BILL ANALYSIS Ó SENATE HUMAN SERVICES COMMITTEE Senator Leland Y. Yee, Chair BILL NO: AB 191 A AUTHOR: Bocanegra B VERSION: May 24, 2013 HEARING DATE: June 25, 2013 1 FISCAL: Yes 9 1 CONSULTANT: Mareva Brown SUBJECT CalFresh SUMMARY This bill would raise the maximum gross income allowed for CalFresh beneficiaries if an applicant is categorically eligible for the program due to Medi-Cal eligiblity, as specified. This bill additionally requires the state to notify the legislature and to develop a plan to maintain the Low-Income Home Energy Assistance Program (LIHEAP) if program costs exceed allocated funding. It requires the California Department of Social Services (DSS) to ensure that receipt of LIHEAP benefits does not adversely affect eligibility or benefit level under the CalFresh program. It also entitles a homeless household to use the homeless shelter deduction rather than the standard utility allowance, if the benefit is greater. ABSTRACT Existing law: 1) Establishes under federal law the Supplemental Nutrition Assistance Program (SNAP) pursuant to the Continued--- STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageB Food Stamp Act of 1964 which provides federal funds to states to assist needy households in maintaining proper nutrition. (P.L. 88-525, 78 § 703-709) 2) Establishes in California statute the CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting specified criteria. (WIC 18900 et seq.) 3) Establishes in federal regulations income eligibility standards that define participants as those whose incomes are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet, as specified. Permits some forms of assistance to be excluded from the calculation of income for the purposes of eligibility for SNAP and others, such as a homeless deduction, to be automatically calculated. (7 CFR 273.9) 4) Provides that any child who is eligible for federal SNAP benefits is automatically certified to receive free school meals without an additional application. (7 USC § 2020(u)(2)(A)). 5) Establishes in state law a LIHEAP program, "Heat and Eat," which provides a nominal benefit and program information to beneficiaries who, in turn, are able to reduce required paperwork and, in some cases, increase SNAP benefits by qualifying for a standard utility allowance. (WIC 18901.2 (a)) 6) Creates within federal statute a program of broad-based categorical eligibility which permits states to make qualifying applicants who are eligible for Temporary Assistance to Needy Families (TANF) automatically eligible for SNAP nutrition benefits. (7 USC § 2014) 7) Creates in California statute a program of STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageC categorical eligibility for CalFresh benefits if an individual is a CalWORKs recipient, or is receiving indigent cash assistance from a county, or is eligible to receive food assistance through the Food Assistance Program for Legal Immigrants (WIC 18930). Participants still must meet other requirements specified in federal law; however, they are not required to go through a separate application process if they do qualify for CalFresh benefits. 8) Establishes in state law the Medi-Cal program to provide health care to low-income individuals, as specified. (WIC 14000 et seq.) This bill: 1) Requires that if the demand for the nominal LIHEAP service benefit exceeds allocated funding established by the California Department of Community Services and Development (CSD) in the LIHEAP state plan, CSD and DSS shall report that information to the Legislature and develop a plan to maintain the program as intended. 2) Prohibits receipt of the nominal LIHEAP service benefit from adversely affecting a CalFresh recipient household's eligibility or reducing a household's CalFresh benefits, in addition to existing prohibitions that the LIHEAP benefit disqualify a CalFresh applicant or beneficiary from receiving other LIHEAP or utility benefits. 3) Provides an entitlement for a homeless family to use the homeless shelter deduction in calculating CalFresh benefit levels instead of the full standard utility allowance (SUA), if using the SUA results in a lower amount of CalFresh benefits for a homeless household. 4) Requires DSS, to the extent permitted by federal law, to raise the maximum gross income allowed in the CalFresh gross income test for any individual who is categorically eligible for CalFresh and a member of a household that receives, or is eligible to receive, STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageD medical assistance under the state's Medi-Cal program. FISCAL IMPACT An Assembly Appropriations Committee analysis concluded this bill would have a number of potential costs and revenues including: Administrative costs for an estimated 5,000 new cases of up to $400,000 ($200,000 GF) per year and approximately $8 million in additional federal (SNAP) funding. Those federal benefits would generate more than $200,000 in GF revenue through increased sales taxes. Administrative costs for an estimated 60,000 individuals who are Medi-Cal recipients but are not participating in CalFresh of about $1.5 million ($750,000 GF) and up to $80 million in additional federal SNAP funding. Those federal benefits would generate close to $2 million in GF revenue through increased sales taxes. Administrative costs of $787,000 ($393,000 GF) related to an estimated 10,000 Medi-Cal beneficiaries who would be added to the program and would participate in CalFresh as a result of federal health care reform in 2014. The federal benefits would generate over $1 million in GF revenue through increased sales taxes. Approximately $3 million (GF) annually for an estimated 750 new participants in the California Food