BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      SB 23


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          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:








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          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.








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          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))









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          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








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             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  








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              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,  








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          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.   








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          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. 










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          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  








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          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