BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2322
AUTHOR: Gatto
AMENDED: May 1, 2012
HEARING DATE: June 20, 2012
CONSULTANT: Orr
SUBJECT : California Special Supplemental Food Program for
Women, Infants, and Children.
SUMMARY : Requires the California Department of Public Health
(CDPH) to adopt regulations to specify the criteria to be used
and actions to be taken when initiating a moratorium on new
Women, Infant, and Children (WIC) Program retail food vendor
location applications.
Existing law:
1. Establishes WIC, under the United States Department of
Agriculture (USDA), which provides grants to states for
supplemental foods, health care referrals, and nutrition
education for low-income pregnant, breastfeeding, and
non-breastfeeding postpartum women and for infants and
children up to age five who are found to be at nutritional
risk. Establishes WIC in California, administered by CDPH,
for these purposes.
2. Allows CDPH to authorize retail food vendors to participate
in the WIC program. Requires CDPH to 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. Requires
CDPH to establish criteria to limit the number of retail food
vendors with which CDPH enters into vendor agreements.
3. Allows, under regulation, any retail outlet meeting certain
requirements to apply to become an authorized food vendor,
and describes the criteria used to select such vendors.
This bill:
1.Requires CDPH to adopt regulations to specify the criteria to
be used and actions to be taken when initiating a moratorium
on new WIC Program retail food vendor location applications.
The regulations must:
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a. Define an effective caseload management level;
b. Identify the maximum duration of a moratorium;
c. Require a vendor alert, or other official communication
regarding initiation of a moratorium along with an action
plan with steps CDPH will take to achieve effective
caseload management by the end of the moratorium, and
requires this information be made available on CDPH's
website and through other forms of electronic
communication;
d. Require CDPH to process applications during the
moratorium if CDPH was notified of the vendors' intent
prior to the moratorium; and
e. Require CDPH to provide retail food vendors with a
minimum of 30 days' notice prior to the effective date of,
or extension of, a moratorium.
2.Requires CDPH to seek necessary federal approvals to implement
the provisions of this bill.
3.Declares legislative findings regarding the rapid increase in
WIC program vendors and the subsequent moratorium on new WIC
program vendors imposed by CDPH.
FISCAL EFFECT : The Assembly Appropriations Committee estimates
one-time costs of $98,000 (federal WIC funding), spread over
three years, for the workload associated with CDPH promulgating
the required regulations.
PRIOR VOTES :
Assembly Health: 19- 0
Assembly Appropriations:17- 0
Assembly Floor: 70- 0
COMMENTS :
1.Author's statement. From 2007 to 2011, there had been a
significant increase in WIC vendor applications. In April
2011, the WIC Program imposed a moratorium on applications for
new vendor authorizations, which was deemed necessary to
ensure CDPH's ability to effectively manage vendor caseload.
Placing an indefinite moratorium on new WIC licenses without
any notice or timeframe makes it challenging for retail food
outlets to open new locations and for low-income communities
to find places to purchase these important products. Often
times, vendors will hold off on expanding operations until
they know they can serve all members of the community. This
uncertainty and delay is challenging for retailers and
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participants who need access to healthy foods. Providing
vendors with the information in AB 2322 will allow them to
plan and prepare for new retail locations to serve WIC
participants.
2.WIC. WIC is a 100 percent federally funded nutrition and
health program that provides nutrition education and food for
low-income pregnant women, new mothers, and infants or
children under age five. The WIC food package is specifically
designed to meet the special nutritional needs of its target
population and includes items like infant formula, milk,
breakfast cereal, cheese, eggs, fruits, vegetables and
legumes. WIC provides checks or coupons for buying healthy
supplemental foods from WIC-authorized vendors.
Prior to the moratorium, any retail outlet meeting certain
requirements could apply to become an authorized WIC retail
food vendor. Vendors can be selected based on several
criteria, including competitive prices for WIC foods,
convenience and accessibility of the vendor location for WIC
participants, and CDPH's ability to ensure that authorized
supplemental foods will be provided. Each retail food outlet
location must be authorized separately from any other location
operated by an individual, group of individuals, or a
corporation. CDPH is required to authorize an appropriate
number and distribution of food vendors in order to ensure
adequate participant convenience and access. According to
CDPH, there are over 5,500 grocery stores statewide that have
entered into vendor agreements with WIC.
3.WIC vendor moratorium. On March 7, 2011, CDPH announced a
temporary moratorium on accepting new vendor location
applications, effective April 6, 2011. The vendor alert
claimed that the moratorium was necessary to ensure CDPH's
ability to effectively manage vendor caseload and indicated it
would remain in effect until budgeted positions could be
filled and staff trained. In response to concerns expressed by
vendors, CDPH modified the vendor alert on March 18, 2011, to
allow vendors that anticipated applying for WIC authorization
for a new store location, but that were not ready to submit an
application before April 6, 2011, to instead submit a letter
requesting the vendor and the store location be placed on
WIC's moratorium exception list. CDPH announced the moratorium
would end effective February 27, 2012, but on February 24,
2012, CDPH issued another vendor alert stating that the
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moratorium would continue indefinitely without explanation. On
April 27, 2012, CDPH announced that the exception list would
be discontinued and that no new vendor applications would be
accepted or processed. The alert claimed the moratorium would
remain in effect until its WIC program develops and implements
an effective cost containment and vendor management system, as
directed by the USDA. The alert also claimed that the WIC
program would need to gain USDA approval to authorize any new
stores.
4.Related legislation. SB 1190 (Hancock) would require CDPH to
implement an electronic benefits transfer system for WIC by
January 1, 2015. SB 1190 is pending in the Assembly Human
Services Committee.
AB 2280 (Lara) would require CDPH to notify a WIC program
vendor, in writing, within 30 days if CDPH determines that the
vendor has committed a violation. AB 2280 is pending in the
Senate Human Services Committee.
5.Prior legislation. AB 313 (Goldberg), Chapter 842, Statutes of
2003, provided that the nutrition coupons issued under the
program are redeemable by recipients at any authorized retail
food vendor, as specified.
6.Support. The California Grocers Association (CGA) supports
the bill because it provides more certainty for WIC vendors by
providing additional information prior to and during a vendor
application moratorium. Grocers have made strong efforts at
opening stores in both rural and urban communities to provide
access to healthy, affordable food. When a moratorium is
enacted, grocers are less likely to expand operations into
communities who may need their services the most.
The Western Center on Law and Poverty (WCLP) believes the AB
2322 is a conservative effort to achieve the goals of improved
processes for imposing moratoriums and managing vendor
communication. WCLP understands the importance of ensuring
adequate staff to support vendor authorizations in an
environment that requires special attention to integrity.
However, WCLP believes that the unique public-private
partnership upon which the WIC program is balanced should be
managed with transparency and consideration for the planning
needs of the retail community seeking to serve populations
where the majority of residents are low-income.
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SUPPORT AND OPPOSITION :
Support: California Chamber of Commerce
California Farm Bureau Federation
California Grocers Association
California Retailers Association
Western Center on Law and Poverty
Oppose: None received.
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