BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HUMAN SERVICES
                               Senator McGuire, Chair
                                2015 - 2016  Regular 

          Bill No:              SB 1232
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          |Author:   |Leno                                                  |
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          |Version:  |March 28 2016          |Hearing    |March 29, 2016   |
          |          |                       |Date:      |                 |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Taryn Smith                                           |
          |:         |                                                      |
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                   Subject:  CalFresh:  eligibility determinations


            SUMMARY
          
          This bill would require a county human services agency that uses  
          information contained in a consumer credit report for the  
          determination of CalFresh or CalWORKs eligibility or benefit  
          level to provide the applicant or recipient with a specified  
          notice indicating that the verification or eligibility  
          determination was based upon the information contained in the  
          consumer credit report. It would prohibit county human services  
          agencies from requiring CalFresh or CalWORKs applicants or  
          recipients to provide hard-copy documentation that is  
          duplicative of the information obtained from the credit  
          reporting agency.


            ABSTRACT
          Existing law:

             1)   Establishes in federal statute 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 California Work  
               Opportunity and Responsibility to Kids (CalWORKs) program.  
               (42 U.S.C. 601 et seq., WIC 11200 et seq.) 

             2)   Establishes income, asset and real property limits used  








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               to determine eligibility for the program, including net  
               income below the Maximum Aid Payment (MAP), based on family  
               size and county of residence. (WIC 11450, 11150 et seq.)

             3)   Establishes a 48-month lifetime limit of CalWORKs  
               benefits for eligible adults, including 24 months during  
               which a recipient must meet federal work requirements in  
               order to retain eligibility.  (WIC 11454, 11322.85)

             4)   Specifies a weekly number of hours required of  
               welfare-to-work participation for adults to remain eligible  
               for CalWORKs benefits, including for those households with  
               "unemployed parents." (WIC 11322.8)

             5)   Establishes under federal law the Supplemental Nutrition  
               Assistance Program (SNAP) within the US Department of  
               Agriculture (USDA) to promote the general welfare and to  
               safeguard the health and wellbeing of the nation's  
               population by raising the levels of nutrition among  
               low-income households. It establishes SNAP eligibility  
               requirements, including income that is at or below 130  
               percent of the federal poverty level and is determined to  
               be a substantial limiting factor in permitting a recipient  
               to obtain a more nutritious diet (7 CFR 271.1; 7 CFR 273.9)

             6)   Establishes in California statute the CalFresh program  
               to administer the provision of federal SNAP benefits to  
               families and individuals meeting specified criteria. (WIC  
               18900 et seq.)

             7)   Establishes under federal law the Fair Consumer  
               Reporting Act (FCRA), which provides procedures for  
               accuracy and fairness of credit reporting.  Among other  
               things, FCRA mandates consumer notification of adverse  
               action taken based on information contained in a consumer  
               credit report and establishes rights for consumers to  
               correct information that is reported incorrectly. (15  
               U.S.C. Sec. 1681 et seq.)
          
          This bill:

             1)   Establishes legislative intent to support an increase in  
               CalFresh benefits for low-income working families by  
               simplifying and adding transparency to the verification of  









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               wages. It also states Legislative intent to educate  
               applicants and recipients of aid of their federal rights to  
               receive a free report and to correct errors in a report  
               issued by federally regulated consumer reporting agencies  
               when the services of those agencies are used by the state  
               or county to determine CalFresh or CalWORKs eligibility or  
               benefit level.

