SRC-JFA H.B. 1439 75(R) BILL ANALYSIS Senate Research Center H.B. 1439 By: Hilderbran (Duncan) Health & Human Services 5-13-97 Engrossed DIGEST The Committee on Human Services Interim Report sets forth legislative recommendations relating to carrying out the intent of the welfare reform package. This bill would implement such recommendations. This bill would state that Aid to Families with Dependent Children payments may be used only to purchase goods and services that are considered essential and necessary to the welfare of the family and directs the Department of Human Services (DHS) to define, by rule, what constitutes essential and necessary goods and services. Additionally, this bill would direct DHS to encourage certain retailers to accept payment through the state's electronic benefit transfer (EBT) system and to conduct a pilot project in which these retailers use the EBT system. PURPOSE As proposed, H.B. 1439 provides that Aid to Families with Dependent Children payments may be used only to purchase goods and services that are considered essential and necessary to the welfare of the family and directs the Department of Human Services (DHS) to define, by rule, what constitutes essential and necessary goods and services. Additionally, this bill directs DHS to encourage certain retailers to accept payment through the state's electronic benefit transfer (EBT) system and to conduct a pilot project in which these retailers use the EBT system. RULEMAKING AUTHORITY Rulemaking authority is granted to the Department of Human Services in SECTION 1 (Section 31.0355(a), Human Resources Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 31B, Human Resources Code, by adding Section 31.0355, as follows: Sec. 31.0355. USE OF FINANCIAL ASSISTANCE. (a) Authorizes financial assistance granted to a person under this chapter to be used only to purchase goods and services that are considered essential and necessary for the welfare of the family. Requires the Department of Human Services (DHS), by rule, to define what constitutes essential and necessary goods and services for purposes of this subsection. (b) Authorizes a recipient, if the recipient of financial assistance who receives the assistance by electronic benefits transfer (EBT) to an account is authorized to make a cash withdrawal from the account through a provider of the goods or services described by Subsection (a), to make the cash withdrawal only at the customer service department of the provider and not at the provider's point-of-sale terminal. (c) Requires DHS to encourage housing authorities, utility companies, public transportation companies, and other nonfood retailers to accept payment for goods and services described by Subsection (a) through the state's EBT system. (d) Sets forth guidelines relating to the required development of a pilot project by DHS to determine the feasibility of using the EBT system to accept payments for certain goods and services. (e) Requires DHS, under certain conditions, to promote the use of the EBT system to appropriate businesses statewide with the goal of securing the participation of all those businesses in using the EBT system to accept payment for certain goods and services. (f) Requires DHS to evaluate the pilot project and report to the 76th Legislature on the effectiveness of the pilot project by January 15, 1999. SECTION 2. Effective date: September 1, 1997. SECTION 3. Emergency clause.