(2) (i) “Personal identifying information” has the meaning stated in § 8-301 of the Criminal Law Article.

(ii) “Personal identifying information” includes an Electronic Benefits Transfer card number or personal identification number.

(3) “Skimming practices” includes:

(i) use of a skimming device, including a scanner, skimmer, reader, or other electronic device used to access, read, scan, obtain, memorize, or store, temporarily or permanently, personal identifying information; or

(ii) adding malicious code illegally to a website to capture Electronic Benefits Transfer card data or personal identifying information.

(4) “Theft” includes:

(i) physical theft of an Electronic Benefits Transfer card;

(ii) identity fraud, as defined in § 8-301 of the Criminal Law Article; and

(iii) theft through skimming practices.

(5) “Two-way fraud alert” means the capability of the Department to communicate with households, and of households to communicate with the Department, through text messaging regarding potential fraudulent use or theft of an Electronic Benefits Transfer card.

(b) (1) If an investigation by the Department shows a household’s correctly issued benefits were lost due to theft, the Department automatically shall restore the benefits without requiring further action from the household.

(2) As soon as practicable, but not later than 10 days after a household informs the Department of the loss of benefits due to theft, the Department shall:

(i) notify the household in writing of the Department’s decision as to whether to restore benefits, the amount of benefits to be restored, and the right to and method of requesting a hearing on the Department’s decision in accordance with subsection (c) of this section;

(ii) if the Department determines that the household receives benefits, restore benefits to the household in the amount of benefits that was lost; and

(iii) provide the household with a new Electronic Benefits Transfer card.

(3) The Department may not:

(i) require a household to provide a police report as a condition of restoration of benefits; or

(ii) limit the number of months in which a household can receive restoration of benefits lost due to theft.

(c) (1) If a household disputes the amount of benefits restored or the Department’s determination that no restoration is due, the household may request a hearing with the Department within 90 days after the date of the Department’s determination.

(2) If a household requests a hearing under this subsection, the Department shall restore the benefits for which the household claims entitlement while the hearing is pending.

(3) If the hearing decision is unfavorable to the household, any benefits improperly restored under paragraph (2) of this subsection may be recovered by the Department by reducing the household’s benefit at a rate that may not exceed the lesser of $10 or 5% of the household’s monthly allotment of benefits.

(d) In the procurement process for electronic benefits distribution or administration, the State or State-aided or State-controlled entity shall give preference to a vendor that:

(1) holds a form of insurance that can be used to reimburse a beneficiary for identity fraud or theft; and

(2) provides identity access protections to protect an eligible beneficiary against identity fraud and theft, which may include multifactor authentication.

(e) The Department shall coordinate with vendors to take available precautions to reduce the vulnerability of Electronic Benefits Transfer cards to theft by utilizing enhanced technology.

(f) On or before December 1 each year, the Department, in consultation with local law enforcement agencies in the State, shall report to the General Assembly, in accordance with § 2-1257 of the State Government Article, on:

(1) the accessibility and security of Electronic Benefits Transfer cards;

(2) actions taken to reduce the fraudulent use of Electronic Benefits Transfer cards;

(3) the number of Electronic Benefits Transfer cards reissued due to fraud in the immediately preceding year;

(4) the number of households reporting theft of benefits, by jurisdiction and program;

(5) the number of households eligible for expedited Supplemental Nutrition Assistance Program benefits that reported loss of benefits due to theft, by jurisdiction and program;

(6) the total dollar amount of benefits reported lost due to theft, by jurisdiction and program;

(7) the number of determinations of theft made by the Department, by jurisdiction;

(8) the number of determinations made by the Department that theft did not occur, by jurisdiction;

(9) the number of households reimbursed for benefits lost due to theft and the total dollar amount of benefits restored, by jurisdiction and program;

(10) the average and maximum length of time, in days, between the report of theft and the restoration of benefits, by jurisdiction;

(11) the number of hearings requested and the number of households that received a restoration of benefits as an outcome of a hearing, by jurisdiction; and

(12) demographic data on households that experienced theft, including race, gender, number of households with children under the age of 18 years, and number of households with a member at least 60 years old.