFresh
benefits" means the dollar amount that federal law permits to be paid
to a child or a family of given size as a cash benefit in lieu of
benefits under the federal Supplemental Nutrition Assistance Program.

   (f) For purposes of this section, "aggregate state and county
expenditure" is defined as expenditure made under subdivision (a) of
Section 11450 and this section, after deducting any federal
reimbursements or credits, and excluding any cost-of-living increment
paid pursuant to Section 11453.
   SEC. 56.5.    Section 11462 of the   Welfare
and Institutions Code   is amended to read: 
   11462.  (a) (1) Effective July 1, 1990, foster care providers
licensed as group homes, as defined in departmental regulations,
including public child care institutions, as defined in Section
11402.5, shall have rates established by classifying each group home
program and applying the standardized schedule of rates. The
department shall collect information from group providers beginning
January 1, 1990, in order to classify each group home program.
   (2) Notwithstanding paragraph (1), foster care providers licensed
as group homes shall have rates established only if the group home is
organized and operated on a nonprofit basis as required under
subdivision (h) of Section 11400. The department shall terminate the
rate effective January 1, 1993, of any group home not organized and
operated on a nonprofit basis as required under subdivision (h) of
Section 11400.
   (3) (A) The department shall determine, consistent with the
requirements of this chapter and other relevant requirements under
law, the rate classification level (RCL) for each group home program
on a biennial basis. Submission of the biennial rate application
shall be made according to a schedule determined by the department.
   (B) The department shall adopt regulations to implement this
paragraph. The adoption, amendment, repeal, or readoption of a
regulation authorized by this paragraph is deemed to be necessary for
the immediate preservation of the public peace, health and safety,
or general welfare, for purposes of Sections 11346.1 and 11349.6 of
the Government Code, and the department is hereby exempted from the
requirement to describe specific facts showing the need for immediate
action.
   (b) A group home program shall be initially classified, for
purposes of emergency regulations, according to the level of care and
services to be provided using a point system developed by the
department and described in the report, "The Classification of Group
Home Programs under the Standardized Schedule of Rates System,"
prepared by the State Department of Social Services, August 30, 1989.

   (c) The rate for each RCL has been determined by the department
with data from the AFDC-FC Group Home Rate Classification Pilot
Study. The rates effective July 1, 1990, were developed using 1985
calendar year costs and reflect adjustments to the costs for each
fiscal year, starting with the 1986-87 fiscal year, by the amount of
the California Necessities Index computed pursuant to the methodology
described in Section 11453. The data obtained by the department
using 1985 calendar year costs shall be updated and revised by
January 1, 1993.
   (d) As used in this section, "standardized schedule of rates"
means a listing of the 14 rate classification levels, and the single
rate established for each RCL.
   (e) Except as specified in paragraph (1), the department shall
determine the RCL for each group home program on a prospective basis,
according to the level of care and services that the group home
operator projects will be provided during the period of time for
which the rate is being established.
   (1) (A) For new and existing providers requesting the
establishment of an RCL, and for existing group home programs
requesting an RCL increase, the department shall determine the RCL no
later than 13 months after the effective date of the provisional
rate. The determination of the RCL shall be based on a program audit
of documentation and other information that verifies the level of
care and supervision provided by the group home program during a
period of the two full calendar months or 60 consecutive days,
whichever is longer, preceding the date of the program audit, unless
the group home program requests a lower RCL. The program audit shall
not cover the first six months of operation under the provisional
rate. Pending the department's issuance of the program audit report
that determines the RCL for the group home program, the group home
program shall be eligible to receive a provisional rate that shall be
based on the level of care and service that the group home program
proposes it will provide. The group home program shall be eligible to
receive only the RCL determined by the department during the
pendency of any appeal of the department's RCL determination.
   (B) A group home program may apply for an increase in its RCL no
earlier than two years from the date the department has determined
the group home program's rate, unless the host county, the primary
placing county, or a regional consortium of counties submits to the
department in writing that the program is needed in that county, that
the provider is capable of effectively and efficiently operating the
proposed program, and that the provider is willing and able to
accept AFDC-FC children for placement who are determined by the
placing agency to need the level of care and services that will be
provided by the program.
   (C) To ensure efficient administration of the department's audit
responsibilities, and to avoid the fraudulent creation of records,
group home programs shall make records that are relevant to the RCL
determination available to the department in a timely manner. Except
as provided in this section, the department may refuse to consider,
for purposes of determining the rate, any documents that are relevant
to the determination of the RCL that are not made available by the
group home provider by the date the group home provider requests a
hearing on the department's RCL determination. The department may
refuse to consider, for purposes of determining the rate, the
following records, unless the group home provider makes the records
available to the department during the fieldwork portion of the
department's program audit:
   (i) Records of each employee's full name, home address,
occupation, and social security number.
   (ii) Time records showing when the employee begins and ends each
work period, meal periods, split shift intervals, and total daily
hours worked.
   (iii) Total wages paid each payroll period.
   (iv) Records required to be maintained by licensed group home
providers under Title 22 of the California Code of Regulations that
are relevant to the RCL determination.
   (D) To minimize financial abuse in the startup of group home
programs, when the department's RCL determination is more than three
levels lower than the RCL level proposed by the group home provider,
and the group home provider does not appeal the department's RCL
determination, the department shall terminate the rate of a group
home program 45 days after issuance of its program audit report. When
the group home provider requests a hearing on the department's RCL
determination, and the RCL determined by the director under
subparagraph (E) is more than three levels lower than the RCL level
proposed by the group home provider, the department shall terminate
the rate of a group home program within 30 days of issuance of the
director's decision. Notwithstanding the reapplication provisions in
subparagraph (B), the department shall deny any request for a new or
increased RCL from a group home provider whose RCL is terminated
pursuant to this subparagraph, for a period of no greater than two
years from the effective date of the RCL termination.
   (E) A group home provider may request a hearing of the department'
s RCL determination under subparagraph (A) no later than 30 days
after the date the department issues its RCL determination. The
department's RCL determination shall be final if the group home
provider does not request a hearing within the prescribed time.
Within 60 days of receipt of the request for hearing, the department
shall conduct a hearing on the RCL determination. The standard of
proof shall be the preponderance of the evidence and the burden of
proof shall be on the department. The hearing officer shall issue the
proposed decision within 45 days of the close of the evidentiary
record. The director shall adopt, reject, or modify the proposed
decision, or refer the matter back to the hearing officer for
additional evidence or findings within 100 days of issuance of the
proposed decision. If the director takes no action on the proposed
decision within the prescribed time, the proposed decision shall take
effect by operation of law.
   (2) Group home programs that fail to maintain at least the level
of care and services associated with the RCL upon which their rate
was established shall inform the department. The department shall
develop regulations specifying procedures to be applied when a group
home fails to maintain the level of services projected, including,
but not limited to, rate reduction and recovery of overpayments.
   (3) The department shall not reduce the rate, establish an
overpayment, or take other actions pursuant to paragraph (2) for any
period that a group home program maintains the level of care and
services associated with the RCL for children actually residing in
the facility. Determinations of levels of care and services shall be
made in the same way as modifications of overpayments are made
pursuant to paragraph (2) of subdivision (b) of Section 11466.2.
   (4) A group home program that substantially changes its staffing
pattern from that reported in the group home program statement shall
provide notification of this change to all counties that have placed
children currently in care. This notification shall be provided
whether or not the RCL for the program may change as a result of the
change in staffing pattern.
   (f) (1) The standardized schedule of rates for the 2002-03,
2003-04, 2004-05, 2005-06, 2006-07, and 2007-08 fiscal years is:
                               FY 2002-03, 2003-
      Rate       Point Ranges         04,
                                 2004-05, 2005-
                                06, 2006-07, and
Classification                     2007-08
      Level                      Standard Rate
        1            Under 60        $1,454
        2              60- 89         1,835
        3              90-119         2,210
        4             120-149         2,589
        5             150-179         2,966
        6             180-209         3,344
        7             210-239         3,723
        8             240-269         4,102
        9             270-299         4,479
       10             300-329         4,858
       11             330-359         5,234
       12             360-389         5,613
       13             390-419         5,994
       14            420 & Up         6,371


   (2) (A) For group home programs that receive AFDC-FC payments for
services performed during the 2002-03, 2003-04, 2004-05, 2005-06,
2006-07, 2007-08, 2008-09, and 2009-10 fiscal years, the adjusted RCL
point ranges below shall be used for establishing the biennial rates
for existing programs, pursuant to paragraph (3) of subdivision (a)
and in performing program audits and in determining any resulting
rate reduction, overpayment assessment, or other actions pursuant to
paragraph (2) of subdivision (e):
        Rate             Adjusted Point Ranges
   Classification      for the 2002-03, 2003-04,
                       2004-05, 2005-06, 2006-07,
                     2007-08, 2008-09, and 2009-10
        Level                 Fiscal Years
          1                     Under 54
          2                      54- 81
          3                      82-110
          4                     111-138
          5                     139-167
          6                     168-195
          7                     196-224
          8                     225-253
          9                     254-281
         10                     282-310
         11                     311-338
         12                     339-367
         13                     368-395
         14                     396 & Up


   (B) Notwithstanding subparagraph (A), foster care providers
operating group homes during the 2002-03, 2003-04, 2004-05, 2005-06,
2006-07, 2007-08, 2008-09, and 2009-10 fiscal years shall remain
responsible for ensuring the health and safety of the children placed
in their programs in accordance with existing applicable provisions
of the Health and Safety Code and community care licensing
regulations, as contained in Title 22 of the Code of California
Regulations.
   (C) Subparagraph (A) shall not apply to program audits of group
home programs with provisional rates established pursuant to
paragraph (1) of subdivision (e). For those program audits, the RCL
point ranges in paragraph (1) shall be used.
   (D) Rates applicable for the 2009-10 fiscal year pursuant to the
act that adds this subparagraph shall be effective October 1, 2009.
   (3) (A) For group home programs that receive AFDC-FC payments for
services performed during the 2009-10 fiscal year the adjusted RCL
point ranges below shall be used for establishing the biennial rates
for existing programs, pursuant to paragraph (3) of subdivision (a)
and in performing program audits and in determining any resulting
rate reduction, overpayment assessment, or other actions pursuant to
paragraph (2) of subdivision (e):
         Rate             Adjusted Point Ranges
    Classification           for the 2009-10
         Level                Fiscal Years
           1                    Under 39
           2                      39-64
           3                      65-90
           4                     91-115
           5                     116-141
           6                     142-167
           7                     168-192
           8                     193-218
           9                     219-244
          10                     245-270
          11                     271-295
          12                     296-321
          13                     322-347
          14                     348 & Up


   (B) Notwithstanding subparagraph (A), foster care providers
operating group homes during the 2009-10 fiscal year shall remain
responsible for ensuring the health and safety of the children placed
in their programs in accordance with existing applicable provisions
of the Health and Safety Code and community care licensing
regulations as contained in Title 22 of the California Code of
Regulations.
   (C) Subparagraph (A) shall not apply to program audits of group
home programs with provisional rates established pursuant to
paragraph (1) of subdivision (e). For those program audits, the RCL
point ranges in paragraph (1) shall be used.
   (g) (1) (A) For the 1999-2000 fiscal year, the standardized rate
for each RCL shall be adjusted by an amount equal to the California
Necessities Index computed pursuant to the methodology described in
Section 11453. The resultant amounts shall constitute the new
standardized schedule of rates, subject to further adjustment
pursuant to subparagraph (B).
   (B) In addition to the adjustment in subparagraph (A), commencing
January 1, 2000, the standardized rate for each RCL shall be
increased by 2.36 percent, rounded to the nearest dollar. The
resultant amounts shall constitute the new standardized schedule of
rates.
