7 U.S.C. § 2018 | Approval of retail food stores and wholesale food concerns

(a)

Authorization to accept and redeem benefits

(1)

Applications.—

(A)

In general .—

Regulations issued pursuant to this chapter shall provide for the submission of applications for approval by retail food stores and wholesale food concerns which desire to be authorized to accept and redeem benefits under the supplemental nutrition assistance program and for the approval of those applicants whose participation will effectuate the purposes of the supplemental nutrition assistance program.

(B)

Factors for consideration .—

In determining the qualifications of applicants, there shall be considered among such other factors as may be appropriate, the following:

(i)

the nature and extent of the food business conducted by the applicant;

(ii)

the volume of benefit transactions which may reasonably be expected to be conducted by the applicant food store or wholesale food concern;

(iii)

whether the applicant is located in an area with significantly limited access to food;

(iv)

any information, if available, about the ability of the anticipated or existing electronic benefit transfer equipment and service provider of the applicant to provide sufficient information through the electronic benefit transfer system to minimize the risk of fraudulent transactions; and

(v)

the business integrity and reputation of the applicant.

(C)

Certificate .—

Approval of an applicant shall be evidenced by the issuance to such applicant of a nontransferable certificate of approval.

(D)

Visit required .—

No retail food store or wholesale food concern of a type determined by the Secretary, based on factors that include size, location, and type of items sold, shall be approved to be authorized or reauthorized for participation in the supplemental nutrition assistance program unless an authorized employee of the Department of Agriculture, a designee of the Secretary, or, if practicable, an official of the State or local government designated by the Secretary has visited the store or concern for the purpose of determining whether the store or concern should be approved or reauthorized, as appropriate.

(2)

The Secretary shall issue regulations providing for—

(A)

the periodic reauthorization of retail food stores and wholesale food concerns; and

(B)

periodic notice to participating retail food stores and wholesale food concerns of the definitions of “retail food store”, “staple foods”, “eligible foods”, and “perishable foods”.

(3)

Authorization periods .—

The Secretary shall establish specific time periods during which authorization to accept and redeem benefits shall be valid under the supplemental nutrition assistance program.

(4)

Electronic benefit transfer equipment and service providers .—

Before implementing clause (iv) of paragraph (1)(B), the Secretary shall issue guidance for retail food stores on how to select electronic benefit transfer equipment and service providers that are able to meet the requirements of that clause.

(b)

Effective and efficient operation of program; effect of disqualification; posting of bond

(1)

No wholesale food concern may be authorized to accept and redeem benefits unless the Secretary determines that its participation is required for the effective and efficient operation of the supplemental nutrition assistance program. No co-located wholesale-retail food concern may be authorized to accept and redeem benefits as a retail food store, unless (A) the concern does a substantial level of retail food business, or (B) the Secretary determines that failure to authorize such a food concern as a retail food store would cause hardship to households that receive supplemental nutrition assistance program benefits. In addition, no firm may be authorized to accept and redeem benefits as both a retail food store and as a wholesale food concern at the same time.

(2)

(A)

section 2021(a) of this title A buyer or transferee (other than a bona fide buyer or transferee) of a retail food store or wholesale food concern that has been disqualified under may not accept or redeem benefits until the Secretary receives full payment of any penalty imposed on such store or concern.

(B)

section 2021(d) of this title A buyer or transferee may not, as a result of the sale or transfer of such store or concern, be required to furnish a bond under .