             2)   Requires a county human services agency that uses  
               information contained in a consumer credit report for the  
               determination of CalFresh or CalWORKs eligibility or  
               benefit level to do all of the following: 

                  a.        Obtain written authorization from an applicant  
                    or recipient prior to obtaining the credit report. 
                  b.        Provide the applicant or recipient with the  
                    notice required by Section 615 of the FCRA (U.S.C. Sec  
                    1681(m)), indicating that the verification or  
                    eligibility determination was based, in whole or in  
                    part, upon the information contained in the consumer  
                    credit report. 
                  c.        Issue the notice in writing an in accordance  
                    with the standards established in federal law.
                  d.        Issue the notice before taking any adverse  
                    action against the applicant or recipient.
                  e.        Make the information available to an applicant  
                    or recipient who requests a copy of his or her case  
                    file or appeals a negative action based in whole or in  
                    part on the information the county obtained from the  
                    consumer credit report. 

             3)   Permits the written authorization and notice required to  
               be provided by electronic means. 

             4)   Prohibits a county human services agency that elects to  
               use information contained in a consumer credit report for  
               the determination of benefit level from requiring the  
               applicant or recipient to submit hard-copy documentation  
               that is duplicative of the information it will verify using  
               the credit report. 
          












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            FISCAL IMPACT
          
          This bill has not yet been analyzed by fiscal committee.

            BACKGROUND AND DISCUSSION
          
          Purpose of the bill:

          According to the author, this bill will facilitate eligibility  
          and enrollment in the CalFresh and CalWORKs programs by  
          streamlining the application process. For these families,  
          support programs like CalFresh and CalWORKs can help prevent the  
          indignity of hunger in meeting basic needs.  The author states  
          that low-wage workers face significant barriers to participation  
          in CalFresh program.  Few have paid time off or reliable  
          transportation to get to the county welfare department for the  
          application process. 

          By prohibiting county agencies that use electronic databases to  
          administer the CalFresh and CalWORKs programs from requiring  
          applicants to submit hard copy documentation that is duplicative  
          of information obtained from the database, SB 1232 would reduce  
          potential for multiple visits to the county offices, according  
          to the author. SB 1232 also will require notice to these  
          applicants and recipients about their federal right to receive  
          free employment data reports and to correct inaccurate  
          information in employment and income verification databases.   
          Additionally, the bill will empower low-income Californians to  
          correct errors in their consumer reports, the author states. 

          The author also states that SB 1232 does not reinforce, require  
          or encourage the use of a particular consumer credit reporting  
          agency database.  The bill does, however, establish that  if  such  
          a database is used to evaluate an application for CalFresh or  
          CalWORKs benefits, the applicant must also benefit from the  
          information in the database and must be protected under federal  
          consumer law. 

          CalWORKs
          
          The CalWORKs program is funded with a mix of federal TANF money,  
          state, and county funds. 
          CalWORKs provides temporary cash assistance to meet basic family  









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          needs.  It also provides education, employment and training  
          programs.  CDSS is the designated state agency responsible for  
          program supervision at the state level.  The counties are  
          responsible for administering the caseloads at the local level.   


          In order to be eligible for CalWORKs, families must meet income  
          and asset tests of no more than $2,250 in savings ($3,250 where  
          the assistance unit includes at least one member who is disabled  
          or aged 60 or older), excluding education and retirement plans  
          plus one car worth $9,500 or less or that was received as a gift  
          or family transfer or donation. In addition, children must be  
          deprived of parental support and care due to the incapacity,  
          death or absence of apparent or unemployment of the principal  
          wage-earner.  Persons fleeing to avoid prosecution, custody or  
          confinement after conviction of a felony are not eligible for  
          CalWORKs.

          State law provides for a cumulative 48-month lifetime limit on  
          cash aid for adults.  During those 48 months, adults may receive  
          a total of 24 months of Welfare-to-Work (WTW) services and  
          activities.  WTW activities include subsidized and unsubsidized  
          employment, community service, adult basic education, job  
          skills, training, mental health counseling, substance abuse  
          treatment and other activities necessary to assist recipients in  
          obtaining employment. Once the 24 months of WTW activities have  
          been exhausted, adults must meet the stricter federal work  
          participation requirements (20, 30, or 35 hours weekly,  
          depending on family composition) unless they are exempt or  
          receive an extension. Children of adults who exhaust the  
          48-month lifetime limit may continue to receive cash aid, if  
          otherwise eligible, up to age 18.  