   (2) Beginning with the 2000-01 fiscal year, the standardized
schedule of rates shall be adjusted annually by an amount equal to
the CNI computed pursuant to Section 11453, subject to the
availability of funds. The resultant amounts shall constitute the new
standardized schedule of rates.
   (3) Effective January 1, 2001, the amount included in the standard
rate for each Rate Classification Level (RCL) for the salaries,
wages, and benefits for staff providing child care and supervision or
performing social work activities, or both, shall be increased by 10
percent. This additional funding shall be used by group home
programs solely to supplement staffing, salaries, wages, and benefit
levels of staff specified in this paragraph. The standard rate for
each RCL shall be recomputed using this adjusted amount and the
resultant rates shall constitute the new standardized schedule of
rates. The department may require a group home receiving this
additional funding to certify that the funding was utilized in
accordance with the provisions of this section.
   (4) Effective January 1, 2008, the amount included in the standard
rate for each RCL for the wages for staff providing child care and
supervision or performing social work activities, or both, shall be
increased by 5 percent, and the amount included for the payroll taxes
and other employer-paid benefits for these staff shall be increased
from 20.325 percent to 24 percent. The standard rate for each RCL
shall be recomputed using these adjusted amounts, and the resulting
rates shall constitute the new standardized schedule of rates.
   (5) The new standardized schedule of rates as provided for in
paragraph (4) shall be reduced by 10 percent, effective October 1,
2009, and the resulting rates shall constitute the new standardized
schedule of rates.
   (6) The rates of licensed group home providers, whose rates are
not established under the standardized schedule of rates, shall be
reduced by 10 percent, effective October 1, 2009.
   (h) The standardized schedule of rates pursuant to subdivisions
(f) and (g) shall be implemented as follows:
   (1) Any group home program that received an AFDC-FC rate in the
prior fiscal year at or above the standard rate for the RCL in the
current fiscal year shall continue to receive that rate.
   (2) Any group home program that received an AFDC-FC rate in the
prior fiscal year below the standard rate for the RCL in the current
fiscal year shall receive the RCL rate for the current year.
   (i) (1) The department shall not establish a rate for a new
program of a new or existing provider, or for an existing program at
a new location of an existing provider, unless the provider submits a
letter of recommendation from the host county, the primary placing
county, or a regional consortium of counties that includes all of the
following:
   (A) That the program is needed by that county.
   (B) That the provider is capable of effectively and efficiently
operating the program.
   (C) That the provider is willing and able to accept AFDC-FC
children for placement who are determined by the placing agency to
need the level of care and services that will be provided by the
program.
   (D) That, if the letter of recommendation is not being issued by
the host county, the primary placing county has notified the host
county of its intention to issue the letter and the host county was
given the opportunity  of  30 days to respond to this
notification and to discuss options with the primary placing county.
   (2) The department shall encourage the establishment of consortia
of county placing agencies on a regional basis for the purpose of
making decisions and recommendations about the need for, and use of,
group home programs and other foster care providers within the
regions.
   (3) The department shall annually conduct a county-by-county
survey to determine the unmet placement needs of children placed
pursuant to Section 300 and Section 601 or 602, and shall publish its
findings by November 1 of each year.
   (j) The department shall develop regulations specifying
ratesetting procedures for program expansions, reductions, or
modifications, including increases or decreases in licensed capacity,
or increases or decreases in level of care or services.
   (k)    (1)  For the purpose of
this subdivision, "program change" means any alteration to an
existing group home program planned by a provider that will increase
the RCL or AFDC-FC rate. An increase in the licensed capacity or
other alteration to an existing group home program that does not
increase the RCL or AFDC-FC rate shall not constitute a program
change. 
   (2) For the 1998-99, 1999-2000, and 2000-01 fiscal years, the rate
for a group home program shall not increase, as the result of a
program change, from the rate established for the program effective
July 1, 2000, and as adjusted pursuant to subparagraph (B) of
paragraph (1) of subdivision (g), except as provided in paragraph
(3).  
   (3) (A) For the 1998-99, 1999-2000, and 2000-01 fiscal years, the
department shall not establish a rate for a new program of a new or
existing provider or approve a program change for an existing
provider that either increases the program's RCL or AFDC-FC rate, or
increases the licensed capacity of the program as a result of
decreases in another program with a lower RCL or lower AFDC-FC rate
that is operated by that provider, unless both of the following
conditions are met:  
   (i) The licensee obtains a letter of recommendation from the host
county, primary placing county, or regional consortium of counties
regarding the proposed program change or new program. 

   (ii) The county determines that there is no increased cost to the
General Fund.  
   (B) Notwithstanding subparagraph (A), the department may grant a
request for a new program or program change, not to exceed 25 beds,
statewide, if both of the following conditions are met: 

   (i) The licensee obtains a letter of recommendation from the host
county, primary placing county, or regional consortium of counties
regarding the proposed program change or new program. 

   (ii) The department determines that the new program or program
change will result in a reduction of referrals to state hospitals
during the 1998-99 fiscal year. 
   (l) General unrestricted or undesignated private charitable
donations and contributions made to charitable or nonprofit
organizations shall not be deducted from the cost of providing
services pursuant to this section. The donations and contributions
shall not be considered in any determination of maximum expenditures
made by the department.

(m) The department shall, by October 1 of each year, commencing
October 1, 1992, provide the Joint Legislative Budget Committee with
a list of any new departmental requirements established during the
previous fiscal year concerning the operation of group homes, and of
any unusual, industrywide increase in costs associated with the
provision of group care that may have significant fiscal impact on
providers of group homes care. The committee may, in fiscal year
1993-94 and beyond, use the list to determine whether an
appropriation for rate adjustments is needed in the subsequent fiscal
year.
  SEC. 57.  Section 11486 of the Welfare and Institutions Code is
amended to read:
   11486.  (a) The needs of any individual who is a member of a
family applying for, or receiving, aid under this chapter shall not
be taken into account in making the determination under Section 11450
with respect to his or her family beginning on the date, or at any
time thereafter, the individual is found in state or federal court or
pursuant to an administrative hearing decision, including any
determination made on the basis of a plea of guilty or nolo
contendere, to have committed any of the following acts:
   (1) Making a fraudulent statement or representation with respect
to the place of residence of the individual in order to receive
assistance simultaneously from two or more states or counties.
   (2) Submitting documents for nonexistent children, or submitting
false documents for the purpose of showing ineligible children to be
eligible for aid.
   (3) When there has been a receipt of cash benefits that exceeds
ten thousand dollars ($10,000) as a result of intentionally and
willfully doing any of the following acts for the purpose of
establishing or maintaining the family's eligibility for aid or
increasing or preventing a reduction in the amount of aid:
   (A) Making a false or misleading statement or misrepresenting,
concealing, or withholding facts.
   (B) Committing any act intended to mislead, misrepresent, conceal,
or withhold facts or propound a falsity.
   (b) The needs of any individual who is a member of a family
applying for, or receiving, aid under this chapter shall not be taken
into account in making the determination under Section 11450 with
respect to his or her family for the following periods beginning on
the date or any time thereafter the individual is convicted of a
felony in state or federal court, including any determination made on
the basis of a plea of guilty or nolo contendere, for committing
fraud in the receipt or attempted receipt of aid:
   (1) For two years, if the amount of aid is less than two thousand
dollars ($2,000).
   (2) For five years, if the amount of aid is two thousand dollars
($2,000) or more but is less than five thousand dollars ($5,000).
   (3) Permanently, if the amount of aid is five thousand dollars
($5,000) or more.
   (c) (1) Except as provided in subdivisions (a) and (b), the needs
of any individual who is a member of a family applying for, or
receiving, aid under this chapter to whom paragraph (2) applies shall
not be taken into account in making the determination under Section
11450 with respect to his or her family for the following periods:
   (A) For a period of six months upon the first occasion of any
offense referred to in paragraph (2).
   (B) For a period of 12 months upon the second occasion of any of
those offenses referred to in paragraph (2).
   (C) Permanently, upon the third occasion of any offense referred
to in subdivision (b) and paragraph (2).
   (2) Except as provided in subdivisions (a), (b)  ,  and
(d), paragraph (1) shall apply to any individual who is found by a
federal or state court, or pursuant to a special administrative
hearing meeting the requirements of regulations adopted by the United
States Secretary of Health and Human Services, including any
determination made on the basis of a plea of guilty or nolo
contendere, to have done any of the following acts for the purpose of
establishing or maintaining the family's eligibility for aid or
increasing, or preventing a reduction in, the amount of that aid:
   (A) Making a false or misleading statement or misrepresenting,
concealing, or withholding facts.
   (B) Committing any act intended to mislead, misrepresent, conceal,
or withhold facts or propound a falsity.
   (d) (1) Except as provided in subdivisions (a) and (b), and
notwithstanding subdivision (c), the needs of any individual who is a
member of a family applying for, or receiving, aid under this
chapter to whom paragraph (2) applies shall not be taken into account
in making the determination under Section 11450 with respect to his
or her family for the following periods:
   (A) For a period of two years upon the first occasion of any
offense referred to in paragraph (2).
   (B) For a period of four years upon the second occasion of any
offense referred to in paragraph (2).
   (C) Permanently, upon the third occasion of any offense referred
to in subdivision (b) and paragraph (2).
   (2) Paragraph (1) shall apply to any individual who is found by a
federal or state court, or pursuant to a special administrative
hearing meeting the requirements of regulations adopted by the United
States Secretary of Health and Human Services, including any
determination made on the basis of a plea of guilty or nolo
contendere, to have submitted more than one application for the same
type of aid for the same period of time, for the purpose of receiving
more than one grant of aid in order to establish or maintain the
family's eligibility for aid or increasing, or preventing a reduction
in, the amount of that aid.
   (e) Proceedings against any individual alleged to have committed
an offense described in subdivision (c) or (d) may be held either by
hearing, pursuant to Section 10950 and in conformity with the
regulations of the United States Secretary of Health and Human
Services, if appropriate, or by referring the matter to the
appropriate authorities for civil or criminal action in court.
   (f) The department shall coordinate any action taken under this
section with any corresponding actions being taken under CalFresh in
any case where the factual issues involved arise from the same or
related circumstances.
   (g) Any period for which sanctions are imposed under this section
shall remain in effect, without possibility of administrative stay,
unless and until the findings upon which the sanctions were imposed
are subsequently reversed by a court of appropriate jurisdiction, but
in no event shall the duration of the period for which the sanctions
are imposed be subject to review.
   (h) Sanctions imposed under this section shall be in addition to,
and not in substitution for, any other sanctions which may be
provided for by law with respect to the offenses for which the
sanctions are imposed.
   (i) The department shall adopt regulations to ensure that any
investigations made under this chapter are conducted throughout the
state in such a manner as to protect the confidentiality of the
current or former working recipient.
   (j) Each county shall receive an amount equal to 12.5 percent of
the actual amount of aid under this chapter repaid or recovered by a
county, as determined by the Director of the Department of Finance
resulting from the detection of fraud.
   SEC. 57.5.    Section 11521 of the   Welfare
and Institutions Code   is repealed.  
   11521.  By July 1, 1998, the department shall revise data
collection procedures used for quality control and caseload
characteristic studies in order to respond to the data collection
requirements of Public Law 104-193 and state law. The department
shall develop common data definitions to be used by the counties,
design common identifiers, and, to the extent possible, standardize
state and county data collection infrastructure. The department shall
accomplish the requirements of this section in consultation with
experts in monitoring and research, representatives of counties, the
Legislature, and appropriate state agencies. 
   SEC. 58.    Section 11521.7 of the   Welfare
and Institutions Code   is repealed.  
