Sec. 10104. Restrictions on internet expenses | Impact

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Legislative and Policy Analysis

Section 10104: Restrictions on internet expenses

Executive Summary

Section 10104 changes SNAP benefit calculations by prohibiting internet service fees from being counted when calculating the excess shelter expense deduction under Section 5(e)(6) of the Food and Nutrition Act of 2008.[1] In practical terms, households can no longer use internet costs to lower countable net income through the shelter deduction, which can reduce monthly SNAP benefits for affected households.

The section does not create a new appropriation, grant program, tax credit, loan authority, or direct payment. Its budget effect comes from reduced SNAP benefit outlays. CBO estimates that the change will reduce monthly SNAP benefits by about $10 for roughly 65 percent of households, on average, in each year over the 2026–2034 period.[2] A later summary of Public Law 119-21 reports CBO-estimated savings of $10.09 billion over 10 years for this provision.[3]

What Section 10104 Actually Does

Section 10104 amends Section 5(e)(6) of the Food and Nutrition Act of 2008 by adding a new rule: any service fee associated with internet connection may not be used in computing the excess shelter expense deduction.[1]

The excess shelter deduction is part of SNAP’s net income calculation. A household’s SNAP allotment generally rises when allowable deductions lower net income, because SNAP benefits are designed to fill the gap between a household’s expected food contribution and the maximum benefit for its household size.[4] By removing internet expenses from the deduction calculation, Section 10104 can increase countable net income and reduce monthly SNAP benefits for households that previously benefited from counting internet costs.

Program or activity	Amount	What the money supports or changes
SNAP excess shelter expense deduction	No new appropriation in the statutory text	Removes internet connection service fees from deductible shelter-related costs.
Federal SNAP benefit outlays	About $10 lower monthly benefit for roughly 65 percent of households, on average, each year from 2026 through 2034	Budgetary effect comes from lower SNAP allotments, not from a new spending account.[2]
Federal savings estimate	$10.09 billion over 10 years	Reported as CBO-estimated savings from excluding internet costs from the SNAP excess shelter deduction.[3]

The provision is narrow but consequential. It does not say that internet service is irrelevant to household life, work, school, telehealth, or job searches. It says that internet connection service fees may not be used in this specific SNAP calculation.

Legislative Mechanism

Section 10104 uses a direct statutory amendment. It adds a new subparagraph to Section 5(e)(6) of the Food and Nutrition Act of 2008, the part of SNAP law that governs deductions from income when determining eligibility and benefit amounts.[1]

The mechanism is not a pilot program, waiver authority, or discretionary rulemaking instruction. It is a categorical exclusion. State SNAP agencies and eligibility systems must treat internet connection service fees as non-countable for the excess shelter expense deduction.

This also reverses the practical direction of recent SNAP utility policy. USDA’s 2024 standard utility allowance rulemaking allowed internet expenses to be included in utility allowance calculations, recognizing internet access as part of modern household utility costs.[5] Section 10104 overrides that approach for SNAP shelter-deduction purposes.

Expenditure Tracking and Reporting Protocol

Section 10104 affects federal financial flows by reducing SNAP benefit payments that otherwise would have been made to households. It does not create a dedicated account or a separately labeled payment stream. The relevant federal program is SNAP, administered nationally by USDA’s Food and Nutrition Service and implemented by state SNAP agencies.

The likely tracking sources are:

Tracking source	What it would show	Visibility limits
USDA Food and Nutrition Service SNAP participation and cost data	Aggregate SNAP participation, benefit, and cost trends	Section-specific reductions may not be separately visible.
State SNAP eligibility and benefit systems	Household-level deduction and allotment calculations	Usually not public at the household level.
State standard utility allowance submissions and USDA guidance	How states revise utility allowance methodologies	Public visibility varies by state and USDA posting practice.
CBO budget estimates	Estimated federal savings and benefit effects	Estimates are model-based and may not show state-by-state household impacts.
SNAP Quality Control reviews	Accuracy of eligibility and benefit calculations	Errors may be visible in aggregate, not necessarily as internet-expense-specific findings.

