BILL NUMBER: AB 2322	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 26, 2012

INTRODUCED BY   Assembly Member Gatto

                        FEBRUARY 24, 2012

   An act to amend  Section   Sections 123285
and  123310 of, and to add  Section 123311 
 Sections 123311, 12331   2, 123313, and 123316 
to, the Health and Safety Code, relating to nutrition.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2322, as amended, Gatto. California Special Supplemental Food
Program for Women, Infants, and Children.
   Existing law, the California Special Supplemental Food Program for
Women, Infants, and Children (WIC  Program  ), authorizes
establishment of a statewide program, administered by the State
Department of Public Health, for providing nutritional food
supplements to low-income pregnant women, low-income postpartum and
lactating women, and low-income infants and children under 5 years of
age, who have been determined to be at nutritional risk. The
program, which implements a program authorized under existing federal
law, provides for the redemption of nutrition coupons by recipients
at any authorized retail food vendor.  Existing 
    Existing  law also authorizes the establishment of a
program, known as the Farmers Market Nutrition Program, to implement
a specified federal law, to provide fresh, high-quality agricultural
products to persons who are nutritionally at risk.  Existing law
requires the department to authorize an appropriate number and
distribution of WIC   Program retail food vendors, and
requires the department to establish certain criteria, including the
prices the vendor charges for foods in relation to other vendors in
its peer group, as defined, to limit the number   of
vendors. Existing law requires the department to ensure that
authorized vendors engage in certain practices. 
   This bill would require a  WIC-authorized  
WIC Program-authorized  food vendor to be either a farmer
participating in the Farmers Market Nutrition Program, or a licensed
retail outlet that meets certain food stocking requirements. 
This bill would require the department to give priority to new WIC
Program retail food vendor location applications from retail food
stores applying to be placed in peer groups that do not contribute to
increased food costs to the WIC Program. This bill would require the
department to adopt regulations to specify certain criteria to be
used when initiating a moratorium on new WIC Program vendor location
applications. This bill would prohibit an authorized vendor from,
among other things, segregating WIC Program products into one section
within the store. This bill would require the department to seek any
federal approvals necessary to implement these provisions. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares as
follows:  
   (a) The California Special Supplemental Food Program for Women,
Infants, and Children (WIC Program) currently authorizes 5,581 retail
food stores, or WIC Program vendors, to accept WIC Program nutrition
coupons from participants in exchange for authorized WIC Program
food products.  
   (b) For purposes of determining reimbursement amounts to its WIC
Program vendors, the WIC Program categorizes each vendor into peer
groups that are based on the number of cash registers in the store.
 
   (c) In the last several years, there has been significant increase
in the total number of authorized WIC Program vendors in high-cost
peer groups. From 2007 to 2011, the total number of authorized WIC
Program vendors has grown from 3,527 vendors in 2007 to 5,135 vendors
in 2011. During this same period, the total number of vendors in the
highest cost peer groups, vendors with one to two cash registers,
has more than tripled, growing from 339 vendors in 2007 to 1,144
vendors in 2011. In 2007, these high-cost vendor peer groups
accounted for less than 3 percent of all WIC Program redemptions in
California. They now account for 13 percent of all redemptions. 

