BILL ANALYSIS Ó
AB 2035
Page 1
Date of Hearing: April 10, 2012
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 2035 (Bradford) - As Introduced: February 23, 2012
SUBJECT : Electronic benefits transfer cards: skimming
SUMMARY : Protects recipients of benefits through the electronic
benefits transfer (EBT) system from a loss of benefits through
the practice of skimming, as defined. Specifically, this bill :
1)States legislative findings and declarations, including the
following:
a) State law provides relief for parents and recipients
under the California Work Opportunity and Responsibility
for Kids program (CalWORKs) to restore their benefits when
stolen but not when benefits are received via an EBT card
and the benefits have been stolen through the practice of
skimming.
b) Recipients of CalWORKs basic needs grants are vulnerable
to electronic crimes.
c) The Legislature intends to address the problem of
electronic theft of public benefits at issue in the Los
Angeles Superior Court case, Carpio v. Lightbourne.
2)Defines "skimming" as "a form of identity theft by which a
recipient's EBT account information or 'pin' number, or both,
are electronically accessed by a third party who uses that
information to unlawfully remove funds from the recipient's
account."
3)Provides that a recipient shall not incur any loss of
electronic benefits after reporting that he or she is a victim
of skimming.
4)Requires the Department of Social Services (DSS) to establish
a protocol for reporting skimming that minimizes the burden on
recipients.
EXISTING LAW
AB 2035
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1)Establishes, under the California Electronic Benefits Transfer
Act an EBT system that automates the delivery, redemption, and
reconciliation of issued public assistance benefits, including
CalFresh benefits, California Food Assistance Program
benefits, and cash aid benefits. Welfare & Institutions (W&I)
Code § 10065 et seq.
2)Provides that a recipient shall not incur any loss of
electronic benefits after reporting that his or her EBT card
or personal identification number (PIN) has been lost or
stolen, and provides for the prompt replacement of lost or
stolen EBT cards and pins.
FISCAL EFFECT : Unknown
COMMENTS : Food benefits through California's CalFresh program
are distributed through an EBT system, which is governed by the
California Electronic Benefits Transfer Act. The EBT system
replaced the former benefit distribution system, which relied on
traditional paper warrants to deliver benefits to recipients.
Under the EBT system, benefits are stored in a central computer
database. Recipients access their electronically-stored
benefits at point-of-sale terminals, ATMs, and other electronic
funds transfer devices, using plastic cards with magnetic
stripes similar to debit cards. DSS has adopted regulations to
deliver benefits under CalFresh (MPP § 16-001.2). Counties may
also use EBT systems to distribute cash benefits under other
programs, such as CalWORKs or General Assistance (MPP §
16-001.3). All 58 California counties use the EBT system to
deliver either CalWORKs or General Assistance benefits or both.
One of the primary purposes of the EBT system, as stated in the
EBT Act, is "to afford public social services recipients the
opportunity to better and more securely manage their financial
affairs." W&I Code § 10065(b).
The sponsor of this bill, the Western Center on Law & Poverty,
points out that "Ýt]he impact of theft on CalWORKs families can
be devastating if not resolved quickly and with as little burden
on the victim as possible." According to the author, "Ýa]n
emerging form of thievery, referred to as 'skimming,' allows
thieves to acquire account numbers and PIN numbers of electronic
cards, including EBT cards, without the card owner ever losing
possession of the card or PIN or knowing they have become
victims until they discover the money is gone."
AB 2035
Page 3
In December 2011, a petition for writ of mandate was filed in
Los Angeles County Superior Court alleging that county welfare
departments deny replacement of benefits to recipients whose
benefits are stolen electronically, without physical theft of
their EBT cards or PINs. Carpio v. Lightbourne, Los Angeles
Superior Court, Case No. BS135127. While Ms. Carpio's benefits
were eventually restored-after two years of appeals-the lawsuit
alleges that counties still deny restoration of benefits lost
through electronic means. As noted in the legislative findings
and declarations, this bill is intended to address the issue
raised in Carpio, and clarify that loss of benefits through
electronic theft (skimming) is also protected.
Establishing loss of benefits through skimming may be more
difficult than in the case of a lost or stolen EBT card;
although, difficulty of proof is not sufficient justification
for denying innocent victims of electronic theft any means of
obtaining replacement benefits. When a card is lost or stolen,
however, the recipient is able to get reimbursement from the
time the loss is reported. With skimming, the recipient may not
reasonably discover and, thus, report the loss immediately.
This is an issue that would need to be addressed in the DSS
protocol, and may require further clarifying amendments to this
bill.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law & Poverty (sponsor)
Coalition of California Welfare Rights Organizations
National Association of Social Workers, CA Chapter
California Catholic Conference, Inc.
Opposition
None on file.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089