BILL ANALYSIS �
AB 197
Page 1
Date of Hearing: April 2, 2013
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
AB 197 (Stone) - As Introduced: January 29, 2013
SUBJECT : CalWORKs eligibility: vehicle asset test
SUMMARY : Eliminates the vehicle asset test for the California
Work Opportunity and Responsibility to Kids (CalWORKs) program.
Specifically, this bill : excludes a motor vehicle from
consideration when determining or re-determining eligibility for
CalWORKs and deletes the requirement that a county workers
assess the value of a motor vehicle when determining and
re-determining eligibility for applicants and recipients of
CalWORKs.
EXISTING LAW
1)Establishes under federal law the Temporary Assistance for
Needy Families (TANF) program to provide welfare-to-work
services to eligible families. In California, TANF funds for
welfare-to-work services are administered through the
California Work Opportunity and Responsibility to Kids
(CalWORKs) program.
2)Establishes income, asset and real property limits used to
determine eligibility for the program, which include:
a) One residence that the family lives in;
b) $2,000 in assets ($3,000 if the household includes a
family member over age 60);
c) One car with a value of $4,650 or less;
d) Net income below the Maximum Aid Payment (MAP), based on
family size and county of residence, which is currently no
higher than 40% of the Federal Poverty Level;
e) Any savings and interest in restricted, federally
qualified accounts for the purpose of retirement, starting
a business, saving for college, purchasing a home, or
overcoming an episode of homelessness.
FISCAL EFFECT : Unknown
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BACKGROUND :
The California Work Opportunity and Responsibility to Kids
(CalWORKs) program provides monthly income assistance and
employment-related services aimed at moving children out of
poverty and helping families meet basic needs. Federal funding
for CalWORKs comes from the Temporary Assistance for Needy
Families (TANF) block grant. The average monthly cash grant for
a family of three on CalWORKs is $467, which is $15.56 in cash
aid per household per day, making CalWORKs grants only $5 more
in actual dollars than they were in 1987. CalWORKs grants are
used to pay rent, buy clothing, pay utilities bills, and pay for
other basic needs to ensure children can be cared for at home
and remain safely with their families. According to December
2012 data from the California Department of Social Services,
562,053 families rely on CalWORKs, including over one million
children. Nearly half of the children on CalWORKs are under age
six.
Asset limits
Under federal TANF rules, states have the option to impose asset
limits on applicants and recipients to ensure TANF block grant
funds are used to aid the neediest families. States can choose
whether to apply a limit, which assets should count toward the
limit, how high the limit is, and to whom the asset limits
should apply. California's current asset test requires families
to have no more than $2,000 in liquid assets (and $3,250 if
there is a person over 60 in the household), and requires a
family's vehicle, if they have one, to have a Blue Book value
under $4,650.
The vehicle asset limit was originally designed to allow
families to have a reliable car to get to and from work.
However, the $4,650 limit was set in 1996 and has not been
adjusted since then to account for increases in vehicle values,
nor does that calculation take into account the actual
reliability of the vehicle. High mileage and high maintenance
costs that poor families can't afford can easily lead to car
malfunctions, increasing the likelihood of not getting children
to school or getting to work on time, which can jeopardize a
parent's employment and the family's grant and services.
Other states
Thirty-nine other states have either exempted one automobile
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entirely or established a higher resource limit than California.
Twelve of those states, including Alabama, North Carolina and
Ohio exclude the value of all vehicles. Others exclude at least
one vehicle if it's used for work or meeting other daily living
requirements.
Increasing administrative efficiency
The auto-resource barrier not only acts to limit successful
welfare-to-work transitions for many low-income families, it is
also counterproductive in helping families achieve
self-sufficiency. County workers are required to screen all
applicants and recipients to verify their eligibility under the
vehicle asset rule. This requires verifying vehicle ownership
and obtaining the information needed to calculate the value of
their vehicle, which wastes valuable county caseworker time that
could be redirected to supporting work activities. Forcing
families to choose between keeping an automobile-a valuable and
necessary tool that can help them rejoin the workforce-and
applying for needed temporary cash assistance and work supports
is futile if counties then need to spend more time with the
recipient to develop a plan for transportation to and from work
activities, and for other needs like taking their children to
school.
Why not just sell the car?
