BILL ANALYSIS Ó SB 23 Page 1 SENATE THIRD READING SB 23 (Mitchell) As Introduced December 1, 2014 Majority vote SENATE VOTE: 27-6 ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Human Services |5-2 |Chu, Calderon, Lopez, |Mayes, Maienschein | | | |Mark Stone, Thurmond | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |14-0 |Gomez, Bloom, Bonta, | | | | |Calderon, Nazarian, | | | | |Eggman, Eduardo | | | | |Garcia, Holden, | | | | |Jones, Quirk, Rendon, | | | | |Wagner, Weber, Wood | | | | | | | ------------------------------------------------------------------ SUMMARY: Repeals the maximum family grant (MFG) or "family cap" rule under the California Work Opportunity and Responsibility to Kids (CalWORKs) program. Specifically, this bill: SB 23 Page 2 1)Prohibits requiring an applicant or recipient of CalWORKs aid to do any of the following as a condition of eligibility: a) Divulge that any member of the assistance unit is a victim of rape or incest; b) Share confidential medical records related to any member of the assistance unit's rape or incest; or c) Use contraception, choose a particular method of contraception, or divulge the method of contraception that any member of the assistance unit uses. 1)Prohibits denial of aid or denial of an increase in the maximum aid payment to a CalWORKs applicant or recipient due to a child being born into the applicant's or recipient's family while the family is receiving CalWORKs aid. 2)Repeals Welfare and Institutions Code (WIC) Section 11450.04, which establishes the MFG rule, including exclusions for families in which a mother reports she is a victim of rape or incest or in instances where specified methods of contraception fail. 3)Specifies that any increased benefit payment resulting from this bill will occur after January 1, 2016, and a CalWORKs applicant or recipient will not be entitled to a retroactive benefit payment increase as a result of repealing the prior statute. 4)Prohibits an appropriation for the purposes of this act, as specified. SB 23 Page 3 5)Declares a number of legislative findings pertaining to the impact of the MFG rule on families, including that the MFG rule makes poor children poorer, reducing the income of families with infants to below 30% of the federal poverty level. 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 601 et seq., WIC Section 11200 et seq.) 2)Requires all individuals over 16 years of age, unless they are otherwise exempt, to participate in welfare-to-work activities as a condition of eligibility for CalWORKs. (WIC Sections 11320.3 and 11322.6) 3)Establishes the number of weekly hours of welfare-to-work participation necessary to remain eligible for aid, including requirements for an unemployed parent in a two-parent assistance unit, as specified. (WIC Section 11322.8) 4)Prohibits an increase in 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. (WIC Section 11450.04(a)) SB 23 Page 4 5)Exempts the following individuals and circumstances from this prohibition: a) Any child who was conceived as a result of an act of rape, as defined in Penal Code Sections 261 and 262, 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; b) 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; c) 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; d) If the family does not receive aid for two consecutive months during the 10-months prior to the child's birth; e) Children born on or before November 1, 1995; f) Any child who would qualify for the maximum family grant cap if the family did not receive aid for 24 consecutive months while the child was living with the family; g) Any child conceived when either parent was a non-needy caretaker relative; and SB 23 Page 5 h) Any child who is no longer living in the same home with either parent. (WIC Section 11450.04(b)) 1)Requires the state Department of Social Services (DSS) to seek appropriate federal waivers to implement the MFG limit and associated conditions, as specified, and directs DSS to implement the rule on the date the waiver is received by declaration of the department's director. (WIC Section 11450.04(g)) 2)Establishes a 48-month lifetime limit of CalWORKs benefits for eligible adults, including a CalWORKs welfare-to-work 24-month time clock, upon exhaustion of which a recipient must meet federal work requirements in order to retain eligibility. (WIC Section 11454 and 11322.85) FISCAL EFFECT: According to the Assembly Appropriations Committee this bill will have the following fiscal impact: 1) Increase in CalWORKs grant costs in the range of $188 million to $220 million (General Fund (GF)) annually based on data from county consortia indicating 13.3% of all children in CalWORKs households (134,900 children) are currently impacted by the MFG rule. 2) Potential future additional CalWORKs grant costs of $3.5 million to $4.1 million (GF) 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. 3) Potential reduction in CalFresh benefits (Federal Funds) for a percentage of families due to the increase in CalWORKs SB 23 Page 6 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% of families that are impacted, CalFresh benefits could decline by up to $5.6 million to $6.6 million annually. 4) Ongoing potential cost savings in averted administrative hearings related to challenges to MFG determinations. At an estimated cost of $1,025 per hearing, elimination of 250 hearings per year would result in cost savings of over $250,000 (GF) per year. 5) 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. 6) One-time costs (GF), likely significant, for automation changes necessary to implement eligibility changes. COMMENTS: History of the Maximum Family Grant rule: In the early 1990's, ongoing controversy regarding the existence and nature of "intergenerational welfare" and whether the availability of public assistance benefits motivated family formation patterns became the backdrop for the first statewide family cap policy, which was implemented in New Jersey in 1992. Under the Aid to Families with Dependent Children (AFDC) program, states needed waivers to implement family cap policies, which required states to conduct rigorous evaluations of their policies and identify whether the policies achieved their intended goals. In 1992, Governor Wilson put Proposition 165 on the ballot, which was a welfare reform and budget powers initiative that included family cap provisions. After the ballot initiative was rejected by voters (54% to 46%), implementation of a family cap policy in the state was delayed until AB 473 (Brulte), Chapter 196, Statutes of 1994 created California's MFG rule. Upon passage, SB 23 Page 7 California was still required to obtain a federal waiver to be able to implement the new MFG rule, as the rule was inconsistent with AFDC regulations. California's waiver application was heavily contested. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which was the final piece of federal welfare reform legislation, repealed the AFDC program and created the block-granted TANF program. The new approach emphasized integrating parents into the workforce and granted states flexibility in implementing their respective programs. Because PRWORA eliminated the waiver requirement for family cap policies, California proceeded with its MFG rule established under AB 473 without a waiver. The legislation was based on the belief that increasing welfare grants for children born into AFDC families may incentivize families to have additional children for the explicit purpose of increasing their monthly grant. By limiting the grant amount, policymakers believed families would be dissuaded from having additional children. Elimination of the waiver requirement for a family cap policy under PRWORA allowed California to abandon any efforts to prove the new rule's effectiveness. California's MFG policy has not been amended since its original enactment. How the MFG rule is applied: The current MFG rule prohibits CalWORKs aid payments, with certain exceptions, for a child that is born into a family that has been receiving aid for 10 or more continuous months. In practical terms for the family, the grant payment that was previously intended for only those members who are aided is spread more thinly and used to also support the newborn child in the family who isn't aided. If a family receives aid for the 10 continuous months preceding the birth of a child, that child is excluded and does not receive an aid payment. However, if the family is off aid for two or more months during the 10-month period preceding the birth of the child, the 10 months are not considered to be continuous, and the child does receive an aid payment. SB 23 Page 8 Additionally, the MFG rule does not apply if a family returns to aid after a break of two or more years during which the family did not receive any aid, provided that the family still meets eligibility requirements and aided children are still under 18 years old. Exceptions to the MFG rule: Current statute allows aid payments for a child who would otherwise be excluded from receiving aid due to the MFG rule if the child is conceived due to incest or rape and the incident has been reported to a law enforcement agency, a medical or mental health professional or social services prior to, or within three months after, the birth of the child. This aspect of the policy requires mothers - already in a vulnerable state and in need of assistance to maintain their family's safety and well-being - to report their victimization, perhaps much sooner than they're ready to come forward. Additionally, it does not take into consideration the possibility that a mother could be putting herself and her children in danger if her attacker seeks retribution after she makes such a report. Statute also allows aid payments for a child who would otherwise be excluded due to the MFG rule if the child is conceived due to the failure of one of three contraception methods specified in statute: an intrauterine device, Norplant, or sterilization of either parent. Not only does this aspect of the policy involve government in the personal sexual health matters of recipients, it also does not take into account any other validated methods of contraception or any of the personal safety and health reasons for which a parent may choose to not use any of the three specified methods or any other method of contraception (e.g., age, spiritual or religious beliefs, or health status). Additionally, the reference to one of the acceptable methods specified in statute, Norplant, is outdated, as the product has been discontinued for use in the United States. SB 23 Page 9 Child support interactions: Federal and state laws impose requirements on families in welfare programs in order to increase child support collections on behalf of families applying for or receiving CalWORKs. Unless the applicant or recipient has good cause (e.g., fear of retaliation from an abuser), he or she is required to cooperate with the local child support agency to collect child support payments from absent parents as a condition of eligibility for CalWORKs. Child support payments collected from non-custodial parents of children in a CalWORKs family are retained by the state to offset the cost of providing aid, with the exception of the first $50 collected each month, which is passed on to the CalWORKs family. State law pertaining to the MFG rule provides that child support collected on behalf of an excluded child must be paid entirely to the family rather than to the state or county as reimbursement for public assistance, and the child support payment is not considered income for purposes of public benefit calculations. While this policy may be considered advantageous for families with children who would otherwise not receive any aid, the policy still results in a shortfall for many families. Cases in which the non-custodial parent can't be located or can't afford to pay child support, or when the aided parent doesn't have a waiver and would experience undue emotional hardship due to having to maintain a connection with an abusive or otherwise unstable non-custodial parent, there is no benefit for the child excluded under the MFG rule. Because this bill repeals all MFG-related provisions in statute, it deletes the requirement that all child support be passed through for children subject to the MFG rule, thereby aligning child support pass-through practices for all children in the CalWORKs program. Family cap policies in other states: There are currently only 15 other states with family cap policies in effect for their TANF programs, eight of which implement a full child exclusion from aid similar to California. Among the remaining seven SB 23 Page 10 states, three have a partial exclusion and increase the family's aid payment by a reduced amount, two more increase a parent's earned income disregard rather than provide cash aid, and another provides the family with a voucher for benefits instead of cash aid. Need for this bill: According to the author, explaining the need for this bill as it pertains to the health of California's families, "As states have realized the long term health consequences of denying services to infants, there has been a movement to repeal MFG policies. California must protect the health of children born into extreme poverty and repeal this draconian and ineffective rule. The MFG rule has not led to changes in birthrates among poor women but has resulted in women being forced to make desperate decisions that endanger the health and safety of themselves and their children." Analysis Prepared by: Myesha Jackson / HUM. S. / (916) 319-2089 FN: 0001605