SRC-CDH S.B. 1400 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1400
By: Moncrief
Health & Human Services
4-7-97
As Filed


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, S.B. 1400 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 (department) to develop and implement policies and
procedures designed to improve the department's electronic benefits
transfer (EBT) cards used for federal and state entitlement programs
administered by the department.  Sets forth the terms by which the
department is required to set an annual goal of reducing the amount of
returned mail it receives.  Requires the department to submit a biennial
report to the governor's office, the legislature, and the Legislative
Budget Board detailing the progress made by the department in reaching its
goals. 

SECTION 2. Amends Section 22.027, Human Resources Code, by adding
Subsections (e) and (f), to require the department 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 the department of the
seizure and return the card to the department.  Requires the department 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 the department 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 the department is
required to determine whether a retailer is eligible to receive free
point-of-sale terminals.  Requires the department 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 the
department, through the use of a computerized matching system, to detect
and prevent fraud in the food stamp program.  Requires the department, 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 the department to close an account
that has not been used by the account holder during the preceding 12
months.  Requires the comptroller to withdraw any unused benefits
remaining in the account and disburse the benefits as authorized by
federal and state law. 

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