The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, generally regulates the disposal, management, and recycling of solid waste.

This bill would state the intent of the Legislature to enact legislation that would address the collapse of foreign recycling markets by reducing solid waste generation, encouraging transition to compostable or recyclable materials, and fostering domestic recycling markets.

Date of Hearing: August 18, 2020

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 33

Author:(Skinner) – As Amended Ver:August 4, 2020

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

SUMMARY:

This bill requires the California Department of Social Services (CDSS) to convene a workgroup to review online purchases using the electronic benefits transfer (EBT) system, and to submit a report with recommendations to the Legislature by December 1, 2021. Specifically, this bill:

1. Requires, no later than February 1, 2021, CDSS to convene a workgroup of interested stakeholders, as specified, to review online purchases using the EBT system and to make recommendations to CDSS ensure consumer protections are in place for individuals making online purchases using the EBT system.
2. Requires CDSS to provide technical assistance and assign staff, as needed, to assist the stakeholder workgroup, including evaluating the feasibility of the workgroup’s recommendations.
3. Requires the stakeholder workgroup to make recommendations to CDSS regarding consumer protection, delivery experiences and associated delivery fees, and safety of food, including perishables.
4. Requires CDSS to review and analyze all recommendations from the stakeholder workgroup, individual workgroup members and any other interested stakeholders, and, no later than December 1, 2021, to report the complete recommendations to the Legislature.
5. Permits the stakeholder workgroup to continue, until January 1, 2023, to develop recommendations regarding improvements to the EBT system and to assist CDSS, the Legislature, or both, on any topic relating to the EBT system.

FISCAL EFFECT:

1. CDSS estimates costs of $158,000 (GF) annually for two years to establish and administer the workgroup, review and analyze recommendations and submit a report to the Legislature.
2. Unknown future cost pressures (GF), likely in the range of hundreds of thousands of dollars, to implement the recommendations in the report.

COMMENTS:

1. Purpose. This bill seeks to improve the process and protections for individuals making online purchases using the EBT system by creating a working group to make recommendations to CDSS for improvements.
2. CalFresh. The CalFresh program, the state’s version of the federal Supplemental Nutrition Assistance Program (SNAP), is the largest food assistance program in the nation and aims to prevent hunger and improve nutrition. The program provides qualifying low-income individuals and households food assistance benefits on an electronic benefits transfer (EBT) card to purchase allowable food items at participating retailers. CalFresh benefits are federally funded, but the program is administered at the local level by county human services agencies, with federal, state, and county governments sharing the costs of program administration. The current average monthly benefit per household is around $282 ($137 per person). In 2019-20, CalFresh benefits were distributed to 2 million households, around 4 million individuals.
3. SNAP Online Purchasing Pilot. In January 2017, the federal Food and Nutrition Service (FNS) announced that seven retailers had been selected for the initial launch of the SNAP online purchasing pilot, including Amazon, Safeway and WalMart, among others. Eight states were anticipated to participate in the initial project. California was not among them. In April 2019, the pilot launched in New York. The pilot is limited to the federally approved retailers and prohibits benefits from being used to pay for delivery, service or convenience fees. The pilot was expected to last two years and to eventually expand to other selected states.

The 2108 federal Farm Bill provided for the nationwide expansion of the pilot project upon the authorization of the U.S. Secretary of Agriculture and through the federal rulemaking process. Earlier this year, Arizona and California received approval from the federal government for their requests to provide online purchasing of food to SNAP (CalFresh) households. As of April 28, 2020, California residents are able to purchase food online from Amazon and Walmart using their EBT benefits. Safeway is anticipated to be available to EBT users in California soon. Since April, the federal government has further expanded the program and as of July 1, 2020, 40 states are participating.

1. Existing Efforts. CDSS indicates it is engaged in ongoing efforts to improve the implementation of the EBT online system and CalFresh generally. These efforts include participation in an existing CalFresh working group as well as contact with federal staff on a regular basis.
2. Related Legislation. A bill in Congress, S. 4202 (Durbin) of 2020, known as the Expanding SNAP Options Act, would expand certain components of online SNAP purchasing choices by enabling additional retailers to participate in the program, among other things.
3. Prior Legislation. SB 470 (Skinner), of this legislative session, establishes processes and standards for the use of CalFresh benefits, via the EBT system, for the online purchase of food, and requires CDSS to work with stakeholders to establish the qualifications and process for approving retailers to accept online cash benefits payments through the EBT system. SB 470 was held on this committee’s suspense file.

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

Date of Hearing: August 3, 2020

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Eloise Gómez Reyes, Chair

SBPCA Bill Id:SB 33

Author:(Skinner) – As Amended Ver:January 6, 2020

SENATE VOTE: 39-0

SUBJECT: Electronic benefits transfer system

SUMMARY: Requires the California Department of Social Services (CDSS) to convene a workgroup of various interested stakeholders to make recommendations to CDSS on how to prepare the electronic benefits transfer (EBT) system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California. Specifically, this bill:

1. Defines “interested stakeholders” as individuals who utilize the EBT system, CalFresh advocates, the County Welfare Directors Association of California, county social workers or their representatives, United Food and Commercial Workers International Union representatives, United for Respect or other retail worker representatives, food industry representatives, grocery industry representatives, retailer industry representatives, restaurant industry representatives, farmers or farmers’ markets representatives, a representative of the Employment Development Department, advocates for persons of advanced age, persons with disabilities and disability rights advocates, and any other organization or individual identified by CDSS.
2. Requires, no later than February 1, 2021, CDSS to convene a workgroup of interested stakeholders to make recommendations to CDSS on how to prepare the EBT system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California.
3. Requires the stakeholder workgroup to meet a minimum of six times, and, further, permits the stakeholder workgroup to convene and meet in subcommittees as necessary.
4. Requires CDSS to assign staff, as needed, to assist the stakeholder workgroup in carrying out its responsibilities, and provide technical assistance to the stakeholder workgroup to evaluate the feasibility of its recommendations, as specified.
5. Requires the stakeholder workgroup to make recommendations to CDSS regarding the use of the EBT system to make online purchases, and, further, requires the stakeholder workgroup, in developing recommendations, to consider the structure of, and potential changes to, the EBT system.
6. Permits the stakeholder workgroup to take into consideration all of the following factors, or any other factors deemed relevant, to ensure the appropriateness of their recommendations:
   1. The precarious health of low-income consumers and need for food prepared and sold from a source where safety is certain;
   2. The very low income of CalFresh and cash aid recipients and the harm of high fees;
   3. The role that online purchasing can have in reducing barriers to healthy food for people who live in food deserts or people who live in communities without a grocery store;
   4. The impact that online purchasing might have on the current grocery, retail, and restaurant industry revenue and jobs; and,
   5. The limits in federal law and regulations that would prevent the state’s establishment of EBT policies on the topic.
7. Permits, in addition to recommendations provided during stakeholder workgroup meetings, individual members of the stakeholder workgroup and any other interested stakeholders to provide to CDSS any additional written recommendations on the items considered in the stakeholder workgroup meetings.
8. Requires CDSS to review and analyze all recommendations from the stakeholder workgroup, individual workgroup members, and any other interested stakeholders.
9. Requires, no later than December 2, 2021, CDSS to report the complete recommendations of the stakeholder workgroup, individual workgroup members, and any other interested stakeholders to the Legislature, and, further, permits CDSS to include in the report CDSS’s analysis of the feasibility of implementing the proposed recommendations.
10. Permits the stakeholder workgroup to continue to meet on and after January 1, 2022, and until January 1, 2023. During this period, requires the stakeholder workgroup to meet at least quarterly, and as agreed to by CDSS and the members of the stakeholder workgroup. Further, permits the stakeholder workgroup, during this period, to develop recommendations regarding any improvements to the EBT system that are needed to enable online purchases and any consumer protections needed when the EBT system is available to make online purchases.
11. Permits, upon completion of the stakeholder workgroup recommendations, as specified, and until January 1, 2023, the stakeholder workgroup to assist CDSS, the Legislature, or both, on any topic relating to the EBT system.

EXISTING LAW:

1. Establishes under federal law the Supplemental Nutrition Assistance Program (SNAP) pursuant to the Food Stamp Act of 1964 and establishes, in California statute, the CalFresh program to administer the provision of federal SNAP benefits to families and individuals meeting certain criteria, as specified. (7 United States Code Section [U.S.C.] 2011 et seq., Welfare and Institutions Code Section [WIC] 18900 et seq.)
2. Establishes the electronic benefits transfer (EBT) Act, and defines the EBT system as the program designed to provide benefits to those eligible to receive public assistance benefits such as CalWORKs and CalFresh. (42 U.S.C. 601 et seq., WIC 10065 et seq.)

FISCAL EFFECT: According to the Senate Appropriations Committee on January 21, 2020, staff estimates approximately ongoing, annual costs of low hundreds of thousands (General Fund, state operations) to establish and administer the workgroup. Costs would include new staff, responsibilities for existing staff, and other operating expenses, such as equipment and per diem and travel reimbursement costs for workgroup attendees. The number and classification of new staff would depend on the types of data or deliverables requested by the workgroup. In addition, indeterminate cost pressures, up to low millions (General Fund), associated with implementing recommendations specified in the legislative report.

COMMENTS:

CalFresh: The federal SNAP Program is known as CalFresh in California, and provides food access to low-income individuals who meet certain eligibility criteria. CalFresh benefits are entirely federally funded, and administration at the federal level lies with the United States Department of Agriculture (USDA). The USDA is tasked with setting specific eligibility requirements for SNAP programs across the country, as well as gross and net income tests, work requirements, and other documentation requirements. Currently, the maximum allowable gross income is 200% of the Federal Poverty Level (FPL), although households with elderly members or members with disabilities are not subject to gross income criteria, but must have a net monthly income at or below 100% of the FPL.

In California, CalFresh is administered at the local level by county human services agencies, with federal, state, and county governments sharing the costs of program administration. Benefits are made available to recipients on an EBT card, which is an automated teller machine (ATM)- like card that allows an individual to purchase food at point-of-sale devices in stores. Nearly 4 million individuals in California receive CalFresh benefits; on average, an individual receives $143.55 per month, and, as of October 1, 2019, the maximum grant amount for a household size of one is $194.

SNAP Online Purchasing Pilot: The 2014 Farm Bill, H.R. 2642 (Lucas), P.L. 113-79, mandated that a pilot be conducted to determine the feasibility and implications of permitting retail food stores to accept SNAP benefits through online transactions. The pilot requires online purchases to be private, secure, easy to use, and provide supports that are similar to those available when in-person SNAP transactions are made. Rules of the pilot program also prohibit SNAP benefits from being used to pay for delivery, service, or convenience fees. In September 2016, the Food and Nutrition Service (FNS) released a request for retail volunteers to solicit applications for a two-year SNAP Online Purchasing Pilot; the application submission deadline for participation in the pilot was November 2016.

On January 5, 2017, FNS announced that seven retailers had been selected for the initial launch of the SNAP Online Purchasing Pilot, including: Amazon, Safeway, and Walmart, among others, with Alabama, Iowa, Maryland, Nebraska, New Jersey, New York, Oregon, and Washington expected to participate in the initial project. As of April 1, 2020, the pilot program was operational in these states, with the exception of Maryland and New Jersey, where the program was non-operational. The authorized retailers working with all pilot states were Amazon and Walmart, while other retailers, such as Wrights Market and ShopRite were working with Alabama and New York, respectively. In most participating states, including California, the only approved retailers participating in the EBT online purchasing pilots are Amazon and Walmart.

It should be noted that, while the 2014 Farm Bill included provisions that required pilot projects to test the feasibility of online purchases using SNAP benefits and report those findings and results to Congress, H.R. 2 (Conway), P.L. 115-334, known as the Agriculture Improvement Act of 2018, or the 2018 Farm Bill, removed those reporting requirements. H.R. 2 also provided for the nationwide expansion of the pilot projects upon the authorization of the U.S. Secretary of Agriculture, Sonny Perdue, and through the federal rulemaking process.

Pilot project expansion: On April 8, 2020, Secretary Perdue announced the approval of Arizona and California’s requests to provide online purchasing of food to SNAP households; as of April 28, 2020, California residents are able to purchase food online using their EBT benefits.

On July 2, 2020, U.S. Senators Dick Durbin and Tammy Duckworth introduced S. 4202 (Durbin), known as the Expanding SNAP Options Act, to further expand online SNAP purchasing choices by enabling additional retailers to participate in the program, among other changes. Specifically, the legislation would:

1. Require the Secretary of Agriculture to implement online SNAP purchasing in all states;
2. Provide $25 million to develop and maintain an app-based portal for EBT redemption to support smaller retailers in offering products for online SNAP purchasing; and,
3. Provide $75 million for the creation of a USDA Technical Assistance Center to facilitate online purchasing and use of the portal for smaller retailers, direct-to-consumer farmers, and farmers’ markets, as well as provide public information about which local vendors participate in SNAP online purchasing.

As of July 1, 2020, 40 states were participating in the SNAP Online Purchasing Pilot.

Need for this bill: The provisions of this bill would require CDSS to convene a workgroup composed of numerous interested stakeholders, including EBT recipients, CalFresh advocates, county representatives, and representatives from the grocery industry, among others, to make recommendations to CDSS on how to prepare the EBT system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California. This bill would also require the stakeholder workgroup, in developing its recommendations, to consider a number of factors to ensure the appropriateness of its recommendations, including the health and safety of low-income consumers; the role of online purchasing in increasing food access for individuals who reside in food deserts; and, the impact that EBT purchases may have on the current grocery, retail, and restaurant industry, among others. Finally, this bill would require CDSS to review and analyze the stakeholder workgroup recommendations and report the recommendations to the Legislature no later than December 1, 2021.

According to the author, “Families with children living in poverty depend on the EBT system to prevent malnutrition and the health complications that follow. EBT recipients have limited rights to recover stolen benefits or to resolve consumer disputes. Additionally, because these families are of low-income, they are at a higher risk to food-borne illness and poor customer service. As a result, families need a system that ensures online retailers are food safe and practice fair and reliable food retail practices. [This bill] guides safe and ethical standards for EBT purchasing by establishing a working group composed of major stakeholders, including CDSS.”

Recommended committee amendments: The provisions of this bill state that the goal of the stakeholder workgroup is to prepare the EBT system to accommodate online purchases if the ability to make online purchases using the EBT system becomes available in California. Because California was authorized to implement online purchases using the EBT system in April 2020, committee staff recommends the following amendments:

On page 2 of the bill, beginning on line 5, make the following amendments:

3

10072.4.   (a) (1) The State Department of Social Services shall

4

convene a workgroup of interested stakeholders to make

5

recommendations to the department on how to prepare the

6

electronic benefit transfer (EBT) system to accommodate online

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purchases if the ability to make online purchases using the EBT

8

system is made available in California. review online purchases using the electronic benefits transfer (EBT) system, and to recommendations to the department to ensure that consumer protections are in place for individuals making online purchases using the EBT system.

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(2) For the purposes of paragraph (1), “interested stakeholders”

10

includes individuals who utilize the EBT system, CalFresh

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advocates, the County Welfare Directors Association of California,

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county social workers or their representatives, United Food and

13

Commercial Workers International Union representatives, United

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For Respect or other retail worker representatives, food industry

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representatives, grocery industry representatives, retailer industry

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representatives, payment technology provider industry representatives, restaurant industry representatives, farmers or

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farmers’ markets representatives, a representative of the

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Employment Development Department, advocates for persons of

1. On page 3 of the bill, beginning on line 16, make the following amendments:

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(c) The stakeholder workgroup shall make recommendations

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to the department regarding strategies to provide consumer protection for individuals making online purchases using the EBT system, improved delivery experiences and associated delivery fees, and safety of food, including perishables. regarding the use of the EBT system to make

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online purchases. In developing recommendations, the stakeholder

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workgroup shall consider the structure of, and potential changes

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to, the EBT system. The stakeholder workgroup may take into

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consideration all the following factors, or any other factors deemed

21

relevant, to ensure the appropriateness of their recommendations:

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(1) The precarious health of low-income consumers and need

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for food prepared and sold from a source where food safety is

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certain.

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(2) The very low income of CalFresh and cash aid recipients,

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and the harm of high fees, and the limited options with which recipients may pay fees.

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(3) The role that online purchasing can have in reducing

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barriers to healthy food for people who live in food deserts or

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people who live in communities without a grocery store.

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(4) The impact that online EBT purchases might have on the

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current grocery, retail, and restaurant industry revenue and jobs.

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(5) The Any limits, if any, in federal law and regulations that would prevent

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the state’s establishment of EBT policies on the topic.

(6) How to facilitate participation by additional grocery vendors throughout the state and in local communities.

PRIOR AND RELATED LEGISLATION:

S. 4202 (Durbin) of 2020, known as the Expanding SNAP Options Act, would expand certain components of online SNAP purchasing choices by enabling additional retailers to participate in the program, among other things.

SB 470 (Skinner) of 2019 would have established processes and standards for the use of CalFresh benefits, via the EBT system, for the online purchase of food, and would have required CDSS to work with stakeholders to establish the qualifications and process for approving retailers to accept online cash benefits payments through the EBT system. SB 470 was held on the Assembly Appropriations Committee suspense file.

H.R. 2 (Conaway), P.L. 115-334, 2018, known as the Agriculture Improvement Act of 2018, or Farm Bill, repealed various reporting requirements for pilot projects examining the online acceptance of SNAP benefits.

SB 675 (Skinner) of 2017 would have required the EBT system to only permit online purchases of food from retailers that comply with various specified requirements and the EBT system to prohibit payment of delivery fees for online food purchase using CalFresh benefits. SB 675 was held on the Assembly Inactive file.

H.R. 2642 (Lucas), P.L. 113-79, 2014, known as the Agriculture Reform and Risk Management Act of 2014, or Farm Bill, authorized nutrition and agriculture programs in the United States for the years 2014 through 2018.

