TANF Restrictions, One Year On

A recently introduced bill in the Utah House of Representatives would ban the accessing of public assistance via EBT in liquor stores, gaming establishments and adult-oriented entertainment establishments. In this it follows section 4004 of the Middle Class Tax Relief and Jobs Creation Act of 2012, signed into law a year ago last week.

But Utah House Bill 209 has significant differences with the federal law which states now face.

HB 209 requires the Utah Department of Workforce Services to submit its compliance plan for restricting TANF benefits to the U.S. Department of Health and Human Services as required by the 2012 federal law. 

However, the state bill clearly claims the right of preemption over the federal statute. Preemption is the legal doctrine that allows a state law to trump provisions of a similar federal law, unless the federal statute specifically prevents it. Without preemption states like Utah can strengthen their approach to benefit diversion. There was no intent by Congress to preempt states on this subject, according to regulators.

Second, unlike a number of states that have passed their own laws restricting where public assistance benefits may be accessed, the Utah bill would allow the Division to temporarily or permanently disqualify an EBT cardholder if he or she accessed benefits in a location prohibited by the new law.

Third, the bill would also allow the Division to penalize a business in one of the proscribed merchant categories if it allowed access to public assistance benefits via EBT or POS terminals in its location.

This last provision of the bill is important because it places the burden of compliance on those businesses where benefits are diverted from their stated purpose.

As we have noted here many times the Colorado Department of Human Services has had positive results by working directly with casinos on restricting benefit access. CDHS claims a 98 percent compliance rate in getting Colorado casinos to comply its restrictions. No legitimate business wants to be on the wrong side of this issue, whatever the gain might be for doing otherwise.

We’ve also noted many times on these pages the near impossibility of gaining significant compliance with both the federal law and state laws. However, Utah HB 209 shows that the Beehive State is serious about taking a bite out crime when it comes to diversion of public assistance.

On the one-year anniversary of the federal law it is states like Utah in the absence of federal guidance that are taking the lead in tightening up on public assistance misuse.