Union Calendar No. 39
104TH CONGRESS
1ST SESSION
H. R. 1135
[Report No. 104–77]
A BILL
To improve the commodity distribution programs of
the Department of Agriculture, to reform and
simplify the Food Stamp Program, and for other
purposes.
MARCH 14, 1995
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
Union Calendar No. 39
104TH CONGRESS
1ST SESSION
H. R. 1135
[Report No. 104–77]
To improve the commodity distribution programs of the Department of Agri-
culture, to reform and simplify the Food Stamp Program, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 6, 1995
Mr. ROBERTS introduced the following bill; which was referred to the
Committee on Agriculture
MARCH 14, 1995
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on March 6, 1995]
A BILL
To improve the commodity distribution programs of the De-
partment of Agriculture, to reform and simplify the Food
Stamp Program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Food Stamp Reform
and Commodity Distribution Act’’.
TITLE I—COMMODITY
DISTRIBUTION PROVISIONS
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Commodity Distribu-
tion Act of 1995’’.
SEC. 102. AVAILABILITY OF COMMODITIES.
(a) Notwithstanding any other provision of law, the
Secretary of Agriculture (hereinafter in this title referred
to as the ‘‘Secretary’’) is authorized during fiscal years
1996 through 2000 to purchase a variety of nutritious and
useful commodities and distribute such commodities to the
States for distribution in accordance with this title.
(b) In addition to the commodities described in sub-
section (a), the Secretary may expend funds made available
to carry out the section 32 of the Act of August 24, 1935
(7 U.S.C. 612c), which are not expended or needed to carry
out such sections, to purchase, process, and distribute com-
modities of the types customarily purchased under such sec-
tion to the States for distribution in accordance with this
title.
(c) In addition to the commodities described in sub-
sections (a) and (b), agricultural commodities and the prod-
ucts thereof made available under clause (2) of the second
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sentence of section 32 of the Act of August 24, 1935 (7
U.S.C. 612c), may be made available by the Secretary to
the States for distribution in accordance with this title.
(d) In addition to the commodities described in sub-
sections (a), (b), and (c), commodities acquired by the Com-
modity Credit Corporation that the Secretary determines,
in the discretion of the Secretary, are in excess of quantities
needed to—
(1) carry out other domestic donation programs;
(2) meet other domestic obligations;
(3) meet international market development and
food aid commitments; and
(4) carry out the farm price and income sta-
bilization purposes of the Agricultural Adjustment
Act of 1938, the Agricultural Act of 1949, and the
Commodity Credit Corporation Charter Act;
shall be made available by the Secretary, without charge
or credit for such commodities, to the States for distribution
in accordance with this title.
(e) During each fiscal year, the types, varieties and
amounts of commodities to be purchased under this title
shall be determined by the Secretary. In purchasing such
commodities, except those commodities purchased pursuant
to section 110, the Secretary shall, to the extent practicable
and appropriate, make purchases based on—
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(1) agricultural market conditions;
(2) the preferences and needs of States and dis-
tributing agencies; and
(3) the preferences of the recipients.
SEC. 103. STATE, LOCAL AND PRIVATE SUPPLEMENTATION
OF COMMODITIES.
(a) The Secretary shall establish procedures under
which State and local agencies, recipient agencies, or any
other entity or person may supplement the commodities dis-
tributed under this title for use by recipient agencies with
nutritious and wholesome commodities that such entities or
persons donate for distribution, in all or part of the State,
in addition to the commodities otherwise made available
under this title.
(b) States and eligible recipient agencies may use—
(1) the funds appropriated for administrative
cost under section 109(b);
(2) equipment, structures, vehicles, and all other
facilities involved in the storage, handling, or dis-
tribution of commodities made available under this
title; and
(3) the personnel, both paid or volunteer, in-
volved in such storage, handling, or distribution;
to store, handle or distribute commodities donated for use
under subsection (a).
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(c) States and recipient agencies shall continue, to the
maximum extent practical, to use volunteer workers, and
commodities and other foodstuffs donated by charitable and
other organizations, in the distribution of commodities
under this title.
SEC. 104. STATE PLAN.
(a) A State seeking to receive commodities under this
title shall submit a plan of operation and administration
every four years to the Secretary for approval. The plan
may be amended at any time, with the approval of the Sec-
retary.
(b) The State plan, at a minimum, shall—
(1) designate the State agency responsible for
distributing the commodities received under this title;
(2) set forth a plan of operation and administra-
tion to expeditiously distribute commodities under
this title in quantities requested to eligible recipient
agencies in accordance with sections 106 and 110;
(3) set forth the standards of eligibility for recip-
ient agencies; and
(4) set forth the standards of eligibility for indi-
vidual or household recipients of commodities, which
at minimum shall require—
(A) individuals or households to be com-
prised of needy persons; and
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(B) individual or household members to be
residing in the geographic location served by the
distributing agency at the time of application for
assistance.
(c) The Secretary shall encourage each State receiving
commodities under this title to establish a State advisory
board consisting of representatives of all interested entities,
both public and private, in the distribution of commodities
received under this title in the State.
(d) A State agency receiving commodities under this
title may—
(1)(A) enter into cooperative agreements with
State agencies of other States to jointly provide com-
modities received under this title to eligible recipient
agencies that serve needy persons in a single geo-
graphical area which includes such States; or
(B) transfer commodities received under this title
to any such eligible recipient agency in the other
State under such agreement; and
(2) advise the Secretary of an agreement entered
into under this subsection and the transfer of com-
modities made pursuant to such agreement.
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SEC. 105. ALLOCATION OF COMMODITIES TO STATES.
(a) In each fiscal year, except for those commodities
purchased under section 110, the Secretary shall allocate
the commodities distributed under this title as follows:
(1) 60 percent of the such total value of commod-
ities shall be allocated in a manner such that the
value of commodities allocated to each State bears the
same ratio to 60 percent of such total value as the
number of persons in households within the State hav-
ing incomes below the poverty line bears to the total
number of persons in households within all States
having incomes below such poverty line. Each State
shall receive the value of commodities allocated under
this paragraph.
(2) 40 percent of such total value of commodities
shall be allocated in a manner such that the value of
commodities allocated to each State bears the same
ratio to 40 percent of such total value as the average
monthly number of unemployed persons within the
State bears to the average monthly number of unem-
ployed persons within all States during the same fis-
cal year. Each State shall receive the value of com-
modities allocated to the State under this paragraph.
(b)(1) The Secretary shall notify each State of the
amount of commodities that such State is allotted to receive
under subsection (a) or this subsection, if applicable. Each
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State shall promptly notify the Secretary if such State de-
termines that it will not accept any or all of the commod-
ities made available under such allocation. On such a noti-
fication by a State, the Secretary shall reallocate and dis-
tribute such commodities as the Secretary deems appro-
priate and equitable. The Secretary shall further establish
procedures to permit States to decline to receive portions
of such allocation during each fiscal year as the State deter-
mines is appropriate and the Secretary shall reallocate and
distribute such allocation as the Secretary deems appro-
priate and equitable.
