A bill aimed at curbing the abuse of Electronic Benefit Transfer, or EBT, cards by people benefiting from the federal Temporary Assistance for Needy Families program passed easily Monday in the state Senate.
Senate Bill 244, sponsored by Sen. Jim Tracy, prohibits the use of a welfare recipient’s EBT card in establishments that primarily sell tobacco products, tattoo services or adult-oriented entertainment, and any business where booze or beer are served for on-site consumption.
“It’s time we stand up and stop the abuse of the EBT card,” the Republican from Shelbyville told members of the upper chamber. “We put teeth in this bill. It requires the person that uses this card illegally, knowing it to be illegal, to reimburse the Department of Human Services.”
The bill, which passed 30-0, also bans the use of EBT benefits at an ATM located inside a liquor store, strip club, casino or gambling establishment. In addition, SB244 assigns civil penalties to businesses that sell those products and accept EBT benefits as payment in violation of the law. The fine for a violation by the seller would be $1,000 for the first violation, $2,500 for the second violation within five years, and $5,000 for a third or subsequent violation within five years.
“And if they [the businesses] continue to do it, it can allow the district attorney general to suspend the business license,” Tracy said.
Unlike other programs for the needy that are restricted to food products, TANF benefits are loaded onto EBT cards, which are used like debit cards. The amount can be as much as $500 per month and can be used whatever way the recipient wishes.
The legislation came after a report was released last summer by the Beacon Center of Tennessee, which documented numerous examples of suspicious card-use by welfare recipients. According to Beacon’s report, EBT cards were swiped at liquor stores, nightclubs, malls, retail outlets, and adult entertainment establishments, as well as for a hotel stay and UPS services, among others. The free-market think tank reported one transaction at a liquor store totaling $790.
“We applaud Sen. Jim Tracy and his colleagues for taking welfare abuse seriously and acting quickly to curb the abuse of EBT cards,” Beacon CEO Justin Owen said.
Tracy, who has announced his intentions to seek Congressman Scott DesJarlais’ Fourth District seat in 2014, also said the EBT measure would mandate that Tennessee add any further restrictions, such as the purchase of tobacco products, as soon as approved by the federal government.
Passage of the legislation will also bring Tennessee into compliance with the Middle Class Tax Relief and Job Creation Act of 2012, which is designed to prevent TANF recipients from abusing their benefits, said Tracy.
House Bill 119, sponsored by Rep. Terri Lynn Weaver of Lancaster, has been assigned to the lower chamber’s Health Committee. No date has been set for when it will be heard.