BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1190
AUTHOR: Hancock
AMENDED: March 29, 2012
HEARING DATE: April 11, 2012
CONSULTANT: Orr
SUBJECT : Women, infants, and children's nutrition.
SUMMARY : Requires the California Department of Public Health
(CDPH) to implement an electronic benefits transfer (EBT) system
for the California Special Supplemental Food Program for Women,
Infants and Children (WIC) by January 1, 2015.
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 to 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.Establishes, in federal law, the Healthy, Hunger-Free Kids Act
of 2010 (HHFKA), which requires, among other provisions, that
states implement EBT systems for WIC programs by October 1,
2020, with specified exemptions.
3.Authorizes the Department of Health Services (DHS, now CDPH)
to design, implement and fund an EBT system for the WIC
program. Requires CDPH to study the feasibility of
implementing an EBT system for the WIC program and report the
findings to the Legislature by July 1, 2003. Prohibits CDPH
from implementing an EBT system until the feasibility study
was completed and funding was allocated in the annual Budget
Act. Requires CDPH to obtain USDA's approval prior to the
establishment of any EBT system.
4.Authorizes the issuance of nutrition coupons by local agencies
to program recipients in order to exchange with vendors for
the purchase of approved nutritious foods. Requires CDPH to
print specified information on each coupon. Requires CDPH to
provide this information on the coupons using optical scanning
Continued---
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technology, to the extent feasible, and requires CDPH to
report to the Legislature on the feasibility and costs of
using this technology by July 1, 2003.
This bill:
1.Requires CDPH to design, implement and maintain an EBT system
for WIC by January 1, 2015. Prohibits CDPH from implementing
the EBT system until funding is provided in the annual Budget
Act.
2.Deletes the requirement that CDPH complete a feasibility study
on implementing EBT and report findings to the Legislature by
January 1, 2003.
3.Extends the date by which CDPH must report to the Legislature
on the feasibility and costs of using optical scanning
technology for the nutrition coupons to July 1, 2013.
Additionally requires CDPH to report on which electronic card
option the state will use to implement the required EBT
system.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, an EBT system
for WIC would replace the current paper checks, which are
cumbersome and outdated for grocers, stigmatizing for
participants at the check stand, and costly to operate. With
WIC EBT, WIC participants would use the electronic system to
purchase healthy, WIC-approved foods with an EBT card instead
of multiple paper checks.
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, 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. Allocated quantities depend on the age of the infant
or child, and whether a mother is pregnant, postpartum, and
partially or fully breastfeeding. WIC provides checks or
coupons for buying healthy supplemental foods from
WIC-authorized vendors. The coupons are required to be printed
with specified information, including the specific food item
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for which the coupon may be used, the specific quantities of
that food item, the valid dates during which the coupon may be
used, and the maximum value for the coupon. In addition to
nutritious foods, WIC also provides nutrition education,
assistance with finding health care and other community
services, and support and information about breastfeeding.
3.EBT. EBT is the automated delivery, redemption and
reconciliation of benefits, most commonly used by the federal
Supplemental Nutrition Assistance Program, known in California
as CalFresh, the California Food Assistance Program, and cash
assistance benefits. EBT provides recipients receiving public
assistance with electronic access to food and cash benefits
through the use of magnetic striped cards at point-of-sale
(POS) devices at stores and ATMs. EBT is used in all 50 states
and in the District of Columbia, Puerto Rico, the Virgin
Islands, and Guam. The California EBT system currently
processes and reconciles food and cash assistance benefit
transactions for over two million EBT cardholders per month.
The state does not own or operate its own EBT system. Instead,
the state contracts with ACS State & Local Solutions, Inc., a
Xerox Company.
There are two main models of electronic card options for EBT
that the WIC program could consider. An off-line model is the
most common approach, and uses "smart" cards with an embedded
chip that stores the contents of the WIC food package on the
card. Smart cards require that at least one terminal at the
grocery store be equipped to read the chip, and infrastructure
costs for this approach have so far prohibited its widespread
expansion. An on-line model uses conventional magnetic stripe
cards swiped in a common card reader in any grocery store
checkout lane. The recipient enters an encrypted personal
identification number to securely validate their identity. The
transaction flows from the POS device to the central database,
where the contents of the recipient's individualized food
package are stored. This bill requires that CDPH report to
the Legislature on which model is chosen by July 1, 2013 in
order to give the vendors and retailers time to prepare
accordingly.