(2) In the event of any drought, flood, hurricane, or
other natural disaster affecting substantial numbers of per-
sons in a State, county, or parish, the Secretary may re-
quest that States unaffected by such a disaster consider as-
sisting affected States by allowing the Secretary to reallo-
cate commodities from such unaffected State to States con-
taining areas adversely affected by the disaster.
(c) Purchases of commodities under this title shall be
made by the Secretary at such times and under such condi-
tions as the Secretary determines appropriate within each
fiscal year. All commodities so purchased for each such fis-
cal year shall be delivered at reasonable intervals to States
based on the allocations and reallocations made under sub-
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sections (a) and (b), and or carry out section 110, not later
than December 31 of the following fiscal year.
SEC. 106. PRIORITY SYSTEM FOR STATE DISTRIBUTION OF
COMMODITIES.
(a) In distributing the commodities allocated under
subsections (a) and (b) of section 105, the State agency,
under procedures determined by the State agency, shall
offer, or otherwise make available, its full allocation of com-
modities for distribution to emergency feeding organiza-
tions.
(b) If the State agency determines that the State will
not exhaust the commodities allocated under subsections (a)
and (b) of section 105 through distribution to organizations
referred to in subsection (a), its remaining allocation of
commodities shall be distributed to charitable institutions
described in section 113(3) not receiving commodities under
subsection (a).
(c) If the State agency determines that the State will
not exhaust the commodities allocated under subsections (a)
and (b) of section 105 through distribution to organizations
referred to in subsections (a) and (b), its remaining alloca-
tion of commodities shall be distributed to any eligible re-
cipient agency not receiving commodities under subsections
(a) and (b).
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SEC. 107. INITIAL PROCESSING COSTS.
The Secretary may use funds of the Commodity Credit
Corporation to pay the costs of initial processing and pack-
aging of commodities to be distributed under this title into
forms and in quantities suitable, as determined by the Sec-
retary, for use by the individual households or eligible recip-
ient agencies, as applicable. The Secretary may pay such
costs in the form of Corporation-owned commodities equal
in value to such costs. The Secretary shall ensure that any
such payments in kind will not displace commercial sales
of such commodities.
SEC. 108. ASSURANCES; ANTICIPATED USE.
(a) The Secretary shall take such precautions as the
Secretary deems necessary to ensure that commodities made
available under this title will not displace commercial sales
of such commodities or the products thereof. The Secretary
shall submit to the Committee on Agriculture of the House
of Representatives and the Committee on Agriculture, Nu-
trition, and Forestry of the Senate by December 31, 1997,
and not less than every two years thereafter, a report as
to whether and to what extent such displacements or substi-
tutions are occurring.
(b) The Secretary shall determine that commodities
provided under this title shall be purchased and distributed
only in quantities that can be consumed without waste. No
eligible recipient agency may receive commodities under
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this title in excess of anticipated use, based on inventory
records and controls, or in excess of its ability to accept
and store such commodities.
SEC. 109. AUTHORIZATION OF APPROPRIATIONS.
(a) PURCHASE OF COMMODITIES.—To carry out this
title, there are authorized to be appropriated $260,000,000
for each of the fiscal years 1996 through 2000 to purchase,
process, and distribute commodities to the States in accord-
ance with this title.
(b) ADMINISTRATIVE FUNDS.—(1) There are author-
ized to be appropriated $40,000,000 for each of the fiscal
years 1996 through 2000 for the Secretary to make available
to the States for State and local payments for costs associ-
ated with the distribution of commodities by eligible recipi-
ent agencies under this title, excluding costs associated with
the distribution of those commodities distributed under sec-
tion 110. Funds appropriated under this paragraph for any
fiscal year shall be allocated to the States on an advance
basis dividing such funds among the States in the same pro-
portions as the commodities distributed under this title for
such fiscal year are allocated among the States. If a State
agency is unable to use all of the funds so allocated to it,
the Secretary shall reallocate such unused funds among the
other States in a manner the Secretary deems appropriate
and equitable.
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(2)(A) A State shall make available in each fiscal year
to eligible recipient agencies in the State not less than 40
percent of the funds received by the State under paragraph
(1) for such fiscal year, as necessary to pay for, or provide
advance payments to cover, the allowable expenses of eligible
recipient agencies for distributing commodities to needy
persons, but only to the extent such expenses are actually
so incurred by such recipient agencies.
(B) As used in this paragraph, the term ‘‘allowable
expenses’’ includes—
(i) costs of transporting, storing, handling, re-
packaging, processing, and distributing commodities
incurred after such commodities are received by eligi-
ble recipient agencies;
(ii) costs associated with determinations of eligi-
bility, verification, and documentation;
(iii) costs of providing information to persons
receiving commodities under this title concerning the
appropriate storage and preparation of such commod-
ities; and
(iv) costs of recordkeeping, auditing, and other
administrative procedures required for participation
in the program under this title.
(C) If a State makes a payment, using State funds,
to cover allowable expenses of eligible recipient agencies, the
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amount of such payment shall be counted toward the
amount a State must make available for allowable expenses
of recipient agencies under this paragraph.
(3) States to which funds are allocated for a fiscal year
under this subsection shall submit financial reports to the
Secretary, on a regular basis, as to the use of such funds.
No such funds may be used by States or eligible recipient
agencies for costs other than those involved in covering the
expenses related to the distribution of commodities by eligi-
ble recipient agencies.
(4)(A) Except as provided in subparagraph (B), to be
eligible to receive funds under this subsection, a State shall
provide in cash or in kind (according to procedures ap-
proved by the Secretary for certifying these in-kind con-
tributions) from non-Federal sources a contribution equal
to the difference between—
(i) the amount of such funds so received; and
(ii) any part of the amount allocated to the
State and paid by the State—
(I) to eligible recipient agencies; or
(II) for the allowable expenses of such recip-
ient agencies;
for use in carrying out this title.
(B) Funds allocated to a State under this section may,
upon State request, be allocated before States satisfy the
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matching requirement specified in subparagraph (A), based
on the estimated contribution required. The Secretary shall
periodically reconcile estimated and actual contributions
and adjust allocations to the State to correct for overpay-
ments and underpayments.
(C) Any funds distributed for administrative costs
under section 110(b) shall not be covered by this paragraph.
(5) States may not charge for commodities made avail-
able to eligible recipient agencies, and may not pass on to
such recipient agencies the cost of any matching require-
ments, under this title.
(c) The value of the commodities made available under
subsection (c) and (d) of section 102, and the funds of the
Commodity Credit Corporation used to pay the costs of ini-
tial processing, packaging (including forms suitable for
home use), and delivering commodities to the States shall
not be charged against appropriations authorized by this
section.
