S.F. 494 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” means the following assets of the members of the 6 applicant’s household: 7 a. All liquid assets. 8 b. All other personal property excluding one vehicle and 9 the fair market value in excess of ten thousand dollars of an 10 additional vehicle. 11 3. “Asset test” means the comparison of the collective 12 value of all countable assets of the members of the applicant’s 13 household to the maximum allowed household asset limit of 14 fifteen thousand dollars. 15 4. “Department” means the department of health and human 16 services. 17 5. “Public assistance” means the supplemental nutrition 18 assistance program or SNAP, the Medicaid program or Medicaid 19 as defined in section 249A.2, the family investment program or 20 FIP as defined in section 239B.1, and the children’s health 21 insurance program or CHIP. 22 6. “Real-time eligibility system” means real-time electronic 23 access to a system that allows verification of all applicable 24 public 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 7. “Recipient” means an individual who is receiving public 29 assistance benefits in the state. 30 8. “Supplemental nutrition assistance program” or “SNAP” 31 means benefits provided by the federal program administered 32 through 7 C.F.R. pts. 270 – 283, as amended. 33 Sec. 2. NEW SECTION . 239.2 Supplemental nutrition 34 assistance program —— income eligibility. 35 -1- LSB 1320SV (5) 90 pf/rh 1/ 15

S.F. 494 The department shall establish the gross countable monthly 1 income threshold for the supplemental nutrition assistance 2 program at less than or equal to one hundred sixty percent of 3 the federal poverty level for the household size. 4 Sec. 3. NEW SECTION . 239.3 Identity authentication. 5 Unless otherwise prohibited by federal law or regulation, 6 prior to the department awarding public assistance benefits, an 7 applicant shall complete a computerized identity authentication 8 process to confirm the identity of the applicant. Identity 9 authentication shall be accomplished through a knowledge-based 10 questionnaire consisting of financial and personal questions. 11 The questionnaire shall contain questions tailored to assist 12 persons without a bank account or those who have poor access 13 to financial and banking services or who do not have an 14 established credit history. The computerized identity 15 authentication process and questionnaire may be completed and 16 submitted online, in person, or via telephone by the applicant 17 or a person authorized by the applicant. The department may 18 adopt rules pursuant to chapter 17A to administer this section. 19 Sec. 4. NEW SECTION . 239.4 Asset test for supplemental 20 nutrition assistance program. 21 1. For the purposes of determining eligibility for receipt 22 of SNAP benefits, the department shall conduct an asset test 23 on all members of the applicant’s household. The allowable 24 financial resources to be included in or excluded from a 25 determination of eligibility for SNAP shall be those specified 26 in 7 U.S.C. §2014(g)(1), to the extent consistent with the term 27 “asset” as defined in this chapter. 28 2. Prior to determining eligibility for SNAP benefits, 29 the department shall access, at a minimum, for every member 30 of the applicant’s household, the following information from 31 the following federal, state, and miscellaneous sources, or 32 successor sources: 33 a. Federal sources and information: 34 (1) Earned and unearned income information maintained by 35 -2- LSB 1320SV (5) 90 pf/rh 2/ 15

S.F. 494 the internal revenue service. 1 (2) The following sources and information maintained by the 2 United States social security administration: 3 (a) Earned income information. 4 (b) Death register information. 5 (c) Prisoner or incarceration status information. 6 (d) Supplemental security income information maintained in 7 the state data exchange database. 8 (e) Beneficiary records and earnings information maintained 9 in the beneficiary and earnings data exchange database. 10 (f) Earnings information maintained in the beneficiary 11 earnings exchange record system database. 12 (3) The following sources and information maintained by the 13 United States department of health and human services: 14 (a) Income and employment information maintained in the 15 national directory of new hires database by the office of child 16 support enforcement of the administration for children and 17 families. 18 (b) Other federal data sources maintained by the office of 19 child support enforcement of the administration for children 20 and families. 21 b. State sources and information: 22 (1) The department’s sources and information including but 23 not limited to all of the following: 24 (a) Income and employment information maintained by child 25 support services. 26 (b) Child care assistance information maintained by the 27 department. 28 (c) Enrollment status in other public assistance programs. 29 (2) The department of workforce development sources and 30 information including all of the following: 31 (a) Employment information. 32 (b) Employer weekly, monthly, and quarterly reports of 33 income and unemployment insurance payments. 34 c. Miscellaneous sources: 35 -3- LSB 1320SV (5) 90 pf/rh 3/ 15

