SR 15-27 Dated 09/15

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SUMMARY

This SR releases:

�      Implementation of the requirements of HB219, Chapter Law 269:1 (2015 session), which revises RSA 167:7-b. Changes in this state law expand the types of businesses at which recipients of Financial Assistance to Needy Families (FANF) or the adult categories of cash assistance are not allowed to use an Electronic Benefits Transfer (EBT)-issued cash grant. The additional prohibited locations are:

-     Business establishments that primarily engage in the practice of body piercing, branding, or tattooing;

-     Cigar stores and stands, pipe stores, smoke shops and tobacco shops; and

-     Marijuana dispensaries, excluding alternative treatment centers as defined at RSA 126-X:1, I;

�      A clarification in the definition of "using an EBT card" at a prohibited site. Using an EBT card at or in a prohibited location means a successful EBT card transaction at a point-of sale (POS) device or ATM machine that is located within the walls of the prohibited place of business and in which the EBT card or cash obtained with the EBT card is exchanged for goods or services; and

�      Redefined parameters on the types of businesses the Department considers "off-premises retail licensees that exclusively or primarily sell beer, wine, or other alcoholic beverages." This type of business will now only include those establishments that have not been certified as a Food Stamp Retailer. This change should reduce the confusion certain cash recipients may be experiencing at being able to use their Food Stamp EBT card benefits at certain prohibited establishments, but not their cash EBT card benefits.

Additionally, enactment of HB219, Chapter Law 269:2-3 (2015 session), includes the requirement that the Department:

�      Develop an education program for cash assistance recipients to provide information regarding the permitted and prohibited use of cash assistance and the penalties for misuse by cash assistance recipients. The education program includes posters describing the restrictions on cash usage to be posted in all District Offices and certain liquor and gaming establishments, as well as a flyer that will be provided to every applicant of cash assistance; and

�      Report on the use and effectiveness of electronically blocking the use of EBT cards at or in prohibited locations. To satisfy this requirement, the Department will be using merchant category codes (MCC), which are used by the Internal Revenue Service (IRS) and based upon the goods/services provided by the business, for each of the prohibited locations as follows:

-     MCC 7995 for gaming establishments;

-     MCC 7273 or 7297 for adult entertainment establishments;

-     MCC 5921 for off-premises retail licensees that exclusively or primarily sell beer, wine, or other alcoholic beverages;

-     MCC 7299 for business establishments that primarily engage in the practice of body piercing, branding, or tattooing;

-     MCC 5993 for cigar stores and stands, pipe stores, smoke shops and tobacco shops; and

-     There is no known MCC used for a marijuana dispensary that is not licensed as an alternative treatment center, therefore those locations, if there are any in NH, will be manually monitored by the Department.

To support the policy changes released in this SR, the following forms were created or revised:

�      DFA Form 214, Cash Restrictions Fact Sheet, its associated instructions, DFA Form 214(i), and its Nepali and Spanish translations, DFA Form 214(Ne) and DFA Form 214(Sp), were newly created;

�      DFA Form 800A, DFA Programs & Services Guide, and its Nepali and Spanish translations, DFA Form 800A(Ne) and DFA Form 800A(Sp), were revised;

�      DFA Form 800W, Website Forms, its associated instructions, DFA Form 800W(i), and its associated Nepali and Spanish translations, DFA Form 800W(Ne) and DFA Form 800W(Sp), were revised;

�      DFA Form 811R, Application: Your Rights and Responsibilities, its associated instructions, DFA Form 811R(i), and its associated Nepali and Spanish translations, DFA Form 811R(Ne) and DFA Form 811R(Sp), were revised;

�      DFA Form 811S, Application Summary: Statements of Understanding, its associated instructions, DFA Form 811S(i), and its associated Nepali and Spanish translations, DFA Form 811S(Ne) and DFA Form 811S(Sp), were revised; and

�      Cash Restrictions Poster was newly created.

BACKGROUND

In January 2014, a combination of federal and state laws, 42 U.S.C. 608(a)(12), newly enacted RSA 167:7-b, and adoption of administrative rules He-W 608.02, prohibited the use of EBT cards, or cash obtained from an EBT card, at or in the following locations:

�      Gaming Establishments;

�      Businesses that provide adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment; and

�      Establishments that exclusively or primarily sell alcoholic drinks.

DFA SR 14-05, dated January 2014, released Department policy associated with these federal and state mandates as well as the penalties that would result from using an EBT card at or in a prohibited location.

