Senate File 389 - Introduced SENATE FILE 389 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 1125) A BILL FOR An Act relating to public assistance program oversight. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 2201SV (1) 89 pf/rh
S.F. 389 Section 1. NEW SECTION . 239.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Applicant” means an individual who is applying for 4 public assistance benefits in the state. 5 2. “Asset” or “asset test” means all assets of the members 6 of the applicant’s household, including all of the following: 7 a. All bank accounts, excluding retirement accounts of 8 members of the household. 9 b. All cash, excluding the first two thousand dollars of 10 members of the household. 11 c. All lottery and gambling income of the household whether 12 received as a lump sum or installment payments. 13 d. All real estate, excluding the primary household 14 residence and surrounding lot. 15 e. All other personal property excluding personal 16 belongings, household goods, and one vehicle. 17 3. “Department” means the department of human services. 18 4. “Public assistance” means SNAP (the supplemental 19 nutrition assistance program), the Medicaid program, FIP (the 20 family investment program), and CHIP (the children’s health 21 insurance program). 22 5. “Real-time system” means real-time electronic access 23 to a system that allows verification of all applicable public 24 assistance program eligibility information based on the 25 most recent information available to the department through 26 nonmodeled earned and unearned income, such as commercially 27 available wage data. 28 6. “Recipient” means an individual who is receiving public 29 assistance benefits in the state. 30 Sec. 2. NEW SECTION . 239.2 Asset test for supplemental 31 nutrition assistance program. 32 1. For the purposes of determining eligibility for receipt 33 of SNAP benefits, the department shall conduct an asset test 34 on all members of the applicant’s household. The allowable 35 -1- LSB 2201SV (1) 89 pf/rh 1/ 15
S.F. 389 financial resources to be included in or excluded from a 1 determination of eligibility for SNAP shall be those specified 2 in 7 U.S.C. §2014(g)(1). 3 2. Prior to determining eligibility for SNAP benefits, 4 the department shall access, at a minimum, for every member 5 of the applicant’s household, the following information from 6 the following federal, state, and miscellaneous sources, or 7 successor sources: 8 a. Federal sources and information: 9 (1) Earned and unearned income information maintained by 10 the internal revenue service. 11 (2) The following sources and information maintained by the 12 United States social security administration: 13 (a) Earned income information. 14 (b) Death register information. 15 (c) Prisoner or incarceration status information. 16 (d) Supplemental security income information maintained in 17 the state data exchange database. 18 (e) Beneficiary records and earnings information maintained 19 in the beneficiary and earnings data exchange database. 20 (f) Earnings and pension information maintained in the 21 beneficiary earnings exchange record system database. 22 (3) The following sources and information maintained by the 23 United States department of health and human services: 24 (a) Income and employment information maintained in the 25 national directory of new hires database by the office of child 26 support enforcement of the administration for children and 27 families. 28 (b) Other federal data sources maintained by the office of 29 child support enforcement of the administration for children 30 and families. 31 b. State sources and information: 32 (1) The department’s sources and information including but 33 not limited to all of the following: 34 (a) Income and employment information maintained by the 35 -2- LSB 2201SV (1) 89 pf/rh 2/ 15
S.F. 389 child support recovery unit. 1 (b) Child care assistance information maintained by the 2 division of child and family services. 3 (c) Enrollment status in other public assistance programs. 4 (2) The department of workforce development sources and 5 information including all of the following: 6 (a) Employment information. 7 (b) Employer weekly, monthly, and quarterly reports of 8 income and unemployment insurance payments. 9 (3) The Iowa public employees’ retirement system for 10 earnings and pension information. 11 c. Miscellaneous sources: 12 (1) Any existing real-time database of persons currently 13 receiving benefits in other states, such as the national 14 accuracy clearinghouse. 15 (2) Any databases maintained by the Iowa lottery 16 commission. 