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Oh, SNAP! FNS Refuses to Comply with the 2018 Farm Bill

Nearly all – more than 98% – of the firms authorized by USDA’s Food and Nutrition Service (FNS) to participate in the Supplemental Nutrition Assistance Program (SNAP) are traditional brick and mortar supermarkets, groceries, and convenience stores.   Accordingly to FNS’s SNAP Retailer Manager Year End Summary, under 1% of SNAP-authorized firms are entities that serve meals to residents, including group homes, homeless shelters, and drug/alcohol treatment centers.  Only 165 SNAP-authorized entities are assisted living facilities occupied by the elderly or disabled. Most of those facilities are located in Illinois, as a result of an innovative Supportive Living Program (SLP) established by the Illinois Department of Healthcare and Family Services (DHFS) during the 1990s. 

For more than two decades, Illinois SLP facilities have been authorized to redeem SNAP benefits in order to provide meals for their residents who are Medicaid beneficiaries.   During that lengthy period of time, SLP facilities participated in SNAP without issue.  During 2017, FNS started withdrawing the SNAP authorization of Illinois SLP facilities based the agency’s mistaken belief that their residents were residents of institutions. After Olsson Weeda Frank Terman Matz PC (OFW Law) appealed, the agency quickly backpedaled its misguided administrative decisions.  Unfortunately, FNS continues to refuse to acknowledge that Congress clearly intended in the Food and Nutrition Act that assisted living facilities and other apartment buildings primarily occupied by the elderly and disabled to be SNAP authorized entities, despite having meetings with and receiving numerous letters from Congressional representatives, DHFS officials, and owners of SLP facilities.

Since 2017, Congress has taken action to address FNS’s obstinate behavior.  The 2018 Farm Bill included a provision, codified at 7 U.S.C. § 2018(i), that expressly prevented FNS from withdrawing the SNAP authorization from any currently authorized SLP facilities or denying an application for SNAP authorization for an 18 month period.  Congress set a deadline because it also required FNS to submit a report to the House and Senate Agriculture Committees following an audit of SLP facilities.  Congress has since extended the protective period on two occasions — until December 31, 2021, through appropriations legislation.  And during December 2020, Illinois Senators Durbin and Duckworth introduced the Supportive Living Food Access Protection Act of 2020.  If passed, this legislation would amend the Food and Nutrition Act of 2008 (former the Food Stamps Act) to make clear that SLP facilities should remain SNAP-authorized.

While FNS’s report was due in June 2020, the agency did not submit it to Congress until October 2020.  Not surprisingly, that report demonstrated that SNAP-authorized assisted living facilities were broadly in full compliance with FNS’s SNAP regulations and did not contain any industry-wide violations.  Of note, the report stated that FNS intended to withdraw the SNAP authorization of all Illinois SLFs and decertify the authorization of the more than 8,000 SNAP beneficiaries living in those facilities once the protective window expires.  This statement is shocking when considering that former USDA Under Secretary Brandon Lipps, during a 2019 Senate Agriculture Committee hearing, made an express promise to U.S. Senator Richard Durbin that residents of SLPs would not be adversely affected once the 18 month protective period expired.  Shortly thereafter, the entire Illinois Congressional delegation sent a letter to former USDA Secretary Sonny Purdue expressing concerns about the agency’s “administrative overreach.” The delegation sent another letter in November 2020 asking “USDA [to] explore every possible grace period, enforcement discretion, or waiver to prevent this catastrophic outcome.” Not surprisingly, neither USDA nor FNS has responded to these letters and the agency’s renegade actions continue. 

During 2019, OFW Law sued FNS in federal court after FNS refused to process any applications for SNAP authorization by SLP facilities. While FNS’s SNAP regulations clearly require the agency to grant or deny an application within 45 days, the agency told SLPs that it would not do so until after it issued the report required by the 2018 Farm Bill.  In response, OFW Law sued the agency on behalf of a Peoria, Illinois SLP facility to compel FNS to comply with its regulations.  That lawsuit quickly resulted in the Peoria SLP facility being SNAP authorized and the agency paying substantial attorney’s fees and costs to the SLP.  Even after it settled the Peoria case, FNS initially refused to process the applications for SNAP authorization that had been submitted by three other SLP facilities.  Only after OFW Law threatened to bring suit again, did FNS process those applications. 

In March 2020, FNS granted the SNAP application of one of those facilities but denied the applications of two others.  FNS inexplicably denied those applications for SNAP authorization because it concluded that those SLFs were “institutions
based on their serving a majority of meals to their residents. 

FNS’s decisions are the hallmark of arbitrary and capricious agency action.  First, the agency’s decisions are directly inconsistent with Section 4007(2) of the 2018 Farm Bill, which expressly prohibits FNS from denying applications for SNAP authorization for the reasons provided in the agency’s denial letters. Second, the two facilities whose applications for SNAP authorization were denied are similarly situated to the 150+ other SLP facilities in Illinois; all serve a majority of meals to their residents as required by Illinois law.  One of the SLP facilities whose application was denied has sued the agency in Federal Court in Chicago to compel FNS to grant its application; that case remains pending.  And the other SLP facility recently submitted a new application for SNAP authorization; FNS hasn’t granted or denied that application yet.

Whether FNS’s improper actions were based on direction from political appointees during the prior administration or were orchestrated by long-entrenched career FNS officials is unclear.  Hopefully, the arrival of President Biden’s appointees, including Tom Vilsack, the soon-to-be-confirmed Secretary of Agriculture, and Acting Under Secretary Stacy Dean, who has oversight over the SNAP program, will direct FNS to start complying with the law and clear Congressional intent.

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