S2967

An Act concerning SNAP benefits, supplementing Title 44 of the Revised Statutes, amending P.L.1993, c.13, and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1993, c.13 (C.2C:20-35) is amended to read as follows:

1. Definitions. As used in [this act] P.L.1993, c.13 (C.2C:20-35 et seq.):

"[ATP card" means a document issued by a State or federal agency, to a certified household, to show the food stamp allotment a household is authorized to receive on presentation.

"Benefit] Electronic Benefits Transfer card" means [a] the payment card [used or intended for use to access Work First New Jersey, food stamp or other benefits as determined] issued to SNAP and WFNJ recipients by the [Commissioner] Department of Human Services under the electronic benefit distribution system established pursuant to [the "Public Assistance Electronic Benefit Distribution System Act," P.L.1985, c.501 (C.44:10-5.1 et seq.) and continued pursuant to] section 5 of P.L.1997, c.37 [(C.44:10-71 et al.)] (C.44:10-75), on which benefits for those programs are deposited and through which recipients can purchase food and access cash assistance benefits.

"Department" means the Department of Human Services.

["Food stamp coupon" means any coupon or stamp used or intended for use in the purchase of food pursuant to the federal food stamp program authorized by Title XIII of the "Food and Agriculture Act of 1977," Pub.L.95-113 (7 U.S.C.s.2011 et seq.), or the New Jersey Supplementary Food Stamp Program established pursuant to P.L.1998, c.32 (C.44:10-79 et al.).]

“SNAP” means the Supplemental Nutrition Assistance Program established pursuant to the federal "Food and Nutrition Act of 2008," Pub.L.110-246 (7 U.S.C. s.2011 et seq.).

“WFNJ” means the Work First New Jersey Program established pursuant to P.L.1997, c.38 (C.44:10-55 et seq.) in accordance with authorization received under Title IV of the federal "Personal Responsibility and Work Opportunity Reconciliation Act of 1996," Pub.L.104-193 (8 U.S.C. s.1601 et seq.).

(cf: P.L.1998, c.32, s.7)

2. Section 2 of P.L.1993, c.13 (C.2C:20-36) is amended to read as follows:

2. If the [face value of food stamp coupons or an ATP card or benefit] SNAP benefits available on an electronic benefits transfer card is equal to or greater than $150, an individual shall be guilty of a crime of the [fourth] third degree if he purposely or knowingly and without authorization:

a. Receives or uses the [proceeds of food stamp coupons or an ATP card or benefit] SNAP benefits available on an electronic benefits transfer card for which he has not applied or has not been approved by the department to use, including through such fraudulent practices as card cloning or card skimming;

b. Engages in any transaction to convert [food stamp coupons or an ATP card or benefit] SNAP benefits available on an electronic benefits transfer card to other property contrary to federal and State government rules and regulations governing the Work First New Jersey program, the [federal food stamp program] SNAP, the New Jersey Supplementary Food Stamp Program, or any other program included in the electronic [benefit distribution] benefits transfer card system; or

c. Transfers [food stamp coupons or an ATP card or benefit] SNAP benefits available on an electronic benefits transfer card to another person who is not lawfully entitled or approved by the department to use the [coupons or ATP card or benefit] benefits or the electronic benefits transfer card in question.

(cf: P.L.1998, c.32, s.8)

3. Section 3 of P.L.1993, c.13 (C.2C:20-37) is amended to read as follows:

3. If the [face value of food stamp coupons or an ATP card or benefit] SNAP benefits available on an electronic benefits transfer card is less than $150, an individual shall be guilty of a [disorderly persons offense] crime of the fourth degree if he purposely or knowingly and without authorization:

(cf: P.L.1998, c.32, s.9)

4. (New section) a. The Commissioner of Human Services shall evaluate and implement fraud prevention and electronic benefits transfer card security options to protect SNAP benefits issued to State residents, as recommended by the Food and Nutrition Service in the United States Department of Agriculture, which practices shall include, but shall not be limited to:

(1) Requiring SNAP participants to select a strong personal identification number for the participants’ electronic benefits transfer card in order to deter card cloning and card skimming practices;

(2) Until such time as the Department of Human Services fully implements embedded microchip technology in all electronic benefits transfer cards issued to SNAP participants, utilizing additional magnetic strip safeguards available from electronic benefits transfer card processors to strengthen the security of SNAP transaction processing;

(3) Improving the department’s data collection practices concerning reports of stolen SNAP benefits in order to identify fraud trends and systems weaknesses;

(4) Requiring SNAP participants to utilize two-factor authentication for SNAP balance inquiries;

(5) Encouraging SNAP participants to change the personal identification number for the participants’ electronic benefits transfer card at least monthly; and,

(6) Educating SNAP participants on the option to restrict certain electronic benefits transfer card transactions, including limiting out-of-state transactions and online purchasing transactions.

b. Theft and fraud prevention information targeting SNAP participants, as provided in subsection a. of this section, shall be distributed, at a minimum, in writing, at the point of enrollment and recertification in the SNAP and with the issuance of the participant’s electronic benefits transfer card.

