WASHINGTON – On December 15, 2016, the U.S. Department of Agriculture’s (USDA) Food and Nutrition Service (FNS) published its final rule, changing the eligibility requirements for retailers participating in the Supplemental Nutrition Assistance Program (SNAP). The final rule makes some changes that were necessary to ensure people could get the food they need, but still has some provisions that may be onerous for convenience store owners to implement and could risk hurting SNAP beneficiaries. Notwithstanding the concerns that remain, NACS is pleased to report that USDA listened to many of the concerns NACS highlighted in the comments it filed with the agency.
SNAP provides more than 44 million Americans, including millions of children, with the resources to buy food and sets the requirements for the 258,632 stores that accept SNAP benefits for food purchases. Small format stores, including the 106,531 convenience stores that currently participate in SNAP, provide critical access to food for many SNAP beneficiaries who may live long distances from a large food retailer or may need to shop for food during non-traditional hours when other food retailers are closed.
The final rule codifies the 2014 Farm Bill’s statutory depth-of-stock provisions, which specify the minimum number of food items a retailer must offer to participate in the program. NACS supported the 2014 Farm Bill, which requires retailers to stock seven varieties of foods in the four “staple food” categories: dairy; meat, poultry, or fish; bread or cereal; and vegetables or fruits. The final rule will also require retailers to stock three of every SNAP item (84 items total) on shelf—although USDA would permit a retailer to demonstrate compliance with the stocking unit requirements via receipts and other invoices that prove he purchased the necessary items up to 21 days before the date of an agency inspection. USDA has also updated the definition of “variety” in a manner that appears to create significant administrative complexity.
Finally, the final rule also altered a proposed provision tying retailer eligibility to sales of food to customers who don’t use SNAP. Under the final rule, stores would be disqualified from the program if 50% or more of the store’s gross retail sales (including fuels sales) come from items that are cooked or heated on site before or after purchase—the so-called “hot foods” threshold. This is a significant improvement from the proposal, which would have disqualified retailers if 15% or more of their stores’ total food sales came from sales of items that were “cooked or heated on site” before or after purchase.
The rule will go into effect on January 17, 2017. After that time, retailers who are currently licensed to accept SNAP will have one year—until January 17, 2018—to come into compliance with the updated stocking requirements. Retailers who are not currently authorized SNAP retailers but who choose to apply for a license will have to be in compliance with the updated stocking regulations beginning May 17, 2017. All retailers will be required to be in compliance with the hot foods threshold on May 17, 2017.
NACS members should stay tuned to the NACS Daily for information on a webinar to review the requirements in the coming months.
NACS members may access the retailer compliance guide prepared by NACS counsel here.
If NACS members have questions about the final rule, they are encouraged to contact Anna Ready at aready@nacsonline.com.