[Congressional Record (Bound Edition), Volume 145 (1999), Part 21]
[Senate]
[Pages 30865-30867]
[From the U.S. Government Publishing Office, www.gpo.gov]



  ELECTRONIC BENEFIT TRANSFER INTEROPERABILITY AND PORTABILITY ACT OF 
                                  1999

  Ms. COLLINS. Mr. President, I ask unanimous consent that the 
Agriculture Committee be discharged from further consideration of S. 
1733, and that the Senate then proceed to its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 1733) to amend the Food Stamp Act of 1977 to 
     provide for a national standard of interoperability and 
     portability applicable to electronic food stamp benefit 
     transactions.

  There being no objection, the Senate proceeded to consider the bill.


                           Amendment No. 2785

  Ms. COLLINS. Mr. President, there is a substitute amendment at the 
desk submitted by Senator Fitzgerald, and I ask for its consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Maine (Ms. Collins), for Mr. Fitzgerald, 
     proposes an amendment numbered 2785.
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Electronic Benefit Transfer 
     Interoperabilty and Portability Act of 1999''.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to protect the integrity of the food stamp program;
       (2) to ensure cost-effective portability of food stamp 
     benefits across State borders without imposing additional 
     administrative expenses for special equipment to address 
     problems relating to the portability;
       (3) to enhance the flow of interstate commerce involving 
     electronic transactions involving food stamp benefits under a 
     uniform national standard of interoperability and 
     portability; and
       (4) to eliminate the inefficiencies resulting from a 
     patchwork of State-administered systems and regulations 
     established to carry out the food stamp program

     SEC. 3. INTEROPERABILTY AND PORTABILITY OF FOOD STAMP 
                   TRANSACTIONS.

       Section 7 of the Food Stamp Act of 1977 (7 U.S.C. 2016) is 
     amended by adding at the end the following:
       ``(k) Interoperabilty 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 Act through an electronic benefit 
     transfer service (as defined in subsection (i)(11)(A)).
       ``(B) Electronic benefit transfer contract.--The term 
     `electronic benefit transfer contract' means a contract that 
     provides for the issuance, use, or redemption of coupons in 
     the form of electronic benefit transfer cards.
       ``(C) Interoperabilty.--The term `interoperability' means a 
     system that enables a coupon issued in the form of an 
     electronic benefit transfer card to be redeemed in any State.

[[Page 30866]]

       ``(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 a coupon issued 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 Act.
       ``(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.
       ``(G) Smart card.--The term `smart card' means an 
     intelligent benefit card described in section 17(f).
       ``(H) Switching.--The term `switching' means the routing of 
     an interstate transaction that consists of transmitting the 
     details of a transaction electronically recorded through the 
     use of an electronic benefit transfer card in 1 State to the 
     issuer of the card that is in another State.
       ``(2) Requirement.--Not later than October 1, 2002, the 
     Secretary shall ensure that systems that provide for the 
     electronic issuance, use, and redemption of coupons in the 
     form of electronic benefit transfer cards are interoperable, 
     and food stamp 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 food stamp retail store, or any wholesale food 
     concern, approved to participate in the food stamp program.
       ``(4) Standards.--Not later than 210 days after the date of 
     enactment of this subsection, the Secretary shall promulgate 
     regulations that--
       ``(A) adopt a uniform national standard of interoperability 
     and portability required under paragraph (2) that is based on 
     the standard of interoperability and portability used by a 
     majority of State agencies; and
       ``(B) require that any electronic benefit transfer contract 
     that is entered into 30 days or more after the regulations 
     are promulgated, by or on behalf of a State agency, provide 
     for the interoperability and portability required under 
     paragraph (2) in accordance with the national standard.
       ``(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--
       ``(i) is entered into before the date that is 30 days after 
     the regulations are promulgated under paragraph (4); and
       ``(ii) expires after October 1, 2002.
       ``(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);
       ``(ii) demonstrates that the best interest of the food 
     stamp program would be served by granting the waiver with 
     respect to the electronic benefit transfer system used by the 
     State agency to administer the food stamp program; and
       ``(iii) specifies a date by which the State agency will 
     achieve 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 
     food stamp 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 
     Act for switching and settling interstate transactions--
       ``(i) incurred after the date of enactment of this 
     subsection and before October 1, 2002, if the State agency 
     uses the standard of interoperability and portability adopted 
     by a majority of State agencies; and
       ``(ii) incurred after September 30, 2002, if the State 
     agency uses the uniform national standard of interoperability 
     and portability adopted under paragraph (4)(A).
       ``(B) Limitation.--The total amount paid to State agencies 
     for each fiscal year under subparagraph (A) shall not exceed 
     $500,000.''.

