[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2407 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2407
To help individuals receiving assistance under the supplemental
nutrition assistance program in obtaining self-sufficiency, to provide
information on total spending on means-tested welfare programs, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 27, 2025
Mr. Brecheen (for himself, Mr. Kennedy of Utah, and Mr. Grothman)
introduced the following bill; which was referred to the Committee on
Agriculture, and in addition to the Committee on Oversight and
Government Reform, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To help individuals receiving assistance under the supplemental
nutrition assistance program in obtaining self-sufficiency, to provide
information on total spending on means-tested welfare programs, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SNAP Reform and Upward Mobility Act
of 2025''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--POVERTY MEASUREMENT IMPROVEMENT
Sec. 101. Improving the measurement of poverty in the United States.
Sec. 102. Commission on valuation of government benefits.
Sec. 103. GAO reports on effect of supplementary data on calculation of
poverty rates and related measures.
Sec. 104. Rule of construction.
TITLE II--MODIFICATIONS TO SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM
Sec. 201. Work requirements.
Sec. 202. Employment and training program outcomes reporting.
Sec. 203. State matching funds.
Sec. 204. Eligibility.
Sec. 205. Compliance with fraud investigations.
Sec. 206. Authorized users of electronic benefit transfer cards.
Sec. 207. Reauthorization of medium- or high-risk retail food stores
and wholesale food concerns.
Sec. 208. State activity reports.
Sec. 209. Disqualification by State agency.
Sec. 210. Retention of recaptured funds by States.
TITLE I--POVERTY MEASUREMENT IMPROVEMENT
SEC. 101. IMPROVING THE MEASUREMENT OF POVERTY IN THE UNITED STATES.
(a) Definitions.--In this section:
(1) Federal benefit.--The term ``Federal benefit'' means a
benefit, refundable tax credit, or other form of assistance
provided under any of the following programs:
(A) Earned Income Tax Credit (refundable portion).
(B) Child Tax Credit (refundable portion).
(C) Supplemental Security Income.
(D) Temporary Assistance for Needy Families.
(E) Title IV-E Foster Care.
(F) Title IV-E Adoption Assistance.
(G) Medicaid.
(H) SCHIP.
(I) Indian Health Services.
(J) PPACA refundable premium assistance and cost
sharing tax credit.
(K) Assets for Independence program.
(L) Supplemental Nutrition Assistance Food Program.
(M) School Breakfast.
(N) School Lunch.
(O) Women, Infants, and Children (WIC) Food
Program.
(P) Child and Adult Care Food Program.
(Q) The Food Distribution Program on Indian
Reservations (FDPIR).
(R) Nutrition Program for the Elderly.
(S) Seniors Farmers' Market Nutrition Program.
(T) Commodity Supplemental Food Program.
(U) Section 8 Housing.
(V) Public Housing.
(W) Housing for Persons with Disabilities.
(X) Home Investment Partnership Program.
(Y) Rural Housing Service.
(Z) Rural Housing Insurance Fund.
(AA) Low-Income Home Energy Assistance Program.
(BB) Universal Service Fund Low Income Support
Mechanism (subsidized phone services).
(CC) Pell Grants.
(DD) Supplemental Educational Opportunity Grants.
(EE) American Opportunity Tax Credit (refundable
portion).
(FF) Healthy Start.
(GG) Job Corps.
(HH) Head Start (including Early Head Start).
(II) Weatherization Assistance.
(JJ) Chafee Foster Care Independence Program.
(KK) Child Care Subsidies from the Child Care and
Development Fund.
(LL) Child Care from the Temporary Assistance for
Needy Families Block Grant.
(MM) Emergency Assistance to Needy Families with
Children.
(NN) Senior Community Service Employment Program.
(OO) Migrant and Seasonal Farm Workers Training
Program.
(PP) Indian and Native American Employment and
Training Program.
(QQ) Independent Living Education and Training
Vouchers.
(2) Resource unit.--The term ``resource unit'' means all
co-resident individuals who are related by birth, marriage, or
adoption, plus any co-resident unrelated children, foster
children, and unmarried partners and their relatives.
