Bill Text: CA AB1058 | 2009-2010 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: CalWORKs eligibility: asset limits: vehicles.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Engrossed - Dead) 2009-08-27 - In committee: Held under submission. [AB1058 Detail]
Download: California-2009-AB1058-Introduced.html
Bill Title: CalWORKs eligibility: asset limits: vehicles.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Engrossed - Dead) 2009-08-27 - In committee: Held under submission. [AB1058 Detail]
Download: California-2009-AB1058-Introduced.html
BILL NUMBER: AB 1058 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Members Beall and Fuentes
FEBRUARY 27, 2009
An act to repeal Sections 11155, 11155.1, 11155.2, 11155.6,
11257.5, and 11260 of, and to repeal and add Section 11257 of, the
Welfare and Institutions Code, relating to CalWORKs.
LEGISLATIVE COUNSEL'S DIGEST
AB 1058, as introduced, Beall. CalWORKs eligibility: asset limits.
Existing federal law provides for allocation of federal funds
through the federal Temporary Assistance for Needy Families (TANF)
block grant program to eligible states, with California's version of
this program being known as the California Work Opportunity and
Responsibility to Kids (CalWORKs) program.
Existing law provides for the CalWORKs program, under which each
county provides cash assistance and other benefits to qualified
low-income families and individuals who meet specified eligibility
criteria.
Existing law continually appropriates money from the General Fund
to pay for a share of aid grant costs under the CalWORKs program.
Existing law 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.
This bill would limit a CalWORKs applicant's assets, as defined,
to $7,000 in order to be eligible for aid, but would remove asset
limitations with respect to a recipient of CalWORKs benefits, except
as required by federal law. By increasing the duties of counties
administering the CalWORKs program, the bill would impose a
state-mandated local program.
This bill would declare that no appropriation would be made for
purposes of the bill pursuant to the provision continuously
appropriating funds for the CalWORKs 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 these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
AB 1058, as introduced, Beall. CalWORKs eligibility: asset limits.
Existing federal law provides for allocation of federal funds
through the federal Temporary Assistance for Needy Families (TANF)
block grant program to eligible states, with California's version of
this program being known as the California Work Opportunity and
Responsibility to Kids (CalWORKs) program.
Existing law provides for the CalWORKs program, under which each
county provides cash assistance and other benefits to qualified
low-income families and individuals who meet specified eligibility
criteria.
Existing law continually appropriates money from the General Fund
to pay for a share of aid grant costs under the CalWORKs program.
Existing law 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.
This bill would limit a CalWORKs applicant's assets, as defined,
to $7,000 in order to be eligible for aid, but would remove asset
limitations with respect to a recipient of CalWORKs benefits, except
as required by federal law. By increasing the duties of counties
administering the CalWORKs program, the bill would impose a
state-mandated local program.
This bill would declare that no appropriation would be made for
purposes of the bill pursuant to the provision continuously
appropriating funds for the CalWORKs 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 these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) In 1996, Congress passed the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA), known as welfare reform,
which created the Temporary Assistance to Needy Families (TANF)
program. TANF gives states power to design their own programs,
including establishing asset limits. The California Work Opportunity
and Responsibility to Kids (CalWORKs) is California's program
implementing federal welfare reform provisions.
(b) The structural components of the TANF program, as administered
by CalWORKs, have proven to be immensely effective in preserving
cash assistance for those in need. Federally mandated and
state-enforced time limits and work requirements effectively deter
anyone from applying for assistance without having exhausted all
other resources. These structural realities, coupled with the social
stigma associated with receiving public assistance, prevent anyone
with financial resources from considering public assistance.
(c) In California, to qualify for public assistance under
CalWORKs, impoverished families must demonstrate that they are both
income- and asset-poor. Under current law, a low-income family will
not qualify for assistance if the family has savings or other assets,
excluding a home and specific vehicle allotment, exceeding the asset
limit of $2,000.
(d) Asset limits were intended to ensure that public assistance
programs provide benefits only to those with too few resources to
support themselves. However, asset limits dissuade low-income
families from saving because, in doing so, they risk losing their
benefits. For families making the difficult transition from welfare
to work, developing assets is critical to achieving true economic
independence. In order to prevent a complete backslide to public
assistance, low-income working families must begin to develop their
own safety net through personal saving for use in the event of an
unexpected income shock due to illness or temporary unemployment. As
personal saving is essential to achieving self-sufficiency, which is
the stated goal of the CalWORKs program, saving should be encouraged
by welfare policy and social service agencies, rather than penalized.