SEC. 110. COMMODITY SUPPLEMENTAL FOOD PROGRAM.
(a) From the funds appropriated under section 109(a),
$94,500,000 shall be used for each fiscal year to purchase
and distribute commodities to supplemental feeding pro-
grams serving women, infants, and children or elderly indi-
viduals (hereinafter in this section referred to as the ‘‘com-
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modity supplemental food program’’), or serving both
groups wherever located.
(b) Not more than 20 percent of the funds made avail-
able under subsection (a) shall be made available to the
States for State and local payments of administrative costs
associated with the distribution of commodities by eligible
recipient agencies under this section. Administrative costs
for the purposes of the commodity supplemental food pro-
gram shall include, but not be limited to, expenses for infor-
mation and referral, operation, monitoring, nutrition edu-
cation, start-up costs, and general administration, includ-
ing staff, warehouse and transportation personnel, insur-
ance, and administration of the State or local office.
(c)(1) During each fiscal year the commodity supple-
mental food program is in operation, the types, varieties,
and amounts of commodities to be purchased under this sec-
tion shall be determined by the Secretary, but, if the Sec-
retary proposes to make any significant changes in the
types, varieties or amounts from those that were available
or were planned at the beginning of the fiscal year the Sec-
retary shall report such changes before implementation to
the Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate.
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(2) Notwithstanding any other provision of law, the
Commodity Credit Corporation shall, to the extent that the
Commodity Credit Corporation inventory levels permit,
provide not less than 9,000,000 pounds of cheese and not
less than 4,000,000 pounds of nonfat dry milk in each of
the fiscal years 1996 through 2000 to the Secretary. The
Secretary shall use such amounts of cheese and nonfat dry
milk to carry out the commodity supplemental food pro-
gram before the end of the fiscal year.
(d) The Secretary shall, in each fiscal year, approve
applications of additional sites for the program, including
sites that serve only elderly persons, in areas in which the
program currently does not operate, to the full extent that
applications can be approved within the appropriations
available for the program for the fiscal year and without
reducing actual participation levels (including participa-
tion of elderly persons under subsection (e)) in areas in
which the program is in effect.
(e) If a local agency that administers the commodity
supplemental food program determines that the amount of
funds made available to the agency to carry out this section
exceeds the amount of funds necessary to provide assistance
under such program to women, infants, and children, the
agency, with the approval of the Secretary, may permit
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low-income elderly persons (as defined by the Secretary) to
participate in and be served by such program.
(f)(1) If it is necessary for the Secretary to pay a sig-
nificantly higher than expected price for one or more types
of commodities purchased under this section, the Secretary
shall promptly determine whether the price is likely to cause
the number of persons that can be served in the program
in a fiscal year to decline.
(2) If the Secretary determines that such a decline
would occur, the Secretary shall promptly notify the State
agencies charged with operating the program of the decline
and shall ensure that a State agency notify all local agen-
cies operating the program in the State of the decline.
(g) Commodities distributed to States pursuant to this
section shall not be considered in determining the commod-
ity allocation to each State under section 105 or priority
of distribution under 106.
SEC. 111. COMMODITIES NOT INCOME.
Notwithstanding any other provision of law, commod-
ities distributed under this title shall not be considered in-
come or resources for purposes of determining recipient eli-
gibility under any Federal, State, or local means-tested pro-
gram.
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SEC. 112. PROHIBITION AGAINST CERTAIN STATE CHARGES.
Whenever a commodity is made available without
charge or credit under this title by the Secretary for dis-
tribution within the States to eligible recipient agencies, the
State may not charge recipient agencies any amount that
is in excess of the State’s direct costs of storing, and trans-
porting to recipient agencies the commodities minus any
amount the Secretary provides the State for the costs of stor-
ing and transporting such commodities.
SEC. 113. DEFINITIONS.
As used in this title:
(1) The term ‘‘average monthly number of unem-
ployed persons’’ means the average monthly number
of unemployed persons within a State in the most re-
cent fiscal year for which such information is avail-
able as determined by the Bureau of Labor Statistics
of the Department of Labor.
(2) The term ‘‘elderly persons’’ means individ-
uals 60 years of age or older.
(3) The term ‘‘eligible recipient agency’’ means
a public or nonprofit organization that administers—
(A) an institution providing commodities to
supplemental feeding programs serving women,
infants, and children or serving elderly persons,
or serving both groups;
(B) an emergency feeding organization;
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(C) a charitable institution (including a
hospitals and retirement home, but excluding a
penal institution) to the extent that such institu-
tion serves needy persons;
(D) a summer camp for children, or a child
nutrition program providing food service;
(E) a nutrition project operating under the
Older Americans Act of 1965, including such
project that operates a congregate nutrition site
and a project that provides home-delivered meals;
or
(F) a disaster relief program;
and that has been designated by the appropriate State
agency, or by the Secretary, and approved by the Sec-
retary for participation in the program established
under this title.
(4) The term ‘‘emergency feeding organization’’
means a public or nonprofit organization that ad-
ministers activities and projects (including the activi-
ties and projects of a charitable institution, a food
bank, a food pantry, a hunger relief center, a soup
kitchen, or a similar public or private nonprofit eligi-
ble recipient agency) providing nutrition assistance to
relieve situations of emergency and distress through
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the provision of food to needy persons, including low-
income and unemployed persons.
(5) The term ‘‘food bank’’ means a public and
charitable institution that maintains an established
operation involving the provision of food or edible
commodities, or the products thereof, to food pantries,
soup kitchens, hunger relief centers, or other food or
feeding centers that, as an integral part of their nor-
mal activities, provide meals or food to feed needy
persons on a regular basis.
(6) The term ‘‘food pantry’’ means a public or
private nonprofit organization that distributes food to
low-income and unemployed households, including
food from sources other than the Department of Agri-
culture, to relieve situations of emergency and dis-
tress.
(7) The term ‘‘needy persons’’ means—
(A) individuals who have low incomes or
who are unemployed, as determined by the State
(in no event shall the income of such individual
or household exceed 185 percent of the poverty
line);
(B) households certified as eligible to par-
ticipate in the food stamp program under the
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Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
or
(C) individuals or households participating
in any other Federal, or federally assisted,
means-tested program.
(8) The term ‘‘poverty line’’ has the same mean-
ing given such term in section 673(2) of the Commu-
nity Services Block Grant Act (42 U.S.C. 9902(2)).
(9) The term ‘‘soup kitchen’’ means a public and
charitable institution that, as integral part of its nor-
mal activities, maintains an established feeding oper-
ation to provide food to needy homeless persons on a
regular basis.
SEC. 114. REGULATIONS.
(a) The Secretary shall issue regulations within 120
days to implement this title.
