HOUSE DOCKET, NO. 4457 FILED ON: 7/10/2012
HOUSE . . . . . . . . . . . . . . . No. 4237
In the Year Two Thousand Twelve
An Act relative to the electronic benefit transfer program.
Whereas, The deferred operation of this act would tend to defeat its purpose, which is to provide for the electronic benefit transfer program, therefore, it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Paragraph (B) of section 2 of chapter 18 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out clause (i) and inserting in place thereof the following 2 clauses:-
(i) charge a fee up to the maximum amount permissible under federal law for any identification card it issues as a replacement for an identification card that has been lost, mutilated, stolen or destroyed, except if such loss or destruction occurs during the mailing of an original identification card to a recipient, if the card ceases to work through no fault of the recipient or if the department issues replacement cards on its own initiative to classes of recipients; provided that the fee shall not be less than $5; and provided further that all fees for replacement cards shall be deducted directly from the recipient’s cash assistance benefits.
(j) send a notice to any benefit recipient who requests more than 3 replacement electronic benefit transfer cards in a calendar year and monitor future requests for replacement cards; provided that the notice shall state that the department has noted an unusual number of requests for replacement electronic benefits cards and will be monitoring all future requests for replacement cards.
SECTION 2. Chapter 18 of the General laws, inserted by chapter 84 of the acts of 2011, is hereby amended by striking out sections 5I and 5J and inserting in place thereof the following 2 sections:-
Section 5I. (a) As used in sections 5I and 5J the following terms shall, unless the context clearly requires otherwise, have the following meanings:-
“Access device”, a card, code or other means of access that can be used, alone or in conjunction with another access device, to obtain payments, allotments, benefits, money, goods or other things of value, or that can be used to initiate a transfer of funds under the federal Food and Nutrition Act of 2008, 7 U.S.C. § 2011 et seq., or regulations issued pursuant to the federal Food and Nutrition Act of 2008.
“Direct cash assistance”, any manner of cash assistance provided by the department of transitional assistance including, but not limited to, temporary aid to families with dependent children, wherein the assistance is provided directly to the recipient, rather than a vendor.
“Electronic benefit transfer card”, a card that provides benefits through an electronic benefit transfer.
“Electronic benefit transfer transaction”, the use of a credit or debit card service, automated teller machine, point-of-sale terminal or access to an online system for the withdrawal of funds or the processing of a payment for merchandise or a service
“Vacation services”, furnishing interstate or foreign travel services solely for the purpose of recreation including, but not limited to transportation, lodging and travel agent services; provided, however, that vacation services shall not include travel related to: a personal or family emergency, the death of a family member, employment, medical treatment, appearance before a court of law, court-authorized parental visitation and such other categories of travel which may be designated from time to time by the department as non-recreational travel.
(b) No person shall knowingly use or accept direct cash assistance funds held on electronic benefit transfer cards or access devices for the purchase or sale of the following services or products: alcoholic beverages as defined in section 1 of chapter 138; lottery tickets; tobacco products as defined in section 1 of chapter 64C; visual material or performances intended to create or simulate sexual conduct or sexual excitement as those terms are defined in section 31 of chapter 272; firearms and ammunition as defined in section 121 of chapter 140; vacation services; tattoos or body piercings; jewelry; for gambling as defined in section 2 of chapter 23K or for the payment to the commonwealth of or any political subdivision thereof of any fees, fines, bail or bail bonds ordered by a court.
(c) Any eligible recipient of direct cash assistance who knowingly makes a prohibited purchase in violation of this section shall reimburse the department for such purchase and, for the second offense, shall be disqualified from the direct cash assistance program for a period of 2 months and, for the third offense, shall be disqualified from the direct cash assistance program permanently; provided, however, that the department shall only disqualify an eligible recipient after notice and a hearing pursuant to section 30A.
Section 5J. (a) The department shall maintain policies and practices as necessary to prevent cash assistance provided under this chapter from being used in any electronic benefit transfer transaction at: liquor stores; casinos, gambling casinos or gaming establishments licensed pursuant to chapter 23K; retail establishments which provide adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment, as defined in Section 408(a) of the Social Security Act, as amended; adult bookstores or adult paraphernalia stores, as defined in section 9A of chapter 40A; firearms dealers licensed under section 122 of chapter 140 and ammunitions dealers licensed pursuant to section 122B of chapter 140; tattoo parlors; manicure shops or aesthetic shops registered pursuant to chapter 112; rent-to-own stores; jewelry stores; or on cruise ships. Such establishments shall not accept electronic benefits transfer cards. A store owner who knowingly allows a prohibited electronic benefit transfer transaction in violation of this section or subsection (b) of section 5I shall be punished by a fine of not more than $500 for a first offense, by a fine of not less than $500 nor more than $2,500 for a second offense and by a fine of not less than $2,500 for a third or subsequent offense.
