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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. LA-
FALCE, 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Food Stamp Quality
Control System Amendments of 1993’’.
SEC. 2. FOOD STAMP QUALITY CONTROL SYSTEM.
(a) COLLECTION AND DISPOSITION OF CLAIMS.—
Section 13(a)(1) of the Food Stamp Act of 1977 (7 U.S.C.
2022(a)(1)) is amended in the fifth sentence by striking
‘‘(after a determination on any request for a waiver for
good cause related to the claim has been made by the
Secretary)’’.
(b) ADMINISTRATIVE AND JUDICIAL REVIEW.—Sec-
tion 14(a) of the Food Stamp Act of 1977 (7 U.S.C.
2023(a)) is amended by—
(1) adding in the sixth sentence, immediately
following ‘‘pursuant to section 16(c)’’ the following:
‘‘(including determinations as to whether there is
good cause for not imposing some or all of the
penalty)’’;
(2) adding following the sixth sentence: ‘‘In de-
ciding whether to uphold a penalty or any portion
thereof (including whether there is good cause for
not imposing some or all of the penalty), such judges
shall conduct a thorough review of the issues and
take into account all relevant evidence.’’;
(3) adding before the period in the sentence be-
ginning with the words ‘‘Such judges’’, the following:
‘‘, and the deliberative process privilege shall not be
the basis for the withholding of documents by the
State agency or by the Secretary’’; and
(4) striking the last sentence.
(c) ADMINISTRATIVE COST SHARING AND QUALITY
CONTROL.—Section 16(c) of the Food Stamp Act of 1977
(7 U.S.C. 2025(c)) is amended to read as follows:
‘‘(c)(1) The program authorized under this Act shall
include a system that enhances payment accuracy by es-
tablishing fiscal incentives that require State agencies with
high error rates to share in the cost of payment error and
provide enhanced administrative funding to State agencies
with the lowest error rates. Under such system—
‘‘(A) the Secretary shall adjust a State agency’s
federally funded share of administrative costs pursu-
ant to subsection (a), other than the costs already
shared in excess of 50 percent under the proviso in
the first sentence of subsection (a) or under sub-
section (g), by increasing such share of all such ad-
ministrative costs by one percentage point to a maxi-
mum of 60 percent of all such administrative costs
for each full one-tenth of a percentage point by
which the payment error rate is less than 6 percent,
except that only State agencies whose rate of invalid
decisions in denying eligibility is less than a nation-
wide percentage that the Secretary determines to be
reasonable shall be entitled to the adjustment
prescribed in this subsection;
‘‘(B) the Secretary shall foster management im-
provements by State agencies pursuant to subsection
(b) by requiring State agencies other than those re-
ceiving adjustment under subparagraph (A) to
develop and implement corrective action plans to
reduce payment errors;
‘‘(C) if a State agency’s overpayment error rate
for a fiscal year exceeds the national average over-
payment error rate for the fiscal year, other than for
good cause shown, the State agency shall pay to the
Secretary a penalty for the fiscal year in an amount
equal to—
‘‘(i) the product of—
‘‘(I) the value of all allotments issued
by the State agency in the fiscal year;
times
‘‘(II) the lesser of—
‘‘(aa) the ratio of—
‘‘(1) the amount by which
the State agency’s overpayment
error rate for the fiscal year ex-
ceeds the national average over-
payment error rate for the fiscal
year, to
‘‘(2) the national average
overpayment error rate for the
fiscal year; or
‘‘(bb) 1; times
‘‘(III) the amount by which the State
agency’s overpayment error rate for the
fiscal year exceeds the national average
overpayment error rate for the fiscal year;
reduced by
‘‘(ii) the product of—
‘‘(I) the ratio of—
‘‘(1) the amount by which the
State agency’s overpayment error rate
for the fiscal year exceeds the national
average overpayment error rate for
the fiscal year; to
‘‘(2) the State agency’s overpay-
ment error rate for the fiscal year;
times
‘‘(II) the overpayments recovered by
the State agency in the fiscal year; and
‘‘(D) a State agency may, at its option, pay a
penalty established pursuant to subparagraph (C) in
quarterly payments over a period not to exceed 30
months, in amounts sufficient to pay the penalty
with interest by the end of such period. The amount
of liability shall not be affected by corrective action
under subparagraph (B).
