Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that elects to use information contained in a consumer credit report for the determination of CalWORKs or CalFresh eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and, if the county takes an adverse action against an applicant or recipient, to provide the applicant or recipient with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. The bill would also prohibit the county from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that elects to use information contained in a consumer credit report for the determination of CalWORKs or CalFresh eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and, if the county takes an adverse action against an applicant or recipient, to provide the applicant or recipient with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. The bill would also prohibit the county from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that elects to use information contained in a consumer credit report for the determination of CalWORKs or CalFresh eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and, if the county takes an adverse action against a recipient, to provide the recipient of benefits with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. The bill would also prohibit the county from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that elects to use information contained in a consumer credit report for the determination of CalWORKs or CalFresh eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and and, if the county takes an adverse action against a recipient, to provide the applicant or recipient of benefits with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. The bill would also prohibit the county from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.

Existing federal law provides for the allocation of federal funds through the federal Temporary Assistance for Needy Families (TANF) block grant program to eligible states. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program under which, through a combination of state and county funds and federal funds received through the TANF program, each county provides cash assistance and other benefits to qualified low-income families.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that elects to use information contained in a consumer credit report for the determination of CalWORKs or CalFresh eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and to provide the applicant or recipient of benefits with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that uses elects to use information contained in a consumer credit report for the determination of CalWORKs or CalFresh eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and to provide the applicant or recipient of benefits with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. By imposing this duty on counties, this bill would impose a state-mandated local program.

Existing federal law provides for the federal Supplemental Nutrition Assistance Program, under which nutrition assistance benefits are allocated to each state by the federal government. Under existing state law, the CalFresh program, Californias federal allocation is distributed to eligible individuals by each county. Existing law requires that the eligibility of households be determined to the extent permitted by federal law, and requires the State Department of Social Services to establish a program of categorical eligibility for CalFresh in accordance with federal law. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the department and to rules and regulations adopted by the department.

This bill would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh eligibility or benefit level to provide the applicant or recipient of benefits with a specified notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. By imposing this duty on counties, this bill would impose 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.

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.

 UNFINISHED BUSINESS  

Bill No: SB 1232

Author:

:

Vote:

SENATE HUMAN SERVICES COMMITTEE: 4-0, 3/29/16

AYES: McGuire, Hancock, Liu, Nguyen

NO VOTE RECORDED: Berryhill

SENATE JUDICIARY COMMITTEE: 6-0, 4/12/16

AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski

NO VOTE RECORDED: Anderson

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

SENATE FLOOR: 39-0, 6/2/16

AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk

NO VOTE RECORDED: Runner

ASSEMBLY FLOOR: 78-0, 8/11/16 (Consent) - See last page for vote

SUBJECT:

SOURCE: Western Center on Law and Poverty

DIGEST: This bill requires a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and to provide the recipient with a specified notice. This bill prohibits county human services agencies from requiring CalFresh or CalWORKs applicants or recipients to provide hard-copy documentation that is duplicative of the information obtained from the credit reporting agency.

Assembly Amendments clarify that certain provisions of this bill apply to applicants as well recipients and to make clear that counties must provide specified information in the event of an adverse action only when the determination behind that action was based in whole or part from information contained in a credit report.

ANALYSIS:

Existing federal law:

1. Establishes the Fair Consumer Reporting Act (FCRA), which provides procedures for accuracy and fairness of credit reporting. Among other things, FCRA mandates consumer notification of adverse action taken based on information contained in a consumer credit report and establishes rights for consumers to correct information that is reported incorrectly. (15 U.S.C. Sec. 1681 et seq.)
2. Establishes the Supplemental Nutrition Assistance Program (SNAP) within the U.S. Department of Agriculture (USDA) to promote the general welfare and to safeguard the health and wellbeing of the nation’s population by raising the levels of nutrition among low-income households. It establishes SNAP eligibility requirements, as specified. (7 CFR 271.1; 7 CFR 273.9)
3. Establishes the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families and, in California, provides that TANF funds for welfare-to-work services are administered through the CalWORKs program. (42 U.S.C. 601 et seq., WIC 11200 et seq.)

Existing state law:

1. Establishes income, asset and real property limits used to determine eligibility for the program based on family size and county of residence. (WIC 11450, 11150 et seq.)
2. Establishes a 48-month lifetime limit of CalWORKs benefits for eligible adults, including 24 months during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85)
3. Specifies a weekly number of hours required of welfare-to-work participation for adults to remain eligible for CalWORKs benefits, including for those households with “unemployed parents.” (WIC 11322.8)
4. Establishes in California statute the CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting specified criteria. (WIC 18900 et seq.)

This bill:

1. Establishes legislative intent to support an increase in CalFresh benefits for low-income working families by simplifying and adding transparency to the verification of wages. It also states legislative intent to educate applicants and recipients of aid of their federal rights to receive a free report and to correct errors in a report issued by federally regulated consumer reporting agencies when the services of those agencies are used by the state or county to determine CalFresh or CalWORKs eligibility or benefit level.
2. Requires a county human services agency that elects to use information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to obtain written authorization from an applicant or recipient prior to obtaining the credit report.
3. Requires that if a county takes an adverse action against an applicant or recipient, the determination of which was based, in whole or in part, upon information contained in the consumer credit report, the county shall do all of the following:
   1. Provide the applicant or recipient with federally mandated notice, indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report.
   2. Issue the notice in writing and in accordance with the standards for adequate notice established in federal law.
   3. Make the information available to an applicant or recipient who requests a copy of his or her case file or appeals a negative action based in whole or in part on information the county obtained from the consumer credit report.
4. Defines “adverse action” as determination of ineligibility for CalFresh or CalWORKs or a reduction in benefits or services.
5. Permits the written authorization and required notice to be provided by electronic means.
6. Prohibits a county human services agency that elects to use information contained in a consumer credit report for the determination of benefit level from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.
7. Requires that nothing in the bill precludes the use of other forms of verification or prohibits the county from requesting additional documentation when the county establishes, in writing, that the information it has already received is questionable.

Background

CalWORKs. CalWORKs provides temporary cash assistance to meet basic family needs. It also provides education, employment and training programs. The CalWORKs program is funded with a mix of federal TANF money, state, and county funds. The Department of Social Services (CDSS) is the designated state agency responsible for program supervision at the state level, while counties are responsible for administering caseloads at the local level.

In order to be eligible for CalWORKs, families must meet income and asset tests, as specified. In addition, children must be deprived of parental support and care due to the incapacity, death or absence of apparent or unemployment of the principal wage-earner. Persons fleeing to avoid prosecution, custody or confinement after conviction of a felony are not eligible for CalWORKs.

State law provides for a cumulative 48-month lifetime limit on cash aid for adults. During those 48 months, adults may receive a total of 24 months of Welfare-to-Work (WTW) services and activities. WTW activities include subsidized and unsubsidized employment, community service, adult basic education, job skills, training, mental health counseling, substance abuse treatment and other activities necessary to assist recipients in obtaining employment. Once the 24 months of WTW activities have been exhausted, adults must meet the stricter federal work participation requirements (20, 30, or 35 hours weekly, depending on family composition) unless they are exempt or receive an extension. Children of adults who exhaust the 48-month lifetime limit may continue to receive cash aid, if otherwise eligible, up to age 18.

CalFresh. CalFresh, California’s version of the federal SNAP program provides monthly benefits to assist low-income households in purchasing food or food products intended for human consumption. CDSS administers CalFresh at the state level and California’s 58 counties are responsible for administering the program at the local level. CalFresh benefits are 100 percent federally funded and eligibility standards and benefit levels are established by the United States Congress.

To qualify for SNAP benefits, some households must meet specified work requirements. SNAP requires all recipients, unless exempted by law, to register for work at the appropriate employment office; to participate in an employment and training program, if assigned by a state or local administering agency; and to accept an offer of suitable employment. To participate in CalFresh, households must meet certain income-eligibility standards.

The average monthly benefit for a CalFresh recipient in federal fiscal year 2016 was $125.78 per month, or $4.19 per day, according to the USDA. CalFresh supplements family food budgets by providing an average of $300 a month per household.

Employment and Income Verification. One of the measures for assessing eligibility for CalFresh and CalWORKs is the income and employment history of the applicant. While some counties still require hard copy evidence of work histories such as paystubs or tax forms, many counties have turned to electronic databases maintained by credit reporting agencies to complete the assessment.

On January 13, 2016, CDSS issued an All County Welfare Director Letter to advise counties of their option to participate in a statewide agreement with a credit reporting agency to provide online employment and wage verification services. Under the agreement, all 58 counties in California can access information in the database from January 1, 2016 through September 30, 2017, at no cost.

On May 12, 2016, CDSS issued additional guidance to the counties regarding the use of a credit reporting agency to determine eligibility for CalWORKs and CalFresh benefits. All County Letter (ACL) #16-43 contains some, but not all of the provisions in SB 1232, including requiring prior authorization for use of a credit report and prior notice of adverse action. The ACL requires counties to issue a10-day notice prior to an adverse action. According to the sponsor, Western Center on Law and Poverty, past communication from CDSS regarding mandatory reports for adverse actions have been clear regarding the denial of employment or credit, but they do not address denial of public benefits. SB 1232 provides specificity by defining “adverse action” against a recipient to include determination of ineligibility for CalFresh or CalWORKs benefits or reduction in benefits or services. Additionally, CDSS’s ACLs are instructions for the counties, and those instructions are not codified or enforceable.

Prior Legislation

SB 672 (Leno, Chapter 568, Statutes of 2013) included a provision similar to what is proposed in SB 1232. While SB 672 was enacted, the provision related to streamlining CalFresh enrollment was removed from the bill.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee, negligible state fiscal impact. CDSS recently issued an ACL specifying county notification requirements relative to this issue.

SUPPORT: (Verified 8/11/16)

Western Center on Law and Poverty (source)

California Alternative Payment Program Association

California Association of Food Banks

California Catholic Conference

California Food Policy Advocates

Children’s Defense Fund

Courage Campaign

Feeding America San Diego

Food Bank of Contra Costa and Solano

National Consumer Law Center

St. Anthony’s Foundation

OPPOSITION: (Verified 8/11/16)

None received

ARGUMENTS IN SUPPORT: According to the author, this bill will facilitate eligibility and enrollment in the CalFresh and CalWORKs programs by streamlining the application process. For some families, support programs like CalFresh and CalWORKs can help prevent the indignity of hunger in meeting basic needs. The author states that low-wage workers face significant barriers to participation in CalFresh program. Few have paid time off or reliable transportation to get to the county welfare department for the application process.

By prohibiting county agencies that use electronic databases to administer the CalFresh and CalWORKs programs from requiring applicants to submit hard copy documentation that is duplicative of information obtained from the database, SB 1232 reduces potential for multiple visits to the county offices, according to the author. SB 1232 also will require notice to recipients about their federal right to receive free employment data reports and to correct inaccurate information in employment and income verification databases. Additionally, this bill will empower low-income Californians to correct errors in their consumer reports, the author states.

The author also states that SB 1232 does not reinforce, require or encourage the use of a particular consumer credit reporting agency database. This bill does, however, establish that if such a database is used to evaluate an application for CalFresh or CalWORKs benefits, the applicant must also benefit from the information in the database and must be protected under federal consumer law.

ASSEMBLY FLOOR: 78-0, 8/11/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Roger Hernández, Low

Prepared by:

8/12/16 13:24:00

**** END ****

Date of Hearing: August 3, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 1232

Author:(Leno) – As Amended Ver:June 30, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires counties that use information contained in consumer credit reports to determine eligibility or benefit amounts for CalWORKs or CalFresh to provide certain information to applicants and recipients, as specified, and prohibits counties from requiring applicants or recipients to submit hard-copy documentation that is duplicative of the information verified using the credit report. Specifically, this bill:

1. Requires a county to do all of the following if that county’s human services agency uses information from consumer credit reports to determine eligibility for, and benefit level of, CalFresh or CalWORKs assistance:
   1. Obtain written authorization from an applicant or recipient before obtaining the credit report.
   2. Provide a recipient, in writing and in accordance with federal law, if the county determines that recipient is ineligible or will have benefits or services reduced for CalFresh or CalWORKs, with a federally required notice indicating that verification or eligibility determination was based in whole or in part upon the information contained in the consumer credit report.
   3. Make the information available to an applicant or recipient who requests a copy of his or her case file, or who appeals a negative action based in whole or in part on information the county obtained from the consumer credit report.
2. Specifies that the written authorization and notice required by this bill may be provided through electronic means.
3. Prohibits a county, if its county human services agency elects to use information contained in a consumer credit report for the determination of benefit level, from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information verified using the credit report.

FISCAL EFFECT:

Negligible state fiscal impact. The Department of Social Services recently issued an all-county letter specifying county notification requirements relative to this issue.

COMMENTS:

1. Purpose. According to the author, “This bill will facilitate eligibility and enrollment in the CalFresh and CalWORKs Program for California’s families by streamlining the application process. According to the Public Policy Institute of California, 78% of poor families in California are working families. For these families, support programs like CalFresh and CalWORKs can help prevent the indignity of hunger in meeting basic needs. Low wage workers face significant barriers to participation in the CalFresh Program. Few have paid time off or reliable transportation to get to the county welfare department for the application process. [This bill] will prohibit county agencies that use electronic databases to administer the CalFresh and CalWORKs programs from requiring applicants to submit hard copy documentation that is duplicative of information obtained from the database. It also will require notice to recipients about their federal right to receive free employment data reports and to correct inaccurate information in employment and income verification databases. It also will empower low-income Californians to correct errors in their consumer reports.”
2. Background. County welfare departments must obtain certain employment and income information from applicants for, and recipients of, CalFresh and CalWORKs. In some cases, government-administered databases and consumer reports can be used in this process, while other situations can still warrant the submission of hard-copy materials. In January of this year, DSS entered into an agreement through September 2017 with Equifax/TALX Corporation to provide an online employment and wage verification service called The Work Number (WN) through the department at no cost to participating counties. Counties can elect, but are not required, to participate.

DSS reports that 30 counties are currently using WN, and another 9 are completing Memoranda of Understanding to participate. Across the 30 counties currently participating, in the month of May, over 23,000 verifications were ordered.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: June 28, 2016

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Susan Bonilla, Chair

SBPCA Bill Id:SB 1232

Author:(Leno) – As Amended Ver:May 31, 2016

SENATE VOTE: 39-0

SUBJECT: CalWORKs and CalFresh: eligibility determinations

SUMMARY: Requires counties that use information contained in consumer credit reports to determine eligibility or benefit amounts for CalWORKs or CalFresh to provide certain information to applicants and recipients, as specified, and prohibits counties from requiring applicants or recipients to submit hard-copy documentation that is duplicative of the information verified using the credit report.

Specifically, this bill:

1. States Legislative intent to support an increase in CalFresh benefits for low-income working families by simplifying and adding transparency to the verification of wages and to educate applicants for and recipients of aid about their federal rights related to consumer credit reports, as specified.
2. Requires a county to do all of the following if that county’s human services agency uses information from consumer credit reports to determine eligibility for, and benefit level of, CalFresh or CalWORKs assistance:
   1. Receive written authorization from an applicant or recipient before obtaining the credit report;
   2. Provide a recipient, in writing and in accordance with federal law as specified, if the county determines that recipient to be ineligible or have benefits or services reduced for CalFresh or CalWORKs, with a federally required notice, as specified, indicating that verification or eligibility determination was based in whole or in part upon the information contained in the consumer credit report; and
   3. Make the information available to an applicant or recipient who requests a copy of his or her case file or appeals a negative action based in whole or in part on information the county obtained from the consumer credit report.
3. Specifies that the written authorization and notice required by this bill may be provided through electronic means.
4. Prohibits a county, if its county human services agency elects to use information contained in a consumer credit report for the determination of benefit level, from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information verified using the credit report.
5. States that nothing in this bill shall preclude the use of other forms of verification or prohibit the county from requesting additional documentation when the county establishes, in writing, that the information it has already received is questionable.

