Electronic benefit transfers

The Secretary shall issue final regulations that establish standards for the approval of such a system and shall periodically review such regulations and modify such regulations to take into account evolving technology and comparable industry standards. The standards shall include—

(A) defining the required level of recipient protection regarding privacy, ease of use, and access to and service in retail food stores;

(B) the terms and conditions of participation by retail food stores, financial institutions, and other appropriate parties;

(C) (i) measures to maximize the security of a system using the most recent technology available that the State agency considers appropriate and cost effective and which may include personal identification numbers, photographic identification on electronic benefit transfer cards, and other measures to protect against fraud and abuse; and (ii) unless determined by the Secretary to be located in an area with significantly limited access to food, measures that require an electronic benefit transfer system— (I) to set and enforce sales restrictions based on benefit transfer payment eligibility by using scanning or product lookup entry; and (II) to deny benefit tenders for manually entered sales of ineligible items.

(D) system transaction interchange, reliability, and processing speeds;

(E) financial accountability;

(F) the required testing of system operations prior to implementation;

(G) the analysis of the results of system implementation in a limited project area prior to expansion; and

(H) procurement standards.

In the case of a system described in paragraph (1) in which participation is not optional for households, the Secretary shall not approve such a system unless—

(A) a sufficient number of eligible retail food stores, including those stores able to serve minority language populations, have agreed to participate in the system throughout the area in which it will operate to ensure that eligible households will not suffer a significant reduction in their choice of retail food stores or a significant increase in the cost of food or transportation to participating food stores; and

(B) any special equipment necessary to allow households to purchase food with the benefits issued under this chapter is operational at a sufficient number of registers to provide service that is comparable to service provided individuals who are not members of households receiving supplemental nutrition assistance program benefits, as determined by the Secretary.

Administrative costs incurred in connection with activities under this subsection shall be eligible for reimbursement in accordance with section 2025 of this title , subject to the limitations in section 2025(g) of this title .

The Secretary shall periodically inform State agencies of the advantages of using electronic benefit systems to issue benefits in accordance with this subsection in lieu of issuing coupons to households.

This subsection shall not diminish the authority of the Secretary to conduct projects to test automated or electronic benefit delivery systems under section 2026(f) of this title .

Regulations issued by the Secretary regarding the replacement of benefits and liability for replacement of benefits under an electronic benefit transfer system shall be similar to the regulations in effect for a paper-based supplemental nutrition assistance issuance system.

(A) Fees .— A State agency may collect a charge for replacement of an electronic benefit transfer card by reducing the monthly allotment of the household receiving the replacement card.

(B) Purposeful loss of cards.— (i) In general .— Subject to terms and conditions established by the Secretary in accordance with clause (ii), if a household makes excessive requests for replacement of the electronic benefit transfer card of the household, the Secretary may require a State agency to decline to issue a replacement card to the household unless the household, upon request of the State agency, provides an explanation for the loss of the card. (ii) Requirements .— The terms and conditions established by the Secretary shall provide that— (I) the household be given the opportunity to provide the requested explanation and meet the requirements under this paragraph promptly; (II) after an excessive number of lost cards, the head of the household shall be required to review program rights and responsibilities with State agency personnel authorized to make determinations under section 2014(a) of this title ; and (III) any action taken, including actions required under section 2015(b)(2) of this title , other than the withholding of the electronic benefit transfer card until an explanation described in subclause (I) is provided, shall be consistent with the due process protections under section 2015(b) or 2020(e)(10) of this title, as appropriate.

(C) Protecting vulnerable persons .— In implementing this paragraph, a State agency shall act to protect homeless persons, persons with disabilities, victims of crimes, and other vulnerable persons who lose electronic benefit transfer cards but are not intentionally committing fraud.

(D) Effect on eligibility .— While a State may decline to issue an electronic benefits transfer card until a household satisfies the requirements under this paragraph, nothing in this paragraph shall be considered a denial of, or limitation on, the eligibility for benefits under section 2014 of this title .

(A) In general .— A State agency may require that an electronic benefit card contain a photograph of 1 or more members of a household.

(B) Other authorized users .— If a State agency requires a photograph on an electronic benefit card under subparagraph (A), the State agency shall establish procedures to ensure that any other appropriate member of the household or any authorized representative of the household may utilize the card.

Section 1693 o –2 of title 15 shall not apply to electronic benefit transfer or reimbursement systems under this chapter.

(A) Definitions .— In this paragraph: (i) Affiliate .— The term “affiliate” has the meaning provided the term in section 1841(k) of title 12 . (ii) Company .— The term “company” has the meaning provided the term in section 1971 of title 12 , but shall not include a bank, a bank holding company, or any subsidiary of a bank holding company. (iii) Electronic benefit transfer service .— The term “electronic benefit transfer service” means the processing of electronic transfers of household benefits, determined under section 2017(a) or 2035 of this title, if the benefits are— (I) issued from and stored in a central databank; (II) electronically accessed by household members at the point of sale; and (III) provided by a Federal or State government. (iv) Point-of-sale service .— The term “point-of-sale service” means any product or service related to the electronic authorization and processing of payments for merchandise at a retail food store, including credit or debit card services, automated teller machines, point-of-sale terminals, or access to on-line systems.

