[Federal Register Volume 81, Number 31 (Wednesday, February 17, 2016)]
[Proposed Rules]
[Pages 8015-8021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03006]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Parts 271 and 278
RIN 0584-AE27
Enhancing Retailer Standards in the Supplemental Nutrition
Assistance Program (SNAP)
AGENCY: Food and Nutrition Service (FNS), USDA.
ACTION: Proposed rule.
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SUMMARY: The Food and Nutrition Service (FNS) proposes to make changes
to the Supplemental Nutrition Assistance Program (SNAP) regulations
pertaining to the eligibility of SNAP retail food stores. The
Agricultural Act of 2014 (2014 Farm Bill) amended the Food and
Nutrition Act of 2008 (the Act) to increase the requirement that
certain SNAP authorized retail food stores have available on a
continual basis at least three varieties of items in each of four
staple food categories, to a mandatory minimum of seven varieties. The
2014 Farm Bill also amended the Act to increase, for certain SNAP
authorized retail food stores, the minimum number of categories in
which perishable foods are required from two to three. This proposed
rule would codify these mandatory requirements.
Further, using existing authority in the Act and feedback from a
Request for Information that included five listening sessions in urban
and rural locations across the nation and generated 233 public
comments, FNS is proposing several additional changes. Among other
items, these proposed changes address depth of stock, amend the
definition of staple foods, and amend the definition of ``retail food
store'' to clarify when a retailer is a restaurant rather than a retail
food store. The rulemaking also proposes that FNS begin disclosing to
the public specific information about retailers who have violated SNAP
rules.
DATES: To be assured of consideration, comments on this proposed rule
must be received by the Food and Nutrition Service on or before April
18, 2016.
ADDRESSES: The Food and Nutrition Service (FNS), USDA, invites
interested persons to submit comments on this proposed rule. Comments
may be submitted by one of the following methods:
Federal e-Rulemaking Portal: Go to http://www.regulations.gov. Preferred method; follow the online instructions
for submitting comments on docket [insert docket number].
Mail: Comments should be addressed to Vicky Robinson,
Chief, Retailer Management and Issuance Branch, Retailer Policy and
Management Division, Room 418, 3101 Park Center Drive, Alexandria,
Virginia 22302.
All comments submitted in response to this rulemaking will be included
in the record and will be made available to the public. Please be
advised that the substance of the comments and the identity of the
individuals or entities submitting the comments will be subject to
public disclosure. FNS will make the comments publicly available on the
internet via: http://www.regulations.gov.
All submissions will be available for public inspection at the
address above during regular business hours (8:30 a.m. to 5:30 p.m.),
Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Address any questions regarding this
rulemaking to Vicky Robinson, Chief, Retailer Management and Issuance
Branch, Retailer Policy and Management Division at the Food and
Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia
22302. Ms. Robinson can also be reached by telephone at 703-305-2476 or
by email at [email protected] during regular business hours
(8:30 a.m. to 5:30 p.m.) Monday through Friday.
SUPPLEMENTARY INFORMATION:
Background
This proposed rulemaking is the result of two separate
developments. First are statutory changes included in the 2014 Farm
Bill. The second is the effort initiated by FNS in 2013 to look at
enhancing the eligibility standards for SNAP retailers to better
enforce the intent of the Act to permit low-income individuals to
purchase more nutritious foods for home preparation and consumption.
The 2014 Farm Bill increases the requirement that certain SNAP
authorized retail food stores have available on a continuous basis at
least three varieties of items in each of four staple food categories
to a mandatory statutory minimum of seven varieties. Further, the 2014
Farm Bill increases the minimum number of categories in which
perishable foods are required from two to three. This proposed rule
[[Page 8016]]
would codify these mandatory requirements.
In addition, on August 20, 2013, FNS published a notice entitled,
``Request for Information: Supplemental Nutrition Assistance Program
(SNAP) Enhancing Retail Food Store Eligibility'' at 78 FR 51136. The
Request for Information (RFI), which included fourteen specific
questions, focused on ways to enhance the definitions of retail food
store and staple foods, and overall eligibility requirements to
participate in SNAP, in order to improve access to healthy foods and
ensure that only retailers that effectuate the purposes of SNAP are
authorized to accept benefits. FNS received a total of 211 comments
from a diverse group, including retailers, academics, trade
associations, policy advocates, professional associations, government
entities, and the general public. RFI comments were considered in
drafting this proposed rule and a copy of the comment summary can be
viewed at: http://www.fns.usda.gov/rfi-retailer-enhancement.
