Amended in Senate August 22, 2014

Amended in Senate August 19, 2014

Amended in Senate August 4, 2014

Amended in Assembly April 22, 2014

Amended in Assembly April 3, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1614

Introduced by Assembly Member Stone

February 6, 2014

An act begin insert to amend Section 17325 of the Family Code, end insert to amend Section 123302 of the Health and Safety Code, and to amend Section 10072 of the Welfare and Institutions Code, relating to begin delete public social services. end delete begin insert electronic transfers. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1614, as amended, Stone. Electronic begin delete benefits transfer cards. end delete begin insert transfers: payments and benefits. end insert

(1) Existing law provides for financial and food assistance benefits to needy Californians including, among other programs, the California Work Opportunity and Responsibility to Kids (CalWORKs) program and CalFresh, under which each county provides for financial and food assistance benefits to qualified individuals who meet specified eligibility criteria.

Existing law, administered by the State Department of Social Services, provides for the establishment of a statewide electronic benefits transfer (EBT) system for the purpose of providing those financial and food assistance benefits. Existing law authorizes a county to deliver CalFresh benefits and, upon election by the county, CalWORKs benefits through the use of an EBT system. Existing law requires, among other things, that the system have a 24-hour per day toll-free telephone hotline for the reporting of lost or stolen cards that will provide recipients with information on how to have the card and personal identification card number replaced.

This bill would require the 24-hour toll-free telephone hotline to provide recipients, at no additional cost, the above-described information and to allow an authorized representative or head of household to access or request the transaction history detail, as specified. This bill would require the system to have an Internet Web site that will provide the same information and allow an authorized representative or head of household to view or request the transaction history detail.

The bill would require a county human services agency to make available to an authorized representative or head of household all electronic benefit transaction history details that are available to the county human services agency within 10 business days after a request has been received.

This bill would also require that the EBT system be designed to inform recipients when the system does not function or is expected not to function for more than a one-hour period between 6 a.m. and midnight during any 24-hour period.

(2) Existing law, except as specified, authorizes a recipient to be charged a fee, not to exceed the amount allowable by applicable state and federal law and customarily charged to other customers, for cash withdrawal transactions that exceed 4 per month.

This bill would require the EBT system to be designed to ensure that recipients of benefits under the CalWORKs program have access to using or withdrawing benefits with minimal fees or charges, including an opportunity to access benefits with no fees or charges.

(3) Existing law requires that EBT system consumers be informed regarding how to use the EBT card and how to protect the card from misuse.

This bill would also require a consumer to be informed of where they can use their EBT cards to withdraw benefits without incurring a fee, charge, or surcharge. This bill would also require the county to use information provided by the department to inform recipients of benefits under the CalWORKs program of, among other things, the methods of electronic delivery of benefits available and any applicable fees, charges, or surcharges associated with the EBT system. begin delete The bill would also require a county to inform recipients of benefits under the CalWORKs program of additional options to which they are entitled regarding the receipt of benefits. end delete

(4) The bill would require the department to implement these provisions by all-county letters or similar instructions no later than April 1, 2015, and until regulations are adopted on or before October 1, 2016.

This bill would also make a conforming change.

By increasing the duties of counties in administering public social services programs, this bill would impose a state-mandated local program.

begin insert

(5) Existing law obligates a parent to support his or her child. Existing law establishes the Department of Child Support Services within the California Health and Human Services Agency, which administers all services and performs all functions necessary to establish, collect, and distribute child support. Existing law, commencing January 1, 2015, requires, if child support payments are directly deposited to an account of the recipient’s choice, that the payments only be deposited to a qualifying account, as defined, and prohibits 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 child support payments to a prepaid card account that does not meet the requirements of a qualifying account.

end insert begin insert

This bill would prohibit the Department of Child Support Services from being held liable for authorizing a direct deposit of child support payments into a prepaid card account designated by the recipient that does not meet the requirements of a qualified account.

end insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 17325 of the end insert begin insert Family Code end insert begin insert , as added by
Section 1 of Chapter 180 of the Statutes of 2014, is amended to
read: end insert

17325.  

(a) (1) Notwithstanding any other law, if child support
payments are directly deposited to an account of the recipient’s
choice, as authorized under the federal Electronic Fund Transfer
Act (EFTA) (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, as defined in paragraph (2), for deposit of child
support payments.

(2) 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 the receipt of child
support 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 eligible for insurance for the benefit of
the person entitled to the receipt of child support 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 EFTA or other rules subsequently adopted under
the EFTA that apply to prepaid card accounts.

