SNAP and Related Nutrition Provisions of the 2014 Farm Bill (P.L. 113-79) 
Released: 2014-04-24T00:00:00

Introduction

Most recently, the farm bill nutrition programs were reauthorized by the Agricultural Act of 2014 ("2014 farm bill"; P.L. 113-79 ; enacted on February 7, 2014) after related action in the 112 th Congress and the 113 th Congress. The "farm bill" is an omnibus bill which reauthorizes dozens of agriculture and agriculture-related statutes and their programs approximately every five years. Since 1973, the farm bill has included the Supplemental Nutrition Assistance Program (SNAP) (formerly, Food Stamp Program) and has come to include certain other (new and existing) nutrition programs administered by the U.S. Department of Agriculture's Food and Nutrition Service (USDA-FNS).

Many programs reauthorized by the Food, Conservation and Energy Act of 2008 (or "2008 farm bill"; P.L. 110-246 ) expired after the end of FY2012 (September 30, 2012). The American Taxpayer Relief Act of 2012 ( P.L. 112-240 , enacted on January 2, 2013) included an extension of the 2008 farm bill through September 30, 2013, after which, most nutrition programs operated under the authority and funding of FY2014 appropriations ( P.L. 113-76 ).

This report discusses the Nutrition Title (Title IV) of the enacted 2014 farm bill. As Congress formulated the Nutrition provisions of the 2014 farm bill, policy makers grappled with the following questions:

Should the reauthorization of SNAP continue to be a part of the omnibus farm bill? Should provisions be enacted that would reduce spending for SNAP and if so, by how much? Should the recent expiration of a temporary SNAP benefit increase be considered in deliberations on SNAP spending levels under the farm bill? Should spending reductions be achieved by changes in households' eligibility and benefit amounts? Specifically, Congress has considered amendments to categorical eligibility rules; treatment of LIHEAP payments in SNAP benefit calculation. Should certain populations (e.g., students, ex-offenders, lottery winners) be disqualified from receiving food assistance? How might changes to retailer and benefit redemption policy have an impact on program integrity and participants' consumption of healthy foods? Should more SNAP participants be required to work? Should more SNAP participants be time-limited off assistance? Should SNAP and the farm bill nutrition programs further promote the purchase of fruits and vegetables, including from local sources? Should the farm bill include provisions to increase the funding and capacity of emergency feeding organizations (e.g., food banks and food pantries)?

This report summarizes key SNAP and other nutrition provisions in the new law and in the 113 th Congress's Senate and House farm bills. For more general background on nutrition programs, more detail on certain SNAP issues, or reports that discuss the entire farm bill (not only nutrition programs), please reference other CRS products listed in the text box below. The law's conference report, H.Rept. 113-333 , is also a resource.

First, this report summarizes the enacted law's 113 th Congress legislative history. Next, it presents the Congressional Budget Office (CBO) cost estimates of the new law's Nutrition Title as compared to those of the Senate and House bills. Finally, the report summarizes the new law and Senate and House proposals related to SNAP (specifically, length of authorization, eligibility rules [including work-related], benefit calculation, retailers, and benefit redemption); Programs in Lieu of SNAP (that some territories and tribes operate); Commodity Distribution Programs (TEFAP, CSFP, and USDA Commodities in School Meals); as well as certain other nutrition-related programs.

Appendix A provides a more detailed CBO estimate comparison table, and Appendix B includes a side-by-side table of every provision in the Nutrition Title conference proposals and enacted law.

Throughout this report, the portion of the farm bill that includes SNAP and the other nutrition programs is referred to interchangeably as "Title IV" and the "Nutrition Title."

113th Congress Legislative Timeline of the Reauthorization of SNAP and Related Programs8

June 10, 2013: Senate Passes Farm Bill (S. 954), Including Nutrition Title

On May 14, 2013, the Senate Committee on Agriculture, Nutrition, and Forestry marked up the Agriculture Reform, Food, and Jobs Act of 2013 and reported an original bill, S. 954 , to the Senate. On May 20, 2013, the Senate proceeded to floor action on this bill. During floor consideration, two Nutrition Title amendments were added. Floor action on S. 954 concluded on June 10, 2013, when the full Senate approved the measure by a vote of 66-27.

June 20, 2013: House Defeats Farm Bill (H.R. 1947), Including Nutrition Title

On May 15, 2013, the House Agriculture Committee completed markup of its version of the farm bill ( H.R. 1947 , the Federal Agriculture Reform and Risk Management Act of 2013) and approved the amended measure by a 36-10 vote. The House Rules Committee considered the bill on June 17 and June 18, 2013, followed by House floor consideration which began the week of June 18. During floor consideration, over a dozen Nutrition Title amendments were added. On June 20, the House considered H.R. 1947 , and the amended bill was defeated (195-234).

July 11, 2013: House Passes Farm Bill (H.R. 2642), Excluding Nutrition Title

Three weeks after H.R. 1947 failed, the full House debated a variation of the defeated bill that dropped all of the Nutrition Title but included all of the earlier adopted floor amendments to the other titles. This revised bill ( H.R. 2642 ) was approved by the House by a 216-208 vote on July 11.

July 18, 2013: Senate Moves to Go to Conference

In order to initiate conference committee negotiations with the House, the Senate on July 18 substituted the text of H.R. 2642 with the text of S. 954 .

September 19, 2013: House Passes Nutrition-Only Bill (H.R. 3102)

After House passage of H.R. 2642 , Republican leadership convened and formulated a nutrition-only proposal. This nutrition proposal, though based mostly on the earlier version that was voted out of committee, had several key differences, namely a reauthorization for three years as well as new and revised policies related to work rules for SNAP participants. On September 19, the House passed a stand-alone nutrition bill ( H.R. 3102 ) by a vote of 217-210.

September 28, 2013: House Formulates Conference Proposal (H.R. 2642 + H.R. 3102), Including Nutrition Title

The House adopted a resolution ( H.Res. 361 ) on September 28 that combined the texts of H.R. 2642 and H.R. 3102 into one bill ( H.R. 2642 ) for purposes of resolving differences with the Senate. H.R. 3102 was inserted into H.R. 2642 as "Title IV. Nutrition," with section numbers changed accordingly.

October 1, 2013 through January 27, 2014: Conference Deliberations

The Senate appointed conferees on October 1, 2013; the House appointed conferees on October 13, 2013. October 30, 2013, was the first (and only) public meeting of the 40-member conference committee.

January 27, 2014, through February 7, 2014: Conference Report Introduction, Passage, and Enactment

On January 27, 2014, a conference agreement reconciling the differences between the two measures was reported as the Agricultural Act of 2014 ( H.R. 2642 , H.Rept. 113-333 ). Within eight days, both chambers approved the conference agreement, the House on January 29 by a vote of 251-166 and the Senate on February 4 by a vote of 68-32. On February 7, 2014, the President signed the bill, enacting P.L. 113-79 .

CBO Cost Estimates

The Congressional Budget Office (CBO) estimates that over 10 years (FY2014-FY2023), the enacted 2014 farm bill will reduce spending by approximately $8.0 billion.

During deliberations on the farm bill, CBO prepared estimates of the impact of proposed changes on program spending levels. Table 1 compares CBO cost-estimates (either increases or decreases in spending from the prior law baseline) of provisions in the Senate proposal, House proposal, and Conference Report (now, current law).

