AB 118 bundles a set of human‑services changes tied to the 2025 Budget Act. It directs the Department of Social Services to evaluate the California Fruit & Vegetable EBT pilot and scope a possible state‑run supplemental benefit program; it requires counties to provide prepopulated CalWORKs semiannual reports by mail or electronically (recipient choice); and it mandates county child welfare agencies convene child and family team meetings for family maintenance cases starting July 1, 2025.
On finance and program oversight, AB 118: (1) codifies a continuous General Fund appropriation up to $300,000 per disaster declaration for Disaster CalFresh administration; (2) makes multi‑year appropriations and a new distribution formula for the Juvenile Justice Realignment Block Grant ($208.8M annually for 2025–26 through 2028–29) and bars grant funding to facilities found unsuitable; and (3) changes IHSS cost‑sharing so counties, beginning July 1, 2026, bear a 100% share of lost enhanced federal CFCO funds caused by untimely reassessments (50/50 split for 2025–26). The bill also authorizes limited Adoption Assistance Program payments for eligible out‑of‑state residential treatment placements under specified conditions and reporting requirements.
At a Glance
What It Does
Requires CDSS to evaluate and report on the CalFresh fruit‑and‑vegetable EBT pilot and scope a state‑run supplemental benefit model; mandates prepopulated semiannual CalWORKs reporting by recipient election; requires counties to convene child & family team meetings for family maintenance; appropriates $208.8M annually for juvenile realignment grants and tightens facility suitability conditions; shifts responsibility to counties for lost IHSS enhanced federal funds under CFCO noncompliance starting July 1, 2026; allows AAP payments for certain out‑of‑state residential treatment placements with caps and documentation requirements.
Who It Affects
County human services and child welfare agencies (new meeting, reporting, and documentation duties); the State Department of Social Services and Office of Technology (evaluation, automation, and guidance tasks); CalFresh recipients and authorized retailers/farmers’ markets participating in nutrition incentive pilots; IHSS providers and counties tied to new cost‑sharing rules; juvenile justice programs and youth placement providers reliant on block grant funding; adoptive families and providers of out‑of‑state residential treatment.
Why It Matters
The bill converts pilots into a possible statewide EBT supplemental model, tightens oversight of juvenile facility funding, and shifts substantial fiscal risk to counties for federal CFCO compliance failures—changes that affect county budgets, vendor onboarding, and IT integration timelines. It also creates new documentation and reporting regimes for out‑of‑state AAP placements and imposes operational deadlines for departmental guidance.
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What This Bill Actually Does
AB 118 is a budget‑related package of operational and fiscal directives for California’s human‑services system. For CalFresh, it requires the State Department of Social Services (CDSS) to evaluate fruit‑and‑vegetable EBT pilot projects that ran between Feb. 1, 2023 and Jan. 31, 2025, deliver recommendations, and scope the steps and resources needed to transition the pilot to a fully state‑managed supplemental benefits program.
The bill spells out specific conversion workstreams the department must size: retailer engagement and enrollment, certification of retailer EBT systems by the Office of Technology and Solutions Integration, CalSAWS/EBT reconciliation automation, and the feasibility of extending supplemental benefits to online CalFresh transactions.
On county reporting and client interactions, AB 118 requires prepopulated semiannual CalWORKs reports to be delivered either by mail or electronically at the recipient’s choice when the Statewide Automated Welfare System (CalSAWS) is certified to support the automation; CDSS must finish final policy guidance by August 15, 2025. For child welfare practice, the bill mandates child and family team meetings for all children receiving family maintenance services effective July 1, 2025, and authorizes CDSS to use all‑county letters to implement the requirement until regulations are adopted.The bill changes funding mechanics.
It appropriates $208.8 million per year from the General Fund for the Juvenile Justice Realignment Block Grant for multiple fiscal years and prescribes a by‑county distribution formula that shifts weighting among offense counts, age population, and transfers to less restrictive programs. Counties must include descriptions of less restrictive programs and prior‑year expenditure accounting in their block grant plans; the Office of Youth and Community Restoration must review the formula by Jan. 10, 2030.
Separately, if the state loses enhanced federal matching funds under the Community First Choice Option because of untimely case reassessments, counties will be billed for the lost federal share: for 2025–26 the state and counties split the loss 50/50, but beginning July 1, 2026 counties must pay 100% of the lost enhanced match (separate from the rebased IHSS MOE), with CDSS required to issue implementation guidance.For Adoption Assistance Program (AAP) payments, AB 118 allows counties to authorize AAP funding for certain out‑of‑state residential treatment placements when an adoptive parent lives in the state where the facility is located, the placement is necessary and time‑limited, and the facility meets licensing, Title IV‑E, and qualified‑residential‑treatment criteria; counties must report placement counts, facility names and length of stay annually beginning Sept. 1, 2025. Finally, the bill codifies a continuous General Fund appropriation (not to exceed $300,000 per disaster declaration) to cover CDSS and county administrative costs associated with Disaster CalFresh operations.