REGISTERED SUPPORT / OPPOSITION:

Support

Western Center on Law & Poverty, INC. (Sponsor)

Alameda County Community Food Bank

California Alliance for Retired Americans

California Association of Food Banks

California Catholic Conference

California Food Policy Advocates

CAPPA

Coalition of California Welfare Rights Organizations

East Bay Community Law Center

Feeding San Diego

Food Bank Coalition of San Luis Obispo County

Food Bank of Contra Costa and Solano

Foodshare Ventura County

Hunger Action Los Angeles INC

Hunger Advocacy Network

Jewish Family Service of Los Angeles

Jewish Family Service San Diego

Los Angeles Regional Food Bank

National Association of Social Workers, California Chapter

National Lawyers Guild San Francisco Bay Area Chapter, Doris Brin Walker Legislative Reform
Committee

River City Food Bank

Sacramento Food Bank & Family Services

San Diego County Childhood Obesity Initiative

San Diego Hunger Coalition

San Francisco Senior and Disability Action

San Francisco-Marin Food Bank

Second Harvest Food Bank of Orange County

Second Harvest Food Bank of San Joaquin and Stanislaus Counties

Second Harvest Food Bank Santa Cruz County

Second Harvest of Silicon Valley

Opposition

None on file

Analysis Prepared by: Kelsy Castillo / HUM. S. / (916) 319-2089

 THIRD READING  

Bill No: SB 33

Author: Skinner (D)

Amended: 1/6/20

Vote: 21

SENATE HUMAN SERVICES COMMITTEE: 5-0, 1/13/20

AYES: Hurtado, Beall, Jackson, Pan, Wiener

SENATE APPROPRIATIONS COMMITTEE: 7-0, 1/23/20

AYES: Portantino, Bates, Bradford, Durazo, Hill, Jones, Wieckowski

SUBJECT: Electronic benefits transfer system

SOURCE: Western Center on Law and Poverty

DIGEST:

This bill requires the California Department of Social Services (CDSS) to convene a stakeholder workgroup, by February 1, 2021, to make recommendations to CDSS on how to prepare the electronic benefits transfer (EBT) system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California.

ANALYSIS:

Existing law:

1. Establishes, under federal law, the Supplemental Nutrition Assistance Program (SNAP) within the United States 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 that net income must be at or below 100 percent of the federal poverty level and is a substantial limiting factor in permitting a recipient to obtain a more nutritious diet. (7 CFR 271.1; 7 CFR 273.9)
2. Establishes, in state statute, the CalFresh program to administer the provisions of federal SNAP benefits to families and individuals meeting specific criteria. (WIC 18900, et seq.)
3. Establishes, in the EBT Act, a system for the distribution and use of public assistance benefits, such as CalWORKs and CalFresh, and requires EBT access to be provided through automated teller machines (ATMs), point-of-sale devices and other devices that accept EBT transactions. (42 USC 6-1 et seq., WIC 10065, et seq.)
4. Directs the USDA Secretary to authorize the use of mobile technologies for the purpose of accessing SNAP benefits, after conducting no more than five demonstration projects to pilot the use of such technologies. Further requires nationwide implementation of the online acceptance of SNAP benefits after the pilots required in the 2014 Farm Bill are implemented and would no longer require a report to Congress on the matter. (PL 115-334)
5. Establishes the Restaurant Meal Program under SNAP to allow eligible recipients who are experiencing homelessness, have a disability, or are elderly to purchase hot, prepared food from participating restaurants. (7 USC 2020, WIC 1819, et seq.)

This bill:

1. Requires CDSS to convene a stakeholder workgroup to make recommendations to the CDSS on how to prepare the EBT system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California by February 1, 2021.
2. Requires the stakeholder workgroup to meet a minimum of six times, and allows the workgroup to convene and meet in subcommittees as necessary.
3. Defines “stakeholders” for the purpose of the working group as provided.
4. Requires CDSS assign staff, as needed, to assist the stakeholder workgroup in carrying out its responsibilities, as well as provide technical assistance to the workgroup to evaluate the feasibility of its recommendations.
5. Requires the stakeholder workgroup make recommendations to CDSS regarding the use of the EBT system to make online purchases. In making these recommendations, requires the workgroup to consider the structure of, and potential changes to, the EBT system.
6. Sets forth considerations the workgroup shall make to ensure the appropriateness of their recommendations, as provided.
7. Allows the workgroup, individual members, and any other interested stakeholders to provide to CDSS any additional written recommendations on the items considered during stakeholder workgroup meetings.
8. Requires CDSS review and analyze all recommendations from the workgroup, its individual members, and any other interested stakeholders, as well as report those recommendations to the Legislature by December 1, 2021. Further provides that CDSS may include in this report their analysis of the feasibility of those proposed recommendations.
9. Allows the workgroup to continue to meet until January 1, 2023, provided they meet at least quarterly and as agreed to by the department and the workgroup members.
10. Provides that the workgroup may develop recommendations regarding any improvements to the EBT system needed to enable online purchases and any consumer protections needed when the EBT system is available to make online purchases.
11. Provides that once the workgroup is done making recommendations on the EBT system and online purchases, and until January 1, 2023, they may assist the department, the Legislature, or both, on any topic relating to the EBT system.

Comments

According to the author, “SB 33 will help guide safe and ethical standards for EBT online purchasing specific to the state of California by establishing a working group composed of major stakeholders, including the California Department of Social Services.”

At this time, there is not the needed federal authority for SNAP beneficiaries to use their benefits to purchase food online. A two-year federal demonstration project began testing the use of the EBT system to allow for the online purchase of food via SNAP benefits in the State of New York in April 2019. While the 2018 Farm Bill gives the USDA Secretary, Secretary Perdue, the authority to expand the online purchase of food utilizing SNAP benefits nationwide, the 2018 Farm Bill states that expansion to all states shall not be taken until the Secretary has completed a number of demonstration projects testing the feasibility of online purchases of food via SNAP benefits.

CalFresh. According to the California Association of Food Banks, one in eight Californians (4.6 million people) currently struggle with food insecurity, which they define as the occasional or constant lack of access to the food one needs for a healthy active life. CalFresh, the state’s largest anti-hunger program, was created to address the fact that hunger, undernutrition, and malnutrition are present and continuing problems faced by California’s low-income households.

