LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 2873
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: AUGUST 11, 2025
SUMMARY
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Synopsis: |
Requires DHS and DOH, respectively, to provide information to SNAP, WFNJ, and WIC recipients regarding card skimming, cloning, and similar fraudulent activities and to replace stolen benefits; makes appropriation. |
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Type of Impact: |
Annual State and county expenditure increases. |
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Agencies Affected: |
Department of Human Services, Department of Health, and Counties. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
One-Time |
Annual |
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State Expenditure Increase – Stolen Benefits Replacement |
N/A |
$5.1 million to $5.5 million |
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State Expenditure Increase – Infrastructure, Outreach, and Fraud Prevention Activities |
At least $320,000 |
Indeterminate |
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County Expenditure Increase |
Indeterminate |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that this bill will increase State expenditures incurred by the Department of Human Services and the Department of Health. The primary cost will be due to the replacement of stolen benefits under the Supplemental Nutrition Assistance Program (SNAP), the Work First New Jersey (WFNJ), and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) programs with State funds, which, based on data from a now expired federal policy and on current enrollment numbers, the OLS estimates will be between $5.1 million and $5.5 million annually.
· Additionally, at least $320,000 in one-time expenses, with indeterminate annual costs, will be realized by the departments in distributing information as required under the bill; in coordinating with the programs’ electronic benefits transfer (EBT) card vendors to reduce the exposure of these cards to theft; and in complying with the reporting requirements of the bill. The OLS assumes that these costs will be minimized through the use of the claims process, informational materials, and EBT card initiatives associated with the expired federal policy.
· To the extent that county eligibility determination agencies require training, new outreach materials, technology upgrades, and additional staff to comply with the provisions of the bill, county governments will also experience expenditure increases.
BILL DESCRIPTION
This bill directs the Department of Human Services and the Department of Health to provide information to benefit recipients of the SNAP, WFNJ, and WIC programs, respectively, regarding card skimming and cloning. This information, at a minimum, is to be distributed at the point of enrollment and recertification in the program and with the issuance of the recipient’s EBT card. Each department is also required to post the information on its website and at eligibility determining offices.
The bill mandates the departments to establish a claims process, that mirrors the provisions of federal law regarding the replacement of stolen SNAP benefits, by which a recipient’s stolen program benefits can be replaced by either federal or State funds, subject to availability. The bill also directs the departments to coordinate with each program’s vendors to implement available precautions to reduce the vulnerability of EBT cards to theft, such as the inclusion of an embedded microchip in all EBT cards, the use of transaction and fraud alerts, and enabling recipients to place purchase and location limits on their cards.
Finally, the departments are required to report to the Governor and the Legislature, 18 months following the effective date of the bill, and annually thereafter, on their efforts required under the bill. The bill also appropriates the necessary funds to the departments to support the provisions of the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received on this bill. However, the Department of Human Services indicated during the FY 2025 Budget process that between July 2023 and March 2024, $2.9 million of stolen SNAP benefits were replaced with federal dollars and $156,000 of WFNJ cash assistance benefits were replaced with a combination of State and federal dollars. The department noted that the replacement of benefits did not incur any additional administrative expenses for the department; however, the process placed an administrative burden on county eligibility determination agency resources.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that this this bill will increase State expenditures incurred by the Department of Human Services and the Department of Health. The primary cost will be the replacement of stolen benefits under the SNAP, WFNJ, and WIC programs with State funds, which, based on data from a now expired federal policy and on current enrollment numbers, the OLS estimates will be between $5.1 million and $5.5 million annually. Additionally, at least $320,000 in one-time costs, with indeterminate annual costs, will be realized by the departments in distributing information as required under the bill; in coordinating with the programs’ EBT card vendors to reduce the exposure of these cards to theft; and in complying with the reporting requirements of the bill. The OLS assumes that these costs will be minimized through the use of the claims process, informational materials, and EBT card initiatives associated with the expired federal policy. To the extent that county eligibility determination agencies require training, new outreach materials, technology upgrades, and additional staff to comply with the provisions of the bill, county governments will also experience expenditure increases.
In recent years, the Department of Human Services has increased its outreach efforts to recipients of SNAP and WFNJ regarding card skimming and cloning, largely triggered by a temporary federal policy to replace SNAP benefits stolen by these and other fraudulent means between October 1, 2022 and December 20, 2024. The FY 2024, FY 2025, and FY 2026 Appropriations Acts included budget language that acknowledged this federal policy and extends the protection to WFNJ. Under this policy, SNAP benefits were replaced at a federal expense while the WFNJ benefits were replaced via a combination of federal and State dollars. According to the department, benefits stolen on or after December 21, 2024 are not eligible for replacement due to the expiration of the federal policy. Under the bill, this replacement would be reinstated for SNAP and WFNJ, and newly established for stolen WIC benefits, through the use of State funds only, at an estimated cost of between $5.1 million to $5.5 million annually.
The OLS assumes that the infrastructure previously used by the Department of Human Services to implement and promote this federal policy for SNAP and WFNJ can be utilized under the bill for the same purposes, thereby minimizing certain costs. These components include the systems by which recipients can submit claims for benefits reimbursement, as well as website and publication design to promote the claims process. To the extent that these components can be retrofitted to support the Department of Health in fulfilling the provisions of the bill for WIC, costs for that department will be minimized as well.
The current EBT vendor for the SNAP and WFNJ programs is Conduent, while the vendor for WIC is Solutran. While the departments may incur expenditures in implementing certain fraud prevention activities, as outlined in the bill, in collaboration with the programs’ EBT vendors, the OLS notes that the FY 2025 Appropriations Act included $1.7 million to replace all existing SNAP and WFNJ EBT cards with embedded microchip technology, as well as to make the necessary upgrades to the EBT system for the use of these cards. Based upon this appropriation, the OLS estimates that it will cost the Department of Health $320,000 in one-time costs to launch the same technology for WIC EBT cards under the bill, with indeterminate annual costs to maintain the chip technology for new enrollees of all three programs.
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Section: |
Human Services |
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Analyst: |
Principal Research Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).