BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
537 (Arambula)
Hearing Date: 08/02/2010 Amended: 06/30/2010
Consultant: Jacqueline Wong-HernandezPolicy Vote: Human
Services 4-1
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BILL SUMMARY: AB 537 would require, with exceptions, a flea
market, farmers' market, or certified farmers' market that does
not have an electronic benefit transfer (EBT) system in place by
January 1, 2012, to designate or assign an interested Food and
Nutrition Service (FNS)-authorized organization to operate an
EBT acceptance system in the market, as specified. This bill
would require the Department of Social Services (DSS) to
consider and solicit input from the market prior to making a
designation or assignment authorized under the bill, as
specified. This bill makes codified legislative findings and
declarations.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
DSS designation/oversight $41 $163
$163 General* $41
$163 $163 Federal*
EBT devices
up to $330 General*
up to $576
Federal*
Local assistance Potentially substantial
one-time costs General*
Federal*
*If federal approval is granted, to allow FNS-authorized
organizations that do not own the market to operate EBT on
behalf of the market.
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STAFF COMMENTS: This bill meets the criteria for referral to
the Suspense File.
Under federal law, food stamp benefits must be issued through
the EBT system, and retailers must apply and become authorized
by the federal FNS to accept EBT transactions. California has a
statewide EBT Farmers Market Program through which approximately
70 farmers markets (out of more than 800 in currently operation
statewide) have opted to participate, and are authorized by FNS
to accept food stamps. Most EBT farmers markets use scrip (a
type of currency). From a central location at the farmers
market, EBT cardholders can use their EBT cards to purchase
scrip. They use this scrip to purchase food stamp eligible items
from farmers at the market, and farmers are later reimbursed by
the market for the amount of scrip they have received.
This bill would require all markets (that do not currently
participate in EBT transactions) to either have an EBT system in
place by January 1, 2012 or allow an outside FNS-authorized
organization to operate an EBT system on behalf of the market,
if allowed by
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AB 537 (Arambula)
federal law. DSS would be responsible for designating an
interested organization (for each market), to the extent there
are interested FNS-authorized organizations.
This bill would incur one-time costs to DSS to purchase
additional EBT devices, to establish new procedures, and to
provide initial local assistance. EBT devices cost approximately
$1,200 each, and new devices could be needed for many of the
additional 750 (or more) farmers markets that would be required
to participate. Some FNS-authorized organizations can likely use
existing wireless point-of-sale devices they already have.
DSS would also incur ongoing staffing costs to monitor the
program, recruit and coordinate organizations, and work with
markets to implement the provisions of this bill. The duties are
extensive, and will likely require two PYs, for state support.
Some amount of local assistance will be ongoing, and will likely
change depending on the level of actual participation by the
outside organizations.