BILL ANALYSIS
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: AB 537
A
AUTHOR: Arambula
B
VERSION: April 28, 2010
HEARING DATE: June 10, 2010
5
FISCAL: Appropriations
3
7
CONSULTANT:
Park
SUBJECT
Farmers' markets: electronic benefit transfers
SUMMARY
Requires flea markets, farmers markets, and certified
farmers markets that have not implemented a system for
their produce sellers to accept electronic benefit transfer
by January 1, 2012, to permit the Department of Social
Services to designate an authorized organization, as
specified, to operate an EBT system in their market on
behalf of the produce sellers.
ABSTRACT
Existing law:
1.Requires the Department of Social Services (DSS) to
provide oversight of the federal Supplemental Nutrition
Assistance Program (SNAP), also known as the Food Stamp
Program, which is administered by local agencies. SNAP is
overseen by the U.S. Department of Agriculture's Food and
Nutrition Service (FNS).
Continued---
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2.Provides for the licensure and oversight of certified
farmers markets by the California Department of Food and
Agriculture (CDFA) and requires all farmers selling at
certified farmers' markets to be certified as growing the
commodities they sell by the county agricultural
commissioner. Allows growers to sell their produce at
roadside stands on or adjacent to their farm.
3.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. Requires
vendors at swap meets to report all merchandise offered
or displayed for sale or exchange at the swap meet on a
form, which is submitted to the swap meet operator and
local law enforcement and the State Board of
Equalization, as specified.
This bill:
1.Finds and declares that flea markets, farmers markets,
and certified farmers' markets are important sources of
low-cost produce for Californians in need of food
assistance.
2.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
FNS-authorized organization to operate an EBT system in
their market on behalf of the produce sellers and
accommodate such organization, as specified.
3.Permits DSS to designate or assign an interested
FNS-authorized organization to operate an EBT system in
the market on behalf of the market's produce sellers.
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.
4.Prohibits these requirements from applying to markets
operating an active and current EBT system.
STAFF ANALYSIS OF ASSEMBLY BILL 537 (Arambula) Page
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5.Prohibits the interpretation that these provisions
require a market to create, operate, or maintain an EBT
system.
FISCAL IMPACT
According to the Assembly Floor analysis of a previous
version, 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 have expressed an interest,
but currently are not participating in the EBT program. The
analysis also notes minor on-going, annual costs for
transaction fees and monthly charges associated with
maintaining the POS devices.
BACKGROUND AND DISCUSSION
Author's statement
The author states that, approximately 10 years ago, when
the federal government switched from paper food stamps to
electronic benefit transfer, access to certified farmers'
markets became non-existent to individuals and families
receiving public assistance. The author states that the
measure reestablishes access for vulnerable and needy
populations to high quality fruits and vegetables by
allowing an FNS vendor to assist in the facilitation of EBT
systems for flea markets, farmers' markets, and certified
farmers' markets that don't have EBT systems operational by
2012.
SNAP, EBT, and markets
Food stamp program benefits must be issued through the EBT
system, and, according to federal law, retailers must apply
and become authorized by the federal Food and Nutrition
Service (FNS) to accept SNAP.
California's Electronic Benefit Transfer (EBT) Farmers
Market Program started as a demonstration program in 2003
to support EBT in nontraditional markets, such as farmers
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markets, produce stands, and similar open-air markets. The
Farmers Market Program is now implemented statewide, and
current participation includes farmers markets, individual
produce stands, and flea markets.
In order to participate in the EBT Farmers Market Program,
each market must be authorized by the FNS to accept SNAP
benefits. Most EBT farmers markets use scrip (a type of
currency) in the form of paper or tokens (wooden or
plastic), designed to be unique to each market, in
denominations of $.50 and/or $1.00. From a central
location at the farmers market, EBT cardholders can use
their EBT cards to purchase scrip. They use this scrip to
purchase SNAP-eligible items from farmers at the market.
At the end of the day, farmers are reimbursed by the market
for the amount of scrip they have received. There are three
ways for a farmers market to process an EBT/scrip
transaction: wired point-of-sale (POS) equipment; wireless
POS device; and paper manual vouchers.
Current usage of SNAP benefits at farmers' markets
According to the USDA's FNS Web site, as of the end of
federal FY 2009, 5,274 farmers' markets were operating
nationwide. Of these, 936 farmers' markets were authorized
to accept SNAP benefits. In FY 2009, there was a 24
percent increase in the number of farmers' markets
authorized, and a 58 percent increase in SNAP redemptions
for farmers' markets, although the actual redemption as a
percentage of overall SNAP benefits remains very small. In
California, farmers' markets have operated point-of-sale
EBT devices for close to a decade. Currently,
approximately 80 out of an estimated 730 farmers' markets
accommodate electronic benefit transfer. In 2007-08,
$633,000 in food stamp benefits were redeemed at these
markets, out of a total statewide food stamp benefit
redemption of close to $3 billion. It's unclear what
percentage of flea markets sell fresh produce, or how much
EBT volume flea markets account for.
Access to fresh fruits and vegetables
There has been an on-going national policy discussion
concerning the lack of available fresh produce to many
people who are living on limited incomes or receiving food
stamps or other forms of assistance. Many poorer urban
neighborhoods lack farmers' markets or grocery stores that
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sell fresh produce. An integral part of those discussions
has been how to allow people using EBT cards to access
farmers' markets.
