I

106TH CONGRESS

2D SESSION S. 1733

IN THE HOUSE OF REPRESENTATIVES

JANUARY 27, 2000

Referred to the Committee on Agriculture

AN ACT

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’’.
2

S 1733 RFH

1 SEC. 2. PURPOSES.

2 The purposes of this Act are—

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

4 program;

5 (2) to ensure cost-effective portability of food

6 stamp benefits across State borders without impos7 ing additional administrative expenses for special

8 equipment to address problems relating to the port9 ability;

10 (3) to enhance the flow of interstate commerce

11 involving electronic transactions involving food

12 stamp benefits under a uniform national standard of

13 interoperability and portability; and

14 (4) to eliminate the inefficiencies resulting from

15 a patchwork of State-administered systems and reg16 ulations established to carry out the food stamp pro17 gram

18 SEC. 3. INTEROPERABILTY AND PORTABILITY OF FOOD

19 STAMP TRANSACTIONS.

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

21 2016) is amended by adding at the end the following:

22 ‘‘(k) INTEROPERABILTY AND PORTABILITY OF ELEC23 TRONIC BENEFIT TRANSFER TRANSACTIONS.—

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

25 ‘‘(A) ELECTRONIC BENEFIT TRANSFER

26 CARD.—The term ‘electronic benefit transfer
3

S 1733 RFH

1 card’ means a card that provides benefits under

2 this Act through an electronic benefit transfer

3 service (as defined in subsection (i)(11)(A)).

4 ‘‘(B) ELECTRONIC BENEFIT TRANSFER

5 CONTRACT.—The term ‘electronic benefit trans6 fer contract’ means a contract that provides for

7 the issuance, use, or redemption of coupons in

8 the form of electronic benefit transfer cards.

9 ‘‘(C) INTEROPERABILTY.—The term ‘inter10 operability’ means a system that enables a cou11 pon issued in the form of an electronic benefit

12 transfer card to be redeemed in any State.

13 ‘‘(D) INTERSTATE TRANSACTION.—The

14 term ‘interstate transaction’ means a trans15 action that is initiated in 1 State by the use of

16 an electronic benefit transfer card that is issued

17 in another State.

18 ‘‘(E) PORTABILITY.—The term ‘port19 ability’ means a system that enables a coupon

20 issued in the form of an electronic benefit

21 transfer card to be used in any State by a

22 household to purchase food at a retail food

23 store or wholesale food concern approved under

24 this Act.
4

S 1733 RFH

1 ‘‘(F) SETTLING.—The term ‘settling’

2 means movement, and reporting such move3 ment, of funds from an electronic benefit trans4 fer card issuer that is located in 1 State to a

5 retail food store, or wholesale food concern, that

6 is located in another State, to accomplish an

7 interstate transaction.

8 ‘‘(G) SMART CARD.—The term ‘smart

9 card’ means an intelligent benefit card de10 scribed in section 17(f).

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

12 means the routing of an interstate transaction

13 that consists of transmitting the details of a

14 transaction electronically recorded through the

15 use of an electronic benefit transfer card in 1

16 State to the issuer of the card that is in an17 other State.

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

19 1, 2002, the Secretary shall ensure that systems

20 that provide for the electronic issuance, use, and re21 demption of coupons in the form of electronic benefit

22 transfer cards are interoperable, and food stamp

23 benefits are portable, among all States.

24 ‘‘(3) COST.—The cost of achieving the inter25 operability and portability required under paragraph
5

S 1733 RFH

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

2 store, or any wholesale food concern, approved to

3 participate in the food stamp program.

4 ‘‘(4) STANDARDS.—Not later than 210 days

5 after the date of enactment of this subsection, the

6 Secretary shall promulgate regulations that—

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

8 interoperability and portability required under

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

10 interoperability and portability used by a major11 ity of State agencies; and

12 ‘‘(B) require that any electronic benefit

13 transfer contract that is entered into 30 days or

14 more after the regulations are promulgated, by

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

16 interoperability and portability required under

17 paragraph (2) in accordance with the national

18 standard.

19 ‘‘(5) EXEMPTIONS—

20 ‘‘(A) CONTRACTS.—The requirements of

21 paragraph (2) shall not apply to the transfer of

22 benefits under an electronic benefit transfer

23 contract before the expiration of the term of the

24 contract if the contract—
6

S 1733 RFH

1 ‘‘(i) is entered into before the date

2 that is 30 days after the regulations are

3 promulgated under paragraph (4); and

4 ‘‘(ii) expires after October 1, 2002.

5 ‘‘(B) WAIVER.—At the request of a State

6 agency, the Secretary may provide 1 waiver to

7 temporarily exempt, for a period ending on or

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

9 State agency from complying with the require10 ments of paragraph (2), if the State agency—

11 ‘‘(i) establishes to the satisfaction of

12 the Secretary that the State agency faces

13 unusual technological barriers to achieving

14 by October 1, 2002, the interoperability

15 and portability required under paragraph

16 (2);

17 ‘‘(ii) demonstrates that the best inter18 est of the food stamp program would be

19 served by granting the waiver with respect

20 to the electronic benefit transfer system

21 used by the State agency to administer the

22 food stamp program; and

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

24 State agency will achieve the interoper-
7

S 1733 RFH

1 ability and portability required under para2 graph (2).

3 ‘‘(C) SMART CARD SYSTEMS.—The Sec4 retary shall allow a State agency that is using

5 smart cards for the delivery of food stamp pro6 gram benefits to comply with the requirements

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

8 2002, as the Secretary determines that a prac9 ticable technological method is available for

10 interoperability with electronic benefit transfer

11 cards.

12 ‘‘(6) FUNDING.—

13 ‘‘(A) IN GENERAL.—In accordance with

14 regulations promulgated by the Secretary, the

15 Secretary shall pay 100 percent of the costs in16 curred by a State agency under this Act for

17 switching and settling interstate transactions—

18 ‘‘(i) incurred after the date of enact19 ment of this subsection and before October

20 1, 2002, if the State agency uses the

21 standard of interoperability and portability

22 adopted by a majority of State agencies;

23 and

24 ‘‘(ii) incurred after September 30,

25 2002, if the State agency uses the uniform
8

S 1733 RFH

1 national standard of interoperability and

2 portability adopted under paragraph

3 (4)(A).

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

5 to State agencies for each fiscal year under sub6 paragraph (A) shall not exceed $500,000.’’.

7 SEC. 4. STUDY OF ALTERNATIVES FOR HANDLING ELEC8 TRONIC BENEFIT TRANSACTIONS INVOLVING

9 FOOD STAMP BENEFITS.

10 Not later than 1 year after the date of enactment

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

12 report to the Committee on Agriculture of the House of

13 Representatives and the Committee on Agriculture, Nutri14 tion, and Forestry of the Senate on alternatives for han15 dling interstate electronic benefit transactions involving

16 food stamp benefits provided under the Food Stamp Act

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

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

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

Passed the Senate November 19, 1999.

Attest: GARY SISCO,

Secretary.