Reporting will likely be clearer inside agency systems than in public datasets. State agencies report SNAP participation, issuance, administrative data, and quality-control information to USDA. USDA publishes aggregate program data, while CBO estimates federal budget effects. But because Section 10104 changes the formula used to calculate benefits, rather than creating a separate payment or grant, the public may not be able to isolate every dollar of savings attributable to this section in routine spending databases.

Simple implementation and tracking flow:

Section 10104 statutory exclusion
        |
        v
USDA FNS guidance and state implementation instructions
        |
        v
State SNAP eligibility systems update deduction rules
        |
        v
Caseworkers and online systems stop counting internet fees
        |
        v
Household net income may increase for SNAP purposes
        |
        v
Monthly SNAP allotment may decrease
        |
        v
Aggregate effects appear in USDA SNAP data, CBO estimates,
state QC reviews, audits, and oversight reporting

Public visibility is likely to be delayed and aggregated. The change may show up as lower average benefits, revised state utility allowance methods, or quality-control issues, but not as a clean public line item labeled “Section 10104 internet expense savings.”

Day-to-Day Government Process Changes

For USDA, Section 10104 requires implementation guidance, conformity checks, and coordination with state SNAP agencies. USDA’s OBBB implementation page identifies Sections 10103 and 10104 as SNAP eligibility provisions and links related implementation resources, including guidance on fiscal year 2026 standard utility allowance values.[6]

For state SNAP agencies, the day-to-day work changes are more direct:

Process area	Operational change
Eligibility interviews	Workers must stop treating internet service fees as allowable shelter-deduction costs.
Online applications	Forms and portals may need updated prompts, help text, and deduction screens.
Verification	Agencies may no longer need internet bills for this deduction, but must still verify other shelter and utility expenses.
Benefit calculation systems	State eligibility systems must remove internet costs from excess shelter deduction logic.
Notices	Benefit-change notices may need to explain reductions where recalculation lowers allotments.
Training	Eligibility staff, call centers, county offices, and community assisters need updated instructions.
Quality control	Incorrectly allowing internet expenses could become a payment accuracy issue.

The administrative burden is not simply deleting one line from a form. States may need system programming, worker training, notice templates, revised manuals, call-center scripts, and public-facing explanations. Counties that administer SNAP may also absorb additional workload because clients may not understand why a real household bill no longer counts in the calculation.

Effects on Consumers

The direct consumer impact falls on SNAP households that pay for internet service and previously could benefit from counting that cost in the shelter-deduction calculation. CBO expects the average monthly SNAP benefit to decrease by about $10 for roughly 65 percent of households, on average, in each year from 2026 through 2034.[2]

For a household already balancing rent, utilities, broadband, transportation, and food, $10 per month is not trivial. It can mean fewer groceries, less flexibility when prices rise, or a harder tradeoff between food and digital access. FRAC estimates that more than 14 million SNAP households will be affected and describes the change as an elimination of the internet deduction.[4]

The policy is also likely to matter more in households where internet access supports job searches, remote work, school assignments, telehealth, benefits management, or communication with caseworkers. The provision does not directly cut internet service, but it weakens the SNAP formula’s recognition that internet bills are part of modern household costs.

Effects on Businesses

The most direct business effects are indirect and localized.

Grocery retailers and food retailers could see lower SNAP purchasing power among affected households. Because SNAP benefits are spent quickly and locally, even modest monthly reductions can reduce food spending in communities with high SNAP participation.

Internet service providers are not directly regulated by Section 10104. The section does not cap prices, change broadband subsidies, or alter telecommunications rules. However, by removing SNAP’s recognition of internet costs, it may make broadband harder to afford for some low-income households. That could contribute to pressure on subscription retention among price-sensitive customers, especially after the end of the Affordable Connectivity Program increased broadband affordability challenges for low-income households.[4]

State eligibility-system vendors, call-center contractors, and benefits administration contractors may see implementation work tied to system updates, notices, and training. These are administrative effects rather than new program benefits.

