§ 2016. Issuance and use of program benefits
(a)
In general
Except as provided in subsection (i), EBT cards shall be issued only to households which have been duly certified as eligible to participate in the supplemental nutrition assistance program.
(b)
Use
Benefits issued to eligible households shall be used by them only to purchase food in retail food stores which have been approved for participation in the supplemental nutrition assistance program at prices prevailing in such stores: Provided, That nothing in this chapter shall be construed as authorizing the Secretary to specify the prices at which food may be sold by wholesale food concerns or retail food stores.
(c)
Design
(d)
Delivery and control procedures
The Secretary shall prescribe appropriate procedures for the delivery of benefits to benefit issuers and for the subsequent controls to be placed over such benefits by benefit issuers in order to ensure adequate accountability.
(e)
State issuance liability
Notwithstanding any other provision of this chapter, the State agency shall be strictly liable to the Secretary for any financial losses involved in the acceptance, storage and issuance of benefits, except that in the case of losses resulting from the issuance and replacement of authorizations for benefits which are sent through the mail, the State agency shall be liable to the Secretary to the extent prescribed in the regulations promulgated by the Secretary.
(f)
Alternative benefit delivery
(1)
In general
If the Secretary determines, in consultation with the Inspector General of the Department of Agriculture, that it would improve the integrity of the supplemental nutrition assistance program, the Secretary shall require a State agency to issue or deliver benefits using alternative methods.
(2)
No imposition of costs
The cost of documents or systems that may be required by this subsection may not be imposed upon a retail food store participating in the supplemental nutrition assistance program.
(3)
Devaluation and termination of issuance of paper coupons
(A)
Coupon issuance
Effective on the date of enactment of the Food, Conservation, and Energy Act of 2008, no State shall issue any coupon, stamp, certificate, or authorization card to a household that receives supplemental nutrition assistance under this chapter.
(g)
Staggered issuance procedures
(1)
The State agency may establish a procedure for staggering the issuance of benefits to eligible households throughout the month. Upon the request of the tribal organization that exercises governmental jurisdiction over the reservation, the State agency shall stagger the issuance of benefits for eligible households located on reservations for at least 15 days of a month.
(h)
Electronic benefit transfers
(1)
In general.—
(A)
Implementation.—
Not later than October 1, 2002, each State agency shall implement an electronic benefit transfer system under which household benefits determined under section
2017
(a) or
2035 of this title are issued from and stored in a central databank, unless the Secretary provides a waiver for a State agency that faces unusual barriers to implementing an electronic benefit transfer system.
(B)
Timely implementation.—
Each State agency is encouraged to implement an electronic benefit transfer system under subparagraph (A) as soon as practicable.
(C)
State flexibility.—
Subject to paragraph (2), a State agency may procure and implement an electronic benefit transfer system under the terms, conditions, and design that the State agency considers appropriate.
(2)
The Secretary shall issue final regulations that establish standards for the approval of such a system. The standards shall include—
(A)
defining the required level of recipient protection regarding privacy, ease of use, and access to and service in retail food stores;
(B)
the terms and conditions of participation by retail food stores, financial institutions, and other appropriate parties;
(C)
(i)
measures to maximize the security of a system using the most recent technology available that the State agency considers appropriate and cost effective and which may include personal identification numbers, photographic identification on electronic benefit transfer cards, and other measures to protect against fraud and abuse; and
(3)
In the case of a system described in paragraph (1) in which participation is not optional for households, the Secretary shall not approve such a system unless—
(A)
a sufficient number of eligible retail food stores, including those stores able to serve minority language populations, have agreed to participate in the system throughout the area in which it will operate to ensure that eligible households will not suffer a significant reduction in their choice of retail food stores or a significant increase in the cost of food or transportation to participating food stores; and
(B)
any special equipment necessary to allow households to purchase food with the benefits issued under this chapter is operational—
(4)
Administrative costs incurred in connection with activities under this subsection shall be eligible for reimbursement in accordance with section
2025 of this title, subject to the limitations in section
2025
(g) of this title.
(5)
The Secretary shall periodically inform State agencies of the advantages of using electronic benefit systems to issue benefits in accordance with this subsection in lieu of issuing coupons to households.
(6)
This subsection shall not diminish the authority of the Secretary to conduct projects to test automated or electronic benefit delivery systems under section
2026
(f) of this title.
(7)
Replacement of benefits.—
Regulations issued by the Secretary regarding the replacement of benefits and liability for replacement of benefits under an electronic benefit transfer system shall be similar to the regulations in effect for a paper-based supplemental nutrition assistance issuance system.
(8)
Replacement card fee.—
A State agency may collect a charge for replacement of an electronic benefit transfer card by reducing the monthly allotment of the household receiving the replacement card.
(9)
Optional photographic identification.—
(10)
Federal law not applicable.—
Section
1693o–2 of title
15 shall not apply to electronic benefit transfer or reimbursement systems under this chapter.
