For further information, please call: (512) 438-3734

Subchapter OO. ELECTRONIC BENEFIT TRANSFER (EBT) RETAILER REQUIREMENTS

40 TAC §§3.5001 - 3.5010

The repeals are proposed under the Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial assistance programs and nutritional assistance programs.

The repeals implement the Human Resources Code, §§31.001 - 31.081 and §§33.001 - 33.027.

§3.5001.Definitions.

§3.5002.Qualifications for Retailers and Third-Party Processors.

§3.5003.General Conditions for Retailer and Third-Party Processor Participation.

§3.5004.Requirements for Retailers Operating Point-of-Sale (POS) Terminals Supplied by the Retailer Management Electronic Benefit Transfer (EBT) Contractor.

§3.5005.Deployment of Point-of-Sale (POS) Terminals (Food Stamp Redeemers Only).

§3.5006.Off-Line (Manual) Transactions.

§3.5007.Third-Party Processors.

§3.5008.Settlements and Credits.

§3.5009.Resolution Procedures for Retailer Management Electronic Benefit Transfer (EBT) Contractor, Retailer, and/or Third Party Processor Disputes.

§3.5010.Administrative Remedies Regarding Disputes.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 25, 2003.

TRD-200302636

For further information, please call: (512) 438-3734

Subchapter UU. ELECTRONIC BENEFITS TRANSFER (EBT)

40 TAC §§3.7401 - 3.7419

The new sections are proposed under the Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial assistance programs and nutritional assistance programs.

The new sections implement the Human Resources Code, §§31.001 - 31.081 and §§33.001 - 33.027.

§3.7401.What do certain words and terms in this subchapter mean?

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) CFR--The United States Code of Federal Regulations.

(2) Cash-back--The disbursement of funds from a cash benefit account transacted through a point-of-sale (POS) terminal.

(3) Client--A household member and/or his authorized representative eligible to receive Temporary Assistance for Needy Families (TANF) and/or Food Stamp Program benefits and to perform transactions using an Electronic Benefit Transfer (EBT) card.

(4) Day--A calendar day unless otherwise specified.

(5) DHS--The Texas Department of Human Services.

(6) EBT--Electronic Benefit Transfer. The delivery of government benefits through electronic means and media.

(7) EBT contractors--Vendors that contract with DHS to provide EBT services in Texas.

(8) EBT program transactions--Benefit or account transactions involving:

(F) reconciliation; or

(G) queries.

(9) EBT system--A computer-based system in which the benefit authorization is received from a central computer through a POS terminal.

(10) Equipment--The hardware and equipment, if any, the retailer management EBT contractor provides to a retailer on behalf of DHS.

(11) Food Stamp Program--The federal food assistance program funded by the Food and Nutrition Service (FNS) division of the United States Department of Agriculture and administered by DHS in Texas.

(12) PIN--A four-digit alphanumeric code selected by or assigned to the client. Used to verify identity of a cardholder when performing an online transaction at automatic teller machines or POS terminals.

(13) POS terminal--Point-of-sale terminal used in connection with the authorization and redemption of EBT program benefits. A terminal may be used for other purposes.

(14) Retailer--A merchant located within the physical borders of Texas that:

(A) is certified by FNS to accept food stamp benefits; or

(B) chooses to accept TANF cash for purchases or provide TANF cash.

(15) TANF--Temporary Assistance for Needy Families. A public assistance program that issues cash benefits to eligible households with minor and dependent children.

(16) Vendor--A company that contracts with DHS to provide EBT services.

§3.7402.What is Electronic Benefit Transfer (EBT)?

(a) DHS uses the EBT computer process as an alternative to paper issuance of:

(1) food stamp benefits, as required by 7 CFR §274.12(a), that are credited to an EBT food account; and

(2) TANF benefits, with certain exceptions, that are credited to an EBT cash account.

(b) DHS contracts with vendors to maintain EBT accounts.

§3.7403.What is an EBT card?

The EBT card is the debit card food stamp households use at retail food stores to access their benefits to purchase food. TANF households use the EBT card to obtain cash or to purchase allowable items at participating businesses.

§3.7404.Who controls access to the EBT account?

Access to the EBT is controlled by the primary cardholder, who is either:

(1) the household member who is the case name; or

(2) an authorized representative.