   11521.7.  The department shall continue the evaluation of
Cal-Learn and issue a final report to the Legislature by July 1,
2000. 
   SEC. 58.   SEC. 58.5.   Section 12200.5
of the Welfare and Institutions Code is amended to read:
   12200.5.  (a) (1) If permitted by federal law, and upon approval
of the Secretaries of the United States Department of Health and
Human Services and the United States Department of Agriculture, state
supplementary payments set forth in Section 12200 shall be decreased
for individuals and couples who live alone as defined for purposes
of eligibility for CalFresh or only with other recipients of aid
under Section 12200 so as to no longer include the bonus value of
CalFresh benefits, and the department shall, instead, provide
CalFresh benefits to each otherwise eligible aged, blind, or disabled
applicant or recipient as specified in this section.
   (2) Amounts of aid payable to individuals pursuant to subdivisions
(a), (c), and (f) of Section 12200 who live alone as defined for
purposes of CalFresh eligibility or only with recipients of aid under
Section 12200 shall be reduced by ten dollars ($10).
   (3) Amounts of aid payable to couples pursuant to subdivisions (b)
and (d) of Section 12200 who live alone as defined for purposes of
CalFresh eligibility or only with other recipients of aid under
Section 12200 shall be reduced by ten dollars ($10).
   (b) (1) This section shall not be operative unless the Secretary
of the United States Department of Agriculture approves the necessary
waivers for a centralized state issuance system.
   (2) Waivers required by paragraph (1) shall include, at a minimum,
all of the following, in order to ensure the most cost-effective
delivery of benefits:
   (A) 7 C.F.R. 273.10(f)--Limitation of certification periods.
   (B) 7 C.F.R. 273.2(e)--Face-to-face interview requirements.
   (C) 7 C.F.R. 273.2(f)(1)--Mandatory verification requirements.
   (D) 7 C.F.R. 273.2(g)--Application processing timeframe
requirements.
   (E) 7 C.F.R. 273.9(d)(6)--Standard utility allowance usage.
   (F) 7 C.F.R. 273.12(a)--Nonmonthly reporting requirements.
   (c) In the administration of the centralized state system, the
department may contract through a competitive bid contract or a sole
source contract all or part of this operation.
  SEC. 59.  Section 14005.37 of the Welfare and Institutions Code is
amended to read:
   14005.37.  (a) Except as provided in Section 14005.39, whenever a
county receives information about changes in a beneficiary's
circumstances that may affect eligibility for Medi-Cal benefits, the
county shall promptly redetermine eligibility. The procedures for
redetermining Medi-Cal eligibility described in this section shall
apply to all Medi-Cal beneficiaries.
   (b)  Loss of eligibility for cash aid under that program shall not
result in a redetermination under this section unless the reason for
the loss of eligibility is one that would result in the need for a
redetermination for a person whose eligibility for Medi-Cal under
Section 14005.30 was determined without a concurrent determination of
eligibility for cash aid under the CalWORKs program.
   (c) A loss of contact, as evidenced by the return of mail marked
in such a way as to indicate that it could not be delivered to the
intended recipient or that there was no forwarding address, shall
require a prompt redetermination according to the procedures set
forth in this section.
   (d) Except as otherwise provided in this section, Medi-Cal
eligibility shall continue during the redetermination process
described in this section. A Medi-Cal beneficiary's eligibility shall
not be terminated under this section until the county makes a
specific determination based on facts clearly demonstrating that the
beneficiary is no longer eligible for Medi-Cal under any basis and
due process rights guaranteed under this division have been met.
   (e) For purposes of acquiring information necessary to conduct the
eligibility determinations described in subdivisions (a) to (d),
inclusive, a county shall make every reasonable effort to gather
information available to the county that is relevant to the
beneficiary's Medi-Cal eligibility prior to contacting the
beneficiary. Sources for these efforts shall include, but are not
limited to, Medi-Cal, CalWORKs, and CalFresh case files of the
beneficiary or of any of his or her immediate family members, which
are open or were closed within the last 45 days, and wherever
feasible, other sources of relevant information reasonably available
to the counties.
   (f) If a county cannot obtain information necessary to redetermine
eligibility pursuant to subdivision (e), the county shall attempt to
reach the beneficiary by telephone in order to obtain this
information, either directly or in collaboration with community-based
organizations so long as confidentiality is protected.
   (g) If a county's efforts pursuant to subdivisions (e) and (f) to
obtain the information necessary to redetermine eligibility have
failed, the county shall send to the beneficiary a form, which shall
highlight the information needed to complete the eligibility
determination. The county shall not request information or
documentation that has been previously provided by the beneficiary,
that is not absolutely necessary to complete the eligibility
determination, or that is not subject to change. The form shall be
accompanied by a simple, clear, consumer-friendly cover letter, which
shall explain why the form is necessary, the fact that it is not
necessary to be receiving CalWORKs benefits to be receiving Medi-Cal
benefits, the fact that receipt of Medi-Cal benefits does not count
toward any time limits imposed by the CalWORKs program, the various
bases for Medi-Cal eligibility, including disability, and the fact
that even persons who are employed can receive Medi-Cal benefits. The
cover letter shall include a telephone number to call in order to
obtain more information. The form and the cover letter shall be
developed by the department in consultation with the counties and
representatives of consumers, managed care plans, and Medi-Cal
providers. A Medi-Cal beneficiary shall have no less than 20 days
from the date the form is mailed pursuant to this subdivision to
respond. Except as provided in subdivision (h), failure to respond
prior to the end of this 20-day period shall not impact his or her
Medi-Cal eligibility.
   (h) If the purpose for a redetermination under this section is a
loss of contact with the Medi-Cal beneficiary, as evidenced by the
return of mail marked in such a way as to indicate that it could not
be delivered to the intended recipient or that there was no
forwarding address, a return of the form described in subdivision (g)
marked as undeliverable shall result in an immediate notice of
action terminating Medi-Cal eligibility.
   (i) If, within 20 days of the date of mailing of a form to the
Medi-Cal beneficiary pursuant to subdivision (g), a beneficiary does
not submit the completed form to the county, the county shall send
the beneficiary a written notice of action stating that his or her
eligibility shall be terminated 10 days from the date of the notice
and the reasons for that determination, unless the beneficiary
submits a completed form prior to the end of the 10-day period.
   (j) If, within 20 days of the date of mailing of a form to the
Medi-Cal beneficiary pursuant to subdivision (g), the beneficiary
submits an incomplete form, the county shall attempt to contact the
beneficiary by telephone and in writing to request the necessary
information. If the beneficiary does not supply the necessary
information to the county within 10 days from the date the county
contacts the beneficiary in regard to the incomplete form, a 10-day
notice of termination of Medi-Cal eligibility shall be sent.
   (k) If, within 30 days of termination of a Medi-Cal beneficiary's
eligibility pursuant to subdivision (h), (i), or (j), the beneficiary
submits to the county a completed form, eligibility shall be
determined as though the form was submitted in a timely manner and if
a beneficiary is found eligible, the termination under subdivision
(h), (I), or (j) shall be rescinded.
   (  l  ) If the information reasonably available to the
county pursuant to the redetermination procedures of subdivisions
(d), (e), (g), and (m) does not indicate a basis of eligibility,
Medi-Cal benefits may be terminated so long as due process
requirements have otherwise been met.
   (m) The department shall, with the counties and representatives of
consumers, including those with disabilities, and Medi-Cal
providers, develop a timeframe for redetermination of Medi-Cal
eligibility based upon disability, including ex parte review, the
redetermination form described in subdivision (g), timeframes for
responding to county or state requests for additional information,
and the forms and procedures to be used. The forms and procedures
shall be as consumer-friendly as possible for people with
disabilities. The timeframe shall provide a reasonable and adequate
opportunity for the Medi-Cal beneficiary to obtain and submit medical
records and other information needed to establish eligibility for
Medi-Cal based upon disability.
   (n) This section shall be implemented on or before July 1, 2001,
but only to the extent that federal financial participation under
Title XIX of the federal Social Security Act (Title 42 U.S.C. Sec.
1396 and following) is available.
   (o) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall, without taking any regulatory action, implement
this section by means of all county letters or similar instructions.
Thereafter, the department shall adopt regulations in accordance with
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. Comprehensive
implementing instructions shall be issued to the counties no later
than March 1, 2001.
  SEC. 60.  Section 14011.1 of the Welfare and Institutions Code is
amended to read:
   14011.1.  (a) The department shall, not later than July 1, 1998,
create and implement a simplified application package for the
following Medi-Cal applicants, as described under Section 1902( 
l  )(3) of the federal Social Security Act (42 U.S.C. Sec. 1396a
(  l  )(3)):
   (1) Children.
   (2) Pregnant women and infants.
   (b) In developing the application package described in this
section, the department shall seek input from the Managed Risk
Medical Insurance Board and persons with expertise, including
beneficiary representatives, counties, and beneficiaries.
   (c) The department shall permit an applicant to whom subdivision
(a) applies to apply for benefits by mailing in the simplified
application package. The package shall include, but not be limited
to, the following items, as they now exist or may be changed from
time to time:
   (1) An application for cash aid, CalFresh, and Medi-Cal.
   (2) A statement of citizenship, alienage, and immigration status.
   (3) A statement of facts.
   (4) Important information for persons requesting Medi-Cal.
   (5) The Child Health and Disability Prevention Program brochure.
   (d) The department shall not require an applicant who submits a
simplified application pursuant to subdivision (c) to complete a
face-to-face interview, except for good cause, a suspicion of fraud,
or to complete the application process. Every application package
shall contain a notification of the applicant's right to complete a
face-to-face interview.
   (e) The department shall implement this section only to the extent
that its provisions are not violative of the requirements of federal
law, and only to the extent that federal financial participation is
not jeopardized.
  SEC. 61.  Section 14011.2 of the Welfare and Institutions Code, as
amended by Section 33 of Chapter 5 of the 4th Extraordinary Session
of the Statutes of 2009, is amended to read:
   14011.2.  (a) The department shall require that each applicant for
or beneficiary of Medi-Cal, including a child, who is not a
recipient of aid under the provisions of Chapter 2 (commencing with
Section 11200) or Chapter 3 (commencing with Section 12000) shall
provide his or her social security account number, or numbers, if he
or she has more than one such number.
   (b) The requirement for a social security account number shall be
a condition of eligibility only for the applicant who is seeking or
the beneficiary who is receiving (1) full-scope medical benefits or
(2), pursuant to Section 14007.5, restricted medical benefits
(emergency and pregnancy-related services only), and, in either case,
who declares, as required in subdivision (d), that he or she is a
citizen or national of the United States, and, if he or she is not a
citizen or national of the United States, that he or she has
satisfactory immigration status.
   (c) The requirement for a social security account number shall not
be a condition of eligibility for the applicant who is seeking or
the beneficiary who is receiving, pursuant to Section 14007.5,
restricted medical benefits (emergency and pregnancy-related services
only), and who has not made the declaration, as required in
subdivision (d), that he or she is not a citizen or national of the
United States, and, if he or she is not a citizen or national of the
United States, that he or she does not have satisfactory immigration
status.
   (d) Every applicant or beneficiary or, in the case of a child, by
the child's caretaker relative or legal guardian on his or her behalf
shall declare, under penalty of perjury, that he or she is, or is
not any of the following:
   (1) A citizen of the United States.
   (2) A national of the United States.
   (3) An alien who has satisfactory immigration status.
   (e) (1) Notwithstanding Section 50301.1 of Title 22 of the
California Code of Regulations, an individual who declares to be a
citizen or national of the United States in accordance with Section
1903(i)(22) of the federal Social Security Act (42 U.S.C. Sec. 1396b
(i)(22)) shall present satisfactory documentary evidence of
citizenship or nationality in compliance with Section 1903(x) (42
U.S.C. Sec. 1396b(x) of the federal Social Security Act). Except as
otherwise provided in Section 14007.2 and in paragraph (7), no
services shall be available under this chapter for an individual who
fails to comply with the documentation requirements of this section.
