BILL ANALYSIS Ó SENATE HUMAN SERVICES COMMITTEE Senator Carol Liu, Chair BILL NO: SB 43 S AUTHOR: Liu B VERSION: As introduced HEARING DATE: April 12, 2011 4 FISCAL: Appropriations 3 CONSULTANT: Park SUBJECT Food Stamp Employment and Training program SUMMARY Makes changes to the administration of the Food Stamp Employment and Training program, including rules governing mandatory and voluntary placements into the program, as well as exemptions. Requires FSET counties to demonstrate how they are effectively using FSET funds, as specified, and to allow work registrants who are mandatorily placed into the FSET program to meet work requirements through self-initiated workfare. ABSTRACT Existing federal law: 1.Establishes the Supplemental Nutrition Assistance Program (SNAP), formerly the food stamp program, administered by the U.S. Department of Agriculture (USDA), which imposes specified rules on specified program participants and limits benefits based on those rules. Generally, one group of participants, able-bodied adults (age 18 to 49) without dependents, known as ABAWDs, are limited to three months of food stamp benefits within a 36-month period unless they comply with work requirements. Continued--- STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 2 2.Establishes the Food Stamp Employment and Training (FSET) program, administered by the USDA, which requires state agencies to implement an employment and training program to assist food stamp recipients who are able-bodied to gain skills, training, work or experience to help them obtain employment. Existing state law: 1.Establishes a statewide program, CalFresh, administered by state and local agencies, that enables recipients of aid and other low-income households to receive federal food assistance benefits. 2.Requires the Department of Social Services (DSS), to the extent permitted by federal law, to annually seek a federal waiver of the existing food stamp program limitation that stipulates that an ABAWD participant is limited to three months of food stamps in a three-year period unless that participant has met the work participation requirement. 3.Requires all eligible counties to be included in and bound by this waiver unless a county declines to participate in the waiver request, as specified. This bill: 1.Requires counties to screen work registrants to determine whether they will participate in, or be deferred from, the FSET program. Requires an individual to be deferred from mandatory placement in the FSET program if he or she satisfies any of the federally mandated criteria, or if he or she resides in a federally determined work surplus area. Allows a work registrant, who is deferred, to request to enroll in the FSET program as a voluntary participant. 2.Requires a county that participates in the FSET program to demonstrate how it is effectively using FSET program funds for each component that the county offers, including but not limited to: self-initiated workfare, work experience or training, education, job search, and the support services or client reimbursements needed to participate in these components, as allowed by federal law and guidance. Clarifies that a county is not STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 3 required to offer any particular component. 3.Requires a county that elects to participate in the FSET program, beginning October 1, 2012, to allow work registrants who are mandatorily placed in the FSET program to meet work requirements of that FSET placement through self-initiated workfare and requires the county to notify the work registrant of the option. 4.Provides that a county has no duty to provide for workers' compensation coverage for an FSET participant who elects to participate in self-initiated workfare, and that nothing in this measure shall limit a county's ability to condition nonmedical benefits under Section 17000. 5.Defines "self-initiated workfare" as a public service placement in a public or private nonprofit agency that is initiated by the CalFresh recipient, for which the recipient is responsible for documentation of hours. Requires self-initiate workfare to be verified in the same manner as other work activity verification, and must meet other federal requirements. 6.Expresses the intent of the Legislature to increase meaningful opportunities for employment and training in the FSET program and to assist CalFresh recipients in meeting the work requirements under the CalFresh program. FISCAL IMPACT Unknown BACKGROUND AND DISCUSSION Author's statement The author states that SB 43 will help CalFresh recipients retain their eligibility for federal food benefits in tough economic times and increase meaningful opportunities in the CalFresh Employment and Training (CFET) program. The author believes that during periods of high unemployment, when meeting work requirements is most difficult, waiving CFET work requirements when federal SNAP work requirements are waived can help vulnerable Californians maintain their STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 4 access to federal food benefits and help retail businesses weather economic downturn. The author points out that, according to the USDA, every $5 in new SNAP benefits generates $9 in total community spending. Additionally, the author states that, by