(11)
Application of anti-tying restrictions to electronic benefit transfer systems.—
(A)
Definitions.—
In this paragraph:
(i)
Affiliate.—
The term “affiliate” has the meaning provided the term in section
1841
(k) of title
12.
(ii)
Company.—
The term “company” has the meaning provided the term in section
1971 of title
12, but shall not include a bank, a bank holding company, or any subsidiary of a bank holding company.
(iii)
Electronic benefit transfer service.—
The term “electronic benefit transfer service” means the processing of electronic transfers of household benefits, determined under section
2017
(a) or
2035 of this title, if the benefits are—
(iv)
Point-of-sale service.—
The term “point-of-sale service” means any product or service related to the electronic authorization and processing of payments for merchandise at a retail food store, including credit or debit card services, automated teller machines, point-of-sale terminals, or access to on-line systems.
(B)
Restrictions.—
A company may not sell or provide electronic benefit transfer services, or fix or vary the consideration for electronic benefit transfer services, on the condition or requirement that the customer—
(12)
[1] Recovering electronic benefits.—
(A)
In general.—
A State agency shall establish a procedure for recovering electronic benefits from the account of a household due to inactivity.
(B)
Benefit storage.—
A State agency may store recovered electronic benefits off-line in accordance with subparagraph (D), if the household has not accessed the account after 6 months.
(12)
[1] Interchange fees.—No interchange fees shall apply to electronic benefit transfer transactions under this subsection.
(i)
State option to issue benefits to certain individuals made ineligible by welfare reform
(1)
In general
Notwithstanding any other provision of law, a State agency may, with the approval of the Secretary, issue benefits under this chapter to an individual who is ineligible to participate in the supplemental nutrition assistance program solely as a result of section
2015
(o)(2) of this title or section
1612 or
1613 of title
8.
(2)
State payments to Secretary
(A)
In general
Not later than the date the State agency issues benefits to individuals under this subsection, the State agency shall pay the Secretary, in accordance with procedures established by the Secretary, an amount that is equal to—
(3)
Reporting
To be eligible to issue benefits under this subsection, a State agency shall comply with reporting requirements established by the Secretary to carry out this subsection.
(4)
Plan
To be eligible to issue benefits under this subsection, a State agency shall—
(j)
Interoperability and portability of electronic benefit transfer transactions
(1)
Definitions
In this subsection:
(A)
Electronic benefit transfer card
The term “electronic benefit transfer card” means a card that provides benefits under this chapter through an electronic benefit transfer service (as defined in subsection (h)(11)(A) of this section).
(B)
Electronic benefit transfer contract
The term “electronic benefit transfer contract” means a contract that provides for the issuance, use, or redemption of program benefits in the form of electronic benefit transfer cards.
(C)
Interoperability
The term “interoperability” means a system that enables program benefits in the form of an electronic benefit transfer card to be redeemed in any State.
(D)
Interstate transaction
The term “interstate transaction” means a transaction that is initiated in 1 State by the use of an electronic benefit transfer card that is issued in another State.
(E)
Portability
The term “portability” means a system that enables program benefits in the form of an electronic benefit transfer card to be used in any State by a household to purchase food at a retail food store or wholesale food concern approved under this chapter.
(F)
Settling
The term “settling” means movement, and reporting such movement, of funds from an electronic benefit transfer card issuer that is located in 1 State to a retail food store, or wholesale food concern, that is located in another State, to accomplish an interstate transaction.
(2)
Requirement
Not later than October 1, 2002, the Secretary shall ensure that systems that provide for the electronic issuance, use, and redemption of program benefits in the form of electronic benefit transfer cards are interoperable, and supplemental nutrition assistance program benefits are portable, among all States.
(3)
Cost
The cost of achieving the interoperability and portability required under paragraph (2) shall not be imposed on any retail store, or any wholesale food concern, approved to participate in the supplemental nutrition assistance program.
(4)
Standards
Not later than 210 days after February 11, 2000, the Secretary shall promulgate regulations that—
(5)
Exemptions
(A)
Contracts
The requirements of paragraph (2) shall not apply to the transfer of benefits under an electronic benefit transfer contract before the expiration of the term of the contract if the contract—
(B)
Waiver
At the request of a State agency, the Secretary may provide 1 waiver to temporarily exempt, for a period ending on or before the date specified under clause (iii), the State agency from complying with the requirements of paragraph (2), if the State agency—
(i)
establishes to the satisfaction of the Secretary that the State agency faces unusual technological barriers to achieving by October 1, 2002, the interoperability and portability required under paragraph (2);
(C)
Smart card systems
The Secretary shall allow a State agency that is using smart cards for the delivery of supplemental nutrition assistance program benefits to comply with the requirements of paragraph (2) at such time after October 1, 2002, as the Secretary determines that a practicable technological method is available for interoperability with electronic benefit transfer cards.
(6)
Funding
(A)
In general
In accordance with regulations promulgated by the Secretary, the Secretary shall pay 100 percent of the costs incurred by a State agency under this chapter for switching and settling interstate transactions—
[1] So in original. Two pars. (12) have been enacted.