BILL ANALYSIS Ó AB 2035 Page 1 Date of Hearing: April 25, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2035 (Bradford) - As Amended: April 16, 2012 Policy Committee: Human ServicesVote:5 - 0 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This bill establishes protections for CalWORKs recipients who are victims of electronic benefit theft. Specifically, this bill: 1)Requires the Department of Social Services (DSS) to develop a protocol for reporting electronic benefit theft or skimming that minimizes the burden for recipients. 2)Defines skimming as a form of identity theft by which a recipient's electronic benefit transfer (EBT) account information or personal identification number are electronically accessed by a third party who uses that information to remove funds from the recipients account. 3)Clarifies that a victim of skimming shall be treated the same as a victim of a stolen EBT card and that any benefits withdrawn from the card shall be promptly replaced after the recipient reports the loss. FISCAL EFFECT Unknown workload costs, likely less than $100,000 for one limited-term staff person to develop the appropriate protocol. COMMENTS 1)Purpose . According to the author, an emerging form of thievery, referred to as skimming, allows thieves to acquire account numbers and personal identification numbers (PINs) of electronic cards, including EBT cards, without the card owner AB 2035 Page 2 losing possession of the card or PIN or knowing they have become victims until they discover the money is gone. Establishing loss of benefits through skimming is generally difficult than in the case of lost or stolen EBT cards because victims still have their cards and may not realize the information has been electronically stolen. When a card is lost or stolen the recipient is able to get reimbursement from the time the loss is reported. With skimming, the recipient may not discover and, thus, report the loss immediately. The intent of this legislation is to require DSS develop protocols for quickly and efficiently restoring benefits to participants whose benefits have been stolen through skimming. 2)Background . 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. Counties may also use EBT systems to distribute cash benefits under other programs, such as CalWORKs or General Assistance. All 58 California counties use the EBT system to deliver either CalWORKs or General Assistance benefits or both. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081