SNAP is an open-ended, appropriated mandatory program. This means that the statute does not specify a particular amount to be appropriated. Instead, the amount required to be spent is determined by various provisions of the law, most notably those pertaining to eligibility rules and benefit calculations, coupled with economic conditions. The Administration estimates the amount needed to be spent each year, and these estimated amounts are then appropriated. Thus, in order to change spending levels for SNAP (either increase or decrease), Congress generally must amend the statutory provisions that affect the program's costs, primarily eligibility and benefit calculation rules.

As Table 1 shows, CBO estimated that the 2014 farm bill's Nutrition Title—which contains SNAP and non-SNAP provisions—will result in a net reduction in spending of approximately $8.0 billion over 10 years. The SNAP provisions alone are estimated to reduce spending by slightly more than $8.6 billion over 10 years; certain non-SNAP provisions are estimated to result in spending increases. This is compared to the Senate bill's $4 billion reduction and the House bill's $39 billion reduction. The law's Nutrition Title cost estimate is largely the result of three SNAP policy decisions: the House's more stringent LIHEAP Standard Utility Allowance language, creating certain work-related pilot projects and related funding, and declining to make changes on SNAP categorical eligibility.

Subsequent sections of this report discuss the changes in policy, including some changes that CBO did not find to have a budgetary impact.

For a more detailed look at the CBO cost estimates, see Table A-1 , which breaks down the cost estimates of the 2014 law and proposals into further detail.

Supplemental Nutrition Assistance Program (SNAP): Selected 2014 Farm Bill Issues11

Of the programs in Title IV, SNAP accounts for the largest amount of federal funding and also serves the largest number of households. In fact, like the farm bills before it, the vast majority of the spending authorized by the 2014 farm bill is for SNAP and related nutrition programs. According to CBO's baseline, direct spending projections authorized by the Nutrition Title represent approximately 79% of the 2014 farm bill's direct spending. SNAP is an open-ended appropriated entitlement and program benefits are 100% federally funded.

In FY2013, SNAP benefits were provided to (a monthly average of) 47.6 million individuals at a cost of $79.6 billion (96% of which was the cost of the benefits themselves). SNAP participation ebbs and flows in relation to the nation's economy. Over the period of the 2008 farm bill (FY2008-FY2012), SNAP participation and spending rose sharply, a trend widely understood to be both a result of the recession and recovery as well as the American Recovery and Reinvestment Act of 2009's SNAP response to the recession. Effective November 1, 2013 the ARRA's SNAP benefit boost has ended; for this and other economic reasons, CBO forecasts reductions in SNAP participation and spending beginning in FY2014.

This statistical backdrop has affected the congressional debate over reauthorization of SNAP. This section of the report highlights SNAP issues in the new law (and Senate and House proposals to a lesser extent). SNAP topics are organized into five categories: length of program authorization, eligibility (categorical, work-related, certain disqualifications), benefit calculation, retailers, and other policies. These are only a portion of the provisions which would affect SNAP. For a summary of every SNAP provision in the new law and the conference proposals, please see Table B-1 through Table B-7 in Appendix B .

SNAP Authorization and Appropriations

Background and Prior Law

Section 18(a) of the Food and Nutrition Act (codified at 7 U.S.C. 2027(a)) had authorized appropriations for SNAP through September 30, 2012, and P.L. 112-240 extended this authorization through September 30, 2013. Between October 1, 2013, and the enactment of P.L. 113-79 on February 7, 2014, Congress provided for FY2014 appropriations or other authority that allowed SNAP operations to continue.

2014 Farm Bill: SNAP Reauthorized Through FY2018

The 2014 farm bill authorized appropriations for SNAP and the other programs that are funded through the SNAP account through September 30, 2018, the end of FY2018. In most farm bills in the past, SNAP was authorized for five years.

The House bill would have reauthorized the nutrition programs for three years (FY2014-FY2016), and the Senate's would have reauthorized the programs for five years (FY2014-FY2018). Throughout the farm bill formulation, some policy makers expressed interest in separating the nutrition programs from the omnibus farm bill. The House-passed proposal to shorten the authorization compared to other farm bill programs was a step in that direction.

Table B-1 summarizes these differences.

SNAP Eligibility: Categorical Eligibility

Background and Current Law

Federal law provides the basic eligibility rules for SNAP, including limits for income and assets. There are two basic pathways to gain financial eligibility for SNAP: (1) having income and assets below specified levels set out in federal SNAP law; and (2) being "categorically," or automatically, eligible based on eligibility and receipt of benefits from other specified low-income assistance programs. A categorically eligible household still undergoes benefit calculation, so being categorically eligible does not mean that the household will necessarily receive benefits.

Under traditional categorical eligibility, a SNAP applicant household is eligible for SNAP when every member receives Temporary Assistance for Needy Families (TANF) cash assistance, Supplemental Security Income (SSI), or state-funded general assistance cash benefits. Under current law, states must—at minimum—administer traditional categorical eligibility. As of July 2013, five states make this minimum choice.

However, states also have the option to adopt so called "broad-based" categorical eligibility. Under this option, in addition to the programs listed above as "traditional," households that receive any TANF-funded benefit may be deemed eligible for SNAP benefits, if certain income conditions are met. A TANF-funded benefit can, and often does, include a nominal service like an educational brochure. Per USDA regulation, the TANF-funded benefit (cash or non-cash) that conveys categorical eligibility must be for households at or below 200% of the federal poverty line. As of July 2013, 43 states had chosen to implement broad-based categorical eligibility in addition to traditional eligibility. Since few of the non-cash TANF-funded benefits require a test of assets, this option often means that applicants' assets are not checked.

For further explanation of SNAP eligibility, categorical eligibility, and the details of states' choices on this topic, please see CRS Report R42054, The Supplemental Nutrition Assistance Program (SNAP): Categorical Eligibility , by [author name scrubbed] and [author name scrubbed].

2014 Farm Bill: No Changes to Categorical Eligibility

Although the 113 th Congress debated this policy, ultimately the new law did not include any changes to categorical eligibility.

The Senate proposal would have made no changes to categorical eligibility. Related amendments were defeated during committee markup and on the Senate floor.

Section 4005 of the House proposal would have repealed "broad-based categorical eligibility," and limited categorical eligibility to SNAP applicants that receive TANF cash assistance, SSI, or state-funded general assistance cash benefits. As shown in Table 1 , CBO estimated that this change would have reduced spending by approximately $11.6 billion over 10 years. CBO estimated that about 1.8 million people per year, on average, would lose benefits if they were subject to SNAP's income and asset tests.

These provisions are summarized in Table B-2 .

SNAP Eligibility: Work and Work-Related Rules

Background

SNAP law has rules on employment or work-related activities for able-bodied, non-elderly adult participants. Some rules apply in all states that operate SNAP. However, because each state designs its own SNAP Employment and Training Program (E&T), certain requirements can vary by state.

In addition to the nationwide and state-specific work eligibility rules, SNAP law creates a time limit for able-bodied adults without dependents ("ABAWDs") who are not working a minimum of 20 hours per week. If these individuals do not work the required number of hours, they can receive no more than three months of benefits over a 36-month period. A state does have limited flexibilities with regard to enforcing this time limit, and so an ABAWD's eligibility is further affected by whether (1) the individual lives in an area that has waived the time limit due to local labor market conditions or (2) whether the state agency chooses to use its available exemptions to serve the individual beyond the time limit.

In the formulation of the 2014 farm bill, policy makers debated whether to require more SNAP participants to be working in addition to or instead of receiving food assistance. Policy makers have also debated the potential paths to such an outcome, and the challenges of accomplishing the outcome during a still fragile economic recovery.

Before discussing the work-related policies enacted by the 2014 farm bill, this section discusses the aspects and relevant background for work requirements in SNAP. Ultimately, the farm bill made little change to these rules, but this background can assist in following ongoing debate and implementation of new policies.

In All States: Overview of SNAP Work-Related Requirements

To gain or retain eligibility, most able-bodied adults (with or without dependents) must

register for work (typically with the SNAP state agency or a state employment service office); accept a suitable job if offered one; fulfill any work, job search, or training requirements established by administering SNAP agencies (see " Varies By State: SNAP Employment and Training (E&T) " in next section); provide the administering public assistance agency with sufficient information to allow a determination with respect to their job availability; and not voluntarily quit a job without good cause or reduce work effort below 30 hours a week.

Individuals are disqualified from SNAP for failure to comply with work requirements for periods of time that differ based upon whether the violation is the first, second, or third. Minimum periods of disqualification, which may be increased by the state SNAP agency, range from one to six months. In addition, states have the option to disqualify the entire household for up to 180 days, if the household head fails to comply with work requirements.

The law exempts certain individuals from the above requirements. In FY2011, nearly 64% of SNAP participants were not expected to work because of age or disability. Specifically, 45% of participants were children; 9% were elderly; and 10% were disabled.

In FY2013, states reported that 13.3 million participants were subject to SNAP work requirements and registered for work.

Varies By State: SNAP Employment and Training (E&T) Required Participation, Services Available

As noted above, those not exempted must register for work and accept suitable job offers; in addition, state SNAP agencies may require work registrants to fulfill some type of work, job search, or training obligation.

SNAP agencies must operate an Employment and Training (E&T) program of their own design for work registrants. SNAP agencies may require all work registrants to participate in one or more components of their program, or limit participation by further exempting additional categories and individuals for whom participation is judged impracticable or not cost effective. States may also make E&T activities open only to those who volunteer to participate.

Program components can include any or all of the following: supervised job search or training for job search; workfare (work-for-benefits); work experience or training programs; education programs to improve basic skills; or any other employment or training activity approved by USDA-FNS.

In FY2013, states placed nearly 640,000 participants in E&T services. Aside from these measures of participation, there has been little national data available on E&T programs. Ultimately, the enacted farm bill expands the capacity, reporting, and evaluation of states' E&T programs (more information under " 2014 Farm Bill: Maintains Current Law, Adds and Funds Work-Related Pilot Program, Requires E&T Reporting ").

"ABAWD" Time Limit29

In addition to SNAP's work registration and Employment and Training program requirements, there is a special time limit for able-bodied adults, aged 18 to 49 who are without dependents (ABAWDs) . This requirement—often referred to as the "ABAWD Rule"—was added by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193 ).

SNAP law limits benefits for ABAWDs to 3 months out of a 36-month period, unless the participant:

works at least 20 hours per week; participates in an employment and training program for at least 20 hours per week; or participates in a state's "workfare" program.

States have the option, but are not required, to offer ABAWDs a slot in an employment and training program or a workfare program. Some states "pledge" to serve all ABAWDs in such programs, others do not. States that "pledge" to serve all ABAWDs in these programs receive extra federal funding for that purpose. If a state does not offer an ABAWD a slot in an employment and training or workfare program, benefits can be terminated for those without at least a half-time job once the 3-month limit is reached, unless the individual is covered by an exemption or a "waiver" of the ABAWD requirement. (Further detail on the available waivers and exemptions from the ABAWD time limit is available in CRS Report R42505, Supplemental Nutrition Assistance Program (SNAP): A Primer on Eligibility and Benefits , by [author name scrubbed].)

Those who lose benefits under this rule are able to reenter the program if, during a 30-day period, they work 80 hours or more or participate in a work/training activity. ABAWDs who become employed, but then again lose their jobs can, under some circumstances, earn an additional 3 months of eligibility, bringing their maximum months of SNAP receipt without working at least 20 hours per week or being in an approved work or training program to 6 months in a 36-month period.

Although the House proposal included changes to this rule, ultimately, the enacted law did not include those policies (more under " House Proposal—Proposed Four Approaches to Changing Work Rules ."

SNAP E&T Financing

Since the 2002 farm bill ( P.L. 107-171 ), SNAP E&T has been financed using several streams of mandatory federal funding. The federal government funds SNAP E&T in four ways:

1. $90 million in annual mandatory funds that are allocated and reallocated to states based on a formula, 2. $20 million in annual mandatory funding allocated to states that pledge to provide E&T services to all able-bodied adults without dependents (ABAWDs), 3. open-ended matching funds for states' administrative costs for E&T, and 4. open-ended matching funds for states' reimbursement of E&T participants' dependent care and transportation costs.

Program requirements, activities, and uptake of these funds vary by state.

Since December 2005, certain appropriations laws have reduced the mandatory $90 million in E&T funding through changes in mandatory program spending (CHIMPs).

2014 Farm Bill: Maintains Current Law, Adds and Funds Work-Related Pilot Program, Requires E&T Reporting

The 2014 farm bill maintains the $90 million per year in mandatory funding for E&T, including reversing the reduction to $79 million made by the FY2014 Agriculture Appropriations law ( P.L. 113-76 ). It makes no changes to the existing funding discussed above in the " SNAP E&T Financing " and no changes to the " "ABAWD" Time Limit ." For the most part, work registration and state E&T requirements remain the same, but Section 4022 does include an opportunity for some states to expand and test their SNAP E&T programs; the provision also requires reporting on outcomes and other performance indicators.

Section 4022 of the Agriculture Act of 2014 ( P.L. 113-79 , the "Farm Bill") requires USDA to conduct pilot projects to test work and job readiness strategies for SNAP participants. This provision was a compromise conference agreement, between (1) no changes to work rules in the Senate-passed bill and (2) House-passed changes that would have required additional monitoring and reporting, a repeal of USDA's authority to grant areas waivers from the ABAWD time limit, and a work-related pilot that would have offered fiscal incentives for states to reduce their SNAP caseloads. (See the following sections and Table B-3 for more detail on the Senate and House bills.)

USDA is to select up to 10 pilot projects and provide grants to the states administering the chosen projects. Taken together, the projects must represent geographic diversity, target different subpopulations (e.g. participants subject to the ABAWD time limit, participants with limited work experience, or participants already working), test mandatory and voluntary E&T participation models, as well as meet other criteria. While the pilots could test some features comparable to TANF work programs, regular SNAP work rules regarding maximum hours of participation and limits to household sanctions still apply.

Each project may run for no longer than three years. USDA is to conduct an independent, longitudinal evaluation of the projects' impact on participants' employment and earnings outcomes.

To fund the projects and their evaluation, the law provides mandatory funding of $10 million in FY2014 and $190 million in FY2015. The funding is available until the end of FY2018.

In addition to pilot projects, the law also requires all states to set performance goals for their existing SNAP Employment & Training (E&T) programs and to report annually. This policy was also included in the House bill.

Senate Proposal—Proposed No Changes to Work Rules

The Senate's proposal would have made no change to work-related policies. By continuing to fund the SNAP E&T funding at $90 million, the proposal incurred a cost from CBO, since the rescissions described earlier have reduced this amount in prior years.

House Proposal—Proposed Four Approaches to Changing Work Rules

The House's conference proposal took four approaches to work rules. Section 4021 would have required additional monitoring of the reporting on SNAP E&T programs. Section 4023 would have provided $10 million in mandatory funding each year in FY2014, FY2015, and FY2016 for an evaluation of pilot projects to identify best practices in SNAP E&T programs. Section 4009 would have repealed the authority for states and portions of states to apply for labor-market-based waivers of the ABAWD time limit. Section 4039 would have created a new pilot/state option where states would require a minimum of 20 hours of work for able-bodied individuals; this proposal would have reduced available E&T funding, but to the extent that an evaluation shows that such a pilot resulted in reduced federal spending, states would have been able to share half of those savings.

Table B-3 compares the House, Senate, and enacted work-related proposals.

SNAP Eligibility: Other Disqualifications

In addition to work-related disqualifications, like the ABAWD time limit, SNAP law provides various causes for temporary or permanent disqualification from the SNAP program. The 2014 farm bill added some additional disqualifications and amended some existing disqualifications. In addition to the discussion below, these disqualification provisions are summarized in Table B-4 . The new law did not include the House's proposal to allow states to drug test SNAP applicants and recipients.

College Students; Lottery Winners

Already prior to the 2014 farm bill, college students (attending higher education courses half-time or more) between ages 18 and 49 were—for the most part—ineligible for SNAP. A student enrolled in an institution of higher education more than half-time was only eligible for SNAP benefits if the individual meets at least one of the following criteria: (1) under 18 years old or age 50 or older; (2) disabled; (3) employed at least 20 hours per week or participating in a work-study program during the school year; (4) a parent (in some circumstances); (5) receiving TANF cash assistance benefits; or (6) enrolled in school because of participation in certain programs (including SNAP E&T).

Also under prior law, there was no provision that specifically addresses lottery or gambling winners ; however, the SNAP program's eligibility tests would appear to limit the increase in income or wealth that would be associated with significant winnings. In several high-profile instances in recent years, SNAP participants won large sums in the lottery, and the state agency learned of their windfall from media reports.

2014 Farm Bill: Identical Changes for College Students' and Lottery Winners' Disqualification

As proposed in the House and Senate bills, P.L. 113-79 made some additions regarding post-secondary students and gambling winnings:

For post-secondary students, the law—retaining the existing rules for college students—adds the requirement that those students enrolled in post-secondary institutions as a requirement of participation in "SNAP Employment and Training" must be enrolled in certain employment-oriented training to qualify for SNAP; specifically, this includes certain career and technical education, remedial courses, basic adult education, literacy, or English as a second language. The law creates more specific rules that make households that receive "substantial lottery or gambling winnings" (as determined by USDA) ineligible for SNAP until the household meets the SNAP resources (assets) and income eligibility limits. State SNAP agencies would be required to establish agreements with the state gaming agency in order to make determinations of winnings.

Drug Testing for Applicants and Participants36

Under current law, SNAP applicants and participants can only be subjected to testing for controlled substances under certain state options. For example, a state may require a SNAP applicant to pass a drug test, if such a test is part of the state's modification to the drug felony disqualification (see next section).

2014 Farm Bill: Did Not Add a Drug Testing Requirement

The conference agreement did not include the House bill's provision that would have allowed states to enact legislation authorizing drug testing for SNAP applicants at full cost to the state.

Felony Convictions38

Under prior law, the only criminal convictions that could impact eligibility for SNAP benefits were drug felony offenses (with some states opting out of or modifying the drug felony disqualification). The drug felony disqualification was added by the 1996 welfare reform law (PRWORA, P.L. 104-193 ).

2014 Farm Bill: Disqualifies Additional Ex-Offenders If They Are Not Compliant with the Terms of their Sentence

The 2014 farm bill disqualifies individuals convicted of specified federal crimes (including murder, rape, and certain crimes against children) and state offenses determined by the Attorney General to be substantially similar from receiving SNAP; however, only when such individuals are not compliant with the terms of their sentence or are " fleeing felons ." The law still allows the disqualified ex-offender's household members to apply for and potentially receive benefits, but the household's benefit amount will likely be smaller than if the ex-offender is included. The amendments require the state agency that administers SNAP benefits to collect, in writing, information on SNAP applicants' convictions. The law also specifies that this disqualification is not to apply to convictions that occurred before the new law's enactment (February 7, 2014); this specification had been included in the House bill but not the Senate bill.

The new law is expected to affect fewer people than the broader disqualifications included in both the House and Senate conference bills. Both Section 4020 of the Senate bill and Section 4037 of the House proposal would have barred from receiving benefits individuals convicted of those same crimes listed in the final law (specified federal crimes, including murder, rape, and certain crimes against children, and state offenses determined by the Attorney General to be substantially similar.) The Senate and House proposals were identical in their language, except that the House includes an additional provision to assure that the policy would affect only those with convictions after the date of the provision's enactment.

SNAP Benefit Calculation41

Becoming eligible for SNAP is only one part of the application process. Once deemed eligible, a household's benefit amount is calculated based on the household's size, income, and SNAP-deductible expenses. A household's net income is determined by subtracting from the household's gross income certain specified expenses and figures. In addition to a standard deduction (available to all households), there are deductions to account for the specific circumstances of a household. Examples of SNAP deductions are the excess shelter deduction (a figure intended to account for variations in the cost of living) and—for households that include the elderly and disabled—an excess medical expenses deduction (a figure intended to account for variations in a household's health costs). Once eligible, 30% of the household's net income is subtracted from USDA's monthly maximum benefit (for household size) to determine the monthly benefit.

The 2014 farm bill, for the most part, maintains current federal law on SNAP benefit calculation; however, the 2014 bill changes the way the excess shelter deduction is calculated (specifically, the treatment of energy assistance payments). This is discussed in more detail in the next section.

The law also included a restriction for medical marijuana in calculating an excess medical expenses deduction.

Table B-5 provides a side-by-side summary of SNAP benefit calculation provisions.

Standard Utility Allowances and the Treatment of LIHEAP Benefits42

Prior Law: Receipt of Less than $20 of LIHEAP Can Increase Benefit Amounts

The SNAP statute allows for certain deductions from income when calculating a household's monthly benefit amount; one of these deductions is the "excess shelter deduction," which incorporates utility costs. If a family incurs heating and/or cooling expenses, this deduction from income can be higher than for households not incurring these expenses, allowing for a higher SNAP benefit for the household.

One way households can document heating and cooling expenses is by showing receipt of LIHEAP assistance. The documentation of LIHEAP receipt triggers a standard utility allowance (SUA), a state-specific figure based on the state's average utility costs that then enters into the SNAP benefit calculation equation. (Proof of heating or cooling expenses will trigger a higher SUA than proof of only telephone or water expenses.) Unless the household is already receiving the maximum SNAP benefit, a household's monthly benefit can increase if the SUA calculation results in an excess shelter deduction or if the SUA calculation results in a higher excess shelter deduction. Under prior law, any amount of LIHEAP assistance could increase benefit amounts; under the 2014 farm bill change (described below), LIHEAP assistance will have to be greater than $20 per year in order to be included in a household's benefit calculation.

While virtually all SNAP states use LIHEAP in their benefit calculations, approximately 16 states had provided nominal LIHEAP benefits through a "Heat and Eat" practice. "Heat and Eat" is a phrase that the low-income and anti-hunger advocacy community has used to describe state and program policies that leverage nominal (as little as 10 cents) LIHEAP payments into an increase in households' SNAP benefits that is larger than the initial LIHEAP payment. Also, a 17 th state allowed SNAP applicants to benefit from an SUA if the household applied for LIHEAP. Thus, the farm bill is expected to change 17 states' administration of SNAP and is expected to reduce some households' benefit amounts.

