[House Report 105-43]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     105-43
_______________________________________________________________________


 
STATE VERIFICATION TO ENSURE PRISONER DISQUALIFICATION FROM FOOD STAMP 
                                PROGRAM

                                _______
                                

 April 8, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


 Mr. Smith of Oregon, from the Committee on Agriculture, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1000]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Agriculture, to whom was referred the bill 
(H.R. 1000) to require States to establish a system to prevent 
prisoners from being considered part of any household for 
purposes of determining eligibility of the household for food 
stamp benefits and the amount of food stamp benefits to be 
provided to the household under the Food Stamp Act of 1977, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                           Brief Explanation

    H.R. 1000 requires states to establish a system to verify 
that individuals detained in Federal, state, or county penal 
facilities are not counted as household members for purposes of 
determining eligibility or the level of benefits in the food 
stamp program.
    The Secretary may waive the verification system requirement 
where the Secretary determines that extraordinary circumstances 
have made it impracticable for the state to obtain the 
information necessary to establish such a system.

                            Purpose and Need

    On March 10, 1997, the General Accounting Office (GAO) 
released a report entitled, ``Food Stamps: Substantial 
Overpayments Result From Prisoners Counted as Household 
Members.'' In this report, GAO sets forth findings and 
conclusions of its review of the problem of prisoners counted 
as household members in the food stamp program. Prisoners are 
not permitted under the Food Stamp Act to be included in food 
stamp households or receive food stamp benefits.
    GAO conducted computer matches of the 1995 food stamp rolls 
with state prison data in Florida, New York, Texas, and Los 
Angeles County, California and with local jail data in three 
metropolitan areas in these states (Dade County, Florida; New 
York City, New York; and Harris County, Texas). The GAO 
computer matches in these areas discovered 12,138 prisoners who 
were counted as members of food stamp households. GAO estimates 
that the inclusion of these individuals in food stamp 
households resulted in $3.5 million in food stamp benefit 
overpayments in 1995. The inclusion of prisoners in food stamp 
households increases overpayments because household size is a 
factor in determining eligibility and benefit levels. By 
increasing the size of the household, the inclusion of the 
prisoner may make an ineligible household appear to be eligible 
or increase the level of food stamp benefits an eligible 
household receives.
    GAO found that prisoners are able to participate in the 
food stamp program because welfare agencies seldom verify the 
composition of a household. Most state agencies simply rely on 
food stamp applicants to provide household information and to 
report subsequent changes, including the incarceration of a 
household member. Based on its review, GAO concludes that 
periodic computer matches of prison inmates with food stamp 
households is a cost effective technique for identifying 
households that improperly include prisoners as members.
    The Committee believes that the GAO report identified a 
problem which is a significant concern. The Committee believes 
that public confidence and support of the food stamp program 
are undermined when a household receives a higher level of food 
stamp benefits than an identically situated household simply 
because the household receiving more food stamp benefits is 
illegally counting an incarcerated individual as a member. The 
Committee's concern is furthered by GAO's conclusion that a 
cost effective matching technique can be used to prevent this 
problem, but that many states have not done so.
    Based on the findings and conclusions of GAO, the Committee 
believes that requiring states to establish a verification 
system is a cost effective method of preventing prisoners from 
being counted as members of food stamp households with a 
minimal burden or inconvenience on food stamp recipients and 
states. Additionally, requiring this verification will identify 
and reduce program fraud and increase collection of benefit 
overpayments.

                      Section-by-Section Analysis

Section 1. States required to establish system to prevent prisoners 
        from being considered part of any household under the Food 
        Stamp Act of 1977