CalFresh is California’s version of the federal SNAP program, it provides monthly food benefits to qualified low-income individuals and families to assist them with purchasing the food they need to maintain adequate nutrition levels. CalFresh is administered by CDSS at the state level and by California’s 58 counties at the local level. CalFresh benefits are 100 percent federally funded with national income eligibility standards and benefit levels established by the federal government. The program issues monthly benefits on EBT cards, which may be used to purchase food, and seeds or plants that grow food for human consumption, at any grocery store or farmers’ market that accepts EBT cards.

In order to be eligible for CalFresh monthly gross income must be at or below 200 percent of the federal poverty level (FPL), or $3,463 for a family of three. Household net income must be at or below 100 percent of the FPL. The benefit amount that a household receives is dependent on household circumstances such as size, countable income, and monthly expenses, such as housing and utilities. As of November 2019 there are approximately 2.2 million households in California receiving CalFresh benefits and the average benefit amount per a household is $233.52. The average CalFresh benefit per person was about $126 per month, with the maximum benefit for a household of one being set at $192 per month.

EBT. California’s EBT system automates the delivery, redemption, and reconciliation of public assistance benefits such as CalWORKs and CalFresh. EBT cards function like a bank-issued ATM card. EBT cardholders can slide the card through a point-of-sale device, or use the card at an ATM. California EBT cards can be used at more than 15,000 businesses and more than 54,000 ATMs in California. Unlike other types of benefits that may be accessed through an EBT card, CalFresh benefits cannot be withdrawn as cash. Additionally, unlike ATM and credit cards, EBT cards cannot be used for any online transactions.

That California Office of Systems Integration (OSI) is charged with the development and maintenance of California’s EBT system. Changes to the EBT system, such as online access to transaction history and account balances, are implemented and overseen by OSI. As OSI would thus be overseeing the development and implementation of system changes allowing EBT cards to be used for online purchases, the author’s office may wish to consider adding a representative of OSI to the task force. Should this bill be signed into law, the resulting workgroup would benefit from an OSI’s representatives understanding of the EBT system in their development of recommendations on how to prepare the EBT system to accommodate online purchases.

Federal Pilot Project for Online SNAP Purchases. The federal government is taking steps towards allowing SNAP benefits to be used for purchasing food online. In 2014, H.R. 2642 (Lucas), P.L. 113-79, the Farm Bill, mandated that a demonstration project be conducted to determine the feasibility and implications of allowing retail food stores to accept SNAP benefits through online transactions. The demonstration project requires online purchases to be secure, private, easy to use, and provide supports similar to those available when SNAP transactions are made in-person at a retail store. Additionally, the provisions of the pilot prohibit SNAP benefits from being used to pay for delivery, service, or convenience fees.

Retailers were invited to apply to the Food and Nutrition Service (FNS) to participate in two-year SNAP Online Purchasing Pilot during the fall of 2016, with applications being due in November. On January 5, 2017, FNS announced that the seven retailers, including Wal-Mart Stores, Amazon, and Safeway, had been selected to participate in the initial launch of the demonstration project. Since that initial launch, FNS has allowed the following eight retailers to participate in phase one of the demonstration project: Amazon; Dash’s Market; FreshDirect; Hy-Vee, Inc.; Safeway; ShopRite; Wal-Mart Stores, Inc; and Wright’s Markets, Inc. Based on selections made by each retailer during their application process, and subsequent agreements by the state agencies, FNS states that the following states are expected to be part of the demonstration project: Alabama, Iowa, Maryland, Nebraska, New York, Oregon, and Washington.

On April 18, 2019, FNS announced that the first demonstration project had gone live in New York City. This resulted in SNAP participants residing in New York City being able to purchase groceries online via Amazon, Walmart and ShopRite using their SNAP benefits as of April 2019. The pilot has since expanded to other parts of New York State. The demonstration project is expected to last for two years and to expand to the other states listed above during that time period.

The 2014 Farm Bill required the demonstration project test the feasibility of online purchases using SNAP benefits and report those findings and results to Congress. The 2018 Farm Bill removed those reporting requirements. Furthermore, the bill amended the definition of a retail food store to include online entities, when it previously defined a retail food store as an “establishment, or house to house trade route.”

The 2018 Farm Bill further specified that the U.S. Secretary of Agriculture, Sonny Purdue, shall approve retail food stores to accept benefits from recipients of SNAP through online transactions, subject to the retailer meeting certain requirements. The 2018 Farm Bill goes on to state that the before the Secretary can authorize implementation of online transactions utilizing SNAP benefits in all states, the Secretary must first “carry out a number of demonstration projects as determined by the Secretary to test the feasibility of allowing retail food stores to accept benefits through on-line transactions.”^[1] This suggests that the Secretary may allow retail food stores to accept benefits through on-line transactions nationwide via the Secretary’s rule making authority, as long as demonstration projects have occurred, but not necessarily completed. There has not yet been any such authorization.

An informational memo on the SNAP Provisions of the Agriculture Improvement Act of 2018, dated March 7, 2019, states:

“FNS is currently in the process of implementing the online purchasing demonstration projects and will complete these pilots to gain insight into the benefits and challenges of online purchasing with SNAP benefits. FNS intends to incorporate information from the pilots through rulemaking.”^[2]

This suggests that Secretary Perdue is not planning to authorize the expansion until the completion of the current federal pilot project, which per the 2014 Farm Bill’s two-year authorization is expected to be completed in 2021.

Related/Prior Legislation

SB 470 (Skinner, 2019) would have required the EBT system to limit the purchase of food via an online transaction only to retailers authorized to accept CalFresh benefits by the USDA. The bill also would have required CDSS to work with stakeholders to establish the qualifications, processes and standards to certify retailers as eligible to accept payments online using cash benefits through the EBT system and to determine the allowable online purchases that may be made using cash benefits, as provided. The bill did not pass out of the Assembly Appropriations Committee.

AB 2313 (Stone, Chapter 718, Statutes 2018) established protections for recipients of public benefits issued via EBT cards whose benefits are stolen.

