[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1114 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                 S. 1114

  To amend the Food Stamp Act of 1977 to reduce food stamp fraud and 
 improve the food stamp program through the elimination of food stamp 
 coupons and the use of electronic benefits transfer systems, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               August 2 (legislative day, July 10), 1995

   Mr. Leahy introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
  To amend the Food Stamp Act of 1977 to reduce food stamp fraud and 
 improve the food stamp program through the elimination of food stamp 
 coupons and the use of electronic benefits transfer systems, and for 
                            other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.

    (a) In General.--This Act may be cited as the ``Food Stamp Fraud 
Reduction Act of 1995''.
    (b) References.--Except as otherwise expressly provided, wherever 
in this title an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).

SEC. 2. FINDINGS.

    Congress finds that--
            (1) Roger Viadero, Inspector General of the United States 
        Department of Agriculture (USDA), testified before Congress on 
        February 1, 1995, that: ``For many years we have supported the 
        implementation of the Electronic Benefits Transfer, commonly 
        called EBT, of food stamp benefits as an alternative to paper 
        coupons....EBT also provides a useful tool in identifying 
        potential retail store violators. EBT-generated records have 
        enabled us to better monitor and analyze sales and benefit 
        activity at authorized retailers....[I]t can be a powerful 
        weapon to improve detection of trafficking and provide evidence 
        leading to the prosecution of traffickers.'';
            (2) Robert Rasor, United States Secret Service, Special 
        Agent in Charge of Financial Crimes Division, testified before 
        Congress on February 1, 1995, that: ``The EBT system is a great 
        advancement generally because it puts an audit trail relative 
        to the user and the retail merchant.'';
            (3) Allan Greenspan, Chairman of the Board of Governors, 
        Federal Reserve System, has noted the ``importance of EBT for 
        the food stamp program, and the potential advantages offered by 
        EBT to government benefit program agencies, benefit recipients, 
        and food retailers. (Indeed, EBT also would help reduce costs 
        in the food stamp processing operations of the Federal Reserve 
        System.)'';
            (4) the Bush Administration strongly supported EBT for the 
        food stamp program, including 1 report that noted ``The 
        potential savings are enormous.'';
            (5) in February 1991, a USDA publication noted that 
        Secretary Yeutter proposed EBT as an element of the 
        ``Department's strategy to reduce food stamp loss, theft, and 
        trafficking.'';
            (6) in March 1992, USDA noted: ``EBT reduces program 
        vulnerability to some kinds of benefit diversion and provides 
        an audit trail that facilitates efficient investigation and 
        successful prosecution of fraudulent activity....Benefit 
        diversions estimated for an EBT system are almost 80 percent 
        less.'';
            (7) in tests of EBT systems, USDA reported during the Bush 
        Administration that: ``EBT also introduces new security 
        features that reduce the chance for unauthorized use of one's 
        benefits as a result of loss or theft....[R]etailer response to 
        actual EBT operations is very positive in all operational EBT 
        projects.'';
            (8) retail stores, the financial services industry, and the 
        States should take the lead in converting from food stamp 
        coupons to an electronic benefits transfer system;
            (9) in the findings of the report entitled ``Making 
        Government Work'' regarding the electronic benefits transfer of 
        food stamps and other government benefits, the Office of 
        Technology Assessment found that--
                    (A) by eliminating cash change and more readily 
                identifying those who illegally traffic in benefits, a 
                nationwide electronic benefits transfer system might 
                reduce levels of food stamp benefit diversion by as 
                much as 80 percent;
                    (B) with use of proper security protections, 
                electronic benefits transfer is likely to reduce theft 
                and fraud, as well as reduce errors, paperwork, delays, 
                and the stigma attached to food stamp coupons;
                    (C) electronic benefits transfer can yield 
                significant cost savings to retailers, recipients, 
                financial institutions, and government agencies; and
                    (D) recipients, retailers, financial institutions, 
                and local program administrators who have tried 
                electronic benefits transfer prefer electronic benefits 
                transfer to coupons;
            (10) the food stamp program prints more than 375,000,000 
        food stamp booklets per year, including 2,500,000,000 paper 
        coupons;
            (11) food stamp coupons (except for $1 coupons) are used 
        once, and each 1 of the over 2,500,000,000 coupons per year is 
        then counted, canceled, shipped, redeemed through the banking 
        system by 10,000 commercial banks, 32 local Federal reserve 
        banks, and the Secretary of the Treasury, stored, and 
        destroyed;
            (12) food stamp recipients can receive cash change in food 
        stamp transactions if the cash does not exceed $1 per purchase; 
        and
            (13) the printing, distribution, handling, and redemption 
        of coupons costs at least $60,000,000 per year.