(e) To be economically secure, families need both income and
assets. Regular income helps families pay for their daily living
expenses. In contrast, families need assets to weather financial
hardships and get ahead. Assets provide a safety net for coping with
unanticipated expenses and emergencies, such as unemployment,
accidents, and illnesses, that could otherwise cause significant
financial hardship. Assets also help families build wealth and plan
for the future by, for example, saving for retirement or investing in
their children's education.
(f) Several studies have documented the negative effect of asset
limits on wealth accumulation among low-income households in a
variety of public assistance programs. One study found that 49
percent of public assistance recipients indicated that they would
save more if the government did not cut their benefits because of
their savings.
(g) Many states are actively trying to stimulate savings by TANF
recipients and other low-income people by addressing asset tests. The
States of Ohio and Virginia have eliminated the asset test
altogether. The State of Virginia decided to eliminate asset limits
for their TANF program, in December 2003, by administrative action,
with the goal of streamlining the eligibility process and cutting
down on administrative costs. This decision has saved the state an
estimated $400,000 annually, and to date, the State of Virginia has
reported no "horror stories" of individuals with significant assets
scamming the TANF program. In addition, in 1997, the State of Ohio
eliminated its asset limit and has not experienced any spike in the
rolls or reported fraud.
SEC. 2. Section 11155 of the Welfare and Institutions Code is
repealed.
11155. (a) Notwithstanding Section 11257, in addition to the
personal property or resources permitted by other provisions of this
part, and to the extent permitted by federal law, an applicant or
recipient for aid under this chapter including an applicant or
recipient under Chapter 2 (commencing with Section 11200) may retain
countable resources in an amount equal to the amount permitted under
federal law for qualification for food stamps.
(b) The county shall determine the value of exempt personal
property other than motor vehicles in conformance with methods
established under the Food Stamp Program.
(c) (1) The value of licensed vehicles shall be the greater of the
fair market value as provided in paragraph (3) or the equity value,
as provided in paragraph (5), unless an exemption as provided in
paragraph (2) applies.
(2) The entire value of any licensed vehicle shall be exempt if
any of the following apply:
(A) It is used primarily for income-producing purposes.
(B) It annually produces income that is consistent with its fair
market value, even if used on a seasonal basis.
(C) It is necessary for long distance travel, other than daily
commuting, that is essential for the employment of a family member.
(D) It is used as the family's residence.
(E) It is necessary to transport a physically disabled family
member, including an excluded disabled family member, regardless of
the purpose of the transportation.
(F) It would be exempted under any of subparagraphs (A) to (D),
inclusive, but the vehicle is not in use because of temporary
unemployment.
(G) It is used to carry fuel for heating for home use, when the
transported fuel or water is the primary source of fuel or water for
the family.
(H) The equity value of the vehicle is one thousand five hundred
one dollars ($1,501) or less.
(3) Each licensed vehicle that is not exempted under paragraph (2)
shall be individually evaluated for fair market value, and any
portion of the value that exceeds four thousand six hundred fifty
dollars ($4,650) shall be attributed in full market value toward the
family's resource level, regardless of any encumbrances on the
vehicle, the amount of the family's investment in the vehicle, and
whether the vehicle is used to transport family members to and from
employment.
(4) Any licensed vehicle that is evaluated for fair market value
shall also be evaluated for its equity value, except for the
following:
(A) One licensed vehicle per adult family member, regardless of
the use of the vehicle.
(B) Any licensed vehicle, other than those to which subparagraph
(A) applies, that is driven by a family member under 18 years of age
to commute to, and return from his or her place of employment or
place of training or education that is preparatory to employment, or
to seek employment. This subparagraph applies only to vehicles used
during a temporary period of unemployment.
(5) For purposes of this section, the equity value of a licensed
vehicle is the fair market value less encumbrances.
(d) The value of any unlicensed vehicle shall be the fair market
value less encumbrances, unless an exemption applies under paragraph
(2).
SEC. 3. Section 11155.1 of the Welfare and Institutions Code is
repealed.
11155.1. (a) Notwithstanding Sections 11155 and 11257, the
department shall seek any federal approvals necessary to conduct a
demonstration program increasing the value of personal property that
may be retained by a recipient of aid under Chapter 2 (commencing
with Section 11200) to two thousand dollars ($2,000) and increasing
the value of the exemption for an automobile to four thousand five
hundred dollars ($4,500). The increased property limits shall not
apply to applicants.
