BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AJR 35


                                                                    Page  1





          Date of Hearing:  April 26, 2016


                        ASSEMBLY COMMITTEE ON HUMAN SERVICES


                                Susan Bonilla, Chair


          AJR 35  
          (Brown) - As Introduced March 17, 2016


          SUBJECT:  Supplemental Nutrition Assistance Program:  cash-out  
          policy


          SUMMARY:  Memorializes the California Legislature's request to  
          the federal government to enable California to end the  
          Supplemental Nutrition Assistance Program (SNAP) cash-out policy  
          in such a way as to maximize benefits and participation while at  
          the same time mitigating or eliminating harm for those  
          households that would currently be detrimentally impacted by  
          ending the policy.


          Specifically, this bill:  


          1)Makes a number of declarations, including:


             a)   The federal SNAP, formerly known as the Food Stamp  
               Program, offers nutrition to millions of eligible,  
               low-income individuals and families, and yet, many  
               low-income seniors and people with disabilities in  
               California cannot receive SNAP benefits;










                                                                     AJR 35


                                                                    Page  2





             b)   CalFresh, California's SNAP program, provides monthly  
               benefits to millions of eligible low-income Californians  
               through an electronic benefit transfer (EBT) card that can  
               be used to purchase food;


             c)   SNAP benefits are provided on a sliding scale based on  
               income, household size, and certain household expenses;


             d)   The federal Supplemental Security Income (SSI) program  
               provides income support to the elderly, blind, or disabled  
               who meet income and other eligibility criteria, and is  
               supplemented by the State Supplementary Payment program  
               (SSP);


             e)   1.3 million SSI/SSP recipients in California are  
               ineligible for SNAP due to the cash-out policy;


             f)   California's cash-out policy, established in 1974,  
               allowed California to cash out SNAP benefits to SSI/SSP  
               recipients by including the estimated values of SNAP  
               benefits, approximately $10 per month in California at the  
               time, within SSI/SSP benefits, thereby reducing  
               administrative and other expenditures, and also preventing  
               SSI/SSP recipients in California from being eligible for  
               SNAP;


             g)   California is the only state in which SSI/SSP recipients  
               are ineligible for SNAP under the cash-out policy;


             h)   California's SSI/SSP recipients currently live closer  
               to, or below, the federal poverty level (FPL) than when the  
               program began;









                                                                     AJR 35


                                                                    Page  3






             i)   SSI/SSP benefits have risen and fallen over time, and  
               the annual cost-of-living-adjustment (COLA) for SSI/SSP was  
               repealed in the state in 2009;


             j)   SSI/SSP recipients in California would, on average, be  
               eligible for more CalFresh benefits than the $10 monthly  
               amount;


             aa)  Technology has advanced to a point where electronic  
               benefits could be made available to an SSI/SSP recipient if  
               the state developed a method of activating an EBT card by  
               asking questions telephonically, or through other efficient  
               means, to determine if the automatically calculated  
               benefits are correct; 


             bb)  California's cash-out policy hurts many low-income  
               seniors and people with disabilities and continuing this  
               policy poses many significant risks to these individuals'  
               health and well-being; and


             cc)  California's cash-out policy benefits some mixed SSI/SSP  
               households, where some members of the household receive  
               SSI/SSP benefits and other members do not, resulting in  
               greater CalFresh benefits overall, and California could  
               provide mixed SSI/SSP households with alternative benefits  
               to replace the reduced or eliminated CalFresh benefits  
               resulting from an end to the cash-out policy.


          2)Resolves that the California Legislature requests the federal  
            government to change federal policy in order to allow  
            California to equitably end the SNAP cash-out policy in a way  
            that would maximize benefits for and participation of  
            newly-eligible individuals while at the same time mitigating  








                                                                     AJR 35


                                                                    Page  4





            or eliminating harm to low-income families and medically needy  
            children who could be made ineligible for certain benefits  
            under a program without a cash-out policy.


          3)Resolves that the Chief Clerk of the Assembly transmit copies  
            of the resolution in question to the President and Vice  
            President of the United States, and the Speaker of the House  
            of Representatives, the Majority Leader of the Senate, each  
            Senator and Representative from California in the Congress of  
            the United States, and the author.