(3) Market income.--The term ``market income'' means
individual income from the following:
(A) Earnings.
(B) Interest.
(C) Dividends.
(D) Rents, royalties, and estates and trusts.
(E) The monetary value of employer-sponsored health
insurance benefits.
(F) Other forms of income, as determined by the
Director.
(4) Entitlement and other income.--The term ``entitlement
and other income'' means income from the following:
(A) Unemployment (insurance) compensation.
(B) Workers' compensation.
(C) Social Security.
(D) Veterans' payments and benefits.
(E) Survivor benefits.
(F) Disability benefits (not including benefits
under the Supplemental Security Income program).
(G) Pension or retirement income.
(H) Alimony.
(I) Child support.
(J) Financial assistance from outside of the
household.
(K) Medicare.
(5) Entitlement and earned unit income.--The term
``entitlement and earned unit income'' means the sum of all
market income and entitlement and other income.
(6) Income tax data.--The term ``income tax data'' means
return information, as such term is defined under section
6103(b)(2) of the Internal Revenue Code of 1986.
(7) Administering agency.--The term ``administering
agency'' means a State or Federal agency responsible for
administering a Federal benefit.
(8) Total resource unit income.--The term ``total resource
unit income'' means, with respect to a resource unit, an amount
equal to--
(A) the sum of--
(i) all market income attributable to
members of the unit;
(ii) all entitlement and other income
attributable to members of the unit; and
(iii) an amount, or cash equivalent, of all
Federal benefits received by members of the
unit; minus
(B) all State and Federal income and payroll taxes
attributable to members of the unit.
(9) Earned resource unit income.--The term ``earned
resource unit income'' means, with respect to a resource unit,
all market income attributable to members of the unit.
(10) Personally identifiable information.--The term
``personally identifiable information'' means any information
that identifies an individual or could reasonably be used to
identify an individual that is--
(A) collected pursuant to a survey conducted by the
Bureau of the Census; or
(B) disclosed to the Bureau of the Census by an
administering agency for the purpose of carrying out
subsection (b).
(11) Director.--The term ``Director'' means the Director of
the Bureau of the Census.
(b) Verification of Data Collected in the Annual Social and
Economic Supplement to the Current Population Survey.--
(1) In general.--Beginning in fiscal year 2025, in order to
more accurately determine the extent of poverty in the United
States and the anti-poverty effectiveness of Federal benefit
programs, the Director shall collect, in addition to the data
collected under the Annual Social and Economic Supplement to
the Current Population Survey, data from the appropriate
administering agencies related to the following:
(A) Participation in any Federal benefit program
and the monetary or cash equivalent value of such
benefit for an individual, where possible, and
otherwise for resource units or households.
(B) The total amount of market income for
individuals.
(C) The total amount of entitlement and other
income for individuals.
(D) Payment of income taxes and payroll taxes for
individuals.
(E) Total resource unit income.
(F) Total earned resource unit income.
(G) Any other information about benefits or income
received by individuals that the Director determines
necessary to carry out this section and that is not
included in the data relating to participation in
Federal benefit programs or market income for
individuals.
(2) Administering agency data.--Not later than 6 months
after receiving a request from the Director, the head of each
administering agency shall make available to the Director such
data (including income tax data) as the Director shall require
for the purpose of carrying out this subsection and for the
purposes outlined in section 6 of title 13, United States Code.
(3) Publication of data.--
(A) Rates and other data.--
(i) Report.--The Director shall submit to
Congress, not later than January 1, 2026, a
report detailing the implementation of this
section, including--
(I) the availability of related
data;
(II) the quality of the data; and
(III) the methodology proposed for
assigning dollar values to the receipt
of noncash Federal benefits.