17 (3) Any existing real-time eligibility system that includes 18 employment and income information maintained by a consumer 19 reporting agency, as defined by the federal Fair Credit 20 Reporting Act, 15 U.S.C. §1681a, for the purpose of obtaining 21 real-time employment and income information. 22 3. Prior to determining eligibility for SNAP benefits, the 23 department shall access information for every member of the 24 applicant’s household from the following public records: 25 a. A nationwide public records data source of physical asset 26 ownership. The data source may include but is not limited to 27 real property, automobiles, watercraft, aircraft, and luxury 28 vehicles, or any other vehicle owned by the applicant. 29 b. National and state financial institutions in order 30 to locate undisclosed depository accounts or verify account 31 balances of disclosed accounts. 32 4. The department shall enter into a memorandum of 33 understanding with any department, division, bureau, section, 34 unit, or any other subunit of a department to obtain the 35 -3- LSB 2201SV (1) 89 pf/rh 3/ 15
S.F. 389 information specified in this section. 1 5. The provisions of this section shall not apply if every 2 member of the applicant’s household receives supplemental 3 security income. 4 Sec. 3. NEW SECTION . 239.3 Cooperation with child support 5 enforcement —— supplemental nutrition assistance program 6 eligibility. 7 An applicant for SNAP benefits shall be required to 8 cooperate with the child support recovery unit as a condition 9 of eligibility as specified in 7 C.F.R. §273.11(o). 10 Sec. 4. NEW SECTION . 239.4 Verification and authentication 11 systems —— public assistance programs. 12 1. By July 1, 2022, the department shall redesign an 13 existing system; establish a new computerized income, asset, 14 and identity eligibility verification system; or contract with 15 a third-party vendor to provide for identity verification, 16 identity authentication, asset verification, and dual 17 enrollment prevention in order to deter waste, fraud, and 18 abuse in each public assistance program administered by the 19 department. 20 2. The department may contract with a third-party vendor 21 to develop or provide a service for a real-time eligibility 22 system that allows the department to verify or authenticate 23 income, assets, and identity eligibility of applicants and 24 recipients to prevent fraud, misrepresentation, and inadequate 25 documentation when determining eligibility for public 26 assistance programs. The system shall be accessed prior to 27 determining eligibility, periodically between eligibility 28 redeterminations, and during eligibility redeterminations 29 and reviews. The department may also contract with a 30 third-party vendor to provide information to facilitate 31 reviews of recipient eligibility conducted by the department. 32 Specifically, the department may contract with a third-party 33 consumer reporting agency, as defined by the federal Fair 34 Credit Reporting Act, 15 U.S.C. §1681a, for the purpose of 35 -4- LSB 2201SV (1) 89 pf/rh 4/ 15
S.F. 389 obtaining real-time employment and income information. 1 3. A contract entered into under this section shall provide, 2 at a minimum, for all of the following: 3 a. The establishment of the annual savings amount from 4 utilization of the system or service, and a provision that the 5 contract may be terminated contingent upon the savings not 6 exceeding the total yearly cost to the state for utilization of 7 the system or service. 8 b. That the contract shall not preclude the department 9 from continuing to conduct additional eligibility verification 10 or authentication processes, to receive, review, or verify 11 additional information related to the eligibility of an 12 individual, or from contracting with a third-party vendor to 13 provide additional eligibility authentication or verification 14 information. 15 4. The department shall seek federal approval as necessary 16 to implement and administer this section. 17 Sec. 5. NEW SECTION . 239.5 Public assistance programs —— 18 applicant and recipient eligibility verification. 19 1. All applications for initial public assistance 20 program benefits and all determinations of ongoing recipient 21 eligibility shall be processed through a system as specified 22 in this section. Complete initial applications shall be 23 processed within the minimum period required by federal law. 24 Prior to determining initial eligibility of an applicant for, 25 or ongoing eligibility of a recipient of, public assistance, 26 the department shall access information for every applicant or 27 recipient from the following federal, state, and other sources: 28 a. Federal sources and information: 29 (1) Earned and unearned income information maintained by 30 the internal revenue service. 31 (2) The following sources and information maintained by the 32 United States social security administration: 33 (a) Earned income information. 34 (b) Death register information. 35 -5- LSB 2201SV (1) 89 pf/rh 5/ 15