In this rulemaking, based in part on feedback received via the RFI,
FNS is proposing further revisions to SNAP regulations pertaining to
the eligibility of retailers to participate in SNAP as retail food
stores. Using the authorities in Sections 3 and 9 of the Act, these
proposed revisions are intended to limit retailers that do not further
the purposes of the Program from participating in SNAP without
negatively impacting access for beneficiaries. This proposed rule would
not impact eligible foods that can be purchased with SNAP benefits.
Over the years, a growing number of retailers have become
authorized to participate in the Program as retail food stores. Some of
these retailers operate primarily as restaurants, not retail food
stores. Nothing in current regulations specifically prohibits items
sold for SNAP benefits that are cold at the point-of-sale from being
heated or cooked in the store after purchase. Further, current rules
allow foods to be classified as staple or non-staple by their first
ingredient; therefore some pizza restaurants, for example, have been
deemed eligible with pizza as the qualifying staple food based on the
primary ingredient (bread). After selling a cold pizza to SNAP
customers, these firms subsequently heat the pizza and then have
ultimately sold hot food from their pizza-restaurant location. Except
for limited exceptions set forth under Section 3(k) of the Act and 7
CFR 278.1(d)(3), which permit State agencies to enter into contracts
with restaurants to prepare and serve low-cost meals to homeless
persons, elderly persons and SSI recipients, Congress specified in
Section 3(k) and Section 3(o)(1) of the Act that SNAP-authorized
retailers must sell food for home preparation and consumption, which
does not include hot foods or hot food products ready for immediate
consumption. This proposed rulemaking would clarify and strengthen
current regulations to ensure that SNAP retailer policy is aligned with
this statutory intent.
The rulemaking also proposes to make ownership information tied to
program violations available to the public, which will assist in
maintaining program integrity.
Unless otherwise specified, the Agency proposes to implement the
changes described in this rulemaking upon the effective date of the
final rule.
Retail Food Store
In order to be eligible to accept SNAP benefits, under Section
3(o)(1) of the Act, a retailer must ``sell food for home preparation
and consumption'' as well as meet other criteria in the Act and SNAP
regulations. Section 3(k)(1) of the Act defines ``food'' to include
``any food or food product for home consumption except . . . hot foods
or hot food products ready for immediate consumption. . . .'' Congress
specifically did not intend for restaurants to participate in SNAP,
except under limited circumstances to serve the elderly, disabled, and
homeless, as set forth in Section 3(k) of the Act and as referenced in
Section 7(f)(2) of the Act.
The current SNAP regulations at 7 CFR 278.1(b)(1)(iv) provide that
ineligible firms include ``firms that are considered to be restaurants,
that is, firms that have more than 50 percent of their total gross
retail sales in hot and/or cold prepared foods not intended for home
preparation and consumption.'' However, nothing in current regulations
specifically prohibits items sold for SNAP benefits to be sold cold at
the point-of-sale and heated or cooked in the store after purchase. As
a result of this gap in existing regulations, some firms are authorized
to accept SNAP benefits even though they primarily sell cold, uncooked,
or raw foods and offer to heat or cook those foods for customers for
free or for cash before the customer leaves the store premises. This
gap has allowed these entities that in effect sell hot foods ready for
immediate consumption to participate in SNAP as authorized retailers.
The changes noted above will not impact farmer's markets, direct-
marketing farmers, military commissaries, and other relevant
establishments as described in Sec. 4002 of the Act.
Comments from the RFI involving firms that primarily sell food for
immediate consumption and that also sell products cold and heat them
for SNAP customers after purchase were evenly split. Some expressed
concerns that allowing prepared foods that could be cooked or heated
after purchase would likely cost more than unprepared foods, pointing
out that SNAP benefit amounts were based on the Thrifty Food Plan,
which is a market basket of foods that makes the economic assumption
that food purchased with SNAP benefits will be foods intended for home
preparation and not prepared foods. Others expressed concern that SNAP
recipients without access to a kitchen could benefit by being able to
have prepared foods cooked in stores where they are purchased.
Despite this latter comment, the Agency thinks it is important to
maintain the intent of Congress' restriction on hot food purchases.
