Food Stamp Fraud Act of 1997

Summary: Food Stamp Fraud Act of 1997 - Amends the Food Stamp Act of 1977 to require by specified dates:  (1) States to implement a food stamp program (program) electronic benefit transfer system; and (2) participating retail stores to use optical scanners to read food sale bar codes.  Authorizes appropriations for grants to stores in low-income areas to meet such requirement. 
Sets forth:  (1) civil and criminal forfeiture provisions for program violations; and (2) retail food store reauthorization periods based upon a food stamp redemption percentage. 
Authorizes the Secretary of Agriculture to require States with payment error rates exceeding the national performance measure to take additional measures with respect to program coordination and employer and financial institution reporting.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Food Stamp Fraud Act of 1997''.

SEC. 2. ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) Issuance and Use of Coupons.--Section 7(g) of the Food Stamp 
Act of 1977 (7 U.S.C. 2016(g)) is amended--
            (1) by striking ``(1)'';
            (2) by striking paragraph (2); and
            (3) by redesignating subparagraphs (A) and (B) as 
        paragraphs (1) and (2), respectively.
    (b) Electronic Benefit Transfer Systems.--Section 7(i) of the Food 
Stamp Act of 1977 (7 U.S.C. 2016(i)) is amended--
            (1) by amending paragraph (1) to read as follows:
    ``(1)(A)(i) Except as provided in clause (ii), each State agency 
shall implement before October 1, 2000, an electronic benefit transfer 
system in which all household benefits determined under section 8(a) 
are issued from and stored in a central databank.
    ``(ii) Upon the request of a State agency, the Secretary may grant 
a waiver extending the deadline for compliance with clause (i) to a 
date not later than October 1, 2002, for a State agency that faces 
unusual barriers to implementing an electronic benefit transfer system.
    ``(B) Subject to paragraph (2), a State agency may procure and 
implement an electronic benefit transfer system under the terms, 
conditions, and design that the State agency considers appropriate.
    ``(C) An electronic benefit transfer system should take into 
account generally accepted standard operating rules based on--
            ``(i) commercial electronic funds transfer technology;
            ``(ii) the need to permit interstate operation and law 
        enforcement monitoring; and
            ``(iii) the need to permit monitoring and investigations by 
        authorized law enforcement agencies.''; and
            (2) in paragraph (2)--
                    (A) by striking subparagraph (A); and
                    (B) by redesignating subparagraphs (B) through (I) 
                as subparagraphs (A) through (H), respectively.
    (c) Redemption of Coupons.--The first sentence of section 10 of the 
Food Stamp Act of 1977 (7 U.S.C. 2019) is amended by inserting before 
the period at the end the following: ``unless such centers, 
organizations, institutions, shelters, group living arrangements, and 
establishment are equipped with point-of-sale devices for the purpose 
of participating in electronic benefit transfer delivery systems''.

SEC. 3. USE OF PRODUCT BAR CODES AND OPTICAL SCANNER DEVICES.

    Section 9 of the Food Stamp Act of 1977 (7 U.S.C. 2018) is amended 
by adding at the end thereof the following:
    ``(h) Approved retail food stores which use optical scanner device 
to read product bar codes in connection with sales, shall use such 
devices, in connection with electronic benefit transfer systems, to 
prevent the purchase of unauthorized food and nonfood items with 
benefits determined under section 8(a) and to maintain a record of 
purchases made with such benefits. Such purchase records shall be made 
available for review under subsection (c).
    ``(i) Notwithstanding any other provision of this section, a retail 
food store may not--
            ``(1) be approved to accept or to redeem coupons; or
            ``(2) accept or redeem coupons accepted;
after October 1, 2002, unless such store uses an optical scanner device 
to read product bar codes in connection with sales of food.''.

SEC. 4. EXPANDED CIVIL AND CRIMINAL FORFEITURE FOR VIOLATIONS OF THE 
              FOOD STAMP ACT.