(c)

Information submitted by applicants; safeguards; disclosure to and use by State agencies

42 U.S.C. 1786 42 U.S.C. 1771Regulations issued pursuant to this chapter shall require an applicant retail food store or wholesale food concern to submit information, which may include relevant income and sales tax filing documents, purchase invoices, records relating to electronic benefit transfer equipment and related services, transaction and redemption data provided through the electronic benefit transfer system, or program-related records, which will permit a determination to be made as to whether such applicant qualifies, or continues to qualify, for approval under the provisions of this chapter or the regulations issued pursuant to this chapter. The regulations may require retail food stores and wholesale food concerns to provide written authorization for the Secretary to verify all relevant tax filings with appropriate agencies and to obtain corroborating documentation from other sources so that the accuracy of information provided by the stores and concerns may be verified. Regulations issued pursuant to this chapter shall provide for safeguards which limit the use or disclosure of information obtained under the authority granted by this subsection to purposes directly connected with administration and enforcement of the provisions of this chapter or the regulations issued pursuant to this chapter, except that such information may be disclosed to and used by Federal law enforcement and investigative agencies and law enforcement and investigative agencies of a State government for the purposes of administering or enforcing this chapter or any other Federal or State law and the regulations issued under this chapter or such law, and State agencies that administer the special supplemental nutrition program for women, infants and children, authorized under section 17 of the Child Nutrition Act of 1966 [], for purposes of administering the provisions of that Act [ et seq.] and the regulations issued under that Act. Any person who publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by Federal law (including a regulation) any information obtained under this subsection shall be fined not more than $1,000 or imprisoned not more than 1 year, or both. The regulations shall establish the criteria to be used by the Secretary to determine whether the information is needed. The regulations shall not prohibit the audit and examination of such information by the Comptroller General of the United States authorized by any other provision of law.

(d)

Hearing upon failure of applicant to receive approval; waiting period for new application

section 2023 of this titleAny retail food store or wholesale food concern which has failed upon application to receive approval to participate in the supplemental nutrition assistance program may obtain a hearing on such refusal as provided in . A retail food store or wholesale food concern that is denied approval to accept and redeem benefits because the store or concern does not meet criteria for approval established by the Secretary may not, for at least 6 months, submit a new application to participate in the program. The Secretary may establish a longer time period under the preceding sentence, including permanent disqualification, that reflects the severity of the basis of the denial.

(e)

Reporting of abuses by public

Approved retail food stores shall display a sign providing information on how persons may report abuses they have observed in the operation of the supplemental nutrition assistance program.

(f)

Limitation on participation of house-to-house trade routes

In those areas in which the Secretary, in consultation with the Inspector General of the Department of Agriculture, finds evidence that the operation of house-to-house trade routes damages the program’s integrity, the Secretary shall limit the participation of house-to-house trade routes to those routes that are reasonably necessary to provide adequate access to households.

(g)

EBT service requirement

section 2016(h)(3)(B) of this titleAn approved retail food store shall provide adequate EBT service as described in .

(h)

Private establishments

(1)

In general

section 2012(k) of this title section 2020(e)(25) of this titleSubject to paragraph (2), no private establishment that contracts with a State agency to offer meals at concessional prices as described in paragraphs (3), (4), and (9) of may be authorized to accept and redeem benefits unless the Secretary determines that the participation of the private establishment is required to meet a documented need in accordance with .

(2)

Existing contracts

(A)

In general

February 7, 2014section 2020(e)(25) of this title section 2020(e)(25) of this titleIf, on the day before , a State has entered into a contract with a private establishment described in paragraph (1) and the Secretary has not determined that the participation of the private establishment is necessary to meet a documented need in accordance with , the Secretary shall allow the operation of the private establishment to continue without that determination of need for a period not to exceed 180 days from the date on which the Secretary establishes determination criteria, by regulation, under .

(B)

Justification

February 7, 2014If the Secretary determines to terminate a contract with a private establishment that is in effect on , the Secretary shall provide justification to the State in which the private establishment is located for that termination.

(3)

Report to Congress

September 30, 2014section 2020(e)(25) of this titleNot later than 90 days after , and 90 days after the last day of each fiscal year thereafter, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the effectiveness of a program under this subsection using any information received from States under as well as any other information the Secretary may have relating to the manner in which benefits are used.

