[Federal Register Volume 84, Number 66 (Friday, April 5, 2019)]
[Proposed Rules]
[Pages 13555-13562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06597]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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 

  Federal Register / Vol. 84, No. 66 / Friday, April 5, 2019 / Proposed 
Rules  

[[Page 13555]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 271 and 278

[FNS-2019-0003]
RIN 0584-AE61


Providing Regulatory Flexibility for Retailers in the 
Supplemental Nutrition Assistance Program (SNAP)

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Food and Nutrition Service (FNS, or the Agency) proposes 
to make changes to the Supplemental Nutrition Assistance Program (SNAP) 
regulations pertaining to the eligibility of certain SNAP retail food 
stores. These proposed changes are in response to the Consolidated 
Appropriations Acts of 2017 and 2018, which prohibited the U.S. 
Department of Agriculture (USDA) from implementing two retailer 
stocking provisions (the ``Breadth of Stock'' provision and the 
``Definition of `Variety' '' provision) of the 2016 final rule titled, 
``Enhancing Retailer Standards in the Supplemental Nutrition Assistance 
Program (SNAP)'', until such a time as regulatory modifications to the 
definition of ``variety'' are made that would increase the number of 
food items that count as acceptable staple food varieties for purposes 
of SNAP retailer eligibility. Using existing authority in the Food and 
Nutrition Act of 2008, the Agency proposes to modify the definition of 
the term ``variety'' as it pertains to the stocking requirements for 
SNAP authorized retail food stores. These proposed changes would 
provide retailers with more flexibility in meeting the enhanced 
stocking requirements of the 2016 final rule which were mandated by the 
Agricultural Act of 2014 (the 2014 Farm Bill), and align SNAP 
regulations with the requirements expressed in the Consolidated 
Appropriations Acts of 2017 and 2018. This proposed rule does not 
modify any other provisions or components of the 2016 final rule, 
``Enhancing Retailer Standards in the Supplemental Nutrition Assistance 
Program (SNAP).''

DATES: To be assured of consideration, comments on this proposed rule 
must be received by FNS on or before June 4, 2019.

ADDRESSES: USDA FNS invites interested persons to submit comments on 
this proposed rule. Comments may be submitted by one of the following 
methods:
     Federal e-Rulemaking Portal: This is the preferred method 
for comment submission. Go to http://www.regulations.gov and follow the 
online instructions for submitting comments.
     Mail: Mailed 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 written comments submitted in response to this proposed rule 
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 USDA FNS, 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: Final Rulemaking Action Establishing SNAP Criterion A

    In order to be eligible to participate in SNAP, a store must meet 
either Criterion A (staple food stock) or Criterion B (staple food 
sales). These requirements were formalized by the final rule titled 
``Food Stamp Program: Revisions to the Retail Food Store Definition and 
Program Authorization Guidance'' which was published on January 12, 
2001 (66 FR 2795). This 2001 final rule implemented changes required by 
the Food Stamp Program Improvements Act of 1994.
    Under this 2001 final rule, Criterion A eligibility was established 
to require that certain stores carry at least three (3) varieties of 
staple foods in each of the four (4) staple food categories as well as 
at least one (1) perishable variety in at least two (2) staple food 
categories. The staple food categories are: Meat, poultry, or fish; 
dairy products; bread or cereals; and vegetables or fruits. This 2001 
final rule defined the term ``variety'', as used with respect to SNAP 
Criterion A, at 7 CFR 278.1(b)(1)(ii)(C).
    This definition of ``variety'' was further clarified by Agency 
guidance in the Benefits Redemption Division Policy Memorandum 01-04, 
titled, ``Implementation of Final Retail Store Eligibility Rule'' which 
was issued on August 14, 2001. This 2001 memorandum states that: 
``Examples of unacceptable varieties includes tomato juice, fresh 
tomatoes and canned stewed tomatoes in the vegetables or fruits 
category.''
    Since the establishment of SNAP Criterion A, Agency policy has not 
considered multiple formats of a product (e.g., raw chicken, canned 
chicken, and frozen chicken) to constitute discrete staple food 
varieties. Variety has been traditionally defined by the Agency based 
on the essential composition of the food product (i.e., main 
ingredient), especially in the meat, poultry, or fish and vegetables or 
fruits staple food categories. Main ingredient has generally been 
determined by a product's first listed ingredient in the ingredients 
list on the product's Nutrition Facts label, as ingredients on the 
label are required to be listed from highest to lowest quantity by 
weight. For example, a can of tomato soup with a first listed 
ingredient of ``tomatoes'' in its ingredients list has a main 
ingredient of tomatoes, as that is the ingredient which occurs in the 
highest quantity in the soup, by weight; such a product has 
historically been considered a ``tomato'' variety in the vegetables or 
fruits staple food category. In the dairy products and

[[Page 13556]]

bread or cereals staple food category, most staple foods share the same 
main ingredients (e.g., cow milk for dairy and wheat for bread or 
cereals); therefore, product kind (e.g., yogurt for dairy and bagels 
for bread or cereals) is used to define variety in conjunction with 
main ingredient. When determining variety in these two categories, FNS 
first considers main ingredient and then product kind. For example, a 
package of butter has a main ingredient of ``cow milk'' and is 
therefore a dairy product. However, FNS classifies this product as a 
``cow milk-based butter'' staple food variety according to its 
identifiable product kind (butter). Products that share the same 
primary component (e.g., sliced turkey and ground turkey--turkey) and 
very similar kinds of products (e.g., McIntosh apples and Empire 
apples--apples; mozzarella cheese and cheddar cheese--cheeses) were not 
generally considered to represent discrete varieties in their 
respective staple food categories under the 2001 final rule. Main 
ingredient and product kind have, therefore, been recognized in Agency 
policy as the primary determinants of variety since the implementation 
of the 2001 final rule.

