BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2322| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2322 Author: Gatto (D) Amended: 5/1/12 in Assembly Vote: 21 SENATE HEALTH COMMITTEE : 9-0, 6/20/12 AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee, De León, DeSaulnier, Rubio, Wolk SENATE APPROPRIATIONS COMMITTEE : 7-0, 7/2/12 AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price, Steinberg ASSEMBLY FLOOR : 70-0, 5/25/12 (Consent) - See last page for vote SUBJECT : California Special Supplemental Food Program for Women, Infants, and Children SOURCE : Author DIGEST : This bill requires the Department of Public Health (DPH) to adopt regulations to specify the criteria to be used and actions to be taken when initiating a moratorium on new Women, Infants, and Children (WIC) Program retail food vendor location applications. ANALYSIS : CONTINUED AB 2322 Page 2 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 DPH, for these purposes. 2.Allows DPH to authorize retail food vendors to participate in the WIC program. Requires DPH 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 DPH to establish criteria to limit the number of retail food vendors with which DPH 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 DPH 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: 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 DPH will take to achieve effective caseload management by the end of the moratorium, and requires this information be made available on DPH's Web site and through other forms of electronic communication. AB 2322 Page 3 D. Require DPH to process applications during the moratorium if DPH was notified of the vendors' intent prior to the moratorium. E. Require DPH 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 DPH 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 DPH. Background 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 DPH'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. DPH is required to authorize an appropriate number and distribution of food vendors in order to ensure adequate participant convenience and access. According to DPH, there are over 5,500 grocery stores statewide that have entered into vendor agreements with WIC. AB 2322 Page 4 WIC vendor moratorium . On March 7, 2011, DPH 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 DPH'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, DPH 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. DPH announced the moratorium would end effective February 27, 2012, but on February 24, 2012, DPH issued another vendor alert stating that the moratorium would continue indefinitely without explanation. On April 27, 2012, DPH 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee, one-time costs of about $100,000 (federal funds) over two years to develop regulations. SUPPORT : (Verified 7/3/12) California Chamber of Commerce California Farm Bureau Federation California Grocers Association California Retailers Association Western Center on Law and Poverty ARGUMENTS IN SUPPORT : The California Grocers Association (CGA) supports this bill because it provides more certainty AB 2322 Page 5 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 this bill 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. ASSEMBLY FLOOR : 70-0, 5/25/12 AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fong, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Hagman, Halderman, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Lara, Logue, Bonnie Lowenthal, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, V. Manuel Pérez, Portantino, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Atkins, Bill Berryhill, Fletcher, Fuentes, Grove, Hall, Knight, Ma, Perea, Silva CTW:d 7/5/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** AB 2322 Page 6