7 U.S.C. § 2016: Issuance and use of program benefits

Except as provided in subsection (i), EBT cards shall be issued only to households which have been duly certified as eligible to participate in the supplemental nutrition assistance program. Benefits issued to eligible households shall be used by them only to purchase food from retail food stores which have been approved for participation in the supplemental nutrition assistance program at prices prevailing in such stores: Provided , That nothing in this chapter shall be construed as authorizing the Secretary to specify the prices at which food may be sold by wholesale food concerns or retail food stores. EBT cards issued to eligible households shall be simple in design and shall include only such words or illustrations as are required to explain their purpose. The name of any public official shall not appear on any EBT card. The Secretary shall prescribe appropriate procedures for the delivery of benefits to benefit issuers and for the subsequent controls to be placed over such benefits by benefit issuers in order to ensure adequate accountability. Notwithstanding any other provision of this chapter, the State agency shall be strictly liable to the Secretary for any financial losses involved in the acceptance, storage and issuance of benefits, except that in the case of losses resulting from the issuance and replacement of authorizations for benefits which are sent through the mail, the State agency shall be liable to the Secretary to the extent prescribed in the regulations promulgated by the Secretary. If the Secretary determines, in consultation with the Inspector General of the Department of Agriculture, that it would improve the integrity of the supplemental nutrition assistance program, the Secretary shall require a State agency to issue or deliver benefits using alternative methods. Except as provided in subparagraph (B), the Secretary shall require participating retail food stores (including restaurants participating in a State option restaurant program intended to serve the elderly, disabled, and homeless) to pay 100 percent of the costs of acquiring, and arrange for the implementation of, electronic benefit transfer point-of-sale equipment and supplies, including related services. farmers’ markets and other direct-to-consumer markets, military commissaries, nonprofit food buying cooperatives, and establishments, organizations, programs, or group living arrangements described in paragraphs (5), (7), and (8) of section 2012(k) of this title ; and establishments described in paragraphs (3), (4), and (9) of section 2012(k) of this title , other than restaurants participating in a State option restaurant program. Nothing in this paragraph permits the charging of fees relating to the redemption of supplemental nutrition assistance program benefits, in accordance with subsection (h)(13). Effective on the date of enactment of the Food, Conservation, and Energy Act of 2008, no State shall issue any coupon, stamp, certificate, or authorization card to a household that receives supplemental nutrition assistance under this chapter. Effective beginning on the date that is 1 year after the date of enactment of the Food, Conservation, and Energy Act of 2008, only an EBT card issued under subsection (i) shall be eligible for exchange at any retail food store. no longer be an obligation of the Federal Government; and not be redeemable. Effective beginning on February 7, 2014 , except as provided in subparagraph (B), no State shall issue manual vouchers to a household that receives supplemental nutrition assistance under this chapter or allow retail food stores to accept manual vouchers as payment, unless the Secretary determines that the manual vouchers are necessary, such as in the event of an electronic benefit transfer system failure or a disaster situation. The Secretary may exempt categories of retail food stores or individual retail food stores from subparagraph (A) based on criteria established by the Secretary. To enhance the anti-fraud protections of the program, the Secretary shall require all parties providing electronic benefit transfer services to provide for and maintain unique terminal identification number information through the supplemental nutrition assistance program electronic benefit transfer transaction routing system. Not earlier than 2 years after February 7, 2014 , the Secretary shall issue proposed regulations to carry out this paragraph. In issuing regulations to carry out this paragraph, the Secretary shall consider existing commercial practices for other point-of-sale debit transactions. the farmers’ market or direct marketing farmer provides to the Secretary information on location and hours of operation at each location; and the point of sale device used by the farmers’ market or direct marketing farmer is capable of providing location information of the device through the electronic benefit transfer system; or if the Secretary determines that the technology is not available for a point of sale device to meet the requirement under subclause (I), the farmers’ market or direct marketing farmer provides to the Secretary any other information, as determined by the Secretary, necessary to ensure the integrity of transactions processed using the point of sale device. The State agency may establish a procedure for staggering the issuance of benefits to eligible households throughout the month. Upon the request of the tribal organization that exercises governmental jurisdiction over the reservation, the