BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1809 (Lopez) - CalWORKs eligibility:  asset limits
          
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          |Version: June 15, 2016          |Policy Vote: HUMAN S. 4 - 1     |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 1, 2016    |Consultant: Debra Cooper        |
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          This bill meets the criteria for referral to the Suspense File.


          Bill  
          Summary:  AB 1809 would eliminate asset limitations for CalWORKs  
          program eligibility and participation, and makes conforming  
          changes. 


          Fiscal  
          Impact:  
           Estimated costs of $12 million in fiscal year 2016-17 and  
            ongoing costs of $81.8 million per year due to administrative  
            costs for cases that would be newly eligible and no longer  
            discontinued and for associated grant costs (including  
            CalWORKs assistance, CalWORKs Employment Services, and  
            CalWORKs Child Care). (TANF/GF)


           Unknown, but likely significant costs to the Department of  
            Social Services (DSS) for automation changes.









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           Potential cost savings for counties of $0.8 million in fiscal  
            year 2016-17 and ongoing savings of $1.5 million per year due  
            to a reduction in administrative workload for determining a  
            family's assets. 


          Background:  The CalWORKs program, which implements the federal TANF  
          program, is a welfare program that gives cash aid and  
          employment-related services to eligible California families. DSS  
          is charged with program supervision at the state level, and  
          counties administer the caseloads at the local level. The  
          CalWORKs program is funded with a mix of federal, state, and  
          county funds. The average monthly cash grant for a family of  
          three on CalWORKs (one parent and two children) for 2016-17 is  
          $497.35 and the maximum monthly grant if the family has no other  
          income and lives in a high-cost county is $704. According to  
          recent data from DSS, approximately 497,000 families rely on  
          CalWORKs.
          California's CalWORKs asset rules were enacted in 1997 when the  
          state's 1996 Welfare Reform Act was implemented. California's  
          asset test for CalWORKs participation limits the value of assets  
          or resources that a family may own. The asset test requires  
          families to have no more than $2,000 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 own one, to have a value of  
          no more than $9,500. A family's home, cash value of life  
          insurance policies, and pensions funds are excluded from  
          consideration. The asset test for CalFresh eligibility was  
          eliminated in July 2009. 


          Based on the CalWORKs Report on Reasons for Discontinuances of  
          Cash Grant (CW 253) and the CalWORKs Report on Reasons for  
          Denials and Other Non-Approvals of Applications (CW 255) for the  
          time period of April 2014 through March 2015, the cases  
          discontinued and application denials represents approximately  
          0.1% of the overall CalWORKs caseload each month (cumulatively,  
          approximately an average of 5,500 cases per year). 


          According to a 2015 report from Howard University, eight states  
          have eliminated their TANF asset tests and, in states where  
          there were sufficient data, eliminated asset tests   for TANF  
          did not result in an increased caseload. The report found that  








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          California spends an estimated $6.4 million per year on asset  
          test verification. Furthermore, only 2% of the intake cases  
          exceeded the cash asset limit and 0.001% exceeded the vehicle  
          asset limit. 




          Proposed Law:  
           This bill would repeal various sections of the Welfare and  
          Institutions Code that specify allowable values and nature of  
          personal property, savings, and motor vehicles for purposes of  
          determining eligibility for the CalWORKs program, as specified. 


          Related  
          Legislation:  
          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  
          was held in the Assembly Appropriations Committee.


          AB 2353 (Hernandez, 2012) would have eliminated the requirement  
          that county welfare departments assess the value of a vehicle  
          when determining eligibility for CalWORKs participation. This  
          bill was held in the Assembly Appropriations Committee.


          AB 1182 (Hernandez, 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 Governor Brown.


          AB 1058 (Beall, 2009) would have eliminated the requirement that  
          county welfare departments assess the value of a vehicle when  
          determining eligibility for CalWORKs participation. This bill  
          was held in the Senate Appropriations Committee. 


          AB 2368 (Fuentes, 2008) would have eliminated the requirement  
          that county welfare departments assess the value of a vehicle  
          when determining eligibility for CalWORKs participation. This  








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          bill was held 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 was  
          aged or has a disability. This bill was held in the Senate  
          Appropriations Committee. 


          Staff Comments:  Potential costs savings are based on county  
          eligibility workers spending approximately 7.5 minutes  
          determining assets for each case. Counties receive a single  
          allocation to administer their CalWORKs programs. This bill will  
          save time and reduce workload for county eligibility workers;  
          however the state will only achieve cost savings if a county's  
          single allocation is further reduced, which is unlikely as  
          county welfare departments have sustained hundreds of millions  
          of dollars in cuts in recent years.




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