          EXISTING LAW:  


          1)Establishes under federal law the Supplemental Nutrition  
            Assistance Program (SNAP) pursuant to the Food Stamp Act of  
            1964 and establishes, in California statute, the CalFresh  
            program to administer the provision of federal SNAP benefits  
            to families and individuals meeting certain criteria, as  
            specified.  (WIC 18900 et seq.)


          2)Establishes the Electronic Benefits Transfer (EBT) Act, and  
            defines the EBT system as the program designed to provide  
            benefits to those eligible to receive public assistance  
            benefits such as CalWORKs and CalFresh.  (WIC 10065 et seq.)


          3)Establishes the State Supplementary Program for Aged, Blind  
            and Disabled, which is intended to supplement SSI and provide  
            persons whose need results from age, blindness or disability  
            with assistance and services that help them meet basic needs  
            and maintain or increase independence.  (WIC 12000 et seq.)


          4)Provides that eligibility requirements for SSP match federal  
            SSI criteria, and requires a minimum level of SSP benefits to  








                                                                     AJR 35


                                                                    Page  5





            be provided in order to maintain federal Medicaid funding, as  
            specified.  (WIC 12000 et seq.)


          5)Prohibits an individual who receives SSI and/or SSP benefits  
            as a resident of California from receiving food stamp  
            benefits.  (7 CFR § 273.20 (a))


          6)Disregards the income and resources of an SSI recipient living  
            in a household from CalFresh eligibility and benefit  
            determination for that household.  (7 CFR § 273.20 (c))


          FISCAL EFFECT:  Unknown.


          COMMENTS:  


          CalFresh:  CalFresh benefits are funded entirely by the federal  
          government through SNAP, and the United States Department of  
          Agriculture (USDA) sets specific eligibility requirements for  
          SNAP programs across the United States, including a gross and  
          net income test, work requirements, and other documentation  
          requirements.  The maximum allowable gross income is typically  
          200% of the Federal Poverty Level (FPL).  Households with  
          elderly or disabled members are not subject to gross income  
          criteria but must have a net monthly income at or below 100% of  
          the FPL.  Other households must meet both gross and net monthly  
          income tests.  CalFresh is administered locally by county human  
          services agencies, and the federal, state, and county  
          governments share in the cost of administration of the program.


          Benefits are made available on a monthly basis for food purchase  
          through an ATM-like EBT card.  However, unlike other types of  
          benefits that may be accessed through an EBT card, CalFresh  
          benefits cannot be withdrawn in cash at point-of-sale terminals  








                                                                     AJR 35


                                                                    Page  6





          or at ATM machines.  CalFresh benefits can only be used to  
          purchase food items to be prepared and consumed at home, as well  
          as seeds and plants that can be grown at home and produce food.   
          The average monthly benefit for a CalFresh recipient is $144.35  
          per month, or $4.81 per person per day. 


          SSI/SSP:  The SSI/SSP program provides a monthly cash benefit to  
          needy aged, blind, and disabled individuals and couples to help  
          them pay for basic living expenses, such as food, clothing and  
          shelter.  In order to be eligible for SSI/SSP, an individual  
          must be 65 years of age or older, blind, or have disabilities  
          (children who are blind or have disabilities can qualify), and  
          must meet certain federal income and resource requirements.  The  
          SSI portion of the benefit is federally-funded and only provided  
          through an approved application to the Social Security  
          Administration (SSA), while the SSP portion is paid for with  
          General Fund dollars, and a qualified SSI recipient is  
          automatically qualified for SSP.  The SSI portion of the grant  
          is meant to provide an income floor for qualifying low-income  
          individuals and couples.


          SSI/SSP grants are adjusted based on whether a recipient is  
          aged, blind or disabled; the individual's or couple's living  
          arrangement, a recipient's marital status, and a recipient's  
          status as a minor.  The current SSI/SSP maximum grant levels are  
          $889.40 per month for an individual ($156.40 SSP) and $1,496 per  
          month for couples ($396.20 SSP), which places individuals at 90%  
          of poverty and couples at 112% of poverty based on federal  
          guidelines.  The estimated SSI/SSP caseload for 2016-17 is 1.31  
          million cases (including 1.51 million people), which are  
          composed of 28% aged persons, 1% blind persons and 71% persons  
          with disabilities.  Over 81% of SSI/SSP cases are individual  
          cases.


