O n December 15, 2016, USDA published in the Federal Register a final rule, "Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program (SNAP)." This final rule followed USDA-FNS's proposed rule earlier in the year: On February 17, 2016, the U.S. Department of Agriculture's (USDA's) Food and Nutrition Service (USDA-FNS) published the proposed rule. On April 5, 2016, USDA-FNS published a clarification of the proposed rule and extended the comment period to May 18, 2016 . SNAP, the largest of USDA's domestic food assistance programs, provides benefits to eligible participants; these benefits are redeemable for SNAP-eligible foods at SNAP-authorized retailers. SNAP-authorized retailers are stores and other food sellers that are allowed to accept SNAP benefits. In FY2015, SNAP had an average monthly participation of 45.8 million individuals, $74.0 billion was obligated for the program (most of the funding is for benefits themselves), and nearly 259,000 firms were authorized to accept benefits. The final rule implements provisions of the Agriculture Act of 2014 ("2014 farm bill," P.L. 113-79 ) that made changes to inventory requirements for SNAP-authorized retailers and also addressed other USDA-FNS policy objectives. The proposed rule had been controversial, particularly the provisions not explicitly required by the farm bill. Changes in retailer authorization policy can impact a range of SNAP program stakeholders—not only retailers, but also food manufacturers and program participants. Driving the debate over these changes has been the potential impact on smaller retailers. This report will present a brief background on SNAP retailer authorization and related administrative data, a summary of prior regulations, the statutory changes enacted in the 2014 farm bill, and the final rule's changes to the current regulations (including comparisons to the proposed rule). SNAP benefits may be redeemed only for eligible foods at authorized retailers. The SNAP program authorizes retailers based, in part, on the retailer's inventory or sales. In order to be authorized, a retailer is generally required to (1) apply for authorization , and (2) pass a USDA-FNS administered inspection and authorization process. A wide range of retailers are authorized to accept SNAP, including supermarkets, farmers' markets, and convenience stores. Inventory requirements for SNAP retailers are based on stock or sales of "staple foods," defined in statute as four categories: (1) meat, poultry, or fish; (2) bread or cereals; (3) vegetables or fruits; and (4) dairy products. Although SNAP participants can buy foods that are not in staple food categories, required staple food inventory or sales is one of the bases for authorizing a retailer to accept SNAP benefits. Though many different types of retailers are authorized to accept benefits, data show that the majority of SNAP benefits are redeemed at supermarkets and superstores. In FY2015, approximately 82% of benefits were redeemed in supermarkets and superstores. Although convenience stores make up over 41% of SNAP-authorized retailers, they redeemed approximately 5% of SNAP benefits in FY2015. Figure 1 displays the share of SNAP benefits redeemed by different categories of retailers, with further detail on authorizations and redemptions shown in Table 1 . Retailer data also indicate that smaller retailers (convenience stores, small grocery stores, medium grocery stores) received the bulk of sanctions from USDA-FNS in FY2015; sanctions include time-limited or permanent disqualifications from SNAP. This section summarizes standards for SNAP retailer authorization prior to the final rule ("prior regulations"). Under the prior regulations, a SNAP-eligible retailer had to meet one of two tests: criterion A (based on store inventory) or criterion B (based on store sales). These rules are displayed in Table 2 . Specialty stores, such as fruit and vegetable or seafood markets, tend to apply under criterion B because they carry a limited number of staple food categories. As noted above, SNAP's authorizing law defines "staple foods" as foods in the following categories: meat, poultry, or fish; bread or cereals; vegetables or fruits; and dairy products. The law further provides that staple foods "do not include accessory food items, such as coffee, tea, cocoa, carbonated and uncarbonated drinks, candy, condiments, and spices." Under prior regulations, foods with multiple ingredients were counted in a staple food group based on the "main ingredient" as determined by USDA-FNS. For example, a box of macaroni and cheese might be classified as a variety within a staple food category but in the bread or cereal category (despite containing dairy). Prior regulation also defined perishable staple food items as "items which are either frozen staple food items or fresh, unrefrigerated or refrigerated staple food items that will spoil or suffer significant deterioration in quality within 2-3 weeks." Regulation specified that a "variety" of