(i)

Review of program operations

(1)

Review by the Secretary

The Secretary—

(A)

section 2012(k)(3) of this title shall review a representative sample of currently authorized facilities referred to in to determine whether benefits are properly used by or on behalf of participating households residing in such facilities and whether such facilities are using more than 1 source of Federal or State funding to meet the food needs of residents;

(B)

section 2012(k) of this title may carry out similar reviews for currently participating residential drug and alcohol treatment and rehabilitation programs, and group living arrangements for the blind and disabled, referred to in ;

(C)

shall gather information, and such facilities, programs, and arrangements shall be required to submit information deemed necessary for a full and thorough review; and

(D)

December 20, 2018 shall report the results of these reviews to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate not later than 18 months after , along with recommendations regarding—

(i)

any additional requirements or oversight that would be appropriate for such facilities, programs, and arrangements; and

(ii)

whether such facilities, programs, and arrangements should continue to be authorized to participate in the supplemental nutrition assistance program.

(2)

Limitation

December 31, 2022Nothing in this subsection shall authorize the Secretary to deny any application for continued authorization, any application for authorization, or any request to withdraw the authorization of any such facility, program, or arrangement based on a determination that residents of any such facility or entity are residents of an institution prior to .

(j)

Incentives

(1)

Definition of eligible incentive food

In this subsection, the term “eligible incentive food” means—

(A)

a staple food that is identified for increased consumption, consistent with the most recent dietary recommendations; and

(B)

a fruit, vegetable, dairy, whole grain, or product thereof.

(2)

Guidance

(A)

In general

The Secretary shall issue guidance to clarify the process by which an approved retail food store may seek a waiver to offer an incentive, which may be used only for the purchase of an eligible incentive food at the point of purchase, to a household purchasing food with benefits issued under this chapter.

(B)

Guidance

The guidance under subparagraph (A) shall establish a process under which an approved retail food store, prior to carrying out an incentive program under this subsection, shall provide to the Secretary information describing the incentive program, including—

(i)

the types of incentives that will be offered;

(ii)

the types of foods that will be incentivized for purchase; and

(iii)

an explanation of how the incentive program intends to support meeting dietary intake goals.

(3)

No limitation on benefits

A waiver granted under this subsection shall not be used to carry out any activity that limits the use of benefits under this chapter or any other Federal nutrition law.

(4)

Effect

section 7517 of this titleGuidance provided under this subsection shall not affect any requirements under , including the eligibility of a retail food store to participate in a project funded under such section.

(5)

Report

The Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an annual report describing the types of incentives approved under this subsection.

Pub. L. 88–525, § 9Aug. 31, 196478 Stat. 705 Pub. L. 95–113, title XIII, § 1301Sept. 29, 197791 Stat. 968 Pub. L. 97–98, title XIIIDec. 22, 198195 Stat. 1285 Pub. L. 97–253, title I, § 165Sept. 8, 198296 Stat. 779 Pub. L. 99–198, title XVDec. 23, 198599 Stat. 1579 Pub. L. 99–570, title XI, § 11002(d)Oct. 27, 1986100 Stat. 3207–168 Pub. L. 101–624, title XVIINov. 28, 1990104 Stat. 3791 Pub. L. 102–237, title IX, § 941(4)Dec. 13, 1991105 Stat. 1892 Pub. L. 103–225, title IIMar. 25, 1994108 Stat. 108 Pub. L. 103–448, title II, § 204(w)(2)(A)Nov. 2, 1994108 Stat. 4746 Pub. L. 104–193, title VIIIAug. 22, 1996110 Stat. 2328 Pub. L. 110–234, title IVMay 22, 2008122 Stat. 1092 Pub. L. 110–246, § 4(a)June 18, 2008122 Stat. 1664 Pub. L. 113–79, title IVFeb. 7, 2014128 Stat. 784 Pub. L. 115–334, title IVDec. 20, 2018132 Stat. 4637–4639 Pub. L. 116–94, div. B, title VII, § 784Dec. 20, 2019133 Stat. 2656 Pub. L. 116–260, div. A, title VII, § 783Dec. 27, 2020134 Stat. 1230 Pub. L. 117–103, div. A, title VII, § 773Mar. 15, 2022136 Stat. 99 (, , ; , , ; , §§ 1313, 1314, , ; , , ; , §§ 1521, 1532(b), , , 1583; , , ; , §§ 1733, 1734, , ; , , ; , §§ 202, 203, , ; , , ; , §§ 831–834, , ; , §§ 4001(b), 4002(a)(5), 4115(b)(6), , , 1093, 1106; , title IV, §§ 4001(b), 4002(a)(5), 4115(b)(6), , , 1853, 1854, 1868; , §§ 4002(e), 4014(b), 4030(f), , , 794, 814; , §§ 4006(f)–4008, , ; , , ; , , ; , , .)