   (2) (A) The documentation required pursuant to paragraph (1) shall
be provided once by each individual, as follows:
   (i) During the initial application process for applicants.
   (ii) During the redetermination process for existing
beneficiaries.
   (B) If the documentation is obtained from a beneficiary, the
county shall maintain a copy of the documentation in the case file of
the beneficiary, and shall not request this documentation again.
   (C) If electronic verification is used, a record of the
documentation shall be maintained in the case record and shall not be
requested again.
   (D) Once the required documentation has been obtained by the
county, the beneficiary shall not be required to provide it again,
even if he or she is transferring to or applying in a new county.
   (3) To the extent that federal financial participation is
available, the department shall provide for exceptions or
alternatives to the documentation requirements imposed by this
subdivision as a means of providing individuals with increased
flexibility and ability to provide satisfactory documentary evidence
within a reasonable period of time. These exceptions or alternatives
may include, but shall not be limited to, using an expanded list of
acceptable documents, relying on electronic data matches for birth
certificates, relying on a sworn affidavit of citizenship with
respect to an individual who can demonstrate good cause for his or
her inability or other failure to provide the required documentation,
and relying on other information that may be available
electronically.
   (4) (A) To the extent that federal financial participation is
available, the department shall rely on the eligibility
determinations for the CalWORKs program or the Aid to Families with
Dependent Children-Foster Care program as meeting the requirements of
this section.
   (B) To the extent that federal financial participation is
available, an individual shall be deemed to have met the
documentation requirements of this subdivision if the individual has
been determined to be eligible for supplemental security income
pursuant to Title XVI of the Social Security Act (42 U.S.C. Sec. 1601
et seq.).
   (5) The following provisions shall apply to the extent that
federal financial participation is available:
   (A) If an individual cooperates in the effort to obtain and
present the documentation required under this subdivision, the
individual shall be given as much time as is allowed by federal law
and policy to present that documentation.
   (B) During the time period described in subparagraph (A), an
applicant shall receive the scope of Medi-Cal benefits for which the
applicant is otherwise eligible.
   (6) To the extent that federal financial participation is
available, the county shall do all of the following to assist an
individual in obtaining and presenting the documentation required
under this subdivision:
   (A) For an applicant who does not present the required
documentation at the time of application, the county, during the time
period described in subparagraph (A) of paragraph (5), shall assist
the applicant in obtaining that documentation.
   (B) For a current beneficiary who has not yet documented his or
her citizenship, the county shall do the following:
   (i) If, at the time of annual redetermination, the beneficiary
returns the annual redetermination form and, but for the failure to
present the required documentation, continued eligibility could be
established, the county shall do the following:
   (I) Review county eligibility files and records, and the Medi-Cal
Eligibility Data System, to access those documents. This review shall
include a review of any CalWORKs or CalFresh files that may exist
for the beneficiary.
   (II) Attempt to reach the beneficiary by telephone to advise the
beneficiary as to the need to obtain and present the required
documentation.
   (III) If the beneficiary fails to respond to the telephone contact
or present the required documents, send a second form to the
beneficiary that
highlights the documentation being requested and informs the
beneficiary to contact the county. The form shall be written in a
simple, clear, consumer-friendly manner, and shall explain why the
documentation is necessary.
   (IV) If the beneficiary fails to contact the county, the county
shall make another attempt to reach the beneficiary by telephone to
advise the beneficiary of the need to obtain and present the required
documentation.
   (ii) Document in the case file any efforts made to contact and
advise the beneficiary as to the need to obtain and present the
required documentation.
   (C) If a beneficiary fails to present the required documentation
after the process required under clause (i), the county shall send a
10-day notice of action to indicate that the beneficiary's benefits
are reduced to those made available under Section 14007.2.
   (7) To the extent federal financial participation is available,
and only to the extent any necessary federal approvals have been
obtained, the department may, in its discretion, elect the option
referenced in Section 1396a(a)(46)(B)(ii) of Title 42 of the United
States Code to satisfy the requirements of paragraph (1). This
paragraph shall become operative on January 1, 2010, or when all
necessary agreements with the Commissioner of Social Security are in
place, whichever is later. The department may implement this
paragraph earlier than January 1, 2010, only to the extent allowed by
federal law or guidance.
   (8) (A) Any benefits provided in accordance with subparagraph (B)
of paragraph (5) shall terminate if any of the following occurs:
   (i) The individual does not obtain and present the required
documentation within the time period provided in subparagraph (A) of
paragraph (5).
   (ii) The documentation is received by the county and the county
has made a final determination of eligibility.
   (B) The termination of Medi-Cal benefits under this paragraph
shall occur without the necessity of further review or determination
by the department. This shall not affect an individual's right to a
hearing with respect to the denial of the application or termination
of eligibility resulting from the annual eligibility redetermination.

   (9) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement this subdivision by means of an 
all county   all-county  letter or similar
instruction without taking regulatory action. Within three years from
the date that this subdivision becomes effective, the department
shall adopt regulations in accordance with the requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.
   (10) The department shall notify and consult with advocates,
providers, counties, and health plans in implementing, interpreting,
or making specific this subdivision.
   (11) The department shall file all necessary state plan amendments
to implement the requirements of this subdivision. Upon filing any
state plan amendment, the department shall provide the appropriate
fiscal committees of the Legislature with a copy of the state plan
amendment.
   (12) If any part of this subdivision is in conflict with or does
not comply with federal law, the subdivision shall be implemented
only to the extent that federal law permits. Any part that is in
conflict with or does not comply with federal law shall be severable
from the remaining portions of this subdivision.
  SEC. 62.  Section 14107.12 of the Welfare and Institutions Code is
amended to read:
   14107.12.  (a) The Department of Justice may pay, pursuant to
subdivision (d), from funds recovered by the Department of Justice,
and only to the extent that the money may be used for this purpose, a
reward to any person who furnishes information leading to the
recovery of not less than one hundred dollars ($100) of public funds
paid for services or goods rendered under the Medi-Cal program due to
an act or omission by a individual or entity from which recovery is
sought and that is the basis of a conviction of a Medi-Cal provider
of services or goods in violation of any statutory criminal
prohibition within the jurisdiction of the Bureau of Medi-Cal Fraud
and Elder Abuse pursuant to Section 12528 of the Government Code.
   (b) No reward shall be paid for information under this section
unless the information relates to the specific activities of a
specific individual or entity, and specifies the time period during
which the prohibited activities occurred.
   (c) No reward shall be paid under this section to a federal,
state, or local public employee or any individual contracting with a
state or local agency for information discovered by the employee
during the course of his or her duties as a federal, state, or local
agency employee or pursuant to a contract with that agency.
   (d) The amount of a reward under this section shall be determined
by the Department of Justice, and shall not exceed 10 percent of the
restitution recovered or one thousand dollars ($1,000), whichever is
less. No reward shall be paid until all recoverable funds have been
collected from the individual or entity convicted of a violation of
statutory prohibitions listed in subdivision (a).
   (e) A determination by the Department of Justice of the
eligibility of an individual to receive a reward, the amount and
appropriateness of a reward under this section, and the timing of the
payment of the reward shall be deemed to be final and shall not be
subject to administrative appeal or judicial review.
   (f) Subject to subdivision (g), payments made under authority of
this section shall be disregarded for purposes of determining
eligibility for any Medi-Cal program, for the CalWORKs program, for
CalFresh, for the County Medical Services Program, and for any other
means-tested public benefit program for which California has
authority to establish the rules for determining eligibility.
   (g) The income disregard described in subdivision (f) shall not be
effective, with respect to an identified program, until the first
day of the third month from the month in which any necessary federal
approval is obtained. The income disregard provided for in
subdivision (f) shall only be implemented to the extent that federal
financial participation is obtained. 
  SEC. 63.    Section 14154 of the Welfare and
Institutions Code is amended to read:
   14154.  (a) (1) The department shall establish and maintain a plan
whereby costs for county administration of the determination of
eligibility for benefits under this chapter will be effectively
controlled within the amounts annually appropriated for that
administration. The plan, to be known as the County Administrative
Cost Control Plan, shall establish standards and performance
criteria, including workload, productivity, and support services
standards, to which counties shall adhere. The plan shall include
standards for controlling eligibility determination costs that are
incurred by performing eligibility determinations at county
hospitals, or that are incurred due to the outstationing of any other
eligibility function. Except as provided in Section 14154.15,
reimbursement to a county for outstationed eligibility functions
shall be based solely on productivity standards applied to that
county's welfare department office.
   (2) (A) The plan shall delineate both of the following:
   (i) The process for determining county administration base costs,
which include salaries and benefits, support costs, and staff
development.
   (ii) The process for determining funding for caseload changes,
cost-of-living adjustments, and program and other changes.
   (B) The annual county budget survey document utilized under the
plan shall be constructed to enable the counties to provide
sufficient detail to the department to support their budget requests.

   (3) The plan shall be part of a single state plan, jointly
developed by the department and the State Department of Social
Services, in conjunction with the counties, for administrative cost
control for the California Work Opportunity and Responsibility to
Kids (CalWORKs), CalFresh, and Medical Assistance (Medi-Cal)
programs. Allocations shall be made to each county and shall be
limited by and determined based upon the County Administrative Cost
Control Plan. In administering the plan to control county
administrative costs, the department shall not allocate state funds
to cover county cost overruns that result from county failure to meet
requirements of the plan. The department and the State Department of
Social Services shall budget, administer, and allocate state funds
for county administration in a uniform and consistent manner.
   (4) The department and county welfare departments shall develop
procedures to ensure the data clarity, consistency, and reliability
of information contained in the county budget survey document
submitted by counties to the department. These procedures shall
include the format of the county budget survey document and process,
data submittal and its documentation, and the use of the county
budget survey documents for the development of determining county
administration costs. Communication between the department and the
county welfare departments shall be ongoing as needed regarding the
content of the county budget surveys and any potential issues to
ensure the information is complete and well understood by involved
parties. Any changes developed pursuant to this section shall be
incorporated within the state's annual budget process by no later
than the 2011-12 fiscal year.
   (5) The department shall provide a clear narrative description
along with fiscal detail in the Medi-Cal estimate package, submitted
to the Legislature in January and May of each year, of each component
of the county administrative funding for the Medi-Cal program. This
shall describe how the information obtained from the county budget
survey documents was utilized and, where applicable, modified and the
rationale for the changes.
   (b) Nothing in this section, Section 15204.5, or Section 18906
shall be construed so as to limit the administrative or budgetary
responsibilities of the department in a manner that would violate
Section 14100.1, and thereby jeopardize federal financial
participation under the Medi-Cal program.
   (c) (1) The Legislature finds and declares that in order for
counties to do the work that is expected of them, it is necessary
that they receive adequate funding, including adjustments for
reasonable annual cost-of-doing-business increases. The Legislature
further finds and declares that linking appropriate funding for
county Medi-Cal administrative operations, including annual
cost-of-doing-business adjustments, with performance standards will
give counties the incentive to meet the performance standards and
enable them to continue to do the work they do on behalf of the
state. It is therefore the Legislature's intent to provide
appropriate funding to the counties for the effective administration
of the Medi-Cal program at the local level to ensure that counties
can reasonably meet the purposes of the performance measures as
contained in this section.
   (2) It is the intent of the Legislature to not appropriate funds
for the cost-of-doing-business adjustment for the 2008-09, 2009-10,
and 2010-11 fiscal years.