The Five Things You Need to Know
CDSS must evaluate California’s fruit‑and‑vegetable EBT pilot projects that ran Feb. 1, 2023–Jan. 31, 2025, and submit a report (including a transition/technical scoping for a state‑managed supplemental benefits program) by July 1, 2025.
Beginning July 1, 2026 counties must pay a 100% share (separate from the rebased IHSS MOE) of any lost enhanced federal CFCO matching funds caused by untimely case reassessments; for fiscal year 2025–26 the state and counties each pay 50% of lost enhanced match.
The bill appropriates $208.8 million per year (2025–26 through 2028–29) for the Juvenile Justice Realignment Block Grant and revises the by‑county allocation formula while prohibiting counties from allocating those funds to juvenile facilities found unsuitable for confinement.
AAP payments may be authorized for eligible out‑of‑state residential treatment placements if an adoptive parent resides in the facility’s state, the placement is necessary and limited to 12 months (plus up to 60 days transition), and the facility is licensed, in good standing, Title IV‑E eligible and a qualified residential treatment program.
Counties must provide CalWORKs recipients with a prepopulated semiannual report either by mail or electronically at the recipient’s election once CalSAWS automation is certified; CDSS must issue final policy guidance by August 15, 2025.
Section-by-Section Breakdown
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California Fruit & Vegetable EBT Pilot — evaluation and state transition planning
This section requires CDSS to evaluate pilot projects operating Feb. 1, 2023–Jan. 31, 2025 and produce recommendations and a transition scoping. It specifies operational attributes the supplemental benefits mechanism must support (transferability across retailers, accrual and redemption tied to fresh produce purchases, at least a 1:1 match, no expiration except as federal rules permit). The bill also lays out grant selection criteria (minimum nonprofit/government grantees, at least one farmers’ market test) and gives CDSS permission to exempt pilot contracts from standard state contracting rules so pilots can be executed quickly. The evaluation must spell out the staff, technical, and reconciliation tasks CDSS and its Office of Technology and Solutions Integration would need to onboard retailers, certify EBT systems, align CalSAWS, and extend to online transactions if the state expands the program.
IHSS Maintenance of Effort and CFCO enhanced match responsibility
This amendment modifies the rebased County IHSS MOE framework by adding a contingency for lost federal enhanced matching funds under Section 1915(k) (Community First Choice Option). If the state loses enhanced federal participation due to untimely reassessments, beginning July 1, 2026 the county must reimburse the full amount of the lost enhanced federal share for the months of nonreceipt, as a payment separate from the rebased MOE. For the 2025–26 fiscal year only, the state and counties share the loss equally. CDSS must consult with county associations to publish guidance implementing the new repayment mechanics and timelines.
Juvenile Justice Realignment Block Grant funding and plan requirements
The bill appropriates $208.8 million annually for fiscal years 2025–26 through 2028–29 and prescribes a shifting by‑county distribution methodology tied to offense counts, transfers to less restrictive programs, and youth population shares. To receive funds, counties must maintain a multiagency subcommittee and submit an annual plan that now must describe less restrictive programs and include a formatted accounting of prior‑year expenditures. The Office of Youth and Community Restoration must publish plans and, by Jan. 10, 2030, review the formula and report on whether the allocation approach meets legislatively stated public‑health and recidivism reduction goals. Importantly, counties are barred from allocating block grant funds to juvenile confinement facilities that were found unsuitable and used for confinement on days they were legally prohibited from use.
Child and family team meetings for family maintenance cases
This short provision requires county child welfare agencies to convene child and family team meetings for every child and youth receiving family maintenance services effective July 1, 2025. Existing statutory requirements that govern child and family teams apply to these meetings. CDSS may issue all‑county letters to implement the requirement until formal regulations are adopted, which reduces the time between enactment and operationalization but places counties on a near‑term implementation schedule.
AAP payments for out‑of‑state residential treatment facilities — conditions and reporting
The bill creates a statutory path for Adoption Assistance Program payments to support eligible placements in out‑of‑state residential treatment facilities when at least one adoptive parent resides in the facility’s state and the placement is necessary and time‑limited. The placement must be licensed/approved in its state, Title IV‑E eligible, a federal qualified residential treatment program, and trauma‑informed. Payments are capped: the AAP rate cannot exceed the lesser of the host‑state rate or specified California Tier 3+ sums once the Tiered Rate Structure is operative (the operative clause ties the ceiling to CalSAWS automation dates). Counties must begin annual reporting on out‑of‑state placements (facility names, counts, and days placed) starting Sept. 1, 2025, and CDSS must provide guidance and use all‑county letters to operationalize documentation and monitoring.
Prepopulated CalWORKs semiannual reports — delivery by recipient election
This technical amendment requires counties, once CalSAWS is certified to support the necessary automation, to provide recipients with a prepopulated semiannual report either by mail or electronically at the recipient’s election rather than a blank form. CDSS must finish final policy guidance by August 15, 2025. The change is explicitly framed as subject to federal law limitations, which preserves the department’s need to ensure federal compliance for TANF and associated programs.