c. The commissioner shall post information concerning the risks of SNAP benefits fraud and theft, including the practices of card cloning and card skimming, precautions that SNAP participants can take to avoid falling victim to SNAP benefits fraud and theft, the process by which SNAP participants may report SNAP benefits fraud and theft to the department and to local law enforcement, and the claims process established pursuant to subsection d. of this section, via a digital formal on the department’s website and in hard copy at all SNAP eligibility determination agencies.

d. Until such time as the department fully implements embedded microchip technology in all electronic benefits transfer cards issued to SNAP participants, the commissioner shall replace SNAP benefits that are determined to have been stolen through card skimming, card cloning, or similar fraudulent methods. The commissioner shall establish a process for such determinations to be made and for the replacement of these benefits, which process shall, at a minimum, require the submission of a police report or such other evidence of fraud or theft as the commissioner may require. The process established by the commissioner shall be subject to the same conditions that apply to the replacement of SNAP benefits, with federal funds, due to card skimming, card cloning, and similar fraudulent methods pursuant to the federal “Consolidated Appropriations Act, 2023,” Pub.L. 117-328; or any applicable subsequent federal law. The commissioner shall provide for the replacement of these benefits with State funds whenever federal funds are not available for that purpose, subject to the availability of State funds.

e. As used in this section:

“Card Cloning” means making an unauthorized copy of an electronic benefits transfer card.

“Card Skimming” means the illegal installation of devices on point-of-sale or automatic teller machine terminals to capture a cardholder’s personal identification number and other data stored on the magnetic strip of the electronic benefits transfer card.

“Electronic Benefits Transfer Card” means the payment card issued to SNAP and Work First New Jersey recipients by the Department of Human Services under the electronic benefit distribution system established pursuant to section 5 of P.L.1997, c.37 (C.44:10-75), on which benefits for those programs are deposited and through which recipients can purchase food and access cash assistance benefits.

“SNAP” means the Supplemental Nutrition Assistance Program established pursuant to the federal "Food and Nutrition Act of 2008," Pub.L.110-246 (7 U.S.C. s.2011 et seq.).

5. The Commissioner of Human Services shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement the provisions under P.L. , c. (C. ) (pending before the Legislature as this bill).

6. There is appropriated from the General Fund to the Department of Human Services such sums as are necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

7. The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall take effect on the first day of the seventh month next following the date of enactment, except that the Commissioner of Human Services may take such anticipatory administrative action in advance to establish the claims process required pursuant to subsection d. of section 4.

STATEMENT

This bill requires the Commissioner of Human Services (the commissioner) to implement fraud prevention and electronic benefits transfer (EBT) card security options to protect Supplemental Nutrition Assistance Program (SNAP) participants from benefits fraud and theft, including the practices of card cloning and card skimming. As used in the bill, “card cloning” means making an unauthorized copy of an EBT card, while “card skimming” means the illegal installation of devices on a point-of-sale terminal to capture a cardholder’s personal identification number and data stored on the EBT card’s magnetic strip.

The security options to be implemented include: utilizing additional magnetic strip safeguards to strengthen transaction processing security; requiring SNAP participants to utilize two-factor authentication for balance inquiries; and educating SNAP participants on the option to limit certain EBT card transactions. This information will be distributed during SNAP enrollment and recertification, and upon issuance of a participant’s EBT card.

Information for consumers concerning the risks of SNAP benefits theft, precautions to avoid benefits theft, the process for reporting benefits theft to the Department of Human Services (department) and local law enforcement, and the process for securing replacement SNAP benefits under the bill, will be provided on the department’s website and at SNAP eligibility determination agencies.

Until the department implements microchip technology in EBT cards issued Statewide, the commissioner will replace stolen SNAP benefits upon submission of a police report or other required evidence. The commissioner will establish a process for claims submissions and SNAP benefits replacement, which process will be subject to the conditions for replacing stolen SNAP benefits with federal funds under the federal “Consolidated Appropriations Act, 2023,” or any subsequent federal law. Whenever federal funds are not available for this purpose, the commissioner will replace stolen SNAP benefits using State funds, subject to availability.

The bill amends P.L.1993, c.13 to upgrade the crime of SNAP benefits theft of $150.00 or greater from a crime of the fourth degree to a crime of the third degree, and to upgrade the crime of SNAP benefits theft of less than $150.00 from a disorderly persons offense to a crime of the fourth degree. A crime of the third degree is punishable by imprisonment for three to five years, a fine of up to $15,000, or both, and a crime of the fourth degree is punishable by imprisonment for up to 18 months, a fine of up to $10,000, or both.

The bill appropriates such sums as necessary from the General Fund to the department to implement the bill’s requirements. The bill’s provisions become effective six months following the date of enactment; however, the commissioner may take administrative action in advance to establish the benefits claims process required under the bill.

The federal Food and Nutrition Service (FNS) in the United States Department of Agriculture urges states to adopt SNAP EBT cards with embedded microchip technology in order to deter benefits theft. Chip EBT cards are a more secure payment option than cards with a magnetic strip, and are already utilized by the credit and banking industries.

As of May 2025, California is the only state that has issued EBT chip cards to all SNAP participants. According to the FNS, New Jersey, Alabama, Maryland, and Oklahoma will soon issue EBT chip cards to SNAP participants.