   (d) The department is responsible for the Medi-Cal program in
accordance with state and federal law. A county shall determine
Medi-Cal eligibility in accordance with state and federal law. If in
the course of its duties the department becomes aware of accuracy
problems in any county, the department shall, within available
resources, provide training and technical assistance as appropriate.
Nothing in this section shall be interpreted to eliminate any remedy
otherwise available to the department to enforce accurate county
administration of the program. In administering the Medi-Cal
eligibility process, each county shall meet the following performance
standards each fiscal year:
   (1) Complete eligibility determinations as follows:
   (A) Ninety percent of the general applications without applicant
errors and are complete shall be completed within 45 days.
   (B) Ninety percent of the applications for Medi-Cal based on
disability shall be completed within 90 days, excluding delays by the
state.
   (2) (A) The department shall establish best practice guidelines
for expedited enrollment of newborns into the Medi-Cal program,
preferably with the goal of enrolling newborns within 10 days after
the county is informed of the birth. The department, in consultation
with counties and other stakeholders, shall work to develop a process
for expediting enrollment for all newborns, including those born to
mothers receiving CalWORKs assistance.
   (B) Upon the development and implementation of the best practice
guidelines and expedited processes, the department and the counties
may develop an expedited enrollment timeframe for newborns that is
separate from the standards for all other applications, to the extent
that the timeframe is consistent with these guidelines and
processes.
   (C) Notwithstanding the rulemaking procedures of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the department may implement this section by
means of all-county letters or similar instructions, without further
regulatory action.
   (3) Perform timely annual redeterminations, as follows:
   (A) Ninety percent of the annual redetermination forms shall be
mailed to the recipient by the anniversary date.
   (B) Ninety percent of the annual redeterminations shall be
completed within 60 days of the recipient's annual redetermination
date for those redeterminations based on forms that are complete and
have been returned to the county by the recipient in a timely manner.

   (C) Ninety percent of those annual redeterminations where the
redetermination form has not been returned to the county by the
recipient shall be completed by sending a notice of action to the
recipient within 45 days after the date the form was due to the
county.
   (D) When a child is determined by the county to change from no
share of cost to a share of cost and the child meets the eligibility
criteria for the Healthy Families Program established under Section
12693.98 of the Insurance Code, the child shall be placed in the
Medi-Cal-to-Healthy Families Bridge Benefits Program, and these cases
shall be processed as follows:
   (i) Ninety percent of the families of these children shall be sent
a notice informing them of the Healthy Families Program within five
working days from the determination of a share of cost.
   (ii) Ninety percent of all annual redetermination forms for these
children shall be sent to the Healthy Families Program within five
working days from the determination of a share of cost if the parent
has given consent to send this information to the Healthy Families
Program.
   (iii) Ninety percent of the families of these children placed in
the Medi-Cal-to-Healthy Families Bridge Benefits Program who have not
consented to sending the child's annual redetermination form to the
Healthy Families Program shall be sent a request, within five working
days of the determination of a share of cost, to consent to send the
information to the Healthy Families Program.
   (E) Subparagraph (D) shall not be implemented until 60 days after
the Medi-Cal and Joint Medi-Cal and Healthy Families applications and
the Medi-Cal redetermination forms are revised to allow the parent
of a child to consent to forward the child's information to the
Healthy Families Program.
   (e) The department shall develop procedures in collaboration with
the counties and stakeholder groups for determining county review
cycles, sampling methodology and procedures, and data reporting.
   (f) On January 1 of each year, each applicable county, as
determined by the department, shall report to the department on the
county's results in meeting the performance standards specified in
this section. The report shall be subject to verification by the
department. County reports shall be provided to the public upon
written request.
   (g) If the department finds that a county is not in compliance
with one or more of the standards set forth in this section, the
county shall, within 60 days, submit a corrective action plan to the
department for approval. The corrective action plan shall, at a
minimum, include steps that the county shall take to improve its
performance on the standard or standards with which the county is out
of compliance. The plan shall establish interim benchmarks for
improvement that shall be expected to be met by the county in order
to avoid a sanction.
   (h) (1) If a county does not meet the performance standards for
completing eligibility determinations and redeterminations as
specified in this section, the department may, at its sole
discretion, reduce the allocation of funds to that county in the
following year by 2 percent. Any funds so reduced may be restored by
the department if, in the determination of the department, sufficient
improvement has been made by the county in meeting the performance
standards during the year for which the funds were reduced. If the
county continues not to meet the performance standards, the
department may reduce the allocation by an additional 2 percent for
each year thereafter in which sufficient improvement has not been
made to meet the performance standards.
   (2) No reduction of the allocation of funds to a county shall be
imposed pursuant to this subdivision for failure to meet performance
standards during any period of time in which the
cost-of-doing-business increase is suspended.
   (i) The department shall develop procedures, in collaboration with
the counties and stakeholders, for developing instructions for the
performance standards established under subparagraph (D) of paragraph
(3) of subdivision (d), no later than September 1, 2005.
   (j) No later than September 1, 2005, the department shall issue a
revised annual redetermination form to allow a parent to indicate
parental consent to forward the annual redetermination form to the
Healthy Families Program if the child is determined to have a share
of cost.
   (k) The department, in coordination with the Managed Risk Medical
Insurance Board, shall streamline the method of providing the Healthy
Families Program with information necessary to determine Healthy
Families eligibility for a child who is receiving services under the
Medi-Cal-to-Healthy Families Bridge Benefits Program. 
   SEC. 64.  SEC. 63.   Section 15125 of
the Welfare and Institutions Code is amended to read:
   15125.  (a) The Central Benefit Issuance Fund is hereby created in
the State Treasury.
   (b) The fund shall be administered by the State Department of
Social Services, and, notwithstanding Section 13340 of the Government
Code, all moneys in the fund are hereby continuously appropriated to
the department, without regard to fiscal years, for expenditure for
the purpose of making payments or advances to recipients of public
social services and CalFresh benefits, as provided in Section
11006.6.
   (c) Amounts to be transferred to the Central Benefit Issuance Fund
shall be determined by the department, in accordance with an agreed
upon format with the Controller, from the funds and appropriations
properly chargeable for the implementation of the central benefit
issuance system provided for in Section 11006.6.
   (d) (1) Notwithstanding Section 17070 of the Government Code, any
warrant drawn on the Central Benefit Issuance Fund that remains
unpaid for 180 days after it becomes payable, shall be void and shall
be canceled by the Controller.
   (2) The Controller shall cause to be printed prominently on the
face of each warrant issued from the fund, a notice regarding the
requirements of paragraph (1).
   (e) Notwithstanding Sections 17091 and 17092 of the Government
Code, the department, with the concurrence of the Controller, shall
provide for the replacement of lost or stolen warrants consistent
with Section 29853.5 of the Government Code. The department may adopt
regulations implementing this subdivision.
   SEC. 65.   SEC. 64.   Section 15204.4 of
the Welfare and Institutions Code is amended to read:
   15204.4.  In addition to the funds received under Section 15204.2,
counties shall be required to expend money from their own funds,
either from the county's general fund or from the social services
account of the county health and welfare trust fund to support
administration of programs providing services to needy families. Each
county shall expend an amount for these programs that, when combined
with funds expended under Section 18906.5 for administration of
CalFresh, equals or exceeds the amount spent by that county for
corresponding activities during the 1996-97 fiscal year. Failure to
meet this required level of spending shall result in a proportionate
reduction of the funds provided under Section 15204.2. In those cases
the Director of Social Services shall report to the Legislature
within 30 days his or her findings relative to the ability of the
county, with reduced funds, to meet its obligations in administering
the affected programs. The report shall include any relevant
information related to the performance of the county.
   SEC. 66.   SEC. 65.   Section 15204.5 of
the Welfare and Institutions Code is amended to read:
   15204.5.  The department shall establish and maintain a plan
whereby costs for county administration of the payment of aid grants
under this part will be effectively controlled within the amounts
annually appropriated for such administration. The plan, to be known
as the County Administrative Cost Control Plan, shall establish
standards and performance criteria, including workload, productivity
and support services standards, to which counties shall adhere. The
plan shall be part of a single state plan, jointly developed by the
department and the State Department of Health Care Services, in
conjunction with the counties, for administrative cost control for
the Aid to Families with Dependent Children (AFDC), CalFresh, and
Medical Assistance (Medi-Cal) programs. Allocations shall be made to
each county and shall be limited by and determined based upon the
County Administrative Cost Control Plan. In administering the plan to
control county administrative costs, the department shall not
allocate state funds to cover county cost overruns which result from
county failure to meet requirements of the plan. The department and
the State Department of Health  Care  Services shall budget,
administer, and allocate state funds for county administration in a
uniform and a consistent manner. 
  SEC. 67.    Section 15525 of the Welfare and
Institutions Code is amended to read:
   15525.  (a) The State Department of Social Services shall
establish a Work Incentive Nutritional Supplement (WINS) program
pursuant to this section.
   (b) Under the WINS program established pursuant to subdivision
(a), each county shall provide a forty dollar ($40) per month
additional food assistance benefit for each eligible CalFresh
household, as defined in subdivision (d).
   (c) The state shall pay to the counties 100 percent of the cost of
WINS benefits, using funds that qualify for the state's maintenance
of effort requirements under Section 609(a)(7)(B)(i) of Title 42 of
the United States Code.
   (d) For purposes of this section, an "eligible CalFresh household"
is a household that meets all of the following criteria:
   (1) Receives benefits pursuant to Chapter 10 (commencing with
Section 18900) of Part 6.
   (2) Has no household member receiving CalWORKs benefits pursuant
to Chapter 2 (commencing with Section 11200).
   (3) Contains at least one child under 18 years of age, unless the
household contains a child who meets the requirements of Section
11253.
   (4) Has at least one parent or caretaker relative determined to be
"work eligible" as defined in Section 261.2(n) of Title 45 of the
Code of Federal Regulations and Section 607 of Title 42 of the United
States Code.
   (5) Meets the federal work participation hours requirement set
forth in Section 607 of Title 42 of the United States Code for
subsidized or unsubsidized employment, and provides documentation
that the household has met the federal work requirements.
   (e) (1) In accordance with federal law, federal Supplemental
Nutrition Assistance Program benefits administered in California as
CalFresh (Chapter 10 (commencing with Section 18900) of Part 6),
federal supplemental security income
         benefits, state supplemental security program benefits,
public social services, as defined in Section 10051, and county aid
benefits (Part 5 (commencing with Section 17000)), shall not be
reduced as a consequence of the receipt of the WINS benefit paid
under this chapter.
   (2) Benefits paid under this chapter shall not count toward the
federal 60-month time limit on aid as set forth in Section 608(a)(7)
(A) of Title 42 of the United States Code. Payment of WINS benefits
shall not commence before October 1, 2012, and full implementation of
the program shall be achieved on or before April 1, 2013.
   (f) (1) Notwithstanding the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code and
Section 10554), until emergency regulations are filed with the
Secretary of State pursuant to paragraph (2), the State Department of
Social Services may implement this section through all-county
letters or similar instructions from the director. The director may
provide for individual county phase-in of this section to allow for
the orderly implementation based upon standards established by the
director, including the operational needs and requirements of the
counties. Implementation of the automation process changes shall
include issuance of an all-county letter or similar instructions to
counties by March 1, 2012.
   (2) The department may adopt regulations to implement this
chapter. The initial adoption, amendment, or repeal of a regulation
authorized by this section is deemed to address an emergency, for
purposes of Sections 11346.1 and 11349.6 of the Government Code, and
the department is hereby exempted for that purpose from the
requirements of subdivision (b) of Section 11346.1 of the Government
Code. After the initial adoption, amendment, or repeal of an
emergency regulation pursuant to this paragraph, the department may
request approval from the Office of Administrative Law to readopt the
regulation as an emergency regulation pursuant to Section 11346.1 of
the Government Code.
