BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1232| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1232 Author: Leno (D) Amended: 5/31/16 Vote: 21 SENATE HUMAN SERVICES COMMITTEE: 4-0, 3/29/16 AYES: McGuire, Hancock, Liu, Nguyen NO VOTE RECORDED: Berryhill SENATE JUDICIARY COMMITTEE: 6-0, 4/12/16 AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski NO VOTE RECORDED: Anderson SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen SUBJECT: CalWORKs and CalFresh: eligibility determinations SOURCE: Western Center on Law and Poverty DIGEST: This bill 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 obtain written authorization from the applicant or recipient prior to obtaining the credit report and to provide the recipient with a specified notice. This bill prohibits 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. ANALYSIS: SB 1232 Page 2 Existing federal law: 1)Establishes 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.) 2)Establishes the Supplemental Nutrition Assistance Program (SNAP) within the U.S. 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, as specified. (7 CFR 271.1; 7 CFR 273.9) 3)Establishes 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 U.S.C. 601 et seq., WIC 11200 et seq.) Existing state law: 1)Establishes income, asset and real property limits used to determine eligibility for the program based on family size and county of residence. (WIC 11450, 11150 et seq.) 2)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) 3)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) 4)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 SB 1232 Page 3 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 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) If the county takes an adverse action against the recipient, provide the recipient with federally mandated notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. Defines "adverse action" as determination of ineligibility for CalFresh or CalWORKs or a reduction in benefits or services. c) Issue the notice in writing and in accordance with the standards for adequate notice established in federal law. d) Make the information available to a 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. 1)Permits the written authorization and notice required to be provided by electronic means. 2)Prohibits a county human services agency that elects to use SB 1232 Page 4 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. 3)Requires that nothing in the bill precludes the use of other forms of verification or prohibits the county from requesting additional documentation when the county establishes, in writing, that the information it has already received is questionable. Background According to the author, this bill will facilitate eligibility and enrollment in the CalFresh and CalWORKs programs by streamlining the application process. For some 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 reduces potential for multiple visits to the county offices, according to the author. SB 1232 also will require notice to recipients about their federal right to receive free employment data reports and to correct inaccurate information in employment and income verification databases. Additionally, this 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. This 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. SB 1232 Page 5 CalWORKs CalWORKs provides temporary cash assistance to meet basic family needs. It also provides education, employment and training programs. The CalWORKs program is funded with a mix of federal TANF money, state, and county funds. The Department of Social Services (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, as specified. 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. SB 1232 Page 6 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. To participate in CalFresh, households must meet certain income-eligibility standards. The average monthly benefit for a CalFresh recipient in federal fiscal year 2016 was $125.78 per month, or $4.19 per day, according to the USDA. CalFresh supplements family food budgets by providing an average of $300 a month per household. 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 January 13, 2016, CDSS issued an All County Welfare Director Letter to advise the counties of their option to participate in a statewide agreement with a 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. On May 12, 2016, CDSS issued All County Letter (ACL) #16-43, which provides additional guidance to the counties regarding the use of a credit reporting agency to determine eligibility for CalWORKs and CalFresh benefits. This ACL contains some, but not all of the provisions in SB 1232, including requiring prior authorization for use of a credit report and prior notice of adverse action. The ACL requires counties to issue a10-day notice prior to adverse action. According to the sponsor, past communication from CDSS regarding mandatory reports for adverse actions have been clear regarding the denial of employment or credit, but they do not address denial of public benefits. SB SB 1232 Page 7 1232 provides specificity by defining "adverse action" against a recipient to include determination of ineligibility for CalFresh or CalWORKs benefits or reduction in benefits or services. Additionally, CDSS's ACLs are instructions for the counties, and those instructions are not codified or enforceable. Prior 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. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: Notification requirements: Potential minor increase in ongoing county eligibility worker costs (Local Funds/General Fund/Federal Funds) for notification activities, as the Department of Social Services recently issued an all-county letter specifying county notification requirements relative to this issue. CalWORKs/CalFresh/CFAP benefits and administration: Potential increase in CalWORKs and CalFresh benefits (Federal Fund/General Fund/Local Funds) to the extent the mandated authorization and notification requirements result in increases in program enrollment and eligibility. While prohibiting counties from requiring hard-copy documentation that is duplicative of information it will verify using the credit report is intended to streamline the eligibility process, to the extent a county must request other forms of verification or documentation due to the prohibition could alternatively delay the eligibility and enrollment process. SUPPORT: (Verified 5/31/16) Western Center on Law and Poverty (source) California Alternative Payment Program Association SB 1232 Page 8 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's Foundation OPPOSITION: (Verified5/31/16) None received Prepared by:Taryn Smith / HUMAN S. / (916) 651-1524 5/31/16 22:23:52 **** END ****