Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): Online Ordering and Transactions and Food Delivery Revisions To Meet the Needs of a Modern, Data-Driven Program, 11516-11553 [2023-02484]
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Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Proposed Rules
1320 Braddock Place, 3rd Floor,
Alexandria, Virginia 22314.
• All written comments submitted in
response to this proposed rule will be
included in the record and will be made
available to the public. Please be
advised that the substance of the
comments and the identity of the
individuals or entities submitting the
comments will be subject to public
disclosure. FNS will make the written
comments publicly available on the
internet via https://
www.regulations.gov.
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 246
[FNS–2022–0015]
RIN 0584–AE85
Special Supplemental Nutrition
Program for Women, Infants, and
Children (WIC): Online Ordering and
Transactions and Food Delivery
Revisions To Meet the Needs of a
Modern, Data-Driven Program
FOR FURTHER INFORMATION CONTACT:
Food and Nutrition Service
(FNS), Department of Agriculture
(USDA).
ACTION: Proposed rule.
AGENCY:
The Food and Nutrition
Service, USDA (the Department),
proposes to remove barriers to online
ordering and internet-based transactions
in the Special Supplemental Nutrition
Program for Women, Infants, and
Children (WIC) through this rulemaking.
This is expected to improve the WIC
shopping experience while increasing
equity and access to nutritious foods for
WIC participants, thus positively
impacting nutrition security. The
proposed rule also complements the
Program’s near-complete transition to
electronic benefit transfer (EBT) by
streamlining and modernizing certain
WIC food delivery regulations to
support current technology and future
innovation, and by introducing
measures intended to meet the needs of
a modern, data-driven program that uses
these technologies for food delivery.
DATES: Written comments must be
received on or before May 24, 2023 to
be assured of consideration.
ADDRESSES: The Food and Nutrition
Service, USDA, invites interested
persons to submit written comments on
this proposed rule. Comments may be
submitted in writing by one of the
following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
online instructions for submitting
comments. The https://
www.regulations.gov electronic filing
system will accept comments until
11:59 p.m. Eastern Time at the end of
May 24, 2023.
• Regular U.S. Mail: WIC Vendor and
Technology Branch, Policy Division,
Food and Nutrition Service, P.O. Box
2885, Fairfax, Virginia 22031–0885.
• Overnight, Courier, or Hand
Delivery: Patricia Bailey, WIC Vendor
and Technology Branch, Policy
Division, Food and Nutrition Service,
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SUMMARY:
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Patricia Bailey, Chief, WIC Vendor and
Technology Branch, Policy Division,
Supplemental Nutrition and Safety
Programs, Food and Nutrition Service,
USDA, 1320 Braddock Place,
Alexandria, Virginia 22314, (703) 305–
2435 or patricia.bailey@usda.gov.
SUPPLEMENTARY INFORMATION:
I. Overview
The retail grocery industry has
changed over the past several years and
online shopping has become an
increasingly common method to shop
for groceries. Advances in technology
related to online shopping and the
development of new payment types
have greatly influenced the way
Americans shop and pay for food. To
ensure that participants in the Special
Supplemental Nutrition Program for
Women, Infants, and Children (WIC)
have equal access to available shopping
options and can transact their WIC
benefits as the retail marketplace
innovates and evolves, the Department
proposes to remove barriers to
innovation and to modernize certain
WIC food delivery regulations. To
accompany these proposed changes, the
Department proposes additional
measures to meet the needs of a modern,
data-driven program that uses current
technologies for food delivery.
Specifically, this rulemaking proposes
to:
(1) Remove barriers to online ordering
and internet-based transactions in WIC,
including a current prohibition of the
authorization of internet-based vendors.
The proposed revisions would provide
State agencies the flexibility to offer
online shopping to participants in a way
that maintains program integrity. The
revisions support oversight measures
and policies appropriate for current and
future technologies and security
requirements and also support program
integrity as the retail marketplace
innovates.
(2) Streamline and modernize WIC
food delivery. The proposed revisions
are intended to reflect the Program’s
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near-complete transition to electronic
benefit transfer (EBT), support current
technology and future innovation, and
expand opportunities for the retail
grocery industry to innovate in ways
that benefit WIC participants. The
proposed revisions would also allow
State agencies to develop and test new
types of food instruments (e.g., mobile
payments) and allow for the remote
issuance of WIC benefits.
(3) Meet the needs of a modern, datadriven program that uses current
technologies for food delivery by
updating reporting requirements and
introducing new staff positions
intended to support the operational
capacity of WIC State agencies.
In the development of this proposed
rule, the Department prioritized equity
and access for WIC participants.
However, the Department recognizes
that the proposed rule would impact
WIC State agencies, including Indian
Tribal Organizations (ITOs), as well as
local agencies, clinics, and vendors in
ways that could affect participants’
access to benefits. To mitigate any
potential civil rights-related impacts of
the proposed rule, FNS intends to
provide State agencies with technical
assistance to implement and
communicate program changes in
alternative languages and formats that
are accessible to all participants and
vendors, and to enable small vendors,
especially small, minority- and Tribalowned stores, to engage with online
shopping.
The Department’s overarching goal is
to advance nutrition security by
improving the WIC shopping experience
and ensuring that WIC participants have
equitable access to nutritious foods. At
the same time, the Department
recognizes the importance of
maintaining security and oversight
measures at the Federal and State
agency levels. This rule represents a
major transition for the WIC Program
and is expected to increase participant
satisfaction and, ultimately,
participation and retention while
preserving program integrity.
II. Background
This part provides key terms used
throughout this preamble, an overview
of the WIC Program, challenges of the
current WIC shopping experience, and a
summary of information used to
develop this proposed rule. Proposed
regulatory changes are discussed in
detail in part III.
A. Introduction of Key Terms
For the purposes of this proposed rule
preamble, the Department will use the
following terms:
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• ‘‘WIC shopper’’ means a person
shopping using WIC benefits (i.e., a WIC
participant, proxy, or a parent or
caretaker of an infant or child
participant).
• ‘‘Online shopping’’ means the
general use of an online, internet-based
ordering system, platform, or site. It can
encompass online ordering with or
without internet-based transactions (i.e.,
the transaction can occur via the
internet, in store, curbside, or at the
point of delivery).
• ‘‘Online ordering’’ means the
process a customer (including a WIC
shopper) uses to select food items for
purchase via an internet-based ordering
system, platform, or site.
• ‘‘Transaction’’ means the process by
which a WIC shopper exchanges their
WIC benefits for supplemental foods.
• ‘‘Internet-based transaction’’ means
a transaction where the WIC payment is
completed through the payment section
of the online ordering system, platform,
or site. This terminology is being used
in lieu of ‘‘online transaction’’ to avoid
confusion with transactions that occur
using online EBT technology.
• ‘‘Redemption’’ means the process in
which a vendor submits records of
electronic benefits for redemption and
the State agency (or its financial agent)
makes payment to the vendor.
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B. Overview of the WIC Program
The WIC Program is administered by
89 WIC State agencies, including the 50
States, 33 Indian Tribal Organizations,
the District of Columbia, and 5 U.S.
Territories (American Samoa, the
Commonwealth of the Northern Mariana
Islands, Guam, Puerto Rico, and the U.S.
Virgin Islands). WIC serves to safeguard
the health of low-income pregnant,
breastfeeding, and non-breastfeeding
postpartum individuals, and infants and
children up to age five who are found
to be at nutritional risk. In 2019, WIC
participants included nearly 43 percent
of all infants in the United States,1 and
in fiscal year (FY) 2020, WIC served an
average of 6.25 million participants per
month.2
The Department provides Federal
grants to WIC State agencies to provide
supplemental foods, health care
1 U.S. Department of Agriculture, Food and
Nutrition Service, ‘‘National- and State-Level
Estimates of WIC Eligibility and WIC Program
Reach in 2019: Final Report, Volume I,’’ pp. 65, by
Kelsey Farson Gray et al. Project Officer Grant
Lovellette, Alexandria, VA: February 2022.
Available online at: https://fns-prod.azureedge.net/
sites/default/files/resource-files/WICEligibles2019Volume1.pdf.
2 U.S. Department of Agriculture Food and
Nutrition Service, ‘‘WIC Data Tables,’’ 2021.
Available online at: https://www.fns.usda.gov/pd/
wic-program.
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referrals, and nutrition education,
including breastfeeding promotion and
support, to WIC participants. WIC
participants typically access
supplemental foods through a retail
food delivery system. In such systems,
a WIC shopper goes to a WIC-authorized
vendor (i.e., a retail store authorized by
the State agency), selects foods available
in their benefit balance, and uses an
EBT card to purchase the items. In FY
2020, there were approximately 40,000
WIC-authorized vendors nationwide,
and nearly 93 percent of WIC
participants received WIC benefits via
EBT.
C. Challenges of the Current WIC
Shopping Experience
Currently, WIC regulations at 7 CFR
246.12(r)(4) require participants to pick
up food instruments (e.g., paper food
instruments, cash-value vouchers
(CVVs), or EBT cards) in person. While
WIC State agencies are required to
develop plans per § 246.4(a)(23) to
‘‘minimize the time participants and
applicants must spend away from work’’
and issue food instruments and CVVs
‘‘through means other than direct
participant pick-up,’’ participants report
that the time and money spent traveling
to a WIC clinic to pick up food
instrument(s) remains a barrier to
participation. The proposed rule would
encourage State agencies to remotely
issue electronic benefits and mail EBT
cards whenever possible, potentially
reducing the number of clinic visits that
WIC participants are required to make.
Additionally, WIC regulations
generally only allow WIC State agencies
to authorize vendors with a single, fixed
location (§ 246.2, Vendor) and require
the WIC shopper to sign food
instruments or enter a Personal
Identification Number (PIN) in the
presence of a cashier (§ 246.12(h)(3)(vi)).
These two provisions require that the
WIC transaction occurs in the physical
space of a brick-and-mortar store.
These in-person requirements present
challenges to families, particularly those
with limited mobility or access to
transportation, those who live in remote
or rural communities, and/or those with
special dietary needs who require
supplemental food substitutions that
may not be readily available at the
closest WIC-authorized grocery store.
WIC households, which are less likely
to use a personal vehicle for grocery
shopping than higher-income non-WIC
households,3 are expected to benefit
3 U.S. Department of Agriculture, Economic
Research Service, ‘‘Where Do Americans Usually
Shop for Food and How Do They Travel to Get
There? Initial Findings from the National
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from additional flexibilities around both
benefit issuance and pickup and the
shopping experience.
D. Key Information Used in the
Development of This Rule
To develop this proposed rule, FNS
reviewed technical materials developed
by a wide variety of WIC stakeholders,
including:
• The Gretchen Swanson Center for
Nutrition (GSCN), through a grant from
FNS, developed a comprehensive plan
for implementing online shopping in
WIC. This plan, called the Blueprint for
WIC Online Ordering Projects (the
‘‘Blueprint’’), was published on June 15,
2021.4 GSCN utilized an input and
consensus building process (a Delphi
process) to gather information from WIC
stakeholders on policy, technical, and
programmatic factors important to the
implementation of online shopping in
WIC. The Blueprint provides
implementation guidance for all WIC
State agencies and stakeholders testing
online shopping in WIC.
• The Task Force on Supplemental
Foods Delivery (the ‘‘Task Force’’),
authorized by the Consolidated
Appropriations Act for Fiscal Year 2021
(Pub. L. 116–260), consisted of WIC
stakeholders convened to independently
‘‘study measures to streamline the
redemption of supplemental foods
benefits that promote convenience,
safety, and equitable access to
supplemental foods, including infant
formula.’’ The Task Force consisted of
18 member organizations from multiple
sectors to ensure a diverse range of
input from: WIC providers, retailers,
manufacturers, EBT processing
companies, advocacy organizations,
WIC participants, and additional
stakeholders. The Task Force submitted
its recommendation report to FNS on
September 30, 2021.5
FNS reviewed the Task Force’s
recommendation report and the
Blueprint’s summary of regulatory
barriers, and this proposed rule
addresses the online shopping
Household Food Acquisition and Purchase
Survey,’’ EIB–138, pp. 10, by Michele Ver Ploeg et
al., March 2015. Available online at: https://
www.ers.usda.gov/publications/pub-details/
?pubid=79791.
4 Gretchen Swanson Center for Nutrition,
‘‘Blueprint for WIC Online Ordering Projects,’’ June
2021. Available online at: https://static1.
squarespace.com/static/58a4dda16
a49633eac5e02a1/t/60c8ea51296905287a9420eb/
1623779922155/Blueprint+for+WIC+Online+
Ordering.pdf.
5 U.S. Department of Agriculture, Food and
Nutrition Service, ‘‘Task Force on Supplemental
Food Delivery in the WIC Program—
Recommendations Report,’’ September 2021.
Available online at: https://www.fns.usda.gov/wic/
food-delivery-task-force-recommendations-report.
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recommendations from these documents
that are within the appropriate scope of
this rulemaking. While in some
instances FNS has taken a different
approach than recommended by the
Task Force’s recommendation report
and/or Blueprint, the proposed
revisions reflect the overall goals of
these stakeholder efforts while adhering
to the general purpose and scope of the
WIC Program.
This proposed rule was also informed
by State agency feedback, including
feedback on waivers of WIC regulatory
requirements issued to State agencies as
part of the Department’s COVID–19
pandemic response (under time-limited
waiver authority granted by the Families
First Coronavirus Response Act, Pub. L.
116–127). Feedback on waivers related
to the WIC shopping experience (e.g.,
remote benefit issuance, transaction
without presence of cashier, and
removing the on-site requirement from
monitoring actions) highlighted
opportunities for modernization within
the Program. For example, almost all
WIC State agencies reported that the
‘‘remote benefit issuance waivers made
WIC safer, more accessible, and more
convenient for participants’ schedules
during the pandemic.’’ 6
FNS has also heard from WIC State
agencies that identifying and recruiting
top talent are integral to the success of
the WIC Program as it evolves to better
serve participants through modern
technologies. The improved data
collection and strengthened staffing
requirements proposed in this rule
would ensure that the WIC Program has
the resources needed to run a modern,
data-driven program while maintaining
program integrity and security
measures.
Additionally, this proposed rule was
informed by WIC participant feedback,
which indicates strong interest in
expanded WIC shopping options. In a
National WIC Association survey that
collected responses from 26,642 WIC
participants from 12 WIC State agencies,
about two-thirds of respondents
reported that they would like to be able
to order their supplemental foods online
or by phone, and about one-third even
indicated that they would be willing to
pay an additional out-of-pocket fee for
home delivery.7
6 U.S. Department of Agriculture, Food and
Nutrition Service, ‘‘Changes in WIC Operations
During the COVID–19 Pandemic: A First Look at the
Impact of Federal Waivers,’’ pg. 1, December 2021.
Available online at: https://www.fns.usda.gov/wic/
operations-impact-federal-waivers-during-covid-19pandemic.
7 Lorrene Ritchie et al., ‘‘Multi-State WIC
Participant Satisfaction Survey: Learning from
Program Adaptations During COVID,’’ pg. 14,
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This proposed rule also incorporates
lessons learned from the Supplemental
Nutrition Assistance Program’s (SNAP)
efforts to support online shopping for
SNAP participants, including the
importance of building program
integrity measures into all levels of
oversight. Learning from SNAP’s
experiences will allow the two programs
to move forward consistently, to the
extent possible, and ensure that crossprogram integrity efforts continue
without interruption.
III. Discussion of Proposed Revisions
1. Remove Barriers to Online Ordering
and Internet-Based Transactions
The proposed revisions would remove
regulatory barriers to online shopping
and allow the Program to adapt with the
marketplace, in order to ensure that WIC
participants have access to a broader
array of shopping options and are not
left behind as the industry innovates.
The proposed revisions would ensure
that WIC State agencies have the
flexibility necessary to oversee new
types of vendors and to maintain
program integrity and security. FNS
would support WIC State agencies
through technical assistance to make
online shopping platforms and
communications about program changes
accessible in appropriate languages and
alternative formats for all participants
and vendors.
The following is a discussion of each
proposed provision.
a. Allow Vendors and WIC Shoppers
to Complete Internet-Based Transactions
[§§ 246.12(h)(3)(v), (vi), and (xxxii),
(v)(1)(iv), and (bb)(2)].
The Department proposes to allow
vendors and WIC shoppers to complete
internet-based transactions by removing
the requirement that WIC shoppers must
sign food instruments, or enter a PIN, in
the presence of a cashier
(§ 246.12(h)(3)(vi)). This flexibility
would allow WIC State agencies to
modernize along with the retail grocery
industry.
The Department proposes the
following changes to:
(i) Clarify which vendor agreement
provisions apply only to paper food
instruments.
The Department proposes changing
‘‘printed’’ to ‘‘paper’’ in
§ 246.12(h)(3)(vi) to indicate that the
remainder of the provision applies
specifically to paper food instruments.
The Department also proposes to
consolidate the requirement from
National WIC Association: December 2021.
Available online at: https://s3.amazonaws.com/
aws.upl/nwica.org/nwamulti-state-wic-participantsatisfaction-surveynationalreportfinal.pdf.
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§ 246.12(h)(3)(v) to enter the purchase
price of the authorized supplemental
foods on paper food instruments and
CVVs before they are signed into a
single provision at § 246.12(h)(3)(vi). In
addition to this change, the Department
proposes modernizing the remaining
text at § 246.12(h)(3)(v), to ensure that
the requirements around the calculation
of the purchase price continue to be
applicable in EBT, and that a WIC
shopper is made aware of the total
purchase price of a transaction before
the transaction is completed, as a
program integrity measure.
(ii) Remove the requirement that WIC
shoppers must sign in the presence of a
cashier.
The Department proposes further
revising the signature requirement for
paper food instruments and CVVs at
§ 246.12(h)(3)(vi) by removing the
requirement that the WIC shopper’s
signature is completed in the presence
of a cashier. WIC shoppers would still
be required to sign the paper food
instrument or CVV to complete the
transaction. Separate transaction
authentication policies, described
below, include program security
requirements for EBT transactions.
(iii) Remove the requirement to use a
PIN in lieu of a signature and create new
provisions to allow WIC State agencies
to explore and identify options to
authenticate EBT transactions.
The Department proposes to remove
the portion of § 246.12(h)(3)(vi) that
allows use of a PIN in lieu of a signature
and create a new provision at
§ 246.12(h)(3)(xxxii), which would
require vendors to authenticate EBT
transactions in accordance with State
agency policies. The Department also
proposes a new provision at
§ 246.12(bb)(2) to require that State
agencies’ transaction authentication
policies are in compliance with
standards established by the
Department. Together, these provisions
will provide State agencies the
flexibility to develop transaction
authentication policies that are
appropriate and secure for the specific
technologies they choose to adopt while
ensuring a level of consistency across
State agencies.
Taken together, the creation of
§ 246.12(h)(3)(xxxii) and (bb)(2) along
with the revisions to § 246.12(h)(3)(vi)
would provide WIC State agencies the
flexibility to allow internet-based
transactions using modern and
appropriate authentication technologies,
and allow the Department the flexibility
to develop the necessary technical and
security requirements in technical
documents that can be updated as the
industry innovates. The Department
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proposes similar edits to
§ 246.12(v)(1)(iv), which would ensure
that transactions at authorized farmers
and farmers’ markets also occur in
accordance with the procedures
established by the State agency and
developed according to standards
established by the Department.
b. Create New Types of Vendors
[§ 246.2].
The Department proposes creating
separate definitions for different types
of vendors at § 246.2. The Department
proposes new definitions for ‘‘brickand-mortar vendors,’’ ‘‘internet
vendors,’’ and ‘‘mobile vendors.’’
Creating new types of vendors would
provide State agencies with flexibility to
authorize the types of vendors needed to
support program modernization while
ensuring participant access to
supplemental foods throughout their
jurisdictions. To ensure continued and
effective State agency management and
oversight, all authorized vendors, no
matter the type, would be subject to all
regulations governing vendors.
The Department proposes the
following changes to:
(i) Create a new definition for ‘‘brickand-mortar vendor.’’
The Department proposes a definition
for ‘‘brick-and-mortar vendor,’’ which
would allow this type of vendor to be
defined separately and distinctly from
other vendor types (e.g., internet or
mobile vendors). Historically, vendors
authorized under a retail food delivery
system were required to be brick-andmortar vendors. The Department
proposes to clarify that ‘‘all transactions
that take place at a brick-and-mortar
vendor will be assigned to that vendor’’
to reinforce that the location of the
transaction (e.g., at a single, physical,
fixed location; via an internet-based
transaction; or at mobile vendor) is used
to classify vendors by vendor type, not
the location where the order was made
or fulfilled.
(ii) Create a new definition for
‘‘internet vendor.’’
The Department proposes a new
definition of ‘‘internet vendor’’ to
distinguish vendors operating through
an online platform with internet-based
transactions from brick-and-mortar
vendors. The proposed definition for
‘‘internet vendor’’ is based, in part, on
SNAP’s working definition of ‘‘internet
retailer,’’ and would be implemented
consistently with SNAP’s definition, to
the extent possible, to ensure that crossprogram integrity efforts may continue
without interruption.
(iii) Create a new definition for
‘‘mobile vendor.’’
The Department proposes to create a
separate definition of ‘‘mobile vendor’’
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to distinguish mobile vendors with
transactions that take place at a truck,
bus, pushcart, or other mobile vehicle.
This is different from vendors operating
a brick-and-mortar location with
transactions at the physical, fixed
location.
(iv) Update the definition of ‘‘above50-percent vendors.’’
The Department proposes to revise
this definition to ensure that any type of
authorized vendor (e.g., brick-andmortar, internet, or mobile) could also
be classified as an above-50-percent
vendor if it meets the conditions of the
definition.
c. Modernize the Definition of
‘‘Vendor’’ [§§ 246.2 & 246.4(a)(14)(xv)].
The Department proposes to
modernize the current definition of
‘‘vendor’’ to allow State agencies the
flexibility to authorize more types of
vendors (e.g., ‘‘internet vendors,’’ and
‘‘mobile vendors’’).
The Department proposes the
following changes to:
(i) Remove language from the
definition of ‘‘vendor’’ that currently
only allows WIC State agencies to
authorize vendors with a ‘‘single, fixed
location’’ (i.e., brick-and-mortar
vendors).
The Department proposes to remove
this requirement to allow for the
creation of distinct vendor type
definitions, including ‘‘brick-andmortar,’’ ‘‘internet,’’ and ‘‘mobile’’
vendors, as described in more detail
above. The proposed revision would
allow State agencies the flexibility to
authorize vendors that would provide
supplemental foods through means
other than a single, fixed location.
(ii) Simplify the definition of
‘‘vendor’’ by replacing current
regulatory language delineating different
business structures that a vendor may
have (i.e., a sole proprietorship,
partnership, cooperative association,
corporation, or other business entity)
with the term ‘‘business entity.’’ This
simplified language would clarify that
any type of business entity may be
authorized as long as it meets the State
agency’s selection criteria. This would
remove the burden of proving or
determining business structure from
vendor applicants and WIC State
agencies during the vendor
authorization process.
(iii) Remove a clause in the definition
of ‘‘vendor’’ requiring a special needs
justification for mobile vendors.
The Department proposes removing
the requirement for a State agency to
justify the authorization of mobile
vendors in its State Plan. This would
allow State agencies to authorize mobile
vendors more easily and would remove
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11519
the burden of providing justification to
FNS for such authorizations. This
change is in alignment with the
proposed removal of the related
provision at § 246.4(a)(14)(xv).
(iv) Clarify that all vendors must be
authorized separately.
The Department proposes to clarify
that all vendors, regardless of type, must
be authorized by the State agency
separately. To ensure that an
authorization in SNAP is related to only
one WIC authorization per State agency,
vendors with a unique SNAP
authorization number must be
authorized as unique vendors by any
WIC State agency that authorizes them.
This allows for coordination of vendor/
retailer activities between the two
programs, supports the ability for the
programs to move forward consistently,
to the extent possible, and ensures that
cross-program integrity efforts continue
without interruption (e.g., reciprocal
disqualifications, etc.).
For vendors with store locations that
are not SNAP authorized, the
Department proposes that each single,
separate location is considered a unique
vendor from all other store locations
and, therefore, must be authorized
separately. This is consistent with how
the WIC Program currently authorizes
vendors.
The proposed revision also clarifies
that a vendor providing supplemental
foods through any means other than a
single, fixed location must be
authorized separately from brick-andmortar vendors, even if operated by the
same business entity. This is consistent
with SNAP’s current retailer
authorization practices.
The Task Force encouraged FNS to
explore ‘‘the option for a national
authorization process, with State optins, that could streamline multistate
authorization for virtual vendor
platforms.’’ However, as section
(c)(2)(A) of the Child Nutrition Act of
1966 (42 U.S.C. 1786(c)(2)(A)) obligates
the Secretary to ‘‘make cash grants to
State agencies for the purpose of
administering the program,’’ the
Department does not have authority to
authorize vendors in the WIC Program.
This activity, along with all other
vendor management functions, is
delegated to WIC State agencies. The
Department’s proposed provisions aim
to streamline and modernize WIC food
delivery wherever possible, while
remaining within the scope and purpose
of the Program.
d. Allow Vendors to Return Benefits
to a Participant’s Benefit Balance
[§§ 246.12(h)(3)(ii) introductory text,
(h)(3)(ii)(A) and (C), (x)(2)(iii), (x)(4)
introductory text, and (x)(4)(i)].
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The Department proposes revisions to
allow electronic benefits to be returned
to the participant’s benefit balance
when an item requested through the
online ordering process is not fulfilled
as ordered, while reinforcing that cash
refunds continue to be prohibited. The
proposed revisions would also provide
changes to support the electronic benefit
return process, including providing
additional time for participants to use
their returned electronic benefits to
purchase supplemental foods. This is
intended to ensure that WIC shoppers
who attempt to order items online close
to the last date of use for those benefits
do not lose them if the vendor is unable
to fulfill the order. These changes would
support the participant’s ability to fully
transact their electronic benefits for
supplemental foods (i.e., to allow the
use of the benefit balance at a later date
or at another vendor) and ensure that
the State agency is only charged for
foods received by the participant. These
flexibilities are expected to be
particularly important to support the
purchase of fruits and vegetables with
cash-value benefits (CVBs), since those
items are often priced by weight.
The differences proposed in this rule
between food instruments, electronic
benefits, CVVs, and CVBs are discussed
in more detail with the Department’s
proposal to permit the remote issuance
of electronic benefits to a participant’s
benefit balance (section 2.a.).
The Department proposes the
following changes to:
(i) Clarify that cash refunds are still
prohibited and update exchange policy
to accommodate recalls.
The Department proposes adding
‘‘cash’’ to the sentence, ‘‘[n]o
substitutions, cash, credit, cash refunds,
or exchanges’’ in § 246.12(h)(3)(ii) to
ensure that cash refunds would
continue to be prohibited. The proposed
provision would clarify that the vendor
must not provide cash in exchange for
electronic benefits, nor a cash refund for
supplemental foods purchased with
benefits.
The Department proposes additional
changes to § 246.12(h)(3)(ii)
introductory text and (3)(ii)(A), and to
introduce § 246.12(h)(3)(ii)(C). First, the
Department proposes to clarify when
language refers to paper food
instruments and CVVs versus electronic
benefits throughout the provision.
Second, the Department proposes
adding ‘‘type’’ and ‘‘physical form’’ to
the list of characteristics to ensure that
exchanges are limited to identical
authorized supplemental food items.
Lastly, the Department proposes to
introduce language at
§ 246.12(h)(3)(ii)(C) to ensure that all
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customers, including WIC shoppers, are
treated the same in the event that an
authorized supplemental food is
recalled. The Department proposes
introducing this vendor agreement
provision to ensure that WIC-authorized
vendors include WIC shoppers in their
recall exchange policies, including
policies related to replacements (which
may include, but are not limited to, the
same product, a substitute product,
store credit, or a cash refund). Under
this new provision, WIC shoppers
would be able to exchange recalled
product like all other consumers.
(ii) Allow for the return and use of
electronic benefits when an online order
cannot be fulfilled.
The Department proposes to add the
provisions at § 246.12(x)(4) to allow for
the return and use of electronic benefits
when an online order cannot be
fulfilled. This proposed provision
would support participants’ ability to
fully transact their benefits for
supplemental foods, and to ensure that
the State agency is only charged for
foods received by the participant.
(iii) Allow for the return and use of
electronic benefits not successfully
transacted before the last date of use.
To address issues that may arise as
transactions approach the last date of
use, the Department proposes
§ 246.12(x)(4)(i) to allow the return of
electronic benefits, and to provide time
for subsequent transactions to occur.
This provision would provide the
participant with no less than 7 calendar
days to transact the returned benefits
when electronic benefits are returned to
a participant’s benefit balance. This
would promote full benefit redemption
for participants, while establishing an
expectation for the length of time
electronic benefits would remain
available after the original last date of
use.
This proposed creation of these
provisions would necessitate a revision
to § 246.12(x)(2)(iii) to reference the
proposed provision that addresses the
return of benefits after the last date of
use § 246.12(x)(4)(i). The Department
expects that WIC State agencies will
require additional time to develop and
refine the technological solutions
needed to meet these provisions and is
proposing an extended implementation
timeframe of eighteen months from
publication of the final rule.
e. Allow State Agencies to Develop
Virtual Methods of Oversight [§§ 246.2
and 246.12(g)(5) and (j)(6)(ii)(B)].
The Department proposes revising
current WIC regulations to allow State
agencies to develop virtual methods of
oversight to ensure that their monitoring
and investigative methods are
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appropriate for the types of vendors
authorized (e.g., internet vendors) and
current environmental conditions (e.g.,
during a pandemic). WIC State agencies
are responsible for all vendor
management and oversight, and the
Department proposes to provide the
flexibility necessary to use technology
to streamline these efforts and develop
new methods of oversight for new types
of vendors.
The Department proposes the
following changes to:
(i) Update the definitions of ‘‘routine
monitoring’’ and ‘‘compliance buy.’’
The Department proposes removing
the requirement that routine monitoring
visits and compliance buys occur on site
from the definition of each term in
§ 246.2. The purposes of monitoring
visits and investigations would remain
unchanged, as well as the minimum
number of vendors that must be
monitored and investigated annually, as
outlined at § 246.12(j)(2) and (4).
Removing this requirement would
also require the Department to clarify
the documentation requirements
outlined in § 246.12(j)(6)(ii)(B). The
proposed revision adds the phrase ‘‘if
applicable’’ to the requirement to
document the cashier involved in a
compliance buy to accommodate
situations in which no cashier is present
(e.g., an internet-based transaction). All
other documentation requirements at
§ 246.12(j)(6) would remain applicable
regardless of the location of the
transaction or type of vendor.
(ii) Introduce virtual visits as an
allowable type of preauthorization visit.
The Department proposes to add
virtual visits to the types of allowable
preauthorization visits established at
§ 246.12(g)(5) to provide WIC State
agencies the flexibility to streamline
such visits and to develop procedures
that are appropriate for the types of
vendors authorized under their
jurisdiction.
f. Permit WIC Shoppers to Pay for
Fees Associated with Online Shopping
[§§ 246.12(h)(3)(xxxiii) and (v)(1)(ix)
and 246.14(b)(1)(i) and (c)(4)].
The Department proposes to add a
new provision at § 246.12(h)(3)(xxxiii)
to clarify that WIC-authorized vendors
must not charge the State agency for fees
associated with online ordering (e.g.,
delivery, service, convenience, bag fees).
If such fees are assessed to non-WIC
customers using the same services, WIC
participants must be allowed to pay
them using another tender type. A
similar provision is proposed for
farmers and farmers’ markets at
§ 246.12(v)(1)(ix).
This proposed change would work in
combination with the revisions
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proposed at § 246.14(b)(1)(i) and (c)(4),
both of which clarify that State agencies
operating home food delivery or direct
distribution systems may continue to
pay for the cost of transporting food
under these food delivery systems. Costs
in home food delivery and direct
distribution are different from fees
associated with online shopping in a
retail food delivery system, which
would only occur if the WIC shopper
chooses online shopping.
The Department is specifically
requesting comment on whether State
agencies should have the option to pay
for fees associated with online shopping
in a retail food delivery system with
either (1) non-Federal funding at State
agency discretion and/or (2) Federal
funding in situations where it is deemed
necessary to meet special needs (e.g.,
participant access or other needs as
identified by the State agency). The
Department requests input from
stakeholders that includes a discussion
of how this option would impact
equitable access to online shopping for
WIC participants, the rationale for State
agencies to pay these fees (e.g., to ensure
participant access to online shopping in
certain areas within the State agency’s
jurisdiction, to transition from a direct
distribution or home food delivery
system), possible models for paying for
such fees (including whether there
should be any limits on the amount of
delivery fees paid by the WIC State
agency), and any considerations
necessary to pay for fees for different
vendor types (e.g., above-50-percent,
internet, brick-and-mortar).
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2. Streamline and Modernize WIC Food
Delivery
The proposed revisions in this section
are intended to reflect the Program’s
near-complete transition to EBT,
support current technology and future
innovation, and expand opportunities
for the retail grocery industry to
innovate in ways that benefit WIC
participants. The proposed revisions
would also allow State agencies to
develop and test new types of food
instruments (e.g., mobile payments) and
allow for the remote issuance of WIC
benefits. As the Program completes the
transition to EBT and innovates further,
FNS will continue to support State
agencies in their efforts to use current
technologies to provide adequate
participant access to supplemental
foods.
The following is a discussion of each
proposed provision.
a. Permit the Remote Issuance of
Electronic Benefits to a Participant’s
Benefit Balance [§§ 246.4(a)(23),
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246.7(f)(2)(iv), and 246.12(r)(2), (4), and
(5)].
The Department proposes to remove
barriers by revising § 246.12(r)(4) to
specifically apply to paper food
instruments and CVVs, and by creating
§ 246.12(r)(5) for the issuance of EBT
cards and electronic benefits. This
proposed provision would encourage
WIC State agencies to allow for the
remote issuance of electronic benefits
(i.e., the loading of electronic benefits to
an EBT card, or other access device or
technology, without requiring the
participant to travel to a clinic) and for
the mailing of EBT cards. The provision
would require that State agencies do so
in a way that ensures that participants
are offered nutrition education in
accordance with § 246.11(a)(2) and that
their EBT cards and electronic benefits
are issued within the processing
timeframe requirements at
§ 246.7(f)(2)(iv), without jeopardizing
the integrity of program services or
program accountability.
Section (f)(6)(B) of the Child Nutrition
Act of 1966 (42 U.S.C. 1786(f)(6)(B))
states that a State agency may provide
for delivery of vouchers to participants
not scheduled for nutrition education
and breastfeeding counseling or
recertification. Since this legislation
requires WIC participants to pick up
paper food instruments when scheduled
for an in-person nutrition education or
subsequent certification appointment,
that requirement would remain in
regulations, as revised, at § 246.12(r)(4).
This proposed revision to
§ 246.12(r)(4) and the proposed creation
of § 246.12(r)(5) would necessitate
revisions to § 246.7(f)(2)(iv), to update
processing timeframe requirements to
support remote issuance of electronic
benefits, and to §§ 246.12(r)(2) and
246.4(a)(23) for clarity.
To ensure clarity related to how these
provisions apply to food instruments,
CVVs, and electronic benefits, the
Department proposes to create a new
definition of ‘‘electronic benefits’’ in
§ 246.2. This new definition clarifies
that electronic benefits are separate and
distinct from food instruments.
Electronic benefits are the WIC benefits
for supplemental foods prescribed to a
participant and contained within the
participant’s benefit balance. This
definition complements the electronic
benefit requirements established at
§ 246.12(x).
Similarly, the Department proposes to
update the definition of cash-value
voucher to remove the clause, ‘‘Cashvalue voucher is also known as cashvalue benefit, or CVB, in an EBT
environment,’’ and create an
independent definition of CVB as a type
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of electronic benefit that is a fixeddollar amount used to obtain authorized
fruits and vegetables. Additionally, the
Department proposes to remove
‘‘electronic benefit transfer (EBT) card’’
as a type of CVV to ensure that the
modern definitions of food instrument,
electronic benefits, and cash-value
benefit work together. The proposed
modernization of the definition of food
instrument is described in more detail
below.
Lastly, the Department proposes
modifying the State Plan requirements
described under § 246.4(a)(23) to focus
this requirement on how the State
agency will improve access for all
participants and prospective applicants
(with an additional focus on those who
are employed and/or reside in rural
areas), including measures to improve
access through the remote issuance of
food instruments, CVVs, and/or
electronic benefits. The Department also
proposes edits to ensure that this
provision remains consistent with
§ 246.12(r)(4) and (5).
b. Expand the Definition of Food
Instrument [§ 246.2].
The Department proposes adding
‘‘other electronic benefit access device
or technology’’ to the definition of ‘‘food
instrument’’ to allow WIC State agencies
to explore and adopt new technologies
beyond the EBT card (e.g., mobile
payment) while ensuring that key
program integrity requirements apply to
these new technologies. In addition, the
proposed revision would better match
the proposed definition of ‘‘EBT’’ which
includes ‘‘other electronic benefit access
device or technology.’’
c. Update the Uniform Food Delivery
Systems Provision to Support State
Agency Innovation [§§ 246.2 and
246.12(b)].
Current WIC regulations require each
food delivery system to be procedurally
uniform throughout the State agency’s
jurisdiction, and that when used, food
instruments must be uniform within
each type of system.
The Department proposes the
following changes to:
(i) Allow State agencies to develop
and test new WIC food instrument
types.
The Department proposes introducing
conditions for when non-uniform food
instruments may be used within a single
food delivery system, such as when
necessary to meet special needs
described in the State agency’s State
Plan per § 246.4(a)(14)(i), or when
transitioning from one type of food
instrument to another. This proposed
flexibility would provide State agencies
the ability to address needs specific to
their jurisdictions, and to test and
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smoothly transition to new food
instrument types, as needed.
(ii) Clarify uniform food delivery
systems and system combinations.
The Department proposes clarifying
in § 246.12(b) that State agencies may
use a combination of retail, home food
delivery, and direct distribution
systems, and that this combination of
systems together must ensure adequate
participant access to supplemental
foods.
Legislation (42 U.S.C. 1786
(h)(12)(A)(i)) defines EBT as a ‘‘food
delivery system that provides benefits
using a card or other access device
approved by the Secretary that permits
electronic access to program benefits,’’
although it is more precisely described
as a benefit delivery method. Therefore,
the Department proposes to update the
definition of ‘‘Electronic Benefit
Transfer’’ to clarify that it is a benefit
delivery method, and to introduce
‘‘other electronic benefit access device
or technology’’ to allow WIC State
agencies to explore and adopt new
technologies beyond the EBT card.
Further, the Department proposes to
clarify in § 246.12(b) that there are three
types of food delivery systems (retail,
home food delivery, and direct
distribution), and that these three must
be procedurally uniform within a State
agency’s jurisdiction. When used, food
instruments must be uniform within
each type of system, except when the
use of non-uniform food instruments
(e.g., introducing a mobile app for
certain participants while others use
EBT cards) is necessary to meet the
special needs described and approved
in the State agency’s State Plan per
§ 246.4(a)(14)(i), or when transitioning
from one type of food instrument to
another. These changes are intended to
provide clarity and flexibility to State
agencies as they work to ensure
participant access to supplemental
foods.
d. Streamline Food Delivery
Operations by Recognizing that EBT
Data are a Sufficient Replacement for
Routine Shelf Price Collection
[§ 246.12(g)(4) introductory text,
(g)(4)(ii)(B), and (g)(9)].
The Department proposes to revise
the requirement at § 246.12(g)(4)(ii)(B)
so that State agencies with access to
EBT data do not have to collect shelf
prices from vendors every six months or
seek an exemption from FNS. With EBT,
State agencies receive current data about
vendors’ prices at least daily and no
longer need to either formally collect
these prices through administratively
burdensome surveys or take the time to
request an exemption from FNS. State
agencies without access to electronic
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benefit redemption data must continue
to collect vendor shelf prices at least
every six months or seek an exemption
from FNS. These changes are expected
to reduce burden on authorized vendors
and State agencies without negatively
impacting program integrity or vendor
cost containment practices.
This proposed change would
necessitate similar updates to
§ 246.12(g)(4) and (9), to allow State
agencies to use other types of
appropriate price data to meet
requirements of vendor authorization
and cost containment provisions.
e. Extend Vendor Application and
Agreement Periods [§ 246.12(g)(8) and
(h)(1)(i)].
The Department proposes to increase
the maximum length of vendor
agreements (§ 246.12(h)(1)(i)) and the
minimum frequency that State agencies
must accept and process applications
(§ 246.12(g)(8)) from three to five years.
The proposed change would reduce the
administrative burden on vendors and
State agencies without sacrificing
program integrity, as time periods for
vendor monitoring, training, and
investigations would be unchanged.
f. Allow State Agencies Using a NonRetail, Home Food Delivery System to
Ship Supplemental Foods to a Location
Designated by Participants [§§ 246.2 and
246.12(m)].
The Department proposes revising the
definition of ‘‘home food delivery
contractor’’ at § 246.2 to allow
supplemental foods to be delivered to ‘‘a
location designated by the participant or
State agency’’ instead of limiting the
delivery to the participant’s home. This
revision would increase flexibility for
both WIC State agencies and
participants to determine the most
appropriate delivery location and would
provide more equitable access to
participants in remote areas without
mail service at all homes. The revision
to this provision would necessitate a
similar change to § 246.12(m). The State
agency must continue to ensure the
accountable delivery of authorized
supplemental foods to participants per
§ 246.12(m)(2).
Additionally, to be consistent with
revisions to the definition of ‘‘vendor,’’
the Department proposes replacing the
specific examples of business entities
from the definition of ‘‘home food
delivery contractor’’ with ‘‘business
entity.’’
3. Meet the Needs of a Modern, DataDriven Program
The Department proposes updating
reporting requirements to align with
data reporting via the Food Delivery
Portal (FDP), which replaced The
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Integrity Profile (TIP) in FY 2022, and
expanding State agency staffing
requirements to support modernizing
and streamlining WIC food delivery and
customer service to participants.
The Department has heard from State
agencies that identifying and recruiting
top talent are key to the success of the
WIC Program. This is especially
important as WIC continues to evolve to
better serve participants through the use
of current and future technologies,
including by providing electronic
benefits and implementing online
ordering. The ability to hire staff who
can focus on food delivery and customer
service would help WIC State agencies
to ensure that program modernization
efforts support meaningful access to
program information for all participants.
The following is a discussion of each
proposed provision.
a. Update Reporting Requirements for
Federal Oversight [§ 246.12(j)(5)].
The Department proposes to revise
§ 246.12(j)(5) to reflect the types of data
that have been collected for Federal
oversight of State agency food delivery
management since 2005, and to align
with the transition in reporting systems
from TIP to FDP. The TIP system, which
WIC State agencies have used since
2005, was upgraded to use current
technology and renamed the Food
Delivery Portal in FY 2022. Since 2005,
there have been changes to
requirements, policies, technology, and
guidance that the TIP system could not
support. FDP uses a more robust data
collection system to align with current
security protocols and compliance
guidance, support data storage and web
components, ensure cost effectiveness,
allow for more data-driven decision
making through increased data analytic
functionality, enhance FNS reporting
capabilities, reduce grantee burden
through automated calculations and
consolidated reporting, and add data
validation features to reduce reporting
errors.
Additionally, current WIC regulations
require the State agency to send ‘‘a
summary of the results of its vendor
monitoring containing information
stipulated by FNS’’ to FNS once a year.
The Department proposes updating this
reporting requirement to ensure that
WIC State agencies report to FDP on all
the entities that provide supplemental
foods to WIC participants: vendors,
home food delivery and direct
distribution contractors, farmers, and
farmers’ markets. The modifications
would also remove language that
requires a report to be sent on each
fiscal year by February 1 of the
following fiscal year to FNS. This would
allow the Department to set data
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submission timelines as appropriate for
the modern system and reporting needs,
which may be as frequent as quarterly
but not less than annually. The
reporting requirements, including data
fields and submission timelines, will be
provided to WIC State agencies with
advance notification via policy
guidance. Reporting timelines for FDP
have already been set via WIC Policy
Memorandum #2021–9: Transition from
The Integrity Profile to the Food
Delivery Portal through reporting year
FY 2024.
b. Create Two New WIC State Agency
Staff Positions to Reflect the Staffing
Needs of a Modern, Innovative Program
[§ 246.3(e)(5) and (6)].
Current WIC regulations at
§ 246.3(e)(3) outline the requirements
for State agencies to employ a State WIC
Nutrition Coordinator with certain
qualifications, and to employ a number
of Program Specialists, based on
caseload. The Department proposes
introducing staffing standards for two
new State agency staff positions, the
WIC Food Delivery and WIC Customer
Service coordinators, at § 246.3(e)(5)
and (6), respectively. The Department
proposes that these positions be staffed
with one full-time or equivalent staff
when the monthly participation is more
than 7,000, or a half-time or equivalent
staff when the monthly participation
exceeds 500 (and, in the case of the WIC
Food Delivery Coordinator, if the State
agency manages its own vendor cost
containment system). At these
thresholds, sixteen of the smallest State
agencies (i.e., those with under 500
monthly participants on average) would
not be impacted. The proposed
revisions also include the ability for
State agencies to request an exception to
these qualifications to allow for existing
personnel or for special circumstances.
