SB560 - Public social services.

Amended IN Senate March 28, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 560 Introduced by Senator Smallwood-Cuevas February 20, 2025 An act to amend Sections 10980, 11004, and 18927.1 of, and to add Section 10981 to, the Welfare and Institutions Code, relating to public social services. LEGISLATIVE COUNSEL'S DIGEST SB 560, as amended, Smallwood-Cuevas. Public social services. Existing law provides for various public social services programs, including, among others, the California Work Opportunity and Responsibility to Kids (CalWORKs) program, under which each county provides cash assistance and other benefits to qualified low-income families and individuals, and CalFresh, under which supplemental nutrition assistance benefits allocated to the state by the federal government are distributed to eligible individuals by each county. Existing law establishes criminal penalties for welfare fraud, defined as willfully and knowingly, with the intent to deceive, by specified means, including a false statement or representation, obtaining or retaining aid through designated public social services for oneself or for a child who is not in fact entitled thereto, as specified. Existing law makes any person who knowingly uses, transfers, sells, purchases, or possesses CalFresh or federal Supplemental Nutrition Assistance Program benefits in any manner not authorized, as specified, guilty of a misdemeanor or felony depending on the face value of the benefits. This bill would delete the provision that establishes criminal penalties for an attempt to commit welfare fraud. The bill would delete criminal penalties for welfare fraud when the total amount of aid obtained or retained is above or below $950, and instead make welfare fraud when aid was obtained or retained in the total amount of $25,000 or more punishable by specified imprisonment in a county jail, by a fine, or by imprisonment and fine. The bill would require a county human services agency to determine whether benefits were authorized as a result of an error in the Statewide Automated Welfare System (CalSAWS) and prohibit the agency from referring a case for criminal action if benefits were authorized in error. The bill would prohibit a person from being subject to criminal prosecution under these provisions for an overpayment or overissuance of benefits obtained under various public social services programs, including CalWORKs and CalFresh, under certain conditions, including that the person is in repayment status or grant or benefit reduction status. The bill would prohibit a person from being subject to criminal prosecution or an administrative finding of intentional program violation under these provisions for an overpayment or overissuance of benefits obtained under various specified public social services programs for any month in which the county human services agency was in receipt of any Income and Eligibility Verification System (IEVS) data match information indicating any potential for an overpayment or an overissuance and for which the agency has not provided the person a timely and adequate notice of action for the collection of the overpayment or overissuance. The bill would prohibit a person from being subject to criminal prosecution or an administrative finding of intentional program violation for overpayment or overissuance of benefits under various specified public social services programs for any month the county human services agency was in receipt of any New Hire Registry (NHR) data match information, as specified, indicating any potential for an overpayment or overissuance and the county human services agency did not provide the person a timely and adequate reminder to report income, as specified. The bill would prohibit criminal prosecution for an overpayment or overissuance of benefits obtained under various specified public social services programs, except as specified or as required by federal law. The bill would prohibit a person from being additionally charged with perjury based solely on a statement made to a county welfare department, if they are subject to prosecution for overpayment or overissuance pursuant to these provisions. Existing law authorizes current and future grants payable to an assistance unit to be reduced due to prior overpayments. In cases in which the overpayment was caused by an agency error, existing law requires grant payments to be reduced by 5% of the maximum aid payment of the assistance unit. Prior to effectuating any reduction of current grants to recover past overpayments, existing law requires the recipient to be advised of the proposed reduction and of their entitlement to a hearing. Existing law prohibits a civil or criminal action from being commenced based on alleged unlawful application for or receipt of public social services if the case record or any consumer credit report used in the case has not been made available to that person or has been destroyed, as specified. This bill would provide that a person or household for whom their grant has or may be reduced under these provisions is only subject to administrative remedies available for responding to an overpayment. The bill would require a recipient’s case file to be reviewed by a qualified caseworker to identify any errors in determining the overpayment prior to advising the recipient of the proposed reduction. If it is determined during that review that an overpayment was not made, the bill would prohibit subsequent recovery efforts. The bill would also prohibit a civil or criminal action against a recipient if their case file was reviewed by qualified caseworker and it is determined that an overissuance was not made. The bill would provide that an overpayment determined to be an administrative error shall only be collected administratively by the county. Commencing on July 1, 2022, or on the date the Department of Social Services notifies the Legislature that a specified event has occurred, whichever date is later, existing law requires a county to only establish an overpayment if the overpayment occurred within 24 months prior to the county discovering the payment. Existing law also prohibits a county from collecting any portion of a nonfraudulent payment that occurred more than 24 months prior to the date the county discovered an overpayment. This bill would also prohibit a county from taking any other action related to a nonfraudulent overpayment that occurred more than 24 months prior to discovery of the overpayment. Existing law requires current and future CalFresh benefits to be reduced, as specified, to recover a benefit overissuance caused by inadvertent household error or administrative error. Existing law, beginning on July 1, 2022, or on the date the department notifies the Legislature that a specified event has occurred, whichever date is later, limits the period in which a county may establish a claim to recover an overissuance of CalFresh benefits due to inadvertent household error or administrative error