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SB-854 Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Act of 2022.(2021-2022)

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Date Published: 05/02/2022 09:00 PM
SB854:v96#DOCUMENT

Amended  IN  Senate  May 02, 2022
Amended  IN  Senate  April 21, 2022
Amended  IN  Senate  April 06, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 854

Introduced by Senator Skinner

January 19, 2022

An act to add Section 17141.5 to the Revenue and Taxation Code, and to add Chapter 16.1 (commencing with Section 18997.5) and Chapter 16.2 (commencing with Section 18997.6) to Part 6 of Division 9 of the Welfare and Institutions Code, relating to public social services.


LEGISLATIVE COUNSEL'S DIGEST


SB 854, as amended, Skinner. Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Act of 2022.
Existing law requires the State Department of Social Services, subject to an appropriation in the annual Budget Act, to administer the California Guaranteed Income Pilot Program to provide grants to eligible entities for the purpose of administering pilot programs and projects that provide a guaranteed income to participants. Existing law requires the department to prioritize funding for pilot programs and projects that serve California residents who age out of the extended foster care program and pregnant individuals.

This bill would, subject to an appropriation by the Legislature or a provision of federal or private funds for these purposes, establish the Hope, Opportunity, Perseverance, and Empowerment (HOPE) Account Program to be administered by the Treasurer to provide eligible children, defined to include minor California residents who are specified dependents or wards under the jurisdiction of juvenile court in foster care for at least 12 months, or who have a parent or guardian who died due to COVID-19 and meet specified family household income limit, with a trust fund account. The bill would require the Treasurer, upon enrollment of an eligible child, to deposit into their trust fund account specified initial deposits and unspecified annual deposits. The bill would authorize a program enrollee to, on and after their 18th or 21st birthday, withdraw or transfer funds from their trust fund account. The bill would require the Treasurer to maintain a publicly available internet website where people may apply for the HOPE Account Program, and program enrollees may have password-protected online access to view information about the trust fund account’s growth and value, among other things. The bill would require, no later than March 1, 2023, the California Health and Human Services Agency to submit a report to the Legislature that identifies the authority necessary to expand the HOPE Account Program to include all children born into low-income circumstances and assesses the funding to do that, among other things.

This bill would require the State Department of Social Services to issue guidance to county human services agencies directing them to inform a parent or guardian of the HOPE Account Program if a child in the household is under the jurisdiction of the juvenile court or the assistance unit is receiving Kinship Guardianship Assistance Payment (Kin-GAP) benefits or the county becomes aware that a parent in a CalWORKs assistance unit or CalFresh household has died due to COVID-19. The bill would, to the extent permitted by federal law, prohibit funds deposited and investment returns accrued in a HOPE trust fund account from being considered as income or assets when determining eligibility and benefit amount for any means-tested program until an eligible child reaches 18 or 21 years of age, as specified. By imposing new duties on counties, the bill would impose a state-mandated local program.

The Personal Income Tax Law imposes taxes based upon taxable income at specified rates. Existing law, in modified conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded. Existing law, beginning on or after January 1, 2015, in modified conformity with federal income tax law, allows an earned income tax credit, the California Earned Income Tax Credit, against personal income tax. The Personal Income Tax Law allows, for each taxable year beginning on or after January 1, 2019, a young child tax credit against the taxes imposed under that law.

This bill, for taxable years beginning on or after January 1, 2023, would exclude from gross income, for purposes of the personal income tax, funds deposited, and any accrued interest, in a HOPE trust fund account. The bill, for taxable years beginning on or after January 1, 2023, would additionally provide that funds deposited, and any accrued interest, in a HOPE trust fund account are not earned income for purposes of eligibility for the California Earned Income Tax Credit and the Young Child Tax Credit.

