BILL ANALYSIS
AB 1058
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1058 (Beall) - As Amended: April 23, 2009
Policy Committee: Human
ServicesVote:5 - 2
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill exempts motor vehicles from the assets that must be
considered by county welfare departments when they are
determining a family's eligibility for CalWORKs. In addition,
this bill increases, from $2,000 to $7,000, the requirement that
limits applicants to no more than $2,000 in savings, and
adjusts that amount annually according to the California
Necessities Index (CNI).
FISCAL EFFECT
1)Net savings in the first year of $4.3 million (TANF/MOE), with
on-going costs of $300,000 (TANF/MOE) per year.
a) Grant cost of $1.3 million ($1 million new TANF
emergency contingency fund (ECF) money and $300,000
existing TANF/MOE) for the 2009-2010, increasing to $9.3
million ($7.4 million ECF and $1.9 million existing
TANF/MOE) due to an increased CalWORKs caseload.
b) Once the TANF ECF funding expires, on-going TANF/MOE
funded grant costs will be $9.2 million per year.
c) Savings of $4.5 million (TANF/MOE) in 2009-2010, growing
to $9 million (TANF/MOE) in 2010-2011 and beyond due to
reduced administrative workload.
2)Actual administrative savings would likely be less as the
CalWORKs program has not received funding increases to keep
pace with actual operations costs since 2001. In addition,
county welfare departments have sustained cuts totaling over
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$336 million over the last several years. However, reducing
the workload associated with CalWORKs eligibility could help
relieve the funding pressures faced by county welfare
departments.
COMMENTS
1)Purpose . The primary goal of the CalWORKs program is to move
families out of poverty toward self sufficiency. One of the
key components of the program is requiring that adult
participants either work or receive some type of training that
will help them get a job. The author and sponsors, the New
America Foundation, argue that limiting the family to an
automobile with a value of less than $4,650 is contrary to
that goal. Without reliable transportation parents are often
unable to get to work or job training and therefore are unable
to work their way out of poverty and off of the welfare rolls.
By eliminating the vehicle from consideration for
eligibility, parents will not be forced to choose between
reliable transportation and receiving much needed financial
assistance for their families.
In addition, the author seeks to encourage CalWORKs families
to build their personal savings and asset accumulation in
order to become self-reliant and end their dependence on
government assistance. The bill accomplishes this by oepning
up eligibility to the program for those families that have up
to $7,000 in savings or other assets (not including their
homes and cars).
2)California Asset Rules . CalWORKs asset rules were enacted in
1997 when the state implemented the 1996 federal welfare
reform act. Families are limited in the value of assets or
resources they may own. The program incorporates federal food
stamp rules, which limits resources to $2,000 per household,
or $3,000 if a family has a member who is aged or disabled.
Some assets, such as the family's home and $4,650 in value of
a motor vehicle, are excluded from consideration in the
determination of a family's resources. Also excluded are
assets that are not available to a household, such as the cash
value of life insurance policies and pension funds.
3)Temporary Assistance for Needy Families Block Grant . Each year
California receives $3.7 billion in federal TANF block grant
funds. In addition to the federal funding, California is
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required to spend $2.9 billion in state GF to meet the
maintenance of effort (MOE) requirement. The majority of these
funds are used for the California Work Opportunity
Responsibility to Kids (CalWORKs) program. However, federal
law permits the expenditure of TANF funds on a variety of
programs and activities.
4)TANF Contingency Fund and KinGAP . On February 17, 2009, the
President signed the American Recovery and Reinvestment Act of
2009 (ARRA), which establishes the Emergency Contingency Fund
for State TANF Programs (ECF) as section 403(c) of the Social
Security Act. This legislation provides up to $5 billion to
help States, Territories, and Tribes in federal fiscal years
2009 and 2010 that have an increase in assistance caseloads or
in certain types of expenditures.
ARRA emergency contingency funds will be awarded to qualifying
states in FFY 2009 (October 1, 2008 to September 30, 2009) and
FFY 2010 (October 1, 2009 to September 30, 2009). States can
request quarterly grants from this fund if they meet any of
the following eligibility requirements:
a) Caseload increases and increased expenditure on basic
assistance.
b) Increased expenditures related to non-recurrent,
short-term benefits.
c) Increased expenditures for subsidized employment.
States will receive 80% federal funding for any expenditures
that meet the ECF criteria.
According to the United States Department of Health and Human
Services, California is eligible for up to $1.8 billion in
TANF emergency contingency funds over the next two years,
should our increased expenditures justify the funding. DOF
currently estimates that California will be able to claim
approximately $500 million in ECF funding over the two fiscal
years. This legislation would increase eligibility for
CalWORKs, thus increasing by over $8 million the amount of
funding the state will receive from the TANF ECF.
5)Related Legislation . In 2008, AB 2368 (Fuentes) exempts motor
vehicles from assets that must be considered by county welfare
departments when they are determining a family's eligibility
for CalWORKs. That bill was held on the Senate Appropriations
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Committee suspense file.
In 2008, AB 2480 (S. Runner) would have amended the CalWORKs
eligibility vehicle asset limit by adding leased vehicles to
the list of countable resources. That bill failed passage in
the Assembly Human Services Committee.
In 2007, AB 167 (Bass) would have eliminated the CalWORKs
asset test entirely. It is currently on the Senate
Appropriations suspense file.
AB 2466 (Daucher; Chapter 781, Statutes of 2006) excluded
funds in specified retirement and educational accounts
authorized under federal law from being considered as income
or resources for purposes of CalWORKs benefits for current
recipients, not for new applicants. In addition, it added
financial management education as an allowable welfare-to-work
activity for adults receiving CalWORKs benefits.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081