BILL ANALYSIS
AB 537
Page 1
ASSEMBLY THIRD READING
AB 537 (Arambula)
As Amended January 25, 2010
Majority vote
AGRICULTURE 8-0 APPROPRIATIONS 12-4
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|Ayes:|Galgiani, Tom Berryhill, |Ayes:|De Leon, Ammiano, |
| |Conway, Fuller, Ma, | |Bradford, Charles |
| |Mendoza, Yamada, Bonnie | |Calderon, Coto, Davis, |
| |Lowenthal | |Fuentes, Hall, John A. |
| | | |Perez, Skinner, Solorio, |
| | | |Torlakson |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Conway, Harkey, Nielson, |
| | | |Audra Strickland |
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SUMMARY : Requires a flea market farmer's market and Certified
Farmers' Market (CFM) selling fresh produce, as of January 1,
2012, to have in place a system for acceptance of electronic
benefit transfer (EBT) for sellers of produce; the State
Department of Social Services (DSS) may designate or assign an
authorized organization to operate an EBT system in the market
on behalf of the produce sellers. Specifically, this bill :
1)States that flea market farmers markets, and CFMs selling
fresh produce, are important sources of low-cost produce for
Californians in need of food assistance.
a) Requires that if any of these market places have not
implemented a system for their produce sellers to accept
EBT by January 1, 2012, the market shall permit an approved
Food and Nutrition Service (FNS) organization to operate an
EBT system in their market on behalf of the produce sellers
and accommodate such organization in a reasonable manner
that aids in the creation, implementation, and operation of
the EBT system;
b) Permits DSS to designate or assign any non-profit public
benefit, charitable or social welfare organization, that is
or can be authorized as an FNS, to accept the EBT card on
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behalf of the produce sellers, but DSS cannot designate or
assign an organization if that organization is another
market competing or will potentially compete with the
market being served; and,
c) States that these requirements do not apply to markets
operating an active and current EBT system.
2)Requires DSS to consider and solicit input from the market
prior to placement of an authorized organization, to avoid
potential conflicts such as direct competition with the market
being served. Permits DSS to place conditions on or remove an
organization from a market.
3)Prohibits the interpretation that this will require a market
to create, operate, or maintain an EBT system.
EXISTING LAW requires DSS to provide oversight of the federal
Supplemental Nutrition Assistance Program (SNAP), also known as
Food Stamp Program. DSS provides guidelines to local
governments that are required to administer SNAP locally. DSS
provides registration and approval services for entities to
become FNSs to accept SNAP's EBT payments. Fines and penalties
are established for anyone who fraudulently appropriates or
acquires food stamps (EBT) or falsifies counterfeits or alters
food stamps (EBT).
The California Department of Food and Agriculture (CDFA) license
CFMs and require all farmers selling at CFMs to be certified as
growing the commodities they sell by the county agricultural
commissioner. Fees, fines and penalties are established for
certification, licensure and violations of these requirements.
Growers may sell their produce at roadside stands on or adjacent
to their farm; these farmers and those selling at CFMs are
exempt from state standard packing and labeling requirements.
The Business and Professions Code defines "Swap Meets" to
include, and which are interchangeable with, the terms flea
market, indoor swap meets, or open-air markets and are defined
as an event that occurs more than six times in a 12-month
period, at which two or more persons offer merchandise for sale
or exchange and that meets specific criteria. CDFA does not
have oversight of flea markets.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, there are one-time costs of less than $25,000
($13,000 General Fund) for the purchase of the point of sale
(POS) devices and the initial activation fee for certified
farmers markets that currently are not participating in the
program but have expressed an interest in allowing the farmers
to operate as a third party. There will be minor on-going,
annual costs for transaction fees and monthly charges associated
with maintaining the POS devices.
COMMENTS : According to the author, approximately 10 years ago,
when the federal government switched from paper food stamps to
EBT, access to CFMs became non-existent to individuals and
families receiving public assistance. AB 537 attempts to
reestablish that access by requiring CFMs to create their own
EBT program or by having a non-profit third party to establish
such a program. This bill also permits DSS to designate or
assign an approved or a qualifying entity to a market for the
purpose of establishing an EBT process, unless such an entity
could compete against the market that is to be served.
Currently, according to the U.S. Department of Agriculture's
SNAP report, within California there are 52 CFMs authorized to
accept SNAP benefits at 118 market locations. The markets are
using both wireless and hard-wired systems with script. This
works by having an approved FNS, be that the market or a third
party, at a central location for the EBT where a beneficiary
uses their card to receive script that can be used to purchase
fruits and vegetables in the market. No change is provided for
the script. At some point during or after the market is
concluded, the farmers exchange the script received with FNS for
currency.
There are two other nutrition programs occurring at CFMs
presently: one is the Senior Nutrition Program and the second
is the Women, Infants and Children Program. Each of these
programs uses a booklet of negotiable script which the farmers
can deposit like a check. Typically the script comes in $2.00
units and the booklets hold 10 scripts.
Several welfare, hunger, and health advocates have become
involved in outreach to farmers and community markets trying to
assist low income families with greater access to fruits and
vegetables. DSS has, when feasible, contacted the CFM managers
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directly, to encourage participation in SNAP.
Supporters state that access to fresh produce is important, and
should be available to everyone, especially low income families,
as fresh products lead to healthier diets and improved health.
AB 537 will increase such access to California-grown products
purchased directly from California farmers.
AB 537 requires the markets to permit an approved FSN
organization onto their property for the purpose of handling EBT
transfers with the farmers of that market. The markets are
given the ability to provide input to DSS regarding who is
designated to provide the EBT services at their respective
markets, while DSS has the ability to remove an organization or
condition their participation at a market site. There are no
requirements that the farmers or vendors that participate in the
respective markets are required to participate in the EBT
program.
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084
FN: 0003620