SSB 3068 (LSB 5725XC (7) 88)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON LABOR AND BUSINESS RELATIONS BILL BY CHAIRPERSON SCHULTZ)

A BILL FOR

An Act relating to public assistance program oversight, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
DATA MATCHING —— PREVENTION OF MULTIPLE ISSUANCES OF SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP) BENEFITS

    Section 1.  DATA MATCHING —— PREVENTION OF MULTIPLE ISSUANCES OF SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP) BENEFITS.  By July 1, 2020, the department of human services shall request any federal waiver or approval necessary from the food and nutrition service of the United States department of agriculture in order to comply with section 4011 of the federal Agriculture Improvement Act of 2018, Pub. L. No. 115-334, and the regulations adopted under the Act. Upon receipt of any necessary federal waiver or approval, the department shall contract with a third-party vendor to conduct national accuracy clearinghouse matches and corresponding actions in accordance with the federal law and regulations to provide real-time prevention of duplicate participation upon a potential beneficiary’s application for SNAP benefits.
    Sec. 2.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
DIVISION II
INCOME AND IDENTITY VERIFICATION —— PUBLIC ASSISTANCE PROGRAMS

    Sec. 3.  NEW SECTION.  239.1  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Applicant” means an individual who is applying for public assistance benefits in the state.
   2.  “Asset” or “asset test” means all assets of the members of the applicant’s household, including all of the following:
   a.  All bank accounts, excluding retirement accounts of members of the household.
   b.  All cash, excluding the first two thousand dollars of members of the household.
   c.  All lottery and gambling income of the household whether received as a lump sum or installment payments.
   d.  All real estate, excluding the primary household residence and surrounding lot.
   e.  All other personal property excluding personal belongings, household goods, and one vehicle.
   3.  “Department” means the department of human services.
   4.  “Public assistance” means SNAP (the supplemental nutrition assistance program), the Medicaid program, FIP (the family investment program), and CHIP (the children’s health insurance program).
   5.  “Recipient” means an individual who is receiving public assistance benefits in the state.
    Sec. 4.  NEW SECTION.  239.2  Asset test for supplemental nutrition assistance program.
   1.  For the purposes of determining eligibility for receipt of SNAP benefits, the department shall conduct an asset test on all members of the applicant’s household. The allowable financial resources to be included in or excluded from a determination of eligibility for SNAP shall be those specified in 7 U.S.C. §2014(g)(1).
   2.  Prior to determining eligibility for SNAP benefits, the department shall access, at a minimum, for every member of the applicant’s household, the following information from the following federal, state, and miscellaneous sources, or successor sources:
   a.  Federal sources and information:
   (1)  Earned and unearned income information maintained by the internal revenue service.
   (2)  The following sources and information maintained by the United States social security administration:
   (a)  Earned income information.
   (b)  Death register information.
   (c)  Prisoner or incarceration status information.
   (d)  Supplemental security income information maintained in the state data exchange database.
   (e)  Beneficiary records and earnings information maintained in the beneficiary and earnings data exchange database.
   (f)  Earnings and pension information maintained in the beneficiary earnings exchange record system database.
   (3)  The following sources and information maintained by the United States department of health and human services:
   (a)  Income and employment information maintained in the national directory of new hires database by the office of child support enforcement of the administration for children and families.
   (b)  Other federal data sources maintained by the office of child support enforcement of the administration for children and families.
   b.  State sources and information:
   (1)  The department’s sources and information including but not limited to all of the following:
   (a)  Income and employment information maintained by the child support recovery unit.
   (b)  Child care assistance information maintained by the division of child and family services.
   (c)  Enrollment status in other public assistance programs.
   (2)  The department of workforce development sources and information including all of the following:
   (a)  Employment information.
   (b)  Employer weekly, monthly, and quarterly reports of income and unemployment insurance payments.
   (3)  Utility payment and emergency utility payment information maintained by the state under the low income home energy assistance program.
   (4)  The Iowa public employees’ retirement system for earnings and pension information.
   c.  Miscellaneous sources:
   (1)  Any existing real-time database of persons currently receiving benefits in other states, such as the national accuracy clearinghouse.
   (2)  Any databases maintained by the Iowa lottery commission.