(b) In administering this subtitle, the Secretary shall
minimize, to the maximum extent practicable, the regu-
latory, recordkeeping, and paperwork requirements imposed
on eligible recipient agencies.
(c) The Secretary shall as early as feasible but not later
than the beginning of each fiscal year, publish in the Fed-
eral Register a nonbinding estimate of the types and quan-
tities of commodities that the Secretary anticipates are like-
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ly to be made available under the commodity distribution
program under this title during the fiscal year.
(d) The regulations issued by the Secretary under this
section shall include provisions that set standards with re-
spect to liability for commodity losses for the commodities
distributed under this title in situations in which there is
no evidence of negligence or fraud, and conditions for pay-
ment to cover such losses. Such provisions shall take into
consideration the special needs and circumstances of eligible
recipient agencies.
SEC. 115. FINALITY OF DETERMINATIONS.
Determinations made by the Secretary under this title
and the facts constituting the basis for any donation of com-
modities under this title, or the amount thereof, when offi-
cially determined in conformity with the applicable regula-
tions prescribed by the Secretary, shall be final and conclu-
sive and shall not be reviewable by any other officer or agen-
cy of the Government.
SEC. 116. SALE OF COMMODITIES PROHIBITED.
Except as otherwise provided in section 107, none of
the commodities distributed under this title shall be sold
or otherwise disposed of in commercial channels in any
form.
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SEC. 117. SETTLEMENT AND ADJUSTMENT OF CLAIMS.
(a) The Secretary, or a designee of the Secretary, shall
have the authority to—
(1) determine the amount of, settle, and adjust
any claim arising under this title; and
(2) waive such a claim is the Secretary deter-
mines that to do so will serve the purposes of this
title.
(b) Nothing contained in this section shall be construed
to diminish the authority of the Attorney General of the
United States under section 516 of title 28, United States
Code, to conduct litigation on behalf of the United States.
SEC. 118. REPEALERS; AMENDMENTS.
(a) The Emergency Food Assistance Act of 1983 (7
U.S.C. 612c note) is repealed.
(b) AMENDMENTS.—
(1) The Hunger Prevention Act of 1988 (7
U.S.C. 612c note) is amended—
(A) by striking section 110;
(B) by striking subtitle C of title II; and
(C) by striking section 502.
(2) The Commodity Distribution Reform Act
and WIC Amendments of 1987 (7 U.S.C. 612c note)
is amended by striking section 4.
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(3) The Charitable Assistance and Food Bank
Act of 1987 (7 U.S.C. 612c note) is amended by strik-
ing section 3.
(4) The Food Security Act of 1985 (7 U.S.C.
612c note) is amended—
(A) by striking section 1571; and
(B) in section 1562(d), by striking ‘‘section
4 of the Agricultural and Consumer Protection
Act of 1973’’ and inserting ‘‘section 110 of the
Commodity Distribution Act of 1995’’.
(5) The Agricultural and Consumer Protection
Act of 1973 (7 U.S.C. 612c note) is amended—
(A) in section 4(a), by striking ‘‘institutions
(including hospitals and facilities caring for
needy infants and children), supplemental feed-
ing programs serving women, infants and chil-
dren or elderly persons, or both, wherever located,
disaster areas, summer camps for children’’ and
inserting ‘‘disaster areas’’;
(B) in subsection 4(c), by striking ‘‘the
Emergency Food Assistance Act of 1983’’ and in-
serting ‘‘the Commodity Distribution Act of
1995’’; and
(C) by striking section 5.
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(6) The Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 612c note) is amended
by striking section 1773(f).
TITLE II—SIMPLIFICATION AND REFORM
OF FOOD STAMP PROGRAM
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Food Stamp Sim-
plification and Reform Act of 1995’’.
Subtitle A—Simplified Food Stamp Program
and State Assistance for Needy Families
SEC. 202. ESTABLISHMENT OF SIMPLIFIED FOOD STAMP
PROGRAM.
Section 4(a) of the Food Stamp Act of 1977 (7 U.S.C.
2013(a)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(2) by adding at the end the following new para-
graph:
‘‘(2) At the request of the State agency, a State may
operate a program, as provided in section 24, within the
State or any political subdivisions within the State in
which households with one or more members receiving regu-
lar cash benefits under the program established by the State
under the Temporary Assistance for Needy Families Block
Grant be issued food stamp benefits in accordance with the
rules and procedures established—
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‘‘(A) by the State under the Temporary Assist-
ance for Needy Families Block Grant or this Act; or
‘‘(B) under the food stamp program.’’.
SEC. 203. SIMPLIFIED FOOD STAMP PROGRAM.
(a) The Food Stamp Act of 1977 (7 U.S.C. 2011 et
seq.) is amended by adding the following new section:
‘‘SEC. 24. SIMPLIFIED FOOD STAMP PROGRAM.
‘‘(a) If a State elects to operate a program under sec-
tion 4(a)(2) within the State or any political subdivision
within the State—
‘‘(1) households in which all members receive reg-
ular cash benefits under the program established by
the State under the Temporary Assistance for Needy
Families Block Grant shall be automatically eligible
to participate in the food stamp program;
‘‘(2) benefits under such program shall be deter-
mined under the rules and procedures established by
the State or political subdivision under the Tem-
porary Assistance for Needy Families Block Grant or
under the food stamp program, subject to subsection
(g).
‘‘(b) In approving a State plan to carry out a program
under section 4(a)(2), the Secretary shall certify that the
average level of food stamp benefits per household partici-
pating in the program under such section for the State or
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political subdivision in which such program is in operation
is not expected to exceed the average level of food stamp
benefits per household that received benefits under the pro-
gram established by a State under the part A of title IV
of the Social Security Act (42 U.S.C. 601 et seq.) in such
area in the preceding fiscal year, adjusted for any changes
in the thrifty food plan under section 3(o). The Secretary
shall compute the permissible average level of food stamp
benefits per household each year for each State or political
subdivision in which such program is in operation and
may require a State to report any information necessary
to make such computation.
‘‘(c) When the Secretary determines that the average
level of food stamp benefits per household provided by the
State or political subdivision under such program has ex-
ceeded the permissible average level of food stamp benefits
per household for the State or political subdivision in which
the program was in operation, the State or political sub-
division shall pay to the Treasury of the United States the
value of the food stamp benefits in excess of the permissible
average level of food stamp benefits per household in the
State or political subdivision within 90 days after the noti-
fication of such excess payments.
‘‘(d)(1) A household against which a penalty is im-
posed (including a reduction in benefits or disqualification)
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for noncompliance with the program established by the
State under the Temporary Assistance for Needy Families
Block Grant may have the same penalty imposed against
it (including a reduction in benefits or disqualification) in
the program administered under this section.
