BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON HUMAN SERVICES
                               Senator McGuire, Chair
                                2015 - 2016  Regular 

          Bill No:              AB 743
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          |Author:   |Eggman                                                |
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          |Version:  |June 1, 2015           |Hearing    | July 14, 2015   |
          |          |                       |Date:      |                 |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Mareva Brown                                          |
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                 Subject:  CalWORKs:  eligibility:  work activities


            SUMMARY
          
          This bill exempts from consideration as income or property in  
          determining CalWORKs eligibility any education, training,  
          vocation, or rehabilitation benefits provided through the U.S.  
          Department of Veterans Affairs for active duty personnel,  
          veterans, dependents, or spouses, as specified. Additionally, it  
          exempts a participant in a self-initiated education and training  
          program (SIP) from the requirement that the person participate  
          in job search activities. The bill would also exempt hours of  
          participation in a SIP from the 24-month time clock, as  
          specified. The bill authorizes study time, as defined by the  
          educational institution, to be counted toward the participant's  
          minimum work participation hours requirements. Additionally the  
          bill requires that supportive services be provided to a person  
          participating in a SIP until an assessment has been completed,  
          if an assessment is found to be necessary. The bill requires  
          that a course schedule approved by a college counselor be deemed  
          sufficient verification of the need for child care.  The bill  
          would also require the county to annually approve a list of  
          programs identified by the county or local educational agencies  
          or providers as leading to employment. 

            ABSTRACT
          
          Existing law:









          AB 743 (Eggman)                                           PageB  
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             1)   Establishes the federal Temporary Assistance for Needy  
               Families (TANF) program, which permits states to implement  
               the program under a state plan, and stablishes in state law  
               the CalWORKs program to provide cash assistance and other  
               social services for low-income families through the TANF  
               program. Under CalWORKs, each county provides assistance  
               through a combination of state, county and federal TANF  
               funds. (42 USC  601 et seq.)(WIC 10530)


             2)   Establishes eligibility for aid under the CalWORKs  
               program, including income and asset requirements and  
               exemptions from considering certain income and assets in  
               determining eligibility. (WIC 11250)


             3)   Requires CalWORKs recipients to participate in a  
               welfare-to-work plan, unless exempted and as defined, in  
               order to remain eligible for CalWORKs benefits, (WIC  
               11320.3.) and defines the scope and sequence of activities  
               (WIC 11320.1)


             4)   Establishes the right of a recipient who is enrolled in  
               an undergraduate degree or certificate program at the time  
               of enrollment in the CalWORKs program to continue in this  
               "self-initiated program," (SIP) if the county determines  
               that continuing in the program is likely to lead to  
               self-supporting employment for that recipient, and the  
               welfare-to-work plan reflects that determination. (WIC  
               11325.23)


             5)   Requires that an applicant or recipient participate in  
               welfare-to-work activities, including specified hours in  
               specified activities within the first 24 months, and other  
               federally identified activities to maintain eligibility in  
               the program after 24 months, until the 48-month lifetime  
               limit on aid is exhausted. (WIC 11322.85)


             6)   Exempts individuals from the requirement to participate  
               in job search activities, as defined, who are participating  
               in Cal-Learn, or are a custodial parent under age 20 and  









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               completing a high school diploma, as defined. (WIC  
               11325.22. (a) (1))


             7)   Requires that at the time a recipient enters the  
               welfare-to-work program, the county shall conduct an  
               appraisal, as specified, to gather and provide information  
               about the recipient including educational and employment  
               history, housing and stability, domestic violence, physical  
               and behavioral health, and others. (WIC 11325.2)


             8)   Exempts participants in a SIP from the requirement to  
               participate in an assessment prior to beginning  
               welfare-to-work activities, unless the county determines  
               that the assessment is necessary to meet required  
               work-participation hours, (WIC 11325.22 (a)(2)(C))


             9)   Requires that individuals who participate in SIPs be  
               reimbursed for supportive services, and that reimbursement  
               shall be provided if no other source of funding for those  
               costs is available.  (WIC 11325.23)


             10)  Requires that if an individual fails or refuses to  
               comply with program requirements without good cause in a  
               program component to which he or she is assigned or with a  
               compliance plan agreed to between the county and the  
               participant, the individual shall be subject to sanctions,  
               as specified (WIC 11327.4)


          
          This bill:

             1)   Names this bill the CalWORKs Self-Sufficiency through  
               Education and GI Bill Exemption Act of 2015.

