SEC. 2. INTEROPERABILTY AND PORTABILITY OF FOOD
STAMP TRANSACTIONS.
Section 7 of the Food Stamp Act of 1977 (7 U.S.C.
2016) is amended by adding at the end the following:
‘‘(k) INTEROPERABILTY AND PORTABILITY OF ELEC-
TRONIC BENEFIT TRANSFER TRANSACTIONS.—
‘‘(1) REQUIREMENT.—To protect the integrity
of the food stamp program, to ensure cost-effective
portability of food stamp benefits across State bor-
ders without imposing additional administrative ex-
penses for special equipment to address problems re-
lating to such portability, to enhance the flow of
interstate commerce involving electronic transactions
involving food stamp benefits under a uniform na-
tional standard of interoperability and portability,
and to eliminate the inefficiencies resulting from a
patchwork of State-administered systems and rules
used to carry out the food stamp program, systems
that provide for the electronic issuance, use, and re-
demption of coupons in the form of electronic benefit
transfer cards shall be interoperable, and food stamp
benefits shall be made portable, among all the States
not later than October 1, 2002, in compliance with
paragraph (3) and subject to paragraph (4).
‘‘(2) COST.—The cost of achieving the inter-
operability and portability described in paragraph
(1) shall not be imposed on any food stamp retail
store, or any wholesale food concern, approved to
participate in the food stamp program.
‘‘(3) RULES.—The Secretary shall issue and
put into effect, not later than December 31, 1999,
rules—
‘‘(A) adopting a uniform national standard
of interoperability and portability described in
paragraph (1) that uses the standard of inter-
operability and portability adopted by a major-
ity of the States; and
‘‘(B) requiring that any electronic benefit
transfer contract that is entered into after De-
cember 31, 1999, by or on behalf of a State
agency shall provide for the interoperability and
portability that is described in paragraph (1)
and that complies with such standard.
‘‘(4) EXEMPTIONS—
‘‘(A) EXISTING CONTRACTS.—With respect
to an electronic benefit transfer contract in ef-
fect on July 22, 1999, paragraph (3)(B) shall
not apply until the expiration date specified in
such contract as so in effect.
‘‘(B) WAIVER.—At the request of a State
agency, the Secretary may provide 1 waiver to
temporarily exempt, for a period ending on or
before the date specified under clause (iii), such
State agency from complying with the require-
ments of paragraph (1) if such State agency—
‘‘(i) establishes to the satisfaction of
the Secretary that it faces unusual techno-
logical barriers to achieving by October 1,
2002, the interoperability and portability
described in paragraph (1);
‘‘(ii) demonstrates that the best inter-
est of food stamp benefit recipients and of
the food stamp program would be served
by granting such waiver with respect to the
electronic benefit transfer system used by
such State agency to administer the food
stamp program; and
‘‘(iii) specifies a date certain by which
such State agency will achieve the inter-
operability and portability described in
paragraph (1).
‘‘(5) FUNDING.—Beginning on the effective
date of this subsection, the Secretary shall pay 100
percent of the fees for switching and settling inter-
state transactions—
‘‘(A) incurred after such date and before
October 1, 2002, in States that use the stand-
ard of interoperability and portability adopted
by a majority of the States; and
‘‘(B) incurred after September 30, 2002,
in States that use the uniform national stand-
ard of interoperability and portability adopted
under paragraph (3)(A) by the Secretary.
‘‘(6) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) ELECTRONIC
BENEFIT
TRANSFER
CONTRACT.—The term ‘electronic benefit trans-
fer contract’ means a contract that provides for
the issuance, use, or redemption of coupons
issued in the form of electronic benefit transfer
cards.
‘‘(B) 
INTEROPERABILTY.—The 
term
‘interoperability’ means a system that enables a
coupon issued in the form of an electronic ben-
efit transfer card to be redeemed in any State.
‘‘(C) 
INTERSTATE
TRANSACTION.—The
term ‘interstate transaction’ means a trans-
action that is initiated in 1 State by the use of
an electronic benefit transfer card that is issued
in another State.
‘‘(D) 
PORTABILITY.—The 
term 
‘port-
ability’ means a system that enables a coupon
issued in the form of an electronic benefit
transfer card to be used in any State by a
household to purchase food at a retail food
store approved under such Act.
‘‘(E) 
SETTLING.—The 
term 
‘settling’
means movement, and reporting such move-
ment, of funds from an electronic benefit trans-
fer card issuer that is located in 1 State to a
retail food store (or wholesale food concern)
that is located in another State, to accomplish
an interstate transaction.
‘‘(F) SWITCHING.—The term ‘switching’
means the routing of an interstate transaction
that consists of transmitting the details of a
transaction electronically recorded through the
use of an electronic benefit transfer card in 1
State to the issuer of such card who is in an-
other State.’’.
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