EXISTING LAW:

1. Establishes under federal law the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families and, in California, provides that TANF funds for welfare-to-work services are administered through the CalWORKs program. (42 U.S.C. 601 et seq., WIC 11200 et seq.)
2. Establishes income, asset and real property limits used to determine eligibility for the program, including net income below the Maximum Aid Payment (MAP), based on family size and county of residence, which is around 40% of the Federal Poverty Level. (WIC 11150 to 11160, 11450 et seq.)
3. Establishes a 48-month lifetime limit of CalWORKs benefits for eligible adults, including 24 months during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85)
4. Requires all individuals over 16 years of age, unless they are otherwise exempt, to participate in welfare-to-work activities as a condition of eligibility for CalWORKs. (WIC 11320.3, 11322.6)
5. Establishes the number of weekly hours of welfare-to-work participation necessary to remain eligible for aid, including requirements for an unemployed parent in a two-parent assistance unit, as specified. (WIC 11322.8)
6. Establishes in federal law the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, to permit low-income households to obtain a more nutritious diet by increasing food purchasing power for all eligible households. (7 USC § 2011 et seq.)
7. Establishes, in state law, the CalFresh program to administer the provision of federal SNAP benefits to low-income families and individuals meeting specified criteria. (WIC 18900 et seq.)
8. Describes, in federal law, the duties of users taking adverse actions on the basis of information contained in consumer reports. (15 U.S.C. § 1681m, 615)

FISCAL EFFECT: According to the Senate Appropriations Committee May 27, 2016, analysis, this bill may result in the following costs:

1. Notification requirements: Potential minor increase in ongoing county eligibility worker costs (Local Funds/General Fund/Federal Funds) for notification activities, as the Department of Social Services recently issued an all-county letter specifying county notification requirements relative to this issue.
2. CalWORKs/CalFresh/CFAP benefits and administration: Potential increase in CalWORKs and CalFresh benefits (Federal Fund/General Fund/Local Funds) to the extent the mandated authorization and notification requirements result in increases in program enrollment and eligibility. While prohibiting counties from requiring hard-copy documentation that is duplicative of information it will verify using the credit report is intended to streamline the eligibility process, to the extent a county must request other forms of verification or documentation due to the prohibition could alternatively delay the eligibility and enrollment process.

COMMENTS:

CalWORKs: The CalWORKs program provides monthly income assistance and employment-related services aimed at moving children out of poverty and helping families meet basic needs. Federal funding for CalWORKs comes from the TANF block grant. The average 2016-17 monthly cash grant for a family of three on CalWORKs (one parent and two children) is $497.35, and the maximum monthly grant amount for a family of three, if the family has no other income and lives in a high-cost county, is $704. According to recent data from the California Department of Social Services (DSS), around 497,000 families rely on CalWORKs, including over one million children. Nearly 60% of cases include children under 6 years old.

Maximum grant amounts in high-cost counties of $704 per month for a family of three, with no other income, means $23.46 per day, per family, or $7.82 per family member, per day to meet basic needs, including rent, clothing, utility bills, food, and anything else a family needs to ensure children can be cared for at home and safely remain with their families. This grant amount puts the annual household income at $8,448 per year, or 42% of poverty. Federal Poverty Guidelines for 2016 show that 100% of poverty for a family of three is $20,160 per year.

CalFresh: CalFresh benefits are funded entirely by the federal government through the Supplemental Nutrition Assistance Program (SNAP), and the United States Department of Agriculture (USDA) sets specific eligibility requirements for SNAP programs across the United States, including a gross and net income test, work requirements, and other documentation requirements. The maximum allowable gross income is typically 200% of the Federal Poverty Level (FPL). Households with elderly or disabled members are not subject to gross income criteria but must have a net monthly income at or below 100% of the FPL. Other households must meet both gross and net monthly income tests. CalFresh is administered locally by county human services agencies, and the federal, state, and county governments share in the cost of administration of the program.

Benefits are made available on a monthly basis for food purchase through an ATM-like electronic benefits transfer (EBT) card. However, unlike other types of benefits that may be accessed through an EBT card, CalFresh benefits cannot be withdrawn in cash at point-of-sale terminals or at ATM machines. CalFresh benefits can only be used to purchase food items to be prepared and consumed at home, as well as seeds and plants that can be grown at home and produce food. The average monthly benefit for a CalFresh recipient is $144.35 per month, or $4.81 per person per day.

Verification of income and employment using The Work Number: County welfare departments must obtain certain employment and income information from applicants for, and recipients of, CalFresh and CalWORKs. In some cases, government-administered databases and consumer reports can be used in this process, while other situations can still warrant the submission of hard-copy materials. In January of this year, DSS entered into an agreement through September 2017 with Equifax/TALX Corporation to provide an online employment and wage verification service called The Work Number (WN) through the department at no cost to participating counties. Counties can elect, but are not required, to participate.

DSS reports that 30 counties are currently using WN, and another 9 are completing Memoranda of Understanding to participate. Across the 30 counties currently participating, in the month of May, over 23,000 verifications were ordered.

Need for this bill: According to the author:

“This bill will facilitate eligibility and enrollment in the CalFresh and CalWORKs Program for California’s families by streamlining the application process. According to the Public Policy Institute of California, 78% of poor families in California are working families. For these families, support programs like CalFresh and CalWORKs can help prevent the indignity of hunger in meeting basic needs. Low wage workers face significant barriers to participation in the CalFresh Program. Few have paid time off or reliable transportation to get to the county welfare department for the application process. [This bill] will prohibit county agencies that use electronic databases to administer the CalFresh and CalWORKs programs from requiring applicants to submit hard copy documentation that is duplicative of information obtained from the database. It also will require notice to recipients about their federal right to receive free employment data reports and to correct inaccurate information in employment and income verification databases. It also will empower low-income Californians to correct errors in their consumer reports.”

Recommended amendments: In order to clarify that certain provisions of this bill apply to applicants as well recipients and to make clear that counties must provide specified required information in the event of an adverse action only when the determination behind that action was based in whole or part from information contained in a credit report, committee staff recommends the following amendments beginning on line 12 of page 2 of the bill:

12

11023.   (a) If a county human services agency elects to use

13

information contained in a consumer credit report for the

14

determination of CalFresh or CalWORKs eligibility or benefit

15

level, the county shall obtain written authorization from an applicant or recipient prior to obtaining the credit report. do all of the following:

16

(1) Obtain written authorization from an applicant or recipient

17

prior to obtaining the credit report.

18

(2) (b) Provide If the a county takes an adverse action against an applicant or a

19

recipient, the determination of which was based in whole or part upon information contained in the consumer credit report, the county shall do all of the following:

1. p Provide the applicant or applicant or recipient with the notice required

P3    1

by Section 615 of the federal Fair Credit Reporting Act (15 U.S.C.

2

Sec. 1681m), indicating that the verification or eligibility

3

determination was based, in whole or in part, upon the information

4

contained in the consumer credit report. For purposes of this

5

paragraph, subdivision, an “adverse action” means a determination of

6

ineligibility for CalFresh or CalWORKs or a reduction in benefits

7

or services.

8

(3) (2) Issue the notice required by paragraph (2) (1) in writing and in

9

accordance with the standards for adequate notice established in

10

federal law.

11

(4) Issue the notice required by paragraph (2) before taking any

12

adverse action, including a denial of CalFresh eligibility or

13

CalWORKs benefits or services, against the applicant or recipient.

14

(5)

15

(4) (3) Make the information available to an applicant or recipient

16

who requests a copy of his or her case file or appeals a negative

17

action based in whole or in part on information the county obtained

18

from the consumer credit report.

19

(b) (c) The written authorization and notice required by this section

20

may be provided by electronic means.

21

(c) (d) If the county human services agency elects to use information

22

contained in a consumer credit report for the determination of

23

benefit level, the county shall not require the applicant or recipient

24

to submit hard-copy documentation that is duplicative of the

25

information it will verify using the credit report.

26

(d) (e) Nothing in this section precludes the use of other forms of

27

verification or prohibits the county from requesting additional

28

documentation when the county establishes, in writing, that the

29

information it has already received is questionable.

