BILL ANALYSIS �
AB 6
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Date of Hearing: April 5, 2011
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 6 (Fuentes) - As Introduced: December 6, 2011
SUBJECT : CalWORKs and CalFresh programs: administrative
streamlining
SUMMARY : Streamlines a number of issues related to the
administration of CalFresh (formerly known as the Food Stamp
Program) and California Work Opportunity and Responsibility to
Kids program (CalWORKs) and improves nutritional outcomes.
Specifically, this bill :
1)Requires counties to convert from a quarterly to a semi-annual
reporting system for CalWORKs and CalFresh no later than
January 1, 2013, as specified.
2)Eliminates the Statewide Finger Imaging System (SFIS).
3)Requires the Department of Social Services (DSS) and the
Department of Community Services and Development to design,
implement and maintain a "Heat and Eat" program by January 1,
2013, as specified.
EXISTING LAW :
1)Provides, under federal law, the option to adopt "Simplified
Reporting" (or as it is known here in California, Semi-Annual
Reporting (SAR).
2)Requires, via an existing federal directive from the United
States Department of Agriculture, that the DSS convert the
CalFresh recipient income reporting period from a quarterly to
SAR period or comply with other federal reporting law, as
specified.
3)Requires, in both the CalFresh and CalWORKs programs that
counties review recipient eligibility and grant amounts on a
quarterly basis using prospective budgeting.
4)Establishes procedures for quarterly reporting, including a
county option for staggered reporting cycles, criteria for a
complete report, and steps to be taken when a recipient fails
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to submit a complete report.
FISCAL EFFECT : Unknown
COMMENTS :
1)Rationale . The current complexity of CalFresh is hurting
participation. The United States Department of Agriculture
(USDA) studies show that only 50% of eligible Californians
receive CalFresh. This bill is designed to improve CalFresh
participation and create efficiencies in the program by
continuing the practice of aligning eligibility requirements
for both the CalWORKs and CalFresh programs.
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2)Semi-annual reporting
a) USDA Opinion . In a letter provided to former
Assemblymember John Laird on a similar bill dealing with
semi-annual reporting (AB 2844 of 2008), the USDA strongly
encouraged the state to move to a semi-annual reporting
process. According to USDA findings from other states,
semi-annual reporting should have numerous positive impacts
for California, such as:
i) Improving the state's CalFresh error rate by
limiting the number of changes that would need to be
reported by CalFresh participants.
ii) Significantly reducing county administrative
workload due to less frequent certifications and
interviews, fewer reapplications following closures, and
fewer periodic report forms to process.
iii) Providing greater access to CalFresh for eligible
families because there would be fewer terminations due to
incomplete recertifications, less frequent
recertification reviews, and more time to provide case
managements and other services designed to assist
clients.
iv) Increasing the number of families that receive
CalFresh benefits based on the study of four states that
saw an increase in participation once they adopted
semi-annual reporting. The USDA also notes that there is
no known correlation between simplified reporting and an
increase in fraud.
b) Quarterly Reporting Grant Impacts . With the change from
a monthly reporting system to quarterly reporting for
CalWORKs and CalFresh, the prior administration estimated
that there would be a significant cost associated with
families continuing to receive grants for two months for
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which they are no longer entitled. However, once the
system was implemented, the actual data on grant payments
showed that this concern was unfounded. Given the state's
experience with the move from monthly to quarterly
reporting, there is no evidence to suggest that a move from
quarterly to semi-annual reporting would have a significant
cost impact on CalWORKs grants. In fact, DSS estimates
that this change would actually result in a CalWORKs grant
savings.
c) CalFresh and Hunger . According to research by the
University of California at Los Angeles, over 2.2 million
Californians cannot always afford enough food, and almost
one-third, or 658,000 of these adults experience episodes
of hunger. According to the USDA, only about half of
eligible food stamp recipients participate in the program
due to programmatic and administrative barriers.
California's participation rate ranks last in the nation
for number of people eligible but are not receiving
benefits. A 2004 study by Mathematica indicated that
CalFresh participation is 12% lower among working
low-income families because of the burdensome eligibility
process.
d) School Meals Program . School meal programs are also
underutilized. Only half of income eligible students
receive lunch at school, and 18% receive school breakfasts.
Some low-income children with incomes between 133% and
185% of the federal poverty level, currently ineligible for
CalFresh, may not receive school meals because their
families cannot afford the 40 cents required for a reduced
price lunch and 30 cents for breakfast. The children in
new CalFresh households would be eligible for free school
meals.
e) Additional Federal Child Welfare Services Funds . The
federal government awards funding to states through the
Promoting Safe and Stable Families (PSSF) program that can
be used in the Child Welfare Services program for efforts
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to reduce the incidences of child abuse and neglect, and to
promote stability and permanency for at-risk children
within families. The federal government sets a capped
amount for funding and then awards those funds to states
and territories based upon the number of children in each
state who are receiving CalFresh benefits. Despite serving
over 25% of the national child welfare caseload, California
receives less than 15% of the federal PSSF funds because of
the low CalFresh participation rate. To the extent this
legislation increases CalFresh participation among families
with children, California's share of the PSSF funding
should increase.
