BILL NUMBER: SB 962 CHAPTERED 09/28/00 CHAPTER 795 FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2000 APPROVED BY GOVERNOR SEPTEMBER 28, 2000 PASSED THE SENATE AUGUST 28, 2000 PASSED THE ASSEMBLY AUGUST 23, 2000 AMENDED IN ASSEMBLY AUGUST 18, 2000 AMENDED IN ASSEMBLY JUNE 7, 2000 AMENDED IN ASSEMBLY FEBRUARY 10, 2000 AMENDED IN SENATE APRIL 7, 1999 INTRODUCED BY Senator Escutia (Coauthors: Senators Bowen, Hayden, Hughes, Perata, and Solis) (Coauthors: Assembly Members Aroner, Bock, Calderon, Cedillo, Dutra, Knox, Kuehl, Mazzoni, and Washington) FEBRUARY 26, 1999 An act to amend Section 11006.2 of the Welfare and Institutions Code, relating to human services. LEGISLATIVE COUNSEL'S DIGEST SB 962, Escutia. Public assistance payments by direct deposit. Existing law requires the State Department of Social Services to provide for the delivery of public assistance payments. Existing law specifies that any person entitled to the receipt of public assistance payments may authorize payment to be directly deposited by electronic funds transfer into that persons's account in a financial institution, and requires each county treasurer to make an agreement with one or more financial institutions participating in the Automated Clearing House pursuant to the local rules, and to establish a program for the direct deposit by electronic funds transfer of payments to any person entitled to public assistance benefits and who authorizes the direct deposit of funds into the person's account in a financial institution. Existing law limits that requirement to counties in which the board of supervisors has adopted a resolution to implement an electronically based system for delivering public assistance payments. This bill would impose that requirement upon each county that offers a program for direct deposit by electronic funds transfer to its employees. By imposing the requirement of providing benefits through electronic funds transfer to those counties, this bill would result in a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. (a) The Legislature finds and declares all of the following: (1) California welfare recipients are in the process of making the transition from welfare into the paid labor market. (2) Part of this transition should include participation in the economic mainstream by having the choice to establish banking relationships. (b) It is the intent of the Legislature to assist welfare recipients in this transition by reducing the barriers to full participation in the banking system. It is the intent of the Legislature that this act address and eliminate one of those barriers. SEC. 2. (a) The Legislature finds and declares: (1) Many California banks offer low- or no-cost accounts for customers who make their deposit through direct deposit. (2) Direct deposit is widely offered by many private and public employers and utilized by many employees because of its convenience, reliability, and low cost. (3) This option is not currently available to most California public assistance recipients. (b) It is the intent of the Legislature in enacting this act, to provide public assistance recipients an option to have their monthly cash benefits deposited into a bank account. SEC. 3. Section 11006.2 of the Welfare and Institutions Code is amended to read: 11006.2. (a) The department may provide for the delivery of public assistance payments at any time during the month consistent with federal law relating to recipient monthly reporting requirements. (b) The department shall cooperate with county treasurers and private financial service providers, including depository institutions, licensed check sellers, data processing service vendors, and retail merchants, in developing and implementing an electronically based system for delivering public assistance payments to those recipients who do not have individual deposit accounts with financial institutions. (c) (1) Notwithstanding any other provision of law, any person entitled to the receipt of public assistance payments may authorize payment to be directly deposited by electronic fund transfer into the person's account at the financial institution of his or her choice under a program for direct deposit by electronic transfer established by the county treasurer. The direct deposit shall discharge the department's obligation with respect to the payment. (2) Each county treasurer shall make an agreement with one or more financial institutions participating in the Automated Clearing House pursuant to the local rules, and shall, by December 1, 2001, establish a program for the direct deposit by electronic fund transfer of payments to any person entitled to the receipt of public assistance benefits who authorizes the direct deposit thereof into the person's account at the financial institution of his or her choice. (3) This subdivision shall apply in each county that offers a program for direct deposit by electronic funds transfer to some or all of its employees. SEC. 4. Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.