S.F. 389 (c) Prisoner or incarceration status information. 1 (d) Supplemental security income information maintained in 2 the state data exchange database. 3 (e) Beneficiary records and earnings information maintained 4 in the beneficiary and earnings data exchange database. 5 (f) Earnings and pension information maintained in the 6 beneficiary earnings exchange record system database. 7 (3) The following sources and information maintained by the 8 United States department of health and human services: 9 (a) Income and employment information maintained in the 10 national directory of new hires database by the office of child 11 support enforcement of the administration for children and 12 families. 13 (b) Other federal data sources maintained by the office of 14 child support enforcement of the administration for children 15 and families. 16 (4) Information maintained by the United States citizenship 17 and immigration services of the United States department of 18 homeland security. 19 (5) Payment information for public housing and section 8 20 housing assistance guidelines maintained by the United States 21 department of housing and urban development. 22 (6) National fleeing felon information maintained by the 23 United States federal bureau of investigation. 24 b. State sources and information: 25 (1) The department’s sources and information including but 26 not limited to all of the following: 27 (a) Income and employment information maintained by the 28 child support recovery unit. 29 (b) Child care assistance information maintained by the 30 division of child and family services. 31 (c) Enrollment status in other public assistance programs. 32 (2) The department of workforce development sources and 33 information including all of the following: 34 (a) Employment information. 35 -6- LSB 2201SV (1) 89 pf/rh 6/ 15
S.F. 389 (b) Employer weekly, monthly, and quarterly reports of 1 income and unemployment insurance payments. 2 (3) The Iowa public employees’ retirement system for 3 earnings and pension information. 4 c. Other sources including all of the following: 5 (1) Any existing real-time database of persons currently 6 receiving benefits in other states, such as the national 7 accuracy clearinghouse. 8 (2) An available database of persons who currently hold a 9 license, permit, or certificate from any state agency, the cost 10 of which exceeds five hundred dollars. 11 (3) Wage reporting and similar information maintained by 12 states contiguous to Iowa. 13 (4) A third-party consumer reporting agency, as defined 14 by the federal Fair Credit Reporting Act, 15 U.S.C. §1681a, 15 for the purpose of obtaining real-time employment and income 16 information. 17 2. Prior to determining the initial eligibility of an 18 applicant for, or the ongoing eligibility of a recipient 19 of, public assistance benefits, the department shall access 20 information for every applicant or recipient from, at a 21 minimum, the following public records: 22 a. A nationwide public records data source of physical asset 23 ownership. The data source may include but is not limited to 24 real property, automobiles, watercraft, aircraft, and luxury 25 vehicles, or any other vehicle owned by the applicant for or 26 recipient of assistance. 27 b. A nationwide public records data source of incarcerated 28 individuals. 29 c. A nationwide best address and driver’s license data 30 source to verify that individuals are residents of the state. 31 d. A comprehensive public records database from which the 32 department may identify potential identity fraud or identity 33 theft that is capable of closely associating name, social 34 security number, date of birth, phone, and address information. 35 -7- LSB 2201SV (1) 89 pf/rh 7/ 15
S.F. 389 e. National and local financial institutions in order 1 to locate undisclosed depository accounts or verify account 2 balances of disclosed accounts. 3 f. Outstanding default or arrest warrant information. 4 3. The state may contract with a third-party consumer 5 reporting agency, as defined by the federal Fair Credit 6 Reporting Act, 15 U.S.C. §1681a, for the purpose of obtaining 7 real-time employment and income information under this section. 8 Sec. 6. NEW SECTION . 239.6 Identity authentication. 9 Unless otherwise prohibited by federal law or regulation, 10 prior to the department awarding public assistance benefits, an 11 applicant shall complete a computerized identity authentication 12 process to confirm the identity of the applicant. Identity 13 authentication shall be accomplished through a knowledge-based 14 questionnaire consisting of financial and personal questions. 