BILL ANALYSIS                                                                                                                                                                                                    



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

          SB 23 (Mitchell) - CalWORKs:  repeal of the maximum family grant  
          rule

          Version:   December 1, 2014     Policy Vote:Human Services 4-0
          Urgency: No                     Mandate: Yes
          Hearing Date:                   April 7, 2015Consultant:Jolie  
          Onodera 


          This bill meets the criteria for referral to the Suspense File.



          Bill  
          Summary:  SB 23 would expressly prohibit the denial of aid or the denial  
          of an increase in the maximum aid payment for a child born into  
          the family of a CalWORKs recipient, and would not entitle  
          increased benefit payments for months prior to January 1, 2016.  
          This bill would prohibit the conditioning of eligibility for  
          CalWORKs aid based on an applicant's or recipient's disclosure  
          of information about being a victim of rape, incest, or  
          contraception failure, as specified.


          Fiscal  
          Impact: 
              Major increase in CalWORKs grant costs in the range of $188  
              million to $220 million (General Fund) annually based on  
              data from county consortia indicating 13.3 percent of all  
              children in CalWORKs households (134,900 children) are  
              currently impacted by the MFG rule. 
              Potential future additional CalWORKs grant costs of $3.5  
              million to $4.1 million (General Fund) for every 2,500  
              children born into CalWORKs families each year who otherwise  
              would have been subject to the MFG rule, with annual costs  
              cumulatively increasing in subsequent years. 
              Potential reduction in CalFresh benefits (Federal Fund) for  
              a percentage of families due to the increase in CalWORKs  
              grant levels under the repeal of the MFG rule. While many  
              families may not experience a reduction due to their limited  
              or lack of income, for every 10 percent of families that are  
              impacted, CalFresh benefits could decline by up to $5.6  
              million to $6.6 million annually. 
              Ongoing potential cost savings in averted administrative  
              hearings related to challenges to MFG determinations. At an  







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              estimated cost of $1,025 per hearing, elimination of 250  
              hearings per year would result in cost savings of over  
              $250,000 (General Fund) per year.
              Potential minor offset to CalWORKs grant cost increases due  
              to child support payments considered countable income in  
              lieu of being provided to the CalWORKs family under the MFG  
              rule.
              One-time costs likely significant and in excess of $150,000  
              (General Fund) for automation changes necessary to implement  
              eligibility changes.


          Background:  Existing law establishes guidelines for determining a family's  
          maximum aid payment under the CalWORKs program, including all  
          eligible family members, as well as the level of aid to be paid.  
          Existing law under the maximum family grant (MFG) rule, which  
          was established in California by AB 473 (Brulte) Chapter  
          196/1994, prohibits an increase in CalWORKs aid based on an  
          increase in the number of needy persons in a family due to the  
          birth of an additional child, if the family has received aid  
          continuously for the 10 months prior to the birth of the child,  
          as specified. Existing law exempts the following circumstances  
          from this prohibition:
                 Any child who was conceived as a result of an act of  
               rape if the rape was reported to a law enforcement agency,  
               medical or mental health professional or social services  
               agency prior to, or within three months after, the birth of  
               the child.
                 Any child who was conceived as a result of an incestuous  
               relationship if the relationship was reported to a medical  
               or mental health professional or a law enforcement agency  
               or social services agency prior to, or within three months  
               after, the birth of the child, or if paternity has been  
               established.
                 Any child who was conceived as a result of contraceptive  
               failure if the parent was using an intrauterine device, a  
               Norplant, or the sterilization of either parent.
                 If the family does not receive aid for two consecutive  
               months during the 10 months prior to the child's birth.
                 Children born on or before November 1, 1995.
                 Any child who would qualify for the MFG cap if the  
               family did not receive aid for 24 consecutive months while  
               the child was living with the family.
                 Any child conceived when either parent was a non-needy  








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               caretaker relative.
                 Any child who is no longer living in the same home with  
               either parent.

          According to the U.C. Berkeley Law Center on Reproductive Rights  
          and Justice article, Bringing Families Out of 'Cap'tivity: The  
          Need to Repeal the CalWORKs Maximum Family Grant Rule (April  
          2013), "Since the early 1990's, 24 states have implemented a  
          child exclusion, or family cap, rule in their welfare programs,  
          the majority of which exclude all cash benefits for a newborn.  
          Today, California is one of 16 states where a family cap remains  
          in place. Maryland and Illinois eliminated their programs in  
          2002 and 2003, respectively, leading the way for other states."  
          Subsequent to the article's publication, legislation was enacted  
          in Minnesota in May 2013, removing its family cap policy,  
          thereby leaving California as one of 15 states to maintain such  
          a policy.