4.Federal WIC requirements for EBT. The HHFKA requires that
states implement EBT systems for WIC programs by October 1,
2020, unless the United States Secretary of Health and Human
Services grants an exemption. To be eligible for an exemption
from this deadline, a state must demonstrate either unusual
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technological barriers to implementation, operational costs
are not affordable within their nutritional services and
administration grant, or if it is otherwise within the best
interest of the program. States requesting an exemption must
specify a date by which the state agency anticipates statewide
implementation of the program, as required. HHFKA also
requires state agencies to submit annual status reports
demonstrating their progress toward statewide EBT
implementation.
5.Related legislation. AB 2280 (Lara) would require CDPH, within
30 days, to provide written notice, as prescribed, to a WIC
vendor if CDPH determines that the vendor has committed an
initial violation for which a pattern of the violation must be
established to impose a sanction. AB 2280 would require the
notice to be delivered to the vendor before CDPH conducts a
second investigation for purposes of establishing a pattern of
the violation. This bill is pending hearing in the Assembly
Health Committee.
6.Prior legislation. AB 313 (Goldberg) Chapter 842, Statutes of
2003, required DHS to study the feasibility of implementing an
EBT system for the WIC Program, and report the findings to the
Legislature by July 1, 2003.
7.Support. Supporters such as the Kings County Department of
Public Health, Planned Parenthood of Orange and San Bernardino
Counties, Bay Region WIC Association, and Antelope Valley
Hospital WIC Program claim that each day over 240,000 WIC
checks are issued in 650 sites in California, and redeemed at
over 5,500 WIC-authorized grocery stores. The State
Treasurer's Office processes over 4.8 million WIC checks
monthly. They argue that this paper check system used by the
WIC program is cumbersome and outdated for grocers,
stigmatizing for participants at the check stand, and costly
to operate. Community Resource Project, Inc. WIC Program says
that the current check system requires participants to
purchase all of their food on a single check at once, which
causes a hardship for families who travel by bus. They believe
EBT for WIC would have an especially positive impact on their
local WIC community because an EBT card would allow those
recipients that take multiple buses to get around to buy their
food in quantities that are more manageable on public
transportation.
Additionally, the American Red Cross WIC program claims they
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hear firsthand about frustrations from using paper checks at
grocery stores, and how this draws negative attention to WIC
participants. Mono County WIC program claims they have only
one grocery store in their area, and the cumbersome WIC check
process can become a nightmare, contributing to long lines and
extended wait times at their sole grocery store.
8.Challenges with EBT implementation for other California public
programs. According to the July 2011 California EBT Project
Report to the Legislature, the state transitioned to the ACS
California EBT system on September 20, 2009 for other public
assistance programs, including CalFresh. During the first year
of the new system, some EBT cardholders experienced issues
with their EBT transactions. For instance, there were
occurrences where database slowdowns led to some cardholders'
accounts being incorrectly debited for certain transactions.
These problems have been identified and appear to have been
rectified through corrective actions. There was also an
instance of an EBT system breach in January of 2011, where
some cardholders' benefits were stolen. The State Office of
Systems Integration and the Department of Social Services
worked with ACS to disable the source of the breach on the EBT
website, replace the stolen benefits, and have since
implemented additional safety precautions to identify unusual
system or website activity to prevent further system breaches.
They continue to work with ACS to improve the system and
provide oversight of the EBT system performance.
9.Deadline differences. According to federal law, states will
have to transition to an EBT system by October 2020. This bill
implements an earlier deadline of 2015. While CDPH completed
the EBT feasibility study required by state statutes passed
back in 2003, they appear to be only in the early stages of
USDA's process for gaining approval for EBT. CDPH must still
complete a comprehensive cost-benefit analysis, define system
requirements, determine which functions and services will be
outsourced or completed by existing staff, then use the
information to submit an Implementation Advance Planning
document to USDA for approval. USDA estimates that EBT
planning can take from 2.5 to 4 years and EBT implementation
can take from 3 to 8 years.
SUPPORT AND OPPOSITION :
Support: California WIC Association (sponsor)
American Red Cross WIC Program
Antelope Valley Hospital WIC Program
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Bay Region WIC Association
California Catholic Conference
California Food Policy Advocates
Community Resource Project, Inc. WIC Program of
Sacramento
Fresno County Economic Opportunities Commission
Insight Center for Community Economic Development
Kings County WIC
Mono County WIC
Scripps Mercy WIC Program
Watts Healthcare Corporation
Western Center on Law and Poverty
WIC of Planned Parenthood of Orange and San Bernardino
Counties
Oppose: None received.
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