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Proposed Rule: SNAP Changes in Federal-State Administrative Cost Sharing

Summary

In response to Section 10106 of Public Law 119-21, the One Big Beautiful Bill Act of 2025, this proposed rule would amend the Supplemental Nutrition Assistance Program (SNAP) regulations to codify the reduction of the amount of the federal government's share of annual SNAP state administrative costs from 50 percent to 25 percent, effective beginning in fiscal year 2027.

Request for Comments

Written comments must be received on or before Aug. 24, 2026, to be assured of consideration.

The Food and Nutrition Administration, USDA, invites interested persons to submit written comments on this proposed rule. Comments may be submitted in writing by one of the following methods:

  • Federal eRulemaking Portal: Go to Regulations.gov. Follow the online instructions for submitting comments.
  • Mail: Send comments to Maribelle Balbes, Food and Nutrition Administration, U.S. Department of Agriculture, 1320 Braddock Place, Alexandria VA 22314, SM.FN.SNAPSAB@usda.gov.
  • Website: Go to Regulations.gov. Follow the online instructions for submitting comments.
  • Email: Send comments to SM.FN.SNAPSAB@usda.gov. Include Docket ID Number [insert number], “Supplemental Nutrition Assistance Program: Administrative Cost Sharing Proposed Rule” in the subject line of the message.

All written comments submitted in response to this proposed rule will be included in the record and will be made available to the public. Please be advised that the substance of the comments and the identity of the individuals or entities submitting the comments will be subject to public disclosure. FNA will make the written comments publicly available on the internet via Regulations.gov.

Supplementary Information

I. Background

A. Statutory Authority

On July 4, 2025, President Donald J. Trump signed Public Law 119-21, the One Big Beautiful Bill Act of 2025 (OBBB). Section 10106 of OBBB amends section 16(a) of the Act by reducing the federal share of administrative costs involved in the state administration of SNAP, from 50 percent to 25 percent, beginning in FY 2027.

B. Existing Requirements

Under existing program rules, the Secretary is authorized to pay an amount equal to 50 percent of all administrative costs state agencies incur in the operation of SNAP. The enactment of OBBB reduces the federal administrative cost share (also known as the federal reimbursement rate) to 25 percent starting in FY 2027. However, OBBB did not amend the state administrative expense (SAE) categories included in Section 16(a) of the Act or current SNAP policies and procedures governing state agencies that participate in the program. Therefore, the proposed rule would only codify the change in percentage—other requirements including expense categories and reimbursement procedures will remain the same. State agencies shall continue to refer to Section 16(a) of the Act and regulations at 7 CFR 272.2(c)(1)(i) and 277 for detailed information about administrative costs and expense categories.

II. Discussion of Proposed Rule Change

FNA proposes revising the following regulations that mention the federal administrative cost reimbursement rate to reflect the new 25 percent rate starting in FY 2027:

PART 272

  • Part 272 sets forth policies and procedures governing state agencies which participate in the program.
  • 7 CFR 272.5(c) specifically addresses the reimbursement of program informational activities for low-income households.

PART 274

  • Part 274 provides requirements for the issuance of program benefits to eligible households and establishes related issuance responsibilities.
  • 7 CFR 274.1(k)(4) addresses federal funding for the costs state agencies incur when switching and settling SNAP interstate transactions under SNAP's interoperability and portability of Electronic Benefits Transfer (EBT) standards. Under Section 7(j) of the Act, state agencies may receive 100 hundred percent federal funding for these costs. The 100 percent federal funding is available annually but limited to $500,000 nationwide and once this limitation is exceeded the federal reimbursement rate for costs reverts to the standard reimbursement rate of 50 percent. The proposed rule would amend the federal reimbursement rate to 25 percent.
  • 7 CFR 274.8(f) provides guidance to state agencies implementing the requirements for photo EBT. The proposed rule would amend language addressing allowable administrative costs for photo EBT (7 CFR 274.8(f)(13)) to the new federal reimbursement rate, from 50 percent to 25 percent.

PART 277

  • Part 277 outlines procedures for payment of administrative costs of state agencies.
  • Regulations at 7 CFR 277.4(b), 7 CFR 277.4(g), 7 CFR 277.9(c)(1) and (2) and 277.18(f)(1) would be amended to reflect the new federal reimbursement rate of 25 percent.
  • OBBB changes to Section 16(a) of the Act (7 USC 2025(a)) do not amend SNAP Employment and Training (E&T) 50 percent reimbursement rates for E&T administrative costs and E&T-related participant reimbursements (ex. transportation, child care) established in Section 16(h)(2) and Section 16(h)(3) of the Act. Therefore, reimbursement rates for SNAP E&T administrative costs and participant reimbursements remain unchanged. FNA is proposing to add language to regulations at 7 CFR 277.4(b)(3) to clarify that the reimbursement rate will remain at the 50 percent for these E&T costs as outlined in 7 CFR 273.7(d)(2).
  • Similarly, the new federal reimbursement rate will not impact state agencies or Indian Tribal Organizations (ITOs), acting as state agencies, administering SNAP on a reservation.1 FNA will continue to pay each state agencies administering SNAP on a reservation 75 percent of all approved administrative costs in accordance with Section 16(a) of the Act, 7 CFR 277.4(b)(2), and 7 CFR 281.9. Additionally, FNA is authorized to pay to each Indian Tribal Organization acting as a state agency and administering SNAP on a reservation 75 percent of all administrative costs approved by FNA as needed for operation of a SNAP on a reservation.