Background: Proposed Rulemaking Action Modifying SNAP Criterion A

    FNS proposed to modify Criterion A eligibility requirements in a 
Notice of Proposed Rulemaking (NPRM) titled ``Enhancing Retailer 
Standards in the SNAP'' which was published on February 17, 2016 (81 FR 
8015). This 2016 NPRM sought to implement changes required by the 2014 
Farm Bill and codify discretionary provisions under existing authority 
in the Food and Nutrition Act.

Breadth of Stock

    The ``Definition of `Retail Food Store'--Breadth of Stock'' 
provision of the 2016 NPRM proposed to increase the number of varieties 
required in each staple food category from three (3) to seven (7) and 
to increase the number of categories required to contain at least one 
(1) variety of perishable staple foods from two (2) to three (3). These 
increases were statutorily mandated by the 2014 Farm Bill, and were 
supported by a majority of commenters.

Definition of ``Variety''

    The ``Definition of `Staple Food'--Acceptable Varieties in the Four 
Staple Food Categories'' provision of the 2016 NPRM proposed to further 
clarify existing language at 7 CFR 278.1(b)(1)(ii)(C) that defines 
``variety'' for the purposes of SNAP Criterion A eligibility by adding 
additional examples of food items considered to be acceptable staple 
food varieties. After the publication of the 2016 NPRM, FNS received a 
high volume of questions and interest from a wide range of 
stakeholders. Some of these questions centered on the definition of 
``variety'' and inquired about other food items considered to be staple 
food varieties. On April 5, 2016, FNS published a clarification of the 
proposed rule and 30-day extension of the comment period at 81 FR 
19500. In this 2016 clarification and extension, FNS indicated a 
specific interest in public feedback on the subject of the definition 
of ``variety'', stating that: ``FNS is particularly interested in 
comments from the public as to whether and how variety should take into 
account the differences between products within staple food categories 
(generally and individually), and what factors should be considered 
when making such distinctions.''
    Of the total 1,260 germane and non-duplicative public comments 
received on both the 2016 NPRM and the subsequent clarification, 168 
comments, or approximately 13% of all public comments, specifically 
addressed this provision. About 16% of total retailer commenters 
specifically opposed this provision. Food industry groups largely 
opposed this provision and other commenter types, such as advocacy, 
medical, and governmental entities, were generally divided and/or 
expressed mixed opinions. Of those that opposed the provision, some 
indicated that small format stores would struggle to reach seven (7) 
varieties in the meat, poultry, or fish and dairy products staple food 
categories and such commenters suggested increasing flexibility for 
stores in these categories. Such commenters suggested including plant-
based proteins in the meat, poultry, or fish staple food category and 
plant-based dairy alternatives in the dairy products staple food 
category.

Background: Final Rulemaking Action Modifying SNAP Criterion A

    After carefully considering the public comments that were received, 
FNS published the final rule titled ``Enhancing Retailer Standards in 
the SNAP'' on December 15, 2016 (81 FR 90675). The ``Definition of 
`Retail Food Store'--Breadth of Stock'' provision was published in this 
2016 final rule as proposed as this was a change mandated by the 2014 
Farm Bill.
    The ``Definition of `Staple Food'--Acceptable Varieties in the Four 
Staple Food Categories'' provision, however, was published with 
substantial modifications in the 2016 final rule. These modifications 
were made in response to public feedback received and were intended to 
provide retail food stores with a greater degree of flexibility in 
reaching the new breadth of stock required of certain retailers under 
SNAP Criterion A, especially in the meat, poultry, or fish and dairy 
products staple food categories.
    Commenters who responded adversely to the definition of ``variety'' 
as it appeared in the 2016 NPRM generally focused on the difficulties 
small format retailers would have in reaching seven (7) varieties in 
the meat, poultry or fish and the dairy products staple food category. 
This concern was born out by the Agency's final Regulatory Flexibility 
Analysis which analyzed data from a nationally-representative sample of 
1,392 SNAP authorized small format retail food stores and indicated 
that about 93% of currently SNAP authorized small stores already 
stocked enough varieties of vegetables or fruits and about 78% of these 
stores already stocked enough bread or cereals, while only about 46% of 
these stores already stocked enough meat, poultry, or fish and only 
about 27% of these stores already stocked enough dairy products. For 
this reason, FNS focused on providing more flexibility in the latter 
two staple food categories through the inclusion of plant-based protein 
sources in the meat, poultry, or fish staple food category, and the 
inclusion of plant-based dairy alternatives as well as additional dairy 
flexibilities in the dairy products staple food category.

Plant-Based Protein Sources

    The 2016 final rule allowed for the counting of plant-based protein 
sources as varieties in the meat, poultry, or fish staple food 
category. Specifically, this meant that beans, peas, and nuts/seeds 
could each individually be counted once in either the vegetables or 
fruits staple food category, or once in the meat, poultry, or fish 
staple food category. In addition, plant-based meat analogues, such as 
tofu and seitan, were added to the meat, poultry, or fish staple food 
category. These changes were made, consistent with USDA's MyPlate 
nutrition guidelines, to allow retailers more flexibility in stocking a 
sufficient number of varieties in the meat, poultry, or fish staple 
food category, and to help to ensure that SNAP households would have 
access to an array of healthy food options that meet diverse dietary 
needs and preferences. FNS is not proposing to modify or affect this 
change in this proposed rule and it will remain in place as it appeared 
in the 2016 final rule.