This bill would require the Treasurer, on or before February 15, 2023, to convene a workgroup to advise the Legislature on the policy and funds necessary to establish trust fund accounts for children whose parent or guardian died from the COVID-19 virus and foster children most immediately, and eventually for all children born into low-income homes. The bill would require, no later than March 1, 2023, the workgroup to submit a report to the Legislature that includes its advice and considerations for the trust fund accounts and identifies the authority necessary to expand an existing trust fund program or create a new program to include all children born into low-income circumstances and assesses the funding to do that, among other things.
Existing federal law establishes the federal Old-Age, Survivors, and Disability Insurance (OASDI) program to provide monthly benefits to qualified retired and disabled workers and their spouses, dependents, and survivors.
This bill would, subject to an appropriation by the Legislature or a provision of federal or private funds for these purposes, require the State Department of Social Services to establish and oversee the California Survivor Benefit (CalSurvivor) Program, a county- or county consortia-administered program to provide cash assistance for a minor who is a California resident with a deceased parent, who was also a California resident upon their death, when the minor is not eligible for federal OASDI survivor benefits, as specified. The bill would require the department to require counties with an unspecified number of residents to establish an advocacy program to assist specified applicants and recipients of CalSurvivor benefits in the application process for federal OASDI survivor benefits if they do not meet certain verification requirements of the program. The bill would require the department to report to the Legislature, by July 1, 2025, on the outcomes of the CalSurvivor program Program and the advocacy programs. The bill would authorize the department to implement these provisions though all-county letters or similar instructions or emergency regulations. By requiring counties to administer the CalSurvivor program, Program, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to 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.

  This act shall be known, and may be cited, as the Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Act of 2022.

SEC. 2.

 (a) The Legislature finds and declares all of the following:
(1) According to the Public Policy Institute of California (PPIC), California is one of the most unequal states in the country, and inequality is at record levels.
(2) The COVID-19 pandemic has only served to increase inequality, and those who have fallen farthest behind are Black, Indigenous, Latino, and Asian Pacific Islander children.
(3) As of January 1, 2021, there is estimated to be nearly 20,000 California children who lost at least one parent or primary caregiver to COVID-19 and are left with significantly reduced financial support.
(4) The remaining parent or guardian of children who have lost a parent or caregiver from COVID-19 will need help to connect them to available survivor benefits or other benefits or services they are eligible for. Because many of those who have perished from COVID-19 did not have enough work quarters to qualify their children for survivor benefits under the federal Old-Age, Survivors, and Disability Insurance (OASDI) program, some children will go without this essential support unless the state intervenes.
(5) Furthermore, while economic stability of children with a deceased parent or caregiver may be improved by ensuring federal survivor benefits reach them, their future financial stability may not. This is because the most significant predictor of the future financial success of a child is the wealth level of the child’s parents with at least 20 percent, and up to 80 percent, of a person’s wealth being the result of an intergenerational transfer.
(6) This bleak economic future not only faces children whose parents are deceased, it faces other groups of young adults transitioning to adulthood in homes with little or no wealth, who are more likely to be Black, Brown, and or Indigenous children of color, due to the persistent and severe racial wealth gap.
(7) The research of economists, Dr. Darrick Hamilton and Dr. William Darity, Jr., has demonstrated that wealth gaps can be narrowed by depositing significant public sector dollars into a trust fund account for children under 18 year years of age to appreciably grow in value overtime, over time, with the contribution determined by family income or wealth.
(8) Children’s trust fund accounts, also referred to in academic publications as baby bonds, have emerged as a hopeful new policy that aims to advance social and economic wellbeing well-being of young adults, to reverse deep inequality, and to reduce the persistent racial wealth gap. These accounts work to support a child’s sense of safety, security, and hope during their formative childhood years knowing they will have this resource when they come of age.
(b) It is the intent of the Legislature to create a state-funded survivor benefit for children who are not eligible for survivor benefits under the federal OASDI program, and to ensure that every child receive federal or state survivor benefits when a parent has died.

(c)It is also the intent of the Legislature to enact legislation that would immediately establish trust fund accounts for lower income children who have lost a parent or guardian to COVID-19 and for foster children.