Therefore, the rulemaking proposes to close the existing gap in SNAP
regulations that allows these types of entities to become authorized
SNAP retailers by adding language to the definition of retail food
store in current regulations at 7 CFR 271.2 that would require that at
least 85 percent of an entity's total food sales must be for items that
are not cooked or heated on-site before or after purchase. This
proposed threshold is based on a review of the data submitted by SNAP
authorized restaurants currently operating outside of the intent of the
Program. FNS requests comments regarding this threshold and the
benefits and costs of alternative levels.
Additionally, this rule would add language to prevent such
businesses that do not effectuate the purposes of SNAP from
circumventing SNAP rules by splitting into two separate businesses that
operate under one roof in order to gain eligibility for one of the
businesses to participate in SNAP as a retail food store. For example,
a restaurant purporting to be two separate businesses (one a hot foods
restaurant and one a cold-prepared foods location) for purposes of SNAP
authorization but operating from a single location with common
employees, accounting, and management, is not eligible. FNS would not
recognize separate businesses operating in one location and eligibility
determinations would continue to be made based on an evaluation of
these separate businesses as a single entity. FNS seeks comments
relative to any unintended adverse effects of this proposed change.
The Agency proposes to make the requirements detailed above under
[[Page 8017]]
``Retail Food Store'' effective for all new applicants and all
retailers authorized to participate in SNAP within 120 days of the
effective date of the final rule.
The rule also proposes to clarify the use of different terms, such
as entities, firms, retailers and stores. These are terms used
interchangeably in regulations and other policy, and they should be
treated as equivalent terms in SNAP regulations and policies.
Staple Food
As defined in Section 3(k) of the Act, current regulations define
staple foods as foods in the following categories: Meat, poultry or
fish; bread or cereals; vegetables or fruits; and dairy products.
Current regulations at 7 CFR 271.2 specify that foods with multiple
ingredients can only be counted in one staple food category, based on
the main ingredient, when determining retailer eligibility. This is
sometimes confusing and requires labels on many multiple-ingredient
products to be examined closely in order to confirm the main ingredient
when assigning it to the appropriate staple food category. For example,
the main ingredient in some frozen chicken pot pies is bread and in
others the main ingredient is chicken; therefore, one brand of chicken
pot pie might be categorized in the bread or cereals category and
another brand of chicken pot pie might be categorized in the meat,
poultry or fish category. In addition, counting foods with multiple
ingredients has allowed prepared foods sold for carry-out or for on-
site consumption to be counted as staple foods when determining a
store's eligibility to participate in SNAP, enabling some restaurants
to inappropriately participate in SNAP as retail food stores.
In order to prevent confusion and unintended consequences caused by
foods with multiple ingredients, this rulemaking proposes to amend 7
CFR 278.1(b) to revise language in 7 CFR 271.2 defining staple food.
The rulemaking proposes to define staple food as those food items
intended for home preparation and consumption in each of the following
four categories: meat, poultry, or fish; bread or cereals; vegetables
or fruits; and dairy products. Hot foods are not eligible for purchase
with SNAP benefits and, therefore, do not qualify as staple foods for
the purpose of determining eligibility under 278.1(b)(1) of this
chapter. Commercially processed foods and prepared mixtures with
multiple ingredients that do not represent a single staple food
category shall not be counted in any staple food category. Examples of
such foods include cold pizza, macaroni and cheese, multiple ingredient
soup, sandwiches, TV dinners, and pot pies. Accessory food items
include foods that are generally consumed between meals and/or are
generally considered snacks or desserts such as, but not limited to
chips, dips, crackers, cupcakes, cookies, ready-popped popcorn,
pastries, and candy, or food items that complement or supplement meals,
such as, but not limited to coffee, tea, cocoa, carbonated and
uncarbonated drinks, condiments, spices, salt, and sugar, and shall not
be considered staple foods for purposes of determining the eligibility
of any firm. These changes would ensure that those foods that do not
represent a single staple food category, such as commercially processed
and prepared mixtures with multiple ingredients are not considered when
determining eligibility to participate in SNAP as a retail food store.
Multiple ingredient foods include frozen entrees and prepared
sandwiches, prepared salads, and pizza. These foods do not include such
items as yogurt, cheeses, and cereals as the primary staple ingredient
is clearly represented and easily recognized.