             2)   Exempts from consideration as income or property when  
               determining eligibility for the CalWORKs program any  
               education, training, vocation or rehabilitation benefits,  
               as defined, provided by the U.S. Department of Veterans  
               Affairs for active duty personnel, veterans, or dependents  









          AB 743 (Eggman)                                           PageD  
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               or spouses of those who died in the line of duty or have a  
               service connected disability.

             3)   Removes a SIP from the mandated activities and time  
               frames in the state's the 24-month clock, and makes  
               corresponding changes to existing law.

             4)   Exempts individuals in a SIP from the requirement to be  
               assigned to four consecutive weeks in job club and job  
               search activities in order to maintain eligibility for  
               CalWORKs benefits. 

             5)   Adds to the statutory requirement that a county must  
               determine that an assessment is necessary to develop a  
               welfare-to-work plan for a person in a SIP, as specified,  
               the requirement that if an assessment is required, it be  
               scheduled at a time that does not interfere with a person's  
               SIP, employment or child care obligations and that the  
               person continue to receive supportive services until the  
               assessment has been completed.

             6)   Establishes that the definition  of  "satisfactory  
               progress" that is required for ongoing participation in a  
               SIP is determined by the educational or vocational  
               institution.

             7)   Establishes that a list of programs that are determined  
               to lead to employment within the SIP program must be  
               approved by the county annually, instead of agreed upon by  
               the county and local education agency or provider. 

             8)   Adds study time to classroom, laboratory and internship  
               activities that are required to be counted toward  
               participation requirements for the SIP program.

             9)   Establishes that a schedule approved by a college  
               counselor is sufficient verification of necessary child  
               care hours to determine eligibility for child care  
               services, and deletes the requirement that reimbursement  
               for child care shall be provide if no other source of  
               funding for those costs is available.

             10)  Removes the potential for sanctioning an individual in a  
               SIP for failing or refusing to comply with program  









          AB 743 (Eggman)                                           PageE  
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               requirements.

             11)  Mandates that an individual in a SIP that is reflected  
               in a welfare-to-work plan shall not be subject to sanctions  
               on the basis of failure to sign a new welfare-to-work plan  
               if the individual is making satisfactory progress in that  
               program, as defined.

             12)  Requires that no appropriation, as defined, be made in  
               implementing this act.

            FISCAL IMPACT
          
          According to an Assembly Appropriations Committee analysis, this  
          bill would result in ongoing costs in the range of $60,786 to  
          $300,900 (Federal funds/GF) for CalWORKs caseload increases and  
          increased grant amounts for those already receiving aid, due to  
          the expanded exemption of veterans' benefits. A portion of new  
          recipients will likely qualify for additional services as well,  
          such as child care, which will increase these costs further.  
          Additionally, the Assembly Appropriations Committee analysis  
          identified minor administrative costs to the Department of  
          Social Services (DSS) resulting from other provisions in the  
          bill.



            BACKGROUND AND DISCUSSION
          
          Purpose of the bill:

          This bill makes several changes in the CalWORKs program to make  
          it easier for a beneficiary to go to college and obtain a degree  
          or certificate. It removes the requirement that beneficiaries  
          who are working toward a degree or certificate additionally  
          participate in the welfare-to-work job search program. It  
          requires that a SIP should include study time, and prohibits a  
          county eligibility worker from disregarding student expenses  
          when a CalWORKs beneficiary is receiving military educational  
          benefits, as defined.  

          The author writes that schoolwork should be considered a  
          priority and component of the Welfare-to-Work Program. This bill  
          would eliminate the requirement that CalWORKs recipients who  









          AB 743 (Eggman)                                           PageF  
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          participate in an employment training or education program also  
          participate in the job search component of CalWORKs  
          welfare-to-work program before their certificate or degree is  
          completed. According to the author, studies have shown higher  
          education is the best pathway out of poverty and into a stable,  
          well-paying job. AB 743 provides a clearer path for students  
          living in poverty to attend and more importantly, complete their  
          degree or certificate, the author states.
          
