A3985

An Act concerning SNAP, WFNJ, and WIC benefits fraud, supplementing P.L.1997, c.37 (C.44:10-71 et seq.) and Title 26 of the Revised Statutes, and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. The Commissioner of Human Services shall provide information to recipients of benefits under SNAP and WFNJ regarding the following:

(1) the risks of card skimming, card cloning, and similar fraudulent methods, as used by criminals to steal SNAP or cash assistance benefits from a recipient’s electronic benefits transfer card;

(2) the precautions a recipient can take to avoid falling victim to card skimming, card cloning, or similar fraudulent methods;

(3) the claims process, as established by the Commissioner of Human Services pursuant to subsection d. of this section, through which a recipient can have SNAP or WFNJ benefits, stolen through card skimming, card cloning, or similar fraudulent methods, replaced with federal or State funds; and

(4) the process by which a recipient can report stolen SNAP and WFNJ benefits due to card skimming, card cloning, or similar fraudulent methods to the Department of Human Services or to local law enforcement agencies.

b. Information provided to SNAP and WFNJ recipients pursuant to subsection a. of this section shall be distributed, at a minimum, in writing, at the point of enrollment and recertification in SNAP or WFNJ and with the issuance of the recipient’s electronic benefits transfer card.

c. The Commissioner of Human Services shall post the information itemized in subsection a. of this section via a digital format on the Department of Human Services’ website and via a paper format at all SNAP and WFNJ eligibility determination agencies.

d. The Commissioner of Human Services shall replace SNAP and WFNJ benefits that are determined to have been stolen through card skimming, card cloning, or similar fraudulent methods. The commissioner shall establish a process for such determinations to be made and for the replacement of these benefits, which process shall be subject to the same conditions that apply to the replacement of SNAP benefits, with federal funds, due to card skimming, card cloning, and similar fraudulent methods pursuant to the federal “Consolidated Appropriations Act, 2023,” P.L. 117-328; or any applicable subsequent federal law. The commissioner shall provide for the replacement of these benefits with State funds whenever federal funds are not available for that purpose, subject to the availability of State funds.

e. The Commissioner of Human Services shall coordinate with SNAP and WFNJ electronic benefits card vendors to implement available precautions to reduce the vulnerability of electronic benefits transfer cards to theft, including but not limited to:

(1) the inclusion of an embedded microchip in all electronic benefits transfer cards;

(2) the use of transaction, fraud, or other alerts; and

(3) enabling electronic benefits transfer cardholders to place certain limits on the use of their cards, including limiting transactions during certain hours or prohibiting out–of–state transactions.

f. The Commissioner of Human Services shall report to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), 18 months following the effective date of the act, and annually thereafter, the number of reports submitted to the Department of Human Services pursuant to paragraph (4) of subsection a. of this section, including the aggregate amount of stolen benefits indicated under those reports; the amount of stolen benefits replaced due to claims submitted pursuant to subsection d. of this section; and any other information that demonstrates the Department of Human Services’ efforts to protect SNAP and WFNJ recipients from fraud due to card skimming, card cloning, or similar fraudulent methods.

g. As used in this section,

“Card Cloning” means making an unauthorized copy of an electronic benefits transfer card.

“Electronic Benefits Transfer Card” means the payment card issued to SNAP and WFNJ recipients by the Department of Human Services in connection with the electronic benefit distribution system implemented pursuant to section 5 of P.L.1997, c.37 (C.44:10-75), on which benefits for those programs are deposited and through which recipients can purchase food and access cash assistance benefits.

“Skimming” means the illegal installation of devices on point-of-sale or automatic teller machine terminals to capture a cardholder’s personal identification number and other data stored on the magnetic strip of the electronic benefits transfer card.

“SNAP” means the Supplemental Nutrition Assistance Program established pursuant to the federal "Food and Nutrition Act of 2008," Pub.L.110-246 (7 U.S.C. s.2011 et seq.).

“WFNJ” means the Work First New Jersey Program established pursuant to P.L.1997, c.38 (C.44:10-55 et seq.) in accordance with authorization received under Title IV of the federal "Personal Responsibility and Work Opportunity Reconciliation Act of 1996," Pub.L.104-193 (8 U.S.C. s.1601 et seq.).

2. a. The Commissioner of Health shall provide information to recipients of benefits under WIC regarding the following:

(1) the risks of card skimming, card cloning, and similar fraudulent methods, as used by criminals to steal WIC benefits from a recipient’s electronic benefits transfer card;

(2) the precautions a recipient can take to avoid falling victim to card skimming, card cloning, or similar fraudulent methods;

(3) the claims process, as established by the Commissioner of Health pursuant to subsection d. of this section, through which a recipient can have WIC benefits, stolen through card skimming, card cloning, or similar fraudulent methods, replaced with federal or State funds; and

(4) the process by which a recipient can report stolen WIC benefits due to card skimming, card cloning, or similar fraudulent methods to the Department of Health or to local law enforcement agencies.