(b) A store owner who knowingly violates this section and who also possesses a license to sell alcoholic beverages under section 12 of chapter 138 shall be referred to the appropriate licensing authority for possible disciplinary action pursuant to section 64 of said chapter 138.
(c) A store owner who knowingly violates this section and who also possesses a license to sell lottery tickets under sections 26 and 27 of chapter 10 shall be referred to the director of the state lottery for possible disciplinary action.
SECTION 3. Said chapter 18 is hereby further amended by inserting after section 5K the following 3 sections:-
Section 5L. (a) As used this section and section 5M, “food stamp benefits” shall mean benefits issued pursuant to the federal Food and Nutrition Act of 2008, 7 U.S.C. §§ 2011 to 2029, inclusive, as amended, including such benefits contained on an electronic benefit transfer card.
(b) An individual commits the offense of food stamp benefits trafficking if the individual knowingly:
(1) presents for payment or redemption or transfers food stamp benefits in any form, including transfers to another, who does not, or does not intend to, use the food stamp benefits for the benefit of the household for whom the benefits were intended, as defined in the regulations of the department; or
(2) possesses, buys, sells, uses, alters, accepts or transfers food stamp benefits in any manner not authorized by the Food and Nutrition Act of 2008, 7 U.S.C. § 2011, as amended.
(c) An individual who traffics food stamp benefits, as described in subsection (b), shall:
(1) if the food stamp benefits are of a value of less than $250 or if the item used, transferred, acquired, altered or possessed has a value of less than $250, be punished by imprisonment in a jail or house of correction for not more than 1 year or by a fine of not more than $1,000, or both such fine and imprisonment; or
(2) if the food stamp benefits are of a value of $250 or more or the item used, transferred, acquired, altered or possessed has a value of $250 or more, be punished by imprisonment in a jail or house of correction for not more than 2 years or by imprisonment in a state prison for not more than 5 years or by a fine of not more than $5,000, or both fine and imprisonment.
(d) If a person is alleged to have committed the offense of trafficking in food stamp benefits 2 or more times within a 6-month period, those offenses may be aggregated and charged in a single count and the offenses so aggregated and charged shall constitute a single offense; provided, however, that, if the aggregate value of the food stamp benefits alleged to be trafficked is $250 or more, the person shall be subject to the penalties prescribed in clause (2) of subsection (c).
(e) Crimes under this section may be prosecuted and punished in any county where a defendant used, transferred, acquired or possessed food stamp benefits or in the county in which the state agency responsible for administering food stamp benefits is headquartered.
Section 5M. (a) As used in this section, “organization” shall mean a corporation for profit or not-for-profit, partnership, limited partnership, joint venture, unincorporated association, estate, trust or other commercial or legal entity; provided, however, that “organization” shall not include an entity organized as or by a governmental agency for the execution of a governmental program.
(b) An organization commits the offense of organizational food stamp benefits trafficking if the organization knowingly; (i) uses, sells, transfers, acquires, alters or possesses food stamp benefits or electronic benefit transfer cards in any manner not authorized by the Food and Nutrition Act of 2008, 7 U.S.C. § 2011, as amended, or the regulations of the department; or (2) presents for payment or redemption food stamp benefits that have been received, transferred, altered or used in violation of this section shall be guilty of organizational food stamp benefits trafficking.
(c) If an organization is alleged to have committed the offense of organizational food stamp benefits trafficking 2 or more times within a 6-month period, any of those offenses may be aggregated and charged in a single count and the offenses so aggregated and charged shall constitute a single offense.
(d) An organization that commits food stamp benefits trafficking as described in subsection (c) shall:
(1) if it is the organization’s first offense under this section, be punished by a fine of not less than $5,000;
(2) if it is the organization’s second offense under this section, be punished by a fine of not less than $10,000; or
(3) if it is the organization’s third or subsequent offense under this section, be punished by a fine of not less than $50,000.
(e) A retail or wholesale organization owner who is convicted of organizational food stamp benefits trafficking and who also possesses a license to sell alcoholic beverages under section 12 of chapter 138 shall be referred to the appropriate licensing authority for possible disciplinary action pursuant to section 64 of said chapter 138.