          CalFresh

          CalFresh, California's version of the federal SNAP program  
          provides monthly benefits to assist low-income households in  
          purchasing food or food products intended for human consumption.  
           CDSS administers CalFresh at the state level and California's  
          58 counties are responsible for administering the program at the  
          local level.  CalFresh benefits are 100% federally funded and  
          national eligibility standards and benefit levels are  
          established by the United States Congress. To participate in  
          CalFresh, households must meet certain income-eligibility  









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          standards.  

          The average monthly benefit for a CalFresh recipient in federal  
          fiscal year 2015 was $126.83 per month, or $4.23 per day,  
          according to the USDA. CalFresh supplements family food budgets  
          by providing an average of $300 a month per household.

          To qualify for SNAP benefits, some households must meet  
          specified work requirements. SNAP requires all recipients,  
          unless exempted by law, to register for work at the appropriate  
          employment office; participate in an employment and training  
          program, if assigned by a state or local administering agency;  
          and accept an offer of suitable employment. SNAP beneficiaries  
          do not have to work or participate in employment and training  
          activities if they are under age 16 or over age 59, are  
          physically or mentally unfit for employment, are caring for a  
          child under the age of six (or 12, in some cases), already  
          employed 30 hours a week, or, subject to and complying with work  
          requirements for other programs, such as those required by  
          CalWORKs, among other exemptions.


          Households who receive or are eligible to receive cash  
          assistance under CalWORKSs or General Assistance/General Relief  
          programs are categorically eligible for CalFresh.  

          Poverty and Food Insecurity 


          California has the highest poverty rate in the nation - just  
          under one-quarter of residents are living at or below the  
          federal poverty level (FPL), or $20,160 per year for a family of  
          three,  according to the national Supplemental Poverty Measure.  
          One of California's most essential anti-poverty strategies is  
          the CalWORKs program, which provided cash assistance to  
          approximately 535,000 families in Fiscal Year 2014-15, including  
          more than 1 million children. A grant to a family of three in a  
          high-cost California county is $704 per month, or approximately  
          42 percent of the FPL. 

          Nationally, the USDA reported an estimated 14 percent of  
          American households were food insecure at least some time during  
          the year in 2014, meaning they lacked access to enough food for  
          an active, healthy life for all household members. During the  









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          last decade, and especially during the Great Recession, the  
          number of families experiencing food insecurity has increased.  
          Since the Great Recession, according to researchers at the USDA,  
          inflation has kept the number of families who are not able to  
          afford sufficient food at approximately the same rate, even with  
          an increase in employment nationwide.<1> 


          According to data from the California Health Interview Survey  
          (CHIS), at least 4 million low-income Californians struggled  
          with food insecurity during 2011-12. A research brief published  
          in 2012 by UCLA's Center for Health Policy Research and the  
          California Food Policy Advocates noted that in 2009, at the  
          height the Recession, more than four in 10 Californian adults,  
          roughly 3.8 million people, who were at or below 200 percent of  
          the Federal Poverty Level suffered from food insecurity. Of  
          those, more than one third - 1.4 million people - reported very  
          low food security. This is defined as having to cut back on  
          food. Nationally, about 5.7 percent of Americans suffered from  
          very low food security.


          CalFresh currently serves approximately 4.4 million people,  
          according to USDA data. Nonetheless, California's participation  
          rate has been ranked last or near last in the country for years,  
          prompting concerns from the USDA, stories in the state's  
          newspapers and two Legislative hearings in 2014. 