§3.7405.How does a primary cardholder use the EBT card?

(a) The primary cardholder uses a PIN to access the:

(1) TANF cash account; or

(2) EBT food account.

(b) DHS arranges for the primary cardholder to have one EBT card and a corresponding PIN.

(1) allows the cardholder to select a PIN; or

(2) pre-assigns a PIN for each new TANF and food stamp cardholder.

§3.7406.Which households must have authorized representatives?

The following households must have authorized representatives:

(1) TANF households with a protective payee or representative payee assigned by DHS, as required by DHS's Texas Works Handbook; and

(2) food stamp households residing in an alcohol or drug treatment center or group living arrangement, as required by 7 CFR §273.11(e) and (f).

§3.7407.Does DHS allow access to EBT benefits by anyone other than the primary cardholder?

(a) DHS allows a secondary cardholder at the request of a household's primary cardholder.

(b) To minimize the risk of loss or abuse of a household's benefits, DHS allows a secondary cardholder only in situations in which the case name is the primary cardholder.

(1) one cash account; and

(2) a food account.

§3.7408.How does DHS put TANF and food stamp benefits into a household's EBT account?

After certifying a household for monthly TANF and/or food stamp benefits, DHS makes the benefits available through EBT accounts on a staggered cycle over the first few calendar days of the month. The cycle is based on the last digit in the case number as follows:

Figure: 40 TAC §3.7408

§3.7409.Where do TANF and food stamp households use their EBT benefits?

(a) TANF households may use the EBT card cash account to:

(1) make purchases of their choice at authorized food retailers; or

(2) obtain cash at participating businesses.

(b) Food stamp households may use the EBT card food account for authorized purchases at authorized food retailers, as specified in 7 CFR §274.12(g).

§3.7410.Do food retailers give change in cash to food stamp households purchasing food with EBT food account benefits?

Retail food stores that accept EBT payment deduct payment amounts from the EBT food account and do not return change in cash to households.

§3.7411.Do businesses charge EBT accounts when the EBT card is used?

(a) Participating businesses in Texas may charge households $.50 per transaction for the third and subsequent cash-only cash-back transactions over $50 in a month.

(b) Participating out-of-state businesses determine the amount they charge for cash-back transactions.

(c) A household must verify and accept the amount of a charge before initiating a transaction to withdraw cash at an out-of-state business.

§3.7412.What happens to the benefits in an EBT food account if a food stamp household moves out of Texas?

The food stamp primary cardholder of a household moving from Texas, either permanently or temporarily because of a family emergency, uses the Texas EBT card at participating out-of-state businesses. If no businesses accept the Texas EBT card in the area, the cardholder:

(1) contacts the DHS vendor by calling the EBT toll-free number;

(2) requests that the EBT benefits be converted to food stamp coupons that can be used in other states. DHS:

(A) converts EBT benefits to paper coupon benefits within three business days after the request, as required by 7 CFR §274.12(f)(6); and

(B) uses direct-mail issuance to send the coupons to an address that is outside the EBT retailer area.

§3.7413.What happens to the benefits in a TANF cash account if the TANF household moves out of Texas?

(a) A TANF household moving out of Texas must use the EBT card:

(1) to remove the cash from the cash account anytime after a month's benefit becomes available; or

(2) at a participating out-of-state business. DHS will not convert a month's benefit if the recipient has already accessed a portion of it.

(b) DHS converts EBT cash benefits to a check, payable to the case name individual or payee, if:

(1) the household moves to an out-of-state area that does not accept the Texas EBT card before a particular month's TANF benefit is available; and

(2) the household requests DHS convert the benefits to a check.

§3.7414.What is DHS's procedure if EBT benefits cannot be used because of a disaster like a hurricane or flood?

(a) If TANF and food stamp EBT benefits become unavailable for more than three days because of a natural disaster or other major emergency or crisis, DHS may offer cardholders an alternative method of issuance of benefits if feasible and cost-effective.

(b) DHS determines alternative benefit issuance methods, which may include:

(1) cashing out EBT benefits and issuing money orders, obtained at DHS-specified locations;

(2) state checks payable to the household either mailed or obtained at DHS-specified locations;

(3) direct-mail issuance of food coupons to recipients; or

(4) over-the-counter food stamp issuance in specified counties or locations.