   (g) (1) The department shall not fully implement this section
until the department convenes a workgroup of advocates, legislative
staff, county representatives, and other stakeholders to consider the
progress of the WINS automation effort in tandem with a
pre-assistance employment readiness system (PAERS) program and any
other program options that may provide offsetting benefits to the
caseload reduction credit in the CalWORKs program. The department
shall convene this workgroup on or before December 1, 2011.
   (2) A PAERS program shall be considered in light of current and
potential federal Temporary Assistance for Needy Families (TANF)
statutes and regulations and how other states with pre-assistance or
other caseload offset options are responding to federal changes.
   (3) The consideration of program options shall include, but not
necessarily be limited to, the potential impacts on helping clients
to obtain self-sufficiency, increasing the federal work participation
rate, increasing the caseload reduction credit, requirements and
efficiency of county administration, and the well-being of CalWORKs
recipients.
   (4) If the workgroup concludes that adopting a PAERS program or
other program option pursuant to this section would, on balance, be
favorable for California and its CalWORKs recipients, the department,
in consultation with the workgroup, shall prepare a proposal by
March 31, 2012, for consideration during the regular legislative
budget subcommittee process in 2012.
   (5) To meet the requirements of this subdivision, the department
may use its TANF reauthorization workgroups. 
   SEC. 66.    Section 15525 of the   Welfare
and Institutions Code   is amended to read: 
   15525.  (a) The State Department of Social Services shall
establish a Work Incentive Nutritional Supplement (WINS) program
pursuant to this section.
   (b) Under the WINS program established pursuant to subdivision
(a), each county shall provide a  forty dollar  
forty-dollar  ($40) per month additional food assistance
benefit for each eligible  food stamp   CalFresh
 household, as defined in subdivision (d).
   (c) The state shall pay to the counties 100 percent of the cost of
WINS benefits, using funds that qualify for the state's maintenance
of effort requirements under Section 609(a)(7)(B)(i) of Title 42 of
the United States Code.
   (d) For purposes of this section, an "eligible  food stamp
  CalFresh  household" is a household that meets
all of the following criteria:
   (1) Receives benefits pursuant to Chapter 10 (commencing with
Section 18900) of Part 6.
   (2) Has no household member receiving CalWORKs benefits pursuant
to Chapter 2 (commencing with Section 11200).
   (3) Contains at least one child under 18 years of age, unless the
household contains a child who meets the requirements of Section
11253.
   (4) Has at least one parent or caretaker relative determined to be
"work eligible" as defined in Section 261.2(n) of Title 45 of the
Code of Federal Regulations and Section 607 of Title 42 of the United
States Code.
   (5) Meets the federal work participation hours requirement set
forth in Section 607 of Title 42 of the United States Code for
subsidized or unsubsidized employment, and provides documentation
that the household has met the federal work requirements.
   (e) (1) In accordance with federal law, federal  food
stamp   Supplemental Nutrition Assistance Program 
benefits  administered in California as CalFresh  (Chapter
10 (commencing with Section 18900) of Part 6), federal supplemental
security income benefits, state supplemental security program
benefits, public social services, as defined in Section 10051, and
county aid benefits (Part 5 (commencing with Section 17000)), shall
not be reduced as a consequence of the receipt of the WINS benefit
paid under this chapter.
   (2) Benefits paid under this chapter shall not count toward the
federal 60-month time limit on aid as set forth in Section 608(a)(7)
(A) of Title 42 of the United States Code. Payment of WINS benefits
shall not commence before October 1, 2013, and full implementation of
the program shall be achieved on or before April 1, 2014.
   (f) (1) Notwithstanding the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code and
Section 10554), until emergency regulations are filed with the
Secretary of State pursuant to paragraph (2), the State Department of
Social Services may implement this section through all-county
letters or similar instructions from the director. The director may
provide for individual county phase-in of this section to allow for
the orderly implementation based upon standards established by the
director, including the operational needs and requirements of the
counties. Implementation of the automation process changes shall
include issuance of an all-county letter or similar instructions to
counties by March 1, 2013.
   (2) The department may adopt regulations to implement this
chapter. The initial adoption, amendment, or repeal of a regulation
authorized by this section is deemed to address an emergency, for
purposes of Sections 11346.1 and 11349.6 of the Government Code, and
the department is hereby exempted for that purpose from the
requirements of subdivision (b) of Section 11346.1 of the Government
Code. After the initial adoption, amendment, or repeal of an
emergency regulation pursuant to this paragraph, the department may
request approval from the Office of Administrative Law to readopt the
regulation as an emergency regulation pursuant to Section 11346.1 of
the Government Code.
   (g) (1) The department shall not fully implement this section
until the department convenes a workgroup of advocates, legislative
staff, county representatives, and other stakeholders to consider the
progress of the WINS automation effort in tandem with a
pre-assistance employment readiness system (PAERS) program and any
other program options that may provide offsetting benefits to the
caseload reduction credit in the CalWORKs program. The department
shall convene this workgroup on or before December 1, 2012.
   (2) A PAERS program shall be considered in light of current and
potential federal Temporary Assistance for Needy Families (TANF)
statutes and regulations and how other states with pre-assistance or
other caseload offset options are responding to federal changes.
   (3) The consideration of program options shall include, but not
necessarily be limited to, the potential impacts on helping clients
to obtain self-sufficiency, increasing the federal work participation
rate, increasing the caseload reduction credit, requirements and
efficiency of county administration, and the well-being of CalWORKs
recipients.
   (4) If the workgroup concludes that adopting a PAERS program or
other program option pursuant to this section would, on balance, be
favorable for California and its CalWORKs recipients, the department,
in consultation with the workgroup, shall prepare a proposal by
March 31, 2013, for consideration during the regular legislative
budget subcommittee process in 2013.
   (5) To meet the requirements of this subdivision, the department
may use its TANF reauthorization workgroups.
   SEC. 68.   SEC. 67.   The heading of
Chapter 10 (commencing with Section 18900) of Part 6 of Division 9 of
the Welfare and Institutions Code is amended to read:
      CHAPTER 10.  CALFRESH


   SEC. 69.   SEC. 68.   Section 18900 of
the Welfare and Institutions Code is amended to read:
   18900.  Finding that hunger, undernutrition, and malnutrition are
present and continuing problems faced by low-income California
households, and further finding that the federal Supplemental
Nutrition Assistance Program (Chapter 51 (commencing with Section
2011), Title 7, United States Code) offers significant health-vital
benefits, the purpose of this chapter is to establish a statewide
program to enable recipients of aid under Part 3 (commencing with
Section 11000) or Part 5 (commencing with Section 17000) of this
division and other low-income households to receive benefits under
the federal Supplemental Nutrition Assistance Program.
   SEC. 70.   SEC. 69.   Section 18900.2 is
added to the Welfare and Institutions Code, to read:
   18900.2.  (a) Pursuant to Section 18900.1, the name of the federal
Supplemental Nutrition Assistance Program (Chapter 51 (commencing
with Section 2011) Title 7 of the United States Code) as administered
in California shall be CalFresh.
   (b) Any reference in any other law to the Food Stamp program shall
refer to CalFresh.
   SEC. 71.   SEC. 70.   Section 18901.3 of
the Welfare and Institutions Code is amended to read:
   18901.3.  (a) Subject to the limitations of subdivision (b),
pursuant to Section 115(d)(1)(A) of Public Law 104-193 (21 U.S.C.
Sec. 862a(d)(1)(A)), California opts out of the provisions of Section
115(a)(2) of Public Law 104-193 (21 U.S.C. Sec. 862a(a)(2)). A
convicted drug felon shall be eligible to receive CalFresh benefits
under this section.
   (b) Subdivision (a) does not apply to a person who has been
convicted of unlawfully transporting, importing into this state,
selling, furnishing, administering, giving away, possessing for sale,
purchasing for purposes of sale, manufacturing a controlled
substance, possessing precursors with the intent to manufacture a
controlled substance, or cultivating, harvesting, or processing
marijuana or any part thereof pursuant to Section 11358 of the Health
and Safety Code.
   (c) Subdivision (a) does not apply to a person who has been
convicted of unlawfully soliciting, inducing, encouraging, or
intimidating a minor to participate in any activity listed in
subdivision (b).
   (d) As a condition of eligibility to receive CalFresh benefits
pursuant to subdivision (a), an applicant convicted of a felony drug
offense that is not excluded under subdivision (b) or (c) shall be
required to provide proof of one of the following subsequent to the
most recent drug-related conviction:
   (1) Completion of a government-recognized drug treatment program.
   (2) Participation in a government-recognized drug treatment
program.
   (3) Enrollment in a government-recognized drug treatment program.
   (4) Placement on a waiting list for a government-recognized drug
treatment program.
   (5) Other evidence that the illegal use of controlled substances
has ceased, as established by State Department of Social Services
regulations.
   (e) Notwithstanding the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code), the department may implement this section
through an all-county letter or similar instructions from the
director no later than January 1, 2005.
   (f) The department shall adopt regulations as otherwise necessary
to implement this section no later than July 1, 2005. Emergency
regulations adopted for implementation of this section may be adopted
by the director in accordance with the Administrative Procedure Act.
The adoption of emergency regulations shall be deemed to be an
emergency and necessary for immediate preservation of the public
peace, health and safety, or general welfare. The emergency
regulations shall be exempt from review by the Office of
Administrative Law. The emergency regulations authorized by this
section shall be submitted to the Office of Administrative Law for
filing with the Secretary of State and shall remain in effect for no
more than 180 days.
   SEC. 72.   SEC. 71.   Section 18901.4 of
the Welfare and Institutions Code is amended to read:
   18901.4.  (a) Effective July 1, 2010, the department shall propose
a Transitional CalFresh for Foster Youth demonstration project under
which independent foster care adolescents, as defined in Section
1905(w)(1) of the federal Social Security Act (42 U.S.C. Sec. 1396d
(w)(1)) who are not eligible for CalWORKs or Supplementary Security
Income program benefits, shall be eligible without regard to income
or resources, subject to federal law authorizing demonstration
projects pursuant to Section 2011 and following of Title 7 of the
United States Code.
   (b) An individual eligible for the program proposed pursuant to
this section shall receive the maximum benefit amount allotted for a
household size of one for the initial certification period, which
shall remain constant for the entirety of the initial certification
period. The CalFresh case shall be established and maintained in the
county of jurisdiction designated by the terminating foster care
case.
   (c) The demonstration project proposed pursuant to this section
shall maximize access to benefits and minimize interim reporting
requirements during the certification period.
   (d) Notwithstanding any other provision of law, Chapter 4.6
(commencing with Section 10830) of Part 2 of Division 9 shall not
apply to individuals eligible under this section during the 12-month
transitional CalFresh demonstration project certification period.
   (e) Not later than March 1, 2010, the department shall seek all
necessary federal approvals to implement this section as a
demonstration project for these beneficiaries. This section shall be
implemented only to the extent that federal financial participation
is available.
   (f) The department shall implement this section by an all-county
letter (ACL) or similar instruction from the director and shall adopt
regulations as otherwise necessary to implement this section no
later than January 1, 2011.
   SEC. 73.   SEC. 72.   Section 18901.5 of
the Welfare and Institutions Code is amended to read:
   18901.5.  (a) The department shall establish a program of
categorical eligibility for CalFresh in accordance with Section 5(a)
of the federal Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2014
(a)), and implementing regulations, to improve nutrition and promote
the retention and development of assets and resources for needy
households who meet all other federal Supplemental Nutrition
Assistance Program eligibility requirements. Categorical eligibility
for CalFresh shall also apply to any individual who is a member of a
household that will be receiving or is eligible to receive cash
assistance under Part 5 (commencing with Section 17000), or eligible
to receive food assistance under Chapter 10.1 (commencing with
Section 18930).
