BILL ANALYSIS Ó AB 2054 Page 1 ASSEMBLY THIRD READING AB 2054 (Thurmond) As Amended May 27, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Human Services |6-0 |Bonilla, Calderon, | | | | |Lopez, Maienschein, | | | | |Mark Stone, Thurmond | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |20-0 |Gonzalez, Bigelow, | | | | |Bloom, Bonilla, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, Eduardo | | | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Jones, Obernolte, | | | | |Quirk, Santiago, | | | | |Wagner, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ AB 2054 Page 2 SUMMARY: Mandates the design and implementation of the Summer Electronic Benefits Transfer for Children (SEBTC). Specifically, this bill: 1)Makes a number of Legislative findings and declarations related to poverty, food insecurity, and the "summer nutrition gap" experienced by many children. 2)Defines "Summer Electronic Benefits Transfer for Children," or "SEBTC," to mean a program, pilot, or demonstration project that provides nutrition assistance when school is out of session via electronic benefits transfer (EBT) to households with children eligible for free and reduced price meals, as specified. 3)Requires the California Health and Human Services Agency, in conjunction with other agencies as specified and pursuant to federal approval and/or authorization, to design and implement the SEBTC to provide nutrition assistance benefits to eligible households. 4)Requires the SEBTC system to be compatible with the State's existing EBT system, comply with any federal laws and regulations governing SEBTC, and comply with any and all privacy and confidentiality procedures, as specified. 5)Specifies that the provision of SEBTC benefits to eligible households is contingent on federal funding for the SEBTC program. EXISTING LAW: AB 2054 Page 3 1)Establishes the Electronic Benefits Transfer Act, and defines the EBT system as the program designed to provide benefits to those eligible to receive public assistance benefits such as CalWORKs and CalFresh. (Welfare and Institutions Code Section (WIC) 10065 et seq.) 2)Establishes the National School Lunch Program, and program requirements for schools participating in the program. (42 United States Code 1751 et seq.) FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill may result in the following costs: 1)Unknown costs, but likely in the hundreds of millions of dollars (Federal funds), to fund the benefit level provided to eligible households. The bill does not specify a benefit level but, for example, if the monthly benefit was $45 per child (as proposed in the Federal budget), the annual cost to fund the benefit level would be approximately $918.5 million, based on an estimated caseload of 1.7 million eligible children. 2)Unknown, but potentially significant costs for automation, design, implementation and operation of a Summer EBT program. These costs would be a shared federal/state/county cost (50/35/15). COMMENTS: Electronic Benefit Transfer (EBT): EBT is an electronic system that automates the delivery, redemption, and reconciliation of issued public assistance benefits such as CalWORKs. EBT is also the method for distributing Cal Fresh benefits (formerly known AB 2054 Page 4 as Food Stamps and currently known federally as Supplemental Nutrition Assistance Program (SNAP)). 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. California National School Breakfast and Lunch Program: The United States Department of Agriculture (USDA) provides funding to support school meals and milk programs to assist schools, districts, and other non-profit agencies in providing nutritious meals and milk to children for free or for a reduced price. The California Department of Education (CDE) is responsible for the administration and implementation of the National School Lunch Program, which provides nutritious lunches to children at reasonable prices, or for free if their family receives certain public benefits, including SNAP benefits, or are eligible based on income. Food scarcity during summer months: According to a study conducted by researchers at the Economic Research Service of the USDA and the Congressional Research Service, food insecurity (chronic hunger) among households with school-age children is more prevalent during the summer than during the school year. In addition to this, research by the California Food Policy Advocates (the sponsor of this legislation), indicates that, in 2014, nearly 2 million (or 80% of) children and youth who benefitted from federally funded free or reduced-price lunches during the school year missed out on such lunches during the summer. While the need for nutritious, affordable meals is consistent year-round, many children fall into the summer nutrition gap. Summer EBT for Children (SEBTC): In 2011, as part of its efforts to end child hunger, the USDA's Food and Nutrition AB 2054 Page 5 Service (FNS) created the Summer Electronic Benefits Transfer for Children (SEBTC) program to study the use of SNAP and Women, Infants, and Children (WIC) EBT technology by providing children and their families with more resources to use at food stores during the summer months. In 2011, the USDA began "proof-of concept" demonstrations in two states, Michigan and Texas, for the WIC model, and in three states, Connecticut, Missouri, and Oregon, for the SNAP model. Each state provided benefits to 2,500 children in the summer of 2011. In 2012, each of the five proof-of-concept states increased operations to reach 5,000 children in new parts of their states. In addition to this, in 2012, five new states and Tribal Organizations implemented SEBTC projects: Cherokee Nation (WIC), Chickasaw Nation (WIC), Nevada (WIC), Delaware (SNAP), and Washington (SNAP). President's Budget proposal: According to the USDA, "The President's FY 2017 Budget seeks to ensure that all children have consistent and adequate access to nutritious food year round by proposing a permanent, nationwide expansion of the [SEBTC] program. This program will provide families with children eligible for free and reduced price school meals access to additional food benefits during the summer." The President's proposal would invest $12 billion over 10 years to create a permanent, universal Summer EBT program. Specifically, the proposal includes a $45 monthly benefit per child during the summer months for school-aged children eligible for free and reduced price meals through the National School Lunch Program (NSLP). The monthly benefit can be redeemed for food purchases at grocery stores and would be annually adjusted for inflation going forward. The program would be phased in over ten years with 10% of states participating by 2017 and serving almost one million low-income children. By 2026, when all states are expected to participate, nearly 20 million children will receive SEBTC benefits AB 2054 Page 6 Need for this bill: According to the author, "Research and common sense tell us that children need year-round access to nutritious meals in order to learn, grow, and achieve at their full potential?Research also shows that food insecurity increases during the summer months. Currently, federally funded summer meal programs operate in a number of communities across California. While summer meal programs provide valuable resources when and where they are able to reach children, nearly 90% of low-income, school-age children in California are not served by these programs?Complex problems like child hunger need multiple solutions. Fortunately, one clear solution has already been rigorously tested and proven effective: Summer Electronic Benefits for Children. Summer EBT for Children (SEBTC) provides nutrition assistance for the purchase of groceries when school is out of session and children lose access to school meals. [This bill] will prepare California to implement SEBTC, which has been successfully serving children in other areas of the country since 2011?[This bill] will ensure that California seizes these opportunities to better support children in need." PRIOR LEGISLATION: AB 1542 (Ducheny), Chapter 270, Statutes of 1997, implemented federal welfare reform and established the CalWORKs program, and conformed to federal law in establishing the Electronic Benefits Transfer (EBT) Act. Analysis Prepared by: Kelsy Castillo / HUM. S. / (916) 319-2089 FN: 0003321 AB 2054 Page 7