BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 1809

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          Date of Hearing:  March 29, 2016


                                Susan Bonilla, Chair

          AB 1809  
          (Lopez) - As Amended March 28, 2016

          SUBJECT:  CalWORKs eligibility:  asset limits

          SUMMARY:  Eliminates the asset limit test as a requirement for  
          California Work Opportunity and Responsibility to Kids  
          (CalWORKs) program eligibility and participation.  Specifically,  
          this bill: 

          1)Makes a number of Legislative findings and declarations  
            relating to the establishment of CalWORKs, the asset test as a  
            requirement for eligibility, and estimated cost savings to the  
            State if it were to repeal the CalWORKs asset limit.

          2)States Legislative intent to repeal the asset test for the  
            CalWORKs program, thereby, among other things, improving  
            program efficiency and increasing the capacity of poor  
            families to exit poverty. 

          3)Repeals various sections of the Welfare and Institutions Code  
            that stipulate the allowable value and nature of personal  
            property, savings, and motor vehicles for purposes of  
            determining eligibility for CalWORKs, as specified. 


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          4)Makes technical changes.

          EXISTING LAW:  

          1)Establishes under federal law the Temporary Assistance for  
            Needy Families (TANF) program to provide aid and  
            welfare-to-work services to eligible families and, in  
            California, provides that TANF funds for welfare-to-work  
            services are administered through the CalWORKs program.  (42  
            U.S.C. 601 et seq., WIC 11200 et seq.)

          2)Establishes income, asset, and real property limits used to  
            determine eligibility for the CalWORKs, including net income  
            below the Maximum Aid Payment (MAP), based on family size and  
            county of residence, which is around 40% of the Federal  
            Poverty Level.  (WIC 11454, 11322.85)

          3)Imposes limits on the amount of income and personal and real  
            property an individual or family may possess in order to be  
            eligible under aid for the CalWORKs program, as specified.   
            (WIC 11155 et seq.)

          FISCAL EFFECT: Unknown.  



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          CalWORKs:  The California Work Opportunity and Responsibility to  
          Kids (CalWORKs) program provides monthly income assistance and  
          employment-related services aimed at moving children out of  
          poverty and helping families meet basic needs.  Federal funding  
          for CalWORKs comes from the Temporary Assistance for Needy  
          Families (TANF) block grant.  The average 2015-16 monthly cash  
          grant for a family of three on CalWORKs (one parent and two  
          children) is $506.55, and the maximum monthly grant amount for a  
          family of three, if the family has no other income and lives in  
          a high-cost county, is $704.  According to recent data from the  
          California Department of Social Services, over 497,000 families  
          rely on CalWORKs, including over one million children.  Nearly  
          60% of cases include children under 6 years old.

          Maximum grant amounts in high-cost counties of $704 per month  
          for a family of three with no other income means $23.46 per day,  
          per family, or $7.82 per family member, per day to meet basic  
          needs, including rent, clothing, utility bills, food, and  
          anything else a family needs to ensure children can be cared for  
          at home and safely remain with their families.  This grant  
          amount puts the annual household income at $8,448 per year, or  
          42% of poverty.  Federal Poverty Guidelines for 2016 show that  
          100% of poverty for a family of three is $20,160 per year.  

          Asset tests for CalWORKs:  In the early 1980s, social welfare  
          policy shifted towards the elimination of wealth accumulation  
          while on public assistance.  However, in the last decade, there  
          has been increased attention given to the role that assets  
          development plays in facilitating the improved economic security  
          of low-income individuals and their families.  Asset limits in  
          public assistance have been associated with low savings rates  
          among low-income families, which may hinder families seeking to  
          transition off of public assistance.

          Currently California's asset test for CalWORKs requires families  
          to have no more than $2,250 in specified assets ($3,250 if there  


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          is a person over 60 years old in the household), and requires a  
          family's vehicle, if they have one, to have a value of no more  
          than $9,500.  Eight states, including Ohio, Virginia, Hawaii,  
          Louisiana, Alabama, Maryland, Illinoi, and Colorado, have  
          eliminated asset tests for TANF in order to reduce  
          administrative costs.  The elimination of asset tests was  
          initially met with concerns about increases in caseload to  
          unmanageable levels.  However, according to data presented in a  
          2015 report prepared by the Howard University Center on Race and  
          Wealth in collaboration with Californians for Shared Prosperity,  
          "The Cost of Asset Testing for the CalWORKs Program," states  
          that eliminated asset tests for TANF did not experience an  
          increase in caseload, with the exception of Alabama, for which  
          the study did not have enough data to be conclusive.

