BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
SB 1232 (Leno)
Version: March 28, 2016
Hearing Date: April 12, 2016
Fiscal: Yes
Urgency: No
NR
SUBJECT
CalWORKs and CalFresh: eligibility determinations
DESCRIPTION
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 notice
indicating that the verification or eligibility determination
was based upon information contained in the report. This bill
would prohibit a county human services agency 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.
BACKGROUND
According to research by the Public Policy Institute of
California, over 20 percent of children in California did not
have enough resources to make ends meet in 2014. Two of the
largest social safety net programs supporting these families are
California's food stamps program (CalFresh), and cash assistance
for families with children (CalWORKs). Out of all the state's
programs, CalFresh lowered California's child poverty rate by
the largest amount, followed by the Earned Income Tax Credit,
and the federal Child Tax Credit. CalWORKs, housing subsidies,
and school meals all lowered the child poverty rate by about 2
points as well. (Public Policy Institute of California, Just the
Facts: Child Poverty in California,
[as of
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4/1/2016].)
However, despite the importance of CalFresh in reducing hunger
among families with low incomes, only roughly half of eligible
Californians participate. Advocates for low-income Californians
argue that the participation rate is low because, at least in
part, because CalFresh applications are difficult for low-wage
workers, who generally do not get paid time off from work and
may not have reliable transportation, to submit. Advocates also
argue that these applications have traditionally been difficult
for counties to process, resulting in counties turning to more
modern practices and procedures to streamline and improve their
verification processes. Specifically, many state and county
agencies now use reports from electronic databases, or consumer
credit reports, to verify information about employment for
public benefit applicants and recipients. A significant benefit
of electronic income verification for applicants is real-time
processing and approval of their eligibility for the program.
This bill, seeking to simplify the application process and
further support low-income families in California, would
prohibit counties from requiring hard-copy information that is
duplicative of the information contained in a consumer credit
report, and would require that the county provide notice to
applicants that such a report was used in determining the
applicant's eligibility. This bill would also require that the
applicant receive the above notice prior to the county taking
any adverse action against the applicant.
CHANGES TO EXISTING LAW
Existing federal law establishes the Supplemental Nutrition
Assistance Program (SNAP) within the U.S. Department of
Agriculture to safeguard the health and wellbeing of the
nation's population by raising the levels of nutrition among
low-income households. (7 C.F.R. 271.1; C.F.R. 273.9.)
Existing federal law establishes the Fair Consumer Reporting Act
(FCRA), which provides procedures for accuracy and fairness of
credit reporting and mandates consumer notification prior to the
taking of any adverse action based on information contained in a
consumer credit report. (15 U.S.C. Sec. 1681 et seq.)
Existing law 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
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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.; Welf. & Inst. Sec. 11200 et seq.)
Existing law establishes California's CalFresh program to
administer the provision of federal SNAP benefits to families
and individuals meeting specified criteria. (Welf. & Inst. Code
Sec. 18900 et seq.)
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 do all of the following:
obtain written authorization from an applicant or
recipient prior to obtaining the credit report;
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;
issue the notice in writing and in accordance with the
standards established in federal law; and
issue the notice before taking any adverse action
against the applicant or recipient.
This bill would prohibit a county human services agency that
elects to use information contained in a consumer credit report
from requiring the applicant or recipient to submit hard-copy
documentation that is duplicative of the information contained
in the credit report.
This bill would clarify that county human service agencies are
free to use other forms of verification and would allow the
county to request additional documentation when the county
establishes, in writing, that the information it received is
questionable.
This bill would state the legislative intent to support an
increase in CalFresh benefits for low-income working families by
simplifying and adding transparency to the verification of
wages, and 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
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agency.
COMMENT
1.Stated need for the bill
According to the author:
According to the Public Policy Institute of California, 78
percent of poor families in California are working families.