   (b) The director shall implement the program established pursuant
to this section only with the appropriate federal authorization and
if implementation would not result in the loss of federal financial
participation.
   (c) Notwithstanding the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code) and
Section 10554, until emergency regulations are filed with the
Secretary of State, the State Department of Social Services may
implement the changes made by subdivision (a) through all-county
letters or similar instructions from the director. The department
shall adopt emergency regulations as necessary to implement those
amendments on or before January 1, 2010. The program established
pursuant to this section shall be established on or before July 1,
2009, and shall be fully implemented as to new applicants for
CalFresh on or before January 1, 2010.
   (d) The department shall adopt regulations to implement this
section. The adoption, amendment, repeal, or readoption of a
regulation authorized by this section is deemed to address an
emergency, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the department is hereby exempted for this
purpose from the requirements of subdivision (b) of Section 11346.1
of the Government Code. The emergency regulations shall be exempt
from review by the Office of Administrative Law. The department shall
adopt final regulations implementing the program authorized by this
section on or before July 1, 2010.
   SEC. 74.   SEC. 73.   Section 18901.6 of
the Welfare and Institutions Code is amended to read:
   18901.6.  To the maximum extent allowable by federal law, each
county welfare department shall provide transitional CalFresh
benefits to households terminating their participation in the
CalWORKs program.
   SEC. 75.   SEC. 74.   Section 18901.7 of
the Welfare and Institutions Code is amended to read:
   18901.7.  (a) To the extent allowable by federal law, the income,
resources, and deductible expenses of any household member who is
rendered ineligible for CalFresh benefits pursuant to Title IV of
Public Law 104-193, and any amendments thereto, shall be excluded
when calculating federal Supplemental Nutrition Assistance Program
benefits administered in California as CalFresh, under this chapter.
   (b) No household shall receive more CalFresh benefits under this
section than it would have received if no household member was
rendered ineligible pursuant to Title IV of Public Law 104-193 and
any subsequent amendments thereto.
   (c) This section shall become operative on September 1, 1998.
   SEC. 76.   SEC. 75.   Section 18901.8 of
the Welfare and Institutions Code is amended to read:
   18901.8.  (a) To the extent permitted by federal law, and with
receipt of necessary federal approvals, the State Department of
Social Services, in conjunction with affected stakeholder groups,
shall develop and implement, if otherwise feasible, a simplified and
shorter application form for nonassistance CalFresh cases. The
contents of this simpler form shall be evaluated for use in
multiprogram application forms for the CalFresh, Medi-Cal, and
CalWORKs programs. The department shall seek any federal approvals
necessary for implementation of the form.
   (b) The department shall not require any county to implement use
of the form described in subdivision (a) until the county has been
allowed sufficient time to reprogram its automated systems for the
purpose of implementing the form.
   (c) The department shall provide information on implementation,
including a simplified form, to the appropriate legislative
committees on or before July 1, 2001.
   SEC. 77.   SEC. 76.   Section 18904.1 of
the Welfare and Institutions Code is amended to read:
   18904.1.  (a) The director, to the extent permitted by federal
law, shall establish methods for CalFresh benefit issuance in all
counties which guarantee to low-income households the health-vital
nutritional benefits available under this chapter and to achieve the
most efficient system for program administration so as to minimize
administrative costs.
   (b) The director shall maintain methods for over-the-counter and
mail issuance of CalFresh benefits in a county until issuance of
CalFresh benefits by electronic benefits transfer for all CalFresh
recipients in the county has been implemented pursuant to Chapter 3
(commencing with Section 10065) of Part 1.
   (c) Until issuance of CalFresh benefits by electronic benefits
transfer has been implemented in a county for all CalFresh
recipients, the director shall maintain, in the county, methods for
over-the-counter issuance that guarantee program accessibility in all
cases where a household has been found to be in immediate need of
food assistance or where a household has been determined to be
eligible for the replacement of a previous issuance.
   SEC. 78.   SEC. 77.   Section 18904.25
of the Welfare and Institutions Code is amended to read:
   18904.25.  (a) Pursuant to the federal Stewart B. McKinney
Homeless Assistance Act (Public Law 100-77), the department shall
develop CalFresh information on expedited services targeted to the
homeless population. These shall be made available to homeless
shelters, emergency food programs, and other community agencies who
provide services to homeless people.
   (b) Each county welfare department shall annually offer training
on CalFresh application procedures to homeless shelter operators. In
addition, each county welfare department, upon request, shall provide
homeless shelters with a supply of that portion of the CalFresh
application used to request CalFresh expedited service.
   SEC. 79.   SEC. 78.   Section 18904.3 of
the Welfare and Institutions Code is amended to read:
   18904.3.  (a) Where private nonprofit organizations are successful
in raising money for CalFresh outreach activities and have secured a
local governmental agency to serve as the contracting agency, the
department shall, upon request and subject to approval by the United
States Department of Agriculture, act as their state entity for
receipt of matching funds.
   (b) Any reduction in federal funding to the state that is due to
the result of any audit of CalFresh outreach contracts or activities
shall be applied to the appropriate local government that served as
the contracting agency for CalFresh outreach activities.
   SEC. 80.   SEC. 79.   Section 18904.35
of the Welfare and Institutions Code is amended to read:
   18904.35.  Upon approval of a final plan for CalFresh outreach
activities, in accordance with Section 18904.4, the department shall,
in determining whether to request federal matching funds for a
CalFresh outreach activity, give priority consideration to those
activities that implement the final plan.
   SEC. 81.   SEC. 80.   Section 18905 of
the Welfare and Institutions Code is amended to read:
   18905.  In the event that the United States Department of
Agriculture makes a final determination to reduce federal funding of
the federal Supplemental Nutrition Assistance Program, administered
in California as CalFresh, due to issuance errors or improper or
inadequate county administration of the program, the county or
counties responsible for such reduction shall be liable for the
amount thereof in accordance with standards adopted by the Director
of Social Services.
   SEC. 82.   SEC. 81.   Section 18906 of
the Welfare and Institutions Code is amended to read:
   18906.  The department shall establish and maintain a plan whereby
costs for county administration of CalFresh under this chapter will
be effectively controlled within the amounts annually appropriated
for such administration. The plan, to be known as the County
Administrative Cost Control Plan, shall establish standards and
performance criteria, including workload, productivity and support
services standards, to which counties shall adhere. The plan shall be
part of a single state plan, jointly developed by the department and
the State Department of Health Care Services, for administrative
cost control for the Aid to Families with Dependent Children (AFDC),
CalFresh, and Medical Assistance (Medi-Cal) programs. Allocations
shall be made to each county and shall be limited by and determined
based upon the County Administrative Cost Control Plan. In
administering the plan to control county administrative costs, the
department shall not allocate state funds to cover county cost
overruns which result from county failure to meet requirements of the
plan. The department and the State Department of Health Care
Services shall budget, administer, and allocate state funds for
county administration in a uniform and consistent manner.
   SEC. 83.   SEC. 82.   Section 18906.5 of
the Welfare and Institutions Code is amended to read:
   18906.5.  (a) The state shall pay 70 percent of the nonfederal
costs of administering the federal Supplemental Nutrition Assistance
Program, administered in California as CalFresh, subject to Sections
18906 and 18906.7. The counties shall pay the remaining share of the
nonfederal costs.
   (b) The state shall pay 85 percent of the nonfederal share of the
costs of AFDC fraud investigation subject to Section 15204.5. The
counties shall pay the remaining share of the nonfederal costs.
   SEC. 84.   SEC. 83.   Section 18906.55
of the Welfare and Institutions Code is amended to read:
   18906.55.  (a) Notwithstanding Section 18906.5 or any other law,
as a result of the substantial fiscal pressures on counties created
by the unprecedented and unanticipated CalFresh caseload growth
associated with the economic downturn beginning in 2008, and
                                    in order to provide fiscal relief
to counties as a result of this growth, a county that meets the
maintenance of effort requirement pursuant to Section 15204.4
entirely through expenditures for the administration of CalFresh in
state fiscal years 2010-11 and 2011-12 shall receive the full General
Fund allocation for administration of CalFresh without paying the
county's share of the nonfederal costs for the amount above the
maintenance of effort required by Section 15204.4.
   (b) The full General Fund allocation for administration of
CalFresh pursuant to subdivision (a) shall equal 35 percent of the
total federal and nonfederal projected funding need for
administration of CalFresh. The methodology used for calculating
those projections shall remain the same as it was for the 2009-10
fiscal year for as long as this section remains in effect.
   (c) No relief to the county share of administrative costs
authorized by this section shall result in any increased cost to the
General Fund as determined in subdivision (b).
   (d) Subdivision (a) shall not be interpreted to prevent a county
from expending funds in excess of the amount required to meet the
maintenance of effort required by Section 15204.4.
   (e) This section shall become inoperative on July 1, 2012, and, as
of January 1, 2013, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2013, deletes or
extends the dates on which it becomes inoperative and is repealed.
   SEC. 85.   SEC. 84.   Section 18907 of
the Welfare and Institutions Code is amended to read:
   18907.  In the determination of eligibility for CalFresh, there
shall be no discrimination against any household by reason of marital
status, political belief, or any characteristic listed or defined in
Section 11135 of the Government Code to the extent not in conflict
with federal law.
   SEC. 86.   SEC. 85.   Section 18908 of
the Welfare and Institutions Code is amended to read:
   18908.  Except as provided in Section 18904.1, federal
supplemental security income benefits, state supplemental security
program benefits, public assistance, and county aid benefits shall
not be reduced as a consequence of the receipt of CalFresh benefits
under this chapter, to the extent permitted by federal law.
   SEC. 87.   SEC. 86.   Section 18910 of
the Welfare and Institutions Code is amended to read:
   18910.  (a) To the extent permitted by federal law, regulations,
waivers, and directives, the department shall implement the
prospective budgeting, quarterly reporting system provided in
Sections 11265.1, 11265.2, and 11265.3, and related provisions
regarding CalFresh, in a cost-effective manner that promotes
compatibility between the CalWORKs program and CalFresh, and
minimizes the potential for payment errors.
   (b) The department shall seek all necessary waivers from the
United States Department of Agriculture to implement subdivision (a).

   SEC. 88.   SEC. 87.   Section 18911 of
the Welfare and Institutions Code is amended to read:
   18911.  (a) An application and an authorization for participation
in CalFresh shall be processed within a period of not more than 30
days from the date of application.
   (b) The department shall develop written information that
describes the eligibility and verification requirements for expedited
service, the process for applying for those benefits, and the
availability of assistance in filling out the forms and gathering
needed documentation.
   (c) Each county welfare department shall make the material
developed pursuant to subdivision (b) available to each applicant at
the time the applicant initially seeks CalFresh benefits.
   (d) Each county welfare department shall, upon request, make
available the information developed pursuant to subdivision (b) to
community action agencies, legal services offices, emergency food
programs, and other programs.
   (e) Each county welfare department shall compile a list of
emergency food providers in the area served by the local CalFresh
office. The list shall be updated, based on information from the food
providers. The list shall be made available upon request, and, where
needed, may be used to refer individuals to emergency food sites
that may be able to provide assistance.
   (f) Each county welfare department shall make available to
CalFresh applicants, upon request, nonpromotional information that
contains addresses and phone numbers of local legal services and
welfare rights organizations.
   SEC. 89.   SEC. 88.   Section 18914 of
the Welfare and Institutions Code, as amended by Section 4 of Chapter
443 of the Statutes of 1990, is amended to read:
   18914.  (a) To the extent provided by federal law, the county
welfare department shall provide CalFresh benefits on an expedited
basis to households determined to be in immediate need of food
assistance.
