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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
SNAP; error rate; forensic audit
Purpose
Requires the Department of Economic Security, by December 30, 2030, to reduce the Supplemental Nutrition Assistance Program (SNAP) payment error rate to no more than three percent. Establishes reporting requirements and procedures for corrective action by the Auditor General.
Background
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. To be eligible for SNAP benefits, an applicant must meet specific age, household, employment and income requirements. Arizona’s SNAP program, the Arizona Nutrition Assistance Program, is administered by DES and provides nutrition assistance to eligible low-income households and is administered in accordance with federal SNAP requirements. Eligibility is primarily based on household income, which generally may not exceed 130 percent of the federal poverty level for gross income and 100 percent of the federal poverty level for net income, adjusted by household size. Arizona uses broad-based categorical eligibility, under which most households are not subject to a resource test. Income eligibility limits are updated annually by the USDA (USDA).
SNAP payment error rates measure the accuracy of each state's eligibility and benefit determinations. A payment error occurs when a SNAP recipient receives either more or less money than the individual was otherwise entitled to. In FY 2024, Arizona had an overpayment rate of 7.56 percent and an underpayment rate of 1.28 percent, with a total payment error rate of 8.84 percent (USDA).
H.R. 1, a federal budget reconciliation measure enacted in 2025, amended the Food and Nutrition Act of 2008 to require states, beginning in FY 2028, to pay a share of SNAP benefit costs based on the state’s payment error rate. States with error rates below six percent will have no benefit cost share, whereas states with error rates at or above six percent will be required to pay between 5 percent and 15 percent of benefit costs, depending on the magnitude of the error rate. Implementation of this requirement is tied to prior-year error rates and includes delayed implementation options for states with especially high error rates (P.L. 119-21, 119th Congress, 2025).
There is no anticipated fiscal impact to the state General Fund (state GF) associated with this legislation.
Provisions
1. Requires DES, by December 30, 2030, to reduce the SNAP payment error rate to no more than three percent.
2. Requires DES, beginning in FY 2027, to submit a quarterly report to the Legislature, within 30 days after the end of the quarter, detailing DES's monthly progress towards reducing the payment error rate, including strategies used and barriers encountered.
3. Requires DES, if it fails to meet the annual interim targets or final target, 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 timeliness for correcting the payment error rate;
b) pay 50 percent of any federal liabilities imposed due to the excess payment error rate, with the remaining federal liabilities being paid out of the state GF; and
c) implement a corrective action plan.
4. Specifies that, if DES fails to comply with the Auditor General's corrective plan, DES administrative funding is reduced by 10 percent until resolved.
5. Requires the Auditor General, by November 15, 2027, to complete a special audit determining what factors contributed to the payment error rate, including recommendations to reduce the payment error rate.
6. Directs DES to implement the Auditor General's recommendations within 12 months, unless the recommendations are waived by the Joint Legislative Budget Committee.
8. Allows the Legislature to allocate additional funding for program improvements if DES corrects the payment error rate ahead of schedule.
9. Repeals the SNAP payment error rate requirements on January 1, 2033.
10. Designates this legislation as the Oh SNAP Act.
11. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Requires the SNAP payment error rate report to be submitted quarterly, rather than annually, and to detail progress monthly.
2. Accelerates the initial reporting year for the SNAP payment error rate report from FY 2028 to FY 2027.
3. Requires the Auditor General to complete a special audit, rather than a forensic audit, to determine contributing factors to the payment error rate, and accelerates the audit completion deadline from December 30, 2031, to November 15, 2027.
4. Allows the Auditor General to request that DES submit a written status report regarding implementation of the special audit recommendations.
5. Removes Auditor General oversight of any DES corrective action plan.
Senate Action
HHS 2/3/26 DPA 4-1-2
Prepared by Senate Research
February 5, 2026
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