allowing people who are assigned to CFET to meet their work requirements by volunteering at a public or private nonprofit agency, such as a school, food bank, or fire department, the bill encourages individual initiative and helps local communities benefit from these volunteers. SNAP/CalFresh In California, 3.6 million people participate in CalFresh/SNAP. In the last federal fiscal year, California received $6.8 billion in federal food assistance benefits; yet, only about half of eligible persons in California participate in CalFresh. Some advocates argue that the state could be receiving billions more in food assistance benefits and the state should take actions to improve food stamp participation for the benefit of low-income individuals and the state's economy. To qualify for SNAP benefits, households must meet income tests, and some households must meet specified work requirements. SNAP requires all recipients, unless exempted by law, to register for work at the appropriate employment office, participate in an employment and training program if assigned by a state or local administering agency, and accept an offer of suitable employment. SNAP beneficiaries are exempted from registering for work and engaging in employment and training activities if they are under age 16 or over age 59; physically or mentally unfit for employment; caring for a child under the age of 6 (or 12, in some cases); employed 30 hours a week; or subject to and complying with work requirements for other programs, such as those required by CalWORKs. Additionally, others are exempted because they are receiving unemployment insurance compensation, participating in a drug and alcohol treatment and rehabilitation program, or are students enrolled at least half time (these students must meet other work participation requirements). Food Stamp Employment and Training Program The USDA provides annual funding for program administration STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 5 for the FSET program, which is designed to help food stamp participants gain skills, training, work experience, and secure work. There are two types of funding from USDA: a 100 percent federal amount for states that is capped; and an uncapped 50-50 (percent) federal/state/other reimbursement program. The 100 percent funds are allocated to states based on a formula that takes into account the number of work registrants in the state. Under the 50-50 formula, the federal government reimburses states fifty cents of every non-federal dollar spent on allowable employment and training services or activities. Non-federal dollars can come from state, county or city revenue; foundation grants; employer paid costs; private tuition payments and private funds raised by community-based organizations. USDA Food and Nutrition Services guidance indicates that non-governmental revenue is subject to federal approval for the purposes of obtaining the 50 percent reimbursement. In California, counties determine which individuals in a non-assistance (i.e., non CalWORKs) food stamp household must participate in the FSET program. Federal law provides for certain exemptions, but counties can additionally determine who must participate in FSET or be exempt beyond the population determined to be exempt by federal law. FSET programs can include a variety of services and support for training and employment activities, such as employment search; general education development; high school equivalency; job skills training; short-term vocational training; and supportive services. In California, individual counties determine the range of services as well as the rules governing mandatory and voluntary placements and exemptions. For FFY (federal fiscal year) 2010, 23 counties in California participated in the FSET program, which totaled $94.5 million. Of that amount, 100 percent federal funds accounted for $7.5 million; 50/50 federal/county funds (for overmatch for administration cost and participant reimbursements) accounted for the remainder. Job search and job club accounted for the vast majority of expenditures, followed by modest expenditures in workfare, vocational training, education, and job retention. On the job training and self-initiated workfare accounted for negligible amounts. Of the $7.5 million in 100 percent STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 6 federal funds, DSS withheld $808,000 from the federal allocation for covering state administrative costs and for providing workers' compensation coverage for FSET participants, which DSS typically budgets at around $408,000. For federal fiscal year 2010, DSS reported more than 791,850 work registrants. Of this population, about 73,859 individuals were expected to participate in at least one FSET program component. Prior legislation SB 1322 (Liu) of 2010, in its final version, was nearly identical to this measure. The measure was vetoed by Governor Schwarzenegger, with the following message: While I support the state's Food Stamp Employment and Training program and the economic benefits that federal food stamps bring to California, I am troubled that this bill reduces county flexibility and instead requires that they offer self-initiated workfare. Self-initiated workfare weakens the "work-first" message of the program by