BILL NUMBER: AB 1280 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member John A. Pérez
FEBRUARY 22, 2013
An act to add Section 1339.1 to the Unemployment Insurance Code,
and to amend Section 11006.2 of the Welfare and Institutions Code,
relating to health and human services.
LEGISLATIVE COUNSEL'S DIGEST
AB 1280, as introduced, John A. Pérez. Public assistance payments
and unemployment compensation benefits: electronic fund transfer:
qualifying accounts.
Existing law provides for protection, care, and assistance for
people of the state, and the promotion of the welfare and happiness
of all people in the state by providing appropriate aid and services
to the needy and distressed. Programs established for this purpose
include the California Work Opportunity and Responsibility to Kids
(CalWORKs) Program, which provides cash assistance and other social
services to needy families, using federal Temporary Assistance for
Needy Families (TANF) block grant program, state, and county funds,
and CalFresh, whereby nutrition assistance benefits allocated to the
state by the federal government are distributed to eligible
individuals by each county. Counties administer the CalWORKs and
CalFresh programs.
Existing law requires the State Department of Social Services to
provide for the delivery of public assistance payments at any time
during the month and authorizes any person entitled to the receipt of
public assistance payments to authorize payment to be directly
deposited by electronic fund transfer into the person's account at a
financial institution of his or her choice under a program of direct
deposit by electronic transfer established by the county treasurer.
Existing law requires each county treasurer to make an agreement with
one or more financial institutions participating in the Automated
Clearing House and to, by December 1, 2001, establish a program for
the direct deposit by electronic fund transfer of payments to any
person entitled to the receipt of public assistance benefits who
authorizes the direct deposit of the benefits into the person's
account at the financial institution of his or her choice.
This bill would instead authorize a person entitled to receipt of
public assistance payments to authorize payment to be directly
deposited by electronic fund transfer to a qualifying account, as
defined, at a financial institution of his or her choice under a
program for direct deposit by electronic transfer, as established by
the bill. The bill would require qualifying accounts to meet
specified requirements.
Existing law also provides for unemployment compensation benefits
to eligible persons who are unemployed through no fault of their own.
This bill would, if a recipient of unemployment compensation
benefit payments elects to receive payments by direct deposit to an
account of the recipient's choice, require that the payments only be
deposited to a qualifying account, as defined.
This bill would prohibit a person or entity that issues a prepaid
card or maintains or manages a prepaid card account from accepting or
facilitating the direct deposit of public assistance payments or
unemployment compensation benefits to a prepaid card account that
does not meet the requirements of a qualified account.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1339.1 is added to the Unemployment Insurance
Code, to read:
1339.1. Notwithstanding any other provisions of this part, if a
recipient of unemployment compensation benefit payments elects to
receive the payments by direct deposit to an account of the recipient'
s choice, as authorized under the federal Electronic Fund Transfer
Act (15 U.S.C. Sec. 1693 et seq.), the payments may only be deposited
to an account that meets the requirements of a qualifying account
for deposit of public assistance payments as set forth in Section
11006.2 of the Welfare and Institutions Code. A person or entity that
issues a prepaid card or maintains or manages a prepaid card account
shall not accept or facilitate direct deposit of unemployment
compensation benefits to a prepaid card account that is ineligible
under this section.
SEC. 2. Section 11006.2 of the Welfare and Institutions Code is
amended to read:
11006.2. (a) The department may provide for the delivery of
public assistance payments at any time during the month.
(b) The department shall cooperate with county treasurers and
private financial service providers, including depository
institutions, licensed check sellers, data processing service
vendors, and retail merchants, in developing and implementing an
electronically based system for delivering public assistance payments
to those recipients who do not have individual deposit accounts with
financial institutions.
(c)
(b) (1) Notwithstanding any other provision of
law, any person entitled to the receipt of public
assistance payments may authorize payment to be directly deposited by
electronic fund transfer into the person's qualifying
account at the financial institution of his or her choice under a
program for direct deposit by electronic transfer as
established by the county treasurer in this
section . The direct deposit to a qualifying account
shall discharge the department's obligation with respect to the
payment.
(2) Each county treasurer shall make an agreement with one or more
financial institutions participating in the Automated Clearing House
pursuant to the local rules, and shall, by December 1, 2001,
establish a program for the direct deposit by electronic fund
transfer of payments to any person entitled to the receipt of public
assistance benefits who authorizes the direct deposit
thereof of the benefits into the person's
qualifying account at the financial institution of his or her
choice.
(3) For purposes of this section, a "qualifying account" is one of
the following:
(A) A demand deposit or savings account at an insured financial
institution in the name of the person entitled to receipt of public
assistance payments.
(B) A prepaid card account that meets all of the following:
(i) The account is held at an insured financial institution.
(ii) The account is set up to meet the requirements for
passthrough deposit or share insurance so that the funds accessible
through the account are insured for the benefit of the person
entitled to the receipt of public assistance payments by the Federal
Deposit Insurance Corporation in accordance with Part 330 of Title 12
of the Code of Federal Regulations, or the National Credit Union
Share Insurance Fund in accordance with Part 745 of Title 12 of the
Code of Federal Regulations.
(iii) The account is not attached to any credit or overdraft
feature that is automatically repaid from the account after delivery
of the payment.
(iv) The issuer of the card complies with all of the requirements,
and provides the holder of the card with all of the consumer
protections, that apply to a payroll card account under the rules
implementing the federal Electronic Fund Transfer Act (EFTA) (15
U.S.C. Sec. 1693 et seq.) or other rules subsequently adopted under
the EFTA that apply to prepaid card accounts.
(4) A person or entity that issues a prepaid card or maintains or
manages a prepaid card account that does not comply with paragraph
(3) shall not accept or facilitate the direct deposit of public
assistance payments to the prepaid card account.
(3)
( 5) This subdivision shall apply in each
county that offers a program for direct deposit by electronic funds
transfer to some or all of its employees.
(c) For the purposes of this section, the following definitions
shall apply:
(1) "Financial institution" means a state or national bank, a
state or federal savings and loan association, a mutual savings bank,
or a state or federal credit union.
(2) "Issuer" means a person or entity that issues a prepaid card.
(3) "Payroll card account" shall have the same meaning as that
term is defined in the regulations implementing the EFTA.
(4) "Prepaid card" or "prepaid card account" means either of the
following:
(A) A card, code, or other means of access to funds of a recipient
that is usable at multiple, unaffiliated merchants for goods or
services, or usable at automated teller machines.
(B) The same as those terms or related terms are defined in the
regulations adopted under the EFTA regarding general use reloadable
cards.