[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[House]
[Pages 256-259]
[From the U.S. Government Publishing Office, www.gpo.gov]



  ELECTRONIC BENEFIT TRANSFER INTEROPERABILITY AND PORTABILITY ACT OF 
                                  1999

  Mr. COMBEST. Mr. Speaker, I move to suspend the rules and pass the 
Senate 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.
  The Clerk read as follows:

                                S. 1733

       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 ``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.
       ``(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--

[[Page 257]]

       ``(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)).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Combest) and the gentleman from Texas (Mr. Stenholm) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Combest).
  Mr. COMBEST. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of the bill, S. 1733, the Food Stamp 
Electronic Benefit Transfer Interoperability and Portability Act. This 
bill was passed unanimously by the Senate last November, and today the 
House will act on that bill.
  The bill provides for a national standard of interoperability and 
portability for the food stamp program. The bill requires the U.S. 
Department of Agriculture to set specific standards for States with 
electronic benefit transfer systems so that food stamp participants can 
redeem their benefits in neighboring States. Under the food stamp 
coupon system, participants can redeem benefits in any retail food 
store. States want to apply this same principle to the EBT system of 
delivery of food assistance benefits.
  The gentleman from Virginia (Mr. Goodlatte), chairman of the 
subcommittee with jurisdiction over the food stamp program, introduced 
a similar bill last year. I commend the chairman of the subcommittee 
for his attention to this matter and his work ensuring proper oversight 
of the food stamp program.
  The Food Stamp Act already requires that all States issue food stamp 
benefits under an EBT system by the year 2002. The EBT is a more 
efficient and effective manner in which to provide food benefits for 
needy families. S. 1733 requires the USDA, within 7 months of 
enactment, adopt a uniform national standard of interoperability and 
portability so that State-issued EBT cards can be used in other States. 
The standards are to be based on the standards used by the majority of 
States, thereby enabling USDA to use flexibility in writing the 
standards.
  The bill also provides for exemptions for States if they have entered 
into EBT contracts using other standards. Also, waivers are provided 
for States operating smart card food stamp systems rather than debit 
card systems, as most States do.
  S. 1733 requires USDA to pay 1 percent of the costs of adopting these 
standards up to a maximum of $500,000 per year.
  Mr. Speaker, I urge my colleagues to support S. 1733.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STENHOLM. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of S. 1733, the Electronic Benefit 
Transfer Interoperability and Portability Act. This legislation is 
designed to ease the current burdens on interstate transactions in the 
food stamp program.
  In 1996, Congress amended the Food Stamp Act by requiring the 
Secretary of Agriculture to consider a cost-effective alternative to 
the use of food stamp coupons in order to reduce the cost of coupon 
redemption. The EBT system was developed.
  The switch to EBT cards is clearly a practical policy objective. 
Unfortunately, there is a lack of uniformity among State EBT systems 
and this negatively affects the delivery of assistance to food stamp 
recipients, many of whom lose benefits when they travel from State to 
State. For example, the different EBT designs of Texas and Oklahoma 
limit a Texas food stamp participants's choice by preventing shopping 
in other States where the EBT system designs and procedures are not 
uniform. This was not the case under the previous inefficient coupon 
system.
  S. 1733 addresses the uniformity issue in a practical and accountable 
manner. Specifically, it requires the Secretary of Agriculture to adopt 
a uniform national standard of interoperability and portability that is 
used by a majority of State agencies. At the present time a majority of 
States are using a standard referred to as ``QUEST.'' This was 
developed by the National Automated Clearing House Association EBT 
Council which includes State food stamp program administrators, 
retailers, and food and nutrition officials.
  Mr. Speaker, under S. 1733, the Secretary of Agriculture will be 
allowed to modify the QUEST rules in order to solve future problems. 
This discretionary authority is important to my State of Texas for a 
couple of reasons.
  Texas operates the Nation's largest EBT system for food stamps, 
benefitting 1.5 million Texas recipients or 635,000 households per 
month. The real challenge for Texas is the search for a replacement of 
its full service EBT contract in a market with limited competition and 
increased pricing, lower levels of service and less State 
customization.
  In order to remedy the lack of competition in the EBT market, Texas 
will serve as its own prime EBT contractor while issuing various 
subcontracts for specific EBT services, including the interoperability 
and portability components. This method will give Texas and other 
States a better chance of delivering uninterrupted, timely, and 
accurate food stamp benefits in a cost-effective manner.
  The bill's language in section 4(a) accommodates these concerns by 
requiring the Secretary to use the QUEST rules as a starting point and 
permitting necessary changes to those rules as the dictates of the food 
stamp program require.
  Finally, Mr. Speaker, this legislation sets an annual cap of $500,000 
to pay for the switching and settling charges associated with 
interstate food stamp purchases. This cost issue has been the cause of 
some disagreement. The States were correct in their belief that the 
Food and Nutrition Service should pay for all of the costs associated 
with

