Supplemental Nutrition Assistance Program (SNAP) Summary And Compliance Guide For Truckstops and Travel Plazas
On December 15, 2016, the U.S. Department of Agriculture’s (“USDA”) Food and Nutrition Service (“FNS” or “Agency”) published a altering the eligibility requirements for retailers participating in the Supplemental Nutrition Assistance Program (“SNAP” or “the program”). The final rule contained several substantial improvements over the which, if it had been enacted as originally proposed, would have virtually eliminated the truckstop industry from SNAP.
Many convenience stores that are owned and operated by truckstop and travel plaza operators redeem SNAP benefits. These locations play an important role in the SNAP program, especially in areas where there are few other locations for financially challenged Americans to purchase food.
The final rule will make several changes to the regulations governing SNAP retailer eligibility, namely: to participate in SNAP, food retailers will be required to stock at least seven different “varieties” of food items in each of the four “staple food” categories and at least one perishable food item in three of the four staple food categories. Retailers will also be required to keep 3 units of every required item on shelf at some time in any given 21 day period.
Finally, if 50 percent or more of a store’s total gross sales are sales of items that are cooked or heated on site by the retailer before or after purchase, the retailer will be ineligible to participate in SNAP.
Part I: Quick Summary of the Final Rule
Part II: Table Summarizing the Final Rule
Part III: Guide to Assist Retailers with Compliance
Part: IV: Conclusion
For questions, please reach out to David Fialkov, VP, Government Affairs, Legislative and Regulatory Counsel at dfialkov@natso.com or (703) 739-8501.
– I. Quick Summary of the Final Rule –
The final rule would make several significant changes to the regulations governing SNAP retailer eligibility, namely:
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Codify the “depth-of-stock” provisions in the Agricultural Act of 2014 (),the requirements that address the amount and variety of food that a retailer must have in stock in order to participate in SNAP as a retail food store. Pursuant to the 2014 Farm Bill requirements, retailers will be required to stock at least seven different “varieties” of food items in each of the four “staple food” categories and at least one perishable food item in three of the staple food categories. (See Section III.A and Appendix 3.A for more information);
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Require retailers to stock three different units per variety of food item in order to meet requirements that they offer foods meeting the depth of stock obligations on a “continuous basis.” If short an item during a site inspection, however, retailers will be able to prove they had the requisite items in stock by submitting supporting documentation (e.g., invoices) dated within 21 days of the store inspection (See Section III.E and Appendix 3.B for more information);
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Redefine the term “accessory foods” to limit the items that may count as staple foods (e.g., crackers no longer considered a staple food). (See Section III.D and Appendix 3.A for more information);
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Redefine the term “variety” as it applies to what retailers can stock to participate in SNAP (See Section III.B-C and Appendix 3.B for more information)
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Amend the definition of retail food store so that if 50 percent or more of a store’s total gross sales come from items that are cooked or heated on site by the retailer before or after purchase, then FNS will consider the establishment to be a restaurant rather than a retail food store. Restaurants are ineligible to participate in SNAP except under select circumstances. (This is the so-called “hot food threshold” provision) (See Section III.F and Appendix 3.C);
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Expand the factors FNS may consider when evaluating retailer eligibility to include food access considerations. (See Section III.G and Appendix 3.D for more information);
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Permit the public disclosure of SNAP retailer sanction information. (See Section III.G and Appendix 3. E for more information); and
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Create a definition for the term “firm” (See Appendix 3.F for more information).
– II. Table Summarizing Final Rule –
Text in italics denotes the Final Rule’s insertions, deletions, and other edits to the regulations.