(ii) Tables and graphs.--The Director shall
produce tables and graphs showing for each year
the poverty rates and related data calculated
using data collected under paragraph (1),
including--
(I) the total resource unit income
for survey respondents;
(II) the total earned resource unit
income for survey respondents;
(III) the total of all amounts
described in subparagraphs (A) through
(G) of paragraph (1) that are received
by survey respondents;
(IV) a breakdown of the amount of
income taxes and payroll taxes
attributable to survey respondents; and
(V) for 2027 and subsequent years,
poverty rates calculated using updated
poverty thresholds as described in
clause (iii).
(iii) Updated poverty thresholds.--For 2027
and subsequent years, the Director shall, in
addition to the official poverty line (as
defined by the Office of Management and Budget)
and the supplemental poverty measure, provide
an alternative poverty measure that uses the
personal consumption expenditure price index
(as published by the Bureau of Economic
Analysis) and accounts for the data collected
under paragraph (1). The Director shall provide
a comparison of the official poverty line (as
defined by the Office of Management and
Budget), the supplemental poverty measure rate
as defined by the Bureau of the Census, and the
alternative poverty rate created using the
alternative poverty measure under this section.
(iv) Rule of construction.--The Office of
Management and Budget shall not use the
additional data collected by the Director
pursuant to paragraph (1) for purposes of
defining the official poverty line.
(B) Confidentiality.--Consistent with the
provisions of sections 8, 9, and 23(c) of title 13,
United States Code, the Director shall ensure the
confidentiality of information furnished to the
Director under this subsection.
(c) Protection and Disclosure of Personally Identifiable
Information.--
(1) In general.--The security, disclosure, and
confidentiality provisions set forth in sections 9 and 23 of
title 13, United States Code, shall apply to personally
identifiable information obtained by the Bureau of the Census
pursuant to this section.
(2) Restricted access to personally identifiable
information.--Access to personally identifiable information
collected to supplement the restricted-use Current Population
Survey Annual Social and Economic Supplements in accordance
with subsection (b)(1) shall be available only to those who
have access to the Current Population Survey data with the
permission of the Bureau of the Census and in accordance with
any other applicable provision of law.
(3) Penalties.--Any individual who knowingly accesses or
discloses personally identifiable information in violation of
this section shall be guilty of a felony and upon conviction
thereof shall be fined in an amount of not more than $300,000
under title 18, United States Code, or imprisoned for not more
than five years, or both.
(d) State Reporting of Federal Data.--Beginning with the first full
calendar year that begins after the date of enactment of this Act, with
respect to any Federal benefit that is administered at the State level
by a State administering agency, such State administering agency shall
submit each year to the Federal administering agency responsible for
administering the benefit at the Federal level a report that identifies
each resource unit that received such benefits during such year by the
personally identifiable information of the head of the resource unit
and the amount, or cash equivalent, of such benefit received by such
resource unit.
SEC. 102. COMMISSION ON VALUATION OF GOVERNMENT BENEFITS.
(a) Establishment.--There is established within the United States
Census Bureau a commission, to be known as the ``Commission on
Valuation of Federal Benefits'' (referred to in this section as the
``Commission'').
(b) Composition.--
(1) In general.--The Commission shall be composed of 8
members, of whom--
(A) 2 members shall be appointed by the majority
leader of the Senate;
(B) 2 members shall be appointed by the minority
leader of the Senate;
(C) 2 members shall be appointed by the Speaker of
the House of Representatives; and
(D) 2 members shall be appointed by the minority
leader of the House of Representatives.
(2) Co-chairs.--Of the members of the Commission--
(A) 1 co-chair shall be designated by the majority
leader of the Senate; and
(B) 1 co-chair shall be designated by the Speaker
of the House of Representatives.
(3) Qualifications.--Each member appointed to the
Commission shall have experience in--
(A) quantitative policy research; and
(B) welfare or poverty studies.
(c) Initial Meeting.--Not later than 60 days after the date on
which the last member is appointed under subsection (b), the Commission
shall hold an initial meeting.
(d) Quorum.--Six members of the Commission shall constitute a
quorum.
(e) No Proxy Voting.--Proxy voting by members of the Commission
shall be prohibited.
(f) Staff.--The Director of the Census Bureau shall appoint an
executive director of the Commission.
