BILL ANALYSIS Ó
AB 2035
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ASSEMBLY THIRD READING
AB 2035 (Bradford)
As Amended April 16, 2012
Majority vote
HUMAN SERVICES 5-0 APPROPRIATIONS 16-0
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|Ayes:|Beall, Jones, Wagner, |Ayes:|Fuentes, Blumenfield, |
| |Hall, Portantino | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Donnelly, Gatto, Hall, |
| | | |Hill, Lara, Mitchell, |
| | | |Nielsen, Norby, Solorio, |
| | | |Wagner |
|-----+--------------------------+-----+--------------------------|
| | | | |
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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; and,
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, Los
Angeles Superior Court, Case No. BS135127.
2)Defines "skimming" as "a form of theft by which a recipient's
EBT account information or 'PIN' number, or both, are accessed
by an unauthorized person who uses that information to
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unlawfully remove funds from the recipient's account."
3)Provides that a recipient shall not incur any loss of
electronic benefits through skimming, and requires prompt
replacement through procedures in existing law related to
replacement of public assistance warrants that have been lost,
stolen, destroyed, or lost in the mail.
4)Requires the Department of Social Services (DSS) to establish
a protocol for recipients to report skimming that minimizes
the burden on recipients and ensures prompt payment of lost
benefits.
EXISTING LAW :
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 Section 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.
3)Establishes procedures for replacement by the county of a
public assistance warrant that has been lost, stolen,
destroyed, or lost in the mail (Government Code Section
29853.5).
FISCAL EFFECT : According to the Assembly Appropriations
Committee, unknown workload costs, likely less than $100,000 for
one limited-term staff person to develop the appropriate
protocol.
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
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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 (Manual of Policies and
Procedures (MPP) Section 16-001.2). Counties may also use EBT
systems to distribute cash benefits under other programs, such
as CalWORKs or General Assistance (MPP Section 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 Section 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."
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.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089
FN: 0003413
AB 2035
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