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NewsTracker Tax and Budget

Governor Gets Bill Restricting Use of Welfare Cards

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.

Representatives voting “no” were G.A. Hardaway and Johnnie Turner, both Memphis Democrats.

“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.

Amelia Morrison Hipps may be reached at amhipps@downhomepolitics.com, on Twitter @DwnHomePolitics or at 615-442-8667.

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Press Releases

Tracy Bill to Prohibit EBT Card Use in Liquor Stores, Strip Clubs Passes Committee

Press release from the Tennessee Senate Republican Caucus; February 20, 2013:

NASHVILLE, Tenn. — State Senator Jim Tracy’s (R-Shelbyville) bill to curb abuse of purchases made through Electronic Benefit Transaction (EBT) cards used by recipients of the Temporary Assistance to Needy Families (TANF) program sailed through the Senate Health and Welfare Committee today. Senate Bill 244 prohibits use of a welfare recipient’s EBT card in liquor stores, adult cabarets and casinos or gambling facilities.

“It is outrageous that these benefit cards, which are meant to help feed families with children in times of desperate need, are reported to have been misused for purchases like alcohol, gambling and adult cabarets,” said Senator Tracy. “Tennessee law should make it perfectly clear that we will not tolerate this fraudulent use of taxpayer money.”

The legislation comes after a report was released last summer by the Beacon Center of Tennessee, which uncovered numerous examples of abuse by welfare recipients. The Center reported one transaction at a liquor store totaling $790.

Under the bill, welfare recipients who use EBT benefits at liquor stores, adult cabarets, or gambling establishments would be subject to disqualification from the program as permitted by federal law and also would have those misused benefits recouped by the Tennessee Department of Human Services. The legislation also prescribes 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 $1000 for the first violation, $2500 for the second violation within five years, and $5000 for a third or subsequent violation within five years.

In addition, the bill bans the use of EBT benefits at an ATM located inside a liquor store, adult cabaret, casino or gambling establishment.

“I’m proud to sponsor this bill and help reform the welfare system in Tennessee,” said Senator Tracy. “We need to continue to make sure that taxpayer money is used appropriately and I applaud the Department of Human Services for working with me on this bill.”

“Many taxpayers struggle to make ends meet and to pay their taxes,” added Beacon Center CEO Justin Owen. “The selfish misuse of the welfare system undermines those who truly need and utilize temporary assistance lawfully and causes widespread public distrust in government services. Taxpayers should not tolerate it.”

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Press Releases

Tracy, Weaver File Bill to ‘Curb Abuse’ of EBT Benefits Program

Press release from the Tennessee Senate Republican Caucus; January 29, 2013:

(NASHVILLE) — State Senator Jim Tracy (R-Shelbyville) and Representative Terri Lynn Weaver (R-Lancaster) have filed legislation in the Tennessee General Assembly to curb abuse of purchases made through Electronic Benefit Transaction (EBT) cards used by recipients of the Temporary Assistance to Needy Families (TANF) program. Senate Bill 244 prohibits use of a welfare recipient’s EBT card in establishments that primarily sell tobacco products, tattoo facilities, psychic services, adult cabarets, and any establishment open to the public where liquor, wine, beer, or other alcoholic beverages are served for consumption on the premises.

“It is outrageous that these benefit cards, which are meant to help feed families with children in times of desperate need, are reported to have been misused for everything from theatre tickets and a tour of Graceland, to the purchase of alcohol and nightclub entertainment,” said Senator Tracy. “Tennessee law should make it perfectly clear that we will not tolerate this fraudulent use of taxpayer money.”

The legislation comes after a report was released last summer by the Beacon Center of Tennessee, which uncovered numerous examples of abuse by welfare recipients. According to the 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 Center reported one transaction at a liquor store totaling $790.

“This money is supposed to be used to feed children in struggling families, providing them with essentials until the family gets back on their feet,” added Rep. Weaver. “We need to put some teeth in our law to ensure that this abuse does not happen again.”

Under the bill, welfare recipients who use EBT benefits for alcohol, tobacco or a lottery ticket would be subject to disqualification from the program. The legislation also prescribes 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 $100 for the first violation, $500 for the second violation within five years, and $1,000 for a third or subsequent violation within five years.

In addition, the legislation calls for welfare recipients who purchasing items or services banned under the proposed act to reimburse the state for the illegal purchase.

“Many taxpayers struggle to make ends meet and to pay their taxes,” added Beacon Center CEO Justin Owen. “The selfish misuse of the welfare system undermines those who truly need and utilize temporary assistance lawfully and causes widespread public distrust in government services. Taxpayers should not tolerate it.”

Categories
Press Releases

Beacon Center: August 2012 Policy Snapshot

Newsletter from the Beacon Center of Tennessee; August 30, 2012: 

Happy Capital Day?

Have you ever wondered why we have a special holiday to celebrate labor but not the capital creation that makes labor possible? From the Foundation for Economic Education’s Lawrence Reed: “[T]his year on Labor Day weekend, I’ll also be thinking about the remarkable achievements of inventors of labor-saving devices, the risk-taking venture capitalists who put their own money (not your tax money) on the line and the fact that nobody in America has to dig a ditch with a spoon or cut his lawn with a knife…Labor Day and Capital Day. I know of no good reason why we should have just one and not the other.” Read his entire article here.

TN Watchdog attracts national attention

Last month, Chris Butler, our director of government accountability and editor of Tennessee Watchdog, published an attention-grabbing story about how Memphis welfare recipients were using their taxpayer money to make purchases in liquor stores and buy tickets to tour Graceland. Television stations as far away as San Francisco covered the story, and radio shows from Ohio to New Hampshire picked it up as well. Even the national Washington Examiner made mention of our story, which you can read here. For the original investigative report, visit TennesseeWatchdog.org.

School choice debate heating up

The Beacon Center has made enacting a school choice program a top priority for the 2013 legislative session of the General Assembly. But we’re not waiting on lawmakers to return to Nashville to start the discussion. As Channel 4 News notes in an interview with Beacon CEO Justin Owen, the governor has appointed a task force to study the matter, which will report to him this November. It is widely expected that this will be the hottest topic next session, and Beacon will play a crucial role educating our fellow Tennesseans about the benefits of school choice. Watch the Channel 4 News interview here.

Car bailouts, bank bailouts…state bailouts?

The federal government has gone on a bailout spree, giving banks and car companies a handout. Could some states be next? In an op-ed that appeared in the Tennessean earlier this week, Beacon CEO Justin Owen joined the Illinois Policy Institute’s Ted Dabrowski in warning against a federal bailout of the states. Owen and Dabrowski explain why this would be devastating for Tennessee taxpayers and call on Congress to swiftly refuse any bailout of irresponsible states. Read the entire article at BeaconTN.org.