    Subsection (a) adds to the Food Stamp Act a requirement 
that states establish a system and take action on a periodic 
basis to verify that an individual who is detained in a 
correctional, detention, or penal facility administered under 
Federal or state law is not considered to be part of any 
household. The Secretary may waive this verification 
requirement if the Secretary determines that extraordinary 
circumstance have made it impracticable for the state to obtain 
the information necessary to establish such a verification 
system.
    While the Committee provides the Secretary the authority to 
waive the verification requirement, the Committee intends that 
the Secretary invoke this authority in truly extraordinary 
circumstances. One example of an extraordinary circumstance is 
a lack of computerized records of state or county inmate 
populations. Under such circumstances, the state could have 
great difficulty establishing a verification system and the 
Secretary may be justified in granting an exception. However, 
even under such circumstances, the Secretary should narrowly 
tailor the exception to address the specific situation giving 
rise to the exception. A state's receipt of a waiver from the 
verification system required by this Act in no way relieves a 
state of its obligation and responsibilities in administering 
the food stamp program to verify the accuracy of information 
provided by households or to enforce households responsibility 
to notify the state of any change in household status or 
circumstances.
    Subsection (b) cross references the penalties against 
states contained in section 11(g) of the Act for failing to 
comply with the Food Stamp Act. Section 11(g) requires the 
Secretary to give notice to a state of its failure to comply 
with the Act. If a state continues to be in non-compliance, the 
Secretary may withhold a portion of the state's administrative 
funds. The Secretary may request the Attorney General to seek 
an injunction ordering the state to comply with the Act in 
addition to withholding administrative funds or as an 
alternative to withholding administrative funds.
    Subsection (c) makes a conforming amendment to a cross 
reference in the Food Stamp Act.
    Subsection (d) provides states one year from the date of 
enactment to comply with the provisions of this bill without 
risk of penalty.

                        Committee Consideration

    The Committee on Agriculture met, pursuant to notice and 
with a quorum present, on March 12, 1997, to consider H.R. 1000 
and other pending business. Chairman Smith recognized Mr. 
Goodlatte, Chairman of the Subcommittee on Department 
Operations, Nutrition, and Foreign Agriculture, for an 
explanation of H.R. 1000.
    Mr. Goodlatte provided a brief explanation of the bill, and 
Mr. Stenholm was also recognized and spoke in favor of the 
bill.
    After a brief discussion on the bill, Mr. Goodlatte moved 
that the bill, H.R. 1000, be adopted and favorably reported the 
House with a recommendation that it do pass. Mr. Goodlatte's 
motion was agreed to by a voice vote of the Committee with a 
majority quorum being present and the bill was ordered to be 
reported to the House with the recommendation that it do pass.

                   Reporting the Bill--Rollcall Votes

    In compliance with clause 2(l)(2) of rule XI of the House 
of Representatives, H.R. 1000, was reported by voice vote with 
a majority quorum present. There was no request for a recorded 
vote.

           Budget Act Compliance (Sections 308, 403 and 424)

    The provisions of clause 2(l)(3)(B) of rule XI of the Rules 
of the House of Representatives and section 308(a)(1) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, new credit authority, 
or increased or decreased revenues or tax expenditures) are not 
considered applicable. The estimate and comparison required to 
be prepared by the Director of the Congressional Budget Office 
under clause 2(l)(3)(C) of rule XI of the Rules of the House of 
Representatives and sections 403 and 424 of the Congressional 
Budget Act of 1974 submitted to the Committee prior to the 
filing of this report are as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 24, 1997.
Hon. Robert F. (Bob) Smith,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1000, a bill to 
require states to establish a system to prevent prisoners from 
being considered part of any household for purposes of 
determining eligibility of the household for Food Stamp 
benefits and the amount of Food Stamp benefits to be provided 
to the household under the Food Stamp Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Dorothy 
Rosenbaum for federal costs and Marc Nicole for state and local 
impacts.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               Congressional Budget Office Cost Estimate

H.R. 1000--A bill to require states to establish a system to prevent 
        prisoners from being considered part of any household for 
        purposes of determining eligibility of the household for Food 
        Stamp benefits and the amount of Food Stamp benefits to be 
        provided to the household under the Food Stamp Act of 1977

