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 








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            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 








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            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 








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            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.  








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           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Grocers Association

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :  Tanya Robinson-Taylor / HEALTH / (916) 
          319-2097