BILL ANALYSIS Ó AB 2280 Page 1 Date of Hearing: April 24, 2012 ASSEMBLY COMMITTEE ON HEALTH William W. Monning, Chair AB 2280 (Lara) - As Amended: March 29, 2012 SUBJECT : California Special Supplemental Food Program for Women, Infants, and Children. SUMMARY : Requires the Department of Public Health (DPH), in its role as administrator of the Special Supplemental Food Program for Women, Infants, and Children (WIC), to provide written notice, with specified information, to a vendor if DPH determines the vendor has committed an initial violation. Requires the notice to be delivered to the vendor within 30 days of the initial violation and before DPH conducts a second investigation for purposes of establishing a pattern of the violation to impose a sanction. Specifically, this bill : 1)Requires DPH, within 30 days, to provide written notice to a retail food vendor if DPH determines that the vendor has committed an initial violation for which a pattern of the violation must be established to impose a sanction. 2)Requires the written notice to be delivered to the vendor's most recent business ownership address on file with DPH before DPH conducts a second investigation for purposes of establishing a pattern of the violation. 3)Requires the written notice to include a description of the initial violation sufficient to allow the vendor to take corrective action that includes all of the following: a) A description of the sales transaction constituting the violation; b) The date and approximate time of the transaction; and, c) The location of the vendor store. EXISTING LAW : 1)Authorizes the establishment of a statewide WIC program, administered by DPH, for providing nutritional food supplements to low-income pregnant women, low-income postpartum and lactating women, and low-income infants and children under five years of age, who have been determined to AB 2280 Page 2 be at nutritional risk. 2)Provides for the redemption of nutrition coupons by WIC participants at any authorized WIC retail food vendor. 3)Requires DPH to authorize an appropriate number and distribution of WIC retail food vendors, and requires DPH to establish certain criteria. FISCAL EFFECT : This bill has not yet been analyzed by a fiscal committee. COMMENTS : 1)PURPOSE OF THIS BILL . According to the author, WIC participants need access to healthy nutritious foods, but to do so they must have access to state-approved WIC retail food vendors in their own communities. The author maintains that current inconsistencies between state regulations and federal law and regulations have compounded the problem of WIC food access. Specifically, failure to notify a vendor of a first or subsequent violation, before sanctions are imposed, denies the vendor the opportunity to implement corrective action to prevent future violations, such as providing additional training for cashiers and store employees. Additionally, the author maintains, current state regulations put a vendor in danger of disqualification thereby exacerbating the community's access to eligible retail food vendors and thus necessary food products. This bill, the author argues, will do the following: a) Ensure the state complies with federal law and regulations pertaining to WIC vendor notifications; b) Create a clear and fair process for WIC retail food vendors to take necessary corrective action after a violation is documented; c) Preserve access to healthy nutritious foods for WIC clients in their own communities; and, d) Prevent exacerbating "food deserts" in our state. 2)WIC . According to DPH, WIC is a 100% federally funded nutrition and health program that provides education and food. DPH asserts that the program is designed to provide temporary assistance during those brief periods in life which can become more challenging: during pregnancy, the birth of a newborn, or having a young child with nutrition and/or health conditions. Most families participating in WIC, according to DPH, are employed with incomes at or below 185% of the federal poverty AB 2280 Page 3 level (currently $42,642 for a family of four). DPH maintains that WIC responds, up to a child's fifth birthday, with nutritious food, parenting and nutrition education, support for breastfeeding mothers and babies, referrals for services needed by the family, and requirements for medical care to continue participation. DPH administers contracts with 84 local agencies - half local governments and half private, non-profit community organizations - which operate WIC centers in 650 locations statewide. DPH maintains that at these centers, approximately 3,000 local WIC staff members assess WIC eligibility based on residency requirements, income, and health or nutritional risk, and issue six million food checks each month. Each check is valid for a 30-day period and is payable for a specific type and quantity of food. DPH asserts that WIC is a direct infusion into the California economy of about $1.1 billion per year, with the retail value of WIC checks about $63 per month per participant. According to DPH, WIC checks can be redeemed at any of the over 5,500 grocery stores statewide that have entered into vendor agreements with WIC. Stores may charge WIC their shelf prices for the foods purchased up to a maximum allowable amount calculated for each peer group (determined by store type, where the store is located, and the number of registers in the store) and updated every two weeks. DPH indicates that WIC is not an entitlement program for which Congress sets aside funds to serve every eligible individual, but rather WIC is a discretionary program operating under a capped grant administered by the United States Department of Agriculture (USDA) for which Congress appropriates a specified amount of funds annually. California WIC supplements this allocation with formula manufacturer rebates. According to the USDA, nationwide, WIC operates in all 50 states plus tribal organizations and territories. In fiscal year 2011, the program served 8.9 million participants, including almost half of all infants born in the United States. California is the nation's largest WIC program serving 16.4% (1.46 million) of all WIC participants. 3)WIC NOTIFICATION OF VENDOR VIOLATION . According to DPH, the department conducts quality assurance of WIC, which includes the review of local agencies and compliance activities at AB 2280 Page 4 authorized WIC retail food vendors in California. DPH's monitoring occurs on-site which leads to further investigation at approximately 15% of authorized WIC retail food vendors each year. WIC also employs "integrity staff" with responsibility for training and for follow-up on reports of program abuse and fraud pertaining to participants, local agency staff, and authorized retail food vendors. Currently, federal law and regulations state the following regarding WIC notification of retail food vendor violations: "the State agency must notify a vendor in writing when an investigation reveals an initial incidence of a violation for which a pattern of incidences must be established in order to impose a sanction, before another such incidence is documented, unless the state agency determines, in its discretion, on a case-by-case basis, that notifying the vendor would compromise an investigation." State regulations, however, state that, "a warning that violations are occurring or have occurred is not required prior to any adverse action taken against food vendors," in the section pertaining to vendor sanctions. 4)SUPPORT . The California Grocers Association (CGA) writes in support that current California Code of Regulations regarding WIC retail food vendor violation notifications is inconsistent with federal law. CGA maintains that in fact, while federal law provides clear direction requiring state agencies to provide vendors notification of vendor violations, California regulations provide direction to the contrary - putting vendors at risk of losing their contract with the state and their ability to serve WIC participants. CGA asserts that this bill will allow WIC retail food vendors the opportunity to remedy alleged violations and help preserve options for WIC participants by allowing vendors to remain in the WIC program after rectifying any alleged violations. 5)POLICY CONCERNS : The author's rationale for this bill is to conform California law with federal law and regulations regarding WIC vendor notification of a violation. This bill only conforms a portion of the federal law and omits DPH's discretion to notify, on a case-by-case basis, if notifying the vendor would compromise an investigation. The author may wish to consider including this discretion in this bill's language in order to truly conform with federal law. AB 2280 Page 5 REGISTERED SUPPORT / OPPOSITION : Support California Grocers Association Opposition None on file. Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916) 319-2097