SEC. 3. ELIMINATION OF FOOD STAMP COUPONS.

    Section 4 (7 U.S.C. 2013) is amended by adding at the end the 
following:
    ``(d) Elimination of Food Stamp Coupons.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        notwithstanding any other provision of this Act, effective 
        beginning on the date that is 3 years after the date of 
        enactment of this subsection, the Secretary shall not provide 
        any food stamp coupons to a State.
            ``(2) Exceptions.--
                    ``(A) Extension.--Paragraph (1) shall not apply to 
                the extent that the chief executive officer of a State 
                determines that an extension is necessary and so 
                notifies the Secretary in writing, except that the 
                extension shall not extend beyond 5 years after the 
                date of enactment of this subsection.
                    ``(B) Waiver.--In addition to any extension under 
                subparagraph (A), the Secretary may grant a waiver to a 
                State to phase-in or delay implementation of electronic 
                benefits transfer for good cause shown by the State, 
                except that the waiver shall not extend for more than 6 
                months.
                    ``(C) Disaster relief.--The Secretary may provide 
                food stamp coupons for disaster relief under section 
                5(h).
            ``(3) Expiration of food stamp coupons.--Any food stamp 
        coupon issued under this Act shall expire 6 years after the 
        date of enactment of this Act.''.

SEC. 4. IMPLEMENTATION OF ELECTRONIC BENEFITS TRANSFER SYSTEMS.

