"Welfare bills: Floor analysis of AB 1501"
Note: The Welfare Conference Committee reported four bills to the floors of the
Legislature. These posts contain the Senate floor analysis for the four bills.
July 8, 1997
CONFERENCE REPORT COMMITTEE ANALYSIS
Bill No: AB 1501
Author: Aroner
RN: 9717386
Report date:July 2, 1997
SUBJECT: Welfare reform
Were the Conference amendments heard in committee? Yes
If yes, were they defeated? No
SUMMARY:
Federal Law Implementation
Under current law, the Aid to Families with Dependent
Children (AFDC) program provides public assistance to
indigent families. Able-bodied adult recipients who do not
have a child under age 3 must participate in the GAIN
employment training program, if funding is available for
child care and training. The federal welfare reform bill,
PL 104-193, made numerous changes to social and health
services including placing federal AFDC (now TANF) and
federal child care funding into two separate block grants,
increasing the flexibility of states to revise TANF and
child care programs, and increasing the percentage of the
AFDC caseload that must be employed or in a
federally-approved work activity (the percentages are
called work participation rates). In addition, the federal
bill imposed a 60-month, cumulative lifetime limit on the
receipt of federal TANF benefits by adult recipients, but
allowed states to exempt 20% of the caseload from this
limit. The federal bill also requires certain recipients
to be engaged in a work activity after 24 cumulative months
on aid.
The Conference Committee on Welfare Reform proposes four
bills to implement the new federal law: SB 293, SB 285, AB
1501 and AB 1006. California's revised AFDC program would
be named "California Work Opportunity and Responsibility to
Kids" or CalWORKs. The proposed amendments to AB 1501
implement numerous changes to address the new federal law
and include major revisions to child care, AFDC and other
programs.
CHILD CARE
Background: The current system of federal and state child
care subsidies for low-income parents in California is
administratively complex and involves over one dozen
subsidized child care programs with varying eligibility
standards. The Department of Social Services administers
GAIN, Non-GAIN Education and Training (NET), Transitional
Child Care (TCC), and a child care disregard program. The
Department of Education administers the bulk of federal and
state child care subsidies, mostly through contracts with
centers or Alternative Payment(AP) programs. AP programs
contract with the Department of Education and provide
vouchers for child care which allow parents to choose
center-based care, family day care, or license exempt
providers. Under current law, parents are not required to
participate in GAIN training unless child care assistance
is available, and are exempt if their child is under 3. HR
3734, the federal welfare reform bill, consolidated various
federal child care funding streams into one Child Care and
Development Block Grant, and specified that a minimum of
70% of the federal block grant funds be used for families
attempting to work their way off welfare or at-risk of
welfare.
Amendments
These amendments would revise existing child care subsidy
programs to meet the needs of both CalWORKs participants
and other low income parents who are employed. The
amendments also repeal the At-Risk and Transitional Child
Care programs and incorporate these programs into a revised
"three stage" child care system for families in CalWORKs.
The amendments would also provide a capped entitlement for
recipient families in Stage I which is administered by
county welfare departments and lasts up to six months. The
amendments would provide a capped entitlement for Stage II,
which is administered by Alternative Payment Programs under
contract with the State Department of Education (SDE).
Stage II child care would serve parents on aid while in job
training, work activities, and transitioning off of aid.
Stage III would incorporate recipient families into the
existing child care system for the working poor, now
administered by SDE. State III includes programs
administered by local SDE contractors, including family day
care networks, subsidized child care centers, and
alternative payment programs. These amendments also would:
-- target some new federal child care block grant funds to
CalWORKs families;
-- standardize rates, application forms, and parent fees
across all child care programs;
-- establish a standardized eligibility criteria for all
programs of 75 percent of the state median income;
-- establish reimbursement rates for all programs at 1.5
standard deviations above the mean rate in the local
market area;
-- provide that reimbursement for care be made directly to
child care providers ( rather than be paid to recipients
and then paid to providers).
These amendments revise local planning council membership
and responsibility to:
-- involve county board of supervisors and the state
superintendent of education in determining where new
child care funds will be used locally, based on needs
assessments;
-- design a system to consolidate local child care waiting
lists across programs;
-- coordinate part-day child care programs with nearby
child care services to provide full day child care.
The amendments direct the Department of Education to
increase parent education and awareness; direct county
welfare departments and alternative payment programs to
encourage all providers who are licensed or license exempt
to secure training and education in basic child
development; and authorize the Department of Education to
fund model recreation and literacy programs that employ
CalWORKs recipients, which are run by collaborations with
schools. Funding would be renewable upon a favorable
evaluation.
The amendments establish a loan guaranty program and direct
loan program for child care facilities in the State
Treasury, for sole proprietorships, partnerships,
proprietary and non-profit corporations, and local public
agencies, with priority for loans to be given to loans or
loan guarantees for the purchase, development,
construction, expansion, or improvement (as specified) of
licensed child care and development facilities serving
families with incomes below 75% of the median income.
