BILL ANALYSIS Ó
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: AB 1182
A
AUTHOR: R. Hernandez
B
VERSION: As introduced
HEARING DATE: June 14, 2011
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FISCAL: Appropriations
1
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CONSULTANT:
2
Park
SUBJECT
CalWORKs: asset limits: vehicles
SUMMARY
Deletes the requirement that county welfare departments
assess the value of a vehicle when determining and
re-determining eligibility for applicants and recipients of
California Work Opportunity and Responsibility to Kids
program (CalWORKs).
ABSTRACT
Existing law
1.Establishes the California Work Opportunity and
Responsibility to Kids (CalWORKs) program to provide
welfare-to-work services to qualifying persons.
2.Imposes limits on the amount of income and personal and
real property an individual or family may possess in
order to be eligible for aid under the CalWORKs program,
including that assets shall not exceed the following:
a. $2,000 in savings and $3,000 for a family
Continued---
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with a member age 60 or above;
b. One residence that the family lives in;
c. One car with a value of $4,650 or less;
and
d. Savings and interests in restricted
federally qualified accounts for the purpose of
saving for college, retirement, starting a
business, purchasing a home, or overcoming an
episode of homelessness.
This bill:
1.Deletes the requirement that county welfare departments
assess the value of a vehicle when determining and
re-determining eligibility for applicants and recipients
of California Work Opportunity and Responsibility to Kids
program (CalWORKs). Specifically, provides that licensed
motor vehicles shall be excluded from consideration as
property in this determination and redetermination.
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FISCAL IMPACT
According to the Assembly Appropriations Committee, the
bill would result in ongoing savings in the CalWORKs
program of $4 million (TANF/MOE) per year, consisting of a
grant cost of $800,000 (TANF/MOE) for 2011-2012, increasing
to $5.7 million (TANF/MOE) in 2012-13 onward due to an
increased CalWORKs caseload; and a savings of $5 million
(TANF/MOE) in 2011-2012, growing to $9.7 million (TANF/MOE)
in 2012-2013 and beyond due to reduced administrative
workload.
The Assembly Appropriations committee analysis notes that
actual administrative savings would likely be less as the
CalWORKs program has not received funding increases to keep
pace with actual operations costs since 2001; and, in
addition, county welfare departments have sustained
hundreds of millions of dollars of cuts over the last
several years, including a cut of $425 million to CalWORKs
administration and services for the coming year alone. The
analysis notes, however, that reducing the workload
associated with CalWORKs eligibility could help relieve the
funding pressures faced by county welfare departments.
In analysis of a nearly identical measure in 2009 (AB 1058,
Beall, of 2009), the Senate Appropriations Committee noted
that these provisions were likely to produce substantial
long term savings, but only minor savings initially. The
analysis estimated more than $1 million in savings annually
in the future.
BACKGROUND AND DISCUSSION
Author's statement
The author states that the ongoing economic downturn and
the State's fiscal crisis continue to negatively and
detrimentally affect Californians. The author points out
that, with 12.5 percent of California's workforce currently
unemployed, people are facing incredible challenges in
order to meet their basic needs, and a growing number of
families and individuals have turned to the CalWORKs
program for assistance. The author states that, as of
September 2010, 576,845 California families relied on the
state's welfare-to-work program, and, in LA County alone,
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about 13,000 families apply for CalWORKs each month.
The author points out that one of the primary goals of the
CalWORKs program is to move families out of poverty and
towards self-sufficiency; and a key component of the
program is to require adult participants to either work or
receive training that will help them get a job. The author
believes that, while the vehicle limit was originally
designed to allow families to retain a reliable car in
order to find and maintain employment, the existing vehicle
asset test is a hindrance to families whose vehicle value
is slightly above the limit because they must either
dispose of their automobile and forego needed cash
assistance. The author contends that California has one of
the most restrictive vehicle asset tests in the nation and
was last increased 15 years ago, and points out that the
asset test has been removed in the CalFresh program and
will be for Medi-Cal. The author believes that repealing
the vehicle asset limit on CalWORKs applicants and
recipients would enable low-income working families to meet
a basic necessity of having a reliable means of
transportation to work.
TANF and CalWORKs:
The Temporary Assistance for Needy Families (TANF) was
created by a bi-partisan federal welfare reform effort in
1996. The intent was to get needy families with children
from welfare to work and end the prior welfare entitlement
program under Aid to Families with Dependent Children. The
four stated goals of the TANF legislation are to:
1) End a needy family's dependence on government
assistance by preparing them for a job and marriage;
2) Help families so that children are cared for in
their own homes or in those of relatives;
3) Prevent out-of-wedlock pregnancies; and,
4) Encourage the formation of two-parent families.
