2013 -- H 5411

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LC00796

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO HUMAN SERVICES - PUBLIC ASSISTANCE ACT

     Introduced By: Representatives Morgan, Newberry, Chippendale, Giarrusso, and Costa

     Date Introduced: February 13, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 40 of the General Laws entitled "HUMAN SERVICES" is hereby

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amended by adding thereto the following chapter:

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     CHAPTER 6.6

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PURCHASE OF ALCOHOLIC BEVERAGES, LOTTERY TICKETS, OR TOBACCO WITH

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DIRECT CASH ASSISTANCE FUNDS

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     40-6.6-1. Definitions. – As used in this chapter, the following terms shall, unless the

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context clearly requires otherwise, have the following meanings:

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     (1) "Access device" means a card, code, or other means of access that can be used alone

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or in conjunction with another access device, to obtain payments, allotments, benefits, money,

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goods, or other things of value, or that can be used to initiate a transfer of funds under the federal

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food and nutrition act of 2008, 7 U.S.C. section 2011 et seq., or regulations issued pursuant to the

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federal food and nutrition act of 2008.

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     (2) "Direct cash assistance" means any manner of cash assistance provided by the

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department of transitional assistance, including, but not limited to, temporary aid to families with

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dependent children, wherein the assistance is provided directly to the recipient, rather than a

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vendor.

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     (3) "Electronic benefit transfer card" means a card that provides benefits through an

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electronic benefit transfer.

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     (4) "Electronic benefit transfer transaction" means the use of a credit or debit card

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service, automated teller machine, point-of-sale terminal or access to an online system for the

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withdrawal of funds or the processing of a payment for merchandise or a service.

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     (5) "Vacation services" means furnishing interstate or foreign travel services solely for

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the purpose of recreation, including, but not limited to transportation, lodging and travel agent

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services; provided, however, that vacation services shall not include travel related to: a personal

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or family emergency, the death of a family member, employment, medical treatment, appearance

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before a court of law, court-authorized parental visitation and such other categories of travel

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which may be designated, from time to time, by the department as non-recreational travel.

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     40-6.6-2. Prohibited transactions. – No person shall knowingly use or accept direct

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cash assistance funds held on electronic benefit transfer cards or access devices for the purchase

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or sale of the following services or products: alcoholic beverages as defined in chapter 3.2; lottery

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tickets; tobacco products as defined in chapter 44-20; visual material or performances intended to

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create or simulate sexual conduct or sexual excitement as those terms are defined in section 11-

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31-1; firearms and ammunition as defined in section 11-47-2; vacation services; tattoos or body

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piercings; jewelry; for gambling or for the payment to the state or any political subdivision

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thereof of any fees, fines, bail, or bail bonds ordered by a court.

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     40-6.6-3. Penalties. – Any eligible recipient of direct cash assistance who knowingly

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makes a prohibited purchase in violation of this section shall reimburse the department for such

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purchase and, for the second offense, shall be disqualified from the direct cash assistance program

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for a period of two (2) months, and, for the third offense, shall be disqualified from the direct

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cash assistance program permanently; provided, however, that the department shall only

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disqualify an eligible recipient after notice and a hearing.

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     40-6.6-4. Electronic benefit transfers. – (a) The department shall maintain policies and

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practices as necessary to prevent cash assistance provided under this chapter from being used in

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any electronic benefit transfer transaction at: liquor stores; casinos, gambling casinos, or gaming

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establishments; retail establishments which provide adult-oriented entertainment in which

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performers disrobe or perform in an unclothed state for entertainment, as defined in section

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408(a) of the social security act, as amended; adult bookstores or adult paraphernalia stores;

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firearms dealers; tattoo parlors; manicure shops or aesthetic shops; rent-to-own stores; jewelry

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stores; or on cruise ships. Such establishments shall not accept electronic benefits transfer cards.

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A store owner who knowingly allows a prohibited electronic benefits transfer transaction in

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violation of this section or subsection (b) of section 40-6.1-1 shall be punished by a fine of not

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more than five hundred dollars ($500) for a first offense, by a fine of not less than five hundred

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dollars ($500) nor more than two thousand five hundred dollars ($2,500) for a second offense and

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by a fine of not less than two thousand five hundred dollars ($2,500) for a third or subsequent

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offense.

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     (b) A store owner who knowingly violates this section and who also possesses a license

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to sell alcoholic beverages under chapter 3-7 shall be referred to the appropriate licensing

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authority for possible disciplinary action pursuant to section 64 of said chapter 138.

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     (c) A store owner who knowingly violates this section and who also possesses a license

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to sell lottery tickets under section 42-61-5 shall be referred to the director of the state lottery for

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possible disciplinary action.

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     40-6.6-5. Food stamp trafficking. – (a) As used in this section, "food stamp benefits"

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means benefits issued pursuant to the federal food and nutrition act of 2008, 7 U.S.C. section

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2011 to 2029, inclusive, as amended, including such benefits contained on an electronic benefit

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transfer card.