‘‘(2) If the penalty for noncompliance with the pro-
gram established by the State under the Temporary Assist-
ance for Needy Families Block Grant is a reduction in bene-
fits in such program, the household shall not receive an in-
creased allotment under the program administered under
this section as a result of a decrease in the household’s in-
come (as determined by the State under this section) caused
by such penalty.
‘‘(3) Any household disqualified from the program ad-
ministered under this subsection may, after such disquali-
fication period has expired, apply for food stamp benefits
under this Act and shall be treated as a new applicant.
‘‘(e) If a State or political subdivision, at its option,
operates a program under section 4(a)(2) for households
that include any member who does not receive regular cash
benefits under the program established by the State under
the Temporary Assistance for Needy Families Block Grant,
the Secretary shall ensure that the State plan provides that
household eligibility shall be determined under this Act,
benefits may be determined under the rules and procedures
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established by the State under the Temporary Assistance
for Needy Families Block Grant or this Act, and benefits
provided under this section shall be equitably distributed
among all household members.
‘‘(f)(1) Under the program operated under section
4(a)(2), the State may elect to provide cash assistance in
lieu of allotments to all households that include a member
who is employed and whose employment produces for the
benefit of the member’s household income that satisfies the
requirements of paragraph (2).
‘‘(2) The State, in electing to provide cash assistance
under paragraph (1), at a minimum shall require that such
earned income is—
‘‘(A) not less than $350 per month;
‘‘(B) earned from employment provided by a
nongovernmental employer, as determined by the
State; and
‘‘(C) received from the same employer for a pe-
riod of employment of not less than 3 consecutive
months.
‘‘(3) If a State that makes the election described in
paragraph (1) identifies each household that receives cash
assistance under this subsection—
‘‘(A) the Secretary shall pay to the State an
amount equal to the value of the allotment that such
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household would be eligible to receive under this sec-
tion but for the operation of this subsection;
‘‘(B) the State shall provide such amount to the
household as cash assistance in lieu of such allotment;
and
‘‘(C) for purposes of food stamp program (other
than this section and section 4(a)(2))—
‘‘(i) such cash assistance shall be considered
to be an allotment; and
‘‘(ii) such household shall not receive any
other food stamp benefit for the period for which
such cash assistance is provided.
‘‘(4) A State that makes the election in paragraph (1)
shall—
‘‘(A) increase the cash benefits provided to house-
holds under this subsection to compensate for any
State or local sales tax that may be collected on pur-
chases of food by any household receiving cash benefits
under this subsection, unless the Secretary determines
on the basis of information provided by the State that
the increase is unnecessary on the basis of the limited
nature of the items subject to the State or local sales
tax; and
‘‘(B) pay the cost of any increase in cash benefits
required by paragraph (1).
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‘‘(5) After a State operates a program under this sub-
section for 2 years, the State shall provide to the Secretary
a written evaluation of the impact of cash assistance.
‘‘(g) In operating a program under section 4(a)(2), the
State or political subdivision may follow the rules and pro-
cedures established by the State or political subdivision
under the Temporary Assistance for Needy Families Block
Grant or under the food stamp program, except that the
State or political subdivision shall comply with the require-
ments of—
‘‘(1) subsections (a) through (g) of section 7 (re-
lating to the issuance and use of coupons);
‘‘(2) section 8(a) (relating to the value of allot-
ments, except that a household’s income may be deter-
mined under the program established by the State
under the Temporary Assistance for Needy Families
Block Grant);
‘‘(3) section 8(b) (allotment not considered in-
come or resources);
‘‘(4) subsections (a), (c), (d), and (n) of section
11 (relating to administration);
‘‘(5) paragraphs (8), (12), (17), (19), (21), (26),
and (27) of section 11(e) (relating to the State plan);
‘‘(6) section 11(e)(10) (relating to a fair hearing)
or a comparable requirement established by the State
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under the Temporary Assistance for Needy Families
Block Grant; and
‘‘(7) section 16 (relating to administrative cost-
sharing and quality control).’’.
(b) Section 11(e) of the Food Stamp Act of 1977 (7
U.S.C. 2020(e)) is amended—
(1) in paragraph (24), by striking ‘‘and’’ at the
end;
(2) in paragraph (25), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following new para-
graph:
‘‘(26) the plans of the State agency for operating,
at the election of the State, a program under section
(4)(a)(2), including—
‘‘(A) the rules and procedures to be followed
by the State to determine food stamp benefits;
‘‘(B) a statement specifying whether the
program operated by the State under section
4(a)(2) will include households that include
members who do not receive regular cash benefits
under the program established by the State
under the Temporary Assistance for Needy Fam-
ilies Block Grant; and
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‘‘(C) a description of the method by which
the State or political subdivision will carry out
a quality control system under section 16(c).’’.
SEC. 204. CONFORMING AMENDMENTS.
(a) Section 8 of the Food Stamp Act of 1977 (7 U.S.C.
2017) is amended by striking subsection (e).
(b) Section 17 of the Food Stamp Act of 1977 (7 U.S.C.
2026) is amended—
(1) by striking subsection (i); and
(2) by redesignating subsections (j), (k), and (l)
as subsections (i), (j), and (k), respectively.
Subtitle B—Food Stamp Program
SEC. 205. THRIFTY FOOD PLAN.
Section 3(o) of the Food Stamp Act of 1977 (7 U.S.C.
2012(o)) is amended by striking ‘‘(4) through January 1,
1980, adjust the cost of such diet every January 1 and July
1’’ and all that follows through the end of the subsection,
and inserting the following: ‘‘(4) on October 1, 1995, adjust
the cost of the thrifty food plan to reflect 103 percent of
the cost of the thrifty food plan in June 1994 and increase
such amount by 2 percent, rounding the result to the nearest
lower dollar increment for each household size; and (5) on
October 1, 1996, and each October 1 thereafter, increase the
amount established for the preceding October 1, before such
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amount was rounded, by 2 percent, rounding the result to
the nearest lower dollar increment for each household size.’’.
SEC. 206. INCOME DEDUCTIONS AND ENERGY ASSISTANCE.
(a) Section 5(d)(11) of the Food Stamp Act of 1977
(7 U.S.C. 2014(d)(11)) is amended—
(1) by striking ‘‘(A)’’; and
(2) by striking ‘‘or (B) under any State or local
laws,’’ and all that follows through ‘‘or impracticable
to do so,’’.
(b) Section 5(e) of the Food Stamp Act of 1977 (7
U.S.C. 2014(e)) is amended to read as follows:
‘‘(e)(1) STANDARD
AND EARNED INCOME DEDUC-
TIONS.—(A) In computing household income, the Secretary
shall allow a standard deduction of $134 a month for each
household, except that households in Alaska, Hawaii,
Guam, and the Virgin Islands of the United States shall
be allowed a standard deduction of $229, $189, $269, and
$118, respectively.
