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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

Rutherford Co. Gov’t Nationally Recognized for Accuracy in Accounting

Press Release from the Senate GOP Caucus, Aug. 10, 2011:

(NASHVILLE, TN) — Rutherford County is one of eight counties in Tennessee that recently received national recognition from the Government Finance Officers Association (GFOA) for outstanding accounting practices.

The GFOA presents certificates of achievement to state and local governments across the country that exceed the minimum requirements of generally accepted accounting principles and prepare comprehensive annual financial reports that provide high levels of transparency and disclosure about their operations.

“I want to congratulate officials in Rutherford County for their excellent work in preparing their financial documents,” Comptroller Justin P. Wilson said. “In order to maintain credibility with the public, I think it is extremely important for governments to be open in their financial dealings. The citizens of Rutherford County should be pleased that the people who represent their interests in county government have chosen to do far more than the minimum in making financial information available.”

“This is a significant recognition,” said Sen. Bill Ketron, who is chairman of the Fiscal Review Committee, which serves as the state’s watchdog on financial matters. “In current economic times, it is more important than ever that we have the highest level of financial scrutiny in handling taxpayer money. I heartily congratulate our local officials for their outstanding work.”

“This award recognizes the counties that are doing an outstanding job in tracking their finances,” Sen. Jim Tracy said. “People who live in Rutherford County have good reason to be proud.”

“When it comes to handling the taxpayers’ money, it’s important for government officials to do more than meet minimum requirements,” Rep. Pat Marsh said. “And this award demonstrates that officials in Rutherford County are doing more than meeting the minimum requirements.”

“I commend Rutherford County for being recognized by the GFOA,” Rep. Mike Sparks said. “This is an award that may not be familiar to many people in the general public, but it’s very important to people who work as government accountants. Counties that earn this distinction can serve as role models for their peers across the country.”

“Once again, under the more than capable leadership of Mayor Ernest Burgess, County Trustee Teb Batey and the County Commission, Rutherford County moves forward with tried and true conservative principles of efficient and accountable government,” said Rep. Joe Carr.

“I’d like to commend Rutherford County Mayor Ernest Burgess for his outstanding leadership and attention to detail when it comes to the finances of Rutherford County,” Rep. Rick Womick said. “He is a true asset and a huge benefit to the people of Rutherford County.”