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“ELECTRONIC BENEFIT TRANSFER INTEROPERABILITY AND PORTABILITY ACT OF 1999” mentioning the U.S. Dept of Agriculture was published in the House of Representatives section on pages H62-H65 on Jan. 31, 2000.
The publication is reproduced in full below:
ELECTRONIC BENEFIT TRANSFER INTEROPERABILITY AND PORTABILITY ACT OF
1999
Mr. COMBEST. Mr. Speaker, I move to suspend the rules and pass the Senate bill (S. 1733) to amend the Food Stamp Act of 1977 to provide for a national standard of interoperability and portability applicable to electronic food stamp benefit transactions.
The Clerk read as follows:
S. 1733
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Electronic Benefit Transfer Interoperabilty and Portability Act of 1999''.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to protect the integrity of the food stamp program;
(2) to ensure cost-effective portability of food stamp benefits across State borders without imposing additional administrative expenses for special equipment to address problems relating to the portability;
(3) to enhance the flow of interstate commerce involving electronic transactions involving food stamp benefits under a uniform national standard of interoperability and portability; and
(4) to eliminate the inefficiencies resulting from a patchwork of State-administered systems and regulations established to carry out the food stamp program
SEC. 3. INTEROPERABILTY AND PORTABILITY OF FOOD STAMP
TRANSACTIONS.
Section 7 of the Food Stamp Act of 1977 (7 U.S.C. 2016) is amended by adding at the end the following:
``(k) Interoperabilty and Portability of Electronic Benefit Transfer Transactions.--
``(1) Definitions.--In this subsection:
``(A) Electronic benefit transfer card.--The term
`electronic benefit transfer card' means a card that provides benefits under this Act through an electronic benefit transfer service (as defined in subsection (i)(11)(A)).
``(B) Electronic benefit transfer contract.--The term
`electronic benefit transfer contract' means a contract that provides for the issuance, use, or redemption of coupons in the form of electronic benefit transfer cards.
``(C) Interoperabilty.--The term `interoperability' means a system that enables a coupon issued in the form of an electronic benefit transfer card to be redeemed in any State.
``(D) Interstate transaction.--The term `interstate transaction' means a transaction that is initiated in 1 State by the use of an electronic benefit transfer card that is issued in another State.
``(E) Portability.--The term `portability' means a system that enables a coupon issued in the form of an electronic benefit transfer card to be used in any State by a household to purchase food at a retail food store or wholesale food concern approved under this Act.
``(F) Settling.--The term `settling' means movement, and reporting such movement, of funds from an electronic benefit transfer card issuer that is located in 1 State to a retail food store, or wholesale food concern, that is located in another State, to accomplish an interstate transaction.
``(G) Smart card.--The term `smart card' means an intelligent benefit card described in section 17(f).
``(H) Switching.--The term `switching' means the routing of an interstate transaction that consists of transmitting the details of a transaction electronically recorded through the use of an electronic benefit transfer card in 1 State to the issuer of the card that is in another State.
``(2) Requirement.--Not later than October 1, 2002, the Secretary shall ensure that systems that provide for the electronic issuance, use, and redemption of coupons in the form of electronic benefit transfer cards are interoperable, and food stamp benefits are portable, among all States.
``(3) Cost.--The cost of achieving the interoperability and portability required under paragraph (2) shall not be imposed on any food stamp retail store, or any wholesale food concern, approved to participate in the food stamp program.
``(4) Standards.--Not later than 210 days after the date of enactment of this subsection, the Secretary shall promulgate regulations that--
``(A) adopt a uniform national standard of interoperability and portability required under paragraph (2) that is based on the standard of interoperability and portability used by a majority of State agencies; and
``(B) require that any electronic benefit transfer contract that is entered into 30 days or more after the regulations are promulgated, by or on behalf of a State agency, provide for the interoperability and portability required under paragraph (2) in accordance with the national standard.
``(5) Exemptions--
``(A) Contracts.--The requirements of paragraph (2) shall not apply to the transfer of benefits under an electronic benefit transfer contract before the expiration of the term of the contract if the contract--
``(i) is entered into before the date that is 30 days after the regulations are promulgated under paragraph (4); and
``(ii) expires after October 1, 2002.