(b) This section shall be implemented only if the director
executes a declaration, that shall be retained by the director,
stating that federal approval for the implementation of this section
has been obtained and specifying the duration of that approval.
SEC. 4. Section 11155.2 of the Welfare and Institutions Code is
repealed.
11155.2. (a) In addition to the personal property permitted by
this part, recipients of aid under CalWORKs shall be permitted to
retain savings and interest thereon for specified purposes. Interest
earned from these savings and deposited into a restricted account
shall be considered exempt as income for purposes of determining
eligibility for aid and grant amounts if the interest is retained in
the account. If the interest is not deposited by the financial
institution into the account, the interest shall be treated as a
nonqualifying withdrawal of funds from the account as specified in
subdivision (b). This section shall not apply to applicants. Funds
may be used by the family for education or job training expenses for
the accountholder or his or her dependents, for starting a business,
for the purchase of a home, or for costs associated with securing
permanent rental housing or to make rent payments to overcome an
episode of homelessness. Recipients who wish to retain savings for
these purposes shall enter into a written agreement with the county
to establish a separate account with a financial institution, with
the account to be used solely for the purpose of accumulating funds
for later withdrawal for a qualifying expenditure. A qualifying
expenditure shall be defined by department regulations and shall be
verified by the recipient. The recipient shall agree to provide
periodic verification of account activity, as required by department
regulations. The agreement shall notify the recipient of the penalty
for nonqualifying withdrawal of funds.
(b) Any nonqualifying withdrawal of funds from the account shall
result in a calculation of a period of ineligibility for all persons
in the assistance unit, to be determined by dividing the balance in
the account immediately prior to the withdrawal by the minimum basic
standard of adequate care for the members of the assistance unit, as
set forth in Section 11452. The resulting whole number shall be the
number of months of ineligibility. The period of ineligibility may be
reduced when the minimum basic standard of adequate care of the
assistance unit, including special needs, increases.
(c) If the California Savings and Asset Project is established
pursuant to Chapter 17 (commencing with Section 50897) of Part 2 of
Division 31 of the Health and Safety Code, then to the extent
permitted by federal law, a recipient shall be eligible to receive
matching funds derived from federal contributions for the purpose of
establishing an individual account in an amount not to exceed three
thousand dollars ($3,000) in addition to the amounts specified in
subdivision (a) and a fiduciary organization may provide amounts in
excess of the first three thousand dollars ($3,000) limitation if
contributed solely through private sources.
SEC. 5. Section 11155.6 of the Welfare and Institutions Code is
repealed.
11155.6. (a) (1) The principal and interest in a 401(k) plan, 403
(b) plan, or 457 plan shall be excluded from consideration as
property when determining eligibility and the amount of assistance
with respect to an applicant for benefits who is not a recipient of
CalWORKs benefits.
(2) The principal and interest in a 401(k) plan, 403(b) plan, IRA,
457 plan, 529 college savings plan, or Coverdell ESA, shall be
excluded from consideration as property when redetermining
eligibility and the amount of assistance for recipients of CalWORKs
benefits.
(b) For purposes of this section, the following terms have the
following meanings:
(1) "401(k) plan" means a deferred compensation plan that
satisfies the requirements of Section 401(k) of the Internal Revenue
Code.
(2) "403(b) plan" means a qualified annuity plan that satisfies
the requirements of Section 403(b) of the Internal Revenue Code.
(3) "IRA" means an individual retirement account that satisfies
the requirements of Section 408 of the Internal Revenue Code.
(4) "457 plan" means a deferred compensation plan that satisfies
the requirements of Section 457 of the Internal Revenue Code.
(5) "529 college savings plan" means a qualified tuition program
that satisfies the requirements of Section 529 of the Internal
Revenue Code.
(6) "Coverdell ESA" means an education savings account that
satisfies the requirements of Section 530 of the Internal Revenue
Code.
SEC. 6. Section 11257 of the Welfare and Institutions Code, as
amended by Section 1 of Chapter 569 of the Statutes of 1984, is
repealed.
11257. (a) No aid under this chapter shall be granted or paid for
any child who has real or personal property, the combined market
value reduced by any obligations or debts with respect to this
property of which exceeds one thousand dollars ($1,000), or for any
child or children in one family who have, or whose parents have, or
the child or children and parents have, real and personal property
the combined market value reduced by any obligations or debts with
respect to this property which exceeds one thousand dollars ($1,000).
