BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                    AB 1809


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          Date of Hearing:  April 27, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          1809 (Lopez) - As Amended April 6, 2016


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          Yes


          SUMMARY: 


          This bill eliminates the asset limit test as a requirement for  
          California Work Opportunity and Responsibility to Kids  
          (CalWORKs) program eligibility and participation.  








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          FISCAL EFFECT:


          1)Increased CalWORKs grants, services, child care, and  
            administrative costs potentially in the millions of dollars  
            (TANF/MOE) for increased CalWORKs caseload, both new as well  
            as existing cases that would have otherwise become ineligible.  
            To the extent the CalWORKs budget exceeds available TANF/MOE  
            funds, any increased costs above the base MOE requirement  
            would be funded with General Fund. For a caseload increase of  
            520 cases, the estimated total costs would be $3.1 million  
            ($0.2 million GF) in FY 2016-17 and $6.3 million ($0.4 million  
            GF) in FY 2017-18 and on-going.
            
          2)Potential savings due to reduced county administrative  
            workload. It is estimated that a county eligibility worker  
            spends approximately 30 minutes per case on average  
            determining the value of a family's assets. The scope of this  
            task varies by county, but this process takes a substantial  
            amount of time because it must be completed for every CalWORKs  
            case. Counties receive a single allocation to administer their  
            CalWORKs programs. While this bill will save time and reduce  
            workload for county eligibility workers, the state will only  
            achieve actual savings if a county's single allocation is  
            further reduced. This action is unlikely given that this work  
            is currently underfunded and county welfare departments have  
            sustained hundreds of millions of dollars in cuts over the  
            past several years. 



          3)Potentially substantial future and indirect savings. The  
            aggregate amount of time saved by eligibility workers will be  
            substantial. This bill could sufficiently reduce county  
            workload to allow these employees to be redirected to  
            providing employment services, resulting in transitioning  
            recipients to work more quickly, thereby potentially reducing  
            grant costs and time on aid, resulting in significant future  
            CalWORKs cost savings. 







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          COMMENTS:


          1)Purpose.  The primary goal of the CalWORKs program is to move  
            families out of poverty toward self-sufficiency.  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 asset 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. 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." 



          2)Background.  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.



          3)California Asset Rules. CalWORKs asset rules were enacted in  
            1997 when the state implemented the 1996 federal welfare  
            reform act. Under California's asset test for CalWORKs,  







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            families are limited in the value of assets or resources they  
            may own. The program incorporates federal food stamp rules,  
            which limits resources to $2,250 per household, or $3,250 if a  
            family has a member who is aged or disabled. Some assets, such  
            as the family's home are excluded from consideration in the  
            determination of a family's resources. A family's vehicle, if  
            they have one, can have a value of no more than $9,500.  Also  
            excluded are assets that are not available to a household,  
            such as the cash value of life insurance policies and pension  
            funds. 
          4)Prior legislation.


             a)   AB 197 (Stone), 2013, AB 2352 (HernŠndez), 2012, and AB  
               1182 (HernŠndez), 2011, were all virtually identical to  
               this bill. AB 197 was held in the Assembly Appropriations  
               Committee, AB 2352 was held in the Senate Appropriations  
               Committee and AB 1182 was vetoed by the Governor.


             b)   AB 1058 (Beall), 2009, would have deleted the  
               requirement that county welfare departments assess the  
               value of a vehicle when determining a CalWORKs' application  
               or recertification.  That bill was held on the Senate  
               Appropriations Committee Suspense File.

             c)   AB 2368 (Fuentes), 2008, would have exempted motor  
               vehicles from assets that must be considered by county  
               welfare departments when they are determining a family's  
               eligibility for CalWORKs. That bill was held on the Senate  
               Appropriations Committee Suspense File. 

             d)   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.  That bill was held in the  
               Senate Appropriations Committee. 


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








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