          Poverty and Education


          California has the highest poverty rate in the nation - just  
          under one-quarter of residents are living at or below the  
          federal poverty level (FPL), earning no more than $20,090 per  
          year for a family of three. According to a 2009 paper by the  
          National Bureau of Economic Research there is a strong link  
          between middle-class income and the receipt of a college degree:  
          "While thirty years ago a high school degree was sufficient for  
          financial security, it is now a college degree that is the key  
          to a middle-class lifestyle."<1> 

          A 2014 report by the Pew Research center, underscored the  
          ongoing significance of a college education: "On virtually every  
          measure of economic well-being and career attainment-from  
          personal earnings to job satisfaction to the share employed full  
          time-young college graduates are outperforming their peers with  
          less education. And when today's young adults are compared with  
          previous generations, the disparity in economic outcomes between  
          college graduates and those with a high school diploma or less  
          formal schooling has never been greater in the modern era."<2>  
          The report included the chart, below.

                                          


          CalWORKs


          ---------------------------
          <1> Deming, David, et al.,"Into College, Out of Poverty?  
          Policies to Increase the Postsecondary Attainment of the Poor,"  
          National Bureau of Economic Research, September 2009
          <2> Pew Research Center, "The Rising Cost of Not Going to  
          College," November 2014








          AB 743 (Eggman)                                           PageG  
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          One of California's most essential anti-poverty strategies is  
          the California Work Opportunity and Responsibility to Kids  
          program (CalWORKs), which provided cash assistance to  
          approximately 540,000 families in 2014, including more than 1  
          million children. Federal funding for CalWORKs comes from the  
          TANF block grant.  Currently, the maximum grant for a family of  
          three in a high-cost California county is $704 per month, or  
          $8,448 per year -- approximately 42 percent of the federal  
          poverty level (FPL). In 1989, a grant to a similar family was  
          worth about 81 percent of FPL, and 55 percent in 1997. Part of  
          the reason for this decline has been a series of changes over  
          the past five years including significant grant cuts, the  
          elimination of a Cost of Living Adjustment, and a major  
          restructuring of the welfare-to-work activities, requirements  
          and time limits. Adults in the program have gone from a 60-month  
          lifetime limit on CalWORKs aid to a 48-month limit, with strict  
          requirements on work participation to remain in the program  
          after 24 months.  

          Self initiated programs

          A CalWORKs participant who is entering the program and already  
          is participating in an undergraduate degree or certificate  
          program may enter into a SIP. SIP participants must be enrolled  
          in a program and the county must determine that continuing in  
          the program is likely to lead to self-supporting employment.  
          Various counties may apply the SIP differently. In order to be  
          enrolled as a SIP, a CalWORKs beneficiary may not already have a  
          bachelor's degree, certificate or vocational license. SIPs must  
          comply with weekly educational activities, and they are eligible  
          for child care and other supportive services, providing they  
          make satisfactory progress in their program. 

          Under current law, a CalWORKs recipient can remain in an  
          educational program - in lieu of work activity - for the first  
          24 months of benefits due to the flexibility of the 24-month  
          time clock. A SIP may continue in the educational program for a  
          year after the end of the 24-month clock due to a one-year  
          federal allowance for educational activities. If a SIP has not  
          completed the school program in those three years, the  
          individual then must meet federal work-participation  
          requirements to remain eligible for CalWORKs benefits. According  
          to CDSS, there are about 6,000 SIPs in the CalWORKs caseload. 










          AB 743 (Eggman)                                           PageH  
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          GI Bill

          The original GI Bill was enacted by Congress to help pave an  
          easy transition for World War II veterans returning home.  
          Although the bill provided a variety of benefits, including  
          down-payments on homes, one of its best-known benefits was to  
          provide tuition payments for servicemen. In 2008, a "Post-9/11  
          GI Bill" was enacted to provide enhanced educational benefits,  
          money for books and a living allowance to veterans with active  
          duty service on or after September 11, 2001. The bill allows  
          veterans to transfer any unused educational benefits to their  
          spouses or children, within specified allowances. 