Editorial Notes

References in Text

Pub. L. 89–642Oct. 11, 196680 Stat. 885 section 1771 of Title 42That Act, meaning the Child Nutrition Act of 1966, referred to in subsec. (c), is , , , which is classified generally to chapter 13A (§ 1771 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Codification

Pub. L. 110–234 Pub. L. 110–246 Pub. L. 110–234 section 4(a) of Pub. L. 110–246 and made identical amendments to this section. The amendments by were repealed by .

Amendments

Pub. L. 117–103December 31, 2022December 31, 20212022—Subsec. (i)(2). substituted “” for “”.

Pub. L. 116–260December 31, 2021December 31, 20202020—Subsec. (i)(2). substituted “” for “”.

Pub. L. 116–94December 31, 2020December 20, 20182019—Subsec. (i)(2). substituted “prior to ” for “for a period of 18 months from ”.

Pub. L. 115–334, § 4006(f)(1)2018—Subsec. (a)(1). , inserted subsec. heading, designated existing provisions, comprised of four sentences, as par. (1), inserted par. heading, designated first through fourth sentences as subpars. (A) to (D), respectively, inserted subpar. headings, redesignated former cls. (A) to (D) of second sentence as cls. (i) to (iii) and (v) of subpar. (B), respectively, and added cl. (iv) of subpar. (B).

Pub. L. 115–334, § 4006(f)(2)Subsec. (a)(4). , added par. (4).

Pub. L. 115–334, § 4006(f)(3)Subsec. (c). , inserted “records relating to electronic benefit transfer equipment and related services, transaction and redemption data provided through the electronic benefit transfer system,” after “purchase invoices,”.

Pub. L. 115–334, § 4007Subsec. (i). , added subsec. (i).

Pub. L. 115–334, § 4008Subsec. (j). , added subsec. (j).

Pub. L. 113–79, § 4002(e)(1)2014—Subsec. (a)(1). , substituted “; (C) whether the applicant is located in an area with significantly limited access to food; and (D)” for “; and (C)”.

Pub. L. 113–79, § 4030(f)Subsec. (a)(3). , realigned margins.

Pub. L. 113–79, § 4002(e)(2)Subsec. (c). , inserted “purchase invoices, or program-related records,” after “relevant income and sales tax filing documents,”.

Pub. L. 113–79, § 4002(e)(3)Subsec. (g). , added subsec. (g).

Pub. L. 113–79, § 4014(b)Subsec. (h). , added subsec. (h).

Pub. L. 110–246, § 4115(b)(6)(A)2008—Subsec. (a)(1). , (B)(i), substituted “benefit transactions” for “coupon business” and “benefits” for “coupons”.

Pub. L. 110–246, § 4001(b), substituted “supplemental nutrition assistance program” for “food stamp program” wherever appearing.

Pub. L. 110–246, § 4115(b)(6)(B)(ii)Subsec. (a)(3). , added par. (3) and struck out former par. (3). Prior to amendment, text read as follows: “The Secretary shall establish specific time periods during which authorization to accept and redeem coupons, or to redeem benefits through an electronic benefit transfer system, shall be valid under the food stamp program.”

Pub. L. 110–246, § 4115(b)(6)(A)Subsec. (b)(1). , substituted “benefits” for “coupons” wherever appearing.

