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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
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HB 4147: 2026-2027; human services.
Sponsor: Representative Livingston, LD 28
Committee on Appropriations
Overview
Contains session law provisions relating to human services needed to implement the FY 2027 budget.
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 federal fiscal year (FFY) 2027 (H.R. 1).
Starting in FFY 2028, states will begin to pay a percentage of SNAP benefit costs if their error rate in administering SNAP is 6% or above. Every June, the USDA analyzes the final data collected from the states and uses the data to determine national and state payment error rates. The FY 2024 error rate for Arizona is 8.84% (USDA).
Temporary Assistance for Needy Families (TANF)
The TANF Block Grant is used to: 1) provide assistance to needy families so that children may be cared for in their own homes or in homes of relatives; 2) end the dependence of needy parents on government benefits by promoting job preparation, work and marriage; 3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and 4) encourage the formation and maintenance of two-parent families (42 U.S.C. § 601). DES utilizes TANF funding to provide temporary financial assistance to dependent children in their own homes or in the homes of responsible caretaker individuals.
According to the FY 2026 Appropriations Report, produced by the Arizona Joint Legislative Budget Committee (JLBC), the FY 2026 budget continued the provision that allows DES to drug test TANF recipients if there is a reasonable suspicion that they are using illegal drugs (Laws 2025, Chapter 241).
Provisions
SNAP Fund
1. Establishes the SNAP Fund as an expenditure authority fund used for the federal share of the administrative and benefit costs of SNAP. (Sec. 1)
2. Requires DES to administer the SNAP Fund. (Sec. 1)
3. Specifies that SNAP Fund monies are continuously appropriated. (Sec. 1)
SNAP Eligibility Evaluations
4. Prohibits DES from establishing a gross income limit of more than 185% of the Federal Poverty Level for categorically eligible SNAP recipients. (Sec. 1)
5. Directs DES, to determine or evaluate SNAP eligibility, to:
a. enter into a data matching agreement with the Arizona Department of Revenue (DOR) to identify households with lottery or gambling winnings of $3,000 or more;
b. treat the data obtained as verified on receipt, to the extent permissible under federal law; and
c. refer those households with lottery or gambling winnings that are equal to or greater than the resource limit for elderly or disabled households as defined under federal law to DES for further investigation if the DOR data cannot be verified on receipt. (Sec. 1)
7. Requires DES to review its own information to identify individuals who have had a change in circumstances that may affect SNAP eligibility, including an individual’s change in unemployment benefits, employment status or wages on a quarterly basis. (Sec. 1)
8. Directs DES to review its own information that identifies individuals who have had a change in circumstances that may affect SNAP eligibility, including potential changes in residency as identified by out-of-state EBT card transactions on a monthly basis. (Sec. 1)
9. Instructs DES to review information provided by the Arizona Department of Corrections, Rehabilitation and Reentry that identifies individuals who have had a change in circumstances that may affect SNAP eligibility on a monthly basis. (Sec. 1)
10. Requires DES to review information provided by DOR that identifies households that have had a change in circumstances that may affect SNAP eligibility, including potential changes in income, wages or residency as identified by tax records on a quarterly basis. (Sec. 1)
11. Requires DES, on at least a quarterly basis, to post on its own public website the following aggregated amounts that were obtained from noncompliance and fraud investigations related to SNAP, excluding confidential and personally identifiable information:
a. the number of SNAP cases that were investigated for intentional violations or fraud;
b. the number of SNAP cases that were referred to the Attorney General's Office for prosecution;
c. the amount of improper payments and expenditures;
d. the amount of monies recovered;
e. the amount of monies spent for improper payments and ineligible recipients as a percentage of cases that were investigated and reviewed; and
f. the amount of monies spent by EBT card transactions that occurred outside of Arizona, categorized by state. (Sec. 1)
12. Directs DHS and DES, on at least a monthly basis, to review the following information from federal sources to assess a recipient's continued eligibility for SNAP:
a) earned income information, death register information, incarceration records, supplemental security income information, beneficiary records, earnings information and pension information that is maintained by the United States (U.S.) Social Security Administration;
b) income and employment information that is maintained by the National Directory of New Hires database and child support enforcement data that is maintained by the U.S. Department of Health and Human Services;
c) payment and earnings information that is maintained by the U.S. Department of Housing and Urban Development; and
d) national fleeing felon information that is maintained by the U.S. Federal Bureau of Investigation. (Sec. 1)
13. Directs DES to review an individual's case that is enrolled in SNAP if DES receives information that indicates a change in circumstances that may affect the individual's SNAP eligibility. (Sec. 1)
14. Defines DES and SNAP. (Sec. 1)
SNAP Payment Error Rate Reporting Requirements
15. 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)
16. Requires DES to submit a quarterly report to the Legislature within 30 days after the end of the quarter, beginning in FY 2027 and each FY thereafter, 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.
17. 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)
18. Specifies that the remaining liabilities will be paid from the state General Fund. (Sec. 1)
19. Reduces DES administrative funding by 10% if the agency fails to comply with the corrective plan until resolved. (Sec. 1)
20. 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)
21. 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)
22. Allows the OAG to request that DES submit a written status report on its implementation of the special audit recommendations. (Sec. 1)
23. Allows the Legislature to allocate additional funding for SNAP improvements if DES corrects the payment error rate ahead of schedule. (Sec. 1)
24. Contains a delayed repeal date of January 1, 2033. (Sec. 2)
EBT Card Transactions
25. Requires DES, on a monthly basis, to use the data from an electronic benefit transfer card to identify any individual who has made purchases exclusively out-of-state over a 90-day period. (Sec. 3)
26. Directs DES to contact the individual who is identified within 30 days to determine whether that individual resides in Arizona. (Sec. 3)
27. Requires DES to terminate assistance, including SNAP benefits, within 30 days after contacting the individual and the individual does not reside in Arizona. (Sec. 3)
28. Specifies that within 15 days after the individual's assistance being terminated, DES must refer them to the U.S. Attorney’s Office for the District of Arizona. (Sec. 3)
TANF
29. Continues, as session law, DES to screen and test each adult recipient who is eligible for TANF cash benefits and who DES has reasonable cause to believe engages in the illegal use of controlled substances. (Sec. 4)
30. Continues, as session law, to deem a TANF recipient ineligible for TANF benefits for one year if the recipient tests positive for the use of a controlled substance that was not prescribed by a licensed health care provider. (Sec. 4)
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34. Initials AG HB 4147
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