Continuous appropriation for Disaster CalFresh administrative costs
AB 118 codifies and makes continuous a General Fund appropriation to CDSS to cover administrative expenses related to Disaster CalFresh and outreach when the Governor or the President declares a major disaster. The appropriation is capped at $300,000 per disaster declaration and is available continuously (not limited to a single fiscal year), enabling quicker access to funds for outreach and maximizing federal D‑SNAP participation.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- CalFresh recipients who use participating retailers: The supplemental benefits mechanism increases buying power for fresh fruits and vegetables (minimum 1:1 match) and aims to make incentives seamless across retailer types, which can increase access and consumption.
- Authorized retailers and farmers’ markets that participate in pilots: Grantees and early adopters receive grants and technical accommodation under the pilot structure, including exemptions from certain state contracting rules, which lowers barriers to onboarding new payment mechanisms.
- Adoptive families with children needing intensive treatment: Under strict conditions, AAP funding can follow a child to certain out‑of‑state residential treatment facilities, enabling placement options when a parent resides in the facility’s state and the placement meets licensing and Title IV‑E criteria.
- Counties receiving Juvenile Justice Realignment funds: The multi‑year appropriation provides predictable, multi‑year funding (with a $250,000 floor for small allocations) and clearer plan content expectations that can help jurisdictions align investments in less restrictive, community‑based programs.
- Youth and families in family maintenance services: Requiring child and family team meetings for family maintenance cases increases structured family engagement and multidisciplinary planning that can improve case coordination and service tailoring.
Who Bears the Cost
- County governments: New reporting, documentation, and meeting mandates (child & family teams; AAP out‑of‑state reporting; expanded plan and expenditure accounting for juvenile block grants) increase administrative workload and costs; counties also face the large fiscal risk of covering 100% of lost CFCO enhanced match starting July 1, 2026.
- State Department of Social Services and IT offices: CDSS must deliver multiple guidance products, perform an evaluation and a complex program scoping for scaling the EBT supplemental benefits mechanism, and coordinate EBT/CalSAWS automation work—tasks that require staffing and systems work.
- Juvenile facility operators that receive block grant funds: Facilities adjudicated as unsuitable and used improperly risk losing allocations; operators may see funding withheld while remediation and reinspections occur.
- Adoption and child welfare agencies: County adoption agencies must verify out‑of‑state facility licensing, Title IV‑E eligibility, and qualified residential treatment status and submit annual placement reports, adding verification and monitoring burdens.
- Retailers expanding EBT integration: While grants offset some costs, retailers (especially small grocers or markets) will need to integrate supplemental‑benefit workflows into existing point‑of‑sale systems and potentially comply with certification steps defined by the state.
Key Issues
The Core Tension
AB 118 tries to expand access and accountability—more nutrition incentives, stricter oversight of juvenile facility funding, and conditional support for out‑of‑state AAP placements—while simultaneously shifting cost and administrative risk from the state to counties (notably via IHSS enhanced‑match liabilities and new reporting duties). The central dilemma is whether counties have the fiscal capacity and operational infrastructure to absorb these responsibilities without undermining the programs the bill aims to strengthen.
AB 118 combines program expansion with shifting financial and operational responsibility. The most consequential fiscal move is the county liability for lost CFCO enhanced match: after July 1, 2026 counties shoulder the full amount lost due to untimely reassessments.
That creates a strong fiscal incentive for counties to tighten reassessment workflows, but it also places a potentially large, unpredictable liability on county budgets—particularly in counties with staffing shortages or high IHSS caseload volatility. The 50/50 bridge for 2025–26 softens the immediate hit but only briefly.
On the program side, the EBT supplemental benefits pathway is promising but not self‑funding: supplemental benefits remain non‑entitlement and require appropriation. The statutory authorizations (exemptions from usual contracting rules, immunity language, and the explicit 1:1 match requirement) lower implementation friction, but successful statewide scale depends on CalSAWS/EBT integration, retailer certification workflows, and reconciliation automation that the bill only directs CDSS to scope.
If the department underestimates the technical and staffing needs, a state‑managed expansion could stall or create reconciliation backlogs.
AAP out‑of‑state placements are narrowly authorized but raise monitoring challenges: counties must verify licensing, Title IV‑E eligibility, and qualified‑residential‑treatment status originating from another state or tribal authority. The bill ties rate ceilings to California’s Tiered Rate Structure once that system is automated; until then, the payment ceiling is the lesser of in‑state SRTP rate or host‑state rates, which creates rate uncertainty.
Finally, the juvenile block grant distribution formula is data‑dependent and shifts weighting over time; accurate county reporting is essential for allocations, but the required expenditure accounting and plan elements increase local administrative burden just as some counties may face facility suitability findings that could disqualify long‑used placements.
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