Bill Text: CA AB1614 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Electronic transfers: payments and benefits.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-09-28 - Chaptered by Secretary of State - Chapter 720, Statutes of 2014. [AB1614 Detail]

Download: California-2013-AB1614-Amended.html

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BILL NUMBER: AB 1614	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 22, 2014
	AMENDED IN SENATE  AUGUST 19, 2014
	AMENDED IN SENATE  AUGUST 4, 2014
	AMENDED IN ASSEMBLY  APRIL 22, 2014
	AMENDED IN ASSEMBLY  APRIL 3, 2014

INTRODUCED BY   Assembly Member Stone

                        FEBRUARY 6, 2014

   An act  to amend Section 17325 of the Family Code,   to
amend Section 123302 of the Health and Safety Code, and to amend
Section 10072 of the Welfare and Institutions Code, relating to
 public social services.   electronic transfers.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1614, as amended, Stone. Electronic  benefits transfer
cards.   transfers: payments and benefits. 
   (1) Existing law provides for financial and food assistance
benefits to needy Californians including, among other programs, the
California Work Opportunity and Responsibility to Kids (CalWORKs)
program and CalFresh, under which each county provides for financial
and food assistance benefits to qualified individuals who meet
specified eligibility criteria.
   Existing law, administered by the State Department of Social
Services, provides for the establishment of a statewide electronic
benefits transfer (EBT) system for the purpose of providing those
financial and food assistance benefits. Existing law authorizes a
county to deliver CalFresh benefits and, upon election by the county,
CalWORKs benefits through the use of an EBT system. Existing law
requires, among other things, that the system have a 24-hour per day
toll-free telephone hotline for the reporting of lost or stolen cards
that will provide recipients with information on how to have the
card and personal identification card number replaced.
   This bill would require the 24-hour toll-free telephone hotline to
provide recipients, at no additional cost, the above-described
information and to allow an authorized representative or head of
household to access or request the transaction history detail, as
specified. This bill would require the system to have an Internet Web
site that will provide the same information and allow an authorized
representative or head of household to view or request the
transaction history detail.
   The bill would require a county human services agency to make
available to an authorized representative or head of household all
electronic benefit transaction history details that are available to
the county human services agency within 10 business days after a
request has been received.
   This bill would also require that the EBT system be designed to
inform recipients when the system does not function or is expected
not to function for more than a one-hour period between 6 a.m. and
midnight during any 24-hour period.
   (2) Existing law, except as specified, authorizes a recipient to
be charged a fee, not to exceed the amount allowable by applicable
state and federal law and customarily charged to other customers, for
cash withdrawal transactions that exceed 4 per month.
   This bill would require the EBT system to be designed to ensure
that recipients of benefits under the CalWORKs program have access to
using or withdrawing benefits with minimal fees or charges,
including an opportunity to access benefits with no fees or charges.
   (3) Existing law requires that EBT system consumers be informed
regarding how to use the EBT card and how to protect the card from
misuse.
   This bill would also require a consumer to be informed of where
they can use their EBT cards to withdraw benefits without incurring a
fee, charge, or surcharge. This bill would also require the county
to use information provided by the department to inform recipients of
benefits under the CalWORKs program of, among other things, the
methods of electronic delivery of benefits available and any
applicable fees, charges, or surcharges associated with the EBT
system.  The bill would also require a county to inform
recipients of benefits under the CalWORKs program of additional
options to which they are entitled regarding the receipt of benefits.

   (4) The bill would require the department to implement these
provisions by all-county letters or similar instructions no later
than April 1, 2015, and until regulations are adopted on or before
October 1, 2016.
   This bill would also make a conforming change.
   By increasing the duties of counties in administering public
social services programs, this bill would impose a state-mandated
local program. 
   (5) Existing law obligates a parent to support his or her child.
Existing law establishes the Department of Child Support Services
within the California Health and Human Services Agency, which
administers all services and performs all functions necessary to
establish, collect, and distribute child support. Existing law,
commencing January 1, 2015, requires, if child support payments are
directly deposited to an account of the recipient's choice, that the
payments only be deposited to a qualifying account, as defined, and
prohibits a person or entity that issues a prepaid card or maintains
or manages a prepaid card account from accepting or facilitating the
direct deposit of child support payments to a prepaid card account
that does not meet the requirements of a qualifying account. 