S.F. 494 (1) Any existing real-time database of persons currently 1 receiving benefits in other states, such as the national 2 accuracy clearinghouse. 3 (2) Any lottery winner databases maintained by the Iowa 4 lottery. 5 (3) Any existing real-time eligibility system that includes 6 employment and income information maintained by a consumer 7 reporting agency, as defined by the federal Fair Credit 8 Reporting Act, 15 U.S.C. §1681a, for the purpose of obtaining 9 real-time employment and income information. 10 3. Prior to determining eligibility for SNAP benefits, the 11 department shall access information for every member of the 12 applicant’s household from the following public records: 13 a. A nationwide public records data source of physical asset 14 ownership. The data source may include but is not limited to 15 real property, automobiles, watercraft, aircraft, and luxury 16 vehicles, or any other vehicle owned by the applicant. 17 b. National and state financial institutions in order 18 to locate undisclosed depository accounts or verify account 19 balances of disclosed accounts. 20 4. The department shall enter into a memorandum of 21 understanding with any department, division, bureau, section, 22 unit, or any other subunit of a department to obtain the 23 information specified in this section. 24 5. The provisions of this section shall not apply if every 25 member of the applicant’s household receives supplemental 26 security income. 27 Sec. 5. NEW SECTION . 239.5 Verification and authentication 28 systems —— public assistance programs. 29 1. No later than July 1, 2025, the department shall 30 redesign an existing system; establish a new computerized 31 income, asset, and identity eligibility verification system; 32 or contract with a third-party vendor to provide for identity 33 verification, identity authentication, asset verification, and 34 dual enrollment prevention in order to deter waste, fraud, and 35 -4- LSB 1320SV (5) 90 pf/rh 4/ 15

S.F. 494 abuse in each public assistance program administered by the 1 department. 2 2. The department may contract with a third-party vendor 3 to develop or provide a service for a real-time eligibility 4 system that allows the department to verify or authenticate 5 income, assets, and identity eligibility of applicants and 6 recipients to prevent fraud, misrepresentation, and inadequate 7 documentation when determining eligibility for public 8 assistance programs. The system shall be accessed prior to 9 determining eligibility, periodically between eligibility 10 redeterminations, and during eligibility redeterminations 11 and reviews. The department may also contract with a 12 third-party vendor to provide information to facilitate 13 reviews of recipient eligibility conducted by the department. 14 Specifically, the department may contract with a third-party 15 consumer reporting agency, as defined by the federal Fair 16 Credit Reporting Act, 15 U.S.C. §1681a, for the purpose of 17 obtaining real-time employment and income information. 18 3. A contract entered into under this section shall provide, 19 at a minimum, for all of the following: 20 a. The establishment of the annual savings amount from 21 utilization of the system or service, and a provision that the 22 contract may be terminated contingent upon the savings not 23 exceeding the total yearly cost to the state for utilization of 24 the system or service. 25 b. That the contract shall not preclude the department 26 from continuing to conduct additional eligibility verification 27 or authentication processes, to receive, review, or verify 28 additional information related to the eligibility of an 29 individual, or from contracting with a third-party vendor to 30 provide additional eligibility authentication or verification 31 information. 32 4. The department shall seek federal approval as necessary 33 to implement and administer this section. 34 Sec. 6. NEW SECTION . 239.6 Public assistance programs —— 35 -5- LSB 1320SV (5) 90 pf/rh 5/ 15