    Section 7 (7 U.S.C. 2016) is amended--
            (1) in subsection (i)--
                    (A) by striking ``(i)(1)(A)'' and all that follows 
                through the end of paragraph (1) and inserting the 
                following:
    ``(i) Phase-In of EBT Systems.--
            ``(1) In general.--Each State agency is encouraged to 
        implement an on-line or hybrid electronic benefits transfer 
        system as soon as practicable after the date of enactment of 
        the Food Stamp Fraud Reduction Act of 1995, under which 
        household benefits determined under section 8(a) are issued 
        electronically and accessed by household members at the point 
        of sale.'';
                    (B) in paragraph (2)--
                            (i) by striking ``final regulations'' and 
                        all that follows through ``the approval of'' 
                        and inserting the following: ``regulations that 
                        establish standards for'';
                            (ii) by striking subparagraph (A); and
                            (iii) by redesignating subparagraphs (B) 
                        through (H) as subparagraphs (A) through (G), 
                        respectively;
                    (C) in paragraph (3), by striking ``the Secretary 
                shall not approve such a system unless--'' and 
                inserting ``the State agency shall ensure that--''; and
                    (D) by striking paragraphs (5) and (6) and 
                inserting the following:
            ``(5) Charging for electronic benefits transfer card 
        replacement.--
                    ``(A) In general.--The Secretary shall reimburse a 
                State agency for the costs of purchasing and issuing 
                electronic benefits transfer cards.
                    ``(B) Replacement cards.--The Secretary may charge 
                a household through allotment reduction or otherwise 
                for the cost of replacing a lost or stolen electronic 
                benefits transfer card, unless the card was stolen by 
                force or threat of force.''; and
            (2) by adding at the end the following:
    ``(j) Conversion to Electronic Benefits Transfer Systems.--
            ``(1) Coordination and law enforcement.--
                    ``(A) Conversion.--The Secretary shall coordinate 
                with, and assist, each State agency in the elimination 
                of the use of food stamp coupons and the conversion to 
                an electronic benefits transfer system.
                    ``(B) Standard operating rules.--The Secretary 
                shall inform each State of the generally accepted 
                standard operating rules for carrying out subparagraph 
                (A), based on--
                            ``(i) commercial electronic funds transfer 
                        technology;
                            ``(ii) the need to permit interstate 
                        operation and law enforcement monitoring; and
                            ``(iii) the need to provide flexibility to 
                        States.
                    ``(C) Law enforcement.--The Secretary, in 
                consultation with the Inspector General of the United 
                States Department of Agriculture and the United States 
                Secret Service, shall advise each State of proper 
                security features, good management techniques, and 
                methods of deterring counterfeiting for carrying out 
                subparagraph (A).
            ``(2) Voluntary purchase.--The Secretary shall encourage 
        any retail food store to voluntarily purchase a point-of-sale 
        terminal.
            ``(3) Paper and other alternative transactions.--Beginning 
        on the date of the implementation of an electronic benefits 
        transfer system in a State, the Secretary shall permit the use 
        of paper or other alternative systems for providing benefits to 
        food stamp households in States that use special-need retail 
        food stores.
            ``(4) State-provided equipment.--
                    ``(A) In general.--A retail food store that does 
                not have point-of-sale electronic benefits transfer 
                equipment, and does not intend to obtain point-of-sale 
                electronic benefits transfer equipment in the near 
                future, shall be provided by a State agency with, or 
                reimbursed for the costs of purchasing, 1 or more 
                single-function point-of-sale terminals, which shall be 
                used only for Federal or State assistance programs.
                    ``(B) Equipment.--
                            ``(i) Operating principles.--Equipment 
                        provided under this paragraph shall be capable 
                        of interstate operations and based on generally 
                        accepted commercial electronic benefits 
                        transfer operating principles that permit 
                        interstate law enforcement monitoring.
                            ``(ii) Multiple programs.--Equipment 
                        provided under this paragraph shall be capable 
                        of providing a recipient with access to 
                        multiple Federal and State benefit programs.
                    ``(C) Voucher benefits transfer equipment.--A 
                special-need retail food store that does not obtain, 
                and does not intend to obtain in the near future, 
                point-of-sale voucher benefits transfer equipment 
                capable of taking an impression of data from an 
                electronic benefits transfer card shall be provided by 
                a State agency with, or reimbursed for the costs of 