REGISTERED SUPPORT / OPPOSITION:

Support

Western Center on Law and Poverty –sponsor

California Association of Food Banks

California Catholic Conference

Children’s Defense Fund

Community Action Partnership of Orange County

St. Anthony Foundation

Food Bank of Contra Costa and Solano

United Ways of California

Opposition

None on file.

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089

 THIRD READING  

Bill No: SB 1232

Author:

: 5/31/16

Vote:

SENATE HUMAN SERVICES COMMITTEE: 4-0, 3/29/16

AYES: McGuire, Hancock, Liu, Nguyen

NO VOTE RECORDED: Berryhill

SENATE JUDICIARY COMMITTEE: 6-0, 4/12/16

AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski

NO VOTE RECORDED: Anderson

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

SUBJECT:

SOURCE: Western Center on Law and Poverty

DIGEST: This bill requires a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to obtain written authorization from the applicant or recipient prior to obtaining the credit report and to provide the recipient with a specified notice. This bill prohibits county human services agencies from requiring CalFresh or CalWORKs applicants or recipients to provide hard-copy documentation that is duplicative of the information obtained from the credit reporting agency.

ANALYSIS:

Existing federal law:

1. Establishes the Fair Consumer Reporting Act (FCRA), which provides procedures for accuracy and fairness of credit reporting. Among other things, FCRA mandates consumer notification of adverse action taken based on information contained in a consumer credit report and establishes rights for consumers to correct information that is reported incorrectly. (15 U.S.C. Sec. 1681 et seq.)
2. Establishes the Supplemental Nutrition Assistance Program (SNAP) within the U.S. Department of Agriculture (USDA) to promote the general welfare and to safeguard the health and wellbeing of the nation’s population by raising the levels of nutrition among low-income households. It establishes SNAP eligibility requirements, as specified. (7 CFR 271.1; 7 CFR 273.9)
3. Establishes the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families and, in California, provides that TANF funds for welfare-to-work services are administered through the CalWORKs program. (42 U.S.C. 601 et seq., WIC 11200 et seq.)

Existing state law:

1. Establishes income, asset and real property limits used to determine eligibility for the program based on family size and county of residence. (WIC 11450, 11150 et seq.)
2. Establishes a 48-month lifetime limit of CalWORKs benefits for eligible adults, including 24 months during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85)
3. Specifies a weekly number of hours required of welfare-to-work participation for adults to remain eligible for CalWORKs benefits, including for those households with “unemployed parents.” (WIC 11322.8)
4. Establishes in California statute the CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting specified criteria. (WIC 18900 et seq.)

This bill:

1. Establishes legislative intent to support an increase in CalFresh benefits for low-income working families by simplifying and adding transparency to the verification of wages. It also states legislative intent to educate applicants and recipients of aid of their federal rights to receive a free report and to correct errors in a report issued by federally regulated consumer reporting agencies when the services of those agencies are used by the state or county to determine CalFresh or CalWORKs eligibility or benefit level.
2. Requires a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to do all of the following:
3. Obtain written authorization from an applicant or recipient prior to obtaining the credit report.
4. If the county takes an adverse action against the recipient, provide the recipient with federally mandated notice indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report. Defines “adverse action” as determination of ineligibility for CalFresh or CalWORKs or a reduction in benefits or services.
5. Issue the notice in writing and in accordance with the standards for adequate notice established in federal law.
6. Make the information available to a recipient who requests a copy of his or her case file or appeals a negative action based in whole or in part on the information the county obtained from the consumer credit report.
7. Permits the written authorization and notice required to be provided by electronic means.
8. Prohibits a county human services agency that elects to use information contained in a consumer credit report for the determination of benefit level from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.
9. Requires that nothing in the bill precludes the use of other forms of verification or prohibits the county from requesting additional documentation when the county establishes, in writing, that the information it has already received is questionable.

Background

According to the author, this bill will facilitate eligibility and enrollment in the CalFresh and CalWORKs programs by streamlining the application process. For some families, support programs like CalFresh and CalWORKs can help prevent the indignity of hunger in meeting basic needs. The author states that low-wage workers face significant barriers to participation in CalFresh program. Few have paid time off or reliable transportation to get to the county welfare department for the application process.

By prohibiting county agencies that use electronic databases to administer the CalFresh and CalWORKs programs from requiring applicants to submit hard copy documentation that is duplicative of information obtained from the database, SB 1232 reduces potential for multiple visits to the county offices, according to the author. SB 1232 also will require notice to recipients about their federal right to receive free employment data reports and to correct inaccurate information in employment and income verification databases. Additionally, this bill will empower low-income Californians to correct errors in their consumer reports, the author states.

The author also states that SB 1232 does not reinforce, require or encourage the use of a particular consumer credit reporting agency database. This bill does, however, establish that if such a database is used to evaluate an application for CalFresh or CalWORKs benefits, the applicant must also benefit from the information in the database and must be protected under federal consumer law.

CalWORKs

CalWORKs provides temporary cash assistance to meet basic family needs. It also provides education, employment and training programs. The CalWORKs program is funded with a mix of federal TANF money, state, and county funds. The Department of Social Services (CDSS) is the designated state agency responsible for program supervision at the state level. The counties are responsible for administering the caseloads at the local level.

In order to be eligible for CalWORKs, families must meet income and asset tests, as specified. In addition, children must be deprived of parental support and care due to the incapacity, death or absence of apparent or unemployment of the principal wage-earner. Persons fleeing to avoid prosecution, custody or confinement after conviction of a felony are not eligible for CalWORKs.

State law provides for a cumulative 48-month lifetime limit on cash aid for adults. During those 48 months, adults may receive a total of 24 months of Welfare-to-Work (WTW) services and activities. WTW activities include subsidized and unsubsidized employment, community service, adult basic education, job skills, training, mental health counseling, substance abuse treatment and other activities necessary to assist recipients in obtaining employment. Once the 24 months of WTW activities have been exhausted, adults must meet the stricter federal work participation requirements (20, 30, or 35 hours weekly, depending on family composition) unless they are exempt or receive an extension. Children of adults who exhaust the 48-month lifetime limit may continue to receive cash aid, if otherwise eligible, up to age 18.

CalFresh

CalFresh, California’s version of the federal SNAP program provides monthly benefits to assist low-income households in purchasing food or food products intended for human consumption. CDSS administers CalFresh at the state level and California’s 58 counties are responsible for administering the program at the local level. CalFresh benefits are 100% federally funded and national eligibility standards and benefit levels are established by the United States Congress.

To qualify for SNAP benefits, some households must meet specified work requirements. SNAP requires all recipients, unless exempted by law, to register for work at the appropriate employment office; participate in an employment and training program, if assigned by a state or local administering agency; and accept an offer of suitable employment. To participate in CalFresh, households must meet certain income-eligibility standards.

The average monthly benefit for a CalFresh recipient in federal fiscal year 2016 was $125.78 per month, or $4.19 per day, according to the USDA. CalFresh supplements family food budgets by providing an average of $300 a month per household.

Employment and Income Verification

One of the measures for assessing eligibility for CalFresh and CalWORKs is the income and employment history of the applicant. While some counties still require hard copy evidence of work histories (such as paystubs or tax forms), many counties have turned to electronic databases maintained by credit reporting agencies to complete the assessment.

On January 13, 2016, CDSS issued an All County Welfare Director Letter to advise the counties of their option to participate in a statewide agreement with a credit reporting agency to provide online employment and wage verification services. Under the agreement, all 58 counties in California can access information in the database from January 1, 2016 through September 30, 2017, at no cost to the counties.

On May 12, 2016, CDSS issued All County Letter (ACL) #16-43, which provides additional guidance to the counties regarding the use of a credit reporting agency to determine eligibility for CalWORKs and CalFresh benefits. This ACL contains some, but not all of the provisions in SB 1232, including requiring prior authorization for use of a credit report and prior notice of adverse action. The ACL requires counties to issue a10-day notice prior to adverse action. According to the sponsor, past communication from CDSS regarding mandatory reports for adverse actions have been clear regarding the denial of employment or credit, but they do not address denial of public benefits. SB 1232 provides specificity by defining “adverse action” against a recipient to include determination of ineligibility for CalFresh or CalWORKs benefits or reduction in benefits or services. Additionally, CDSS’s ACLs are instructions for the counties, and those instructions are not codified or enforceable.