S.F. 494 applicant and recipient eligibility verification. 1 1. All applications for initial public assistance 2 program benefits and all determinations of ongoing recipient 3 eligibility shall be processed through a system as specified 4 in this section. Complete initial applications shall be 5 processed within the minimum period required by federal law. 6 Prior to determining initial eligibility of an applicant for, 7 or ongoing eligibility of a recipient of, public assistance, 8 the department shall access information for every applicant or 9 recipient from the following federal, state, and other sources: 10 a. Federal sources and information: 11 (1) Earned and unearned income information maintained by 12 the internal revenue service. 13 (2) The following sources and information maintained by the 14 United States social security administration: 15 (a) Earned income information. 16 (b) Death register information. 17 (c) Prisoner or incarceration status information. 18 (d) Supplemental security income information maintained in 19 the state data exchange database. 20 (e) Beneficiary records and earnings information maintained 21 in the beneficiary and earnings data exchange database. 22 (f) Earnings information maintained in the beneficiary 23 earnings exchange record system database. 24 (3) The following sources and information maintained by the 25 United States department of health and human services: 26 (a) Income and employment information maintained in the 27 national directory of new hires database by the office of child 28 support enforcement of the administration for children and 29 families. 30 (b) Other federal data sources maintained by the office of 31 child support enforcement of the administration for children 32 and families. 33 (4) Information maintained by the United States citizenship 34 and immigration services of the United States department of 35 -6- LSB 1320SV (5) 90 pf/rh 6/ 15

S.F. 494 homeland security. 1 (5) Payment information for public housing and section 8 2 housing assistance guidelines maintained by the United States 3 department of housing and urban development. 4 (6) National fleeing felon information maintained by the 5 United States federal bureau of investigation. 6 b. State sources and information: 7 (1) The department’s sources and information including but 8 not limited to all of the following: 9 (a) Income and employment information maintained by child 10 support services. 11 (b) Child care assistance information maintained by the 12 department. 13 (c) Enrollment status in other public assistance programs. 14 (2) The department of workforce development sources and 15 information including all of the following: 16 (a) Employment information. 17 (b) Employer weekly, monthly, and quarterly reports of 18 income and unemployment insurance payments. 19 c. Other sources including all of the following: 20 (1) Any existing real-time database of persons currently 21 receiving benefits in other states, such as the national 22 accuracy clearinghouse. 23 (2) An available database of persons who currently hold a 24 license, permit, or certificate from any state agency, the cost 25 of which exceeds five hundred dollars. 26 (3) Wage reporting and similar information maintained by 27 states contiguous to Iowa. 28 (4) A third-party consumer reporting agency, as defined 29 by the federal Fair Credit Reporting Act, 15 U.S.C. §1681a, 30 for the purpose of obtaining real-time employment and income 31 information. 32 2. Prior to determining the initial eligibility of an 33 applicant for, or the ongoing eligibility of a recipient 34 of, public assistance benefits, the department shall access 35 -7- LSB 1320SV (5) 90 pf/rh 7/ 15

S.F. 494 information for every applicant or recipient from, at a 1 minimum, the following public records: 2 a. A nationwide public records data source of physical asset 3 ownership. The data source may include but is not limited to 4 real property, automobiles, watercraft, aircraft, and luxury 5 vehicles, or any other vehicle owned by the applicant for or 6 recipient of assistance. 7 b. A nationwide public records data source of incarcerated 8 individuals. 9 c. A nationwide best address and driver’s license data 10 source to verify that individuals are residents of the state. 11 d. A comprehensive public records database from which the 12 department may identify potential identity fraud or identity 13 theft that is capable of closely associating name, social 14 security number, date of birth, phone, and address information. 15 e. National and local financial institutions in order 16 to locate undisclosed depository accounts or verify account 17 balances of disclosed accounts. 18 f. Outstanding default or arrest warrant information. 19 3. The state may contract with a third-party consumer 20 reporting agency, as defined by the federal Fair Credit 21 Reporting Act, 15 U.S.C. §1681a, for the purpose of obtaining 22 real-time employment and income information under this section. 23 Sec. 7. NEW SECTION . 239.7 Case review of applicant and 24 recipient information. 25 1. If the information obtained from a review of an 26 applicant’s or recipient’s information under this chapter does 27 not result in the department finding a discrepancy or change 28 in an individual’s circumstances affecting eligibility, the 29 department shall take no further action. 30 2. If the information obtained from a review of the 31 applicant’s or recipient’s information under this chapter 32 results in the department finding a discrepancy or change in 33 the individual’s circumstances affecting eligibility, the 34 department shall respond in accordance with the provisions of 35 -8- LSB 1320SV (5) 90 pf/rh 8/ 15