   This bill would prohibit the Department of Child Support Services
from being held liable for authorizing a direct deposit of child
support payments into a prepaid card account designated by the
recipient that does not meet the requirements of a qualified account.

   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.    Section 17325 of the   Family
Code   , as added by Section 1 of Chapter 180 of the
Statutes of 2014, is amended to read: 
   17325.  (a) (1) Notwithstanding any other law, if child support
payments are directly deposited to an account of the recipient's
choice, as authorized under the federal Electronic Fund Transfer Act
(EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments may only be
deposited to an account that meets the requirements of a qualifying
account, as defined in paragraph (2), for deposit of child support
payments.
   (2) For purposes of this section, a "qualifying account" is one of
the following:
   (A) A demand deposit or savings account at an insured financial
institution in the name of the person entitled to the receipt of
child support payments.
   (B) A prepaid card account that meets all of the following:
   (i) The account is held at an insured financial institution.
   (ii) The account is set up to meet the requirements for
passthrough deposit or share insurance so that the funds accessible
through the account are eligible for insurance for the benefit of the
person entitled to the receipt of child support payments by the
Federal Deposit Insurance Corporation in accordance with Part 330 of
Title 12 of the Code of Federal Regulations, or the National Credit
Union Share Insurance Fund in accordance with Part 745 of Title 12 of
the Code of Federal Regulations.
   (iii) The account is not attached to any credit or overdraft
feature that is automatically repaid from the account after delivery
of the payment.
   (iv) The issuer of the card complies with all of the requirements,
and provides the holder of the card with all of the consumer
protections, that apply to a payroll card account under the rules
implementing the EFTA or other rules subsequently adopted under the
EFTA that apply to prepaid card accounts.
   (3) A person or entity that issues a prepaid card or maintains or
manages a prepaid card account that does not comply with paragraph
(2) shall not accept or facilitate the direct deposit of child
support payments to the prepaid card account. 
   (b) For purposes of this section, the department shall not be held
liable for authorizing a direct deposit of child support payments
into a prepaid card account designated by the recipient that does not
comply with paragraph (2) of subdivision (a).  
   (b) 
    (c)  For the purposes of this section, the following
definitions shall apply:
   (1) "Financial institution" means a state or national bank, a
state or federal savings and loan association, a mutual savings bank,
or a state or federal credit union.
   (2) "Issuer" means a person or entity that issues a prepaid card.
   (3) "Payroll card account" shall have the same meaning as that
term is defined in the regulations implementing the EFTA.
   (4) "Prepaid card" or "prepaid card account" means either of the
following:
   (A) A card, code, or other means of access to funds of a recipient
that is usable at multiple, unaffiliated merchants for goods or
services, or usable at automated teller machines.
   (B) The same as those terms or related terms are defined in the
regulations adopted under the EFTA regarding general use reloadable
cards.
   SECTION 1.   SEC. 2.   Section 123302 of
the Health and Safety Code is amended to read:
   123302.  (a) (1) Notwithstanding any other law, the department may
design, implement, and fund an electronic benefits transfer (EBT)
system for the California Special Supplemental Food Program for
Women, Infants, and Children. Sections 10066, 10067, and 10068 of,
and subdivision  (l)   (m)  of Section
10072 of, the Welfare and Institutions Code, shall apply to the
administration of this section.
   (2) The department shall not implement any EBT system authorized
by this section until the department completes a feasibility study,
and funding for the system is provided in the annual Budget Act.
   (b) The department shall seek the advice of the Electronic
Benefits Transfer Committee, created by Section 10067 of the Welfare
and Institutions Code, in implementing this section, and shall obtain
the approval of the United States Department of Agriculture, which
is the federal governing agency, prior to the establishment of any
EBT system.
   (c) The department shall develop a plan to determine the
feasibility of implementing an EBT system for the California Special
Supplemental Food Program for Women, Infants, and Children by January
1, 2003, and shall report its findings to the Legislature by July 1,
2003.
   SEC. 2.   SEC. 3.   Section 10072 of the
Welfare and Institutions Code is amended to read:
   10072.  The electronic benefits transfer system required by this
chapter shall be designed to do, but not be limited to, all of the
following:
   (a) To the extent permitted by federal law and the rules of the
program providing the benefits, recipients who are required to
receive their benefits using an electronic benefits transfer system
shall be permitted to gain access to the benefits in any part of the
state where electronic benefits transfers are accepted. All
electronic benefits transfer systems in this state shall be designed
to allow recipients to gain access to their benefits by using every
other electronic benefits transfer system.
   (b) To the maximum extent feasible, electronic benefits transfer
systems shall be designed to be compatible with the electronic
benefits transfer systems in other states.
   (c) All reasonable measures shall be taken in order to ensure that
recipients have access to electronically issued benefits through
systems such as automated teller machines, point-of-sale devices, or
other devices that accept electronic benefits transfer transactions.
Benefits provided under Chapter 2 (commencing with Section 11200) of
Part 3 shall be staggered over a period of three calendar days,
unless a county requests a waiver from the department and the waiver
is approved, or in cases of hardship pursuant to subdivision (p).
   (d) The system shall provide for reasonable access to benefits to
recipients who demonstrate an inability to use an electronic benefits
transfer card or other aspect of the system because of disability,
language, lack of access, or other barrier. These alternative methods
shall conform to the requirements of the Americans with Disabilities
