I

103D CONGRESS

1ST SESSION H. R. 1195

To amend the Food Stamp Act of 1977 regarding quality control.

IN THE HOUSE OF REPRESENTATIVES

MARCH 3, 1993

Ms. LONG (for herself and Mr. GUNDERSON, Mr. BROWN of California, Mr.

ENGLISH of Oklahoma, Mr. BOEHNER, Mr. DOOLITTLE, Mrs. THURMAN,

Mr. ACKERMAN, Mr. CLYBURN, Mr. HALL of Ohio, Mr. HAMILTON, Mr.

HINCHEY, Mr. HOBSON, Mr. HOKE, Mr. JACOBS, Ms. KAPTUR, Mr. LAFALCE, Mrs. MALONEY, Mr. MANN, Mr. MCCLOSKEY, Mr. MOLLOHAN,

Mr. OXLEY, Mr. RAHALL, Mr. RICHARDSON, Mr. ROEMER, Mr. SAWYER,

Mr. SCHUMER, Mr. SHARP, Mr. SPRATT, Mr. TRAFICANT, Mr. WALSH,

and Mr. WISE) introduced the following bill; which was referred to the

Committee on Agriculture

A BILL

To amend the Food Stamp Act of 1977 regarding quality

control.

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 Amendments of 1993’’.
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1 SEC. 2. FOOD STAMP QUALITY CONTROL SYSTEM.

2 (a) COLLECTION AND DISPOSITION OF CLAIMS.—

3 Section 13(a)(1) of the Food Stamp Act of 1977 (7 U.S.C.

4 2022(a)(1)) is amended in the fifth sentence by striking

5 ‘‘(after a determination on any request for a waiver for

6 good cause related to the claim has been made by the

7 Secretary)’’.

8 (b) ADMINISTRATIVE AND JUDICIAL REVIEW.—Sec9 tion 14(a) of the Food Stamp Act of 1977 (7 U.S.C.

10 2023(a)) is amended by—

11 (1) adding in the sixth sentence, immediately

12 following ‘‘pursuant to section 16(c)’’ the following:

13 ‘‘(including determinations as to whether there is

14 good cause for not imposing some or all of the

15 penalty)’’;

16 (2) adding following the sixth sentence: ‘‘In de17 ciding whether to uphold a penalty or any portion

18 thereof (including whether there is good cause for

19 not imposing some or all of the penalty), such judges

20 shall conduct a thorough review of the issues and

21 take into account all relevant evidence.’’;

22 (3) adding before the period in the sentence be23 ginning with the words ‘‘Such judges’’, the following:

24 ‘‘, and the deliberative process privilege shall not be

25 the basis for the withholding of documents by the

26 State agency or by the Secretary’’; and
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1 (4) striking the last sentence.

2 (c) ADMINISTRATIVE COST SHARING AND QUALITY

3 CONTROL.—Section 16(c) of the Food Stamp Act of 1977

4 (7 U.S.C. 2025(c)) is amended to read as follows:

5 ‘‘(c)(1) The program authorized under this Act shall

6 include a system that enhances payment accuracy by es7 tablishing fiscal incentives that require State agencies with

8 high error rates to share in the cost of payment error and

9 provide enhanced administrative funding to State agencies

10 with the lowest error rates. Under such system—

11 ‘‘(A) the Secretary shall adjust a State agency’s

12 federally funded share of administrative costs pursu13 ant to subsection (a), other than the costs already

14 shared in excess of 50 percent under the proviso in

15 the first sentence of subsection (a) or under sub16 section (g), by increasing such share of all such ad17 ministrative costs by one percentage point to a maxi18 mum of 60 percent of all such administrative costs

19 for each full one-tenth of a percentage point by

20 which the payment error rate is less than 6 percent,

21 except that only State agencies whose rate of invalid

22 decisions in denying eligibility is less than a nation23 wide percentage that the Secretary determines to be

24 reasonable shall be entitled to the adjustment

25 prescribed in this subsection;
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1 ‘‘(B) the Secretary shall foster management im2 provements by State agencies pursuant to subsection

3 (b) by requiring State agencies other than those re4 ceiving adjustment under subparagraph (A) to

5 develop and implement corrective action plans to

6 reduce payment errors;

7 ‘‘(C) if a State agency’s overpayment error rate

8 for a fiscal year exceeds the national average over9 payment error rate for the fiscal year, other than for