SB 675 (Skinner, 2017) would have required the EBT system to only permit online purchase of food from retailers that comply with various specified requirements and the EBT system to prohibit payment of delivery fees for online food purchase using CalFresh benefits. The bill did not pass out of the Assembly.

AB 1614 (Stone, Chapter 270, Statutes 2014) required users of EBT cards to be provided access to transaction history via a toll-free telephone hotline and Internet Web site, among other methods. The bill also required the EBT system to be designed so that users are informed when the system is down and funds are not accessible, as specified. Additionally, the bill required users of the EBT card to be informed of where they can use their cards to withdraw funds without fees, and other information regarding fees.

AB 1280 (Perez, Chapter 557, Statutes 2013) authorized the direct deposit of public assistance payments by electronic transfer into a qualifying account and required those accounts to meet specified consumer protection regulations.

AB 2035 (Bradford, Chapter 319, Statutes 2012) provided that a recipient would not incur any loss of cash benefits that are taken by an unauthorized withdrawal, removal, or use of benefits that does not occur by the use of a physical EBT card issued to the recipient or authorized third party to directly access the benefits.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, “Staff estimates approximately ongoing, annual costs of low hundreds of thousands (General Fund, state operations) to establish and administer the workgroup. Costs would include new staff, responsibilities for existing staff, and other operating expenses, such as equipment and per diem and travel reimbursement costs for workgroup attendees. The number and classification of new staff would depend on the types of data or deliverables requested by the workgroup. In addition, indeterminate cost pressures, up to low millions (General Fund), associated with implementing recommendations specified in the legislative report.”

SUPPORT: (Verified 1/23/20)

Western Center on Law and Poverty (source)

OPPOSITION: (Verified 1/23/20)

None received

Prepared by: Marisa Shea / HUMAN S. /

1/24/20 14:34:07

**** END ****

1. 7 USC §2012 ↑

2. See: https://fns-prod.azureedge.net/sites/default/files/resource-files/Farm-Bill-Information-Memo.pdf ↑

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 33 (Skinner) – Electronic benefits transfer system.

Bill Summary:

Senate Bill 33 would require the Department of Social Services (CDSS) to convene a workgroup, no later than February 1, 2021, and until January 1, 2023, which would make recommendations on the Electronic Benefits Transfer (EBT) system and submit a legislative report by December 1, 2021.

Fiscal Impact:

Staff estimates approximately ongoing, annual costs of low hundreds of thousands (General Fund, state operations) to establish and administer the workgroup. Costs would include new staff, responsibilities for existing staff, and other operating expenses, such as equipment and per diem and travel reimbursement costs for workgroup attendees. The number and classification of new staff would depend on the types of data or deliverables requested by the workgroup. In addition, indeterminate cost pressures, up to low millions (General Fund), associated with implementing recommendations specified in the legislative report.

Background:

The CalFresh program, the state’s version of the federal Supplemental Nutrition Assistance Program (SNAP), is the largest food assistance program in the nation and aims to prevent hunger and improve nutrition. The program provides qualifying low-income individuals and households food assistance benefits on an EBT card to purchase allowable food items at participating retailers. EBT is the system used in California for the delivery, redemption, and reconciliation of assistance benefits. CalFresh. CalFresh benefits are funded almost exclusively by the federal government, with the state General Fund covering less than one percent for certain qualified immigrants. Counties administer the program, and administrative costs are split 50 federal/35 state/15 counties. The current average monthly benefit per household is around $282 ($137 per person). In 2019-20, CalFresh benefits were distributed to 2 million households, around 4 million individuals.

In federal fiscal year 2016, the most recent period for which official measures are available, California’s participation rate for the working low-income population was the lowest in the nation at an estimated 61 percent. Several recently enacted program changes seek to improve CalFresh program participation, such as expanded program eligibility, elimination of fingerprint imaging, and the recent “cash-out” for Supplemental Security Income (SSI)/State Supplemental Payment (SSP) recipients (AB 1811, Chapter 35, Statutes of 2019).

According to the Senate Human Services policy committee analysis: The federal government is taking steps toward allowing online purchase of food via SNAP. The 2014 Farm Bill (H.R. 2642, P.S. 113-79) mandated a demonstration project be conducted to determine the feasibility and implications of allowing retail stores to accept SNAP benefits through online transactions. The federal demonstration project is expected to be completed in 2021.

An existing CalFresh workgroup, comprised of CDSS, stakeholders, and counties, has met at least eight times in the recent past to discuss program implementation and expansion.

Proposed Law:

The bill would require the CDSS, no later than February 1, 2021, to convene a workgroup, comprised of specified stakeholders, to meet a minimum of six times, and to make recommendations on the EBT system to accommodate online purchases, if an online EBT system is made available in California. The bill also includes the following provisions, among others:

• • Requires the CDSS to assign staff to the stakeholder workgroup and to provide technical assistance;
  • Requires the CDSS to report the complete recommendations to the Legislature by December 1, 2021; and,
  • Authorizes the stakeholder workgroup to meet at least quarterly, on and after January 1, 2022, and until January 1, 2023, to develop additional recommendations.

Related Legislation: Senate Bill 470 (Skinner, 2019) would require CDSS to limit the purchase of food by an online transaction to authorized USDA retailers, and would require CDSS to work with stakeholders to establish qualifications, processes, and standards to certify eligible retailers to accept online payments. The bill was held in the Assembly Appropriations Committee.

-- END --

SENATE COMMITTEE ON HUMAN SERVICES

Senator Hurtado, Chair

2019 - 2020 Regular

Subject: Electronic benefits transfer system

SUMMARY

This bill requires the California Department of Social Services (CDSS) to convene a stakeholder workgroup, by February 1, 2021, to make recommendations to CDSS on how to prepare the Electronic Benefits Transfer (EBT) system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California.

