BILL ANALYSIS �
AB 493
Page 1
ASSEMBLY THIRD READING
AB 493 (Perea)
As Amended May 27, 2011
Majority vote
HUMAN SERVICES 4-2 APPROPRIATIONS 11-1
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|Ayes:|Jones, Grove, Hall, |Ayes:|Fuentes, Blumenfield, |
| |Portantino | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beall, Ammiano |Nays:|Mitchell |
| | | | |
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SUMMARY : Requires the Electronic Benefit Transfer (EBT) system
to prevent California Work Opportunity and Responsibility to
Kids (CalWORKS) recipients from using their EBT card to access
automated teller machines (ATMs) located in gambling and adult
entertainment establishments.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, costs potentially up to $100,000 (General
Fund/Temporary Assistance for Needy Families) for the oversight
and monitoring associated with prohibiting the use of EBT cards
at gambling establishments and strip clubs.
COMMENTS : The author points to a Los Angeles Times article last
year as the impetus for this bill. The article implied that
out-of-state purchases and cash withdrawals by CalWORKs
recipients were a misuse of public funds. Because cash
assistance is intended to pay for basic needs, the discovery
that some recipients had withdrawn cash at casinos in Las Vegas
or made purchases in shops and restaurants in Hawaii suggested
to the author that preventive measures were necessary to ensure
program integrity. Indeed, the author states that, "Given the
current climate of the state's economy and the limited resources
available to all of California's programs, it is more important
than ever to ensure that state aid is to provide basic
necessities for California's under-resourced families."
AB 493
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While the article largely focused on where the funds were spent
and what for, it also highlighted that the expenditures amounted
to less than 1% of the $10.8 billion spent during the
approximate three-year period in question. As well, it was
mentioned that the expenditures may not be inappropriate as many
recipients need to travel to other states for emergencies such
as a death in the family.
The author proposes to prevent all CalWORKs recipients from
accessing cash at ATMs located in gambling and adult
entertainment establishments and directs the state-contracted
EBT processor to block these transactions.
Executive order blocks EBT access . In response to the articles
like the one discussed above, Executive Order S-09-10 (executive
order) under the Schwarzenegger Administration mandated that
CalWORKs recipients can no longer withdraw cash benefits at
gambling establishments. Additionally, the former governor
directed the Department of Social Services (DSS) to propose
other methods to reduce waste, fraud, and abuse in the
disbursement of CalWORKs benefits. Soon after that directive,
DSS and the Office of Systems Integration blocked EBT access at
ATMs and POS devices located in: adult entertainment
establishments; certain liquor stores; bail bonds businesses;
bingo halls; cannabis shops; cruise ships; gun/ammunition
stores; night clubs/saloons/taverns; psychic readers; race
tracks; smoking shops; spa/massage salons; and, tattoo/piercing
shops.
While much of what this bill seeks to accomplish has already
been done through the executive order, the author seeks to
codify its provisions, thereby making it more difficult to
overturn.
Support and opposition . The proponents of restricting EBT
access state simply that the funds need to be used for their
intended purpose-basic needs-and not to be abused. While there
is no known definition for what constitutes a basic need, the
executive order arguably and legally established what is not.
The Western Center on Law and Poverty believes this bill
undermines the goals of CalWORKs and the EBT system - to
integrate welfare recipients into the world of work and personal
responsibility and that it promotes negative stereotypes of
AB 493
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low-income people. Others argue that blocking cash access in
casinos limits access because many low-income workers are
employed at casinos and that in some areas of the state the
casinos may be the closest ATM.
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089
FN: 0001022