‘‘(B) All households with earned income shall also be
allowed an additional deduction of 20 percent of all earned
income (other than that excluded by subsection (d) of this
section and that earned under section 16(j)), to compensate
for taxes, other mandatory deductions from salary, and
work expenses, except that such additional deduction shall
not be allowed with respect to earned income that a house-
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hold willfully or fraudulently fails (as proven in a proceed-
ing provided for in section 6(b)) to report in a timely man-
ner.
‘‘(2) DEPENDENT CARE DEDUCTION.—The Secretary
shall allow households a deduction with respect to expenses
other than expenses paid on behalf of the household by a
third party or amounts made available and excluded for
the expenses under subsection (d)(3), the maximum allow-
able level of which shall be $200 a month for each dependent
child under 2 years of age and $175 a month for each other
dependent, for the actual cost of payments necessary for the
care of a dependent when such care enables a household
member to accept or continue employment, or training or
education which is preparatory for employment.
‘‘(3) EXCESS SHELTER EXPENSE DEDUCTION.—(A)
The Secretary shall allow households, other than those
households containing an elderly or disabled member, with
respect to expenses other than expenses paid on behalf of
the household by a third party, an excess shelter expense
deduction to the extent that the monthly amount expended
by a household for shelter exceeds an amount equal to 50
percent of monthly household income after all other applica-
ble deductions have been allowed.
‘‘(B) Such excess shelter expense deduction shall not
exceed $231 a month in the 48 contiguous States and the
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District of Columbia, and shall not exceed, in Alaska, Ha-
waii, Guam, and the Virgin Islands of the United States,
$402, $330, $280, and $171 a month, respectively.
‘‘(C)(i) Notwithstanding section 2605(f) of the Low-In-
come Home Energy Assistance Act of 1981 (42 U.S.C.
8624(f)), a household may not claim as a shelter expense
any payment received, or costs paid on its behalf, under
the Low-Income Home Energy Assistance Act of 1981 (42
U.S.C. 8621 et seq.).
‘‘(ii) Notwithstanding section 2605(f) of the Low-In-
come Home Energy Assistance Act of 1981 (42 U.S.C.
8624(f)), a State agency may use a standard utility allow-
ance as provided under subparagraph (D) for heating and
cooling expenses only if the household incurs out-of-pocket
heating or cooling expenses in excess of any payment re-
ceived, or costs paid on its behalf, under the Low-Income
Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et
seq.).
‘‘(iii) For purposes of the food stamp program, assist-
ance provided under the Low-Income Home Energy Assist-
ance Act of 1981 shall be considered to be prorated over
the entire heating or cooling season for which it was pro-
vided.
‘‘(iv) At the end of any certification period and up
to one additional time during each twelve-month period, a
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State agency shall allow a household to switch between any
standard utility allowance and a deduction based on its
actual utility costs.
‘‘(D)(i) In computing the excess shelter expense deduc-
tion, a State agency may use a standard utility allowance
in accordance with regulations promulgated by the Sec-
retary, except that a State agency may use an allowance
which does not fluctuate within a year to reflect seasonal
variations.
‘‘(ii) An allowance for a heating or cooling expense
may not be used for a household that does not incur a heat-
ing or cooling expense, as the case may be, or does incur
a heating or cooling expense but is located in a public hous-
ing unit which has central utility meters and charges house-
holds, with regard to such expense, only for excess utility
costs.
‘‘(iii) No such allowance may be used for a household
that shares such expense with, and lives with, another indi-
vidual not participating in the food stamp program, an-
other household participating in the food stamp program,
or both, unless the allowance is prorated between the house-
hold and the other individual, household, or both.
‘‘(4) HOMELESS SHELTER DEDUCTION.—
‘‘(A) A State shall develop a standard homeless
shelter deduction, which shall not exceed $139 a
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month, for the expenses that may reasonably be ex-
pected to be incurred by households in which all mem-
bers are homeless but are not receiving free shelter
throughout the month. Subject to subparagraph (B),
the State shall use such deduction in determining the
eligibility and allotments for such households.
‘‘(B) The Secretary may prohibit the use of the
standard homeless shelter deduction for households
with extremely low shelter costs.
‘‘(5) ELDERLY
AND DISABLED HOUSEHOLDS.—(A)
The Secretary shall allow households containing an elderly
or disabled member, with respect to expenses other than ex-
penses paid on behalf of the household by a third party—
‘‘(i) an excess medical expense deduction for that
portion of the actual cost of allowable medical ex-
penses, incurred by elderly or disabled members, ex-
clusive of special diets, that exceed $35 a month; and
‘‘(ii) an excess shelter expense deduction to the
extent that the monthly amount expended by a house-
hold for shelter exceeds an amount equal to 50 percent
of monthly household income after all other applicable
deductions have been allowed.
‘‘(B) State agencies shall offer eligible households a
method of claiming a deduction for recurring medical ex-
penses that are initially verified under the excess medical
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expense deduction provided for in subparagraph (A), in lieu
of submitting information or verification on actual expenses
on a monthly basis. The method described in the preceding
sentence shall be designed to minimize the administrative
burden for eligible elderly and disabled household members
choosing to deduct their recurrent medical expenses pursu-
ant to such method, shall rely on reasonable estimates of
the member’s expected medical expenses for the certification
period (including changes that can be reasonably antici-
pated based on available information about the member’s
medical condition, public or private medical insurance cov-
erage, and the current verified medical expenses incurred
by the member), and shall not require further reporting or
verification of a change in medical expenses if such a
change has been anticipated for the certification period.
‘‘(6) CHILD SUPPORT DEDUCTION.—Before determin-
ing the excess shelter expense deduction, the Secretary shall
allow all households a deduction for child support payments
made by a household member to or for an individual who
is not a member of the household if such household member
was legally obligated to make such payments, except that
the Secretary is authorized to prescribe by regulation the
methods, including calculation on a retrospective basis, that
State agencies shall use to determine the amount of the de-
duction for child support payments.’’.
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(c) Section 11(e)(3) of the Food Stamp Act of 1977
(7 U.S.C. 2020(e)(3)) is amended by striking ‘‘Under the
rules prescribed by the Secretary, a State agency shall de-
velop standard estimates’’ and all that follows through the
end of the paragraph.
SEC. 207. VEHICLE ALLOWANCE.
Section 5(g)(2) of the Food Stamp Act of 1977 (7
U.S.C. 2014(g)(2)) is amended by striking ‘‘a level set by
the Secretary, which shall be $4,500 through August 31,
1994,’’ and all that follows through the end of the para-
graph, and inserting ‘‘$4,550.’’.
SEC. 208. ELIGIBILITY OF ALIENS.
(a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C.
2014) is amended—
(1) by striking subsection (i); and
(2) by redesignating subsections (j) through (m)
as subsections (i) through (l), respectively.
