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SB-278 CalFresh: overissuance.(2017-2018)

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Date Published: 05/26/2017 10:00 AM
SB278:v97#DOCUMENT

Amended  IN  Senate  May 26, 2017
Amended  IN  Senate  April 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 278


Introduced by Senator Wiener

February 09, 2017


An act to amend Section 18927 of, and to add Section 18927.5 to, the Welfare and Institutions Code, relating to CalFresh.


LEGISLATIVE COUNSEL'S DIGEST


SB 278, as amended, Wiener. CalFresh: overissuance.
Existing law provides for the federal Supplemental Nutrition Assistance Program (SNAP), administered in California as CalFresh, under which each county distributes nutrition assistance benefits provided by the federal government to eligible households. Existing law requires each county human services agency to carry out the local administrative responsibilities of this program, subject to the supervision of the State Department of Social Services and to rules and regulations adopted by the department. Existing law requires current and future CalFresh benefits to be reduced, as specified, to recover an overissuance caused by administrative error if required by federal law, or if the overissuance exceeds $125 or the minimum cost-effective threshold for collecting overissuances that the department is authorized to establish, whichever is greater.
This bill would instead require the department to establish the minimum specify that the department is authorized to establish a minimum statewide cost-effective threshold for collecting overissuances that are caused by administrative error from former CalFresh recipients. If the department does not establish a minimum statewide cost-effective threshold, the bill would authorize a county to request that the state allow for a minimum county cost-effective threshold, as specified. If a county makes that request, the bill would require the department to include the request in the state plan submitted annually to the United States Department of Agriculture, Food and Nutrition Service.
Existing federal law requires, if the Secretary of Agriculture of the United States determines that there has been negligence or fraud on part of a state in the certification of applicant households, the state to deposit into the Treasury of the United States, a sum equal to the face value of any benefits issued as a result of the negligence or fraud. Existing federal law authorizes the secretary, if he or she determines that a state overissued benefits to a substantial number of households in a fiscal year as a result of a major systemic error by the state, to prohibit the state from collecting these overissuances and requires the secretary to establish a claim against the state equal to the value of the overissuance caused by the systemic error.
This bill would require a county human services agency to notify the State Department of Social Services and recipients impacted by a mass overissuance when a mass overissuance, as defined, has been identified. The bill would require the department to determine whether the state or county may be required to pay the mass overissuance pursuant to the above-mentioned federal law. The bill would require the department, if it makes that determination, to notify the regional office of the United States Department of Agriculture of the mass overissuance and the cause of the overissuance, and would require the State Department of Social Services to facilitate payment if the Secretary of Agriculture of the United States determines that the mass overissuance shall be paid by the state or county. The bill would prohibit the county from beginning to collect for an overissuance from current or former CalFresh recipients until unless it has been determined that neither the county nor the state is responsible for payment of the mass overissuance. By increasing the duties of local officials, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 18927 of the Welfare and Institutions Code is amended to read:

18927.
 (a) Current and future CalFresh benefits shall be reduced in accordance with subdivisions (c) and (d) to recover an overissuance caused by intentional program violation, as defined in subdivision (c) of Section 273.16 of Title 7 of the Code of Federal Regulations, fraud, or inadvertent household error.
(b) Current and future CalFresh benefits shall be reduced in accordance with subdivisions (c) and (d) to recover an overissuance caused by administrative error if required by federal law or if the overissuance exceeds one hundred twenty-five dollars ($125) or the threshold established pursuant to subdivision (h), whichever is greater.
(c) A household’s CalFresh benefits shall not be reduced to recover an overissuance as required or authorized by subdivision (a) or (b) unless the household receives adequate and timely notice of the overissuance, including, but not limited to, the budget worksheet that includes the amount and calculation of the overissuance and the reason for the overissuance.
(d) (1) In recovering an overissuance caused by administrative error, a recipient household’s monthly CalFresh benefits shall not be reduced by more than 5 percent of the household’s monthly CalFresh benefits or ten dollars ($10), whichever is greater, unless the recipient elects for the benefits to be reduced at a higher rate.
(2) In recovering an overissuance caused by inadvertent household error, a recipient household’s monthly CalFresh benefits shall not be reduced by more than 10 percent of the household’s monthly CalFresh benefits or ten dollars ($10), whichever is greater.
(3) In recovering an overissuance caused by intentional program violation, as defined in subdivision (c) of Section 273.16 of Title 7 of the Code of Federal Regulations, or fraud, a recipient household’s monthly CalFresh benefits shall be reduced by 20 percent of the household’s monthly CalFresh benefit or twenty dollars ($20), whichever is greater.
(e) If a household is no longer receiving CalFresh benefits, a CalFresh overissuance caused by administrative error shall not be established, and collection shall not be attempted, if the overissuance is less than one hundred twenty-five dollars ($125) or the threshold established pursuant to subdivision (h), whichever is greater.
(f) If a household is no longer receiving CalFresh benefits, collection shall be attempted if the overissuance is caused by inadvertent household error and the overissuance is thirty-five dollars ($35) or more. All overissuances caused by intentional program violation, as defined in subdivision (c) of Section 273.16 of Title 7 of the Code of Federal Regulations, or fraud shall be collected as required by federal law.
(g) When an overissuance collection is attempted, reasonable cost-effective methods of collection shall be implemented. The department shall define reasonable cost-effective collection methods, which shall include adequate and timely notice of the overissuance, including, but not limited to, all of the following:
(1) The amount and calculation of, and reason for, the overissuance.
(2) A statement of the monetary threshold described in this subdivision.
(3) Information about how to appeal the overissuance.
(4) Instructions for timely commencement of repayment.
(5) Consequences of delinquent payment.
(h) (1) The department shall may establish a minimum statewide cost-effective threshold for collecting CalFresh overissuances that are caused by administrative error from former CalFresh recipients. If the department determines that the minimum cost-effective threshold is greater than one hundred twenty-five dollars ($125), this threshold shall be included in the state’s claims management plan submitted annually for federal approval.
(2) (A) If the department does not establish a minimum statewide cost-effective threshold for collecting CalFresh overissuances pursuant to paragraph (1), a county may request that the state allow for a minimum county cost-effective threshold based on calculations for cost-effectiveness specific to that county.
(B) If a county requests that the state allow for a minimum county cost-effective threshold, the department shall include this request in the state plan submitted annually to the United States Department of Agriculture, Food and Nutrition Service.
(i) Nothing in this section shall prevent a county from writing off or terminating an overissuance claim when it meets the provisions of paragraph (8) of subdivision (e) of Section 273.18 of Title 7 of the Code of Federal Regulations.
(j) Nothing in this section shall prevent a county or the state from collecting all overissuances that are identified during a quality control review, as required by Section 275.12 of Title 7 of the Code of Federal Regulations.
(k) 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), the department may implement this section through all-county letters or similar instructions from the director no later than January 1, 2014, to allow for automation updates required by this section to be made in coordination with other scheduled updates.

SEC. 2.

 Section 18927.5 is added to the Welfare and Institutions Code, to read:

18927.5.
 (a) A county human services agency shall notify the department and recipients impacted by a mass overissuance when a mass overissuance has been identified. The county shall not begin collecting for an overissuance from current or former CalFresh recipients unless either the department or the United States Department of Agriculture has determined, pursuant to subdivision (c), that neither the county, nor the state, is responsible for payment of the mass overissuance.
(b) If a county human services agency has reported a mass overissuance pursuant to subdivision (a), the department shall determine whether the state or county may be required to pay the mass overissuance pursuant to either of the following provisions:
(1) Section 2020(h) of Title 7 of the United States Code because the mass overissuance was caused by negligence or fraud on the part of the county human services agency in the certification of applicant households.
(2) Section 2022(b)(5) of Title 7 of the United States Code because the mass overissuance was a result of a major systemic error by the state or county human services agency.
(c) If the department determines that the state or county may be required to pay the mass overissuance pursuant to subdivision (b), the department shall notify the regional office of the United States Department of Agriculture of the mass overissuance and the cause of the overissuance, and the department shall facilitate payment if the Secretary of Agriculture of the United States determines that the mass overissuance shall be paid by the state or county.
(d) For purposes of this section, “mass overissuance” means an overissuance that is caused by the same action or inaction, impacts 1,000 or more CalFresh households, and occurs in either of the following:
(1) A single Statewide Automated Welfare System consortium system.
(2) A single county, but only if the county is a Performance Sample County identified in the department’s Manual of Policies and Procedures.

SEC. 3.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.