(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) 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 section 2021(a) of this title may not accept or redeem benefits until the Secretary receives full payment of any penalty imposed on such store or concern.

(B) 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 section 2021(d) of this title.

(c) Information submitted by applicants; safeguards; disclosure to and use by State agencies
Regulations 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 [42 U.S.C. 1786], for purposes of administering the provisions of that Act [42 U.S.C. 1771 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
Any 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 section 2023 of this title. 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
An approved retail food store shall provide adequate EBT service as described in section 2016(h)(3)(B) of this title.

(h) Private establishments

(1) In general
Subject 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 section 2012(k) of this title 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 section 2020(e)(25) of this title.

(2) Existing contracts

(A) In general
If, on the day before February 7, 2014, 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 section 2020(e)(25) of this title, 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 section 2020(e)(25) of this title.

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

(3) Report to Congress
Not later than 90 days after September 30, 2014, 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 section 2020(e)(25) of this title 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) shall review a representative sample of currently authorized facilities referred to in section 2012(k)(3) of this title 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) 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 section 2012(k) of this title;

(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) 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 December 20, 2018, 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
Nothing 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 December 31, 2020.

(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
Guidance provided under this subsection shall not affect any requirements under section 7517 of this title, 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.