§3.7415.What happens if the EBT card is lost or stolen?

(a) TANF and food stamp EBT cardholders are responsible for protecting the card and PIN.

(b) Cardholders call the EBT vendor's toll-free number to report a lost or stolen card or compromised PIN.

(1) The vendor immediately places a hold on the card access, as required by 7 CFR §274.12(f)(5).

(2) DHS applies the hold required by 7 CFR 274.12(f)(5) to both TANF and food stamp accounts.

§3.7416.Does DHS replace lost TANF or food stamp benefits?

(a) DHS replaces benefits removed from an EBT account without authorization after the household or representative reports a lost or stolen EBT card or compromised PIN to the DHS vendor, as required by 7 CFR §274.12(f)(5), which DHS applies to both TANF and food stamps.

(b) DHS does not replace TANF or food stamp benefits issued by the EBT card, except as provided by subsection (a) of this section.

§3.7417.What happens to EBT benefits a TANF or food stamp household does not use?

When a household fails to access the EBT cash or food account for three consecutive months, the EBT vendor:

(1) notifies DHS, as required by 7 CFR §274.12(f)(7), which DHS applies to both TANF and food stamps; and

(2) DHS immediately places a hold on future issuances. The hold is not released until the household contacts the local DHS office.

§3.7418.Under what circumstances does DHS cancel and remove benefits from a TANF or food stamp household's EBT account?

(a) DHS cancels and removes TANF benefits from a household's EBT account if the account has not been accessed for one year.

(b) DHS cancels and removes food stamp benefits in the following situations:

(1) the household has not accessed the account for one year, as specified in 7 CFR §274.12(f)(7);

(2) the account has been converted to food stamp coupons, and the client has not spent the remaining benefits in the account within one week after the conversion, as specified in 7 CFR §274.12(f)(6); or

(3) a one-person food stamp household is denied due to the death of the recipient.

§3.7419.Who answers questions about EBT cash and food balances for TANF and food stamp households?

(a) TANF and food stamp households contact the EBT call center's toll-free help desk to report an EBT account balance error or an EBT transaction error. Help desk staff will resolve questions by contacting:

(1) the retailer management EBT contractor; or

(2) DHS State Office Lone Star Technology Department staff.

(b) Households claiming an EBT account or transaction error that are dissatisfied with DHS's decision may request a fair hearing as provided by DHS's fair hearing sections in Chapter 79, Subchapters L, M, N, and O of this title (relating to Fair Hearings, Appeals Process, Hearing Procedure, and Social Service Appeals).

(c) The household must inform the local DHS office of the request for a fair hearing. No later than five days following the request, DHS staff:

(1) complete a Petition for Fair Hearing form; and

(2) send the form to the DHS regional attorney for the region in which the client lives.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 25, 2003.

TRD-200302637

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 8, 2003

For further information, please call: (512) 438-3734

Subchapter ZZ. ELECTRONIC BENEFIT TRANSFER (EBT) RETAILER REQUIREMENTS

40 TAC §§3.7901 - 3.7920

The new sections are proposed under the Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial assistance programs and nutritional assistance programs.

The new sections implement the Human Resources Code, §§31.001 - 31.081 and §§33.001 - 33.027.

§3.7901.What do certain words and terms in this subchapter mean?

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) ACH--Automated Clearing House Network. The Federal Reserve and financial institutions operate the ACH network to electronically process fund transfers between financial institutions.

(2) Advice--Electronic message a retailer sends to receive reimbursement for a manual transaction previously authorized verbally by the call center. The EBT system acknowledges receipt of the Advice, but does not send another approval. The Advice may be declined if it does not match the information on the original transaction authorized by the call center.

(3) Banking business day--A calendar day (begins at midnight and ends the following midnight) other than a calendar day that is a Saturday, Sunday, or day on which banks and federal institutions are closed.

(4) CFR--The United States Code of Federal Regulations.

(5) Cash-back--The disbursement of funds from a cash benefit account transacted through a point-of-sale (POS) terminal.

(6) Chargeback--An account adjustment entry against the respondent's settlement account made as a result of the resolution of the dispute in favor of the initiator.