15 The questionnaire shall contain questions tailored to assist 16 persons without a bank account or those who have poor access 17 to financial and banking services or who do not have an 18 established credit history. The questionnaire may be submitted 19 by the applicant online, in person, or via telephone. 20 Sec. 7. NEW SECTION . 239.7 Case review of applicant and 21 recipient information. 22 1. If the information obtained from a review of an 23 applicant’s or recipient’s information under this chapter does 24 not result in the department finding a discrepancy or change 25 in an individual’s circumstances affecting eligibility, the 26 department shall take no further action. 27 2. If the information obtained from a review of the 28 applicant’s or recipient’s information under this chapter 29 results in the department finding a discrepancy or change in 30 the individual’s circumstances affecting eligibility, the 31 department shall respond in accordance with the provisions of 32 section 239.8. 33 Sec. 8. NEW SECTION . 239.8 Notice and right to be heard. 34 1. An applicant for, or recipient of, public assistance 35 -8- LSB 2201SV (1) 89 pf/rh 8/ 15
S.F. 389 shall be provided written notice and the opportunity to explain 1 any issues identified in a review performed under this chapter 2 for initial eligibility or redetermination of eligibility. 3 Unless otherwise prohibited by federal law or regulation, 4 a self-declaration by an applicant or recipient shall not 5 be accepted as verification of categorical and financial 6 eligibility during such review. 7 2. The notice provided to the applicant or recipient shall 8 describe in sufficient detail the circumstances of the issue 9 identified, the manner in which the applicant or recipient 10 may respond, and the consequences of failing to respond to 11 the notice or resolve the issue identified. The applicant or 12 recipient shall be provided ten days to respond to the notice. 13 The department may request additional information as necessary 14 to reach a decision. 15 3. An applicant or recipient may respond to the notice as 16 follows: 17 a. By disagreeing with the findings of the department. If 18 the applicant or recipient responds in a timely manner and 19 disagrees with the findings of the department, the department 20 shall reevaluate the circumstances to determine if the 21 applicant’s or recipient’s position is valid. If, through 22 reevaluation, the department finds that the department is in 23 error, the department shall take immediate action to correct 24 the error. If, through reevaluation, the department affirms 25 that the applicant’s or recipient’s position is invalid, the 26 department shall determine the effect on the applicant’s or 27 recipient’s eligibility and take appropriate action. Written 28 notice of the department’s determination and the actions taken 29 shall be provided to the applicant or recipient. 30 b. By agreeing with the findings of the department. If 31 the applicant or recipient responds in a timely manner and 32 agrees with the findings of the department, the department 33 shall determine the effect on the applicant’s or recipient’s 34 eligibility and take appropriate action. Written notice of the 35 -9- LSB 2201SV (1) 89 pf/rh 9/ 15
S.F. 389 department’s determination and actions taken shall be provided 1 to the applicant or recipient. 2 4. If the applicant or recipient fails to respond to the 3 notice in a timely manner, the department shall provide notice 4 to terminate the applicant’s application or to discontinue 5 the recipient’s enrollment for failure to cooperate, and 6 shall terminate the applicant’s application or discontinue 7 the recipient’s enrollment. The applicant’s or recipient’s 8 eligibility for such public assistance shall not be established 9 or reestablished until the issue has been resolved. 10 Sec. 9. NEW SECTION . 239.9 Referrals for fraud, 11 misrepresentation, or inadequate documentation. 12 1. Following a review of an applicant’s or recipient’s 13 eligibility under this chapter, the department may refer cases 14 of suspected fraud along with any supportive information to the 15 department of inspections and appeals for review. 16 2. In cases of substantiated fraud, upon conviction, the 17 state shall review all appropriate legal options including 18 but not limited to removal of a recipient from other public 19 assistance programs and garnishment of wages or state income 20 tax refunds until the department recovers an equal amount of 21 benefits fraudulently claimed. 