SRC-CDH H.B. 2123 75(R)BILL ANALYSIS


Senate Research CenterH.B. 2123
By: Maxey (Moncrief)
Health & Human Services
5-1-97
Committee Report (Amended)


DIGEST 

Currently, Texas uses a statewide electronic benefit transfer (EBT)
program that allows recipients to access food stamp and welfare benefits
with a Lone Star card, a debit card similar to an automated teller machine
card.  The program is administered by the Texas Department of Human
Services (DHS), but the U.S. Department of Agriculture (USDA) is
responsible for certification of retailers and for ensuring compliance
with the program.  Although the USDA and DHS have taken efforts to combat
fraud in the EBT program at the retail level, recent investigations have
found that up to 15 percent of the retailers participating may be
ineligible.  Additionally, research has shown that improved returned mail
practices and expanded use of EBT data could result in further
efficiencies in the EBT and Aid to Families with Dependent Children (AFDC)
programs.  This legislation aims to increase the efficiency of the EBT
program by directing the state's EBT contractor to report suspicious
retailer circumstances to the USDA; requiring DHS to collaborate with the
Comptroller's Office to enhance enforcement; shortening the length of time
that an AFDC account can remain dormant without being purged; and
improving returned mail policies at DHS.        

PURPOSE

As proposed, H.B. 2123 provides for the prevention and detection of fraud
in certain programs administered by the Texas Department of Human
Services.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 22, Human Resources Code, by adding Section
22.0255, as follows: 

Sec. 22.0255.  RETURNED-MAIL REDUCTION.  Requires the Texas Department of
Human Services (DHS) to develop and implement policies and procedures
designed to improve DHS's electronic benefits transfer (EBT) cards used
for federal and state entitlement programs administered by DHS.  Sets
forth the terms by which DHS is required to set an annual goal of reducing
the amount of returned mail it receives.  Requires DHS to submit a
biennial report to the governor's office, the legislature, and the
Legislative Budget Board detailing the progress made by DHS in reaching
its goals. 

SECTION 2. Amends Section 22.027, Human Resources Code, by adding
Subsections (e) and (f), to require DHS and the comptroller to coordinate
their efforts to cross-train agency staff whose duties include fraud
prevention and detection to enable the staff to identify and report
possible fraudulent activity.  Requires a local law enforcement agency
that seizes an EBT card to immediately notify DHS of the seizure and
return the card to DHS.  Requires DHS to take certain measures to ensure
that local law enforcement officials are aware of this requirement.   

SECTION 3. Amends Chapter 33, Human Resources Code, by adding Sections
33.0022 and 32.0023, as follows: 

Sec. 33.0022.  FRAUD PREVENTION IN FOOD STAMP PROGRAM.  Sets forth the
terms by which the EBT system operator and installer is required to report
to DHS and the United  States Department of Agriculture suspicious
activity relating to a retailer's participation in the food stamp program.
Establishes the conditions under which DHS is required to determine
whether a retailer is eligible to receive free point-of-sale terminals.
Requires DHS to provide any information reported under Subsection (a) to
the Public Assistance Fraud Oversight Task Force at least once each fiscal
quarter.  Defines "retailer." 

Sec. 33.0023.  FOOD STAMP INFORMATION MATCHING SYSTEM.  Requires DHS,
through the use of a computerized matching system, to detect and prevent
fraud in the food stamp program.  Requires DHS, the comptroller, and the
appropriate agencies to take all measures necessary to protect the
confidentiality of information provided under this section. Defines
"retailer." 

SECTION 4. Amends Chapter 31B, Human Resources Code, by adding Section
31.043, as follows: 

Sec. 31.043.  INACTIVE ELECTRONIC BENEFITS TRANSFER ACCOUNTS.  Provides
that this section applies only to an account to which financial assistance
has been transferred under the EBT system for access and use by a
recipient of that assistance.  Requires DHS to close an account that has
not been used by the account holder during the preceding 12 months.  

SECTION 5. Emergency clause.
  Effective date:  upon passage.  

SUMMARY OF COMMITTEE CHANGES

Amendment 1.

Amends Section 31.043, Human Resources Code, to delete the provision
requiring the comptroller to withdraw any unused benefits remaining in the
account and disburse the benefits as authorized by federal and state law.