[Congressional Record Volume 142, Number 92 (Thursday, June 20, 1996)]
[Extensions of Remarks]
[Pages E1148-E1149]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         FOOD STAMPS AND THE ELECTRONIC BENEFIT TRANSFER SYSTEM

                                 ______


                            HON. PAT ROBERTS

                               of kansas

                    in the house of representatives

                        Thursday, June 20, 1996

  Mr. ROBERTS. Mr. Speaker, today I am introducing legislation 
concerning the Food Stamp Program and the electronic benefit transfer 
[EBT] system, on behalf of myself and Bill Emerson, the chairman of the 
Department Operations, Nutrition, and Foreign Agriculture Subcommittee, 
who is an expert in the food stamp and EBT programs. We are introducing 
this bill, along with other members of the Committee on Agriculture, 
because we believe that EBT systems, in which food stamp benefits are 
provided through a debit card system instead of coupons, are the 
preferred choice of delivering food benefits. The inspector general of 
USDA, in his testimony of February 1, 1995, before the committee, made 
it clear that EBT systems, while not eliminating trafficking in food 
stamps, were superior to coupons and a tool that can be used in 
tracking down persons abusing the Food Stamp Program.
  It is vital that States be allowed to proceed with implementation of 
EBT systems for the Food Stamp Program. An element that is standing in 
the way of implementation of EBT is a Federal Reserve Board rule known 
as regulation E. This rule, among other provisions, would create a new 
entitlement to the replacement of food stamps for persons receiving 
their benefits under an EBT system. The bill we are introducing 
provides that regulation E will not apply to the Food Stamp Program.
  The National Governors' Association supports exemption of State and 
local EBT programs from the regulation E provisions and have stated 
their opposition to unfunded mandates that are created by the liability 
provisions of regulation E. The National Governors' Association also 
stated that without this exemption, States will not be able to move 
forward with EBT.
  For more than 10 years the U.S. Department of Agriculture [USDA], at 
the direction of Congress, has been investigating the feasibility, 
cost-effectiveness, and general impact of using an electronic benefit 
transfer [EBT] system to issue food stamp benefits. Paper coupons are 
replaced and recipients use a debit-like card at the grocery store 
checkout. Counties in several States, including Pennsylvania, 
Minnesota, New Mexico, and New Jersey have implemented EBT and 
Maryland, Texas, Utah, and South Carolina have EBT systems statewide.
  USDA has found that EBT administrative costs are lower than coupon 
issuance costs; that food stamp benefit loss and trafficking are 
reduced; grocery store costs are reduced; food stamp participants 
prefer EBT; and financial institutions also prefer EBT and their costs 
are reduced.
  Law enforcement officials have spoken in favor of EBT because it 
provides an electronic trail of abuses in the program. While 
trafficking is not eliminated under an EBT system, incidental street 
trafficking is reduced considerably.
  States want to move ahead with EBT. Regulation E rules stand in their 
way. Until recently, USDA viewed regulation E as inappropriate for the 
Food Stamp Program. USDA, in May 1993, stated its opposition to the 
applicability of regulation E to its programs because those programs do 
not fall under the jurisdiction of that regulation; legislation and 
regulations for the USDA programs already have provisions for benefit 
recipient rights and protection; and regulation E may reduce benefit 
recipient's services.
  However, in June 1995, the Federal Electronic Benefits Transfer Task 
Force, represented by officials from the Office of Management and 
Budget, the USDA, and the Department of Health and Human Services, 
stated its opposition to removing regulation E applicability for the 
food stamp and other assistance programs. This is very unfortunate and 
this position is contrary to the positions of the National Governors' 
Association, the National Conference of State Legislators, the National 
Association of Counties, and the American Public Welfare Association.
  According to a 1993 Department of the Treasury study, application of 
regulation E for State EBT systems would cost States over $800 million 
per year for Aid to Families with Dependent Children [AFDC], food stamp 
and general assistance programs. This represents an unfunded mandate to 
the States and many States have said they could cease EBT program 
planning and operations if regulation E is applied to them.
  For these reasons we are introducing this bill today and urge our 
colleagues to support it.

                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Encouragement of Electronic 
     Benefit Transfer Systems Act''.

     SEC. 2. AMENDMENT.

       Section 7(i) of the Food Stamp Act of 1977 (7 U.S.C. 
     2016(i)) is amended by adding at the end the following:
       ``(7) Encourage electronic benefit transfer systems.--
       ``(A) In general.--The disclosures, protections, 
     responsibilities, and remedies established under section 904 
     of the Electronic Fund Transfer Act (15 U.S.C. 1693b), and 
     any regulation or order issued by the Board of Governors of 
     the Federal Reserve System in accordance with such Act, shall 
     not apply to benefits under this Act delivered through any 
     electronic benefit transfer system.
       ``(B) Replacement of benefits.--Any regulation issued by 
     the Secretary regarding the replacement of benefits under 
     this Act, and liability for replacement of benefits under 
     this Act, and liability for replacement of benefits under 
     this Act, under an electronic benefit transfer system shall 
     be similar to the regulations in effect for a paper food 
     stamp issuance system.
       ``(C) Definition of electronic benefit transfer system.--As 
     used in this paragraph, the term `electronic benefit transfer 
     system' means a system under which a governmental entity 
     distributes benefits determined under this Act, or other 
     benefits or payments, by establishing accounts to be accessed 
     electronically by recipients of the benefits, including 
     through the use of an automated teller machine, a point-of-
     sale terminal, or an intelligent benefit card.''.

[[Page E1149]]



                       THANK YOU, WILLIAM C. AYRE

                                 ______


                          HON. JAMES A. BARCIA

                              of michigan

                    in the house of representatives

                        Thursday, June 20, 1996

  Mr. BARCIA. Mr. Speaker, the heart of our democratic system of 
Government is local government. People concerned about the current 
situation and future of their communities depend upon local government 
to meet their most immediate needs. And the success of local government 
depends upon dedicated individuals who are willing to deal directly 
with both the people and the issues on a daily basis.
  For the past 18 years, Genesee Township, within my congressional 
district, has had the good fortune to be ably represented by William C. 
Ayre, as the Township's Supervisor. He is retiring after 18 years of 
commitment to making Genesee Township a constantly better place, and he 
is being recognized for his service tomorrow evening.
  William Ayre is one of those individuals who works at causes in which 
he believes. In addition to having been Township Supervisor for the 
past 18 years, he has also served on several Genesee County committees, 
the Mass Transit Authority, the Genesee County Economic Growth 
Alliance, the Flint Area Narcotics Group, as well as several positions 
within the Michigan Townships Association. In fact, he served as the 
president of the Michigan Township Association in 1995, as well as a 
member of the Board of Directors of the National Associations of Towns 
and Townships.
  His commitment is no surprise to anyone who knows him, as best 
evidenced by his 36 year marriage to his wife, Sandra. His two children 
and seven grandchildren who have seen his commitment to his community, 
and know of his dedication to this nation through his service in the 
Air Force, including 3 years in Germany, have had the kind of guidance 
and role model that we hope for for all children.
  Mr. Speaker, as William Ayre continues his commitment to his 
community by now moving on to another position with the Genesee County 
Road Commission, I ask that you and all of our colleagues join me in 
thanking him for his years of service, and wishing him the very best in 
all that lies ahead for him and his family.

                          ____________________