Multiple ingredient foods and accessory foods would not be counted
toward variety, perishables, or depth of stock when determining a
firm's eligibility to participate in SNAP as a retail food store. This
would not change the eligibility of these foods for purchase with SNAP
benefits in authorized stores. FNS believes this approach would better
reflect the intent of Congress that staple foods are those foods used
primarily for home preparation and consumption that provide the main
sources of nutrition intake for households.
The rulemaking also proposes changes to the Agency's interpretation
of accessory foods, which are not considered to be staple foods, but
are eligible foods that can be purchased with SNAP benefits. The Agency
currently treats any food items for home preparation and consumption
not specifically listed as an accessory food in Section 3(q)(2) of the
Act as a staple food. Section 3(q)(2) of the Act states that staple
foods do not include ``accessory food items, such as coffee, tea,
cocoa, carbonated and un-carbonated drinks, candy, condiments and
spices.'' This language in Section 3(q)(2) indicates that the list of
accessory foods in the Act is an illustrative list, not a complete
list. Therefore, under the proposed changes, FNS is clarifying that in
addition to the examples of accessory foods provided in Section 3(q)(2)
of the Act, accessory foods also include items such as chips, dips,
cookies, cakes and pastries that are commonly recognized as snack foods
and desserts and/or that are typically consumed between meals. Similar
to candy, carbonated and un-carbonated drinks, and condiments, which
are examples of accessory foods provided in the Act, chips, ready-
popped popcorn, cookies, cakes and pastries and similar foods are
examples of snack foods or desserts, with limited nutritional value.
FNS believes counting such foods as accessory items will ultimately
encourage stores to offer more nutritious options and provide SNAP
recipients access to a larger selection of healthy foods. Stores that,
until now, have relied on these types of accessory foods to count as
staple foods may need to expand their offerings of proper staple foods
to continue to be eligible. FNS remains concerned that those stores
that sell predominantly accessory foods do not further the purposes of
SNAP. FNS is interested in public comments as to additional foods that
should be categorized as accessory items and/or standards and criteria
to determine whether a food is a staple food or an accessory; for
example, popcorn that is already popped and has added salt or butter
would be considered an accessory food. FNS is interested in whether and
how the public would make a distinction between dried corn as a grain
and popcorn (popped or un-popped) as a snack food. Accessory foods
would remain eligible for purchase with SNAP benefits but would not be
counted as staple foods for purposes of determining a store's
eligibility to participate in SNAP.
FNS understands there are challenges in making clear distinctions
in the areas of multi-ingredient foods and accessory foods. FNS plans
to issue specific guidance on the changes proposed in this rulemaking.
In the past, FNS has issued questions and answers following a final
rule. FNS is seeking comments on what specific aspects of the proposed
changes should be addressed in guidance and whether guidance should
again be issued after the rule is final or concurrent to issuance of
the final rule.
There was mixed reaction from commenters on the RFI with respect to
counting multiple ingredient foods as staple foods when determining
store eligibility. Approximately half the submissions, including
retailer groups and food manufacturers, support the current
requirements to count foods with multiple ingredient foods in one
staple food category based on the main ingredient. Other commenters,
including farmers markets, professional associations, government
agencies and
[[Page 8018]]
policy advocates, supported changing FNS' current rules on multiple
ingredient foods.
However, there was strong support, and little opposition, from
those submitting comments to the RFI for the notion that enhancing the
standards for staple foods would lead to healthier food options that
would help prevent obesity and reduce food insecurity. Consequently,
most supported changes to the current definition of ``staple foods.''
Determination of Authorization
Changes proposed for regulations at 7 CFR 271.2 would also require
clarification in 7 CFR 278.1 to conform to those changes. Current
regulations at 7 CFR 278.1(b)(1)(ii)(C) include language about multiple
ingredient foods and, as stated above, this rulemaking proposes to
revise and add language to clarify that such foods are not counted as
staple foods for purposes of determining store eligibility. Therefore,
conforming changes to this paragraph are being proposed as well.