2014 Farm Bill: Requires a LIHEAP Payment of Greater than $20 to Trigger a Standard Utility Allowance

The 2014 farm bill's change in the law requires more than $20 a year in LIHEAP assistance in order to trigger this potential increase in benefits. This change is expected to affect some households' SNAP benefit amounts, but it will not affect households' eligibility for SNAP benefits. This change is expected to particularly affect states that had implemented "Heat and Eat" policies.

Within the provisions of the new law, however, states and households may have some options to reduce the impact of this change. For instance, the law gives states the option to delay implementation or reduce its impact for as long as five months after the law takes effect. In addition to the option to delay implementation, a state continues to have the option to issue LIHEAP payments greater than $20 to maintain benefit levels that had been based on more nominal LIHEAP payments. Following enactment, some states have already chosen to provide $20 of energy assistance, at least in the short-term. USDA has issued two implementing memos to guide state planning.

Because SNAP benefits are 100% federally funded and because SNAP is an open-ended entitlement, policy changes to benefit amounts or eligibility can generate substantial changes in spending. As shown in Table 1 , the Congressional Budget Office (CBO) estimated that this LIHEAP-related change included in the 2014 farm bill will reduce SNAP spending by approximately $8.6 billion over the 10-year budget window of FY2014-FY2023. (Although this change is similar to the House-passed proposal, it is estimated to impact spending slightly less due to the timing of implementation.) CBO last published an estimate of households affected with their cost estimate for the House bill; at that time, CBO estimated that 850,000 SNAP-recipient households each year, on average, would have their benefits reduced by an average of $90 per household per month.

Congress's final decision to change the law came after the passage of related proposals in both the House and the Senate. The 113 th Congress's Senate-passed farm bill ( S. 954 ) would have set a $10 threshold for LIHEAP payments to confer this potential advantage. The House-passed farm bill ( H.R. 2642 combined with H.R. 3102 ) included the $20 threshold.

Medical Marijuana and Excess Medical Expense Deduction

Background

Section 5(e) of the Food and Nutrition Act, 7 U.S.C. 2014(e)(5), specifies the parameters for an excess medical expense deduction. Households that contain an elderly or disabled member are eligible to have this deduction included in their net income (where applicable) and benefit calculation processes.

It was reported that certain states were including a household's medical marijuana expenses to determine a household's excess shelter deduction. In a July 10, 2012, memorandum to regional directors, FNS "reaffirmed its longstanding policy that a household may not use the SNAP medical deduction for the cost of any substance considered illegal under Federal law," and went on to say that, "States that currently allow for the deduction of medical marijuana must cease this practice immediately and make any necessary corrections to their State policy manuals and instructions. Cases that cannot be readily identified must be corrected at the time of recertification or periodic report, whichever is sooner. States that are not in compliance may face penalties for any overissuance of SNAP benefits."

2014 Farm Bill: Requires USDA to Promulgate Regulations on the Exclusion of Medical Marijuana from Excess Medical Expense Calculation

The law requires USDA to promulgate regulations to ensure that medical marijuana is not treated as a medical expense in the calculation of the excess medical expenses deduction. The House bill had included this provision, but the Senate bill did not.

SNAP-Authorized Retailers and Benefit Redemption Issues

SNAP does not provide households with cash benefits. Instead, participating households are provided benefits on an electronic benefit transfer (EBT) card which participants may only redeem for SNAP-eligible foods at authorized retailers .

During the formulation of the 2014 farm bill, proposals that relate to eligibility and benefit amounts have garnered the most attention, but arguably it is the law's retailer-related provisions that present the biggest changes to how SNAP will operate. The 2014 farm bill makes changes to (1) the requirements for becoming a SNAP retailer (" Definition of Retail Food Store: Store Inventory and EBT Service "), (2) using technology for EBT transactions (" New Technology for EBT Redemption "), and (3) specific types of retailers that may accept SNAP (" Specific Retailers "). The law also includes resources and policies intended to further prevent the illegal use of benefits (" Trafficking "). In addition to those discussed below, Table B-6 includes a summary of all of the related provisions.

Definition of Retail Food Store: Store Inventory and EBT Service

Prior Law and Background

SNAP benefits can be accepted only by authorized retailers. Among other application requirements, USDA authorization of a retailer is based on the retailer's inventory and sales. The Food and Nutrition Act defines a retail food store, and included—before the 2014 farm bill—within that definition an establishment that either (1) offers, on a continuous basis, a variety of foods in each of four staple food categories, including perishable foods in at least two of the categories, or (2) has over 50% of its sales in staple foods. While the authority existed to consider the nature and extent of the food business conducted, there was no statutory provision tying a retailer's sales of non-food items (e.g., alcohol and tobacco) to its authorization.

2014 Farm Bill: Requirements to Carry a Greater Variety of Foods, Before Accepting SNAP

The 2014 farm bill amended SNAP's definition of retail food store. The law requires SNAP retailers that are authorized based on their inventory of staple foods to carry perishable foods in at least three (rather than two) of the staple food categories. Also, stores must offer at least seven foods in each of the four staple food categories. The law gives USDA the authority "to consider whether the applicant is located in an area with significantly limited access to food" in its authorization of stores. The law also adds requirements about the adequacy of the store's EBT service.

The House and Senate bills would have required stores to carry perishable foods in at least three of the staple food categories. The Senate bill during the 112 th Congress would have required SNAP-authorized retailers to have limited sales of alcohol and tobacco.

Electronic Benefit Transfer Equipment and Manual Vouchers

Prior Law and Background

Prior to the 2014 farm bill, an electronic benefit transfer (EBT) point-of-sale machine could be provided by the state agency to the retailer at no cost to the retailer. At their own cost, many retailers choose to purchase credit card machines that also accept EBT. Although SNAP has transitioned to being fully EBT, and paper coupons ("food stamps") are no longer offered, the authority still exists to accept manual SNAP vouchers. Some small retailers use these rather than acquire an EBT machine. Prior to the 2014 law, there were no statutory requirements regarding unique terminal identification numbers for EBT machines.

2014 Farm Bill: Requires Retailers to Purchase EBT Machinery, Further Limits Manual Vouchers

The 2014 law changed the policy around EBT equipment and the related topic of manual vouchers. The law shifts the costs of EBT machinery to retailers. CBO estimated that this change would save $77 million over 10 years (see Table A-1 ).

The law also bars states from issuing manual SNAP vouchers or allowing retailers to accept manual vouchers unless USDA makes a determination that circumstances or categories of retailers warrant use of manual vouchers.

It requires EBT service providers to provide for and maintain "unique terminal identification number information"; this is intended to assist USDA in tracking and preventing fraudulent transactions. The law includes further details for the "unique terminal identification number information" provision: requiring USDA to "consider existing commercial practices for other point-of-sale debit transactions" and prohibiting USDA from issuing a regulation earlier than two years from the bill's enactment.

For the most part, these proposals about EBT machinery and manual vouchers were included in both the House and Senate bills.

New Technology for EBT Redemption

Prior Law and Background

Prior to the new farm bill, government funding typically provided for only wired EBT machines. No provisions of the authorizing statute explicitly authorized redemption of SNAP benefits via wireless EBT machinery or online SNAP transactions.

Advocates had asked for technological accommodations for farmers' markets and other direct-to-consumer venues. From FY2012 appropriated resources, USDA used $4 million to expand EBT point of sale devices at farmers' markets.

Also, prior to the new law, using a SNAP EBT card to make purchase over the Internet was neither allowed nor technologically feasible.

2014 Farm Bill: Authorizes Technology Modernization Demonstration Projects That Could Lead to More Permanent Authorization

The enacted law requires USDA, depending on results of an authorized demonstration project, to authorize retailers that conduct EBT transactions using mobile technologies (defined as "electronic means other than wired point of sale devices") if retailers meet certain requirements. Similar to the mobile technologies provision, the bill includes a statutory authorization for USDA to authorize retailers to accept benefits over the Internet, contingent upon results of a demonstration project and a report to Congress.

The Senate bill also contained demonstration projects for mobile and online redemption, whereas the House proposal only contained the mobile demonstration project.

Specific Retailers

Prior Law and Background

Prior to the 2014 farm bill, shares in a Community Supported Agriculture (CSA) establishment were not a SNAP-eligible purchase. In a CSA, a farmer or community garden grows food for a group of local residents—members, shareholders, or subscribers—who pledge support to a farm at the beginning of each year by agreeing to cover a portion of the farm's expected costs and risks. In return, the members receive shares of the farm's production during the growing season.

Also prior to the 2014 law, non profit grocery delivery services for the elderly and disabled were not included as a "retail food store" that can accept SNAP benefits. Such establishments would have to negotiate waivers with USDA in order to accept SNAP benefits. Under various authorities and waivers other retailers may conduct deliveries to SNAP participants, but fees may not be paid with SNAP benefits.

For the most part, SNAP benefits are not redeemable at restaurants, as the benefits are not redeemable for hot, prepared foods. However, states had been able to choose to operate restaurant meals programs , allowing homeless, disabled, or elderly households to redeem SNAP benefits at restaurants that offer concessional prices. States contract with restaurants, and USDA authorizes them as SNAP retailers. FY2012 redemption data indicate that approximately $44.3 million (or less than 0.1% of SNAP benefits) were redeemed at "meal delivery/private restaurants."

2014 Farm Bill: CSAs and Certain Grocery Delivery Services to Accept SNAP, Changes to Restaurant Meal Program

The 2014 farm bill makes SNAP benefits redeemable for shares of Community-Supported Agriculture (CSA). This was included in the Senate and House bills.

The law adds "governmental or private nonprofit food purchasing and delivery service" that serve the elderly and disabled to the definition of a retail food store, emphasizing that delivery fees are not to be paid with SNAP. The law requires USDA regulations to include certain protections and limitations, and, until the regulations have been issued, the USDA may not approve more than 20 such purchasing and delivery services. This change is substantially similar to the Senate and House proposals.

Also, the law added responsibilities for state agencies, private establishments, and USDA before restaurants would be able to participate in a restaurant meals program. For restaurants that had contracted with the state to accept SNAP benefits before this provision was enacted, the restaurant would be able to continue to accept SNAP without meeting the additional requirements for no more than 180 days. This had been included in the Senate and House bills as well.

Trafficking

Prior Law and Background

Trafficking is the sale of SNAP benefits for cash or for ineligible items. Trafficking is illegal and enforced by USDA-FNS using a number of methods. The Food and Nutrition Act includes penalties for retailers and participants engaged in trafficking; penalties include fines and imprisonment. An analysis of trafficking during the 2009-2011 period estimated that the trafficking rate is 1.3%, up from 1.0% in a 2006-2008 study.

Current law authorizes civil penalties and SNAP disqualification penalties for retailers that engage in SNAP trafficking (the sale of SNAP benefits for money or ineligible items). USDA enforces those penalties through a variety of activities and funds from the SNAP account. Approximately $8 million each year was obligated for retailer integrity and trafficking in FY2010, FY2011, and FY2012.

Some have argued that increasing the monitoring and penalties around lost-EBT-card replacement could eliminate a source of potential trafficking, and FNS has recently proposed a rule in this regard. Prior to the 2014 farm bill, the only mention of replacement cards in the authorizing statute was where the law states that state agencies may collect a fee for replacement of an EBT card by reducing the monthly allotment of the participating household.

2014 Farm Bill: New Trafficking Funding, Replacement Card Measures

To track and prevent SNAP trafficking, the 2014 farm bill provides $15 million in mandatory funding in FY2014, which is available until expended. The law also authorizes up to $5 million, subject to appropriations, for each year from FY2014 through FY2018. The Senate's bill would have provided USDA $5 million in FY2014 in additional mandatory funding; it also would have authorized $12 million subject to appropriations for each year from FY2014 to FY2018. The House proposal was similar to the Senate's except that the House would have provided USDA $5 million annually for three years.

The 2014 farm bill adds additional statutory measures regarding "the purposeful loss of cards." The law permits USDA to authorize a state agency to decline a participant's request for a replacement card, unless the household provides an explanation for the loss of the card. The provisions specify that USDA regulations must include protections for vulnerable individuals (homeless, disabled, victims of crimes) and must assure that certain procedures occur and that procedures are consistent with participants' existing due process protections. This change to the prior law was included in the Senate and House bills.

Other SNAP Funding, Policies

Throughout the formulation of the new law, policy makers showed interest in reducing federal spending, including in the Nutrition Title. For some policy makers, there was interest in doing that without affecting benefits, but that can be difficult. Each year, roughly 95% of SNAP spending is on the benefits themselves, and around 5% is on non-benefit costs, such as the federal match to states' administrative costs, the related Nutrition Education and Obesity Prevention Grant program, SNAP Employment and Training funds, and the awards for high-performing states. This section summarizes two areas addressed in formulation of the new law, and a complete summary of the other SNAP provisions is in Table B-7 .

SNAP Performance Bonuses for State Agencies

Prior Law and Background

State agencies are currently eligible for, in total, $48 million per year in performance awards. These grant awards are provided to states for performance accomplishments in payment accuracy, program access index (a proxy measure for the share of eligible people who participate in SNAP), application timeliness, and best negative (improper denial) error rate. The 2002 farm bill ( P.L. 107-171 ) established this system of performance awards and expanded the performance system to include measures other than payment accuracy rates (i.e., error rates). From FY2003 through FY2011, 52 of the 53 state agencies received bonus awards at least once. There had been no requirement that these performance awards be reinvested in SNAP.

As part of SNAP's quality control system, states are also subject to fiscal penalties for poor performance. Although the system has changed a number of times, under the 2002 farm bill revision, sanctions are only assessed against states with above-threshold rates of error for two consecutive years.

2014 Farm Bill: Retains Performance Award Program, but Requires Reinvestment

The law amended the SNAP performance bonus payments so their reinvestment in the program is required. This was the same as the Senate bill.

The House bill would have repealed USDA's authority to issue performance awards and the related $48 million per year in mandatory funding.

Nutrition Education and Obesity Prevention Grant Program

Formerly SNAP Nutrition Education, this program—as created by the 2010 child nutrition reauthorization ( P.L. 111-296 )—provides formula grant funding for states to provide programs for SNAP (and other domestic food assistance program) participants as well as other low-income households. With these funds, "[s]tate agencies may implement a nutrition education and obesity prevention program for eligible individuals that promotes healthy food choices consistent with the most recent Dietary Guidelines for Americans." The authorizing law provides mandatory funding of $375 million in FY2011 and adjusts for inflation each year thereafter. The program received $401 million in FY2014.

2014 Farm Bill: No Change to Funding Level, Broadens Use of Funds

The law amends the Nutrition Education and Obesity Prevention Grants so that funds may also be used for programs that promote physical activity. This was a change included in the House and Senate bills.

The House bill would have reduced funding in FY2014 and then would have adjusted for inflation in subsequent years; CBO estimated that that proposal would have reduced funding for the program by $146 million over 5 years and $308 million over 10 years.

Programs in Lieu of SNAP

"Programs in Lieu of SNAP" refers to the related programs operated by entities that do not operate SNAP. Puerto Rico, American Samoa, and the Northern Mariana Islands do not participate in the SNAP program. Instead, they receive nutrition assistance block grants, under which they administer a nutrition assistance program with service delivery unique to each territory. Indian tribal organizations may choose to operate the Food Distribution Program on Indian Reservations (FDPIR) instead of having the state offer regular food stamp benefits; the full cost of benefits and most administrative expenses are covered by the federal government.

Funding for territorial nutrition programs and FDPIR is included within the account for SNAP. By authorizing the appropriations in Section 18(a) of the Food and Nutrition Act (see " SNAP Authorization and Appropriations "), the 2014 farm bill continues operations for the programs in general. Table B-8 summarizes the other proposals for these programs.

FDPIR

Background

FDPIR provides an alternative to SNAP for participating Indian Reservations by delivering a household food package, which includes specific foods, as opposed to SNAP's electronic benefit transfer benefits that are redeemable at authorized retailers. Funding for FDPIR is included within the SNAP account. The Food and Nutrition Act includes an authority to fund a local foods pilot program to incorporate local and traditional foods in the FDPIR program.

2014 Farm Bill: Reauthorizes Local Foods Pilot, Authorizes Feasibility Study

The law, as House and Senate bills proposed, continues to authorize FDPIR and reauthorizes the local foods pilot program through the end of FY2017. The law requires USDA to study the feasibility of tribes, as opposed to states, operating nutrition assistance programs, in addition to FDPIR, and it provides (in FY2014 but available until expended) $1 million in mandatory funding. An authorization of this feasibility study was also included in the House and Senate bills.

The law also directs USDA to carry out a demonstration project for the purchase of traditional and local foods. The Senate bill had included a set-aside from existing funding which would allow tribes to substitute local, tribal foods for up to 5% of the USDA commodities received through FDPIR; the 2014 farm bill does not include this policy.

Programs in Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands

Background

Guam and the Virgin Islands participate in SNAP, but the Commonwealth of the Northern Mariana Islands (CNMI), Puerto Rico, and American Samoa do not. In the Food and Nutrition Act of 2008, American Samoa and Puerto Rico are given mandatory funds for nutrition assistance block grants. CNMI receives a block grant that is negotiated with USDA. Generally speaking, the block grants offer flexibility to the administering territory, but also mean that they have limited funding. While SNAP is an open-ended entitlement, the nutrition assistance block grants to the territories grow at the rate of inflation (measured by the Thrifty Food Plan).

The 2008 farm bill authorized and funded a study of the feasibility of including Puerto Rico in SNAP; the study was completed and published in June 2010. In the case of Puerto Rico's administration of its block grant, the territory currently has sufficient flexibility to provide some food assistance benefits in the form of SNAP. One of the feasibility study's findings on "Projected Administration Changes" was:

Like SNAP, NAP [Puerto Rico's food assistance program] distributes benefits on an EBT debit card. However, unlike SNAP, up to 25 percent of the monthly benefit may be redeemed for cash. Although the cash is designated for eligible food items, it is widely acknowledged that participants use at least some of their allotted cash for non-food essentials, such as medicine and hygiene products. It is difficult to determine what the full impact of a completely non-cash allotment would be on Puerto Rico retailers and participants. Because the current cash allotment is the sole or primary source of cash income for many participants, it is clear that families would need to find other ways to pay for essential non-food items.

2014 Farm Bill: Phases Out Puerto Rico's Provision of Cash; SNAP Pilot in CNMI

The 2014 farm bill includes a policy that will phase out the block grant's provision of cash assistance over time. It first provides a mandatory $1 million in FY2014 for USDA (and HHS) to study aspects of Puerto Rico's 25% cash practice. After a report to Congress on the study, USDA is to annually phase out the provision of cash beginning in FY2017 until no cash is provided in FY2021. The law includes exceptions for vulnerable populations. The House proposal would have amended Puerto Rico's block grant so that Puerto Rico would no longer be permitted to use its block grant funding to provide benefits in the form of cash; Puerto Rico would have had to provide benefits only in EBT form.

For the Commonwealth of the Northern Mariana Islands, similar to the House's proposal, the law authorizes and provides $1 million in both FY2014 and FY2015 for a feasibility study of CNMI's capacity to administer a SNAP pilot. Then—if determined to be feasible—the law authorizes and provides administrative and technical assistance funds to support the pilot ($13.5 million in FY2016, $8.5 million in each of FY2017 and FY2018). Different from the House proposal, the law adds that if the pilot is found to be unfeasible, then the funding will instead be added to CNMI's existing block grant.

The Senate bill did not propose any changes to these territories' programs.

Commodity Distribution Programs

USDA commodity foods are foods purchased by the USDA for distribution to USDA nutrition programs. They are not necessarily specific types of food; the catalog of commodity foods is a wide variety of fruit, vegetable, livestock, dairy—fresh, frozen, and processed foods. The USDA Food and Nutrition Service programs that include USDA commodity foods are The Emergency Food Assistance Program (TEFAP), Commodity Supplemental Food Program (CSFP), National School Lunch Program (NSLP), Summer Food Service Program (SFSP), and Child and Adult Care Food Program (CACFP). Many of these programs distribute "entitlement commodities" (an amount of USDA foods to which grantees are entitled by law) as well as "bonus commodities" (USDA food purchases based on requests from the agricultural producer community). All of the new law and conference proposal provisions that pertain to commodity distribution are summarized in Table B-9 .

The Emergency Food Assistance Program (TEFAP)

Background and Prior Law

TEFAP, the main USDA-FNS program that supports emergency feeding organizations, currently receives federal government resources in several ways. Congress provides mandatory funding for the purchase of "entitlement commodity" foods that are distributed to emergency feeding organizations (e.g., food banks and food pantries) in addition to discretionary funding for organizations' administrative costs. TEFAP also receives bonus commodity donations from USDA when the department exercises its purchasing authority in response to requests from the agricultural industry for surplus removal or price support.

TEFAP's mandatory funding for "entitlement commodities" for FY2012 and subsequent years (FY2013, FY2014) is $250 million, plus an adjustment for food-price inflation. This mandatory entitlement funding is only available to be spent over a one-year period. In addition, the law authorizes to be appropriated up to $100 million for TEFAP administrative and distribution costs; in recent years, funding of approximately $50 million has been provided. The law also authorizes to be appropriated up to $15 million in TEFAP infrastructure grants; funds have not been appropriated for these grants since FY2010.

Before the 2014 farm bill, there was no statutory requirement about Kosher or Halal foods.

2014 Farm Bill: Increases Entitlement Commodities Funding, Makes Funds Available for Two Years

According to CBO's accounting for inflation, the 2014 farm bill increases funding for TEFAP's entitlement commodities by $125 million over five years and $205 million over 10 years. The increases will first take effect in FY2015 with an increase of $50 million above prior law.

Both proposals would have increased mandatory funding for TEFAP, but in differing amounts and with different approaches. The Senate bill would have increased entitlement commodity funding by $54 million over 10 years, and the House bill would have increased entitlement commodity funding by $333 million over 10 years.