[[Page 258]]

interstate transactions. We should not, however, set a precedent 
suggesting that the Federal Government will pay for every new 
technology advancement used by retailers who participate in the food 
stamp program.
  National uniformity among State food stamp systems will mean that 
program participants will no longer encounter problems with the use of 
their EBT cards beyond the borders of the issuing State. I urge my 
colleagues to support the passage of this legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. COMBEST. Mr. Speaker, I yield 5 minutes to the gentleman from 
Virginia (Mr. Goodlatte).
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Combest), my chairman, for yielding me this time and for his support of 
this important legislation.
  Mr. Speaker, on August 4, 1999, I introduced H.R. 2709, the 
Electronic Benefit Transfer Interoperability and Portability Act of 
1999. The Senator from Illinois, Senator Fitzgerald, introduced an 
almost identical bill, S. 1733, which passed the Senate at the end of 
the first session of the 106th Congress; and it is that bill that we 
consider today.
  The sole focus of my bill was to allow food stamp beneficiaries the 
ability to redeem their benefits in any general store, regardless of 
location. Beneficiaries had this ability under the old food stamp 
system, but lost it as States migrated to an electronic benefits 
transfer system.
  Under the old paper food stamp system, recipients could redeem their 
food coupons in any authorized food store anywhere in the country. For 
example, a food stamp recipient living in Bath County, Virginia, could 
use their food stamps in their favorite grocery store, even if that 
happened to be in West Virginia. Similarly, a recipient living in 
Tennessee could visit their mother in Virginia and purchase food for 
their children while away from home.
  Unfortunately, as we move to electronic delivery of benefits, this is 
currently not the case. My bill provides for the portability of food 
assistance benefits and allows food stamp recipients the flexibility of 
shopping at locations that they choose. Across the country we are 
finding that people live in one State and shop in another. This cross-
border shopping is conducted for a variety of reasons. One of them is 
convenience. Another is the cost of goods.
  The supermarket industry is very competitive. Every week, stores 
advertise specials in newspaper ads across the country. People not only 
shop at locations convenient to them but also shop around for the best 
prices. Customers paying with every type of tender except EBT have the 
flexibility to shop where they choose.

                              {time}  1445

  Why should recipients of food assistance benefits not be allowed to 
stretch their dollars in the same way that other consumers do without 
regard to State borders?
  EBT portability is simply allowing recipients of benefits under the 
food stamp program to redeem those benefits without regard to State 
borders at the stores they choose. In addition to portability, my 
legislation allows for the interoperability of EBT transactions. 
Interoperability can be simply defined as the ability of various 
computers involved in authorizing, routing, and selling an EBT 
transaction to talk to each other.
  I offered a Sense of the Congress amendment to the Welfare Reform 
bill that Congress passed in 1996. My amendment urged States to work 
together to achieve a seamless system of food stamp benefit redemption. 
States did a decent job considering the circumstances. They are now 
asking for an extra nudge to realize the goal of my earlier amendment.
  My legislation requires States to conform their EBT standards to a 
national uniform operating system that the States themselves choose. 
The clear choice, the Quest operating system, has already been adopted 
by 33 States.
  Pilot studies have been conducted to determine the cost and other 
efficiencies that might be realized by EBT interoperability. The pilot 
program determined my bill would only cost the food stamp program 
$500,000. That is not a lot of money for an $18 billion program.
  Also, the State of Missouri found around $32 million in abuse of the 
program that they never would have found if their EBT system could not 
talk with neighboring State systems or they found people were getting 
dual food stamps, applying for and receiving food stamps in more than 
one State.
  Mr. Speaker, the bill we consider today is simple. It returns the 
national redemption convenience to the beneficiaries of the program, 
gives the States the guidance they are look being for, and provides 
another tool in the fight against fraud, waste, and abuse in the food 
stamp program.
  I thank my colleagues for this time, and I urge support from the 
membership for the Electronic Benefit Transfer Interoperability and 
Portability Act.
  Mr. COMBEST. Mr. Speaker, I yield 5 minutes to the gentleman from 
Ohio (Mr. Boehner).
  Mr. BOEHNER. Mr. Speaker, I wish to congratulate the gentleman from 
Texas (Mr. Combest), the chairman of the committee, and the gentleman 
from Texas (Mr. Stenholm), the ranking member, for the job that they 
have done.
  Specifically, I want to congratulate the gentleman from Virginia 
(Chairman Goodlatte) and commend him on his efforts here today 
regarding the EBT bill.
  This common sense piece of legislation will achieve portability for 
the delivery of food stamp benefits in every State across the Nation. 
The legislation that my colleague has introduced is very important as 
the States make the transition from paper coupons or food stamps to a 
more efficient electronic system.
  As my colleagues know, the State of Ohio has been an innovator in 
this area, having developed an extremely successful Smart Card program 
for the delivery of food stamp benefits to more than 300,000 recipients 
in my home State.
  In this regard, I wish to engage my colleague from Virginia in a 
colloquy to receive assurances that his bill will in no way harm the 
innovative technology that Ohio has adopted for delivering benefits.
  Mr. GOODLATTE. Mr. Speaker, will the gentleman yield?
  Mr. BOEHNER. I yield to the gentleman from Virginia.
  Mr. GOODLATTE. Mr. Speaker, I thank the gentleman from Ohio for 
yielding to me and for his interest and support of this legislation. I 
very much appreciate his kind remarks and for bringing this particular 
concern to my attention.
  In the legislation that the House is now considering, there are 
provisions that have been included to ensure that the two existing 
Smart Card programs that are currently in place, those being Ohio and 
Wyoming, will not be forced to make any changes that would result in 
either new or additional expenses for the States.
  Ohio and Wyoming can continue using their Smart Cards until the 
Secretary determines that a practicable technological method is 
available for interoperability between electronic benefit transfer 
Smart Card systems and the magnetic stripe card systems that most other 
States are using.
  Furthermore, the legislation provides safeguards so that these off-
line programs are not jeopardized in any way.
  It is my understanding that both Ohio and Wyoming chose to embrace 
this Smart Card technology for the delivery of benefits with the 
blessing and approval of the United States Department of Agriculture. 
Therefore, Ohio and Wyoming should not be required to change their 
systems until they are interested in doing so.
  I wish to ensure my good friend and colleague from Ohio (Mr. Boehner) 
that the legislation's waiver section and the provision for specific 
exemptions for Smart Card systems were incorporated into these 
initiatives with Ohio and Wyoming's interest in mind.
  As a footnote, I should mention that the technology is not currently 
available in the marketplace for on- and off-

[[Page 259]]