22 3. The department may refer suspected cases of fraud, 23 misrepresentation, or inadequate documentation relating to 24 initial or continued eligibility to appropriate state agencies, 25 divisions, or departments for review of eligibility issues in 26 programs providing public benefits other than those as defined 27 in this chapter. 28 Sec. 10. NEW SECTION . 239.10 Administration —— rules —— 29 reporting. 30 1. The department of human services shall adopt rules 31 pursuant to chapter 17A to administer this chapter. 32 2. The department shall submit a report to the governor 33 and the general assembly by January 15, 2023, and by January 34 15 annually thereafter through January 15, 2028, detailing the 35 -10- LSB 2201SV (1) 89 pf/rh 10/ 15
S.F. 389 impact of the verification and authentication measures taken 1 under this chapter. The report shall include data for all 2 affected public assistance programs including the number of 3 cases reviewed, the number of cases closed, the number of fraud 4 investigation referrals made, and the amount of savings and 5 cost avoidance realized from the provisions of this chapter. 6 Sec. 11. IMPLEMENTATION. 7 1. The department of human services shall request federal 8 approval including for any state plan amendment or waiver 9 necessary to administer this Act. 10 2. The provisions of this Act requiring federal approval 11 shall be implemented upon receipt of such federal approval. 12 3. The provisions of this Act not requiring federal approval 13 shall be implemented as specified in this Act, or if not 14 specified in this Act, no later than July 1, 2022. 15 4. The department may contract with multiple third-party 16 vendors to administer this Act. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill relates to public assistance program oversight. 21 The bill relates to various eligibility verification and 22 authentication measures under new Code chapter 239. 23 The bill provides definitions used in the new Code chapter. 24 The bill requires the department of human services (DHS) to 25 conduct an asset test on all members of the household of an 26 applicant for SNAP benefits. The bill specifies the minimum 27 information, federal, state, and other data sources, and public 28 records that DHS must access prior to determining eligibility 29 for an applicant’s SNAP benefits. The bill requires DHS to 30 enter into a memorandum of understanding with any department or 31 subunit of a department to obtain the information specified. 32 The bill provisions do not apply if every member of the 33 applicant’s household receives supplemental security income. 34 The bill requires that an applicant for SNAP benefits shall 35 -11- LSB 2201SV (1) 89 pf/rh 11/ 15
S.F. 389 cooperate with the child support recovery unit as a condition 1 of eligibility for SNAP benefits. 2 The bill requires that by July 1, 2022, DHS shall redesign 3 an existing system; establish a new computerized income, 4 asset, and identity eligibility verification system; or 5 contract with a third-party vendor to provide for identity 6 verification, identity authentication, asset verification, and 7 dual enrollment prevention in each public assistance program 8 administered by DHS. DHS may contract with a third-party 9 vendor to develop or provide a real-time eligibility system 10 to verify or authenticate income, assets, and identity 11 eligibility of applicants and recipients. The system shall 12 be accessed prior to determining eligibility, periodically 13 between eligibility redeterminations, and during eligibility 14 redeterminations and reviews. DHS may contract with a 15 third-party vendor to provide information to facilitate reviews 16 of recipient eligibility conducted by DHS. A contract entered 17 into to provide a system or service must establish the annual 18 savings amount from utilization of the system or service, 19 and include a provision that the contract may be terminated 20 contingent upon the savings not exceeding the total yearly 21 cost to the state for utilization of the system or service. 22 The contract does not preclude DHS from continuing to conduct 23 additional eligibility verification or authentication processes 24 to receive, review, or verify additional information related 25 to the eligibility of an individual; or from contracting 26 with a third-party vendor to provide additional eligibility 27 authentication or verification information. DHS shall seek 28 federal approval as necessary to implement and administer this 29 provision of the bill. 30 The bill requires that for all applications for initial 31 public assistance program benefits and all determinations of 32 ongoing recipient eligibility processed by DHS, DHS shall 33 access information for every applicant or recipient from 34 specified federal, state, and other sources, and from specified 35 -12- LSB 2201SV (1) 89 pf/rh 12/ 15