According to FNS, several welfare, hunger, and health
advocates have become involved in conducting outreach to
farmers and markets in their communities. FNS states that,
when feasible, the state agency contacts market managers
directly to discuss bringing EBT into their markets. In
2008, a new farmer's market in San Diego was approved for a
demonstration project, called the Fresh Fund, which matches
up to $10 to purchase fresh fruits and vegetables for EBT
recipients.
Other farmers' market programs
The Farmers' Market Nutrition Program was established by
Congress in 1992 to provide fresh, unprepared, locally
grown fruits and vegetables to participants in the Women,
Infants, and Children Nutrition Program (WIC), and to
expand the awareness, use of and sales at farmers' markets.
Currently, 46 states, including California, participate in
the federal program. Eligible WIC participants are issued
Farmers' Market Nutrition Program (FMNP) coupons in
addition to their regular WIC food instruments. These
coupons can be used to buy fresh, unprepared fruits,
vegetables and herbs from farmers, farmers' markets or
roadside stands that have been approved by the state agency
to accept FMNP coupons. The farmers, farmers' markets or
roadside stands then submit the coupons to the bank or
state agency for reimbursement. The federal food benefit
level for FMNP recipients may not be less than $10 and no
more than $30 per year, per recipient.
The Senior Nutrition Program uses a booklet of negotiable
scrip, which the farmers can deposit like a check.
Typically, the scrip comes in $2.00 units and the booklets
hold 10 scripts.
Arguments in support
Supporters state that access to fresh produce is important,
and should be available to everyone, especially low income
families, as fresh produce leads to healthier diets and
improved health. Supporters believe that this measure can
help increase consumption of healthy fresh produce and
increase access to California-grown products purchased
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directly from California farmers. The California Rural
Legal Assistance Foundation (CRLAF) writes that the USDA
currently funds DSS to cover costs to operate EBT, and,
moreover, the state has set aside funds to assist markets
with funding EBT and provides free EBT equipment to
farmers' markets and flea markets on a voluntary basis.
Arguments in opposition
DSS staff reports that FNS has stated that federal
regulations, under 7 C.F.R. 278.1 (a), require the market
owner to file an application to be FNS-authorized. DSS
staff state that, although the regulation does not
specifically prohibit other FNS-authorized entities to
operate EBT on behalf of another FNS-authorized market,
from conversations with FNS on several occasions, DSS has
been informed that the market owner must fill out the
application, and meet all other requirements in order to be
FNS-authorized.
Related/prior legislation
SB 48 (Alquist) of 2007 requires the Department of Public
Health (DPH) to establish the Access to Healthy Food
program and make grants and loans available to retail food
markets that agree to offer quality fruits and vegetables
for residents of low income, underserved communities. Held
in the Assembly Appropriations Committee.
AB 2384 (Leno), Chapter 236 of 2006, establishes a "Healthy
Food Purchase" pilot program (pilot program) to increase
the sale and purchase of fresh fruits and vegetables in
low-income communities.
SB 1329 (Alquist) of 2006 requires CDFA, until January 1,
2010, in partnership with the Department of Health
Services, and to the extent funds are appropriated, to
establish the "Healthy Food Retailing Initiative" to
provide residents of underserved communities with retail
food markets that offer high quality fruit and vegetables.
Held in the Assembly Appropriations Committee.
AB 1542 (Ducheny), Chapter 270, Statutes of 1997,
established the authority for a statewide EBT system to
issue food stamp benefits and, at county option, the
issuance of cash benefits.
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PRIOR VOTES
Assembly Floor: 66 - 3
Assembly Appropriations: 12 - 4
Assembly Agriculture:8 - 0
COMMENTS
1.Conformity with federal law and regulation. Staff
recommends the following amendment to align this measure
with federal law and regulation.
Page 2, lines 7-16:
(b) (1) If by January 1, 2012, a market described in
subdivision
(a) does not have a system in place for its produce
sellers to accept
electronic benefit transfer (EBT) for purchases, the
State
Department of Social Services, to the extent and manner
allowed by federal law and regulation, may designate or
assign an interested
Food and Nutrition Service (FNS)-authorized organization
to operate
an EBT acceptance system in the market on behalf of the
market's
produce sellers. The market shall allow and accommodate
the
FNS-authorized organization in a reasonable manner that
aids in the
creation, implementation, and operation of the EBT
acceptance system.
POSITIONS
Support: Alameda County Community Food Bank
Alchemist Community Development Corporation
Agricultural Council of California
Agriculture and Land-Based Training Association
STAFF ANALYSIS OF ASSEMBLY BILL 537 (Arambula) Page
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Breast Cancer Action
California Association of Food Banks
California Catholic Conference
California Federation of Certified Farmers'
Markets
California Food Policy Advocates
California Immigrant Policy Center
California Pan-Ethnic Health Network
California Rural Legal Assistance Foundation
Center for Community Advocacy
Community Alliance with Family Farmers
Consumer Federation of California
County Health Executives Association of
California
County Welfare Directors Association
First 5 Fresno County
Food FUNdamentals
Fresno County Economic Opportunities Commission
Having Our Say
Jericho
Latino Coalition for a Healthy California
Monterey County, Board of Supervisors
Pacific Coast Farmers' Market Association
Roots of Change
San Francisco, City and County of
Santa Clara County, Board of Supervisors
Statewide Youth Board on Obesity Prevention
Sustainable Economic Enterprises of Los Angeles
Ubuntu Green
Urban and Environmental Policy Institute,
Occidental College
Western Center on Law and Poverty
2 individuals
Oppose:Department of Social Services
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