   3.  Prior to determining eligibility for SNAP benefits, the department shall access information for every member of the applicant’s household from the following public records:
   a.  A nationwide public records data source of physical asset ownership. The data source may include but is not limited to real property, automobiles, watercraft, aircraft, and luxury vehicles, or any other vehicle owned by the applicant.
   b.  National and state financial institutions in order to locate undisclosed depository accounts or verify account balances of disclosed accounts.
   4.  The department shall enter into a memorandum of understanding with any department, division, bureau, section, unit, or any other subunit of a department to obtain the information specified in this section.
   5.  The provisions of this section shall not apply if every member of the applicant’s household receives supplemental security income.
    Sec. 5.  NEW SECTION.  239.3  Cooperation with child support enforcement —— supplemental nutrition assistance program eligibility.
   An applicant for SNAP benefits who is in arrears for a period of more than six months on a child support obligation pursuant to a court or administrative order issued pursuant to chapter 252A, 252C, 252F, 598, or 600B, or any other chapter under which child support is granted, shall be required to cooperate with the child support recovery unit as a condition of eligibility as specified in 7 C.F.R. §273.11(o) and (p).
    Sec. 6.  NEW SECTION.  239.4  Verification and authentication systems —— public assistance programs.
   1.  By July 1, 2021, the department shall redesign an existing system; establish a new computerized income, asset, and identity eligibility verification system; or contract with a third-party vendor to provide for identity verification, identity authentication, asset verification, and dual enrollment prevention in order to deter waste, fraud, and abuse in each public assistance program administered by the department. 
   2.  The department may contract with a third-party vendor to develop a system or provide a service to verify or authenticate income, assets, and identity eligibility of applicants and recipients to prevent fraud, misrepresentation, and inadequate documentation when determining eligibility for public assistance programs. The system or service shall be accessed prior to determining eligibility, periodically between eligibility redeterminations, and during eligibility redeterminations and reviews. The department may also contract with a third-party vendor to provide information to facilitate reviews of recipient eligibility conducted by the department.
   3.  A contract entered into under this section shall provide, at a minimum, for all of the following:
   a.  The establishment of the annual savings amount from utilization of the system or service, and a provision that the contract may be terminated contingent upon the savings exceeding the total yearly cost to the state for utilization of the system or service.
   b.  That the contract shall not preclude the department from continuing to conduct additional eligibility verification or authentication processes, to receive, review, or verify additional information related to the eligibility of an individual, or from contracting with a third-party vendor to provide additional eligibility authentication or verification information.
   4.  The department shall seek federal approval as necessary to implement and administer this section.
    Sec. 7.  NEW SECTION.  239.5  Public assistance programs —— applicant and recipient eligibility verification.
   1.  All applications for initial public assistance program benefits and all determinations of ongoing recipient eligibility shall be processed through a system as specified in this section. Complete initial applications shall be processed within ten days of receipt or the minimum period required by federal law. Prior to determining initial eligibility of an applicant for, or ongoing eligibility of a recipient of, public assistance, the department shall access information for every applicant or recipient from the following federal, state, and other sources:
   a.  Federal sources and information:
   (1)  Earned and unearned income information maintained by the internal revenue service.
   (2)  The following sources and information maintained by the United States social security administration:
   (a)  Earned income information.
   (b)  Death register information.
   (c)  Prisoner or incarceration status information.
   (d)  Supplemental security income information maintained in the state data exchange database.
   (e)  Beneficiary records and earnings information maintained in the beneficiary and earnings data exchange database.
   (f)  Earnings and pension information maintained in the beneficiary earnings exchange record system database.
   (3)  The following sources and information maintained by the United States department of health and human services:
   (a)  Income and employment information maintained in the national directory of new hires database by the office of child support enforcement of the administration for children and families.
   (b)  Other federal data sources maintained by the office of child support enforcement of the administration for children and families.
   (4)  Information maintained by the United States citizenship and immigration services of the United States department of homeland security.
   (5)  Payment information for public housing and section 8 housing assistance guidelines maintained by the United States department of housing and urban development.
   (6)  National fleeing felon information maintained by the United States federal bureau of investigation.
   b.  State sources and information:
   (1)  The department’s sources and information including but not limited to all of the following:
   (a)  Income and employment information maintained by the child support recovery unit.
   (b)  Child care assistance information maintained by the division of child and family services.
   (c)  Enrollment status in other public assistance programs.
   (2)  The department of workforce development sources and information including all of the following:
   (a)  Employment information.