The amendments prohibit a loan guarantee from exceeding 80%
of the principal amount of a guaranteed loan and a direct
loan from exceeding 50% of the amount for purchase,
development, construction, expansion or improvement of
eligible facilities. These amendments prohibit the amount
of outstanding loan guarantees from exceeding four times
the amount in the fund.
The amendments require the Department of Education to
provide program priorities after consultation with
specified parties, which are to include geographic
priorities (with a 30% rural set-aside), age priorities,
income priorities to benefit families transitioning from
assistance to work, and program priorities based on the
state program needs. These priorities are to govern the
ranking of applications for the loan guarantees and direct
loan program to be administered by the Trade and Commerce
Agency through its existing statewide network of eight
regional nonprofit Small Business Development Financial
Corporations which currently administer loan guarantees for
other small businesses, and have established relationships
with local lenders and loan processing expertise. The
amendments revise definition of "cost" in the Child Care
and Development Services Act in order to enable subsidized
child care programs to utilize the loans.
The amendments require agencies operating direct service
programs and resource and referral programs to provide at
least four referrals, at least one of which is a provider
over which the agency has no fiscal or operational control.
JOB CREATION
Background: Statewide, current AFDC caseloads total
approximately 800,000; based on estimates of the number of
cases that will leave aid or meet exemption criteria,
California will need to place between 350,000 and 500,000
parents into jobs or work-related activities within the
next few years. Given current job creation rates, this is
likely to present a challenge to many counties. EDD data
indicate approximately 1.1 million Californians currently
are unemployed; although, approximately 300,000 jobs are
created annually, the competition for jobs is likely to
increase as high school and college graduates enter the
work force. Also, job growth does not necessarily occur in
the same communities as most recipients reside. The need
to create jobs accessible to recipients will be a challenge
for many states under federal welfare reform. According to
an analysis published by the National Governor's
Association, up to 20 states are considering job creation
strategies as part of their welfare reform legislation.
Amendments
The proposed amendments contain several job creation
measures:
Job Creation Investment Fund: The proposed amendments
create in the State Treasury a "Job Creation Investment
Fund" administered by the Trade and Commerce Agency, to
fund local job creation activities for employment of
CalWORKs recipients. Funds would be allocated to counties
submitting strategic job creation plans based on the number
of adult recipients on aid and job growth in the county,
with each county receiving a minimum of $100,000. After
initial disbursement of 20% of the county's allocation,
additional disbursement would occur as specific
requirements were met. The amendments allow counties
flexibility in job creation plan design, but plans would be
required to include consideration of local labor market
needs. The amendments also require the Agency to convene a
California Job Creation Coordinating Council to integrate
state agency job creation efforts.
Regional Economic Investment--Under current law, the
community colleges may offer "contract education" services,
or customized training for employers, and may offer the
training program the Ed>Net program which assists business
and industry. Under the proposed amendments, the
Chancellor of the California Community Colleges would
establish a network between existing Economic Development
Centers and any new Service Centers established. The
amendments also authorize the Chancellor to fund new
Economic Development Centers and "industry-driven regional
collaboratives" to:
-- develop common training curriculums to meet local
employers' needs;
-- develop courses, purchase equipment and provide
in-service training in support of the new curriculum;
-- provide workshops to foster business growth;
-- subsidize internships in industry-identified
occupational skills.
In addition, the amendments would authorize the funds
appropriated to the Community College Economic Development
program to be used, without requirements for private sector
employers to contribute to training costs, if the employer
creates employment opportunities for CalWORKs recipients.
Also, the amendments authorize up to $25 million in these
funds to be used for financial incentives for businesses
working with community colleges to upgrade the skills of
current workers, thereby freeing up entry level jobs for
welfare recipients.
Regional collaboration pilots---The proposed amendments
authorize five Regional Collaborative pilot projects, under
which state agencies, county welfare departments, community
colleges, local school districts, other agencies providing
job training and private sector business and labor
representatives would develop more effective delivery
systems for job training services and set measurable
performance goals. Up to $5 million in existing state or
federal funds could be redirected for this purpose.
COMMUNITY COLLEGES
Current law authorizes community colleges to provide
matriculation and counseling services to students enrolled
in credit, but not noncredit courses; noncredit courses are
likely to include job training courses for CalWORKs
students in the first year. These amendments would
authorize that, subject to annually appropriated funding,
community colleges also must provide counseling and
matriculation services for students in noncredit courses.
Current law authorizes community colleges to offer course
instruction to serve the educational needs of adults in the
local community. The proposed amendments, subject to
annually appropriated funds, direct community colleges to
develop and re-design their course offerings, in
collaboration with local employers and industry groups, so
that they prepare students for employment that is in demand
in the local labor market.
