2016 -- H 7172

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LC003522

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO HUMAN SERVICES - PUBLIC ASSISTANCE ACT

     Introduced By: Representatives Morgan, Filippi, Roberts, Price, and Giarrusso

     Date Introduced: January 14, 2016

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

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

amended by adding thereto the following chapter:

CHAPTER 6.7

PURCHASE OF ALCOHOLIC BEVERAGES, LOTTERY TICKETS, OR TOBACCO WITH

DIRECT CASH ASSISTANCE FUNDS

     40-6.7-1. Definitions. – As used in this chapter, the following terms shall, unless the

context clearly requires otherwise, have the following meanings:

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

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

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

Food and Nutrition Act of 2008, 7 U.S.C. 2011 et seq., or regulations issued pursuant to the

Federal Food and Nutrition Act of 2008.

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

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

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

vendor.

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

electronic benefit transfer.

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

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

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

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

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

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

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

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

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

     40-6.7-2. Prohibited transactions. – No person shall knowingly use or accept direct

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

or sale of the following services or products: alcoholic beverages as defined in §44-18-7.1; lottery

tickets; tobacco products as identified in chapter 20 of title 44; visual material or performances

intended to create or simulate sexual conduct or sexual excitement as those terms are defined in

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

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

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

     40-6.7-3. Penalties. – Any eligible recipient of direct cash assistance who knowingly

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

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

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

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

disqualify an eligible recipient after notice and a hearing.

     40-6.7-4. Electronic benefit transfers. – (a) The department shall maintain policies and

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

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

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

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

408(a) of the Social Security Act, as amended; adult bookstores or adult paraphernalia stores;

firearms dealers; tattoo parlors; manicure shops or aesthetic shops; jewelry stores; or on cruise

ships. Such establishments shall not accept electronic benefits transfer cards. A store owner who

knowingly allows a prohibited electronic benefits transfer transaction in violation of this section

or §40-6.7-2 shall be punished by a fine of not more than five hundred dollars ($500) for a first

offense, by a fine of not less than five hundred dollars ($500) nor more than two thousand five

hundred dollars ($2,500) for a second offense and by a fine of not less than two thousand five

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hundred dollars ($2,500) for a third or subsequent offense.

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

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

authority for possible disciplinary action.

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

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

possible disciplinary action.

     40-6.7-5. Food stamp trafficking. – (a) As used in this section, "food stamp benefits"

means benefits issued pursuant to the Federal Food and Nutrition Act of 2008, 7 U.S.C. 2011 to

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

card.

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

knowingly:

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

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

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

the department; or

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

manner not authorized by the Food and Nutrition Act of 2008, 7 U.S.C. 2011, as amended.

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

section shall:

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

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

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

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

and imprisonment; or

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

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

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

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

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

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

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

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

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

prescribed in §40-6.7-5(c)(2).

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

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

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

     40-6.7-6. Penalties for organizations. – (a) As used in this section, "organization" shall

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

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

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

execution of a governmental program.

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

if the organization knowingly:

     (1) Uses, sells, transfers, acquires, alters, or possesses food stamp benefits or electronic

benefit transfer cards in any manner not authorized by the Food and Nutrition Act of 2008, 7

U.S.C. 2011, as amended, or the regulations of the department; or

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

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

stamp benefits trafficking.

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

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

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

charged shall constitute a single offense.

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

subsection (c) of this section shall:

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

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

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

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

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

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

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

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

chapter 7 of title 3 shall be referred to the appropriate licensing authority for possible disciplinary

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action.

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

stamp benefits trafficking and who also possesses a license to sell lottery tickets under §42-61-5

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

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

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

     40-6.7-7. Duties of department. – The department shall develop and make available on

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

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

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

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

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

register.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HUMAN SERVICES - PUBLIC ASSISTANCE ACT

***

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

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

other prohibited transactions. It would further require eligible recipients of direct cash assistance

who make a purchase in violation of this act to reimburse the department for such purchases.

     This act would take effect upon passage.

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