For these families, support programs like CalFresh and Cal
WORKs can help prevent the indignity of hunger in meeting
basic needs. ? According to the U.S. Department of
Agriculture's 2012 reporting, only 53 percent of eligible
working families in California receive this federally funded
food benefit. That's one of the lowest participation rates in
the nation. California is forgoing federal funds that could
be nourishing our people and bolstering our neighborhood
economies.
2.Would streamline the process for low-income families applying
for benefits
This bill would prohibit the county from requiring applicants to
submit hard-copy documentation of information that is
duplicative of information contained in a consumer credit
report. In the event that the county finds that the information
provided in a consumer credit report is questionable, this bill
would allow the county to request additional information from
the applicant. Arguably, this will streamline the application
process for families seeking Calfresh and CalWORKs benefits
because they will not have to go through the onerous process of
coordinating, printing, and delivering employment and income
verification information, while still permitting the county to
investigate an application further if the information produced
by a consumer credit report seems untrustworthy. In support,
California Alternative Payment Program Association (CAPPA)
writes:
This legislation aims to facilitate the eligibility and
enrollment in the CalFresh Program for California's working
families. Currently, the eligibility and enrollment process
for this program is burdensome for welfare departments as well
as on the families it purports to help by weighing the process
down in paperwork and antiquated verification. California has
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vested monies into developing more efficient technologies that
seamlessly process and can pull verification of populations
from a variety of databases. Furthermore, these more efficient
and electronic systems comply with existing federal and state
laws allowing its existence. SB 1232 simply overlays
technological opportunities on top of our existing
bureaucratically burdensome process with an objective to
better serve low wage workers and those needing food
assistance.
However, because this bill would allow the county to use other
forms of verification or request additional information when
investigating a questionable consumer credit report, it is
necessary to clarify that the ban on requiring duplicative
information need only apply in the initial verification and
eligibility process where a county utilizes consumer credit
reports. The following amendment would ensure that the ban on
duplicative hard-copy information is specific to that provision
of the bill.
Author's amendment:
Page 2, line 25, after "(b)" insert "If the county uses
information contained in a consumer credit report,"
3.Would ensure that low-income families understand how to access
important credit information
This bill would require, in accordance with the federal Fair
Credit Reporting Act (FCRA), that applicants be notified, prior
to the initiation of any adverse action, that the verification
or eligibility determination was based on information contained
in a consumer credit report. The FCRA, however, does not
clearly define "adverse action," for the purposes of CalFresh
and CalWORKs and staff notes that while a reduction or
elimination in benefits that a recipient was already receiving
would clearly be an "adverse action," it is not entirely clear
that a denial of benefits would be, because the applicant had
not been receiving the benefit already. It is clearly the
intent of the author that a denial of benefits be included in
the understanding of "adverse action," which would be clarified
by the following amendment.
Author's amendment:
Page 3, line 18, after "action" insert "including a denial of
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CalFresh eligibility or CalWORKs benefit or services"
In support, the California Association of Food Banks writes,
"while the Department's regulations acknowledge rights of
applicants and recipients to know when the information in the
consumer report has been used to take negative action, the
guidance isn't clear when a recipient is to be noticed, doesn't
require that the notification meet the Federal Consumer Rights
Act 'model notice language,' and hasn't clarified whether or not
that this notice should also comply with the rights for notices
that already exist in the CalFresh notices. SB 1232 offers a
win-win-win by improving accuracy in e-verification reports,
protecting low-wage workers from inaccurate reports and by
reducing paperwork for low-income working families when applying
for federally funded benefits."
Support : California Alternative Payment Program Association
(CAPPA); California Association of Food Banks; California
Catholic Conference; California Food Policy Advocates; Courage
Campaign; Feeding America San Diego; Food Bank of Contra Costa
and Solano; National Consumer Law Center; St. Anthony Foundation
Opposition : None known
HISTORY
Source : Western Center on Law and Poverty
Related Pending Legislation : None known
Prior Legislation : SB 672 (Leno, Ch. 568, Stats. 2013)
originally included a provision similar to the concept of SB
1232 that was amended out of the bill prior to its enactment.
Prior Vote : Senate Human Services Committee (Ayes 4, Noes 0)
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