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     (b) An individual commits the offense of food stamp benefits trafficking if the individual

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knowingly:

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     (1) Presents for payment or redemption or transfers food stamp benefits in any form,

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including transfers to another, who does not, or does not intend to, use the food stamp benefits for

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the benefit of the household for whom the benefits were intended, as defied in the regulations of

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the department; or

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     (2) Possesses, buys, sells, uses, alters, accepts, or transfers food stamp benefits in any

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manner not authorized by the food and nutrition act of 2008, 7 U.S.C., section 2011, as amended.

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     (c) An individual who traffics food stamp benefits, as described in subsection (b) shall:

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     (1) If the food stamp benefits are of a value of less than two hundred fifty dollars ($250)

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or if the item used, transferred, acquired, altered, or possessed has a value of less than two

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hundred fifty dollars ($250), be punished by imprisonment in a jail or house of correction for not

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more than one year or by a fine of not more than one thousand dollars ($1,000), or both such fine

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and imprisonment; or

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     (2) If the food stamp benefits are of a value of two hundred fifty dollars ($250) or more

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or the item used, transferred, acquired, altered, or possessed has a value of two hundred fifty

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dollars ($250) or more, be punished by imprisonment in a jail or house of correction for not more

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than two (2) years or by imprisonment in a state prison for not more than five (5) years or by a

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fine of not more than five thousand dollars ($5,000), or both fine and imprisonment.

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     (d) If a person is alleged to have committed the offense of trafficking in food stamp

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benefits two (2) or more times within a six (6) month period, those offenses may be aggregated

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and charged in a single count and the offenses so aggregated and charged shall constitute a single

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offense; provided, however, that, if the aggregate value of the food stamp benefits alleged to be

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trafficked is two hundred fifty dollars ($250) or more, the person shall be subject to the penalties

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prescribed in subdivision 40-6.6-5(c)(2).

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     (e) Crimes under this section may be prosecuted and punished in any county where a

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defendant used, transferred, acquired, or possessed food stamp benefits or in the county in which

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the state agency responsible for administering food stamp benefits is headquartered.

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     40-6.6-6. Penalties for organizations. – (a) As used in this section, "organization" shall

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mean a corporation for profit or not-for-profit, partnership, limited partnership, joint venture,

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unincorporated association, estate, trust, or other commercial or legal entity; provided, however,

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that "organization" shall not include an entity organized as or by a governmental agency for the

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execution of a governmental program.

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     (b) An organization commits the offense of organizational food stamp benefits trafficking

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if the organization knowingly: (1) Uses, sells, transfers, acquires, alters, or possesses food stamp

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benefits or electronic benefit transfer cards in any manner not authorized by the food and

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nutrition act of 2008, 7 U.S.C., section 2011, as amended, or the regulations of the department; or

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(2) Presents for payment or redemption food stamp benefits that have been received, transferred,

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altered, or used in violation of this section shall be guilty of organizational food stamp benefits

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trafficking.

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     (c) If an organization is alleged to have committed the offense of organizational food

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stamp benefits trafficking two (2) or more times within a six (6) month period, any of those

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offenses may be aggregated and charged in a single count and the offenses so aggregated and

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charged shall constitute a single offense.

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     (d) An organization that commits food stamp benefits trafficking as described in

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subsection (c) shall:

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     (1) If it is the organization's first offense under this section, be punished by a fine of not

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less than five thousand dollars ($5,000);

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     (2) If it is the organization's second offense under this section, be punished by a fine of

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not less than ten thousand dollars ($10,000); or

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     (3) If it is the organization's third or subsequent offense under this section, be punished

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by a fine of not less than fifty thousand dollars ($50,000).

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     (e) A retail or wholesale organization owner who is convicted of organizational food

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stamp benefits trafficking and who also possesses a license to sell alcoholic beverages under

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chapter 3-7 shall be referred to the appropriate licensing authority for possible disciplinary action.

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     (f) A retail or wholesale organization owner who is convicted of organizational food

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stamp benefits trafficking and who also possesses a license to sell lottery tickets under section 42-

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61-5 shall be referred to the director of the state lottery for possible disciplinary action.

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     (g) Crimes under this section may be prosecuted and punished in any county where

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defendant used, transferred, acquired, or possessed food stamp benefits.

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     40-6.6-7. Duties of department. – The department shall develop and make available on

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its website for download a sign specifying the department's fraud hotline. Business associations

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may also maintain a downloadable form of the sign on the business associations' websites. Such

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sign shall be posted in a conspicuous area in any business accepting electronic benefits transfer

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cards as a form of payment. Any business accepting electronic benefit transfer cards as a form of

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payment shall maintain a list of categories of prohibited products under this chapter at each cash

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register.

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     SECTION 2. This act shall take effect upon passage.

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LC00796

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO HUMAN SERVICES - PUBLIC ASSISTANCE ACT

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     This act would prohibit eligible recipients of direct cash assistance from using direct cash

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assistance funds for the purchase of alcoholic beverages, lottery tickets, or tobacco products. It

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further requires eligible recipients of direct cash assistance who make a purchase in violation of

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this act to reimburse the department for such purchases.

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     This act would take effect upon passage.

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LC00796

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