BILL ANALYSIS �
SB 1190
Page 1
Date of Hearing: June 26, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 1190 (Hancock) - As Amended: May 29, 2012
SENATE VOTE : 38-0
SUBJECT : Women, infants, and children's nutrition.
SUMMARY : Directs the Department of Public Health (DPH) to
provide quarterly briefings on the development of an electronic
benefits transfer (EBT) system for the California Special
Supplemental Food Program for Women, Infants, and Children
(WIC), as specified, beginning on January 1, 2013, and until the
system is fully operational. Specifically, this bill :
1)Expresses legislative intent to implement an EBT system for
WIC as soon as feasible.
2)Requires DPH to provide quarterly briefings to the appropriate
fiscal and policy committees of the Legislature, the
Legislative Analyst's Office, and the office of the State
Chief Information Officer on the development of the EBT system
for WIC, pursuant to authority granted under existing law.
3)Specifies that the quarterly briefings in 2) above must be
provided within 30 days of the close of each quarter, with the
first quarter commencing January 1, 2013, and continue until
the EBT system is fully operational.
4)Sunsets the provisions of this bill on January 1, 2023.
EXISTING FEDERAL LAW :
1)Establishes WIC under the United States Department of
Agriculture (USDA) to provide 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.
2)Requires states, under the Healthy, Hunger-Free Kids Act of
2010 (HHFKA), to implement EBT systems for WIC programs by
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October 1, 2020, with certain exemptions.
EXISTING STATE LAW :
1)Establishes WIC in California, administered by DPH, and
provides for the redemption of nutrition coupons by WIC
participants at any approved WIC retail food vendor.
2)Authorizes the Department of Health Services (DHS now DPH) to
design, implement, and fund an EBT system for the WIC program.
3)Requires DPH to develop a plan to determine the feasibility of
implementing an EBT system for WIC, and report the findings to
the Legislature by July 1, 2003.
4)Conditions implementation of an EBT system on completion of
the feasibility study in 3) above and the allocation of
funding for the system in the annual Budget Act.
5)Requires DPH to obtain USDA's approval prior to the
establishment of any EBT system.
FISCAL EFFECT : According to the Senate Appropriations
Committee, minor costs to provide briefings (federal funds).
COMMENTS :
1)PURPOSE OF THIS BILL . The author states that, due to limited
staff and funding, transition to an EBT system should be the
highest priority project for WIC. The author maintains that
the current process of using WIC benefits in a paper check or
voucher form is outdated, cumbersome, and stigmatizing at the
grocery check stand. According to the author, moving to EBT
will make WIC much easier for participants, benefit grocers,
and simplify program operations while lowering costs to local
agencies. The author contends that the current WIC management
information system (MIS) is more than adequate as a platform
to generate WIC benefits for an EBT system and can easily be
interfaced to support EBT. The sponsor, the California WIC
Association, notes that DPH is in the early stages of EBT
implementation and this bill would ensure that DPH is actively
engaged in providing quarterly status updates to the
Legislature and interested parties on the development of the
system.
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2)BACKGROUND . According to DPH, WIC is a 100% federally funded
nutrition and health program that provides education and food.
DPH states that the program is designed to provide temporary
assistance during brief periods in life that are more
challenging, such as before or after the birth of a newborn,
or raising a young child with nutrition and/or health
conditions. Most families participating in WIC are employed
with incomes at or below 185% of the federal poverty level
(currently $42,642 for a family of four). WIC provides, up to
a child's fifth birthday: nutritious food; parenting and
nutrition education; support for breastfeeding mothers and
babies; referrals for services needed by the family; and,
under certain conditions, medical care in order to continue
participation.
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 beans. 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 over 5,500
WIC-authorized vendors. The coupons are required to be
printed with specified information, including the specific
food item 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.
84 local agencies, consisting of local governments as well as
private, non-profit community organizations, operate WIC
centers in 650 locations statewide. Approximately 3,000 local
WIC personnel at these centers assess WIC eligibility based on
residency requirements, income, and health or nutritional
risk, and issue six million food checks every month. DPH
maintains that WIC is a direct infusion into the California
economy of about $1.1 billion per year, with the retail value
of WIC checks averaging $63 per month per participant.
DPH indicates that WIC is not an entitlement program for which
Congress sets aside funds to serve every eligible individual,
but rather a discretionary program that operates under a
capped grant administered by the USDA for which Congress
appropriates a specified amount of funds annually. California
WIC supplements this allocation with formula manufacturer
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rebates. According to the USDA, nationwide, WIC operates in
all 50 states plus tribal organizations and territories. In
fiscal year 2011, the program served 8.9 million participants,
including almost half of all infants born in the U.S.
California is the nation's largest WIC program serving 16.4%
(1.46 million) of all WIC participants.
3)EBT . EBT is an electronic system that automates the delivery,
redemption, and reconciliation of public assistance benefits
from the California Work Opportunity and Responsibility to
Kids program (CalWORKs) and the CalFresh program. EBT is
currently used in all 50 states. In California, CalWORKs and
CalFresh recipients access their benefits via a state-issued
EBT card.
Similar to a bank-issued Automated Teller Machine (ATM) card,
the EBT card slides through a Point-of-Sale (POS) device, or
is used at an ATM. It is designed to be convenient and
secure, and to reduce the stigma that is sometimes associated
with public assistance. According to the state Office of
Systems Integration Internet Website, EBT food and cash aid
benefits are redeemable at more than 80,000 locations in
California. The state's 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 and, instead, contracts
with ACS State & Local Solutions, Inc., a Xerox Company.
