Interoperability 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 chapter through an electronic benefit transfer service (as defined in subsection (h)(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 program benefits in the form of electronic benefit transfer cards. (C) Interoperability 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. (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 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. (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 2026(f) of this title . (H) Switching 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.

(2) Requirement 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.

(3) Cost 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.

(4) Standards Not later than 210 days after February 11, 2000 , 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 (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 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 (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 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.

(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 chapter for switching and settling interstate transactions— (i) 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 (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.