    Summary: H.R. 1000 would require states to establish a 
system to assure that prisoners are not counted as members of 
households that receive food stamps.
    CBO estimates that H.R. 1000 would increase federal 
spending by $1 million in fiscal year 1998, decrease federal 
spending by $1 million in fiscal year 1999, and decrease 
federal spending by $2 million in each subsequent fiscal year. 
The legislation affects direct spending; therefore, pay-as-you-
go procedures would apply.
    H.R. 1000 contains an intergovernmental mandate, as defined 
in the Unfunded Mandates Reform Act of 1995 (UMRA). CBO 
estimates that the net costs of complying with the mandate 
would not be significant. The bill would impose no new private-
sector mandates as defined in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1000 is shown in the table on the 
following page. CBO expects that, as a result of the 
legislation, about 15 states would establish automated systems 
for matching Food Stamp data with prison data. The new 
automated systems would slightly increase federal 
administrative costs, but would result in lower payments for 
Food Stamp benefits.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                        1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING                                                
Food stamp spending under current law:                                                                          
    Estimated budget authority......................    23,869    24,456    24,905    27,245    28,675    29,425
    Estimated outlays...............................    23,794    24,450    25,884    27,226    28,645    29,417
Proposed changes:                                                                                               
    Estimated budget authority......................         0         1        -1        -2        -2        -2
    Estimated outlays...............................         0         1        -1        -2        -2        -2
Food stamp spending under H.R. 1000:                                                                            
    Estimated budget authority......................    23,869    24,457    25,904    27,243    28,673    29,423
    Estimated outlays...............................    23,794    24,451    25,883    27,224    28,643    29,415
----------------------------------------------------------------------------------------------------------------

    The costs of this legislation fall within budget function 
600 (Income Security).
    Prisoners are currently not eligible to receive food 
stamps. If a member of a household receiving food stamps goes 
to prison, the remaining members should report the change to 
the local welfare office and the eligibility worker should 
adjust the household size and Food Stamp benefit accordingly. A 
recent General Accounting Office (GAO) report, Food Stamps: 
Substantial Overpayments Result from Prisoners Counted as 
Household Members (GAO-RCED-97-54), examined the incidence of 
prisoners being erroneously included in Food Stamp households. 
The report highlighted the usefulness of automated matches 
between Food Stamp and prison data as a way of investigating 
whether Food Stamp recipients are incarcerated.
    H.R. 1000 would require states to amend their state Food 
Stamp plans to include a system for determining whether members 
of Food Stamp households are detained in penal systems 
administered under federal or state law. Currently, about 15 
states have automated systems to match state Food Stamp data 
with state, and sometimes local, prison data. These states 
account for about half of all Food Stamp benefits. CBO assumes 
that a number of states would increase their efforts to verify 
whether Food Stamp recipients are incarcerated even in the 
absence of this legislation. The GAO report has heightened 
attention to the problem and increased the likelihood that 
states will share information with each other and that the 
Department of Agriculture (USDA) will encourage states to 
undertake data matches. On the other hand, some states may not 
have prison data that are sufficiently automated to follow fora 
data match with Food Stamp data. CBO assumes the Secretary of 
Agriculture would use the authority provided in the bill and determine 
it impracticable for these states to undertake data matches. In these 
two situations--when a state would have done matches under current law 
and when, under the bill, the Secretary would determine it 
impracticable for a state to do matches--CBO estimates that H.R. 1000 
would have no impact on the federal budget.
    CBO expects, however, that as a result of this legislation 
an additional 15 states (accounting for 15 percent of Food 
Stamp benefits) would undertake data matches. Based on 
information from the GAO report and earlier USDA report on 
income verification, CBO estimates that the start-up costs of 
these systems would be about $100,000 per state, resulting in 
$1.5 million in total costs in 1998. The states and the federal 
government would split this cost because, under Food Stamp law, 
state administrative costs are shared at a 50 percent match 
rate. Ongoing administrative cost of less than $500,000 a year 
would continue in later years from periodic data matches and 
related follow-up.
    Furthermore, CBO estimates that the matching process in the 
15 states cited above would result in lower Food Stamp benefits 
as caseworkers identify prisoners in Food Stamp households and 
reduce benefits accordingly. The GAO found $3.5 million in Food 
Stamp benefits going to prisoners in the four states it studied 
[Florida, New York, Texas, and Los Angeles County, California]. 
These are areas with large prison populations, and all but 
California currently match data at the state level, through 
Texas began its matches after GAO completed the study. Based on 
the prison populations and Food Stamp case loads of the 
remaining states, CBO estimates that after the matches were 
fully operational, Food Stamp outlays would be lower by $2 
million a year as a result of the provision.
    Finally, CBO expects that states will recoup some 
overissuances of benefits by lowering the future Food Stamp 
benefits of the households where the remaining members continue 
to receive food stamps after the prisoner is identified. States 
return to the federal government between 65 and 80 percent of 
collected overissuances and retain the remainder. CBO estimates 
that the amount of federal savings from collected overissuances 
would be less than $500,000 a year.
    Pay-as-you-go considerations: H.R. 1000 would increase 
direct spending by $1 million in fiscal year 1998. Therefore, 
pay-as-you-go procedures would apply.
    Estimated impact on State, local, and tribal governments: 
H.R. 1000 contains an intergovernmental mandate as defined in 
UMRA, but CBO estimates that the costs of complying with the 
mandate would not exceed the threshold established in that act. 
(UMRA estimates a threshold for intergovernmental mandates of 
$50 million in 1996, adjusted annually for inflation.) The bill 
would require state Food Stamp agencies to establish a system 
to prevent prisoners from being considered part of any 
household under the Food Stamp Act of 1977. Based on 
information from GAO, USDA, and state Food Stamp 
administrators, we expect that about 15 states would comply 
with the mandate by developing automated systems to match Food 
Stamp rolls and prison rolls. CBO estimates that the cost of 
developing these systems in the states currently without this 
capability would total about $1.5 million and would be incurred 
in fiscal year 1998. As provided for in law, states would pay 
50 percent of these administrative costs.
    States would also incur ongoing administrative costs of 
less than $500,000 a year after 1998 to conduct periodic data 
matches and to follow-up on cases. These costs would be largely 
offset, however, because states retain between 20 percent and 
35 percent of the overissuances they collect.
    The bill could result in additional savings to states to 
the extent that they use newly developed matching systems to 
identify prisoners who are erroneously receiving payments from 
the Temporary Assistance for Needy Families (TANF) program. CBO 
estimates the amount of state savings from such activities 
would total less than $500,000 a year. The bill would not have 
any other significant impacts on the budgets of state and local 
government.
    Estimated impact on the private sector: The bill would 
impose no new private-sector mandates as defined in UMRA.
    Estimated prepared by: Federal cost--Dorothy Rosenbaum; 
impact on State, local, and tribal governments--Marc Nocole; 
impact on the private sector--Daniel Mont.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds the 
Constitutional authority for this legislation in Article I, 
section 8, clause 18, that grants Congress the power to make 
all laws necessary and proper for carrying out the powers 
vested by Congress in the Government of the United States or in 
any department or officer thereof.