In addition, the new law includes a provision that requires USDA to devise a plan for increasing purchases and modifying the labeling of Kosher and Halal foods at emergency feeding organizations. This policy had been included in the House bill, but not in the Senate bill.

The new law also requires funding for TEFAP to be available to be spent over a two-year period, and it reauthorizes the discretionary program, TEFAP infrastructure grants. Both of these policies had been included in the House and Senate bills.

Commodity Supplemental Food Program (CSFP)

Background and Prior Law

CSFP is a household-based food assistance program that provides distribution of USDA commodity foods to a household. The program operates in 39 states, DC, and through two Indian Tribal Organizations. Prior to the 2014 farm bill, low-income women, infants, children under six, and the elderly (60 or over) could participate in the program. In FY2013, over 97% of CSFP participants were elderly, with under 3% being non-elderly women, infants, and children under 6.

2014 Farm Bill: Reauthorizes CSFP as a Seniors-Only Program

The new law reauthorizes CSFP through FY2018.

As included in the House and Senate bill, the new law makes a change to eligibility rules, limiting the program to only low-income seniors. This change has not been regarded as controversial, as the vast majority of CSFP participants are already seniors, and women, infants, and children usually opt to participate in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). The provision includes some protections for the low-income women, infants, and children already participating in CSFP.

FNS has already issued guidance on how this provision is to be implemented.

Commodity Foods in School Meals

Background

In addition to USDA commodity foods purchased and distributed for TEFAP and CSFP, child-serving institutions that participate in the National School Lunch Program (NSLP), Summer Food Service Program (SFSP), and Child and Adult Care Food Program (CACFP, which also serves adult day care settings) also receive assistance in the form of USDA commodity foods (in addition to per-meal cash reimbursements). While typically, changes to the programs' authorizing statutes (Russell National School Lunch Act and Child Nutrition Act) are reported by the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Education and the Workforce, the policies pertaining to USDA commodity food procurement are overseen by the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture.

In FY2013, approximately 10% of the federal assistance for the National School Lunch Program was in the form of donations of USDA commodity purchased foods. This includes "entitlement commodities," the food amounts to which a school is entitled based on the number of meals served; as well as "bonus commodities," which are based on USDA purchases under its agricultural surplus and price support authorities. Schools redeem National School Lunch Program commodity "entitlement" food assistance (the amount of which is based on a per-meal rate) from USDA's offerings. Some stakeholders have been interested in assuring that entitlement commodity assistance can instead be used for local purchases instead of USDA foods.

The 2014 farm bill contained various policies that impact the USDA foods served in school meal programs (National School Lunch Program and National School Breakfast Program). Some are discussed below, but the complete list is summarized in Table B-9 .

2014 Farm Bill: Added Additional Options for Commodity Foods

Processing of USDA Commodities . The new law, like the House and Senate bill proposed, extends the authority for USDA to enter into reprocessing agreements with private companies in order to process commodity foods. The law, like the House and Senate bills, also includes a new provision that allows USDA to contract with a processor and retain title to those foods while processing.

USDA purchases of fresh fruits and vegetables ; farm to school. The new law, like the House and Senate bills proposed, continues the requirement that $50 million of USDA's additional acquisitions of fruits and vegetables be fresh fruit and vegetables. The law, similar to the House proposal, also creates a pilot grant program that would allow eight states to use this funding for their own local sourcing of fresh fruits and vegetables.

Pulse crop pilot program. The new law included the Senate bill's proposal to create a pilot project to purchase pulse crops (dry beans, dry peas, lentils, and chickpeas) and pulse crop products for schools. Up to $10 million in discretionary appropriations are authorized.

Other Farm Bill Nutrition Program Provisions

The 2014 farm bill's Nutrition Title contains numerous other new and reauthorized programs and policies. Below are a few highlights, including the reauthorization of programs included in the 2008 farm bill (e.g., Senior Farmers' Market Nutrition Program, Community Food Projects, and Fresh Fruit and Vegetable Program), and new mandatory funding that makes federal funding available for SNAP bonus incentive projects. While only a select overview is included in the list below, all remaining provisions are summarized in Table B-10 .

Senior Farmers' Market Nutrition Program : Reauthorization. The new law reauthorizes the Senior Farmers' Market Nutrition Program, which provides formula grants to participating states to run programs for seniors to redeem vouchers at area farmers' markets, through FY2018. Funding remains at $20.6 million in mandatory funding per year, transferred from the Commodity Credit Corporation, so appropriations are not required. The House and Senate had proposed reauthorization at $20.6 million, but the House bill had also proposed further amendments to the program, which were not adopted. Namely, the House proposal would have expanded eligibility from "low-income seniors" to "low-income seniors and low-income families who are determined to be at nutritional risk," and a House amendment further specified that 50% of the funding would be for seniors.

Fresh Fruit and Vegetable ("Snack") Program : Pilot Project to Include Frozen, Canned, and Dried Products. The Fresh Fruit and Vegetable Program is permanently authorized and funded by the 2008 farm bill, so there is no need for legislative action to continue operations. However, the House proposal would have made changes to the program's authorization; namely, it would have stricken "fresh" from the program's title and authorization and would allow the inclusion of frozen, dried, and canned fruits and vegetables. Instead, the new law includes a pilot project that requires USDA to test schools offering frozen, dried, and canned fruits and vegetables in at least five states. The new law includes $5 million to implement and evaluate this pilot.

Community Food Projects: Increased Funding, Eligibility for Gleaners. Since the 1996 farm bill ( P.L. 104-127 ), the Food and Nutrition Act (formerly, Food Stamp Act) has permanently authorized a grant program for eligible nonprofit organizations, in order to improve community access to food. Infrastructure projects are an eligible use of these funds. Grants require 50% in matching funds. The 2008 farm bill (and subsequent extensions) provided $5 million annually in mandatory funding for this purpose. The 2014 farm bill reauthorized the program, and increased mandatory funding by $4 million each year to a total of $9 million in FY2015 and each fiscal year thereafter. The new law also included the Senate bill's expansions of eligible organizations and purposes, plus added gleaners (entities that glean fields for food donations to nutrition programs) as eligible. The Senate bill would have continued to provide the $5 million, and the House would have increased funding to $15 million per year, carving out $5 million of those funds for projects that would incentivize low-income households' fruit and vegetable purchases.

"Food Insecurity Nutrition Incentive" Grants. The 2014 farm bill includes a new mandatorily funded grant program to support programs that provide SNAP households incentives when they purchase healthy foods. This policy (under the name Hunger-free Community Incentive Grants) was included in the Senate bill but not the House. Like the Senate bill, the new law includes $100 million in mandatory funding over five years for these grants. These competitive grants will be for projects that incentivize SNAP participants to buy fruits and vegetables. Until this federal funding opportunity, such bonus incentive projects were funded only by non-federal funds.

Healthy Food Financing Initiative : Streamlined Program at USDA. Although the Administration already provides support to the development of fresh food retailers in underserved communities using a range of existing authorities, the House and Senate conference proposals both included a new authorization for a consolidated Healthy Food Financing Initiative housed at the USDA. USDA would approve a community development financial institution as "national fund manager." An annual amount of $125 million would be authorized to be appropriated. The new law included this language.

Appendix A. Detailed CBO Cost Estimates and All-Sections Summary

Detailed CBO Cost Estimates

Appendix B. Comparison of the Enacted 2014 Farm Bill ( P.L. 113-79 ) Nutrition Title to the Nutrition Titles of the 2013 Conference Proposals and Prior Law