(A) The Secretary may conduct on a trial basis, in one or more areas of the United States, pilot or experimental projects designed to test program changes that might increase the efficiency of the supplemental nutrition assistance program and improve the delivery of supplemental nutrition assistance program benefits to eligible households, and may waive any requirement of this chapter to the extent necessary for the project to be conducted.

(B) Project requirements.— (i) Program goal .— The Secretary may not conduct a project under subparagraph (A) unless— (I) the project is consistent with the goal of the supplemental nutrition assistance program of providing food assistance to raise levels of nutrition among low-income individuals; and (II) the project includes an evaluation to determine the effects of the project. (ii) Permissible projects .— The Secretary may conduct a project under subparagraph (A) to— (I) improve program administration; (II) increase the self-sufficiency of supplemental nutrition assistance program recipients; (III) test innovative welfare reform strategies; or (IV) allow greater conformity with the rules of other programs than would be allowed but for this paragraph. (iii) Restrictions on permissible projects .— If the Secretary finds that a project under subparagraph (A) would reduce benefits by more than 20 percent for more than 5 percent of households in the area subject to the project (not including any household whose benefits are reduced due to a failure to comply with work or other conduct requirements), the project— (I) may not include more than 15 percent of the number of households in the State receiving supplemental nutrition assistance program benefits; and (II) shall continue for not more than 5 years after the date of implementation, unless the Secretary approves an extension requested by the State agency at any time. (iv) Impermissible projects .— The Secretary may not conduct a project under subparagraph (A) that— (I) involves the payment of the value of an allotment in the form of cash or otherwise providing benefits in a form not restricted to the purchase of food, unless the project was approved prior to August 22, 1996 ; (II) has the effect of substantially transferring funds made available under this chapter to services or benefits provided primarily through another public assistance program, or using the funds for any purpose other than the purchase of food, program administration, or an employment or training program; (III) is inconsistent with— (aa) paragraphs (4) and (5) of section 2012(m) of this title ; (bb) the last sentence of section 2014(a) of this title , insofar as a waiver denies assistance to an otherwise eligible household or individual if the household or individual has not failed to comply with any work, behavioral, or other conduct requirement under this or another program; (cc) section 2014(c)(2) of this title ; (dd) paragraph (2)(B), (4)(F)(i), or (4)(K) of section 2015(d) of this title ; (ee) section 2017(b) of this title ; (ff) section 2020(e)(2)(B) of this title ; (gg) the time standard under section 2020(e)(3) of this title ; (hh) subsection (a), (c), (g), (h)(1)(F), (h)(2), or (h)(3) of section 2025 of this title ; (ii) this paragraph; or (jj) subsection (a)(1) or (g)(1) of section 2029 of this title ; (IV) modifies the operation of section 2014 of this title so as to have the effect of— (aa) increasing the shelter deduction to households with no out-of-pocket housing costs or housing costs that consume a low percentage of the household’s income; or (bb) absolving a State from acting with reasonable promptness on substantial reported changes in income or household size (except that this subclause shall not apply with regard to changes related to supplemental nutrition assistance program deductions); (V) is not limited to a specific time period; (VI) waives a provision of section 2035 of this title ; or (VII) waives a provision of section 2016(i) of this title . (v) Additional included projects .— A pilot or experimental project may include projects involving the payment of the value of allotments or the average value of allotments by household size in the form of cash to eligible households all of whose members are age sixty-five or over or any of whose members are entitled to supplemental security income benefits under title XVI of the Social Security Act [ 42 U.S.C. 1381 et seq.] or are receiving assistance under a State program funded under part A of title IV of the Social Security Act ( 42 U.S.C. 601 et seq.), the use of identification mechanisms that do not invade a household’s privacy, and the use of food checks or other voucher-type forms in place of EBT cards. (vi) Cash payment pilot projects .— Subject to the availability of appropriations under section 2027(a) of this title , any pilot or experimental project implemented under this paragraph and operating as of October 1, 1981 , involving the payment of the value of allotments in the form of cash to eligible households all of whose members are either age sixty-five or over or entitled to supplemental security income benefits under title XVI of the Social Security Act shall be continued if the State so requests.

(C) (i) No waiver or demonstration program shall be approved under this chapter after November 28, 1990 , unless— (I) any household whose food assistance is issued in a form other than EBT cards has its allotment increased to the extent necessary to compensate for any State or local sales tax that may be collected in all or part of the area covered by the demonstration project, the tax on purchases of food by any such household is waived, or the Secretary determines on the basis of information provided by the State agency that the increase is unnecessary on the basis of the limited nature of the items subject to the State or local sales tax; and (II) the State agency conducting the demonstration project pays the cost of any increased allotments. (ii) Clause (i) shall not apply if a waiver or demonstration project already provides a household with assistance that exceeds that which the household would otherwise be eligible to receive by more than the estimated amount of any sales tax on the purchases of food that would be collected from the household in the project area in which the household resides.

(D) Response to waivers.— (i) Response .— Not later than 60 days after the date of receiving a request for a waiver under subparagraph (A), the Secretary shall provide a response that— (I) approves the waiver request; (II) denies the waiver request and describes any modification needed for approval of the waiver request; (III) denies the waiver request and describes the grounds for the denial; or (IV) requests clarification of the waiver request. (ii) Failure to respond .— If the Secretary does not provide a response in accordance with clause (i), the waiver shall be considered approved, unless the approval is specifically prohibited by this chapter. (iii) Notice of denial .— On denial of a waiver request under clause (i)(III), the Secretary shall provide a copy of the waiver request and a description of the reasons for the denial to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate.