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103D CONGRESS

1ST SESSION S. 1135

To amend the Food Stamp Act of 1977 to improve quality control, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 22, 1993

Mr. DASCHLE (for himself, Mr. KERREY, and Mr. HEFLIN) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To amend the Food Stamp Act of 1977 to improve quality

control, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Food Stamp Quality

5 Control System Act of 1993’’.

6 SEC. 2. FOOD STAMP QUALITY CONTROL SYSTEM.

7 (a) COLLECTION AND DISPOSITION OF CLAIMS.—

8 The fifth sentence of section 13(a)(1) of the Food Stamp

9 Act of 1977 (7 U.S.C. 2022(a)(1)) is amended by striking

10 ‘‘(after a determination on any request for a waiver for
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1 good cause related to the claim has been made by the

2 Secretary)’’.

3 (b) ADMINISTRATIVE AND JUDICIAL REVIEW.—Sec4 tion 14(a) of such Act (7 U.S.C. 2023(a)) is amended—

5 (1) in the sixth sentence, by inserting after

6 ‘‘pursuant to section 16(c)’’ the following: ‘‘(includ7 ing determinations as to whether there is good cause

8 for not imposing all or part of the penalty)’’;

9 (2) by inserting after the sixth sentence the fol10 lowing new sentence: ‘‘In deciding whether to uphold

11 all or part of a penalty (including whether there is

12 good cause for not imposing all or part of the pen13 alty), the judges shall conduct a thorough review of

14 the issues and take into account all relevant evi15 dence.’’;

16 (3) by inserting after the eighth sentence (after

17 the amendment made by paragraph (2)) the follow18 ing new sentence: ‘‘The deliberative process privilege

19 shall not be the basis for the withholding of docu20 ments by the Secretary or the State agency.’’; and

21 (4) by striking the last sentence.

22 (c) ADMINISTRATIVE COST SHARING AND QUALITY

23 CONTROL.—Subsection (c) of section 16 of such Act (7

24 U.S.C. 2025(c)) is amended to read as follows:

25 ‘‘(c)(1) As used in this subsection:
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1 ‘‘(A) The term ‘good cause’ shall include, but

2 not be limited to—

3 ‘‘(i) uncontrollable, significant caseload

4 fluctuations that substantially disrupt food

5 stamp program administration;

6 ‘‘(ii) natural disasters that substantially

7 disrupt food stamp program administration;

8 ‘‘(iii) Federal or State program changes

9 that substantially disrupt food stamp program

10 administration;

11 ‘‘(iv) strikes that substantially disrupt food

12 stamp program administration;

13 ‘‘(v) uncontrollable client-caused errors;

14 ‘‘(vi) demographic factors, such as literacy,

15 homelessness, unemployment, poverty, and the

16 rural composition of the population, that con17 tribute substantially to an excessive error rate

18 and depart substantially from national averages

19 for the factors;

20 ‘‘(vii) State program improvements reason21 ably designed to reduce error rates in the longer

22 term, but that uncontrollably cause short-term

23 increases in the error rate; and

24 ‘‘(viii) other circumstances beyond the con25 trol of a State agency.
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1 ‘‘(B) The term ‘national average overpayment

2 error rate’ means, in the case a fiscal year, the ratio

3 of—

4 ‘‘(i) the total value of allotments issued by

5 all State agencies in the fiscal year that are—

6 ‘‘(I) issued to households that fail to

7 meet basic program eligibility require8 ments; or

9 ‘‘(II) overissued to eligible households;

10 to

11 ‘‘(ii) the total value of all allotments issued

12 by all State agencies in the fiscal year.

13 ‘‘(C) The term ‘national average underpayment

14 rate’ means, in the case of a fiscal year, the ratio

15 of—

16 ‘‘(i) the total value of all allotments

17 underissued by all State agencies to recipient

18 households in the fiscal year; to

19 ‘‘(ii) the total value of all allotments issued

20 by all State agencies in the fiscal year.

21 ‘‘(D)(i) The term ‘overpayment error rate’

22 means—

23 ‘‘(I) the percentage of the value of all allot24 ments issued in a fiscal year by a State agency

25 that are—
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1 ‘‘(aa) issued to households that fail to

2 meet basic program eligibility require3 ments; or

4 ‘‘(bb) overissued to eligible house5 holds,

6 ‘‘(II) reduced by the amount by which the

7 national average underpayment error rate for

8 the fiscal year exceeds the underpayment error

9 rate of the State agency for the fiscal year.

10 ‘‘(ii) At the request of a State agency, the Sec11 retary shall apply the reduction required under

12 clause (i)(II) in determining the overpayment error

13 rate of the State agency for either of the 2 following

14 fiscal years instead of in determining the overpay15 ment error rate of the State agency for the fiscal

16 year to which the reduction would otherwise apply.

17 ‘‘(E) The term ‘payment error rate’ means the

18 sum of the overpayment error rate and the

19 underpayment error rate.

20 ‘‘(F) The term ‘underpayment error rate’

21 means the ratio of the value of allotments

22 underissued to recipient households to the total

23 value of allotments issued in a fiscal year by a State

24 agency.
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1 ‘‘(2) The program authorized under this Act shall in2 clude a system that enhances payment accuracy by estab3 lishing fiscal incentives that require State agencies with

4 high error rates to share in the cost of payment errors

5 and provide enhanced administrative funding to State

6 agencies with the lowest error rates.

7 ‘‘(3)(A) Under the system, subject to subparagraph

8 (B), the Secretary shall adjust the federally funded share

9 of a State agency of administrative costs pursuant to sub10 section (a), other than the costs already shared in excess

11 of 50 percent under the proviso in the first sentence of

12 subsection (a) or under subsection (g), by increasing the

13 share of all the administrative costs by 1 percentage point

14 to a maximum of 60 percent of all the administrative costs

for each full 1 15 ⁄10 of a percentage point by which the pay16 ment error rate is less than 6 percent.

17 ‘‘(B) Only a State agency whose rate of invalid deci18 sions in denying eligibility is less than a nationwide per19 centage that the Secretary determines to be reasonable

20 shall be entitled to the adjustment prescribed in subpara21 graph (A).

22 ‘‘(4) The Secretary shall foster management improve23 ments by State agencies pursuant to subsection (b) by re24 quiring a State agency, other than a State agency that

25 receives an adjustment under paragraph (3), to develop
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1 and implement corrective action plans to reduce payment

2 errors.

3 ‘‘(5) Subject to paragraph (6), if the overpayment

4 error rate of a State agency for a fiscal year exceeds the

5 national average overpayment error rate for the fiscal

6 year, other than for good cause shown, the State agency

7 shall pay to the Secretary a penalty for the fiscal year

8 in an amount obtained by multiplying—

9 ‘‘(A) the value of all allotments issued by the

10 State agency in the fiscal year; times

11 ‘‘(B) the lesser of—

12 ‘‘(I) the ratio of—

13 ‘‘(i) the amount by which the overpay14 ment error rate of the State agency for the

15 fiscal year exceeds the national average

16 overpayment error rate for the fiscal year;

17 to

18 ‘‘(ii) the national average overpay19 ment error rate for the fiscal year; or

20 ‘‘(II) 1; times

21 ‘‘(C) the amount by which the overpayment

22 error rate of the State agency for the fiscal year ex23 ceeds the national average overpayment error rate

24 for the fiscal year.
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1 ‘‘(6) The amount determined under paragraph (5)

2 shall be reduced by the product obtained by multiplying—

3 ‘‘(A) the ratio of—

4 ‘‘(i) the amount by which the overpayment

5 error rate of the State agency for the fiscal year

6 exceeds the national average overpayment error

7 rate for the fiscal year; to

8 ‘‘(ii) the overpayment error rate of the

9 State agency for the fiscal year; times

10 ‘‘(B) the overpayments recovered by the State

11 agency in the fiscal year.

12 ‘‘(7) A State agency may pay a penalty established

13 pursuant to paragraphs (5) and (6) in quarterly payments

14 over a period not to exceed 30 months, in amounts suffi15 cient to pay the penalty with interest by the end of the

16 period. The amount of liability shall not be affected by

17 corrective action taken under paragraph (4).

18 ‘‘(8) The following errors may be measured for man19 agement purposes but shall not be included in the overpay20 ment or underpayment error rate:

21 ‘‘(A) Any error resulting from the application of

22 new regulations promulgated under this Act during

23 the 120-day period beginning on the date of the im24 plementation of the regulations.
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1 ‘‘(B) Any error resulting from the use by a

2 State agency of correctly processed information con3 cerning a household or individual received from a

4 Federal agency or from an action based on policy in5 formation approved or disseminated, in writing, by

6 the Secretary.

7 ‘‘(C) Any case found by a quality control review

8 to have involved, but later found in a fair hearing

9 not to have involved, an overpayment,

10 underpayment, or payment to an ineligible recipient.

11 ‘‘(9)(A) Except as provided in subparagraph (B), in

12 determining whether a payment is an erroneous payment,

13 the Secretary and the State agency shall apply all relevant

14 provisions of the State plan approved under section 11.

15 ‘‘(B)(i) Except as provided in clause (i), if a provision

16 of a State plan approved under section 11 is inconsistent

17 with a provision of Federal law or regulations, and the

18 Secretary has notified the State agency of the inconsist19 ency in writing, the provision of Federal law or regulations

20 shall control.