(3) A person or entity that issues a prepaid card or maintains or
manages a prepaid card account that does not comply with
paragraph (2) shall not accept or facilitate the direct deposit of
child support payments to the prepaid card account.

begin insert

(b) For purposes of this section, the department shall not be
held liable for authorizing a direct deposit of child support
payments into a prepaid card account designated by the recipient
that does not comply with paragraph (2) of subdivision (a).

end insert begin delete

(b)

end delete

begin insert (c) end insert  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.

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 123302 of the Health and Safety Code is
amended to read:

123302.  

(a) (1) Notwithstanding any other law, the department
may design, implement, and fund an electronic benefits transfer
(EBT) system for the California Special Supplemental Food
Program for Women, Infants, and Children. Sections 10066, 10067,
and 10068 of, and subdivision begin delete (l) end delete begin insert (m) end insert of Section 10072 of, the
Welfare and Institutions Code, shall apply to the administration
of this section.

(2) The department shall not implement any EBT system
authorized by this section until the department completes a
feasibility study, and funding for the system is provided in the
annual Budget Act.

(b) The department shall seek the advice of the Electronic
Benefits Transfer Committee, created by Section 10067 of the
Welfare and Institutions Code, in implementing this section, and
shall obtain the approval of the United States Department of
Agriculture, which is the federal governing agency, prior to the
establishment of any EBT system.

(c) The department shall develop a plan to determine the
feasibility of implementing an EBT system for the California
Special Supplemental Food Program for Women, Infants, and
Children by January 1, 2003, and shall report its findings to the
Legislature by July 1, 2003.

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 10072 of the Welfare and Institutions Code is
amended to read:

10072.  

The electronic benefits transfer system required by this
chapter shall be designed to do, but not be limited to, all of the
following:

(a) To the extent permitted by federal law and the rules of the
program providing the benefits, recipients who are required to
receive their benefits using an electronic benefits transfer system
shall be permitted to gain access to the benefits in any part of the
state where electronic benefits transfers are accepted. All electronic
benefits transfer systems in this state shall be designed to allow
recipients to gain access to their benefits by using every other
electronic benefits transfer system.

(b) To the maximum extent feasible, electronic benefits transfer
systems shall be designed to be compatible with the electronic
benefits transfer systems in other states.

(c) All reasonable measures shall be taken in order to ensure
that recipients have access to electronically issued benefits through
systems such as automated teller machines, point-of-sale devices,
or other devices that accept electronic benefits transfer transactions.
Benefits provided under Chapter 2 (commencing with Section
11200) of Part 3 shall be staggered over a period of three calendar
days, unless a county requests a waiver from the department and
the waiver is approved, or in cases of hardship pursuant to
subdivision (p).

(d) The system shall provide for reasonable access to benefits
to recipients who demonstrate an inability to use an electronic
benefits transfer card or other aspect of the system because of
disability, language, lack of access, or other barrier. These
alternative methods shall conform to the requirements of the
Americans with Disabilities Act (42 U.S.C. Sec. 12101, et seq.),
including reasonable accommodations for recipients who, because
of physical or mental disabilities, are unable to operate or otherwise
make effective use of the electronic benefits transfer system.

(e) The system shall permit a recipient the option to choose a
personal identification number, also known as a “PIN” number,
to assist the recipient to remember his or her number in order to
allow access to benefits. Whenever an institution, authorized
representative, or other third party not part of the recipient
household or assistance unit has been issued an electronic benefits
transfer card, either in lieu of, or in addition to, the recipient, the
third party shall have a separate card and personal identification
number. At the option of the recipient, he or she may designate
whether restrictions apply to the third party’s access to the
recipient’s benefits. At the option of the recipient head of
household or assistance unit, the county shall provide one electronic
benefits transfer card to each adult member to enable them to
access benefits.

(f) The system shall have a 24-hour per day toll-free telephone
hotline for the reporting of lost or stolen cards that will provide
recipients, at no additional cost to the recipient, with information
on how to have the card and personal identification number
replaced, and that will allow an authorized representative or head
of household to access, over the telephone, the transaction history
detail for at least the last 10 transactions and to request that the
transaction history detail for at least the past two months be sent
by mail.

(g) The system shall have an Internet Web site that will provide
recipients, at no additional cost to the recipient, with information
on how to have the card and personal identification number
replaced, and that will allow an authorized representative or head
of household to view the transaction history detail for at least the
last 10 transactions and to request that the transaction history detail
for at least the past two months be sent by mail.

(h) In addition to the ability to receive transaction history detail
pursuant to subdivisions (f) and (g), a county human services
agency shall make available to an authorized representative or
head of household, at no additional cost to the authorized
representative or head of household, all electronic benefit
transaction history details that are available to the county human
services agency within 10 business days after a request has been
received by the agency.

