In general.—

(A) Implementation .— 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.

(B) Timely implementation .— Each State agency is encouraged to implement an electronic benefit transfer system under subparagraph (A) as soon as practicable.

(C) State flexibility .— 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.

(D) Operation .— An electronic benefit transfer system should take into account generally accepted standard operating rules based on— (i) commercial electronic funds transfer technology; (ii) the need to permit interstate operation and law enforcement monitoring; and (iii) the need to permit monitoring and investigations by authorized law enforcement agencies.