   (b)  Employer weekly, monthly, and quarterly reports of income and unemployment insurance payments.
   (3)  Utility payment and emergency utility payment information maintained by the state under the low income home energy assistance program.
   (4)  The Iowa public employees’ retirement system for earnings and pension information.
   c.  Other sources including all of the following:
   (1)  Any existing real-time database of persons currently receiving benefits in other states, such as the national accuracy clearinghouse.
   (2)  An available database of persons who currently hold a license, permit, or certificate from any state agency, the cost of which exceeds five hundred dollars.
   (3)  Wage reporting and similar information maintained by states contiguous to Iowa.
   (4)  A database which is substantially similar to, or a successor of, a database established in this chapter.
   2.  Prior to determining the initial eligibility of an applicant for, or the ongoing eligibility of a recipient of, public assistance benefits, the department shall access information for every applicant or recipient from, at a minimum, the following public records:
   a.  A nationwide public records data source of physical asset ownership. The data source may include but is not limited to real property, automobiles, watercraft, aircraft, and luxury vehicles, or any other vehicle owned by the applicant for or recipient of assistance.
   b.  A nationwide public records data source of incarcerated individuals.
   c.  A nationwide best address and driver’s license data source to verify that individuals are residents of the state.
   d.  A comprehensive public records database from which the department may identify potential identity fraud or identity theft that is capable of closely associating name, social security number, date of birth, phone, and address information.
   e.  National and local financial institutions in order to locate undisclosed depository accounts or verify account balances of disclosed accounts.
   f.  Outstanding default or arrest warrant information.
    Sec. 8.  NEW SECTION.  239.6  Identity authentication.
   Prior to the department awarding public assistance benefits, an applicant shall complete a computerized identity authentication process to confirm the identity of the applicant. Identity authentication shall be accomplished through a knowledge-based questionnaire consisting of financial and personal questions. The questionnaire shall contain questions tailored to assist persons without a bank account or those who have poor access to financial and banking services or who do not have an established credit history. The questionnaire may be submitted by the applicant online, in person, or via telephone.
    Sec. 9.  NEW SECTION.  239.7  Case review of applicant and recipient information —— fraudulent activity —— child support obligation.
   1.  If the information obtained from a review of an applicant’s or recipient’s information under this chapter does not result in the department finding a discrepancy or change in an individual’s circumstances affecting eligibility, the department shall take no further action.
   2.  If the information obtained from a review of the applicant’s or recipient’s information under this chapter results in the department finding a discrepancy or change in the individual’s circumstances affecting eligibility, the department shall respond in accordance with the provisions of section 239.8. 
   3.  Public assistance shall not be granted to a household if a member of the household has been found guilty of fraudulent activity directly related to any public assistance program.
   4.  An applicant for public assistance benefits who is in arrears in payment for a period of more than six months on a child support obligation pursuant to a court or administrative order issued pursuant to chapter 252A, 252C, 252F, 598, or 600B, or any other chapter under which child support is granted, shall not be granted public assistance benefits until the applicant enters into a payment arrangement with the child support recovery unit or is found by the child support recovery unit to have no ability to pay the child support obligation.
    Sec. 10.  NEW SECTION.  239.8  Notice and right to be heard.
   1.  An applicant for, or recipient of, public assistance shall be provided written notice and the opportunity to explain any issues identified in a review performed under this chapter for initial eligibility or redetermination of eligibility. A self-declaration by an applicant or recipient shall not be accepted as verification of categorical and financial eligibility during such review.
   2.  The notice provided to the applicant or recipient shall describe in sufficient detail the circumstances of the issue identified, the manner in which the applicant or recipient may respond, and the consequences of failing to respond to the notice or resolve the issue identified. The applicant or recipient shall be provided ten days to respond to the notice. The applicant’s or recipient’s response shall be in writing. The department may request additional information as necessary to reach a decision.
   3.  An applicant or recipient may respond to the notice as follows:
   a.  By disagreeing with the findings of the department. If the applicant or recipient responds in a timely manner and disagrees with the findings of the department, the department shall reevaluate the circumstances to determine if the applicant’s or recipient’s position is valid. If, through reevaluation, the department finds that the department is in error, the department shall take immediate action to correct the error. If, through reevaluation, the department affirms that the applicant’s or recipient’s position is invalid, the department shall determine the effect on the applicant’s or recipient’s eligibility and take appropriate action. Written notice of the department’s determination and the actions taken shall be provided to the applicant or recipient.
   b.  By agreeing with the findings of the department. If the applicant or recipient responds in a timely manner and agrees with the findings of the department, the department shall determine the effect on the applicant’s or recipient’s eligibility and take appropriate action. Written notice of the department’s determination and actions taken shall be provided to the applicant or recipient.