          The Social Security Administration applies an annual cost of  
          living adjustment (COLA) to the SSI portion of the grant  








                                                                     AJR 35


                                                                    Page  7





          pursuant to annual increases in the Consumer Price Index (CPI).   
          This federal COLA is passed through to SSI/SSP recipients in  
          California, which allows SSI/SSP grants to remain at the minimum  
          level allowed under federal law for individuals and couples,  
          thereby allowing the state to maintain its federal Medicaid  
          funding.  During the state's economic downturn, the SSI/SSP  
          program was one of many safety net programs negatively impacted.  
           The COLA California once applied to the SSP amount was made  
          inoperative as part of the 2009-10 Budget Act.


          The Governor's 2016-17 Budget proposed in January includes a  
          cost-of-living increase to the SSP beginning January 1, 2017,  
          that is equal to the California Necessities Index (CNI),  
          estimated to be 2.96%.  This will have the effect of increasing  
          SSI/SSP monthly grant amounts by $17 for individuals and $31 for  
          couples.


          Cash-out policy:  California's cash-out policy dates back to  
          1974.  That year, the federal government began the combined  
          SSI/SSP program and, among other things, authorized states to  
          increase the amount of their SSP to include the value of the  
          food stamp allotment in lieu of separately administering food  
          stamps to SSI/SSP recipients, with the goal of lowering  
          administrative costs.  This meant that California increased its  
          monthly SSP grant by $10.  Today, California remains the only  
          state with a cash-out policy.


          In "mixed" households that contain a disabled or elderly  
          household member who receives SSI/SSP, the SSI/SSP income is  
          disregarded when determining the household's CalFresh  
          eligibility and level of benefits.  This means that ending the  
          cash-out policy could create "winners" and "losers": SSI/SSP  
          recipients would stand to gain higher levels of food assistance  
          by becoming eligible for CalFresh, while mixed households could  
          see their nutrition assistance reduced or eliminated if the  
          SSI/SSP income is now counted for purposes of determining  








                                                                     AJR 35


                                                                    Page  8





          household CalFresh eligibility and benefit levels.  Currently,  
          according to the author, it is estimated that approximately  
          60,000 medically needy children in mixed households may be  
          detrimentally impacted by ending the state's cash-out policy.


          Need for this bill:  According to the author, "The Federal  
          Supplemental Nutrition Assistance Program (SNAP), known as  
          CalFresh in our state, supports millions of low-income  
          Californians.  Unfortunately, 1.3 million SSI/SSP recipients are  
          ineligible for CalFresh benefits because of a policy known as  
          'cash-out.'  This policy, which only impacts California, started  
          in 1974 when the federal government began the combined  
          federal-state SSI/SSP program.  A $10 food-stamp benefit was  
          traded for a $10 cash benefit due to the extreme administrative  
          costs of delivering the $10 food stamp benefit.  This policy  
          made sense in the mid 1970's, but today, it is hurting our poor  
          vulnerable populations because the $10 cash benefit has been  
          decimated by decades of budget and fiscal changes.  California's  
          SSI/SSP recipients are living much closer to, or below, the  
          federal poverty level than they were when the program began.   
          While ending the program would solve this problem, doing so  
          without a change to federal policy would reduce benefits for  
          approximately 58,000 medically dependent children.  A federal  
          change would allow California to provide CalFresh benefits to  
          SSI/SSP recipients and maintain the current benefits for  
          medically dependent children."  


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Bay Area Community Services









                                                                     AJR 35


                                                                    Page  9






          California Alliance for Retired Americans


          California Association of Public Affairs (CAPA)


          Mercy Brown Bag Program


          Personal Assistance Services Council of Los Angeles County


          Resources for Independent Living


          San Francisco Senior Disability Action


          St. Mary's Center




          Opposition


          None on file.




          Analysis Prepared by:Daphne Hunt / HUM. S. / (916) 319-2089














                                                                     AJR 35


                                                                    Page  10