Exemptions .—
The Secretary may exempt from the requirements of clause (i)—
(I)#
a State agency that elects not to authorize any types of vendors described in subparagraph (D)(ii)(I) and that demonstrates to the Secretary that—
(aa) compliance with clause (i) would be inconsistent with efficient and effective operation of the program administered by the State under this section; or
(bb) an alternative cost-containment system would be as effective as a vendor peer group system; or
(I)(aa)#
compliance with clause (i) would be inconsistent with efficient and effective operation of the program administered by the State under this section; or
(I)(bb)#
an alternative cost-containment system would be as effective as a vendor peer group system; or
(II)#
a State agency—
(aa) in which the sale of supplemental foods that are obtained with food instruments from vendors described in subparagraph (D)(ii)(I) constituted less than 5 percent of total sales of supplemental foods that were obtained with food instruments in the State in the year preceding a year in which the exemption is effective; and
(bb) that demonstrates to the Secretary that an alternative cost-containment system would be as effective as the vendor peer group system and would not result in higher food costs if program participants redeem supplemental food vouchers at vendors described in subparagraph (D)(ii)(I) rather than at vendors other than vendors described in subparagraph (D)(ii)(I).
(II)(aa)#
in which the sale of supplemental foods that are obtained with food instruments from vendors described in subparagraph (D)(ii)(I) constituted less than 5 percent of total sales of supplemental foods that were obtained with food instruments in the State in the year preceding a year in which the exemption is effective; and
(II)(bb)#
that demonstrates to the Secretary that an alternative cost-containment system would be as effective as the vendor peer group system and would not result in higher food costs if program participants redeem supplemental food vouchers at vendors described in subparagraph (D)(ii)(I) rather than at vendors other than vendors described in subparagraph (D)(ii)(I).