Assistance Program (CFAP), which provides nutrition benefits for recent, legal immigrants who are ineligible for federal SNAP benefits. The nutrition benefits provided to those families will generate approximately $80,000 in state sales tax revenue. BACKGROUND AND DISCUSSION Purpose of the bill STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageE According to the author, while nutrition is a critical component of overall health and wellbeing, many households with a Medi-Cal recipient who would be otherwise eligible for the program are barred from participating in the program because they have a gross income above the CalFresh limit. This means that while they would qualify under net income qualifications, it is only the CalFresh gross income test that prevents otherwise eligible households from accessing CalFresh food benefits. These households typically are working poor families with high expenses, such as child care costs. Under this bill, these families' gross income test would be raised from the current limit of 130% of Federal Poverty Level (FPL) to 200% of FPL. The net income test would still apply. The FPL in 2013 for a family of four is $23,550 annually. The author states that this bill has the potential to increase CalFresh participation by 227,000 Californians. This policy additionally would benefit children of these families because children in CalFresh households are automatically enrolled for free school meals, through an existing process called direct certification, the author writes. According to California Food Policy Advocates (CFPA), of the 2.5 million Medi-Cal beneficiaries who are currently eligible for CalFresh, only 1.3 million actually participate in the program, or just over half. The author further states that AB 191 could bring up to $10 million in federal nutrition benefits to the state. According to USDA estimates, every SNAP (CalFresh) dollar spent generates $1.79 in economic activity. The author also states that this bill would also bring California up to speed with 27 other states that have used categorical eligibility to increase CalFresh access. Additionally, this bill was amended to include cleanup language from AB 6 (Fuentes, Chapter 501, Statutes of 2011), which created California's "Heat and Eat" program to permit applicants to draw down a nominal LIHEAP benefit and, by extension, simplify the application process for beneficiaries. The cleanup language, which is mirrored in this year's Human Services budget trailer bill, AB 74 (Committee on Budget, 2013), would ensure that if payments STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageF from the program exceed allocated funding, the state and legislature would work out a plan to ensure the continuation of the program. It also prohibits use of the LIHEAP benefit from disadvantaging any applicant or beneficiary of the program. The final cleanup piece from AB 6 is to permit applicants and caseworkers to apply the homeless shelter deduction rather than the standard utility allowance (SUA) if the homeless deduction results in a higher food benefit for a household. CalFresh CalFresh food benefits for low-income, needy Californians are wholly funded through the SNAP program at the US Department of Agriculture (USDA). CalFresh is administered locally by county welfare departments, and the federal, state, and county governments share in the cost of administration of the program. Generally, eligibility for the program is determined by the USDA and is consistent across the nation, although states may seek waivers to modify some elements of the program. It includes a gross and net income asset test, work requirements, and other documentation requirements. From that information, a caseworker calculates eligibility and benefits based on specified income and deductions. Currently, the maximum allowable gross income is 130% of the Federal Poverty Level (FPL). All households must meet both gross and net monthly income thresholds to qualify, with the exception of households with elderly or disabled members who are not subject to gross income criteria but must have a net monthly income at or below 100% of the FPL. Cash resources generally cannot exceed $2,000, or $3,250 for households in which there is a household member who has a disability or is 60 years of age or older. The average CalFresh benefit per household per month is $336 ($153 per person), with nearly 1.9 million households in California receiving benefits. The CalFresh benefit is delivered on an EBT card, which can be swiped at grocery stores, farmer's markets and other food sales locations. Categorical Eligiblity STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageG Federal law provides two pathways for SNAP eligibility: either by meeting federal eligibility requirements, or by being automatically or "categorically" eligible for SNAP, based on being eligible for other low-income assistance programs. In April 2012, there were 46 million people in 22 million households benefitting from SNAP, according to a summary of the program by the Congressional Research Service in 2012. Traditionally across the country, categorical eligibility establishes the eligibility for SNAP benefits through eligibility in the state TANF program or other specified public benefits. In California, this translates to categorical eligibility for CalFresh benefits if the recipient is eligible for or receiving the CalWORKs benefits, or county-run General Assistance programs. Additionally, the 1996 welfare reform law permitted states to convey categorical eligibility to recipients of a TANF "benefit," beyond cash aid, based on a wide range of benefits and services. TANF benefits other than cash assistance typically are available to a broader range of households and at higher levels of income than are TANF cash assistance benefits.