S.F. 494 sections 239.8 and 239.9. 1 Sec. 8. NEW SECTION . 239.8 Notice and right to be heard. 2 1. An applicant for, or recipient of, public assistance 3 shall be provided written notice and the opportunity to explain 4 any issues identified in a review performed under this chapter 5 for initial eligibility or redetermination of eligibility. 6 Unless otherwise prohibited by federal law or regulation, 7 a self-declaration by an applicant or recipient shall not 8 be accepted as verification of categorical and financial 9 eligibility during such review. 10 2. The notice provided to the applicant or recipient shall 11 describe in sufficient detail the circumstances of the issue 12 identified, the manner in which the applicant or recipient 13 may respond, and the consequences of failing to respond to 14 the notice or resolve the issue identified. The applicant or 15 recipient shall be provided ten days to respond to the notice. 16 The department may request additional information as necessary 17 to reach a decision. 18 3. An applicant or recipient may respond to the notice as 19 follows: 20 a. By disagreeing with the findings of the department. If 21 the applicant or recipient responds in a timely manner and 22 disagrees with the findings of the department, the department 23 shall reevaluate the circumstances to determine if the 24 applicant’s or recipient’s position is valid. If, through 25 reevaluation, the department finds that the department is in 26 error, the department shall take immediate action to correct 27 the error. If, through reevaluation, the department affirms 28 that the applicant’s or recipient’s position is invalid, the 29 department shall determine the effect on the applicant’s or 30 recipient’s eligibility and take appropriate action. Written 31 notice of the department’s determination and the actions taken 32 shall be provided to the applicant or recipient. 33 b. By agreeing with the findings of the department. If 34 the applicant or recipient responds in a timely manner and 35 -9- LSB 1320SV (5) 90 pf/rh 9/ 15

S.F. 494 agrees with the findings of the department, the department 1 shall determine the effect on the applicant’s or recipient’s 2 eligibility and take appropriate action. Written notice of the 3 department’s determination and actions taken shall be provided 4 to the applicant or recipient. 5 4. If the applicant or recipient fails to respond to the 6 notice in a timely manner, the department shall provide notice 7 to terminate the applicant’s application or to discontinue 8 the recipient’s enrollment for failure to cooperate, and 9 shall terminate the applicant’s application or discontinue 10 the recipient’s enrollment. The applicant’s or recipient’s 11 eligibility for such public assistance shall not be established 12 or reestablished until the issue has been resolved. 13 Sec. 9. NEW SECTION . 239.9 Referrals for fraud, 14 misrepresentation, or inadequate documentation. 15 1. Following a review of an applicant’s or recipient’s 16 eligibility under this chapter, the department may refer cases 17 of suspected fraud along with any supportive information to the 18 department of inspections and appeals for review. 19 2. In cases of substantiated fraud, upon conviction, the 20 state shall review all appropriate legal options including 21 but not limited to removal of a recipient from other public 22 assistance programs and garnishment of wages or state income 23 tax refunds until the department recovers an equal amount of 24 benefits fraudulently claimed. 25 3. The department may refer suspected cases of fraud, 26 misrepresentation, or inadequate documentation relating to 27 initial or continued eligibility to appropriate state agencies, 28 divisions, or departments for review of eligibility issues in 29 programs providing public benefits other than those as defined 30 in this chapter. 31 Sec. 10. NEW SECTION . 239.10 Administration —— rules —— 32 reporting. 33 1. The department of health and human services shall adopt 34 rules pursuant to chapter 17A to administer this chapter. 35 -10- LSB 1320SV (5) 90 pf/rh 10/ 15

