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
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<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
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<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.