(7) Client--A household member or his authorized representative eligible to receive Temporary Assistance for Needy Families (TANF) and/or Food Stamp Program benefits and to perform transactions using an EBT card.

(8) Day--A calendar day unless otherwise specified.

(9) DHS--The Texas Department of Human Services.

(10) EBT--Electronic Benefit Transfer. The delivery of government benefits through electronic means and media.

(11) EBT contractors--Vendors that contract with DHS to provide EBT services in Texas.

(12) EBT program transactions--Benefit or account transactions involving:

(F) reconciliation; or

(G) queries.

(13) EBT system--A computer-based system in which the benefit authorization is received from a central computer through a POS terminal.

(14) Entertainment--The sale of alcoholic beverages, legalized games of chance, sexually oriented material, coin-operated amusement machines, or amusement services as defined by the Comptroller of Public Accounts for tax purposes in 34 TAC §3.298 (relating to Amusement Services).

(15) Equipment--The hardware and equipment, if any, the retailer management EBT contractor provides to a retailer on behalf of DHS.

(16) FNS--Food and Nutrition Service. The division of the United States Department of Agriculture responsible for administering the Food Stamp Program at the federal level.

(17) Food Stamp Program--The federal food assistance program funded by FNS and administered by DHS in Texas.

(18) Initiator--The party initiating the process to resolve a disputed EBT account discrepancy with the respondent.

(19) PIN--Personal identification number. A four-digit alphanumeric code selected by or assigned to the client. Used to verify identity of a cardholder when performing an online transaction at automatic teller machines or POS terminals.

(20) POS terminal--Point-of-sale terminal used in connection with the authorization and redemption of EBT program benefits. A terminal may be used for other purposes.

(21) Respondent--The second party to a disputed EBT account discrepancy identified by the initiator.

(22) Retailer--A merchant located within the physical borders of Texas that:

(A) is certified by FNS to accept food stamp benefits; or

(B) chooses to accept TANF cash for purchases or provide TANF cash.

(23) Software--The software operating on or in connection with the equipment.

(24) Switch--An entity that electronically routes an interstate transaction by transmitting the details of an EBT card transaction in one state to the issuer of the card in another state.

(25) TANF--Temporary Assistance for Needy Families. A public assistance program that issues cash benefits to eligible households with minor and dependent children.

(26) Third-party processor--An entity that relays EBT program transactions through its own system(s) to the Texas EBT central processing system for authorization. The entity may be a:

(A) financial institution;

(B) cardholder authorization processor other than the Texas EBT contractors; or

(27) USDA--United States Department of Agriculture.

§3.7902.What are DHS's requirements for retailers and third-party processors to participate in the EBT system?

(a) A retailer must be:

(1) currently authorized by the USDA to participate in the Food Stamp Program; or

(2) a non-food (non-FNS-authorized) retailer that provides TANF cash-back. To be a non-food retailer, no more than 10% of the retailer's gross revenue may be derived from entertainment.

(b) A retailer must represent and warrant that the facility in which a POS terminal(s) is or will be located complies with all applicable building and zoning codes and ordinances.

(c) A retailer or third-party processor must represent and warrant that it validly exists and is in good standing under the laws of the jurisdiction of its organization and the state of Texas.

(d) A retailer or third-party processor must not have been debarred from contracting by any unit of the federal government or any unit of a state government.

(e) A retailer or third-party processor that is a for-profit corporation must not be delinquent in making state of Texas franchise tax payments.

§3.7903.What are the general conditions for retailers and third-party processors to participate in the EBT system?

(a) Participating retailers must comply with program participation regulations in the Food Stamp Program, as required by 7 CFR, §274, §278, and this chapter.

(b) A retailer or third-party processor and the retailer management EBT contractor must execute a written agreement adopted in compliance with 7 CFR §274.12(g)(6).

(c) Retailer participation in the EBT system is voluntary. An FNS-authorized retailer must notify the retailer management EBT contractor in writing that it wishes to decline participation in the EBT system.

(d) Retailers suspended or terminated as redeemers of Food Stamp Program benefits, for any reason, must:

(1) immediately notify the retailer management EBT contractor; and

(2) cease using the EBT system to redeem food stamp benefits. Upon notification of suspension or termination by a retailer, the retailer management EBT contractor will discontinue connection to the retailer.