Prior Legislation

SB 672 (Leno, Chapter 568, Statutes of 2013) included a provision similar to what is proposed in SB 1232. While SB 672 was enacted, the provision related to streamlining CalFresh enrollment was removed from the bill.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

Notification requirements: Potential minor increase in ongoing county eligibility worker costs (Local Funds/General Fund/Federal Funds) for notification activities, as the Department of Social Services recently issued an all-county letter specifying county notification requirements relative to this issue.

CalWORKs/CalFresh/CFAP benefits and administration: Potential increase in CalWORKs and CalFresh benefits (Federal Fund/General Fund/Local Funds) to the extent the mandated authorization and notification requirements result in increases in program enrollment and eligibility. While prohibiting counties from requiring hard-copy documentation that is duplicative of information it will verify using the credit report is intended to streamline the eligibility process, to the extent a county must request other forms of verification or documentation due to the prohibition could alternatively delay the eligibility and enrollment process.

SUPPORT: (Verified 5/31/16)

Western Center on Law and Poverty (source)

California Alternative Payment Program Association

California Association of Food Banks

California Catholic Conference

California Food Policy Advocates

Courage Campaign

Feeding America San Diego

Food Bank of Contra Costa and Solano

National Consumer Law Center

St. Anthony’s Foundation

OPPOSITION: (Verified 5/31/16)

None received

Prepared by:

5/31/16 22:23:52

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1232 (Leno) - CalWORKs and CalFresh: eligibility determinations

Bill Summary:

SB 1232 would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level, to obtain written authorization from an applicant or recipient prior to obtaining the credit report, and to provide the applicant or recipient with notice, as specified, prior to taking any adverse action, including a denial of CalFresh eligibility or CalWORKs benefits or services, against the applicant or recipient.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 27, 2016

Fiscal Impact:

• Notification requirements: Potential minor increase in ongoing county eligibility worker costs (Local Funds/General Fund/Federal Funds*) for notification activities, as the Department of Social Services recently issued an all-county letter specifying county notification requirements relative to this issue.
• CalWORKs/CalFresh/CFAP benefits and administration: Potential increase in CalWORKs and CalFresh benefits (Federal Fund/General Fund/Local Funds*) to the extent the mandated authorization and notification requirements result in increases in program enrollment and eligibility. While prohibiting counties from requiring hard-copy documentation that is duplicative of information it will verify using the credit report is intended to streamline the eligibility process, to the extent a county must request other forms of verification or documentation due to the prohibition could alternatively delay the eligibility and enrollment process.

*CalWORKs program costs are funded with a combination of federal TANF, General Fund, and county funds. CalFresh benefits are funded with 100 percent federal funds. CalFresh administrative costs are funded with a combination of federal, state, and county funds. California Food Assistance Program (CFAP) costs are 100 percent General Fund.

Author Amendments:

Revise the noticing requirement to occur after adverse action has been taken, consistent with the requirement under federal law, and additionally strike the noticing requirements on applicants.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1232 (Leno) - CalWORKs and CalFresh: eligibility determinations

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 1232 would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level, to obtain written authorization from an applicant or recipient prior to obtaining the credit report, and to provide the applicant or recipient with notice, as specified, prior to taking any adverse action, including a denial of CalFresh eligibility or CalWORKs benefits or services, against the applicant or recipient.

Fiscal Impact:

• Notification requirements: Potentially significant increase in ongoing county eligibility worker costs (Local Funds/General Fund/Federal Funds*) for notification activities, some of which may exceed the requirements under federal law. Pursuant to 15 U.S.C. 1681m, prior notification of adverse action is not required, but rather upon the adverse action being taken. Additionally, notice of adverse action under specified circumstances may be provided in writing, orally, or electronically.
• Notification to applicants prior to denial: Potentially major ongoing county eligibility worker costs (Local Funds/General Fund/Federal Funds*) to implement the process of notification to CalFresh and CalWORKs applicants prior to taking any adverse action, including a denial of eligibility. Based on the most recent 12 months of data available for 2015, over 745,000 applications for CalWORKs and CalFresh were denied. Assuming even a few minutes are required to issue a notice would cost in the low millions of dollars annually. Staff notes the noticing of applicants for whom no case file exists could potentially require much more time, if even possible, to accomplish.
• CalWORKs/CalFresh/CFAP benefits and administration: Potentially major increase in CalWORKs and CalFresh benefits (Federal Fund/General Fund/Local Funds*) to the extent the mandated authorization and notification requirements result in increases in program enrollment and eligibility. While prohibiting counties from requiring hard-copy documentation that is duplicative of information it will verify using the credit report is intended to streamline the eligibility process, to the extent a county must request other forms of verification or documentation due to the prohibition could alternatively delay the eligibility and enrollment process.
• Overpayments/underpayments: Unknown, potentially significant increases or decreases in county human services agency administrative workload to process, track, and follow-up on a greater or lesser number of benefits overpayments and/or underpayments resulting from the notification requirements of this measure.

*CalWORKs program costs are funded with a combination of federal TANF, General Fund, and county funds. CalFresh benefits are funded with 100 percent federal funds. CalFresh administrative costs are funded with a combination of federal, state, and county funds. California Food Assistance Program (CFAP) costs are 100 percent General Fund.

Background:

Existing federal law establishes the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families and, in California, provides that TANF funds for welfare-to-work services are administered through the California Work Opportunity and Responsibility to Kids (CalWORKs) program. (42 U.S.C. 601 et seq., WIC § 11200 et seq.)

Existing federal law establishes the Supplemental Nutrition Assistance Program (SNAP) to promote the general welfare, health, and wellbeing of the nation’s population by raising the levels of nutrition among low-income households. It establishes SNAP eligibility requirements, including income that is at or below 130 percent of the federal poverty level and is determined to be a substantial limiting factor in permitting a recipient to obtain a more nutritious diet. (7 CFR 271.1; 7 CFR 273.9.) In California, federal SNAP benefits are provided through the CalFresh program to families and individuals meeting specified criteria. (WIC § 18900 et seq.)

The determination of eligibility for the CalFresh and CalWORKs programs includes an assessment of the income and employment history of the applicant. While some county human services agencies require hard copy documentation to verify income that may include employment paystubs or tax returns, numerous county human service agencies have chosen to utilize electronic databases maintained by credit reporting agencies to provide online employment and wage verification to complete the eligibility assessment.

As described in the Senate Human Services Committee analysis of this measure,

“On August 12, 2014, the department [Department of Social Services] issued an All County Information Notice (#41-14) to advise county human services agencies of a 90-day pilot program from October 1, 2014, through December 31, 2014, during which participating counties could access data provided by a specified consumer credit reporting agency. The usage and efficacy of the credit reporting agency service would be evaluated to determine whether or not to pursue a long-term statewide agreement.

On January 13, 2016, the department issued an All County Welfare Directors Letter to advise the counties of their option to participate in a statewide agreement with the same credit reporting agency to provide online employment and wage verification services.

Under the agreement, all 58 counties can access information in the database from January 1, 2016, through September 30, 2017, at no cost to the counties. According to the department, 29 counties currently take advantage of the agreement. The remaining 19 counties either contract directly with a credit reporting agency that provides employment and wage verification services or do not use one at all. The department reports that counties that use a credit reporting agency to verify employment and earnings do not require applicants to submit hard copies of documents to verify the same information. Those that don’t use a credit reporting agency require applicants to submit hard copies of all documents.

While some counties are operating under the department’s statewide agreement with a credit reporting agency, the department has not yet issued specific instructions on how the counties may use the credit reporting database. Those instructions are forthcoming and, while the instructions may include some of the provisions of this bill, it should not be presumed the All County Letter will cover all of the bill language. Additionally, the department’s All County Letters are instructions for the counties, and those instructions are not codified or enforceable.”

This bill seeks to simplify and add transparency to the process of verification of wages of applicants and recipients of CalWORKs and CalFresh.