Act (42 U.S.C. Sec. 12101, et seq.), including reasonable
accommodations for recipients who, because of physical or mental
disabilities, are unable to operate or otherwise make effective use
of the electronic benefits transfer system.
   (e) The system shall permit a recipient the option to choose a
personal identification number, also known as a "PIN" number, to
assist the recipient to remember his or her number in order to allow
access to benefits. Whenever an institution, authorized
representative, or other third party not part of the recipient
household or assistance unit has been issued an electronic benefits
transfer card, either in lieu of, or in addition to, the recipient,
the third party shall have a separate card and personal
identification number. At the option of the recipient, he or she may
designate whether restrictions apply to the third party's access to
the recipient's benefits. At the option of the recipient head of
household or assistance unit, the county shall provide one electronic
benefits transfer card to each adult member to enable them to access
benefits.
   (f) The system shall have a 24-hour per day toll-free telephone
hotline for the reporting of lost or stolen cards that will provide
recipients, at no additional cost to the recipient, with information
on how to have the card and personal identification number replaced,
and that will allow an authorized representative or head of household
to access, over the telephone, the transaction history detail for at
least the last 10 transactions and to request that the transaction
history detail for at least the past two months be sent by mail.
   (g) The system shall have an Internet Web site that will provide
recipients, at no additional cost to the recipient, with information
on how to have the card and personal identification number replaced,
and that will allow an authorized representative or head of household
to view the transaction history detail for at least the last 10
transactions and to request that the transaction history detail for
at least the past two months be sent by mail.
   (h) In addition to the ability to receive transaction history
detail pursuant to subdivisions (f) and (g), a county human services
agency shall make available to an authorized representative or head
of household, at no additional cost to the authorized representative
or head of household, all electronic benefit transaction history
details that are available to the county human services agency within
10 business days after a request has been received by the agency.
   (i) (1) A recipient shall not incur any loss of electronic
benefits after reporting that his or her electronic benefits transfer
card or personal identification number has been lost or stolen. The
system shall provide for the prompt replacement of lost or stolen
electronic benefits transfer cards and personal identification
numbers. Electronic benefits for which the case was determined
eligible and that were not withdrawn by transactions using an
authorized personal identification number for the account shall also
be promptly replaced.
   (2) A recipient shall not incur any loss of cash benefits that are
taken by an unauthorized withdrawal, removal, or use of benefits
that does not occur by the use of a physical EBT card issued to the
recipient or authorized third party to directly access the benefits.
Benefits taken as described in this paragraph shall be promptly
replaced in accordance with the protocol established by the
department pursuant to paragraph (3).
   (3) The State Department of Social Services shall establish a
protocol for recipients to report electronic theft of cash benefits
that minimizes the burden on recipients, ensures prompt replacement
of benefits in order to minimize the harm to recipients, and ensures
program integrity. This protocol may include the automatic
replacement of benefits without the need for recipient reporting and
verification.
   (j) Electronic benefits transfer system consumers shall be
informed on how to use electronic benefits transfer cards, how to
protect their cards from misuse, and where consumers can use their
cards to withdraw benefits without incurring a fee, charge, or
surcharge.
   (k) The electronic benefits transfer system shall be designed to
inform recipients when the electronic benefits transfer system does
not function or is expected not to function for more than a one-hour
period between 6 a.m. and midnight during any 24-hour period. This
information shall be made available in the recipient's preferred
language if the electronic benefits transfer system vendor contract
provides for services in that language.
   (l) Procedures shall be developed for error resolution.
   (m) No fee shall be charged by the state, a county, or an
electronic benefits processor certified by the state to retailers
participating in the electronic benefits transfer system.
   (n) Except for CalFresh transactions, a recipient may be charged a
fee, not to exceed the amount allowed by applicable state and
federal law and customarily charged to other customers, for cash
withdrawal transactions that exceed four per month.
   (o) The electronic benefits transfer system shall be designed to
ensure that recipients of benefits under Chapter 2 (commencing with
Section 11200) of Part 3 have access to using or withdrawing benefits
with minimal fees or charges, including an opportunity to access
benefits with no fee or charges.
   (p) A county shall exempt an individual from the three-day
staggering requirement under subdivision (c) on a case-by-case basis
for hardship. Hardship includes, but is not limited to, the
incurrence of late charges on an individual's housing payments.
   (q) A county shall use information provided by the department to
inform recipients of benefits under Chapter 2 (commencing with
Section 11200) of Part 3 of all of the following:
   (1) The methods of electronic delivery of benefits available,
including distribution of benefits through the electronic benefits
transfer system or direct deposit pursuant to Section 11006.2.
   (2) Applicable fees and charges, including surcharges, consumer
and privacy protections, and liability for theft associated with the
electronic benefits transfer system.
   (3) How to avoid fees and charges, including opting for delivery
of benefits by direct deposit and using the electronic benefits
transfer card solely at surcharge free locations.
   (4) Where to withdraw benefits without a surcharge when using the
electronic benefits transfer system. 
   (r) A county shall inform a recipient of benefits under Chapter 2
(commencing with Section 11200) of Part 3 of all of the following:
 