(e) Before implementing EBT, the retailer management EBT contractor must provide a retailer's employees with training in the processing of EBT program transactions, including:

(1) operation of the equipment if supplied by the retailer management EBT contractor; and

(2) notifying the retailer in advance of the retailer's scheduled time for in-person training; or

(3) in lieu of in-person training, retailers may receive training by phone or by mail.

(f) Access to the EBT system is granted:

(1) after training has been completed in-person, by phone, or by mail; and

(2) when system testing has been approved.

(g) A retailer must not subject any client, employee, or applicant to actions that are discriminatory in nature or refuse to process a client's EBT program transaction on the grounds of:

(7) religious belief; or

(8) political belief.

(h) A retailer redeeming TANF benefits by providing cash-back on a no-purchase-required basis must maintain a sufficient amount of cash on hand to accommodate cash-back transaction volumes.

§3.7904.What are POS requirements for retailers operating terminals supplied by the retailer management EBT contractor?

(a) Site Survey. Retailers must permit the retailer management EBT contractor to:

(1) conduct necessary site surveys at all locations of a retailer participating in the EBT program; and

(2) during the course of this survey, the retailer management EBT contractor must determine the equipment needs for each qualified location to comply with the applicable POS terminal deployment, as provided by §3.7905 of this chapter (relating to What are DHS's requirements for retailers that redeem food stamp benefits to deploy POS terminals?).

(b) Equipment. A retailer may, but is not required to, obtain equipment from the retailer management EBT contractor as specified in 7 CFR §274.12(g)(2).

§3.7905.What are DHS's requirements for retailers that redeem food stamp benefits to deploy POS terminals?

(a) General. Retailers must deploy POS terminals, as required by 7 CFR §274.12(g)(4)(ii), whether the terminals are provided by the retailer management EBT contractor or by a third- party processor.

(b) Optional terminals. A retailer may deploy a POS terminal(s) within its respective store office, customer service area, or another location to enable clients who are not making a purchase to complete credit transactions and cash-back transactions.

(1) $100 per month or more, receive equipment at no cost from the retailer management EBT contractor; or

(2) less than $100 per month, must obtain the hardware and equipment at their own expense. Otherwise, these retailers may participate in the EBT system using the manual voucher transaction process, as described in §3.7906 of this chapter (relating to What are the procedures for off-line (manual) transactions?).

(d) Special checkout lanes. A retailer may not establish special checkout lanes that are only for EBT program transactions, as stated in 7 CFR §274.12(h)(4)(i).

§3.7906.What are the procedures for off-line (manual) transactions?

(a) Retailers without immediate access to telephones at the time of purchase must:

(1) use a manual voucher system with delayed telephone verification when selling food to eligible food stamp customers; and

(2) telephone the EBT call center before redeeming the manual voucher in order to log the transaction and obtain an authorization number.

(b) Retailers with delayed telephone verification include:

(1) stationary food stores that make home deliveries to food stamp households;

(2) house-to-house trade routes that operate on standing orders from customers, such as milk and bread delivery routes;

(3) food-buying cooperatives; and

(4) other food retailers authorized by 7 CFR §278.1.

(1) contact the EBT call center by telephone; and

(2) obtain an authorization number for the amount of purchase before completing the sale.

§3.7907.What process is followed for off-line (manual) vouchers with delayed telephone verification or preliminary telephone verification?

(a) Retailers who delay telephone verification or obtain preliminary telephone verification must:

(1) complete the manual voucher properly and legibly;

(2) include the telephone authorization number;

(3) ensure that the voucher is signed by the client and initialed by the sales clerk; and

(4) submit the voucher to the retailer management EBT contractor within 15 calendar days from the date of purchase.

(b) The retailer management EBT contractor must:

(1) process vouchers within three banking business days of receipt; or

(2) if the voucher is incomplete or otherwise improperly prepared and submitted, return the voucher to the retailer for correction and/or completion within four banking business days of the date the retailer management EBT contractor received it.

§3.7908.What are DHS's off-line (manual) procedures for retailers with electronic voucher transaction capacity?

(a) Electronic voucher transaction. A retailer may enter the manual vouchers into a POS terminal at the retailer location and submit them as electronic vouchers in the form of an Advice transaction.

