II

106TH CONGRESS

1ST SESSION 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.

IN THE SENATE OF THE UNITED STATES

OCTOBER 14, 1999

Mr. FITZGERALD (for himself, Mr. LEAHY, Mr. LUGAR, Mr. HARKIN, and Mr.

CRAIG) 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 provide for

a national standard of interoperability and portability

applicable to electronic food stamp benefit transactions.

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 ‘‘Electronic Benefit

5 Transfer Interoperabilty and Portability Act of 1999’’.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are—

8 (1) to protect the integrity of the food stamp

9 program;
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1 (2) to ensure cost-effective portability of food

2 stamp benefits across State borders without impos3 ing additional administrative expenses for special

4 equipment to address problems relating to the port5 ability;

6 (3) to enhance the flow of interstate commerce

7 involving electronic transactions involving food

8 stamp benefits under a uniform national standard of

9 interoperability and portability; and

10 (4) to eliminate the inefficiencies resulting from

11 a patchwork of State-administered systems and reg12 ulations established to carry out the food stamp pro13 gram

14 SEC. 3. INTEROPERABILTY AND PORTABILITY OF FOOD

15 STAMP TRANSACTIONS.

16 Section 7 of the Food Stamp Act of 1977 (7 U.S.C.

17 2016) is amended by adding at the end the following:

18 ‘‘(k) INTEROPERABILTY AND PORTABILITY OF ELEC19 TRONIC BENEFIT TRANSFER TRANSACTIONS.—

20 ‘‘(1) DEFINITIONS.—In this subsection:

21 ‘‘(A) ELECTRONIC BENEFIT TRANSFER

22 CARD.—The term ‘electronic benefit transfer

23 card’ means a card that provides benefits under

24 this Act through an electronic benefit transfer

25 service (as defined in subsection (i)(11)(A)).
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1 ‘‘(B) ELECTRONIC BENEFIT TRANSFER

2 CONTRACT.—The term ‘electronic benefit trans3 fer contract’ means a contract that provides for

4 the issuance, use, or redemption of coupons in

5 the form of electronic benefit transfer cards.

6 ‘‘(C) INTEROPERABILTY.—The term ‘inter7 operability’ means a system that enables a cou8 pon issued in the form of an electronic benefit

9 transfer card to be redeemed in any State.

10 ‘‘(D) INTERSTATE TRANSACTION.—The

11 term ‘interstate transaction’ means a trans12 action that is initiated in 1 State by the use of

13 an electronic benefit transfer card that is issued

14 in another State.

15 ‘‘(E) PORTABILITY.—The term ‘port16 ability’ means a system that enables a coupon

17 issued in the form of an electronic benefit

18 transfer card to be used in any State by a

19 household to purchase food at a retail food

20 store or wholesale food concern approved under

21 this Act.

22 ‘‘(F) SETTLING.—The term ‘settling’

23 means movement, and reporting such move24 ment, of funds from an electronic benefit trans25 fer card issuer that is located in 1 State to a
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1 retail food store, or wholesale food concern, that

2 is located in another State, to accomplish an

3 interstate transaction.

4 ‘‘(G) SMART CARD.—The term ‘smart

5 card’ means an intelligent benefit card de6 scribed in section 17(f).

7 ‘‘(H) SWITCHING.—The term ‘switching’

8 means the routing of an interstate transaction

9 that consists of transmitting the details of a

10 transaction electronically recorded through the

11 use of an electronic benefit transfer card in 1

12 State to the issuer of the card that is in an13 other State.

14 ‘‘(2) REQUIREMENT.—Not later than October

15 1, 2002, the Secretary shall ensure that systems

16 that provide for the electronic issuance, use, and re17 demption of coupons in the form of electronic benefit

18 transfer cards are interoperable, and food stamp

19 benefits are portable, among all States.

20 ‘‘(3) COST.—The cost of achieving the inter21 operability and portability required under paragraph

22 (2) shall not be imposed on any food stamp retail

23 store, or any wholesale food concern, approved to

24 participate in the food stamp program.
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1 ‘‘(4) STANDARDS.—Not later than 120 days

2 after the date of enactment of this subsection, the

3 Secretary shall promulgate regulations that—

4 ‘‘(A) adopt a uniform national standard of

5 interoperability and portability required under

6 paragraph (2) that is based on the standard of

7 interoperability and portability used by a major8 ity of State agencies.

9 ‘‘(B) require that any electronic benefit

10 transfer contract that is entered into 30 days or

11 more after the regulations are promulgated, by

12 or on behalf of a State agency, provide for the

13 interoperability and portability required under

14 paragraph (2) in accordance with the national

15 standard.

16 ‘‘(5) EXEMPTIONS—

17 ‘‘(A) WAIVER.—At the request of a State

18 agency, the Secretary may provide 1 waiver to

19 temporarily exempt, for a period ending on or

20 before the date specified under clause (iii), the

21 State agency from complying with the require22 ments of paragraph (2), if the State agency—

23 ‘‘(i) establishes to the satisfaction of

24 the Secretary that the State agency faces

25 unusual technological barriers to achieving
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1 by October 1, 2002, the interoperability

2 and portability required under paragraph

3 (2);

4 ‘‘(ii) demonstrates that the best inter5 est of food stamp benefit households and

6 of the food stamp program would be served

7 by granting the waiver with respect to the

8 electronic benefit transfer system used by

9 the State agency to administer the food

10 stamp program; and

11 ‘‘(iii) specifies a date by which the

12 State agency will achieve the interoper13 ability and portability required under para14 graph (2).

15 ‘‘(B) SMART CARD SYSTEMS.—The Sec16 retary shall allow a State agency that is using

17 smart cards for the delivery of food stamp pro18 gram benefits to comply with the requirements

19 of paragraph (2) at such time after October 1,

20 2002, as the Secretary determines that a prac21 ticable technological method is available for

22 interoperability with electronic benefit transfer

23 cards.

24 ‘‘(6) FUNDING.—
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1 ‘‘(A) IN GENERAL.—In accordance with

2 regulations promulgated by the Secretary, the

3 Secretary shall pay 100 percent of the costs in4 curred by a State agency under this Act for

5 switching and settling interstate transactions—

6 ‘‘(i) incurred after the date of enact7 ment of this subsection and before October

8 1, 2002, if the State agency uses the

9 standard of interoperability and portability

10 adopted by a majority of State agencies;

11 and

12 ‘‘(ii) incurred after September 30,

13 2002, if the State agency uses the uniform

14 national standard of interoperability and

15 portability adopted under paragraph

16 (4)(A).

17 ‘‘(B) LIMITATION.—The total amount paid

18 to State agencies for each fiscal year under sub19 paragraph (A) shall not exceed $500,000.’’.

20 SEC. 4. STUDY OF ALTERNATIVES FOR HANDLING ELEC21 TRONIC BENEFIT TRANSACTIONS INVOLVING

22 FOOD STAMP BENEFITS.

23 Not later than 1 year after the date of enactment

24 of this Act, the Secretary of Agriculture shall study and

25 report to the Committee on Agriculture of the House of
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1 Representatives and the Committee on Agriculture, Nutri2 tion, and Forestry of the Senate on alternatives for han3 dling interstate electronic benefit transactions involving

4 food stamp benefits provided under the Food Stamp Act

5 of 1977 (7 U.S.C. 2011 et seq.), including the feasibility

6 and desirability of a single hub for switching (as defined

7 in section 7(k)(1) of that Act (as added by section 3)).

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