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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: HHS DP 7-5-0-0 | Third Read 33-25-2-0Senate: HHS DPA 4-1-2-0 | Third Read 17-12-1-0 |
HB 2206: SNAP; error rate; forensic audit
Sponsor: Representative Kupper, LD 25
Vetoed by the Governor
Overview
Establishes forensic audit and reporting requirements for the Arizona Department of Economic Security to reduce the payment error rate of the Supplemental Nutrition Assistance Program to not more than 3%.
History
The Supplemental Nutrition Assistance Program (SNAP) is a federal program that provides food benefits to low-income families to supplement their grocery budget and help the family afford nutritious food. It is administered by the U.S. Department of Agriculture (USDA), within its Food and Nutrition Service agency in partnership with state or tribal agencies. States operate the program locally under federal rules and oversight. Arizona's SNAP program is administered by the Arizona Department of Economic Security (DES) and is known as the Arizona Nutrition Assistance Program (DES).
H.R. 1, also known as the One Big Beautiful Bill, was signed into law on July 4, 2025, and makes several changes to the SNAP program. Prior to H.R. 1, the federal government paid 100% of the cost of SNAP benefits. The federal government and the state each paid 50% of the administrative costs of the program. H.R. 1 reduces the amount that USDA may pay a state agency for administrative costs involved in its operation of SNAP to 25%, from the current 50%, beginning in fiscal year (FY) 2027 (H.R. 1).
Starting in FY 2028, states will begin to pay a percentage of SNAP benefit costs if their error rate in administering SNAP is 6% or above. The FY 2028 payment will be based on the lower of the FY 2025 or FY 2026 error rate, each of which will be available about 12 months after the end of the fiscal year (H.R. 1).
The error rate is calculated through the review of payment errors from a select number of households participating in SNAP each month. Payment errors occur when an applicant's eligibility is incorrectly determined or when an eligible participant receives an incorrect benefit amount. Every June, the USDA analyzes the final data collected from the states and uses the data to determine national and state payment error rate. The FY 2024 error rate is 8.84% (DES FY 2027 Budget Request).
Provisions
1. Requires DES to reduce the SNAP payment error rate as reported by the USDA to not more than 3% by December 30, 2030. (Sec. 1)
2. Requires DES to submit a quarterly report to the Legislature within 30 days after the end of the quarter, beginning in FY 2027, that details the monthly progress towards reducing the payment error rate and includes strategies and barriers that may be present in reducing the payment error rate. (Sec. 1)
3. Requires DES, if it fails to meet annual interim targets or reduce the payment error rate by 3% by December 30, 2030, to:
a. submit a corrective action plan to the Legislature within 60 days that includes an analysis of why the targets were not met and timelines for correcting the payment error rate;
b. pay 50% of any federal liabilities that may be imposed due to the excess payment error rates; and
c. implement a corrective action plan. (Sec. 1)
4. Specifies that the remaining liabilities will be paid from the state General Fund. (Sec. 1)
5. Reduces DES administrative funding by 10% if the agency fails to comply with the corrective plan until resolved. (Sec. 1)
6. Requires by November 15, 2027, the Office of Arizona Auditor General (OAG) to complete a special audit which will determine what factors contributed to the payment error rate and include recommendations to reduce the payment error rate. (Sec. 1)
7. Directs DES to implement the special audit recommendations within 12 months after receiving the recommendations from the OAG unless the recommendations are waived by the Joint Legislative Audit Committee. (Sec. 1)
8. Allows the OAG to request that DES submit a written status report on the department's implementation of the special audit recommendations. (Sec. 1)
9. Allows the Legislature to allocate additional funding for SNAP improvements if DES corrects the payment error rate ahead of schedule. (Sec. 1)
10. Contains a delayed repeal date of January 1, 2033. (Sec. 2)
11. Cites this act as the Oh SNAP Act. (Sec. 3)
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Initials AG/LK HB 2206
4/14/2026 Page 0 Vetoed by the Governor
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