(b) EBT electronic manual voucher procedures. A retailer or its third-party processor must complete a manual voucher as specified in §3.7907 of this chapter (relating to What process is followed for off-line (manual) vouchers with delayed telephone verification or preliminary telephone verification?) and:

(1) obtain voice authorization from the EBT call center before completing the manual voucher transaction;

(2) enter the authorization code on the manual voucher and in the Advice; and

(3) submit the Advice transaction within 15 calendar days from the date of purchase.

§3.7909.What are the liability implications for off-line (manual) transactions?

(a) DHS's manual transactions liability is only for those manual transactions performed in accordance with the provisions set forth in 7 CFR §274.12(g)(6)(iv) and processing standards in 7 CFR §274.12(h).

(b) DHS reimburses a retailer for manual transactions, as required by the terms and conditions of the retailer agreement, for which an insufficient amount of benefits remain in the client's account at the time the manual voucher is presented for processing and payment.

(c) A retailer is not required to process manual transactions. If authorization cannot be obtained before or at the time of purchase, a retailer assumes the risk of insufficient benefits being available in the client's account.

(d) A retailer using voice authorization and electronic voucher is liable if the retailer management EBT contractor rejects its or its third-party processor's submission because of failure to follow the procedures in §3.7908 of this chapter (relating to What are DHS's off-line (manual) procedures for retailers with electronic voucher transaction capacity?).

(e) Neither the retailer management EBT contractor nor the retailer may re-present a manual voucher, as described in 7 CFR §274.12(l), for payment if insufficient funds exist when the voucher is submitted for processing and payment.

§3.7910.How do retailers choose qualified third-party EBT processors?

(a) Retailers entering the EBT system that choose to use an authorized third-party processor must choose one that is certified to the Texas EBT system.

(b) A third-party processor must:

(1) comply with performance and technical standards set forth in 7 CFR §274.12(h)(1) and (2);

(2) meet all third-party interface specifications and certification standards associated with 7 CFR §274.12(h)(5);

(3) execute a written agreement adopted in accordance with 7 CFR §274.12(g)(6) with the retailer management EBT contractor;

(4) meet the qualifications established in §3.7902 of this chapter (relating to What are DHS's requirements for retailers and third-party processors to participate in the EBT system?); and

(5) comply with applicable general conditions established in §3.7903 of this chapter (relating to What are the general conditions for retailers and third-party processors to participate in the EBT system?).

§3.7911.How does DHS reimburse retailers and third-party processors for EBT transactions?

(a) The retailer or third-party processor must have a bank account with a federally insured financial institution capable of accepting credits and debits in the Automated Clearing House Network (ACH) format.

(b) The retailer management EBT contractor transfers the reimbursement for EBT transactions into the third-party processor's bank account for reimbursement to the retailer's bank account.

§3.7912.How are EBT account discrepancies of settlement totals and the corresponding adjustments handled?

(a) Any discrepancy between a retailer management EBT contractor's settlement total and a retailer's or third-party processor's settlement total must be:

(1) communicated by the retailer or third-party processor within 10 banking business days of discovery; and

(2) reported in writing, which includes the applicable documentation.

(b) The retailer management EBT contractor rejects discrepancies or adjustments reported after 90 days from the settlement date.

§3.7913.What does a retailer or third-party processor do if it did not receive or disagrees with the amount of an individual EBT transaction reimbursement to its bank account?

The retailer or third-party processor must contact the retailer management EBT contractor to dispute the reimbursement or lack of reimbursement.

§3.7914.What are some reasons that could lead to a dispute?

Disputes may be initiated for any reason deemed valid by the initiator, including:

(1) processing errors, including duplicate processing; or

(2) incorrect off-line (manual) vouchers.

§3.7915.How long does a retailer or third-party processor have to dispute a transaction?

All disputes must be initiated with the respondent no later than 90 calendar days from the date the initiator knows or has reason to know of the dispute.

§3.7916.How are transaction disputes resolved?

(a) The retailer management EBT contractor:

(1) investigates and resolves disputes; and

(2) requests information from the initiator and responder as needed.

(b) Funds are transferred to the retailer or third-party processor only.

(d) A chargeback may be issued against the:

(1) retailer management EBT contractor;

(2) retailer; or

(3) third-party processor's settlement account.