<1> In total, 43 jurisdictions have implemented what the USDA has called "broad-based" categorical eligibility. Recent efforts in Congress to eliminate the Categorical Eligibility program have thus far been unsuccessful, however, the issue has arisen several times in recent years, including in current conversations about the federal funding for SNAP. Participation rate California's SNAP participation rates have consistently ranked among the lowest in the nation. In 2010, just 55 percent of all eligible individuals participated in CalFresh, according to USDA data, which is an improvement over prior years. Since the beginning of the recession, CalFresh enrollment has increased approximately 21 percent from FY 2009 to FY 2010. Still, that growth has not met the ------------------------- <1> Falk, Gene and Randy Alison Aussenberg, "The Supplemental Nutrition Assistance Program: Categorical Eligibility," Congressional Research Service, July 17, 2012. STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageH growing need for nutrition assistance, according to a 2013 report, "Lost Dollars, Empty Plates," published by the California Food Policy Advocates.<2> According to the report, more than 4.1 million Californians were participating in CalFresh as of November 2012, up from 3.9 million participants a year earlier. The USDA's target participation rate for states was 71 percent in 2011. Between 2004 to 2008, CalFresh served approximately one-third of California's eligible working poor and no more than half of all eligible individuals in the state. From FFY 2002 to 2006, CalFresh served no more than 11 percent of the state's eligible seniors, 60 years or older. CalFresh participants received more than $612 million in federal monthly nutrition assistance benefits for eligible children, adults, and seniors, for an average household benefit of $332 per month during FY 2012. Related legislation AB 6 (Fuentes) Chapter 501, Statutes of 2011 made a number of broad changes to CalFresh policy, including implementing "Heat and Eat," to draw federal funds from the LIHEAP block grant and to simplify verification of utility costs for CalFresh applicants. AB 1560 (Fuentes, 2012) was identical to this bill. It was held on the suspense file in the Senate Appropriations Committee. AB 433 (Beall) Chapter 623, Statutes of 2008, established categorical eligibility for CalFresh benefits for individuals at or below 130% of the federal poverty level, regardless of the level of their assets. Language that would have established categorical eligibility for Medi-Cal beneficiaries was stripped from the final version of the bill. AB 2205 (Evans, 2006) would have established CalFresh categorical eligibility for Medi-Cal recipients if they ------------------------- <2> http://cfpa.net/CalFresh/CFPAPublications/LDEP-FullReport-20 13.pdf STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageI were eligible for or receiving services from the CalWORKs program. This bill was vetoed by the governor. COMMENTS 1. Identical language regarding LIHEAP benefits and use of the Standard Utilities Allowance (SUA) for homeless families is included in this year's Human Services trailer bill, AB 74 (Committee on Budget). The trailer bill was passed by both houses on June 14, 2013. Staff recommends deleting this language from the bill as it is now redundant. Staff recommends the following amendment: Remove Section 1 from this bill. 2. In response to concerns that the bill's language could permit the higher gross income test for additional participants, the author has proposed amending the bill to clarify that the gross income test change shall only apply to individuals determined categorically eligible for CalFresh because of their Medi-Cal eligibility. Staff recommends the following amendment:(2) The department, to the extent permitted by federal law, shall raise the maximum gross income allowed in the CalFresh gross income test for any individual who is categorically eligible for CalFresh pursuant to paragraph (1), and who is a member of a household that receives, or is eligible to receive, medical assistance under Chapter 7 (commencing with Section 14000) of Part 3.(2) The department shall to the extent permitted by federal law, design and implement a program of categorical eligibility for CalFresh, for the purposes of establishing the gross income limit for the TANF/MOE funded service that confers categorical eligibility for any household who is categorically eligible pursuant to section (1) and that includes a member that receives, or is eligible to receive, medical assistance under chapter 7 (commencing with section 1400) of Part 3. STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageJ PRIOR VOTES Assembly Floor: 54 - 23 Assembly Appropriations 12 - 5 Assembly Human Services 5 - 2 POSITIONS Support: AARP AFSCME Alameda County Community Food Bank Asian Law Alliance California Association of Food Banks California Catholic Conference California Food Policy Advocates County Health Executives Association of California (CHEAC) Feeding America San Diego Food for People, Inc. Greenlining Institute Health Access California Interfaith Community Services Jewish Family Service of Los Angeles Jewish Family Service of San Diego Latino Coalition for a Healthy California National Association of Social Workers San Diego Hunger Coalition San Francisco and Marin Food Banks Second Harvest Food Bank St. Anthony Foundation Women Organizing Resources Knowledge & Services Oppose: None received -- END -- STAFF ANALYSIS OF ASSEMBLY BILL 191 (Bocanegra) PageK