ABSTRACT

Existing Law:

1. 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 that net income must be at or below 100 percent of the federal poverty level and is a substantial limiting factor in permitting a recipient to obtain a more nutritious diet. (7 CFR 271.1; 7 CRF 273.9)
2. Establishes in state statute the CalFresh program to administer the provisions of federal SNAP benefits to families and individuals meeting specific criteria. (WIC 18900, et seq.)
3. Establishes in the EBT Act a system for the distribution and use of public assistance benefits, such as CalWORKs and CalFresh, and requires EBT access to be provided through automated teller machines (ATMs), point-of-sale devices and other devices that accept EBT transactions. (42 USC 6-1 et seq., WIC 10065, et seq.)
4. Directs the USDA Secretary to authorize the use of mobile technologies for the purpose of accessing SNAP benefits, after conducting no more than five demonstration projects to pilot the use of such technologies. Further requires nationwide implementation of the online acceptance of SNAP benefits after the pilots required in the 2014 Farm Bill are implemented and would no longer require a report to Congress on the matter. (PL 115-334)
5. Establishes the Restaurant Meal Program (RMP) under SNAP to allow eligible recipients who are experiencing homelessness, have a disability, or are elderly to purchase hot, prepared food from participating restaurants. (7 USC 2020, WIC 1819 et seq.)

This Bill:

1. Requires CDSS to convene a stakeholder workgroup to make recommendations to the CDSS on how to prepare the EBT system to accommodate online purchases if the ability to make online purchases using the EBT system is made available in California by February 1, 2021.
2. Requires the stakeholder workgroup to meet a minimum of six times, and allows the workgroup to convene and meet in subcommittees as necessary.
3. Defines “stakeholders” for the purpose of the working group as including: individuals who utilize the EBT system; CalFresh advocate; the County Welfare Directors Association of California; county social workers or their representative; United Food and Commercial Workers International union representatives; United for Respect or other retail worker representatives; food, retail, restaurant and grocery industry representatives; farmers or farmers’ market representatives; a representative of the Employment Development Department; advocates for person of advanced aged; persons with disabilities and disability rights advocates; and any other organization or individual identified by CDSS.
4. Requires CDSS assign staff, as needed, to assist the stakeholder workgroup in carrying out its responsibilities, as well as provide technical assistance to the workgroup to evaluate the feasibility of its recommendations.
5. Requires the stakeholder workgroup make recommendations to CDSS regarding the use of the EBT system to make online purchases. In making these recommendations, requires the workgroup to consider the structure of, and potential changes to, the EBT system.
6. Sets forth the following as considerations the workgroup make to ensure the appropriateness of their recommendations:
   1. The precarious health of low-income consumers and need for food prepared and sold from a source where food safety is certain;
   2. The very low income of CalFresh and cash aid recipients and the harm of high fees;
   3. The role that online purchasing can have in reducing barriers to healthy food for people who live in food deserts or people who live in communities without a grocery store;
   4. The impact that online EBT purchases might have on current grocery, retail, and restaurant industry revenue and jobs; and
   5. The limits in federal law and regulations that would prevent the state’s establishment of EBT policies on the topic.
7. Allows the workgroup, individual members, and any other interested stakeholders to provide to CDSS any additional written recommendations on the items considered during stakeholder workgroup meetings.
8. Requires CDSS review and analyze all recommendations from the workgroup, its individual members, and any other interested stakeholders, as well as report those recommendations to the Legislature by December 1, 2021. Further provides that CDSS may include in this report their analysis of the feasibility of those proposed recommendations.
9. Allows the workgroup to continue to meet until January 1, 2023, provided they meet at least quarterly and as agreed to by the department and the workgroup members.
10. Provides that the workgroup may develop recommendations regarding any improvements to the EBT system needed to enable online purchases and any consumer protections needed when the EBT system is available to make online purchases.
11. Provides that once the workgroup is done making recommendations on the EBT system and online purchases, and until January 1, 2023, they may assist the department, the Legislature, or both, on any topic relating to the EBT system.

FISCAL IMPACT

This bill has not yet been analyzed by a fiscal committee.

BACKGROUND AND DISCUSSION

Purpose of the Bill:

According to the author, “SB 33 will help guide safe and ethical standards for EBT online purchasing specific to the state of California by establishing a working group composed of major stakeholders, including the California Department of Social Services.”

At this time, there is not the needed federal authority for SNAP beneficiaries to use their benefits to purchase food online. A two-year federal demonstration project began testing the use of the EBT system to allow for the online purchase of food via SNAP benefits in the State of New York in April 2019. While the 2018 Farm Bill gives the USDA Secretary, Secretary Perdue, the authority to expand the online purchase of food utilizing SNAP benefits nationwide, the 2018 Farm Bill states that expansion to all states shall not be taken until the Secretary has completed a number of demonstration projects testing the feasibility of online purchases of food via SNAP benefits.

CalFresh

According to the California Association of Food Banks, one in eight Californians (4.6 million people) currently struggle with food insecurity, which they define as the occasional or constant lack of access to the food one needs for a healthy active life. CalFresh, the state’s largest anti-hunger program, was created to address the fact that hunger, undernutrition, and malnutrition are present and continuing problems faced by California’s low-income households.

CalFresh is California’s version of the federal SNAP program, it provides monthly food benefits to qualified low-income individuals and families to assist them with purchasing the food they need to maintain adequate nutrition levels. CalFresh is administered by CDSS at the state level and by California’s 58 counties at the local level. CalFresh benefits are 100 percent federally funded with national income eligibility standards and benefit levels established by the federal government. The program issues monthly benefits on EBT cards, which may be used to purchase food, and seeds or plants that grow food for human consumption, at any grocery store or farmers’ market that accepts EBT cards.

In order to be eligible for CalFresh monthly gross income must be at or below 200 percent of the federal poverty level (FPL), or $3,463 for a family of three. Household net income must be at or below 100 percent of the FPL. The benefit amount that a household receives is dependent on household circumstances such as size, countable income, and monthly expenses, such as housing and utilities. As of November 2019 there are approximately 2.2 million households in California receiving CalFresh benefits and the average benefit amount per a household is $233.52. The average CalFresh benefit per person was about $126 per month, with the maximum benefit for a household of one being set at $192 per month.

Electronic Benefits Transfer (EBT)

California’s EBT system automates the delivery, redemption, and reconciliation of public assistance benefits such as CalWORKs and CalFresh. EBT cards function like a bank-issued ATM card. EBT cardholders can slide the card through a point-of-sale device, or use the card at an ATM. California EBT cards can be used at more than 15,000 businesses and more than 54,000 ATMs in California. Unlike other types of benefits that may be accessed through an EBT card, CalFresh benefits cannot be withdrawn as cash. Additionally, unlike ATM and credit cards, EBT cards cannot be used for any online transactions.