In addition, the rule proposes to codify in 7 CFR 278.1 mandatory
requirements from the 2014 Farm Bill. The 2014 Farm Bill amended
Section 3(o)(1)(A) of the Food and Nutrition Act to increase the
required minimum variety of foods in each staple food category from
three to seven different varieties and require perishables in three
staple food categories instead of two, in order to be eligible to
participate in SNAP as a retail food store. The rulemaking also
proposes a minimum number of six stocking units per variety to ensure
that retailers can meet the statutory requirement to offer for sale, on
a continuous basis, staple foods in each staple food category. This
stocking depth ensures that stores offer the minimum number of
varieties on a continuous basis, as required by law without
complicating collection of information that store visit contractors now
collect for FNS to use in determining store eligibility. FNS requests
comments on this stocking depth requirement. This new requirement only
affects establishments and house-to-house trade routes that meet the
definition of a retail food store in accordance with Section 3(o)(1)(A)
of the Act; it does not affect establishments and house-to-house trade
routes that have over 50 percent of their total sales in staple foods
and would meet the definition of retail food store under Section
3(o)(1)(B) of the Act (i.e. stores that currently participate under
criteria B generally include, for example, specialty food meat, fruit
and vegetable, or seafood markets with 50% or more of their sales in a
specific staple food category. These firm types will not be affected by
the changes in this rule.).
The rule also proposes to revise in 7 CFR 278.1(b)(1)(ii)(B) what
constitutes a variety of staple foods in order to clear up any
confusion that may exist with current regulations and to conform to
earlier changes in 7 CFR 271.2 to the definition of staple foods
pertaining to multiple ingredient foods.
Responses to the RFI questions mostly indicated support, though
there was limited opposition, for the now mandatory, statutory changes
to increase the minimum number of staple foods by increasing variety
requirements. Most felt the minimum of twelve items currently required
was too few. There was also support for the now mandatory, statutory
change that requires perishable items in more than two staple food
categories.
The Agency proposes to make the requirements detailed above under
``Staple Food'' and ``Determination of Authorization'' effective for
all new applicants within 120 days of the effective date of a final
rule. Further, FNS proposes that once these requirements become
effective for new applicants, a retailer that is withdrawn or
disqualified for a term and is subsequently reinstated, must meet these
new requirements prior to reinstatement. Finally, this rule proposes
that SNAP retailers authorized to participate in the Program on the
effective date of the final rule will have one year (365 days) from the
effective date of the final rule to comply with the new requirements.
Need for Access
The 2014 Farm Bill amended Section 9(a) of the Act to allow the
Agency to consider whether an applicant retailer is located in an area
with significantly limited access to food when determining the
qualifications of that applicant. Pursuant to that change, FNS proposes
to amend 278.1(b) to allow the Agency to consider need for access when
a retailer does not meet all of the requirements for SNAP
authorization.
FNS is interested in comments and suggestions regarding this
proposed change. In considering need for access, at both authorization
and reauthorization, the Agency would consider factors such as distance
from the nearest SNAP authorized retailer, transportation options to
other SNAP authorized retailer locations, the gap between store's stock
and SNAP required stock for authorization eligibility, and whether the
store furthers the purposes of the Program. FNS is particularly
interested in comments to help the Agency refine the language in the
proposed change.
Public Disclosure of SNAP Information
With the exception of employment identification numbers (EINs) and
social security numbers (SSNs), the Act allows information collected
from retail food stores to be disclosed for purposes directly connected
with the administration and enforcement of the Act and SNAP
regulations. This rulemaking proposes to allow FNS to disclose to the
public specific information about retailers that have been disqualified
or otherwise sanctioned for SNAP violations. The information would be
disclosed only after the time for administrative and judicial appeals
has expired and would be limited to the name and address of the store,
the owner name(s) and information about the sanction itself. Public
disclosure of this information may include the posting of a list of
sanctioned retailers on a public Web site. Public disclosure of such
information would assist the Department in its efforts to combat SNAP
fraud by providing an additional deterrent. The information would also
provide the public with valuable information about the integrity of
these businesses and individuals for future dealings. Therefore, public
disclosure of this information would be for purposes directly connected
with the administration and enforcement of the Act and its regulations.
Regulatory Impact Analysis
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all cost
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health, and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both cost and benefits, of
reducing cost, of harmonizing rules, and of promoting flexibility. This
proposed rule has been determined to be significant and was reviewed by
the Office of Management and Budget. The RIA for this rulemaking was
published as part of the docket in Supporting Documents on
www.regulations.gov. A summary of the regulatory impact analysis (RIA)
follows.