Given the importance of WIC food
delivery, the Program’s near-complete
transition to EBT, and the special skills
necessary to effectively operate and
monitor a retail food delivery system in
accordance with Federal vendor cost
containment requirements, the
Department proposes to develop
stronger standards for the position of the
WIC Food Delivery Coordinator.
The Department expects that adding
this position would ensure that WIC
State agencies have the staff in place to
make the data-driven decisions
necessary for a modern, efficient WIC
Program that uses current technologies
for food delivery.
Additionally, the Department
proposes adding standards to create a
WIC Customer Service Coordinator to
support WIC State agencies as they work
to hire staff who are well-equipped to
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support program improvements related
to participant-facing activities,
particularly those that involve emergent
technologies and future innovations,
potentially including those related to
modernized WIC food delivery. WIC
State agencies currently use participantfacing technologies to provide WIC
services in a customer-centered manner.
State agencies have indicated, though,
that they do not always have the ability
to hire staff with the necessary technical
and procurement-related skills to
procure, operate, and update these
technologies. The Department expects
that establishing a WIC Customer
Service Coordinator position will help
WIC State agencies as they work to
recruit and retain staff that can manage
current technology projects and
continue WIC modernization work
through the assessment and
implementation of future technologies.
These proposed provisions would
formalize both the staffing requirement
and the expected education and
experience levels required for the two
positions. To ensure that equity is
considered in the development of these
standards, the standards allow certain
work experience to be treated the same
as certain higher educational
requirements. The Department expects
that these provisions will help WIC
State agencies to recruit and retain staff
with the skills necessary to manage and
modernize their food delivery systems,
and to adopt new technologies to
improve the participant experience. The
WIC Food Delivery and WIC Customer
Service coordinators would also play an
important role in ensuring that program
modernization efforts and
improvements to participant-facing
technologies are completed in a manner
that ensures accessible and meaningful
access to program information for all
participants.
The Department is specifically
requesting comments on whether the
staffing standards proposed at
§ 246.3(e)(5) and (6) would support
State agencies’ search for qualified
personnel. The Department asks
stakeholders to include a discussion of
the State agency’s ability to recruit and
fill these positions as described
(considering both the recruitment and
hiring of staff with the proposed
credentials), an assessment of any
challenges and costs associated with the
adoption of these provisions, necessary
timeline to operationalize such
requirements, and any
recommendations for changes to the
standards along with related rationale.
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4. Request for Public Comment on Key
Topic Areas
The Department encourages
stakeholders to provide comment on
potential civil rights impacts of the
proposed rule. Further, in addition to
proposed regulatory changes described
previously, the Department seeks
comment on the below topic for
consideration in this or a future rule.
The Department will review and revise
all proposed provisions, as needed,
prior to submission of a final rule,
considering both public comments and
relevant publications by regulatory
agencies.
a. Exceptions to Minimum Stocking
Requirements.
The Department seeks comment on
whether there is a need to authorize
vendors that sell a specific subset of
supplemental foods (e.g., dairies,
bakeries, produce sellers) but would not
meet the minimum variety and quantity
of supplemental foods, as required by
WIC regulations (i.e., two different
fruits, two different vegetables, and at
least one whole grain cereal per
§ 246.12(g)(3)(i)). The Department
requests input from stakeholders that
includes a discussion of:
• Whether the authorization of these
specialty store types would improve
WIC participant access to supplemental
foods, with EBT shopping patterns and
habits in mind. If so, please describe
how this would improve access, equity,
and/or nutrition security for
participants.
• If there are any special needs or
access issues that would necessitate the
authorization of these store types. If so,
please describe the need and how this
would improve access, equity, and/or
nutrition security for participants.
• An assessment of the impact on
vendor oversight and monitoring,
including any changes that would be
needed to ensure effective oversight and
program integrity.
• Any concerns around including
stores that only provide certain types of
foods including those relating to State
agency capacity to oversee the stores.
IV. Implementation
Because the majority of the revisions
proposed are introducing opportunities
for increased flexibility for WIC State
agencies, the Department proposes that
the proposed rule would take effect 30
days after publication of the final rule,
except for the following listed
provisions where State agencies would
have 18 months from publication of the
final rule to implement: § 246.12(x)(4)
introductory text and (x)(4)(i), the
provisions that propose to allow for the
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return and use of benefits when an
online order could not be fulfilled, and
§ 246.3(e)(5) and (6), which would
create two new WIC State agency staff
positions. For § 246.12(x)(4)
introductory text and (x)(4)(i), the 18
months would provide WIC State
agencies the time to develop and refine
the technological solutions needed to
meet these provisions. For § 246.3(e)(5)
and (6), the 18 months would provide
WIC State agencies the necessary time to
prepare for any significant changes in
State agency-level hiring structures and
the State agency’s specific staffing
requirements. The Department seeks
comments from State agencies on the
type and scope of the administrative
burden that may be associated with
implementing the provisions in this
proposed rule in this manner.
Procedural Matters
Executive Order 12866 and 13563
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility.
This proposed rule has been
determined to be significant and was
reviewed by the Office of Management
and Budget (OMB) in conformance with
Executive Order 12866.
The Department estimates that
allowing WIC online shopping will
increase Federal WIC food spending, in
the form of transfers, by a total of $392
million over 5 years. This is driven by
an understanding that shoppers
typically pay higher prices for online
groceries and an expectation that online
shopping would moderately increase
WIC benefit redemption by making the
WIC shopping experience more
convenient for some participants.
The Department estimates that the
proposed rule would also result in
around $30 million in net WIC State
agency costs from FY 2024 to FY 2028.
State agency costs include nearly $27
million in total 5-year expenses required
to update State agency systems to enable
online transaction of WIC electronic
benefits and $55 million in total 5-year
costs for increased staffing expenses due
to the proposed changes to State agency
staffing requirements. State agency costs
would be partially offset by a large
reduction in State agency reporting
burden and recordkeeping burden,
which is estimated to result in a savings
of $52 million over 5 years and is
largely attributable to the removal of
shelf price collection requirements for
EBT State agencies and the extension of
vendor agreement and application
periods. These State agency costs are
considered allowable expenses for State
agencies under their annually awarded
Nutrition Services and Administration
(NSA) grants. In general, the Department
believes that State agencies would be
able to absorb the costs associated with
implementing the provisions under this
proposed rule with current NSA funds.
Regulatory Impact Analysis Summary
As required for all rules that have
been designated as Significant by the
Office of Management and Budget, a
Regulatory Impact Analysis (RIA) was
developed for this proposed rule. The
complete RIA follows this proposed rule
as an Appendix. The following
summarizes the conclusions of the
regulatory impact analysis:
Need for Action
To ensure that WIC participants have
equal access to available shopping
options, with the expansion of online
shopping in the retail grocery industry
and the development of new payment
types, the Department proposes to
remove barriers to online shopping and
to modernize certain food delivery
regulations in the WIC Program through
this rulemaking. The proposed measures
would complement the Program’s nearcomplete transition to EBT and aim to
meet the needs of a modern, data-driven
program that uses current technologies
for food delivery. These changes are
expected to improve nutrition security
among WIC participants by increasing
equity and access to available shopping
options.
Costs
The Department estimates that the
provisions under this proposed rule
would collectively result in $404
million in costs and Federal transfers
over 5 years from FY 2024 through FY
2028 (Table 1). This estimate includes
increases in Federal Government WIC
spending, increased net costs to WIC
State agencies, and a savings for WIC
retail vendors.
TABLE 1—SUMMARY OF ESTIMABLE IMPACTS ON TRANSFERS AND COSTS
[FY 2024–2028]
Fiscal year
(millions)
2024
2025
2026
2027
2028
Total
Federal Transfers
Impact of online shopping on Federal WIC food spending .................................................................................
$5.6
$43.7
$79.0
$121.9
$142.0
$392.1
6.0
¥10.3
11.9
7.1
¥10.6
12.3
5.1
¥10.9
12.7
26.9
¥51.5
54.7
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State Agency Costs
Systems development and maintenance for online
shopping .......................................................................
Changes to reporting and recordkeeping burden ............
New State agency staff positions ....................................
1.1
¥9.7
5.9
7.5
¥10.0
11.9
WIC Vendor Costs
Changes to reporting burden ...........................................
¥3.6
¥3.6
¥3.7
¥3.8
¥3.9
¥18.4
Total Estimated Impact .............................................
¥0.6
49.5
83.0
127.0
145.0
403.8
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Finally, the removal of shelf price
collection requirements and the
extension of vendor application and
agreement periods are also expected to
significantly reduce burden on WIC
vendors. The Department estimates that
the reductions in vendor reporting
burden under the proposed rule would
save WIC vendors $18 million over 5
years.
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Benefits
The provisions under this proposed
rule aim to modernize the ways that
WIC participants can receive and
transact their electronic benefits,
creating opportunities to improve equity
and accessibility in the Program as a
result. An estimated 14 percent of the
U.S. population lives in low-income
census tracts with limited access to food
stores 8 and 21 percent of WIC
participants report using a means of
transportation other than a personal car
to travel to a vendor to use their WIC
benefits.9 Once at the vendor,
participants also report challenges
shopping for WIC foods. Recent USDA
survey data indicate that finding the
right WIC-approved products in stores,
WIC-approved products being out of
stock, and feeling embarrassed shopping
for WIC foods are some of the most cited
challenges among WIC participants who
report difficulties shopping for WIC
supplemental foods.10 Online shopping
may alleviate some of these issues for
WIC participants and has the potential
to provide benefits during supply chain
disruptions. Enabling online shopping
in WIC under this proposed rule is
expected to reduce barriers to WIC
Program services, ensure that WIC
participants have an equitable shopping
experience as the retail marketplace
8 U.S. Department of Agriculture, Economic
Research Service, ‘‘State-Level Estimates of Low
Income and Low Access Populations,’’ last updated
September 30, 2019. Available online at: https://
www.ers.usda.gov/data-products/food-accessresearch-atlas/state-level-estimates-of-low-incomeand-low-access-populations/.
9 U.S. Department of Agriculture, Food and
Nutrition Service, ‘‘Brief Report #6: WIC Participant
Satisfaction and Shopping Experience,’’ Third
National Survey of WIC Participants, by Magness,
A., et al., prepared by Capital Consulting
Corporation and 2M Research Services, contract No.
AG–3198–K–15–0077, Project Officer Karen
Castellanos-Brown, Alexandria, VA: December
2021. Available online at: https://
www.fns.usda.gov/wic/third-national-survey-wicparticipants.
10 Gleason, S., Wroblewska, K., Trippe, C., Kline,
N., Meyers Mathieu, K., Breck, A., Marr, J., Bellows,
D. (2022). WIC Food Cost-Containment Practices
Study. Prepared by Insight Policy Research,
Contract No. AG–3198–C–15–0022. Alexandria, VA:
U.S. Department of Agriculture, Food and Nutrition
Service, Office of Policy Support, Project Officer:
Ruth Morgan. Available online at: https://
www.fns.usda.gov/wic/wic-food-cost-containmentpractices-study.
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innovates, and increase participant
purchases of supplemental foods. These
regulatory changes would ensure that
WIC participants have the ability to
transact benefits online as an increasing
share of U.S. consumers prefer to shop
for groceries online. The proposed rule
would further make WIC more
convenient and accessible by
encouraging State agencies to remotely
issue electronic benefits and mail EBT
cards whenever possible, potentially
reducing the number of clinic visits that
WIC participants are required to make.
The proposed rule also includes
provisions that would streamline and
modernize WIC food delivery by
promoting innovation and ensuring that
State agencies have enough qualified
staff meet the needs of a modern, datadriven program. These provisions
provide necessary measures to ensure
that State agencies can deliver a more
efficient and effective program for WIC
participants.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601–612) requires Agencies to
analyze the impact of rulemaking on
small entities and consider alternatives
that would minimize any significant
impacts on a substantial number of
small entities. Pursuant to that review,
it has been certified that this proposed
rule would not have a significant impact
on a substantial number of small
entities.
The provisions of this proposed rule
would primarily affect WIC State
agencies and WIC-authorized vendors.
The staffing standards proposed at
§ 246.3(e)(5) and (6) would not apply to
smaller State agencies, which have
fewer resources. Otherwise, the
proposed provisions would apply to all
State agencies administering the WIC
Program, regardless of size, and would
largely be implemented at State agency
option. The Department does not expect
the proposed rule to have a significant
impact on small State agencies. Large
retailers may be able to implement WIC
online shopping more readily than other
store types. However, the Department
does not expect the proposed rule to
have a lasting or significant negative
impact on smaller WIC vendors as WIC
sales represent a relatively small share
of these stores’ revenue. The
Department’s most recent available
estimates of WIC redemptions by vendor
size found that in fiscal year 2012, 76
percent of WIC retail redemptions
occurred at larger stores (super stores,
supermarkets, or large grocery stores),
10 percent occurred at smaller stores
(small grocery stores, medium grocery
stores, or convenience stores), 9 percent
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occurred at WIC-only and above-50percent stores, and 5 percent occurred at
other stores (other retail stores,
combination grocery/other stores,
commissaries, or unknown store
types).11
WIC sales make up a relatively small
fraction of the revenue for smaller
stores. Among convenience stores, for
example, WIC sales only made up about
0.12 percent of non-fuel sales in 2012.12
Therefore, the Department expects any
revenue that convenience stores and
other small vendors (such as small and
medium grocery stores) may lose to
online shopping at large WIC vendors to
be relatively minor. The Department
will provide technical assistance to
State agencies when necessary to help
small vendors engage with online
shopping in the WIC Program.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public
Law 104–4, establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and Tribal governments and the private
sector. Under section 202 of the UMRA,
the Department generally must prepare
a written statement, including a cost
benefit analysis, for proposed and final
rules with ‘‘Federal mandates’’ that may
result in expenditures by State, local, or
Tribal governments, in the aggregate, or
the private sector, of $146 million or
more (when adjusted for inflation; GDP
deflator source: Table 1.1.9 at https://
www.bea.gov/iTable) in any one year.
When such a statement is needed for a
rule, section 205 of the UMRA generally
requires the Department to identify and
consider a reasonable number of
regulatory alternatives and adopt the
most cost effective or least burdensome
alternative that achieves the objectives
of the rule.
This proposed rule does not contain
Federal mandates (under the regulatory
provisions of Title II of the UMRA) for
State, local, and Tribal governments or
the private sector of $146 million or
more in any one year. Thus, the
proposed rule is not subject to the
requirements of sections 202 and 205 of
the UMRA.
11 U.S. Department of Agriculture, Economic
Research Service, ‘‘Where Do WIC Participants
Redeem Their Food Benefits? An Analysis of WIC
Food Dollar Redemption Patterns by Store Type,’’
EIB–152, by L. Tiehen, and E. Fraza˜o: April 2016.
Available online at: https://www.ers.usda.gov/
publications/pub-details/?pubid=44076.
12 Statista, ‘‘Sales of the convenience store
industry in the United States from 2011 to 2020, by
format,’’ January 2022. Available online at: https://
www.statista.com/statistics/308767/sales-of-the-usconvenience-store-industry-by-format/.
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Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Proposed Rules
Executive Order 12372
This Special Supplemental Nutrition
Program for Women, Infants, and
Children is listed in the Catalog of
Federal Domestic Assistance under
Number 10.557 and is subject to
Executive Order 12372, which requires
intergovernmental consultation with
State and local officials. (See 2 CFR
chapter IV.)
Federalism Summary Impact Statement
Executive Order 13132 requires
Federal agencies to consider the impact
of their regulatory actions on State and
local governments. Where such actions
have federalism implications, agencies
are directed to provide a statement for
inclusion in the preamble to the
regulations describing the agency’s
considerations in terms of the three
categories called for under section
(6)(b)(2)(B) of Executive Order 13132.
The Department has considered the
impact of this proposed rule on State
and local governments and has
determined that this proposed rule does
not have federalism implications.
Therefore, under section 6(b) of the
Executive order, a federalism summary
is not required.
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Executive Order 12988, Civil Justice
Reform
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. This rule is intended to
have preemptive effect with respect to
any State or local laws, regulations or
policies which conflict with its
provisions or which would otherwise
impede its full and timely
implementation. This proposed rule is
not intended to have retroactive effect
unless so specified in the DATES section
of the final rule. Prior to any judicial
challenge to the provisions of the final
rule, all applicable administrative
procedures must be exhausted.
Civil Rights Impact Analysis (CRIA)
FNS has reviewed the proposed rule,
in accordance with the Department
Regulation 4300–004 ‘‘Civil Rights
Impact Analysis,’’ to identify and
address any major civil rights impacts
the proposed rule might have on
participants on the basis of race, sex,
national origin, disability, or age. The
requirements outlined in the proposed
rule aim to remove barriers to online
ordering and internet-based
transactions, streamline and modernize
WIC food delivery, and meet the needs
of a modern, data-driven program that
uses current technologies for food
delivery. The proposed changes would
impact WIC State agencies, including
ITOs, WIC local agencies and clinics,
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and WIC vendors in ways that are
expected to increase equity and access
for WIC participants while enhancing
the overall shopping experience.
In particular, the proposed rule would
allow State agencies, including ITOs, to
authorize new types of vendors and
explore modern payment technologies
and authentication methods. To comply
with revised regulations and implement
the proposed changes, staff at State
agencies, local agencies, and WIC
clinics would need to update operations
and communicate these changes to
participants. The rule would increase
the number of WIC-authorized vendors
by allowing different types of vendors
(e.g., internet and mobile vendors) to
participate in WIC, and eliminate the
requirement for vendors to collect shelfprice data, thereby expanding
participant shopping options. WIC
participants would further benefit from
fewer in-person requirements.
To mitigate potential impacts on
program access for Limited English
Proficiency populations and persons
with disabilities, FNS will provide State
agencies with technical assistance
aimed at ensuring that online shopping
platforms and communications about
program changes are available in
appropriate languages and in alternative
formats for persons with disabilities.
FNS will also support State agencies as
they work to engage small vendors in
online shopping in the WIC Program.
After reviewing the potential impacts,
FNS does not believe the proposed rule
would result in civil rights impacts on
protected groups of WIC participants
and applicants. However, the FNS Civil
Rights Division will propose further
outreach and mitigation strategies to
alleviate any unforeseen impacts, if
deemed necessary.
Executive Order 13175
Executive Order 13175 requires
Federal agencies to consult and
coordinate with Tribes on a
government-to-government basis on
policies that have Tribal implications,
including regulations, legislative
comments or proposed legislation, and
other policy statements or actions that
have substantial direct effects on one or
more Indian Tribes, on the relationship
between the Federal Government and
Indian Tribes, or on the distribution of
power and responsibilities between the
Federal Government and Indian Tribes.
On November 30, 2021, FNS held a
consultation with Tribal leaders and
representatives on key issues related to
the proposed rule. Tribal leaders were
generally supportive of online ordering
for WIC, which may increase access to
food benefits for those with limited
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access to a physical store. Tribal leaders
provided substantive feedback that was
taken into consideration during the
development of this proposed rule,
including the importance of continuing
to support brick-and-mortar vendors
and small, Tribal-owned stores, and
concern for the barriers that fees related
to online ordering could pose to
participants who want to use WIC
online shopping options. FNS will
explore additional opportunities for
engagement as needed.
Once the proposed rule is published
in the Federal Register, FNS will
encourage stakeholders representing
Indian Tribal Organizations to provide
input on whether the proposed rule
poses any adverse Tribal implications. If
a Tribe requests additional consultation
in the future, FNS will work with the
Office of Tribal Relations to ensure
meaningful consultation is provided.
FNS is unaware of any current Tribal
laws that could be in conflict with this
proposed rule.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. Chap. 35; 5 CFR part 1320)
requires the Office of Management and
Budget (OMB) to approve all collections
of information by a Federal agency
before they can be implemented.
Respondents are not required to respond
to any collection of information unless
it displays a current valid OMB control
number.
This proposed rule impacts existing
information collection requirements that
are contained in OMB Control Number
0584–0043 Special Supplemental
Nutrition Program for Women, Infants,
and Children (WIC) Program
Regulations—Reporting and
Recordkeeping (expiration date
December 31, 2023) which are subject to
review and approval by OMB in
accordance with the Paperwork
Reduction Act of 1995. Additionally,
this proposed rule impacts existing
reporting requirements that are
approved under OMB Control Number
0584–0401 Food Delivery Portal (FDP)
Data Collection (expiration date
December 31, 2024), which are subject
to review and approval by OMB in
accordance with the Paperwork
Reduction Act of 1995. Therefore, FNS
is submitting for public comment the
changes in the information collection
burdens in OMB Control Numbers
0584–0043 and 0584–0401 that would
result from adoption of the proposals in
the rule.
Comments on the information
collection for this proposed rule must be
received by April 24, 2023.
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Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Proposed Rules
Comments may be sent to: Patricia
Bailey, Food and Nutrition Service, U.S.
Department of Agriculture, 1320
Braddock Place, 3rd Floor, Alexandria,
VA 22314. Comments will also be
accepted through the Federal
eRulemaking Portal. Go to https://
www.regulations.gov, and follow the
online instructions for submitting
comments electronically.
Comments are invited on: (a) whether
the proposed collection of information
is necessary for the proper performance
of the functions of the Department,
including whether the information shall
have practical utility; (b) the accuracy of
the Department’s estimate of the burden
of the proposed collection of
information, including the validity of
the methodology and assumptions used;
(c) ways to enhance the quality, utility,
and clarity of the information to be
collected; and (d) ways to minimize the
burden of the collection of information
on those who are to respond, including
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology.
All responses to this notification will
be summarized and included in the
request for OMB approval. All
comments will also become a matter of
public record.
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a. Revisions to OMB Control Number
0584–0043
Title: Special Supplemental Nutrition
Program for Women, Infants, and
Children (WIC) Program Regulations—
Reporting and Recordkeeping Burden.
OMB Number: 0584–0043.
Expiration Date: 12/31/2023.
Type of Request: Revision of a
currently approved collection.
Abstract: This is a revision of existing
information collection requirements in
the information collection under OMB
Control Number 0584–0043 that are
affected by this proposed rulemaking.
Under this proposed rule, the
Department proposes to remove
regulatory barriers to online ordering
and internet-based transactions in the
WIC Program, streamline and modernize
WIC food delivery, and meet the needs
of a modern, data-driven program that
uses current technologies for food
delivery. This proposed rule impacts the
burden associated with reporting
requirements for State agencies,
individuals and households, and
vendors, as well as the burden
associated with recordkeeping
requirements for State agencies. This
proposed rule may also result in
additional financial costs to WIC
participants and State agencies.
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(i) Burden Revisions Related to Internet
Vendor Authorization, Monitoring and
Oversight, and Training
The proposed rule would allow State
agencies to authorize internet vendors,
in addition to brick-and-mortar vendors
and mobile vendors. Using the new
definitions proposed, all vendors
authorized under current WIC
regulations would be classified as brickand-mortar vendors with the exception
of one mobile vendor. FNS estimates
that 800 internet vendors in 80 State
agencies with online EBT systems will
be authorized initially following the
rulemaking (due to technological
constraints, offline EBT systems would
not be able to support online
transactions), increasing the total
number of WIC-authorized vendors from
41,164 in the previous information
collection submission to 41,964
vendors.
WIC regulations at § 246.12(g)(5)
require that State agencies visit a vendor
prior to their initial authorization in the
Program. During an on-site
preauthorization visit, State agency staff
spend approximately 40 minutes
verifying information provided by the
vendor applicant and 20 minutes
traveling to and from the vendor.13 FNS
is seeking approval for the requirement
for on-site initial preauthorization visits
and its associated burden through a
separate revision to OMB Control
Number 0584–0043. While the proposed
rule would allow initial
preauthorization visits of internet
vendors to take place virtually, therefore
not requiring travel time for State
agency staff, the initial authorization of
800 internet vendors would add 536.00
reporting burden hours for both State
agencies and vendors.
The Department is proposing to
increase the maximum length of vendor
agreements and the minimum frequency
that State agencies must accept and
process applications from three to five
years. FNS estimates that currently,
State agencies spend approximately 45
minutes reviewing, processing, and
approving vendor applications and
agreements from one-third of the WICauthorized vendors per year, for a total
of 10,188.09 hours.14 Proposed changes
13 The estimate of State agency travel time to visit
a vendor is based on the amount of time WIC
participants reported traveling to the store where
WIC foods are purchased. U.S. Department of
Agriculture, Food and Nutrition Service,
‘‘Appendix G. Program Experiences Survey Tables.’’
Third National Survey of WIC Participants,
Alexandria, VA: 2021, Table 4h. Available online
at: https://www.fns.usda.gov/wic/third-nationalsurvey-wic-participants.
14 FNS is seeking approval for the State agency
requirement to review and process vendor
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to the definition of ‘‘vendor’’ would
remove the requirement that State
agencies determine a vendor applicant’s
business structure, decreasing the
amount of time it takes a State agency
to review a vendor application by 5
minutes, from 45 to 40 minutes. This
change, along with extending vendor
agreement periods from three to five
years and adding internet vendors,
would result in a net decrease of State
agencies’ reporting burden of 4,592.89
hours due to the proposed rule,
resulting in a total 5,595.20 hours.
Additionally, the proposed increase to
the length of vendor agreement periods
and the addition of internet vendors
would overall result in fewer vendors
submitting vendor agreements and
applications for review each year (onefifth of vendors rather than one-third),
decreasing vendors’ associated reporting
burden by 5,191.32 hours, from
13,584.12 to 8,392.80 hours. These
changes would also affect the existing
State agency burden for maintaining
records of vendor applications and
agreements, decreasing this burden on
net by 5,191.32 hours, from 13,584.12 to
8,392.80 hours. The number of
respondents and frequency of responses
for the State agency recordkeeping
burden associated with vendor
applications and agreements have also
been adjusted to correct for clerical
errors in this information collection.
Under current regulations, the number
of respondents is 89.00, rather than
13,584.12 State agencies, and the
frequency of responses is 152.63 rather
than 1 response per year. These clerical
corrections do not affect the existing
State agency recordkeeping burden as
the underlying math is unchanged. As
noted, the longer vendor agreement
periods proposed in this rule would
decrease the number of vendor
agreements that each State agency
collects and records each year from
152.63 to 94.30, resulting in the
5,191.32 hour decrease in the associated
State agency recordkeeping burden.
Although the proposed rule would
not change procedures for vendor
oversight, the rulemaking would allow
routine vendor monitoring and
compliance investigations to be
conducted virtually so that State
agencies may use oversight methods
appropriate for vendors. As with initial
vendor preauthorization visits, FNS
estimates that it takes State agency staff
an average of 20 minutes round trip to
travel to a brick-and-mortar or mobile
vendor.
agreements and its associated burden through a
separate revision to OMB Control Number 0584–
0043.
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Considering the additional virtual
routine monitoring visits on internet
vendors authorized under the proposed
rule would add 40.00 more hours to
State agencies’ reporting burden. FNS is
seeking approval for the requirement for
on-site routine vendor monitoring and
its associated burden through a separate
revision to OMB Control Number 0584–
0043. The overall increase in the
number of WIC-authorized vendors
would increase the State agency
recordkeeping burden for routine
vendor monitoring by 20.00 hours, from
1,029.10 to 1,049.10 hours.
State agency staff conduct on-site
compliance investigations of five
percent of vendors each year, which
requires 20 minutes of travel time and
two hours to complete an investigation
of a brick-and-mortar or mobile vendor.
FNS is seeking approval for the State
agency requirement to conduct on site
compliance investigations and its
associated burden through a separate
revision to OMB Control Number 0584–
00343. State agencies would also be
required to conduct virtual compliance
investigations of internet vendors each
year, resulting in 80.00 additional
burden hours. The overall increase in
the number of WIC-authorized vendors
would increase the State agency
recordkeeping burden for compliance
investigations by 80.00 hours.
The addition of 800 internet vendors
under the proposed rule would also
increase State agencies’ reporting
burden for vendor training, increasing
associated burden hours by 1,600.00
hours per year. It takes two hours for
vendors to attend the annual training
provided by State agencies. FNS is
seeking approval for the requirement for
annual vendor training and its
associated burden through a separate
revision to OMB Control Number 0584–
0043. Authorizing 800 internet vendors
under the proposed rule would result in
an additional 1,600.00 hours of
reporting burden for those new vendors
to receive training.
Further, FNS estimates that the
increase in the overall number of WICauthorized vendors will result in
proportionate increases in both the
number of vendors classified as ‘‘above50-percent’’ vendors and the number of
vendors that demonstrate a pattern of
violations during investigations. These
changes would result in associated
increases in: the State agency reporting
burden related to assessing a vendor’s
food sales data to determine if they are
an ‘‘above-50-percent’’ vendor (288.00
additional hours); the vendor reporting
burden required to provide such sales
data (144.00 additional hours); the
reporting burden for above-50-percent
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vendors who request approval from
their State agency to provide incentive
items to WIC shoppers (7.60 additional
hours); the State agency recordkeeping
burden to collect information on above50-percent vendors’ incentive items
(7.60 additional hours); and the State
agency recordkeeping burden to notify
vendors in writing of violations revealed
during an investigation (10.00
additional hours).
The number of respondents and
frequency of responses for the State
agency recordkeeping burden associated
with collecting information on above50-percent vendors’ incentive items
have also been adjusted to correct for
clerical errors in this information
collection. Under current regulations,
the number of respondents is 4, rather
than 389.20 State agencies, and the
frequency of responses is 97.30, rather
than 1 response per year. These clerical
corrections do not affect the existing
State agency recordkeeping burden as
the underlying math is unchanged. As
noted, the expected increase in the
number of above-50-vendors with the
addition of internet vendors in this
proposed rule would increase the
number of above-50-vendors that each
State agency collects information from
each year from 97.30 to 99.20, resulting
in the 7.60 hour increase in the
associated State agency recordkeeping
burden stated in the previous paragraph.
(ii) Burden Revisions Related to
Program Modernization
In recognition of the efficiency of
using electronic benefit redemption data
to analyze the prices vendors charge for
supplemental foods, the proposed rule
would remove the requirement that
State agencies with access to EBT data
collect shelf prices from vendors on a
biannual basis or seek an exemption
from FNS. Until all State agencies have
fully implemented EBT systems, FNS
estimates that four State agencies will
continue to be required to collect shelf
prices from WIC-authorized vendors
each year, and that one of these State
agencies will request an exemption to
this collection requirement from FNS.
Removing the shelf price collection
requirement for State agencies with
access to EBT data would significantly
decrease the reporting burden for WIC
State agencies (¥158,997.93 hours for
collecting shelf prices and ¥37.33
hours for preparing exemption requests)
and WIC-authorized vendors
(¥140,497.26 hours).
State agencies are required to submit
requests for approval for costs of capital
expenditures per § 246.14(d). FNS
estimates that implementing updates to
State agency systems to allow for online
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ordering and transactions will cost
approximately $90,000 per State agency.
Therefore, the proposed rule is expected
to increase the number of State agencies
submitting such requests during online
shopping implementation from 20 to 30
per year, which would increase the
associated reporting burden by 1,600.00
hours.
The proposed rule would allow State
agencies to adopt EBT transaction
authentication technologies other than
PIN authentication. State agencies
would be required to develop
transaction authentication policies that
are appropriate for the authentication
technology they choose to adopt and in
accordance with standards established
by the Department. FNS estimates that
five State agencies will adopt a new
transaction authentication method each
year, requiring them to spend an
estimated 25 hours developing a new
transaction authentication policy. This
would add 125.00 hours to State
agencies’ reporting burden.
The proposed rule would encourage
State agencies to issue electronic
benefits remotely and mail EBT cards to
participants to reduce the number of
clinic visits households make to receive
benefits. FNS expects that this proposal
will decrease the burden associated
with picking up food instruments and
cash-value vouchers outside of a
certification clinic visit by 1,049,334.86
hours. These estimates assume that: on
average, WIC households consist of two
WIC participants,15 requiring only one
trip to the clinic to pick up both
participants’ benefits; currently,
households in State agencies without an
online EBT system are required to travel
to a clinic to pick up paper food
instruments and CVVs or reload offline
EBT cards three times a year outside of
another scheduled appointment; and
currently, new participants in State
agencies with online EBT systems are
required to pick up their EBT card in
person. With the proposed rule, only
participants who need to reload an
offline EBT card would be required to
travel to a clinic to pick up benefits in
person. FNS estimates that on average,
picking up benefits in person takes a
household 30 minutes, including 26
minutes of round-trip travel time and 4
minutes to obtain the benefits.16 FNS is
15 U.S. Department of Agriculture, ‘‘WIC
Participant and Program Characteristics 2020
Appendices.’’ WIC Participant and Program
Characteristics 2020, Alexandria, VA: February
2022, Table C.14. Available online at: https://
www.fns.usda.gov/wic/participant-programcharacteristics-2020.
16 This estimate is based on the amount of time
WIC participants reported traveling to the WIC
clinic. U.S. Department of Agriculture, Food and
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seeking approval for the burden for
participants to visit a clinic to pick up
food instruments and CVVs outside of a
scheduled appointment and its
associated burden through a separate
revision to OMB Control Number 0584–
0043.
Finally, the proposed rule would
make small adjustments to the
information that State agencies are
required to submit annually to FNS in
their State Plans. FNS estimates that one
State agency currently provides
justification to authorize a mobile
vendor in their State Plan which
requires approximately one hour to
complete. Therefore, across all State
agencies, the removal of the requirement
to justify authorization of mobile
vendors would result in less than a oneminute decrease in the number of hours
that an average WIC State agency spends
preparing their State Plan each year
(from 134.62 to 134.61 hours; 1 hour ÷
89 State agencies = 0.01 hours). This
change to the State Plan requirement
would result in a small overall decrease
in State agencies’ reporting burden of
0.89 hours.
Additionally, the proposed rule
would allow State agencies to use nonuniform food instruments within a food
delivery system when justified in their
State Plan. FNS estimates that five State
agencies will pursue using non-uniform
food instruments through their State
Plan as they either transition from
offline to online EBT systems or test
alternative payment technologies. These
justifications each would require an
estimated one hour to complete,
resulting in an increase to State
agencies’ total reporting burden of 5.00
hours.
(iii) Costs Associated With the Proposed
Rule and OMB Control Number 0584–
0043
In addition to the changes to the
information collection burdens
discussed in this section, implementing
the proposed rule is expected to create
additional costs for State agencies and
WIC participants. As previously noted,
FNS estimates that it will cost each of
the 89 WIC State agencies
approximately $90,000 to update their
EBT system to implement online
shopping. Altogether, these one-time
implementation costs would total $8.01
million. After implementation, the
Department anticipates that
maintenance of such systems will cost
approximately $4,000 per month.
Nutrition Service, ‘‘Appendix G. Program
Experiences Survey Tables.’’ Third National Survey
of WIC Participants, Alexandria, VA: 2021, Table
5c.2. Available online at: https://www.fns.usda.gov/
wic/third-national-survey-wic-participants.
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Therefore, in an average year following
implementation of online shopping in
all State agencies, these ongoing
maintenance costs would total $4.27
million per year.
The proposed rule would add staffing
standards at § 246.3(e) for two new State
agency positions: the WIC Food
Delivery Coordinator and the WIC
Customer Service Coordinator. FNS
estimates that 51 State agencies have
over 7,000 monthly participants and
would be required to employ full-time
or equivalent staff persons for both
proposed positions, and that current
staff meet the requirements for the WIC
Food Delivery Coordinator at 13 State
agencies, and for the WIC Customer
Service Coordinator at 3 State agencies.
Additionally, 22 State agencies with
monthly participation above 500 but
below 7,000 would need to employ a
half-time or equivalent staff person for
these two new positions, equivalent to
11 additional full-time WIC Food
Delivery Coordinators and 11 additional
full-time WIC Customer Service
Coordinators. Therefore, FNS estimates
that in response to the proposed staffing
standards, State agencies would need to
fill 108 new full-time positions (49 WIC
Food Delivery Coordinators and 59 WIC
Customer Service Coordinators).
Altogether, FNS estimates that these
new part-time and full-time staffing
standards would cost State agencies
approximately $117,590 for each fulltime position, or $12.7 million total, in
staffing costs per year.17
The proposed rule would add a
provision at § 246.12(h)(3)(xxxiii) that
would allow WIC participants who
choose to shop for supplemental foods
online to pay for fees associated with
such services using another tender type,
as long as those fees are also assessed to
non-WIC customers using the same
services. FNS estimates that an average
online grocery order in 2024 will be
assessed $9.59 in delivery and service
fees. Additionally, FNS estimates that
once online shopping has been
implemented across all State agencies,
20 percent of WIC households
(consisting of two WIC participants, on
17 Hourly compensation is based on the hourly
total compensation for all State and local workers
from calculated by the U.S. Bureau of Labor
Statistics for FY 2021 (U.S. Bureau of Labor
Statistics, ‘‘Total compensation cost per hour
worked for state and local government workers.’’
Available online at: https://data.bls.gov/timeseries/
CMU3010000000000D.), adjusted for inflation.
Total annual compensation for a full-time position
is calculated by multiplying hourly compensation
by 1,767 hours (Organisation for Economic Cooperation and Development (OECD) Labour Force
Statistics, ‘‘2020 Average annual hours actually
worked per worker in United States.’’ Available
online at: https://stats.oecd.org/index.aspx?
DataSetCode=ANHRS.).
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11529
average) would make one online WIC
order each month and that 33 percent of
WIC online shopping orders will be
placed for home delivery. Therefore,
FNS estimates that approximately
229,000 households would place an
online order for home delivery each
month, costing WIC participants a total
of about $26.4 million per year if all
State agencies implemented online
shopping.
(iv) Summary of Revisions to OMB
Control Number 0584–0043
The current approved burden for
OMB Control Number 0584–0043 is
4,547,099 hours and 48,798,800 total
responses. The baseline current burden
discussed here and in the tables below
includes revisions to OMB Control
Number 0584–0043 that FNS is seeking
separately. The updated current burden
for this information collection is
6,144,866 hours and 51,864,053 total
responses. Changes to the burden due to
the rulemaking decrease the total
burden by 1,357,162 hours, resulting in
a revised burden of 4,787,704 hours.
The proposed rule is estimated to
decrease the revised total number of
responses by 2,260,446 resulting in
49,603,607 total responses. The
estimated addition of 800 internet
vendors due to the proposed rule is
expected to increase the total number of
respondents for this information
collection from 6,913,189 to 6,913,989.
One-time costs associated with the
proposed rule are expected to total
$8.01 million and annual costs and fees
following implementation of online
shopping are estimated to total $47.64
million. The average burden per
response, the annual burden hours, and
the total fees and costs related to this
proposed rule are explained below and
summarized in the tables which follow.
The change in burden hours to OMB
Control Number 0584–0043 and costs
associated with the proposed rule are
best estimates. The Department requests
comments on the burden and all
proposed changes. Comments received
in response to the proposed rule and
burden estimates will inform the final
burden estimates.
Respondents: State agencies,
including Indian Tribal Organizations
and U.S. Territories (note that burden
estimates for local agencies are not
affected by this proposed rule).
Estimated Number of Respondents:
89.
Reporting
Estimated Number of Reporting
Responses per Respondent: 651.22.
Estimated Number of Responses:
57,958.17.
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Estimated Hours per Reporting
Response: 2.21.
Estimated Total Annual Reporting
Burden Hours for Respondents:
127,802.22.
Reporting
Respondents: Individuals and
households.
Reporting
Recordkeeping
Estimated Number of Recordkeeping
Responses per Respondent: 151.80.
Estimated Number of Responses:
13,510.00.
Estimated Hours per Recordkeeping
Response: 1.08.
Estimated Total Annual
Recordkeeping Burden Hours for
Respondents: 14,559.10.
Estimated Number of Respondents:
347,366.
Estimated Number of Responses per
Respondent: 2.63.
Estimated Number of Responses:
911,835.81.
Estimated Hours per Response: 0.50.
Estimated Total Annual Burden on
Respondents: 455,917.90.
Respondents: WIC-authorized
vendors.
Estimated Number of Respondents:
41,964 (41,163 brick-and-mortar
vendors, 800 internet vendors, and 1
mobile vendor).
Estimated Number of Responses per
Respondent: 1.39.
Estimated Number of Responses:
58,145.63.
Estimated Hours per Response: 1.83.
Estimated Total Annual Burden on
Respondents: 106,437.67.
Estimated Capital, Start-up,
Operation, Maintenance and
Implementation Costs and Fees:
SUMMARY OF COSTS ASSOCIATED WITH THE PROPOSED RULE
One-time
costs
(millions)
Number of
respondents
Description of cost
Annual costs
(millions)
Total costs
(millions)
State Agencies
Systems development and maintenance for online shopping .........................
New State agency staff positions: WIC Customer Service and Food Delivery coordinators ...........................................................................................
89
8.01
4.27
12.28
108
0.00
12.70
12.70
Fees associated with online shopping .............................................................
229,000
0.00
26.40
26.40
Total Costs ...............................................................................................
........................
8.01
47.64
55.65
Individuals and Households
TABLE 3—ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN FOR OMB #0584–0043 AS A RESULT OF
PROPOSED RULE CHANGES
Regulatory citation
Description of activities
Estimated
number of
respondents
Frequency
of
responses
Total annual
responses
Average
burden
hours per
response
Estimated
total
burden
hours
Current
burden hours
in OMB
#0584–0043 *
Estimated
change in
burden hours
due to
rulemaking
REPORTING BURDEN ESTIMATES
Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
246.4 ..................................
246.4(a)(14)(i) ....................
246.12(g)(4)(i) ....................
246.12(g)(4)(ii)(B) ..............
246.12(g)(4)(ii)(B) ..............
246.12(g)(5) .......................
246.12(h)(1)(i) ....................
246.12(i)(1) ........................
246.12(j)(2) ........................
246.12(j)(4) ........................
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246.12(bb)(2) .....................
246.14(d) ...........................
Subtotal Reporting: State
Agencies.
VerDate Sep<11>2014
State Plan .........................
State Plan: Justification for
non-uniform food instruments.
Vendor food sales data .....
Vendor shelf prices ...........
Vendor shelf prices exemption.
Vendor initial
preauthorization visits
(virtual).
Vendor applications &
agreements.
Vendor training ..................
Routine vendor monitoring
(virtual).
Vendor compliance investigations (virtual).
Transaction authentication
policy development.
ADP proposals—Costs allowable with approval.
...........................................
17:45 Feb 22, 2023
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PO 00000
89.00
5.00
1.00
1.00
89.00
5.00
134.61
1.00
11,980.29
5.00
11,981.18
0.00
¥0.89
5.00
89.00
3.00
1.00
42.28
943.01
0.33
3,763.00
2,829.03
0.33
4.00
2.00
8.00
15,052.00
5,658.07
2.67
14,764.00
164,656.00
40.00
288.00
¥158,997.93
¥37.33
80.00
10.00
800.00
0.67
536.00
0.00
536.00
89.00
94.30
8,392.80
0.67
5,595.20
* 10,188.09
¥4,592.89
89.00
80.00
471.51
0.50
41,964.00
40.00
2.00
1.00
83,928.00
40.00
82,328.00
0.00
1,600
40.00
80.00
0.50
40.00
2.00
80.00
0.00
80.00
5.00
1.00
5.00
25.00
125.00
0.00
125.00
30.00
1.00
30.00
160.00
4,800.00
3,200.00
1,600.00
89.00
651.22
57,958.17
2.21
127,802.22
* 287,157.27
¥159,355.05
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11531
TABLE 3—ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN FOR OMB #0584–0043 AS A RESULT OF
PROPOSED RULE CHANGES—Continued
Regulatory citation
Description of activities
Estimated
number of
respondents
Frequency
of
responses
Total annual
responses
Average
burden
hours per
response
Estimated
total
burden
hours
Current
burden hours
in OMB
#0584–0043 *
Estimated
change in
burden hours
due to
rulemaking
Affected Public: Individuals and Households: Applicants for Program Benefits
246.12(r)(4) & (r)(5) ...........
Food instrument and cashvalue voucher pick up
(non-certification clinic
visits).
347,366.02
2.63
911,835.81
0.50
455,917.90
* 1,505,252.76
¥1,049,334.86
Subtotal Reporting: Individuals/Households.
...........................................
347,366.02
2.63
911,835.81
0.50
455,917.90
* 1,505,252.76
¥1,049,334.86
Affected Public: Business: Retail Vendors (WIC-Authorized Food Stores)
246.12(g)(4)(i) ....................
246.12(g)(4)(ii)(B) ..............
246.12(g)(5) .......................
246.12(h) ...........................
246.12(h)(8)(i) ....................
246.12(i)(1) ........................
Subtotal Reporting: Retail Vendors.
Grand Subtotal: Reporting.
Vendor food sales data for
A50s.
Vendor shelf prices ...........
Vendor initial
preauthorization visits
(virtual).
Vendor applications &
Agreements.
Vendor incentive items .....
Vendor training ..................
3,763.00
1.00
3,763.00
2.00
7,526.00
7,382.00
144.00
1,414.52
800.00
2.00
1.00
2,829.03
800.00
2.00
0.67
5,658.07
536.00
146,155.33
0.00
¥140,497.26
536.00
8,392.80
1.00
8,392.80
1.00
8,392.80
13,584.12
¥5,191.32
396.80
41,964.00
1.00
1.00
396.80
41,964.00
1.00
2.00
396.80
83,928.00
389.20
* 82,328.00
7.60
1,600.00
...........................................
41,964.00
1.39
58,145.63
1.83
106,437.67
* 249,838.65
¥143,400.98
...........................................