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TANF allowed states the flexibility to continue and to
start programs that had previously required federal
waivers, but also capped federal spending on welfare by
creating fixed funding in the form of block grants for each
state. This shift allowed California to customize its
program to fit the varying needs of its needy family
population while adhering to the federal statutory and
regulatory requirements. In particular, TANF allowed
significant state flexibility on eligibility rules for
families applying to CalWORKs for cash and employment
assistance. Specifically, states can decide the income
level and property or asset levels that an applicant or
recipient must meet in order to be eligible. In
California, an applicant or recipient may have a vehicle
worth no more than $4,650.
Asset test: California versus other states
In California, the vehicle test was last increased 15 years
ago. According to the author, California is currently tied
with Texas and Idaho in having the most restrictive asset
test for vehicles of any state in the country. The
following is the vehicle asset policy of the rest of the
nation: 12 states exclude all vehicles owned by the
household; 15 exclude at least one vehicle per household;
and 20 have substantially increased the value of the
vehicle exclusion.
Transportation and employment
A recent report by the County of Los Angeles on the
transportation barriers faced by low-income families
concludes that "car ownership is strongly correlated with
employment status, and increases the likelihood of
employment." The study found that welfare-to-work
recipients without a vehicle were 31 percent more likely to
indicate that they face difficulty in seeking work, while
those with a vehicle were 20 percent more likely to be
gainfully employed.
California Research Bureau analysis
In response to a legislative request, the California
Research Bureau estimated, in August of 2009, that the
elimination of the vehicle asset test would increase annual
CalWORKs caseloads by between 130 and 427 cases, with a
"best guess" of 279 cases. Additionally, these CalWORKs
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cases would lead to an increase in Medi-Cal caseloads of
between 4 and 125 cases, with a "best guess" of 45 cases.
It is unclear whether all the same assumptions in building
this estimate would still apply. The changes related to
the state's implementation of its 1115 waiver and the
federal health law in 2014 may affect any estimates
concerning the Medi-Cal population.
Prior legislation
AB 1058 (Beall) of 2009-10 would have deleted the
requirement that county welfare departments assess the
value of a vehicle when determining a CalWORKs' application
or recertification. Died in Senate Appropriations suspense
file.
AB 2368 (Fuentes) of 2007-08 would have eliminated the
vehicle asset test for CalWORKs applicants and recipients.
Died in the Senate Appropriations suspense file.
AB 2480 (S. Runner) 2007-2008 would have amended the
CalWORKs eligibility vehicle asset limit by adding leased
vehicles to the list of countable resources. Failed
passage in the Assembly Human Services Committee.
AB 1078 (Lieber), Chapter 622, Statutes of 2007, in
addition to EITC awareness provisions, excluded funds in
specified retirement and educational accounts authorized
under federal law from being considered as income or
resources for purposes of CalWORKs benefits for applicants.
AB 167 (Bass) of 2007-08 would have eliminated the CalWORKs
asset test for applicants and recipients. Died in the
Senate Appropriations suspense file.
AB 2466 (Daucher and Arambula), Chapter 781, Statutes of
2006, excluded funds in specified retirement and
educational accounts authorized under federal law from
being considered as income or resources for purposes of
CalWORKs benefits for current recipients, not for new
applicants. In addition, it added financial management
education as an allowable welfare-to-work activity for
adults receiving CalWORKs benefits.
Arguments in support
Supporters state that access to reliable transportation is
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critical for any person who wishes to be employed in
California today. Supporters point out that, according to
a 2000 study by UCLA researchers, transportation is often a
key factor in finding and maintaining stable employment for
CalWORKs recipients. Supporters believe that the measure
will increase opportunities for recipients to find and
maintain stable employment, increase the state's work
participation rate, reduce grant costs in the long run, and
help the state and counties to avoid federal penalties in
the future.
The Regional Council of Rural Counties writes that reliable
transportation in rural and frontier areas is critical, not
only to seek and maintain employment, but also for the
health and safety of enrollees and their families. The
Council further writes that a dependable motor vehicle is
not a luxury, but a necessity for low-income rural
families.
PRIOR VOTES
Assembly Floor 55 - 17
Assembly Appropriations 11 - 6
Assembly Human Services 4 - 2
POSITIONS
Support: Asian Law Alliance
California Catholic Conference
California Commission on the Status of Women
California Communities United Institute
(CalComUI)
California National Organization for Women
California State Association of Counties (CSAC)
City and County of San Francisco
Coalition of California Welfare Rights
Organizations
County of Los Angeles
County Welfare Directors Association
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East Bay Community Law Center
Inner City Law Center
National Association of Social Workers,
California Chapter
New America Foundation
Regional Council of Rural Counties
Urban Counties Caucus
Western Center on Law and Poverty
1 individual
Oppose:None received
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