Need for Action
The proposed rule is needed to codify mandatory provisions of the
2014 Farm
[[Page 8019]]
Bill, and to clarify and enhance current regulations governing the
eligibility of retail food stores participating in SNAP.
Benefits
This rulemaking will codify mandatory provisions of the 2014 Farm
Bill, and strengthen provisions in current regulations, to conform to
the intent of the statutory requirements. Proposed changes will improve
SNAP recipient access to a variety of healthy food options. It reflects
the Department's commitment to provide vital nutrition assistance to
our most vulnerable Americans, protect taxpayer dollars and build on
aggressive efforts to ensure program integrity. The proposed rule would
allow FNS to ensure that retailers authorized to participate in SNAP as
retail food stores are consistent with the purposes of the Program. It
would reinforce the intent of SNAP, that participants use their
benefits to purchase more nutritious foods intended for home
preparation and consumption. FNS requests information on any other
benefits of this rule.
Costs
There will be minor costs to the Federal government as a result of
the rule, as it does not change benefit levels, and existing retailer
authorization and oversight resources would be used to enforce it. FNS
anticipates that this rule may result initially in a small increase in
requests for administrative reviews, but the estimated cost for
additional reviews is less than $150,000. With respect to the cost
impact to retailers, the rule would mainly impact those firms that are
minimally stocked and those that are primarily restaurants and
therefore are inconsistent with the intent of Congress to make foods
available to SNAP participants for home preparation and consumption.
Firms that do not stock sufficient staple foods to meet the new
requirements will have the opportunity to modify their staple food
stock in order to be eligible to participate in SNAP. In the course of
store reviews, FNS has observed that stores that are determined to not
be eligible typically expand their food offerings to participate in
SNAP. FNS requests comments on the costs to retailers from this rule.
Regulatory Flexibility Act
This proposed rule has been reviewed with regard to the
requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-
612). Pursuant to that review, FNS believes that the rulemaking does
not present a significant economic impact to a substantial number of
small businesses; although the number of stores impacted is large, we
estimate that the cost to those small businesses for stocking
additional inventory would be nominal, on average about $140. However,
FNS has prepared this Regulatory Flexibility Analysis to provide the
opportunity for comment and input from the public. The complete
Regulatory Flexibility Analysis for this rule was published as part of
the docket in Supporting Documents on www.regulations.gov. A summary of
the analysis follows: This proposed rule will impact nearly 200,000
small grocery stores and convenience stores by requiring that these
stores make changes to their inventory in order to comply with the new
minimum inventory requirement mandated in this rule. FNS estimates that
for the vast majority of stores the changes needed will be minimal and
represent less than one-tenth of one percent of a store's total gross
sales.
Public Law 104-4
Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under Section 202 of the UMRA, the
Department generally must prepare a written statement, including a
cost-benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, or Tribal
governments in the aggregate, or to the private sector, of $100 million
or more in any one year. When such a statement is needed for a rule,
section 205 of the UMRA generally requires the Department to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, more cost-effective or least burdensome alternative
that achieves the objectives of the rule. This proposed rule contains
no Federal mandates (under the regulatory provisions of Title II of the
UMRA) for State, local and Tribal governments or the private sector of
$100 million or more in any one year. This rulemaking is, therefore,
not subject to the requirements of sections 202 and 205 of the UMRA.
Executive Order 12372
SNAP is listed in the Catalog of Federal Domestic Assistance under
Number 10.551 and is subject to Executive Order 12372, which requires
intergovernmental consultation with State and local officials. (See 2
CFR chapter IV.)
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have Federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under Section (6)(b)(2)(B) of the Executive Order 13132. FNS
has determined that this rulemaking does not have Federalism
implications. This proposed rule does not impose substantial or direct
compliance costs on State and local governments. Therefore, under
Section 6(b) of the Executive Order, a Federalism summary impact
statement is not required.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed rule is intended to have preemptive
effects with respect to any State or local laws, regulations or
policies which conflict with its provisions or which would otherwise
impede its full implementation. This proposed rule is not intended to
have retroactive effects unless so specified in the Effective Date
paragraph of the final rule. Prior to any judicial challenge to the
provisions of the final rule or the application of its provisions, all
applicable administrative procedures must be exhausted.
Executive Order 13175
Executive Order 13175 requires Federal agencies to consult and
coordinate with tribes on a government-to-government basis on policies
that have Tribal implications, including regulations, legislative
comments or proposed legislation, and other policy statements or
actions that have substantial direct effects on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes.