State agency shall stagger the issuance of benefits for eligible households located on reservations for at least 15 days of a month. not reduce the allotment of any household for any period; and ensure that no household experiences an interval between issuances of more than 40 days. The procedure may include issuing benefits to a household in more than 1 issuance during a month only when a benefit correction is necessary. Not later than October 1, 2002 , each State agency shall implement an electronic benefit transfer system under which household benefits determined under section 2017(a) or 2035 of this title are issued from and stored in a central databank, unless the Secretary provides a waiver for a State agency that faces unusual barriers to implementing an electronic benefit transfer system. Each State agency is encouraged to implement an electronic benefit transfer system under subparagraph (A) as soon as practicable. Subject to paragraph (2), a State agency may procure and implement an electronic benefit transfer system under the terms, conditions, and design that the State agency considers appropriate. commercial electronic funds transfer technology; the need to permit interstate operation and law enforcement monitoring; and the need to permit monitoring and investigations by authorized law enforcement agencies. defining the required level of recipient protection regarding privacy, ease of use, and access to and service in retail food stores; the terms and conditions of participation by retail food stores, financial institutions, and other appropriate parties; measures to maximize the security of a system using the most recent technology available that the State agency considers appropriate and cost effective and which may include personal identification numbers, photographic identification on electronic benefit transfer cards, and other measures to protect against fraud and abuse; and to set and enforce sales restrictions based on benefit transfer payment eligibility by using scanning or product lookup entry; and to deny benefit tenders for manually entered sales of ineligible items. system transaction interchange, reliability, and processing speeds; financial accountability; the required testing of system operations prior to implementation; the analysis of the results of system implementation in a limited project area prior to expansion; and procurement standards. a sufficient number of eligible retail food stores, including those stores able to serve minority language populations, have agreed to participate in the system throughout the area in which it will operate to ensure that eligible households will not suffer a significant reduction in their choice of retail food stores or a significant increase in the cost of food or transportation to participating food stores; and any special equipment necessary to allow households to purchase food with the benefits issued under this chapter is operational at a sufficient number of registers to provide service that is comparable to service provided individuals who are not members of households receiving supplemental nutrition assistance program benefits, as determined by the Secretary. Administrative costs incurred in connection with activities under this subsection shall be eligible for reimbursement in accordance with section 2025 of this title , subject to the limitations in section 2025(g) of this title . The Secretary shall periodically inform State agencies of the advantages of using electronic benefit systems to issue benefits in accordance with this subsection in lieu of issuing coupons to households. This subsection shall not diminish the authority of the Secretary to conduct projects to test automated or electronic benefit delivery systems under section 2026(f) of this title . Regulations issued by the Secretary regarding the replacement of benefits and liability for replacement of benefits under an electronic benefit transfer system shall be similar to the regulations in effect for a paper-based supplemental nutrition assistance issuance system. A State agency may collect a charge for replacement of an electronic benefit transfer card by reducing the monthly allotment of the household receiving the replacement card. Subject to terms and conditions established by the Secretary in accordance with clause (ii), if a household makes excessive requests for replacement of the electronic benefit transfer card of the household, the Secretary may require a State agency to decline to issue a replacement card to the household unless the household, upon request of the State agency, provides an explanation for the loss of the card. the household be given the opportunity to provide the requested explanation and meet the requirements under this paragraph promptly; after an excessive number of lost cards, the head of the household shall be required to review program rights and responsibilities with State agency personnel authorized to make determinations under section 2014(a) of this title ; and any action taken, including actions required under section 2015(b)(2) of this title , other than the withholding of the electronic benefit transfer card until an explanation described in subclause (I) is provided, shall be consistent with the due process protections under section 2015(b) or 2020(e)(10) of this title, as appropriate. In implementing this paragraph, a State agency shall act to protect homeless persons, persons with disabilities, victims of crimes, and other vulnerable persons who lose electronic benefit transfer cards but are not