BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                    AB 1809


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          ASSEMBLY THIRD READING


          AB  
          1809 (Lopez)


          As Amended  April 6, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Human Services  |5-1  |Bonilla, Calderon,    |Maienschein         |
          |                |     |Lopez,                |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Mark Stone, Thurmond  |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |14-6 |Gonzalez, Bloom,      |Bigelow, Chang,     |
          |                |     |Bonilla, Bonta,       |Gallagher, Jones,   |
          |                |     |Calderon, Daly,       |Obernolte, Wagner   |
          |                |     |Eggman, Eduardo       |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Weber, Wood           |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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                                                                    AB 1809


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          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. 


          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  
            United States Code Section (U.S.C.) 601 et seq., Welfare and  
            Institutions Code Section (WIC) 11200 et seq.)










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          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:  According to the Assembly Appropriations  
          Committee, this bill may result in the following costs:


          1)Increased CalWORKs grants, services, child care, and  
            administrative costs potentially in the millions of dollars  
            (TANF/MOE [Maintenance of Effort]) 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 General Fund)  
            in Fiscal Year 2016-17 and $6.3 million ($0.4 million General  
            Fund) in Fiscal Year 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  








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            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. 


          COMMENTS:  


          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  








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          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  
          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  








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          development is arguably counter to core goals of CalWORKs aimed  
          at offering short-term aid and services to facilitate long-term  
          self-sufficiency.


          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." 


          PRIOR LEGISLATION:


          AB 197 (Stone), of 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), of 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), of 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), of 2009, would have eliminated the use of a  
          motor vehicle valued at more than $4,500 when determining  








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          eligibility for CalWORKs.  This bill died in the Senate  
          Appropriations Committee.


          AB 2368 (Fuentes), of 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), of 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.




          Analysis Prepared by:                                             
          Kelsy Castillo / HUM. S. / (916) 319-2089  FN: 0003208