                purchasing, voucher benefits transfer equipment, which 
                shall be used only for Federal or State assistance 
                programs.
                    ``(D) Return of electronic benefits transfer 
                equipment.--A retail food store may at any time return 
                the equipment to the
                 State and obtain equipment with funds of the store.
                    ``(E) Prior system.--If a State has implemented an 
                electronic benefits transfer system prior to the date 
                of enactment of the Food Stamp Fraud Reduction Act of 
                1995, the Secretary shall provide assistance to the 
                State to bring the system into compliance with this 
                Act.
                    ``(F) No charge for assistance.--Notwithstanding 
                any other provision of this Act, the Secretary shall be 
                responsible for all costs incurred in providing 
                assistance under this paragraph.
            ``(5) Applicable law.--
                    ``(A) Disclosures, protections, responsibilities, 
                and remedies established by the Federal Reserve Board 
                under section 904 of the Electronic Fund Transfer Act 
                (15 U.S.C. 1693b) shall not apply to benefits under 
                this Act delivered through any electronic benefits 
                transfer system.
                    ``(B) Fraud and related activities which arise in 
                connection with electronic benefit systems set forth in 
                this Act shall be governed by section 1029, of title 
                18, United States Code, and other appropriate laws.
    ``(k) Conversion Fund.--
            ``(1) Establishment of ebt conversion account.--At the 
        beginning of each fiscal year during the 10-year period 
        beginning with the first full fiscal year following the date of 
        enactment of this subsection, the Secretary shall place the 
        funds made available under paragraph (2) into an account, to be 
        known as the EBT conversion account. Funds in the account shall 
        remain available until expended.
            ``(2) Transaction fee.--
                    ``(A) In general.--During the 10-year period 
                beginning on the date of enactment of this subsection, 
                the Secretary shall, to the extent necessary, impose a 
                transaction fee of not more than 2 cents for each 
                transaction made at a retail food store using an 
                electronic benefits transfer card provided under the 
                food stamp program, to be taken from the benefits of 
                the household using the card. The Secretary may reduce 
                the fee on a household receiving the maximum benefits 
                available under the program.
                    ``(B) Fees limited to uses.--A fee imposed under 
                subparagraph (A) shall be in an amount not greater than 
                is necessary to carry out the uses of the EBT 
                conversion account in paragraph (3).
            ``(3) Use of account.--The Secretary may use amounts in the 
        EBT conversion account to--
                    ``(A) provide funds to a State agency for--
                            ``(i) the reasonable cost of purchasing and 
                        installing, or for the cost of reimbursing a 
                        retail food store for the cost of purchasing 
                        and installing, a single-function, inexpensive, 
                        point-of-sale terminal, to be used only for 
                        Federal or State assistance programs, under 
                        rules and procedures prescribed by the 
                        Secretary; or
                            ``(ii) the reasonable start-up cost of 
                        installing telephone equipment or connections 
                        for a single-function, point-of-sale terminal, 
                        to be used only for Federal or State programs, 
                        under rules and procedures prescribed by the 
                        Secretary;
                    ``(B) pay for liabilities assumed by the Secretary 
                under subsection (l);
                    ``(C) pay other costs or liabilities related to the 
                electronic benefits transfer system established under 
                this Act that are incurred by the Secretary, a 
                participating State, or a store that are--
                            ``(i) required by this Act; or
                            ``(ii) determined appropriate by the 
                        Secretary; or
                    ``(D) expand and implement a nationwide program to 
                monitor compliance with program rules related to retail 
                food stores and the electronic delivery of benefits.
    ``(l) Liability or Replacements for Unauthorized Use of EBT Cards 
or Lost or Stolen EBT Cards.--
            ``(1) In general.--The Secretary shall require State 
        agencies to advise any household participating in the food 
        stamp program how to promptly report a lost, destroyed, 
        damaged, improperly manufactured, dysfunctional, or stolen 
        electronic benefits transfer card.
            ``(2) Regulations.--The Secretary shall issue regulations 
        providing that--
                    ``(A) a household shall not receive any replacement 
                for benefits lost due to the unauthorized use of an 
                electronic benefits transfer card; and
                    ``(B) a household shall not be liable for any 
                amounts in excess of the benefits available to the 
                household at the time of a loss or theft of an 
                electronic benefits transfer card due to the 