Issue |
Current Regulations |
Final (New) Regulations |
Staple Foods 7 C.F.R. |
“Staple Food” means:
The following items are NOT “staple foods”:
|
“Staple Food” means:
The following items are NOT “staple foods”:
|
Retail Food Store 7 C.F.R. § 271.2 |
To be considered a “retail food store,” a store must:
The following entities are NOT eligible for SNAP participation as retail food stores: • Entities that have more than 50 percent of their total gross retail sales in hot and/or cold prepared, ready-to-eat foods that are intended for immediate consumption either for carry-out or on- premises consumption” |
To be considered a “retail food store,” a store must:
The following entities are NOT eligible for SNAP participation as retail food stores:
|
Approval of Retail Food Store 7 C.F.R. §278.1 (b)(1)(iv) “Ineligible Firms” |
Ineligible firms include, but are not limited to:
|
Ineligible firms include, but are not limited to:
|
Depth-of- Stock 7 C.F.R. § 278.1 (b)(1)(ii)(B), (C) |
Retailer required to offer for sale and normally display in a public area, qualifying staple foods on a “continuous basis,” evidenced by: 3 different varieties in each of the 4 staple food categories;2 At least 1 perishable food item in 2 of the staple food categories; and
|
Retailer required to offer for sale and normally display in a public area, qualifying staple foods on a “continuous basis,” evidenced by:
|
Depth-of- Stock 7 C.F.R. §278.1 (b)(1)(ii)(C) “Variety” |
Retailer must offer a variety of staple foods, meaning:
|
Retailer must offer a variety of staple foods, meaning:
Accessory foods shall not be counted as staple foods for purposes of determining eligibility to participate in SNAP as a retail food store. (Appears to remove multiple ingredient description from definition of variety but retains it in definition of staple food (7 CFR 271.2, see above))
|
Access Considerations 7 C.F.R. §278.1 (b)(6)
|
No relevant provision. |
When considering whether to allow a retailer applicant to participate in SNAP: FNS will consider whether the applicant is located in an area with significantly limited access to food. To do so, FNS will consider factors such as distance from the nearest SNAP authorized retailer and transportation options, the extent of the applicant firm’s stocking deficiencies, and whether the store furthers the purpose of the Program. |
Public disclosure of firms sanctioned for SNAP violations 7 C.F.R. §278.1(q)(5) |
No relevant provision. |
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 name(s) and information about the sanction itself. FNS may continue to disclose this information for as long as the duration of the period of disqualification or until the civil penalty has been paid in full, whichever is longer. |
Firm 7 C.F.R. §278.1 |
No relevant provision.
|
Firm means: Aretailfoodstorethatisauthorizedtoaccept or redeem SNAP benefits; Aretailfoodstorethatisnotauthorizedto accept or redeem SNAP benefits; or An entity that does not meet the definition of a retail food store. For purposes of the regulations and SNAP policies, the terms firm, entity, retailer, and store are used interchangeably. |
– III. How to Comply with the New SNAP Requirements? A Guide for Retailers –
A. What Qualifies as a Staple Food?
To participate in SNAP,3 retailers must stock on a “continuous basis,” 7 different varieties in each of the 4 staple food categories: (1) meat, poultry, or fish; (2) bread or cereals; (3) vegetables or fruits; and (4) dairy. Staple foods are those food items intended for home preparation and consumption, and do not include “accessory foods” such as coffee, tea, cocoa, soda, non-carbonated drinks, etc. (discussed further below), hot foods, and/or other foods that are “ready to go” or “made to take out” (e.g., prepared salad or sub).4 Of those staple food items (7 varieties in the 4 categories), retailers must stock at least 1 perishable food item in 3 of the staple food categories. “Perishable” foods are items which are frozen, fresh, unrefrigerated or refrigerated staple food items that will spoil, or suffer significant deterioration in quality within 2-3 weeks.
B. Understanding Variety
Retailers must offer 7 different varieties in each of the 4 staple food categories. To count towards variety, food items must be different types of food—different brands, nutrient values, flavorings, packaging types or package sizes of the same or similar foods do not count as different varieties of staple foods. For example, tomatoes and tomato juice would only count as one variety (tomato); brown rice and white rice would only count as one variety (rice); ground beef and beefsteak would only count as one variety (beef); and low fat cow’s milk and whole cow’s milk would only count as one variety (cow’s milk).