(B) Restrictions .— A company may not sell or provide electronic benefit transfer services, or fix or vary the consideration for electronic benefit transfer services, on the condition or requirement that the customer— (i) obtain some additional point-of-sale service from the company or an affiliate of the company; or (ii) not obtain some additional point-of-sale service from a competitor of the company or competitor of any affiliate of the company.

(C) Consultation with the federal reserve board .— Before promulgating regulations or interpretations of regulations to carry out this paragraph, the Secretary shall consult with the Board of Governors of the Federal Reserve System.

(A) In general .— A State agency shall establish a procedure for recovering electronic benefits from the account of a household due to inactivity, or due to the death of all members of the household.

(B) Benefit storage.— (i) In general .— A State agency may store recovered electronic benefits off-line in accordance with clause (ii), if the household has not accessed the account after 3 months. (ii) Notice of benefit storage .— A State agency shall— (I) send notice to a household the benefits of which are stored under clause (i); and (II) not later than 48 hours after request by the household, make the stored benefits available to the household.

(C) Benefit expunging.— (i) In general .— Subject to clause (ii), a State agency shall expunge benefits that have not been accessed by a household after a period of 9 months, or upon verification that all members of the household are deceased. (ii) Notice of benefit expunging .— Not later than 30 days before benefits are to be expunged under clause (i), a State agency shall— (I) provide sufficient notice to the household that benefits will be expunged due to inactivity, and the date upon which benefits will be expunged; (II) for benefits stored off-line in accordance with subparagraph (B), provide the household an opportunity to request that such benefits be restored to the household; and (III) not later than 48 hours after request by the household, make the benefits available to the household.

(D) Notice .— A State agency shall— (i) send notice to a household the benefits of which are stored under subparagraph (B); and (ii) not later than 48 hours after request by the household, make the stored benefits available to the household.

(A) Interchange fees .— No interchange fees shall apply to electronic benefit transfer transactions under this subsection.

(B) Other fees .— Effective through fiscal year 2023, neither a State, nor any agent, contractor, or subcontractor of a State who facilitates the provision of supplemental nutrition assistance program benefits in such State may impose a fee for switching (as defined in subsection (j)(1)(H)) or routing such benefits.

(A) In general .— Subject to subparagraph (B), the Secretary shall authorize the use of mobile technologies for the purpose of accessing supplemental nutrition assistance program benefits.

(B) Demonstration projects on access of benefits through mobile technologies.— (i) Demonstration projects .— Before authorizing implementation of subparagraph (A) in all States, the Secretary shall approve not more than 5 demonstration project proposals submitted by State agencies that will pilot the use of mobile technologies for supplemental nutrition assistance program benefits access. (ii) Project requirements .— To be eligible to participate in a demonstration project under clause (i), a State agency shall submit to the Secretary for approval a plan that— (I) provides recipient protections regarding privacy, ease of use, household access to benefits, and support similar to the protections provided under existing methods; (II) ensures that all recipients, including those without access to mobile payment technology and those who shop across State borders, have a means of benefit access; (III) requires retail food stores, unless exempt under section 2016(f)(2)(B) of this title , to bear the costs of acquiring and arranging for the implementation of point-of-sale equipment and supplies for the redemption of benefits that are accessed through mobile technologies; (IV) requires that foods purchased with benefits issued under this section through mobile technologies are purchased at a price not higher than the price of the same food purchased by other methods used by the retail food store, as determined by the Secretary; (V) ensures adequate documentation for each authorized transaction, adequate security measures to deter fraud, and adequate access to retail food stores that accept benefits accessed through mobile technologies, as determined by the Secretary; (VI) provides for an evaluation of the demonstration project, including, but not limited to, an evaluation of household access to benefits; (VII) requires that the State demonstration projects are voluntary for all retail food stores and that all recipients are able to use benefits in non-participating retail food stores; and (VIII) meets other criteria as established by the Secretary. (iii) Priority .— The Secretary may prioritize demonstration project proposals that would— (I) reduce fraud; (II) encourage positive nutritional outcomes; and (III) meet such other criteria as determined by the Secretary. (iv) Date of project approval .— The Secretary shall solicit and approve the qualifying demonstration projects required under subparagraph (B)(i) not later than January 1, 2021 .

(C) Report to congress .— The Secretary shall— (i) by not later than January 1, 2022 , authorize implementation of subparagraph (A) in all States, unless the Secretary makes a finding, based on the data provided under subparagraph (B), that implementation in all States requires further study by way of an extended pilot period or is not in the best interest of the supplemental nutrition assistance program; and (ii) if the determination made in clause (i) is not to implement subparagraph (A) in all States, submit a report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate that includes the basis of the finding.