Environmental and Climate Impact

Section 10104 has no direct environmental permitting, energy production, land use, conservation, emissions, or climate funding provision. Its environmental impact is therefore indirect and likely small compared with provisions that directly affect energy or land management.

There are still second-order considerations. Internet access can reduce transportation needs by enabling online benefits management, telehealth, remote work, remote education, and digital document submission. If reduced benefit adequacy makes internet access harder to maintain, some households may need more in-person trips for services that could otherwise be handled online. That effect is plausible but not quantified in the statutory text or the major budget sources reviewed.

The more concrete climate-related conclusion is that Section 10104 does not provide climate funding, does not rescind climate funding, and does not establish a climate reporting mechanism. Its primary impact is food assistance benefit calculation.

Impact Summary

Section 10104 is a formula change with real household consequences. It does not appropriate money or create a new program. Instead, it narrows what counts as an allowable household cost in SNAP, reducing benefits for many households that pay for internet service.

The strongest policy critique is that the section treats internet access as outside the shelter-and-utility cost structure even though modern households often need internet access for work, school, health care, and benefits administration. The strongest administrative concern is that states must reprogram and explain a benefit calculation change that may be hard for households to understand because the excluded expense is still real.

The clearest budgetary effect is lower SNAP spending. The clearest household effect is lower monthly benefits for affected SNAP households. The clearest public-tracking limitation is that the savings will generally appear inside aggregate SNAP spending and eligibility data rather than as a separately visible Section 10104 spending line.

Key References and Sourcing

Source	Relevance
GovInfo, H.R. 1 Engrossed Amendment Senate text	Primary legislative text for Section 10104 and the amendment to the Food and Nutrition Act of 2008.
Congressional Budget Office, Estimated Effects of Public Law 119-21 on SNAP	Provides CBO’s estimate of benefit reductions for households affected by Section 10104.
USDA Food and Nutrition Service, One Big Beautiful Bill Act of 2025	Official USDA implementation hub identifying SNAP implementation resources for Sections 10103 and 10104.
USDA Food and Nutrition Service, SNAP FY 2026 Standard Utility Allowance Values	USDA implementation resource related to standard utility allowance calculations.
Senate Agriculture Committee, Section-by-Section Summary	Committee summary stating that Section 10104 prohibits households from including internet costs in the excess shelter deduction.
Food Research & Action Center, H.R. 1 Changes to SNAP — Elimination of the Internet Deduction	Explains the consumer-facing impact of eliminating the internet deduction and summarizes affected households.
National Association of Counties, H.R. 1 and SNAP: What Counties Should Know	Describes county and state administrative implications for SNAP implementation.
American Medical Association, Summary of Select Provisions and Implementation Dates in Public Law 119-21	Secondary summary reporting CBO-estimated 10-year savings for Section 10104.

[1] GovInfo, “H.R. 1 Engrossed Amendment Senate,” Section 10104, https://www.govinfo.gov/content/pkg/BILLS-119hr1eas/html/BILLS-119hr1eas.htm.

[2] Congressional Budget Office, “Estimated Effects of Public Law 119-21 on Participation and Benefits Under the Supplemental Nutrition Assistance Program,” August 11, 2025, https://www.cbo.gov/system/files/2025-08/61367-SNAP.pdf.

[3] American Medical Association, “Summary of Select Provisions and Implementation Dates in Public Law 119-21,” 2025, https://www.ama-assn.org/system/files/select-provisions-implementation-dates-obbba-summary.pdf.

[4] Food Research & Action Center, “H.R. 1 Changes to SNAP — Elimination of the Internet Deduction,” April 2026, https://frac.org/wp-content/uploads/HR-1-SNAP-Elimination-Internet-Deduction.pdf.

[5] Federal Register, “Supplemental Nutrition Assistance Program: Standardization of State Heating and Cooling Standard Utility Allowances,” 2024, https://www.federalregister.gov/d/2024-26845.

[6] USDA Food and Nutrition Service, “One Big Beautiful Bill Act of 2025,” page updated February 24, 2026, https://www.fns.usda.gov/obbb.