BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 191 (Bocanegra) - CalFresh: categorical eligibility.
Amended: June 27, 2013 Policy Vote: Human Services 4-2
Urgency: No Mandate: Yes
Hearing Date: August 12, 2013
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 191 would require the Department of Social
Services (DSS), to the extent permitted by federal law, to
design and implement a program of categorical eligibility for
CalFresh, as specified, for any categorically eligible household
that includes a member who receives, or is eligible to receive,
assistance under the Medi-Cal program, as specified.
Fiscal Impact:
For existing Medi-Cal recipients currently eligible but not
participating in CalFresh, and those newly eligible under
the bill, potential annual costs of $12.2 million (General
Fund) for CalFresh administration and California Food
Assistance Program (CFAP) benefits and administration.
Increased federal funding in the range of $375 million in
CalFresh benefits, generating $6.7 million (General Fund)
through increased sales tax revenue.
For every 5 percent of the 600,000 to 700,000 individuals
potentially eligible for CalFresh/CFAP (assuming 30 to 35
percent of the 2 million newly eligible Medi-Cal recipients
under federal health care reform (ACA) effective January 1,
2014, would be eligible), annual costs of $3 million to $3.5
million (General Fund) for state benefits and
administration. Increased federal funding in the range of
$50 million to $60 million in CalFresh benefits, generating
$0.9 million to $1.1 million in increased sales tax revenue.
For every 100,000 newly eligible children directly
certified for free school meals under the National School
Lunch Program (SLP) and School Breakfast Program (SBP),
increased federal funding of $75 million could be received
and state reimbursement of $8 million (General Fund) would
be required.
AB 191 (Bocanegra)
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Background: Existing federal law provides for the Supplemental
Nutrition Assistance Program (SNAP), known as CalFresh in
California, which provides financial assistance to low-income
households to purchase food. Existing federal law also
establishes the Medicaid health care program, known as Medi-Cal
in California, which provides for a variety of medical services
for children and adults with limited income and resources.
Under existing law, the gross income threshold for CalFresh is
130 percent of the federal poverty level (FPL). Medi-Cal
eligibility income thresholds vary, however, for different
applicants. Categorical eligibility is the system by which
individuals qualify for CalFresh benefits based on their
participation in other federal or state programs, such as cash
and non-cash benefits under the Temporary Assistance for Needy
Families (TANF) program. Use of categorical eligibility permits
states to raise the gross income threshold and remove asset
limits for nutrition assistance by providing applicants access
to a TANF-funded benefit, such as a brochure or referral to a
toll-free hotline. Extending a TANF-funded benefit to a
population even though they are not formally enrolled in TANF
(CalWORKs in California) authorizes a state to consider the
population income-eligible for CalFresh. According to the
Congressional Budget Office (CBO) report released on SNAP in
April 2012, three-fourths of all SNAP recipients qualified for
benefits on the basis of categorical eligibility, of which
two-thirds (or 50 percent of total SNAP recipients) qualified
through the receipt of noncash benefits from TANF.
Current law also establishes a direct certification process
whereby children who are enrolled in public benefits programs
such as CalWORKs and CalFresh are automatically enrolled in the
National School Lunch Program (SLP) and School Breakfast Program
(SBP), the free and reduced-price meal programs funded
predominantly by the U.S. Department of Agriculture and
supplemented by state funds.
As these programs are federal entitlement programs, federal
funds will be provided as long as recipients meet eligibility
criteria. In 2011-12, the state received $404.0 million for the
SBP and $1.4 billion for the NSLP. State funds augmented the
program by $45.7 million for SBP and $101.1 million for NSLP.
According to the CDE, on an average day, more than 4.5 million
nutritious meals are served at approximately 11,000 locations
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statewide. Income eligibility is 130 percent of federal poverty
guidelines for free meals and 185 percent of federal poverty
guidelines for reduced-price meals.
Proposed Law: This bill seeks to remove a CalFresh income
barrier for Medi-Cal recipients and their families.
Specifically, this bill would require the DSS, to the extent
permitted by federal law, to waive the gross income test for
CalFresh for any individual who is categorically eligible for
CalFresh and who is a member of a household that receives, or is
eligible to receive, assistance under the Medi-Cal program.
Related Legislation: AB 1560 (Fuentes) 2012 was substantially
similar to this measure. This bill was held on the Suspense File
of this committee.
AB 433 (Beall) Chapter 623/2008 established categorical
eligibility for CalFresh beneficiaries with income below 130
percent of the federal poverty level, regardless of the level of
assets. Early versions of the bill included proposed categorical
eligibility for Medi-Cal recipients, but the language was
removed from the enacted version of the bill.