(d)It is also the intent of the Legislature to enact legislation that would create a path for every child born into low-income circumstances to have a trust fund account opened in their name in order to create opportunities and hope for intergenerational wealth and asset building as one of the many strategies California must employ to reverse our state’s record level of inequality.

(c) It is also the intent of the Legislature to enact legislation that would establish a work group to advise the Legislature on establishing trust fund accounts for children who have lost a parent or guardian to COVID-19 and for foster children most immediately, and eventually for all children born into a low-income circumstance, in order to create opportunities and hope for intergenerational wealth and asset building as one of the many strategies California must employ to reverse our state’s record level of inequality.
SEC. 3.Section 17141.5 is added to the Revenue and Taxation Code, to read:
17141.5.

(a)For taxable years beginning on or after January 1, 2023, gross income does not include any funds deposited, and any accrued interest, in a trust fund account under the Hope, Opportunity, Perseverance, and Empowerment (HOPE) Account Program established pursuant to Chapter 16.1 (commencing with Section 18997.5) of Part 6 of Division 9 of the Welfare and Institutions Code and any funds from that account that is withdrawn or transferred by the program enrollee.

(b)For taxable years beginning on or after January 1, 2023, funds deposited, and any accrued interest, in a trust fund account under the HOPE Account Program established pursuant to Chapter 16.1 (commencing with Section 18997.5) of Part 6 of Division 9 of the Welfare and Institutions Code and any funds from a HOPE trust fund account that is withdrawn or transferred by a program enrollee shall not be considered earned income for purposes of eligibility for the California Earned Income Tax Credit pursuant to Section 17052 and the Young Child Tax Credit pursuant to Section 17052.1.

SEC. 4.SEC. 3.

 Chapter 16.1 (commencing with Section 18997.5) is added to Part 6 of Division 9 of the Welfare and Institutions Code, to read:
CHAPTER  16.1. The Hope, Opportunity, Perseverance, and Empowerment (HOPE) Account Program
18997.5.

(a)The Hope, Opportunity, Perseverance, and Empowerment (HOPE) Account Program is hereby established to be administered by the Treasurer for the purpose of promoting greater opportunity for eligible children by providing them with a trust fund account to improve their sense of security and hope in their formative childhood years while also reducing income inequality in California.

(b)“Eligible child” or “eligible children” means a minor resident of California who is under 18 years of age and who meets one of the following:

(1)Their parent or guardian died, and the cause of death for the parent or guardian is listed as COVID-19 on their death certificate, or they died as a consequence of having long-term COVID-19, and the minor’s family household income, considering the income prior to the death of the parent, is at or below the income that would make the child eligible for Medi-Cal benefits under Chapter 7 (commencing with Section 14000) of Part 3, or the state median income for the previous year, whichever is more. For purposes of this paragraph, “family household” means one or more persons, all of whom are related by marriage, birth, adoption, or guardianship, and “federal poverty level” means the poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under the authority of Section 9902(2) of Title 42 of the United States Code.

(2)(A) The child meets all of the following:

(i)The child has been adjudged a dependent child of the juvenile court on the grounds that the child is a person described by Section 300, or the child has been adjudged a ward of the juvenile court on the grounds that the child is a person described by Section 601 or 602, or the child is a dependent child of the court of an Indian tribe, consortium of tribes, or tribal organization who is the subject of a petition filed in the tribal court pursuant to the tribal court’s jurisdiction in accordance with the tribe’s law and the tribe has notified the department about the child's status as a dependent child under the tribal court. The department shall not require an Indian tribe, consortium of tribes, tribal organization, or tribal court representative to notify the department of any child who is a dependent of the tribal court.

(ii)The child is subject to a foster care order and has been in foster care for at least 12 months.

(iii)The court has determined that the child is not likely to be able to return safely to the home of their parent or legal guardian.

