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SB-470 Electronic benefits transfer system.(2019-2020)

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Date Published: 06/20/2019 09:00 PM
SB470:v97#DOCUMENT

Amended  IN  Assembly  June 20, 2019
Amended  IN  Senate  May 17, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 470


Introduced by Senator Skinner
(Coauthor: Assembly Member Gipson)

February 21, 2019


An act to amend Section 10072 of, and to add Section 10072.4 to, the Welfare and Institutions Code, relating to public social services.


LEGISLATIVE COUNSEL'S DIGEST


SB 470, as amended, Skinner. Electronic benefits transfer system.
Existing federal law provides for the Supplemental Nutrition Assistance Program (SNAP), known in California as CalFresh, under which supplemental nutrition assistance benefits allocated to the state by the federal government are distributed to eligible individuals by each county. Existing federal law requires the Secretary of Agriculture to approve retail food stores to accept CalFresh benefits through online transactions if the secretary implements this program after a required demonstration project.
Existing law provides for the establishment of a statewide electronic benefits transfer (EBT) system, administered by the State Department of Social Services, for the purpose of providing financial and food assistance benefits. Existing law authorizes a county to deliver CalFresh benefits through the use of the EBT system.
This bill would require the EBT system to limit the purchase of food through an online transaction only to retailers that are authorized to accept CalFresh benefits by the United States Department of Agriculture and that comply with various requirements, including, providing reasonable access to exchange food within 4 hours of receipt of the food.
This bill would also require the State Department of Social Services, in consultation with the Office of Systems Integration and other relevant stakeholders, to establish the qualifications, and process, for approving retailers to accept, and standards for accepting, online cash benefits payments through the EBT system. processes, and standards required to certify and recertify retailers as eligible to accept payments online using cash benefits and to determine the allowable online purchases that may be made using cash benefits. The bill would require the department to issue an all-county letter or similar guidance by January 1, 2021, describing the qualifications, process, and standards developed. The bill would require the EBT system to limit the ability to make online payments using cash benefits to only those retailers approved by the department to accept online cash benefits payments.

Existing law requires that all reasonable measures be taken in order to ensure that recipients have access to electronically issued benefits through systems that accept electronic benefits transfer transactions. Existing regulations require CalFresh benefits to be staggered over the first 10 calendar days of the month.

This bill would require, unless otherwise required by federal law, that CalFresh benefits, except for Disaster CalFresh benefits, be staggered over a period of 10 days.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 10072 of the Welfare and Institutions Code is amended to read:

10072.
 The electronic benefits transfer system required by this chapter shall be designed to do, but not be limited to, all of the following:
(a) To the extent permitted by federal law and the rules of the program providing the benefits, recipients who are required to receive their benefits using an electronic benefits transfer system shall be permitted to gain access to the benefits in any part of the state where electronic benefits transfers are accepted. All electronic benefits transfer systems in this state shall be designed to allow recipients to gain access to their benefits by using every other electronic benefits transfer system.
(b) (1) To the maximum extent feasible, electronic benefits transfer systems shall be designed to be compatible with the electronic benefits transfer systems in other states.
(2) (A) To the maximum extent feasible and to the extent permitted by federal law and the rules of the program providing the benefits, or pursuant to a waiver from the United States Department of Agriculture, the electronic benefits transfer system shall limit the purchase of food through an online transaction only to retailers that are authorized to accept CalFresh benefits by the United States Department of Agriculture and that comply with all of the following:
(i) Provide reasonable access to exchange the food within four hours of receipt of the food.
(ii) Meet state and local food safety requirements and require that food purchased online is packed and delivered by employees of the approved food retailer with appropriate food safety credentials.
(iii) Provide Provide, when a customer either picks up an order at a store or receives an order as a delivery, an in-person confirmation of delivery as an option for a customer to either pick up at the store or to receive in pickup or delivery on which the signature of the person providing the pick-up order or delivering the food and order and the signature of the person receiving the food order is secured and stored by the retailer.
(B) The State Department of Social Services shall, in consultation with the Office of Systems Integration, county human services agencies, consumer advocates, public benefit recipient advocates, representatives of public benefit caseworkers and food workers, grocery industry representatives, and other relevant stakeholders, establish protocols to block prohibit retailers from accepting online food benefits payments through the electronic benefits transfer system if they do not meet the qualifications enumerated in this paragraph regarding using existing processes for blocking EBT use at certain retailers. subparagraph (A).
(C) (i) For the purposes of this paragraph, “retailer” means a grocery establishment, as defined in Section 2502 of the Labor Code, a grocery store, as defined in Section 113948 of the Health and Safety Code, a commissary, a community-supported agriculture program, as defined in Section 47060 of the Food and Agricultural Code, or a restaurant that has entered into a memorandum of understanding with a county human services agency to serve CalFresh recipients who are elderly or homeless or who have disabilities through the CalFresh Restaurant Meals Program.
(ii) For the purposes of this subparagraph, “commissary” means a store that sells food to the personnel or workers at a military post.
(D) This paragraph shall become inoperative upon certification by the director that federal regulations for online food EBT purchases already include the consumer protections established in this paragraph.
(c) (1) All reasonable measures shall be taken in order to ensure that recipients have access to electronically issued benefits through systems, including, but not limited to, automated teller machines, point-of-sale devices, or other devices that accept electronic benefits transfer transactions.
(2) Benefits provided under Chapter 2 (commencing with Section 11200) of Part 3 shall be staggered over a period of three calendar days, unless a county requests a waiver from the department to issue those benefits on the first of the month and the waiver is approved, or, in cases of hardship, pursuant to subdivision (p).