(b) Section 6(f)(2) of the Food Stamp Act of 1977 (7
U.S.C. 2015(f)(2)) is amended—
(1) in subparagraph (B), by inserting the follow-
ing before the semicolon: ‘‘, and such alien has ful-
filled the residence requirements and has an applica-
tion pending for naturalization under the Immigra-
tion and Nationality Act, or is a veteran (as defined
in section 101 of title 38, United States Code) with
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a discharge characterized as an honorable discharge
(or is spouse or dependent child of such alien), is on
active duty (other than active duty for training) in
the Armed Forces of the United States (or is the
spouse or dependent child of such alien), or is at least
75 years of age and has resided in the United States
for at least 5 years’’; and
(2) in subparagraph (D), by inserting ‘‘, but
such alien shall be eligible only for five years after
such entry’’ before the semicolon.
SEC. 209. WORK REQUIREMENTS.
(a) Section 6(d) of the Food Stamp Act of 1977 (42
U.S.C. 2015(d)) is amended—
(1) in paragraph (1)(A)(i), by striking ‘‘an em-
ployment and training program under paragraph
(4), to the extent required under paragraph (4), in-
cluding any reasonable employment requirements as
are prescribed by the State agency in accordance with
paragraph (4)’’ and inserting ‘‘a State job search pro-
gram’’;
(2) in paragraph (2)(A)—
(A) by striking ‘‘title IV of the Social Secu-
rity Act (42 U.S.C. 602)’’ and inserting ‘‘the
program established by the State under the Tem-
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porary Assistance for Needy Families Block
Grant’’; and
(B) by striking ‘‘that is comparable to a re-
quirement of paragraph (1)’’; and
(3) by amending paragraph (4), to read as fol-
lows:
‘‘(4)(A) Except as provided in subparagraphs
(B), (C), and (D), an individual shall not be denied
initial eligibility but shall be disqualified from the
food stamp program if after 90 days from the certifi-
cation of eligibility of such individual the individual
was not employed a minimum of 20 hours per week,
or does not participate in a program established
under section 20 or a comparable program established
by the State or local government.
‘‘(B) Subparagraph (A) shall not apply in the
case of an individual who—
‘‘(i) is under eighteen or over fifty years of
age;
‘‘(ii) is certified by a physician as phys-
ically or mentally unfit for employment;
‘‘(iii) is a parent or other member of a
household with responsibility for the care of a de-
pendent; or
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‘‘(iv) is participating a minimum of 20
hours per week and is in compliance with the re-
quirements of—
‘‘(I) a program under the Job Train-
ing Partnership Act (29 U.S.C. 1501 et
seq.);
‘‘(II) a program under section 236 of
the Trade Act of 1974 (19 U.S.C. 2296); or
‘‘(III) a program of employment or
training operated or supervised by a agency
of State or local government which meets
standards deemed appropriate by the Gov-
ernor; or
‘‘(v) would otherwise be exempt under sub-
section (d)(2).
‘‘(C) Upon request of the State, the Secretary
may waive the requirements of subparagraph (A) in
the case of some or all individuals within all or part
of the State if the Secretary makes a determination
that such area—
‘‘(i) has an unemployment rate of over 10
percent; or
‘‘(ii) does not have a sufficient number of
jobs to provide employment for individuals sub-
ject to this paragraph. The Secretary shall report
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to the Committee on Agriculture of the House of
Representatives and the Committee on Agri-
culture, Nutrition, and Forestry of the Senate on
the basis on which the Secretary made such a de-
cision.
‘‘(D) An individual who has been disqualified
from the food stamp program under subparagraph
(A) may reestablish eligibility for assistance if such
person becomes exempt under subparagraph (B) or
by—
‘‘(i) becoming employed for a minimum of
20 hours per week during any consecutive thirty-
day period; or
‘‘(ii) participating in a program established
under section 20 or a comparable program estab-
lished by the State or local government.’’.
(b) Section 16 of the Food Stamp Act of 1977 (7 U.S.C.
2025) is amended—
(1) by striking subsection (h); and
(2) by redesignating subsections (i) and (j) as
subsections (h) and (i), respectively.
(c) Section 17 of the Food Stamp Act of 1977 (7 U.S.C.
2026), as amended by section 204(b), is amended—
(1) by striking subsection (d); and
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(2) by redesignating subsections (e) through (k)
as subsections (d) through (j), respectively.
(d) Section 20 of the Food Stamp Act of 1977 (7
U.S.C. 2029) is amended to read as follows:
‘‘SEC. 20. (a)(1) The Secretary shall permit a State
that applies and submits a plan in compliance with guide-
lines promulgated by the Secretary to operate a program
within the State or any political subdivision within the
State, under which persons who are required to work under
section 6(d)(4) may accept an offer from the State or politi-
cal subdivision to perform work on its behalf, or on behalf
of a private nonprofit entity designated by the state or po-
litical subdivision, in order to continue to qualify for bene-
fits after they have initially been judged eligible.
‘‘(2) The Secretary shall promulgate guidelines pursu-
ant to paragraph (1) which, to the maximum extent prac-
ticable, enable a State or political subdivision to design and
operate a program that is compatible and consistent with
similar programs operated by the State or political subdivi-
sion.
‘‘(b) To be approved by the Secretary, a program shall
provide that participants work, in return for compensation
consisting of the allotment to which the household is entitled
under section 8(a), with each hour of such work entitling
that household to a portion of its allotment equal in value
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to 100 percent of the higher of the applicable State mini-
mum wage or the Federal minimum hourly rate under the
Fair Labor Standards Act of 1938.
‘‘(c) No State or political subdivision that receives
funds provided under this section shall replace any em-
ployed worker with an individual who is participating in
a program under this section for the purposes of complying
with section 6(d)(4). Such an individual may be placed in
any position offered by the state or political subdivision
that—
‘‘(1) is a new position;
‘‘(2) is a position that became available in the
normal course of conducting the business of the State
or political subdivision;
‘‘(3) involves performing work that would other-
wise be performed on an overtime basis by a worker
who is not an individual participating in such pro-
gram; or
‘‘(4) that is a position which became available by
shifting a current employee to an alternate position.
‘‘(d) The Secretary shall allocate among the States or
political subdivisions in each fiscal year, from funds appro-
priated for the fiscal year under section 18(a)(1), the
amount of $75,000,000 to assist in carrying out the pro-
gram under this section during the fiscal year.
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‘‘(e)(1) In making the allocation required under sub-
section (d), the Secretary shall allocate to each State operat-
ing a program under this section that percentage of the total
funds allocated under subsection (d) which equals the esti-
mate of the Secretary of the percentage of participants who
are required to work under section 6(d)(4) that reside in
such State.