S.F. 494 2. The department shall submit a report to the governor 1 and the general assembly by January 15, 2025, and by January 2 15 annually thereafter through January 15, 2030, detailing the 3 impact of the verification and authentication measures taken 4 under this chapter. The report shall include data for all 5 affected public assistance programs including the number of 6 cases reviewed, the number of cases closed, the number of fraud 7 investigation referrals made, and the amount of savings and 8 cost avoidance realized from the provisions of this chapter. 9 Sec. 11. NEW SECTION . 249A.59 Cooperation with child 10 support services. 11 1. Unless exempt pursuant to state or federal law or 12 regulation, an applicant for or recipient of medical assistance 13 shall be required to cooperate with child support services as a 14 condition of eligibility. 15 2. The department shall adopt rules pursuant to chapter 17A 16 to administer this section. 17 Sec. 12. IMPLEMENTATION. 18 1. The department of health and human services shall request 19 federal approval including for any state plan amendment or 20 waiver necessary to administer this Act. 21 2. If the department of health and human services determines 22 that any provision of this Act would result in the denial 23 of funds or services from the federal government that would 24 otherwise be available or would be inconsistent with the 25 requirements of federal law or regulation, such provision shall 26 be suspended, but only to the extent necessary to eliminate the 27 inconsistency with federal requirements. 28 3. Unless otherwise provided in this Act, the department 29 of health and human services shall implement the provisions of 30 this Act in an incremental fashion, beginning July 1, 2023, 31 with a goal of full implementation no later than July 1, 2025, 32 to minimize duplication of efforts and to maximize coordination 33 with the implementation time frames of other departmental 34 resource enhancements. 35 -11- LSB 1320SV (5) 90 pf/rh 11/ 15

S.F. 494 4. The provisions of this Act requiring federal approval 1 shall be implemented upon receipt of such federal approval. 2 5. The provisions of this Act not requiring federal approval 3 shall be implemented as specified in this Act, or if not 4 specified in this Act, no later than July 1, 2025. 5 6. The department may contract with multiple third-party 6 vendors to administer this Act. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill relates to public assistance program oversight. 11 The bill relates to various eligibility verification and 12 authentication measures under new Code chapter 239. 13 The bill provides definitions used in the new Code chapter. 14 The bill requires the department of health and human 15 services (HHS or the department) to establish the income 16 threshold for the supplemental nutrition assistance program 17 (SNAP) at less than or equal to 160 percent of the federal 18 poverty level for the household size. The bill also requires 19 HHS to complete a computerized identity authentication process 20 for an applicant for public assistance benefits and to conduct 21 an asset test on all members of the household of an applicant 22 for SNAP benefits. The bill specifies the minimum information 23 from federal, state, and other data sources and public records 24 that HHS must access prior to determining eligibility for an 25 applicant’s SNAP benefits. The bill requires HHS to enter into 26 a memorandum of understanding with any department or subunit 27 of a department to obtain the information specified. The bill 28 provisions do not apply if every member of the applicant’s 29 household receives supplemental security income. 30 The bill requires that no later than July 1, 2025, HHS shall 31 redesign an existing system; establish a new computerized 32 income, asset, and identity eligibility verification system; 33 or contract with a third-party vendor to provide for identity 34 verification, identity authentication, asset verification, 35 -12- LSB 1320SV (5) 90 pf/rh 12/ 15

S.F. 494 and dual enrollment prevention in each public assistance 1 program administered by HHS. The department may contract 2 with a third-party vendor to develop or provide a real-time 3 eligibility system to verify or authenticate income, assets, 4 and identity eligibility of applicants and recipients. The 5 system shall be accessed prior to determining eligibility, 6 periodically between eligibility redeterminations, and during 7 eligibility redeterminations and reviews. The department may 8 contract with a third-party vendor to provide information to 9 facilitate reviews of recipient eligibility conducted by HHS. 10 A contract entered into to provide a system or service must 11 establish the annual savings amount from utilization of the 12 system or service, and include a provision that the contract 13 may be terminated contingent upon the savings not exceeding the 14 total yearly cost to the state for utilization of the system or 15 service. The contract does not preclude HHS from continuing to 16 conduct additional eligibility verification or authentication 17 processes to receive, review, or verify additional information 18 related to the eligibility of an individual; or from 19 contracting with a third-party vendor to provide additional 20 eligibility authentication or verification information. 21 The department shall seek federal approval as necessary to 22 implement and administer this provision of the bill. 23 The bill requires that for all applications for initial 24 public assistance program benefits and all determinations of 25 ongoing recipient eligibility processed by HHS, HHS shall 26 access information for every applicant or recipient from 27 specified federal, state, and other sources, and from specified 28 public records. 29 The bill provides that if information obtained from a review 30 of an applicant’s or recipient’s information under the bill 31 does not result in HHS finding a discrepancy or change in an 32 individual’s circumstances affecting eligibility, HHS shall 33 take no further action. 34 If the information obtained from a review of the applicant’s 35 -13- LSB 1320SV (5) 90 pf/rh 13/ 15