Proposed Law:

This bill would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to do all of the following:

• Obtain written authorization from an applicant or recipient prior to obtaining the credit report.
• Provide the applicant or recipient with the notice required by Section 615 of the Fair Credit Reporting Act (15 U.S.C. Sec. 1681m), indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report.
• Issue the notice in writing and in accordance with the standards established in federal law.
• Issue the notice before taking any adverse action, including a denial of CalFresh eligibility or CalWORKs benefits or services, against the applicant or recipient.

This bill provides that the written authorization and notice required by this section may be provided by electronic means.

This bill would prohibit a county human services agency that elects to use information contained in a consumer credit report from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information contained in the credit report.

This bill would clarify that county human service agencies are free to use other forms of verification and would allow the county to request additional documentation when the county establishes, in writing, that the information it received is questionable.

This bill would state the legislative intent to support an increase in CalFresh benefits for low-income working families by simplifying and adding transparency to the verification of wages, and to educate applicants and recipients of aid of their federal rights to receive a free report and to correct errors in a report issued by federally regulated consumer reporting agency.

Prior Legislation:

SB 672 (Leno) Chapter 568/2013 originally included a provision similar to the concept of this bill that was amended out of the bill prior to its enactment.

Staff Comments:

This bill mandates specified activities a county human services agency must complete during the process of eligibility assessment of both applicants and recipients of CalWORKs and CalFresh, which will result in potentially significant increases in workload for county human services eligibility workers as described in the Fiscal Impact section of this analysis.

Staff notes the notification requirements specified in this bill may exceed the provisions under federal law to the extent such notice is required for actions taken regarding eligibility for CalWORKs and CalFresh benefits, whether using information directly from credit reports or based on information from third parties. Under federal law, the FCRA outlines requirements for both users of information taken directly from consumer credit reports, as well as requirements for actions taken based on information obtained from third parties other than consumer reporting agencies:

Duties of users taking adverse actions on basis of information contained in consumer reports.

If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall:

(1) Provide oral, written, or electronic notice of the adverse action to the consumer.

(2) Provide to the consumer written or electronic disclosure of a numerical credit score, as defined, used by such person in taking any adverse action based in whole or in part on any information in a consumer report.

(3) Provide to the consumer orally, in writing, or electronically the name, address, and telephone number of the consumer reporting agency that furnished the report to the person; and a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken.

(4) Provide to the consumer an oral, written, or electronic notice of the consumer’s right to obtain a free copy of a consumer report on the consumer from the consumer reporting agency which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and to dispute with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

Adverse action based on information obtained from third parties other than consumer reporting agencies

(1) Whenever credit for personal, family, or household purposes involving a consumer is denied or the charge for such credit is increased either wholly or partly because of information obtained from a person other than a consumer reporting agency bearing upon the consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, the user of such information shall, within a reasonable period of time, upon the consumer’s written request for the reasons for such adverse action received within sixty days after learning of such adverse action, disclose the nature of the information to the consumer. The user of such information shall clearly and accurately disclose to the consumer his right to make such written request at the time such adverse action is communicated to the consumer.

(2) Duties of person taking certain actions based on information provided by affiliate: If a person takes an action with respect to a consumer, based in whole or in part on information in a credit report, the person shall notify the consumer of the action, as specified, and upon a written request from the consumer received within 60 days after transmittal of the notice required, disclose to the consumer the nature of the information upon which the action is based by not later than 30 days after receipt of the request.

Recommended Amendments:

To reduce the potential costs of this bill, staff recommends amendments to delete the references to “applicants” in the bill in paragraphs (2) and (4) of WIC § 11023(a).

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: SB 1232 (Author:Leno)

Version: March 28, 2016

Hearing Date: April 12, 2016

Fiscal: Yes

Urgency: No

Consultant: NR

SUBJECT

CalWORKs and CalFresh: eligibility determinations

DESCRIPTION

This bill would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level, to provide the applicant or recipient with notice indicating that the verification or eligibility determination was based upon information contained in the report. This bill would prohibit a county human services agency from requiring CalFresh or CalWORKs applicants or recipients to provide hard-copy documentation that is duplicative of the information obtained from the credit reporting agency.

BACKGROUND

According to research by the Public Policy Institute of California, over 20 percent of children in California did not have enough resources to make ends meet in 2014. Two of the largest social safety net programs supporting these families are California’s food stamps program (CalFresh), and cash assistance for families with children (CalWORKs). Out of all the state’s programs, CalFresh lowered California’s child poverty rate by the largest amount, followed by the Earned Income Tax Credit, and the federal Child Tax Credit. CalWORKs, housing subsidies, and school meals all lowered the child poverty rate by about 2 points as well. (Public Policy Institute of California, Just the Facts: Child Poverty in California, <http://www.ppic.org/main/publication_show.asp?i=721> [as of 4/1/2016].)

However, despite the importance of CalFresh in reducing hunger among families with low incomes, only roughly half of eligible Californians participate. Advocates for low-income Californians argue that the participation rate is low because, at least in part, because CalFresh applications are difficult for low-wage workers, who generally do not get paid time off from work and may not have reliable transportation, to submit. Advocates also argue that these applications have traditionally been difficult for counties to process, resulting in counties turning to more modern practices and procedures to streamline and improve their verification processes. Specifically, many state and county agencies now use reports from electronic databases, or consumer credit reports, to verify information about employment for public benefit applicants and recipients. A significant benefit of electronic income verification for applicants is real-time processing and approval of their eligibility for the program. This bill, seeking to simplify the application process and further support low-income families in California, would prohibit counties from requiring hard-copy information that is duplicative of the information contained in a consumer credit report, and would require that the county provide notice to applicants that such a report was used in determining the applicant’s eligibility. This bill would also require that the applicant receive the above notice prior to the county taking any adverse action against the applicant.

CHANGES TO EXISTING LAW

Existing federal law establishes the Supplemental Nutrition Assistance Program (SNAP) within the U.S. Department of Agriculture to safeguard the health and wellbeing of the nation’s population by raising the levels of nutrition among low-income households. (7 C.F.R. 271.1; C.F.R. 273.9.)

Existing federal law establishes the Fair Consumer Reporting Act (FCRA), which provides procedures for accuracy and fairness of credit reporting and mandates consumer notification prior to the taking of any adverse action based on information contained in a consumer credit report. (15 U.S.C. Sec. 1681 et seq.)

Existing law establishes in federal statute the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families and, in California, provides that TANF funds for welfare-to-work services are administered through the California Work Opportunity and Responsibility to Kids (CalWORKs) program. (42 U.S.C. 601 et seq.; Welf. & Inst. Sec. 11200 et seq.)

Existing law establishes California’s CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting specified criteria. (Welf. & Inst. Code Sec. 18900 et seq.)

This bill would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to do all of the following:

• obtain written authorization from an applicant or recipient prior to obtaining the credit report;
• provide the applicant or recipient with the notice required by Section 615 of the FCRA (U.S.C. Sec 1681(m)), indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report;
• issue the notice in writing and in accordance with the standards established in federal law; and
• issue the notice before taking any adverse action against the applicant or recipient.

This bill would prohibit a county human services agency that elects to use information contained in a consumer credit report from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information contained in the credit report.

This bill would clarify that county human service agencies are free to use other forms of verification and would allow the county to request additional documentation when the county establishes, in writing, that the information it received is questionable.

This bill would state the legislative intent to support an increase in CalFresh benefits for low-income working families by simplifying and adding transparency to the verification of wages, and to educate applicants and recipients of aid of their federal rights to receive a free report and to correct errors in a report issued by federally regulated consumer reporting agency.

COMMENT

1. Stated need for the bill

According to the author:

According to the Public Policy Institute of California, 78 percent of poor families in California are working families. For these families, support programs like CalFresh and Cal WORKs can help prevent the indignity of hunger in meeting basic needs. … According to the U.S. Department of Agriculture’s 2012 reporting, only 53 percent of eligible working families in California receive this federally funded food benefit. That’s one of the lowest participation rates in the nation. California is forgoing federal funds that could be nourishing our people and bolstering our neighborhood economies.