389,419.02
2.64
1,027,939.61
0.67
690,157.80
2,042,248.68
¥1,352,090.88
RECORDKEEPING BURDEN ESTIMATES
Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
246.12(h)(1)(i) ....................
89.00
94.30
8,392.80
1.00
8,392.80
13,584.12
¥5,191.32
4.00
89.00
89.00
99.20
23.58
23.58
396.80
2,098.20
2,098.20
1.00
0.50
2.00
396.80
1,049.10
4,196.40
389.20
1,029.10
4,116.40
7.60
20.00
80.00
89.00
5.89
524.00
1.00
524.00
514.00
10.00
...........................................
89.00
151.80
13,510.00
1.08
14,559.10
19,632.82
¥5,073.72
...........................................
389,419.02
2.67
1,041,449.61
0.68
704,716.90
* 2,061,881.50
¥1,357,164.60
Vendor applications &
agreements.
Vendor incentive items .....
Routine vendor monitoring
Vendor compliance investigations.
Vendor notice of violations
Subtotal: Recordkeeping
Grand Total: Reporting and Recordkeeping due to
Rulemaking.
246.12(h)(8)(i) ....................
246.12(j)(6) ........................
246.12(j)(6)(ii) ....................
246.12(l)(3) ........................
* To capture the estimated changes to the burden from the proposed rule as accurately as possible, the current hours reflect a baseline burden that includes revisions to OMB Control Number 0584–0043 that FNS is seeking separately.
Summary of Requested Burden
Revisions:
TABLE 4—SUMMARY OF REQUESTED BURDEN REVISIONS TO #0584–0043
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Responses
Current Inventory: * Total Burden ................................................................................................
Current Inventory: * Reporting ..............................................................................................
Current Inventory: * Recordkeeping .....................................................................................
Total Burden Revision Requested ...............................................................................................
Burden Revision Requested: Reporting ...............................................................................
Burden Revision Requested: Recordkeeping ......................................................................
Difference in Total Burden from Rulemaking ................................................................
51,864,053
24,320,009
27,544,044
49,603,607
22,064,657
27,538,950
¥2,260,446
Respondents
6,913,189
6,913,189
11,897
6,913,989
6,913,989
11,897
800
Time burden
6,144,866
5,614,900
529,967
4,787,704
4,262,811
524,893
¥1,357,164
* To capture the estimated changes to the burden from the proposed rule as accurately as possible, the ‘‘current inventory’’ reflects a baseline
that includes revisions to OMB Control Number 0584–0043 that FNS is seeking separately.
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b. Revisions to OMB Control Number
0584–0401
Title: Food Delivery Portal (FDP) Data
Collection.
OMB Number: 0584–0401.
Expiration Date: 12/31/2024.
Type of Request: Revision of a
currently approved collection.
Abstract: This is a revision of existing
information collection requirements in
the information collection under OMB
Control Number 0584–0401 that are
affected by this proposed rulemaking.
This proposed rule would revise
regulations around data submission
timelines for information that State
agencies must report to FNS using the
Food Delivery Portal (FDP). All WIC
State agencies are required to submit
information on their vendor monitoring
and investigation activities, in
accordance with § 246.12(j)(5). The
revisions in the proposed rule to this
section would replace the current,
annual submission deadline of February
1 of each fiscal year with submission
timelines that may be as frequent as
quarterly but not less than annually,
based on system capabilities and
reporting needs. Therefore, this
proposed rule revises the frequency of
data preparation and submissions to
FDP included in the current information
collection to show the possibility of
quarterly submissions. Each quarterly
submission would contain one-fourth of
the data typically included in an annual
submission (i.e., 3 months of data rather
than 12 months). FDP reporting
requirements, including data
submission timelines, would be
communicated to State agencies with
advance notice to prepare submissions.
FNS estimates that 73 of the 89 WIC
State agencies enter information into
FDP using the data upload process. WIC
State agencies using this option must (1)
update redemption data, monitoring
activities, compliance investigations,
sanctions, and administrative reviews
on existing vendors and (2) complete all
data fields for new vendors, authorized
during the reporting period. In instances
where data submission timelines are set
as quarterly, FNS estimates that it will
take an average of 7.5 minutes (0.125
hours) for a WIC State agency to upload
its vendor data. This is approximately a
quarter of the time that FNS estimates
it currently takes State agencies to
upload annual data. In total, State
agencies would spend an estimated
36.50 hours uploading data annually (73
State agencies × 4 submissions = 292
annual responses × 0.125 hours per
response = 36.50 burden hours). The
changes to this burden estimate are the
frequency of data uploads and amount
of time each data upload requires. The
total hours would not be affected.
FNS currently estimates that each
State agency requires approximately 10
hours to generate the data for each
annual FDP submission. With the
possibility of quarterly data
submissions, FNS estimates that it
would require each State agency an
average of 2.5 hours per response (10
hours ÷ 4 = 2.5 hours). These responses
may need to be prepared up to four
times a year under the proposed rule.
Therefore, across all 89 State agencies,
356 data submissions would be
prepared each year (89 State agencies ×
4 submissions per year), requiring 890
total burden hours (356 submissions ×
2.5 hours per submission = 890). The
only changes to this burden estimate are
the frequency of data uploads and
amount of time each data upload
requires. The total hours would not be
affected.
Currently, FNS estimates that 16 WIC
State agencies choose to manually add
or update records in FDP, rather than
extracting the information from their
management information system (MIS)
or vendor documentation records. While
the data reporting frequency for all State
agencies may be as frequent as quarterly
under the proposed rule, FNS does not
anticipate that the burdens associated
with manually adding or updating
records in FDP would change with the
increased frequency of submissions,
because the same number of State
agencies would submit the same total
number of responses throughout the
course of one year.
(i) Summary of Revisions to OMB
Control Number 0584–0401
The current approved burden for
OMB Control Number 0584–0401 is
1,189 hours and 707 total responses.
Changes to the burden due to the
rulemaking have no effect on the total
number of burden hours, which would
remain 1,189 hours. The proposed rule
is estimated to increase the total number
of responses by 486, resulting in 1,139
annual responses due to the increased
frequency of submissions to FDP. The
total number of respondents for this
information collection is not expected to
change from 194. The average burden
per response and the annual burden
hours related to this proposed rule are
explained below and summarized in the
tables which follow.
The change in burden hours to OMB
Control Number 0584–0401 associated
with the proposed rule are best
estimates. The Department requests
comments on the burden and all
proposed changes. Comments received
in response to the proposed rule and
burden estimates will inform the final
burden estimates.
Respondents: State agencies,
including Indian Tribal Organizations
and U.S. Territories.
Estimated Number of Respondents:
162.
Reporting
Estimated Number of Reporting
Responses per Respondent: 4.
Estimated Number of Responses: 648.
Estimated Hours per Reporting
Response: 1.43.
Estimated Total Annual Reporting
Burden Hours for Respondents: 926.50.
TABLE 5—ESTIMATED ANNUAL REPORTING AND RECORDKEEPING BURDEN FOR OMB #0584–0401 AS A RESULT OF
PROPOSED RULE CHANGES
Regulatory citation
Estimated
number of
respondents
Description of activities
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I
Frequency
of
responses
I
Total
annual
responses
I
I
Average
burden
hours per
response
I
Estimated
total
burden
hours
I
Current
OMB
approved
burden hours
in OMB
#0584–0401
Estimated
change in
burden hours
due to
rulemaking
REPORTING BURDEN ESTIMATES
Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
246.12(j)(5) ............................
246.12(j)(5) ............................
Total: Reporting due to
Rulemaking.
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Data Preparation ...................
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Summary of Requested Burden
Revisions:
TABLE 6—SUMMARY OF REQUESTED BURDEN REVISIONS TO OMB #0584–0401
Responses
Current OMB Inventory: Total Burden .........................................................................................
Total Burden Revision Requested ...............................................................................................
Difference in Total Burden from Rulemaking .......................................................................
E-Government Act Compliance
§ 246.2
The Department is committed to
complying with the E-Government Act
of 2002, to promote the use of the
internet and other information
technologies to provide increased
opportunities for citizen access to
Government information and services,
and for other purposes.
*
List of Subjects in 7 CFR Part 246
Administrative practice and
procedure, Civil rights, Food assistance
programs, Foods, Grants administration,
Grant programs—health, Grant
programs—social programs, Indians,
Infants and children, Maternal and child
health, Nutrition, Penalties, Public
health, Reporting and recordkeeping
requirements, Women.
Accordingly, the FNS proposes to
amend 7 CFR part 246 as follows:
PART 246—SPECIAL SUPPLEMENTAL
NUTRITION PROGRAM FOR WOMEN,
INFANTS AND CHILDREN
1. The authority citation for part 246
continues to read as follows:
■
Authority: 42 U.S.C. 1786.
2. In § 246.2:
a. Remove the definition of ‘‘Above50-percent vendors’’ and add in its
place the definition of ‘‘Above-50percent vendor’’;
■ b. Add the definitions of ‘‘Brick-andmortar vendor’’ and ‘‘Cash-value
benefit’’ in alphabetical order;
■ c. Revise the definitions of ‘‘Cashvalue voucher’’ and ‘‘Compliance buy’’;
■ d. Remove the definition of
‘‘Electronic Benefit Transfer’’ and add in
its place the definition of ‘‘Electronic
benefit transfer’’;
■ e. Add the definition of ‘‘Electronic
benefits’’ in alphabetical order;
■ f. Revise the definitions of ‘‘Food
instrument’’ and ‘‘Home food delivery
contractor’’;
■ g. Add the definitions of ‘‘Internet
vendor’’ and ‘‘Mobile vendor’’ in
alphabetical order; and
■ h. Revise the definitions of ‘‘Routine
monitoring’’ and ‘‘Vendor’’.
The revisions and additions read as
follows:
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■
■
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Definitions.
*
*
*
*
Above-50-percent vendor means any
type of vendor that derives more than 50
percent of its annual food sales revenue
from WIC food instruments, and new
vendor applicants expected to meet this
criterion under guidelines approved by
FNS.
*
*
*
*
*
Brick-and-mortar vendor means a
type of vendor authorized to provide
authorized supplemental foods to
participants through transactions at a
single, physical, fixed location. All
transactions that take place at the brickand-mortar vendor will be assigned to
that vendor.
Cash-value benefit means a type of
electronic benefit that is a fixed-dollar
amount used to obtain authorized fruits
and vegetables.
Cash-value voucher means a fixeddollar amount check, voucher, or other
document which is used to obtain
authorized fruits and vegetables.
*
*
*
*
*
Compliance buy means a covert
investigation in which a representative
of the Program poses as a participant,
parent or caretaker of an infant or child
participant, or proxy, transacts food
instruments, cash-value vouchers, or
electronic benefits, and does not reveal
during the visit their identity as a
program representative.
*
*
*
*
*
Electronic benefit transfer (EBT)
means a benefit delivery method that
permits electronic access to WIC food
benefits using a card or other electronic
benefit access device or technology
approved by the Secretary.
Electronic benefits mean the WIC
benefits for supplemental foods
prescribed to a participant and
contained within the participant’s
benefit balance.
*
*
*
*
*
Food instrument means a paper
voucher, check, coupon, other
document; or an EBT card or other
electronic benefit access device or
technology that is used to obtain
supplemental foods.
*
*
*
*
*
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Respondents
707
1,193
486
194
194
0
Time burden
1,189
1,189
0
Home food delivery contractor means
a business entity that contracts directly
with a State agency to deliver
authorized supplemental foods to a
location designated by the participant or
State agency under a home food
delivery system.
*
*
*
*
*
Internet vendor means a type of
vendor authorized to provide authorized
supplemental foods to participants
through internet-based transactions.
*
*
*
*
*
Mobile vendor means a type of vendor
authorized to provide authorized
supplemental foods to participants
through transactions that take place at a
truck, bus, pushcart, or other mobile
vehicle.
*
*
*
*
*
Routine monitoring means overt
monitoring during which program
representatives identify themselves to
vendor personnel.
*
*
*
*
*
Vendor means a business entity
authorized by the State agency to
provide authorized supplemental foods
to participants under a retail food
delivery system. Each vendor with a
unique SNAP authorization number
must be authorized separately. For
vendors that are not SNAP authorized,
each single, separate location
constitutes a unique vendor from other
store locations and must be authorized
separately. A vendor providing
supplemental foods through any means
other than a single, physical, fixed
location must be authorized separately
from any related brick-and-mortar
vendors.
*
*
*
*
*
■ 3. In § 246.3:
■ a. Revise paragraph (e)(5); and
■ b. Redesignate paragraph (e)(6) as
paragraph (e)(7) and add a new
paragraph (e)(6).
The revision and addition read as
follows:
§ 246.3
Administration.
*
*
*
*
*
(e) * * *
(5) For food delivery system
management, one full-time or equivalent
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staff person when the monthly
participation is above 7,000, or a halftime or equivalent staff when the
monthly participation exceeds 500 and
the State agency manages its own
vendor cost containment system. The
staff person will be named WIC Food
Delivery Coordinator and must meet
State personnel standards and
qualifications in paragraph (e)(5)(i) or
(ii) of this section and have the
qualifications in paragraph (e)(5)(iii) of
this section. Upon request, an exception
to these qualifications may be granted
by FNS to allow for existing personnel
or for special circumstances. The WIC
Food Delivery Coordinator must—
(i) Hold a Master’s degree or higher,
with sufficient statistical coursework to
independently analyze and act upon
food delivery data, including vendor
cost containment data, and have at least
one year experience in:
(A) Public health, government
administration, or equivalent; or
(B) A WIC food delivery or vendor
management position that involved data
analysis and vendor cost containment
activities; or
(ii) Hold a Bachelor’s degree or
equivalent educational experience from
an accredited four-year institution, with
sufficient statistical coursework to
independently analyze and act upon
food delivery data, including vendor
cost containment data; and have at least
three years of experience in:
(A) Public health, government
administration, or equivalent; or
(B) A WIC food delivery or vendor
management position that involved data
analysis and vendor cost containment
activities; and
(iii) Have demonstrated proficiency in
at least one of the following: Program
management skills; experience
coordinating with information
technology contractors; or experience
with external stakeholder engagement.
(6) To ensure the State agency’s
operations are participant-centered and
comply with Federal requirements, one
full-time or equivalent staff person
designated when the monthly
participation is above 7,000, or a halftime or equivalent staff when the
monthly participation exceeds 500. The
staff person will be named WIC
Customer Service Coordinator and will
be responsible for improvements related
to participant-facing activities and
technologies. The WIC Customer
Service Coordinator must meet State
personnel standards and qualifications
in paragraph (e)(6)(i) or (ii) of this
section and have the qualifications in
paragraph (e)(6)(iii) of this section.
Upon request, an exception to these
qualifications may be granted by FNS to
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allow for existing personnel or for
special circumstances. The WIC
Customer Service Coordinator must—
(i) Hold a Master’s degree or higher,
and have at least one year experience in:
(A) Public health, government
administration, or equivalent; product
or technology management; acquisitions
management; or
(B) A position focused on innovation
or modernization with similar
complexities to the WIC Program; or
(ii) Hold a Bachelor’s degree or
equivalent educational experience from
an accredited four-year institution and
have at least three years of experience
in:
(A) Public health, government
administration, or equivalent; product
or technology management; acquisitions
management; or
(B) A position focused on innovation
or modernization with similar
complexities to the WIC Program; and
(iii) Have demonstrated proficiency in
at least one of the following: Product
management or product ownership (to
include owning business and product
vision of technology systems, defining
and measuring project objectives, and/or
communication and collaboration across
cross-functional teams); experience with
user-centered design, agile
development, DevOps, and other
modern technologies, experience
managing information technology
contractors that employ modern
practices; extensive IT or acquisition
management experience; experience
with contract management.
*
*
*
*
*
■ 4. In § 246.4:
■ a. Remove and reserve paragraph
(a)(14)(xv); and
■ b. Revise paragraph (a)(23).
The revision reads as follows:
§ 246.4
State plan.
*
*
*
*
*
(a) * * *
(23) A plan to improve access to the
Program for participants and
prospective applicants, with additional
focus on those who are employed and/
or reside in rural areas. The plan must
identify and address the needs of these
individuals, and must include, at a
minimum, policies and procedures to
minimize the time they must spend
away from work and the distances they
must travel. This plan must include
measures to improve access to the
Program through the remote issuance of
food instruments, cash-value vouchers,
and/or electronic benefits, as applicable,
to participants through means other
than direct participant pick-up,
pursuant to § 246.12(r)(4) and (5). The
State agency must also describe the
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State agency’s policy for approving
transportation of participants to and
from WIC clinics per § 246.14(c)(7). This
plan must describe how the State
agency will ensure the integrity of
Program services and fiscal
accountability.
*
*
*
*
*
■ 5. In § 246.7, revise paragraph
(f)(2)(iv) to read as follows:
§ 246.7
Certification of participants.
*
*
*
*
*
(f) * * *
(2) * * *
(iv) Each local agency using a retail
food delivery system must issue food
instruments, cash-value vouchers, or
electronic benefits, as applicable, to the
participant at the same time as
notification of certification. Such food
instruments, cash-value vouchers, and
electronic benefits must be provided for
the current month or the remaining
portion thereof and must be transactable
immediately upon receipt by the
participant. Local agencies may issue
electronic benefits remotely or mail the
food instruments and cash-value
vouchers with the notification of
certification, as provided in
§ 246.12(r)(4) and (5).
*
*
*
*
*
■ 6. In § 246.12:
■ a. Revise paragraph (b);
■ b. Revise the third sentence of the
introductory text of paragraph (g)(4),
paragraphs (g)(4)(ii)(B) and (g)(5), the
first sentence of paragraph (g)(8), and
the last sentence of paragraph (g)(9);
■ c. Revise the second sentence of
paragraph (h)(1)(i) and paragraphs
(h)(3)(ii), (v), and (vi);
■ d. Add paragraphs (h)(3)(xxxii) and
(xxxiii);
■ e. Revise paragraphs (j)(5) and
(j)(6)(ii)(B);
■ f. Revise the first sentence of the
introductory text of paragraph (m);
■ g. Revise paragraphs (r)(2) and (4);
■ h. Redesignate paragraphs (r)(5) and
(6) as paragraphs (r)(6) and (7),
respectively, and add a new paragraph
(r)(5);
■ i. Remove the period at the end of
newly redesignated paragraph (r)(6) and
add ‘‘; and’’ in its place;
■ i. Revise paragraphs (v)(1)(iv) and (ix);
■ j. Revise paragraph (x)(2)(iii);
■ k. Add paragraph (x)(4);
■ l. Redesignate paragraphs (bb)(2) and
(3) as paragraph (bb)(3) and (4),
respectively, and add a new paragraph
(bb)(2).
The revisions and additions read as
follows:
§ 246.12
*
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(b) Uniform food delivery systems.
The State agency may operate a
combination of up to three types of food
delivery systems under its jurisdiction—
retail, home food delivery, and direct
distribution. These three food delivery
systems must be procedurally uniform
throughout the jurisdiction of the State
agency and the combination of systems
used must ensure adequate participant
access to supplemental foods. When
used, food instruments must be uniform
within each type of system, except
when the use of non-uniform food
instruments is necessary to meet the
special needs described and approved
in the State agency’s State Plan per
§ 246.4(a)(14)(i), or when transitioning
from one type of food instrument to
another.
*
*
*
*
*
(g) * * *
(4) * * * The State agency must
consider a vendor applicant’s prices for
non-WIC customers or the prices it bids
for supplemental foods, which must not
exceed the price charged to non-WIC
customers. * * *
*
*
*
*
*
(ii) * * *
(B) The analysis of vendor prices to
monitor vendor compliance with
paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and
(g)(4)(iii) of this section and to ensure
State agency policies and procedures
dependent on price data are efficient
and effective. State agencies without
access to electronic benefit redemption
data must collect vendor shelf prices at
least every six months to ensure
compliance with this paragraph
(g)(4)(ii)(B). FNS may grant an
exemption from the requirement to
collect shelf prices if the State agency
demonstrates to FNS’ satisfaction that
an alternative methodology for
monitoring vendor compliance with
paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and
(g)(4)(iii) of this section is efficient and
effective and other State agency policies
and procedures are not dependent on
frequent collection of shelf price data.
Such exemption would remain in effect
until the State agency no longer meets
the conditions on which the exemption
was based, until FNS revokes the
exemption, or for three years, whichever
occurs first; and
*
*
*
*
*
(5) Preauthorization visit. The State
agency must conduct an on-site or
virtual visit prior to or at the time of a
vendor’s initial authorization.
*
*
*
*
*
(8) * * * The State agency may limit
the periods during which applications
for vendor authorization will be
accepted and processed, except that
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applications must be accepted and
processed at least once every five years.
* * *
*
*
*
*
*
(9) * * * In addition, if the State
agency does not have access to
electronic benefit redemption data, the
State agency must collect the vendor
applicant’s current prices for
supplemental foods.
*
*
*
*
*
(h) * * *
(1) * * *
(i) * * * The agreements must be for
a period not to exceed five years. * * *
*
*
*
*
*
(3) * * *
(ii) No substitutions, cash, credit, cash
refunds, or exchanges. The vendor may
provide only the authorized
supplemental foods listed on the paper
food instrument and cash-value voucher
or available in the participant’s benefit
balance.
(A) Except as specified in paragraph
(h)(3)(ii)(C) of this section, the vendor
must not provide unauthorized food
items, nonfood items, cash, or credit
(including rain checks) in exchange for
benefits. The vendor must not provide
cash refunds or permit exchanges for
authorized supplemental foods obtained
with benefits, except for exchanges of an
identical authorized supplemental food
item when the original authorized
supplemental food item is defective,
spoiled, or has exceeded its ‘‘sell by,’’
‘‘best if used by,’’ or other date limiting
the sale or use of the food item. An
identical authorized supplemental food
item means the exact brand, type,
physical form, and size as the original
authorized supplemental food item
obtained and returned by the
participant.
(B) The vendor may provide only the
authorized infant formula which the
vendor has obtained from sources
included on the list described in
paragraph (g)(11) of this section to
participants in exchange for food
instruments specifying infant formula.
(C) During a supply chain disruption,
as defined in section 17(b)(24) of the
Child Nutrition Act of 1966, as
amended, including a supplemental
food product recall, the vendor must
treat all customers, including WIC
participants, parents or caretakers of
infant or child participants, and proxies
the same. This should be reflected in
store recall exchange policies, including
policies related to replacements (which
may include, but are not limited to, the
same product, a substitute product,
store credit, or a cash refund).
*
*
*
*
*
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(v) Purchase price. The vendor must
ensure that the purchase price is
calculated in accordance with the
procedures described in the vendor
agreement. The purchase price must
include only the amount(s) for the
authorized supplemental food items
actually provided, and the WIC
participant, parent or caretaker of an
infant or child participant, or proxy
must be made aware of the total
purchase price of the transaction before
the transaction is completed.
(vi) Signature on paper food
instruments and cash-value vouchers.
For paper food instruments and cashvalue vouchers, the vendor must ensure
the participant, parent or caretaker of an
infant or child participant, or proxy
signs the paper food instrument or cashvalue voucher after the purchase price
is entered.
*
*
*
*
*
(xxxii) Transaction authentication.
The vendor must authenticate
transactions in accordance with the
policies established by the State agency.
(xxxiii) Fees associated with online
ordering. A vendor must not charge the
State agency for fees associated with
online ordering (e.g., delivery, service,
convenience, bag fees). If such fees are
assessed to non-WIC customers using
the same services, WIC participants
must be allowed to pay them using
another tender type.
*
*
*
*
*
(j) * * *
(5) Reporting. The State agency must
send FNS certain vendor, direct
distribution contractor, home food
delivery contractor, farmer, and farmers’
market data containing information
stipulated by FNS via reporting
requirements that will be provided to
WIC State agencies with advance
notification. Reporting requirements
will include required data fields and
data submission timelines, which may
be as frequent as quarterly but not less
than annually based on system
capabilities and reporting needs. Plans
for improvement in the coming year
must be included in the State Plan in
accordance with § 246.4(a)(14)(iv).
(6) * * *
(ii) * * *
(B) A description of the cashier
involved in each transaction, if
applicable;
*
*
*
*
*
(m) * * * Home food delivery
systems are systems in which
authorized supplemental foods are
delivered to a location designated by the
participant or State agency. * * *
*
*
*
*
*
(r) * * *
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(2) Signature requirement. Ensure that
the participant, parent or caretaker of an
infant or child participant, or proxy
signs for receipt of food instruments,
cash-value vouchers, or authorized
supplemental foods, except as provided
in paragraphs (r)(4) and (5) of this
section;
*
*
*
*
*
(4) Paper food instrument and cashvalue voucher pick up. Require
participants, parents and caretakers of
infant and child participants, and
proxies to pick up paper food
instruments and cash-value vouchers in
person when scheduled for in-person
nutrition education or for an in-person
appointment to determine whether
participants are eligible for a second or
subsequent certification period. In all
other circumstances the State agency
may opt to mail paper food instruments
or cash-value vouchers unless FNS
determines that it would jeopardize the
integrity of program services or program
accountability;
(5) EBT card and electronic benefit
issuance. Ensure participants receive
their EBT cards and electronic benefits
in accordance with §§ 246.7(f)(2)(iv) and
246.11(a)(2), without jeopardizing the
integrity of program services or program
accountability. The State agency is
encouraged to remotely issue electronic
benefits and mail EBT cards, when
possible, unless FNS determines that it
would jeopardize the integrity of
program services or program
accountability;
*
*
*
*
*
(v) * * *
(1) * * *
(iv) Transact and redeem cash-value
vouchers or cash-value benefits in
accordance with procedures established
by the State agency. Such procedures
must include:
(A) A requirement for the farmer or
farmers’ market to allow the participant,
parent or caretaker of an infant or child
participant, or proxy to pay the
difference when the purchase price of
fruits and vegetables exceeds the value
of the cash-value vouchers or cash-value
benefits. This is known as a split tender
transaction; and
(B) Procedures to ensure that the WIC
participant, parent or caretaker of an
infant or child participant, or proxy is
made aware of the total purchase price
of the transaction before the transaction
is completed;
*
*
*
*
*
(ix) Offer WIC participants, parents or
caretakers of infant or child
participants, or proxies the same
courtesies as other customers. If fees
associated with online ordering (e.g.,
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delivery, service, convenience, bag fees)
are assessed to non-WIC customers
using the same services, WIC
participants must be allowed to pay
them using another tender type;
*
*
*
*
*
(x) * * *
(2) * * *
(iii) Last date of use. The last date on
which the electronic benefit may be
used to obtain authorized supplemental
foods. This date must be a minimum of
30 days, or in the month of February 28
or 29 days, from the first date on which
it may be used to obtain authorized
supplemental foods except for the
participant’s first month of issuance
when it may be the end of the month or
cycle for which the electronic benefit is
valid. This must be extended, as
applicable, per paragraph (x)(4)(i) of this
section; and
*
*
*
*
*
(4) Return of benefits. If applicable,
the State agency must allow for the
return of electronic benefits to a
participant’s balance when items in an
online order are not fulfilled. The return
of electronic benefits and subsequent
purchase must be linked to one or more
items in the original transaction and
must comply with the following
requirements:
(i) Return of benefits after the last
date of use. When electronic benefits are
returned to a participant’s balance, the
State agency must provide the
participant with no less than 7 calendar
days to transact the returned benefits.
(ii) [Reserved]
*
*
*
*
*
(bb) * * *
(2) The State agency must develop
policies to ensure that each transaction
is authenticated according to standards
established by FNS.
*
*
*
*
*
■ 7. In § 246.14, revise paragraphs
(b)(1)(i) and (c)(4) to read as follows:
§ 246.14
Program costs.
*
*
*
*
*
(b) * * *
(1) * * *
(i) Purchasing supplemental foods in
a retail food delivery system using WIC
benefits and/or acquiring supplemental
foods provided to State or local agencies
or participants, whichever receives the
supplemental foods first in a home food
delivery system or a direct distribution
food delivery system;
*
*
*
*
*
(c) * * *
(4) The cost of administering the food
delivery system, including the cost of
transporting supplemental foods, except
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as prohibited at § 246.12(h)(3)(xxxiii)
and (v)(1)(ix).
*
*
*
*
*
Cynthia Long,
Administrator, Food and Nutrition Service.
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix A—Regulatory Impact
Analysis
Statement of Need
The methods consumers, including those
served by the Special Supplemental
Nutrition Program for Women, Infants, and
Children (WIC), use to purchase food have
changed in response to advances in
technology as well as changes in purchasing
behavior brought on by the COVID–19
pandemic. The Department’s regulations
have not been changed to reflect these
increased options available to consumers. To
ensure that WIC participants have equal
access to available shopping options, with
the expansion of online shopping in the retail
grocery industry and the development of new
payment types, the Department proposes to
remove barriers its current regulations
impose on online shopping and to modernize
certain food delivery regulations in the WIC
Program through this rulemaking. The
proposed measures would complement the
Program’s near-complete transition to
electronic benefit transfer (EBT) and aim to
meet the needs of a modern, data-driven
program that uses current technologies for
food delivery. These changes are expected to
improve nutrition security among WIC
participants by increasing equity and access
to available shopping options.
Background
Introduction of Key Terms
For the purposes of this proposed rule and
analysis, the Department will use the
following definitions:
• ‘‘WIC shopper’’ means a person
shopping using WIC benefits (i.e., a WIC
participant, proxy, or a parent or caretaker of
an infant or child participant).
• ‘‘Online shopping’’ means the general
use of an online, internet-based ordering
system, platform, or site. It can encompass
online ordering with or without internetbased transactions (i.e., the transaction can
occur via the internet, in store, curbside, or
at the point of delivery).
• ‘‘Online ordering’’ means the process a
customer (including a WIC shopper) uses to
select food items for purchase via an internetbased ordering system, platform, or site.
• ‘‘Transaction’’ means the process by
which a WIC shopper exchanges their WIC
benefits for supplemental foods.
• ‘‘internet-based transaction’’ means a
transaction where the WIC payment is
completed through the payment section of
the online ordering system, platform, or site.
This terminology is being used in lieu of
‘‘online transaction’’ to avoid confusion with
transactions that occur using online EBT
technology.
• ‘‘Redemption’’ means the process in
which a vendor submits records of electronic
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benefits for redemption and the State agency
(or its financial agent) makes payment to the
vendor.
Overview of the WIC Program and Shopping
Experience
The WIC Program is administered by 89
WIC State agencies, including the 50 States,
33 Indian Tribal Organizations, the District of
Columbia, and 5 U.S. Territories (American
Samoa, the Commonwealth of the Northern
Mariana Islands, Guam, Puerto Rico, and the
U.S. Virgin Islands). WIC serves to safeguard
the health of low-income pregnant,
breastfeeding, and non-breastfeeding
postpartum individuals, and infants and
children up to age five who are found to be
at nutritional risk. In 2019, WIC participants
included nearly 43 percent of all infants in
the United States,1 and in fiscal year (FY)
2020, WIC served an average of 6.25 million
participants.2
The Department provides Federal grants to
WIC State agencies to provide supplemental
foods, health care referrals, and nutrition
education, including breastfeeding
promotion and support, to WIC participants.
WIC participants typically access
supplemental foods through a retail food
delivery system. In such systems, a WIC
shopper goes to a WIC-authorized vendor
(i.e., a retail store authorized by the State
agency), selects foods available in their
benefit balance, and uses an EBT card to
purchase the items. In FY 2020, there were
approximately 40,000 WIC-authorized
vendors nationwide, and nearly 93 percent of
WIC participants received WIC benefits via
EBT.
Current WIC regulations were written for a
paper-based benefit delivery system and
restrain State agencies from making use of
the opportunities that EBT provides,
including remotely issuing electronic
benefits and transacting those benefits
online. Current regulations that require
participants to pick up food benefits in
person and transact food benefits in the
presence of a cashier pose challenges to
participants with special dietary needs,
limited mobility or access to transportation,
and/or those who live in remote or rural
communities. These requirements also
present unique challenges during disasters or
public health emergencies, such as the
COVID–19 pandemic.
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Key Information Used in the Development of
This Proposed Rule and Analysis
The 2014 Farm Bill (Pub. L. 113–79)
mandated that the Department conduct a
pilot to assess the feasibility and implications
of allowing retailers authorized under the
Supplemental Nutrition Assistance Program
1 U.S. Department of Agriculture, Food and
Nutrition Service, ‘‘National- and State-Level
Estimates of WIC Eligibility and WIC Program
Reach in 2019: Final Report, Volume I,’’ pp. 65, by
Kelsey Farson Gray et al. Project Officer Grant
Lovellette, Alexandria, VA: February 2022.
Available online at: https://fns-prod.azureedge.net/
sites/default/files/resource-files/WICEligibles2019Volume1.pdf.
2 U.S. Department of Agriculture Food and
Nutrition Service, ‘‘WIC Data Tables,’’ 2021.
Available online at: https://www.fns.usda.gov/pd/
wic-program.
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(SNAP) to accept SNAP benefits for online
transactions. The SNAP Online Purchasing
Pilot initially launched in New York in April
2019, then expanded to Washington in
January 2020, followed by Alabama, Oregon,
and Iowa in March 2020, and Nebraska in
April 2020. The onset of the COVID–19
pandemic spurred a rapid expansion of the
pilot across 47 States and the District of
Columbia by early 2021. While online
shopping with SNAP benefits is now
available in nearly all States, WIC shoppers
do not yet have widespread access to online
shopping due in part to barriers under
current WIC regulations.
In September 2020, the Department
awarded a grant to the Gretchen Swanson
Center for Nutrition (GSCN) to develop a
plan for implementing online shopping in
WIC. With extensive stakeholder input,
GSCN developed the Blueprint for WIC
Online Ordering Projects (the ‘‘Blueprint’’),
which was published in June 2021.3 As a part
of the grant agreement, GSCN has since
awarded sub-grants to State agency and
vendor partners to fund four projects that
will test WIC online shopping across seven
geographic States and one Indian Tribal
Organization (ITO).
The Consolidated Appropriations Act for
Fiscal Year 2021 (Pub. L. 116–260)
authorized the Department to establish the
Task Force on Supplemental Foods Delivery
(the ‘‘Task Force’’). The Task Force was
charged with assembling WIC stakeholders to
independently ‘‘study measures to streamline
the redemption of supplemental foods
benefits that promote convenience, safety,
and equitable access to supplemental foods,
including infant formula.’’ The Task Force
submitted its recommendation report to the
Department on September 30, 2021. The
Department was then required to report a
plan to Congress on how the
recommendations would be carried out as
well as whether any legislative changes
would be required.4
The proposed Special Supplemental
Nutrition Program for Women, Infants and
Children (WIC): Online Ordering and
Transactions and Food Delivery Revisions to
Meet the Needs of a Modern, Data-Driven
Program rule is informed by WIC stakeholder
input and recommendations in both the
Blueprint and the final reports of the Task
Force. The Department has also incorporated
lessons learned from the SNAP Online
Purchasing Pilot. The GSCN sub-grant
projects will be evaluated over the next year
to assess the start-up costs required by State
agencies and vendors to operationalize WIC
online shopping and the impact that online
shopping has on key outcomes including
WIC benefit redemption rates. The
Department intends to review the findings
from the GSCN projects and use updated data
to inform future iterations of this initial
3 Gretchen Swanson Center for Nutrition.
‘‘Blueprint for WIC Online Ordering Projects,’’
2021. Available online at: https://
www.centerfornutrition.org/wic-online-ordering.
4 More information on the WIC Task Force on
Supplemental Foods Delivery, including links to
both the Departmental and Congressional reports, is
available online at: https://www.fns.usda.gov/wic/
task-force-supplemental-foods-delivery.
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11537
impact analysis throughout the rulemaking
process, especially on implementation costs
and redemption rate impacts.
Summary of Provisions
The proposed rule would update WIC
regulations to remove current regulatory
barriers to online ordering and transactions
in WIC, streamline and modernize food and
benefit delivery options for WIC participants,
and introduce measures intended to meet the
needs of a modern, data-driven program that
uses current technologies for food delivery.
Specifically, the rule proposes the following
changes:
• Remove barriers to online ordering and
internet-based transactions.
Æ Allow vendors and WIC shoppers to
complete internet-based transactions and
allow State agencies to explore and identify
options to authenticate EBT transactions that
are appropriate for the specific technologies
they choose to adopt.
Æ Allow State agencies to authorize new
types of vendors to give WIC participants
more shopping options by:
D Creating definitions for ‘‘brick-andmortar,’’ ‘‘internet,’’ and ‘‘mobile’’ vendors.
D Removing language from the definition
of ‘‘vendor’’ that currently only allows State
agencies to authorize vendors with a ‘‘single,
fixed location’’ (i.e., brick-and-mortar
vendors).
Æ Allow vendors to return benefits to a
participant’s benefit balance when an item
requested through an online order cannot be
fulfilled.
Æ Allow State agencies to develop virtual
methods of oversight.
Æ Permit WIC shoppers to pay for fees
related to online shopping (e.g., delivery,
service, convenience, bag fees) using a
separate tender type if such fees are assessed
to non-WIC customers using the same
services.
• Streamline and modernize WIC food
delivery.
Æ Permit the remote issuance of electronic
benefits to a participant’s benefit balance and
clarify the definitions of ‘‘electronic benefits’’
and ‘‘cash-value benefit’’ as separate and
distinct from paper food instruments.
Æ Add ‘‘other electronic benefit access
device or technology’’ to the definition of a
‘‘food instrument.’’
Æ Allow State agencies to develop and test
new WIC food instrument types.
Æ Streamline food delivery operations by
recognizing that EBT data are a sufficient
replacement for routine shelf price
collection.
Æ Extend vendor application and
agreement periods from three to five years.
Æ Allow State agencies using a home food
delivery system (non-retail) to ship
supplemental foods to a location designated
by participants (e.g., Alaska Natives who do
not have at-home mail service).
• Meet the needs of a modern, data-driven
program.
Æ Update reporting requirements for
Federal oversight to align with the transition
in reporting systems from The Integrity
Profile (TIP) to the Food Delivery Portal
(FDP).
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Æ Create two new WIC State agency staff
positions to reflect staffing needs of a
modern, innovative program.
Summary of Impacts
• Costs
The Department estimates that the
provisions under this proposed rule would
collectively result in a total of $404 million
in costs and Federal transfers over 5 years
from FY 2024 through FY 2028 (Table 1).
This estimate includes increases in Federal
Government WIC spending, increased net
costs to WIC State agencies, and a savings for
WIC retail vendors.
The Department estimates that allowing
WIC online shopping will increase Federal
WIC food spending, in the form of transfers,
by a total of $392 million over 5 years. This
is driven by an understanding that shoppers
typically pay higher prices for online
groceries and an expectation that online
shopping would moderately increase WIC
benefit redemption by making the WIC
shopping experience more convenient for
some participants.
TABLE 1—SUMMARY OF ESTIMABLE IMPACTS ON TRANSFERS AND COSTS
[FY 2024–2028]
Fiscal year
(millions)
2024
2025
2026
2027
2028
Total
Federal Transfers
Impact of online shopping on Federal
WIC food spending ...............................
$5.6
$43.7
$79.0
$121.9
$142.0
$392.1
6.0
7.1
5.1
26.9
¥10.3
11.9
¥10.6
12.3
¥10.9
12.7
¥51.5
54.7
State Agency Costs
Systems development and maintenance
for online shopping ...............................
Changes to reporting and recordkeeping
burden ..................................................
New State agency staff positions ............
I
1.1
7.5
¥9.7
5.9
¥10.0
11.9
I
I
WIC Vendor Costs
Changes to reporting burden ...................
¥3.6
¥3.6
¥3.7
¥3.8
¥3.9
¥18.4
Total Estimated Impact .....................
¥0.6
49.4
83.0
127.0
145.0
403.8
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Notes: All monetary figures are adjusted for annual inflation.
The Department estimates that the
proposed rule would also result in around
$30 million in net WIC State agency costs
from FY 2024 to FY 2028. State agency costs
include nearly $27 million in total 5-year
expenses required to update State agency
systems to enable online transaction of WIC
electronic benefits and $55 million in total 5year costs for increased staffing expenses due
to the proposed changes to State agency
staffing requirements. State agency costs
would be partially offset by a large reduction
in State agency reporting burden and
recordkeeping burden, which is estimated to
result in a savings of $52 million over 5 years
and is largely attributable to the removal of
shelf price collection requirements for EBT
State agencies and the extension of vendor
agreement and application periods. These
State agency costs are considered allowable
expenses for State agencies under their
annually awarded Nutrition Services and
Administration (NSA) grants. The
Department expects that State agencies
would be able to absorb the costs associated
with implementing the provisions under this
proposed rule with current NSA funds
without any increase in the level of NSA
grants.
Finally, the removal of shelf price
collection requirements and the extension of
vendor application and agreement periods
are also expected to significantly reduce
burden on WIC vendors. The Department
estimates that the reductions in vendor
reporting burden under the proposed rule
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would save WIC vendors $18 million over 5
years.
• Benefits
The provisions under this proposed rule
aim to modernize the ways that WIC
participants can receive and transact their
electronic benefits, creating opportunities to
improve equity and accessibility in the
Program as a result. An estimated 14 percent
of the U.S. population lives in low-income
census tracts with limited access to food
stores,5 and 21 percent of WIC participants
report using a means of transportation other
than their own personal car to travel to a
vendor to use their WIC benefits.6 By
comparison, 95 percent of higher income
households (above 185 percent of the Federal
poverty line) use their own vehicle to travel
to a grocery store.7 Once at the vendor,
participants also report challenges shopping
for WIC foods. Recent USDA survey data
indicate that finding the right WIC-approved
products in stores, WIC-approved products
being out of stock, and feeling embarrassed
shopping for WIC foods are some of the most
cited challenges among WIC participants
who report difficulties shopping for WIC
supplemental foods.8 Online shopping may
alleviate some of these issues for WIC
participants and has the potential to provide
benefits during supply chain disruptions.
Enabling online shopping in WIC under
this proposed rule is expected to reduce
barriers to WIC services, ensure that WIC
participants have an equitable shopping
5 USDA Economic Research Service. ‘‘State-Level
Estimates of Low Income and Low Access
Populations.’’ Last updated September 30, 2019.
Available online at: https://www.ers.usda.gov/dataproducts/food-access-research-atlas/state-levelestimates-of-low-income-and-low-accesspopulations/.
6 Magness, A., Williams, K. Gordon, E., Morrissey,
N., Papa, F., Garza, A., Okyere, D., Nisar, H.,
Bajowski, F., & Singer, B. (2021). Third National
Survey of WIC Participants: WIC Participant
Satisfaction and Shopping Experience: Brief Report
#6. Prepared by Capital Consulting Corporation and
2M Research Services. Contract No. AG–3198–K–
15–0077. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of
Policy Support, Project Officer: Karen CastellanosBrown. Available online at: https://
www.fns.usda.gov/wic/third-national-survey-wicparticipants.
7 Ver Ploeg, Michele, Lisa Mancino, Jessica E.
Todd, Dawn Marie Clay, and Benjamin Scharadin.
Where Do Americans Usually Shop for Food and
How Do They Travel To Get There? Initial Findings
From the National Household Food Acquisition and
Purchase Survey, EIB–138, U.S. Department of
Agriculture, Economic Research Service, March
2015. Available online at: https://
www.ers.usda.gov/publications/pub-details/
?pubid=79791.
8 Gleason, S., Wroblewska, K., Trippe, C., Kline,
N., Meyers Mathieu, K., Breck, A., Marr, J., Bellows,
D. (2022). WIC Food Cost-Containment Practices
Study. Prepared by Insight Policy Research,
Contract No. AG–3198–C–15–0022. Alexandria, VA:
U.S. Department of Agriculture, Food and Nutrition
Service, Office of Policy Support, Project Officer:
Ruth Morgan. Available online at: https://
www.fns.usda.gov/wic/wic-food-cost-containmentpractices-study.
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experience as the retail marketplace
innovates, and increase participant purchases
of supplemental foods. Online shopping may
also expand participant choice in
supplemental foods, particularly for
authorized supplemental food substitutions
needed to meet certain dietary restrictions,
that may not be readily available at the
closest WIC-authorized grocery stores. These
regulatory changes would ensure that WIC
participants have the ability to transact
benefits online as an increasing share of U.S.
consumers prefer to shop for groceries
online. The proposed rule would further
make WIC more convenient and accessible by
encouraging State agencies to remotely issue
electronic benefits and mail EBT cards
whenever possible, potentially reducing the
number of clinic visits that WIC participants
are required to make. The proposed rule also
includes provisions that would streamline
and modernize WIC food delivery by
promoting innovation and ensuring that State
agencies have enough qualified staff meet the
needs of a modern, data-driven program.
These provisions provide necessary measures
to ensure that State agencies can deliver a
more efficient and effective program for WIC
participants.
Section-by-Section Analysis
A. Baseline for Cost Estimate
Baseline Federal Costs
The total projected baseline Federal cost of
WIC absent the proposed rule for FY 2024
11539
through FY 2028 is shown in Table 2 below.
At the Federal level, WIC expenditures are
broadly split between grants to State agencies
to fund food benefits (‘‘food costs’’) and NSA
grants to fund all approved non-food
expenses (‘‘NSA costs’’). WIC food costs are
a function of the number of participants
receiving each food package, the retail prices
of supplemental foods, the quantity of WIC
foods prescribed to each participant, and the
percentage of WIC benefits used by
participants to purchase the supplemental
foods that WIC-authorized vendors have
submitted for reimbursement from the State
agency (known as the ‘‘redemption rate’’).
TABLE 2—PROJECTED BASELINE FEDERAL WIC SPENDING
[FY 2024–2028]
Fiscal year
(millions)
2024
2025
2026
2027
2028
Total
Total Food Costs .....................................
Total Nutrition Services & Administration
Costs ....................................................
$3,434.9
$3,595.9
$3,766.8
$3,948.1
$4,140.6
$18,886.4
2,157.6
2,224.5
2,293.4
2,364.5
2,437.8
11,477.8
Total Federal Spending ....................
5,592.5
5,820.4
6,060.2
6,312.6
6,578.4
30,364.1
Note: Totals may not sum due to rounding.
Participation
This analysis bases WIC participation
projections on participation changes
observed during FY 2020 and FY 2021
(including when program flexibilities were
implemented in response to the COVID–19
pandemic); specifically, a fixed level of
participation among women and infants and
annual increases in participation among
children. Accordingly, growth in child
participation is estimated at 2.08 percent
annually between FY 2021 and FY 2023 and
to rise to 4.82 percent annual growth between
FY 2023 and FY 2026 before leveling off at
the higher participation level in FY 2027 and
FY 2028. In 2019, the most recent data
available, only 45 percent of eligible children
participated in WIC. The share of eligible
children that do not participate in WIC is
considered the ‘‘coverage gap.’’ 9 The
estimated increases in child participation
used in this analysis reflect a projected
narrowing of the coverage gap among WICeligible children as a result of current and
future efforts to improve child retention in
WIC. While declining birth rates in the U.S.
have contributed to a decrease in women and
infants enrolling in WIC since 2009, the
Department projects participation of women
and infants to level off due to future outreach
efforts to increase participation among the
eligible population.10
TABLE 3—BASELINE WIC PARTICIPATION PROJECTIONS
[FY 2024–2028]
Fiscal year participants
2024
2025
2026
2027
2028
Women .................................................................................
Infants ..................................................................................
Children ................................................................................
1,381,305
1,468,664
3,714,820
1,381,305
1,468,664
3,894,002
1,381,305
1,468,664
4,081,826
1,381,305
1,468,664
4,081,826
1,381,305
1,468,664
4,081,826
Total Participants ..........................................................
6,564,789
6,743,971
6,931,795
6,931,795
6,931,795
Source: Internal USDA estimates.
• Key Assumptions
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Adoption of Online Ordering
While the proposed rule would remove
barriers to allow for online shopping in WIC,
9 Gray K., Balch-Crystal E., Giannarelli, L., and
Johnson, P. (2022). National- and State-Level
Estimates of the Special Supplemental Nutrition
Program for Women, Infants, and Children (WIC)
Eligibility and WIC Program Reach in 2019.
Prepared by Insight Policy Research, Contract No.
AG–3198–D–16–0095. Alexandria, VA: U.S.
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it would not require State agencies to
implement online shopping. However, due to
widespread interest in improving the WIC
shopping experience, particularly through
online shopping, this analysis assumes that
by FY 2027, all 89 State agencies will have
implemented WIC online shopping for WIC
participants. However, like the adoption of
EBT, the analysis assumes that online
shopping will gradually roll out across State
Department of Agriculture, Food and Nutrition
Service, Office of Policy Support, Project Officer:
Grant Lovellette. Available online at:
www.fns.usda.gov/research-analysis.
10 Although birthrates increased slightly (by about
1 percent) between 2020 and 2021, births continue
to be below 2019 levels. Source: Martin JA,
Hamilton BE, Osterman MJK. Births in the United
States, 2021. NCHS Data Brief, no. 442. Hyattsville,
MD: National Center for Health Statistics. 2022.
DOI: https://dx.doi.org/10.15620/cdc:119632.
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agencies between FY 2024 and FY 2027,
covering around half of WIC State agencies
by FY 2025. State agencies may vary in the
time it takes to implement online shopping
systems for many reasons, including
contracting requirements with technology
partners, the need to coordinate changes with
Management Information Systems (MIS), or
resource allocation constraints due to other
State agency priorities. The Department also
recognizes that implementation of online
shopping in WIC depends upon authorized
vendors offering this service to WIC
participants. Because the Department is
unable to predict at this time which State
agencies will be the earliest adopters of
online shopping, the analysis also assumes
an even distribution of WIC participants
across these State agencies (i.e., the 51
percent of WIC State agencies offering online
shopping in FY 2025 will also cover 51
percent of WIC participants).
TABLE 4—ESTIMATED NUMBER OF STATE AGENCIES USING WIC ONLINE SHOPPING
[FY 2024–2028]
Fiscal year
2024
Number of State Agencies ...................................................
(% of Total) ..........................................................................
2025
7
(8%)
2026
45
(51%)
2027
68
(76%)
2028
89
(100%)
89
(100%)
Notes: The 7 State agencies expected to offer online shopping in FY 2024 represent the 7 State agencies currently participating in the Gretchen Swanson Center for Nutrition WIC Online Purchasing Sub-grant Projects.
In addition to estimating the number of
State agencies offering online shopping in
WIC, this analysis must also estimate how
many WIC participants will transact any
benefits online and, among online WIC
shoppers, what share of their benefits will be
transacted online. A recent nationally
representative poll conducted in July 2021
found that 23 percent of Americans reported
ordering groceries online for pickup or
delivery at least once a month.11 Online
grocery sales are estimated to have accounted
for about 12 percent of total grocery sales in
2021, in terms of total revenue, with their
market share expected to grow to around 19
percent by 2024 (a 53 percent increase).12 By
the end of FY 2021, just over 8 percent of
SNAP households nationwide made at least
one SNAP purchase online in a given month,
and online redemptions accounted for just
under 5 percent of the total dollar amount of
SNAP redemptions between August and
September 2021.13 This analysis assumes
that SNAP shoppers are a better proxy for
WIC shoppers than the general population
but also estimates that growth in online
shopping among all shoppers will follow at
least the same 53 percent total increase that
Mercatus predicts for the general population
between 2021 and 2024. Accordingly, by
increasing the 8 percent of SNAP households
redeeming benefits online in 2021 by 53
percent total between 2021 and 2024, the
Department projects that among State
agencies operating online shopping in WIC,
12 percent of WIC participants will transact
at least some of their benefits online in FY
2024. As online grocery shopping continues
to gain popularity, the share of WIC
participants shopping online is expected to
increase each year between FY 2024 and FY
2028 within participating State agencies. The
Mercatus report also projects around a 13
percent relative increase in the online
grocery shopping market share between 2024
and 2025. The Department applies the same
13 percent year-to-year growth rate to project
the growth of WIC online shopping between
FY 2024 and FY 2028. Beginning in FY 2024,
this 13 percent annual growth rate amounts
to about a 2-percentage point increase each
year in the share of WIC participants, within
participating State agencies, using at least
some of their WIC benefits online between
FY 2024 and FY 2028 (see Table 5).
TABLE 5—ESTIMATED USE OF WIC ONLINE SHOPPING WHERE AVAILABLE
[FY 2024–2028]
Fiscal year
Percentage of WIC participants expected to transact at least some benefits online
2024
2025
2026
2027
2028
12%
14%
16%
18%
20%
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Notes: Estimates for each year reflect the percentage of participants that will use WIC online shopping only in State agencies where it is available at that time.
Even among online WIC shoppers, it is
reasonable to assume some level of variation
in exactly what percentage of their WIC
benefits are transacted online. Thus, this
analysis assumes that the average online WIC
shopper will transact about half of their
benefits online in a given month. This is
consistent with initial estimates of SNAP
online shopping, based on the share of SNAP
benefits redeemed compared to the share of
SNAP households shopping online after
adjusting for estimated variations in in-store
and online retail prices (described later in
this analysis).
• Cost, Participant, Vendor, and State
Agency Impacts
11 Brenan, M. ‘‘More in U.S. Grocery Shopping
Online, Fewer Dining Out.’’ Gallup, 10 August
2021. Available online at: https://news.gallup.com/
poll/353090/grocery-shopping-online-fewerdining.aspx.
12 Mercatus. ‘‘eGrocery Transformed: Market
projections and insight into online grocery’s
elevated future,’’ 2021.
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• Remove Barriers to Online Ordering and
Internet-Based Transactions
Discussion
While use of online grocery shopping has
expanded in recent years, including among
SNAP shoppers, WIC participants do not
have widespread access to online shopping
with WIC benefits due in part to barriers in
current WIC regulations. Current regulations
require that WIC transactions occur in the
presence of a cashier, allowing WIC shoppers
to either sign a paper food instrument or
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enter a Personal Identification Number (PIN)
for an EBT transaction. While some States
agencies, including one ITO, have recently
adopted WIC online ordering, this in-person
requirement has prevented the transaction of
WIC benefits from occurring online. Current
rules also typically require WIC vendors to
have a single, fixed location and require most
vendor oversight activities to occur through
on-site visits to those locations. The
Department proposes several changes under
this rule to address these and other
regulatory barriers to allow WIC shoppers
and WIC-approved vendors to complete
13 Based on internal, unpublished data on
monthly online SNAP redemptions in FY 2021.
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transactions online. Specifically, the
proposed rule would:
• Allow vendors and WIC shoppers to
complete internet-based transactions by
removing the requirement that participants
complete WIC transactions in the presence of
a cashier. Associated new provisions would
allow State agencies to explore and identify
options to authenticate EBT transactions that
are appropriate for the specific technologies
they choose to adopt.
• Allow State agencies to authorize new
types of vendors to give WIC participants
more shopping options by:
Æ Creating definitions for ‘‘brick-andmortar,’’ ‘‘internet,’’ and ‘‘mobile’’ vendors to
distinguish vendors operating solely online
from stores with a single, fixed location. The
definitions for ‘‘internet vendor’’ and
‘‘mobile vendor’’ are based on SNAP’s
definitions of ‘‘internet retailer’’ and ‘‘houseto-house trade route,’’ respectively, to ensure
that cross-program integrity efforts continue
without interruption.
Æ Removing language from the definition
of ‘‘vendor’’ that currently only allows State
agencies to authorize vendors with a ‘‘single,
fixed location’’ (i.e., brick-and-mortar
vendors).
• Allow vendors to return benefits to a
participant’s benefit balance when an item
requested through an online order cannot be
fulfilled to ensure that WIC benefits are not
lost in these situations.
• Allow State agencies to develop virtual
methods of oversight to ensure their
monitoring and investigative methods are
appropriate for the types of vendors
authorized (e.g., internet vendors) and
current environmental circumstances (e.g.,
during a pandemic).
• Permit WIC shoppers to pay for fees
associated with online shopping by clarifying
that WIC-authorized vendors, farmers, and
farmers’ markets must not charge the State
agency for fees associated with online
ordering (e.g., delivery, service, convenience,
and bag fees). If such fees are assessed to
non-WIC customers using the same services,
WIC participants must be allowed to pay
them using another tender type. The
Department is requesting comment on
whether State agencies should have the
option to pay for such fees with either (1)
non-Federal funding at State agency
discretion and/or (2) Federal funding in
situations where it is deemed necessary to
meet special needs (e.g., participant access or
other needs as identified by the State
agency).
Cost
Impact on Federal WIC Food Costs
Over the 5 years between FY 2024 and FY
2028, the rollout of WIC online shopping
under this proposed rule is expected to
increase Federal WIC food costs by $392
million in total. The effect of allowing online
shopping in WIC on Federal food costs is a
function of both the effect on total WIC
redemptions and the effect on the prices of
WIC foods. When estimating the impact of
online shopping on WIC food costs under
this proposed rule, the analysis collectively
considers the effect of each provision
required to operate a modern online retail
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system, including allowing electronic
benefits to be returned to a participant’s
benefit balance when an online order cannot
be fulfilled. Because these provisions all
contribute to enabling online shopping, the
Department does not provide separate
estimates for each provision.
On average, WIC participants do not use all
their WIC benefits each month. WIC benefit
redemption rates vary by food category. For
example, in 2020, the estimated redemption
rate was 44 percent for whole wheat bread
and whole grains and about 72 percent for
fruits and vegetables purchased with the
cash-value benefit (CVB).14 WIC participants
report various barriers to using WIC benefits
that impact these redemption rates, both in
terms of traveling to a WIC-authorized
vendor and using their benefits once there.
One USDA study, which surveyed a
representative sample of WIC participants
from 12 State agencies, found that 90 percent
of respondents reported experiencing at least
one negative shopping experience while
transacting their WIC benefits in stores.15
Among those, around 77 percent reported
they had selected the wrong item and were
sent back at checkout to find the correct WIC
item, around 72 percent found a WIC item to
be out of stock or unavailable in the correct
container size, and around 34 percent
reported they had felt embarrassed while
using WIC benefits in stores. Traveling to a
WIC-authorized vendor also presents
challenges to some participants. In the same
study, when surveying former WIC
participants from three State agencies, 15
percent of respondents reported that they
lacked convenient access to a WICauthorized vendor.
Based on the opportunities that online
shopping presents to address many of the instore barriers and challenges that WIC
shoppers report, as described above, the
Department estimates that participants who
use any WIC benefits online will, on average,
increase their overall benefit redemption by
10 percent (e.g., a participant who previously
purchased $30 worth of WIC benefits would
purchase $33 under this proposed rule),
independent of price variations. This
analysis estimates an overall increase to
purchases, rather than food category level
impacts, because sufficient data are not
available to project whether some food items
will be impacted by online shopping more
than others.
In order to better understand and estimate
the effect online shopping may have on
redemption rates, the GSCN sub-grant
projects will evaluate the impacts of WIC
online shopping on redemption rates. The
Department has provided a range of cost
14 Based on internal USDA data collected in
March 2021 covering monthly WIC redemptions for
all months in calendar year 2020.
15 Gleason, S., Wroblewska, K., Trippe, C., Kline,
N., Meyers Mathieu, K., Breck, A., Marr, J., Bellows,
D. (2022). WIC Food Cost-Containment Practices
Study. Prepared by Insight Policy Research,
Contract No. AG–3198–C–15–0022. Alexandria, VA:
U.S. Department of Agriculture, Food and Nutrition
Service, Office of Policy Support, Project Officer:
Ruth Morgan. Available online at: https://
www.fns.usda.gov/wic/wic-food-cost-containmentpractices-study.
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11541
estimates at different levels of redemption in
the Uncertainties section of this analysis.
These estimates will be updated, as
appropriate, in future cost analyses later in
the rulemaking process once redemption data
from the GSCN projects become available.
The Department also invites public comment
on how online shopping in WIC may affect
redemption rates.
The Federal WIC food costs associated
with the proposed rule are also expected to
be impacted by differences in the retail prices
of online groceries compared to in-store
options. A recent analysis published by
Information Resources, Inc. (IRI), a retail
market research firm, estimates that in May
2021 online grocery shoppers paid about 13
percent higher per unit retail prices (i.e.,
before separate delivery or other convenience
fees) for fresh foods online compared to
similar in-store products.16 While online and
in-store price differences tend to vary by
vendor, these higher prices often reflect the
added convenience costs of assembling
online orders and processing internet-based
transactions, which many retailers include
within the unit costs of food items rather
than charging separately (unlike delivery
fees, which are typically separate and cannot
be paid for with WIC benefits). WIC benefits
are redeemed on a per unit basis (e.g., one
gallon of milk or one dozen eggs) rather than
as a set dollar amount, with the exception of
the CVB. WIC shoppers are not expected to
be price sensitive when using WIC benefits,
and thus higher prices are expected to
directly increase the Federal cost of the WIC
food package. For this analysis, the
Department uses IRI’s recent estimate to
project that, on average, WIC food items
purchased online will be about 13 percent
more expensive than in-store prices.
Although the CVB is transacted as a set dollar
amount, rather than per food item like other
WIC foods, the Department estimates the
same 13 percent price increase for online
CVB redemptions, on average.17 Because WIC
participants transact around 72 percent of
their CVB in an average month, a 13 percent
increase in food prices online may be
reflected as an apparent increase in the CVB
redemption rate, as participants would need
to use 13 percent more of their CVB to
purchase the same amount of fruits and
vegetables that they would in brick-and16 The term ‘‘fresh foods’’ in this context includes
items classified by retailers as bakery, dairy, deli,
fresh produce, fresh meat and seafood, and meat
alternatives. Although some WIC approved foods
fall outside of this definition (including infant
formula), this analysis applies the estimated 13
percent increase in online prices as an average
across all WIC food types due to a lack more
detailed and available industry data on food
specific variations. For information see: Information
Resources, Inc. and 210 Analytics. ‘‘Grocery ECommerce—Opportunity Remains,’’ 2021.
Available online at: https://www.iriworldwide.com/
IRI/media/Library/IRI-Ecommerce-Update-May2021.pdf.
17 Note that these estimates and the analysis are
based on the average WIC shopper redeeming 72
percent of their CVB prior to the proposed rule.
WIC shoppers that currently spend all or nearly all
of their CVB may find that they cannot purchase the
same quantity of fruits and vegetables online as
they can afford in brick-and-mortar stores.
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Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Proposed Rules
mortar vendors. The Department will
continue to collect data on price differences
as it becomes available. The Department
presents a range of cost estimates based on
different pricing variations in the
Uncertainties section of this analysis.
TABLE 6—PROJECTED UPTAKE OF ONLINE SHOPPING AND IMPACT ON MONTHLY PER PERSON FOOD PACKAGE COST
[FY 2024–2028]
Fiscal year
2024
Projected number of State agencies offering WIC online
shopping ...........................................................................
Percentage of participants making at least one WIC purchase online, within participating State agencies ............
Average percentage of WIC benefits used online among
online shoppers ................................................................
Expected increase in total redemptions among online WIC
shoppers ...........................................................................
Expected increase in online retail food prices, compared
to in-store .........................................................................
Total WIC participation ........................................................
Number of participants making at least one WIC purchase
online ................................................................................
Baseline monthly per person WIC food cost a ...............
Projected monthly WIC food cost among online shoppers a b ........................................................................
2025
2026
2027
2028
7
45
68
89
89
12
14
16
18
20
50
50
50
50
50
10
10
10
10
10
13
6,564,789
13
6,743,971
13
6,931,795
13
6,931,795
13
6,931,795
61,960
$43.60
477,382
$44.43
847,392
$45.28
1,247,723
$47.46
1,386,359
$49.78
51.08
52.05
53.05
55.60
58.32
Notes:
a Food cost inflation is estimated for FY 2024 through FY 2028 using the Office of Management and Budget’s (OMB) food at home projections
used in the most recent President’s Budget request.
b The projected monthly food cost among online shoppers includes both in-store and online shopping with the assumption that half of benefits
are transacted in-store and half online. The half of benefits transacted online are then increased by 13 percent to reflect the projected increase in
prices for online food items.
The projected 10 percent increase in total
redemptions among online shoppers and the
estimated 13 percent increase in retail unit
prices for online food items would
collectively increase the expected monthly
per person WIC food costs from a baseline of
$43.60 among exclusively in-store shoppers
to $51.08 among average online shoppers in
FY 2024.18 Table 6 summarizes the expected
uptake of WIC online shopping among
participants and provides annual estimates
for monthly per person food package costs,
adjusted for annual inflation.
The cost impact of online shopping will
continue to increase as more WIC State
agencies offer online shopping and as use
among WIC shoppers in those State agencies
increases. In FY 2024, online shopping is
only expected to increase total Federal WIC
food spending by about $5.6 million because
the Department estimates that just 12 percent
of participants in seven State agencies will
transact WIC benefits online. The annual cost
is expected to rise to $121.9 million in FY
2027 and $142.0 million in FY 2028 when
WIC online shopping is expected to be
offered by all 89 State agencies and used by
an increasing share of participants (see Table
7).
TABLE 7—ESTIMATED IMPACT OF ONLINE SHOPPING ON FEDERAL WIC FOOD SPENDING
[FY 2024–2028]
Fiscal year (millions)
2024
Total food costs, online shoppers ............
Total food costs, in-store shoppers .........
Total food costs, all shoppers ..................
Baseline food costs without online shopping .......................................................
Increase in WIC food costs due to online
shopping ...............................................
2025
2026
2027
2028
Total
$38.0
3,402.5
3,440.5
$298.2
3,341.4
3,639.6
$539.4
3,306.3
3,845.7
$832.5
3,237.4
4,070.0
$970.1
3,312.5
4,282.6
$2,678.3
16,600.1
19,278.4
3,434.9
3,595.9
3,766.8
3,948.1
4,140.6
18,886.4
5.6
43.7
79.0
121.9
142.0
392.1
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Notes: All monetary estimates are adjusted for annual inflation.
Online Shopping System Development and
Maintenance
Spending associated with EBT system
development and maintenance is estimated
to increase WIC State agency costs by around
$27 million in total over 5 years between FY
2024 and FY 2028. Implementation of WIC
online shopping would initially require new
costs to State agencies associated with
systems design, development, and testing of
new processes for transacting WIC electronic
benefits online. In addition to these initial
costs, State agencies would incur new
ongoing costs required to pay EBT processor
18 Estimated $45.64 monthly per person food
costs assumes an average online WIC shopper is
using 50 percent of their transacted benefits online
and 50 percent in-store.
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fees associated with monthly support and
maintenance of EBT systems to allow for
online transaction of benefits. The State
agency costs detailed below assume the same
implementation timeline presented
previously in Table 6.
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The Department expects that State agencies
would be able to absorb these EBT processor
costs using existing NSA funds. State
agencies are generally allowed considerable
flexibility in how they spend NSA funds. The
estimates in Table 8 represent an initial
assessment of projected costs. As mentioned
above, the Department is testing these
activities through the GSCN sub-grant
projects and will collect information on
actual costs incurred during the projects to
better understand future implementation
expenses. The Department also seeks public
comment from State agencies, EBT
processors, and WIC-authorized vendors on
expected costs associated with these and any
unforeseen, required system updates to help
refine the estimates below.
processors. Initial costs would also include
separate start-up costs paid to EBT processors
each time a new State agency is added to an
online shopping solution. The Department
estimates that, once EBT processors have
developed online shopping solutions, there
will be an average one-time cost of $90,000
(in FY 2022 dollars, adjusted annually for
inflation) for each State agency to update its
EBT system to implement online shopping
(see Table 8). As new State agencies
gradually implement online shopping
solutions, the Department estimates $8.26
million in start-up costs over 5 years for EBT
updates to implement online shopping in 82
State agencies, in addition to the $2.20
million estimate for design, development,
and testing.20
The estimate of WIC State agency costs
includes both initial costs and ongoing costs.
To estimate initial costs, the Department has
estimated EBT processor costs to design,
develop, and test new technology solutions
that would allow participants and vendors to
transact WIC electronic benefits online. The
Department estimates that the costs for EBT
processors to design, develop, and test new
online shopping solutions will be spread
over 2 years and total $2.20 million across all
current EBT processors (see Table 8). The
same small number of EBT processors
contract with multiple State agencies.19
Therefore, these initial costs to design,
develop, and test new online shopping
solutions are expected to be shared across
multiple State agencies using common EBT
TABLE 8—ESTIMATED EBT PROCESSOR COSTS TO IMPLEMENT WIC ONLINE SHOPPING
[FY 2024–2028]
Fiscal year (millions)
2024
Initial Costs:
Design, develop, and test new online shopping solutions ....................................................................
Start-up cost to implement solution across all State
agencies ................................................................
Ongoing Costs:
Monthly support and maintenance costs ..................
Total ...................................................................
2025
2026
2027
2028
Total
$0.80
$1.40
$0.00
$0.00
$0.00
$2.20
0.00
3.74
2.33
2.19
0.00
8.26
0.34
2.36
3.67
4.95
5.10
16.42
1.14
7.50
6.00
7.14
5.10
26.88
Notes: Monetary values are adjusted annually for inflation based on CPI–W wage projections consistent with the FY 23 President’s Budget as
costs primarily account for labor expenses for start-up and ongoing support.
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New, ongoing operational costs are also
expected for each State agency offering WIC
online shopping. Once State agencies have
implemented online shopping, the
Department estimates an additional $4,000
(in FY 2022 dollars, adjusted annually for
inflation) in ongoing monthly EBT costs per
State agency to address new support and
system maintenance requirements. All
projected costs represent estimated averages;
however, actual costs may vary by State
agency. In total, as all State agencies
implement WIC online shopping systems, the
Department estimates these ongoing monthly
costs to add up to $16.4 million in State
agency spending over 5 years (see Table 8).
The Department expects that the additional
work required to adapt State agency policies
and oversight methods and resolve
participant concerns related to online
shopping will be addressed by the WIC Food
Delivery and WIC Customer Service
coordinators. The estimated costs of these
19 See latest ‘‘WIC EBT Detail Status Report’’ for
more information: https://www.fns.usda.gov/wic/
wic-ebt-activities.
20 The estimate of $8.26 million is based on a cost
of $90,000 each for 82 State agencies, adjusted
annually for inflation. This assumes that these startup costs would not be needed in the 7 State
agencies that are developing internet-based
transactions while participating in the Gretchen
Swanson Center for Nutrition WIC online shopping
sub-grant projects.
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proposed State agency staff positions are
discussed below.
Effect on WIC Participants
This proposed rule is primarily intended to
remove barriers that prevent WIC
participants from accessing the benefits of
online shopping. Enabling WIC participants
to shop online is expected to increase
participant access to WIC foods, address
barriers and challenges participants report
related to shopping for WIC foods, and
broadly improve equity in the shopping
experience.
Expanding access to WIC online shopping
may increase participant access to WICauthorized vendors. A 2018 USDA survey of
three WIC State agencies found that, among
former participants who had a negative
shopping or vendor experience, 15 percent
reported that they lacked convenient access
to a WIC-approved vendor.21 According to
estimates from the USDA Economic Research
Service (ERS), nearly 40 million people, or 14
21 The survey did not define what participants
meant by ‘‘convenient’’ so this could be inclusive
of factors other than geography (e.g., hours of
operation). Source: Gleason, S., Wroblewska, K.,
Trippe, C., Kline, N., Meyers Mathieu, K., Breck, A.,
Marr, J., Bellows, D. (2022). WIC Food CostContainment Practices Study. Prepared by Insight
Policy Research, Contract No. AG–3198–C–15–
0022. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of
Policy Support, Project Officer: Ruth Morgan.
Available online at: https://www.fns.usda.gov/wic/
wic-food-cost-containment-practices-study.
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percent of the U.S. population, lived in lowincome and low-access (LILA) census tracts
in 2015.22 LILA measures define a low-access
census tract as one where a significant
number (at least 500 people) or share (at least
33 percent) of the population has limited
access to a food store (supermarket,
supercenter, or large grocery store), which is
defined as living more than 1 mile from a
food store in urban areas or more than 10
miles in rural areas. A recent study found
that among the initial eight States
participating in the SNAP Online Purchasing
Pilot, online grocery delivery systems
reached around 90 percent of LILA census
tracts, though this varied substantially
between urban and rural areas.23
As noted in the previous section, even WIC
participants who are able to travel to WICauthorized vendors report difficulties using
their WIC benefits. Data discussed earlier
from a recent USDA study indicate that a
majority of WIC shoppers in the 12 State
agencies covered by the study reported
22 USDA Economic Research Service. ‘‘StateLevel Estimates of Low Income and Low Access
Populations.’’ Last updated September 30, 2019.
Available online at: https://www.ers.usda.gov/dataproducts/food-access-research-atlas/state-levelestimates-of-low-income-and-low-accesspopulations/.
23 Brandt EJ, Silvestri DM, Mande JR, Holland
ML, et al. Availability of grocery delivery to food
deserts in states participating in the online
purchase pilot. JAMA Netw Open. 2019;2:e1916444.
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having difficulty locating WIC-approved
foods in stores.24 Another study, which
collected qualitative data through focus
groups and in-depth interviews of
participants across four State agencies, found
that difficulty identifying WIC-approved
items as well as perceived stigma during
checkout were the primary complaints
participants reported about the WIC
shopping experience.25 Online shopping may
address some of these barriers. For example,
an online shopping system could be designed
to allow WIC shoppers to filter to only
display items approved for WIC by their State
agency or to only show the items available
to them based on their WIC benefit balance.26
Participants that find stigma to be a barrier
to using their WIC benefits may also find
more comfort and privacy in transacting
benefits online. Finally, online shopping may
also improve the shopping experience for
WIC participants that report transportation
challenges. Data from a nationally
representative sample of WIC participants
indicate that in 2019 around 21 percent of
WIC participants used some means of
transportation other than a personal car to
travel to a vendor to transact their WIC
benefits.27 Individuals unable to drive
themselves to a WIC-authorized vendor may
prefer transacting WIC benefits online for
delivery rather than transporting heavier
items, such as milk and juice, by foot or on
public transit. By addressing these barriers,
this proposed rule is expected to increase
benefit redemptions, as described in the
previous section, and thus increase the
amount of nutritious supplemental foods
consumed by WIC participants.
Enabling WIC participants to use their
benefits online is also expected to improve
equity in access to online grocery shopping
enabling WIC participants greater access to
the convenience and potential time savings
allowed by online grocery shopping. Data
published in 2020 and 2021 by IRI indicate
24 Gleason, S., Wroblewska, K., Trippe, C., Kline,
N., Meyers Mathieu, K., Breck, A., Marr, J., Bellows,
D. (2022). WIC Food Cost-Containment Practices
Study. Prepared by Insight Policy Research,
Contract No. AG–3198–C–15–0022. Alexandria, VA:
U.S. Department of Agriculture, Food and Nutrition
Service, Office of Policy Support, Project Officer:
Ruth Morgan. Available online at: https://
www.fns.usda.gov/wic/wic-food-cost-containmentpractices-study.
25 Chauvenet C, De Marco M, Barnes C,
Ammerman AS. WIC Recipients in the Retail
Environment: A Qualitative Study Assessing
Customer Experience and Satisfaction. J Acad Nutr
Diet. 2019;119(3):416–424.e2. doi:10.1016/
j.jand.2018.09.003.
26 Gretchen Swanson Center for Nutrition.
‘‘Blueprint for WIC Online Ordering Projects,’’
2021. Available online at: https://www.centerfor
nutrition.org/wic-online-ordering.
27 Magness, A., Williams, K. Gordon, E.,
Morrissey, N., Papa, F., Garza, A., Okyere, D., Nisar,
H., Bajowski, F., & Singer, B. (2021). Third National
Survey of WIC Participants: WIC Participant
Satisfaction and Shopping Experience: Brief Report
#6. Prepared by Capital Consulting Corporation and
2M Research Services. Contract No. AG–3198–K–
15–0077. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of
Policy Support, Project Officer: Karen CastellanosBrown. Available online at: https://
www.fns.usda.gov/research-and-analysis.
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that low-income shoppers are less likely than
middle- and high-income shoppers to
purchase groceries online.28 A recent
systematic review of online grocery shopping
among low-income populations found that
price and the inability to use nutrition
assistance benefits like SNAP and WIC are
barriers to equitable access to online grocery
services.29 While this gap is likely to narrow
as the SNAP Online Purchasing Pilot
continues to expand, this proposed rule
would ensure that WIC participants will also
able to transact their WIC benefits online.
Recent evidence also suggests that shoppers
may make fewer unhealthy purchases when
shopping online compared to in-stores
specifically making fewer ‘‘impulse’’
purchases on items like sweets and
candy.30 31 Therefore, expanding equitable
access to online grocery shopping for WIC
participants may have spillover effects into
the rest of their grocery shopping if those
shoppers move their non-WIC grocery
shopping online as well.
Effect on Vendors
The provisions included in the proposed
rule are expected to increase opportunities
for innovation in the retail grocery industry
and may provide opportunities for increased
revenue for vendors that offer online
shopping for WIC participants using WIC
benefits. For some WIC vendors, the
opportunity to transact WIC electronic
benefits online could expand their customer
base by reaching WIC shoppers who had not
previously shopped at the vendor’s brickand-mortar locations. Other vendors may see
an increase in revenue from existing WIC
shoppers who prefer to use their online
shopping platforms and increase their
purchases of supplemental foods, as
described in the previous section. However,
the expansion of WIC online shopping is not
expected to have the same impact on all
vendors. The Distributive Impacts section of
this analysis includes further discussion
around potential disparate impacts for
certain types of vendors.
The overall national increase in online
grocery shopping is expected to impact the
number and types of jobs employed in the
retail food industry. Specifically, one group
of university researchers estimates a shift
28 Information Resources, Inc. ‘‘Winning in CPG
e-Commerce: Part 4,’’ March 26, 2021. Available
online at: https://www.iriworldwide.com/IRI/media/
Library/IRI-TL-Demand-Pockets-Part-4-CPG-ECommerce-03-29-21.pdf.
29 Trude, A., Lowery, C., Ali, S., Vedovato, G. An
equity-oriented systematic review of online grocery
shopping among low-income populations:
implications for policy and research, Nutrition
Reviews, 2022; nuab122, https://doi.org/10.1093/
nutrit/nuab122.
30 Harris-Lagoudakis, K. (2022). ’’ Online
shopping and the healthfulness of grocery
purchases.’’ American Journal of Agricultural
Economics 104(3): 1050–1076. https://doi.org/
10.1111/ajae.12262.
31 Zatz, L.Y., Moran, A.J., Franckle, R.L., Block,
J.P., Hou, T., Blue, D., Greene, J.C., Gortmaker, S.,
Bleich, S.N., Polacsek, M., Thorndike, A.N., &
Rimm, E.B. (2021). Comparing Online and In-Store
Grocery Purchases. Journal of Nutrition Education
and Behavior, 53(6). https://doi.org/10.1016/
j.jneb.2021.03.001.
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towards fewer cashier positions and an
increase in jobs associated with assembling,
fulfilling, and delivering online grocery
orders.32 Because WIC redemptions
accounted for only about 0.6 percent of total
U.S. food at home expenditures in 2019, the
Department does not expect this proposed
rule to have a significant impact on the food
retail employment landscape beyond what is
already projected in the market as a whole.33
Under the proposed rule, providing online
shopping to WIC participants would be
optional to vendors, and therefore the
Department only expects vendors to
participate in WIC online shopping if the
vendor believes it to be in their best interest.
Aside from the benefits described above,
there may also be some upfront development
costs for vendors who choose to update their
online grocery platforms to be compatible
with transacting WIC benefits online. The
Department does not have the necessary data
to provide even approximate estimates of
these costs. To the extent possible, the
Department intends to use development cost
data collected in the GSCN sub-grant projects
described above to better understand
potential costs to vendors. The Department
also recognizes that recent industry reporting
suggests lower profit margins for grocery
sales online compared to in-store and that
vendors continue to explore ways to
minimize the cost of fulfilling online orders
to improve these margins.34 So while
improving equitable access to online
shopping for WIC participants is expected to
bring some WIC redemptions from in-store to
online, because WIC redemptions account for
such a small share of total U.S. food at home
expenditures (as cited above) the Department
does not expect this proposed rule to be
meaningfully disruptive to the trajectory of ecommerce in the grocery industry as a whole.
Effect on State Agencies
In addition to the State agency costs
discussed above, the provisions in the
proposed rule related to implementing online
shopping in WIC are expected to create some
additional, short-term actions as State
agencies elect to participate. Initially, the
rollout of online ordering systems is likely to
require increased State agency staff time
devoted to establishing contract changes with
EBT processors, processing any necessary
updates to State agency MIS data and
systems, developing expertise in monitoring
and oversight of internet-based transactions
and vendors, and communicating the
32 Benner, C., Mason, S., Carre
´ , F., and Tilly, C.
Delivering Insecurity: E-commerce and the Future
of Work in Food Retail. Berkeley: UC Berkeley
Labor Center and Working Partnerships USA. 2020.
https://laborcenter.berkeley.edu/deliveringinsecurity/.
33 Based the sum of WIC food costs and rebates
issued in FY 2019 (https://www.fns.usda.gov/pd/
wic-program) as a share of USDA ERS Food at
Home expenditures, nominal dollars, in 2019
(https://www.ers.usda.gov/data-products/foodexpenditure-series/food-expenditure-series/
#Current%20Food%20Expenditure%20Series).
34 McKinsey. ‘‘Achieving profitable online
grocery order fulfillment.’’ May 18, 2022. Available
online at: https://www.mckinsey.com/industries/
retail/our-insights/achieving-profitable-onlinegrocery-order-fulfillment.
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program changes to WIC participants.
However, the Department does not expect
these up-front efforts to be significant and
they would be far outweighed by reductions
in burden discussed later in this analysis.
The additional staffing standards discussed
later in this analysis would also help State
agencies to adapt to online shopping.
Over time, the provisions allowing for
remote vendor oversight are expected to
decrease staff burden and travel costs. The
Department does not specifically track State
agency expenses associated with travel and
on-site monitoring or investigative activities
and cannot provide an estimate for the level
of savings. Internal data from a survey of WIC
State agencies that utilized the Vendor
Preauthorization Visits waiver, authorized
under the Families First Coronavirus
Response Act of 2020 (FFCRA, Pub. L. 116–
127), found that over half of State agencies
reported saving staff time by using the waiver
to conduct preauthorization visits
remotely.35
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• Streamline and Modernize WIC Food
Delivery
Discussion
Current WIC regulations were written
within the context of a paper-based voucher
environment (prior to the advent of EBT),
that envisioned a WIC participant traveling to
a WIC clinic to pick up a paper voucher and
then traveling to a WIC vendor to use their
paper voucher in person. In the past two
decades, much has changed in terms of
technology, security, innovation, and WIC
participant preferences to make these paperbased voucher assumptions obsolete. The
proposed rule complements the Program’s
near-complete transition to EBT by
modernizing and streamlining WIC food
delivery regulations to reflect recent
technological innovations in electronic
benefit issuance, transaction, and
redemption, and food delivery options to
promote further innovation; to decrease
burden on WIC participants, WIC vendors,
and State and local agencies; to increase WIC
participant choice; to improve program
equity; and to reduce stigma experienced by
WIC participants, while maintaining the WIC
Program’s high standards of program services
and program accountability.
Specifically, the proposed rule would:
• Permit the remote issuance of electronic
benefits to a participant’s benefit balance
(e.g., load electronic benefits on to an EBT
card, or other access device or technology,
without requiring the participant to travel to
a clinic). To clarify how remote issuance
applies to food instruments, cash-value
vouchers, and electronic benefits, associated
provisions would add definitions for
‘‘electronic benefits’’ and ‘‘cash-value
benefit’’ that are separate and distinct from
the paper food instruments.
• Add ‘‘other electronic benefit access
device or technology’’ to the definition of
‘‘food instrument’’ to support innovation in
35 Unpublished data collected in March 2021 to
fulfill FFCRA waiver reporting requirements. For
more information: https://www.fns.usda.gov/
programs/fns-disaster-assistance/fns-respondscovid-19/wic-covid-19-waivers.
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benefit delivery methods and enable WIC
State agencies to explore and adopt new
technologies beyond the EBT card (e.g.,
mobile payment) while ensuring that key
program integrity requirements apply to
these new technologies.
• Allow State agencies to develop and test
new WIC food instrument types by
eliminating a provision that only allows one
type of food instrument to be used within a
State agency’s jurisdiction at a time.
• Streamline food delivery operations by
recognizing that EBT data are a sufficient
replacement for routine shelf price collection
and eliminating certain collection
requirements.
• Extend vendor agreement periods to
reduce the application burden on potential
WIC vendors and State agencies. The
revisions would extend the maximum vendor
authorization period from three to five years,
consistent with SNAP.
• Allow State agencies using a home food
delivery system (non-retail) to ship
supplemental foods to a location designated
by participants to better serve participants in
remote areas (e.g., Alaska Natives who do not
have at-home mail service).
The benefits of these proposed revisions
extend to WIC participants, State agencies,
and WIC vendors. Remote issuance of
electronic benefits would save some WIC
participants time and money by decreasing
the number of trips they must make to their
local WIC clinic, which may prove
particularly beneficial to those WIC
participants who face transportation barriers.
If WIC participants are able to purchase and
consume more of their WIC foods, and/or if
more WIC-eligible individuals are able to
participate in WIC for longer periods of time,
then more participants will receive the health
benefits offered by consumption of the
nutritious supplemental foods provided by
the WIC Program.
Extending vendor application and
agreement periods would decrease
administrative burden on both WIC vendors
and WIC State agencies. The other proposed
provisions either decrease the burden on
State agencies or promote innovation in the
WIC benefit delivery space while
maintaining the Program’s high standards for
transaction authentication, program services
and program accountability, and participant
privacy.
Cost
Remote Issuance of Electronic Benefits
Remote electronic benefit issuance would
decrease transportation, childcare, and/or
other costs (e.g., loss of work hours) currently
borne by WIC participants in the process of
picking up their WIC food instruments in
person at a WIC clinic. As explained in the
burden adjustment estimates published with
this proposed rule, the Department estimates
that remotely issuing benefits would save
WIC participants a combined 1,049,335 hours
per year in time spent traveling to and
waiting to receive WIC benefits in person.
Remote issuance of electronic benefits may
slightly increase WIC participation by
retaining some WIC participants who may
have otherwise dropped off the Program due
to transportation, or other access challenges,
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11545
but would now be able to receive their
benefits remotely and shop online. If WIC
participation increases, there will be a related
increase in Federal costs to provide these
participants with their WIC benefits.
However, the Department expects the
participation impact of this particular
provision to be relatively small, and any
increase in participation solely attributable to
this provision is extremely difficult to
disentangle from the expected increase in
WIC participation as a result of the $390
million in additional WIC funding made
available in the American Rescue Plan Act of
2021 (ARPA, Pub. L. 117–2) to carry out
outreach, innovation, and program
modernization efforts to increase
participation and redemption of benefits.
Therefore, the Department does not provide
a separate estimate of the cost of this
provision as a result of increased
participation, but the public will have the
opportunity to provide feedback on
participation impacts due to remote issuance
during the comment period. See below for
additional discussion of participation
impacts of this proposed rule.
Decrease in State Agency and Vendor Burden
As explained in the annual burden
adjustment estimates published with this
proposed rule, the Department expects the
proposed rule would substantially decrease
reporting and recordkeeping burden hours on
both WIC State agencies and WIC vendors.
The Department estimates a net decrease in
reporting burden hours to State agencies of
approximately 159,354 hours per year, which
is almost entirely attributable to the proposed
provision to remove shelf price collection
requirements for State agencies operating an
EBT system. State agency recordkeeping
burden is also expected to decrease by an
estimated 5,074 hours per year, primarily as
a result of the proposed extension of vendor
application and agreement periods.
Reductions in State agency reporting and
recordkeeping burden are collectively
expected to result in a 5-year savings to State
agencies of $51.5 million in administrative
costs.36 Removing shelf price collection
requirements in State agencies with EBT
systems and extending vendor application
and agreement periods are expected to have
a similar effect on WIC vendor burden. The
Department estimates a net decrease in
reporting burden hours to WIC vendors of
143,401 hours per year, resulting in a 5-year
savings to WIC vendors of $18.4 million in
administrative costs.37
36 Cost savings associated with State agency
burden hours are calculated using the hourly total
compensation for all State and Local workers from
the Bureau of Labor and Statistics (BLS) for FY 2021
and inflated according to the CPI–W increase in
OMB’s economic assumptions for the FY2023
President’s Budget for years FY2024–FY2028
(https://data.bls.gov/timeseries/
CMU3010000000000D).
37 Cost savings associated with vendor burden
hours are calculated using the hourly total
compensation for all retail workers from the Bureau
of Labor and Statistics (BLS) for FY 2021 and
inflated according to the CPI–W increase in OMB’s
economic assumptions for the FY2023 President’s
Budget for years FY2024–FY2028 (https://
data.bls.gov/timeseries/CMU2014120000000D).
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Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Proposed Rules
Effect on WIC Participants
The provisions in this proposed rule are
expected to decrease the burden on WIC
participants and would make participating in
the Program more convenient. Remote
issuance of electronic benefits would
decrease the number of visits that
participants must make to their WIC clinics,
saving these participants time and money as
described above. A recent USDA study found
that among surveyed participants with
children who left WIC before age 5, around
40 percent reported inconvenience as a
reason for leaving WIC early.38 In an
unpublished USDA study, 52 percent of
surveyed WIC clinic staff reported that
‘‘difficulty being physically present for
appointments’’ was a reason that child
participants leave the Program between ages
2 to 4.39 Remote issuance of electronic
benefits may result in a small number of
child participants who might otherwise drop
off of the Program as they age to remain on
the Program for longer, enabling these
participants to receive more supplemental
foods and nutrition education.
The provisions that provide State agencies
with additional flexibility in the exact type
of food instruments used would allow State
agencies to innovate with service delivery,
enabling them to provide the best experience
to WIC participants at the lowest cost as
technological advancements and WIC
participant preferences continue to evolve in
future years.
Effect on Vendors
Extending vendor application and
agreement periods would decrease the
administrative burden on vendors to provide
this information to State agencies. WIC
vendor error is already very low (estimated
at 0.30 percent of total WIC food outlays).40
EBT technology allows State agencies to
receive current data about vendor prices at
least daily, eliminating the need for
additional burdensome reporting. Removing
the requirement to collect shelf prices would
result in a substantial decrease in
administrative costs to vendors, as noted
above.
lotter on DSK11XQN23PROD with PROPOSALS2
Effect on State Agencies
The proposed revisions would streamline
and modernize WIC food delivery regulations
to reflect current EBT technologies and
provide space for future innovation by State
agencies. Adding ‘‘other electronic benefit
38 Borger, C., Zimmerman, T., Vericker, T., et al.
(2022). WIC Infant and Toddler Feeding Practices
Study-2: Fifth Year Report. Prepared by Westat,
Contract No. AG–3198–K–15–0033 and AG–3198–
K–15–0050. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of
Policy Support, Project Officer: Courtney Paolicelli.
Available online at: https://www.fns.usda.gov/
resource/wic-infant-and-toddler-feeding-practicesstudy-2-itfps-2-fifth-year-report.
39 Unpublished data from a USDA survey of
clinic-level WIC staff from a nationally
representative sample of local agencies, collected in
March 2020.
40 See the 2021 Annual Improper Payment
Dataset, available at https://www.cfo.gov/paymentaccuracy/FY2021%20Payment
%20Accuracy%20Dataset_3_1_2022.xlsx (accessed
March 8. 2022).
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access device or technology’’ to the definition
of ‘‘food instrument’’ would enable WIC State
agencies to explore and adopt new
technologies beyond the EBT card (e.g.,
mobile payment) while ensuring that key
program integrity requirements apply to
these new technologies. This revision would
allow State agencies to deliver WIC benefits
in a secure, cost-effective, and convenient
manner. Similarly, updating the uniform
food delivery systems provision would
provide State agencies the ability to test new
food instrument types that align with
innovations in the retail market, and to
smoothly transition to new types of food
instruments.
Removing the requirement to collect shelf
prices, or obtain an exemption, for State
agencies that use EBT would decrease their
administrative burden while allowing them
to continue to meet the requirements of the
vendor authorization and cost containment
provisions. Receiving price information via
EBT transaction data serves as a substitute for
the burdensome practice of collecting shelf
prices from WIC vendors. As discussed
above, extending vendor application and
agreement periods would also decrease
burden on State agencies without sacrificing
program accountability, as time periods for
vendor monitoring, training, and
investigations would remain unchanged.
• Meet the Needs of a Modern, Data-Driven
Program
Discussion
The Department proposes several
provisions that are intended to meet the
needs of a modern, data-driven program that
uses current technologies for food delivery.
Specifically, the proposed rule would:
• Update reporting requirements for
Federal oversight to align with the transition
in reporting systems from TIP to FDP, which
is now the system of record for WIC vendor
management data.
• Create two new WIC State agency staff
positions to reflect the staffing needs of a
modern, innovative program. The revisions
include staffing standards for WIC Food
Delivery and WIC Customer Service
coordinators. These proposed staff would be
in addition to the minimum number of staff
currently required by regulations. As State
agencies move to adopt new technologies and
modern food delivery methods, these
provisions are necessary to ensure State
agencies have staff capable of meeting those
demands.
Under current rules, WIC State agencies are
required to have at least one full-time or
equivalent Program Specialist for each 10,000
participants above 1,500, but not more than
eight Program Specialists, unless the State
agency considers it necessary.
The proposed rule would require that, in
addition to current requirements for Program
Specialists, State agencies must create two
new staff positions: a WIC Food Delivery
Coordinator and a WIC Customer Service
Coordinator, based on the below monthly
participation thresholds. The Department
proposes to develop stronger standards for
the position of the WIC Food Delivery
Coordinator to manage the State agency’s
food delivery system, which likely includes
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the management and oversight of WICauthorized vendors in a retail food delivery
system, to ensure that WIC State agencies
have the staff in place to make the datadriven decisions necessary for a modern,
efficient WIC Program that uses current
technologies for food delivery. The
Department also proposes adding standards
to create a WIC Customer Service
Coordinator to support program
improvements related to participant-facing
activities, particularly those that involve
emergent technologies and future
innovations. These staffing requirements
would vary depending on the State agency’s
participant caseload:
• State agencies with monthly
participation above 7,000 would be required
to employ one full-time or equivalent WIC
Food Delivery Coordinator and one full-time
or equivalent WIC Customer Service
Coordinator.
• State agencies with monthly
participation above 500, but less than 7,001,
would be required to employ a half-time or
equivalent WIC Food Delivery Coordinator (if
the State agency manages its own vendor cost
containment system) and a half-time or
equivalent WIC Customer Service
Coordinator.
Cost
New State Agency Staff Positions
The provisions creating new WIC State
agency staff positions are expected to
increase WIC State agency costs by a total of
$55 million during FY 2024 to FY 2028.
Based on current State agency monthly
participation and staffing estimates, the
Department estimates that a total of 108 new
staff positions would be created. As State
agencies would have 18 months from
publication of the final rule to implement
these requirements, this estimate assumes a
phased implementation where 50 percent of
the positions are filled in FY 2024 and the
remainder filled by FY 2025.
Currently there are 51 State agencies with
more than 7,000 monthly participants, and
each of these State agencies would be
required to employ one full-time or
equivalent WIC Food Delivery Coordinator
and one full-time or equivalent WIC
Customer Service Coordinator who meet the
new staffing standards. However, the
Department estimates that 13 State agencies
already meet the proposed WIC Food
Delivery Coordinator requirements and that 3
State agencies already meet the proposed
WIC Customer Service Coordinator
requirements with current staff and will not
need to make new hires to fill these full-time
roles. Therefore, the proposed rule would
result in 38 new full-time or equivalent WIC
Food Delivery Coordinator positions and 48
new full-time or equivalent WIC Customer
Service Coordinator positions.
There are 22 State agencies, including
some ITOs and smaller State agencies, with
monthly participation greater than 500 but
not exceeding 7,000, and each of these State
agencies would be required to employ a halftime or equivalent WIC Food Delivery
Coordinator and a half-time or equivalent
WIC Customer Service Coordinator, which is
equivalent to 11 new full-time WIC.
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11547
TABLE 9—ESTIMATED COST OF CREATING TWO NEW STAFF POSITIONS
[FY 2024–2028]
Fiscal year
2024 a
2025
2026
2027
2028
Total
Hourly Total Compensation b ...................
Total Annual Compensation c ..................
Cost of 108 New State agency Staff Positions (Millions) ....................................
Cost of Hiring and Recruitment (Millions)
$ 59.02
104,283
$60.79
107,412
$62.61
110,634
$64.49
113,953
$66.42
117,372
N/A
N/A
5.6
0.3
11.6
0.3
11.9
0.0
12.3
0.0
12.7
0.0
$54.2
0.5
Total New Staffing Costs (Millions) ..
5.9
11.9
11.9
12.3
12.7
54.7
Notes: Numbers may not sum due to rounding.
a Because the proposed staffing standards will not be required until 18 months after the final rule is published, estimates assume a phasing in
effect with only 50 percent of positions filled in FY 2024 and increasing to 100 percent by FY 2025.
b The hourly total compensation for FY 2024–FY 2028 are calculated by taking the hourly total compensation for all State and Local workers
from BLS for FY 2021 (https://data.bls.gov/timeseries/CMU3010000000000D) and inflating that hourly total compensation figure according to the
CPI–W increase in OMB’s economic assumptions for the FY 2023 President’s Budget for years FY 2024–FY 2028.
c Total annual compensation for a full-time position is calculated by multiplying hourly compensation by 1,767 hours (OECD Labour Force Statistics, 2020 average annual hours actually worked per worker in United States, https://stats.oecd.org/index.aspx?DataSetCode=ANHRS). Total
compensation includes holidays, vacation and sick leave, and the cost of taxes and benefits.
lotter on DSK11XQN23PROD with PROPOSALS2
Food Delivery Coordinator positions
(assuming each State agency manages its own
vendor cost containment system) and 11 new
WIC Customer Service Coordinator positions.
The remaining 16 State agencies with
monthly participation not exceeding 500
would not be required to create any new
positions. See Table 9 for detailed costs for
hourly compensation, full-time annual
salary, and annual total costs.
In addition to the total cost of
compensation associated with the new
staffing requirements, State agencies are also
expected to incur some costs routinely
associated with recruiting and hiring new
staff. The Society for Human Resource
Management estimates that in 2022,
organizations spent on average around $4,700
in hiring and recruitment costs per hire.41
Applying CPI–W inflation projects the
Department estimates about $5,000 in hiring
and recruitment costs per hire for the new
positions—amounting to around $300,000 in
total hiring and recruitment costs each year
in FY 2024 and FY 2025 (assuming half of
the 108 positions are filled in each of these
years as described above).
Effect on WIC Participants
The proposal to create two new WIC State
agency staff positions would formalize both
the staffing requirement and the expected
education and experience levels needed for
the WIC Customer Service Coordinator and
the WIC Food Delivery Coordinator, enabling
WIC State agencies to hire qualified staff to
support a modern, participant-centered
program.
The WIC Customer Service Coordinator
specifically would play a key role in future
State agency efforts to design and implement
innovative strategies and participant-facing
technologies to increase participation in the
WIC Program and the redemption of WIC
benefits (see the below section on
Participation Effects for more information on
these efforts).
41 Navarra, Katie. ‘‘The Real Costs of
Recruitment.’’ SHRM, 12 Apr. 2022, www.shrm.org/
resourcesandtools/hr-topics/talent-acquisition/
pages/the-real-costs-of-recruitment.aspx.
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Effect on Vendors
The proposed revisions to update State
agency reporting requirements and to create
two new WIC State agency staff positions
would improve vendor management and
oversight, which has grown in complexity
over the past decade. Vendor management
and oversight relies on data analysis and
statistical assessments to ensure the State
agency can operate the Program effectively
and efficiently. While these changes are
expected to improve State agency vendor
management operations, the Department does
not expect that these provisions would have
a measurable impact on vendors themselves.
Effect on State Agencies
These proposed provisions may initially
increase burden on State agencies. First, the
proposed revision to update reporting
requirements for Federal oversight would
streamline State agency reporting to FNS and
ensure that State agencies report to FDP on
all business entities authorized and
monitored by WIC State agencies. This
provision is meant to align WIC regulations
with the information that State agencies are
already required to report in the new FDP
system. While the system is designed to be
less burdensome for State agency reporting,
some up-front work will be necessary to
develop procedures to comply with the
requirements of FDP.
Second, the proposal to create two new
WIC State agency staff positions would
require some State agencies to hire new staff
with the qualifications outlined in the
staffing standards, which some State agencies
may find challenging. On the other hand, the
provision may assist some State agencies
already seeking support to increase staffing.
Despite potential up-front need of recruiting
and filling these positions, the Department
expects these new roles to be instrumental in
supporting State agency efforts to oversee an
increasingly modern and complex WIC
Program. The Department is specifically
requesting comments on whether the
proposed staffing standards would support
State agencies’ search for qualified personnel,
including a discussion of the State agency’s
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ability to recruit and fill these positions as
described (considering both the recruitment
and hiring of staff with the proposed
credentials), an assessment of any challenges
and costs associated with the adoption of
these provisions, necessary timeline to
operationalize such requirements, and any
recommendations for changes to the
standards along with related rationale.
• Participation Impacts
The baseline and revised costs presented in
this analysis both assume a change in WIC
participation from historical participation
trends as a result of the $390 million in
additional WIC funding made available in
ARPA to carry out outreach, innovation, and
program modernization efforts to increase
participation and redemption of benefits.
Implementation of projects made possible by
this ARPA funding assume that participation
will remain at current levels among infants
and women, despite further declines in the
birth rate, and an eventual increase in
participation among children followed by a
leveling off at the higher rate of child
participation.
Given planned efforts to increase
participation and retention under ARPA, as
described above, the Department is uncertain
at this time how much of an increase in
participation may be attributable solely to the
proposed rule.
• Distributive Impacts
Differences Among Vendors
The largest retailers may be more likely
than independent grocers or smaller stores to
initially benefit from a shift to WIC online
shopping. However, due to the recent sales
growth of independent grocers and the
relatively small share of small vendor
revenue attributable to WIC, the Department
does not expect the proposed rule to have a
lasting or significant negative impact on
these firms.
In 2020, the National Grocers Association
reported that independent grocers accounted
for 33 percent of total U.S. grocery sales, up
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from 25 percent in 2012.42 This trend
suggests a resilience among independent
grocers to shifts in the retail landscape as
many independent grocers utilized online
shopping platforms when Americans turned
to online grocery shopping in 2020 during
the first year of the COVID–19 pandemic.
However, data from IRI estimate that
Walmart, Amazon, Instacart,43 Target, and
major grocery firms claimed over 82 percent
of the grocery e-commerce market share in
2021, suggesting that the largest retailers and
fulfillment platforms still likely hold a larger
stake in the online retail space than
independent grocers do relative to their share
in the total grocery market.44 The Department
does not routinely track data necessary to
determine how WIC benefit redemptions vary
by most vendor characteristics, including
indicators for whether the store is a small
business or independent grocer. USDA’s ERS
estimated, by merging WIC and SNAP
redemption databases, that 76 percent of WIC
retail redemptions occurred in larger stores
(super stores, supermarkets, or large grocery
stores) in FY 2012; however, the study’s
definition of supermarkets and large grocery
stores is inclusive of many independent
grocers.45 The Department does not have data
on the extent to which small businesses and
independent grocers have implemented
online shopping to date, but is aware of
products on the market being employed by
independent grocers to provide online
ordering currently for WIC participants (with
in-store or curbside transactions).
If smaller WIC vendors (such as
convenience stores or small and medium
grocery stores) do not adopt online shopping
solutions, then they may see some of their
WIC revenues lost to larger retailers that
provide online shopping. According to ERS
data, in FY 2012, small grocery stores,
medium grocery stores, and convenience
stores accounted for 2.9 percent, 3.5 percent,
and 3.8 percent of WIC retail redemptions,
respectively. As WIC sales make up a
relatively small fraction of the total revenue
of smaller stores, and especially convenience
stores, the Department expects any lost
revenue for smaller vendors that do not adopt
an online shopping solution to be relatively
minor. For example, the 3.8 percent of total
WIC benefits transacted at convenience stores
in FY 2012 amounts to about $228 million.
U.S. convenience stores reported an
estimated $193 billion in total in-store sales,
not including fuel, in 2012, suggesting that
WIC redemptions represented only about
0.12 percent of non-fuel sales for
convenience stores that year.46 As mentioned
earlier, the Department also projects a
relatively small portion of WIC transactions
to move online even when fully implemented
in FY 2027 and FY 2028.47
The Department will continue to collect
more timely information to better understand
the potential impacts of this proposed rule on
independent grocers and smaller vendors.
Specifically, the Department will examine
lessons learned from the SNAP Online
Purchasing Pilot and GSCN sub-grant
projects and will consider recommendations
related to small vendor challenges published
in the Task Force’s Recommendations
Report.
Differences Among Participant Subgroups
Early data from research conducted on the
implementation of the SNAP Online
Purchasing Pilot in eight States in 2019
suggest that many individuals living in rural
LILA census tracts may fall outside the
Use of WIC Online Shopping
The impact of the proposed rule provisions
that enable online shopping in WIC will
depend largely on how many participants
transact any WIC electronic benefits online.
In this impact analysis, the Department
projects that, within State agencies offering
online shopping, 12 percent of participants
will transact benefits online in FY 2024,
increasing gradually to reach 20 percent of
participants in FY 2028. These estimates are
largely based on the uptake of the SNAP
Online Purchasing Pilot and project outward
based on the predicted growth rate of online
grocery shopping among the general
population.
If usage is 5 percentage points higher,
starting at 17 percent in FY 2024, and
continues to increase by about 2 percentage
points each year, then the total cost impact
would be estimated to be $504 million over
5 years. If usage is 5 percentage points lower,
starting at 7 percent in FY 2024, and
maintains a 2-percentage point increase each
year, then the total cost impact would be
estimated to be $280 million over 5 years (see
Table 10).
42 Redman, R., ‘‘Independent supermarkets drive
one-third of U.S. grocery sales.’’ Supermarket News,
15 June 2021. Available online at: https://
www.supermarketnews.com/retail-financial/
independent-supermarkets-drive-one-third-usgrocery-sales.
43 Note that Instacart is an e-commerce platform
and not generally a direct retailer, therefore IRI data
for Instacart sales likely represents a mix of retailer
sizes. Although much of Instacart’s sales are
through large chains, the platform also provides an
opportunity for many independent grocers to
participate in e-commerce without developing a
platform themselves.
44 Information Resources, Inc. ‘‘Winning in CPG
e-Commerce: Part 4,’’ March 26, 2021. Available
online at: https://www.iriworldwide.com/IRI/media/
Library/IRI-TL-Demand-Pockets-Part-4-CPG-ECommerce-03-29-21.pdf.
45 Tiehen, L. and Fraza
˜ o, E. Where Do WIC
Participants Redeem Their Food Benefits? An
Analysis of WIC Food Dollar Redemption Patterns
by Store Type, EIB–152, U.S. Department of
Agriculture, Economic Research Service, April
2016. Available online at: https://
www.ers.usda.gov/webdocs/publications/44073/
57246_eib152.pdf?v=0.
46 Statista. ‘‘Sales of the convenience store
industry in the United States from 2011 to 2020, by
format’’ 27 January 2022. Available online at:
https://www.statista.com/statistics/308767/sales-ofthe-us-convenience-store-industry-by-format/.
47 The Department projects that about 18 and 20
percent of WIC participants will transact any WIC
electronic benefits online in FY 2027 and 2028,
respectively. Among those transacting any WIC
electronic benefits online, only about half of their
redemptions are expected to be online those years.
See Table 6 for more details.
48 Brandt EJ, Silvestri DM, Mande JR, Holland
ML, et al. Availability of grocery delivery to food
deserts in states participating in the online
purchase pilot. JAMA Netw Open. 2019;2:e1916444.
49 Swenson, K. and Ghertner, R. People in LowIncome Households Have Less Access to internet
Services—2019 Update. U.S. Department of Health
& Human Services, Office of the Assistant Secretary
for Planning & Evaluation. March 2021. Available
online at: https://aspe.hhs.gov/sites/default/files/
2021-07/internet-access-among-low-income2019.pdf.
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Differences Among State Agencies
The Department does not expect the
proposed rule to have an uneven or
disproportionate impact on certain WIC State
agencies over others. Many of the provisions
in the proposed rule are written as State
agency options, which would allow State
agencies to tailor their approach to
innovation around the issuance and
redemption of WIC benefits to best fit their
circumstances. The proposed changes to
staffing standards to add new positions for a
WIC Food Delivery Coordinator and WIC
Customer Service Coordinator have the
potential to put more strain on smaller State
agencies with fewer resources to dedicate
towards staffing. However, the Department is
attempting to alleviate this in part by tiering
the proposed staffing standards to adjust new
hiring requirements by WIC caseload. The
Department is specifically requesting
comments on whether the proposed staffing
standards would support State agencies’
search for qualified personnel, including a
discussion of the State agency’s ability to
recruit and fill these positions as described
(considering both the recruitment and hiring
of staff with the proposed credentials), an
assessment of any challenges and costs
associated with the adoption of these
provisions, necessary timeline to
operationalize such requirements, and any
recommendations for changes to the
standards along with related rationale.
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service area of online grocery delivery
services.48 Although the study found that
delivery systems reached around 90 percent
of LILA census tracts, as discussed earlier in
this analysis, this varied substantially
between urban and rural areas. Using data
from the eight States, the researchers
estimated that grocery delivery services were
available in only 39 percent of rural LILA
census tracts, compared to 94 percent of
urban LILA census tracts. Although online
grocery services may have expanded in rural
communities since this data was collected,
and particularly following the onset of the
COVID–19 pandemic, these findings suggest
that WIC online shopping may not reach all
participants equally, especially at first.
Allowing State agencies to adopt online
shopping in WIC would also be less useful
for households without internet access.
According to data from the 2019 American
Community Survey (ACS), between 78 to 85
percent of Americans in metro areas and 70
to 79 percent of Americans in non-metro
areas between ages 18 to 64 living below 199
percent of the Federal poverty line had
access to internet at home.49 This leaves a
significant number of families out of reach
from online shopping services.
• Uncertainties
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TABLE 10—PROJECTED COST OF ONLINE SHOPPING AT DIFFERENT USAGE LEVELS
[Fiscal year (millions)]
2024
Higher (+ 5%): Percentage of participants making at least one WIC purchase online, within participating State
agencies ...............................................
Increase in total WIC food costs due to
online shopping ....................................
Current: Percentage of participants making at least one WIC purchase online,
within participating State agencies .......
Increase in total WIC food costs due to
online shopping ....................................
Lower (¥5%): Percentage of participants
making at least one WIC purchase online, within participating State agencies
Increase in total WIC food costs due to
online shopping ....................................
2025
2026
2027
2028
Total
17%
19%
21%
23%
25%
........................
$7.9
$59.2
$103.7
$155.7
$177.5
$504.0
12%
14%
16%
18%
20%
........................
$5.6
$43.7
$79.0
$121.9
$142.0
$392.1
7%
9%
11%
13%
15%
........................
$3.2
$28.1
$54.3
$88.0
$106.5
$280.1
Notes: All monetary estimates are adjusted for annual inflation.
Impact of WIC Online Shopping on
Redemption
The overall cost impact of enabling online
shopping in WIC will also depend on how
much the added convenience leads to an
increase in overall redemptions. As described
above, the benefits of online shopping are
expected to address some of the barriers and
challenges that WIC participants report about
the current shopping experience. This
analysis expects about a 10 percent increase
in WIC electronic benefit redemptions among
participants that transact at least some WIC
electronic benefits online. As shown in Table
11, a 5-percentage point variation in this
effect is estimated to amount to around a
$120 million difference in the 5-year estimate
for WIC food costs. If benefit redemptions do
not increase at all under the proposed rule,
then the Department still estimates nearly a
$149 million increase in Federal WIC food
costs attributed solely to the expected 13
percent increase in online food prices
described earlier in this analysis.
TABLE 11—PROJECTED COST OF ONLINE SHOPPING AT DIFFERENT REDEMPTION LEVELS
[Millions]
Fiscal year
2024
Higher: 15% Increase in Benefit Redemption for Online Shoppers .............
Current: 10% Increase in Benefit Redemption for Online Shoppers .............
Lower: 5% Increase in Benefit Redemption for Online Shoppers ......................
Zero: 0% Increase in Benefit Redemption
for Online Shoppers .............................
2025
2026
2027
2028
Total
$7.3
$57.2
$103.5
$159.7
$186.1
$513.8
5.6
43.7
79.0
121.9
142.0
392.1
3.8
30.1
54.5
84.0
97.9
270.3
2.1
16.5
29.9
46.2
53.8
148.6
Notes: All monetary estimates are adjusted for annual inflation.
Difference in Prices of Online WIC Foods
The overall cost impact of enabling online
shopping in WIC would also be affected by
differences in the retail prices consumers pay
online. As described earlier in this analysis,
the Department uses current market estimates
to project that WIC shoppers will pay an
average of 13 percent higher retail prices for
WIC foods when transacting benefits online.
An increase or decrease in retail prices of 5
percentage points, relative to in-store prices,
would amount to over a $60 million impact
on the overall Federal WIC food costs
associated with this provision of the
proposed rule over 5 years (see Table 12). If
there is no difference between in-store and
online retail prices of WIC foods, then the
proposed rule is still expected to increase
WIC food costs by around $229 million over
5 years attributed solely to the projected 10
percent increase in redemptions for online
WIC shoppers, as described earlier in this
analysis.
TABLE 12—PROJECTED COST OF ONLINE SHOPPING AT DIFFERENT RETAIL PRICE VARIATIONS
[Millions]
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Fiscal year
2024
Higher: 18% Increase in Retail Prices for
Online Shoppers ...................................
Current: 13% Increase in Retail Prices
for Online Shoppers .............................
Lower: 8% Increase in Retail Prices for
Online Shoppers ...................................
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2025
2026
2027
2028
Total
$6.5
$50.7
$91.6
$141.4
$164.8
$455.0
5.6
43.7
79.0
121.9
142.0
392.1
4.7
36.7
66.3
102.3
119.2
329.2
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TABLE 12—PROJECTED COST OF ONLINE SHOPPING AT DIFFERENT RETAIL PRICE VARIATIONS—Continued
[Millions]
Fiscal year
2024
Zero: 0% Increase in Retail Prices for
Online Shoppers ...................................
2025
3.2
2026
25.5
2027
46.0
2028
71.1
Total
82.8
228.6
Notes: All monetary estimates are adjusted for annual inflation.
Number of State Agencies That Already Meet
New Staffing Requirements
The overall cost of creating new staff
positions based on the provisions of this
proposed rule depend on the Department’s
estimate for current State agency staffing
capacity. However, it is difficult to estimate
how many State agencies already fulfill the
proposed requirements because the
Department does not routinely track State
agencies’ staffing qualifications. If an
additional 5 percent of larger State agencies
(those with more than 7,000 monthly
participants) already meet the new
requirements respectively for each new staff
position, and do not need to hire new staff,
only 36 State agencies would be required to
hire a full-time WIC Food Delivery
Coordinator and 46 State agencies would be
required to hire a full-time WIC Customer
Service Coordinator. Under these conditions,
the above estimate of $55 million for creating
108 new staff positions during FY 2024 to FY
2028 would decrease to nearly $53 million
for creating 104 new staff positions
(including both costs of total compensation
and costs associated with hiring and
recruitment). If an additional 5 percent of
larger State agencies are required to hire new
staff for each new staff position, then 41 State
agencies would be required to hire a full-time
WIC Food Delivery Coordinator and all 51
larger State agencies would be required to
hire a full-time WIC Customer Service
Coordinator. This increase in hiring would
bring the 5-year cost estimate up to $58
million for 114 new staff positions during FY
2024 through FY 2028 (including both costs
of total compensation and costs associated
with hiring and recruitment). See Table 13
for annual and total cost estimates based on
the number of new staff positions required.
TABLE 13—ESTIMATED COST OF CREATING TWO NEW STAFF POSITIONS
[FY 2024–2028, Variations]
Fiscal year (millions)
2024
Higher (+5% of State agencies): 114
New State agency Staff Positions ........
Current: 108 New State agency Staff Positions ...................................................
Lower (¥5% of State agencies): 104
New State agency Staff Positions ........
2025
2026
2027
2028
Total
$6.2
$12.5
$12.6
$13.0
$13.4
$57.7
5.9
11.9
11.9
12.3
12.7
54.7
5.7
11.4
11.5
11.9
12.2
52.7
Notes: All monetary estimates are adjusted for annual inflation. Staffing costs include both total cost of compensation and costs associated
with recruitment and hiring in FY 2024 and FY 2025.
Alternatives
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State Agencies Pay for Delivery Fees
The Department is requesting public
comment on whether State agencies should
have the option to pay for fees associated
with online shopping in a retail food delivery
system with either (1) non-Federal funding at
State agency discretion or (2) Federal funding
in situations where it is deemed necessary to
meet special needs (e.g., participant access or
other needs as identified by the State
agency). If State agencies were to pay for
these fees for all WIC online grocery orders
using Federal funds, then the cost of the
proposed rule would increase. These
additional costs would be a function of two
related cost streams: (1) payments made to
cover the cost of delivery fees, and (2) new
costs associated with a projected increase in
usage of online shopping as WIC participants
would no long face a barrier of out-of-pocket
delivery fees for WIC orders. The cost impact
of the increase in online shopping is
expected to be the same whether State
agencies pay for the delivery fees using
Federal or non-Federal funds.
To analyze the cost impact of this policy
alternative, this analysis focuses on fees
associated with grocery delivery services
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from internet-based grocery retailers and, in
this model, assumes that all State agencies
opt to pay for delivery fees for all WIC online
shopping delivery orders. The Department
averaged the typical delivery and service fees
of six of the largest online grocery firms.
After adjusting for annual inflation, the
Department estimates that an average online
grocery order in 2024 will be assessed $9.59
in delivery and service fees, increasing to
$10.51, adjusting for inflation, in FY 2028.
The Department expects an increase in the
use of online shopping in WIC if participants
do not have to pay delivery fees. Based on
data from a recent Mercatus report, the
Department estimates that, when faced with
delivery fees, 33 percent of WIC online
shopping orders will be placed for home
delivery while the remaining 67 percent will
opt for in-store or curbside pickup.50 While
many shoppers prefer curbside pickup
regardless of the fees associated with
delivery, this analysis estimates the share of
online WIC shoppers choosing home delivery
will increase from 33 percent to 45 percent
if State agencies pay for delivery fees on
50 Mercatus. ‘‘eGrocery Transformed: Market
projections and insight into online grocery’s
elevated future,’’ 2021.
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behalf of participants. Paying delivery fees on
behalf of participants is also expected to
attract more in-store only shoppers to
purchase WIC foods online. While the
Department expects about 12 percent of WIC
participants to transact their food benefits
online in FY 2024, this figure is expected to
increase slightly to 14 percent if State
agencies pay for delivery fees and continue
to steadily increase to 22 percent in FY 2028
(up from the 20 percent projected in Table 6
of this analysis). As discussed previously, the
Department expects the average online WIC
shopper would transact about 50 percent of
the WIC food benefits they use online and the
other 50 percent in brick-and-mortar stores.
Data from four States in 2012 indicate that
the average WIC participant in those States
made 3.2 WIC shopping trips each month to
use their WIC benefits.51 National polling
data suggest that individuals who buy
groceries online do so less frequently than in51 Phillips, D., Bell, L., Morgan, R., & Pooler, J.
(2014). Transition to EBT in WIC: Review of impact
and examination of participant redemption
patterns: Final report. Retrieved from https://
altarum.org/sites/default/files/uploadedpublication-files/Altarum_Transition%20
to%20WIC%20EBT_Final%20Report_071614.pdf.
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store shopping trips.52 Accordingly, the
Department estimates that the average online
WIC shopper will make one online WIC order
each month and that the average WIC
household will order benefits for two WIC
participants in a single order (e.g., formula
for a partially breastfeeding infant and WICapproved foods for their partially
breastfeeding parent).53
Given these assumptions, the Department
estimates that total delivery fees paid will
amount to $124 million between FY 2024
and FY 2028 (Table 14). The slight expected
increase in online shopping if State agencies
pay for delivery fees on behalf of participants
is expected to result in a total 5-year increase
of $437 million in Federal WIC food costs,
approximately $45 million higher than the
estimated $392 million increase to food costs
over 5 years attributed to the proposed rule
as currently written (Table 7). Between the
projected increase in food costs and the new
costs incurred for delivery fees, the
Department estimates that using Federal
11551
funds to pay delivery fees on behalf of
participants would increase the cost of this
proposed rule by around $169 million over
5 years (Table 14). If State agencies use only
non-Federal funds to pay for the delivery
fees, then the increase to Federal transfers
would only reflect the increase in food costs
driven by the increased uptake in online
shopping described above—increasing 5-year
costs by about $45 million.
TABLE 14—ESTIMATED IMPACT ON COST OF PROPOSED RULE IF STATE AGENCIES PAY DELIVERY FEES
[FY 2024–2028]
Fiscal year (millions)
2024
Alternative:
Projected increase in Federal food
costs due to online shopping if
State agencies pay delivery fees ..
Projected total cost of delivery fees
(paid by State agencies) ...............
Current:
Projected increase in Federal food
costs due to online shopping if
participants pay delivery fees outof-pocket (Current) ........................
Increase in cost of proposed rule if
State agencies pay delivery fees
with Federal funds .........................
2025
2026
2027
2028
Total
$6.5
$49.9
$88.8
$135.4
$156.2
$436.9
1.9
14.5
25.8
38.4
43.3
123.9
5.6
43.7
79.0
121.9
142.0
392.1
2.8
20.7
35.7
52.0
57.5
168.7
Notes: All monetary estimates are adjusted for annual inflation.
Requiring All 89 State Agencies To Create
Two New Full-Time Staff Positions
The Department proposes to adjust the
staffing standards based on the caseload size
of the State agency. As an alternative, the
Department could have proposed to require
all 89 State agencies to create two new full-
time staffing positions. Under the alternative,
the total number of new staff positions
required would be 178, and the total
estimated cost would be $90 million
(including both costs of total compensation
and costs associated with hiring and
recruitment). However, the Department
ultimately decided to adjust the staffing
requirements based on each State agency’s
participant caseload due to resource
constraints and to avoid undue burden on
smaller States, Territories, and ITOs. See the
Table 15 for annual and total cost estimates
if all State agencies were required to employ
two new full-time staff.
TABLE 15—ESTIMATED COST OF ALL STATE AGENCIES CREATING TWO NEW STAFF POSITIONS
[FY 2024–2028]
Fiscal year (millions)
2024
Current:
108 New State agency Staff Positions ...............................................
Alternative:
178 New State agency Staff Positions (requiring all State agencies
to hire new staff) ...........................
2025
2026
2027
2028
Total
$5.9
$11.9
$11.9
$12.3
$12.7
$54.7
9.7
19.6
19.7
20.3
20.9
90.2
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Notes: All monetary estimates are adjusted for annual inflation. Staffing costs include both total cost of compensation and costs associated
with recruitment and hiring in FY 2024 and FY 2025.
52 Brenan, M. ‘‘More in U.S. Grocery Shopping
Online, Fewer Dining Out.’’ Gallup, 10 August
2021. Available online at: https://news.gallup.com/
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poll/353090/grocery-shopping-online-fewerdining.aspx.
53 According to data reported by 80 State agencies
in the Supplemental Data Set of the WIC Participant
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and Program Characteristics 2020 Final Report, the
average WIC household includes around 2
individuals receiving WIC benefits.
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Accounting Statement
As required by OMB Circular A–4
(available at https://www.whitehouse.gov/wpcontent/uploads/legacy_drupal_files/omb/
circulars/A4/a-4.pdf), the Department has
prepared an accounting statement
summarizing the annualized estimates of
benefits and costs associated with the
provisions of this proposed rule.
The benefits of the proposed rule include
decreasing burden on WIC participants, WIC
vendors, and State agencies; encouraging
innovation by State agencies; and allowing
WIC participants to transact benefits in new
and innovative ways.
The net costs or savings (i.e., negative
costs) and transfers associated with
provisions of the proposed rule are incurred
by the Federal government, WIC State
Agencies, and/or WIC vendors. These
include the following, as described in the full
regulatory impact analysis text:
• Costs for new staff positions
• Costs associated with updating State
agency systems for online transactions
• Decreased administrative burden
• Increased WIC food spending
TABLE 16—UNDISCOUNTED COST AND TRANSFER STREAM
[$ millions]
Fiscal year
2024
Nominal Federal transfer stream .............
Nominal State Agency cost stream .........
Nominal WIC Vendor cost stream ...........
2025
$5.6
¥2.7
¥3.5
2026
$43.7
9.4
¥3.6
2027
$79.0
7.7
¥3.7
2028
$121.9
8.8
¥3.8
Total
$142.0
6.9
¥3.8
$392.1
30.1
¥18.4
Applying 3 percent and 7 percent discount
rates to these undiscounted streams gives
present values (in 2022 dollars):
TABLE 17—DISCOUNTED COST AND TRANSFER STREAMS
[$ Millions, 2022 Dollars]
Fiscal year
2024
Discounted Federal transfer stream
3 percent ...........................................
7 percent ...........................................
Discounted State Agency cost stream
3 percent ...........................................
7 percent ...........................................
Discounted WIC Vendor cost stream
3 percent ...........................................
7 percent ...........................................
2025
2026
2027
2028
Total
$5.0
4.7
$37.4
33.5
$64.3
55.4
$94.3
78.3
$104.4
83.5
$305.5
255.3
¥2.4
¥2.2
7.9
7.0
6.1
5.2
6.6
5.5
4.8
3.9
23.0
19.4
¥3.3
¥3.1
¥3.3
¥2.9
¥3.3
¥2.8
¥3.2
¥2.7
¥3.2
¥2.6
¥16.3
¥14.1
Table 18 takes the discounted streams from
Table 17 and computes annualized values in
FY 2022 dollars.
TABLE 18—ACCOUNTING STATEMENT
Benefits
Range
Estimate
Year
dollar
Discount
rate
Period
covered
Qualitative: Improved shopping experience, increased flexibility and convenience, and decreased burden on WIC participants; increased flexibility for WIC State Agencies; and increased opportunity for innovation by WIC State Agencies and WIC vendors.
State Agencies, WIC Vendors, and WIC Participants
Annualized Monetized ($millions/year) .....................
n.a.
n.a.
Transfers
Range
Estimate
n.a.
Year
dollar
n.a.
FY2024–2028
Discount
rate
Period
covered
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Quantitative: Impact of online shopping on Federal transfers for WIC food spending.
Annualized Monetized ($millions/year) .....................
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3%
FY2024–2028
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TABLE 18—ACCOUNTING STATEMENT—CONTINUED
Costs
Range
Estimate
Year
dollar
Discount
rate
Period
covered
State Agencies
Quantitative: Net impact of online purchasing system and maintenance, increased staffing costs, and decreased administrative costs.
Annualized Monetized ($millions/year) .....................
n.a
................
$3.9
$4.6
2022
2022
7%
3%
FY2024–2028
7%
3%
FY2024–2028
WIC Vendors (Negative Costs = Savings)
Quantitative: Impact of decreased administrative costs.
Annualized Monetized ($millions/year) .....................
¥$2.8
¥$3.3
n.a
................
2022
2022
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]]>Agencies
[Federal Register Volume 88, Number 36 (Thursday, February 23, 2023)]
[Proposed Rules]
[Pages 11516-11553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02484]
[[Page 11515]]
Vol. 88
Thursday,
No. 36
February 23, 2023
Part II
Department of Agriculture
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Food and Nutrition Service
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7 CFR Part 246
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC): Online Ordering and Transactions and Food Delivery Revisions To
Meet the Needs of a Modern, Data-Driven Program; Proposed Rule
Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 /
Proposed Rules
[[Page 11516]]
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DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 246
[FNS-2022-0015]
RIN 0584-AE85
Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC): Online Ordering and Transactions and Food Delivery
Revisions To Meet the Needs of a Modern, Data-Driven Program
AGENCY: Food and Nutrition Service (FNS), Department of Agriculture
(USDA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Nutrition Service, USDA (the Department),
proposes to remove barriers to online ordering and internet-based
transactions in the Special Supplemental Nutrition Program for Women,
Infants, and Children (WIC) through this rulemaking. This is expected
to improve the WIC shopping experience while increasing equity and
access to nutritious foods for WIC participants, thus positively
impacting nutrition security. The proposed rule also complements the
Program's near-complete transition to electronic benefit transfer (EBT)
by streamlining and modernizing certain WIC food delivery regulations
to support current technology and future innovation, and by introducing
measures intended to meet the needs of a modern, data-driven program
that uses these technologies for food delivery.
DATES: Written comments must be received on or before May 24, 2023 to
be assured of consideration.
ADDRESSES: The Food and Nutrition Service, USDA, invites interested
persons to submit written comments on this proposed rule. Comments may
be submitted in writing by one of the following methods:
Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting
comments. The https://www.regulations.gov electronic filing system will
accept comments until 11:59 p.m. Eastern Time at the end of May 24,
2023.
Regular U.S. Mail: WIC Vendor and Technology Branch,
Policy Division, Food and Nutrition Service, P.O. Box 2885, Fairfax,
Virginia 22031-0885.
Overnight, Courier, or Hand Delivery: Patricia Bailey, WIC
Vendor and Technology Branch, Policy Division, Food and Nutrition
Service, 1320 Braddock Place, 3rd Floor, Alexandria, Virginia 22314.
All written comments submitted in response to this
proposed rule will be included in the record and will be made available
to the public. Please be advised that the substance of the comments and
the identity of the individuals or entities submitting the comments
will be subject to public disclosure. FNS will make the written
comments publicly available on the internet via https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Patricia Bailey, Chief, WIC Vendor and
Technology Branch, Policy Division, Supplemental Nutrition and Safety
Programs, Food and Nutrition Service, USDA, 1320 Braddock Place,
Alexandria, Virginia 22314, (703) 305-2435 or [email protected].
SUPPLEMENTARY INFORMATION:
I. Overview
The retail grocery industry has changed over the past several years
and online shopping has become an increasingly common method to shop
for groceries. Advances in technology related to online shopping and
the development of new payment types have greatly influenced the way
Americans shop and pay for food. To ensure that participants in the
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC) have equal access to available shopping options and can transact
their WIC benefits as the retail marketplace innovates and evolves, the
Department proposes to remove barriers to innovation and to modernize
certain WIC food delivery regulations. To accompany these proposed
changes, the Department proposes additional measures to meet the needs
of a modern, data-driven program that uses current technologies for
food delivery.
Specifically, this rulemaking proposes to:
(1) Remove barriers to online ordering and internet-based
transactions in WIC, including a current prohibition of the
authorization of internet-based vendors. The proposed revisions would
provide State agencies the flexibility to offer online shopping to
participants in a way that maintains program integrity. The revisions
support oversight measures and policies appropriate for current and
future technologies and security requirements and also support program
integrity as the retail marketplace innovates.
(2) Streamline and modernize WIC food delivery. The proposed
revisions are intended to reflect the Program's near-complete
transition to electronic benefit transfer (EBT), support current
technology and future innovation, and expand opportunities for the
retail grocery industry to innovate in ways that benefit WIC
participants. The proposed revisions would also allow State agencies to
develop and test new types of food instruments (e.g., mobile payments)
and allow for the remote issuance of WIC benefits.
(3) Meet the needs of a modern, data-driven program that uses
current technologies for food delivery by updating reporting
requirements and introducing new staff positions intended to support
the operational capacity of WIC State agencies.
In the development of this proposed rule, the Department
prioritized equity and access for WIC participants. However, the
Department recognizes that the proposed rule would impact WIC State
agencies, including Indian Tribal Organizations (ITOs), as well as
local agencies, clinics, and vendors in ways that could affect
participants' access to benefits. To mitigate any potential civil
rights-related impacts of the proposed rule, FNS intends to provide
State agencies with technical assistance to implement and communicate
program changes in alternative languages and formats that are
accessible to all participants and vendors, and to enable small
vendors, especially small, minority- and Tribal-owned stores, to engage
with online shopping.
The Department's overarching goal is to advance nutrition security
by improving the WIC shopping experience and ensuring that WIC
participants have equitable access to nutritious foods. At the same
time, the Department recognizes the importance of maintaining security
and oversight measures at the Federal and State agency levels. This
rule represents a major transition for the WIC Program and is expected
to increase participant satisfaction and, ultimately, participation and
retention while preserving program integrity.
II. Background
This part provides key terms used throughout this preamble, an
overview of the WIC Program, challenges of the current WIC shopping
experience, and a summary of information used to develop this proposed
rule. Proposed regulatory changes are discussed in detail in part III.
A. Introduction of Key Terms
For the purposes of this proposed rule preamble, the Department
will use the following terms:
[[Page 11517]]
``WIC shopper'' means a person shopping using WIC benefits
(i.e., a WIC participant, proxy, or a parent or caretaker of an infant
or child participant).
``Online shopping'' means the general use of an online,
internet-based ordering system, platform, or site. It can encompass
online ordering with or without internet-based transactions (i.e., the
transaction can occur via the internet, in store, curbside, or at the
point of delivery).
``Online ordering'' means the process a customer
(including a WIC shopper) uses to select food items for purchase via an
internet-based ordering system, platform, or site.
``Transaction'' means the process by which a WIC shopper
exchanges their WIC benefits for supplemental foods.
``Internet-based transaction'' means a transaction where
the WIC payment is completed through the payment section of the online
ordering system, platform, or site. This terminology is being used in
lieu of ``online transaction'' to avoid confusion with transactions
that occur using online EBT technology.
``Redemption'' means the process in which a vendor submits
records of electronic benefits for redemption and the State agency (or
its financial agent) makes payment to the vendor.
B. Overview of the WIC Program
The WIC Program is administered by 89 WIC State agencies, including
the 50 States, 33 Indian Tribal Organizations, the District of
Columbia, and 5 U.S. Territories (American Samoa, the Commonwealth of
the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin
Islands). WIC serves to safeguard the health of low-income pregnant,
breastfeeding, and non-breastfeeding postpartum individuals, and
infants and children up to age five who are found to be at nutritional
risk. In 2019, WIC participants included nearly 43 percent of all
infants in the United States,\1\ and in fiscal year (FY) 2020, WIC
served an average of 6.25 million participants per month.\2\
---------------------------------------------------------------------------
\1\ U.S. Department of Agriculture, Food and Nutrition Service,
``National- and State-Level Estimates of WIC Eligibility and WIC
Program Reach in 2019: Final Report, Volume I,'' pp. 65, by Kelsey
Farson Gray et al. Project Officer Grant Lovellette, Alexandria, VA:
February 2022. Available online at: https://fns-prod.azureedge.net/sites/default/files/resource-files/WICEligibles2019-Volume1.pdf.
\2\ U.S. Department of Agriculture Food and Nutrition Service,
``WIC Data Tables,'' 2021. Available online at: https://www.fns.usda.gov/pd/wic-program.
---------------------------------------------------------------------------
The Department provides Federal grants to WIC State agencies to
provide supplemental foods, health care referrals, and nutrition
education, including breastfeeding promotion and support, to WIC
participants. WIC participants typically access supplemental foods
through a retail food delivery system. In such systems, a WIC shopper
goes to a WIC-authorized vendor (i.e., a retail store authorized by the
State agency), selects foods available in their benefit balance, and
uses an EBT card to purchase the items. In FY 2020, there were
approximately 40,000 WIC-authorized vendors nationwide, and nearly 93
percent of WIC participants received WIC benefits via EBT.
C. Challenges of the Current WIC Shopping Experience
Currently, WIC regulations at 7 CFR 246.12(r)(4) require
participants to pick up food instruments (e.g., paper food instruments,
cash-value vouchers (CVVs), or EBT cards) in person. While WIC State
agencies are required to develop plans per Sec. 246.4(a)(23) to
``minimize the time participants and applicants must spend away from
work'' and issue food instruments and CVVs ``through means other than
direct participant pick-up,'' participants report that the time and
money spent traveling to a WIC clinic to pick up food instrument(s)
remains a barrier to participation. The proposed rule would encourage
State agencies to remotely issue electronic benefits and mail EBT cards
whenever possible, potentially reducing the number of clinic visits
that WIC participants are required to make.
Additionally, WIC regulations generally only allow WIC State
agencies to authorize vendors with a single, fixed location (Sec.
246.2, Vendor) and require the WIC shopper to sign food instruments or
enter a Personal Identification Number (PIN) in the presence of a
cashier (Sec. 246.12(h)(3)(vi)). These two provisions require that the
WIC transaction occurs in the physical space of a brick-and-mortar
store.
These in-person requirements present challenges to families,
particularly those with limited mobility or access to transportation,
those who live in remote or rural communities, and/or those with
special dietary needs who require supplemental food substitutions that
may not be readily available at the closest WIC-authorized grocery
store. WIC households, which are less likely to use a personal vehicle
for grocery shopping than higher-income non-WIC households,\3\ are
expected to benefit from additional flexibilities around both benefit
issuance and pickup and the shopping experience.
---------------------------------------------------------------------------
\3\ U.S. Department of Agriculture, Economic Research Service,
``Where Do Americans Usually Shop for Food and How Do They Travel to
Get There? Initial Findings from the National Household Food
Acquisition and Purchase Survey,'' EIB-138, pp. 10, by Michele Ver
Ploeg et al., March 2015. Available online at: https://www.ers.usda.gov/publications/pub-details/?pubid=79791.
---------------------------------------------------------------------------
D. Key Information Used in the Development of This Rule
To develop this proposed rule, FNS reviewed technical materials
developed by a wide variety of WIC stakeholders, including:
The Gretchen Swanson Center for Nutrition (GSCN), through
a grant from FNS, developed a comprehensive plan for implementing
online shopping in WIC. This plan, called the Blueprint for WIC Online
Ordering Projects (the ``Blueprint''), was published on June 15,
2021.\4\ GSCN utilized an input and consensus building process (a
Delphi process) to gather information from WIC stakeholders on policy,
technical, and programmatic factors important to the implementation of
online shopping in WIC. The Blueprint provides implementation guidance
for all WIC State agencies and stakeholders testing online shopping in
WIC.
---------------------------------------------------------------------------
\4\ Gretchen Swanson Center for Nutrition, ``Blueprint for WIC
Online Ordering Projects,'' June 2021. Available online at: https://static1.squarespace.com/static/58a4dda16a49633eac5e02a1/t/60c8ea51296905287a9420eb/1623779922155/Blueprint+for+WIC+Online+Ordering.pdf.
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The Task Force on Supplemental Foods Delivery (the ``Task
Force''), authorized by the Consolidated Appropriations Act for Fiscal
Year 2021 (Pub. L. 116-260), consisted of WIC stakeholders convened to
independently ``study measures to streamline the redemption of
supplemental foods benefits that promote convenience, safety, and
equitable access to supplemental foods, including infant formula.'' The
Task Force consisted of 18 member organizations from multiple sectors
to ensure a diverse range of input from: WIC providers, retailers,
manufacturers, EBT processing companies, advocacy organizations, WIC
participants, and additional stakeholders. The Task Force submitted its
recommendation report to FNS on September 30, 2021.\5\
---------------------------------------------------------------------------
\5\ U.S. Department of Agriculture, Food and Nutrition Service,
``Task Force on Supplemental Food Delivery in the WIC Program--
Recommendations Report,'' September 2021. Available online at:
https://www.fns.usda.gov/wic/food-delivery-task-force-recommendations-report.
---------------------------------------------------------------------------
FNS reviewed the Task Force's recommendation report and the
Blueprint's summary of regulatory barriers, and this proposed rule
addresses the online shopping
[[Page 11518]]
recommendations from these documents that are within the appropriate
scope of this rulemaking. While in some instances FNS has taken a
different approach than recommended by the Task Force's recommendation
report and/or Blueprint, the proposed revisions reflect the overall
goals of these stakeholder efforts while adhering to the general
purpose and scope of the WIC Program.
This proposed rule was also informed by State agency feedback,
including feedback on waivers of WIC regulatory requirements issued to
State agencies as part of the Department's COVID-19 pandemic response
(under time-limited waiver authority granted by the Families First
Coronavirus Response Act, Pub. L. 116-127). Feedback on waivers related
to the WIC shopping experience (e.g., remote benefit issuance,
transaction without presence of cashier, and removing the on-site
requirement from monitoring actions) highlighted opportunities for
modernization within the Program. For example, almost all WIC State
agencies reported that the ``remote benefit issuance waivers made WIC
safer, more accessible, and more convenient for participants' schedules
during the pandemic.'' \6\
---------------------------------------------------------------------------
\6\ U.S. Department of Agriculture, Food and Nutrition Service,
``Changes in WIC Operations During the COVID-19 Pandemic: A First
Look at the Impact of Federal Waivers,'' pg. 1, December 2021.
Available online at: https://www.fns.usda.gov/wic/operations-impact-federal-waivers-during-covid-19-pandemic.
---------------------------------------------------------------------------
FNS has also heard from WIC State agencies that identifying and
recruiting top talent are integral to the success of the WIC Program as
it evolves to better serve participants through modern technologies.
The improved data collection and strengthened staffing requirements
proposed in this rule would ensure that the WIC Program has the
resources needed to run a modern, data-driven program while maintaining
program integrity and security measures.
Additionally, this proposed rule was informed by WIC participant
feedback, which indicates strong interest in expanded WIC shopping
options. In a National WIC Association survey that collected responses
from 26,642 WIC participants from 12 WIC State agencies, about two-
thirds of respondents reported that they would like to be able to order
their supplemental foods online or by phone, and about one-third even
indicated that they would be willing to pay an additional out-of-pocket
fee for home delivery.\7\
---------------------------------------------------------------------------
\7\ Lorrene Ritchie et al., ``Multi-State WIC Participant
Satisfaction Survey: Learning from Program Adaptations During
COVID,'' pg. 14, National WIC Association: December 2021. Available
online at: https://s3.amazonaws.com/aws.upl/nwica.org/nwamulti-state-wic-participant-satisfaction-surveynationalreportfinal.pdf.
---------------------------------------------------------------------------
This proposed rule also incorporates lessons learned from the
Supplemental Nutrition Assistance Program's (SNAP) efforts to support
online shopping for SNAP participants, including the importance of
building program integrity measures into all levels of oversight.
Learning from SNAP's experiences will allow the two programs to move
forward consistently, to the extent possible, and ensure that cross-
program integrity efforts continue without interruption.
III. Discussion of Proposed Revisions
1. Remove Barriers to Online Ordering and Internet-Based Transactions
The proposed revisions would remove regulatory barriers to online
shopping and allow the Program to adapt with the marketplace, in order
to ensure that WIC participants have access to a broader array of
shopping options and are not left behind as the industry innovates. The
proposed revisions would ensure that WIC State agencies have the
flexibility necessary to oversee new types of vendors and to maintain
program integrity and security. FNS would support WIC State agencies
through technical assistance to make online shopping platforms and
communications about program changes accessible in appropriate
languages and alternative formats for all participants and vendors.
The following is a discussion of each proposed provision.
a. Allow Vendors and WIC Shoppers to Complete Internet-Based
Transactions [Sec. Sec. 246.12(h)(3)(v), (vi), and (xxxii),
(v)(1)(iv), and (bb)(2)].
The Department proposes to allow vendors and WIC shoppers to
complete internet-based transactions by removing the requirement that
WIC shoppers must sign food instruments, or enter a PIN, in the
presence of a cashier (Sec. 246.12(h)(3)(vi)). This flexibility would
allow WIC State agencies to modernize along with the retail grocery
industry.
The Department proposes the following changes to:
(i) Clarify which vendor agreement provisions apply only to paper
food instruments.
The Department proposes changing ``printed'' to ``paper'' in Sec.
246.12(h)(3)(vi) to indicate that the remainder of the provision
applies specifically to paper food instruments. The Department also
proposes to consolidate the requirement from Sec. 246.12(h)(3)(v) to
enter the purchase price of the authorized supplemental foods on paper
food instruments and CVVs before they are signed into a single
provision at Sec. 246.12(h)(3)(vi). In addition to this change, the
Department proposes modernizing the remaining text at Sec.
246.12(h)(3)(v), to ensure that the requirements around the calculation
of the purchase price continue to be applicable in EBT, and that a WIC
shopper is made aware of the total purchase price of a transaction
before the transaction is completed, as a program integrity measure.
(ii) Remove the requirement that WIC shoppers must sign in the
presence of a cashier.
The Department proposes further revising the signature requirement
for paper food instruments and CVVs at Sec. 246.12(h)(3)(vi) by
removing the requirement that the WIC shopper's signature is completed
in the presence of a cashier. WIC shoppers would still be required to
sign the paper food instrument or CVV to complete the transaction.
Separate transaction authentication policies, described below, include
program security requirements for EBT transactions.
(iii) Remove the requirement to use a PIN in lieu of a signature
and create new provisions to allow WIC State agencies to explore and
identify options to authenticate EBT transactions.
The Department proposes to remove the portion of Sec.
246.12(h)(3)(vi) that allows use of a PIN in lieu of a signature and
create a new provision at Sec. 246.12(h)(3)(xxxii), which would
require vendors to authenticate EBT transactions in accordance with
State agency policies. The Department also proposes a new provision at
Sec. 246.12(bb)(2) to require that State agencies' transaction
authentication policies are in compliance with standards established by
the Department. Together, these provisions will provide State agencies
the flexibility to develop transaction authentication policies that are
appropriate and secure for the specific technologies they choose to
adopt while ensuring a level of consistency across State agencies.
Taken together, the creation of Sec. 246.12(h)(3)(xxxii) and
(bb)(2) along with the revisions to Sec. 246.12(h)(3)(vi) would
provide WIC State agencies the flexibility to allow internet-based
transactions using modern and appropriate authentication technologies,
and allow the Department the flexibility to develop the necessary
technical and security requirements in technical documents that can be
updated as the industry innovates. The Department
[[Page 11519]]
proposes similar edits to Sec. 246.12(v)(1)(iv), which would ensure
that transactions at authorized farmers and farmers' markets also occur
in accordance with the procedures established by the State agency and
developed according to standards established by the Department.
b. Create New Types of Vendors [Sec. 246.2].
The Department proposes creating separate definitions for different
types of vendors at Sec. 246.2. The Department proposes new
definitions for ``brick-and-mortar vendors,'' ``internet vendors,'' and
``mobile vendors.'' Creating new types of vendors would provide State
agencies with flexibility to authorize the types of vendors needed to
support program modernization while ensuring participant access to
supplemental foods throughout their jurisdictions. To ensure continued
and effective State agency management and oversight, all authorized
vendors, no matter the type, would be subject to all regulations
governing vendors.
The Department proposes the following changes to:
(i) Create a new definition for ``brick-and-mortar vendor.''
The Department proposes a definition for ``brick-and-mortar
vendor,'' which would allow this type of vendor to be defined
separately and distinctly from other vendor types (e.g., internet or
mobile vendors). Historically, vendors authorized under a retail food
delivery system were required to be brick-and-mortar vendors. The
Department proposes to clarify that ``all transactions that take place
at a brick-and-mortar vendor will be assigned to that vendor'' to
reinforce that the location of the transaction (e.g., at a single,
physical, fixed location; via an internet-based transaction; or at
mobile vendor) is used to classify vendors by vendor type, not the
location where the order was made or fulfilled.
(ii) Create a new definition for ``internet vendor.''
The Department proposes a new definition of ``internet vendor'' to
distinguish vendors operating through an online platform with internet-
based transactions from brick-and-mortar vendors. The proposed
definition for ``internet vendor'' is based, in part, on SNAP's working
definition of ``internet retailer,'' and would be implemented
consistently with SNAP's definition, to the extent possible, to ensure
that cross-program integrity efforts may continue without interruption.
(iii) Create a new definition for ``mobile vendor.''
The Department proposes to create a separate definition of ``mobile
vendor'' to distinguish mobile vendors with transactions that take
place at a truck, bus, pushcart, or other mobile vehicle. This is
different from vendors operating a brick-and-mortar location with
transactions at the physical, fixed location.
(iv) Update the definition of ``above-50-percent vendors.''
The Department proposes to revise this definition to ensure that
any type of authorized vendor (e.g., brick-and-mortar, internet, or
mobile) could also be classified as an above-50-percent vendor if it
meets the conditions of the definition.
c. Modernize the Definition of ``Vendor'' [Sec. Sec. 246.2 &
246.4(a)(14)(xv)].
The Department proposes to modernize the current definition of
``vendor'' to allow State agencies the flexibility to authorize more
types of vendors (e.g., ``internet vendors,'' and ``mobile vendors'').
The Department proposes the following changes to:
(i) Remove language from the definition of ``vendor'' that
currently only allows WIC State agencies to authorize vendors with a
``single, fixed location'' (i.e., brick-and-mortar vendors).
The Department proposes to remove this requirement to allow for the
creation of distinct vendor type definitions, including ``brick-and-
mortar,'' ``internet,'' and ``mobile'' vendors, as described in more
detail above. The proposed revision would allow State agencies the
flexibility to authorize vendors that would provide supplemental foods
through means other than a single, fixed location.
(ii) Simplify the definition of ``vendor'' by replacing current
regulatory language delineating different business structures that a
vendor may have (i.e., a sole proprietorship, partnership, cooperative
association, corporation, or other business entity) with the term
``business entity.'' This simplified language would clarify that any
type of business entity may be authorized as long as it meets the State
agency's selection criteria. This would remove the burden of proving or
determining business structure from vendor applicants and WIC State
agencies during the vendor authorization process.
(iii) Remove a clause in the definition of ``vendor'' requiring a
special needs justification for mobile vendors.
The Department proposes removing the requirement for a State agency
to justify the authorization of mobile vendors in its State Plan. This
would allow State agencies to authorize mobile vendors more easily and
would remove the burden of providing justification to FNS for such
authorizations. This change is in alignment with the proposed removal
of the related provision at Sec. 246.4(a)(14)(xv).
(iv) Clarify that all vendors must be authorized separately.
The Department proposes to clarify that all vendors, regardless of
type, must be authorized by the State agency separately. To ensure that
an authorization in SNAP is related to only one WIC authorization per
State agency, vendors with a unique SNAP authorization number must be
authorized as unique vendors by any WIC State agency that authorizes
them. This allows for coordination of vendor/retailer activities
between the two programs, supports the ability for the programs to move
forward consistently, to the extent possible, and ensures that cross-
program integrity efforts continue without interruption (e.g.,
reciprocal disqualifications, etc.).
For vendors with store locations that are not SNAP authorized, the
Department proposes that each single, separate location is considered a
unique vendor from all other store locations and, therefore, must be
authorized separately. This is consistent with how the WIC Program
currently authorizes vendors.
The proposed revision also clarifies that a vendor providing
supplemental foods through any means other than a single, fixed
location must be authorized separately from brick-and-mortar vendors,
even if operated by the same business entity. This is consistent with
SNAP's current retailer authorization practices.
The Task Force encouraged FNS to explore ``the option for a
national authorization process, with State opt-ins, that could
streamline multistate authorization for virtual vendor platforms.''
However, as section (c)(2)(A) of the Child Nutrition Act of 1966 (42
U.S.C. 1786(c)(2)(A)) obligates the Secretary to ``make cash grants to
State agencies for the purpose of administering the program,'' the
Department does not have authority to authorize vendors in the WIC
Program. This activity, along with all other vendor management
functions, is delegated to WIC State agencies. The Department's
proposed provisions aim to streamline and modernize WIC food delivery
wherever possible, while remaining within the scope and purpose of the
Program.
d. Allow Vendors to Return Benefits to a Participant's Benefit
Balance [Sec. Sec. 246.12(h)(3)(ii) introductory text, (h)(3)(ii)(A)
and (C), (x)(2)(iii), (x)(4) introductory text, and (x)(4)(i)].
[[Page 11520]]
The Department proposes revisions to allow electronic benefits to
be returned to the participant's benefit balance when an item requested
through the online ordering process is not fulfilled as ordered, while
reinforcing that cash refunds continue to be prohibited. The proposed
revisions would also provide changes to support the electronic benefit
return process, including providing additional time for participants to
use their returned electronic benefits to purchase supplemental foods.
This is intended to ensure that WIC shoppers who attempt to order items
online close to the last date of use for those benefits do not lose
them if the vendor is unable to fulfill the order. These changes would
support the participant's ability to fully transact their electronic
benefits for supplemental foods (i.e., to allow the use of the benefit
balance at a later date or at another vendor) and ensure that the State
agency is only charged for foods received by the participant. These
flexibilities are expected to be particularly important to support the
purchase of fruits and vegetables with cash-value benefits (CVBs),
since those items are often priced by weight.
The differences proposed in this rule between food instruments,
electronic benefits, CVVs, and CVBs are discussed in more detail with
the Department's proposal to permit the remote issuance of electronic
benefits to a participant's benefit balance (section 2.a.).
The Department proposes the following changes to:
(i) Clarify that cash refunds are still prohibited and update
exchange policy to accommodate recalls.
The Department proposes adding ``cash'' to the sentence, ``[n]o
substitutions, cash, credit, cash refunds, or exchanges'' in Sec.
246.12(h)(3)(ii) to ensure that cash refunds would continue to be
prohibited. The proposed provision would clarify that the vendor must
not provide cash in exchange for electronic benefits, nor a cash refund
for supplemental foods purchased with benefits.
The Department proposes additional changes to Sec.
246.12(h)(3)(ii) introductory text and (3)(ii)(A), and to introduce
Sec. 246.12(h)(3)(ii)(C). First, the Department proposes to clarify
when language refers to paper food instruments and CVVs versus
electronic benefits throughout the provision. Second, the Department
proposes adding ``type'' and ``physical form'' to the list of
characteristics to ensure that exchanges are limited to identical
authorized supplemental food items. Lastly, the Department proposes to
introduce language at Sec. 246.12(h)(3)(ii)(C) to ensure that all
customers, including WIC shoppers, are treated the same in the event
that an authorized supplemental food is recalled. The Department
proposes introducing this vendor agreement provision to ensure that
WIC-authorized vendors include WIC shoppers in their recall exchange
policies, including policies related to replacements (which may
include, but are not limited to, the same product, a substitute
product, store credit, or a cash refund). Under this new provision, WIC
shoppers would be able to exchange recalled product like all other
consumers.
(ii) Allow for the return and use of electronic benefits when an
online order cannot be fulfilled.
The Department proposes to add the provisions at Sec. 246.12(x)(4)
to allow for the return and use of electronic benefits when an online
order cannot be fulfilled. This proposed provision would support
participants' ability to fully transact their benefits for supplemental
foods, and to ensure that the State agency is only charged for foods
received by the participant.
(iii) Allow for the return and use of electronic benefits not
successfully transacted before the last date of use.
To address issues that may arise as transactions approach the last
date of use, the Department proposes Sec. 246.12(x)(4)(i) to allow the
return of electronic benefits, and to provide time for subsequent
transactions to occur. This provision would provide the participant
with no less than 7 calendar days to transact the returned benefits
when electronic benefits are returned to a participant's benefit
balance. This would promote full benefit redemption for participants,
while establishing an expectation for the length of time electronic
benefits would remain available after the original last date of use.
This proposed creation of these provisions would necessitate a
revision to Sec. 246.12(x)(2)(iii) to reference the proposed provision
that addresses the return of benefits after the last date of use Sec.
246.12(x)(4)(i). The Department expects that WIC State agencies will
require additional time to develop and refine the technological
solutions needed to meet these provisions and is proposing an extended
implementation timeframe of eighteen months from publication of the
final rule.
e. Allow State Agencies to Develop Virtual Methods of Oversight
[Sec. Sec. 246.2 and 246.12(g)(5) and (j)(6)(ii)(B)].
The Department proposes revising current WIC regulations to allow
State agencies to develop virtual methods of oversight to ensure that
their monitoring and investigative methods are appropriate for the
types of vendors authorized (e.g., internet vendors) and current
environmental conditions (e.g., during a pandemic). WIC State agencies
are responsible for all vendor management and oversight, and the
Department proposes to provide the flexibility necessary to use
technology to streamline these efforts and develop new methods of
oversight for new types of vendors.
The Department proposes the following changes to:
(i) Update the definitions of ``routine monitoring'' and
``compliance buy.''
The Department proposes removing the requirement that routine
monitoring visits and compliance buys occur on site from the definition
of each term in Sec. 246.2. The purposes of monitoring visits and
investigations would remain unchanged, as well as the minimum number of
vendors that must be monitored and investigated annually, as outlined
at Sec. 246.12(j)(2) and (4).
Removing this requirement would also require the Department to
clarify the documentation requirements outlined in Sec.
246.12(j)(6)(ii)(B). The proposed revision adds the phrase ``if
applicable'' to the requirement to document the cashier involved in a
compliance buy to accommodate situations in which no cashier is present
(e.g., an internet-based transaction). All other documentation
requirements at Sec. 246.12(j)(6) would remain applicable regardless
of the location of the transaction or type of vendor.
(ii) Introduce virtual visits as an allowable type of
preauthorization visit.
The Department proposes to add virtual visits to the types of
allowable preauthorization visits established at Sec. 246.12(g)(5) to
provide WIC State agencies the flexibility to streamline such visits
and to develop procedures that are appropriate for the types of vendors
authorized under their jurisdiction.
f. Permit WIC Shoppers to Pay for Fees Associated with Online
Shopping [Sec. Sec. 246.12(h)(3)(xxxiii) and (v)(1)(ix) and
246.14(b)(1)(i) and (c)(4)].
The Department proposes to add a new provision at Sec.
246.12(h)(3)(xxxiii) to clarify that WIC-authorized vendors must not
charge the State agency for fees associated with online ordering (e.g.,
delivery, service, convenience, bag fees). If such fees are assessed to
non-WIC customers using the same services, WIC participants must be
allowed to pay them using another tender type. A similar provision is
proposed for farmers and farmers' markets at Sec. 246.12(v)(1)(ix).
This proposed change would work in combination with the revisions
[[Page 11521]]
proposed at Sec. 246.14(b)(1)(i) and (c)(4), both of which clarify
that State agencies operating home food delivery or direct distribution
systems may continue to pay for the cost of transporting food under
these food delivery systems. Costs in home food delivery and direct
distribution are different from fees associated with online shopping in
a retail food delivery system, which would only occur if the WIC
shopper chooses online shopping.
The Department is specifically requesting comment on whether State
agencies should have the option to pay for fees associated with online
shopping in a retail food delivery system with either (1) non-Federal
funding at State agency discretion and/or (2) Federal funding in
situations where it is deemed necessary to meet special needs (e.g.,
participant access or other needs as identified by the State agency).
The Department requests input from stakeholders that includes a
discussion of how this option would impact equitable access to online
shopping for WIC participants, the rationale for State agencies to pay
these fees (e.g., to ensure participant access to online shopping in
certain areas within the State agency's jurisdiction, to transition
from a direct distribution or home food delivery system), possible
models for paying for such fees (including whether there should be any
limits on the amount of delivery fees paid by the WIC State agency),
and any considerations necessary to pay for fees for different vendor
types (e.g., above-50-percent, internet, brick-and-mortar).
2. Streamline and Modernize WIC Food Delivery
The proposed revisions in this section are intended to reflect the
Program's near-complete transition to EBT, support current technology
and future innovation, and expand opportunities for the retail grocery
industry to innovate in ways that benefit WIC participants. The
proposed revisions would also allow State agencies to develop and test
new types of food instruments (e.g., mobile payments) and allow for the
remote issuance of WIC benefits. As the Program completes the
transition to EBT and innovates further, FNS will continue to support
State agencies in their efforts to use current technologies to provide
adequate participant access to supplemental foods.
The following is a discussion of each proposed provision.
a. Permit the Remote Issuance of Electronic Benefits to a
Participant's Benefit Balance [Sec. Sec. 246.4(a)(23),
246.7(f)(2)(iv), and 246.12(r)(2), (4), and (5)].
The Department proposes to remove barriers by revising Sec.
246.12(r)(4) to specifically apply to paper food instruments and CVVs,
and by creating Sec. 246.12(r)(5) for the issuance of EBT cards and
electronic benefits. This proposed provision would encourage WIC State
agencies to allow for the remote issuance of electronic benefits (i.e.,
the loading of electronic benefits to an EBT card, or other access
device or technology, without requiring the participant to travel to a
clinic) and for the mailing of EBT cards. The provision would require
that State agencies do so in a way that ensures that participants are
offered nutrition education in accordance with Sec. 246.11(a)(2) and
that their EBT cards and electronic benefits are issued within the
processing timeframe requirements at Sec. 246.7(f)(2)(iv), without
jeopardizing the integrity of program services or program
accountability.
Section (f)(6)(B) of the Child Nutrition Act of 1966 (42 U.S.C.
1786(f)(6)(B)) states that a State agency may provide for delivery of
vouchers to participants not scheduled for nutrition education and
breastfeeding counseling or recertification. Since this legislation
requires WIC participants to pick up paper food instruments when
scheduled for an in-person nutrition education or subsequent
certification appointment, that requirement would remain in
regulations, as revised, at Sec. 246.12(r)(4).
This proposed revision to Sec. 246.12(r)(4) and the proposed
creation of Sec. 246.12(r)(5) would necessitate revisions to Sec.
246.7(f)(2)(iv), to update processing timeframe requirements to support
remote issuance of electronic benefits, and to Sec. Sec. 246.12(r)(2)
and 246.4(a)(23) for clarity.
To ensure clarity related to how these provisions apply to food
instruments, CVVs, and electronic benefits, the Department proposes to
create a new definition of ``electronic benefits'' in Sec. 246.2. This
new definition clarifies that electronic benefits are separate and
distinct from food instruments. Electronic benefits are the WIC
benefits for supplemental foods prescribed to a participant and
contained within the participant's benefit balance. This definition
complements the electronic benefit requirements established at Sec.
246.12(x).
Similarly, the Department proposes to update the definition of
cash-value voucher to remove the clause, ``Cash-value voucher is also
known as cash-value benefit, or CVB, in an EBT environment,'' and
create an independent definition of CVB as a type of electronic benefit
that is a fixed-dollar amount used to obtain authorized fruits and
vegetables. Additionally, the Department proposes to remove
``electronic benefit transfer (EBT) card'' as a type of CVV to ensure
that the modern definitions of food instrument, electronic benefits,
and cash-value benefit work together. The proposed modernization of the
definition of food instrument is described in more detail below.
Lastly, the Department proposes modifying the State Plan
requirements described under Sec. 246.4(a)(23) to focus this
requirement on how the State agency will improve access for all
participants and prospective applicants (with an additional focus on
those who are employed and/or reside in rural areas), including
measures to improve access through the remote issuance of food
instruments, CVVs, and/or electronic benefits. The Department also
proposes edits to ensure that this provision remains consistent with
Sec. 246.12(r)(4) and (5).
b. Expand the Definition of Food Instrument [Sec. 246.2].
The Department proposes adding ``other electronic benefit access
device or technology'' to the definition of ``food instrument'' to
allow WIC State agencies to explore and adopt new technologies beyond
the EBT card (e.g., mobile payment) while ensuring that key program
integrity requirements apply to these new technologies. In addition,
the proposed revision would better match the proposed definition of
``EBT'' which includes ``other electronic benefit access device or
technology.''
c. Update the Uniform Food Delivery Systems Provision to Support
State Agency Innovation [Sec. Sec. 246.2 and 246.12(b)].
Current WIC regulations require each food delivery system to be
procedurally uniform throughout the State agency's jurisdiction, and
that when used, food instruments must be uniform within each type of
system.
The Department proposes the following changes to:
(i) Allow State agencies to develop and test new WIC food
instrument types.
The Department proposes introducing conditions for when non-uniform
food instruments may be used within a single food delivery system, such
as when necessary to meet special needs described in the State agency's
State Plan per Sec. 246.4(a)(14)(i), or when transitioning from one
type of food instrument to another. This proposed flexibility would
provide State agencies the ability to address needs specific to their
jurisdictions, and to test and
[[Page 11522]]
smoothly transition to new food instrument types, as needed.
(ii) Clarify uniform food delivery systems and system combinations.
The Department proposes clarifying in Sec. 246.12(b) that State
agencies may use a combination of retail, home food delivery, and
direct distribution systems, and that this combination of systems
together must ensure adequate participant access to supplemental foods.
Legislation (42 U.S.C. 1786 (h)(12)(A)(i)) defines EBT as a ``food
delivery system that provides benefits using a card or other access
device approved by the Secretary that permits electronic access to
program benefits,'' although it is more precisely described as a
benefit delivery method. Therefore, the Department proposes to update
the definition of ``Electronic Benefit Transfer'' to clarify that it is
a benefit delivery method, and to introduce ``other electronic benefit
access device or technology'' to allow WIC State agencies to explore
and adopt new technologies beyond the EBT card.
Further, the Department proposes to clarify in Sec. 246.12(b) that
there are three types of food delivery systems (retail, home food
delivery, and direct distribution), and that these three must be
procedurally uniform within a State agency's jurisdiction. When used,
food instruments must be uniform within each type of system, except
when the use of non-uniform food instruments (e.g., introducing a
mobile app for certain participants while others use EBT cards) is
necessary to meet the special needs described and approved in the State
agency's State Plan per Sec. 246.4(a)(14)(i), or when transitioning
from one type of food instrument to another. These changes are intended
to provide clarity and flexibility to State agencies as they work to
ensure participant access to supplemental foods.
d. Streamline Food Delivery Operations by Recognizing that EBT Data
are a Sufficient Replacement for Routine Shelf Price Collection [Sec.
246.12(g)(4) introductory text, (g)(4)(ii)(B), and (g)(9)].
The Department proposes to revise the requirement at Sec.
246.12(g)(4)(ii)(B) so that State agencies with access to EBT data do
not have to collect shelf prices from vendors every six months or seek
an exemption from FNS. With EBT, State agencies receive current data
about vendors' prices at least daily and no longer need to either
formally collect these prices through administratively burdensome
surveys or take the time to request an exemption from FNS. State
agencies without access to electronic benefit redemption data must
continue to collect vendor shelf prices at least every six months or
seek an exemption from FNS. These changes are expected to reduce burden
on authorized vendors and State agencies without negatively impacting
program integrity or vendor cost containment practices.
This proposed change would necessitate similar updates to Sec.
246.12(g)(4) and (9), to allow State agencies to use other types of
appropriate price data to meet requirements of vendor authorization and
cost containment provisions.
e. Extend Vendor Application and Agreement Periods [Sec.
246.12(g)(8) and (h)(1)(i)].
The Department proposes to increase the maximum length of vendor
agreements (Sec. 246.12(h)(1)(i)) and the minimum frequency that State
agencies must accept and process applications (Sec. 246.12(g)(8)) from
three to five years. The proposed change would reduce the
administrative burden on vendors and State agencies without sacrificing
program integrity, as time periods for vendor monitoring, training, and
investigations would be unchanged.
f. Allow State Agencies Using a Non-Retail, Home Food Delivery
System to Ship Supplemental Foods to a Location Designated by
Participants [Sec. Sec. 246.2 and 246.12(m)].
The Department proposes revising the definition of ``home food
delivery contractor'' at Sec. 246.2 to allow supplemental foods to be
delivered to ``a location designated by the participant or State
agency'' instead of limiting the delivery to the participant's home.
This revision would increase flexibility for both WIC State agencies
and participants to determine the most appropriate delivery location
and would provide more equitable access to participants in remote areas
without mail service at all homes. The revision to this provision would
necessitate a similar change to Sec. 246.12(m). The State agency must
continue to ensure the accountable delivery of authorized supplemental
foods to participants per Sec. 246.12(m)(2).
Additionally, to be consistent with revisions to the definition of
``vendor,'' the Department proposes replacing the specific examples of
business entities from the definition of ``home food delivery
contractor'' with ``business entity.''
3. Meet the Needs of a Modern, Data-Driven Program
The Department proposes updating reporting requirements to align
with data reporting via the Food Delivery Portal (FDP), which replaced
The Integrity Profile (TIP) in FY 2022, and expanding State agency
staffing requirements to support modernizing and streamlining WIC food
delivery and customer service to participants.
The Department has heard from State agencies that identifying and
recruiting top talent are key to the success of the WIC Program. This
is especially important as WIC continues to evolve to better serve
participants through the use of current and future technologies,
including by providing electronic benefits and implementing online
ordering. The ability to hire staff who can focus on food delivery and
customer service would help WIC State agencies to ensure that program
modernization efforts support meaningful access to program information
for all participants.
The following is a discussion of each proposed provision.
a. Update Reporting Requirements for Federal Oversight [Sec.
246.12(j)(5)].
The Department proposes to revise Sec. 246.12(j)(5) to reflect the
types of data that have been collected for Federal oversight of State
agency food delivery management since 2005, and to align with the
transition in reporting systems from TIP to FDP. The TIP system, which
WIC State agencies have used since 2005, was upgraded to use current
technology and renamed the Food Delivery Portal in FY 2022. Since 2005,
there have been changes to requirements, policies, technology, and
guidance that the TIP system could not support. FDP uses a more robust
data collection system to align with current security protocols and
compliance guidance, support data storage and web components, ensure
cost effectiveness, allow for more data-driven decision making through
increased data analytic functionality, enhance FNS reporting
capabilities, reduce grantee burden through automated calculations and
consolidated reporting, and add data validation features to reduce
reporting errors.
Additionally, current WIC regulations require the State agency to
send ``a summary of the results of its vendor monitoring containing
information stipulated by FNS'' to FNS once a year. The Department
proposes updating this reporting requirement to ensure that WIC State
agencies report to FDP on all the entities that provide supplemental
foods to WIC participants: vendors, home food delivery and direct
distribution contractors, farmers, and farmers' markets. The
modifications would also remove language that requires a report to be
sent on each fiscal year by February 1 of the following fiscal year to
FNS. This would allow the Department to set data
[[Page 11523]]
submission timelines as appropriate for the modern system and reporting
needs, which may be as frequent as quarterly but not less than
annually. The reporting requirements, including data fields and
submission timelines, will be provided to WIC State agencies with
advance notification via policy guidance. Reporting timelines for FDP
have already been set via WIC Policy Memorandum #2021-9: Transition
from The Integrity Profile to the Food Delivery Portal through
reporting year FY 2024.
b. Create Two New WIC State Agency Staff Positions to Reflect the
Staffing Needs of a Modern, Innovative Program [Sec. 246.3(e)(5) and
(6)].
Current WIC regulations at Sec. 246.3(e)(3) outline the
requirements for State agencies to employ a State WIC Nutrition
Coordinator with certain qualifications, and to employ a number of
Program Specialists, based on caseload. The Department proposes
introducing staffing standards for two new State agency staff
positions, the WIC Food Delivery and WIC Customer Service coordinators,
at Sec. 246.3(e)(5) and (6), respectively. The Department proposes
that these positions be staffed with one full-time or equivalent staff
when the monthly participation is more than 7,000, or a half-time or
equivalent staff when the monthly participation exceeds 500 (and, in
the case of the WIC Food Delivery Coordinator, if the State agency
manages its own vendor cost containment system). At these thresholds,
sixteen of the smallest State agencies (i.e., those with under 500
monthly participants on average) would not be impacted. The proposed
revisions also include the ability for State agencies to request an
exception to these qualifications to allow for existing personnel or
for special circumstances.
Given the importance of WIC food delivery, the Program's near-
complete transition to EBT, and the special skills necessary to
effectively operate and monitor a retail food delivery system in
accordance with Federal vendor cost containment requirements, the
Department proposes to develop stronger standards for the position of
the WIC Food Delivery Coordinator.
The Department expects that adding this position would ensure that
WIC State agencies have the staff in place to make the data-driven
decisions necessary for a modern, efficient WIC Program that uses
current technologies for food delivery.
Additionally, the Department proposes adding standards to create a
WIC Customer Service Coordinator to support WIC State agencies as they
work to hire staff who are well-equipped to support program
improvements related to participant-facing activities, particularly
those that involve emergent technologies and future innovations,
potentially including those related to modernized WIC food delivery.
WIC State agencies currently use participant-facing technologies to
provide WIC services in a customer-centered manner. State agencies have
indicated, though, that they do not always have the ability to hire
staff with the necessary technical and procurement-related skills to
procure, operate, and update these technologies. The Department expects
that establishing a WIC Customer Service Coordinator position will help
WIC State agencies as they work to recruit and retain staff that can
manage current technology projects and continue WIC modernization work
through the assessment and implementation of future technologies. These
proposed provisions would formalize both the staffing requirement and
the expected education and experience levels required for the two
positions. To ensure that equity is considered in the development of
these standards, the standards allow certain work experience to be
treated the same as certain higher educational requirements. The
Department expects that these provisions will help WIC State agencies
to recruit and retain staff with the skills necessary to manage and
modernize their food delivery systems, and to adopt new technologies to
improve the participant experience. The WIC Food Delivery and WIC
Customer Service coordinators would also play an important role in
ensuring that program modernization efforts and improvements to
participant-facing technologies are completed in a manner that ensures
accessible and meaningful access to program information for all
participants.
The Department is specifically requesting comments on whether the
staffing standards proposed at Sec. 246.3(e)(5) and (6) would support
State agencies' search for qualified personnel. The Department asks
stakeholders to include a discussion of the State agency's ability to
recruit and fill these positions as described (considering both the
recruitment and hiring of staff with the proposed credentials), an
assessment of any challenges and costs associated with the adoption of
these provisions, necessary timeline to operationalize such
requirements, and any recommendations for changes to the standards
along with related rationale.
4. Request for Public Comment on Key Topic Areas
The Department encourages stakeholders to provide comment on
potential civil rights impacts of the proposed rule. Further, in
addition to proposed regulatory changes described previously, the
Department seeks comment on the below topic for consideration in this
or a future rule. The Department will review and revise all proposed
provisions, as needed, prior to submission of a final rule, considering
both public comments and relevant publications by regulatory agencies.
a. Exceptions to Minimum Stocking Requirements.
The Department seeks comment on whether there is a need to
authorize vendors that sell a specific subset of supplemental foods
(e.g., dairies, bakeries, produce sellers) but would not meet the
minimum variety and quantity of supplemental foods, as required by WIC
regulations (i.e., two different fruits, two different vegetables, and
at least one whole grain cereal per Sec. 246.12(g)(3)(i)). The
Department requests input from stakeholders that includes a discussion
of:
Whether the authorization of these specialty store types
would improve WIC participant access to supplemental foods, with EBT
shopping patterns and habits in mind. If so, please describe how this
would improve access, equity, and/or nutrition security for
participants.
If there are any special needs or access issues that would
necessitate the authorization of these store types. If so, please
describe the need and how this would improve access, equity, and/or
nutrition security for participants.
An assessment of the impact on vendor oversight and
monitoring, including any changes that would be needed to ensure
effective oversight and program integrity.
Any concerns around including stores that only provide
certain types of foods including those relating to State agency
capacity to oversee the stores.
IV. Implementation
Because the majority of the revisions proposed are introducing
opportunities for increased flexibility for WIC State agencies, the
Department proposes that the proposed rule would take effect 30 days
after publication of the final rule, except for the following listed
provisions where State agencies would have 18 months from publication
of the final rule to implement: Sec. 246.12(x)(4) introductory text
and (x)(4)(i), the provisions that propose to allow for the
[[Page 11524]]
return and use of benefits when an online order could not be fulfilled,
and Sec. 246.3(e)(5) and (6), which would create two new WIC State
agency staff positions. For Sec. 246.12(x)(4) introductory text and
(x)(4)(i), the 18 months would provide WIC State agencies the time to
develop and refine the technological solutions needed to meet these
provisions. For Sec. 246.3(e)(5) and (6), the 18 months would provide
WIC State agencies the necessary time to prepare for any significant
changes in State agency-level hiring structures and the State agency's
specific staffing requirements. The Department seeks comments from
State agencies on the type and scope of the administrative burden that
may be associated with implementing the provisions in this proposed
rule in this manner.
Procedural Matters
Executive Order 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
This proposed rule has been determined to be significant and was
reviewed by the Office of Management and Budget (OMB) in conformance
with Executive Order 12866.
Regulatory Impact Analysis Summary
As required for all rules that have been designated as Significant
by the Office of Management and Budget, a Regulatory Impact Analysis
(RIA) was developed for this proposed rule. The complete RIA follows
this proposed rule as an Appendix. The following summarizes the
conclusions of the regulatory impact analysis:
Need for Action
To ensure that WIC participants have equal access to available
shopping options, with the expansion of online shopping in the retail
grocery industry and the development of new payment types, the
Department proposes to remove barriers to online shopping and to
modernize certain food delivery regulations in the WIC Program through
this rulemaking. The proposed measures would complement the Program's
near-complete transition to EBT and aim to meet the needs of a modern,
data-driven program that uses current technologies for food delivery.
These changes are expected to improve nutrition security among WIC
participants by increasing equity and access to available shopping
options.
Costs
The Department estimates that the provisions under this proposed
rule would collectively result in $404 million in costs and Federal
transfers over 5 years from FY 2024 through FY 2028 (Table 1). This
estimate includes increases in Federal Government WIC spending,
increased net costs to WIC State agencies, and a savings for WIC retail
vendors.
The Department estimates that allowing WIC online shopping will
increase Federal WIC food spending, in the form of transfers, by a
total of $392 million over 5 years. This is driven by an understanding
that shoppers typically pay higher prices for online groceries and an
expectation that online shopping would moderately increase WIC benefit
redemption by making the WIC shopping experience more convenient for
some participants.
The Department estimates that the proposed rule would also result
in around $30 million in net WIC State agency costs from FY 2024 to FY
2028. State agency costs include nearly $27 million in total 5-year
expenses required to update State agency systems to enable online
transaction of WIC electronic benefits and $55 million in total 5-year
costs for increased staffing expenses due to the proposed changes to
State agency staffing requirements. State agency costs would be
partially offset by a large reduction in State agency reporting burden
and recordkeeping burden, which is estimated to result in a savings of
$52 million over 5 years and is largely attributable to the removal of
shelf price collection requirements for EBT State agencies and the
extension of vendor agreement and application periods. These State
agency costs are considered allowable expenses for State agencies under
their annually awarded Nutrition Services and Administration (NSA)
grants. In general, the Department believes that State agencies would
be able to absorb the costs associated with implementing the provisions
under this proposed rule with current NSA funds.
Table 1--Summary of Estimable Impacts on Transfers and Costs
[FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
----------------------------------------------------------------------------------------------------------------
Federal Transfers
----------------------------------------------------------------------------------------------------------------
Impact of online shopping on $5.6 $43.7 $79.0 $121.9 $142.0 $392.1
Federal WIC food spending........
----------------------------------------------------------------------------------------------------------------
State Agency Costs
----------------------------------------------------------------------------------------------------------------
Systems development and 1.1 7.5 6.0 7.1 5.1 26.9
maintenance for online shopping..
Changes to reporting and -9.7 -10.0 -10.3 -10.6 -10.9 -51.5
recordkeeping burden.............
New State agency staff positions.. 5.9 11.9 11.9 12.3 12.7 54.7
----------------------------------------------------------------------------------------------------------------
WIC Vendor Costs
----------------------------------------------------------------------------------------------------------------
Changes to reporting burden....... -3.6 -3.6 -3.7 -3.8 -3.9 -18.4
-----------------------------------------------------------------------------
Total Estimated Impact........ -0.6 49.5 83.0 127.0 145.0 403.8
----------------------------------------------------------------------------------------------------------------
[[Page 11525]]
Finally, the removal of shelf price collection requirements and the
extension of vendor application and agreement periods are also expected
to significantly reduce burden on WIC vendors. The Department estimates
that the reductions in vendor reporting burden under the proposed rule
would save WIC vendors $18 million over 5 years.
Benefits
The provisions under this proposed rule aim to modernize the ways
that WIC participants can receive and transact their electronic
benefits, creating opportunities to improve equity and accessibility in
the Program as a result. An estimated 14 percent of the U.S. population
lives in low-income census tracts with limited access to food stores
\8\ and 21 percent of WIC participants report using a means of
transportation other than a personal car to travel to a vendor to use
their WIC benefits.\9\ Once at the vendor, participants also report
challenges shopping for WIC foods. Recent USDA survey data indicate
that finding the right WIC-approved products in stores, WIC-approved
products being out of stock, and feeling embarrassed shopping for WIC
foods are some of the most cited challenges among WIC participants who
report difficulties shopping for WIC supplemental foods.\10\ Online
shopping may alleviate some of these issues for WIC participants and
has the potential to provide benefits during supply chain disruptions.
Enabling online shopping in WIC under this proposed rule is expected to
reduce barriers to WIC Program services, ensure that WIC participants
have an equitable shopping experience as the retail marketplace
innovates, and increase participant purchases of supplemental foods.
These regulatory changes would ensure that WIC participants have the
ability to transact benefits online as an increasing share of U.S.
consumers prefer to shop for groceries online. The proposed rule would
further make WIC more convenient and accessible by encouraging State
agencies to remotely issue electronic benefits and mail EBT cards
whenever possible, potentially reducing the number of clinic visits
that WIC participants are required to make. The proposed rule also
includes provisions that would streamline and modernize WIC food
delivery by promoting innovation and ensuring that State agencies have
enough qualified staff meet the needs of a modern, data-driven program.
These provisions provide necessary measures to ensure that State
agencies can deliver a more efficient and effective program for WIC
participants.
---------------------------------------------------------------------------
\8\ U.S. Department of Agriculture, Economic Research Service,
``State-Level Estimates of Low Income and Low Access Populations,''
last updated September 30, 2019. Available online at: https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/.
\9\ U.S. Department of Agriculture, Food and Nutrition Service,
``Brief Report #6: WIC Participant Satisfaction and Shopping
Experience,'' Third National Survey of WIC Participants, by Magness,
A., et al., prepared by Capital Consulting Corporation and 2M
Research Services, contract No. AG-3198-K-15-0077, Project Officer
Karen Castellanos-Brown, Alexandria, VA: December 2021. Available
online at: https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
\10\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research,
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of Policy Support,
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
---------------------------------------------------------------------------
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies
to analyze the impact of rulemaking on small entities and consider
alternatives that would minimize any significant impacts on a
substantial number of small entities. Pursuant to that review, it has
been certified that this proposed rule would not have a significant
impact on a substantial number of small entities.
The provisions of this proposed rule would primarily affect WIC
State agencies and WIC-authorized vendors. The staffing standards
proposed at Sec. 246.3(e)(5) and (6) would not apply to smaller State
agencies, which have fewer resources. Otherwise, the proposed
provisions would apply to all State agencies administering the WIC
Program, regardless of size, and would largely be implemented at State
agency option. The Department does not expect the proposed rule to have
a significant impact on small State agencies. Large retailers may be
able to implement WIC online shopping more readily than other store
types. However, the Department does not expect the proposed rule to
have a lasting or significant negative impact on smaller WIC vendors as
WIC sales represent a relatively small share of these stores' revenue.
The Department's most recent available estimates of WIC redemptions by
vendor size found that in fiscal year 2012, 76 percent of WIC retail
redemptions occurred at larger stores (super stores, supermarkets, or
large grocery stores), 10 percent occurred at smaller stores (small
grocery stores, medium grocery stores, or convenience stores), 9
percent occurred at WIC-only and above-50-percent stores, and 5 percent
occurred at other stores (other retail stores, combination grocery/
other stores, commissaries, or unknown store types).\11\
---------------------------------------------------------------------------
\11\ U.S. Department of Agriculture, Economic Research Service,
``Where Do WIC Participants Redeem Their Food Benefits? An Analysis
of WIC Food Dollar Redemption Patterns by Store Type,'' EIB-152, by
L. Tiehen, and E. Fraz[atilde]o: April 2016. Available online at:
https://www.ers.usda.gov/publications/pub-details/?pubid=44076.
---------------------------------------------------------------------------
WIC sales make up a relatively small fraction of the revenue for
smaller stores. Among convenience stores, for example, WIC sales only
made up about 0.12 percent of non-fuel sales in 2012.\12\ Therefore,
the Department expects any revenue that convenience stores and other
small vendors (such as small and medium grocery stores) may lose to
online shopping at large WIC vendors to be relatively minor. The
Department will provide technical assistance to State agencies when
necessary to help small vendors engage with online shopping in the WIC
Program.
---------------------------------------------------------------------------
\12\ Statista, ``Sales of the convenience store industry in the
United States from 2011 to 2020, by format,'' January 2022.
Available online at: https://www.statista.com/statistics/308767/sales-of-the-us-convenience-store-industry-by-format/.
---------------------------------------------------------------------------
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of the UMRA, the
Department generally must prepare a written statement, including a cost
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures by State, local, or Tribal
governments, in the aggregate, or the private sector, of $146 million
or more (when adjusted for inflation; GDP deflator source: Table 1.1.9
at https://www.bea.gov/iTable) in any one year. When such a statement
is needed for a rule, section 205 of the UMRA generally requires the
Department to identify and consider a reasonable number of regulatory
alternatives and adopt the most cost effective or least burdensome
alternative that achieves the objectives of the rule.
This proposed rule does not contain Federal mandates (under the
regulatory provisions of Title II of the UMRA) for State, local, and
Tribal governments or the private sector of $146 million or more in any
one year. Thus, the proposed rule is not subject to the requirements of
sections 202 and 205 of the UMRA.
[[Page 11526]]
Executive Order 12372
This Special Supplemental Nutrition Program for Women, Infants, and
Children is listed in the Catalog of Federal Domestic Assistance under
Number 10.557 and is subject to Executive Order 12372, which requires
intergovernmental consultation with State and local officials. (See 2
CFR chapter IV.)
Federalism Summary Impact Statement
Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under section (6)(b)(2)(B) of Executive Order 13132.
The Department has considered the impact of this proposed rule on
State and local governments and has determined that this proposed rule
does not have federalism implications. Therefore, under section 6(b) of
the Executive order, a federalism summary is not required.
Executive Order 12988, Civil Justice Reform
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is intended to have preemptive effect
with respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
and timely implementation. This proposed rule is not intended to have
retroactive effect unless so specified in the DATES section of the
final rule. Prior to any judicial challenge to the provisions of the
final rule, all applicable administrative procedures must be exhausted.
Civil Rights Impact Analysis (CRIA)
FNS has reviewed the proposed rule, in accordance with the
Department Regulation 4300-004 ``Civil Rights Impact Analysis,'' to
identify and address any major civil rights impacts the proposed rule
might have on participants on the basis of race, sex, national origin,
disability, or age. The requirements outlined in the proposed rule aim
to remove barriers to online ordering and internet-based transactions,
streamline and modernize WIC food delivery, and meet the needs of a
modern, data-driven program that uses current technologies for food
delivery. The proposed changes would impact WIC State agencies,
including ITOs, WIC local agencies and clinics, and WIC vendors in ways
that are expected to increase equity and access for WIC participants
while enhancing the overall shopping experience.
In particular, the proposed rule would allow State agencies,
including ITOs, to authorize new types of vendors and explore modern
payment technologies and authentication methods. To comply with revised
regulations and implement the proposed changes, staff at State
agencies, local agencies, and WIC clinics would need to update
operations and communicate these changes to participants. The rule
would increase the number of WIC-authorized vendors by allowing
different types of vendors (e.g., internet and mobile vendors) to
participate in WIC, and eliminate the requirement for vendors to
collect shelf-price data, thereby expanding participant shopping
options. WIC participants would further benefit from fewer in-person
requirements.
To mitigate potential impacts on program access for Limited English
Proficiency populations and persons with disabilities, FNS will provide
State agencies with technical assistance aimed at ensuring that online
shopping platforms and communications about program changes are
available in appropriate languages and in alternative formats for
persons with disabilities. FNS will also support State agencies as they
work to engage small vendors in online shopping in the WIC Program.
After reviewing the potential impacts, FNS does not believe the
proposed rule would result in civil rights impacts on protected groups
of WIC participants and applicants. However, the FNS Civil Rights
Division will propose further outreach and mitigation strategies to
alleviate any unforeseen impacts, if deemed necessary.
Executive Order 13175
Executive Order 13175 requires Federal agencies to consult and
coordinate with Tribes on a government-to-government basis on policies
that have Tribal implications, including regulations, legislative
comments or proposed legislation, and other policy statements or
actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes. On November 30, 2021, FNS
held a consultation with Tribal leaders and representatives on key
issues related to the proposed rule. Tribal leaders were generally
supportive of online ordering for WIC, which may increase access to
food benefits for those with limited access to a physical store. Tribal
leaders provided substantive feedback that was taken into consideration
during the development of this proposed rule, including the importance
of continuing to support brick-and-mortar vendors and small, Tribal-
owned stores, and concern for the barriers that fees related to online
ordering could pose to participants who want to use WIC online shopping
options. FNS will explore additional opportunities for engagement as
needed.
Once the proposed rule is published in the Federal Register, FNS
will encourage stakeholders representing Indian Tribal Organizations to
provide input on whether the proposed rule poses any adverse Tribal
implications. If a Tribe requests additional consultation in the
future, FNS will work with the Office of Tribal Relations to ensure
meaningful consultation is provided. FNS is unaware of any current
Tribal laws that could be in conflict with this proposed rule.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR part
1320) requires the Office of Management and Budget (OMB) to approve all
collections of information by a Federal agency before they can be
implemented. Respondents are not required to respond to any collection
of information unless it displays a current valid OMB control number.
This proposed rule impacts existing information collection
requirements that are contained in OMB Control Number 0584-0043 Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC)
Program Regulations--Reporting and Recordkeeping (expiration date
December 31, 2023) which are subject to review and approval by OMB in
accordance with the Paperwork Reduction Act of 1995. Additionally, this
proposed rule impacts existing reporting requirements that are approved
under OMB Control Number 0584-0401 Food Delivery Portal (FDP) Data
Collection (expiration date December 31, 2024), which are subject to
review and approval by OMB in accordance with the Paperwork Reduction
Act of 1995. Therefore, FNS is submitting for public comment the
changes in the information collection burdens in OMB Control Numbers
0584-0043 and 0584-0401 that would result from adoption of the
proposals in the rule.
Comments on the information collection for this proposed rule must
be received by April 24, 2023.
[[Page 11527]]
Comments may be sent to: Patricia Bailey, Food and Nutrition
Service, U.S. Department of Agriculture, 1320 Braddock Place, 3rd
Floor, Alexandria, VA 22314. Comments will also be accepted through the
Federal eRulemaking Portal. Go to https://www.regulations.gov, and
follow the online instructions for submitting comments electronically.
Comments are invited on: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the Department, including whether the information shall have practical
utility; (b) the accuracy of the Department's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on those who
are to respond, including use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology.
All responses to this notification will be summarized and included
in the request for OMB approval. All comments will also become a matter
of public record.
a. Revisions to OMB Control Number 0584-0043
Title: Special Supplemental Nutrition Program for Women, Infants,
and Children (WIC) Program Regulations--Reporting and Recordkeeping
Burden.
OMB Number: 0584-0043.
Expiration Date: 12/31/2023.
Type of Request: Revision of a currently approved collection.
Abstract: This is a revision of existing information collection
requirements in the information collection under OMB Control Number
0584-0043 that are affected by this proposed rulemaking. Under this
proposed rule, the Department proposes to remove regulatory barriers to
online ordering and internet-based transactions in the WIC Program,
streamline and modernize WIC food delivery, and meet the needs of a
modern, data-driven program that uses current technologies for food
delivery. This proposed rule impacts the burden associated with
reporting requirements for State agencies, individuals and households,
and vendors, as well as the burden associated with recordkeeping
requirements for State agencies. This proposed rule may also result in
additional financial costs to WIC participants and State agencies.
(i) Burden Revisions Related to Internet Vendor Authorization,
Monitoring and Oversight, and Training
The proposed rule would allow State agencies to authorize internet
vendors, in addition to brick-and-mortar vendors and mobile vendors.
Using the new definitions proposed, all vendors authorized under
current WIC regulations would be classified as brick-and-mortar vendors
with the exception of one mobile vendor. FNS estimates that 800
internet vendors in 80 State agencies with online EBT systems will be
authorized initially following the rulemaking (due to technological
constraints, offline EBT systems would not be able to support online
transactions), increasing the total number of WIC-authorized vendors
from 41,164 in the previous information collection submission to 41,964
vendors.
WIC regulations at Sec. 246.12(g)(5) require that State agencies
visit a vendor prior to their initial authorization in the Program.
During an on-site preauthorization visit, State agency staff spend
approximately 40 minutes verifying information provided by the vendor
applicant and 20 minutes traveling to and from the vendor.\13\ FNS is
seeking approval for the requirement for on-site initial
preauthorization visits and its associated burden through a separate
revision to OMB Control Number 0584-0043. While the proposed rule would
allow initial preauthorization visits of internet vendors to take place
virtually, therefore not requiring travel time for State agency staff,
the initial authorization of 800 internet vendors would add 536.00
reporting burden hours for both State agencies and vendors.
---------------------------------------------------------------------------
\13\ The estimate of State agency travel time to visit a vendor
is based on the amount of time WIC participants reported traveling
to the store where WIC foods are purchased. U.S. Department of
Agriculture, Food and Nutrition Service, ``Appendix G. Program
Experiences Survey Tables.'' Third National Survey of WIC
Participants, Alexandria, VA: 2021, Table 4h. Available online at:
https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
---------------------------------------------------------------------------
The Department is proposing to increase the maximum length of
vendor agreements and the minimum frequency that State agencies must
accept and process applications from three to five years. FNS estimates
that currently, State agencies spend approximately 45 minutes
reviewing, processing, and approving vendor applications and agreements
from one-third of the WIC-authorized vendors per year, for a total of
10,188.09 hours.\14\ Proposed changes to the definition of ``vendor''
would remove the requirement that State agencies determine a vendor
applicant's business structure, decreasing the amount of time it takes
a State agency to review a vendor application by 5 minutes, from 45 to
40 minutes. This change, along with extending vendor agreement periods
from three to five years and adding internet vendors, would result in a
net decrease of State agencies' reporting burden of 4,592.89 hours due
to the proposed rule, resulting in a total 5,595.20 hours.
---------------------------------------------------------------------------
\14\ FNS is seeking approval for the State agency requirement to
review and process vendor agreements and its associated burden
through a separate revision to OMB Control Number 0584-0043.
---------------------------------------------------------------------------
Additionally, the proposed increase to the length of vendor
agreement periods and the addition of internet vendors would overall
result in fewer vendors submitting vendor agreements and applications
for review each year (one-fifth of vendors rather than one-third),
decreasing vendors' associated reporting burden by 5,191.32 hours, from
13,584.12 to 8,392.80 hours. These changes would also affect the
existing State agency burden for maintaining records of vendor
applications and agreements, decreasing this burden on net by 5,191.32
hours, from 13,584.12 to 8,392.80 hours. The number of respondents and
frequency of responses for the State agency recordkeeping burden
associated with vendor applications and agreements have also been
adjusted to correct for clerical errors in this information collection.
Under current regulations, the number of respondents is 89.00, rather
than 13,584.12 State agencies, and the frequency of responses is 152.63
rather than 1 response per year. These clerical corrections do not
affect the existing State agency recordkeeping burden as the underlying
math is unchanged. As noted, the longer vendor agreement periods
proposed in this rule would decrease the number of vendor agreements
that each State agency collects and records each year from 152.63 to
94.30, resulting in the 5,191.32 hour decrease in the associated State
agency recordkeeping burden.
Although the proposed rule would not change procedures for vendor
oversight, the rulemaking would allow routine vendor monitoring and
compliance investigations to be conducted virtually so that State
agencies may use oversight methods appropriate for vendors. As with
initial vendor preauthorization visits, FNS estimates that it takes
State agency staff an average of 20 minutes round trip to travel to a
brick-and-mortar or mobile vendor.
[[Page 11528]]
Considering the additional virtual routine monitoring visits on
internet vendors authorized under the proposed rule would add 40.00
more hours to State agencies' reporting burden. FNS is seeking approval
for the requirement for on-site routine vendor monitoring and its
associated burden through a separate revision to OMB Control Number
0584-0043. The overall increase in the number of WIC-authorized vendors
would increase the State agency recordkeeping burden for routine vendor
monitoring by 20.00 hours, from 1,029.10 to 1,049.10 hours.
State agency staff conduct on-site compliance investigations of
five percent of vendors each year, which requires 20 minutes of travel
time and two hours to complete an investigation of a brick-and-mortar
or mobile vendor. FNS is seeking approval for the State agency
requirement to conduct on site compliance investigations and its
associated burden through a separate revision to OMB Control Number
0584-00343. State agencies would also be required to conduct virtual
compliance investigations of internet vendors each year, resulting in
80.00 additional burden hours. The overall increase in the number of
WIC-authorized vendors would increase the State agency recordkeeping
burden for compliance investigations by 80.00 hours.
The addition of 800 internet vendors under the proposed rule would
also increase State agencies' reporting burden for vendor training,
increasing associated burden hours by 1,600.00 hours per year. It takes
two hours for vendors to attend the annual training provided by State
agencies. FNS is seeking approval for the requirement for annual vendor
training and its associated burden through a separate revision to OMB
Control Number 0584-0043. Authorizing 800 internet vendors under the
proposed rule would result in an additional 1,600.00 hours of reporting
burden for those new vendors to receive training.
Further, FNS estimates that the increase in the overall number of
WIC-authorized vendors will result in proportionate increases in both
the number of vendors classified as ``above-50-percent'' vendors and
the number of vendors that demonstrate a pattern of violations during
investigations. These changes would result in associated increases in:
the State agency reporting burden related to assessing a vendor's food
sales data to determine if they are an ``above-50-percent'' vendor
(288.00 additional hours); the vendor reporting burden required to
provide such sales data (144.00 additional hours); the reporting burden
for above-50-percent vendors who request approval from their State
agency to provide incentive items to WIC shoppers (7.60 additional
hours); the State agency recordkeeping burden to collect information on
above-50-percent vendors' incentive items (7.60 additional hours); and
the State agency recordkeeping burden to notify vendors in writing of
violations revealed during an investigation (10.00 additional hours).
The number of respondents and frequency of responses for the State
agency recordkeeping burden associated with collecting information on
above-50-percent vendors' incentive items have also been adjusted to
correct for clerical errors in this information collection. Under
current regulations, the number of respondents is 4, rather than 389.20
State agencies, and the frequency of responses is 97.30, rather than 1
response per year. These clerical corrections do not affect the
existing State agency recordkeeping burden as the underlying math is
unchanged. As noted, the expected increase in the number of above-50-
vendors with the addition of internet vendors in this proposed rule
would increase the number of above-50-vendors that each State agency
collects information from each year from 97.30 to 99.20, resulting in
the 7.60 hour increase in the associated State agency recordkeeping
burden stated in the previous paragraph.
(ii) Burden Revisions Related to Program Modernization
In recognition of the efficiency of using electronic benefit
redemption data to analyze the prices vendors charge for supplemental
foods, the proposed rule would remove the requirement that State
agencies with access to EBT data collect shelf prices from vendors on a
biannual basis or seek an exemption from FNS. Until all State agencies
have fully implemented EBT systems, FNS estimates that four State
agencies will continue to be required to collect shelf prices from WIC-
authorized vendors each year, and that one of these State agencies will
request an exemption to this collection requirement from FNS. Removing
the shelf price collection requirement for State agencies with access
to EBT data would significantly decrease the reporting burden for WIC
State agencies (-158,997.93 hours for collecting shelf prices and -
37.33 hours for preparing exemption requests) and WIC-authorized
vendors (-140,497.26 hours).
State agencies are required to submit requests for approval for
costs of capital expenditures per Sec. 246.14(d). FNS estimates that
implementing updates to State agency systems to allow for online
ordering and transactions will cost approximately $90,000 per State
agency. Therefore, the proposed rule is expected to increase the number
of State agencies submitting such requests during online shopping
implementation from 20 to 30 per year, which would increase the
associated reporting burden by 1,600.00 hours.
The proposed rule would allow State agencies to adopt EBT
transaction authentication technologies other than PIN authentication.
State agencies would be required to develop transaction authentication
policies that are appropriate for the authentication technology they
choose to adopt and in accordance with standards established by the
Department. FNS estimates that five State agencies will adopt a new
transaction authentication method each year, requiring them to spend an
estimated 25 hours developing a new transaction authentication policy.
This would add 125.00 hours to State agencies' reporting burden.
The proposed rule would encourage State agencies to issue
electronic benefits remotely and mail EBT cards to participants to
reduce the number of clinic visits households make to receive benefits.
FNS expects that this proposal will decrease the burden associated with
picking up food instruments and cash-value vouchers outside of a
certification clinic visit by 1,049,334.86 hours. These estimates
assume that: on average, WIC households consist of two WIC
participants,\15\ requiring only one trip to the clinic to pick up both
participants' benefits; currently, households in State agencies without
an online EBT system are required to travel to a clinic to pick up
paper food instruments and CVVs or reload offline EBT cards three times
a year outside of another scheduled appointment; and currently, new
participants in State agencies with online EBT systems are required to
pick up their EBT card in person. With the proposed rule, only
participants who need to reload an offline EBT card would be required
to travel to a clinic to pick up benefits in person. FNS estimates that
on average, picking up benefits in person takes a household 30 minutes,
including 26 minutes of round-trip travel time and 4 minutes to obtain
the benefits.\16\ FNS is
[[Page 11529]]
seeking approval for the burden for participants to visit a clinic to
pick up food instruments and CVVs outside of a scheduled appointment
and its associated burden through a separate revision to OMB Control
Number 0584-0043.
---------------------------------------------------------------------------
\15\ U.S. Department of Agriculture, ``WIC Participant and
Program Characteristics 2020 Appendices.'' WIC Participant and
Program Characteristics 2020, Alexandria, VA: February 2022, Table
C.14. Available online at: https://www.fns.usda.gov/wic/participant-program-characteristics-2020.
\16\ This estimate is based on the amount of time WIC
participants reported traveling to the WIC clinic. U.S. Department
of Agriculture, Food and Nutrition Service, ``Appendix G. Program
Experiences Survey Tables.'' Third National Survey of WIC
Participants, Alexandria, VA: 2021, Table 5c.2. Available online at:
https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
---------------------------------------------------------------------------
Finally, the proposed rule would make small adjustments to the
information that State agencies are required to submit annually to FNS
in their State Plans. FNS estimates that one State agency currently
provides justification to authorize a mobile vendor in their State Plan
which requires approximately one hour to complete. Therefore, across
all State agencies, the removal of the requirement to justify
authorization of mobile vendors would result in less than a one-minute
decrease in the number of hours that an average WIC State agency spends
preparing their State Plan each year (from 134.62 to 134.61 hours; 1
hour / 89 State agencies = 0.01 hours). This change to the State Plan
requirement would result in a small overall decrease in State agencies'
reporting burden of 0.89 hours.
Additionally, the proposed rule would allow State agencies to use
non-uniform food instruments within a food delivery system when
justified in their State Plan. FNS estimates that five State agencies
will pursue using non-uniform food instruments through their State Plan
as they either transition from offline to online EBT systems or test
alternative payment technologies. These justifications each would
require an estimated one hour to complete, resulting in an increase to
State agencies' total reporting burden of 5.00 hours.
(iii) Costs Associated With the Proposed Rule and OMB Control Number
0584-0043
In addition to the changes to the information collection burdens
discussed in this section, implementing the proposed rule is expected
to create additional costs for State agencies and WIC participants. As
previously noted, FNS estimates that it will cost each of the 89 WIC
State agencies approximately $90,000 to update their EBT system to
implement online shopping. Altogether, these one-time implementation
costs would total $8.01 million. After implementation, the Department
anticipates that maintenance of such systems will cost approximately
$4,000 per month. Therefore, in an average year following
implementation of online shopping in all State agencies, these ongoing
maintenance costs would total $4.27 million per year.
The proposed rule would add staffing standards at Sec. 246.3(e)
for two new State agency positions: the WIC Food Delivery Coordinator
and the WIC Customer Service Coordinator. FNS estimates that 51 State
agencies have over 7,000 monthly participants and would be required to
employ full-time or equivalent staff persons for both proposed
positions, and that current staff meet the requirements for the WIC
Food Delivery Coordinator at 13 State agencies, and for the WIC
Customer Service Coordinator at 3 State agencies. Additionally, 22
State agencies with monthly participation above 500 but below 7,000
would need to employ a half-time or equivalent staff person for these
two new positions, equivalent to 11 additional full-time WIC Food
Delivery Coordinators and 11 additional full-time WIC Customer Service
Coordinators. Therefore, FNS estimates that in response to the proposed
staffing standards, State agencies would need to fill 108 new full-time
positions (49 WIC Food Delivery Coordinators and 59 WIC Customer
Service Coordinators). Altogether, FNS estimates that these new part-
time and full-time staffing standards would cost State agencies
approximately $117,590 for each full-time position, or $12.7 million
total, in staffing costs per year.\17\
---------------------------------------------------------------------------
\17\ Hourly compensation is based on the hourly total
compensation for all State and local workers from calculated by the
U.S. Bureau of Labor Statistics for FY 2021 (U.S. Bureau of Labor
Statistics, ``Total compensation cost per hour worked for state and
local government workers.'' Available online at: https://data.bls.gov/timeseries/CMU3010000000000D.), adjusted for inflation.
Total annual compensation for a full-time position is calculated by
multiplying hourly compensation by 1,767 hours (Organisation for
Economic Co-operation and Development (OECD) Labour Force
Statistics, ``2020 Average annual hours actually worked per worker
in United States.'' Available online at: https://stats.oecd.org/index.aspx?DataSetCode=ANHRS.).
---------------------------------------------------------------------------
The proposed rule would add a provision at Sec.
246.12(h)(3)(xxxiii) that would allow WIC participants who choose to
shop for supplemental foods online to pay for fees associated with such
services using another tender type, as long as those fees are also
assessed to non-WIC customers using the same services. FNS estimates
that an average online grocery order in 2024 will be assessed $9.59 in
delivery and service fees. Additionally, FNS estimates that once online
shopping has been implemented across all State agencies, 20 percent of
WIC households (consisting of two WIC participants, on average) would
make one online WIC order each month and that 33 percent of WIC online
shopping orders will be placed for home delivery. Therefore, FNS
estimates that approximately 229,000 households would place an online
order for home delivery each month, costing WIC participants a total of
about $26.4 million per year if all State agencies implemented online
shopping.
(iv) Summary of Revisions to OMB Control Number 0584-0043
The current approved burden for OMB Control Number 0584-0043 is
4,547,099 hours and 48,798,800 total responses. The baseline current
burden discussed here and in the tables below includes revisions to OMB
Control Number 0584-0043 that FNS is seeking separately. The updated
current burden for this information collection is 6,144,866 hours and
51,864,053 total responses. Changes to the burden due to the rulemaking
decrease the total burden by 1,357,162 hours, resulting in a revised
burden of 4,787,704 hours. The proposed rule is estimated to decrease
the revised total number of responses by 2,260,446 resulting in
49,603,607 total responses. The estimated addition of 800 internet
vendors due to the proposed rule is expected to increase the total
number of respondents for this information collection from 6,913,189 to
6,913,989. One-time costs associated with the proposed rule are
expected to total $8.01 million and annual costs and fees following
implementation of online shopping are estimated to total $47.64
million. The average burden per response, the annual burden hours, and
the total fees and costs related to this proposed rule are explained
below and summarized in the tables which follow.
The change in burden hours to OMB Control Number 0584-0043 and
costs associated with the proposed rule are best estimates. The
Department requests comments on the burden and all proposed changes.
Comments received in response to the proposed rule and burden estimates
will inform the final burden estimates.
Respondents: State agencies, including Indian Tribal Organizations
and U.S. Territories (note that burden estimates for local agencies are
not affected by this proposed rule).
Estimated Number of Respondents: 89.
Reporting
Estimated Number of Reporting Responses per Respondent: 651.22.
Estimated Number of Responses: 57,958.17.
[[Page 11530]]
Estimated Hours per Reporting Response: 2.21.
Estimated Total Annual Reporting Burden Hours for Respondents:
127,802.22.
Recordkeeping
Estimated Number of Recordkeeping Responses per Respondent: 151.80.
Estimated Number of Responses: 13,510.00.
Estimated Hours per Recordkeeping Response: 1.08.
Estimated Total Annual Recordkeeping Burden Hours for Respondents:
14,559.10.
Respondents: Individuals and households.
Reporting
Estimated Number of Respondents: 347,366.
Estimated Number of Responses per Respondent: 2.63.
Estimated Number of Responses: 911,835.81.
Estimated Hours per Response: 0.50.
Estimated Total Annual Burden on Respondents: 455,917.90.
Respondents: WIC-authorized vendors.
Reporting
Estimated Number of Respondents: 41,964 (41,163 brick-and-mortar
vendors, 800 internet vendors, and 1 mobile vendor).
Estimated Number of Responses per Respondent: 1.39.
Estimated Number of Responses: 58,145.63.
Estimated Hours per Response: 1.83.
Estimated Total Annual Burden on Respondents: 106,437.67.
Estimated Capital, Start-up, Operation, Maintenance and
Implementation Costs and Fees:
Summary of Costs Associated With the Proposed Rule
----------------------------------------------------------------------------------------------------------------
Number of One-time costs Annual costs Total costs
Description of cost respondents (millions) (millions) (millions)
----------------------------------------------------------------------------------------------------------------
State Agencies
----------------------------------------------------------------------------------------------------------------
Systems development and maintenance for online 89 8.01 4.27 12.28
shopping.......................................
New State agency staff positions: WIC Customer 108 0.00 12.70 12.70
Service and Food Delivery coordinators.........
----------------------------------------------------------------------------------------------------------------
Individuals and Households
----------------------------------------------------------------------------------------------------------------
Fees associated with online shopping............ 229,000 0.00 26.40 26.40
---------------------------------------------------------------
Total Costs................................. .............. 8.01 47.64 55.65
----------------------------------------------------------------------------------------------------------------
Table 3--Estimated Annual Reporting and Recordkeeping Burden for OMB #0584-0043 as a Result of Proposed Rule Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated
Estimated Frequency Average Estimated Current burden change in
Regulatory citation Description of number of of Total annual burden total hours in OMB burden hours
activities respondents responses responses hours per burden #0584-0043 * due to
response hours rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
REPORTING BURDEN ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.4............................ State Plan......... 89.00 1.00 89.00 134.61 11,980.29 11,981.18 -0.89
246.4(a)(14)(i).................. State Plan: 5.00 1.00 5.00 1.00 5.00 0.00 5.00
Justification for
non-uniform food
instruments.
246.12(g)(4)(i).................. Vendor food sales 89.00 42.28 3,763.00 4.00 15,052.00 14,764.00 288.00
data.
246.12(g)(4)(ii)(B).............. Vendor shelf prices 3.00 943.01 2,829.03 2.00 5,658.07 164,656.00 -158,997.93
246.12(g)(4)(ii)(B).............. Vendor shelf prices 1.00 0.33 0.33 8.00 2.67 40.00 -37.33
exemption.
246.12(g)(5)..................... Vendor initial 80.00 10.00 800.00 0.67 536.00 0.00 536.00
preauthorization
visits (virtual).
246.12(h)(1)(i).................. Vendor applications 89.00 94.30 8,392.80 0.67 5,595.20 * 10,188.09 -4,592.89
& agreements.
246.12(i)(1)..................... Vendor training.... 89.00 471.51 41,964.00 2.00 83,928.00 82,328.00 1,600
246.12(j)(2)..................... Routine vendor 80.00 0.50 40.00 1.00 40.00 0.00 40.00
monitoring
(virtual).
246.12(j)(4)..................... Vendor compliance 80.00 0.50 40.00 2.00 80.00 0.00 80.00
investigations
(virtual).
246.12(bb)(2).................... Transaction 5.00 1.00 5.00 25.00 125.00 0.00 125.00
authentication
policy development.
246.14(d)........................ ADP proposals-- 30.00 1.00 30.00 160.00 4,800.00 3,200.00 1,600.00
Costs allowable
with approval.
-------------------------------------------------------------------------------------------------
Subtotal Reporting: State ................... 89.00 651.22 57,958.17 2.21 127,802.22 * 287,157.27 -159,355.05
Agencies.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 11531]]
Affected Public: Individuals and Households: Applicants for Program Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(r)(4) & (r)(5)............ Food instrument and 347,366.02 2.63 911,835.81 0.50 455,917.90 * 1,505,252.76 -1,049,334.86
cash-value voucher
pick up (non-
certification
clinic visits).
-------------------------------------------------------------------------------------------------
Subtotal Reporting: Individuals/ ................... 347,366.02 2.63 911,835.81 0.50 455,917.90 * 1,505,252.76 -1,049,334.86
Households.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: Business: Retail Vendors (WIC-Authorized Food Stores)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(g)(4)(i).................. Vendor food sales 3,763.00 1.00 3,763.00 2.00 7,526.00 7,382.00 144.00
data for A50s.
246.12(g)(4)(ii)(B).............. Vendor shelf prices 1,414.52 2.00 2,829.03 2.00 5,658.07 146,155.33 -140,497.26
246.12(g)(5)..................... Vendor initial 800.00 1.00 800.00 0.67 536.00 0.00 536.00
preauthorization
visits (virtual).
246.12(h)........................ Vendor applications 8,392.80 1.00 8,392.80 1.00 8,392.80 13,584.12 -5,191.32
& Agreements.
246.12(h)(8)(i).................. Vendor incentive 396.80 1.00 396.80 1.00 396.80 389.20 7.60
items.
246.12(i)(1)..................... Vendor training.... 41,964.00 1.00 41,964.00 2.00 83,928.00 * 82,328.00 1,600.00
----------------------------------------------------------------------------------------------------------------------
Subtotal Reporting: Retail ................... 41,964.00 1.39 58,145.63 1.83 106,437.67 * 249,838.65 -143,400.98
Vendors.
-------------------------------------------------------------------------------------------------
Grand Subtotal: Reporting.. ................... 389,419.02 2.64 1,027,939.61 0.67 690,157.80 2,042,248.68 -1,352,090.88
--------------------------------------------------------------------------------------------------------------------------------------------------------
RECORDKEEPING BURDEN ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(h)(1)(i).................. Vendor applications 89.00 94.30 8,392.80 1.00 8,392.80 13,584.12 -5,191.32
& agreements.
246.12(h)(8)(i).................. Vendor incentive 4.00 99.20 396.80 1.00 396.80 389.20 7.60
items.
246.12(j)(6)..................... Routine vendor 89.00 23.58 2,098.20 0.50 1,049.10 1,029.10 20.00
monitoring.
246.12(j)(6)(ii)................. Vendor compliance 89.00 23.58 2,098.20 2.00 4,196.40 4,116.40 80.00
investigations.
246.12(l)(3)..................... Vendor notice of 89.00 5.89 524.00 1.00 524.00 514.00 10.00
violations.
-------------------------------------------------------------------------------------------------
Subtotal: Recordkeeping........ ................... 89.00 151.80 13,510.00 1.08 14,559.10 19,632.82 -5,073.72
-------------------------------------------------------------------------------------------------
Grand Total: Reporting and ................... 389,419.02 2.67 1,041,449.61 0.68 704,716.90 * 2,061,881.50 -1,357,164.60
Recordkeeping due to
Rulemaking.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* To capture the estimated changes to the burden from the proposed rule as accurately as possible, the current hours reflect a baseline burden that
includes revisions to OMB Control Number 0584-0043 that FNS is seeking separately.
Summary of Requested Burden Revisions:
Table 4--Summary of Requested Burden Revisions to #0584-0043
----------------------------------------------------------------------------------------------------------------
Responses Respondents Time burden
----------------------------------------------------------------------------------------------------------------
Current Inventory: * Total Burden............................... 51,864,053 6,913,189 6,144,866
Current Inventory: * Reporting.............................. 24,320,009 6,913,189 5,614,900
Current Inventory: * Recordkeeping.......................... 27,544,044 11,897 529,967
Total Burden Revision Requested................................. 49,603,607 6,913,989 4,787,704
Burden Revision Requested: Reporting........................ 22,064,657 6,913,989 4,262,811
Burden Revision Requested: Recordkeeping.................... 27,538,950 11,897 524,893
Difference in Total Burden from Rulemaking.............. -2,260,446 800 -1,357,164
----------------------------------------------------------------------------------------------------------------
* To capture the estimated changes to the burden from the proposed rule as accurately as possible, the ``current
inventory'' reflects a baseline that includes revisions to OMB Control Number 0584-0043 that FNS is seeking
separately.
[[Page 11532]]
b. Revisions to OMB Control Number 0584-0401
Title: Food Delivery Portal (FDP) Data Collection.
OMB Number: 0584-0401.
Expiration Date: 12/31/2024.
Type of Request: Revision of a currently approved collection.
Abstract: This is a revision of existing information collection
requirements in the information collection under OMB Control Number
0584-0401 that are affected by this proposed rulemaking. This proposed
rule would revise regulations around data submission timelines for
information that State agencies must report to FNS using the Food
Delivery Portal (FDP). All WIC State agencies are required to submit
information on their vendor monitoring and investigation activities, in
accordance with Sec. 246.12(j)(5). The revisions in the proposed rule
to this section would replace the current, annual submission deadline
of February 1 of each fiscal year with submission timelines that may be
as frequent as quarterly but not less than annually, based on system
capabilities and reporting needs. Therefore, this proposed rule revises
the frequency of data preparation and submissions to FDP included in
the current information collection to show the possibility of quarterly
submissions. Each quarterly submission would contain one-fourth of the
data typically included in an annual submission (i.e., 3 months of data
rather than 12 months). FDP reporting requirements, including data
submission timelines, would be communicated to State agencies with
advance notice to prepare submissions.
FNS estimates that 73 of the 89 WIC State agencies enter
information into FDP using the data upload process. WIC State agencies
using this option must (1) update redemption data, monitoring
activities, compliance investigations, sanctions, and administrative
reviews on existing vendors and (2) complete all data fields for new
vendors, authorized during the reporting period. In instances where
data submission timelines are set as quarterly, FNS estimates that it
will take an average of 7.5 minutes (0.125 hours) for a WIC State
agency to upload its vendor data. This is approximately a quarter of
the time that FNS estimates it currently takes State agencies to upload
annual data. In total, State agencies would spend an estimated 36.50
hours uploading data annually (73 State agencies x 4 submissions = 292
annual responses x 0.125 hours per response = 36.50 burden hours). The
changes to this burden estimate are the frequency of data uploads and
amount of time each data upload requires. The total hours would not be
affected.
FNS currently estimates that each State agency requires
approximately 10 hours to generate the data for each annual FDP
submission. With the possibility of quarterly data submissions, FNS
estimates that it would require each State agency an average of 2.5
hours per response (10 hours / 4 = 2.5 hours). These responses may need
to be prepared up to four times a year under the proposed rule.
Therefore, across all 89 State agencies, 356 data submissions would be
prepared each year (89 State agencies x 4 submissions per year),
requiring 890 total burden hours (356 submissions x 2.5 hours per
submission = 890). The only changes to this burden estimate are the
frequency of data uploads and amount of time each data upload requires.
The total hours would not be affected.
Currently, FNS estimates that 16 WIC State agencies choose to
manually add or update records in FDP, rather than extracting the
information from their management information system (MIS) or vendor
documentation records. While the data reporting frequency for all State
agencies may be as frequent as quarterly under the proposed rule, FNS
does not anticipate that the burdens associated with manually adding or
updating records in FDP would change with the increased frequency of
submissions, because the same number of State agencies would submit the
same total number of responses throughout the course of one year.
(i) Summary of Revisions to OMB Control Number 0584-0401
The current approved burden for OMB Control Number 0584-0401 is
1,189 hours and 707 total responses. Changes to the burden due to the
rulemaking have no effect on the total number of burden hours, which
would remain 1,189 hours. The proposed rule is estimated to increase
the total number of responses by 486, resulting in 1,139 annual
responses due to the increased frequency of submissions to FDP. The
total number of respondents for this information collection is not
expected to change from 194. The average burden per response and the
annual burden hours related to this proposed rule are explained below
and summarized in the tables which follow.
The change in burden hours to OMB Control Number 0584-0401
associated with the proposed rule are best estimates. The Department
requests comments on the burden and all proposed changes. Comments
received in response to the proposed rule and burden estimates will
inform the final burden estimates.
Respondents: State agencies, including Indian Tribal Organizations
and U.S. Territories.
Estimated Number of Respondents: 162.
Reporting
Estimated Number of Reporting Responses per Respondent: 4.
Estimated Number of Responses: 648.
Estimated Hours per Reporting Response: 1.43.
Estimated Total Annual Reporting Burden Hours for Respondents:
926.50.
Table 5--Estimated Annual Reporting and Recordkeeping Burden for OMB #0584-0401 as a Result of Proposed Rule Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current OMB Estimated
Estimated Frequency Total Average Estimated approved change in
Regulatory citation Description of number of of annual burden total burden hours burden hours
activities respondents responses responses hours per burden in OMB #0584- due to
response hours 0401 rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
REPORTING BURDEN ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(j)(5)....................... Data Upload........... 73 4.00 292.00 0.125 36.50 36.50 0.00
246.12(j)(5)....................... Data Preparation...... 89 4.00 356.00 2.500 890.00 890.00 0.00
--------------------------------------------------------------------------------------------
Total: Reporting due to ...................... 162 4.00 648.00 1.43 926.50 926.50 0.00
Rulemaking.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 11533]]
Summary of Requested Burden Revisions:
Table 6--Summary of Requested Burden Revisions to OMB #0584-0401
----------------------------------------------------------------------------------------------------------------
Responses Respondents Time burden
----------------------------------------------------------------------------------------------------------------
Current OMB Inventory: Total Burden............................. 707 194 1,189
Total Burden Revision Requested................................. 1,193 194 1,189
Difference in Total Burden from Rulemaking.................. 486 0 0
----------------------------------------------------------------------------------------------------------------
E-Government Act Compliance
The Department is committed to complying with the E-Government Act
of 2002, to promote the use of the internet and other information
technologies to provide increased opportunities for citizen access to
Government information and services, and for other purposes.
List of Subjects in 7 CFR Part 246
Administrative practice and procedure, Civil rights, Food
assistance programs, Foods, Grants administration, Grant programs--
health, Grant programs--social programs, Indians, Infants and children,
Maternal and child health, Nutrition, Penalties, Public health,
Reporting and recordkeeping requirements, Women.
Accordingly, the FNS proposes to amend 7 CFR part 246 as follows:
PART 246--SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS
AND CHILDREN
0
1. The authority citation for part 246 continues to read as follows:
Authority: 42 U.S.C. 1786.
0
2. In Sec. 246.2:
0
a. Remove the definition of ``Above-50-percent vendors'' and add in its
place the definition of ``Above-50-percent vendor'';
0
b. Add the definitions of ``Brick-and-mortar vendor'' and ``Cash-value
benefit'' in alphabetical order;
0
c. Revise the definitions of ``Cash-value voucher'' and ``Compliance
buy'';
0
d. Remove the definition of ``Electronic Benefit Transfer'' and add in
its place the definition of ``Electronic benefit transfer'';
0
e. Add the definition of ``Electronic benefits'' in alphabetical order;
0
f. Revise the definitions of ``Food instrument'' and ``Home food
delivery contractor'';
0
g. Add the definitions of ``Internet vendor'' and ``Mobile vendor'' in
alphabetical order; and
0
h. Revise the definitions of ``Routine monitoring'' and ``Vendor''.
The revisions and additions read as follows:
Sec. 246.2 Definitions.
* * * * *
Above-50-percent vendor means any type of vendor that derives more
than 50 percent of its annual food sales revenue from WIC food
instruments, and new vendor applicants expected to meet this criterion
under guidelines approved by FNS.
* * * * *
Brick-and-mortar vendor means a type of vendor authorized to
provide authorized supplemental foods to participants through
transactions at a single, physical, fixed location. All transactions
that take place at the brick-and-mortar vendor will be assigned to that
vendor.
Cash-value benefit means a type of electronic benefit that is a
fixed-dollar amount used to obtain authorized fruits and vegetables.
Cash-value voucher means a fixed-dollar amount check, voucher, or
other document which is used to obtain authorized fruits and
vegetables.
* * * * *
Compliance buy means a covert investigation in which a
representative of the Program poses as a participant, parent or
caretaker of an infant or child participant, or proxy, transacts food
instruments, cash-value vouchers, or electronic benefits, and does not
reveal during the visit their identity as a program representative.
* * * * *
Electronic benefit transfer (EBT) means a benefit delivery method
that permits electronic access to WIC food benefits using a card or
other electronic benefit access device or technology approved by the
Secretary.
Electronic benefits mean the WIC benefits for supplemental foods
prescribed to a participant and contained within the participant's
benefit balance.
* * * * *
Food instrument means a paper voucher, check, coupon, other
document; or an EBT card or other electronic benefit access device or
technology that is used to obtain supplemental foods.
* * * * *
Home food delivery contractor means a business entity that
contracts directly with a State agency to deliver authorized
supplemental foods to a location designated by the participant or State
agency under a home food delivery system.
* * * * *
Internet vendor means a type of vendor authorized to provide
authorized supplemental foods to participants through internet-based
transactions.
* * * * *
Mobile vendor means a type of vendor authorized to provide
authorized supplemental foods to participants through transactions that
take place at a truck, bus, pushcart, or other mobile vehicle.
* * * * *
Routine monitoring means overt monitoring during which program
representatives identify themselves to vendor personnel.
* * * * *
Vendor means a business entity authorized by the State agency to
provide authorized supplemental foods to participants under a retail
food delivery system. Each vendor with a unique SNAP authorization
number must be authorized separately. For vendors that are not SNAP
authorized, each single, separate location constitutes a unique vendor
from other store locations and must be authorized separately. A vendor
providing supplemental foods through any means other than a single,
physical, fixed location must be authorized separately from any related
brick-and-mortar vendors.
* * * * *
0
3. In Sec. 246.3:
0
a. Revise paragraph (e)(5); and
0
b. Redesignate paragraph (e)(6) as paragraph (e)(7) and add a new
paragraph (e)(6).
The revision and addition read as follows:
Sec. 246.3 Administration.
