NASHVILLE — Several key laws sponsored by State Senator Jim Tracy (R-Shelbyville) and approved by the General Assembly this year will become effective on Friday, July 1 as Tennessee’s new fiscal year begins. The new laws include major legislation which puts more teeth in Tennessee’s E-Verify law to ensure that new hires are in the state legally and a bill aiming to reduce fraud in Tennessee’s child feeding programs.

The welfare fraud legislation comes after audits and investigations by Tennessee Comptroller Justin Wilson that identified financial mismanagement and fraud within some of the federal child feeding programs administered by Tennessee Department of Human Services (DHS). Approximately $80 million flows through DHS for program services.

The new law makes substantial changes to the way the DHS contracts and monitors third-party agencies that receive taxpayer money to feed children and adults.

“This new law both protects the taxpayer and ensures that money designated to feed hungry children is spent for that purpose instead of feeding the pocketbooks of those who defraud the system,” said Sen. Tracy. “It puts into place a number of strong accountability measures to help detect fraud and recover any misused funds.”

The new law directs DHS to conduct background checks on each applicant of the subrecipient or sponsoring organization and requires sponsoring organizations applying to participate in any food program administered through the department to obtain and maintain a performance bond. It requires DHS to perform both unannounced and announced physical site visits during the subrecipient monitoring process and report their findings. The measure also requires the inspector general of DHS to submit a report summarizing the results of any substantiated investigations concerning fraud, waste and abuse regarding the child and adult care food program and summer food service program every three months.

Tracy also sponsored another government accountability law set to take effect on Friday which makes it a Class A misdemeanor criminal offense for a supervisor or employee of state government to intentionally interfere with, impede, obstruct or limit access to information that is requested during an audit by the Office of the Comptroller of Tennessee.

On E-Verify, the new law set to take effect July 1, strengthens penalties for companies who are knowingly discarding the E-Verify system by creating an additional $500 civil penalty per day if the employer fails to use E-Verify or provide an affidavit of undue hardship. This legislation also makes it mandatory for a company with 50 or more employees to use the E-Verify system beginning January 1, 2017. Presently, all Tennessee employers with six or more employees must keep a copy of an employee’s or new hire’s driver’s license or listed identity/employment authorization documents showing that he or she is in the U.S. legally.

“The new law targets bad actors who find it more advantageous to pay a one-time $500 fine for hiring illegal aliens than to follow Tennessee’s Lawful Employment Act passed in 2011,” added Tracy. “This is very important in our efforts to stop illegal immigration.”

E-Verify is an Internet-based system operated by the Department of Homeland Security in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of newly hired employees by entering their name and a social security number. It is free to employers in all 50 states, including Tennessee. The E-Verify system has a 97 percent accuracy rate.


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