                unauthorized use of the card.
            ``(3) Special losses.--
                    ``(A) Notwithstanding paragraph (2), a household 
                shall receive a replacement for any benefits lost if 
                the loss was caused by--
                            ``(i) force or the threat of force;
                            ``(ii) unauthorized use of the card after 
                        the State agency receives notice that the card 
                        was lost or stolen; or
                            ``(iii) a system error or malfunction, 
                        fraud, abuse, negligence, or mistake by the 
                        service provider, the card issuing agency, or 
                        the State agency, or an inaccurate execution of 
                        a transaction by the service provider.
                    ``(B) With respect to losses described in clauses A 
                (ii) and (iii) the State shall reimburse the Secretary.
    ``(m) Special Rule.--A State agency may require a household to 
explain the circumstances regarding each occasion that--
            ``(1) the household reports a lost or stolen electronic 
        benefits transfer card; and
            ``(2) the card was used for an unauthorized transaction.
    ``(n) Establishment.--In carrying out this Act, the Secretary 
shall--
            ``(1) take into account the lead role of retail food 
        stores, financial institutions, and States;
            ``(2) take into account the needs of law enforcement 
        personnel and the need to permit and encourage further 
        technological developments and scientific advances;
            ``(3) ensure that security is protected by appropriate 
        means such as requiring that a personal identification number 
        be issued with each electronic benefits transfer card to help 
        protect the integrity of the program;
            ``(4) provide for--
                    ``(A) recipient protection regarding privacy, ease 
                of use, and access to and service in retail food 
                stores;
                    ``(B) financial accountability and the capability 
                of the system to handle interstate operations and 
                interstate monitoring by law enforcement agencies and 
                the Inspector General of the Department of Agriculture;
                    ``(C) rules prohibiting store participation unless 
                any appropriate equipment necessary to permit 
                households to purchase food with the benefits issued 
                under the Food Stamp Act of 1977 is operational and 
                reasonably available;
                    ``(D) rules providing for monitoring and 
                investigation by an authorized law enforcement agency 
                or the Inspector General of the Department of 
                Agriculture; and
                    ``(E) rules providing for minimum standards; and
            ``(5) assign additional employees to investigate and 
        adequately monitor compliance with program rules related to 
        electronic benefits transfer systems and retail food store 
        participation.
    ``(o) Requests for Statements.--
            ``(1) In general.--On the request of a household receiving 
        electronic benefits transfer, the State, through a person 
        issuing benefits to the household, shall provide a statement of 
        electronic benefits transfer for the month preceding the 
        request.
            ``(2) Statement items.--A statement provided under 
        paragraph (1) shall include--
                    ``(A) opening and closing balances for the account 
                for the statement period;
                    ``(B) the date, the amount, and any fee charged for 
                each transaction; and
                    ``(C) an address and phone number that the 
                household may use to make an inquiry regarding the 
                account.
    ``(p) Errors.--
            ``(1) In general.--Not later than 10 days after the date a 
        household notifies a State agency of an alleged error, or the 
        State agency discovers an alleged error, the State agency or a 
        person issuing benefits to the household shall conduct an 
        investigation of the alleged error.
            ``(2) Correction.--If a State agency or person conducting 
        an investigation under paragraph (1) determines that an error 
        has been made, any account affected by the error shall be 
        adjusted to correct the error not later than 1 day after the 
        determination.
            ``(3) Temporary credit.--If an investigation under 
        paragraph (1) of an error does not determine whether an error 
        has occurred within 10 days after discovering or being notified 
        of the alleged error, a household affected by the alleged error 
        shall receive a temporary credit as though the investigation 
        had determined that an error was made. The temporary credit 
        shall be removed from the account on a determination whether 
        the error occurred.
    ``(q) Definitions.--In this section:
            ``(1) Retail food store.--The term `retail food store' 
        means a retail food store, a farmer's market, or a house-to-
        house trade route authorized to participate in the food stamp 
        program.
            ``(2) Special-need retail food store.--The term `special-
        need retail food store' means--
                    ``(A) a retail food store located in a very rural 
                area;
                    ``(B) a retail food store without access to 
                electricity or regular telephone service; or
                    ``(C) a farmers' market or house-to-house trade 
                route that is authorized to participate in the food 
                stamp program.''.