For a parent with income and assets besides the car low enough
to otherwise meet CalWORKs eligibility requirements, the extra
time and costs incurred by selling a car and purchasing another
can be significant and can result in hardship. There is
considerable time involved in selling an old car and buying a
new car, especially when the car to be purchased costs less than
$4,650. This is especially true for single parents trying to
accomplish this with children in tow or for a family that
doesn't have internet access, which is the case for many
low-income Californians. Additionally, the Blue Book value of
the car a family is selling does not necessarily determine the
actual amount the buyer will pay, further reducing the amount to
be gained by the sale.
The loss of assets in the transaction makes the sale of a car
ineffective for both the CalWORKs program budget and the needy
family. The recipient is left without resources to care for his
or her family for an extended period and without a vehicle,
often resulting in a merely temporarily delay in the family's
return to the county welfare office for assistance.
Furthermore, according to the CA DMV vehicle registration fee
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calculator, if a family were to sell their car then buy another
that costs $4,650 or less, they would pay as much as $434 in
fees and taxes; another loss of resources that could go towards
a family's basic needs.
In addition to fees and taxes associated with purchasing a car,
financing the purchase can be a major, often insurmountable
barrier. According to a study by the County of Los Angeles,
"After finding a car within their means and under the
eligibility asset cap, most recipients would need to finance the
car purchase. Obtaining credit is difficult for most welfare
recipients due to low wages, a lack of stable attachment to the
labor force, and problematic credit histories. Furthermore, in
cases where financing options are available, the terms and
interest rates can be usurious. Those with bad credit or no
credit are typically subjected to high interest rates and
shorter borrowing periods. In addition, many recipients reside
in low-income and minority communities that have less access to
credit options."
There are also many low-income families that rely on "Salvage
Title" cars that may have higher Blue Book values but that were
sold to them at a low price at an auction after the car had been
in a wreck. According to CarFax.com, Salvage Titles are issued
by states when a vehicle has sustained damage as a result of one
or more incidents. States issue Salvage Titles to indicate that
a vehicle is not road worthy and cannot be titled again in that
state. So for some recipients, selling their car is not even an
option.
Transportation and employment
According to the California Budget Project, "California's weak
job market poses a serious and persistent challenge. The
state's current jobless rate of 9.8 percent is still nearly
double the rate before the Great Recession began. Only recently
- in November 2012 - did the jobless rate finally reach single
digits after spending 45 consecutive months in double figures.
Long-term unemployment remains near a record high, with more
than one in three of California's unemployed reporting that they
have been searching for a job for at least one year. Our
state's budget policy choices should reflect the fact that many
Californians are still confronting the harsh aftereffects of the
Great Recession. "
The primary goal of the CalWORKs program is to move families out
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of poverty and towards self-sufficiency. Considering the
negative effects of the recent recession and a continued slow
recovery, Californians are facing incredible challenges
returning to the workforce. As a result, a number of families
have turned to the CalWORKs program for temporary assistance
while they seek jobs. Unless eligible for an exemption or a
waiver, all adult recipients of assistance are required to be
employed or to participate in a job training or job search
activity as a condition of eligibility for CalWORKs.
When a family applies for CalWORKs assistance and a parent
embarks on the path to employment, one of the first
considerations is transportation. If a parent doesn't have a
vehicle, they are provided a nominal amount to pay for their
transportation, often meaning they rely on public transportation
and walking, if feasible, to get themselves to their work
activities and to get their children to school. Without access
to their own vehicle, certain employment options may be
unattainable due to distance or location, and safety becomes an
issue for parents and their children.
In their research paper, "Measuring the Role of Transportation
in Facilitating the Welfare-to-Work Transition: Evidence from
Three California Counties," Evelyn Blumenberg and Daniel Baldwin
Hess conclude, "In all cases, commuting by private vehicle vs.
traveling by public transportation allows residents to access a
greater number of low-wage jobs?The disadvantage of public
transit, particularly for low-income mothers, may include long
headways, limited service hours, costs, difficulty using transit
to make multiple stops on the way to or from work and safety
issues after dark."
A report from Los Angeles County that assessed the
transportation needs of the welfare-to-work populations
concludes that, "Among the welfare-to-work population, car
owners are a relatively 'privileged' subgroup, experiencing the
fewest difficulties, and reporting the fewest transportation
barriers. Additionally, car ownership is strongly correlated
with employment status, and increases the likelihood of
employment." Their survey results of welfare-to-work
participants shows that 64% of participants with unlimited
access to an automobile were employed, whereas 44% of those who
had either limited or no access to an automobile were employed.
Purpose of the bill
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According to the author:
"AB 197 will remove an unnecessary barrier to employment
and ensure access to basic needs assistance for struggling
California families. If we expect families on CalWORKs to
fully participate in their welfare-to-work plans, we need
to be willing to remove the roadblocks, like the vehicle
asset limit, that hinder participation and create an
unnecessary administrative burden. By preventing families
from owning a reliable vehicle, California is inhibiting a
parent's ability to secure and maintain employment and
eventually work their way off of public assistance."
Additionally, some supporters indicate that vehicle reliability
can be an especially important in rural areas. According to the
Rural County Representatives of California:
"Reliable transportation in rural and underserved areas is
critical - not only to seek and maintain employment, but
also for the health and safety of recipients and their
families. Driving in rural California presents specific
challenges to residents - including weather, geography,
distances between communities and limited or non-existent
access to public transportation. A reliable motor vehicle
is not a luxury, but a necessity for low-income rural
families - promoting self-sufficiency and the maintenance
of stable employment."
COMMENTS :
Why now?
Prior identical legislation has died as a result of perceived
fiscal implications the legislation would have while the
CalWORKs budget was being cut year after year. However, after
facing a major economic downturn over the last few years,
California's economy is slowly bouncing back. As people in the
general working population see more job opportunities open up
and a lowered unemployment rate, employment opportunities for
parents receiving CalWORKs benefits should also continue to
increase, thereby helping families achieve stable work and be
able to support their families without aid. Additionally, the
changes made to the CalWORKs program as a result of 2012-13
Budget Trailer bill language refocus the CalWORKs program,
targeting appropriate and effective work readiness and education
programs at the front end of a recipient's time on aid while
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ensuring that barriers to employment and self-sufficiency are
removed as quickly and as appropriately as possible.
PRIOR LEGISLATION
AB 2352 (R. Hern�ndez), 2012, was identical to this legislation.
Died on the Senate Appropriations suspense file.
AB 1182 (R. Hern�ndez), 2011, would have eliminated the vehicle
asset test for CalWORKs applicants and recipients. Vetoed by
the Governor.
AB 1058 (Beall), 2009-10, would have eliminated the vehicle
asset test for CalWORKs applicants and recipients. Died on the
Senate Appropriations suspense file.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law and Poverty (WCLP) co-sponsor
United Ways of California co-sponsor
Coalition of California Welfare Rights Organizations (CCWRO)
co-sponsor
County Welfare Directors Association of CA (CWDA) co- sponsor
American Federation of State, County and Municipal Employees
(AFSCME), AFL-CIO
Asian Law Alliance
Butte County Department of Employment and Social Services (DESS)
California Association of Food Banks
California Catholic Conference
California Communities United Institute (CalComUI)
California Immigrant Policy Center (CIPC)
California State Association of Counties (CSAC)
Californians for Shared Prosperity
Central Labor Council of Contra Costa County
Contra Costa County Board of Supervisors
County of Santa Cruz, Board of Supervisors
EARN
East Bay Community Law Center
Hunger Action Los Angeles
Inland Empire United Way
Laborers' International Union of North America Locals 777 & 792
Lutheran Office of Public Policy - California
Merced County Human Services Agency
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Mission Economic Development Agency (MEDA)
National Association of Social Workers, CA Chapter (NASW-CA)
Parent Voices
Riverside County Department of Public Social Services
Rural County Representatives of California (RCRC)
Sacramento Housing Alliance
San Diego Hunger Coalition
San Luis Obispo County Department of Social Services
San Mateo County
San Mateo County Central Labor Council
Service Employees International Union (SEIU)
United Way Monterey County
United Way of Fresno County
United Way of Santa Cruz
United Way of Tulare County
Urban Counties Caucus (UCC)
Western Regional Advocacy Project
Opposition
None on file
Analysis Prepared by : Myesha Jackson / HUM. S. / (916)
319-2089