4)FEDERAL EBT REQUIREMENTS FOR WIC . The HHFKA mandates that
states implement WIC EBT systems by October 1, 2020, unless
the federal Secretary of Health and Human Services grants an
exemption. To qualify for an exemption, a state must
demonstrate that there are unusual technological barriers to
implementation, that operational costs are unaffordable within
the state's nutritional services and administration grant, or
that it is within the best interest of the state's EBT program
to be exempt. States that request an exemption must specify a
date by which the state agency anticipates statewide
implementation of the EBT program. State WIC programs are
also required to submit annual status reports demonstrating
their progress toward statewide EBT implementation.
5)EBT & CALIFORNIA WIC . Pursuant to the HHFKA, the USDA is
encouraging states to start migrating from a paper-based
benefits delivery system to an EBT system by providing funding
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for WIC EBT planning projects. DPH reports that California
was awarded grant funds on September 17, 2010, to hire a
contractor to conduct a comprehensive EBT planning and
feasibility study by September 30, 2012. The feasibility
study will assess the following specified components, among
others, to determine whether EBT is feasible within the
State's operating environment:
a) Evaluate the capability of the WIC MIS to electronically
issue and track benefits;
b) Review WIC business capacity;
c) Survey a sample of WIC-approved retailers for their
readiness for EBT;
d) Assess EBT effects on financial payments to vendors;
e) Address infrastructure issues;
f) Examine the choices of cards for the development,
testing, and evaluation of integrated EBT solutions;
g) Analyze the available EBT technologies and vendors; and,
h) Recommend a two to five year plan for the State to
pursue WIC EBT.
DPH currently maintains on its Internet Website an ongoing WIC
EBT update. According to the Website, WIC EBT will result in
a better shopping experience. Specifically, DPH points to the
following benefits of a WIC EBT system:
a) With WIC EBT, transactions will be approved at the POS
and all checks will be eliminated;
b) Cashiers will no longer be responsible for ensuring the
correct foods are purchased by participants because only
the prescribed foods on the Approved Product List will be
able to be purchased with WIC benefits;
c) Requirements imposed on WIC EBT cashiers to verify the
shopper's identity and check the "valid through" date on
multiple paper food checks will be eliminated;
d) With WIC EBT, the time in lane, redemption errors, and a
need for extensive clerk training will be reduced;
e) WIC EBT presents the possibility for a "mixed basket"
approach to benefit redemption, meaning that participants,
depending on the cash register system or vendor, will no
longer be required to physically separate WIC food items
from other items; the system will sort WIC-allowable foods
from non-WIC foods being purchased automatically; and,
f) WIC EBT will reduce paper processes and may reduce
errors in-lane that result in rejected WIC checks.
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6)RELATED LEGISLATION .
a) AB 2280 (Lara) requires DPH to provide written notice
with specified information to a WIC vendor within 30 days,
if DPH 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 is pending in
the Senate Human Services Committee.
b) AB 2322 (Gatto) directs DPH to adopt regulations to
specify the criteria to be used and actions to be taken
when initiating a moratorium on applications for new WIC
retail food vendor locations. AB 2322 is pending in the
Senate Appropriations Committee.
7)PRIOR LEGISLATION . AB 313 (Goldberg), Chapter 842, Statutes
of 2003, requires DHS to conduct a feasibility study regarding
implementation of a WIC EBT system, and report the findings to
the Legislature by July 1, 2003.
8)SUPPORT . Supporters point out that other states, such as
Texas, Michigan, Nevada, and New Mexico, have fully
implemented a WIC EBT system and California already has an EBT
system for the California Food Assistance Program, or
CalFresh, (formerly known as food stamps) that was implemented
in 2003. The sponsor writes that this bill is needed to
expedite the WIC program's transition to EBT because EBT will
bring much needed modernization to the program and create ease
and efficiency for WIC participants and grocers. The
California National Organization for Women states that moving
the WIC program into the electronic age would greatly benefit
mothers in the program who would no longer be required to
purchase all their items at once and could retain some
anonymity in the grocery line by simply swiping a card for
their purchase instead of using the current paper checks that
require verification for each item being purchased. The
Western Center on Law and Poverty adds that requiring
quarterly updates from DPH on the progress of shifting WIC to
EBT delivery of benefits will ensure that the department
pursues implementation in a swift but thoughtful manner and
provides a forum for continued stakeholder engagement.
9)POLICY COMMENT . Given that DPH currently maintains updates on
the WIC EBT transition process on its Website, the author may
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wish to address to what extent the requirement for quarterly
briefings in this bill can be accomplished administratively.
10)AUTHOR'S AMENDMENT . To address a concern raised by committee
staff that the requirement in this bill for DPH to provide
briefings every three months may be too frequent and inhibit
DPH's ability to perform this function in a way that yields
useful information, the author has agreed to accept an
amendment to increase the frequency of the mandated briefings
to every six months.
REGISTERED SUPPORT / OPPOSITION :
Support
California WIC Association (sponsor)
Alameda County Board of Supervisors (prior version)
American Red Cross WIC Program (prior version)
Antelope Valley Hospital WIC Program (prior version)
Bay Region WIC Association (prior version)
California Catholic Conference (prior version)
California Food Policy Advocates (prior version)
California National Organization for Women
Community Resource Project, Inc. WIC Program (prior version)
Insight Center for Community Economic Development (prior
version)
Planned Parenthood of Orange & San Bernardino Counties (prior
version)
Kings County WIC (prior version)
Mono County WIC (prior version)
San Francisco Food Security Task Force (prior version)
Watts Healthcare Corporation (prior version)
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by : Cassie Royce / HEALTH / (916) 319-2097