S.F. 389 public records. 1 The bill requires that prior to awarding public assistance 2 benefits to an applicant, the applicant shall complete a 3 computerized identity authentication process to confirm the 4 identity of the applicant through the use of a knowledge-based 5 questionnaire consisting of financial and personal questions 6 tailored to assist persons without a bank account or those who 7 have poor access to financial and banking services or who do 8 not have an established credit history. The questionnaire 9 may be submitted by the applicant online, in person, or via 10 telephone. 11 The bill provides that if information obtained from a review 12 of an applicant’s or recipient’s information under the bill 13 does not result in DHS finding a discrepancy or change in an 14 individual’s circumstances affecting eligibility, DHS shall 15 take no further action. 16 If the information obtained from a review of the applicant’s 17 or recipient’s information under the bill results in DHS 18 finding a discrepancy or a change in the individual’s 19 circumstances affecting eligibility, DHS shall provide written 20 notice to the individual and the opportunity to explain any 21 issues identified. Unless otherwise prohibited by federal law 22 or regulation, a self-declaration by an applicant or recipient 23 shall not be accepted as verification of categorical and 24 financial eligibility during such review. 25 The notice provided to the applicant or recipient shall 26 describe in sufficient detail the circumstances of the issue 27 identified, the manner in which the applicant or recipient 28 may respond, and the consequences of failing to respond to 29 the notice or resolve the issue identified. The applicant or 30 recipient shall be provided 10 days to respond to the notice. 31 DHS may request additional information as necessary to reach 32 a decision. 33 The bill specifies the processes and results dependent upon 34 whether an applicant or recipient responds by disagreeing 35 -13- LSB 2201SV (1) 89 pf/rh 13/ 15
S.F. 389 or agreeing with the findings of a review by DHS. If the 1 applicant or recipient fails to respond to the notice in a 2 timely manner, DHS shall provide notice to terminate the 3 applicant’s application or to discontinue the recipient’s 4 enrollment for failure to cooperate, and shall terminate 5 the applicant’s application or discontinue the recipient’s 6 enrollment. The applicant’s or recipient’s eligibility 7 for such public assistance shall not be established or 8 reestablished until the issue has been resolved. 9 Following a review of an applicant’s or recipient’s 10 eligibility, DHS may refer cases of suspected fraud along with 11 any supportive information to the department of inspections 12 and appeals for review. In cases of substantiated fraud, 13 upon conviction, the state shall review all appropriate legal 14 options including but not limited to removal of a recipient 15 from other public assistance programs and garnishment of wages 16 or state income tax refunds until DHS recovers an equal amount 17 of benefits fraudulently claimed. DHS may refer suspected 18 cases of fraud, misrepresentation, or inadequate documentation 19 relating to initial or continued eligibility to appropriate 20 state agencies, divisions, or departments for review of 21 eligibility issues in other public assistance programs. 22 Under the bill, DHS shall adopt administrative rules to 23 administer the Code chapter. DHS shall submit a report to the 24 governor and the general assembly by January 15, 2023, and 25 by January 15 annually thereafter through January 15, 2028, 26 detailing the impact of the verification and authentication 27 measures taken under the bill. The report shall include data 28 for all affected public assistance programs including the 29 number of cases reviewed, the number of cases closed, the 30 number of fraud investigation referrals made, and the amount of 31 savings and cost avoidance realized from the provisions of the 32 bill. 33 DHS shall request federal approval including for any state 34 plan amendment or waiver necessary to administer the bill, and 35 -14- LSB 2201SV (1) 89 pf/rh 14/ 15
S.F. 389 the provisions of the bill requiring federal approval shall 1 be implemented upon receipt of such federal approval. The 2 provisions of the bill that do not require federal approval 3 shall be implemented as specified in the bill or, if not 4 specified in the bill, no later than July 1, 2022. 5 -15- LSB 2201SV (1) 89 pf/rh 15/ 15