[[Page 13557]]

Plant-Based Dairy Alternatives

    The 2016 final rule allowed for the counting of plant-based dairy 
alternatives as varieties in the dairy products staple food category. 
Specifically this meant that plant-based dairy products would be 
considered a variety in the dairy products staple food category based 
on their main ingredient and the traditional dairy product for which 
they are a substitute. So, for example, soy-based milk substitute, 
almond-based milk substitute, rice-based milk substitute, soy-based 
cheese substitute, almond-based cheese substitute, rice-based cheese 
substitute, soy-based yogurt substitute, almond-based yogurt 
substitute, and rice-based yogurt substitute would each be considered a 
discrete variety in the dairy products staple food category under the 
2016 final rule. Though these items are plant-based, they are 
recognized as dairy equivalents and, therefore, would not count as 
varieties in the remaining staple food categories under the 2016 final 
rule. These changes were made in keeping with USDA's MyPlate nutrition 
guidelines, to allow retailers more flexibility in stocking a 
sufficient number of varieties in the dairy products category, and to 
help to ensure that SNAP households will have access to an array of 
healthy food options that meet diverse dietary needs and preferences. 
FNS is not proposing to modify or affect this change in this proposed 
rule and it will remain in place as it appeared in the 2016 final rule.

Additional Dairy Flexibilities

    The 2016 final rule modified existing Agency policy to subdivide 
certain traditional, cow milk-based dairy varieties into more than one 
variety. For example, under the 2001 final rule, cheese was considered 
one variety while under the 2016 final rule, cow milk-based soft cheese 
and cow milk-based firm/hard cheese each were considered discrete 
varieties. Additionally, under the 2016 final rule, shelf-stable liquid 
cow milk (e.g., evaporated or condensed milk), perishable liquid cow 
milk, and shelf-stable powdered cow milk would each be considered 
discrete varieties in the dairy products staple food category. Finally, 
under the 2016 final rule, cow milk-based yogurt and cow milk-based 
kefir (a yogurt drink) would each be considered discrete varieties in 
the dairy products staple food category. These changes were made in 
order to allow retailers more flexibility in stocking a sufficient 
number of traditional varieties in the dairy products category. This 
proposed rule would modify these changes, as discussed later in this 
document, in order to provide further flexibility in the dairy products 
staple food category.

Sufficient Breadth of Stock Under the 2016 Final Rule

    Included below are two (2) tables that demonstrate completely 
different ways a retail food store could reach the required seven (7) 
varieties in each of the four staple food categories using the 
definition of ``variety'' as it appeared in the 2016 final rule. These 
are just examples of two (2) combinations that would satisfy the 
requirements in the 2016 final rule. These charts do not include all of 
the acceptable varieties or possible combinations of varieties. 
Additional examples of acceptable varieties in the four staple food 
categories are available in the ``List of Examples'' section of the 
2016 final rule.

----------------------------------------------------------------------------------------------------------------
        Meat, poultry, or fish              Dairy products        Vegetables or fruits       Bread or cereals
----------------------------------------------------------------------------------------------------------------
1. nuts/seeds........................  1. liquid, perishable    1. apples..............  1. wheat-based
                                        cow milk.                                         tortillas.
2. chicken...........................  2. cow milk-based        2. oranges.............  2. wheat-based pitas.
                                        yogurt.
3. tuna fish.........................  3. soy-based milk        3. plums...............  3. corn-based cold
                                        substitute.                                       breakfast cereal.
4. beef..............................  4. cow milk-based        4. peaches.............  4. rice.
                                        infant formula.
5. eggs..............................  5. cow milk-based hard   5. lettuce.............  5. oats-based hot
                                        cheese.                                           breakfast cereal.
6. catfish...........................  6. powdered, shelf-      6. celery..............  6. wheat-based bread.
                                        stable cow milk.
7. beans.............................  7. cow milk-based soft   7. pumpkin.............  7. wheat-based buns/
                                        cheese.                                           rolls.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
        Meat, poultry, or fish              Dairy products        Vegetables or fruits       Bread or cereals
----------------------------------------------------------------------------------------------------------------
1. salmon............................  1. cow milk-based        1. tomatoes............  1. wheat-based flour.
                                        butter.
2. turkey............................  2. oil-based butter      2. bananas.............  2. wheat-based baking
                                        substitute.                                       mixes.
3. sardines..........................  3. cow milk-based sour   3. grapes..............  3. rye-based bread.
                                        cream.
4. pork..............................  4. rice-based milk       4. onions..............  4. rice-based pasta.
                                        substitute.
5. clams.............................  5. liquid, shelf-stable  5. pineapple...........  5. wheat-based bagels.
                                        cow milk.
6. peas..............................  6. cow milk-based kefir  6. cucumbers...........  6. rice-based infant
                                                                                          cereal.
7. tilapia...........................  7. soy-based infant      7. carrots.............  7. wheat-based English
                                        formula.                                          muffins.
----------------------------------------------------------------------------------------------------------------

Proposed Changes to the Definition of ``Variety''

    On May 5, 2017, the Consolidated Appropriations Act of 2017 was 
signed into law. Sec. 765 of the Consolidated Appropriations Acts of 
2017 and thereafter the Consolidated Appropriations Act of 2018, 
prohibit the USDA from implementing the ``Definition of `Staple Food'--
Acceptable Varieties in the Four Staple Food Categories'' provision (7 
CFR 271.2 and 7 CFR 278.1(b)(1)(ii)(C)) and the ``Definition of `Retail 
Food Store'--Breadth of Stock'' provision (7 CFR 271.2 and 7 CFR 
278.1(b)(1)(ii)(A)) of the 2016 final rule until the USDA promulgates 
regulatory amendments that modify the ``Definition of `Staple Food'--
Acceptable Varieties in the Four Staple Food Categories'' provision of 
the 2016 final rule. Such regulatory amendments, moreover, must 
increase the number of items that qualify as acceptable varieties in 
each staple food category.
    Using existing authority in the Food and Nutrition Act of 2008, as 
amended, FNS proposes to make changes to regulations at 7 CFR 271.2 and 
7 CFR 278.1(b)(1)(ii)(C) to modify the definition of the term 
``variety'' as it pertains to the stocking requirements for certain 
SNAP authorized retail food stores in order to increase the number of 
items that qualify as acceptable varieties in the four staple food 
categories, especially in the meat, poultry or fish, dairy, and breads 
or

[[Page 13558]]

cereals staple food categories. These changes would provide retailers 
with more flexibility in meeting the enhanced SNAP eligibility 
requirements and meet the requirements expressed in the Consolidated 
Appropriations Acts of 2017 and 2018.
    Together the changes proposed below add five (5) or more 
additional, discrete varieties in the meat, poultry, or fish, dairy, 
and bread or cereals staple food category, and provide five (5) more 
illustrative examples in the vegetables or fruits staple food category. 
Additionally, the current proposed rule will retain the changes in the 
2016 final rule that provided flexibility regarding plant-based protein 
sources and plant-based dairy alternatives. Those flexibilities would 
remain in place as they appeared in the 2016 final rule. In conjunction 
with the twenty (20) discrete varieties identified in the ``List of 
Examples'' in the 2016 final rule, the proposed changes to the 
definition of ``variety'' would provide stores with a wide range of 
options in meeting stocking requirements in all four staple food 
categories.
    FNS is also proposing to add an official definition of ``variety'' 
to the General Information and Definitions section of SNAP regulations 
found at 7 CFR 271.2 in order to convey that variety is intended to 
signify main ingredient or product kind. The inclusion of this 
definition codifies existing Agency practice which dictates which food 
items are considered to be staple food varieties. FNS considers the 
inclusion of this definition to be paramount to a clear understanding 
of the term ``variety'' in the context of SNAP retailer eligibility and 
the proposed changes in this rulemaking. This proposed rule would not 
modify any other provisions or components of the 2016 final rule.
    Proposed changes made to the definition of ``variety'' are expected 
to have significant effects upon the SNAP retailer authorization 
process. Below are the strategies FNS is proposing to modify the 
definition of ``variety'' and provide retail food stores with more 
flexibility. FNS welcomes comments that specifically address these 
proposed changes as well as comments that offer other possible 
strategies for providing retailers with more flexibility while ensuring 
SNAP recipients have access to a range of healthful options at SNAP 
authorized retail food stores. FNS encourages commenters to include 
comments discussing the practicality and rationality of any suggested 
changes, as well as the nutritional and industry impact of these 
changes.

I. Flexibility for Perishable and Shelf-Stable Meat, Poultry, and Fish 
Products

    Under the 2016 final rule, ``variety'' was generally defined by 
product kind or main ingredient in the meat, poultry, or fish staple 
food category. This meant that chicken, pork, and beef were each 
considered discrete varieties. This also meant that, under the 2016 
final rule, canned chicken and frozen chicken were not each considered 
discrete varieties. The Department is proposing a change with this rule 
that would allow any species of meat, poultry, or fish to be counted 
once as a discrete variety, if perishable, and once as a discrete 
variety, if shelf-stable.
    Per SNAP regulations at 7 CFR 278.1(b)(1)(ii)(B), ``perishable 
foods'' are items which are frozen, refrigerated, or fresh staple food 
items that would spoil or suffer significant deterioration in quality 
within three weeks if stored at room temperature. An example of a 
perishable food in the meat, poultry, or fish staple food category is a 
raw salmon filet. ``Shelf-stable foods'' are items which are dried, 
pickled, smoked, or otherwise preserved, and stored in cans, jars, or 
other packaging that do not require refrigeration and would not spoil 
or suffer significant deterioration in quality within three weeks if 
the packaging remains unopened. An example of a shelf-stable food in 
the meat, poultry, or fish staple food category is a tin of sardines 
that requires no refrigeration.
    To reach the required seven (7) varieties in the meat, poultry, or 
fish staple food category under this change, for example, a store could 
stock the following:

1. Canned ham (shelf-stable pork)
2. refrigerated bacon (perishable pork)
3. beef jerky (shelf-stable beef)
4. refrigerated deli-sliced roast beef (perishable beef)
5. frozen chicken breasts (perishable chicken)
6. canned chicken (shelf-stable chicken)
7. canned tuna fish (shelf-stable tuna fish)
    This is just an illustrative list and not meant to be exhaustive. 
This proposed change to the definition of ``variety'' would provide 
considerable additional flexibility in the meat, poultry, or fish 
staple food category, as this change would effectively double the 
number of available varieties in this category, where a staple food is 
available in both perishable and non-perishable forms.