(g) Travel Expenses.--Members of the Commission shall serve without
pay, but shall receive travel expenses in accordance with sections 5702
and 5703 of title 5, United States Code.
(h) Duties of Commission.--
(1) Recommendations.--
(A) In general.--The Commission shall produce
recommendations for the valuation of Federal benefits
listed under section 101(a)(1) for the purpose of
United States Census Bureau estimates of the Federal
Poverty Level, including non-cash benefits.
(2) Report.--
(A) In general.--Not later than 270 days after the
date of enactment of this Act, the Commission shall
submit to Congress a report of the recommendations
required under paragraph (1), including a detailed
statement of methodology and reasoning behind
recommendations.
(B) Public availability.--The report required by
subparagraph (A) shall be made available on an internet
website of the United States Government that is
available to the public.
(i) Powers of Commission.--On request by the executive director of
the Commission, the head of a Federal agency shall furnish information
to the Commission.
(j) Termination of Commission.--The Commission shall terminate 90
days after the date on which the Commission submits the report under
subsection (h)(2).
(k) Authorization of Appropriations.--There is authorized to be
appropriated $1,000,000 to carry out this section.
SEC. 103. GAO REPORTS ON EFFECT OF SUPPLEMENTARY DATA ON CALCULATION OF
POVERTY RATES AND RELATED MEASURES.
Not later than January 1, 2028, and every 2 years thereafter, the
Comptroller General of the United States shall submit to Congress a
report that compares the poverty rates and related measures calculated
under the Annual Social and Economic Supplement to the Current
Population Survey with the poverty rates and related measures
calculated using the data collected under section 101(b)(1).
SEC. 104. RULE OF CONSTRUCTION.
Nothing in this title shall be construed to affect the eligibility
of an individual or household for a Federal benefit.
TITLE II--MODIFICATIONS TO SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM
SEC. 201. WORK REQUIREMENTS.
(a) Declaration of Policy.--Section 2 of the Food and Nutrition Act
of 2008 (7 U.S.C. 2011) is amended by adding at the end the following:
``Congress further finds that it should also be the purpose of the
supplemental nutrition assistance program to increase employment, to
encourage healthy marriage, and to promote prosperous self-sufficiency,
which means the ability of households to maintain an income above the
poverty level without services and benefits from the Federal
Government.''.
(b) Definition of Food.--Section 3(k) of the Food and Nutrition Act
of 2008 (7 U.S.C. 2012(k)) is amended by striking ``means (1)'' and
inserting ``means the following foods, food products, meals, and other
items, only if the food, food product, meal, or other item is
essential, as determined by the Secretary: (1)''.
(c) General Work Requirements.--Section 6(d)(1)(A) of the Food and
Nutrition Act of 2008 (7 U.S.C. 2015(d)(1)(A)) is amended, in the
matter preceding clause (i), by striking ``60'' and inserting ``65''.
(d) Hour-Based Work Requirement.--Section 6(o) of the Food and
Nutrition Act of 2008 (7 U.S.C. 2015(o)) is amended--
(1) in paragraph (1)(C), by striking ``other than a
supervised job search program or job search training program''
and inserting ``including an in-person supervised job search
program'';
(2) in paragraph (3)(A)(ii)(III), by striking ``55'' and
inserting ``64'';
(3) in paragraph (4)(A)--
(A) in the matter preceding clause (i), by striking
``area'' and inserting ``county or county equivalent'';
(B) in clause (i), by striking ``or'' and inserting
``and''; and
(C) by striking clause (ii) and inserting the
following:
``(ii) is not located within a labor market
area, as determined by data published by the
Bureau of Labor Statistics, that has an
unemployment rate of over 10 percent.'';
(4) in paragraph (6)(D), by striking ``15 percent'' and
inserting ``5 percent'';
(5) by redesignating paragraph (7) as paragraph (8);
(6) by inserting after paragraph (6) the following:
``(7) Work or work preparation hours requirement for
married couples with children.--The total combined number of
hours of work or work preparation activities under
subparagraphs (A), (B), and (C) of paragraph (2) for both
spouses in a married couple household with 1 or more children
over the age of 6 shall not be greater than the total number of
hours required under those subparagraphs for a single head of
household.''; and
(7) by inserting after paragraph (8) (as so redesignated)
the following:
``(9) Minimum wage rule.--The limitation under subsection
(d)(4)(F)(i) shall not apply to any work requirement, program,
or activity required under this subsection.''.
