BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 43 (Liu)
          
          Hearing Date: 5/26/2011         Amended: 4/25/2011
          Consultant: Jolie Onodera       Policy Vote: Human Services 7-0
          
















































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          ____
          BILL SUMMARY: SB 43 would require those counties that elect to 
          provide a CalFresh Employment and Training (CalFresh E&T) 
          program to screen work registrants and defer (exempt) an 
          individual from mandatory placement if he or she meets federal 
          deferral criteria or resides in a federally determined work 
          surplus area. This bill would also require those counties that 
          elect to participate in the CalFresh E&T program, beginning 
          October 1, 2012, to offer self-initiated workfare to registrants 
          who are mandatorily placed in the program. 
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14    Fund
           
          Additional CalFresh benefits      $10,700 annually per 25% of 
          E&T                    Federal
                                 participants discontinued for failure
                                 to meet work requirements

          Additional CalFresh admin         $1,100 annually ($385 GF) 
          perFederal/General/    
                                 25% of E&T participants discontinued   
          Local
                                 for failure to meet work requirements

          CalFresh E&T regulationCost pressure on county E&T grants     
          Federal
          changes                                                 
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          ____

          STAFF COMMENTS: SUSPENSE FILE.
          
          This bill makes changes to the administration of the CalFresh 
          E&T program, including rules governing mandatory and voluntary 
          placements into the program, as well as exemptions from work 
          program requirements.  

          The United States Department of Agriculture (USDA) provides 
          annual funding for program administration of the Food Stamp 
          Employment and Training program (to be designated as the 
          CalFresh E&T program in California) to provide job training 
          services for non-assistance food stamp (NAFS) applicants and 








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          recipients. The CalFresh E&T program is administered by the 
          counties and overseen by the Department of Social Services 
          (DSS). There are currently 25 counties participating in the 
          CalFresh E&T program, with approximately 915,000 work 
          registrants reported and $94.5 million in total funding for 
          Federal Fiscal Year (FFY) 2010.

          State regulations currently allow counties to defer specific 
          populations of work registrants from mandatory participation in 
          the CalFresh E&T program. Those who are deferred may voluntarily 
          participate and are not subject to CalFresh sanctions 

          (ineligibility for aid) for non-participation. For mandatory 
          placements, failure to participate without documented good cause 
          results in sanctions for one, three, and then six months. 

          This bill would require counties to screen work registrants for 
          CalFresh E&T program participation or deferral, and would 
          require an individual to be deferred from mandatory placement if 
          he or she satisfies federally mandated criteria or resides in a 
          federally determined work surplus area. 

          According to the U.S. Department of Labor, the qualifying rate 
          for a Labor Surplus Area (LSA) classification is 20 percent 
          above the national average unemployment rate. For FFY 2011, the 
          qualifying rate is 9.1 percent or above during the previous two 
          calendar years. California's unemployment rate has historically 
          exceeded national trends, and nearly all counties in California 
          currently qualify as a work surplus area. As a result, under the 
          provisions of this bill nearly all CalFresh E&T program 
          participants would be deferred from mandatory placement and 
          would not be subject to CalFresh sanctions due to 
          non-participation, resulting in significantly more recipients 
          retaining eligibility for CalFresh benefits. 

          Based on statewide data reported since 2008, the number of work 
          registrants who are discontinued from receiving CalFresh 
          benefits each month has been increasing, averaging 34,000 
          participants over the last six months of 2010, and 36,000 work 
          registrants in December 2010. The number of work registrants 
          attributable to CalFresh E&T counties is estimated to be 
          approximately 65 percent of total work registrants, or 23,400 
          participants statewide. It is unknown how many work registrants 
          are discontinued for failure to meet work requirements, as the 
          reasons for discontinuance are not reported statewide, and can 








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          include other causes such as failure to submit timely reports or 
          moving out of state. 

          It is estimated that every 25 percent of CalFresh E&T 
          participants discontinued monthly due to failure to meet work 
          requirements would impact approximately 5,850 individuals. 
          Deferring mandatory placement during periods of high 
          unemployment for these individuals could result in increased 
          annual CalFresh benefits of $10.7 million statewide (average 
          monthly CalFresh benefit of $153 per individual), with 
          associated administration costs of $1.1 million ($0.4 million 
          General Fund). The administrative costs would be offset to some 
          degree by cost savings for re-certification costs that would 
          have otherwise been incurred for sanctioned cases. Staff notes 
          that research also indicates that every $1 in CalFresh benefits 
          spent generates $1.73 in economic activity.

          This bill requires counties that elect to participate in the 
          CalFresh E&T program to allow participants to meet work program 
          requirements through self-initiated workfare (in addition to any 
          other components the county offers). Self-initiated workfare is 
          a public service placement in a public or private nonprofit 
          agency that is initiated by the CalFresh recipient. Currently, 
          only Riverside County offers self-initiated workfare as a 
          CalFresh E&T program component. Effective October 1, 2012, 
          counties opting to participate in the CalFresh E&T program could 
          experience workload increases in order to develop a process for 
          tracking and verifying an individual's self-initiated work. 
          Workload increases 

          for DSS to work with counties and develop new claiming 
          procedures would be absorbable within existing resources.

          A county that elects to participate in the CalFresh E&T program 
          would also be required to "demonstrate in its plan how it is 
          effectively using CalFresh E&T funds for each of the components 
          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." This provision is vague, and suggests that 
          participating counties would have to report to DSS on their 
          activities in compliance with this section. To the extent that 
          this requires additional work and changes to county programming, 
          there could be cost pressure on CalFresh E&T funds to spend more 








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          on administration.

          This bill states that counties shall have no duty to provide 
          workers' compensation coverage for a CalFresh E&T participant 
          who elects to participate in self-initiated workfare. DSS 
          currently covers workers' compensation coverage costs for the 
          CalFresh E&T program. To the extent increased workers' 
          compensation coverage is required, this would result in 
          increased DSS withholding of CalFresh E&T funds, and a 
          commensurate reduction in CalFresh E&T funds allocated to the 
          counties, placing further cost pressure on available CalFresh 
          E&T funds.

          SB 1322 (Liu) 2010, which was substantially similar to this 
          bill, was vetoed by the Governor with the following message:

          I am returning Senate Bill 1322 without my signature. 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.