II. Additional Flexibilities for Common Cow Milk-Based Dairy Products

A. Cheese
    Under the 2016 final rule, one specific traditional dairy product 
(cow milk-based cheese) was subdivided into two varieties (i.e., soft 
cheese and hard/firm cheese) in order to provide more flexibility for 
stores in meeting the required seven (7) varieties in the dairy staple 
food category. The Department is proposing a change with this rule that 
would further subdivide cow milk-based cheese into four discrete 
varieties in the dairy products staple food category. The proposed 
subdivision of cow milk-based cheese would include the following four 
varieties and would be mirrored for other animal milk-based cheeses 
(e.g., goat milk-based cheese):
    1. Fresh cow milk-based cheeses (e.g., cream cheese, cottage 
cheese, and ricotta cheese) are creamy, spreadable, and perishable 
dairy products.
    2. Soft and semi-soft cow milk-based cheeses (e.g., mozzarella 
cheese, Munster cheese, and brie cheese) are moist, slightly cured, and 
perishable dairy products.
    3. Hard, firm, semi-hard, or medium-hard cow milk-based cheeses 
(e.g., cheddar cheese, Swiss cheese, and Parmesan cheese) are less 
moist and more cured dairy products.
    4. Cow milk-based cheese products and cow milk-based cheese- or 
dairy-based sauces, spreads, or dips (e.g., canned spray cheese sauce, 
canned cheese dipping sauce, jarred Alfredo pasta sauce, and American 
cheese slices) are processed, often shelf-stable dairy products that 
have a dairy main ingredient (e.g., milk or whey).
    With this change, a store could stock four discrete varieties of 
cow milk-based cheese (fresh cheese, soft cheese, hard cheese, and 
cheese product). This change to the definition of ``variety'' would, 
therefore, provide an additional two cheese varieties for each type of 
animal milk-based cheese in the dairy products staple food category.
B. Milk
    Under the 2016 final rule, one specific traditional dairy product 
(cow milk) was subdivided into three varieties (perishable cow milk, 
liquid shelf-stable cow milk, and powdered cow milk) in order to 
provide more flexibility for stores in meeting the required seven (7) 
varieties in the dairy staple food category. The Department is 
proposing a change with this rule that would further subdivide 
traditional dairy milk (cow milk) into four discrete varieties in the 
dairy products staple food category. The proposed subdivision of cow 
milk

[[Page 13559]]

would include the following four varieties and would be mirrored for 
other animal milks (e.g., goat milk):
    1. Full-fat cow milks (e.g., whole milk, cream, and half-and-half) 
are liquid, perishable cow milk products with 3% or greater fat 
content.
    2. Fat-reduced cow milks (e.g., 2% milk, 1% milk, skim milk, and 
other low-fat and non-fat milks) are liquid, perishable cow milk 
products with less than 3% fat content.
    3. Liquid shelf-stable cow milks (e.g., long-life milk, evaporated 
milk, and condensed milk) are cow milk products that have been 
processed and sealed in cans or cartons to render them shelf-stable.
    4. Powdered cow milks (e.g., dried milk, whey powder, and casein 
powder) are cow milk products that have been processed and dehydrated 
to render them shelf-stable.
    With this change, a store could stock four discrete varieties of 
cow milk products (full-fat cow milk, fat-reduced cow milk, liquid 
shelf-stable cow milk, and powdered cow milk). This change to the 
definition of ``variety'' would, therefore, provide an additional 
variety in the dairy products staple food category for each type of 
animal milk in the dairy products staple food category. As noted 
earlier, the plant-based dairy alternatives proposed in the 2016 final 
rule--such as almond-based and soy-based milk substitutes--would remain 
unchanged in this proposed rule, and thus would also provide retailers 
with additional stocking options in this category.
C. Yogurt
    Under the 2016 final rule one specific traditional dairy product 
(cow milk-based yogurt) was subdivided into two varieties (cow milk-
based yogurt and perishable cow milk-based kefir) in order to provide 
more flexibility for stores in meeting the required seven (7) varieties 
in the dairy staple food category. The Department is proposing a change 
with this rule that would replace ``perishable cow milk-based kefir'' 
with cow milk-based yogurt drinks, to include other general yogurt-
based drinks such as lassi and probiotic cultured milk smoothies. In 
addition, the Department is proposing to further subdivide ``cow milk-
based yogurt'' into two distinct varieties and to mirror this 
subdivision in other animal milk-based yogurts (e.g., goat milk-based 
yogurt). Thus, these proposed changes to the definition of variety 
would provide an additional variety in the dairy products staple food 
category for each type of animal milk-based yogurt. The proposed 
subdivision of cow milk-based yogurt would include the following three 
varieties:
    1. Cow milk-based yogurt drinks (e.g., lassi, kefir, and probiotic 
cultured milk smoothie) are liquid cow milk-based yogurt beverages that 
have cultured milk or yogurt as a main ingredient.
    2. Full-fat cow milk-based yogurts (e.g., strawberry full-fat 
yogurt, vanilla full-fat yogurt, and plain full-fat yogurt) are 
fermented semi-solid food products made from cow milk with 3% or 
greater fat content.
    3. Fat-reduced cow milk-based yogurts (e.g., strawberry low-fat 
yogurt, vanilla non-fat yogurt, and plain non-fat yogurt) are fermented 
semi-solid food products made from cow milk with less than 3% fat 
content.
    To reach the required seven (7) varieties in the dairy products 
food category under this change, for example, a store could stock the 
following:

1. 2% milk (fat-reduced cow milk)
2. nacho cheese dip (cow milk-based cheese-based sauce)
3. parmesan cheese (cow milk-based hard cheese)
4. evaporated milk (liquid shelf-stable cow milk)
5. peach full-fat yogurt cup (cow milk-based full-fat yogurt)
6. ricotta cheese (cow milk-based fresh cheese)
7. whole milk (full-fat cow milk)