HB219 has further revised RSA 167:7-b to prohibit the use of EBT cards or cash obtained from an EBT card at or in businesses that primarily engage in body piercing, branding, or tattooing, cigar stores and smoke shops, and marijuana dispensaries. The bill also requires DHHS to establish an education program relative to the use of EBT cards and requires DHHS to report on the effectiveness of electronic blocking of EBT cards at prohibited locations. Neither the bill effective in January 2014 nor the current bill effective September 18, 2015 appropriated funds to DHHS to carry out any aspect of implementation, enforcement, or monitoring. Additionally, the Fiscal Note for HB219 details that DHHS' Special Investigations Unit (SIU) spent $39,738 enforcing the January 2014 EBT cash restrictions while only saving $11,752, resulting in a net cost to NH of $27,986 to implement the original changes. It is assumed that there will be a similar cost to cost-savings ratio to implement, enforce, and monitor EBT card usage activity at the newly expanded prohibited locations, although with the use of MCCs to help implement the expanded policy, the costs to the state may be reduced.

POLICY

In addition to the existing list of prohibited locations at which the FANF or adult category cash grant issued on an EBT card or cash obtained from an EBT card cannot be used, the following categories of business are now also considered prohibited locations:

�      Business establishments primarily engaged in the practice of body piercing, branding, or tattooing;

�      Cigar stores and stands, pipe stores, smoke shops and tobacco shops; and

�      Marijuana dispensaries, excluding alternative treatment centers as defined at RSA 126-X:1, I.

A violation of the EBT cash grant usage policy has occurred if the EBT card assigned to the individual designated as the EBT cardholder, or cash obtained with the EBT card, is exchanged for goods or services at or in a prohibited location, as determined by the EBT record of transaction indicating a successful EBT card transaction at a point-of-sale (POS) device or ATM machine that is located within the walls of the place of business. This means that the EBT card transaction must be successful within the walls of the prohibited location and the cash assistance recipient must also then use the EBT card-issued cash grant in exchange for goods or services in that prohibited location for a violation to have occurred.

Additionally:

�      Businesses that exclusively or primarily sell beer, wine, or other alcoholic beverages are only considered a prohibited location if the business is not certified as a Food Stamp Retailer and greater than 50% of visible inventory is beer, wine, or other alcoholic beverages;

�      The Department is implementing an education program for cash recipients which includes a newly created poster describing cash restrictions to be posted in all District Offices and certain liquor and gaming establishments, and a new fact sheet to be provided to every cash assistance applicant. These new notifications are in addition to current tactics used to educate cash assistance recipients about the restrictions on cash benefit usage which include warning text posted on every open Notice of Decision (NOD) generated to a cash assistance recipient who opts for EBT for his or her cash grant issuance method, notices on NH EASY, notices on the DFA website, and notifications in the following forms: DFA Form 800A, DFA Programs & Services Guide, DFA Form 811R, Application: Your Rights and Responsibilities, and DFA Form 811S, Application Summary: Statements of Understanding; and

�      The Department is now using merchant category codes (MCC), which are used by the IRS and based upon the goods/services provided by the business, to assist in electronically identifying prohibited locations.

To support the policy changes described above:

�      The Department is now using the following MCCs to identify the prohibited locations:

-     MCC 7995 for gaming establishments;

-     MCC 7273 or 7297 for adult entertainment establishments;

-     MCC 5921 for off-premises retail licensees that exclusively or primarily sell beer, wine, or other alcoholic beverages;

-     MCC 7299 for business establishments that primarily engage in the practice of body piercing, branding, or tattooing;

-     MCC 5993 for cigar stores and stands, pipe stores, smoke shops and tobacco shops; and

-     There is no known MCC used for a marijuana dispensary that is not licensed as an alternative treatment center, therefore those locations, if there are any in NH, will be manually monitored by the Department; and

�      The following forms were created or revised:

-     DFA Form 214, Cash Restrictions Fact Sheet, its associated instructions, DFA Form 214(i), and its Nepali and Spanish translations, DFA Form 214(Ne) and DFA Form 214(Sp), were newly created;

-     DFA Form 800A and its Nepali and Spanish translations, DFA Form 800A(Ne) and DFA Form 800A(Sp), were revised;

-     DFA Form 800W, Website Forms, its associated instructions, DFA Form 800W(i), and its associated Nepali and Spanish translations, DFA Form 800W(Ne) and DFA Form 800W(Sp), were revised;

-     DFA Form 811R, its associated instructions, DFA Form 811R(i), and its associated Nepali and Spanish translations, DFA Form 811R(Ne) and DFA Form 811R(Sp), were revised;

-     DFA Form 811S, its associated instructions, DFA Form 811S(i), and its associated Nepali and Spanish translations, DFA Form 811S(Ne) and DFA Form 811S(Sp), were revised; and

-     Cash Restrictions Poster was newly created.