10 good cause shown, the State agency shall pay to the

11 Secretary a penalty for the fiscal year in an amount

12 equal to—

13 ‘‘(i) the product of—

14 ‘‘(I) the value of all allotments issued

15 by the State agency in the fiscal year;

16 times

17 ‘‘(II) the lesser of—

18 ‘‘(aa) the ratio of—

19 ‘‘(1) the amount by which

20 the State agency’s overpayment

21 error rate for the fiscal year ex22 ceeds the national average over23 payment error rate for the fiscal

24 year, to
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1 ‘‘(2) the national average

2 overpayment error rate for the

3 fiscal year; or

4 ‘‘(bb) 1; times

5 ‘‘(III) the amount by which the State

6 agency’s overpayment error rate for the

7 fiscal year exceeds the national average

8 overpayment error rate for the fiscal year;

9 reduced by

10 ‘‘(ii) the product of—

11 ‘‘(I) the ratio of—

12 ‘‘(1) the amount by which the

13 State agency’s overpayment error rate

14 for the fiscal year exceeds the national

15 average overpayment error rate for

16 the fiscal year; to

17 ‘‘(2) the State agency’s overpay18 ment error rate for the fiscal year;

19 times

20 ‘‘(II) the overpayments recovered by

21 the State agency in the fiscal year; and

22 ‘‘(D) a State agency may, at its option, pay a

23 penalty established pursuant to subparagraph (C) in

24 quarterly payments over a period not to exceed 30

25 months, in amounts sufficient to pay the penalty
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1 with interest by the end of such period. The amount

2 of liability shall not be affected by corrective action

3 under subparagraph (B).

4 ‘‘(2) As used in this section—

5 ‘‘(A) the term ‘payment error rate’ means the

6 sum of the overpayment error rate and the

7 underpayment error rate;

8 ‘‘(B) the term ‘overpayment error rate’ means

9 ‘‘(i) the percentage of the value of all allot10 ments issued in a fiscal year by a State agency

11 that are either—

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

13 meet basic program eligibility require14 ments; or

15 ‘‘(II) overissued to eligible households,

16 ‘‘(ii) reduced by the amount by which the

17 national average underpayment error rate for

18 the fiscal year exceeds the underpayment error

19 rate of the State agency for the fiscal year. At

20 the request of a State agency, the Secretary

21 shall apply such reduction in determining the

22 State agency’s overpayment error rate for ei23 ther of the two following fiscal years instead of

24 in determining the State agency’s overpayment
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1 error rate for the fiscal year to which the reduc2 tion would otherwise apply;

3 ‘‘(C) the term ‘underpayment error rate’ means

4 the ratio of the value of allotments underissued to

5 recipient households to the total value of allotments

6 issued in a fiscal year by a State agency;

7 ‘‘(D) the term ‘national average overpayment

8 error rate’ for a fiscal year means the ratio of—

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

10 all State agencies in the fiscal year that are

11 either

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

13 meet basic program eligibility require14 ments, or

15 ‘‘(II) overissued to eligible households;

16 to

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

18 by all State agencies in the fiscal year.

19 ‘‘(E) the term ‘national average underpayment

20 rate’ for a fiscal year means the ratio of—

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

22 underissued by all State agencies to recipient

23 households in the fiscal year; to

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

25 by all State agencies in the fiscal year; and
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1 ‘‘(F) the term ‘good cause’ shall include, but

2 not be limited to, the following factors:

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 rural

16 composition of population, that contribute sub17 stantially to an excessive error rate and depart

18 substantially from national averages for such

19 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 ‘‘(3) The following errors may be measured for

2 management purposes but shall not be included in

3 the overpayment or underpayment error rate:

4 ‘‘(A) any errors resulting from the applica5 tion of new regulations promulgated under this

6 Act during the first 120 days from the required

7 implementation date for such regulations;

8 ‘‘(B) errors resulting from the use by a

9 State agency of correctly processed information

10 concerning households or individuals received

11 from Federal agencies or from actions based on

12 policy information approved or disseminated, in

13 writing, by the Secretary; and

14 ‘‘(C) cases found by quality control reviews

15 to have involved, but later found in a fair hear16 ing not to have involved, overpayments, under17 payments, or payments to ineligible recipients.