SEC. 202. EMPLOYMENT AND TRAINING PROGRAM OUTCOMES REPORTING.
Not later than 1 year after the date of enactment of this Act, the
Secretary of Agriculture shall submit to Congress a report, using data
from the most recent 5 fiscal years available, detailing the outcomes
of beneficiaries of the supplemental nutrition assistance program
established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et
seq.) (referred to in this section as ``SNAP'') who participate in
employment and training programs (as defined in section 6(d)(4)(B) of
that Act (7 U.S.C. 2015(d)(4)(B))) for each of those 5 years that
includes the following information:
(1) The number and percentage of SNAP beneficiaries in each
State who participated in an employment and training program
compared to the number and percentage of SNAP beneficiaries in
each State who did not participate in an employment and
training program.
(2) The number and percentage of SNAP beneficiaries in each
State who obtained a job while participating in an employment
and training program compared to the number and percentage of
SNAP beneficiaries in each State who obtained a job but did not
participate in an employment and training program.
(3) The number and percentage of SNAP beneficiaries in each
State who retained a job for 6 months, 1 year, and 5 years
after completing an employment and training program and
obtaining a job compared to the number and percentage of SNAP
beneficiaries in each State who retained a job for 6 months, 1
year, and 5 years but did not complete an employment and
training program prior to obtaining that job.
(4) The increase or decrease in wages, if applicable, for
SNAP beneficiaries in each State who retained a job for 6
months, 1 year, and 5 years after completing an employment and
training program and obtaining a job compared to the increase
or decrease in wages, if applicable, for SNAP beneficiaries in
each State who retained a job for 6 months, 1 year, and 5 years
but did not complete an employment and training program prior
to obtaining that job.
(5) The number and percentage of SNAP beneficiaries who--
(A) previously participated in an employment and
training program;
(B) after that participation, obtained a job or
stopped receiving SNAP benefits; and
(C) after regaining eligibility for SNAP benefits,
reentered an employment or training program.
(6) The average duration that SNAP beneficiaries in each
State participated in an employment and training program.
(7) A breakdown of--
(A) the types of employment and training activities
offered by the employment and training program of each
State; and
(B) the types of jobs that States are preparing
employment and training program participants to obtain.
SEC. 203. STATE MATCHING FUNDS.
Section 4 of the Food and Nutrition Act of 2008 (7 U.S.C. 2013) is
amended by adding at the end the following:
``(d) State Matching Funds.--
``(1) In general.--Each State that participates in the
supplemental nutrition assistance program shall, as a condition
of participation, be required to contribute matching funds in
an amount equal to, of the funds received from the Secretary by
the State for program administration--
``(A) for fiscal year 2025, 10 percent;
``(B) for fiscal year 2026, 15 percent;
``(C) for fiscal year 2027, 20 percent;
``(D) for fiscal year 2028, 25 percent;
``(E) for fiscal year 2029, 30 percent;
``(F) for fiscal year 2030, 35 percent;
``(G) for fiscal year 2031, 40 percent;
``(H) for fiscal year 2032, 45 percent; and
``(I) for fiscal year 2033 and each fiscal year
thereafter, 50 percent.
``(2) Additional contributions permitted.--Nothing in this
subsection prevents a State from contributing matching funds in
an amount greater than the amount required under paragraph (1)
for the applicable fiscal year.''.
SEC. 204. ELIGIBILITY.
Section 5(a) of the Food and Nutrition Act of 2008 (7 U.S.C.
2014(a)) is amended--
(1) in the second sentence, by inserting ``that are limited
to families whose income and resources satisfy financial need
criteria established in accordance with subsections (c) and (g)
by the State for receipt of the benefits'' after ``(42 U.S.C.