intentionally committing fraud. While a State may decline to issue an electronic benefits transfer card until a household satisfies the requirements under this paragraph, nothing in this paragraph shall be considered a denial of, or limitation on, the eligibility for benefits under section 2014 of this title . A State agency may require that an electronic benefit card contain a photograph of 1 or more members of a household. If a State agency requires a photograph on an electronic benefit card under subparagraph (A), the State agency shall establish procedures to ensure that any other appropriate member of the household or any authorized representative of the household may utilize the card. Section 1693 o –2 of title 15 shall not apply to electronic benefit transfer or reimbursement systems under this chapter. The term “affiliate” has the meaning provided the term in section 1841(k) of title 12 . The term “company” has the meaning provided the term in section 1971 of title 12 , but shall not include a bank, a bank holding company, or any subsidiary of a bank holding company. issued from and stored in a central databank; electronically accessed by household members at the point of sale; and provided by a Federal or State government. The term “point-of-sale service” means any product or service related to the electronic authorization and processing of payments for merchandise at a retail food store, including credit or debit card services, automated teller machines, point-of-sale terminals, or access to on-line systems. obtain some additional point-of-sale service from the company or an affiliate of the company; or not obtain some additional point-of-sale service from a competitor of the company or competitor of any affiliate of the company. Before promulgating regulations or interpretations of regulations to carry out this paragraph, the Secretary shall consult with the Board of Governors of the Federal Reserve System. A State agency shall establish a procedure for recovering electronic benefits from the account of a household due to inactivity, or due to the death of all members of the household. A State agency may store recovered electronic benefits off-line in accordance with clause (ii), if the household has not accessed the account after 3 months. send notice to a household the benefits of which are stored under clause (i); and not later than 48 hours after request by the household, make the stored benefits available to the household. Subject to clause (ii), a State agency shall expunge benefits that have not been accessed by a household after a period of 9 months, or upon verification that all members of the household are deceased. provide sufficient notice to the household that benefits will be expunged due to inactivity, and the date upon which benefits will be expunged; for benefits stored off-line in accordance with subparagraph (B), provide the household an opportunity to request that such benefits be restored to the household; and not later than 48 hours after request by the household, make the benefits available to the household. send notice to a household the benefits of which are stored under subparagraph (B); and not later than 48 hours after request by the household, make the stored benefits available to the household. No interchange fees shall apply to electronic benefit transfer transactions under this subsection. Effective through fiscal year 2023, neither a State, nor any agent, contractor, or subcontractor of a State who facilitates the provision of supplemental nutrition assistance program benefits in such State may impose a fee for switching (as defined in subsection (j)(1)(H)) or routing such benefits. Subject to subparagraph (B), the Secretary shall authorize the use of mobile technologies for the purpose of accessing supplemental nutrition assistance program benefits. Before authorizing implementation of subparagraph (A) in all States, the Secretary shall approve not more than 5 demonstration project proposals submitted by State agencies that will pilot the use of mobile technologies for supplemental nutrition assistance program benefits access. provides recipient protections regarding privacy, ease of use, household access to benefits, and support similar to the protections provided under existing methods; ensures that all recipients, including those without access to mobile payment technology and those who shop across State borders, have a means of benefit access; requires retail food stores, unless exempt under section 2016(f)(2)(B) of this title , to bear the costs of acquiring and arranging for the implementation of point-of-sale equipment and supplies for the redemption of benefits that are accessed through mobile technologies; requires that foods purchased with benefits issued under this section through mobile technologies are purchased at a price not higher than the price of the same food purchased by other methods used by the retail food store, as determined by the Secretary; ensures adequate documentation for each authorized transaction, adequate security measures to deter fraud, and adequate access to retail food stores that accept benefits accessed through mobile technologies, as determined by the Secretary; provides for an evaluation of the demonstration project, including, but not limited to, an evaluation of household access to benefits; requires that the State demonstration projects are voluntary for all retail food stores and that all recipients are able to use benefits in non-participating retail food stores; and meets other criteria