21 ‘‘(ii) Clause (i) shall not apply with respect to a pay22 ment of the State agency if—

23 ‘‘(I) it is necessary for the State to enact a law

24 in order to remove an inconsistency described in

25 clause (i), the Secretary has advised the State agen-
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1 cy that the State will be allowed a reasonable period

2 during which to enact the law, and the payment was

3 made during the period; or

4 ‘‘(II) the State agency made the payment in

5 compliance with a court order.

6 ‘‘(10) If the Secretary, directly or indirectly, receives

7 from a State agency all or part of the amount of a penalty

8 imposed under paragraph (5) and all or part of the pen9 alty is finally determined not to have been due, the Sec10 retary shall promptly refund to the State agency the

11 amount determined not to have been due, with interest

12 which shall accrue from the date of receipt at the rate

13 described in section 13(a)(1).

14 ‘‘(11)(A) For purposes of this subsection—

15 ‘‘(i) each State error rate shall be determined

16 on the basis of a review of a single statistical sample

17 of food stamp cases of each State agency for the fis18 cal year (without sub-sampling, re-reviews, or statis19 tical regression analyses); and

20 ‘‘(ii) national average error rates shall be de21 rived from State error rates determined in accord22 ance with clause (i).

23 ‘‘(B) The review shall be conducted—
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1 ‘‘(i) by State agency personnel under the direc2 tion of the Secretary pursuant to regulations adopt3 ed by the Secretary; or

4 ‘‘(ii) if a State agency elects for any particular

5 review, by the Secretary.

6 ‘‘(C) No penalty shall be collected under paragraph

7 (5) if the width of the 95 percent confidence interval of

8 any error rate on which the error rate is based exceeds

9 50 percent of the point estimate of the error rate, unless

10 the State to which a particular error rate pertains agreed

11 in writing to a sample size that precludes meeting the re12 quirements of this subparagraph.

13 ‘‘(D) An error rate, incentive payment, and penalty

14 claim for a fiscal year shall be determined by the Secretary

15 and communicated to a State agency not later than 9

16 months after the end of the fiscal year.

17 ‘‘(12) If the Secretary asserts a financial claim

18 against a State agency under paragraph (5), the State

19 may seek administrative and judicial review of the action

20 pursuant to section 14.’’.

21 SEC. 3. STUDY OF QUALITY CONTROL STATISTICAL SYS22 TEM.

23 (a) STUDY.—

24 (1) IN GENERAL.—The Secretary of Agriculture

25 and State agencies that administer the food stamp
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1 program established under the Food Stamp Act of

2 1977 (7 U.S.C. 2011 et seq.) shall jointly undertake

3 a study of measurement error, and of geographical

4 and temporal uniformity of measurements, in the

5 food stamp program quality control error-rate esti6 mation system.

7 (2) EXPERIMENTS.—As part of the study, the

8 Secretary and the State agencies shall jointly con9 duct controlled experiments under which various re10 viewers review identical cases, with the objective of

11 determining the degree of uniformity in quality con12 trol error-rate measurements and the extent to

13 which different levels of investment of resources in

14 the review process affect measurement error.

15 (b) REPORT.—

16 (1) IN GENERAL.—Not later than 1 year after

17 the date of enactment of this Act, the Secretary and

18 State agencies shall report the results and rec19 ommendations of the study to the Committee on Ag20 riculture of the House of Representatives and the

21 Committee on Agriculture, Nutrition, and Forestry

22 of the Senate.

23 (2) RECOMMENDATIONS.—The report shall in24 clude recommendations as to what measures would

25 best reduce measurement error and increase uni-
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1 formity of quality control error-rate measurements

2 at a reasonable cost.

3 SEC. 4. BUDGET NEUTRALITY REQUIREMENT.

4 (a) IN GENERAL.—No provision of this Act or an

5 amendment made by this Act shall become effective unless

6 the cost of the provision or amendment is fully offset in

7 each fiscal year through fiscal year 1995.

8 (b) PRICE SUPPORT PROGRAMS.—No agricultural

9 price support, production adjustment, or income support

10 program administered by the Secretary of Agriculture or

11 the Commodity Credit Corporation may be reduced to

12 achieve the offset.

13 SEC. 5. EFFECTIVE DATES.

14 (a) IN GENERAL.—Except as provided in subsection

15 (b), this Act shall become effective on the date of enact16 ment of this Act.

17 (b) FOOD STAMP QUALITY CONTROL SYSTEM.—The

18 amendments made by section 2 shall be effective as of Oc19 tober 1, 1991.

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