1. Would streamline the process for low-income families applying for benefits

This bill would prohibit the county from requiring applicants to submit hard-copy documentation of information that is duplicative of information contained in a consumer credit report. In the event that the county finds that the information provided in a consumer credit report is questionable, this bill would allow the county to request additional information from the applicant. Arguably, this will streamline the application process for families seeking Calfresh and CalWORKs benefits because they will not have to go through the onerous process of coordinating, printing, and delivering employment and income verification information, while still permitting the county to investigate an application further if the information produced by a consumer credit report seems untrustworthy. In support, California Alternative Payment Program Association (CAPPA) writes:

This legislation aims to facilitate the eligibility and enrollment in the CalFresh Program for California’s working families. Currently, the eligibility and enrollment process for this program is burdensome for welfare departments as well as on the families it purports to help by weighing the process down in paperwork and antiquated verification. California has vested monies into developing more efficient technologies that seamlessly process and can pull verification of populations from a variety of databases. Furthermore, these more efficient and electronic systems comply with existing federal and state laws allowing its existence. SB 1232 simply overlays technological opportunities on top of our existing bureaucratically burdensome process with an objective to better serve low wage workers and those needing food assistance.

However, because this bill would allow the county to use other forms of verification or request additional information when investigating a questionable consumer credit report, it is necessary to clarify that the ban on requiring duplicative information need only apply in the initial verification and eligibility process where a county utilizes consumer credit reports. The following amendment would ensure that the ban on duplicative hard-copy information is specific to that provision of the bill.

Author’s amendment:

Page 2, line 25, after “(b)” insert “If the county uses information contained in a consumer credit report,”

1. Would ensure that low-income families understand how to access important credit information

This bill would require, in accordance with the federal Fair Credit Reporting Act (FCRA), that applicants be notified, prior to the initiation of any adverse action, that the verification or eligibility determination was based on information contained in a consumer credit report. The FCRA, however, does not clearly define “adverse action,” for the purposes of CalFresh and CalWORKs and staff notes that while a reduction or elimination in benefits that a recipient was already receiving would clearly be an “adverse action,” it is not entirely clear that a denial of benefits would be, because the applicant had not been receiving the benefit already. It is clearly the intent of the author that a denial of benefits be included in the understanding of “adverse action,” which would be clarified by the following amendment.

Author’s amendment:

Page 3, line 18, after “action” insert “including a denial of CalFresh eligibility or CalWORKs benefit or services”

In support, the California Association of Food Banks writes, “while the Department’s regulations acknowledge rights of applicants and recipients to know when the information in the consumer report has been used to take negative action, the guidance isn’t clear when a recipient is to be noticed, doesn’t require that the notification meet the Federal Consumer Rights Act ‘model notice language,’ and hasn’t clarified whether or not that this notice should also comply with the rights for notices that already exist in the CalFresh notices. SB 1232 offers a win-win-win by improving accuracy in e-verification reports, protecting low-wage workers from inaccurate reports and by reducing paperwork for low-income working families when applying for federally funded benefits.”

Support: California Alternative Payment Program Association (CAPPA); California Association of Food Banks; California Catholic Conference; California Food Policy Advocates; Courage Campaign; Feeding America San Diego; Food Bank of Contra Costa and Solano; National Consumer Law Center; St. Anthony Foundation

Opposition: None known

HISTORY

Source: Western Center on Law and Poverty

Related Pending Legislation: None known

Prior Legislation: SB 672 (Leno, Ch. 568, Stats. 2013) originally included a provision similar to the concept of SB 1232 that was amended out of the bill prior to its enactment.

Prior Vote: Senate Human Services Committee (Ayes 4, Noes 0)

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SENATE COMMITTEE ON HUMAN SERVICES

Senator McGuire, Chair

2015 - 2016 Regular

Bill No: SB 1232

Subject: CalFresh: eligibility determinations

SUMMARY

This bill would require a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to provide the applicant or recipient with a specified notice indicating that the verification or eligibility determination was based upon the information contained in the consumer credit report. It would prohibit county human services agencies from requiring CalFresh or CalWORKs applicants or recipients to provide hard-copy documentation that is duplicative of the information obtained from the credit reporting agency.

ABSTRACT

Existing law:

1. Establishes in federal statute the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families and, in California, provides that TANF funds for welfare-to-work services are administered through the California Work Opportunity and Responsibility to Kids (CalWORKs) program. (42 U.S.C. 601 et seq., WIC 11200 et seq.)
2. Establishes income, asset and real property limits used to determine eligibility for the program, including net income below the Maximum Aid Payment (MAP), based on family size and county of residence. (WIC 11450, 11150 et seq.)
3. Establishes a 48-month lifetime limit of CalWORKs benefits for eligible adults, including 24 months during which a recipient must meet federal work requirements in order to retain eligibility. (WIC 11454, 11322.85)
4. Specifies a weekly number of hours required of welfare-to-work participation for adults to remain eligible for CalWORKs benefits, including for those households with “unemployed parents.” (WIC 11322.8)
5. Establishes under federal law the Supplemental Nutrition Assistance Program (SNAP) within the US Department of Agriculture (USDA) to promote the general welfare and to safeguard the health and wellbeing of the nation’s population by raising the levels of nutrition among low-income households. It establishes SNAP eligibility requirements, including income that is at or below 130 percent of the federal poverty level and is determined to be a substantial limiting factor in permitting a recipient to obtain a more nutritious diet (7 CFR 271.1; 7 CFR 273.9)
6. Establishes in California statute the CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting specified criteria. (WIC 18900 et seq.)
7. Establishes under federal law the Fair Consumer Reporting Act (FCRA), which provides procedures for accuracy and fairness of credit reporting. Among other things, FCRA mandates consumer notification of adverse action taken based on information contained in a consumer credit report and establishes rights for consumers to correct information that is reported incorrectly. (15 U.S.C. Sec. 1681 et seq.)

This bill:

1. Establishes legislative intent to support an increase in CalFresh benefits for low-income working families by simplifying and adding transparency to the verification of wages. It also states Legislative intent to educate applicants and recipients of aid of their federal rights to receive a free report and to correct errors in a report issued by federally regulated consumer reporting agencies when the services of those agencies are used by the state or county to determine CalFresh or CalWORKs eligibility or benefit level.
2. Requires a county human services agency that uses information contained in a consumer credit report for the determination of CalFresh or CalWORKs eligibility or benefit level to do all of the following:
   1. Obtain written authorization from an applicant or recipient prior to obtaining the credit report.
   2. Provide the applicant or recipient with the notice required by Section 615 of the FCRA (U.S.C. Sec 1681(m)), indicating that the verification or eligibility determination was based, in whole or in part, upon the information contained in the consumer credit report.
   3. Issue the notice in writing an in accordance with the standards established in federal law.
   4. Issue the notice before taking any adverse action against the applicant or recipient.
   5. Make the information available to an applicant or recipient who requests a copy of his or her case file or appeals a negative action based in whole or in part on the information the county obtained from the consumer credit report.
3. Permits the written authorization and notice required to be provided by electronic means.
4. Prohibits a county human services agency that elects to use information contained in a consumer credit report for the determination of benefit level from requiring the applicant or recipient to submit hard-copy documentation that is duplicative of the information it will verify using the credit report.

FISCAL IMPACT

This bill has not yet been analyzed by fiscal committee.

BACKGROUND AND DISCUSSION

Purpose of the bill:

According to the author, this bill will facilitate eligibility and enrollment in the CalFresh and CalWORKs programs by streamlining the application process. For these families, support programs like CalFresh and CalWORKs can help prevent the indignity of hunger in meeting basic needs. The author states that low-wage workers face significant barriers to participation in CalFresh program. Few have paid time off or reliable transportation to get to the county welfare department for the application process.

By prohibiting county agencies that use electronic databases to administer the CalFresh and CalWORKs programs from requiring applicants to submit hard copy documentation that is duplicative of information obtained from the database, SB 1232 would reduce potential for multiple visits to the county offices, according to the author. SB 1232 also will require notice to these applicants and recipients about their federal right to receive free employment data reports and to correct inaccurate information in employment and income verification databases. Additionally, the bill will empower low-income Californians to correct errors in their consumer reports, the author states.