Multiple ingredient items may count towards a retailer’s staple food (and variety) requirements. To count as one variety in a particular staple food category, however, the main/primary/predominant ingredient must be from that particular staple food category. For example, if the main ingredient of a can of chicken noodle soup is chicken, it could count as one item in the meat, poultry, or fish staple food category.5 If the main ingredient were the noodles, it could count as one item in the breads or cereals category.
Below are some examples of acceptable varieties (perishable and non-perishable) in each of the four staple food categories. Items described in parentheticals are merely examples of food items within each food category that are most likely to be offered in truckstops and travel plazas. Perishable foods are indicated via italic font.
i. Meat, Poultry, or Fish
- Plant-based Protein Types
- Nuts/Seeds (sunflower seeds or peanut butter).
- Beans (dried black beans or dried red kidney beans).
- Peas (dried lentils or canned split pea soup with a first listed ingredient of split peas).
- Meat, Poultry, and Fish
- Turkey fresh deli sliced turkey or fresh ground turkey or frozen turkey products). o Salmon (packaged smoked salmon or canned salmon).
- Chicken fresh chicken cutlets or frozen chicken nuggets or canned chicken).
- Beef (fresh ground beef or frozen beef products or beef jerky.
- Tuna (canned albacore tuna fish).
- Crab (canned crab meat).
- Soy-based meat analogue (tofu or soy-based vegan chicken alternative). o Chicken eggs (fresh eggs or liquid egg whites).
- Pork (pork loin or fresh sliced ham).
- Clams (frozen clams or canned clam meat).
ii. Vegetables or Fruits
- Potatoes (potatoes or frozen tater tots).
- Oranges (100% orange juice or fresh oranges).
- Tomatoes (canned tomato soup or sun dried tomatoes or fresh tomatoes).
- Apples (dried apples or pre-cut apple go-packs).
- Bananas (fresh bananas or frozen bananas).
- Onions (canned onions).
- Grapes (fresh grapes or 100% grape juice).
- Lettuce (pre-cut and bagged romaine lettuce).
- Pineapples (canned pineapple rings).
- Cucumbers (jarred pickles).
- Strawberries (frozen strawberries).
- Peaches (canned peaches).
- Carrots (pre-cut carrot stick go-packs).
- Broccoli (frozen broccoli florets).
- Celery (pre-cut celery stick go-packs).
iii. Dairy
- Yogurt
- Soy yogurt
- Almond yogurt
- Cow milk (skim, whole, 1% or 2%).
- Powdered cow milk.
- Cow milk-based infant formula.
- Soy-based infant formula.
- Butter (frozen sweet cream butter or fresh salted butter).
- Butter substitute (margarine or non-dairy spread).
- Sour cream (fresh, lite sour cream or fresh, organic sour cream).
- Almond-based milk (refrigerated or shelf-stable.)
- Soy-based milk (refrigerated or shelf-stable).
- Firm / hard cheese (fresh sliced cheddar cheese or packaged grated parmesan cheese).
- Soft cheese (e.g., pre-wrapped American cheese product slices).
- Soy-based cheese alternative.
iv. Bread or Cereals
- Wheat (e.g., whole wheat flour).
- Corn.
- Rice.
- Oats (e.g., oatmeal).
- Rye.
- Bread.
- Pasta.
- Baking mixes (e.g., pancake mix or cornbread mix).
- Tortillas (e.g., corn tortillas or flour tortillas).
- Bagels.
- Pitas.
- Cold breakfast cereal.
- English muffins.
- Buns/rolls.
- Infant cereal.