allowing recipients to self-direct their own volunteer work. While I wholeheartedly support volunteer work in local communities, it does not build the skills and work experience that is the primary objective of this particular program. For these reasons, I cannot support this measure. Arguments in support Western Center on Law and Poverty (WCLP), the sponsor of the measure, writes that participation in CalFresh has almost doubled since the recession began; yet California has the worst food stamp participation rates according to the USDA. WCLP believes that one of the most efficient and humane ways to address under-participation in the program is to ensure that people who are eligible and currently receiving CalFresh benefits can easily retain them when they are eligible under federal law. WCLP notes that aligning federal and local work rules associated with the CalFresh Program and offering new ways STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 7 for people to meet these work rules will help achieve that. WCLP points out that, during times of high unemployment, the federal government relaxes the mandatory work rules by allowing states to waive work requirements and time limits for Able Bodied Adults Without Dependents (ABAWDs), because it is unfair to keep food assistance from people who cannot meet work rules when unemployment is high, and because communities depend on federal funds to continue to infuse their local economies when they are struggling through bad economic times. WCLP notes that, over the past several years, all counties have chosen to 'opt in' to the federal ABAWD waiver, relieving its food stamp participants of this work rule; yet 20 counties imposed harsher sanctions on the same population of unemployed Californians who are required to participate in their CalFresh E&T Programs. WCLP believes that, because work rules and accompanying sanctions are applied disproportionately across the state, unemployed Californians are losing federal food benefits and going hungry. Further, WCLP believes that self-initiated workfare will allow an individual to select a community based nonprofit or public agency that better fits with his or her employment goals or skills training needs, and also benefits his or her community. WCLP believes that the bill will help end hunger and get people back to work when jobs return. The Alameda County Community Food Bank (ACCFB) writes that, in the last fiscal year, 83 people served as volunteers through the county's self-initiated workfare program, contributing 6,502 hours to the food bank. ACCFB notes that, as the need for its services grows due to the struggling economy, so does the need to grow its volunteer workforce. ACCFB states that without the workfare participants and other volunteers, it wouldn't be able to serve the growing number of people in the county who need food assistance. COMMENTS 1.Food Stamp Employment and Training program should be renamed. Based on the renaming of California's food STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 8 stamp program to CalFresh, (initiated by the enactment of AB 433, Beall, Chapter 625 of 2008, and the federal renaming of the food stamp program to SNAP), staff recommends all references to the Food Stamp Employment and Training program and FSET be likewise renamed to the CalFresh Employment and Training program. 2.Clarifying amendment. Staff recommends the following change, to account for the requirement in subdivision (d), which is the requirement for counties who elect to participate in FSET to allow self-initiated workfare for mandatory placements. Page 3, lines 14-32: 14 (c) (1) A county that elects to participate in the FSET program 15 shall be required to demonstrate in its FSET plan how it is 16 effectively using FSET funds for each of the components that the 17 county offers, including, but not limited to, any of the following: 18 (A) Self-initiated workfare. 19 (B) Work experience or training. 20 (C) Education. 21 (D) Job search. 22 (E) The support services or client reimbursements needed to 23 participate in subparagraphs (A) to (D), inclusive, as allowed by 24 federal law and guidance. 25 (2) Nothing in this section shall be construed to require a county 26 to offer a particular component as a part of its FSET plan, except as it meets the criteria in subdivision (d). 27 (d) Commencing October 1, 2012, a county that elects to 28 participate in the FSET program shall allow work registrants who 29 are mandatorily placed in the program to meet the work 30 requirements of the mandatory placement through self-initiated 31 workfare, as defined in paragraph (2), and shall STAFF ANALYSIS OF SENATE BILL 43 (Liu) Page 9 inform the work 32 registrant of this option. POSITIONS Support: Western Center on Law and Poverty (sponsor) AARP Alameda County Community Food Bank California Association of Food Banks California Food Policy Advocates California Grocers Association California Hunger Action Coalition California Retailers Association Catholic Charities of California United Coalition of California Welfare Rights Organizations County Welfare Directions Association Hunger Action Los Angeles JERICHO Jewish Family Service of Los Angeles Los Angeles Regional Foodbank Sacramento Hunger Coalition Oppose:None received -- END --