Pub. L. 110–246, § 4002(a)(5), substituted “households that receive supplemental nutrition assistance program benefits” for “food stamp households”.

Pub. L. 110–246, § 4001(b), substituted “supplemental nutrition assistance program” for “food stamp program”.

Pub. L. 110–246, § 4115(b)(6)(A)Subsec. (b)(2)(A). , substituted “benefits” for “coupons”.

Pub. L. 110–246, § 4115(b)(6)(A)Subsec. (d). , substituted “benefits” for “coupons”.

Pub. L. 110–246, § 4001(b), substituted “supplemental nutrition assistance program” for “food stamp program”.

Pub. L. 110–246, § 4001(b)Subsec. (e). , substituted “supplemental nutrition assistance program” for “food stamp program”.

Pub. L. 110–246, § 4115(b)(6)(C)Subsec. (g). , which directed substitution of “section 2012(k)(9)” for “section 2012(g)(9)” in subsec. (g), could not be executed because subsec. (g) did not appear in text subsequent to its termination. See 1986 Amendment note and Effective and Termination Dates of 1986 Amendment note below.

Pub. L. 104–193, § 8311996—Subsec. (a)(1). , inserted at end “No retail food store or wholesale food concern of a type determined by the Secretary, based on factors that include size, location, and type of items sold, shall be approved to be authorized or reauthorized for participation in the food stamp program unless an authorized employee of the Department of Agriculture, a designee of the Secretary, or, if practicable, an official of the State or local government designated by the Secretary has visited the store or concern for the purpose of determining whether the store or concern should be approved or reauthorized, as appropriate.”

Pub. L. 104–193, § 832Subsec. (a)(3). , added par. (3).

Pub. L. 104–193, § 833Subsec. (c). , in first sentence, inserted “, which may include relevant income and sales tax filing documents,” after “submit information” and inserted after first sentence “The regulations may require retail food stores and wholesale food concerns to provide written authorization for the Secretary to verify all relevant tax filings with appropriate agencies and to obtain corroborating documentation from other sources so that the accuracy of information provided by the stores and concerns may be verified.”

Pub. L. 104–193, § 834Subsec. (d). , inserted at end “A retail food store or wholesale food concern that is denied approval to accept and redeem coupons because the store or concern does not meet criteria for approval established by the Secretary may not, for at least 6 months, submit a new application to participate in the program. The Secretary may establish a longer time period under the preceding sentence, including permanent disqualification, that reflects the severity of the basis of the denial.”

Pub. L. 103–225, § 2021994—Subsec. (a)(2). , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The Secretary is authorized to issue regulations providing for a periodic reauthorization of retail food stores and wholesale food concerns.”

Pub. L. 103–448Subsec. (c). in second sentence substituted “special supplemental nutrition program” for “special supplemental food program”.

Pub. L. 103–225, § 203, in second sentence inserted “Federal law enforcement and investigative agencies and law enforcement and investigative agencies of a State government for the purposes of administering or enforcing this chapter or any other Federal or State law and the regulations issued under this chapter or such law, and” after “disclosed to and used by”, inserted after second sentence “Any person who publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by Federal law (including a regulation) any information obtained under this subsection shall be fined not more than $1,000 or imprisoned not more than 1 year, or both.”, and in last sentence substituted “The regulations shall establish the criteria to be used by the Secretary to determine whether the information is needed. The regulations shall not prohibit” for “Such purposes shall not exclude”.

Pub. L. 102–2371991—Subsec. (a)(1). redesignated cls. (1) to (3) as (A) to (C), respectively.

Pub. L. 101–624, § 17331990—Subsec. (a). , designated existing provisions as par. (1) and added par. (2).

Pub. L. 101–624, § 1734Subsec. (b)(1). , inserted after first sentence “No co-located wholesale-retail food concern may be authorized to accept and redeem coupons as a retail food store, unless (A) the concern does a substantial level of retail food business, or (B) the Secretary determines that failure to authorize such a food concern as a retail food store would cause hardship to food stamp households.”

Pub. L. 99–570, § 1102(d)section 2012(g)(9) of this title1986—Subsec. (g). , (f)(3), temporarily added subsec. (g) which read as follows: “In an area in which the Secretary, in consultation with the Inspector General of the Department of Agriculture, finds evidence that the participation of an establishment or shelter described in damages the program’s integrity, the Secretary shall limit the participation of such establishment or shelter in the food stamp program, unless the establishment or shelter is the only establishment or shelter serving the area.” See Effective and Termination Dates of 1986 Amendment note below.

Pub. L. 99–198, § 1532(b)1985—Subsec. (b). , designated existing provisions as par. (1) and added par. (2).

Pub. L. 99–198, § 1521Subsec. (c). , inserted provisions relating to disclosure of information to, and the use by, State agencies which administer the special supplemental food program for women, infants, and children, authorized under section 17 of the Child Nutrition Act of 1966.

Pub. L. 97–2531982—Subsec. (f). added subsec. (f).

Pub. L. 97–98, § 13131981—Subsec. (c). , inserted provision that such purposes not exclude the audit and examination of such information by the Comptroller General of the United States authorized by any other provision of law.

Pub. L. 97–98, § 1314Subsec. (e). , added subsec. (e).

Pub. L. 95–113 section 2019 of this title1977— substituted revised provisions covering approval of retail food stores and wholesale food concerns for provisions relating to redemption of coupons which are now covered by .

Statutory Notes and Related Subsidiaries

Effective Date of 2008 Amendment

Pub. L. 110–234 Pub. L. 110–246May 22, 2008Pub. L. 110–234 section 4 of Pub. L. 110–246 section 8701 of this titleAmendment of this section and repeal of by effective , the date of enactment of , except as otherwise provided, see , set out as an Effective Date note under .

Pub. L. 110–246Oct. 1, 2008section 4407 of Pub. L. 110–246 section 1161 of Title 2Amendment by sections 4001(b), 4002(a)(5), and 4115(b)(6) of effective , see , set out as a note under , The Congress.

Effective Date of 1994 Amendment

Pub. L. 103–448Oct. 1, 1994section 401 of Pub. L. 103–448 section 1755 of Title 42Amendment by effective , see , set out as a note under , The Public Health and Welfare.

Effective Date of 1991 Amendment

Pub. L. 102–237Feb. 1, 1992section 1101(d)(1) of Pub. L. 102–237 section 1421 of this titleAmendment by effective and to be implemented no later than , see , set out as a note under .

Effective Date of 1990 Amendment

Pub. L. 101–624Oct. 1, 1991section 1781(a) of Pub. L. 101–624 section 2012 of this titleAmendment by effective and implemented first day of month beginning 120 days after publication of implementing regulations to be promulgated not later than , see , set out as a note under .

Effective and Termination Dates of 1986 Amendment

Pub. L. 99–570Apr. 1, 1987Sept. 30, 1990Pub. L. 99–570 section 2012 of this titleAmendment by effective, and to be implemented by issuance of final regulations, not later than , and cease to be effective after , see section 11002(f)(1), (2) of , set out as a note under .

Effective Date of 1982 Amendment

Pub. L. 97–253Sept. 8, 1982section 193(a) of Pub. L. 97–253 section 2012 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1981 Amendment

Pub. L. 97–98Sept. 8, 1982section 1338 of Pub. L. 97–98 section 2012 of this title section 192(b) of Pub. L. 97–253 section 2012 of this titleAmendment by effective on earlier of , or date such amendment became effective pursuant to , set out as a note under , see , set out as a note under .

Pub. L. 97–98 section 1338 of Pub. L. 97–98 section 2012 of this titleAmendment by effective upon such date as Secretary of Agriculture may prescribe, taking into account need for orderly implementation, see , set out as a note under .

Effective Date of 1977 Amendment

Pub. L. 95–113, title XIII, § 1301Sept. 29, 197791 Stat. 958 Oct. 1, 1977, , , provided that the amendment made by section 1301 is effective .