as established by the Secretary. reduce fraud; encourage positive nutritional outcomes; and meet such other criteria as determined by the Secretary. The Secretary shall solicit and approve the qualifying demonstration projects required under subparagraph (B)(i) not later than January 1, 2021 . by not later than January 1, 2022 , authorize implementation of subparagraph (A) in all States, unless the Secretary makes a finding, based on the data provided under subparagraph (B), that implementation in all States requires further study by way of an extended pilot period or is not in the best interest of the supplemental nutrition assistance program; and if the determination made in clause (i) is not to implement subparagraph (A) in all States, submit a report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate that includes the basis of the finding. Notwithstanding any other provision of law, a State agency may, with the approval of the Secretary, issue benefits under this chapter to an individual who is ineligible to participate in the supplemental nutrition assistance program solely as a result of section 2015( o )(2) of this title or section 1612 or 1613 of title 8. the value of the benefits; and the costs of issuing and redeeming benefits, and other Federal costs, incurred in providing the benefits, as determined by the Secretary. Notwithstanding section 3302(b) of title 31 , payments received under subparagraph (A) shall be credited to the supplemental nutrition assistance program appropriation account or the account from which the costs were drawn, as appropriate, for the fiscal year in which the payment is received. To be eligible to issue benefits under this subsection, a State agency shall comply with reporting requirements established by the Secretary to carry out this subsection. submit a plan to the Secretary that describes the conditions and procedures under which the benefits will be issued, including eligibility standards, benefit levels, and the methodology the State agency will use to determine amounts due the Secretary under paragraph (2); and obtain the approval of the Secretary for the plan. A sanction, disqualification, fine, or other penalty prescribed under Federal law (including sections 2021 and 2024 of this title) shall apply to a violation committed in connection with a benefit issued under this subsection. Administrative and other costs incurred in issuing a benefit under this subsection shall not be eligible for Federal funding under this chapter. Section 2025(c) of this title shall not apply to benefits issued under this subsection. The term “electronic benefit transfer card” means a card that provides benefits under this chapter through an electronic benefit transfer service (as defined in subsection (h)(11)(A)). The term “electronic benefit transfer contract” means a contract that provides for the issuance, use, or redemption of program benefits in the form of electronic benefit transfer cards. The term “interoperability” means a system that enables program benefits in the form of an electronic benefit transfer card to be redeemed in any State. 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. The term “portability” means a system that enables program benefits 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 chapter. 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. The term “smart card” means an intelligent benefit card described in section 2026(f) of this title . The term “switching” means the routing of an intrastate or interstate transaction that consists of transmitting the details of a transaction electronically recorded through the use of an electronic benefit transfer card in one State to the issuer of the card that may be in the same or different State. Not later than October 1, 2002 , the Secretary shall ensure that systems that provide for the electronic issuance, use, and redemption of program benefits in the form of electronic benefit transfer cards are interoperable, and supplemental nutrition assistance program benefits are portable, among all States. The cost of achieving the interoperability and portability required under paragraph (2) shall not be imposed on any retail store, or any wholesale food concern, approved to participate in the supplemental nutrition assistance program. 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 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. is entered into before the date that is 30 days after the regulations are promulgated under paragraph (4); and expires after October 1, 2002 . 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); demonstrates that the best interest of the supplemental nutrition assistance program would be served by granting the waiver with respect to the electronic benefit transfer system used by the State agency to administer the supplemental nutrition assistance program; and specifies a date by which the State agency will achieve the interoperability and portability required under paragraph (2). The Secretary shall allow a State agency that is using smart cards for the delivery of supplemental nutrition assistance 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. incurred after February 11, 2000 , and before October 1, 2002 , if the State agency uses the standard of interoperability and portability adopted by a majority of State agencies; and incurred after September 30, 2002 , if the State agency uses the uniform national standard of interoperability and portability adopted under paragraph (4)(A). The total amount paid to State agencies for