Currently, FNS provides regularly scheduled quarterly consultation
sessions as a venue for collaborative conversations with Tribal
officials or their designees. Reports from these consultations are part
of the USDA annual reporting on Tribal consultation and collaboration.
FNS will respond in timely and meaningful manner to Tribal government
requests for consultation concerning this proposed rule. The policies
contained in this rulemaking
[[Page 8020]]
should not have Tribal implications that preempt Tribal law.
Civil Rights Impact Analysis
FNS has reviewed this rule in accordance with Departmental
Regulations 4300-4, ``Civil Rights Impact Analysis'' and 1512-1,
``Regulatory Decision Making Requirements.'' After a careful review of
the proposed rule's intent and provisions, FNS has determined that this
rulemaking will not in any way limit or reduce the ability of protected
classes of individuals to receive SNAP benefits on the basis of their
race, color, national origin, sex, age, disability, religion or
political belief nor will it have a differential impact on minority
owned or operated business entities, and woman owned or operated
business entities that participate in SNAP. The regulation affects or
may potentially affect certain retail food stores that participate in
(accept or redeem) SNAP. The only retail food stores that will be
directly affected, however, are those retailers that participate in
SNAP in accordance with Section 3(o)(1)(A) of the Act and that do not
stock at the newly required and proposed levels, or whose hot food
(heated before or after purchase) sales exceed 15 percent. FNS does not
collect data from retail food stores regarding any of the protected
classes under Title VI of the Civil Rights Act of 1964. FNS
specifically prohibits retailers that participate in SNAP to engage in
actions that discriminate based on race, color, national origin, sex,
age, disability, religion or political belief. This proposed rule will
not change any requirements related to the eligibility or participation
of protected classes or individuals, minority owned or operated
business entities, or woman owned or operated business entities in
SNAP. As a result, this rulemaking will have no differential impact on
protected classes of individuals, minority owned or operated business
entities, or woman owned or operated business entities.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR
part 1320) requires that the Office of Management and Budget (OMB)
approve all collections of information by a Federal agency from the
public before they can be implemented. Respondents are not required to
respond to any collection of information unless it displays a current
valid OMB control number. There is no new information collection burden
associated with this proposed rule.
E-Government Act Compliance
FNS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to government information
and services, and for other purposes.
Lists of Subjects
7 CFR Part 271
Food stamps, Grant programs--Social programs, Reporting and
recordkeeping requirements.
7 CFR Part 278
Approval and participation of retail food stores and wholesale food
concerns, food stamps; Participation of financial institutions,
disqualification and imposition of civil penalties or fines for retail
food stores and wholesale food concerns; and Disposition of claims;
penalties.
Accordingly, for reasons set forth in the preamble, 7 CFR parts 271
and 278 are proposed to be amended as follows:
0
1. The authority citation for 7 CFR 271 and 278 continue to read as
follows:
Authority: 7 U.S.C. 2011-2036.
PART 271--GENERAL INFORMATION AND DEFINITIONS
0
2. In Sec. 271.2:
0
a. Add a definition for Firm.
0
b. Amend the definition of Retail food store by adding two sentences at
the end of paragraph (1).
0
c. Revise the definition of Staple food.
The additions and revision read as follows:
Sec. 271.2 Definitions.
* * * * *
Firm (1) Means:
(i) A retail food store that is authorized to accept or redeem SNAP
benefits;
(ii) A retail food store that is not authorized to accept or redeem
SNAP benefits; or
(iii) An entity that does not meet the definition of a retail food
store.
(2) For purposes of the regulations and SNAP policies, the terms
firm, entity, retailer, and store are used interchangeably.
* * * * *
Retail food store means:
(1) * * * In addition, at least 85 percent of an entity's total
food sales must be for items that are not cooked or heated on-site
before or after purchase. Establishments that include separate
businesses that operate under one roof and have commonalities, such as
sale of similar foods, single management structure, shared space,
logistics, bank accounts, employees, and/or inventory, are considered
to be a single establishment when determining eligibility to
participate in SNAP as retail food stores.
