Rule ties food stamp systems

The Agriculture Department's Food and Nutrition Service has issued an interim

rule to ensure that food stamp recipients can use their electronic food

stamp benefits across state borders.

The interim rule published in the Federal Register on Aug. 15 implements

legislation passed in February that requires nationwide interoperability

of electronic benefit transfer (EBT) systems used to deliver food stamps.

The rule establishes uniform standards that states must follow in order

to achieve interoperability by October 2002. The standards are based on

Quest, which are operating rules that more than 25 states follow. But there

are many state EBT systems that do not interoperate, leading to widespread

fraud.

The federal government plans to fund the operational costs necessary

to make the state systems interoperate, but only up to a national annual

limit of $500,000. Costs beyond this amount will be covered at 50 percent.

Last year, a study sponsored by the National Automated Clearing House

Association, which represents 13,000 financial institutions, found that

it would cost about $500,000 per year to cover the fees associated with

processing electronic food stamp transactions among EBT networks operated

in different states.

The Food and Nutrition Service is accepting comments on the rule through

Nov. 13.

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