   4.  If the applicant or recipient fails to respond to the notice in a timely manner, the department shall provide notice to terminate the applicant’s application or to discontinue the recipient’s enrollment for failure to cooperate, and shall terminate the applicant’s application or discontinue the recipient’s enrollment. The applicant’s or recipient’s eligibility for such public assistance shall not be established or reestablished until the issue has been resolved.
    Sec. 11.  NEW SECTION.  239.9  Referrals for fraud, misrepresentation, or inadequate documentation.
   1.  Following a review of an applicant’s or recipient’s eligibility under this chapter, the department may refer cases of suspected fraud along with any supportive information to the department of inspections and appeals for review.
   2.  In cases of substantiated fraud, upon conviction, the state shall review all appropriate legal options including but not limited to removal of a recipient from other public assistance programs and garnishment of wages or state income tax refunds until the department recovers an equal amount of benefits fraudulently claimed.
   3.  The department may refer suspected cases of fraud, misrepresentation, or inadequate documentation relating to initial or continued eligibility to appropriate state agencies, divisions, or departments for review of eligibility issues in programs providing public benefits other than those as defined in this chapter.
    Sec. 12.  NEW SECTION.  239.10  Administration —— rules —— reporting.
   1.  The department of human services shall adopt rules pursuant to chapter 17A to administer this chapter.
   2.  The department shall submit a report to the governor and the general assembly by January 15, 2022, and by January 15 annually thereafter through January 15, 2027, detailing the impact of the verification and authentication measures taken under this chapter. The report shall include data for all affected public assistance programs including the number of cases reviewed, the number of cases closed, the number of fraud investigation referrals made, and the amount of savings and cost avoidance realized from the provisions of this chapter.
    Sec. 13.  IMPLEMENTATION.
   1.  The department of human services shall request federal approval including for any state plan amendment or waiver necessary to administer this division of this Act.
   2.  The provisions of this division of this Act requiring federal approval shall be implemented upon receipt of such federal approval.
   3.  The provisions of this division of this Act not requiring federal approval shall be implemented as specified in this Act, or if not specified in this Act, no later than July 1, 2021.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to public assistance program oversight.
   Division I of the bill requires the department of human services (DHS), by July 1, 2020, to request any federal waiver or approval necessary from the food and nutrition service of the United States department of agriculture in order to comply with the provision of the federal Agriculture Improvement Act of 2018 and the regulations adopted under the Act to provide real-time prevention of duplicate participation upon a potential beneficiary’s application for SNAP (the supplemental nutrition assistance program). DHS is required, upon receipt of any necessary federal waiver or approval, to contract with a third-party vendor to conduct national accuracy clearinghouse matches and corresponding actions in accordance with the federal law and regulations.
   Division II of the bill relates to various eligibility verification and authentication measures under new Code chapter 239.
   The bill provides definitions used in the new Code chapter.
   The bill requires DHS to conduct an asset test on all members of the household of an applicant for SNAP benefits. The bill specifies the minimum information, federal, state, and other data sources, and public records that DHS must access prior to determining eligibility for an applicant’s SNAP benefits. The bill requires DHS to enter into a memorandum of understanding with any department or subunit of a department to obtain the information specified. The bill provisions do not apply if every member of the applicant’s household receives supplemental security income.
   The bill requires that an applicant for SNAP benefits who is in arrears for a period of more than six months on a child support obligation shall be required to cooperate with the child support recovery unit as a condition of eligibility for SNAP benefits. 
