BILL ANALYSIS Ó
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: AB 2035
A
AUTHOR: Bradford
B
VERSION: April 16, 2012
HEARING DATE: June 12, 2012
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FISCAL: Yes
0
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CONSULTANT: Mareva Brown
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SUBJECT
Electronic benefits transfer cards: skimming
SUMMARY
Protects recipients of CalFresh benefits from losses due to
the practice of electronic skimming of their electronic
benefit transfer (EBT) cards.
ABSTRACT
Current law
1. Establishes under federal law the Supplemental
Nutrition Assistance Program (SNAP) pursuant to the
Food Stamp Act of 1964.
2. Establishes under state law the CalFresh program,
which provides assistance using federal SNAP funds to
low-income families in order to mitigate hunger,
undernutrition and malnutrition in the state. In
California this is accomplished through distribution
of EBT cards to CalFresh recipients (WIC 18900 et
seq).
Continued---
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3. Creates through the Electronic Benefits Transfer
Act (WIC 10065, et seq.) an EBT system to store
information and distribute benefits to recipients of
CalFresh. Regulations issued by the Department of
Social Services give counties the option of also
delivering CalWORKs and General Assistance benefits
through EBT cards. (Manual of Policies and Procedures
§ 16-001.3)
4. Provides that a recipient does not incur any loss
of electronic benefits after reporting that his or her
EBT card of the personal identification number has
been lost or stolen. (WIC 10072(g))
This bill
1. Makes a series of findings and declarations about
the need to address a recipient's loss of benefits due
to electronic skimming.
2. Provides that a recipient shall not incur any loss
of electronic benefits that are removed from his or
her EBT account through skimming and requires that
electronic benefits withdrawn by skimming be promptly
replaced after the recipient reports the loss, in
accordance with existing law governing stolen public
assistance issuances. (Gov. 29853.3)
3. Requires that the state Department of Social
Services establish a protocol for recipients to report
skimming that minimizes the burden to recipients and
ensures a prompt payment of benefits.
4. 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 unlawfully remove funds from
the recipient's account.
FISCAL IMPACT
The Assembly appropriations committee analysis indicates
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this bill would result in unknown workload costs, likely
less than $100,000 for one limited-term staff person to
develop the appropriate protocol.
BACKGROUND AND DISCUSSION
Purpose of the bill
The author states that the emerging practice of illegally
"skimming" account numbers and personal identification
numbers (PIN) of electronic cards leaves low-income
recipients who rely on of CalFresh benefits without
protections afforded other victims of theft. A recent
lawsuit highlights the lack of process that would allow a
victim this type of theft to recover their EBT benefits.
While California law provides recourse for recipients whose
EBT cards have been stolen, it does not extend the same
protection for individuals whose EBT benefits have been
stolen through the act of skimming because the victims
never lose possession of their cards. 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."
EBT usage
Food benefits for CalFresh recipients are distributed
through an EBT system, which allows recipients to access
funds at point-of-sale terminals, automated teller machines
(ATMs) and other electronic fund transfer devices. EBT
cards look similar to ATM debit cards, and are swiped
through the same machines using magnetic strips to transfer
information.
In addition to delivering CalFresh benefits through the EBT
system, all of California's 58 counties also deliver either
CalWORKs or General Assistance benefits, or both, through
the EBT cards. According to DSS, in May 2012 there were
nearly 22.5 million EBT transactions to purchase food
through the CalFresh program and nearly 3 million cash
purchase or withdrawals at point-of-sale or ATM machines
through the cash benefit programs, CalWORKs and General
Assistance.
Carpio v Lightbourne
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In December 2011, Evelyn Carpio filed suit against the
Department of Social Services and its director, Will
Lightbourne, claiming that the department illegally refused
to replace benefits that were stolen electronically. On
Oct. 5, 2009, thieves stole $720 of CalWORKs cash
assistance from her EBT account, even though the EBT card
never left her possession. Ms. Carpio, a single mother who
works part-time as a sales associate at a department store,
discovered the loss when she attempted to access her funds
at a Food4Less that afternoon.
She argued in her filing that the state provides for
replacement of stolen EBT benefits through the state's EBT
statute, however acknowledges that DSS does not have
procedures in place to replace lost benefits when the card
itself is not stolen. Although her benefits eventually were
restored after two years of appeals, Ms. Carpio argues in
her lawsuit that counties continue to deny restoration of
benefits that are lost through electronic theft. The
lawsuit seeks to establish that the department must replace
stolen benefits in a timely manner, however it does not
seek to remedy the need for state protocols regarding
skimming theft. The next conference in the case is set
before the judge on September 6.
Comments:
For clarity, staff suggests the following amendment:
12 (3) The State Department of Social Services shall
establish a
13 protocol for recipients to report skimming that
minimizes
14 the burden on recipients, and ensures prompt payment
replacement of benefits to ,
15 recipients and ensures program integrity . For
purposes of this section,"skimming" 16 means a form of
theft by which a recipient's EBT account information,
17 or "PIN" number, or both, are accessed by an
unauthorized person, who uses that 18 information to
unlawfully remove funds from the recipient's account.
PRIOR VOTES
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Assembly Floor: 73 - 0
Assembly Appropriations:16 - 0
Assembly Human Services: 5 - 0
POSITIONS
Support: Western Center on Law and Poverty (sponsor)
California Bankers Association
California Catholic Conference, Inc.
California Coalition of Welfare Rights
Organizations, Inc.
California Reinvestment Coalition
Coalition of California Welfare Rights
Organizations
Consumer Federation of California
Insight Center for Community Economic
Development
Legal Services of Northern California
National association of Social Workers
Oppose: None received
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