TITLE: CONCERNING CHARGING A FEE FOR A REPLACEMENT ELECTRONIC BENEFITS TRANSFER CARD.

The bill provides that the Department of Human Services (DHS) may authorize county departments of social services to charge a fee to a client to cover the costs related to issuing a replacement electronic benefits transfer card. The bill is effective upon signature of the Governor.

STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000
State Revenues Cash Fund	0	0
State Expenditures Cash Fund	0	0
FTE Position Change	None	None
Local Government Impact — See Local Government Impact section of this fiscal note.

Background. The Electronic Benefit Transfer Service (EBTS), authorized by HB 95-1144, is a contractor-operated benefit delivery service which allows clients to use a debit-type card to access their cash benefits through automated teller machines or their cash and food stamp benefits through point of sale devices at food retailers. The EBTS program was piloted in February 1997 in Custer, Fremont, and Pueblo counties. Statewide implementation began in May 1997 and will be fully implemented by February 1998. DHS indicates that in the early months of EBTS implementation the card replacement rate is averaging approximately 10 percent. It is anticipated that this will decrease to approximately 3 percent as households become more acquainted with card care and security. DHS indicates that the replacement fee will be set at $2. Fee revenue will offset the cost of card replacement. The information below illustrates fees collected based on either a 3 percent or 10 percent replacement rate.

Existing Card Base

Replacement Rate

Monthly Replacement

Annualized

Annual Cards Replaced

Replacement Fee

Annual Fees

115,560

x 3%

3,469

x 12

41,269

x $2

$ 82,536

115,560

x 10%

11,555

x 12

138,660

x $2

$ 277,320

DHS will not be assessing the fee. Further, the bill does not require counties to assess the fee. Counties that opt to assess a fee will be solely responsible for fees collected, and moneys will remain at the county level. These moneys will not impact state expenditures or revenues. To the extent that counties are at their TABOR revenue limitations, each county, on a county by county basis, will make a determination on whether or not to assess the fee. The bill is assessed as having no fiscal impact at the state level. It will have a conditional fiscal impact at the local level, contingent upon each county’s decision to assess the fee.