III. Procedural Matters

List of Subjects

7 CFR Part 272

  • Administrative practice and procedure
  • Supplemental Nutrition Assistance Program
  • Grant programs—social programs
  • Reporting and recordkeeping requirements

7 CFR Part 274

  • Administrative practice and procedure
  • Supplemental Nutrition Assistance Program
  • Investigations
  • Grant programs—social programs
  • Reporting and recordkeeping requirements

7 CFR Part 277

  • Supplemental Nutrition Assistance Program
  • Government procedure
  • Grant programs—social programs
  • Records
  • Reporting and recordkeeping requirements

Accordingly, the Food and Nutrition Administration proposes to amend 7 CFR parts 272, 274, and 277 as follows:

Authority: 7 USC 2011-2036

PART 272 - Requirements for Participating State Agencies

  1. In § 272.5, revise the fourth sentence of paragraph (c) to remove the word “fifty” and replace it with the number “25”.

The revision reads as follows:

§ 272.5 Program informational activities.

(c) * * * Before FNA considers costs for allowable informational activities eligible for reimbursement at the 25 percent rate under part 277 of this chapter, State agencies shall obtain FNA approval for the attachment to their Plans of Operation as specified in § 272.2(d)(1)(ix). * * *

PART 274 - Issuance and Use of Program Benefits

  1. In § 274.1, revise the fourth sentence of paragraph (k)(4) to remove the number “50” and replace it with “25”.
  2. In § 274.8, revise the second sentence of paragraph (f)(13) to remove the number “50” and replace it with “25”.

The revision read as follows:

§ 274.1 Issuance system approval standards.

(k) Federal financial participation.

* * * * *

(4) * * * Once the $500,000 limitation is exceeded, Federal financial participation reverts to the standard 25 percent program reimbursement rate and procedure. * * *

§ 274.8 Functional and technical EBT system requirements.

(f) State agency requirements for photo EBT card implementation —

* * * * *

(13) * * * Appropriate implementation and administration of the photo EBT card consistent with all applicable requirements is an allowable State administrative cost that FNA shall reimburse at 25 percent in accordance with 7 CFR part 277. * * *

PART 277 - Payments of Certain Administrative Costs of State Agencies

  1. In § 277.4, revise the second sentence of paragraph (b) to remove the number “50” and replace it with “25”.
  2. In § 277.4, revise paragraph (b)(4) to add “(1)(i)” after the regulation citation “§ 273.7(d)”, and add “and other Employment and Training administrative costs shall be funded at 50 percent as outlined in § 273.7(d)(2).” after the word “federally-funded”.
  3. In § 277.4, revise paragraph (g) to remove the number “50” and replace it with “25”.
  4. In § 277.9, revise the second sentence on paragraph (c)(1) to remove the number “50” and replace it with “25”.
  5. In § 277.9, revise the second sentence on paragraph (c)(2) to remove the number “50” and replace it with “25”.
  6. In § 277.18, revise paragraph (f)(1) to remove the number “50” and replace it with “25”.

The revision reads as follows:

§ 277.4 Funding

(b) * * * The base percentage for Federal payment shall be 25 percent of State agencies' allowable SNAP administrative costs.

* * * * *

(4) Employment and training program grants, as outlined in § 273.7(d)(1)(i) shall be 100 percent federally-funded and other Employment and Training administrative costs shall be funded at 50 percent as outlined in § 273.7(d)(2).

* * * * *

(g) Investigations of authorized retail or wholesale food concerns when performed in coordination with the USDA Office of Inspector General and FNA shall be funded at the 25 percent Federal reimbursement rate.

§ 277.9 Administrative costs principles.

(c) * * *

(1) Direct cost. Allowable direct costs may be charged to SNAP at the 25 percent or higher funding level as specified in this part.

(2) Indirect Cost. Allowable indirect costs may also be claimed at the 25 percent or higher reimbursement funding level as specified in 2 CFR part 200, subpart E, and USDA implementing regulations 2 CFR parts 400 and 415.

§ 277.18 State Systems Advance Planning Document (APD) process.

(f) * * *

(1) A State agency may receive FFP at the 25 percent reimbursement rate for the costs of planning, design, development or installation of IS and information retrieval systems if the proposed system will:

1 The proposed rule does not make any changes to the Food Distribution Program on Indian Reservations (FDPIR) reimbursement rate under Section 4(b)(4) of the Act.

Page updated: June 24, 2026