* * * * *
Staple food means those food items intended for home preparation
and consumption in each of the following four categories: Meat,
poultry, or fish; bread or cereals; vegetables or fruits; and dairy
products. Hot foods are not eligible for purchase with SNAP benefits
and, therefore, do not qualify as staple foods for the purpose of
determining eligibility under Sec. 278.1(b)(1) of this chapter.
Commercially processed foods and prepared mixtures with multiple
ingredients that do not represent a single staple food category shall
not be counted in any staple food category. Examples of such foods
include cold pizza, macaroni and cheese, multiple ingredient soup,
sandwiches, TV dinners, and pot pies. Accessory food items include
foods that are generally consumed between meals and/or are generally
considered snacks or desserts such as, but not limited to chips, dips,
crackers, cupcakes, cookies, popcorn, pastries, and candy, or food
items that complement or supplement meals, such as, but not limited to
coffee, tea, cocoa, carbonated and uncarbonated drinks, condiments,
spices, salt, and sugar, and shall not be considered staple foods for
purposes of determining the eligibility of any firm.
* * * * *
PART 278--PARTICIPATION OF RETAIL FOOD STORES, WHOLESALE FOOD
CONCERNS AND INSURED FINANCIAL INSTITUTIONS
0
3. In Sec. 278.1:
0
a. Revise the first sentence in paragraph (b)(1)(ii)(A);
0
b. Amend the first sentence in paragraph (b)(1)(ii)(B) by removing the
word ``two'' and adding in its place the word ``three''.
0
c. Revise paragraph (b)(1)(ii)(C);
0
d. Amend paragraph (b)(1)(iv) by adding a new sixth sentence;
0
e. Redesignate paragraph (b)(6) as paragraph (b)(7);
0
f. Add new paragraph (b)(6).
0
g. Add paragraph (q)(5).
The additions and revisions read as follows:
Sec. 278.1 Approval of retail food stores and wholesale food
concerns.
* * * * *
(b) * * *
(1) * * *
[[Page 8021]]
(ii) * * *
(A) Offer for sale and normally display in a public area,
qualifying staple food items on a continuous basis, evidenced by
having, on any given day of operation, no fewer than seven different
varieties of food items in each of the staple food categories, with a
minimum of six stocking units for each food item. * * *
* * * * *
(C) Offer a variety of staple foods which means different types of
foods within each staple food category. For example: apples, cabbage,
tomatoes, bananas, melons, broccoli, and squash in the vegetables or
fruits category; or animal-based milk, plant-based milk, hard cheese,
soft cheese, butter, sour cream, and yogurt in the dairy category; or
rice, couscous, quinoa, bread, cold cereals, oatmeal, and flour
tortillas in the bread or cereals category; or chicken, turkey, duck,
beef, pork, salmon, and tuna in the meat and fish category. Variety of
foods is not to be interpreted as different brands, nutrient values,
packaging types or package sizes of the same or similar foods. Similar
food items such as, but not limited to, link sausages and sausage
patties, different types of cold breakfast cereals, whole milk and skim
milk, or different types of apples (e.g., Empire, Jonagold and
McIntosh), shall count as depth of stock but shall not each be counted
as more than one staple food variety for the purpose of determining the
number of varieties in any staple food group. Accessory foods and
processed multiple ingredient foods shall not be counted as staple
foods for purposes of determining eligibility to participate in SNAP as
a retail food store.
* * * * *
(iv) * * * Firms that do not have 85 percent or more of their total
food sales in items that are not cooked or heated on-site, before or
after purchase, are ineligible. * * *
* * * * *
(6) FNS will consider whether the applicant is located in an area
with significantly limited access to food. In determining whether an
applicant is located in such an area, FNS will consider factors such as
distance from the nearest SNAP authorized retailer, transportation
options to other SNAP authorized retailer locations, the gap between a
store's stock and SNAP required stock for authorized eligibility, and
whether the store furthers the purpose of the Program.
* * * * *
(q) * * *
(5) Public disclosure of firms sanctioned for SNAP violations. FNS
may disclose information to the public when a retail food store has
been disqualified or otherwise sanctioned for violations of the Program
after the time for administrative and judicial appeals has expired.
This information is limited to the name and address of the store, the
owner names(s) and information about the sanction itself.
Dated: February 8, 2016.
Kevin Concannon,
Under Secretary, Food Nutrition and Consumer Services.
[FR Doc. 2016-03006 Filed 2-16-16; 8:45 am]
BILLING CODE 3410-30-P