(f) A retail or wholesale organization owner who is convicted of organizational food stamp benefits trafficking and who also possesses a license to sell lottery tickets under sections 26 and 27 of chapter 10 shall be referred to the director of the state lottery for possible disciplinary action.
(g) Crimes under this section may be prosecuted and punished in any county where defendant used, transferred, acquired or possessed food stamp benefits, or the county in which the state agency responsible for administering food stamp benefits is headquartered.
Section 5N. The department shall develop and make available on its website for download a sign specifying the department’s fraud hotline. Business associations may also maintain a downloadable form of the sign on the business associations’ websites. Such sign shall be posted in a conspicuous area in any business accepting electronic benefits transfer cards as a form of payment. Any business accepting electronic benefit transfer cards as a form of payment shall maintain a list of categories of prohibited products under section 5I at each cash register.
SECTION 4. Notwithstanding any general or special law to the contrary, the department of transitional assistance shall provide benefits in the form of vendor payments with respect to rent and utilities whenever a determination is made that the grant has not been used in the best interests of the child or the assistance unit or other chronic misuse of benefits is occurring; provided, however, that vendor payments shall not be instituted when doing so may increase the risk of homelessness, decrease the ability to escape domestic abuse or impair the assistance unit’s ability to withhold payment as a reasonable exercise of consumer or tenant rights when there is a legitimate dispute as to whether the payment is owed. The department of transitional assistance may presume mismanagement of benefits whenever shelter costs, including, but not limited to, rent, heat, fuel and utilities, have regularly not been met without reasonable cause. At eligibility determinations and redeterminations, the department shall screen households to determine if they have chronically failed to pay rent and utilities to determine if it is appropriate to institute or terminate vendor payments and shall refer those households to the housing consumer education centers and community-based resources for assistance in meeting their expenses.
SECTION 5. Notwithstanding any general or special law to the contrary, there shall be an independent commission to study and report on the development of a cashless payment system in using electronic benefit transfer, or EBT, cards. The commission shall consist of : the commissioner of transitional assistance, or a designee, who shall serve as chair; the inspector general, or a designee; the state auditor, or a designee; 2 members of the house of representatives, 1 of whom shall be appointed by the minority leader; 2 members of the senate, 1 of whom shall be appointed by the minority leader; and 2 persons representing eligible recipients to be appointed by the governor. The commission shall research, assess and develop recommendations to implement a cashless payment system and investigate and report on the feasibility of expanding the direct vendor payment system: (i) under [direct vendor payments section]; and (ii) for rent and utility payments for all eligible recipients. The commission shall hire an independent consultant to conduct the research and assist with the preparation of any recommendations. The report shall include, but not be limited to, the following: (1) the costs associated with and any technological improvements necessary to implement and the time frame required for the expansion; (2) the implementation of a vendor payment system for the non-cash payment of rent and utility bills for all eligible recipients of direct cash assistance; and (3) the feasibility of placing fluctuating limitations on the percentage allocated to direct cash assistance and point of sale use. The commission shall submit a final report of its findings and recommendations, together with drafts of legislation necessary to implement those recommendations, by filing the same with the clerks of the senate and house on or before December 31, 2012.
SECTION 6. Notwithstanding any general or special law to the contrary, the inspector general shall conduct a data match survey involving the case records for households receiving cash assistance benefits under chapter 18 of the General Laws for the purposes of uncovering information that is inconsistent with or contradictory to information provided by the cash assistance benefit recipients. The inspector general shall submit a report that shall include the results of a further investigation on a statistically valid sample of the cases for which inconsistent or contradictory information has been found to determine if the household is receiving benefits for which it is not eligible, and if so, whether the error is due to administrative error, unintentional program violation or intentional program violation with the house and senate committees on ways and means on or before December 31, 2012; provided, however, that 60 days before filing the report the inspector general shall provide a draft of the report to the department of transitional assistance for review and comment and the inspector general shall include the department’s comments with the report when it is made public and filed.
SECTION 7. Notwithstanding any general or special law to the contrary, the department of transitional assistance shall coordinate with the Massachusetts Bay Transportation Authority and each of the regional transit authorities to ensure that by June 30, 2013, cash assistance funds held on electronic benefit transfer cards are accepted for payment of public transportation fares at electronic fare vending machines.
SECTION 8. Section 173 shall take effect 6 months after the commission established in section 174 issues its report.