For purposes of this subdivision, real and personal property shall
be considered both when actually available and when the applicant or
recipient has a legal interest in a liquidated sum and has the legal
ability to make that sum available for support and maintenance.
(b) Notwithstanding subdivision (a) above, an applicant or
recipient may retain the following:
(1) Personal or real property owned by him or her, or in
combination with any other person, without reference to its value, if
it serves to provide the applicant or recipient with a home. If the
basic home is a unit in a multiple dwelling, then only that unit
shall be exempt.
For the purposes of paragraph (1), if an applicant has entered
into a marital separation for the purpose of trial or legal
separation or dissolution, real property which was the usual home of
the applicant shall be exempt for three months following the end of
the month in which aid begins. If the recipient was receiving aid
when the marital separation occurred, the period of exemption shall
be three months following the end of the month in which the
separation occurs. To remain exempt following this three-month
period, the home must be occupied by the recipient, or be unavailable
for use, control, and possession due to legal proceedings affecting
a property settlement or sale of the property.
(2) Personal property consisting of one automobile with maximum
equity value as permitted by federal law.
(3) In addition to the foregoing, the director may at his or her
discretion, and to the extent permitted by federal law, exempt other
items of personal property not exempted under this section.
SEC. 7. Section 11257 of the Welfare and Institutions Code, as
amended by Section 28 of Chapter 1022 of the Statutes of 2002, is
repealed.
11257. (a) To the extent not inconsistent with Sections 11265.1,
11265.2, 11265.3, and 11004.1, no aid under this chapter shall be
granted or paid for any child who has real or personal property, the
combined market value reduced by any obligations or debts with
respect to this property of which exceeds one thousand dollars
($1,000), or for any child or children in one family who have, or
whose parents have, or the child or children and parents have, real
and personal property the combined market value reduced by any
obligations or debts with respect to this property which exceeds one
thousand dollars ($1,000).
For purposes of this subdivision, real and personal property shall
be considered both when actually available and when the applicant or
recipient has a legal interest in a liquidated sum and has the legal
ability to make that sum available for support and maintenance.
(b) Notwithstanding subdivision (a) above, an applicant or
recipient may retain the following:
(1) Personal or real property owned by him or her, or in
combination with any other person, without reference to its value, if
it serves to provide the applicant or recipient with a home. If the
basic home is a unit in a multiple dwelling, then only that unit
shall be exempt.
For the purposes of paragraph (1), if an applicant has entered
into a marital separation for the purpose of trial or legal
separation or dissolution, real property which was the usual home of
the applicant shall be exempt for three months following the end of
the month in which aid begins. If the recipient was receiving aid
when the marital separation occurred, the period of exemption shall
be three months following the end of the month in which the
separation occurs. To remain exempt following this three-month
period, the home must be occupied by the recipient, or be unavailable
for use, control, and possession due to legal proceedings affecting
a property settlement or sale of the property.
(2) Personal property consisting of one automobile with maximum
equity value as permitted by federal law.
(3) In addition to the foregoing, the director may at his or her
discretion, and to the extent permitted by federal law, exempt other
items of personal property not exempted under this section.
SEC. 8. Section 11257 is added to the Welfare and Institutions
Code, to read:
11257. (a) Notwithstanding any other provision of law, for any
individual who is a recipient of aid under this chapter, in order to
encourage personal savings as a bridge from government dependency to
self-sufficiency, and to create an incentive to saving, there shall
be no limitation on the assets of an individual or a family as a
condition of eligibility for receiving aid under this chapter, to the
extent permitted under federal law.
(b) Notwithstanding subdivision (a), an applicant for benefits
under this chapter may retain assets not to exceed a total value of
seven thousand dollars ($7,000). This amount shall be adjusted
annually in accordance with changes in the California Necessities
Index.
(c) For the purposes of this section, the term "assets" includes
investments that appreciate over time, including, but not limited to,
investments that can be converted into cash, such as savings,
equities, 401(k) accounts, and individual retirement accounts. Assets
also include personal or real property that holds monetary value,
such as a house, an automobile, or a small business.
SEC. 9. Section 11257.5 of the Welfare and Institutions Code is
repealed.
11257.5. Notwithstanding the property limitations in subdivision
(a) of Section 11257, a family may retain, for nine months, real
property if the family is making a good faith effort to sell the real
property. However, any aid payable to the family for the nine-month
period shall be conditioned upon the sale. At the time of the sale
any aid payments made during the nine-month period shall be
considered overpayments to the extent they would not have been made
had the sale occurred at the beginning of the nine-month period.
Notwithstanding Section 11004 overpayments shall be recouped from the
proceeds of the sale. If the real property has not been sold at the
end of the nine-month period, the family shall be ineligible for aid
if the combined net value of the real and personal property owned by
the family exceeds the one thousand dollar ($1,000) limitation in
Section 11257.
Notwithstanding Section 11007 as a condition to the granting of
aid pursuant to this section, the family shall grant the county a
lien upon the real property as security for the aid to be paid. The
lien shall be used to recoup any overpayments incurred pursuant to
this section. Notwithstanding any other provision of law, the lien
shall not be enforceable by the sale of the secured property by the
county. The lien of the county shall be paid upon the sale of the
property.
The department shall define good faith effort in regulation.
SEC. 10. Section 11260 of the Welfare and Institutions Code is
repealed.
11260. A child's share of any estate, which share has not been
distributed and of which he has no present economic use, does not
constitute property for the purpose of this chapter.
SEC. 11. No appropriation pursuant to Section 15200 of the Welfare
and Institutions Code shall be made for the purposes of this act.
SEC. 12. 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.
SECTION 1. The Legislature finds and declares all of the
following:
(a) In 1996, Congress passed the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA), known as welfare reform,
which created the Temporary Assistance to Needy Families (TANF)
program. TANF gives states power to design their own programs,
including establishing asset limits. The California Work Opportunity
and Responsibility to Kids (CalWORKs) is California's program
implementing federal welfare reform provisions.
(b) The structural components of the TANF program, as administered
by CalWORKs, have proven to be immensely effective in preserving
cash assistance for those in need. Federally mandated and
state-enforced time limits and work requirements effectively deter
anyone from applying for assistance without having exhausted all
other resources. These structural realities, coupled with the social
stigma associated with receiving public assistance, prevent anyone
with financial resources from considering public assistance.
(c) In California, to qualify for public assistance under
CalWORKs, impoverished families must demonstrate that they are both
income- and asset-poor. Under current law, a low-income family will
not qualify for assistance if the family has savings or other assets,
excluding a home and specific vehicle allotment, exceeding the asset
limit of $2,000.
(d) Asset limits were intended to ensure that public assistance
programs provide benefits only to those with too few resources to
support themselves. However, asset limits dissuade low-income
families from saving because, in doing so, they risk losing their
benefits. For families making the difficult transition from welfare
to work, developing assets is critical to achieving true economic
independence. In order to prevent a complete backslide to public
assistance, low-income working families must begin to develop their
own safety net through personal saving for use in the event of an
unexpected income shock due to illness or temporary unemployment. As
personal saving is essential to achieving self-sufficiency, which is
the stated goal of the CalWORKs program, saving should be encouraged
by welfare policy and social service agencies, rather than penalized.
(e) To be economically secure, families need both income and
assets. Regular income helps families pay for their daily living
expenses. In contrast, families need assets to weather financial
hardships and get ahead. Assets provide a safety net for coping with
unanticipated expenses and emergencies, such as unemployment,
accidents, and illnesses, that could otherwise cause significant
financial hardship. Assets also help families build wealth and plan
for the future by, for example, saving for retirement or investing in
their children's education.
(f) Several studies have documented the negative effect of asset
limits on wealth accumulation among low-income households in a
variety of public assistance programs. One study found that 49
percent of public assistance recipients indicated that they would
save more if the government did not cut their benefits because of
their savings.
(g) Many states are actively trying to stimulate savings by TANF
recipients and other low-income people by addressing asset tests. The
States of Ohio and Virginia have eliminated the asset test
altogether. The State of Virginia decided to eliminate asset limits
for their TANF program, in December 2003, by administrative action,
with the goal of streamlining the eligibility process and cutting
down on administrative costs. This decision has saved the state an
estimated $400,000 annually, and to date, the State of Virginia has
reported no "horror stories" of individuals with significant assets
scamming the TANF program. In addition, in 1997, the State of Ohio
eliminated its asset limit and has not experienced any spike in the
rolls or reported fraud.