   (1) 
    (5)  That a recipient may authorize any available method
of electronic delivery of benefits and instructions regarding how
the recipient may select or change his or her preferred method of
electronic delivery of benefits and that the recipient shall be given
the opportunity to select the method prior to the first payment.

   (2) 
    (6)  That a recipient may be entitled to an alternative
method of delivery if the recipient demonstrates an inability to use
an electronic benefits transfer card or other aspect of the system
because of disability, language, lack of access, or other barrier
pursuant to subdivision (d) and instructions regarding how to
determine whether the recipient qualifies for an alternative method
of delivery. 
   (3) 
    (7)  That a recipient may be entitled to an exemption
from the three-day staggering requirement under subdivision (c) on a
case-by-case basis for hardship pursuant to subdivision (o) and
instructions regarding how to determine whether the recipient
qualifies for the exemption. 
   (r) A county is in compliance with subdivision (q) if it provides
the recipient a copy of the information developed by the department.
A county may provide a recipient information, in addition to the copy
of the information developed by the department, pursuant to
subdivision (q), either verbally or in writing, if the county
determines the additional information will benefit the recipient's
understanding of the information provided. 
   SEC. 3.   SEC. 4.   Notwithstanding the
rulemaking provisions of the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code), the  department  
State Department of Social Services  shall implement 
Sections 2 and 3 of  this act by all-county letters or similar
instructions no later than April 1, 2015, and until regulations are
developed. The department shall adopt regulations implementing this
act on or before October 1, 2016.
   SEC. 4.   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.