   (b) At the time an applicant initially seeks assistance, the
county welfare department shall screen all expedited service
applications on a priority basis. Applicants who meet the federal
criteria for expedited service shall receive either a manual
authorization to participate or automated card or the immediate
issuance of CalFresh benefits no later than the third day following
the date the application was filed. To the maximum extent permitted
by federal law, the amount of income to be received from any source
shall be deemed to be uncertain and exempt from consideration in the
determination of eligibility for expedited service. For purposes of
this subdivision, a weekend shall be considered one calendar day.
   (c) The State Department of Social Services shall develop and
implement for expedited issuance a uniform procedure for verifying
information required of an applicant.
   SEC. 90.   SEC. 89.   Section 18914 of
the Welfare and Institutions Code, as added by Section 9 of Chapter
1293 of the Statutes of 1987, is amended to read:
   18914.  To the extent provided by federal law, the county welfare
department shall provide CalFresh benefits on an expedited basis to
households determined to be in immediate need of food assistance.
   This section shall become operative July 1, 1991.
   SEC. 91.   SEC. 90.   Section 18915 of
the Welfare and Institutions Code is amended to read:
   18915.  All applications and public information materials shall be
available to potential, present, and past CalFresh recipients in
each county in Spanish as well as English plus any other non-English
language prevalent in each county. It shall be within the discretion
of the director to designate such other prevalent non-English
languages.
   SEC. 92.   SEC. 91.   Section 18918 of
the Welfare and Institutions Code is amended to read:
   18918.  Not later than January 15, 2001, the State Department of
Social Services, in conjunction with the State Department of Public
Health and appropriate stakeholders, shall develop and submit to the
Legislature a community outreach and education campaign to help
families learn about, and apply for, the federal Supplemental
Nutrition Assistance Program, administered in California as CalFresh,
and the California Food Assistance Program. At a minimum, the plan
shall include the following:
   (a) Specific milestones and objectives proposed to be completed
for the upcoming year and their anticipated cost.
   (b) A general description of each strategy or method to be used
for outreach.
   (c) Geographic areas and special populations to be targeted, if
any, and why the special targeting is needed.
   (d) Coordination with other state or county education and outreach
efforts.
   (e) The results of previous years' outreach efforts.
   (1) If necessary to obtain federal financial participation the
CalFresh outreach plan shall be submitted to the United States
Department of Agriculture not later than January 15, 2001. The state
share of the funding shall be subject to appropriation in the annual
Budget Act and may be funded through the General Fund or other state
or local funding sources, as appropriate.
   (2) After submission of the initial plan, it shall be updated
annually and submitted to the Legislature by April 1 for the
following year.
   SEC. 93.  SEC. 92.   Section 18923 of
the Welfare and Institutions Code is amended to read:
   18923.  (a) The State Department of Social Services shall submit a
request to the United States Department of Agriculture for a waiver
to permit a CalFresh household to retain funds in the restricted
savings account as specified in subdivision (a) of Section 11155.2
and as accumulated while participating in the Aid to Families with
Dependent Children program. The participation requirements for this
specific savings account as specified in subdivision (a) of Section
11155.2 shall apply to CalFresh. Penalties for nonqualifying
withdrawal of these funds shall result in a calculation of a period
of ineligibility for all persons in the CalFresh household, to be
determined by dividing the balance in the account immediately prior
to the withdrawal by the CalFresh allotment to which the household is
entitled. The resulting whole number shall be the number of months
of ineligibility. The period of ineligibility may be reduced when the
divisor, which is the CalFresh allotment, increases as a result of a
cost-of-living adjustment.
   (b) The director may waive, with federal approval, the enforcement
of specific federal Supplemental Nutrition Assistance Program
requirements, regulations, and standards necessary to implement this
provision.
   SEC. 94.   SEC. 93.   Section 18925 of
the Welfare and Institutions Code is amended to read:
   18925.  (a) The State Department of Health Care Services, in
conjunction with the State Department of Social Services, shall
implement a simplified eligibility process as part of CalFresh to
expedite Medi-Cal program and Healthy Families Program enrollment for
CalFresh recipients, including children and their eligible parents
or caretaker relatives who are not enrolled in those programs.
   (b) Each county welfare department shall develop a data list of
family members residing in eligible CalFresh households who are not
enrolled in the Medi-Cal program or the Healthy Families Program.
   (c) The county welfare department shall develop a notice informing
individuals identified pursuant to subdivision (b) that they may be
entitled to receive benefits under the Medi-Cal program or the
Healthy Families Program.
   (d) At the time of the CalFresh household's annual
recertification, the county welfare department shall send the notice
specified in subdivision (c) to the individuals identified in
subdivision (b). The notice shall include a request for permission to
use the information in the CalFresh recipient's case file to make a
determination of eligibility for the Medi-Cal program and the Healthy
Families Program.
   (e) The notice shall be written in culturally and linguistically
appropriate language and at an appropriate literacy level. The notice
shall include information on the Medi-Cal program and the Healthy
Families Program, and a telephone number that CalFresh recipients may
call for additional information.
   (f) To apply for medical assistance under the Medi-Cal program,
the CalFresh recipient shall sign, date, and return the notice
requesting that an eligibility determination be made. Upon receipt of
the notice, the county welfare department shall make an eligibility
determination by utilizing the information in the CalFresh recipient'
s case file or paper application. The Medi-Cal application date shall
be the date the notice is received by the county welfare department.
If the CalFresh case file does not include sufficient information to
establish Medi-Cal program eligibility, the county welfare
department shall request, either orally or in writing, additional
information from the CalFresh recipient.
   (g) If the CalFresh recipient is determined to be eligible to
participate in the Medi-Cal program with a share of cost, or is
determined to be ineligible for Medi-Cal, information pertinent to
the CalFresh recipient's eligibility for the Healthy Families Program
shall be forwarded by the county welfare department to the Healthy
Families Program statewide administrator for immediate processing. If
there is insufficient information to establish Healthy Families
Program eligibility, the administrator shall request, either orally
or in writing, additional information from the CalFresh recipient.
   (h) Counties shall include the cost of implementing this section
in their annual administrative budget requests to the State
Department of Health  Care  Services.
   (i) This section shall be implemented on or after July 1, 2003,
but only to the extent federal financial participation is available.
   SEC. 95.   SEC. 94.   Section 18926 of
the Welfare and Institutions Code is amended to read:
   18926.  (a) To the extent permitted by federal law, the department
shall annually seek a federal waiver of the existing federal
Supplemental Nutrition Assistance Program limitation that stipulates
that an able-bodied adult without dependents (ABAWD) participant is
limited to three months of CalFresh benefits in a three-year period
unless that participant has met the work participation requirement.
   (b) All eligible counties shall be included in and bound by this
waiver unless a county declines to participate in the waiver request.
If a county declines, the county shall submit documentation from the
board of supervisors of that county to that effect.
   (c) Notwithstanding the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 2 of the Government Code) the department
may implement this section by  all county  
all-county  letters or similar instructions.
   SEC. 96.   SEC. 95.   Section 18930 of
the Welfare and Institutions Code is amended to read:
   18930.  (a) The State Department of Social Services shall
establish a Food Assistance Program to provide assistance for those
persons described in subdivision (b). The department shall enter into
an agreement with the United States Department of Agriculture to use
the existing federal Supplemental Nutrition Assistance Program
coupons for the purposes of administering this program. Persons who
are members of a household receiving CalFresh benefits under this
chapter or under Chapter 10 (commencing with Section 18900), and are
receiving CalWORKs benefits under Chapter 2 (commencing with Section
11200) of Part 3 on September 1, 1998, shall have eligibility
determined under this chapter without need for a new application no
later than November 1, 1998, and the beginning date of assistance
under this chapter for those persons shall be September 1, 1998.
   (b) (1) Except as provided in paragraphs (2), (3), and (4) and
Section 18930.5, noncitizens of the United States shall be eligible
for the program established pursuant to subdivision (a) if the person'
s immigration status meets the eligibility criteria of the federal
Supplemental Nutrition Assistance Program in effect on August 21,
1996, but he or she is not eligible for federal Supplemental
Nutrition Assistance Program benefits solely due to his or her
immigration status under Public Law 104-193 and any subsequent
amendments thereto.
   (2) Noncitizens of the United States shall be eligible for the
program established pursuant to subdivision (a) if the person is a
battered immigrant spouse or child or the parent or child of the
battered immigrant, as described in Section 1641(c) of Title 8 of the
United States Code, as amended by Section 5571 of Public Law 105-33,
or if the person is a Cuban or Haitian entrant as described in
Section 501(e) of the federal Refugee Education Assistance Act of
1980 (Public Law 96-122).
   (3) An applicant who is otherwise eligible for the program but who
entered the United States on or after August 22, 1996, shall be
eligible for aid under this chapter only if he or she is sponsored
and one of the following apply:
   (A) The sponsor has died.
   (B) The sponsor is disabled as defined in subparagraph (A) of
paragraph (3) of subdivision (b) of Section 11320.3.
   (C) The applicant, after entry into the United States, is a victim
of abuse by the sponsor or the spouse of the sponsor if the spouse
is living with the sponsor.
   (4) An applicant who is otherwise eligible for the program but who
entered the United States on or after August 22, 1996, who does not
meet one of the conditions of paragraph (3), shall be eligible for
aid under this chapter beginning on October 1, 1999.
   (5) The applicant shall be required to provide verification that
one of the conditions of subparagraph (A), (B), or (C)  have
  has  been met.
   (6) For purposes of subparagraph (C) of paragraph (2), abuse shall
be defined in the same manner as provided in Section 11495.1 and
Section 11495.12. A sworn statement of abuse by a victim, or the
representative of the victim if the victim is not able to competently
swear, shall be sufficient to establish abuse if one or more
additional items of evidence of abuse is also provided. Additional
evidence may include, but is not limited to, the following:
   (A) Police, government agency, or court records or files.
   (B) Documentation from a domestic violence program, legal,
clinical, medical, or other professional from whom the applicant or
recipient has sought assistance in dealing with abuse.
   (C) A statement from any other individual with knowledge of the
circumstances that provided the basis for the claim.
   (D) Physical evidence of abuse.
   (7) If the victim cannot provide additional evidence of abuse,
then the sworn statement shall be sufficient if the county makes a
determination documented in writing in the case file that the
applicant is credible.
   (c) In counties approved for alternate benefit issuance systems,
that same alternate benefit issuance system shall be approved for the
program established by this chapter.
   (d) (1) To the extent allowed by federal law, the income,
resources, and deductible expenses of those persons described in
subdivision (b) shall be excluded when calculating CalFresh benefits
under Chapter 10 (commencing with Section 18900).
   (2) No household shall receive more CalFresh benefits under this
section than it would if no household member was rendered ineligible
pursuant to Title IV of Public Law 104-193 and any subsequent
amendments thereto.
   (e) This section shall become operative on September 1, 1998.
   SEC. 97.   SEC. 96.   Section 18931 of
the Welfare and Institutions Code is amended to read:
   18931.  Any person who is eligible for federally funded
Supplemental Nutrition Assistance Program benefits, administered in
California as CalFresh benefits, shall not be eligible for assistance
under this chapter.
   SEC. 97.    Any section of any act enacted by the
Legislature during the 2011 calendar year that takes effect on or
before January 1, 2012, and that amends, amends and renumbers, adds,
repeals and adds, or repeals a section that is amended, amended and
renumbered, repealed and added, or repealed by this act, shall
prevail over this act, whether that act is enacted prior to, or
subsequent to, the enactment of this act, except that this act shall
prevail over any section enacted by Chapter 8 of the Statutes of 2011
or Chapter 15 of the Statutes of 2011.