BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1747


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          Date of Hearing:  May 18, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          1747 (Weber) - As Amended May 11, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:  This bill requires, as a condition of participation in  
          the Cal Grant Program, each public and private postsecondary  
          educational institution to take a number of steps to facilitate  
          student access to nutrition programs.  Specifically, this bill:


          1)Requires a public or private postsecondary education  








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            institution, as a condition of its participation in the Cal  
            Grant Program, to do all of the following:


             a)   Ensure campus access to surcharge-free transactions  
               using the electronic benefits transfer (EBT) system, except  
               for the imposition of a surcharge by an owner or operator,  
               other than the institution, of an automated teller machine  
               on a campus, or an issuer of an EBT card, if otherwise  
               permitted by law.


             b)   Increase access to, and information about, the  
               Restaurant Meals Program on campus, as specified; and


          1)Specifies that a public or private postsecondary education  
            institution is not required to create, operate, or maintain an  
            EBT system on behalf of on-campus food vendors.


          2)Allows public postsecondary educational institutions that are  
            successful in raising money for CalFresh outreach activities  
            to receive matching funds from the United States Department of  
            Agriculture, as specified.


          3)Creates the Public Higher Education Pantry Assistance Program  
            Account in the Emergency Food Assistance Program, and  
            allocates funds in the account to food banks if:


             a)   The primary function of the food bank is the  
               distribution of food to low-income households; and


             b)   The food bank has identified specific costs associated  
               with supporting on-campus pantry and hunger relief efforts  
               serving low-income students. 








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          FISCAL EFFECT:


          1)Community Colleges. Unknown one-time costs to California  
            Community Colleges, likely in the high tens of thousands of  
            dollars (GF/Prop 98), to install and set up stand-alone  
            terminals and design and implement the system  
            administratively. Ongoing costs, likely in the hundreds of  
            thousands of dollars (GF/Prop 98) to cover associated fees and  
            operating costs. There are 72 community college districts and  
            113 campuses statewide.  Assuming a cost of approximately $250  
            per terminal, one terminal on each of the 113 campuses would  
            cost approximately $28,250. This would be higher if to the  
            extent each campus had multiple terminals. Vendor fees will  
            likely be approximately $200,000 annually statewide based on  
            available data.


            This bill conditions receipt of state funds for student  
            financial aid on community college districts providing  
            surcharge-free EBT access on each campus. If a community  
            college district submits a claim for reimbursement, the  
            Commission on State Mandates could determine activities  
            related this requirement to be a reimbursable mandate based on  
            practical compulsion - that there is no reasonable alternative  
            but to comply with bill's requirement. 





          2)California State University (CSU). Unknown one-time costs to  
            the CSU, likely in the thousands of dollars (GF), to install  
            and set up stand-alone terminals and pay vendor fees.   
            Assuming a cost of approximately $250 per terminal, one  
            terminal on each of the 23 campuses would cost approximately  
            $5,750. This number could vary as some campuses may already  








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            have terminals and others may want more than one. On-going  
            costs to cover vendor fees, likely be in the low thousands of  
            dollars (GF) per campus annually, based on available data.


          3)University of California (UC). Unknown one-time costs to the  
            UC, likely in the hundreds of thousands of dollars (GF), to  
            install and set up stand-alone terminals and to make software  
            and hardware adjustments to campus infrastructure. Assuming  
            one terminal on each of the 10 campuses, total cost would be  
            approximately $2,500. On-going costs to pay vendor fees,  
            likely in the low thousands of dollars (GF) per campus  
            annually, based on available data.  In addition, UC  
            anticipates on-going costs of approximately $500,000 for  0.5  
            FTE staff per campus to coordinate with departments and ensure  
            compliance with the bill's requirements.


          4)Minor and absorbable costs associated with applying to become  
            an approved vendor for the Restaurant Meals Program.


          COMMENTS:


          1)Purpose.  This bill seeks to address the growing incidence of  
            hunger among low-income college students in California.  A  
            growing number of college students are enrolled in SNAP, but  
            few students who receive SNAP benefits can purchase food on  
            college campuses.  According to a December 2015 report, by  
            Wisconsin Hope Lab, entitled, "Hungry to Learn:  Addressing  
            Food and Housing Insecurity Among Undergraduates," of a survey  
            of more than 4,000 undergraduates at 10 community colleges  
            across the nation, half of all of the respondents reported  
            that they struggle with food and/or housing insecurity.  The  
            report also found that 20 percent of the student respondents  
            indicated that they are hungry. 










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          2)Electronic Benefit Transfer (EBT).  EBT is an electronic  
            system that automates the delivery, redemption, and  
            reconciliation of issued public assistance benefits such as  
            CalWORKs and Cal Fresh benefits. EBT is currently used in all  
            50 states.  In California, CalWORKs and CalFresh recipients  
            access their benefits via what has been named the Golden State  
            Advantage EBT card.  Like a bank-issued automated teller  
            machine (ATM) card, the cardholder slides this card through a  
            point-of-sale (POS) device, or uses the card at an ATM.


            Under existing law, the electronics benefit processor cannot  
            charge a recipient a fee for cash transactions until after the  
            fourth transaction within a month; however surcharges for  
            subsequent transactions currently range from $1.00 to $3.50.   
            In 2014-15, low-income Californians paid more than $19 million  
            in EBT related surcharge fees to banks, according to data from  
            the California Department of Social Services. 


            This bill requires an education institution to ensure  
            surcharge-free EBT access on each campus, except that banks  
            can continue to impose their surcharges.


          3)CalFresh. CalFresh benefits are funded by the federal  
            government through the Supplemental Nutrition Assistance  
            Program (SNAP), and the United States Department of  
            Agriculture (USDA) sets specific eligibility requirements for  
            SNAP programs across the United States. The maximum allowable  
            gross income is 200% of the Federal Poverty Level (FPL).   
            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 or at  
            ATM machines.   The average monthly benefit for a CalFresh  








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            recipient is $144.35 per month, or $4.81 per person per day.


          4)Restaurant Meal Program:  Under SNAP rules, recipients are  
            limited to purchasing only non-prepared food items; however  
            some people are less able to use SNAP food benefits in  
            traditional ways due to the lack of necessary tools,  
            appliances or physical abilities required to prepare their own  
            meals.  Accordingly, SNAP allows states to participate in the  
            Restaurant Meal Program option, which allows SNAP recipients  
            to purchase hot prepared food in authorized restaurants.   
            California operates the largest Restaurant Meal Program and  
            has allowed counties to utilize this option since 2003. 


            This bill requires education institutions located in counties  
            that participate in the Restaurant Meals Program to apply to  
            become an approved food vendor if they have a qualifying food  
            facility on campus, and to provide information to all their  
            on-campus food vendors regarding the Program, including how to  
            apply.


          5)Prior Legislation.



             a)   AB 832 (Weber), 2013, would have required all  
               convenience stores and bookstores at the California State  
               University, the University of California, and community  
               colleges to accept the use of EBT cards.  It was held in  
               the Assembly Human Services Committee. 



             b)   AB 756 (Mitchell), 2011, would have prohibited  
               surcharges on ATM withdrawals and POS transactions for  
               CalWORKs recipients when they use their state-issued EBT  
               card.  It was held in the Assembly Human Services  








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               Committee.
          


          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081