``(B) Waiver.--At the request of a State agency, the Secretary may provide 1 waiver to temporarily exempt, for a period ending on or before the date specified under clause
(iii), the State agency from complying with the requirements of paragraph (2), if the State agency--
``(i) establishes to the satisfaction of the Secretary that the State agency faces unusual technological barriers to achieving by October 1, 2002, the interoperability and portability required under paragraph (2);
``(ii) demonstrates that the best interest of the food stamp program would be served by granting the waiver with respect to the electronic benefit transfer system used by the State agency to administer the food stamp program; and
``(iii) specifies a date by which the State agency will achieve the interoperability and portability required under paragraph (2).
``(C) Smart card systems.--The Secretary shall allow a State agency that is using smart cards for the delivery of food stamp program benefits to comply with the requirements of paragraph (2) at such time after October 1, 2002, as the Secretary determines that a practicable technological method is available for interoperability with electronic benefit transfer cards.
``(6) Funding.--
``(A) In general.--In accordance with regulations promulgated by the Secretary, the Secretary shall pay 100 percent of the costs incurred by a State agency under this Act for switching and settling interstate transactions--
``(i) incurred after the date of enactment of this subsection and before October 1, 2002, if the State agency uses the standard of interoperability and portability adopted by a majority of State agencies; and
``(ii) incurred after September 30, 2002, if the State agency uses the uniform national standard of interoperability and portability adopted under paragraph (4)(A).
``(B) Limitation.--The total amount paid to State agencies for each fiscal year under subparagraph (A) shall not exceed
$500,000.''. SEC. 4. STUDY OF ALTERNATIVES FOR HANDLING ELECTRONIC BENEFIT
TRANSACTIONS INVOLVING FOOD STAMP BENEFITS.
Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture shall study and report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on alternatives for handling interstate electronic benefit transactions involving food stamp benefits provided under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), including the feasibility and desirability of a single hub for switching (as defined in section 7(k)(1) of that Act (as added by section 3)).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Texas (Mr. Combest) and the gentleman from Texas (Mr. Stenholm) each will control 20 minutes.
The Chair recognizes the gentleman from Texas (Mr. Combest).
Mr. COMBEST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of the bill, S. 1733, the Food Stamp Electronic Benefit Transfer Interoperability and Portability Act. This bill was passed unanimously by the Senate last November, and today the House will act on that bill.
The bill provides for a national standard of interoperability and portability for the food stamp program. The bill requires the U.S. Department of Agriculture to set specific standards for States with electronic benefit transfer systems so that food stamp participants can redeem their benefits in neighboring States. Under the food stamp coupon system, participants can redeem benefits in any retail food store. States want to apply this same principle to the EBT system of delivery of food assistance benefits.
The gentleman from Virginia (Mr. Goodlatte), chairman of the subcommittee with jurisdiction over the food stamp program, introduced a similar bill last year. I commend the chairman of the subcommittee for his attention to this matter and his work ensuring proper oversight of the food stamp program.
The Food Stamp Act already requires that all States issue food stamp benefits under an EBT system by the year 2002. The EBT is a more efficient and effective manner in which to provide food benefits for needy families. S. 1733 requires the USDA, within 7 months of enactment, adopt a uniform national standard of interoperability and portability so that State-issued EBT cards can be used in other States. The standards are to be based on the standards used by the majority of States, thereby enabling USDA to use flexibility in writing the standards.
The bill also provides for exemptions for States if they have entered into EBT contracts using other standards. Also, waivers are provided for States operating smart card food stamp systems rather than debit card systems, as most States do.
S. 1733 requires USDA to pay 1 percent of the costs of adopting these standards up to a maximum of $500,000 per year.
Mr. Speaker, I urge my colleagues to support S. 1733.
Mr. Speaker, I reserve the balance of my time.
Mr. STENHOLM. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of S. 1733, the Electronic Benefit Transfer Interoperability and Portability Act. This legislation is designed to ease the current burdens on interstate transactions in the food stamp program.
In 1996, Congress amended the Food Stamp Act by requiring the Secretary of Agriculture to consider a cost-effective alternative to the use of food stamp coupons in order to reduce the cost of coupon redemption. The EBT system was developed.
The switch to EBT cards is clearly a practical policy objective. Unfortunately, there is a lack of uniformity among State EBT systems and this negatively affects the delivery of assistance to food stamp recipients, many of whom lose benefits when they travel from State to State. For example, the different EBT designs of Texas and Oklahoma limit a Texas food stamp participants's choice by preventing shopping in other States where the EBT system designs and procedures are not uniform. This was not the case under the previous inefficient coupon system.
S. 1733 addresses the uniformity issue in a practical and accountable manner. Specifically, it requires the Secretary of Agriculture to adopt a uniform national standard of interoperability and portability that is used by a majority of State agencies. At the present time a majority of States are using a standard referred to as ``QUEST.'' This was developed by the National Automated Clearing House Association EBT Council which includes State food stamp program administrators, retailers, and food and nutrition officials.
Mr. Speaker, under S. 1733, the Secretary of Agriculture will be allowed to modify the QUEST rules in order to solve future problems. This discretionary authority is important to my State of Texas for a couple of reasons.
Texas operates the Nation's largest EBT system for food stamps, benefitting 1.5 million Texas recipients or 635,000 households per month. The real challenge for Texas is the search for a replacement of its full service EBT contract in a market with limited competition and increased pricing, lower levels of service and less State customization.
In order to remedy the lack of competition in the EBT market, Texas will serve as its own prime EBT contractor while issuing various subcontracts for specific EBT services, including the interoperability and portability components. This method will give Texas and other States a better chance of delivering uninterrupted, timely, and accurate food stamp benefits in a cost-effective manner.
The bill's language in section 4(a) accommodates these concerns by requiring the Secretary to use the QUEST rules as a starting point and permitting necessary changes to those rules as the dictates of the food stamp program require.
Finally, Mr. Speaker, this legislation sets an annual cap of $500,000 to pay for the switching and settling charges associated with interstate food stamp purchases. This cost issue has been the cause of some disagreement. The States were correct in their belief that the Food and Nutrition Service should pay for all of the costs associated with interstate transactions. We should not, however, set a precedent suggesting that the Federal Government will pay for every new technology advancement used by retailers who participate in the food stamp program.
National uniformity among State food stamp systems will mean that program participants will no longer encounter problems with the use of their EBT cards beyond the borders of the issuing State. I urge my colleagues to support the passage of this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. COMBEST. Mr. Speaker, I yield 5 minutes to the gentleman from Virginia (Mr. Goodlatte).
Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Texas (Mr. Combest), my chairman, for yielding me this time and for his support of this important legislation.
Mr. Speaker, on August 4, 1999, I introduced H.R. 2709, the Electronic Benefit Transfer Interoperability and Portability Act of 1999. The Senator from Illinois, Senator Fitzgerald, introduced an almost identical bill, S. 1733, which passed the Senate at the end of the first session of the 106th Congress; and it is that bill that we consider today.
The sole focus of my bill was to allow food stamp beneficiaries the ability to redeem their benefits in any general store, regardless of location. Beneficiaries had this ability under the old food stamp system, but lost it as States migrated to an electronic benefits transfer system.
Under the old paper food stamp system, recipients could redeem their food coupons in any authorized food store anywhere in the country. For example, a food stamp recipient living in Bath County, Virginia, could use their food stamps in their favorite grocery store, even if that happened to be in West Virginia. Similarly, a recipient living in Tennessee could visit their mother in Virginia and purchase food for their children while away from home.
Unfortunately, as we move to electronic delivery of benefits, this is currently not the case. My bill provides for the portability of food assistance benefits and allows food stamp recipients the flexibility of shopping at locations that they choose. Across the country we are finding that people live in one State and shop in another. This cross-border shopping is conducted for a variety of reasons. One of them is convenience. Another is the cost of goods.
The supermarket industry is very competitive. Every week, stores advertise specials in newspaper ads across the country. People not only shop at locations convenient to them but also shop around for the best prices. Customers paying with every type of tender except EBT have the flexibility to shop where they choose.
{time} 1445
Why should recipients of food assistance benefits not be allowed to stretch their dollars in the same way that other consumers do without regard to State borders?
EBT portability is simply allowing recipients of benefits under the food stamp program to redeem those benefits without regard to State borders at the stores they choose. In addition to portability, my legislation allows for the interoperability of EBT transactions. Interoperability can be simply defined as the ability of various computers involved in authorizing, routing, and selling an EBT transaction to talk to each other.
I offered a Sense of the Congress amendment to the Welfare Reform bill that Congress passed in 1996. My amendment urged States to work together to achieve a seamless system of food stamp benefit redemption. States did a decent job considering the circumstances. They are now asking for an extra nudge to realize the goal of my earlier amendment.