3)Elimination of the Finger Imaging Requirement
a) California is one of only 3 states and one city across
the country that has maintained the practice of finger
imaging CalFresh households as a component of the
application process. This practice, intended to prevent
duplicate aid fraud, has been shown in a California state
audit to be an inefficient and redundant use of funds. The
California state budget estimates that SFIS will cost $17
million to maintain in 2012 alone. Other more effective
and economical approaches to preventing duplicate aid
fraud, as well as other types of fraud, are already in
place (e.g. Income Eligibility Verification System).
During tough budget times the state cannot continue to fund
a redundant and obsolete administrative practice.
b) In addition, finger imaging acts as a barrier to
participation, preventing eligible Californian's from
receiving nutrition benefits. According to USDA, states
that use finger print imaging have an average 7% lower
participation rate compared to the most similar states (in
terms of caseload) that do not require a finger image.
Concern over the negative impact on participation has lead
the federal government, who pays for 100% of CalFresh
benefits, to urge California to drop the practice and place
a moratorium on any additional states implementing finger
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imaging.
c) Given the results of the state audit, the recent
research indicating a negative impact on participation, and
California's need to reduce state costs by eliminating
ineffective administrative practices, the finger print
image requirement should be eliminated.
4)" Heat and Eat "
a) A Heat and Eat initiative would promote access to
CalFresh, by simplifying the verification process, and will
maximize critical federal nutrition benefits for eligible
and participating households.
b) For many California families a barrier to accessing and
maintaining CalFresh benefits is the complicated and often
excessive verification process that is a component of the
CalFresh application process. The verification process has
been successfully streamlined in a number of other states
to promote ease of application, without compromising the
integrity of the program. One such strategy is to
implement a heat and eat initiative. Such an initiative
provides all CalFresh households with a nominal Low Income
Home Energy Assistance Program (LIHEAP) benefit that
qualifies them to use the standard utility allowance (SUA)
for the purpose of calculating CalFresh benefit levels.
Knowing that a majority of California households incur
utility expenses in one way or another, the initiative will
remove the verification requirement associated with utility
costs (i.e. utility bill) for all households thus
simplifying the application process.
c) An ongoing issue faced by many CalFresh eligible and
participating households is the high cost of living in
California, as well as the often high cost of healthier
food options. In addition, redemption trends show that
CalFresh recipients use their benefits quickly and have
little, if any benefits left at the end of the month.
These facts indicate that current CalFresh benefit
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allocations may be inadequate for many California
households. The change in benefit calculations resulting
from the application of a universal SUA through a heat and
eat initiative would result in an increase in monthly
CalFresh benefits for a significant number of households.
Therefore, maximizing critical federal nutrition assistance
and further supporting California families.
d) A heat and eat initiative will increase federally funded
CalFresh benefits, simplify the verification process for
all households, reduce the opportunity for utility related
errors, and will draw down federal funding to stimulate
local economies.
5)Positive fiscal effect of food stamp benefits:
According to Moody's Investor Services, an independent provider
of credit ratings and financial services research, CalFresh
benefits have the highest economic multiplier effect out of
all government programs or fiscal policy tools that stimulate
the economy. Moody's finds that for every CalFresh dollar
spent, $1.74 is generated in economic activity. (The USDA
finds this amount to be $1.84). Additionally, these benefits
generate sales tax revenue for county and the state coffers.
To the extent that this bill increases CalFresh participation,
the state could expect to receive additional state General
Fund revenues due to increased taxable purchases by
recipients. This is possible because studies show that
low-income families such as CalFresh recipients spend
approximately 45% of their income on taxable goods. By
providing these families with CalFresh benefits, 45% of the
money previously used by the family to purchase food would now
be used for purchasing taxable goods.
6)Technical amendments
Authors amendments will be offered to add co-authors and change
references in the bill from "LIHEAP" to "HEAP" in order to
specify the appropriate federal program.
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7)Related Legislation
a) AB 1642 (Beall) 2010- held in committee (Assembly
Appropriations)
b) AB 1057(Beall) 2009- held in committee (Assembly
Appropriations)
c) AB 2844 (Laird) 2008- vetoed by the Governor
d) AB 1382 (Leno) 2007-vetoed by the Governor
e) AB 3029 (Laird) 2006-"died at desk"
f) AB 696 (Chu) 2005-vetoed by the Governor
g) AB 2013 (Steinberg/Lieber) 2004- held in Senate
committee
REGISTERED SUPPORT / OPPOSITION :
Support
California Food Policy Advocates (sponsor)
AARP California
Alameda County Community Food Bank
California Association of Food Banks
California Catholic Conference
California Grocers Association
California Hunger Action Coalition
California Immigrant Policy Center
California Restaurant Association
California Retailers Association
Feeding America
Food Share, Ventura County
Hunger Action Los Angeles
JERICHO
Jewish Family Service of Los Angeles
Los Angeles Regional Foodbank
MAZON
Orange County Food Bank
Second Harvest Food Bank, Santa Cruz County
St. Anthony's Foundation
United Way Silicon Valley
Western Center on Law and Poverty
Opposition
California District Attorneys Association (CDAA)
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Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089