each fiscal year under subparagraph (A) shall not exceed $500,000. Subject to paragraph (4), the Secretary shall approve retail food stores to accept benefits from recipients of supplemental nutrition assistance through on-line transactions. establish recipient protections regarding privacy, ease of use, access, and support similar to the protections provided for transactions made in retail food stores; ensure benefits are not used to pay delivery, ordering, convenience, or other fees or charges; of any delivery, ordering, convenience, or other fee or charge associated with the food purchase; and that any such fee cannot be paid with benefits provided under this chapter; ensure the security of on-line transactions by using the most effective technology available that the Secretary considers appropriate and cost-effective and that is comparable to the security of transactions at retail food stores; and meet other criteria as established by the Secretary. Each State agency shall ensure that recipients of supplemental nutrition assistance can use benefits on-line as described in this subsection as appropriate. Before the Secretary authorizes implementation of paragraph (1) in all States, the Secretary shall carry out a number of demonstration projects as determined by the Secretary to test the feasibility of allowing retail food stores to accept benefits through on-line transactions. a method of ensuring that benefits may be used to purchase only eligible items under this chapter; a description of the method of educating participant households about the availability and operation of on-line purchasing; adequate testing of the on-line purchasing option prior to implementation; the provision of data as requested by the Secretary for purposes of analyzing the impact of the project on participant access, ease of use, and program integrity; reports on progress, challenges, and results, as determined by the Secretary; and such other criteria, including security criteria, as established by the Secretary. In addition to amounts otherwise made available, there is appropriated for fiscal year 2021, out of any amounts in the Treasury not otherwise appropriated, $25,000,000 to remain available through September 30, 2026 , to carry out this section. to make technological improvements to improve online purchasing in the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.); to modernize electronic benefit transfer technology; to support the mobile technologies demonstration projects and the use of mobile technologies authorized under section 7(h)(14) of the Food and Nutrition Act of 2008 ( 7 U.S.C. 2016(h)(14) ); and to provide technical assistance to educate retailers on the process and technical requirements for the online acceptance of the supplemental nutrition assistance program benefits, for mobile payments, and for electronic benefit transfer modernization initiatives.” additional support for the Food and Nutrition Service to conduct end-to-end testing in the online production environment; and technical assistance to educate retailers on the process and technical requirements for the online acceptance of SNAP benefits and to support and expedite SNAP online purchasing. The Secretary shall prioritize eligible entities with experience building online purchasing platforms for technology solutions for farmers’ markets and direct-marketing farmers. In this subsection, the term ‘eligible entity’ means a nonprofit entity with experience building online purchasing platforms or technology solutions, or with experience working with commercial entities that have experience building online purchasing platforms or technology solutions. review technological developments, including developments related to security and privacy, surrounding mobile payment technology, to support the mobile technologies demonstration projects and the use of mobile technologies authorized under section 7(k)(14) [probably should be “7(k)(4)”] of the Food and Nutrition Act of 2008 [ 7 U.S.C. 2016(k)(4) ]; and test methods to modernize electronic benefit transfer technology for the purpose of improving the security and integrity of the electronic benefits transfer system. a description of the activities conducted under subsections (a), (b), and (c); a description of any grants, cooperative agreements, or contracts awarded under this section; an analysis of the technological developments surrounding mobile payment technology; and a summary of EBT modernization testing results under subsection (c)(2). There is hereby appropriated to the Secretary, out of any money in the Treasury not otherwise appropriated, $5,000,000 to be available until expended to carry out this section. not more than $1,000,000 for purposes described in subsection (a); and not more than $1,000,000 for purposes described in subsection (b).” to protect the integrity of the supplemental nutrition assistance program; to ensure cost-effective portability of supplemental nutrition assistance program benefits benefits [sic] across State borders without imposing additional administrative expenses for special equipment to address problems relating to the portability; to enhance the flow of interstate commerce involving electronic transactions involving supplemental nutrition assistance program benefits benefits [sic] under a uniform national standard of interoperability and portability; and to eliminate the inefficiencies resulting from a patchwork of State-administered systems and regulations established to carry out the supplemental nutrition assistance program.”