b. Information provided to WIC recipients pursuant to subsection a. of this section shall be distributed, at a minimum, in writing, at the point of enrollment and recertification in WIC and with the issuance of the recipient’s electronic benefits transfer card.

c. The Commissioner of Health shall post the information itemized in subsection a. of this section via a digital format on the Department of Health’s website and via a paper format at all WIC program offices.

d. The Commissioner of Health shall replace WIC benefits that are determined to have been stolen through card skimming, card cloning, or similar fraudulent methods. The commissioner shall establish a process for such determinations to be made and for the replacement of these benefits, which process shall be subject to the same conditions that apply to the replacement of SNAP benefits, with federal funds, due to card skimming, card cloning, and similar fraudulent methods pursuant to the federal “Consolidated Appropriations Act, 2023,” P.L. 117-328; or any applicable subsequent federal law. The commissioner shall provide for the replacement of these benefits with State funds whenever federal funds are not available for that purpose, subject to the availability of State funds.

e. The Commissioner of Health shall coordinate with WIC electronic benefits card vendor to implement available precautions to reduce the vulnerability of electronic benefits transfer cards to theft, including but not limited to:

(1) the inclusion of an embedded microchip in all electronic benefits transfer cards;

(2) the use of transaction, fraud, or other alerts; and

f. The Commissioner of Health shall report to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), 18 months following the effective date of the act, and annually thereafter, the number of reports submitted to the Department of Health pursuant to paragraph (4) of subsection a. of this section, including the aggregate amount of stolen benefits indicated under those reports; the amount of stolen benefits replaced due to claims submitted pursuant to subsection d. of this section; and any other information that demonstrates the Department of Health’s efforts to protect WIC recipients from fraud due to card skimming, card cloning, or similar fraudulent methods.

g. As used in this section,

“Card Cloning” means making an unauthorized copy of an electronic benefits transfer card.

“Electronic Benefits Transfer Card” means the payment card issued to WIC recipients by the Department of Health, on which benefits for that program are deposited and through which recipients can purchase authorized items.

“SNAP” means the Supplemental Nutrition Assistance Program established pursuant to the federal "Food and Nutrition Act of 2008," Pub.L.110-246 (7 U.S.C. s.2011 et seq.).

“WIC” means the federal Special Supplemental Nutrition Program for Women, Infants, and Children, established pursuant to the “Child Nutrition Act of 1966,” Pub.L.89-642 (42 U.S.C. s.1771 et seq.).

3. The Commissioners of Human Services and Health may adopt rules and regulations pursuant to the "Administrative Procedure Act" P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the purposes of this act.

4. There is appropriated from the General Fund to the Department of Human Services and to the Department of Health the sum necessary to effectuate the provisions of this act.

5. This act shall take effecton the first day of the seventh month next following the date of enactment, except that the Commissioners of Human Services and Health, respectively, may take such anticipatory administrative action in advance to establish the claims process required pursuant to subsection d. of section 1 and subsection d. of section 2.

STATEMENT

This bill directs the Commissioners of Human Services and Health, respectively, to provide information to certain benefit recipients regarding card skimming and cloning and to replace stolen benefits under fraudulent circumstances. Specifically, the Commissioner of Human Services is responsible for implementing these provisions for the Supplemental Nutrition Assistance Program (SNAP) and the Work First New Jersey Program (WFNJ), while the Commissioner of Health is responsible for implementing the provisions for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). The bill also appropriates the necessary funds to the departments to support the provisions of the bill. As used under the bill, “skimming” means the illegal installation of devices on point-of-sale or automatic teller machine terminals to capture a cardholder’s personal identification number and other data stored on the magnetic strip of the electronic benefits transfer card; and “card cloning” means making an unauthorized copy of an electronic benefits transfer card.

Under the bill, each commissioner is to provide information to program recipients regarding the: risks of card skimming, card cloning, and similar fraudulent methods; precautions a recipient can take to avoid falling victim to fraudulent methods; claims process, established under the bill, through which a recipient can have stolen benefits replaced; and process by which a recipient can report stolen to the appropriate department or to local law enforcement agencies. This information is to be distributed to recipients, at a minimum, at the point of enrollment and recertification in the program and with the issuance of the recipient’s electronic benefits transfer card. Each commissioner is also required to post the information on the department’s website and at eligibility determining offices.

The bill mandates the commissioners to establish a claims process, that mirrors the provisions of federal law regarding the replacement of stolen SNAP benefits, by which a recipient’s stolen program benefits can be replaced by either federal or State funds, subject to availability. The bill also directs the commissioners to coordinate with vendors to implement available precautions to reduce the vulnerability of electronic benefits transfer cards to theft, such as the inclusion of an embedded microchip in all electronic benefits transfer cards

Finally, the commissioners are required to report to the Governor and the Legislature, 18 months following the effective date of the bill, and annually thereafter, data regarding stolen and replaced program benefits, as collected under the bill, as well as any other information that demonstrates the departments’ efforts to protect recipients from fraud.