AB 2205 (Evans) 2006 would have established categorical
eligibility for CalFresh for Medi-Cal recipients if they were
eligible for or receiving CalWORKs services. This bill was
vetoed by the Governor with the following message:
While I support efforts to increase participation in the Food
Stamps program through improved outreach efforts and more
streamlined administrative requirements, I am unable to support
Assembly Bill 2205 as it would expand eligibility for food
stamps increasing state costs by tens of millions of dollars.
Our state continues to face a significant structural deficit.
Accordingly, the outreach and eligibility expansions proposed by
AB 2205 are more appropriately addressed in the budget. For this
reasons, I am returning AB 2205 without my signature.
H.R. 1947 (Lucas), the Federal Agriculture Reform and Risk
Management Act of 2013 (FARRM), among other provisions, proposed
to restrict categorical eligibility to only those households
receiving cash assistance from SSI, TANF, or other state general
assistance programs. As a result, receiving a TANF-funded
brochure or referral to an "800" number hotline would no longer
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automatically make a household eligible for SNAP. This bill
failed passage in the House of Representatives on June 20, 2013.
Staff Comments: This bill will increase CalFresh participation
among existing and new Medi-Cal recipients, as well as Medi-Cal
eligible individuals, resulting in a significant increase in
federal benefits, as well as costs and revenues to the state.
It is estimated that 1.2 million existing Medi-Cal recipients
are eligible for CalFresh but are not currently participating in
the program. Additionally, there are households with gross
income below 200 percent FPL containing at least one Medi-Cal
recipient and not categorically ineligible for CalFresh who
could become newly eligible for the program. Although the extent
of the impact of Cat-El on participation in CalFresh is unknown,
a USDA Economic Research Service (ERS) article drawn from
various studies noted that recent econometric studies estimate
that SNAP caseloads increased by 6.2 percent in the year
following implementation of the broad-based categorical
eligibility, holding all other factors constant. Utilizing this
assumption would result in increased federal SNAP benefits of
$375 million, as well as additional state costs for
administration and California Food Assistance Program (CFAP)
benefits of approximately $12.2 million (General Fund) in
first-year costs. The increase in benefits could also generate
General Fund sales tax revenue of up to $6.7 million (utilizing
a General Fund revenue rate of 3.9375 percent), as studies have
shown that a percentage of food benefits are spent on taxable
goods.
With the implementation of specific provisions of federal health
care reform, effective January 1, 2014, it is estimated an
additional two million Californians will enroll in the Medi-Cal
program. Removing barriers to CalFresh enrollment through Cat-El
could result in significant increases in CalFresh and CFAP
participation. It is unknown what portion of the new Medi-Cal
caseload will participate, but as it is estimated that 30 to 35
percent of Medi-Cal recipients are eligible for CalFresh, there
could be an additional 600,000 to 700,000 individuals
potentially eligible for food benefits. The number of
individuals who would participate is unknown at this time but
could be significant. For every 5 percent of the potentially
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eligible caseload, annual costs would be in the range of $3
million to $3.5 million (General Fund) for state benefits and
administration. Increased federal funding would be in the range
of $50 million to $60 million in CalFresh benefits, generating
$0.9 million to $1.1 million in increased sales tax revenue.
Children in households that receive CalFresh are automatically
certified for free school meals under a rule known as direct
certification. To the extent this bill increases the number of
families enrolled in CalFresh will have the effect of increasing
the number of children eligible for free school meals under the
National School Lunch (SLP) and School Breakfast Programs (SBP).
A USDA report to Congress in October 2011 on direct
certification in the SLP indicated states and local education
agencies directly certified 78 percent of school age children
from SNAP-participant households categorically eligible for free
school meals in 2010-11. Assuming 85 percent of SNAP households
have children, and applying the 78 percent direct certification
rate on new households could result in over 170,000 children
impacted in the first year. It is unknown how many newly
qualified children would participate in the SLP/SBP, but
increased federal funding and state reimbursement for school
meals could be in the millions of dollars. For every 100,000
additional children, increased federal funding of $75 million
for free school lunches and breakfasts could be received, and $8
million (General Fund) in state reimbursement would be required.
This estimate is based on federal reimbursement of $2.72 per
lunch and $1.48 per breakfast, and state reimbursement of
approximately $0.22 per meal.
In order to be categorically eligible for CalFresh, these new
families would need to receive some form of TANF-funded benefit
or service. This service may be as minimal as providing families
with a brochure that outlines available TANF employment
services. The cost of printing additional copies of existing
publications is not estimated to be significant.