18 ‘‘(4)(A) Except as provided in subparagraph (B), in

19 determining whether a payment is an erroneous payment,

20 the State agency and the Secretary shall apply all relevant

21 provisions of the State plan approved under section 11.

22 ‘‘(B)(i) If a provision of a State plan approved under

23 section 11 is inconsistent with a provision of Federal law

24 or regulations, and the Secretary has notified the State
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1 agency of the inconsistency in writing, the provision of

2 Federal law or regulations shall control.

3 ‘‘(ii) Clause (i) shall not apply with respect to a pay4 ment of the State agency if—

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

6 in order to remove an inconsistency described in

7 clause (i), the Secretary has advised the State agen8 cy that the State will be allowed a reasonable period

9 in which to enact such a law, and the payment was

10 made during such period; or

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

12 compliance with a court order.

13 ‘‘(5) If the Secretary, directly or indirectly, receives

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

15 imposed under paragraph (1)(C) and part or all of the

16 penalty is finally determined not to have been payable, the

17 Secretary shall promptly refund to the State agency the

18 amount determined not to have been payable, with interest

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

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

21 ‘‘(6) Each State error rate for purposes of this sub22 section shall be determined on the basis of a review of

23 a single statistical sample of each State agency’s food

24 stamp cases for the fiscal year (without sub-sampling, re25 reviews, or statistical regression analyses), and national
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1 average error rates for purposes of this subsection shall

2 be derived from State error rates so determined. Said re3 views shall be conducted by State agency personnel under

4 the direction of the Secretary pursuant to regulations

5 adopted by the Secretary, or, if a State agency so elects

6 as to any particular review, shall be conducted by the Sec7 retary. No penalty shall be collected under paragraph

8 (1)(C) if the width of the 95 percent confidence interval

9 of any error rate on which it is based exceeds 50 percent

10 of the point estimate of said error rate, unless the State

11 to which a particular error rate pertains agreed in writing

12 to a sample size that precludes meeting this requirement.

13 All error rates, incentive payments, and penalty claims for

14 a fiscal year shall be determined by the Secretary and

15 communicated to State agencies within nine months

16 following the end of the fiscal year.

17 ‘‘(7) If the Secretary asserts a financial claim against

18 a State agency under paragraph (1)(C), the State may

19 seek administrative and judicial review of the action

20 pursuant to section 14.’’.

21 SEC. 3. FISCAL YEAR 1992.

22 No penalty, disallowance, or other similar action shall

23 be applied to or collected from any State agency admin24 istering the food stamp program for fiscal year 1992

25 under section 16(c) of the Food Stamp Act of 1977 (7
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1 U.S.C. 2025(c)) or any predecessor law or regulation re2 lating to penalties, disallowances, or other similar actions

3 for erroneous issuances in the food stamp program.

4 SEC. 4. STUDY OF QUALITY CONTROL STATISTICAL SYS5 TEM.

6 The Secretary of Agriculture and the State agencies

7 that administer the food stamp program shall jointly un8 dertake a study of measurement error, and of geographical

9 and temporal uniformity of measurements, in the food

10 stamp program quality control error-rate estimation sys11 tem, and shall report the results and recommendations of

12 such study to the Committee on Agriculture of the House

13 of Representatives and the Committee on Agriculture, Nu14 trition, and Forestry of the Senate no later than one year

15 after the date of enactment of this Act. As part of the

16 study, the Secretary and the State agencies shall jointly

17 conduct controlled experiments under which various re18 viewers review identical cases, with the objective of deter19 mining the degree of uniformity in quality control error20 rate measurements and the extent to which different levels

21 of investment of resources in the review process affect

22 measurement error. The study report shall include rec23 ommendations as to what measures would best reduce

24 measurement error and increase uniformity of quality

25 control error-rate measurements at reasonable cost.
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1 SEC. 5. EFFECTIVE DATE.

2 The amendments made by section 2 shall be effective

3 as of October 1, 1992.

4 SEC. 6. BUDGET NEUTRALITY REQUIREMENT.

5 None of the provisions of this Act shall become effec6 tive unless the costs are fully offset in each fiscal year

7 through fiscal year 1995. No agriculture price support or

8 income support program administered through the Com9 modity Credit Corporation under the Agricultural Act of

10 1949 may be reduced to achieve such offset.

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