III. Additional Examples of Staple Food Varieties in the Vegetables or 
Fruits Staple Food Category

    Under the 2016 final rule, FNS generally considered each distinct 
vegetable or fruit plant (e.g., lettuce, collard greens, kale, etc.) to 
be a discrete staple food variety. As such, twenty (20) examples of 
fruits or vegetables, all considered to be acceptable varieties in the 
vegetables or fruits staple food category, were provided in the ``List 
of Examples'' section. This list was not intended to be comprehensive, 
as the number of distinct vegetable and fruit plants is considerable. 
Accordingly, the 2016 final rule provided numerous stocking options in 
meeting requirements in the vegetables or fruits staple food category, 
as evidenced by the 93% of currently authorized small format retailers 
who already meet requirements under the definition of variety provided 
in the 2016 final rule.
    This proposed rule would maintain the definition of variety as 
outlined in the 2016 final rule as it pertains to acceptable varieties 
in the fruits or vegetables staple food category, with no proposed 
changes at this time. In attempting to identify additional, new staple 
food varieties in the category, FNS was unable to identify any 
additional edible vegetable or fruit which was not already considered 
to be a discrete staple food variety under the 2016 final rule. 
Further, all attempts to subdivide existing vegetable or fruit staple 
food varieties were problematic in that they clearly favored those 
vegetables or fruits which are more distinctly divisible.
    That said, FNS recognizes that additional guidance on the numerous 
stocking options available in this category may be necessary. Thus, in 
addition to the further explanation provided above, included below are 
an additional five (5) varieties that are also considered acceptable 
varieties in the vegetables or fruits staple food category. These five 
(5) examples of acceptable varieties did not appear in the 2016 final 
rule ``List of Examples'' section:

1. Lemons (e.g., 100% lemon juice and fresh lemons)
2. Beets (e.g., canned beets and fresh beets)
3. Spinach (e.g., fresh spinach and frozen spinach)
4. Cauliflower (e.g., fresh cauliflower and packaged cauliflower rice)
5. Olives (e.g., canned black olives and jarred pimiento stuffed 
olives)

IV. Additional Flexibilities for Common Wheat-Based Bread and Cereal 
Products

A. Bread
    Under the 2016 final rule, the staple food variety ``wheat-based 
bread'' was subdivided into five discrete staple food varieties in the 
bread or cereals staple food category (wheat-based bread, wheat-based 
bagels, wheat-based buns/rolls, wheat-based English muffins, and wheat-
based pitas) in order to provide more flexibility for stores in meeting 
the required seven (7) varieties in the bread or cereals staple food 
category. The Department is proposing a change with this rule that 
would further subdivide the ``wheat-based bread'' staple food variety 
by adding the following three discrete staple food varieties in 
addition to the five varieties listed above: Wheat-based Indian 
flatbread, wheat-based crescent bread, and wheat-based matzah. This 
subdivision would be mirrored for other grain-based breads such as 
oats-based breads and rice-based breads. Thus, the proposed change to 
the definition of ``variety'' would provide three additional staple 
food varieties in the bread or cereals products staple food category 
for each type of grain-based bread. Under the proposed changes, the 
following eight would be considered discrete staple food varieties in 
the bread or cereals staple food category:


[[Page 13560]]


1. Wheat-based breads (e.g., loaves of sliced bread and whole 
baguettes)
2. Wheat-based pitas (e.g., plain pitas)
3. Wheat-based bagels (e.g., cinnamon raisin bagels and blueberry 
bagels)
4. Wheat-based English muffins (e.g., plain English muffins and maple-
infused English muffins)
5. Wheat-based buns/rolls (e.g., hamburger buns and frozen dinner 
rolls)
6. Wheat-based Indian flatbreads (e.g., roti and Naan)
7. Wheat-based matzah (e.g., egg matzah and wheat matzah)
8. Wheat-based crescent breads (e.g., plain croissants and 
refrigerated, ready-to-bake crescent breads)
B. Flour
    Under the 2016 final rule, wheat flour was considered to be a 
``general wheat-based product'' staple food variety, such that a bag of 
wheat flour and a wheat-based frozen pizza were both considered to be a 
``general wheat-based product'' staple food variety in the bread or 
cereals staple food category. The Department is proposing a change with 
this rule that would add ``wheat-based flour'' as a discrete staple 
food variety in the bread or cereals staple food category. This change 
would be mirrored for other grain-based flours such as rice-based flour 
and cornmeal. Thus, the proposed change to the definition of 
``variety'' would, therefore, provide an additional staple food variety 
in the bread or cereals products staple food category for each type of 
grain-based flour. Under the proposed changes, the following two would 
be considered discrete staple food varieties in the bread or cereals 
staple food category:

1. General wheat-based product (e.g., a wheat-based frozen pizza and a 
wheat-based pre-packaged sandwich)
2. Wheat-based flour (e.g., a bag of wheat flour)

V. Flexibility for 100% Whole Grain Products

    Under the 2016 final rule, 100% whole grain products, such as 100% 
whole grain rye-based bread, were not considered to be discrete 
varieties in the bread or cereals staple food category. This meant that 
if a store stocked both wheat-based bagels and 100% whole grain wheat-
based bagels, the store would have only one staple food variety: Wheat-
based bagels. The Department is proposing a change with this rule that 
would allow any bread or cereal staple food to be counted once if it is 
a 100% whole grain product, and once if less than a 100% whole grain 
product. The proposed change to the definition of ``variety'' would 
provide considerable additional flexibility in the bread or cereals 
staple food category, as this change would effectively double the 
number of available varieties in this category, where a staple food is 
available in both 100% whole grain and less than 100% whole grain 
forms.
    To reach the required seven (7) varieties in the bread or cereals 
staple food category under the proposed changes, for example, a store 
could stock the following:

1. Spaghetti (wheat-based pasta)
2. frozen pre-made burritos (general wheat-based product)
3. wheat flour (wheat-based flour)
4. whole wheat bagels (100% whole grain wheat-based bagels)
5. roti (wheat-based Indian flatbreads)
6. plain croissants (wheat-based crescent breads)
7. cinnamon raisin bagels (wheat-based bagels)

Comments Requested on the Definition of ``Variety''

    FNS requests comments that address logical and implementable ways 
to modify the definition of ``variety'' so that it provides more 
flexibility to stores, while also ensuring that SNAP recipients are 
assured access to a range of healthful food options.
    The word ``variety'' denotes diversity and difference. FNS depends 
primarily upon a product's main ingredient or product kind to define 
``variety.'' Several other defining elements of food products (brands, 
nutrient values, flavorings, packaging types or styles, or package 
sizes) are generally excluded from consideration, as they have the 
potential to render the term ``variety'' meaningless in effect. For 
example, if FNS were to consider different brands and packaging types 
as discrete staple food varieties, a store could meet the vegetables or 
fruits staple food category requirement with seven (7) kinds of 
tomatoes (e.g., Brand A tomato sauce, Brand B tomato sauce, 100% tomato 
juice, raw Roma tomato, raw beefsteak tomato, canned tomato paste, and 
sundried tomatoes). Such a result would seem to run counter to the 
purpose of Criterion A, namely ensuring that SNAP authorized retail 
food stores offer for sale to SNAP recipients a range of different food 
products in all four staple food categories.
    That said, some of the changes to the definition of ``variety'' 
already discussed in this proposed rule consider nutrient values and 
packaging styles in a limited fashion, especially in the meat, poultry, 
or fish and dairy products staple food categories. In providing these 
additional flexibilities, FNS acknowledges these were the two (2) main 
categories in which small format retailers were likely to experience 
stocking challenges under the 2016 final rule. Nevertheless, FNS 
welcomes comments that address feasible ways to modify the definition 
of ``variety'' in each staple food category to provide more flexibility 
to stores.

Procedural Matters

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs 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, reducing cost, harmonizing rules, and promoting 
flexibility. This proposed rule has been determined to be significant 
and was reviewed by the Office of Management and Budget. The Regulatory 
Impact Analysis (RIA) for this rulemaking was published as part of the 
docket in Supporting Documents on www.regulations.gov. A summary of the 
RIA follows.

Regulatory Impact Analysis

Need for Action
    The proposed rule is in response to Sec. 765 of the Consolidated 
Appropriations Act of 2017 and Sec. 728 of the Consolidated 
Appropriations Act of 2018, which prohibit USDA from implementing two 
retailer stocking provisions (``Breadth of Stock'' and ``Definition of 
`Variety''') of the final rule, ``Enhancing Retailer Standards in the 
Supplemental Nutrition Assistance Program (SNAP)'' (the 2016 final 
rule), until such a time as regulatory modifications to the definition 
of ``variety'' are made that would increase the number of food items 
considered to be staple food varieties for purposes of SNAP retailer 
eligibility. The proposed rulemaking would modify the definition of 
``variety'' in order to align SNAP regulations with the requirements 
expressed in the Consolidated Appropriations Acts of 2017 and 2018, 
thus allowing FNS to move forward with implementation of the ``Breadth 
of Stock'' requirements of the final rule, which were mandated by the 
Agricultural Act of 2014.

[[Page 13561]]

Benefits
    This rulemaking would provide regulatory flexibility to 187,000 
smaller authorized retailers (e.g. convenience stores, small grocery 
stores, combination stores, etc.) in meeting the enhanced stocking 
requirements of the 2016 final rule. As discussed below, the proposed 
changes would require the average small store to add six (6) fewer 
items to their stock in order to meet the new stocking requirements of 
the 2016 final rule, providing a savings of $16.1 million to retailers 
in fiscal year (FY) 2018 and approximately $22.5 million over five 
years, FY 2018 through FY 2022, relative to the costs of the 2016 final 
rule.
Costs
    The proposed rule is not expected to impact costs to the Federal 
government. While FNS anticipates that the need to conduct store visits 
to verify that stores are compliant with the new requirements, those 
costs were fully captured in the 2016 final rule analysis.

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 would 
not present a significant impact to a substantial number of small 
businesses. It provides greater regulatory flexibility to SNAP 
retailers, particularly small entities, in meeting the enhanced 
stocking requirements of the 2016 final rule, ``Enhancing Retailer 
Standards in the Supplemental Nutrition Assistance Program (SNAP).'' 
FNS estimates average costs to those small businesses for meeting 
enhanced stocking requirements, would be $86 less per store in the 
first year and $120 less over five years, for a decreased average cost 
of $160 per store in the first year and $500 over five years. 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.

Unfunded Mandate Reform Act

    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 
Agency 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 Agency 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

    Executive Order 12372 requires Federal agencies to engage in 
intergovernmental consultation with State and local officials when 
involved in Federal financial assistance programs and direct Federal 
development. SNAP is listed in the Catalog of Federal Domestic 
Assistance under No. 10.551. For the reasons set forth in this proposed 
rule, Department of Agriculture Programs and Activities Excluded from 
Executive Order 12372 (48 FR 29115, June 24, 1983), this Program is 
excluded from the scope of Executive Order 12372.

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 agencies' 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 proposed rulemaking does not have 
federalism implications. Therefore, under Section 6(b) of the Executive 
Order, a federalism summary impact statement is not required.