‘‘(2) As used in this section—
‘‘(A) the term ‘payment error rate’ means the
sum of the overpayment error rate and the
underpayment error rate;
‘‘(B) the term ‘overpayment error rate’ means
‘‘(i) the percentage of the value of all allot-
ments issued in a fiscal year by a State agency
that are either—
‘‘(I) issued to households that fail to
meet basic program eligibility require-
ments; or
‘‘(II) overissued to eligible households,
‘‘(ii) reduced by the amount by which the
national average underpayment error rate for
the fiscal year exceeds the underpayment error
rate of the State agency for the fiscal year. At
the request of a State agency, the Secretary
shall apply such reduction in determining the
State agency’s overpayment error rate for ei-
ther of the two following fiscal years instead of
in determining the State agency’s overpayment
error rate for the fiscal year to which the reduc-
tion would otherwise apply;
‘‘(C) the term ‘underpayment error rate’ means
the ratio of the value of allotments underissued to
recipient households to the total value of allotments
issued in a fiscal year by a State agency;
‘‘(D) the term ‘national average overpayment
error rate’ for a fiscal year means the ratio of—
‘‘(i) the total value of allotments issued by
all State agencies in the fiscal year that are
either
‘‘(I) issued to households that fail to
meet basic program eligibility require-
ments, or
‘‘(II) overissued to eligible households;
to
‘‘(ii) the total value of all allotments issued
by all State agencies in the fiscal year.
‘‘(E) the term ‘national average underpayment
rate’ for a fiscal year means the ratio of—
‘‘(i) the total value of all allotments
underissued by all State agencies to recipient
households in the fiscal year; to
‘‘(ii) the total value of all allotments issued
by all State agencies in the fiscal year; and
‘‘(F) the term ‘good cause’ shall include, but
not be limited to, the following factors:
‘‘(i) uncontrollable, significant caseload
fluctuations that substantially disrupt food
stamp program administration;
‘‘(ii) natural disasters that substantially
disrupt food stamp program administration;
‘‘(iii) Federal or State program changes
that substantially disrupt food stamp program
administration;
‘‘(iv) strikes that substantially disrupt food
stamp program administration;
‘‘(v) uncontrollable client-caused errors;
‘‘(vi) demographic factors, such as literacy,
homelessness, unemployment, poverty and rural
composition of population, that contribute sub-
stantially to an excessive error rate and depart
substantially from national averages for such
factors;
‘‘(vii) state program improvements reason-
ably designed to reduce error rates in the longer
term, but that uncontrollably cause short-term
increases in the error rate; and
‘‘(viii) other circumstances beyond the con-
trol of a State agency.
‘‘(3) The following errors may be measured for
management purposes but shall not be included in
the overpayment or underpayment error rate:
‘‘(A) any errors resulting from the applica-
tion of new regulations promulgated under this
Act during the first 120 days from the required
implementation date for such regulations;
‘‘(B) errors resulting from the use by a
State agency of correctly processed information
concerning households or individuals received
from Federal agencies or from actions based on
policy information approved or disseminated, in
writing, by the Secretary; and
‘‘(C) cases found by quality control reviews
to have involved, but later found in a fair hear-
ing not to have involved, overpayments, under-
payments, or payments to ineligible recipients.
‘‘(4)(A) Except as provided in subparagraph (B), in
determining whether a payment is an erroneous payment,
the State agency and the Secretary shall apply all relevant
provisions of the State plan approved under section 11.