D. Understanding Accessory Foods
By definition, accessory foods are not staple foods. Therefore, accessory foods do not count towards a retailer’s stocking requirements. FNS considers the items listed below to be accessory foods. This list is just a set of examples and is not exhaustive. As a general matter, any food product with a main ingredient that is an accessory food will be considered an accessory food item. For example, a cheese and cracker to-go pack contains cheese (a staple food) and crackers (an accessory food). If the main ingredient of the to-go pack is crackers (i.e., there are more crackers than cheese), the item would count as an accessory food, not a staple food. .
Below is a non-exhaustive list of items that FNS considers “accessory foods” and thus may not count toward a retailer’s stocking requirements (but generally may be purchased with SNAP benefits):
- Snack and Dessert Food Items:
- Potato, corn, wheat, pita, and vegetable chips, crisps, sticks, and straws; onion ring snacks; corn nuts; snack mixes; crackers; pork rinds; pretzels; pre-popped or un-popped popcorn; and cheese puffs or curls.
- Doughnuts, cupcakes, cookies, snack cakes, muffins, pastries, sweet rolls, pies, cakes, pudding, churros, scones, gelatin desserts, and any packages mixes intended to create any of the aforementioned products.
- Mints, chocolate, marshmallow, gum, toffee, brittle, fudge, candy bars, and candy of all kinds.
- Ice cream, ice milk, frozen yogurt, custard, whipped cream, Italian ices, frozen carbonated beverages, snow cones and ice pops.
- Food Items That Complement or Supplement Meals:
- Powdered, dried, or extracted spices or seasonings.
- Baking soda and baking powder.
- Sugar, honey, maple syrup, high fructose corn syrup, and any other natural or artificial sweeteners.
- Soda pop, sports or energy drinks, iced team fruit punch, water, and all other carbonated and uncarbonated beverages (with the exception of milk and 100% fruit or vegetable juice).
- Vegetable oil, olice oil, and any other solid or liquid oils or fats (except butter).
- Condiments.
E. Stocking on a “Continuous Basis”
As mentioned above, to participate in SNAP a retailer must stock the requisite number of “qualifying staple foods on a continuous basis,” meaning: the SNAP retailer must, on any given day of operation, offer for sale and normally display in a public area, “a minimum of three stocking units for each qualifying staple variety.”6 This means a retailer must always have in stock three different units per variety of food item—a total of 84 items (7 varieties x 4 staple food categories x 3 stocking units = 84).
Should a retailer sell an item or experience stocking shortfalls that might coincide with a formal inspection, however, FNS added a provision to the final rule that will allow retailers to prove they had the requisite items in stock by submitting supporting documentation dated within 21 days of the store inspection.7 Acceptable supporting documentation would include invoices and receipts.
F. Ineligible Firms – The “Hot Foods” Threshold
Even if a store were to meet all of the stocking requirements described above, if more than 50 percent of a store’s total gross retail sales come from foods that are “cooked or heated on site by the retailer before or after purchase,” the store would be ineligible to participate in SNAP.8 Gross retail sales include sales of fuels, tobacco, and other items that are not eligible for purchase with SNAP benefits.
FNS specifically acknowledged members’ position in this regard, given that most truckstops’ convenience stores are located in the same building as a restaurant. Specifically, FNS stated that “it was never the Agency’s intent . . . to consider multiple businesses operating within one truck stop . . . as a single firm even if they shared some commonalities, such as management and personnel.”
When calculating total gross sales, FNS will consider “co-located” firms, i.e., firms that “include separate businesses that operate under one roof and share all three of the following commonalities: ownership, sale of similar foods, and shared inventory” to be a single firm for purposes of determining eligibility.9 To avoid running afoul of this provision, members operating a c-store with a separate restaurant chain under the same roof should take care to ensure that they maintain separate records for those two separate businesses and ensure there is no co-mingling of inventory.10
G. Other Provisions
Access – If a retailer, who cannot meet the stocking requirements described above, is located in an area with significantly limited access to food, it may still be possible for the retailer to participate in SNAP provided the store meets certain “access” criteria. Specifically, FNS is allowed to consider “access” factors such as (1) distance from the nearest SNAP authorized retailer, (2) transportation options, (3) the extent of the store’s stocking deficiencies, and (4) whether the store furthers the purpose of the program during the SNAP authorization process. At this time, however, it is unclear how this access exception will work in practice and it is likely that FNS will try to utilize this access exception sparingly.
