1-1                                   AN ACT

 1-2     relating to use of financial assistance granted to persons with

 1-3     dependent children.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Chapter 31, Human Resources Code,

 1-6     is amended by adding Section 31.0355 to read as follows:

 1-7           Sec. 31.0355.  USE OF FINANCIAL ASSISTANCE.  (a)  Financial

 1-8     assistance granted to a person under this chapter may be used only

 1-9     to purchase goods and services that are considered essential and

1-10     necessary for the welfare of the family, including food, clothing,

1-11     housing, utilities, child care, and incidentals such as

1-12     transportation and medicine or medical supplies or equipment not

1-13     covered by Medicaid.  The department by rule shall define what

1-14     constitutes essential and necessary goods and services for purposes

1-15     of this subsection.

1-16           (b)  If a recipient of financial assistance who receives the

1-17     assistance by electronic benefits transfer to an account is

1-18     authorized to make a cash withdrawal from the account through a

1-19     provider of the goods or services described by Subsection (a), the

1-20     recipient may make the cash withdrawal only at the customer service

1-21     department of the provider and not at the provider's point-of-sale

1-22     terminal.

1-23           (c)  The department shall encourage housing authorities,

1-24     utility companies, public transportation companies, and other

 2-1     nonfood retailers to accept payment for goods and services

 2-2     described by Subsection (a) through the state's electronic benefits

 2-3     transfer (EBT) system.

 2-4           (d)  To determine the feasibility of using the EBT system to

 2-5     accept payment for goods and services described by Subsection (a),

 2-6     the department shall conduct a pilot project in which utility

 2-7     companies, housing agencies, and other retailers use the EBT system

 2-8     to accept payment for medicine, medical supplies, and medical

 2-9     equipment not covered by Medicaid and other goods and services

2-10     described by Subsection (a).  The cost of the point-of-sale (POS)

2-11     devices in the pilot project shall not be a state expense, except

2-12     for POS devices located in retail businesses that sell medicine or

2-13     medical supplies or medical equipment.  The department shall work

2-14     in conjunction with the office of client transportation services of

2-15     the Health and Human Services Commission to determine if EBT

2-16     transportation applications are feasible.

2-17           (e)  If the department determines that the pilot projects

2-18     show that use of the EBT system is feasible and useful for the

2-19     businesses and clients participating in the pilot project, the

2-20     department shall promote the use of the EBT system to appropriate

2-21     businesses statewide with the goal of securing the participation of

2-22     all those businesses in using the EBT system to accept payment for

2-23     goods and services described by Subsection (a).

2-24           (f)  The department shall evaluate the pilot project and

2-25     report to the 76th Legislature on the effectiveness of the pilot

2-26     project not later than January 15, 1999.

2-27           SECTION 2.  This Act takes effect September 1, 1997.

 3-1           SECTION 3.  The importance of this legislation and the

 3-2     crowded condition of the calendars in both houses create an

 3-3     emergency and an imperative public necessity that the

 3-4     constitutional rule requiring bills to be read on three several

 3-5     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 1439 was passed by the House on May

         5, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 1439 was passed by the Senate on May

         21, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor