BG C.S.S.B. 910 75(R) BILL ANALYSIS PUBLIC HEALTH C.S.S.B. 910 By: Zaffirini (Maxey) 5-8-97 Committee Report (Substituted) BACKGROUND In November 1995, Texas implemented a statewide electronic benefit transfer (EBT) program using the Lone Star card, an electronic debit card similar to an automatic teller machine card that allows recipients to access food stamps and welfare benefits via point-of-sale terminals at retail outlets. The EBT system streamlines program administration; law enforcement citations cite EBT as a factor in reducing the illegal sale of food stamps; and the retailers and financial institutions are pleased with the system's reducing handling costs. This bill will direct the interagency task force on electronic benefits transfers, created in 1995, to examine expanding the use of EBT to other state benefit programs, propose methods to prevent or deter fraud, evaluate the feasibility of adding the Medicaid program to the EBT system, develop a plan to assist beneficiaries of public programs to obtain bank accounts, and determine the feasibility and cost effectiveness of using EBT or direct deposit for recurring payments. PURPOSE C.S.S.B. 910 directs the interagency task force on electronic benefits transfer to examine expanding the use of electronic benefits transfers (EBT) to other state benefit programs, propose methods to prevent or deter fraud, and evaluate the feasibility of adding the Medicaid program to the EBT system. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 531B, Government Code, by adding Section 531.045 as follows: Sec. 531.045. INTERAGENCY TASK FORCE ON ELECTRONIC BENEFITS TRANSFERS. Requires the task force to advise and assist the commission in adding new benefit programs to the statewide electronic benefits transfer system. Sets forth the composition of the task force as specified. Establishes that a task force member serves at the will of the appointing agency. Provides that the representative of the comptroller's office serves as presiding officer. Allows the task force to elect other necessary officers. Requires the task force to meet at the presiding officer's call. Establishes that the appointing agency is responsible for expenses as specified and that a task force member is not entitled to additional compensation. Requires the task force to be the state's counterpoint for the federal EBT task force; to identify and address programs and possible problems as specified; to pursue federal-state partnerships as specified; Requires the task force to track and distribute legislation and information that relates to EBT systems; to ensure efficiency and planning coordination; to develop plans for use of imaging technology as specified, and if shown to be effective in reducing fraud and misuse, to use the new cards throughout the program. Requires that the task force review problems with EBT fraud and propose preventative or deterrence methods. Requires the task force to evaluate the feasibility of adding the Medicaid program to the EBT program, and develop a plan to assist recipients of public programs to obtain bank accounts. Requires the task force to, at a minimum, consider savings to the state, the ease of addition to the existing infrastructure; and the number of clients served, in determining which benefits can be added. SECTION 2. Amends Sections 22.029(a) and (b), Human Resources Code, to require, rather than authorize, the commission to implement a data matching project. Adds language to require that the costs of developing and administering the data matching project be paid entirely from amounts recovered by participating agencies as a result of potential fraudulent occurrences or administrative errors identified by the project. Adds language to clarify that the project is to involve the matching of database information among all agencies using electronic funds transfer and other participating agencies. SECTION 3. Amends Chapter 22, Human Resources Code, by adding Section 22.0291, as follows: Sec. 22.0291. PROJECT FOR IDENTIFYING PERSONS ELIGIBLE FOR BENEFITS THROUGH DATA MATCHING. Requires the Texas Department of Health (department) to implement a data matching project to locate individuals who qualify to participate in the federal special supplemental food program for women, infants, and children (program). Requires the department to notify eligible persons and encourage them to apply for the program. Requires the department to identify other state agency databases that could be matched with the department's database for the program. Requires the department to contract through a memorandum of understanding with each participating agency. Requires participating agencies to cooperate fully with the department and promptly provide data in the requested format. Requires the department and agencies, as specified to take all necessary steps to protect the confidentiality of information as specified. Requires the department to identify the databases for the matching project by December 30, 1997, and to begin database matching by July 1, 1998. SECTION 4. Establishes that this Act conforms Chapter 531, Government Code to Section 8.10, Chapter 655, Acts of the 74th Legislature, Regular Session, 1995. Repeals Section 8.10, Chapter 655, Acts of the 74th Legislature, 1995. Provides that this Act prevails over another Act of the 75th Legislature , Regular Session, 1997, as specified. SECTION 5. (a) Requires the task force to review each agency that makes recurring payments to an individual or transmits data on state clients to determine the feasibility of using electronic benefits transfer or direct deposit to make the recurring payments or data transmission. Subsection (b) requires the task force to report as specified by December 30, 1997. Subsection (c) requires an agency to implement electronic benefits transfer or direct deposit by September 1, 1999, if the task force determines it is feasible. SECTION 6. (a) Requires the attorney general, TDH and the Texas Workforce Commission to analyze the cost-effectiveness of using electronic benefits transfer in conjunction with direct deposit to distribute certain funds. Subsection (b) authorizes each agency to work with the task force to determine the costeffectiveness of using electronic benefits transfers to distribute payments or benefits. Subsection (c) requires each agency to complete the cost-benefit analysis by December 30, 1997. Subsection (d) requires an agency to submit an implementation plan as specified if the agency determines that electronic benefits transfer is cost-effective. Requires the agency to execute the plan by August 31, 1998. SECTION 7. Requires each agency that provides benefits or recurring payments by way of electronic benefits transfer to evaluate the cost-effectiveness of providing access to the benefits or recurring payments through automated teller machines. SECTION 8. Effective date: September 1, 1997. SECTION 9. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE In SECTION 1, CSSB 910 substitutes "appropriate state agencies" for "Department of Public Safety" as was originally drafted in Sec. 531.045 (g)(7), Government Code. The substitute bill removes the original's explanation concerning conformity to Section 8.10, Chapter 655, Acts of the 74th Legislature, 1995 from SECTION 1, and instead adds it to SECTION 4 (a). The repealer which was SECTION 4 in SB 910 is SECTION 4 (b) in the substitute bill. SECTION 4 (c) of the substitute bill is newly added for clarification in regards to any conflicting legislation.