          Need for this bill:  The CalWORKs asset limits currently in  
          place can cause some families to be dependent on less-reliable  
          modes of transportation, and prevent them from being able to  
          save up sufficient funds to cover important and common costs  
          such as paying the deposit and the first month's rent on an  
          apartment, making necessary car repairs, or dealing with  
          unforeseen emergencies.  Indeed, the discouragement of asset  
          development is arguably counter to core goals of CalWORKs aimed  
          at offering short-term aid and services to facilitate long-term  

          According to the author, "[This bill] gives families a  
          meaningful and more realistic financial foundation needed for  
          survival within CalWORKs and better ensures economic mobility  
          after they leave CalWORKs.  [This bill] is a cost effective way  
          to streamline the CalWORKs application process and achieve an  
          estimated $6.4 million in administrative savings and  
          subsequently realize a decrease in cases, which would be similar  
          to other states." 


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          Suggested amendments:

          For matters of clarification, and to ensure consistency with the  
          intent of the bill, committee staff recommends the following  

             1)   On page 6, strike lines 5-21, inclusive.


          AB 197 (Stone), 2013, would have eliminated the requirement that  
          county welfare departments assess the value of a vehicle when  
          determining eligibility for CalWORKs participation.  This bill  
          died in the Assembly Appropriations Committee.

          AB 2352 (HernŠndez), 2012, would have eliminated the requirement  
          that county welfare departments assess the value of a vehicle  
          when determining eligibility for CalWORKs participation.  This  
          bill died in the Assembly Appropriations Committee. 

          AB 1182 (HernŠndez), 2011, would have eliminated the requirement  
          that county welfare departments assess the value of a vehicle  
          when determining eligibility for CalWORKs participation.  This  
          bill was vetoed by the Governor.

          AB 1058 (Beall), 2009, would have eliminated the use of a motor  
          vehicle valued at more than $4,500 when determining eligibility  
          for CalWORKs.  This bill died in the Senate Appropriations  


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          AB 2368 (Fuentes), 2008, would have eliminated the vehicle asset  
          test as a condition of eligibility for CalWORKs benefits.  This  
          bill died in the Assembly Appropriations Committee.

          AB 167 (Bass), 2007,  would have repealed the asset test for  
          CalWORKs eligibility if a household contained a member who is  
          aged or has a disability.  This bill died in the Senate  
          Appropriations Committee. 



          2Gen Equity 2.11

          Alameda County Social Services Agency 

          Asset Building Strategies 

          Brighter Beginning 

          California Alternative Payment Program Association (CAPPA)

          California Asset Building Coalition


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          California Catholic Conference

          California Community College CalWORKs Associates

          California Immigrant Policy Center (CIPC)

          California Reinvestment Coalition

          California Urban Partnership (CUP)

          Capital Region Assets & Opportunity (A&O)

          CFED (Corporation for Enterprise Development)

          Children's Defense Fund - CA (CDF-CA) 

          Coalition of California Welfare Rights Organizations, Inc.

          Community Financial Resources 

          County of Alameda

          County Welfare Directors Association of CA (CWDA) 

          Courage Campaign 


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          EARN - sponsor 

          Ella Baker Center for Human Rights

          Family Paths, Inc.

          First Place for Youth 

          Hunger Action Los Angeles

          Koreatown Youth and Community Center (KYCCL) 

          LIFT-Los Angeles 

          MidPen Housing 

          Mission Asset Fund 

          Mission Economic Developer Agency (MEDA)

          National Council of La Raza (NCLR) 

          Non-Profit Housing Association of Northern CA (NPH)

          Opportunity Fund 


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          St. Anthony Foundation

          Treasure Island Homeless Development Initiative 

          United Way of California 

          United Way of the Bay Area

          Urban Strategies Council 

          Western Center on Law and Poverty 

          1 individual 


          None on File.

          Analysis Prepared by:Kelsy C. Castillo / HUM. S. / (916)  


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