          In 2013, the year for which the most recent data is available,  
          66 percent of eligible Californians participated in SNAP.  That  
          year, California and Nevada tied for second-lowest participation  
          rate in the country. Wyoming's participation rates were the  
          lowest at 57 percent. That rate compares to a national average  
          of 85 percent. Furthermore, just 52 percent of California's  
          eligible working poor families received CalFresh benefits, the  
          worst rate in the country, compared to a national average of 74  
          ---------------------------
          ---------------------------


          <1> Nord, Mark, et al, "Prevalence of U.S. Food Insecurity Is  
          Related to Changes in Unemployment, Inflation, and the Price of  
          Food," Economic Research Report No. (ERR-167) June 2014









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          percent.<2> 


          Employment and Income Verification

          One of the measures for assessing eligibility for CalFresh and  
          CalWORKs, is the income and employment history of the applicant.  
           While some counties still require hard copy evidence of work  
          histories (such as paystubs or tax forms), many counties have  
          turned to electronic databases maintained by credit reporting  
          agencies to complete the assessment.  

          On August 12, 2014, the department issued an All County  
          Information Notice (#41-14)<3> to advise county human services  
          agencies of a 90-day pilot program from October 1, 2014 through  
          December 31, 2014 during which participating counties could  
          access data provided by a specified consumer credit reporting  
          agency.  The usage and efficacy of the credit reporting agency  
          service would be evaluated to determine whether or not to pursue  
          a long-term statewide agreement.  

          On January 13, 2016, the department issued an All County Welfare  
          Director Letter<4> to advise the counties of their option to  
          participate in a statewide agreement with the same credit  
          reporting agency to provide online employment and wage  
          verification services. Under the agreement, all 58 counties in  
          California can access information in the database from January  
          1, 2016 through September 30, 2017, at no cost to the counties.   


          According to the department, 29 counties currently take  
          ---------------------------
          <2> USDA, "Reaching Those in Need: Estimates of State  
          Supplemental Nutrition Assistance Program Participation Rates in  
          2013," February 2016


          <3>  
           http://www.cdss.ca.gov/lettersnotices/EntRes/getinfo/acin/2014/I- 
          41_14.pdf  
          <4>  
           http://www.cdss.ca.gov/lettersnotices/EntRes/getinfo/coletters/AC 
          WDL1_13_16.PDF  









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          advantage of the agreement.  The remaining 19 counties either  
          contract directly with a credit reporting agency that provides  
          employment and wage verification services or do not use one at  
          all.  The department reports that counties that use a credit  
          reporting agency to verity employment and earnings do not  
          require applicants to submit hard copies of documents to verify  
          the same information. Those that don't use a credit reporting  
          agency require applicants to submit hard copies of all documents

          While some counties are operating under the department's  
          statewide agreement with a credit reporting agency, the  
          department has not yet issued specific instructions on how the  
          counties may use the credit reporting database.  Those  
          instructions are forthcoming and, while the instructions may  
          include some of the provisions of this bill, it should not be  
          presumed the All County Letter will cover all of the bill  
          language.  Additionally, the department's All county Letters are  
          instructions for the counties, and those instructions are not  
          codified or enforceable.

          It is not clear if the federal Fair Consumer Reporting Act  
          requires such notice for applicants and recipients of CalFresh  
          and CalWORKs benefits.  According to the sponsor, past  
          communication from the department regarding mandatory reports  
          for adverse actions have been clear regarding the denial of  
          employment or credit, but they do not address about denial of  
          public benefits.  

          Related legislation:

           SB 672 (Leno, Chapter 568, Statutes of 2013)  included a  
          provision similar to what is proposed in SB 1232. While SB 672  
          was enacted, the provision related to streamlining CalFresh  
          enrollment was removed from the bill.  
            
          
            POSITIONS
                                          
          Support:       
               California Alternative Payment Program Association
               California Association of Food Banks
               California Food Policy Advocates
               Courage Campaign
               Feeding America San Diego









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               Food Bank of Contra Costa and Solano
               National Consumer Law Center
               St. Anthony's Foundation

          Oppose:
               None received.