   (d) From October 2009 to September 2011, the WIC Program
experienced a 4.6-percent increase in prerebate food costs, while
programs in all other western states showed decreases in food costs
and had a combined average of a 7.7-percent decrease in food costs.
It is estimated that this increase in food costs cost the state at
least $49 million in extra WIC Program food expenditures in 2011
alone.  
   (e) In April 2011, the WIC Program imposed a moratorium on
accepting applications for new vendor authorizations. The moratorium
was necessary to ensure the department's ability to effectively
manage vendor caseload, as required by Section 40735(a) of Title 22
of the California Code of Regulations and Section 246.12(g) of Title
7 of the Code of Federal Regulations. This moratorium was extended in
February 2012, in order to provide the department with an
opportunity to develop appropriate measures to contain rapidly
increasing WIC Program food costs. Because higher food costs result
in fewer women, infants, and children being served, effective food
costs containment policies are necessary to ensure that excessive
food costs do not result in limiting the number of women, infants,
and children who are able to participate in the WIC Program. 
   SEC. 2.    Section 123285 of the   Health
and Safety Code   is amended to read: 
   123285.  As used in this article, the following definitions shall
apply:
   (a) "Health professional" means a physician and surgeon,
registered nurse, nutritionist, dietitian, or state or local
medically trained health official, who is competent to professionally
evaluate nutritional need and to authorize supplemental foods, as
determined by the state department.
   (b) "Low income" means an income of not more than 185 percent of
the poverty level as determined by the federal poverty income
guidelines promulgated by the United States Department of Health and
Human Services.
   (c) "Recipient" means low-income pregnant women, low-income
postpartum and lactating women, and low-income infants and children
under five years of age, who are determined to be at nutritional risk
by a health professional, based on criteria established by the state
department.
   (d) "Nutrition coupon" means a check that is limited as to value,
food type, and food quantity and that has a limited period of
validity. 
   (e) "WIC Program" means the California Special Supplement Food
Program for Women, Infants, and Children. 
   SECTION 1.   SEC. 3.   Section 123310 of
the Health and Safety Code is amended to read:
   123310.  The department, under any program established pursuant to
this article, shall authorize retail food vendors, as described in
Section 123311, by written agreement, to accept nutrition coupons and
reimbursement according to the system developed by the department.
The department shall authorize an appropriate number and distribution
of food vendors in order to ensure adequate participant convenience
and access and to ensure that state or local officials can
effectively manage review of authorized food vendors in their
jurisdictions. The department shall establish criteria to limit the
number of retail food vendors with which the department enters into
agreements. The criteria, at a minimum, shall include:
   (a) The prices the vendor charges for foods in relation to other
vendors in its peer group. For purposes of this subdivision, "peer
group" means a group of vendors with similar characteristics that may
include, but shall not be limited to, any or all of the following:
   (1) Geographic location of the store.
   (2) Store size.
   (3) Type of store.
   (4) Number of cash registers.
   (5) Sales volume relating to any program established pursuant to
this article.
   (6) Gross sales volume.
   (7) Inventory.
   (8) Other vendor characteristics established by the department.
   (b) The ability of the department to ensure that authorized
supplemental foods will be provided through in-store compliance
purchases.
   (c) The adequacy of the shelf stock of the authorized supplemental
foods.
   (d) Past performance of the vendor in compliance with this article
and with CalFresh.
   SEC. 2.   SEC. 4.   Section 123311 is
added to the Health and Safety Code, to read:
   123311.  (a) An authorized food vendor under this article shall be
either of the following:
   (1) A licensed retail outlet that satisfies the minimum food
stocking requirements established in departmental regulations.
   (2) A farmer participating in the Farmers Market Nutrition Program
 to accept   accepting  WIC  Program
 fruit and vegetable checks  (FVCs)  at an
authorized farmers' market.
   (b) An authorized food vendor described in paragraph (1) of
subdivision (a) shall be open at least five days per week. Daily
operating hours shall be posted, and shall be consistent from week to
week.
   SEC. 5.    Section 123312 is added to the  
Health and Safety Code   , to read:  
   123312.  (a) The department shall give priority to new WIC Program
retail food vendor location applications from retail food stores
applying to be placed in peer groups that do not contribute to
increased food costs to the WIC Program. This section shall not apply
to new authorized vendor locations that are necessary to ensure
participant access, as determined by the department.
   (b) The department shall adopt regulations to implement this
section in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The adoption of any emergency regulations on or after January 1,
2013, shall be deemed to be an emergency and necessary for the
immediate preservation of the public peace, health and safety, or
general welfare. Emergency regulations adopted pursuant to this
section shall remain in effect for no more than 180 days. 
   SEC. 6.   Section 123313 is added to the  
Health and Safety Code   , to read:  
   123313.  (a) The department shall adopt regulations to specify
criteria to be used when initiating a moratorium on new WIC Program
retail food vendor location applications. The regulations, at a
minimum, shall do all of the following:
   (1) Define what is an effective caseload management level.
   (2) Identify the maximum duration of a moratorium.
   (3) Require a vendor alert or other official communication
regarding initiation of a moratorium to be accompanied by an outline
of specific steps the department plans to take to achieve effective
caseload management by the identified end date of the moratorium.
   (4) Require the department to process applications during the
moratorium period if the department was notified by the retail food
vendor of the vendor's intent to obtain authorization for a specific
store location prior to the effective date of the moratorium.
   (5) Require the department to provide retail food vendors with a
minimum of 60 days notice prior to the effective date of, or
extension of, a moratorium. 
   SEC. 7.    Section 123316 is added to the  
Health and Safety Code   , to read:  
   123316.  (a) An authorized vendor shall not do any of the
following:
   (1) Segregate authorized WIC Program products into one section
within the store.
   (2) Prohibit WIC Program customers from purchasing products at all
operating check stands and registers within the store.
   (3) Charge WIC Program customers a different price for an item
than the price that is offered to the general public.
   (b) The department shall ensure that an authorized vendor does not
engage in any of the practices prohibited in subdivision (a). 
   SEC. 8.    The department shall seek any federal
approvals necessary to implement this act.