qualifying foods in a particular category means different types of foods, not different brands, different nutrient values, different varieties of packaging, or different package sizes; the example was given that apples, cabbage, and tomatoes are varieties in the fruit or vegetable staple food category. Although retailers must offer these particular types of foods to qualify as a SNAP-eligible retailer, SNAP participants may redeem their benefits for generally any foods for home preparation and consumption whether they are staple foods or not. SNAP benefits may not be redeemed for alcohol; tobacco; or hot, prepared foods intended for immediate consumption (e.g., a rotisserie chicken). Prior regulations also made ineligible "firms that are considered to be restaurants, that is, firms that have more than 50 percent of their total gross retail sales in hot and/or cold prepared foods not intended for home preparation and consumption." Restaurants authorized to participate under certain states' restaurant option (an option to assist homeless, elderly, and disabled individuals who may have difficulty preparing food) are an exception to this 50% rule. The 2014 farm bill (enacted February 7, 2014) amended many different aspects of SNAP law, including changes to the authorization of SNAP retailers. Section 4002 of P.L. 113-79 required that retailers seeking authorization based on inventory (i.e., criterion A) will have to increase their variety of stock. Namely, the law was amended to require stores to stock at least seven varieties of staple foods in each of the four staple food categories and to stock perishable foods in at least three categories. Section 4002, which includes other requirements for retailers, also amended the authorizing law to require a review of retailer applications to consider "whether the [retailer] applicant is located in an area with significantly limited access to food." The law's conference report included further information on the decision to craft this policy change. In a March 2014 policy memorandum, USDA-FNS said that the 2014 farm bill changes to inventory requirements would require rulemaking to implement. This section summarizes the USDA-FNS final rule's changes to prior regulations and includes comparison to the proposed rule. This section has also been amended to reflect changes made by the FY2017 appropriations law, which limits some of the final rule's provisions. As a basis for rulemaking, in the February 2016 proposed rule, USDA-FNS explained that the proposed rule was "the result of two separate developments": (1) the 2014 farm bill's statutory changes, and (2) "the effort initiated by FNS in 2013 to look at enhancing the eligibility standards for SNAP retailers to better enforce the intent of the [Food and Nutrition Act of 2008] to permit low-income individuals to purchase more nutritious foods for home preparation and consumption." Related to the latter development, USDA-FNS cited findings from an August 2013 Request for Information (RFI) , which posed 14 questions to the public on SNAP retailer eligibility and authorization. USDA-FNS stated that they received from the RFI over 200 comments "from a diverse group, including retailers, academics, trade associations, policy advocates, professional associations, government entities, and the general public." The agency also cited related listening sessions. Before issuing the final rule, FNS reviewed 1,260 germane, nonduplicative comments on the proposed rule. About 72% of comments came from retail food store representatives, owners, managers, or employees, most of whom submitted template or form letters. Some Members of Congress and other stakeholders had voiced strong opposition to aspects of the proposed rule. As the proposed rule would have, the final rule made changes to 7 C.F.R. Part 271 and Part 278 in five areas of retailer authorization policy: (1) sales of hot, prepared foods; (2) definition of staple foods; (3) inventory and depth of stock; (4) access-related exceptions to the rules; and (5) disclosures of retailer information. The final rule's ultimate changes in some ways vary notably from those in the proposed rule. These areas are briefly discussed in the sections to follow. The final rule is presented "at-a-glance"—as compared to the proposed rule and the prior regulations—in Table 4 at the end of this section. Throughout the proposed and final rules, USDA-FNS expressed the objectives of improving access to healthy foods and preserving the integrity of the program. The statute as amended by the farm bill explicitly requires an increase in the minimum number of food varieties and perishable varieties for retailers authorized under criteria A (discussed further below in " Inventory "); and access-related exceptions to retailer authorization (discussed further below in " Access-Related Exceptions to the Rules "). USDA-FNS acknowledged throughout the final rule's preamble that the regulatory changes in other areas are discretionary.