SEC. 2. Section 11155 of the Welfare and Institutions Code is
repealed.
11155. (a) Notwithstanding Section 11257, in addition to the
personal property or resources permitted by other provisions of this
part, and to the extent permitted by federal law, an applicant or
recipient for aid under this chapter including an applicant or
recipient under Chapter 2 (commencing with Section 11200) may retain
countable resources in an amount equal to the amount permitted under
federal law for qualification for food stamps.
(b) The county shall determine the value of exempt personal
property other than motor vehicles in conformance with methods
established under the Food Stamp Program.
(c) (1) The value of licensed vehicles shall be the greater of the
fair market value as provided in paragraph (3) or the equity value,
as provided in paragraph (5), unless an exemption as provided in
paragraph (2) applies.
(2) The entire value of any licensed vehicle shall be exempt if
any of the following apply:
(A) It is used primarily for income-producing purposes.
(B) It annually produces income that is consistent with its fair
market value, even if used on a seasonal basis.
(C) It is necessary for long distance travel, other than daily
commuting, that is essential for the employment of a family member.
(D) It is used as the family's residence.
(E) It is necessary to transport a physically disabled family
member, including an excluded disabled family member, regardless of
the purpose of the transportation.
(F) It would be exempted under any of subparagraphs (A) to (D),
inclusive, but the vehicle is not in use because of temporary
unemployment.
(G) It is used to carry fuel for heating for home use, when the
transported fuel or water is the primary source of fuel or water for
the family.
(H) The equity value of the vehicle is one thousand five hundred
one dollars ($1,501) or less.
(3) Each licensed vehicle that is not exempted under paragraph (2)
shall be individually evaluated for fair market value, and any
portion of the value that exceeds four thousand six hundred fifty
dollars ($4,650) shall be attributed in full market value toward the
family's resource level, regardless of any encumbrances on the
vehicle, the amount of the family's investment in the vehicle, and
whether the vehicle is used to transport family members to and from
employment.
(4) Any licensed vehicle that is evaluated for fair market value
shall also be evaluated for its equity value, except for the
following:
(A) One licensed vehicle per adult family member, regardless of
the use of the vehicle.
(B) Any licensed vehicle, other than those to which subparagraph
(A) applies, that is driven by a family member under 18 years of age
to commute to, and return from his or her place of employment or
place of training or education that is preparatory to employment, or
to seek employment. This subparagraph applies only to vehicles used
during a temporary period of unemployment.
(5) For purposes of this section, the equity value of a licensed
vehicle is the fair market value less encumbrances.
(d) The value of any unlicensed vehicle shall be the fair market
value less encumbrances, unless an exemption applies under paragraph
(2).
SEC. 3. Section 11155.1 of the Welfare and Institutions Code is
repealed.
11155.1. (a) Notwithstanding Sections 11155 and 11257, the
department shall seek any federal approvals necessary to conduct a
demonstration program increasing the value of personal property that
may be retained by a recipient of aid under Chapter 2 (commencing
with Section 11200) to two thousand dollars ($2,000) and increasing
the value of the exemption for an automobile to four thousand five
hundred dollars ($4,500). The increased property limits shall not
apply to applicants.
(b) This section shall be implemented only if the director
executes a declaration, that shall be retained by the director,
stating that federal approval for the implementation of this section
has been obtained and specifying the duration of that approval.
SEC. 4. Section 11155.2 of the Welfare and Institutions Code is
repealed.
11155.2. (a) In addition to the personal property permitted by
this part, recipients of aid under CalWORKs shall be permitted to
retain savings and interest thereon for specified purposes. Interest
earned from these savings and deposited into a restricted account
shall be considered exempt as income for purposes of determining
eligibility for aid and grant amounts if the interest is retained in
the account. If the interest is not deposited by the financial
institution into the account, the interest shall be treated as a
nonqualifying withdrawal of funds from the account as specified in
subdivision (b). This section shall not apply to applicants. Funds
may be used by the family for education or job training expenses for
the accountholder or his or her dependents, for starting a business,
for the purchase of a home, or for costs associated with securing
permanent rental housing or to make rent payments to overcome an
episode of homelessness. Recipients who wish to retain savings for
these purposes shall enter into a written agreement with the county
to establish a separate account with a financial institution, with
the account to be used solely for the purpose of accumulating funds
for later withdrawal for a qualifying expenditure. A qualifying
expenditure shall be defined by department regulations and shall be
verified by the recipient. The recipient shall agree to provide
periodic verification of account activity, as required by department
regulations. The agreement shall notify the recipient of the penalty
for nonqualifying withdrawal of funds.