          Proposed Law:  
           This bill repeals Welfare and Institutions Code (WIC)   
          11450.04, which establishes and defines the MFG rule, including  
          exclusions for families in which a mother reports she is a  
          victim of rape, incest, or specified methods of contraception  
          failure. In addition, this bill:
                 Prohibits an applicant for, or recipient of, CalWORKs  
               aid from being required as a condition of eligibility to do  
               any of the following:
                  o         Divulge any member of the assistance unit's  
                    (AU's) status as a victim of rape or incest.
                  o         Share confidential medical records related to  
                    any member of the AU's rape or incest.
                  o         Use contraception, choose a particular method  
                    of contraception, or divulge the method of  
                    contraception that any member of the assistance unit  
                    uses.
                 Prohibits an applicant for or recipient of CalWORKs  
               benefits from being denied aid, or denied an increase in  
               the maximum aid payment, for a child born into the family  
               during a period in which the family is receiving CalWORKs  
               aid.
                 Specifies that applicants for or recipients of aid are  
               not entitled to increased benefit payments for any month  
               prior to January 1, 2016, as a result of the repeal of the  








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               MFG rule.

          Makes uncodified legislative findings and declarations that this  
          legislation is necessary to protect the reproductive and privacy  
          rights of all applicants for, and recipients of, aid under  
          CalWORKs.


          Prior  
          Legislation:  SB 899 (Mitchell) 2014 was virtually identical to this  
          measure. This bill was held on the Suspense File of this  
          Committee.

          AB 271 (Mitchell) 2013 was virtually identical to this measure.  
          This bill was held on the Suspense File of this Committee. 

          Elimination of the MFG rule was part of the 2013-14 Budget  
          Conference Committee package of proposals that was ultimately  
          rejected by the Legislature.
          
          AB 22 (Lieber) 2007 was substantially similar to this measure.  
          This bill was held on the Suspense File of the Assembly  
          Committee on Appropriations.

          AB 473 (Brulte) Chapter 196/1994 established California's MFG  
          rule and required California to obtain a federal waiver to  
          implement the rule. This bill was enacted prior to the  
          establishment of the state's CalWORKs program which implemented  
          the federal Personal Responsibility and Work Opportunity  
          Reconciliation Act (PRWORA). 


          Staff  
          Comments:  Based on information provided by the Department of Social  
          Services (DSS) of data collected from the county consortia, 13.3  
          percent of total children in CalWORKs families are currently  
          subject to the MFG rule. This equates to 134,900 children. 

          Assuming a per child CalWORKs grant increase ranging from $116  
          to $136 per month, annual costs to provide CalWORKs grant  
          payments to the 134,900 impacted children in existing CalWORKs  
          families would be in the range of $188 million to $220 million  
          (General Fund). Future annual costs for existing cases  
          thereafter could potentially be greater due to increases in  








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          CalWORKs grant levels to the extent permitted under AB 85  
          (Committee on Budget) Chapter 24/2013, which specifies  
          additional annual grant increases subject to projected  
          expenditure and revenue thresholds. 
          
          It is unknown how many additional children would be impacted  
          prospectively under the provisions of this bill, as  
          comprehensive statewide data was unavailable at the time of this  
          analysis on the caseload trend of the number of children  
          affected by the MFG rule. Based on point-in-time data for Los  
          Angeles County, although the percentage of cases affected by the  
          MFG rule has declined since 2006, the overall number of MFG  
          children has increased and the percentage of MFG children to the  
          total number of CalWORKs children has remained relatively  
          stable. For every 2,500 children born into CalWORKs families  
          each year that otherwise would have been subject to the MFG  
          rule, additional annual costs in the range of $3.5 million to  
          $4.1 million would be incurred, with annual costs cumulatively  
          increasing in subsequent years.

          Some CalWORKs families would potentially experience a reduction  
          in CalFresh benefits (Federal Funds) due to the higher CalWORKs  
          grant payments received under the repeal of the MFG rule. Under  
          federal SNAP benefit calculation formulas, for every $100  
          increase in a CalFresh household's monthly net income (after  
          various deductions), the amount of the food benefit decreases by  
          up to $30. While there are many CalWORKs families with little to  
          no income that would still receive the maximum CalFresh benefit,  
          there would likely be some percentage of families who would  
          experience a CalFresh benefit reduction. For every 10 percent of  
          CalWORKs families impacted, CalFresh benefits could decline by  
          up to $5.6 million to $6.6 million annually.

          To the extent repealing the MFG rule results in the elimination  
          of administrative hearings related to contested MFG  
          determinations could result in administrative cost savings of  
          over $250,000 per year, assuming approximately 250 MFG-related  
          hearings conducted annually at a cost of $1,025 per hearing  
          would no longer be required.

          Under existing law, child support collected on behalf of an  
          excluded child is required to be paid entirely to the family,  
          rather than to the state or county as reimbursement for public  
          assistance, and is not considered income for purposes of public  








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          benefit calculations. To the extent the provisions of this bill  
          decrease the number of child support payments paid directly to  
          the family could result in a minor offset in CalWORKs program  
          costs for a number of child support payments that would be  
          counted as income in the absence of the MFG rule.

          According to the Urban Institute study, The Effect of Specific  
          Welfare Policies on Poverty (McKernan and Ratcliffe, 2006), the  
          family cap policy increases the deep poverty rate of mothers by  
          12.5 percent and increases the deep poverty rate of children by  
          13.1 percent. While the near-term costs of eliminating the MFG  
          rule are significant, more broadly, the long-term effects of its  
          repeal are unknown but could significantly reduce the costs of  
          the projected lifetime physical, mental, and social impacts  
          related to children raised in poverty and the long-term economic  
          and societal effects linked to this policy.



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