(3)Unless otherwise required by federal law, except for Disaster CalFresh benefits, CalFresh benefits shall be staggered over a period of 10 calendar days.

(d) The system shall provide for reasonable access to benefits to recipients who demonstrate an inability to use an electronic benefits transfer card or other aspect of the system because of disability, language, lack of access, or other barrier. These alternative methods shall conform to the requirements of the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101, et seq.), including reasonable accommodations for recipients who, because of physical or mental disabilities, are unable to operate or otherwise make effective use of the electronic benefits transfer system.
(e) The system shall permit a recipient the option to choose a personal identification number, also known as a “PIN” number, to assist the recipient to remember the number in order to allow access to benefits. Whenever an institution, authorized representative, or other third party not part of the recipient household or assistance unit has been issued an electronic benefits transfer card, either in lieu of, or in addition to, the recipient, the third party shall have a separate card and personal identification number. At the option of the recipient, the recipient may designate whether restrictions apply to the third party’s access to the recipient’s benefits. At the option of the recipient head of household or assistance unit, the county shall provide one electronic benefits transfer card to each adult member to enable them to access benefits.
(f) The system shall have a 24-hour per day toll-free telephone hotline for the reporting of lost or stolen cards that will provide recipients, at no additional cost to the recipient, with information on how to have the card and personal identification number replaced, and that will allow an authorized representative or head of household to access, over the telephone, the transaction history detail for at least the last 10 transactions and to request that the transaction history detail for at least the past two months be sent by mail.
(g) The system shall have an internet website that will provide recipients, at no additional cost to the recipient, with information on how to have the card and personal identification number replaced, and that will allow an authorized representative or head of household to view the transaction history detail for at least the last 10 transactions and to request that the transaction history detail for at least the past two months be sent by mail.
(h) In addition to the ability to receive transaction history detail pursuant to subdivisions (f) and (g), a county human services agency shall make available to an authorized representative or head of household, at no additional cost to the authorized representative or head of household, all electronic benefit transaction history details that are available to the county human services agency within 10 business days after a request has been received by the agency.
(i) (1) A recipient shall not incur any loss of electronic benefits after reporting that their electronic benefits transfer card or personal identification number has been lost or stolen. The system shall provide for the prompt replacement of lost or stolen electronic benefits transfer cards and personal identification numbers. Electronic benefits for which the case was determined eligible and that were not withdrawn by transactions using an authorized personal identification number for the account shall also be promptly replaced.
(2) (A) Except as provided in subparagraph (B), a recipient shall not incur any loss of cash benefits that are taken by an unauthorized contact, withdrawal, removal, or use of benefits, including, but not limited to, use that results from an unauthorized solicitation, request, or representation that does not occur by the use of a physical electronic benefits transfer card issued to the recipient or authorized third party to directly access the benefits. Benefits taken as described in this subparagraph shall be promptly replaced in accordance with the protocol established by the department pursuant to paragraph (3).
(B) If a recipient knowingly provides their electronic benefits transfer card number and personal identification number to an unauthorized third party that the recipient mistakenly believes to be the contracted electronic benefits transfer vendor, an approved retailer, or a governmental entity, any benefits taken as described in subparagraph (A) shall be promptly replaced in accordance with the protocol established by the department pursuant to paragraph (3), but not more than one time in a 36-month period.
(3) The State Department of Social Services shall establish a protocol for recipients to report electronic theft of cash benefits that minimizes the burden on recipients, ensures prompt replacement of benefits in order to minimize the harm to recipients, and ensures program integrity. This protocol may include the automatic replacement of benefits without the need for recipient reporting and verification.
(4) (A) Notwithstanding paragraphs (2) and (3), the State Department of Social Services may issue mass reimbursements to recipients for the loss of cash benefits if the department finds that the benefits of multiple recipients were taken by an unauthorized withdrawal, removal, or use of benefits in which the recipients’ electronic benefits transfer card numbers or personal identification numbers were obtained by means of a data breach.
(B) A mass reimbursement made pursuant to subparagraph (A) requires the approval of the Department of Finance with notice given to the Joint Legislative Budget Committee.
(j) Electronic benefits transfer system consumers shall be informed on how to use electronic benefits transfer cards, how to protect their cards from misuse, and where consumers can use their cards to withdraw benefits without incurring a fee, charge, or surcharge.
(k) The electronic benefits transfer system shall be designed to inform recipients when the electronic benefits transfer system does not function or is expected not to function for more than a one-hour period between 6 a.m. and midnight during any 24-hour period. This information shall be made available in the recipient’s preferred language if the electronic benefits transfer system vendor contract provides for services in that language.
(l) Procedures shall be developed for error resolution.
(m) A fee shall not be charged by the state, a county, or an electronic benefits processor certified by the state to retailers participating in the electronic benefits transfer system.
(n) Except for CalFresh transactions, a recipient may be charged a fee, not to exceed the amount allowed by applicable state and federal law and customarily charged to other customers, for cash withdrawal transactions that exceed four per month.
(o) The electronic benefits transfer system shall be designed to ensure that recipients of benefits under Chapter 2 (commencing with Section 11200) of Part 3 have access to using or withdrawing benefits with minimal fees or charges, including an opportunity to access benefits with no fee or charges.
(p) A county shall exempt an individual from the three-day staggering requirement under subdivision (c) on a case-by-case basis for hardship. Hardship includes, but is not limited to, the incurrence of late charges on an individual’s housing payments.
(q) A county shall use information provided by the department to inform recipients of benefits under Chapter 2 (commencing with Section 11200) of Part 3 of all of the following:
(1) The methods of electronic delivery of benefits available, including distribution of benefits through the electronic benefits transfer system or direct deposit pursuant to Section 11006.2.
(2) Applicable fees and charges, including surcharges, consumer and privacy protections, and liability for theft associated with the electronic benefits transfer system.
(3) How to avoid fees and charges, including opting for delivery of benefits by direct deposit and using the electronic benefits transfer card solely at surcharge free locations.
(4) Where to withdraw benefits without a surcharge when using the electronic benefits transfer system.
(5) That a recipient may authorize any available method of electronic delivery of benefits and instructions regarding how the recipient may select or change their preferred method of electronic delivery of benefits and that the recipient shall be given the opportunity to select the method prior to the first payment.
(6) That a recipient may be entitled to an alternative method of delivery if the recipient demonstrates an inability to use an electronic benefits transfer card or other aspect of the system because of disability, language, lack of access, or other barrier pursuant to subdivision (d) and instructions regarding how to determine whether the recipient qualifies for an alternative method of delivery.
(7) That a recipient may be entitled to an exemption from the three-day staggering requirement under subdivision (c) on a case-by-case basis for hardship pursuant to subdivision (p) and instructions regarding how to determine whether the recipient qualifies for the exemption.
(r) A county is in compliance with subdivision (q) if it provides the recipient a copy of the information developed by the department. A county may provide a recipient information, in addition to the copy of the information developed by the department, pursuant to subdivision (q), either verbally or in writing, if the county determines the additional information will benefit the recipient’s understanding of the information provided.

SEC. 2.

 Section 10072.4 is added to the Welfare and Institutions Code, to read:

10072.4.
 (a) To the maximum extent feasible and to the extent permitted by federal law and the rules of the program providing the benefits, or pursuant to a waiver from the United States Department of Agriculture, the State Department of Social Services shall, in consultation with the Office of Systems Integration, county human services agencies, consumer advocates, public benefit recipient advocates, representatives of public benefit caseworkers and food workers, grocery industry representatives, and other relevant stakeholders, establish the qualifications, and process, for approving retailers to accept, and standards for accepting, online cash benefits payments through the electronic benefits transfer system. do both of the following:

(b)The electronic benefits system shall limit the ability to make online payments using cash benefits, including, but not limited, the payment of a fee for the delivery of food purchased using CalFresh benefits through the electronic benefits transfer system, to only retailers approved by the State Department of Social Services to accept online cash benefits payments through the electronic benefits transfer system.

(c)

(1) Establish qualifications, processes, and standards required to certify, and periodically recertify, retailers as eligible to accept payments online using cash benefits.
(2) Determine the allowable online purchases that may be made using cash benefits. In making that determination, consideration shall be given, at a minimum, to the allowable payment of fees for the delivery of food purchased using CalFresh benefits through the electronic benefits transfer system.
(b) A retailer approved by the State Department of Social Services to accept online cash benefits payments shall comply with standards established pursuant to subdivision (a), for the online acceptance of cash benefit payments through the electronic benefits transfer system.

SEC. 3.

 Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), both of the following apply:
(a) The State Department of Social Services may implement and administer this act through an all-county letter or similar instruction until regulations are adopted. Thereafter, the department shall adopt regulations to implement this act within two years following the federal approval of online EBT purchases for California EBT cardholders.
(b) By January 1, 2021, the State Department of Social Services shall issue an all-county letter or similar instructions from the director describing the qualifications, process, and standards developed pursuant to subdivision (a) of Section 10072.4 of the Welfare and Institutions Code.