NEW HEIGHTS SYSTEMS PROCEDURES AND IMPLEMENTATION

The implementation of this process is primarily through the new EBT contract, which now includes the ability to block prohibited transactions through the MCCs. All transactions, including those that cannot be resolved through EBT blocking via the use of MCCs, will continue to be monitored by the EBT Administrator or designee and SIU staff who will determine when a violation has occurred, apply penalties, and field any requests for an administrative appeal on any aspect of the process, as described in SR 14-05, dated January 2014.

In New HEIGHTS, beginning October 1, 2015, the following message that is currently displayed on any Notice of Decision generated for a case opening for cash assistance in which the benefit issuance method chosen is EBT will be updated to read as follows:

Important Information About Using Your EBT Card

Do not use your EBT card or cash from your EBT card at liquor stores, gaming establishments, businesses which provide adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment, businesses that primarily engage in body piercing, branding, or tattooing, cigar stores and smoke shops, and marijuana dispensaries. If you use your EBT card or cash from your EBT card at one of these places, you will be sanctioned with a cash penalty, per RSA 167:7-b and He-W 608.02. The best use of your cash grant is to help pay for things you need to support you and your family, such as for rent or mortgage payments, utility bills, gas, child care, or laundry.

Additionally, as of the end of October, 2015, the following new "Useful Information" post that is currently displayed on the Client Home Page within NH EASY will be updated to read as follows: There are cash penalties if you use your EBT card, or cash from your EBT card, at a prohibited place. Read this to find out more.

The "Read this" phrase is linked to the following revised text posted in NH EASY:

Cash Benefits

How should you use your cash grant? The best use of your cash grant is to help pay for things you need to support you and your family. This could mean using your grant to help pay for your shelter, such as rent or your mortgage, or for utility bills, such as heat or electricity. Other ways to use your grant is for things like child care co-pays so you can work, laundromats to clean your clothes, and gas to get to and from work or medical appointments. Under NH Law RSA 167:7-b and administrative rules He-W 608.02, you cannot use your EBT card, or cash you get from your EBT card, at places that are banned. Those include:

�      Gaming Establishments - this includes commercial and charitable bingo halls, card halls, or race tracks, even if the gaming provided is through video, rather than live, events;

�      Businesses that provide adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment - whether live or video. This includes businesses in which greater than 50% of visible inventory being sold or rented is printed matter, visual representation, live performance or sound recording including, but not limited to, books, magazines, motion picture films, pamphlets, pornographic records, pictures, photographs, figures, statues, plays, dances, in which performers disrobe or perform in unclothed states for entertainment. It also includes businesses which provide on or off-site adult-oriented entertainment for such venues, commonly referred to as, but not limited to, bachelor parties or peep shows, in which performers disrobe or perform in an unclothed state for entertainment;

�      Places that primarily sell alcoholic beverages - this includes liquor stores or any businesses in which greater than 50% of visible inventory is beer, wine, or other alcoholic drinks;

�      Places that primarily engage in body piercing, branding, or tattooing;

�      Cigar stores and smoke shops; and

�      Marijuana dispensaries other than those that have been licensed as alternative treatment centers per RSA 126-X:1, I.

If you use your EBT card or cash from your card at one of these places, the following will happen:

�      First offense: your portion of your grant will be suspended for 1 month;

�      Second offense: your portion of your grant will be suspended for 2 months; and

�      Third or additional offenses: your portion of your grant will be suspended for 3 months.

Finally, NH EASY will be updated at the end of October 2015 to incorporate the new text added to DFA Form 811R and DFA Form 811S. New HEIGHTs will release the changes to the New HEIGHTS-generated Eligibility Interview Summary (EIS) under separate cover at a later date.

DESCRIPTION OF REVISIONS MADE TO FORMS

New Forms DFA Form 214, and the Cash Restrictions Poster

To implement the education program for cash recipients as required by HB219, Chapter Law 269:2 (2015 session), the following forms were created:

�      DFA Form 214, Cash Restrictions Fact Sheet, and

�      The Cash Restrictions Poster.