SEC. 5. LEAD ROLE OF INDUSTRY AND STATES.

    Section 17 (7 U.S.C. 2026) is amended by adding at the end the 
following:
    ``(m) Lead Role of Industry and States.--The Secretary shall 
consult with the Secretary of the Treasury, the Secretary of Health and 
Human Services, the Inspector General of the United States Department 
of Agriculture, the United States Secret Service, the National 
Governor's Association, the American Bankers Association, the Food 
Marketing Institute, the National Association of Convenience Stores, 
the American Public Welfare Association, the financial services 
community, State agencies, and food advocates to obtain information 
helpful to retail stores, the financial services industry, and States 
in the conversion to electronic benefits transfer, including 
information regarding--
            ``(1) the degree to which an electronic benefits transfer 
        system could be integrated with commercial networks;
            ``(2) the usefulness of appropriate electronic benefits 
        transfer security features and local management controls, 
        including features in an electronic benefits transfer card to 
        deter counterfeiting of the card;
            ``(3) the use of laser scanner technology with electronic 
        benefits transfer technology so that only eligible food items 
        can be purchased by food stamp participants in stores that use 
        scanners;
            ``(4) how to maximize technology that uses data available 
        from an electronic benefits transfer system to identify fraud 
        and allow law enforcement personnel to quickly identify or 
        target a suspected or actual program violator;
            ``(5) means of ensuring the confidentiality of personal 
        information in electronic benefits transfer systems and the 
        applicability of section 552a of title 5, United States Code, 
        to electronic benefits transfer systems;
            ``(6) the best approaches for maximizing the use of then 
        current point-of-sale terminals and systems to reduce costs; 
        and
            ``(7) the best approaches for maximizing the use of 
        electronic benefits transfer systems for multiple Federal 
        benefit programs so as to achieve the highest cost savings 
        possible through the implementation of electronic benefits 
        transfer systems.''.

SEC. 6. CONFORMING AMENDMENTS.