That California Office of Systems Integration (OSI) is charged with the development and maintenance of California’s EBT system. Changes to the EBT system, such as online access to transaction history and account balances, are implemented and overseen by OSI. As OSI would thus be overseeing the development and implementation of system changes allowing EBT cards to be used for online purchases, the author’s office may wish to consider adding a representative of OSI to the task force. Should this bill be signed into law, the resulting workgroup would benefit from an OSI’s representatives understanding of the EBT system in their development of recommendations on how to prepare the EBT system to accommodate online purchases.

Federal Pilot Project for Online SNAP Purchases

The federal government is taking steps towards allowing SNAP benefits to be used for purchasing food online. In 2014, H.R. 2642 (Lucas), P.L. 113-79, the Farm Bill, mandated that a demonstration project be conducted to determine the feasibility and implications of allowing retail food stores to accept SNAP benefits through online transactions. The demonstration project requires online purchases to be secure, private, easy to use, and provide supports similar to those available when SNAP transactions are made in-person at a retail store. Additionally, the provisions of the pilot prohibit SNAP benefits from being used to pay for delivery, service, or convenience fees.

Retailers were invited to apply to the Food and Nutrition Service (FNS) to participate in two-year SNAP Online Purchasing Pilot during the fall of 2016, with applications being due in November. On January 5, 2017, FNS announced that the seven retailers, including Wal-Mart Stores, Amazon, and Safeway, had been selected to participate in the initial launch of the demonstration project. Since that initial launch, FNS has allowed the following 8 retailers to participate in phase one of the demonstration project: Amazon; Dash’s Market; FreshDirect; Hy-Vee, Inc.; Safeway; ShopRite; Wal-Mart Stores, Inc; and Wright’s Markets, Inc. Based on selections made by each retailer during their application process, and subsequent agreements by the state agencies, FNS states that the following states are expected to be part of the demonstration project: Alabama; Iowa; Maryland; Nebraska; New York; Oregon; and Washington.

On April 18, 2019, FNS announced that the first demonstration project had gone live in New York City. This resulted in SNAP participants residing in New York City being able to purchase groceries online via Amazon, Walmart and ShopRite using their SNAP benefits as of April 2019. The pilot has since expanded to other parts of New York State. The demonstration project is expected to last for two years and to expand to the other states listed above during that time period.

The 2014 Farm Bill required the demonstration project test the feasibility of online purchases using SNAP benefits and report those findings and results to Congress. The 2018 Farm Bill removed those reporting requirements. Furthermore, the bill amended the definition of a retail food store to include online entities, when it previously defined a retail food store as an “establishment, or house to house trade route.”

The 2018 Farm Bill further specified that the U.S. Secretary of Agriculture, Sonny Purdue, shall approve retail food stores to accept benefits from recipients of SNAP through online transactions, subject to the retailer meeting certain requirements. The 2018 Farm Bill goes on to state that the before the Secretary can authorize implementation of online transactions utilizing SNAP benefits in all states, the Secretary must first “carry out a number of demonstration projects as determined by the Secretary to test the feasibility of allowing retail food stores to accept benefits through on-line transactions.”^[1] This suggests that the Secretary may allow retail food stores to accept benefits through on-line transactions nationwide via the Secretary’s rule making authority, as long as demonstration projects have occurred, but not necessarily completed. There has not yet been any such authorization.

An informational memo on the Supplemental Nutrition Assistance Program Provisions of the Agriculture Improvement Act of 2018, date March 7, 2019, states:

“FNS is currently in the process of implementing the online purchasing demonstration projects and will complete these pilots to gain insight into the benefits and challenges of online purchasing with SNAP benefits. FNS intends to incorporate information from the pilots through rulemaking.”^[2]

This suggests that Secretary Perdue is not planning to authorize the expansion until the completion of the current federal pilot project, which per the 2014 Farm Bill’s 2 year authorization is expected to be completed in 2021.

Related/Prior Legislation:

SB 470 (Skinner, 2019) would have required the EBT system to limit the purchase of food via an online transaction only to retailers authorized to accept CalFresh benefits by the USDA. This bill also would have required CDSS to work with stakeholders to establish the qualifications, processes and standards to certify retailers as eligible to accept payments online using cash benefits through the EBT system and to determine the allowable online purchases that may be made using cash benefits, as provided. This bill did not pass out the Assembly Appropriations Committee.

AB 2313 (Stone, Chapter 718, Statutes 2018) established protections for recipients of public benefits issued via EBT cards whose benefits are stolen.

SB 675 (Skinner, 2017) would have required the EBT system to only permit online purchase of food from retailers that comply with various specified requirements and the EBT system to prohibit payment of delivery fees for online food purchase using CalFresh benefits. This bill did not pass out of the Assembly.

AB 1614 (Stone, Chapter 270, Statutes 2014) required users of EBT cards to be provided access to transaction history via a toll-free telephone hotline and Internet Web site, among other methods. This bill also required the EBT system to be designed so that users are informed when the system is down and funds are not accessible, as specified. Additionally, this bill required users of the EBT card to be informed of where they can use their cards to withdraw funds without fees, and other information regarding fees.

AB 1280 (Perez, Chapter 557, Statutes 2013) authorized the direct deposit of public assistance payments by electronic transfer into a qualifying account and required those accounts to meet specified consumer protection regulations.

AB 2035 (Bradford, Chapter 319, Statutes 2012) provided that a recipient would not incur any loss of cash benefits that are taken by an unauthorized withdrawal, removal, or use of benefits that does not occur by the use of a physical EBT card issued to the recipient or authorized third party to directly access the benefits.

POSITIONS

Support:

Western Center on Law & Poverty (Sponsor)

Oppose:

None received. -- END --

1. 7 USC §2012 ↑

2. See: https://fns-prod.azureedge.net/sites/default/files/resource-files/Farm-Bill-Information-Memo.pdf ↑