ELECTRONIC BENEFITS ISSUANCE.

SEC. 1729. ELECTRONIC BENEFITS ISSUANCE. (a) In General.— Section 7 (7 U.S.C. 2016) is amended by adding at the end the following new subsection: “(i) (1) (A) Any State agency may, with the approval of the Secretary, implement an on-line electronic benefit transfer system in which household benefits determined under section 8(a) are issued from and stored in a central data bank and electronically accessed by household members at the point-of-sale. “(B) No State agency may implement or expand an electronic benefit transfer system without prior approval from the Secretary. “(2) The Secretary shall issue final regulations effective no later than April 1, 1992, that establish standards for the approval of such a system. The standards shall include— “(A) determining the cost-effectiveness of the system to ensure that its operational cost, including the pro rata cost of capital expenditures and other reasonable startup costs, does not exceed, in any 1 year, the operational cost of issuance systems in use prior to the implementation of the on-line electronic benefit transfer system; “(B) defining the required level of recipient protection regarding privacy, ease of use, and access to and service in retail food stores; “(C) the terms and conditions of participation by retail food stores, financial institutions, and other appropriate parties; “(D) system security; “(E) system transaction interchange, reliability, and processing speeds; “(F) financial accountability; “(G) the required testing of system operations prior to implementation; and “(H) the analysis of the results of system implementation in a limited project area prior to expansion. “(3) In the case of a system described in paragraph (1) in which participation is not optional for households, the Secretary shall not approve such a system unless— “(A) a sufficient number of eligible retail food stores, including those stores able to serve minority language populations, have agreed to participate in the system throughout the area in which it will operate to ensure that eligible households will not suffer a significant reduction in their choice of retail food stores or a significant increase in the cost of food or transportation to participating food stores; and “(B) any special equipment necessary to allow households to purchase food with the benefits issued under this Act is operational— “(i) in the case of a participating retail food store in which coupons are used to purchase 15 percent or more of the total dollar amount of food sold by the store (as determined by the Secretary), at all registers in the store; and “(ii) in the case of other participating stores, at a sufficient number of registers to provide service that is com-104 STAT. 3790parable to service provided individuals who are not members of food stamp households, as determined by the Secretary. “(4) Administrative costs incurred in connection with activities under this subsection shall be eligible for reimbursement in accordance with section 16, subject to the limitations in section 16(g). “(5) The Secretary shall periodically inform State agencies of the advantages of using electronic benefit systems to issue benefits in accordance with this subsection in lieu of issuing coupons to households. “(6) This subsection shall not diminish the authority of the Secretary to conduct projects to test automated or electronic benefit delivery systems under section 17(f).”. (b) Conforming and Technical Amendment.— Section 17(f) is amended by striking “(f)(1)” and inserting “(f)”.