BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1614 (Stone) - Electronic benefits transfer cards.
Amended: August 4, 2014 Policy Vote: Human Services 4-0
Urgency: No Mandate: Yes
Hearing Date: August 4, 2014
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1614 would require users of electronic benefit
transfer (EBT) cards to be provided with specified information
and would require the CalWORKs/CalFresh EBT system to meet
specified requirements. Specifically, this bill:
Requires counties to inform recipients of CalWORKs and
General Assistance/General Relief (GA/GR) of various
information provided by the DSS, including the methods of
electronic delivery of benefits available and the
applicable charges, fees, or surcharges associated with
each method, how to avoid fees/charges, consumer and
privacy protections, liability for theft, as well as where
to withdraw benefits without a surcharge when using the EBT
system.
Requires counties to inform recipients of CalWORKs of
the available methods of delivery of benefits and
instructions regarding how to select or change the
preferred method, as specified.
Creates the Electronic Benefits Transfer System Consumer
Protection, Financial Empowerment, and Cash Access Fund for
the purpose of ensuring CalWORKs recipients are educated
about their consumer rights and financial management tools
and services available to them.
Fiscal Impact:
Ongoing state-reimbursable administrative costs to counties
to inform all CalWORKs and GA/GR recipients of specified
information provided by the DSS regarding the electronic
delivery of benefits. Based on CalWORKs and GA recipients of
about 700,000, to the extent the information is provided
verbally in person or over the phone, an additional five
minutes of eligibility worker time for each recipient would
result in costs of $3.3 million (General Fund).
AB 1614 (Stone)
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Minor, absorbable costs to the DSS, as most of the
requirements of the EBT system are already implemented and
part of the existing system.
Background: Existing law provides for financial and food
assistance benefits to needy California families and individuals
through, among other programs, the California Work Opportunity
and Responsibility to Kids (CalWORKs) program and the CalFresh
program, to qualified individuals who meet specified eligibility
criteria.
Existing law provides for the establishment of a statewide EBT
system administered by the Department of Social Services (DSS)
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 provisions, that the EBT system have a 24-hour 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 seeks to provide recipients with additional
information regarding the use of the EBT system to enable better
management of their benefits.
Proposed Law: This bill would require users of electronic
benefit transfer (EBT) cards to be provided with specified
information and would require the CalWORKs/CalFresh EBT system
to meet specified requirements. Specifically, this bill:
Requires the CalWORKs/CalFresh 24-hour toll-free
telephone hotline to provide recipients, at no additional
cost, the ability to view transaction history detail (at
least 10 transactions over the telephone), and to request
at least two months of transactions be sent by mail.
Requires the EBT system to be designed to ensure that
CalWORKs recipients have access to using or withdrawing
benefits with minimal fees or charges, including an
opportunity to access benefits with no fees or charges.
Requires the EBT system to have a website to provide
recipients, at no additional cost, information on how to
replace a lost or stolen EBT card and pin number.
Requires the EBT system be designed to inform recipients
that access to electronic benefits is temporarily
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unavailable if 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.
Requires counties to inform recipients of CalWORKs and
General Assistance/General Relief (GA/GR) of various
information provided by the DSS, including the methods of
electronic delivery of benefits available, including the
EBT system or direct deposit, and the applicable charges,
fees, or surcharges associated with each method, how to
avoid fees/charges, consumer and privacy protections,
liability for theft, as well as where to withdraw benefits
without a surcharge when using the EBT system.
Requires counties in inform recipients of CalWORKs of
the available methods of delivery of benefits and
instructions regarding how to select or change the
preferred method, as specified.
Creates the Electronic Benefits Transfer System Consumer
Protection, Financial Empowerment, and Cash Access Fund for
the purpose of ensuring CalWORKs recipients are educated
about their consumer rights and financial management tools
and services available to them. The fund may contain
federal, state, and private funds.
Prior Legislation: AB 1280 (Perez) Chapter 557/2013 authorized
public assistance payments to be directly deposited by
electronic funds transfer to a qualifying account and required
those accounts to meet specified consumer protection
regulations.
AB 2035 (Bradford) Chapter 319/2012 protects recipients against
the loss of EBT benefits that are stolen electronically.
AB 756 (Mitchell) 2011 would have prohibited fees or surcharges
for EBT cash withdrawals at ATMs, POS machines, or similar cash
withdrawal devices. This bill failed passage in the Assembly
Committee on Human Services.
AB 1542 (Ducheny) Chapter 270/1997 implemented federal welfare
reform and conformed to federal law in establishing the EBT
system to deliver CalWORKs and CalFresh benefits.
Staff Comments: By mandating counties to inform all CalWORKs and
General Assistance recipients of specified information, this
bill creates an ongoing state-reimbursable mandate potentially
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resulting in increased county administrative costs to inform all
recipients of specified information regarding the electronic
delivery of benefits and associated charges, fees, and
surcharges. Based on the combined CalWORKs and GA/GR caseloads
of about 700,000, an additional five minutes of eligibility
worker time for each recipient would result in additional costs
of $3.3 million (General Fund). To the extent the workload
required to provide this information takes more or less time,
costs would be commensurately greater or less than the estimate
noted above.
Because the bill does not specify in what manner the recipients
are to be informed, whether verbally in person or over the
phone, or possibly through a written notification provided in
person or mailed, the costs to counties is unknown and would
likely vary by county. To the extent the information is provided
to recipients through a written notice and does not require
additional eligibility worker time would mitigate costs to some
extent.
The DSS has indicated minor costs to meet the mandates on the
EBT system specified in the bill, as most of the requirements of
the EBT system are already implemented and part of the existing
system.