WeVote
Log In

Bill

Bill

AB 1402

Fresh Start Grants: Personal Income Tax Law: credits.

2025-2026 Regular Session Introduced by Heath Flora and 2 co-sponsors

AB 1402 moves certain refundable tax credits for CalFresh recipients into upfront Fresh Start Grants via county welfare departments, changing timing and reducing future credits.

Re-referred to Com. on HUM. S.
#freshstartgrants #personalincometaxlaw #credits
0
WeVote Research Nonpartisan
Bill Summary · AB 1402

AB 1402 — Fresh Start Grants: Personal Income Tax Law: credits

Author: McKinnor | Introduced: Feb 21, 2025 | Status: Re‑referred to Com. on Human Services (Apr 24, 2025)

Purpose

AB 1402 would convert certain refundable state tax-credit benefits into immediate cash supplements for low‑income Californians receiving CalFresh (SNAP) by directing county welfare departments to identify eligible recipients, calculate the value of specified tax credits, and add that value to monthly benefits as “Fresh Start Grants.” The policy shifts some benefits from an annual tax refund to an up‑front grant distributed through counties.

Key provisions

  • Beginning January 1, 2027, county welfare departments must determine, for each CalFresh recipient, eligibility for specified refundable tax credits (notably the California Earned Income Tax Credit (EITC), the young child tax credit, and the foster youth tax credit), calculate the credit value, and add that amount to the recipient’s benefits as a Fresh Start Grant.
  • County welfare departments act as primary administrators for calculating and distributing grants. They must:
    • Add grant amounts to benefits,
    • Notify recipients and recoup from future grants any overpayments caused by administrative error,
    • Evaluate recipients of other specified programs for Fresh Start eligibility without duplicative documentation.
  • Establishes the continuously appropriated Fresh Start Grants Fund in the State Treasury to provide these payments.
  • Requires the Franchise Tax Board (FTB), no later than June 30, 2026 and annually thereafter, to estimate the amount of credits to be issued for the subsequent taxable year and request the Controller transfer that amount from the Tax Relief and Refund Account to the Fresh Start Grants Fund.
  • The State Department of Social Services (SDSS) must share relevant issuance and tracking data with FTB, counties, and commission an independent study of the program in collaboration with FTB and counties.
  • Data privacy and security: SDSS, counties, and program administrators must implement data safeguards under CCPA/CPRA; the California Privacy Protection Agency will monitor compliance. FTB’s shared taxpayer information remains subject to criminal penalties for unauthorized use.
  • For taxable years beginning on or after January 1, 2027, the EITC, young child, and foster youth tax credit amounts would be reduced by the amount the taxpayer already received as a Fresh Start Grant.

Who is affected

  • Primary beneficiaries: CalFresh recipients (low‑income individuals and families).
  • Administrative: County welfare departments (new duties), SDSS, FTB, Controller, California Privacy Protection Agency.
  • Taxpayers receiving the credits: their refundable tax credits will be reduced dollar‑for‑dollar by prior Fresh Start Grants for tax years beginning on/after Jan 1, 2027.

Fiscal, legal, and procedural notes

  • Creates a new continuously appropriated state fund (Fresh Start Grants Fund) — constitutes an appropriation.
  • Expands county responsibilities, creating a state‑mandated local program. The bill states specified mandates require no reimbursement; for others the Commission on State Mandates may require reimbursement under existing law.
  • Because the change reduces state tax credits (effectively increasing tax in some respects), the bill includes a statutory change that triggers a two‑thirds legislative vote requirement (Article XIII A, §3).
  • Legislative timeline: introduced Feb 21, 2025; amended Apr 23, 2025; re‑referred to Human Services Apr 24, 2025.

Potential impacts to consider

  • Moves benefit timing from tax season refunds to ongoing cash assistance, which may improve liquidity for low‑income households.
  • Adds administrative burden and privacy/data‑security requirements for counties and state agencies.
  • Reduces refundable tax credit amounts at filing by amounts already distributed as grants, altering tax outcomes and requiring taxpayer reconciliation.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.