(b) Any nonqualifying withdrawal of funds from the account shall
result in a calculation of a period of ineligibility for all persons
in the assistance unit, to be determined by dividing the balance in
the account immediately prior to the withdrawal by the minimum basic
standard of adequate care for the members of the assistance unit, as
set forth in Section 11452. The resulting whole number shall be the
number of months of ineligibility. The period of ineligibility may be
reduced when the minimum basic standard of adequate care of the
assistance unit, including special needs, increases.
(c) If the California Savings and Asset Project is established
pursuant to Chapter 17 (commencing with Section 50897) of Part 2 of
Division 31 of the Health and Safety Code, then to the extent
permitted by federal law, a recipient shall be eligible to receive
matching funds derived from federal contributions for the purpose of
establishing an individual account in an amount not to exceed three
thousand dollars ($3,000) in addition to the amounts specified in
subdivision (a) and a fiduciary organization may provide amounts in
excess of the first three thousand dollars ($3,000) limitation if
contributed solely through private sources.
SEC. 5. Section 11155.6 of the Welfare and Institutions Code is
repealed.
11155.6. (a) (1) The principal and interest in a 401(k) plan, 403
(b) plan, or 457 plan shall be excluded from consideration as
property when determining eligibility and the amount of assistance
with respect to an applicant for benefits who is not a recipient of
CalWORKs benefits.
(2) The principal and interest in a 401(k) plan, 403(b) plan, IRA,
457 plan, 529 college savings plan, or Coverdell ESA, shall be
excluded from consideration as property when redetermining
eligibility and the amount of assistance for recipients of CalWORKs
benefits.
(b) For purposes of this section, the following terms have the
following meanings:
(1) "401(k) plan" means a deferred compensation plan that
satisfies the requirements of Section 401(k) of the Internal Revenue
Code.
(2) "403(b) plan" means a qualified annuity plan that satisfies
the requirements of Section 403(b) of the Internal Revenue Code.
(3) "IRA" means an individual retirement account that satisfies
the requirements of Section 408 of the Internal Revenue Code.
(4) "457 plan" means a deferred compensation plan that satisfies
the requirements of Section 457 of the Internal Revenue Code.
(5) "529 college savings plan" means a qualified tuition program
that satisfies the requirements of Section 529 of the Internal
Revenue Code.
(6) "Coverdell ESA" means an education savings account that
satisfies the requirements of Section 530 of the Internal Revenue
Code.
SEC. 6. Section 11257 of the Welfare and Institutions Code, as
amended by Section 1 of Chapter 569 of the Statutes of 1984, is
repealed.
11257. (a) No aid under this chapter shall be granted or paid for
any child who has real or personal property, the combined market
value reduced by any obligations or debts with respect to this
property of which exceeds one thousand dollars ($1,000), or for any
child or children in one family who have, or whose parents have, or
the child or children and parents have, real and personal property
the combined market value reduced by any obligations or debts with
respect to this property which exceeds one thousand dollars ($1,000).
For purposes of this subdivision, real and personal property shall
be considered both when actually available and when the applicant or
recipient has a legal interest in a liquidated sum and has the legal
ability to make that sum available for support and maintenance.
(b) Notwithstanding subdivision (a) above, an applicant or
recipient may retain the following:
(1) Personal or real property owned by him or her, or in
combination with any other person, without reference to its value, if
it serves to provide the applicant or recipient with a home. If the
basic home is a unit in a multiple dwelling, then only that unit
shall be exempt.
For the purposes of paragraph (1), if an applicant has entered
into a marital separation for the purpose of trial or legal
separation or dissolution, real property which was the usual home of
the applicant shall be exempt for three months following the end of
the month in which aid begins. If the recipient was receiving aid
when the marital separation occurred, the period of exemption shall
be three months following the end of the month in which the
separation occurs. To remain exempt following this three-month
period, the home must be occupied by the recipient, or be unavailable
for use, control, and possession due to legal proceedings affecting
a property settlement or sale of the property.
(2) Personal property consisting of one automobile with maximum
equity value as permitted by federal law.
(3) In addition to the foregoing, the director may at his or her
discretion, and to the extent permitted by federal law, exempt other
items of personal property not exempted under this section.
SEC. 7. Section 11257 of the Welfare and Institutions Code, as
amended by Section 28 of Chapter 1022 of the Statutes of 2002, is
repealed.
11257. (a) To the extent not inconsistent with Sections 11265.1,
11265.2, 11265.3, and 11004.1, no aid under this chapter shall be
granted or paid for any child who has real or personal property, the
combined market value reduced by any obligations or debts with
respect to this property of which exceeds one thousand dollars
($1,000), or for any child or children in one family who have, or
whose parents have, or the child or children and parents have, real
and personal property the combined market value reduced by any
obligations or debts with respect to this property which exceeds one
thousand dollars ($1,000).
For purposes of this subdivision, real and personal property shall
be considered both when actually available and when the applicant or
recipient has a legal interest in a liquidated sum and has the legal
ability to make that sum available for support and maintenance.
(b) Notwithstanding subdivision (a) above, an applicant or
recipient may retain the following:
(1) Personal or real property owned by him or her, or in
combination with any other person, without reference to its value, if
it serves to provide the applicant or recipient with a home. If the
basic home is a unit in a multiple dwelling, then only that unit
shall be exempt.
For the purposes of paragraph (1), if an applicant has entered
into a marital separation for the purpose of trial or legal
separation or dissolution, real property which was the usual home of
the applicant shall be exempt for three months following the end of
the month in which aid begins. If the recipient was receiving aid
when the marital separation occurred, the period of exemption shall
be three months following the end of the month in which the
separation occurs. To remain exempt following this three-month
period, the home must be occupied by the recipient, or be unavailable
for use, control, and possession due to legal proceedings affecting
a property settlement or sale of the property.
(2) Personal property consisting of one automobile with maximum
equity value as permitted by federal law.
(3) In addition to the foregoing, the director may at his or her
discretion, and to the extent permitted by federal law, exempt other
items of personal property not exempted under this section.
SEC. 8. Section 11257 is added to the Welfare and Institutions
Code, to read:
11257. (a) Notwithstanding any other provision of law, for any
individual who is a recipient of aid under this chapter, in order to
encourage personal savings as a bridge from government dependency to
self-sufficiency, and to create an incentive to saving, there shall
be no limitation on the assets of an individual or a family as a
condition of eligibility for receiving aid under this chapter, to the
extent permitted under federal law.
(b) Notwithstanding subdivision (a), an applicant for benefits
under this chapter may retain assets not to exceed a total value of
seven thousand dollars ($7,000). This amount shall be adjusted
annually in accordance with changes in the California Necessities
Index.
(c) For the purposes of this section, the term "assets" includes
investments that appreciate over time, including, but not limited to,
investments that can be converted into cash, such as savings,
equities, 401(k) accounts, and individual retirement accounts. Assets
also include personal or real property that holds monetary value,
such as a house, an automobile, or a small business.
SEC. 9. Section 11257.5 of the Welfare and Institutions Code is
repealed.
11257.5. Notwithstanding the property limitations in subdivision
(a) of Section 11257, a family may retain, for nine months, real
property if the family is making a good faith effort to sell the real
property. However, any aid payable to the family for the nine-month
period shall be conditioned upon the sale. At the time of the sale
any aid payments made during the nine-month period shall be
considered overpayments to the extent they would not have been made
had the sale occurred at the beginning of the nine-month period.
Notwithstanding Section 11004 overpayments shall be recouped from the
proceeds of the sale. If the real property has not been sold at the
end of the nine-month period, the family shall be ineligible for aid
if the combined net value of the real and personal property owned by
the family exceeds the one thousand dollar ($1,000) limitation in
Section 11257.
Notwithstanding Section 11007 as a condition to the granting of
aid pursuant to this section, the family shall grant the county a
lien upon the real property as security for the aid to be paid. The
lien shall be used to recoup any overpayments incurred pursuant to
this section. Notwithstanding any other provision of law, the lien
shall not be enforceable by the sale of the secured property by the
county. The lien of the county shall be paid upon the sale of the
property.
The department shall define good faith effort in regulation.
SEC. 10. Section 11260 of the Welfare and Institutions Code is
repealed.
11260. A child's share of any estate, which share has not been
distributed and of which he has no present economic use, does not
constitute property for the purpose of this chapter.
SEC. 11. No appropriation pursuant to Section 15200 of the Welfare
and Institutions Code shall be made for the purposes of this act.
SEC. 12. 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.