My legislation requires States to conform their EBT standards to a national uniform operating system that the States themselves choose. The clear choice, the Quest operating system, has already been adopted by 33 States.
Pilot studies have been conducted to determine the cost and other efficiencies that might be realized by EBT interoperability. The pilot program determined my bill would only cost the food stamp program
$500,000. That is not a lot of money for an $18 billion program.
Also, the State of Missouri found around $32 million in abuse of the program that they never would have found if their EBT system could not talk with neighboring State systems or they found people were getting dual food stamps, applying for and receiving food stamps in more than one State.
Mr. Speaker, the bill we consider today is simple. It returns the national redemption convenience to the beneficiaries of the program, gives the States the guidance they are look being for, and provides another tool in the fight against fraud, waste, and abuse in the food stamp program.
I thank my colleagues for this time, and I urge support from the membership for the Electronic Benefit Transfer Interoperability and Portability Act.
Mr. COMBEST. Mr. Speaker, I yield 5 minutes to the gentleman from Ohio (Mr. Boehner).
Mr. BOEHNER. Mr. Speaker, I wish to congratulate the gentleman from Texas (Mr. Combest), the chairman of the committee, and the gentleman from Texas (Mr. Stenholm), the ranking member, for the job that they have done.
Specifically, I want to congratulate the gentleman from Virginia
(Chairman Goodlatte) and commend him on his efforts here today regarding the EBT bill.
This common sense piece of legislation will achieve portability for the delivery of food stamp benefits in every State across the Nation. The legislation that my colleague has introduced is very important as the States make the transition from paper coupons or food stamps to a more efficient electronic system.
As my colleagues know, the State of Ohio has been an innovator in this area, having developed an extremely successful Smart Card program for the delivery of food stamp benefits to more than 300,000 recipients in my home State.
In this regard, I wish to engage my colleague from Virginia in a colloquy to receive assurances that his bill will in no way harm the innovative technology that Ohio has adopted for delivering benefits.
Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
Mr. BOEHNER. I yield to the gentleman from Virginia.
Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Ohio for yielding to me and for his interest and support of this legislation. I very much appreciate his kind remarks and for bringing this particular concern to my attention.
In the legislation that the House is now considering, there are provisions that have been included to ensure that the two existing Smart Card programs that are currently in place, those being Ohio and Wyoming, will not be forced to make any changes that would result in either new or additional expenses for the States.
Ohio and Wyoming can continue using their Smart Cards until the Secretary determines that a practicable technological method is available for interoperability between electronic benefit transfer Smart Card systems and the magnetic stripe card systems that most other States are using.
Furthermore, the legislation provides safeguards so that these off-
line programs are not jeopardized in any way.
It is my understanding that both Ohio and Wyoming chose to embrace this Smart Card technology for the delivery of benefits with the blessing and approval of the United States Department of Agriculture. Therefore, Ohio and Wyoming should not be required to change their systems until they are interested in doing so.
I wish to ensure my good friend and colleague from Ohio (Mr. Boehner) that the legislation's waiver section and the provision for specific exemptions for Smart Card systems were incorporated into these initiatives with Ohio and Wyoming's interest in mind.
As a footnote, I should mention that the technology is not currently available in the marketplace for on- and off-line systems to be compatible and interoperable. However, that day is rapidly approaching.
In the short term, it is my hope that the Congress will have the opportunity to work toward a national standard for Smart Cards as other States like Ohio and Wyoming begin to consider their own Smart Card projects for domestic feeding programs, unemployment compensation, health care, and other benefits. It is my view that there is much to learn from Ohio's leadership and experience in this area.
Mr. BOEHNER. Mr. Speaker, reclaiming my time, I want to thank the chairman for his comments.
As I understand his comments, Ohio would not, then, be required to change its off-line system to an on-line system under this proposal?
Mr. GOODLATTE. Mr. Speaker, if the gentleman will continue to yield, he is correct; Ohio, as well as Wyoming, would not be required to make any changes. And for that matter, those States currently using an on-
line system that does not achieve the national interoperability standard would not be required to meet this standard until their current contracts expire.
Finally, I should point out that in the case of Ohio and Wyoming's Smart Card programs, the bill's waiver language and Smart Card provisions provide a clear exemption with no time limit imposed as to when changes would have to be made.
