Legislation aimed at curbing the abuse of Electronic Benefit Transfer, or EBT, cards by people receiving public assistance passed the Tennessee House of Representatives 90-2 on Monday.
House Bill 119, sponsored by Terri Lynn Weaver, is now headed to the governor’s desk. The House conformed the legislation to Senate Bill 244, which passed in the upper chamber 30-0 earlier this month. The bill bans the use of a recipient’s EBT card in liquor stores, casinos, gaming establishments or adult cabarets.
“This bill places the strictest possible limitations on the use of EBT cards,” said Weaver, a Republican from Lancaster. In initial form, HB119 included a prohibition on the purchase of tobacco products, but had to be amended because it would have conflicted with federal law, she added.
Passage of the legislation brings Tennessee into compliance with the federal Middle Class Tax Relief and Job Creation Act of 2012, which is designed to prevent Temporary Assistance for Needy Families recipients from abusing their benefits.
The bill also bans the use of EBT benefits at an ATM located inside a liquor store, strip club, casino, or gaming establishment. In addition, it 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.
Rep. Vance Dennis, R-Savannah, explained that TANF benefits, which are a cash payment of about $185 on average to an individual, are loaded onto the EBT cards. Currently, there are no restrictions on where that cash money can be used. “So right now, they can use that in a strip club, in a bar, in a casino, the type places that you’re prohibiting,” Dennis said. “Your bill would prohibit in these certain locations that are listed from them getting those funds there. Welfare cash they can get right now wherever they want to use wherever they want.”
“That is correct,” Weaver replied.
Rep. Joe Carr, R-Lascassas, asked if there were potentially any ramifications if the General Assembly failed to pass the legislation. Weaver acknowledged that if the legislation failed to pass the state would lose federal matching dollars, because the Middle Class Tax Relief act required states to adopt the same restrictions as the federal law.
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 Rep. Weaver, Sen. Tracy, Commissioner Hatter, and all those who supported this important effort to restrict the abusive use of EBT cards in our state,” said Beacon Center CEO Justin Owen.