                          Oversight Statement

    No summary of oversight findings and recommendations made 
by the Committee on Government Reform and Oversight as provided 
for in clause 2(l)(3)(D) of rule XI, and under clause 4(c)(2) 
of rule X of the Rules of the House of Representatives was 
available to the Committee with reference to the subject matter 
specifically addressed by H.R. 1000.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Agriculture's oversight findings and 
recommendations are reflected in the body of this report.

                        Committee Cost Estimate

    Pursuant to clause 7(a) of rule XIII of the Rules of the 
House of Representatives, the Committee report incorporates the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to sections 403 and 424 of the 
Congressional Budget Act of 1974.

                      Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                    SECTION 11 OF THE FOOD STAMP ACT

                             administration

  Sec. 11. (a) * * *
          * * * * * * *
  (e) The State plan of operation required under subsection (d) 
of this section shall provide, among such other provisions as 
may be required by regulation--
          (1) * * *
          * * * * * * *
          (8) safeguards which limit the use or disclosure of 
        information obtained from applicant households to 
        persons directly connected with the administration or 
        enforcement of the provisions of this Act, regulations 
        issued pursuant to this Act, Federal assistance 
        programs, or federally assisted State programs, except 
        that--
                  (A) * * *
          * * * * * * *
                  (E) the safeguards shall not prevent 
                compliance with paragraph (16) or (20)(B);
          * * * * * * *
          [(20) that the State agency shall establish a system 
        and take action on a periodic basis to verify and 
        otherwise assure that an individual does not receive 
        coupons in more than one jurisdiction within the 
        State;]
          (20) that the State agency shall establish a system 
        and take action on a periodic basis--
                  (A) to verify and otherwise assure that an 
                individual does not receive coupons in more 
                than one jurisdiction within the State; and
                  (B) to verify and otherwise assure that an 
                individual who is officially detained in a 
                correctional, detention, or penal facility 
                administered under Federal or State law is not 
                considered to be part of any household 
                participating in the food stamp program, except 
                to the extent that the Secretary determines 
                that extraordinary circumstances have made it 
                impracticable for the State agency to obtain 
                the information necessary to do so.
          * * * * * * *