‘‘(B)(i) If a provision of a State plan approved under
section 11 is inconsistent with a provision of Federal law
or regulations, and the Secretary has notified the State
agency of the inconsistency in writing, the provision of
Federal law or regulations shall control.
‘‘(ii) Clause (i) shall not apply with respect to a pay-
ment of the State agency if—
‘‘(I) it is necessary for the State to enact a law
in order to remove an inconsistency described in
clause (i), the Secretary has advised the State agen-
cy that the State will be allowed a reasonable period
in which to enact such a law, and the payment was
made during such period; or
‘‘(II) the State agency made the payment in
compliance with a court order.
‘‘(5) If the Secretary, directly or indirectly, receives
from a State agency part or all of the amount of a penalty
imposed under paragraph (1)(C) and part or all of the
penalty is finally determined not to have been payable, the
Secretary shall promptly refund to the State agency the
amount determined not to have been payable, with interest
which shall accrue from the date of receipt at the rate
described in section 13(a)(1).
‘‘(6) Each State error rate for purposes of this sub-
section shall be determined on the basis of a review of
a single statistical sample of each State agency’s food
stamp cases for the fiscal year (without sub-sampling, re-
reviews, or statistical regression analyses), and national
average error rates for purposes of this subsection shall
be derived from State error rates so determined. Said re-
views shall be conducted by State agency personnel under
the direction of the Secretary pursuant to regulations
adopted by the Secretary, or, if a State agency so elects
as to any particular review, shall be conducted by the Sec-
retary. No penalty shall be collected under paragraph
(1)(C) if the width of the 95 percent confidence interval
of any error rate on which it is based exceeds 50 percent
of the point estimate of said error rate, unless the State
to which a particular error rate pertains agreed in writing
to a sample size that precludes meeting this requirement.
All error rates, incentive payments, and penalty claims for
a fiscal year shall be determined by the Secretary and
communicated to State agencies within nine months
following the end of the fiscal year.
‘‘(7) If the Secretary asserts a financial claim against
a State agency under paragraph (1)(C), the State may
seek administrative and judicial review of the action
pursuant to section 14.’’.
SEC. 3. FISCAL YEAR 1992.
No penalty, disallowance, or other similar action shall
be applied to or collected from any State agency admin-
istering the food stamp program for fiscal year 1992
under section 16(c) of the Food Stamp Act of 1977 (7
U.S.C. 2025(c)) or any predecessor law or regulation re-
lating to penalties, disallowances, or other similar actions
for erroneous issuances in the food stamp program.
SEC. 4. STUDY OF QUALITY CONTROL STATISTICAL SYS-
TEM.
The Secretary of Agriculture and the State agencies
that administer the food stamp program shall jointly un-
dertake a study of measurement error, and of geographical
and temporal uniformity of measurements, in the food
stamp program quality control error-rate estimation sys-
tem, and shall report the results and recommendations of
such study to the Committee on Agriculture of the House
of Representatives and the Committee on Agriculture, Nu-
trition, and Forestry of the Senate no later than one year
after the date of enactment of this Act. As part of the
study, the Secretary and the State agencies shall jointly
conduct controlled experiments under which various re-
viewers review identical cases, with the objective of deter-
mining the degree of uniformity in quality control error-
rate measurements and the extent to which different levels
of investment of resources in the review process affect
measurement error. The study report shall include rec-
ommendations as to what measures would best reduce
measurement error and increase uniformity of quality
control error-rate measurements at reasonable cost.
SEC. 5. EFFECTIVE DATE.
The amendments made by section 2 shall be effective
as of October 1, 1992.
SEC. 6. BUDGET NEUTRALITY REQUIREMENT.
None of the provisions of this Act shall become effec-
tive unless the costs are fully offset in each fiscal year
through fiscal year 1995. No agriculture price support or
income support program administered through the Com-
modity Credit Corporation under the Agricultural Act of
1949 may be reduced to achieve such offset.
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