   The bill requires that by July 1, 2021, DHS shall redesign an existing system; establish a new computerized income, asset, and identity eligibility verification system; or contract with a third-party vendor to provide for identity verification, identity authentication, asset verification, and dual enrollment prevention in each public assistance program administered by DHS. DHS may contract with a third-party vendor to develop a system or provide a service to verify income, assets, and identity eligibility of applicants and recipients. The system or service shall be accessed prior to determining eligibility, periodically between eligibility redeterminations, and during eligibility redeterminations and reviews. DHS may contract with a third-party vendor to provide information to facilitate reviews of recipient eligibility conducted by DHS. A contract entered into to provide a system or service must establish the annual savings amount from utilization of the system or service, and include a provision that the contract may be terminated contingent upon the savings exceeding the total yearly cost to the state for utilization of the system or service. The contract does not preclude DHS from continuing to conduct additional eligibility verification or authentication processes to receive, review, or verify additional information related to the eligibility of an individual; or from contracting with a third-party vendor to provide additional eligibility authentication or verification information. DHS shall seek federal approval as necessary to implement and administer this provision of the bill.
   The bill requires that for all applications for initial public assistance program benefits and all determinations of ongoing recipient eligibility processed by DHS, DHS shall access information for every applicant or recipient from specified federal, state, and other sources, and from specified public records.
   The bill requires that prior to awarding public assistance benefits to an applicant, the applicant shall complete a computerized identity authentication process to confirm the identity of the applicant through the use of a knowledge-based questionnaire consisting of financial and personal questions tailored to assist persons without a bank account or those who have poor access to financial and banking services or who do not have an established credit history. The questionnaire may be submitted by the applicant online, in person, or via telephone.
   The bill provides that if information obtained from a review of an applicant’s or recipient’s information under the bill does not result in DHS finding a discrepancy or change in an individual’s circumstances affecting eligibility, DHS shall take no further action. Public assistance shall not be granted to a household if a member of the household has been found guilty of fraudulent activity directly related to any public assistance program. An applicant for public assistance benefits who is in arrears in payment for a period of more than six months on a child support obligation shall not be granted public assistance benefits until the applicant enters into a payment arrangement with the child support recovery unit or is found by the child support recovery unit to have no ability to pay the child support obligation.
   If the information obtained from a review of the applicant’s or recipient’s information under the bill results in DHS finding a discrepancy or a change in the individual’s circumstances affecting eligibility, DHS shall provide written notice to the individual and the opportunity to explain any issues identified. A self-declaration by an applicant or recipient shall not be accepted as verification of categorical and financial eligibility during such review.
   The notice provided to the applicant or recipient shall describe in sufficient detail the circumstances of the issue identified, the manner in which the applicant or recipient may respond, and the consequences of failing to respond to the notice or resolve the issue identified. The applicant or recipient shall be provided 10 days to respond to the notice. The applicant’s or recipient’s response shall be in writing. DHS may request additional information as necessary to reach a decision.
   The bill specifies the processes and results depending upon whether an applicant or recipient responds by disagreeing or agreeing with the findings of a review by DHS. If the applicant or recipient fails to respond to the notice in a timely manner, DHS shall provide notice to terminate the applicant’s application or to discontinue the recipient’s enrollment for failure to cooperate, and shall terminate the applicant’s application or discontinue the recipient’s enrollment. The applicant’s or recipient’s eligibility for such public assistance shall not be established or reestablished until the issue has been resolved.
   Following a review of an applicant’s or recipient’s eligibility, DHS may refer cases of suspected fraud along with any supportive information to the department of inspections and appeals for review. In cases of substantiated fraud, upon conviction, the state shall review all appropriate legal options including but not limited to removal of a recipient from other public assistance programs and garnishment of wages or state income tax refunds until DHS recovers an equal amount of benefits fraudulently claimed. DHS may refer suspected cases of fraud, misrepresentation, or inadequate documentation relating to initial or continued eligibility to appropriate state agencies, divisions, or departments for review of eligibility issues in other public assistance programs.
   Under the bill, DHS shall adopt administrative rules to administer the Code chapter. DHS shall submit a report to the governor and the general assembly by January 15, 2022, and by January 15 annually thereafter through January 15, 2027, detailing the impact of the verification and authentication measures taken under the bill. The report shall include data for all affected public assistance programs including the number of cases reviewed, the number of cases closed, the number of fraud investigation referrals made, and the amount of savings and cost avoidance realized from the provisions of the bill.
   DHS shall request federal approval including for any state plan amendment or waiver necessary to administer Division II of the bill, and the provisions of Division II requiring federal approval shall be implemented upon receipt of such federal approval. The provisions of Division II that do not require federal approval shall be implemented as specified in the bill or, if not specified in the bill, no later than July 1, 2021.