The new rule was published March 31 by the state Human Services Department and took effect that day.
The House last year unanimously approved a bill backed by Republican Gov. Susana Martinez with the same restrictions on the use of cash assistance cards. The measure reached the Senate floor with four days left in the Legislature’s regular session but was never brought up for a vote.
Belen Democrat Michael Sanchez, who as Senate majority leader controls the chamber’s calendar, said in a published report that the Senate “ran out of time” to consider the bill. Sanchez opposed the legislation.
The measure wasn’t reintroduced in this year’s regular session of the Legislature, which ended in mid-February. Human Services Department spokesman Matt Kennicott said a decision was made to enact a rule rather than again seek legislation.
Congress in 2012 passed a bill requiring states to maintain policies and practices to prevent the use of welfare cash assistance, or EBT, cards at gambling establishments, liquor stores and strip clubs or face a loss of some federal welfare dollars. New Mexico’s potential penalty had been estimated at $5.5 million.
The new state rule doesn’t define “liquor store” or “gambling establishment,” but Kennicott said it will be enforced for businesses meeting the definitions in the federal law.
The federal law defines a liquor store as a business that “sells exclusively or primarily intoxicating liquor.” That definition doesn’t include convenience and grocery stores.
Also, under federal law, the principal purpose of a business must be gambling to meet the definition of a gambling establishment.
Horse-racing tracks and their slot-machine casinos meet that definition. State-tribal compacts have for years required tribes to prohibit the use of EBT cards to make withdrawals from automated teller machines at Indian casinos.
New Mexico veterans and fraternal clubs with slot machines don’t meet the definition of gambling establishments, but some may fall under the category of liquor store, Kennicott said.
Also, the rule prohibits the use of EBT cards not only at ATMs in the prohibited establishments, but also their use at point-of-sale terminals.
Kennicott said the Human Services Department is creating lists of names and addresses of businesses where cash assistance cards cannot be used under the new rule. That information will then be provided to the state contractor for EBT cards, which will block card use at the affected businesses.
New Mexicans can qualify for cash help for up to 60 months from the federally funded Temporary Assistance for Needy Families program – known in New Mexico as NMWorks – if they’re poor, have dependent children and meet other guidelines.
Those who qualify receive the assistance on electronic benefit transfer, or EBT, cards.
Kennicott said benefit recipients are supposed to use the money for daily living expenses.
“Beer or other liquor or strip clubs are not considered daily living expenses,” he said.
Because EBT cards can be used to make cash withdrawals at ATMs or to receive cash back at point-of-sale terminals, it is impossible to track exactly how recipients use the money.
Studies here and elsewhere have found the use of the cards at gambling establishments, liquor stores and strip clubs, but there has been no evidence of widespread use of the cards at those businesses.
Advocates of the poor have expressed concerns that limiting where EBT cards can be used could make it harder for recipients – especially in rural areas, where transportation is a challenge and businesses are limited – to access their benefits.
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