601 et seq.)''; and
(2) by inserting after the second sentence the following:
``To be deemed eligible for participation in the supplemental
nutrition assistance program under this subsection, a household
shall receive a cash or noncash means-tested public benefit for
at least 6 consecutive months valued at not less than $50.''.
SEC. 205. COMPLIANCE WITH FRAUD INVESTIGATIONS.
Section 6(d) of the Food and Nutrition Act of 2008 (7 U.S.C.
2015(d)) is amended by adding at the end the following:
``(5) Compliance with fraud investigations.--To be eligible
to participate in the supplemental nutrition assistance
program, an individual shall cooperate with any investigation
into fraud under that program, including full participation in
any--
``(A) meeting requested by fraud investigators; and
``(B) administrative hearing.''.
SEC. 206. AUTHORIZED USERS OF ELECTRONIC BENEFIT TRANSFER CARDS.
Section 7(h) of the Food and Nutrition Act of 2008 (7 U.S.C.
2016(h)) is amended by adding at the end the following:
``(15) Authorized users.--
``(A) In general.--A State agency shall register--
``(i) at least 1 member of a household
issued an EBT card as an authorized user of the
card; and
``(ii) an authorized representative of a
household as an authorized user of the EBT card
issued to the household.
``(B) Limit.--Not more than 5 individuals shall be
registered as authorized users, including the
authorized representative of a household, on an EBT
card.
``(C) Unauthorized use.--
``(i) In general.--An EBT card shall not be
used by any individual who is not an authorized
user of the EBT card.
``(ii) 2 unauthorized uses.--If an EBT card
has been used 2 times by an unauthorized user
of the EBT card, the head of the household to
which the EBT card is issued shall be required
to review program rights and responsibilities
with personnel of the State agency.
``(iii) 4 unauthorized uses.--If an EBT
card has been used 4 times by an unauthorized
user of the EBT card, the State agency shall
suspend benefits for the household to which the
EBT card is issued for 1 month.
``(iv) 6 unauthorized uses.--If an EBT card
has been used 6 times by an unauthorized user
of the EBT card, the State agency shall suspend
benefits for the household to which the EBT
card is issued for 3 months.
``(v) 7 or more unauthorized uses.--If an
EBT card has been used 7 or more times by an
unauthorized user of the EBT card, the State
agency shall suspend benefits for the household
to which the EBT card is issued for 1 month per
unauthorized use.
``(vi) Administration.--Any action taken
under clauses (ii) through (v) shall be
consistent with sections 6(b) and 11(e)(10), as
applicable.''.
SEC. 207. REAUTHORIZATION OF MEDIUM- OR HIGH-RISK RETAIL FOOD STORES
AND WHOLESALE FOOD CONCERNS.
Section 9(a)(2)(A) of the Food and Nutrition Act of 2008 (7 U.S.C.
2018(a)(2)(A)) is amended by striking ``; and'' and inserting ``,
which, in the case of a retail food store or wholesale food concern for
which there is a medium risk or high risk of fraudulent transactions,
as determined by the fraud detection system of the Food and Nutrition
Service, shall be annually; and''.
SEC. 208. STATE ACTIVITY REPORTS.
Section 11 of the Food and Nutrition Act of 2008 (7 U.S.C. 2020) is
amended by adding at the end the following:
``(y) State Activity Reports.--The Secretary shall publish for each
fiscal year a report describing the activity of each State in the
supplemental nutrition assistance program, which shall contain, for the
applicable fiscal year, substantially the same information as is
contained in the report published by the Food and Nutrition Service
entitled `Supplemental Nutrition Assistance Program State Activity
Report Fiscal Year 2016' and published September 2017.''.
SEC. 209. DISQUALIFICATION BY STATE AGENCY.
Section 12 of the Food and Nutrition Act of 2008 (7 U.S.C. 2021) is
amended by adding at the end the following:
``(j) Disqualification by State Agency.--
``(1) In general.--Except as provided in paragraph (4), a
State agency shall permanently disqualify from participation in
the supplemental nutrition assistance program an approved
retail food store or wholesale food concern convicted of--
``(A) trafficking in food instruments (including
any voucher, draft, check, or access device (including
an electronic benefit transfer card or personal
identification number) issued in lieu of a food
instrument under this Act); or
``(B) selling firearms, ammunition, explosives, or
controlled substances (as defined in section 102 of the
Controlled Substances Act (21 U.S.C. 802)) in exchange
for food instruments (including any item described in
subparagraph (A) issued in lieu of a food instrument
under this Act).
``(2) Notice of disqualification.--The State agency shall--
``(A) provide the approved retail food store or
wholesale food concern with notification of the
disqualification; and
``(B) make the disqualification effective on the
date of receipt of the notice of disqualification.
``(3) Prohibition of receipt of lost revenues.--A retail
food store or wholesale food concern shall not be entitled to
receive any compensation for revenues lost as a result of
disqualification under this subsection.
``(4) Exceptions in lieu of disqualification.--
``(A) In general.--A State agency may permit a
retail food store or wholesale food concern that, but
for this paragraph, would be disqualified under
paragraph (1), to continue to participate in the
supplemental nutrition assistance program if the State
agency determines, in its sole discretion, that--
``(i) disqualification of the retail food
store or wholesale food concern, as applicable,
would cause hardship to participants in the
supplemental nutrition assistance program; or
``(ii)(I) the retail food store or
wholesale food concern had, at the time of the
violation under paragraph (1), an effective
policy and program in effect to prevent
violations described in paragraph (1); and
``(II) the ownership of the retail food
store or wholesale food concern was not aware
of, did not approve of, and was not involved in
the conduct of the violation.
``(B) Civil penalty.--If a State agency under
subparagraph (A) permits a retail food store or
wholesale food concern to continue to participate in
the supplemental nutrition assistance program in lieu
of disqualification, the State agency shall assess a
civil penalty in an amount determined by the State
agency, except that--
``(i) the amount of the civil penalty shall
not exceed $10,000 for each violation; and
``(ii) the amount of civil penalties
imposed for violations investigated as part of
a single investigation may not exceed $40,000.
``(C) Reporting.--
``(i) To the secretary.--If a State agency
under subparagraph (A) permits a retail food
store or wholesale food concern to continue to
participate in the supplemental nutrition
assistance program in lieu of disqualification,
the State agency shall annually submit to the
Secretary a report describing the justification
of the State agency for that action.
``(ii) To congress.--The Secretary shall
annually submit to Congress a report compiling
the information contained in reports submitted
to the Secretary under clause (i).''.
SEC. 210. RETENTION OF RECAPTURED FUNDS BY STATES.
Section 16(a) of the Food and Nutrition Act of 2008 (7 U.S.C.
2025(a)) is amended--
(1) in the second sentence, by striking ``The officials''
and inserting the following:
``(3) Prohibition.--The officials'';
(2) in the first sentence--
(A) by redesignating paragraphs (1) through (9) as
subparagraphs (A) through (I), respectively; and
(B) by striking ``section 17(n): Provided, That the
Secretary'' and inserting the following: ``section
17(n).
``(2) Administration on indian reservations and in native
villages.--
``(A) In general.--The Secretary'';
(3) in paragraph (2) (as so designated)--
(A) in subparagraph (A), by striking ``35 percent''
and inserting ``50 percent''; and
(B) by adding at the end the following:
``(B) Use of retained amounts for fraud
investigations.--The value of funds or allotments
recovered or collected pursuant to sections 6(b) and
13(c) that are retained by a State under subparagraph
(A) in excess of 35 percent shall be used by the State
for investigations of fraud in the supplemental
nutrition assistance program.''; and
(4) by striking the subsection designation and all that
follows through ``Subject to'' in the matter preceding
paragraph (2) (as so designated) and inserting the following:
``(a) Administrative Cost-Sharing.--
``(1) In general.--Subject to''.
<all>