Public Sanctions – FNS will be allowed to publically disclose certain information about retailers that have been disqualified or otherwise sanctioned for SNAP violations.11 FNS would only be allowed to disclose the name and address of the store, the owner name(s), and information about the sanction in question—and FNS would only be permitted to disclose that information after the time for administrative and judicial appeals has expired. Moreover, FNS will only be allowed to disclose sanction information for “as long as the duration of the period of disqualification or until the civil penalty has been paid in full, whichever is longer.”
– IV. Conclusions –
is pleased that FNS, in issuing its final rule, heeded many of the comments raised by the association and it members during the rulemaking process. Nevertheless, concerns with the final rule remain and welcomes comments from its members that provide insight into the potential impact of this final rule on SNAP retailer participation. Additional materials can be found in the appendices to this compliance guide.
Footnotes:
1 In addition, a business may qualify as a retail food store if more than 50 percent of its total gross retail sales are in staple foods. This provision has been omitted from the above table as it tends to apply to grocery stores.
2 Staple Food Categories are: (1) meat, poultry, or fish; (2) bread or cereals; (3) vegetables or fruits; and (4) dairy.
3 To be eligible to redeem SNAP benefits, a food retailer must sell food for home preparation and consumption and meet one of the following two criteria: (1) offer for sale, “on a continuous basis, a variety of foods in each of the 4 categories of staple foods . . . including perishable foods in at least 3 of the categories,” or (2) have “over 50 percent of the total sales of the establishment or route in staple foods . . . .” See 7 U.S.C. § 2012(p)(1), 7 C.F.R. §271.2 (definition of “retail food store”). Because staple foods are unlikely to constitute more than half of a convenience store’s total sales, the industry has relied primarily on the first prong. The grocery industry relies on the second prong.
4 See 7 U.S.C.§ 2012(r)(1); 7 C.F.R. § 271.2. Commercially processed foods and prepared mixtures with multiple ingredients shall only be counted in one staple food category. For example, foods such as cold pizza, macaroni and cheese, multi- ingredient soup, or frozen dinners, shall only be counted as one staple food item and will normally be included in the staple food category of the main ingredient as determined by FNS. 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.
5 When the main ingredient of a multiple ingredient item is water, FNS will count the second most common ingredient when making a determination of which staple food category it qualifies under.
6 7 C.F.R. §278.1(b)(1)(ii)(A)(emphasis added).
7 The final rule states: Documentation to determine if a firm stocks a sufficient amount of required staple foods to offer them for sale on a continuous basis may be required in cases where it is not clear that the firm has made reasonable stocking efforts to meet the stocking requirement. Such documentation can be achieved through verifying information, when requested by FNS, such as invoices and receipts in order to prove that the firm had ordered and/or received a sufficient amount of required staple foods up to 21 calendar days prior to the date of the store visit. Failure to provide verifying information related to stock when requested may result in denial or withdrawal of authorization. Failure to cooperate with store visits shall result in the denial or withdrawal of authorization. Final Rule, 81 Fed. Reg. at 90699.
8 FNS officials have stated that total gross sales will be assessed based on annual totals.
9 7 C.F.R. §271.1 (definition of “retail food store” as revised by final rule).
10 FNS would consider the inventory of two businesses to be co-mingled or “shared” if it were stored in the same backroom or freezer. Call with Andrea Gold, Director, Retailer Policy and Management Division, Supplemental Nutrition Assistance Program, Food and Nutrition Service (Jan. 5, 2017).
11 Public disclosure may include posting a list of sanctioned retailers on a public website.
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