S.F. 494 or recipient’s information under the bill results in HHS 1 finding a discrepancy or a change in the individual’s 2 circumstances affecting eligibility, HHS shall provide written 3 notice to the individual and the opportunity to explain any 4 issues identified. Unless otherwise prohibited by federal law 5 or regulation, a self-declaration by an applicant or recipient 6 shall not be accepted as verification of categorical and 7 financial eligibility during such review. 8 The notice provided to the applicant or recipient shall 9 describe in sufficient detail the circumstances of the issue 10 identified, the manner in which the applicant or recipient 11 may respond, and the consequences of failing to respond to 12 the notice or resolve the issue identified. The applicant or 13 recipient shall be provided 10 days to respond to the notice. 14 The department may request additional information as necessary 15 to reach a decision. 16 The bill specifies the processes and results dependent upon 17 whether an applicant or recipient responds by disagreeing 18 or agreeing with the findings of a review by HHS. If the 19 applicant or recipient fails to respond to the notice in a 20 timely manner, HHS shall provide notice to terminate the 21 applicant’s application or to discontinue the recipient’s 22 enrollment for failure to cooperate, and shall terminate 23 the applicant’s application or discontinue the recipient’s 24 enrollment. The applicant’s or recipient’s eligibility 25 for such public assistance shall not be established or 26 reestablished until the issue has been resolved. 27 Following a review of an applicant’s or recipient’s 28 eligibility, HHS may refer cases of suspected fraud along with 29 any supportive information to the department of inspections 30 and appeals for review. In cases of substantiated fraud, 31 upon conviction, the state shall review all appropriate legal 32 options including but not limited to removal of a recipient 33 from other public assistance programs and garnishment of wages 34 or state income tax refunds until HHS recovers an equal amount 35 -14- LSB 1320SV (5) 90 pf/rh 14/ 15

S.F. 494 of benefits fraudulently claimed. The department may refer 1 suspected cases of fraud, misrepresentation, or inadequate 2 documentation relating to initial or continued eligibility 3 to appropriate state agencies, divisions, or departments 4 for review of eligibility issues in other public assistance 5 programs. 6 Under the bill, HHS shall adopt administrative rules to 7 administer the Code chapter. The department shall submit a 8 report to the governor and the general assembly by January 9 15, 2025, and by January 15 annually thereafter through 10 January 15, 2030, detailing the impact of the verification 11 and authentication measures taken under the bill. The report 12 shall include data for all affected public assistance programs 13 including the number of cases reviewed, the number of cases 14 closed, the number of fraud investigation referrals made, and 15 the amount of savings and cost avoidance realized from the 16 provisions of the bill. 17 The bill requires an applicant for or recipient of Medicaid 18 to cooperate with child support services as a condition of 19 eligibility. 20 The department shall request federal approval including for 21 any state plan amendment or waiver necessary to administer 22 the bill. If HHS determines a provision of the bill would 23 result in denial of federal funds, that provision shall be 24 suspended. The provisions of the bill shall be implemented 25 incrementally no later than July 1, 2025; the provisions of 26 the bill requiring federal approval shall be implemented upon 27 receipt of such federal approval. The provisions of the bill 28 that do not require federal approval shall be implemented as 29 specified in the bill or, if not specified in the bill, no 30 later than July 1, 2025. 31 The department may contract with multiple third-party 32 vendors to administer the bill. 33 -15- LSB 1320SV (5) 90 pf/rh 15/ 15