    (a) Section 3 (42 U.S.C. 2012) is amended--
            (1) in subsection (a), by striking ``coupons'' and 
        inserting ``benefits'';
            (2) in the first sentence of subsection (c), by striking 
        ``authorization cards'' and inserting ``allotments'';
            (3) in subsection (d), by striking ``the provisions of this 
        Act'' and inserting ``sections 5(h) and 7(g)'';
            (4) in subsection (e)--
                    (A) by striking ``Coupon issuer'' and inserting 
                ``Benefit issuer''; and
                    (B) by striking ``coupons'' and inserting 
                ``benefits'';
            (5) in the last sentence of subsection (i), by striking 
        ``coupons'' and inserting ``allotments''; and
            (6) by adding at the end the following:
    ``(v) `Electronic benefits transfer card' means a card issued to a 
household participating in the program that is used to purchase 
food.''.
    (b) Section 4(a) of such Act (7 U.S.C. 2013(a)) is amended--
            (1) in the first sentence, by inserting ``and the 
        availability of funds made available under section 7'' after 
        ``of this Act'';
            (2) in the first and second sentences, by striking 
        ``coupons'' each place it appears and inserting ``electronic 
        benefits transfer cards or coupons''; and
            (3) by striking the third sentence and inserting the 
        following new sentence: ``The Secretary, through the facilities 
        of the Treasury of the United States, shall reimburse the 
        stores for food purchases made with electronic benefits 
        transfer cards or coupons provided under this Act.''.
    (c) The first sentence of section 6(b)(1) of such Act (7 U.S.C. 
2015(b)(1)) is amended--
            (1) by striking ``coupons or authorization cards'' and 
        inserting ``electronic benefits transfer cards, coupons, or 
        authorization cards''; and
            (2) in clauses (ii) and (iii), by inserting ``or electronic 
        benefits transfer cards'' after ``coupons'' each place it 
        appears.
    (d) Section 7 of such Act (7 U.S.C. 2016) is amended--
            (1) by striking the section heading and inserting the 
        following new section heading:
 ``issuance and use of electronic benefits transfer cards or coupons'';

            (2) in subsection (a), by striking ``Coupons'' and all that 
        follows through ``necessary, and'' and inserting ``Electronic 
        benefits transfer cards or coupons'';
            (3) in subsection (b), by striking ``Coupons'' and 
        inserting ``Electronic benefits transfer cards'';
            (4) in subsection (e), by striking ``coupons to coupon 
        issuers'' and inserting ``benefits to benefit issuers'';
            (5) in subsection (f)--
                    (A) by striking ``issuance of coupons'' and 
                inserting ``issuance of electronic benefits transfer 
                cards or coupons'';
                    (B) by striking ``coupon issuer'' and inserting 
                ``electronic benefits transfer or coupon issuer''; and
                    (C) by striking ``coupons and allotments'' and 
                inserting ``electronic benefits transfer cards, 
                coupons, and allotments'';
            (6) by striking subsections (g) and (h);
            (7) by redesignating subsections (i) through (q) (as added 
        by section 4) as subsections (g) through (o), respectively; and
            (8) in subsection (j)(3)(B) (as added by section 4 and 
        redesignated by paragraph (7)), by striking ``(l)'' and 
        inserting ``(k)''.
    (e) Section 8(b) of such Act (7 U.S.C. 2017(b)) is amended by 
striking ``coupons'' and inserting ``electronic benefits transfer cards 
or coupons''.
    (f) Section 9 of such Act (7 U.S.C. 2018) is amended--
            (1) in subsections (a) and (b), by striking ``coupons'' 
        each place it appears and inserting ``coupons, or accept 
        electronic benefits transfer cards,''; and
            (2) in subsection (a)(1)(B), by striking ``coupon 
        business'' and inserting ``electronic benefits transfer cards 
        and coupon business''.
    (g) Section 10 of such Act (7 U.S.C. 2019) is amended--
            (1) by striking the section heading and inserting the 
        following:

    ``redemption of coupons or electronic benefits transfer cards'';

and
            (2) in the first sentence--
                    (A) by inserting after ``provide for'' the 
                following: ``the reimbursement of stores for program 
                benefits provided and for'';
                    (B) by inserting after ``food coupons'' the 
                following: ``or use their members' electronic benefits 
                transfer cards''; and
                    (C) by striking the period at the end and inserting 
                the following: ``, unless the center, organization, 
                institution, shelter, group living arrangement, or 
                establishment is equipped with a point-of-sale device 
                for the purpose of participating in the electronic 
                benefits transfer system.''.
    (h) Section 11 of such Act (7 U.S.C. 2020) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``coupons'' and inserting ``electronic benefits transfer cards 
        or coupons,'';
            (2) in subsection (e)--
                    (A) in paragraph (2)--
                            (i) by striking ``a coupon allotment'' and 
                        inserting ``an allotment''; and
                            (ii) by striking ``issuing coupons'' and 
                        inserting ``issuing electronic benefits 
                        transfer cards or coupons'';
                    (B) in paragraph (7), by striking ``coupon 
                issuance'' and inserting ``electronic benefits transfer 
                card or coupon issuance'';
                    (C) in paragraph (8)(C), by striking ``coupons'' 
                and inserting ``benefits'';
                    (D) in paragraph (9), by striking ``coupons'' each 
                place it appears and inserting ``electronic benefits 
                transfer cards or coupons'';
                    (E) in paragraph (11), by striking ``in the form of 
                coupons'';
                    (F) in paragraph (16), by striking ``coupons'' and 
                inserting ``electronic benefits transfer card or 
                coupons'';
                    (G) in paragraph (17), by striking ``food stamps'' 
                and inserting ``benefits'';
                    (H) in paragraph (21), by striking ``coupons'' and 
                inserting ``electronic benefits transfer cards or 
                coupons'';
                    (I) in paragraph (24), by striking ``coupons'' and 
                inserting ``benefits''; and
                    (J) in paragraph (25), by striking ``coupons'' each 
                place it appears and inserting ``electronic benefits 
                transfer cards or coupons'';
            (3) in subsection (h), by striking ``face value of any 
        coupon or coupons'' and inserting ``value of any benefits''; 
        and
            (4) in subsection (n)--
                    (A) by striking ``both coupons'' each place it 
                appears and inserting ``benefits under this Act''; and
                    (B) by striking ``of coupons'' and inserting ``of 
                benefits''.
    (i) Section 12 of such Act (7 U.S.C. 2021) is amended--
            (1) in subsection (b)(3), by striking ``coupons'' each 
        place it appears and inserting ``electronic benefits transfer 
        cards or coupons'';
            (2) in subsection (d)--
                    (A) in the first sentence--
                            (i) by inserting after ``redeem coupons'' 
                        the following: ``and to accept electronic 
                        benefits transfer cards''; and
                            (ii) by striking ``value of coupons'' and 
                        inserting ``value of benefits and coupons''; 
                        and
                    (B) in the third sentence, by striking ``coupons'' 
                each place it appears and inserting ``benefits''; and
            (3) in the first sentence of subsection (f)--
                    (A) by inserting after ``to accept and redeem food 
                coupons'' the following: ``electronic benefits transfer 
                cards, or to accept and redeem food coupons,''; and
                    (B) by inserting before the period at the end the 
                following: ``or program benefits''.
    (j) Section 13 of such Act (7 U.S.C. 2022) is amended by striking 
``coupons'' each place it appears '' and inserting ``benefits''.
    (k) Section 15 of such Act (7 U.S.C. 2024) is amended--
            (1) in subsection (a), by striking ``issuance or 
        presentment for redemption'' and inserting ``issuance, 
        presentment for redemption, or use of electronic benefits 
        transfer cards or'';
            (2) in the first sentence of subsection (b)(1)--
                    (A) by inserting after ``coupons, authorization 
                cards,'' each place it appears the following: 
                ``electronic benefits transfer cards,''; and
                    (B) by striking ``coupons or authorization cards'' 
                each place it appears and inserting the following: 
                ``coupons, authorization cards, or electronic benefits 
                transfer cards'';
            (3) in the first sentence of subsection (c)--
                    (A) by striking ``coupons'' and inserting ``a 
                coupon or an electronic benefits transfer card''; and
                    (B) by striking ``such coupons are'' and inserting 
                ``the payment or redemption is'';
            (4) in subsection (d), by striking ``Coupons'' and 
        inserting ``Benefits'';
            (5) in subsection (e), by inserting ``or electronic 
        benefits transfer card'' after ``coupon'';
            (6) in subsection (f), by inserting ``or electronic 
        benefits transfer card'' after ``coupon'';
            (7) in the first sentence of subsection (g), by inserting 
        after ``coupons, authorization cards,'' the following: 
        ``electronic benefits transfer cards,''; and
            (8) by adding at the end the following:
    ``(h) Governing Law.--Fraud and related activities related to 
electronic benefits transfer shall be governed by section 1029 of title 
18, United States Code.''.
    (l) Section 16 (7 U.S.C. 2025) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by inserting ``or electronic 
                benefits transfer cards'' after ``coupons''; and
                    (B) in paragraph (3), by inserting after 
                ``households'' the following: ``, including the cost of 
                providing equipment necessary for retail food stores to 
                participate in an electronic benefits transfer 
                system'';
            (2) by striking subsection (d);
            (3) by redesignating subsections (e) through (j) as 
        subsections (d) through (i), respectively;
            (4) in subsection (g)(5) (as redesignated by paragraph 
        (3))--
                    (A) in subparagraph (A), by striking ``(A)''; and
                    (B) by striking subparagraph (B);
            (5) in subsection (h) (as redesignated by paragraph (3)), 
        by striking paragraph (3); and
            (6) by striking subsection (i) (as redesignated by 
        paragraph (3)).
    (m) Section 17 of such Act (7 U.S.C. 2026) is amended--
            (1) in the last sentence of subsection (a)(2), by striking 
        ``coupon'' and inserting ``benefit'';
            (2) in subsection (b)(2), by striking the last sentence;
            (3) in subsection (c), by striking the last sentence;
            (4) in subsection (d)(1)(B), by striking ``coupons'' each 
        place it appears and inserting ``benefits'';
            (5) in subsection (e), by striking the last sentence;
            (6) by striking subsection (f); and
            (7) by redesignating subsections (g) through (k) as 
        subsections (f) through (j), respectively.
    (n) Section 21 of such Act (7 U.S.C. 2030) is amended--
            (1) by striking ``coupons'' each place it appears (other 
        than in subsections (b)(2)(A)(ii) and (d)) and inserting 
        ``benefits'';
            (2) in subsection (b)(2)(A)(ii), by striking ``coupons'' 
        and inserting ``electronic benefits transfer cards or 
        coupons''; and
            (3) in subsection (d)--
                    (A) in paragraph (2), by striking ``Coupons'' and 
                inserting ``Benefits''; and
                    (B) in paragraph (3), by striking ``in food 
                coupons''.
    (o) Section 22 of such Act (7 U.S.C. 2031) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (3)(D)--
                            (i) in clause (ii), by striking ``coupons'' 
                        and inserting ``benefits''; and
                            (ii) in clause (iii), by striking 
                        ``coupons'' and inserting ``electronic benefits 
                        transfer benefits'';
                    (B) in paragraph (9), by striking ``coupons'' and 
                inserting ``benefits''; and
                    (C) in paragraph (10)(B)--
                            (i) in the second sentence of clause (i), 
                        by striking ``Food coupons'' and inserting 
                        ``Program benefits''; and
                            (ii) in clause (ii)--
                                    (I) in the second sentence, by 
                                striking ``Food coupons'' and inserting 
                                ``Benefits''; and
                                    (II) in the third sentence, by 
                                striking ``food coupons'' each place it 
                                appears and inserting ``benefits'';
            (2) in subsection (d), by striking ``coupons'' each place 
        it appears and inserting ``benefits'';
            (3) in subsection (g)(1)(A), by striking ``coupon''; and
            (4) in subsection (h), by striking ``food coupons'' and 
        inserting ``benefits''.
    (p) Section 1956(c)(7)(D) of title 18, United States Code, is 
amended by inserting ``electronic benefits transfer cards or'' before 
``coupons having''.
    (q) This section and the amendments made by this section shall 
become effective on the date that the Secretary of Agriculture 
implements an electronic benefits transfer system in accordance with 
section 7 of the Food Stamp Act of 1977 (7 U.S.C. 2016) (as amended by 
this Act).
                                 <all>
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