As prescribed in funding formulas in state law, community
colleges are reimbursed by the state for course offerings
at different rates. The proposed amendments authorize
community colleges to receive additional funding for
offering noncredit course instruction for CalWORKs students
when the cost of these courses exceeds the average cost of
noncredit instruction to the community college.
JOB TRAINING PARTNERSHIP ACT (JTPA)
Current law authorizes the Employment Development
Department (EDD) to administer the JTPA program, a
federally funded job training program for the economically
disadvantaged. Approximately 43% of the funds annually
available to JTPA are used to serve welfare recipients.
The proposed amendments express Legislative intent that:
-- CalWORKs recipients shall, to the maximum extent funds
are available, continue to be served with JTPA funds;
-- The Governor request a waiver from U.S. Department of
Labor restrictions that prevent provision of certain job
training services, including stand-alone job search, work
experience and provision of services during the year
after placement in a job.
TRUANCY
Current law requires school-age AFDC recipients to be
enrolled in school but does not condition receipt of AFDC
on attendance. Current law also authorizes in every school
district, School Attendance Review Boards (SARB) which
review truancy cases, provide case management services and
referrals to families of truant students, refer cases to
the county District Attorney for prosecution where
appropriate, and assist the District Attorney to prepare
the cases for prosecution. These amendments establish in
every county office of education, to the extent funds are
made available through the budget act, a School Attendance
Review Board Coordinator to assist all school districts
within the county, to operate SARBs.
In addition, the proposed amendments require each county
District Attorney's office to have at least one truancy
coordinator to provide assistance to school districts or
cases of habitual truancy. The truancy coordinator would
prepare cases for prosecution, represent the district
attorney on the SARB and develop a truancy mediation
program, among other duties.
TREATMENT SERVICES
Current law allows GAIN program case managers to exempt or
defer from training or work-related activities recipients
in need of mental health or substance abuse treatment. The
proposed amendments, instead, require that in most cases,
recipients in need of mental health or substance abuse
treatment obtain treatment as part of their required work
activity. Welfare-to-work case managers would refer
recipients to the county mental health department or county
alcohol and drug program for diagnosis, treatment and case
management. The recipient's work contract, which specifies
required work activities, could include treatment
requirements as part of work activities. Recipients who
fail to participate in work and treatment activities
without good cause would be sanctioned by removing the
adult from the household when calculating the grant (a
reduction of approximately 20% for a three person
household.) The amendments also would require counties to
ensure that, to the extent possible, services to CalWORKs
recipients qualify for reimbursement under the Medi-Cal
program to obtain federal matching funds. The amendments
further specify that any new funding not supplant existing
funds.
SELF-INITIATED EDUCATION PROGRAMS
Under current law, recipients--at their own initiative--may
attend adult education and other public or private
educational programs while on aid. If a recipient in a
"self initiated" program is called to participate in the
GAIN program, he or she can be deferred from GAIN
participation if they can provide specified evidence their
program will lead to employment. The proposed amendments
permit recipients to continue in self-initiated degree or
certificate programs, but require that the program be
determined by the county and the education or training
provider to be likely to lead to unsubsidized employment.
The amendments also limit such programs to 30 months and
require that the participant make satisfactory progress
toward completion of the program. The amendments also
require that any degree or certificate program offered by
private post-secondary providers must be approved or
exempted by the appropriate state regulatory agency.
EMPLOYMENT RETENTION SERVICES
Current law permits county welfare departments to provide
post-employment case management services only to recipients
who are exempt from GAIN because they are already employed.
The proposed amendments expand county flexibility to offer
these services, by allowing counties to provide case
management and other services to any recipient or recent
recipient in the first 12 months after leaving aid for
employment, if the services are not available from other
sources. Post-employment services could include, but are
not limited to, assistance with locating appropriate child
care or transportation.
PROBATION DEPARTMENT
Prior to 1996, counties used federal Emergency Assistance
funds from Title IV-A to support the out-of-home placement
of minors and juvenile probation facilities. The federal
Department of Health and Human Services ended this practice
in January 1, 1996. However, these county costs were
included in the calculation of California's TANF block
grant level. The federal TANF block grant allows
expenditures in any manner for which the state was
authorized to use AFDC funds on September 30, 1995. The
proposed amendments establish a Comprehensive Youth
Services Act to support children who are habitual truants,
run-aways, at-risk of adjudication by the juvenile court or
under probation supervision. The amendments authorize
county probation departments to provide a broad set of
services to help such at-risk youth or youthful offenders.
The amendments further require collaboration with other
local agencies involved in the lives of the family and
child and specify an allocation by county for funds
appropriated through the budget.
OTHER
The amendments specify that the counties shall remain
responsible for eligibility determinations, and may
contract out other services to the extent allowed under
state and federal law as of August 21, 1996.
The amendments specify that this bill will become not
operative until the Budget Act of 1997 is chaptered.
By: Senate Health & Human Services Committee
Sara McCarthy/Ellen Dektar