Federal agencies are viewed by many as possessing immense power over regulated businesses. This is especially true at the Food and Nutrition Service (“FNS”) in the context of retail food stores that participate in the Supplemental Nutrition Assistance Program (“SNAP”), previously known as the Food Stamp program. But FNS’s power is not without limits and is based upon a delegation from Congress to the U.S. Secretary of Agriculture in the Food and Nutrition Act of 2008, 7 U.S.C. §2013(a). And what Congress giveth, Congress may taketh away. Here is what Congress did in its 2017 Omnibus spending bill:
On December 15, 2016, FNS promulgated its final rule entitled “Enhancing Retailer Standards in the SNAP.” (“Final Rule”) This lengthy issuance imposed many new requirements on SNAP retailers, including:
Many small retailers opposed these new requirements because they would raise costs and lead to substantial increases in food waste. Congress listened and addressed these concerns in its 2017 Omnibus spending bill, providing some relief to more than 260,000 SNAP-authorized retailers regarding the variety of staple food items each must carry. Section 765 of the Omnibus prohibits FNS from spending any funds to implement, administer, or enforce the “variety” requirements of the Final Rule until FNS amends the definition of that term to increase the number of items that qualify as acceptable varieties in each staple food category. Until such time, FNS is required to apply the pre-existing requirements in its regulations.
On January 17, 2018, FNS issued Retailer Policy and Management Division Policy Memorandum 2018-04. FNS’s memorandum delicately advises retailers that Congress prohibited FNS from spending any funds to enforce several requirements in the Final Rule. FNS’s memorandum mentions, in passing, that “the Code of Federal Regulations (CFR) has not been updated to reflect the changes required by the Consolidated Appropriations Act of 2017.” In practical terms, this means that FNS revised definition of “variety” in its regulations has not taken effect. Given the notice-and-comment requirements of the Administrative Procedure Act, retailers will not be obligated to comply with these increased variety requirements in FNS’s Final Rule for the foreseeable future. More recently, on February 13, 2018, FNS updated its “Is My Store Eligible” page on its website. The posting summarizes FNS’s regulatory requirements for store eligibility and includes a chart detailing FNS’s requirements for the criterion under which most stores qualify for SNAP authorization.