‘‘(2) The State shall promptly notify the Secretary if
such state determines that it will not expend the funds allo-
cated it under paragraph (1) and the Secretary shall reallo-
cate such funds as the Secretary deems appropriate and eq-
uitable.
‘‘(f) Notwithstanding subsection (d), the Secretary
shall ensure that each State operating a program under this
section is allocated at least $50,000 by reducing, to the ex-
tent necessary, the funds allocated to those States allocated
more than $50,000.
‘‘(g) If, in carrying out such program during such fis-
cal year, a State or political subdivision incurs costs that
exceed the amount allocated to the State agency under sub-
section (d)—
‘‘(1) the Secretary shall pay such state agency
an amount equal to 50 percent of such additional
costs, subject to the first limitation in paragraph (2);
and
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‘‘(2) the Secretary shall also reimburse each
State agency in an amount equal to 50 percent of the
total amount of payments made or costs incurred by
the State or political subdivision in connection with
transportation costs and other expenses reasonably
necessary and directly related to participation in a
program under this section, except that such total
amount shall not exceed an amount representing $25
per participant per month for costs of transportation
and other actual costs and cash reimbursement shall
not be made out of funds allocated under subsection
(d).
‘‘(h) The Secretary may suspend or cancel some or all
of these payments, or may withdraw approval from a State
or political subdivision to operate a program, upon a find-
ing that the State or political subdivision has failed to com-
ply with the requirements of this section.’’.
(e) Section 7(i)(6) of the Food Stamp Act of 1977 (7
U.S.C. 2015(i)(6)) is amended by striking ‘‘section 17(f)’’
and inserting ‘‘17(e)’’.
SEC. 210. COMPARABLE TREATMENT OF DISQUALIFIED IN-
DIVIDUALS.
Section 6 of the Food Stamp Act of 1977 (7 U.S.C.
2015) is amended by adding at the end the following new
subsection:
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‘‘(i) An individual who is a member of a household
who would otherwise be eligible to participate in the food
stamp program under this section and who has been dis-
qualified for noncompliance with program requirements
from the program established by the State under part A
of title IV of the Social Security Act (42 U.S.C. 601 et seq.)
shall not be eligible to participate in the food stamp pro-
gram during the period such disqualification is in effect.’’.
SEC. 211. ENCOURAGE ELECTRONIC BENEFIT TRANSFER
SYSTEMS.
(a) Section 7(i) of the Food Stamp Act of 1977 (7
U.S.C. 201(i)) is amended—
(1) by amending paragraph (1) to read as fol-
lows:
‘‘(1)(A) State agencies are encouraged to imple-
ment an on-line electronic benefit transfer system in
which household benefits determined under section
8(a) or section 24 are issued from and stored in a
central data bank and electronically accessed by
household members at the point-of-sale.
‘‘(B) Subject to paragraph (2), a State is author-
ized to procure and implement an on-line electronic
benefit transfer system under the terms, conditions,
and design that the State deems appropriate.
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‘‘(C) Upon request of a State, the Secretary may
waive any provision of this Act prohibiting the effec-
tive implementation of an electronic benefit transfer
system under this subsection.’’;
(2) in paragraph (2), by striking ‘‘the approval
of’’; and
(3) in paragraph (3), by striking ‘‘the Secretary
shall not approve such a system unless—’’ and insert-
ing ‘‘such system shall provide that—’’.
(b) The Food Stamp Act of 1977 (7 U.S.C. 2011 et
seq.), as amended by section 203(a), is amended by adding
at the end the following new section:
‘‘SEC. 25. ENCOURAGEMENT OF ELECTRONIC BENEFIT
TRANSFER SYSTEMS.
‘‘(a) Upon fully implementing an electronic benefit
transfer system which operates in the entire State, a State
may, subject to the provisions of this section, elect to receive
a grant for any fiscal year to operate a low-income nutri-
tion assistance program in such fiscal year in lieu of the
food stamp program.
‘‘(b)(1) A State that meets the requirements of this sec-
tion and elects to operate such program, shall receive each
fiscal year under this section sum of—
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‘‘(A)(i) the total dollar value of all benefits is-
sued under the food stamp program by the State dur-
ing fiscal year 1994; or
‘‘(ii) the average per fiscal year of the total dol-
lar value of all benefits issued under the food stamp
program by the State during fiscal years 1992
through 1994; and
‘‘(B) the total amount received by the State for
administrative costs under section 16(a) for fiscal
year 1994 or the average per fiscal year of the total
amount received by the State for administrative costs
under section 16(a) for fiscal years 1992 through
1994.
‘‘(2) Upon approval by the Secretary of the plan sub-
mitted by a State under subsection (c), the Secretary shall
pay to the State at such times and in such manner as the
Secretary may determine, the amount to which the State
is eligible under subsection (b)(1).
‘‘(c) To be eligible to operate a low-income nutrition
assistance program under this section, a State shall submit
for approval each fiscal year a plan of operation specifying
the manner in which such a program will be conducted by
the State. Such plan shall—
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‘‘(1) certify that the State has implemented a
state-wide electronic benefit transfer system in accord-
ance with section 7(i);
‘‘(2) designate a single State agency responsible
for the administration of the low-income nutrition as-
sistance program under this section;
‘‘(3) assess the food and nutrition needs of needy
persons residing in the State;
‘‘(4) limit the assistance to be provided under
this section to the purchase of food;
‘‘(5) describe the persons to whom such assistance
will be provided;
‘‘(6) assure the Secretary that assistance will be
provided to the most needy persons in the State and
that applicants for assistance shall have adequate no-
tice and fair hearings comparable to those required
under section 11;
‘‘(7) provide that, in the operation of the low-in-
come nutrition assistance program, there shall be no
discrimination on the basis of race, sex, religion, na-
tional origin, or political beliefs; and
‘‘(8) include other information as may be re-
quired by the Secretary.
‘‘(d) Payments made under this section to the State
may be expended only in the fiscal year for which such pay-
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ments are distributed, except that the State may reserve up
to 5 percent of the grant received for a fiscal year to provide
assistance under this section in the subsequent fiscal year:
Provided, That such reserved funds may not total more than
20 percent of the total grant received under this section for
a fiscal year.
‘‘(e) The State agency shall keep records concerning the
operation of the program carried out under this section and
shall make such records available to the Secretary and the
Comptroller General of the United States.
‘‘(f) If the Secretary finds that there is substantial fail-
ure by a State to comply with the requirements of this sec-
tion, regulations issued pursuant to this section, or the plan
approved under subsection (c), then the Secretary shall take
one or more of the following actions:
‘‘(1) Suspend all or part of such payment au-
thorized by subsection (b)(2) to be made available to
such State, until the Secretary determines the State
to be in substantial compliance with such require-
ments.
‘‘(2) Withhold all or part of such payments until
the Secretary determines that there is no longer fail-
ure to comply with such requirements, at which time
the withheld payment may be paid.