    (a) Forfeiture of Certain Property.--Section 15(h) of the Food 
Stamp Act of 1977 (7 U.S.C. 2024(h)) is amended by adding at the end 
the following:
            ``(5) Procedures.--(A) All food stamp benefits and any 
        property subject to forfeiture under this subsection, any 
        seizure and disposition thereof, and any proceeding relating 
        thereto, shall be governed by section 413 of the Comprehensive 
        Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853), 
        excluding subsection (d) of such section, insofar as applicable 
        and not inconsistent with the provisions of this subsection.
            ``(B) Restraining orders available under subsection (e) of 
        such Act shall apply to assets otherwise subject to forfeiture 
        under subsection (p) of such Act, as incorporated in this 
        section.
            ``(C) The provisions of chapter 46 of title 18, United 
        States Code, relating to civil forfeitures shall extend to a 
        seizure or forfeiture under this subsection, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, except that such duties as are imposed upon the 
        Secretary of the Treasury under such chapter 46 may also be 
        performed with respect to seizures and forfeitures under this 
        section by such officers, agents, or other persons as 
        designated for that purpose by the Secretary. Civil forfeitures 
        imposed under this subsection shall be in addition to any 
        criminal sanctions imposed against the owner of the forfeited 
        property.
            ``(D) The proceeds from any sale of forfeited property and 
        any monies forfeited under this subsection shall be used--
                    ``(i) first, to reimburse the Department of Justice 
                for the costs incurred by the Department to initiate 
                and complete the forfeiture proceeding;
                    ``(ii) second, to reimburse the Department of 
                Agriculture Office of Inspector General for any costs 
                the Office incurred in the law enforcement effort 
                resulting in the forfeiture;
                    ``(iii) third, to reimburse any Federal or State 
                law enforcement agency for any costs incurred in the 
                law enforcement effort resulting in the forfeiture; and
                    ``(iv) fourth, by the Secretary to carry out the 
                approval, reauthorization, and compliance 
                investigations of retail stores and wholesale food 
                concerns under section 9.''.

SEC. 5. PROVIDE AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

    Section 9(a) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)) is 
amended by adding at the end the following:
    ``(3)(A) Such time period shall be determined based upon total food 
stamp redemptions expressed as a percentage of food stamp sales to 
total food sales.
    ``(B)(i) Except as provided in clause (ii), retailers with a ratio 
of food stamp sales to total food sales of 30 percent or more may be 
authorized for not more than one year, and retailers with a ratio of 
food stamp sales to total food sales of 5 percent or less may be 
authorized for up to 5 years.
    ``(ii) Retailers with a ratio of food stamp sales to total food 
sales of more than 10 percent that do not use an optical scanner device 
to read product bar codes in connection with sales may be authorized 
for not more than one year.''.

SEC. 6. STATE REQUIREMENTS.

    Section 16(d) of the Food Stamp Act of 1977 (7 U.S.C. 2025(d)) is 
amended to read as follows:
    ``(d) States which fail to meet the national performance measure 
for the payment error rate set forth under subsection (c)(6) may be 
required by the Secretary to implement, in whole or in part, one or 
more of the following additional measures in furtherance of waste and 
fraud reduction:
            ``(1) Computerize and coordinate food stamp, aid to 
        families with dependent children, and supplemental security 
        income caseloads so that reported changes in any one program 
        automatically adjusts allotments for the remaining program.
            ``(2) Require any employer, public or private, to report 
        new hires and wage rates to the State department of revenue, or 
        equivalent taxing authority. Such reported information shall be 
        made available to and used by the State agency to adjust 
        accordingly any benefit allotments or payments received by the 
        individual or households of which the individual is a member.
            ``(3) Require all financial institutions to report asset 
        information to State agency caseworkers whenever such requests 
        are made. The financial institutions may be required to provide 
        the requested information without compensation or at cost.''.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS FOR THE PURCHASE OF OPTICAL 
              SCANNERS.

    Section 18 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended 
by adding at the end the following:
    ``(g)(1) There is authorized to be appropriated for fiscal years 
1998, 1999, and 2000, in the aggregate, $50,000,000 to the Secretary to 
make grants, in the discretion of the Secretary, to separately owned 
retail food stores located in low-income areas (as determined by the 
Secretary) and approved under section 9, to enable such stores to 
purchase optical scanner devices to read product bar codes in 
connection with sales of food.
    ``(2) For purposes of this subsection, the term `low-income area' 
means an urban census tract, a nonmetropolitan county, a Native 
American Indian reservation, an Alaska Native village, or a migrant or 
seasonal farmworker community, in which not less than 30 percent of 
households have annual income that does not exceed 30 percent of the 
median income of the area involved.''.

SEC. 8. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect on January 1, 
1998.
    (b) Application of Amendments--The amendments made by this Act 
shall not apply with respect to certification periods beginning before 
the effective date of this Act.