The author also states that SB 1232 does not reinforce, require or encourage the use of a particular consumer credit reporting agency database. The bill does, however, establish that if such a database is used to evaluate an application for CalFresh or CalWORKs benefits, the applicant must also benefit from the information in the database and must be protected under federal consumer law.

CalWORKs

The CalWORKs program is funded with a mix of federal TANF money, state, and county funds.

CalWORKs provides temporary cash assistance to meet basic family needs. It also provides education, employment and training programs. CDSS is the designated state agency responsible for program supervision at the state level. The counties are responsible for administering the caseloads at the local level.

In order to be eligible for CalWORKs, families must meet income and asset tests of no more than $2,250 in savings ($3,250 where the assistance unit includes at least one member who is disabled or aged 60 or older), excluding education and retirement plans plus one car worth $9,500 or less or that was received as a gift or family transfer or donation. In addition, children must be deprived of parental support and care due to the incapacity, death or absence of apparent or unemployment of the principal wage-earner. Persons fleeing to avoid prosecution, custody or confinement after conviction of a felony are not eligible for CalWORKs.

State law provides for a cumulative 48-month lifetime limit on cash aid for adults. During those 48 months, adults may receive a total of 24 months of Welfare-to-Work (WTW) services and activities. WTW activities include subsidized and unsubsidized employment, community service, adult basic education, job skills, training, mental health counseling, substance abuse treatment and other activities necessary to assist recipients in obtaining employment. Once the 24 months of WTW activities have been exhausted, adults must meet the stricter federal work participation requirements (20, 30, or 35 hours weekly, depending on family composition) unless they are exempt or receive an extension. Children of adults who exhaust the 48-month lifetime limit may continue to receive cash aid, if otherwise eligible, up to age 18.

CalFresh

CalFresh, California’s version of the federal SNAP program provides monthly benefits to assist low-income households in purchasing food or food products intended for human consumption. CDSS administers CalFresh at the state level and California’s 58 counties are responsible for administering the program at the local level. CalFresh benefits are 100% federally funded and national eligibility standards and benefit levels are established by the United States Congress. To participate in CalFresh, households must meet certain income-eligibility standards.

The average monthly benefit for a CalFresh recipient in federal fiscal year 2015 was $126.83 per month, or $4.23 per day, according to the USDA. CalFresh supplements family food budgets by providing an average of $300 a month per household.

To qualify for SNAP benefits, some households must meet specified work requirements. SNAP requires all recipients, unless exempted by law, to register for work at the appropriate employment office; participate in an employment and training program, if assigned by a state or local administering agency; and accept an offer of suitable employment. SNAP beneficiaries do not have to work or participate in employment and training activities if they are under age 16 or over age 59, are physically or mentally unfit for employment, are caring for a child under the age of six (or 12, in some cases), already employed 30 hours a week, or, subject to and complying with work requirements for other programs, such as those required by CalWORKs, among other exemptions.

Households who receive or are eligible to receive cash assistance under CalWORKSs or General Assistance/General Relief programs are categorically eligible for CalFresh.

Poverty and Food Insecurity

California has the highest poverty rate in the nation – just under one-quarter of residents are living at or below the federal poverty level (FPL), or $20,160 per year for a family of three, according to the national Supplemental Poverty Measure. One of California’s most essential anti-poverty strategies is the CalWORKs program, which provided cash assistance to approximately 535,000 families in Fiscal Year 2014-15, including more than 1 million children. A grant to a family of three in a high-cost California county is $704 per month, or approximately 42 percent of the FPL.

Nationally, the USDA reported an estimated 14 percent of American households were food insecure at least some time during the year in 2014, meaning they lacked access to enough food for an active, healthy life for all household members. During the last decade, and especially during the Great Recession, the number of families experiencing food insecurity has increased. Since the Great Recession, according to researchers at the USDA, inflation has kept the number of families who are not able to afford sufficient food at approximately the same rate, even with an increase in employment nationwide.^[1]

According to data from the California Health Interview Survey (CHIS), at least 4 million low-income Californians struggled with food insecurity during 2011-12. A research brief published in 2012 by UCLA’s Center for Health Policy Research and the California Food Policy Advocates noted that in 2009, at the height the Recession, more than four in 10 Californian adults, roughly 3.8 million people, who were at or below 200 percent of the Federal Poverty Level suffered from food insecurity. Of those, more than one third – 1.4 million people – reported very low food security. This is defined as having to cut back on food. Nationally, about 5.7 percent of Americans suffered from very low food security.

CalFresh currently serves approximately 4.4 million people, according to USDA data. Nonetheless, California’s participation rate has been ranked last or near last in the country for years, prompting concerns from the USDA, stories in the state’s newspapers and two Legislative hearings in 2014.

In 2013, the year for which the most recent data is available, 66 percent of eligible Californians participated in SNAP. That year, California and Nevada tied for second-lowest participation rate in the country. Wyoming’s participation rates were the lowest at 57 percent. That rate compares to a national average of 85 percent. Furthermore, just 52 percent of California’s eligible working poor families received CalFresh benefits, the worst rate in the country, compared to a national average of 74 percent.^[2]

Employment and Income Verification

One of the measures for assessing eligibility for CalFresh and CalWORKs, is the income and employment history of the applicant. While some counties still require hard copy evidence of work histories (such as paystubs or tax forms), many counties have turned to electronic databases maintained by credit reporting agencies to complete the assessment.

On August 12, 2014, the department issued an All County Information Notice (#41-14)^[3] to advise county human services agencies of a 90-day pilot program from October 1, 2014 through December 31, 2014 during which participating counties could access data provided by a specified consumer credit reporting agency. The usage and efficacy of the credit reporting agency service would be evaluated to determine whether or not to pursue a long-term statewide agreement.

On January 13, 2016, the department issued an All County Welfare Director Letter^[4] to advise the counties of their option to participate in a statewide agreement with the same credit reporting agency to provide online employment and wage verification services. Under the agreement, all 58 counties in California can access information in the database from January 1, 2016 through September 30, 2017, at no cost to the counties.

According to the department, 29 counties currently take advantage of the agreement. The remaining 19 counties either contract directly with a credit reporting agency that provides employment and wage verification services or do not use one at all. The department reports that counties that use a credit reporting agency to verity employment and earnings do not require applicants to submit hard copies of documents to verify the same information. Those that don’t use a credit reporting agency require applicants to submit hard copies of all documents

While some counties are operating under the department’s statewide agreement with a credit reporting agency, the department has not yet issued specific instructions on how the counties may use the credit reporting database. Those instructions are forthcoming and, while the instructions may include some of the provisions of this bill, it should not be presumed the All County Letter will cover all of the bill language. Additionally, the department’s All county Letters are instructions for the counties, and those instructions are not codified or enforceable.

It is not clear if the federal Fair Consumer Reporting Act requires such notice for applicants and recipients of CalFresh and CalWORKs benefits. According to the sponsor, past communication from the department regarding mandatory reports for adverse actions have been clear regarding the denial of employment or credit, but they do not address about denial of public benefits.

Related legislation:

SB 672 (Leno, Chapter 568, Statutes of 2013) included a provision similar to what is proposed in SB 1232. While SB 672 was enacted, the provision related to streamlining CalFresh enrollment was removed from the bill.

POSITIONS

Support:

California Alternative Payment Program Association

California Association of Food Banks

California Food Policy Advocates

Courage Campaign

Feeding America San Diego

Food Bank of Contra Costa and Solano

National Consumer Law Center

St. Anthony’s Foundation

Oppose:

None received.

1. Nord, Mark, et al, “Prevalence of U.S. Food Insecurity Is Related to Changes in Unemployment, Inflation, and the Price of Food,” Economic Research Report No. (ERR-167) June 2014 ↑

2. USDA, “Reaching Those in Need: Estimates of State Supplemental Nutrition Assistance Program Participation Rates in 2013,” February 2016 ↑

3. http://www.cdss.ca.gov/lettersnotices/EntRes/getinfo/acin/2014/I-41_14.pdf ↑

4. http://www.cdss.ca.gov/lettersnotices/EntRes/getinfo/coletters/ACWDL1_13_16.PDF ↑