Executive Order 13771

    This proposed rule is expected to be an Executive Order 13771 
deregulatory action that seeks to ease the staple food stocking 
requirements for SNAP authorized retailers. In particular, the proposed 
changes would aid small format retailers in meeting the enhanced 
stocking requirements of the 2016 final rule, ``Enhancing Retailer 
Standards in the Supplemental Nutrition Assistance Program (SNAP),'' by 
expanding the definition of ``variety'' in the four staple food 
categories. These changes would provide retailers with additional 
options of acceptable staple food varieties in each of the four staple 
food categories, which will aid them in meeting the enhanced SNAP 
retailer eligibility requirements of Criterion A and save them an 
average of $86 in meeting stocking requirements.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is intended to have preemptive effects 
with respect to any State or local laws, regulations, or policies that 
conflict with its provisions or that would otherwise impede its full 
implementation. This rule is not intended to have retroactive effects. 
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

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' 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.
    FNS has assessed the impact of this rule on Indian tribes and 
determined that this rule does not, to our knowledge, have tribal 
implications that require tribal consultation under E.O. 13175. If a 
Tribe requests consultation, the FNS will work with the Office of 
Tribal Relations to ensure meaningful consultation is provided where 
changes, additions and modifications identified herein are not 
expressly mandated by Congress.
    It should be noted that, currently, FNS provides regularly 
scheduled quarterly information sessions as a venue for collaborative 
conversations with Tribal officials or their designees. Reports from 
these information sessions are part of the USDA annual reporting

[[Page 13562]]

on Tribal consultation and collaboration.

Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with Departmental 
Regulations 4300-4, ``Civil Rights Impact Analysis'' and 1512-1, 
``Regulatory Decision Making Requirements'' to identify and address any 
major civil rights impacts the proposed rule might have on minorities, 
women, persons with disabilities, or other protected classes. FNS has 
determined that this proposed rule will not have an adverse impact on 
any retail food store owners or SNAP recipients belonging to protected 
classes. The regulation only concerns those retail food stores 
participating in SNAP that would not meet the increased staple food 
stocking requirements necessary for SNAP authorization that were 
mandated by the 2014 Farm Bill and codified in the 2016 final rule, 
``Enhancing Retailer Standards in the Supplemental Nutrition Assistance 
Program (SNAP).'' The proposed regulatory changes would aid those 
retail stores, which are primarily small format retailers, in meeting 
the enhanced stocking requirements of the 2016 final rule. This 
proposed rule would 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 would 
have no differential impact on protected classes of individuals, 
minority owned or operated business entities, or woman owned or 
operated business entities. Relatedly, 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, and 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.

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 information collection burden 
associated with this proposed rule.

E-Government Act Compliance

    FNS is committed to complying with the E-Government Act of 2002, 
Public Law 107-347, 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. 
FNS intends to provide Program stakeholders with guidance and technical 
assistance materials related to this proposed rule using online media.

List of Subjects

7 CFR Part 271

    Food stamps, Grant programs--Social programs, Reporting and 
recordkeeping requirements.

7 CFR Part 278

    Banks, banking, Food stamps, Grant programs--social programs, 
Penalties, Reporting and recordkeeping requirements, Surety bonds.

    Accordingly, 7 CFR parts 271 and 278 are proposed to be amended as 
follows:

0
1. The authority citation for parts 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, add a definition for Variety in alphabetical order 
to read as follows:


Sec.  271.2   Definitions.

* * * * *
    Variety, in evaluating a firm's stock of staple foods for purposes 
of determining eligibility to participate in SNAP, means foods that 
differ from each other by distinct main ingredient or product kind as 
determined by the Secretary. See 7 CFR 278.1(b)(1)(ii)(C).
* * * * *

PART 278--PARTICIPATION OF RETAIL FOOD STORES, WHOLESALE FOOD 
CONCERNS AND INSURED FINANCIAL INSTITUTIONS

0
3. Revise Sec.  278.1(b)(1)(ii)(C) to read as follows:


Sec.  278.1  Approval of retail food stores and wholesale food 
concerns.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (C)(1) Offer a variety of staple foods within each staple food 
category that differ from each other by distinct main ingredient or 
product kind. For example: Apples, cabbage, tomatoes, bananas, 
pumpkins, broccoli, and grapes in the vegetables or fruits category; or 
fat-reduced cow milk, almond-based milk substitute, soy-based yogurt 
substitute, soft goat milk-based cheese, cow milk-based butter, cow 
milk-based sour cream, and cow milk-based full-fat yogurt in the dairy 
products category; or rice, wheat-based bagels, 100% whole grain wheat-
based bagels, wheat-based pitas, rye-based bread, rice-based pasta, 
oatmeal, and wheat-based matzah in the bread or cereals category; or 
shelf-stable chicken, beans, nuts/seeds, perishable beef, perishable 
pork, chicken eggs, and perishable chicken in the meat, poultry, or 
fish category.
    (2) Variety of foods is not to be interpreted as different brands, 
nutrient values (e.g., low sodium and lite), flavorings (e.g., vanilla 
and chocolate), packaging types or styles (e.g. boxed and bagged, or 
fresh and frozen), meat cuts, product shapes, textures, or package 
sizes of the same or similar foods except where explicitly specified in 
Agency guidance. Similar food items such as, but not limited to, 
tomatoes and tomato juice, brown rice and white rice, 1% milk and skim 
milk, perishable ground beef and perishable beefsteak, 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 category except where explicitly specified in Agency 
guidance. Accessory foods shall not be counted as staple foods for 
purposes of determining eligibility to participate in SNAP as a retail 
food store.
* * * * *

    Dated: March 28, 2019.
Brandon Lipps,
Acting Deputy Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2019-06597 Filed 4-4-19; 8:45 am]
 BILLING CODE 3410-30-P