BILL ANALYSIS Ó AB 1747 Page 1 Date of Hearing: May 18, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 1747 (Weber) - As Amended May 11, 2016 ----------------------------------------------------------------- |Policy |Human Services |Vote:|5 - 1 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Higher Education | |11 - 0 | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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 AB 1747 Page 2 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. AB 1747 Page 3 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 AB 1747 Page 4 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. AB 1747 Page 5 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 AB 1747 Page 6 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 AB 1747 Page 7 Committee. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081