(i) (1) A recipient shall not incur any loss of electronic benefits
after reporting that his or her electronic benefits transfer card or
personal identification number has been lost or stolen. The system
shall provide for the prompt replacement of lost or stolen electronic
benefits transfer cards and personal identification numbers.
Electronic benefits for which the case was determined eligible and
that were not withdrawn by transactions using an authorized
personal identification number for the account shall also be
promptly replaced.

(2) A recipient shall not incur any loss of cash benefits that are
taken by an unauthorized withdrawal, removal, or use of benefits
that does not occur by the use of a physical EBT card issued to the
recipient or authorized third party to directly access the benefits.
Benefits taken as described in this paragraph shall be promptly
replaced in accordance with the protocol established by the
department pursuant to paragraph (3).

(3) The State Department of Social Services shall establish a
protocol for recipients to report electronic theft of cash benefits
that minimizes the burden on recipients, ensures prompt
replacement of benefits in order to minimize the harm to recipients,
and ensures program integrity. This protocol may include the
automatic replacement of benefits without the need for recipient
reporting and verification.

(j) Electronic benefits transfer system consumers shall be
informed on how to use electronic benefits transfer cards, how to
protect their cards from misuse, and where consumers can use their
cards to withdraw benefits without incurring a fee, charge, or
surcharge.

(k) The electronic benefits transfer system shall be designed to
inform recipients when the electronic benefits transfer system does
not function or is expected not to function for more than a one-hour
period between 6 a.m. and midnight during any 24-hour period.
This information shall be made available in the recipient’s preferred
language if the electronic benefits transfer system vendor contract
provides for services in that language.

(l) Procedures shall be developed for error resolution.

(m) No fee shall be charged by the state, a county, or an
electronic benefits processor certified by the state to retailers
participating in the electronic benefits transfer system.

(n) Except for CalFresh transactions, a recipient may be charged
a fee, not to exceed the amount allowed by applicable state and
federal law and customarily charged to other customers, for cash
withdrawal transactions that exceed four per month.

(o) The electronic benefits transfer system shall be designed to
ensure that recipients of benefits under Chapter 2 (commencing
with Section 11200) of Part 3 have access to using or withdrawing
benefits with minimal fees or charges, including an opportunity
to access benefits with no fee or charges.

(p) A county shall exempt an individual from the three-day
staggering requirement under subdivision (c) on a case-by-case
basis for hardship. Hardship includes, but is not limited to, the
incurrence of late charges on an individual’s housing payments.

(q) A county shall use information provided by the department
to inform recipients of benefits under Chapter 2 (commencing with
Section 11200) of Part 3 of all of the following:

(1) The methods of electronic delivery of benefits available,
including distribution of benefits through the electronic benefits
transfer system or direct deposit pursuant to Section 11006.2.

(2) Applicable fees and charges, including surcharges, consumer
and privacy protections, and liability for theft associated with the
electronic benefits transfer system.

(3) How to avoid fees and charges, including opting for delivery
of benefits by direct deposit and using the electronic benefits
transfer card solely at surcharge free locations.

(4) Where to withdraw benefits without a surcharge when using
the electronic benefits transfer system.

begin delete

(r) A county shall inform a recipient of benefits under Chapter
2 (commencing with Section 11200) of Part 3 of all of the
following:

end delete begin delete

(1)

end delete

begin insert (5) end insert  That a recipient may authorize any available method of
electronic delivery of benefits and instructions regarding how the
recipient may select or change his or her preferred method of
electronic delivery of benefits and that the recipient shall be given
the opportunity to select the method prior to the first payment.

begin delete

(2)

end delete

begin insert (6) end insert  That a recipient may be entitled to an alternative method of
delivery if the recipient demonstrates an inability to use an
electronic benefits transfer card or other aspect of the system
because of disability, language, lack of access, or other barrier
pursuant to subdivision (d) and instructions regarding how to
determine whether the recipient qualifies for an alternative method
of delivery.

begin delete

(3)

end delete

begin insert (7) end insert  That a recipient may be entitled to an exemption from the
three-day staggering requirement under subdivision (c) on a
case-by-case basis for hardship pursuant to subdivision (o) and
instructions regarding how to determine whether the recipient
qualifies for the exemption.

begin insert

(r) A county is in compliance with subdivision (q) if it provides
the recipient a copy of the information developed by the
department. A county may provide a recipient information, in
addition to the copy of the information developed by the
department, pursuant to subdivision (q), either verbally or in
writing, if the county determines the additional information will
benefit the recipient’s understanding of the information provided.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

Notwithstanding the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code), the begin delete department end delete begin insert State Department of Social Services end insert shall
implement begin insert Sections 2 and 3 of end insert this act by all-county letters or
similar instructions no later than April 1, 2015, and until regulations
are developed. The department shall adopt regulations
implementing this act on or before October 1, 2016.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.