          According to September 2014 estimates from the US Department of  
          Veterans Affairs, more than 1.8 million veterans lived in  
          California, or about one in eight of the 22 million veterans in  
          the United States. Another 156,000 active duty military  
          personnel lived in California as of 2012. Existing law currently  
          exempts G.I. Bill education benefits from calculation in  
          CalWORKs eligibility, but the statute is silent as to whether  
          housing stipends available for post-911 GI Bill recipients or  
          education benefits received by survivors are exempt from  
          consideration under the CalWORKs program.


            COMMENTS
          
          This bill makes substantial changes to the structure of the  
          CalWORKs program for individuals who are engaged in study  
          leading to a degree or certification through a SIP. Research  
          links attainment of a college degree with higher income, and  
          advocates have argued that enabling CalWORKs recipients who want  
          to earn a degree is one of the surest paths out of poverty.   
          Advocates and the author say this bill is in response to  
          concerns statewide that there are barriers within the CalWORKs  
          program that prevent participants from pursuing educational  
          activities. 

          Should this bill be passed from this committee, staff recommends  
          the author address all of the following concerns prior to being  
          heard in the next committee:
          
             1.   24-month clock: Removal of the SIP from the 24-month  









          AB 743 (Eggman)                                           PageI  
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               time clock (section 4) would eliminate the opportunity to  
               participate in associated welfare-to-work services, such as  
               Family Stabilization. If the intent is not for SIPs to lose  
               all 24-month clock services, the author needs to make that  
               clarification.

             2.   Determining progress: This bill removes the county's  
               authority to determine if a SIP is making satisfactory  
               educational progress and vests that authority instead with  
               the SIPs educational or vocational institution. Similarly,  
               the bill authorizes the educational institution to  
               determine if a program of study is leading to employment,  
               rather than requiring that it be determined jointly with  
               the county. (Sections 4 and 5). There are concerns that  
               some institutions may have less rigorous standards in  
               making these determinations. The author needs to clarify  
               who makes the decision or how it is made.

             3.   Defining a SIP: This bill appears to remove the criteria  
               for becoming a SIP, which had been to be enrolled in an  
               educational program prior to obtaining CalWORKs  
               authorization. (Section 5) Under the bill, a SIP may be  
               anyone who  is enrolled in any undergraduate degree or  
               certificate program that leads to employment. The author  
               should clarify if there is a distinction between  
               individuals in CalWORKs who are pursuing education through  
               a welfare-to-work plan from individuals pursuing education  
               through a SIP. The author also should clarify how the  
               county makes such a distinction.

             4.   Child care verification: This bill enables a SIP to  
               provide a schedule approved by a college counselor in order  
               to establish eligibility for child care. (Section 5) This  
               attempt to solve the problem of participants whose official  
               schedules are released so close to the beginning of school  
               that they are unable to set up child care before classes  
               start. The Department of Social Services has indicated an  
               interest in continued discussion of this problem and  
               resolution. Should the bill move forward, the author may  
               wish to attempt to resolve this issue via a work group in  
               order to more precisely identify the resolution.

          Additionally, in order to clarify language around who may  
          receive the benefit exemptions, staff recommends making the  









          AB 743 (Eggman)                                           PageJ  
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          following amendment to Section 2 of the bill as follows:

           11250.8. (b)  Education, training, vocation, or rehabilitation  
          benefits, and related allowances provided through the United  
          States Department of Veterans Affairs for active duty  personnel,   
           personnel  or veterans, and  dependents,   dependents  or spouses of  
          those who either died in the line of duty or have a  
          service-connected disability, shall be totally exempt from  
          consideration as income or property for purposes of determining  
          eligibility or available income or property for purposes of this  
          chapter.

            PRIOR VOTES
          
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          |Assembly Floor:                                            |53 - |
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          |Assembly Appropriations Committee:                         |12 - |
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          |Assembly Human Services Committee:                         |5 -  |
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            POSITIONS
                                          
          Support:
               Western Center on Law and Poverty (Sponsor)
               California Partnership
               California School Employees Association
               Courage Campaign
               National Association of Social Workers
                    

          Oppose:   
               None received.
                                      -- END --