line systems to be compatible and interoperable. However, that day is 
rapidly approaching.
  In the short term, it is my hope that the Congress will have the 
opportunity to work toward a national standard for Smart Cards as other 
States like Ohio and Wyoming begin to consider their own Smart Card 
projects for domestic feeding programs, unemployment compensation, 
health care, and other benefits. It is my view that there is much to 
learn from Ohio's leadership and experience in this area.
  Mr. BOEHNER. Mr. Speaker, reclaiming my time, I want to thank the 
chairman for his comments.
  As I understand his comments, Ohio would not, then, be required to 
change its off-line system to an on-line system under this proposal?
  Mr. GOODLATTE. Mr. Speaker, if the gentleman will continue to yield, 
he is correct; Ohio, as well as Wyoming, would not be required to make 
any changes. And for that matter, those States currently using an on-
line system that does not achieve the national interoperability 
standard would not be required to meet this standard until their 
current contracts expire.
  Finally, I should point out that in the case of Ohio and Wyoming's 
Smart Card programs, the bill's waiver language and Smart Card 
provisions provide a clear exemption with no time limit imposed as to 
when changes would have to be made.
  Mr. BOEHNER. Mr. Speaker, reclaiming my time, I appreciate these very 
important clarifications with regard to how legislation relates to 
Smart Card changes, especially my home State of Ohio.
  Mr. STENHOLM. Mr. Speaker, I have no further requests for time on 
this side. I would just conclude by thanking the gentleman from 
Virginia (Chairman Goodlatte) and the gentleman from Texas (Chairman 
Combest) for their work on this piece of legislation, and I urge our 
colleagues to support it.
  Ms. JACKSON-LEE of Texas. I rise to support this important bill that 
amends the Food Stamp Act of 1977 to provide for a national standard of 
interoperability and portability applicable to electronic food stamp 
benefit transactions.
  This measure ensures that our citizens can use their food stamp cards 
in any state. Currently, citizens in my home State of Texas cannot use 
their cards in any other states--a situation that hinders their ability 
to obtain vital necessities while traveling to other states. Clearly, 
we do not want our citizens burdened when they cross state lines to 
visit friends and families.
  By amending the Food Stamp Act of 1977 with this bill, we can provide 
for a national standard of interoperability and portability applicable 
to electronic food stamp benefit transactions enhance food stamp 
interstate commerce. This measure would bring the food stamp process 
into a new age of technology by requiring systems that provide for the 
electronic issuance, use, and redemption of coupons in the form of 
electronic benefit transfer cards to be interoperable, and food stamp 
benefits to be made portable, among all States not later than October 
1, 2002.
  I appreciate that this bill works in conjunction with the Secretary 
of Agriculture. The measure appropriately directs the Secretary of 
Agriculture to promulgate regulations that adopt a national standard 
based upon a standard used by the majority of States and require any 
electronic benefit transfer contract (as defined by this Act) entered 
into 30 days or more after promulgation of such regulations be in 
accordance with the national standard.
  The bill also includes language to rectify potential technological 
difficulties. This piece of legislation authorizes the Secretary to 
provide a requesting State with a temporary deadline waiver based upon 
unusual technological barriers.
  It is also vitally important that we provide for an interim system 
until the electronic standard is completed. This bill directs the 
Secretary to allow a State using a smart card food stamp delivery 
system to continue such system until a technological method is 
available for electronic benefit transfer card interoperability. Sets 
forth the conditions for full Federal payment of State switching costs, 
including annual fiscal year caps.
  In an effort to provide a thorough analysis of this undertaking, this 
measure directs the Secretary of Agriculture to conduct a study of 
alternatives for handling food stamp benefit electronic transactions, 
including use of a single switching hub.
  I am aware that this measure passed the Senate, and I appreciate the 
bipartisan effort to enact this bill. I support this fine piece of 
legislation.
  Mrs. EMERSON. Mr. Speaker, I rise today in support of S. 1733, the 
Electronic Benefit Transfer (EBT) Interoperability and Portability Act. 
I'd like to thank Chairman Larry Combest and Chairman Bob Goodlatte for 
bringing this bill to the floor today and for their strong leadership 
on this important issue.
  Interoperability of food stamp EBT systems makes sense both for 
recipients and retailers. As USDA moves from paper food coupons to EBT 
cards, interoperability ensures that recipients will retain the same 
portability as before. Recipients will be able to access stores nearest 
to their homes and retailers will be able to serve their customers 
regardless of state boundaries. In areas of the country near state 
lines, such as in my Congressional District in Southern Missouri, 
incompatible EBT systems have been a significant problem for both 
groups. I am very pleased that the bill before us today will resolve 
this problem and bring the best technology to the food stamp program.
  The government and the taxpayer, too, are well served by S. 1733, 
because it establishes a new mechanism for tracking and policing fraud 
and abuse in the food stamp program. In my home state of Missouri, the 
Department of Social Services estimates that an interoperable EBT 
system would save the federal government as much as $1 million annually 
in reduced fraud in Missouri alone.
  One aspect of S. 1733 that I would like to highlight is that it 
provides 100% federal funding of the costs associated with switching 
and settling interstate transactions. These costs will not be imposed 
on other entities, such as retail food stores, states, and food stamp 
households. This is entirely appropriate because these costs are 
directly related to administering the program on a nationwide basis, 
not within a particular state.
  Again, I would like to reiterate to my colleagues that this is a very 
sensible piece of legislation that deserves the support of this House. 
I urge a strong ``Yes'' vote.
  Mr. STENHOLM. Mr. Speaker, I yield back the balance of my time.
  Mr. COMBEST. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Petri). The question is on the motion 
offered by the gentleman from Texas (Mr. Combest) that the House 
suspend the rules and pass the Senate bill, S. 1733.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate bill was passed.
  A motion to reconsider was laid on the table.

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