DFA Form 214, is a one-page, singled-sided document which provides information regarding the permitted and prohibited use of cash assistance under RSA 167:7-b, including penalties for misuse by cash assistance recipients. This paper form is provided to all applicants for Financial Assistance to Needy Families (FANF) and the adult categories of cash assistance.

Family Services Specialists (FSS) retrieve this paper form from their District Office form supply room to provide to all cash assistance applicants if the cash assistance applicant states that he or she does not have internet access or does have internet access but refuses to sign paper DFA Form 800W, Website Forms. Otherwise, if the applicant indicates he or she has internet access, the applicant is directed to the website, www.dhhs.nh.gov/dfa/apply.htm, to access DFA Form 214, and then signs paper DFA Form 800W indicating he or she will read this form and be responsible for all information in the form. DFA Form 214 is a client-informational document provided for client reference purposes only and is not retained in the case record.

Instructions have been created for this form accordingly, and the form has been translated into Nepali and Spanish. The English version of the form is available in the DHHS Warehouse and can be ordered using current forms reordering procedures, via the Quarterly Forms Order (QFO), although all District Offices have been provided with an initial supply for the September effective date. The form is available electronically, for Department staff only, on the Lotus Notes Family Services Database, and available for public access at www.dhhs.nh.gov/dfa/apply.htm. The Nepali and Spanish versions of the form can be printed from the Lotus Notes Family Services Database or, for a larger supply, contact the DFA Policy Unit Supervisor.

A new Cash Restrictions Poster was also created. This single-sided poster also provides information regarding the permitted and prohibited use of cash assistance under RSA 167:7-b. A supply of this poster has been provided to all District Offices for posting in the reception areas and interview rooms. No instructions were created for this poster, nor will be it be translated. It is available in the DHHS Warehouse and can be ordered using current forms reordering procedures, via the QFO, if the District Offices require more. The poster is also available electronically, for Department staff only, on the Lotus Notes Family Services Database, under the Non Number Forms view.

Revised Forms DFA Form 800A, 800W, 811R, and 811S

The following forms were revised to add the three (3) new types of locations that are now prohibited:

�      DFA Form 800A, DFA Programs & Services Guide;

�      DFA Form 811R, Application: Your Rights and Responsibilities; and

�      DFA Form 811S, Application Summary: Statements of Understanding.

DFA Form 800W, Website Forms, was updated to add newly created DFA Form 214 to ensure that the education of cash assistance applicants on the cash grant restriction policies occurs at application.

Nepali and Spanish translations of all forms were updated accordingly. Although the usage of DFA Forms 811R, DFA Form 811S, and DFA Form 800W did not change, the instructions for these forms are being released in this SR to add the legal basis for the forms, translations of the forms, and the workflow of the forms.

The current versions of DFA Forms 800A, DFA Form 800W, DFA Form 811R, and DFA Form 811S are to be used until the supply is exhausted, at which point the new versions will be printed. All English versions of the form are available in the DHHS Warehouse and can be ordered using current forms reordering procedures, via the QFO. The forms, both English and Translated versions, are available electronically, for Department staff only, on the Lotus Notes Family Services Database. DFA Form 800A and DFA Form 811R, both English and translated versions, are available for public access at www.dhhs.nh.gov/dfa/apply.htm and DFA Form 800A is additionally available at www.dhhs.nh.gov/dfa/publications.htm. The Nepali and Spanish versions of all the forms can be printed from the Lotus Notes Family Services Database or, for a larger supply, contact the DFA Policy Unit Supervisor.

NH EASY will be updated at the end of October 2015 to incorporate the new text added to DFA Form 811R and DFA Form 811S. New HEIGHTS will release the changes needed to the New HEIGHTS-generated Eligibility Interview Summary (EIS) under separate cover at a later date.

POLICY MANUAL REVISIONS

Revised Adult Assistance Manual Topics

Section 705.01 Using Cash Benefits

Section 705.03 Penalties for an EBT Card Violation

Revised Family Assistance Manual Topics

Section 707.03 Using Cash Benefits

Section 707.05 Penalties for an EBT Card Violation

IMPLEMENTATION

The policy in this SR is effective September 18, 2015.