     SEC. 4. STUDY OF ALTERNATIVES FOR HANDLING ELECTRONIC BENEFIT 
                   TRANSACTIONS INVOLVING FOOD STAMP BENEFITS.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary of Agriculture shall study and report to 
     the Committee on Agriculture of the House of Representatives 
     and the Committee on Agriculture, Nutrition, and Forestry of 
     the Senate on alternatives for handling interstate electronic 
     benefit transactions involving food stamp benefits provided 
     under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), 
     including the feasibility and desirability of a single hub 
     for switching (as defined in section 7(k)(1) of that Act (as 
     added by section 3)).

  Mr. FITZGERALD. Mr. President, I rise today to recognize the passage 
of the Electronic Benefit Transfer Interoperability and Portability Act 
of 1999. This legislation addreses the problem of food stamp 
beneficiaries being unable to redeem their benefits in authorized 
stores that may be located outside their state of residence.
  As you may know, Congress passed legislation in 1996 that required 
the federal government to deliver food stamp benefits electronically, 
rather than using paper coupons. Most states have started the process 
of issuing plastic cards, very similar to ATM cards, to access these 
benefits. The federal government termed this new process, electronic 
benefits transfer (EBT).
  You may have noticed a separate button on the payment terminal in 
your local supermarket with the designation ``EBT'' or a separate 
stand-along payment terminal to handle these new transactions.
  More than half of the country has already switched from the paper 
coupons to this new EBT card. However, one significant issue is causing 
problems in the program for retailers, states, and recipients. That 
issue is the inability of recipients to use their state-issued cards 
across state lines. This is especially true in communities that are 
near a state border.
  Under the old paper system, recipients could use the coupons in any 
state in the country. Under the new electronic system, that is the case 
Customers go into a food store expecting to use their federal benefits 
to purchase food. When they cannot use their EBT cards, they become 
frustrated and dissatisfied with the food stamp program.
  For example, under the old system, a food stamp recipient living in 
Palmyra, Missouri could use his food stamp coupons in his favorite 
grocery store in Quincy, Illinois, just over the border. Similarly, a 
recipient living in Illinois could visit family in Tennessee and still 
purchase food for his children. Food stamp beneficiaries are not unlike 
the average shopper. Cross-border shopping occurs for a variety of 
reasons. One reason is convenience; another equally important reason is 
the cost of groceries. The supermarket industry is very competitive. 
Customers paying with every type of tender except EBT have the ability 
to shop around for the best prices. Shouldn't recipients of our 
nation's federal food assistance benefits be able to stretch their 
dollars without regard to state borders?
  Another reason for cross-border shopping is convenience. While one of 
my constituents may live in the metro east area of Illinois, he or she 
may work in St. Louis. Under the current situation, if the only grocery 
store between work and home is in Missouri, the recipient cannot 
purchase food without traveling miles out of the way.
  The legislation would once again provide for the portability of food 
assistance benefits and allow food stamp recipients the flexibility of 
shopping at locations that they choose.
  Interoperability works well today with ATM/Debit cards, the type of 
cards that EBT was modeled after. Consumers and merchants are confident 
that when a MAC card issued by a bank in Pittsburgh is presented, 
authorization and settlement of that transaction will work the same as 
when a Star card, issued by Bank of America in California is presented. 
This occurs regardless of where the merchant is located.
  Unfortunately, this is currently not the case with EBT cards. If 
every state operated their EBT program under a standard set of 
operating rules, as this legislation requires, companies operating in 
multiple states could be more efficient, resolve any discrepancies in 
customer accounts more quickly, and ultimately hold down the price of 
groceries for all consumers.
  This legislation is more about good government than it is about food

[[Page 30867]]

stamps. Since 1996, the transition from paper coupons to electronic 
benefit transfers has saved the federal government a significant amount 
of money. For example, while the food stamp caseload decreased 24 
percent from fiscal year 1995 to 1998, food stamp production and 
redemption costs dropped by an impressive 39 percent. While it is 
estimated that the bill's implementation will cost the federal 
government no more than $500,000 annually, it will save at least $20 
million per year when paper coupons are a thing of the past.
  This legislation is sound public policy that enjoys strong bipartisan 
support. I thank my colleagues, Senators Leahy, Lugar, Harkin, Craig, 
Cochran, Crapo, Kohl, and Kerrey for joining me as co-sponsors of this 
bill. This legislation is vitally important to every food stamp 
recipient, every state food stamp program administrator, and every 
grocery store in the country.
  I thank the presiding officer, and I yield the floor.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the 
amendment be agreed to, the bill be read a third time and passed, as 
amended, the motion to reconsider be laid upon the table, and that any 
statements relating to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2785) was agreed to.
  The bill (S. 1733), as amended, was read the third time and passed, 
as follows:
  [The bill was not available for printing. It will appear in a future 
edition of the Record.]

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