(B)Notwithstanding clause (iii) of subparagraph (A), if the court order is changed at a later date and the child reunifies with their parent or legal guardian, is adopted, enters into a tribal customary adoption, or is placed into a legal guardianship, any HOPE trust fund account previously established for that child pursuant to this chapter shall remain in effect and shall become available to that child upon them turning 18 or 21 years of age, as otherwise prescribed in this chapter.

(c)

18997.5.
 (a) On or before February 15, 2023, the Treasurer shall convene a workgroup to advise the Treasurer on Legislature on the policy and funds necessary to establish trust fund accounts for children whose parent or guardian died from the COVID-19 virus and foster children most immediately, and eventually for all children born into low-income homes. The workgroup shall consider program design, including, but not limited to, the process for program enrollment and continuous measurement of outcomes of the HOPE trust fund accounts. The workgroup shall consist of all of the following:
(1) Representatives from the California Health and Human Services Agency, the State Department of Social Services, the State Department of Public Health, the State Department of Health Care Services, and the Department of Corrections and Rehabilitation.
(2) Representatives of the Legislature.
(3) Community stakeholders.
(4) Representatives of county human services agencies.
(5) The exclusive representatives of county child welfare workers.
(6) Representatives of tribal communities.

(d)(1)Upon enrollment into the program, the Treasurer shall deposit into an eligible child’s HOPE trust fund account an initial deposit amount of four thousand dollars ($4,000) for children under 10 years of age and eight thousand dollars ($8,000) for children 10 years of age or older. By January 1 of each subsequent year, the Treasurer shall make an annual deposit into the HOPE trust fund account in the amount of ___ dollars ($___) for each continually eligible child.

(2)Nothing in this chapter prevents the Treasurer from depositing in an established HOPE trust fund account an amount that is equal to more than the amount established for annual deposits pursuant to subparagraph (1), if an appropriation is made available for this purpose in the annual Budget Act, federal funds are provided for this purpose, or a special fund is created for the purpose of increasing HOPE trust fund account deposits.

(e)The Treasurer shall maintain a publicly available internet website where people may apply for the HOPE Account Program, program enrollees may have password protected online access to view information about the HOPE trust fund account’s growth and value, and eligible children who have turned 18 years of age may be connected to banking services and financial literacy resources made available through the Department of Financial Protection and Innovation.

(f)(1)Except as provided in paragraph (2), a program enrollee may, on and after their 18th birthday, withdraw or transfer funds from their HOPE trust fund account.

(2)(A)Notwithstanding paragraph (1), a program enrollee who is a nonminor dependent, as defined in subdivision (v) of Section 11400, may withdraw or transfer funds from their HOPE trust fund account on and after their 21st birthday, or upon exit from foster care if exiting prior to 21 years of age.

(B)The Treasurer shall assist a nonminor dependent who is eligible for an ABLE account, as defined in Section 4875, and their guardian, in transferring funds from their HOPE trust fund account to the ABLE account.

(3)The Treasurer shall refer a program enrollee to the Department of Financial Protection and Innovation for consumer education and outreach services within six months prior to the program enrollee’s 18th birthday.

(g)(1)Nothing in this chapter shall prevent deposits into HOPE trust fund accounts made pursuant to paragraph (c) of this section from being a tax credit if established under the Revenue and Taxation Code.

(2)If the deposit made pursuant to this chapter is deemed to be a tax credit, the Treasurer shall certify to the Legislature that they have received and complied with any additional required authority from the Franchise Tax Board.

(7) Representatives of the foster community with personal experience as a foster youth.
(8) Representatives of COVID-19 victims groups representing children who have lost a parent or caregiver to the COVID-19 virus.

(h)

(b) (1) No later than March 1, 2023, the California Health and Human Services Agency, in collaboration with the Treasurer and other stakeholders determined as necessary by the Secretary of California Health and Human Services, workgroup shall submit a report to the Legislature that includes the advice and considerations specified in subdivision (a) and identifies the authority necessary to expand the HOPE Account Program an existing trust fund program or create a new program, if one does not exist, to include all children born into low-income circumstances and assesses the funding to do that. The report shall include recommendations on how to best reach children disproportionately impacted by poverty and low wealth, including, but not limited to, foster youth, Indigenous children, migrant and refugee children, children living in communities with high poverty rates, and children whose parents and or guardians are incarcerated. This report shall also contemplate how, and under which circumstances, to establish a HOPE trust fund account for a child or categories of children for whom an account was not opened at birth, but whose circumstances warrant the establishment of an account pursuant to this paragraph.
(2) The report required by this paragraph shall be submitted in compliance with Section 9795 of the Government Code.

18997.51.

(a)The State Department of Social Services shall, in consultation with the County Welfare Directors Association of California, develop and issue guidance to county human services agencies regarding how to inform a parent, legal guardian, foster caregiver, and the child, as applicable, of the availability of the HOPE Account Program under either of the following circumstances:

(1)The child appears to meet the requirements set forth in subdivision (b) of Section 18997.5.

(2)The county becomes aware that a parent in a CalWORKs assistance unit or CalFresh household has died due to COVID-19.

(b)A county may, but is not required to, implement the guidance issued pursuant to, subdivision (a) until 60 days after its issuance.

(c)Counties are obligated to implement the requirements of this section only to the extent that state funds have been provided to counties for this purpose.

18997.52.

(a)Notwithstanding any other law, and to the extent permitted by federal law, funds deposited and investment returns accrued in a HOPE trust fund account established pursuant to this chapter shall not be considered as income or assets when determining eligibility and benefit amount for any means-tested program, including, but not limited to, CalWORKs, CalFresh, General Assistance, Medi-Cal, Kinship Guardianship Assistance Payment (Kin-GAP), or Adoption Assistance Program (AAP), and Cash Assistance Program for Immigrants (CAPI), and any scholarships for public colleges and universities, including, but not limited to, Cal Grant awards, Chafee grant awards, Middle Class Scholarship Program awards, California College Promise Grants, California State University Educational Opportunity Program (EOP) grants, Community College Extended Opportunity Programs and Services (EOPS) grants, and grants from the University of California or California State University, until an eligible child reaches 18 years of age, or, in the case of a nonminor dependent, 21 years of age, and the funds are disbursed to the eligible child, at which point, the distribution of the funds shall be considered a lump-sum payment and the balance shall be counted to any extent that the balance of any savings account is counted as income or an asset in a program.

(b)Notwithstanding any other law or guidance, funds deposited and investment returns accrued in a HOPE trust fund account paid to an eligible child who turns 18 years of age or older shall not be subject to any money judgment or a Franchise Tax Board intercept.

18997.53.

Implementation of this chapter shall be subject to an appropriation by the Legislature for these purposes or a provision of federal funds or private funds for these purposes.

SEC. 5.SEC. 4.

 Chapter 16.2 (commencing with Section 18997.6) is added to Part 6 of Division 9 of the Welfare and Institutions Code, to read:
CHAPTER  16.2. California Survivor Benefit (CalSurvivor) Program

18997.6.
 The State Department of Social Services shall establish and oversee the California Survivor Benefit (CalSurvivor) Program, a county- or county consortia-administered program to provide cash assistance for a minor who is a California resident with a deceased parent, who was also a California resident upon their death, when the minor is not eligible for survivor benefits under the federal Old-Age, Survivors, and Disability Insurance (OASDI) program pursuant to Section 402 of Title 42 of the United States Code. The department shall conduct the eligibility determination for the program.