The current versions of DFA Form 800A, DFA Form 800W, DFA Form 811R, and DFA Form 811S are to be used until the supply is exhausted, at which point the new version will be printed. All English versions of the forms are available in the DHHS Warehouse and can be ordered using current forms reordering procedures, via the QFO. The forms are also available electronically, for Department staff only, on the Lotus Notes Family Services Database. DFA Form 800A and DFA Form 811R and its translations are also available on the following web pages: www.dhhs.nh.gov/dfa/apply.htm and www.dhhs.nh.gov/dfa/forms.htm. The translated versions of the forms can be reordered by printing them from the Lotus Notes Database, or, for a larger supply, by contacting the Supervisor of the Policy Development Unit.

New DFA Form 214 and the Cash Restrictions Poster have been printed and an initial supply sent to all District Offices.

CLIENT NOTIFICATION

Notification of the change in policy around the prohibited uses of cash grants will be published in the NH Rulemaking Register, Office of Legislative Services, in October 2015. A public hearing on the amended Administrative Rules will be held in late October or early November 2015.

Beginning October 1, 2015, the following message that is currently displayed on any Notice of Decision generated for a case opening for cash assistance in which the benefit issuance method chosen is the EBT card will be updated to read as follows:

Important Information About Using Your EBT Card

Do not use your EBT card or cash from your EBT card at liquor stores, gaming establishments, businesses which provide adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment, businesses that primarily engage in body piercing, branding, or tattooing, cigar stores and smoke shops, and marijuana dispensaries. If you use your EBT card or cash from your EBT card at one of these places, you will be sanctioned with a cash penalty, per RSA 167:7-b and He-W 608.02. The best use of your cash grant is to help pay for things you need to support you and your family, such as for rent or mortgage payments, utility bills, gas, child care, or laundry.

Additionally, as of the end of October 2015, the following new "Useful Information" post that is currently displayed on the Client Home Page within NH EASY will be updated to read as follows: There are cash penalties if you use your EBT card, or cash from your EBT card, at a prohibited place. Read this to find out more.

The "Read this" phrase is linked to the following revised text posted in NH EASY:

Cash Benefits

How should you use your cash grant? The best use of your cash grant is to help pay for things you need to support you and your family. This could mean using your grant to help pay for your shelter, such as rent or your mortgage, or for utility bills, such as heat or electricity. Other ways to use your grant is for things like child care co-pays so you can work, laundromats to clean your clothes, and gas to get to and from work or medical appointments. Under NH Law RSA 167:7-b and administrative rules He-W 608.02, you cannot use your EBT card, or cash you get from your EBT card, at places that are banned. Those include:

�      Gaming Establishments - this includes commercial and charitable bingo halls, card halls, or race tracks, even if the gaming provided is through video, rather than live, events;

�      Businesses that provide adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment - whether live or video. This includes businesses in which greater than 50% of visible inventory being sold or rented is printed matter, visual representation, live performance or sound recording including, but not limited to, books, magazines, motion picture films, pamphlets, pornographic records, pictures, photographs, figures, statues, plays, dances, in which performers disrobe or perform in unclothed states for entertainment. It also includes businesses which provide on or off-site adult-oriented entertainment for such venues, commonly referred to as, but not limited to, bachelor parties or peep shows, in which performers disrobe or perform in an unclothed state for entertainment;

�      Places that primarily sell alcoholic beverages - this includes liquor stores or any businesses in which greater than 50% of visible inventory is beer, wine, or other alcoholic drinks;

�      Places that primarily engage in body piercing, branding, or tattooing;

�      Cigar stores and smoke shops; and

�      Marijuana dispensaries other than those that have been licensed as alternative treatment centers per RSA 126-X:1, I.

If you use your EBT card or cash from your card at one of these places, the following will happen:

�      First offense: your portion of your grant will be suspended for 1 month;

�      Second offense: your portion of your grant will be suspended for 2 months; and

�      Third or additional offenses: your portion of your grant will be suspended for 3 months.

Finally, as of September 18, 2015, the following web page, www.dhhs.nh.gov/dfa/benefits.htm, was updated to display the same "Cash Benefits" text used above in NH EASY.

No other client notification is planned.

TRAINING

No special training is planned.

FORMS MANUAL POSTING INSTRUCTIONS

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted and the revised manual topics released by this SR have been posted to the On-line manuals.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at www.dhhs.nh.gov/DFA/publications.htm, effective September 28, 2015. Additionally, this SR, and printed pages with posting instructions, will be distributed under separate cover to all internal hard copy holders of the Adult Assistance, Family Assistance, and Forms Manuals.

DFA/JBV:s