Mr. BOEHNER. Mr. Speaker, reclaiming my time, I appreciate these very important clarifications with regard to how legislation relates to Smart Card changes, especially my home State of Ohio.
Mr. STENHOLM. Mr. Speaker, I have no further requests for time on this side. I would just conclude by thanking the gentleman from Virginia (Chairman Goodlatte) and the gentleman from Texas (Chairman Combest) for their work on this piece of legislation, and I urge our colleagues to support it.
Ms. JACKSON-LEE of Texas. I rise to support this important bill that amends the Food Stamp Act of 1977 to provide for a national standard of interoperability and portability applicable to electronic food stamp benefit transactions.
This measure ensures that our citizens can use their food stamp cards in any state. Currently, citizens in my home State of Texas cannot use their cards in any other states--a situation that hinders their ability to obtain vital necessities while traveling to other states. Clearly, we do not want our citizens burdened when they cross state lines to visit friends and families.
By amending the Food Stamp Act of 1977 with this bill, we can provide for a national standard of interoperability and portability applicable to electronic food stamp benefit transactions enhance food stamp interstate commerce. This measure would bring the food stamp process into a new age of technology by requiring systems that provide for the electronic issuance, use, and redemption of coupons in the form of electronic benefit transfer cards to be interoperable, and food stamp benefits to be made portable, among all States not later than October 1, 2002.
I appreciate that this bill works in conjunction with the Secretary of Agriculture. The measure appropriately directs the Secretary of Agriculture to promulgate regulations that adopt a national standard based upon a standard used by the majority of States and require any electronic benefit transfer contract (as defined by this Act) entered into 30 days or more after promulgation of such regulations be in accordance with the national standard.
The bill also includes language to rectify potential technological difficulties. This piece of legislation authorizes the Secretary to provide a requesting State with a temporary deadline waiver based upon unusual technological barriers.
It is also vitally important that we provide for an interim system until the electronic standard is completed. This bill directs the Secretary to allow a State using a smart card food stamp delivery system to continue such system until a technological method is available for electronic benefit transfer card interoperability. Sets forth the conditions for full Federal payment of State switching costs, including annual fiscal year caps.
In an effort to provide a thorough analysis of this undertaking, this measure directs the Secretary of Agriculture to conduct a study of alternatives for handling food stamp benefit electronic transactions, including use of a single switching hub.
I am aware that this measure passed the Senate, and I appreciate the bipartisan effort to enact this bill. I support this fine piece of legislation.
Mrs. EMERSON. Mr. Speaker, I rise today in support of S. 1733, the Electronic Benefit Transfer (EBT) Interoperability and Portability Act. I'd like to thank Chairman Larry Combest and Chairman Bob Goodlatte for bringing this bill to the floor today and for their strong leadership on this important issue.
Interoperability of food stamp EBT systems makes sense both for recipients and retailers. As USDA moves from paper food coupons to EBT cards, interoperability ensures that recipients will retain the same portability as before. Recipients will be able to access stores nearest to their homes and retailers will be able to serve their customers regardless of state boundaries. In areas of the country near state lines, such as in my Congressional District in Southern Missouri, incompatible EBT systems have been a significant problem for both groups. I am very pleased that the bill before us today will resolve this problem and bring the best technology to the food stamp program.
The government and the taxpayer, too, are well served by S. 1733, because it establishes a new mechanism for tracking and policing fraud and abuse in the food stamp program. In my home state of Missouri, the Department of Social Services estimates that an interoperable EBT system would save the federal government as much as $1 million annually in reduced fraud in Missouri alone.
One aspect of S. 1733 that I would like to highlight is that it provides 100% federal funding of the costs associated with switching and settling interstate transactions. These costs will not be imposed on other entities, such as retail food stores, states, and food stamp households. This is entirely appropriate because these costs are directly related to administering the program on a nationwide basis, not within a particular state.
Again, I would like to reiterate to my colleagues that this is a very sensible piece of legislation that deserves the support of this House. I urge a strong ``Yes'' vote.
Mr. STENHOLM. Mr. Speaker, I yield back the balance of my time.
Mr. COMBEST. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Petri). The question is on the motion offered by the gentleman from Texas (Mr. Combest) that the House suspend the rules and pass the Senate bill, S. 1733.
The question was taken; and (two-thirds having voted in favor thereof) the rules were suspended and the Senate bill was passed.
A motion to reconsider was laid on the table.
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