18997.61.
 (a) (1) Subject to paragraphs (2) and (3), upon application, a minor shall be eligible for the program established pursuant to this chapter if their status as a surviving child of a deceased parent would make them eligible for federal OASDI survivor benefits, but the minor is determined to not be eligible.
(2) The minor child of the deceased Californian is eligible if they meet any of the following:
(A) They are under 18 years of age and unmarried.
(B) They are under 19 years of age and unmarried, but in elementary or secondary school as a full-time student.
(C) They are 18 years of age or older and have a severe disability that originated before they attained 22 years of age.
(3) The applicant shall provide all of the following documentation to the department:
(A) Death certificate of the deceased parent.
(B) Birth certificate of the applicant.
(C) Proof that both the parent and the child were residents of California on the date of the death of the parent.
(D) Proof that an applicant is not eligible for federal OASDI survivor benefits.
(b) The department shall periodically redetermine the eligibility of each individual.
(c) (1) The department shall require counties with ___ or more residents to establish an advocacy program to assist applicants and recipients of aid under this chapter in the application process for federal OASDI survivor benefits if the applicant is denied for not having the verification required pursuant to subparagraph (D) of paragraph (3) of subdivision (a), unless the applicant affirmatively states that they do not want the assistance in writing.
(2) The department shall provide assistance to counties in their efforts to implement the advocacy program described in paragraph (1) and the CalSurvivor program Program established pursuant to this chapter.
(3) The department shall reimburse fees incurred by attorneys or other authorized representatives during the appeals phase of the federal OASDI survivor benefits application process, but only when the county demonstrates that the legal representative successfully secures approval of federal OASDI survivor benefits. The legal fees for each case shall not exceed twice the difference between the maximum monthly individual payment provided under this chapter and the maximum monthly federal OASDI survivor benefits payment.
(4) The department shall report to the Legislature, by July 1, 2025, on the outcomes of the CalSurvivor program Program and the advocacy programs described in paragraph (1), including the numbers number of cases that were approved for benefit benefits in each program, disaggregated by county.
(5) Counties are obligated to operate the advocacy program only to the extent that state funds have been provided to counties for this purpose.

18997.62.
 (a) Benefits provided under this chapter shall be equivalent to the federal OASDI survivor benefits.
(b) Except as otherwise provided in this chapter, the federal and state laws and regulations governing the federal OASDI survivor benefits program shall also govern the program provided for under this chapter.
(c) (1) Nothing in this chapter shall prevent the CalSurvivor program benefits issued pursuant to this chapter from being a tax credit if established under the Revenue and Taxation Code.
(2) If the CalSurvivor program Program benefits issued pursuant to this chapter are deemed to be a tax credit, the Director of Social Services shall certify to the Legislature that they have received and complied with any additional required authority from the Franchise Tax Board.

18997.63.
  The department shall reimburse counties for the cost of actual payments made pursuant to this chapter and for the administrative costs actually attributable to those payments.

18997.64.
 (a) The department and the State Department of Health Care Services shall jointly issue guidance to county human services agencies directing them to inform a parent or guardian of the CalSurvivor program Program when the county becomes aware that a child’s parent has died.
(b) The Department of Child Support Services shall issue guidance to local child support agencies directing them to inform a custodial parent or guardian of the CalSurvivor program Program when the department becomes aware that a child’s noncustodial parent has died.

18997.65.
 (a) Notwithstanding the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), through June 30, 2025, the department may implement this chapter through all-county letter letters or similar instructions.
(b) The department shall adopt regulations, as otherwise necessary, to implement the applicable provisions of this chapter no later than July 1, 2025.
(c) Emergency regulations to implement the applicable provisions of this chapter may be adopted by the director in accordance with the Administrative Procedure Act. The adoption of emergency regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. Emergency regulations shall be exempt from review by the Office of Administrative Law. The emergency regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and shall remain in effect for no more than 180 days.

18997.66.
 (a) This chapter shall become operative on July 1, 2023.
(b) Implementation of this chapter shall be subject to an appropriation by the Legislature for these purposes or a provision of federal funds or private funds for these purposes.
(c) This chapter shall be implemented only during any period that federal benefits are provided under Section 402(d) of Title 42 of the United States Code.

SEC. 6.SEC. 5.

 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.