(e) Client or household-related disputes are resolved as required by §3.7419 of this chapter (relating to Who answers questions about EBT cash and food balances for TANF and food stamp households?).

§3.7917.When are transaction disputes resolved?

The retailer management EBT contractor must respond in writing to all disputes resulting from system errors within 10 banking business days and within 15 calendar days of initiation for all other disputes.

§3.7918.What action does a retailer or third-party processor take if it disagrees with the resolution of a transaction dispute?

(a) A retailer or third-party processor that has a transaction dispute with the retailer management EBT contractor must first file a complaint in writing with the retailer management EBT contractor.

(b) The retailer or third-party processor may send a written request for an informal review within 15 days of the official notice of action from the retailer management EBT contractor to the Texas Department of Human Services, Lone Star Technology Department, P.O. Box 149030, Mail Code Y-916, Austin, Texas 78714-9030.

§3.7919.What option does a retailer or third-party processor have if it is dissatisfied with the decision from Lone Star Technology Department's informal review?

If dissatisfied with the results of the informal review, the retailer or third-party processor may send a written request for an administrative hearing to the Texas Department of Human Services, Hearings Department, P.O. Box 149030, Mail Code W-613, Austin, Texas, 78714-9030.

§3.7920.How do retailers or third-party processors outside of Texas accept TANF and food stamp benefits issued by the state of Texas?

(a) Retailers outside of Texas may accept the EBT card and process transactions if they route those transactions through a third-party processor or switch certified to the Texas EBT system.

(b) Third-party processors may accept and route transactions from retailers outside of Texas if they are certified to the Texas EBT system or if they route transactions through a switch certified to the Texas EBT system.

(c) Retailers outside of Texas must provide their own equipment and arrange for their own training for electronic transaction processing or obtain equipment and training from the state in which they are located.

(d) Retailers outside of Texas that route transactions through a switch cannot use off-line (manual) vouchers.

(e) Disputes with out-of-state retailers involving transactions for Texas EBT cardholders are resolved using the same procedures as for Texas retailers.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 25, 2003.

TRD-200302638

For further information, please call: (512) 438-3734

Subchapter UU. STATE IMMIGRANTS FOOD ASSISTANCE PROGRAM

40 TAC §§3.7401 - 3.7409

The Texas Department of Human Services (DHS) proposes to repeal Subchapter UU, consisting of §§3.7401 - 3.7409, concerning the State Immigrants Food Assistance Program (SIFAP), in its Texas Works chapter. The purpose of the repeals is to delete rules for a program that is no longer necessary due to the passage of the Farm Security and Rural Investment Act of 2002 (Farm Bill). DHS provided benefits through SIFAP to individuals who had legal immigration status with the Immigration and Naturalization Service (INS) but who lost eligibility for the federally funded Food Stamp Program due to their immigration status as a result of the Personal Responsibility and Work Opportunity Act of 1996. Section 4401 of the Farm Bill, codified at 8 United States Code 1612(a), partially restores food stamp eligibility to qualified aliens in three phases. Effective April 1, 2003, eligibility for food stamp benefits was restored to qualified aliens who had qualified alien status for five years. Because all aliens eligible for SIFAP are included in the new federal eligibility criterion, the state program is no longer needed and the rules are obsolete.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed repeals are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the repeals.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the repeals are in effect, the public benefit anticipated as a result of repealing the sections is that the public will have access to the most current and relevant rule language. There is no adverse economic effect on small or micro businesses as a result of repealing the sections, because the SIFAP rules govern client eligibility and requirements and do not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed repeals. There is no anticipated effect on local employment in geographic areas affected by these repeals.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438-2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-174, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

The repeals are proposed under the Human Resources Code, Chapter 33, which authorizes DHS to administer nutritional assistance programs.

The repeals implement the Human Resources Code, §§33.001 - 33.027.

§3.7401.Eligibility Requirements.

§3.7402.Notice of Eligibility.

§3.7403.Benefit Amounts.

§3.7404.Issuance Method.

§3.7405.Appeals.

§3.7406.Termination of the Program.

§3.7407.Overpayments.

§3.7408.Use of Benefits for Minors.

§3.7409.Notice of Benefit Termination.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 25, 2003.

TRD-200302639