BILL ANALYSIS �
SB 1391
Page 1
SENATE THIRD READING
SB 1391 (Liu)
As Amended August 6, 2012
Majority vote
SENATE VOTE :32-6
HUMAN SERVICES 4-2 APPROPRIATIONS 12-5
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|Ayes:|Beall, Ammiano, Hall, |Ayes:|Gatto, Blumenfield, |
| |Portantino | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Fuentes, Hall, Hill, |
| | | |Cedillo, Mitchell, |
| | | |Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Jones, Grove |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : This measure would amend the Welfare and Institutions
Code to institute a new process for the collection of CalFresh
over issuances. Specifically, this bill :
1)Make a legislative finding and declaration that the CalFresh
program shall be administered fairly to provide all applicants
and recipients timely services with due consideration of their
need.
2)States the intent of the Legislature to reduce the cost of
CalFresh administration through a cost-effective structure to
address overpayments and to protect the rights of applicants.
3)States the intent of the Legislature that this measure shall
not overturn or otherwise eliminate any existing right or
protection to which an applicant or recipient is entitled
under existing state laws.
4)Establishes a new section in the Welfare and Institutions Code
to require the Department of Social Services (DSS) to
implement the collection of CalFresh monetary overpayment
threshold amounts in cases relating to administrative error,
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household recipient error, or intentional fraud no later than
January 1, 2014.
5)Establishes a $125 or greater collection threshold in
accordance with federal law when the over issuance was caused
by administrative error, and allows DSS to establish a higher
threshold if necessary, as specified.
6)Requires CalFresh monthly benefits for active recipients to be
reduced for over issuances as follows:
a) For over issuances caused by administrative error,
monthly benefits shall be reduced by no more than 5%t or
$10, whichever is greater;
b) For over issuances caused by household error, monthly
benefits shall be reduced by no more than 10% or $10,
whichever is greater; and,
c) For over issuances caused by household error, monthly
benefits shall be reduced by no more than 20% or $20,
whichever is greater.
7)Requires the collection of over issuances for former CalFresh
benefit recipients as follows:
a) For over issuances caused by administrative error
totaling $125 or less, collection of the over issuance
shall not be attempted;
b) For over issuances caused by household error totaling
$35 or less, collection of the over issuance shall not be
attempted; and,
c) Over issuances caused by intentional fraud, shall be
collected in accordance with federal law.
8)Restricts the reduction or recovery of over issued CalFresh
benefits, unless the household has been properly notified of
the over issuance, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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1)One-time costs of approximately $150,000 if this bill results
in changes to the Statewide Automated Welfare System (SAWS).
Those costs may be absorbable within the existing SAWS
Maintenance and Operations budget.
2)Potential ongoing administrative cost savings due to raising
the over-issuance recovery threshold, however, due to county
budget constraints, administrative savings may be difficult to
realize. Additionally, the conversion to semi-annual reporting
(SAR) may result in minimal administrative impact due to
increasing the over-issuance threshold.
COMMENTS :
Need for the bill . According to the author, this measure is
needed to align California with other states in setting the
threshold for collecting administrative errors at $125, as many
states already have done. It would relieve counties of the time
and expense required to pursue collections from clients who have
relatively small amounts of overpayments. In this fiscal
climate, it is important to find efficiencies in government.
Relieving counties and the state of the obligation to collect
small amounts of accidentally over issued funds, which must be
fully returned to the federal government is a fiscally prudent
move.
According to the Western Center on Law and Poverty, sponsors of
this measure, over issuances and the collection of over
issuances can cause hardship and confusion among CalFresh
recipients, families that have recently transitioned off of the
CalFresh program, and within the general community. By
preventing confusion among recipients who receive a request for
payment of an over issuance caused by administrative error, SB
1391 will improve the perception of the program.
Further, according to the California State Association of
Counties and the County Welfare Directors Association, raising
the threshold for recovering CalFresh over issuances to $125
will allow eligibility workers to focus on the more egregious
instances while also providing more time for caseload work.
Development of federal Supplemental Nutrition Assistance Program
(SNAP) over issuance regulations and guidance . According to the
United States Department of Agriculture, the federal SNAP is the
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foundation for America's national nutrition safety net and the
first line of the nation's defense against hunger. It provides
grants to states to administer and distribute grants to
low-income families in need of important nutritional assistance.
In many cases, it is the only funding resource low-income
parents living at or below the federal poverty line have to
provide nutritional meals for themselves and their children.
Without this important social service, many families would
become malnourished and struggle to meet their basic day-to-day
needs.
This measure is primarily a federal compliance measure that
seeks to establish specific collections requirements for
CalFresh overpayments in accordance with the federal SNAP.
Whereas existing state law provides general collection
requirements for the over issuance of services or funds rendered
for public assistance, which applies to the CalFresh program,
state law is silent in regards to specific federal law and
guidance on the collection of SNAP overpayments.
With the adoption of regulations in 2000, and subsequent SNAP
guidance from the USDA, there has been clearer direction as to
how and at what levels the state and county welfare agencies
should pursue CalFresh benefit over issuances and under what
conditions. Rather than continue to require the state and CWAs
to blindly pursue over issuances regardless of the amount or the
cause, providing for a clearer standard, which is aligned with
federal law that has been in existence for more than ten years
is more than appropriate.
Inadvertent household error . Under current law, any over
payment made as a result of inadvertent household error is
required to be collected by the CWA, regardless of amount.
There is merit in determining a cost-effective amount to collect
overpayments due to household error for several reasons:
1)Household error overpayments comprise a small portion of the
overall number of CalFresh overpayments, with administrative
error being more than twice as common. Of the $24 million
collected from CalFresh recipients for over issuances in the
third quarter of the 2011 fiscal year, 21% were caused by
household error. Further, according to a report by the USDA
Food and Nutrition Services Office of Analysis, Nutrition and
Evaluation, more than half of over payments were less than $10
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per month.
2)It is costly to both the county and a struggling family to
undergo the collection and repayment of CalFresh household
error overpayments, especially when the overpayment being
collected is negligible. It would likely cost a county more
than $10 to pursue a monthly CalFresh overpayment of $10. It
is also not unreasonable to expect a family to undergo shame,
anxiety and greater economic stress when it is found that due
to their error they will have to not only repay the
overpayment but also have their future payments reduced.
3)Even with a minimal overpayment, a family living below the
federal poverty line is likely to remain poor even when
overpaid. Under federal poverty level criteria, a family of
two would have an annual gross (pre-tax) earned income of just
over $15,000.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089
FN: 0005058