to the 24 months preceding the month the county welfare department determined the overissuance occurred. The bill would require a recipient’s case file to be reviewed by a qualified caseworker to identify any errors in determining the overpayment prior to establishing a claim to recover an overissuance. If it is determined during that review that an overissuance was not made, the bill would prohibit any subsequent recovery effort. The bill would require a claim established under these provisions to only be pursued through the applicable administrative process provided by federal law or pursuant to specified procedures prescribed by state law. By expanding county duties relating to the administration of benefits, 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 10980 of the Welfare and Institutions Code is amended to read: 10980. (a) Any person who knowingly makes more than one application for aid under the provisions of this division with the intent of establishing multiple entitlements for any person for the same period or who makes an application for that aid for a fictitious or nonexistent person or by claiming a false identity for any person is guilty of a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of 16 months, two years, or three years, by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine; or by imprisonment in a county jail for a period of not more than one year, or by a fine of not more than one thousand dollars ($1,000), or by both imprisonment and fine. (b) Whenever any person has, willfully and knowingly, with the intent to deceive, by means of false statement or representation, or by failing to disclose a material fact, or by impersonation or other fraudulent device, obtained or retained aid in the total amount of $25,000 or more under the provisions of this division for themselves or for a child not in fact entitled thereto, the person obtaining this aid shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of 16 months, two years, or three years, by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine; or by imprisonment in a county jail for a period of not more than one year, by a fine of not more than one thousand dollars ($1,000), or by both imprisonment and fine. (c) Any person who knowingly uses, transfers, acquires, or possesses an electronic benefit transfer (EBT) card issued under the federal Supplemental Nutrition Assistance Program with the intent to use the benefits in any manner not authorized by Chapter 10 (commencing with Section 18900) of Part 6 with the intent to defraud is guilty of a felony, punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of 16 months, two years, or three years, by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine. (d) Any person who counterfeits or alters or knowingly uses, transfers, acquires, or possesses a counterfeited or altered EBT card with the intent to participate in the federal Supplemental Nutrition Assistance Program or to receive CalFresh benefits or electronically transferred benefits in any manner not authorized by the former federal Food Stamp Act of 1964 (Public Law 88-525 and all amendments thereto) or the federal Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2011 et seq.) or the federal regulations pursuant to the act is guilty of forgery. (e) Any person who fraudulently appropriates CalFresh benefits or an EBT card issued under the federal Supplemental Nutrition Assistance Program with which they have been entrusted pursuant to their duties as a public employee is guilty of embezzlement of public funds. (f) (1) Any person who knowingly uses, transfers, sells, purchases, or possesses CalFresh benefits or an EBT card issued under the federal Supplemental Nutrition Assistance Program in any manner not authorized by Chapter 10 (commencing with Section 18900) of Part 6, or by the former federal Food Stamp Act of 1977 (Public Law 95-113 and all amendments thereto) or the federal Food and Nutrition Act of 2008 (7 U.S.C. Sec. 2011 et seq.) is either: (A) Guilty of a misdemeanor if the face value of the benefits is nine hundred fifty dollars ($950) or less, and shall be punished by imprisonment in a county jail for a period of not more than six months, by a fine of not more than five hundred dollars ($500), or by both imprisonment or fine. (B) Guilty of a felony if the face value of the CalFresh benefits exceeds nine hundred fifty dollars ($950), and shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of 16 months, two years, or three years, by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine, or by imprisonment in a county jail for a period of not more than one year, or by a fine of not more than one thousand dollars ($1,000), or by both imprisonment and fine. (2) Prior to commencing a criminal action under paragraph (1), a county human services agency shall determine whether benefits were authorized as a result of an error in the Statewide Automated Welfare System (CalSAWS). If benefits were authorized as a result of an error in the CalSAWS, the county human services agency shall not refer the case for criminal action under paragraph (1). (g) (1) If the violation of subdivision (e) or (f) is committed by means of an electronic transfer of benefits, in addition and consecutive to the penalties for the violation, or attempted violation, of those subdivisions, the court shall impose the following punishment: (A) If the electronic transfer of benefits exceeds fifty thousand dollars ($50,000), an additional term pursuant to subdivision (h) of Section 1170 of the Penal Code of one year. (B) If the electronic transfer of benefits exceeds one hundred fifty thousand dollars ($150,000), an additional term pursuant to subdivision (h) of Section 1170 of the Penal Code of two years. (C) If the electronic transfer of benefits exceeds one million dollars ($1,000,000), an additional term pursuant to subdivision (h) of Section 1170 of the Penal Code of three years. (D) If the electronic transfer of benefits exceeds two million five hundred thousand dollars ($2,500,000), an additional term pursuant to subdivision (h) of Section 1170 of the Penal Code of four years. (2) In any accusatory pleading involving multiple charges of violations of subdivision (e) or (f), or both, committed by means of an electronic transfer of benefits, the additional terms provided in paragraph (1) may be imposed if the aggregate losses to the victims from all violations exceed the amounts specified in this paragraph and arise from a common scheme or plan. (h) A person who is punished by an additional term of imprisonment under another law for a violation of subdivision (e) or (f) shall not receive an additional term of imprisonment under subdivision (g). (i) (1) A person shall not be subject to criminal prosecution, prosecution or an administrative finding of intentional program violation, under this section or under any other law, for an overpayment or overissuance of benefits, obtain [Text truncated for display. Full text available on Congress.gov.]