* * * * *
(e) * * *
(5) For food delivery system management, one full-time or
equivalent
[[Page 11534]]
staff person when the monthly participation is above 7,000, or a half-
time or equivalent staff when the monthly participation exceeds 500 and
the State agency manages its own vendor cost containment system. The
staff person will be named WIC Food Delivery Coordinator and must meet
State personnel standards and qualifications in paragraph (e)(5)(i) or
(ii) of this section and have the qualifications in paragraph
(e)(5)(iii) of this section. Upon request, an exception to these
qualifications may be granted by FNS to allow for existing personnel or
for special circumstances. The WIC Food Delivery Coordinator must--
(i) Hold a Master's degree or higher, with sufficient statistical
coursework to independently analyze and act upon food delivery data,
including vendor cost containment data, and have at least one year
experience in:
(A) Public health, government administration, or equivalent; or
(B) A WIC food delivery or vendor management position that involved
data analysis and vendor cost containment activities; or
(ii) Hold a Bachelor's degree or equivalent educational experience
from an accredited four-year institution, with sufficient statistical
coursework to independently analyze and act upon food delivery data,
including vendor cost containment data; and have at least three years
of experience in:
(A) Public health, government administration, or equivalent; or
(B) A WIC food delivery or vendor management position that involved
data analysis and vendor cost containment activities; and
(iii) Have demonstrated proficiency in at least one of the
following: Program management skills; experience coordinating with
information technology contractors; or experience with external
stakeholder engagement.
(6) To ensure the State agency's operations are participant-
centered and comply with Federal requirements, one full-time or
equivalent staff person designated when the monthly participation is
above 7,000, or a half-time or equivalent staff when the monthly
participation exceeds 500. The staff person will be named WIC Customer
Service Coordinator and will be responsible for improvements related to
participant-facing activities and technologies. The WIC Customer
Service Coordinator must meet State personnel standards and
qualifications in paragraph (e)(6)(i) or (ii) of this section and have
the qualifications in paragraph (e)(6)(iii) of this section. Upon
request, an exception to these qualifications may be granted by FNS to
allow for existing personnel or for special circumstances. The WIC
Customer Service Coordinator must--
(i) Hold a Master's degree or higher, and have at least one year
experience in:
(A) Public health, government administration, or equivalent;
product or technology management; acquisitions management; or
(B) A position focused on innovation or modernization with similar
complexities to the WIC Program; or
(ii) Hold a Bachelor's degree or equivalent educational experience
from an accredited four-year institution and have at least three years
of experience in:
(A) Public health, government administration, or equivalent;
product or technology management; acquisitions management; or
(B) A position focused on innovation or modernization with similar
complexities to the WIC Program; and
(iii) Have demonstrated proficiency in at least one of the
following: Product management or product ownership (to include owning
business and product vision of technology systems, defining and
measuring project objectives, and/or communication and collaboration
across cross-functional teams); experience with user-centered design,
agile development, DevOps, and other modern technologies, experience
managing information technology contractors that employ modern
practices; extensive IT or acquisition management experience;
experience with contract management.
* * * * *
0
4. In Sec. 246.4:
0
a. Remove and reserve paragraph (a)(14)(xv); and
0
b. Revise paragraph (a)(23).
The revision reads as follows:
Sec. 246.4 State plan.
* * * * *
(a) * * *
(23) A plan to improve access to the Program for participants and
prospective applicants, with additional focus on those who are employed
and/or reside in rural areas. The plan must identify and address the
needs of these individuals, and must include, at a minimum, policies
and procedures to minimize the time they must spend away from work and
the distances they must travel. This plan must include measures to
improve access to the Program through the remote issuance of food
instruments, cash-value vouchers, and/or electronic benefits, as
applicable, to participants through means other than direct participant
pick-up, pursuant to Sec. 246.12(r)(4) and (5). The State agency must
also describe the State agency's policy for approving transportation of
participants to and from WIC clinics per Sec. 246.14(c)(7). This plan
must describe how the State agency will ensure the integrity of Program
services and fiscal accountability.
* * * * *
0
5. In Sec. 246.7, revise paragraph (f)(2)(iv) to read as follows:
Sec. 246.7 Certification of participants.
* * * * *
(f) * * *
(2) * * *
(iv) Each local agency using a retail food delivery system must
issue food instruments, cash-value vouchers, or electronic benefits, as
applicable, to the participant at the same time as notification of
certification. Such food instruments, cash-value vouchers, and
electronic benefits must be provided for the current month or the
remaining portion thereof and must be transactable immediately upon
receipt by the participant. Local agencies may issue electronic
benefits remotely or mail the food instruments and cash-value vouchers
with the notification of certification, as provided in Sec.
246.12(r)(4) and (5).
* * * * *
0
6. In Sec. 246.12:
0
a. Revise paragraph (b);
0
b. Revise the third sentence of the introductory text of paragraph
(g)(4), paragraphs (g)(4)(ii)(B) and (g)(5), the first sentence of
paragraph (g)(8), and the last sentence of paragraph (g)(9);
0
c. Revise the second sentence of paragraph (h)(1)(i) and paragraphs
(h)(3)(ii), (v), and (vi);
0
d. Add paragraphs (h)(3)(xxxii) and (xxxiii);
0
e. Revise paragraphs (j)(5) and (j)(6)(ii)(B);
0
f. Revise the first sentence of the introductory text of paragraph (m);
0
g. Revise paragraphs (r)(2) and (4);
0
h. Redesignate paragraphs (r)(5) and (6) as paragraphs (r)(6) and (7),
respectively, and add a new paragraph (r)(5);
0
i. Remove the period at the end of newly redesignated paragraph (r)(6)
and add ``; and'' in its place;
0
i. Revise paragraphs (v)(1)(iv) and (ix);
0
j. Revise paragraph (x)(2)(iii);
0
k. Add paragraph (x)(4);
0
l. Redesignate paragraphs (bb)(2) and (3) as paragraph (bb)(3) and (4),
respectively, and add a new paragraph (bb)(2).
The revisions and additions read as follows:
Sec. 246.12 Food delivery methods.
* * * * *
[[Page 11535]]
(b) Uniform food delivery systems. The State agency may operate a
combination of up to three types of food delivery systems under its
jurisdiction--retail, home food delivery, and direct distribution.
These three food delivery systems must be procedurally uniform
throughout the jurisdiction of the State agency and the combination of
systems used must ensure adequate participant access to supplemental
foods. When used, food instruments must be uniform within each type of
system, except when the use of non-uniform food instruments is
necessary to meet the special needs described and approved in the State
agency's State Plan per Sec. 246.4(a)(14)(i), or when transitioning
from one type of food instrument to another.
* * * * *
(g) * * *
(4) * * * The State agency must consider a vendor applicant's
prices for non-WIC customers or the prices it bids for supplemental
foods, which must not exceed the price charged to non-WIC customers. *
* *
* * * * *
(ii) * * *
(B) The analysis of vendor prices to monitor vendor compliance with
paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and (g)(4)(iii) of this section
and to ensure State agency policies and procedures dependent on price
data are efficient and effective. State agencies without access to
electronic benefit redemption data must collect vendor shelf prices at
least every six months to ensure compliance with this paragraph
(g)(4)(ii)(B). FNS may grant an exemption from the requirement to
collect shelf prices if the State agency demonstrates to FNS'
satisfaction that an alternative methodology for monitoring vendor
compliance with paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and (g)(4)(iii)
of this section is efficient and effective and other State agency
policies and procedures are not dependent on frequent collection of
shelf price data. Such exemption would remain in effect until the State
agency no longer meets the conditions on which the exemption was based,
until FNS revokes the exemption, or for three years, whichever occurs
first; and
* * * * *
(5) Preauthorization visit. The State agency must conduct an on-
site or virtual visit prior to or at the time of a vendor's initial
authorization.
* * * * *
(8) * * * The State agency may limit the periods during which
applications for vendor authorization will be accepted and processed,
except that applications must be accepted and processed at least once
every five years. * * *
* * * * *
(9) * * * In addition, if the State agency does not have access to
electronic benefit redemption data, the State agency must collect the
vendor applicant's current prices for supplemental foods.
* * * * *
(h) * * *
(1) * * *
(i) * * * The agreements must be for a period not to exceed five
years. * * *
* * * * *
(3) * * *
(ii) No substitutions, cash, credit, cash refunds, or exchanges.
The vendor may provide only the authorized supplemental foods listed on
the paper food instrument and cash-value voucher or available in the
participant's benefit balance.
(A) Except as specified in paragraph (h)(3)(ii)(C) of this section,
the vendor must not provide unauthorized food items, nonfood items,
cash, or credit (including rain checks) in exchange for benefits. The
vendor must not provide cash refunds or permit exchanges for authorized
supplemental foods obtained with benefits, except for exchanges of an
identical authorized supplemental food item when the original
authorized supplemental food item is defective, spoiled, or has
exceeded its ``sell by,'' ``best if used by,'' or other date limiting
the sale or use of the food item. An identical authorized supplemental
food item means the exact brand, type, physical form, and size as the
original authorized supplemental food item obtained and returned by the
participant.
(B) The vendor may provide only the authorized infant formula which
the vendor has obtained from sources included on the list described in
paragraph (g)(11) of this section to participants in exchange for food
instruments specifying infant formula.
(C) During a supply chain disruption, as defined in section
17(b)(24) of the Child Nutrition Act of 1966, as amended, including a
supplemental food product recall, the vendor must treat all customers,
including WIC participants, parents or caretakers of infant or child
participants, and proxies the same. This should be reflected in store
recall exchange policies, including policies related to replacements
(which may include, but are not limited to, the same product, a
substitute product, store credit, or a cash refund).
* * * * *
(v) Purchase price. The vendor must ensure that the purchase price
is calculated in accordance with the procedures described in the vendor
agreement. The purchase price must include only the amount(s) for the
authorized supplemental food items actually provided, and the WIC
participant, parent or caretaker of an infant or child participant, or
proxy must be made aware of the total purchase price of the transaction
before the transaction is completed.
(vi) Signature on paper food instruments and cash-value vouchers.
For paper food instruments and cash-value vouchers, the vendor must
ensure the participant, parent or caretaker of an infant or child
participant, or proxy signs the paper food instrument or cash-value
voucher after the purchase price is entered.
* * * * *
(xxxii) Transaction authentication. The vendor must authenticate
transactions in accordance with the policies established by the State
agency.
(xxxiii) Fees associated with online ordering. A vendor must not
charge the State agency for fees associated with online ordering (e.g.,
delivery, service, convenience, bag fees). If such fees are assessed to
non-WIC customers using the same services, WIC participants must be
allowed to pay them using another tender type.
* * * * *
(j) * * *
(5) Reporting. The State agency must send FNS certain vendor,
direct distribution contractor, home food delivery contractor, farmer,
and farmers' market data containing information stipulated by FNS via
reporting requirements that will be provided to WIC State agencies with
advance notification. Reporting requirements will include required data
fields and data submission timelines, which may be as frequent as
quarterly but not less than annually based on system capabilities and
reporting needs. Plans for improvement in the coming year must be
included in the State Plan in accordance with Sec. 246.4(a)(14)(iv).
(6) * * *
(ii) * * *
(B) A description of the cashier involved in each transaction, if
applicable;
* * * * *
(m) * * * Home food delivery systems are systems in which
authorized supplemental foods are delivered to a location designated by
the participant or State agency. * * *
* * * * *
(r) * * *
[[Page 11536]]
(2) Signature requirement. Ensure that the participant, parent or
caretaker of an infant or child participant, or proxy signs for receipt
of food instruments, cash-value vouchers, or authorized supplemental
foods, except as provided in paragraphs (r)(4) and (5) of this section;
* * * * *
(4) Paper food instrument and cash-value voucher pick up. Require
participants, parents and caretakers of infant and child participants,
and proxies to pick up paper food instruments and cash-value vouchers
in person when scheduled for in-person nutrition education or for an
in-person appointment to determine whether participants are eligible
for a second or subsequent certification period. In all other
circumstances the State agency may opt to mail paper food instruments
or cash-value vouchers unless FNS determines that it would jeopardize
the integrity of program services or program accountability;
(5) EBT card and electronic benefit issuance. Ensure participants
receive their EBT cards and electronic benefits in accordance with
Sec. Sec. 246.7(f)(2)(iv) and 246.11(a)(2), without jeopardizing the
integrity of program services or program accountability. The State
agency is encouraged to remotely issue electronic benefits and mail EBT
cards, when possible, unless FNS determines that it would jeopardize
the integrity of program services or program accountability;
* * * * *
(v) * * *
(1) * * *
(iv) Transact and redeem cash-value vouchers or cash-value benefits
in accordance with procedures established by the State agency. Such
procedures must include:
(A) A requirement for the farmer or farmers' market to allow the
participant, parent or caretaker of an infant or child participant, or
proxy to pay the difference when the purchase price of fruits and
vegetables exceeds the value of the cash-value vouchers or cash-value
benefits. This is known as a split tender transaction; and
(B) Procedures to ensure that the WIC participant, parent or
caretaker of an infant or child participant, or proxy is made aware of
the total purchase price of the transaction before the transaction is
completed;
* * * * *
(ix) Offer WIC participants, parents or caretakers of infant or
child participants, or proxies the same courtesies as other customers.
If fees associated with online ordering (e.g., delivery, service,
convenience, bag fees) are assessed to non-WIC customers using the same
services, WIC participants must be allowed to pay them using another
tender type;
* * * * *
(x) * * *
(2) * * *
(iii) Last date of use. The last date on which the electronic
benefit may be used to obtain authorized supplemental foods. This date
must be a minimum of 30 days, or in the month of February 28 or 29
days, from the first date on which it may be used to obtain authorized
supplemental foods except for the participant's first month of issuance
when it may be the end of the month or cycle for which the electronic
benefit is valid. This must be extended, as applicable, per paragraph
(x)(4)(i) of this section; and
* * * * *
(4) Return of benefits. If applicable, the State agency must allow
for the return of electronic benefits to a participant's balance when
items in an online order are not fulfilled. The return of electronic
benefits and subsequent purchase must be linked to one or more items in
the original transaction and must comply with the following
requirements:
(i) Return of benefits after the last date of use. When electronic
benefits are returned to a participant's balance, the State agency must
provide the participant with no less than 7 calendar days to transact
the returned benefits.
(ii) [Reserved]
* * * * *
(bb) * * *
(2) The State agency must develop policies to ensure that each
transaction is authenticated according to standards established by FNS.
* * * * *
0
7. In Sec. 246.14, revise paragraphs (b)(1)(i) and (c)(4) to read as
follows:
Sec. 246.14 Program costs.
* * * * *
(b) * * *
(1) * * *
(i) Purchasing supplemental foods in a retail food delivery system
using WIC benefits and/or acquiring supplemental foods provided to
State or local agencies or participants, whichever receives the
supplemental foods first in a home food delivery system or a direct
distribution food delivery system;
* * * * *
(c) * * *
(4) The cost of administering the food delivery system, including
the cost of transporting supplemental foods, except as prohibited at
Sec. 246.12(h)(3)(xxxiii) and (v)(1)(ix).
* * * * *
Cynthia Long,
Administrator, Food and Nutrition Service.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix A--Regulatory Impact Analysis
Statement of Need
The methods consumers, including those served by the Special
Supplemental Nutrition Program for Women, Infants, and Children
(WIC), use to purchase food have changed in response to advances in
technology as well as changes in purchasing behavior brought on by
the COVID-19 pandemic. The Department's regulations have not been
changed to reflect these increased options available to consumers.
To ensure that WIC participants have equal access to available
shopping options, with the expansion of online shopping in the
retail grocery industry and the development of new payment types,
the Department proposes to remove barriers its current regulations
impose on online shopping and to modernize certain food delivery
regulations in the WIC Program through this rulemaking. The proposed
measures would complement the Program's near-complete transition to
electronic benefit transfer (EBT) and aim to meet the needs of a
modern, data-driven program that uses current technologies for food
delivery. These changes are expected to improve nutrition security
among WIC participants by increasing equity and access to available
shopping options.
Background
Introduction of Key Terms
For the purposes of this proposed rule and analysis, the
Department will use the following definitions:
``WIC shopper'' means a person shopping using WIC
benefits (i.e., a WIC participant, proxy, or a parent or caretaker
of an infant or child participant).
``Online shopping'' means the general use of an online,
internet-based ordering system, platform, or site. It can encompass
online ordering with or without internet-based transactions (i.e.,
the transaction can occur via the internet, in store, curbside, or
at the point of delivery).
``Online ordering'' means the process a customer
(including a WIC shopper) uses to select food items for purchase via
an internet-based ordering system, platform, or site.
``Transaction'' means the process by which a WIC
shopper exchanges their WIC benefits for supplemental foods.
``internet-based transaction'' means a transaction
where the WIC payment is completed through the payment section of
the online ordering system, platform, or site. This terminology is
being used in lieu of ``online transaction'' to avoid confusion with
transactions that occur using online EBT technology.
``Redemption'' means the process in which a vendor
submits records of electronic
[[Page 11537]]
benefits for redemption and the State agency (or its financial
agent) makes payment to the vendor.
Overview of the WIC Program and Shopping Experience
The WIC Program is administered by 89 WIC State agencies,
including the 50 States, 33 Indian Tribal Organizations, the
District of Columbia, and 5 U.S. Territories (American Samoa, the
Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and
the U.S. Virgin Islands). WIC serves to safeguard the health of low-
income pregnant, breastfeeding, and non-breastfeeding postpartum
individuals, and infants and children up to age five who are found
to be at nutritional risk. In 2019, WIC participants included nearly
43 percent of all infants in the United States,\1\ and in fiscal
year (FY) 2020, WIC served an average of 6.25 million
participants.\2\
---------------------------------------------------------------------------
\1\ U.S. Department of Agriculture, Food and Nutrition Service,
``National- and State-Level Estimates of WIC Eligibility and WIC
Program Reach in 2019: Final Report, Volume I,'' pp. 65, by Kelsey
Farson Gray et al. Project Officer Grant Lovellette, Alexandria, VA:
February 2022. Available online at: https://fns-prod.azureedge.net/sites/default/files/resource-files/WICEligibles2019-Volume1.pdf.
\2\ U.S. Department of Agriculture Food and Nutrition Service,
``WIC Data Tables,'' 2021. Available online at: https://www.fns.usda.gov/pd/wic-program.
---------------------------------------------------------------------------
The Department provides Federal grants to WIC State agencies to
provide supplemental foods, health care referrals, and nutrition
education, including breastfeeding promotion and support, to WIC
participants. WIC participants typically access supplemental foods
through a retail food delivery system. In such systems, a WIC
shopper goes to a WIC-authorized vendor (i.e., a retail store
authorized by the State agency), selects foods available in their
benefit balance, and uses an EBT card to purchase the items. In FY
2020, there were approximately 40,000 WIC-authorized vendors
nationwide, and nearly 93 percent of WIC participants received WIC
benefits via EBT.
Current WIC regulations were written for a paper-based benefit
delivery system and restrain State agencies from making use of the
opportunities that EBT provides, including remotely issuing
electronic benefits and transacting those benefits online. Current
regulations that require participants to pick up food benefits in
person and transact food benefits in the presence of a cashier pose
challenges to participants with special dietary needs, limited
mobility or access to transportation, and/or those who live in
remote or rural communities. These requirements also present unique
challenges during disasters or public health emergencies, such as
the COVID-19 pandemic.
Key Information Used in the Development of This Proposed Rule and
Analysis
The 2014 Farm Bill (Pub. L. 113-79) mandated that the Department
conduct a pilot to assess the feasibility and implications of
allowing retailers authorized under the Supplemental Nutrition
Assistance Program (SNAP) to accept SNAP benefits for online
transactions. The SNAP Online Purchasing Pilot initially launched in
New York in April 2019, then expanded to Washington in January 2020,
followed by Alabama, Oregon, and Iowa in March 2020, and Nebraska in
April 2020. The onset of the COVID-19 pandemic spurred a rapid
expansion of the pilot across 47 States and the District of Columbia
by early 2021. While online shopping with SNAP benefits is now
available in nearly all States, WIC shoppers do not yet have
widespread access to online shopping due in part to barriers under
current WIC regulations.
In September 2020, the Department awarded a grant to the
Gretchen Swanson Center for Nutrition (GSCN) to develop a plan for
implementing online shopping in WIC. With extensive stakeholder
input, GSCN developed the Blueprint for WIC Online Ordering Projects
(the ``Blueprint''), which was published in June 2021.\3\ As a part
of the grant agreement, GSCN has since awarded sub-grants to State
agency and vendor partners to fund four projects that will test WIC
online shopping across seven geographic States and one Indian Tribal
Organization (ITO).
---------------------------------------------------------------------------
\3\ Gretchen Swanson Center for Nutrition. ``Blueprint for WIC
Online Ordering Projects,'' 2021. Available online at: https://www.centerfornutrition.org/wic-online-ordering.
---------------------------------------------------------------------------
The Consolidated Appropriations Act for Fiscal Year 2021 (Pub.
L. 116-260) authorized the Department to establish the Task Force on
Supplemental Foods Delivery (the ``Task Force''). The Task Force was
charged with assembling WIC stakeholders to independently ``study
measures to streamline the redemption of supplemental foods benefits
that promote convenience, safety, and equitable access to
supplemental foods, including infant formula.'' The Task Force
submitted its recommendation report to the Department on September
30, 2021. The Department was then required to report a plan to
Congress on how the recommendations would be carried out as well as
whether any legislative changes would be required.\4\
---------------------------------------------------------------------------
\4\ More information on the WIC Task Force on Supplemental Foods
Delivery, including links to both the Departmental and Congressional
reports, is available online at: https://www.fns.usda.gov/wic/task-force-supplemental-foods-delivery.
---------------------------------------------------------------------------
The proposed Special Supplemental Nutrition Program for Women,
Infants and Children (WIC): Online Ordering and Transactions and
Food Delivery Revisions to Meet the Needs of a Modern, Data-Driven
Program rule is informed by WIC stakeholder input and
recommendations in both the Blueprint and the final reports of the
Task Force. The Department has also incorporated lessons learned
from the SNAP Online Purchasing Pilot. The GSCN sub-grant projects
will be evaluated over the next year to assess the start-up costs
required by State agencies and vendors to operationalize WIC online
shopping and the impact that online shopping has on key outcomes
including WIC benefit redemption rates. The Department intends to
review the findings from the GSCN projects and use updated data to
inform future iterations of this initial impact analysis throughout
the rulemaking process, especially on implementation costs and
redemption rate impacts.
Summary of Provisions
The proposed rule would update WIC regulations to remove current
regulatory barriers to online ordering and transactions in WIC,
streamline and modernize food and benefit delivery options for WIC
participants, and introduce measures intended to meet the needs of a
modern, data-driven program that uses current technologies for food
delivery. Specifically, the rule proposes the following changes:
Remove barriers to online ordering and internet-based
transactions.
[cir] Allow vendors and WIC shoppers to complete internet-based
transactions and allow State agencies to explore and identify
options to authenticate EBT transactions that are appropriate for
the specific technologies they choose to adopt.
[cir] Allow State agencies to authorize new types of vendors to
give WIC participants more shopping options by:
[ssquf] Creating definitions for ``brick-and-mortar,''
``internet,'' and ``mobile'' vendors.
[ssquf] Removing language from the definition of ``vendor'' that
currently only allows State agencies to authorize vendors with a
``single, fixed location'' (i.e., brick-and-mortar vendors).
[cir] Allow vendors to return benefits to a participant's
benefit balance when an item requested through an online order
cannot be fulfilled.
[cir] Allow State agencies to develop virtual methods of
oversight.
[cir] Permit WIC shoppers to pay for fees related to online
shopping (e.g., delivery, service, convenience, bag fees) using a
separate tender type if such fees are assessed to non-WIC customers
using the same services.
Streamline and modernize WIC food delivery.
[cir] Permit the remote issuance of electronic benefits to a
participant's benefit balance and clarify the definitions of
``electronic benefits'' and ``cash-value benefit'' as separate and
distinct from paper food instruments.
[cir] Add ``other electronic benefit access device or
technology'' to the definition of a ``food instrument.''
[cir] Allow State agencies to develop and test new WIC food
instrument types.
[cir] Streamline food delivery operations by recognizing that
EBT data are a sufficient replacement for routine shelf price
collection.
[cir] Extend vendor application and agreement periods from three
to five years.
[cir] Allow State agencies using a home food delivery system
(non-retail) to ship supplemental foods to a location designated by
participants (e.g., Alaska Natives who do not have at-home mail
service).
Meet the needs of a modern, data-driven program.
[cir] Update reporting requirements for Federal oversight to
align with the transition in reporting systems from The Integrity
Profile (TIP) to the Food Delivery Portal (FDP).
[[Page 11538]]
[cir] Create two new WIC State agency staff positions to reflect
staffing needs of a modern, innovative program.
Summary of Impacts
Costs
The Department estimates that the provisions under this proposed
rule would collectively result in a total of $404 million in costs
and Federal transfers over 5 years from FY 2024 through FY 2028
(Table 1). This estimate includes increases in Federal Government
WIC spending, increased net costs to WIC State agencies, and a
savings for WIC retail vendors.
The Department estimates that allowing WIC online shopping will
increase Federal WIC food spending, in the form of transfers, by a
total of $392 million over 5 years. This is driven by an
understanding that shoppers typically pay higher prices for online
groceries and an expectation that online shopping would moderately
increase WIC benefit redemption by making the WIC shopping
experience more convenient for some participants.
Table 1--Summary of Estimable Impacts on Transfers and Costs
[FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal Transfers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Impact of online shopping on Federal WIC food spending.. $5.6 $43.7 $79.0 $121.9 $142.0 $392.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
State Agency Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Systems development and maintenance for online shopping. 1.1 7.5 6.0 7.1 5.1 26.9
Changes to reporting and recordkeeping burden........... -9.7 -10.0 -10.3 -10.6 -10.9 -51.5
New State agency staff positions........................ 5.9 11.9 11.9 12.3 12.7 54.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
WIC Vendor Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes to reporting burden............................. -3.6 -3.6 -3.7 -3.8 -3.9 -18.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Estimated Impact.............................. -0.6 49.4 83.0 127.0 145.0 403.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary figures are adjusted for annual inflation.
The Department estimates that the proposed rule would also
result in around $30 million in net WIC State agency costs from FY
2024 to FY 2028. State agency costs include nearly $27 million in
total 5-year expenses required to update State agency systems to
enable online transaction of WIC electronic benefits and $55 million
in total 5-year costs for increased staffing expenses due to the
proposed changes to State agency staffing requirements. State agency
costs would be partially offset by a large reduction in State agency
reporting burden and recordkeeping burden, which is estimated to
result in a savings of $52 million over 5 years and is largely
attributable to the removal of shelf price collection requirements
for EBT State agencies and the extension of vendor agreement and
application periods. These State agency costs are considered
allowable expenses for State agencies under their annually awarded
Nutrition Services and Administration (NSA) grants. The Department
expects that State agencies would be able to absorb the costs
associated with implementing the provisions under this proposed rule
with current NSA funds without any increase in the level of NSA
grants.
Finally, the removal of shelf price collection requirements and
the extension of vendor application and agreement periods are also
expected to significantly reduce burden on WIC vendors. The
Department estimates that the reductions in vendor reporting burden
under the proposed rule would save WIC vendors $18 million over 5
years.
Benefits
The provisions under this proposed rule aim to modernize the
ways that WIC participants can receive and transact their electronic
benefits, creating opportunities to improve equity and accessibility
in the Program as a result. An estimated 14 percent of the U.S.
population lives in low-income census tracts with limited access to
food stores,\5\ and 21 percent of WIC participants report using a
means of transportation other than their own personal car to travel
to a vendor to use their WIC benefits.\6\ By comparison, 95 percent
of higher income households (above 185 percent of the Federal
poverty line) use their own vehicle to travel to a grocery store.\7\
Once at the vendor, participants also report challenges shopping for
WIC foods. Recent USDA survey data indicate that finding the right
WIC-approved products in stores, WIC-approved products being out of
stock, and feeling embarrassed shopping for WIC foods are some of
the most cited challenges among WIC participants who report
difficulties shopping for WIC supplemental foods.\8\ Online shopping
may alleviate some of these issues for WIC participants and has the
potential to provide benefits during supply chain disruptions.
---------------------------------------------------------------------------
\5\ USDA Economic Research Service. ``State-Level Estimates of
Low Income and Low Access Populations.'' Last updated September 30,
2019. Available online at: https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/.
\6\ Magness, A., Williams, K. Gordon, E., Morrissey, N., Papa,
F., Garza, A., Okyere, D., Nisar, H., Bajowski, F., & Singer, B.
(2021). Third National Survey of WIC Participants: WIC Participant
Satisfaction and Shopping Experience: Brief Report #6. Prepared by
Capital Consulting Corporation and 2M Research Services. Contract
No. AG-3198-K-15-0077. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of Policy Support,
Project Officer: Karen Castellanos-Brown. Available online at:
https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
\7\ Ver Ploeg, Michele, Lisa Mancino, Jessica E. Todd, Dawn
Marie Clay, and Benjamin Scharadin. Where Do Americans Usually Shop
for Food and How Do They Travel To Get There? Initial Findings From
the National Household Food Acquisition and Purchase Survey, EIB-
138, U.S. Department of Agriculture, Economic Research Service,
March 2015. Available online at: https://www.ers.usda.gov/publications/pub-details/?pubid=79791.
\8\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research,
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of Policy Support,
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
---------------------------------------------------------------------------
Enabling online shopping in WIC under this proposed rule is
expected to reduce barriers to WIC services, ensure that WIC
participants have an equitable shopping
[[Page 11539]]
experience as the retail marketplace innovates, and increase
participant purchases of supplemental foods. Online shopping may
also expand participant choice in supplemental foods, particularly
for authorized supplemental food substitutions needed to meet
certain dietary restrictions, that may not be readily available at
the closest WIC-authorized grocery stores. These regulatory changes
would ensure that WIC participants have the ability to transact
benefits online as an increasing share of U.S. consumers prefer to
shop for groceries online. The proposed rule would further make WIC
more convenient and accessible by encouraging State agencies to
remotely issue electronic benefits and mail EBT cards whenever
possible, potentially reducing the number of clinic visits that WIC
participants are required to make. The proposed rule also includes
provisions that would streamline and modernize WIC food delivery by
promoting innovation and ensuring that State agencies have enough
qualified staff meet the needs of a modern, data-driven program.
These provisions provide necessary measures to ensure that State
agencies can deliver a more efficient and effective program for WIC
participants.
Section-by-Section Analysis
A. Baseline for Cost Estimate
Baseline Federal Costs
The total projected baseline Federal cost of WIC absent the
proposed rule for FY 2024 through FY 2028 is shown in Table 2 below.
At the Federal level, WIC expenditures are broadly split between
grants to State agencies to fund food benefits (``food costs'') and
NSA grants to fund all approved non-food expenses (``NSA costs'').
WIC food costs are a function of the number of participants
receiving each food package, the retail prices of supplemental
foods, the quantity of WIC foods prescribed to each participant, and
the percentage of WIC benefits used by participants to purchase the
supplemental foods that WIC-authorized vendors have submitted for
reimbursement from the State agency (known as the ``redemption
rate'').
Table 2--Projected Baseline Federal WIC Spending
[FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Food Costs........................................ $3,434.9 $3,595.9 $3,766.8 $3,948.1 $4,140.6 $18,886.4
Total Nutrition Services & Administration Costs......... 2,157.6 2,224.5 2,293.4 2,364.5 2,437.8 11,477.8
-----------------------------------------------------------------------------------------------
Total Federal Spending.............................. 5,592.5 5,820.4 6,060.2 6,312.6 6,578.4 30,364.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Totals may not sum due to rounding.
Participation
This analysis bases WIC participation projections on
participation changes observed during FY 2020 and FY 2021 (including
when program flexibilities were implemented in response to the
COVID-19 pandemic); specifically, a fixed level of participation
among women and infants and annual increases in participation among
children. Accordingly, growth in child participation is estimated at
2.08 percent annually between FY 2021 and FY 2023 and to rise to
4.82 percent annual growth between FY 2023 and FY 2026 before
leveling off at the higher participation level in FY 2027 and FY
2028. In 2019, the most recent data available, only 45 percent of
eligible children participated in WIC. The share of eligible
children that do not participate in WIC is considered the ``coverage
gap.'' \9\ The estimated increases in child participation used in
this analysis reflect a projected narrowing of the coverage gap
among WIC-eligible children as a result of current and future
efforts to improve child retention in WIC. While declining birth
rates in the U.S. have contributed to a decrease in women and
infants enrolling in WIC since 2009, the Department projects
participation of women and infants to level off due to future
outreach efforts to increase participation among the eligible
population.\10\
---------------------------------------------------------------------------
\9\ Gray K., Balch-Crystal E., Giannarelli, L., and Johnson, P.
(2022). National- and State-Level Estimates of the Special
Supplemental Nutrition Program for Women, Infants, and Children
(WIC) Eligibility and WIC Program Reach in 2019. Prepared by Insight
Policy Research, Contract No. AG-3198-D-16-0095. Alexandria, VA:
U.S. Department of Agriculture, Food and Nutrition Service, Office
of Policy Support, Project Officer: Grant Lovellette. Available
online at: www.fns.usda.gov/research-analysis.
\10\ Although birthrates increased slightly (by about 1 percent)
between 2020 and 2021, births continue to be below 2019 levels.
Source: Martin JA, Hamilton BE, Osterman MJK. Births in the United
States, 2021. NCHS Data Brief, no. 442. Hyattsville, MD: National
Center for Health Statistics. 2022. DOI: https://dx.doi.org/10.15620/cdc:119632.
Table 3--Baseline WIC Participation Projections
[FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
Fiscal year participants
-------------------------------------------------------------------------------
2024 2025 2026 2027 2028
----------------------------------------------------------------------------------------------------------------
Women........................... 1,381,305 1,381,305 1,381,305 1,381,305 1,381,305
Infants......................... 1,468,664 1,468,664 1,468,664 1,468,664 1,468,664
Children........................ 3,714,820 3,894,002 4,081,826 4,081,826 4,081,826
-------------------------------------------------------------------------------
Total Participants.......... 6,564,789 6,743,971 6,931,795 6,931,795 6,931,795
----------------------------------------------------------------------------------------------------------------
Source: Internal USDA estimates.
Key Assumptions
Adoption of Online Ordering
While the proposed rule would remove barriers to allow for
online shopping in WIC, it would not require State agencies to
implement online shopping. However, due to widespread interest in
improving the WIC shopping experience, particularly through online
shopping, this analysis assumes that by FY 2027, all 89 State
agencies will have implemented WIC online shopping for WIC
participants. However, like the adoption of EBT, the analysis
assumes that online shopping will gradually roll out across State
[[Page 11540]]
agencies between FY 2024 and FY 2027, covering around half of WIC
State agencies by FY 2025. State agencies may vary in the time it
takes to implement online shopping systems for many reasons,
including contracting requirements with technology partners, the
need to coordinate changes with Management Information Systems
(MIS), or resource allocation constraints due to other State agency
priorities. The Department also recognizes that implementation of
online shopping in WIC depends upon authorized vendors offering this
service to WIC participants. Because the Department is unable to
predict at this time which State agencies will be the earliest
adopters of online shopping, the analysis also assumes an even
distribution of WIC participants across these State agencies (i.e.,
the 51 percent of WIC State agencies offering online shopping in FY
2025 will also cover 51 percent of WIC participants).
Table 4--Estimated Number of State Agencies Using WIC Online Shopping
[FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
Fiscal year
-------------------------------------------------------------------------------
2024 2025 2026 2027 2028
----------------------------------------------------------------------------------------------------------------
Number of State Agencies........ 7 45 68 89 89
(% of Total).................... (8%) (51%) (76%) (100%) (100%)
----------------------------------------------------------------------------------------------------------------
Notes: The 7 State agencies expected to offer online shopping in FY 2024 represent the 7 State agencies
currently participating in the Gretchen Swanson Center for Nutrition WIC Online Purchasing Sub-grant Projects.
In addition to estimating the number of State agencies offering
online shopping in WIC, this analysis must also estimate how many
WIC participants will transact any benefits online and, among online
WIC shoppers, what share of their benefits will be transacted
online. A recent nationally representative poll conducted in July
2021 found that 23 percent of Americans reported ordering groceries
online for pickup or delivery at least once a month.\11\ Online
grocery sales are estimated to have accounted for about 12 percent
of total grocery sales in 2021, in terms of total revenue, with
their market share expected to grow to around 19 percent by 2024 (a
53 percent increase).\12\ By the end of FY 2021, just over 8 percent
of SNAP households nationwide made at least one SNAP purchase online
in a given month, and online redemptions accounted for just under 5
percent of the total dollar amount of SNAP redemptions between
August and September 2021.\13\ This analysis assumes that SNAP
shoppers are a better proxy for WIC shoppers than the general
population but also estimates that growth in online shopping among
all shoppers will follow at least the same 53 percent total increase
that Mercatus predicts for the general population between 2021 and
2024. Accordingly, by increasing the 8 percent of SNAP households
redeeming benefits online in 2021 by 53 percent total between 2021
and 2024, the Department projects that among State agencies
operating online shopping in WIC, 12 percent of WIC participants
will transact at least some of their benefits online in FY 2024. As
online grocery shopping continues to gain popularity, the share of
WIC participants shopping online is expected to increase each year
between FY 2024 and FY 2028 within participating State agencies. The
Mercatus report also projects around a 13 percent relative increase
in the online grocery shopping market share between 2024 and 2025.
The Department applies the same 13 percent year-to-year growth rate
to project the growth of WIC online shopping between FY 2024 and FY
2028. Beginning in FY 2024, this 13 percent annual growth rate
amounts to about a 2-percentage point increase each year in the
share of WIC participants, within participating State agencies,
using at least some of their WIC benefits online between FY 2024 and
FY 2028 (see Table 5).
---------------------------------------------------------------------------
\11\ Brenan, M. ``More in U.S. Grocery Shopping Online, Fewer
Dining Out.'' Gallup, 10 August 2021. Available online at: https://news.gallup.com/poll/353090/grocery-shopping-online-fewer-dining.aspx.
\12\ Mercatus. ``eGrocery Transformed: Market projections and
insight into online grocery's elevated future,'' 2021.
\13\ Based on internal, unpublished data on monthly online SNAP
redemptions in FY 2021.
Table 5--Estimated Use of WIC Online Shopping Where Available
[FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------
2024 2025 2026 2027 2028
----------------------------------------------------------------------------------------------------------------
Percentage of WIC participants expected to transact 12% 14% 16% 18% 20%
at least some benefits online......................
----------------------------------------------------------------------------------------------------------------
Notes: Estimates for each year reflect the percentage of participants that will use WIC online shopping only in
State agencies where it is available at that time.
Even among online WIC shoppers, it is reasonable to assume some
level of variation in exactly what percentage of their WIC benefits
are transacted online. Thus, this analysis assumes that the average
online WIC shopper will transact about half of their benefits online
in a given month. This is consistent with initial estimates of SNAP
online shopping, based on the share of SNAP benefits redeemed
compared to the share of SNAP households shopping online after
adjusting for estimated variations in in-store and online retail
prices (described later in this analysis).
Cost, Participant, Vendor, and State Agency Impacts
Remove Barriers to Online Ordering and Internet-Based
Transactions
Discussion
While use of online grocery shopping has expanded in recent
years, including among SNAP shoppers, WIC participants do not have
widespread access to online shopping with WIC benefits due in part
to barriers in current WIC regulations. Current regulations require
that WIC transactions occur in the presence of a cashier, allowing
WIC shoppers to either sign a paper food instrument or enter a
Personal Identification Number (PIN) for an EBT transaction. While
some States agencies, including one ITO, have recently adopted WIC
online ordering, this in-person requirement has prevented the
transaction of WIC benefits from occurring online. Current rules
also typically require WIC vendors to have a single, fixed location
and require most vendor oversight activities to occur through on-
site visits to those locations. The Department proposes several
changes under this rule to address these and other regulatory
barriers to allow WIC shoppers and WIC-approved vendors to complete
[[Page 11541]]
transactions online. Specifically, the proposed rule would:
Allow vendors and WIC shoppers to complete internet-
based transactions by removing the requirement that participants
complete WIC transactions in the presence of a cashier. Associated
new provisions would allow State agencies to explore and identify
options to authenticate EBT transactions that are appropriate for
the specific technologies they choose to adopt.
Allow State agencies to authorize new types of vendors
to give WIC participants more shopping options by:
[cir] Creating definitions for ``brick-and-mortar,''
``internet,'' and ``mobile'' vendors to distinguish vendors
operating solely online from stores with a single, fixed location.
The definitions for ``internet vendor'' and ``mobile vendor'' are
based on SNAP's definitions of ``internet retailer'' and ``house-to-
house trade route,'' respectively, to ensure that cross-program
integrity efforts continue without interruption.
[cir] Removing language from the definition of ``vendor'' that
currently only allows State agencies to authorize vendors with a
``single, fixed location'' (i.e., brick-and-mortar vendors).
Allow vendors to return benefits to a participant's
benefit balance when an item requested through an online order
cannot be fulfilled to ensure that WIC benefits are not lost in
these situations.
Allow State agencies to develop virtual methods of
oversight to ensure their monitoring and investigative methods are
appropriate for the types of vendors authorized (e.g., internet
vendors) and current environmental circumstances (e.g., during a
pandemic).
Permit WIC shoppers to pay for fees associated with
online shopping by clarifying that WIC-authorized vendors, farmers,
and farmers' markets must not charge the State agency for fees
associated with online ordering (e.g., delivery, service,
convenience, and bag fees). If such fees are assessed to non-WIC
customers using the same services, WIC participants must be allowed
to pay them using another tender type. The Department is requesting
comment on whether State agencies should have the option to pay for
such fees with either (1) non-Federal funding at State agency
discretion and/or (2) Federal funding in situations where it is
deemed necessary to meet special needs (e.g., participant access or
other needs as identified by the State agency).
Cost
Impact on Federal WIC Food Costs
Over the 5 years between FY 2024 and FY 2028, the rollout of WIC
online shopping under this proposed rule is expected to increase
Federal WIC food costs by $392 million in total. The effect of
allowing online shopping in WIC on Federal food costs is a function
of both the effect on total WIC redemptions and the effect on the
prices of WIC foods. When estimating the impact of online shopping
on WIC food costs under this proposed rule, the analysis
collectively considers the effect of each provision required to
operate a modern online retail system, including allowing electronic
benefits to be returned to a participant's benefit balance when an
online order cannot be fulfilled. Because these provisions all
contribute to enabling online shopping, the Department does not
provide separate estimates for each provision.
On average, WIC participants do not use all their WIC benefits
each month. WIC benefit redemption rates vary by food category. For
example, in 2020, the estimated redemption rate was 44 percent for
whole wheat bread and whole grains and about 72 percent for fruits
and vegetables purchased with the cash-value benefit (CVB).\14\ WIC
participants report various barriers to using WIC benefits that
impact these redemption rates, both in terms of traveling to a WIC-
authorized vendor and using their benefits once there.
---------------------------------------------------------------------------
\14\ Based on internal USDA data collected in March 2021
covering monthly WIC redemptions for all months in calendar year
2020.
---------------------------------------------------------------------------
One USDA study, which surveyed a representative sample of WIC
participants from 12 State agencies, found that 90 percent of
respondents reported experiencing at least one negative shopping
experience while transacting their WIC benefits in stores.\15\ Among
those, around 77 percent reported they had selected the wrong item
and were sent back at checkout to find the correct WIC item, around
72 percent found a WIC item to be out of stock or unavailable in the
correct container size, and around 34 percent reported they had felt
embarrassed while using WIC benefits in stores. Traveling to a WIC-
authorized vendor also presents challenges to some participants. In
the same study, when surveying former WIC participants from three
State agencies, 15 percent of respondents reported that they lacked
convenient access to a WIC-authorized vendor.
---------------------------------------------------------------------------
\15\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research,
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of Policy Support,
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
---------------------------------------------------------------------------
Based on the opportunities that online shopping presents to
address many of the in-store barriers and challenges that WIC
shoppers report, as described above, the Department estimates that
participants who use any WIC benefits online will, on average,
increase their overall benefit redemption by 10 percent (e.g., a
participant who previously purchased $30 worth of WIC benefits would
purchase $33 under this proposed rule), independent of price
variations. This analysis estimates an overall increase to
purchases, rather than food category level impacts, because
sufficient data are not available to project whether some food items
will be impacted by online shopping more than others.
In order to better understand and estimate the effect online
shopping may have on redemption rates, the GSCN sub-grant projects
will evaluate the impacts of WIC online shopping on redemption
rates. The Department has provided a range of cost estimates at
different levels of redemption in the Uncertainties section of this
analysis. These estimates will be updated, as appropriate, in future
cost analyses later in the rulemaking process once redemption data
from the GSCN projects become available. The Department also invites
public comment on how online shopping in WIC may affect redemption
rates.
The Federal WIC food costs associated with the proposed rule are
also expected to be impacted by differences in the retail prices of
online groceries compared to in-store options. A recent analysis
published by Information Resources, Inc. (IRI), a retail market
research firm, estimates that in May 2021 online grocery shoppers
paid about 13 percent higher per unit retail prices (i.e., before
separate delivery or other convenience fees) for fresh foods online
compared to similar in-store products.\16\ While online and in-store
price differences tend to vary by vendor, these higher prices often
reflect the added convenience costs of assembling online orders and
processing internet-based transactions, which many retailers include
within the unit costs of food items rather than charging separately
(unlike delivery fees, which are typically separate and cannot be
paid for with WIC benefits). WIC benefits are redeemed on a per unit
basis (e.g., one gallon of milk or one dozen eggs) rather than as a
set dollar amount, with the exception of the CVB. WIC shoppers are
not expected to be price sensitive when using WIC benefits, and thus
higher prices are expected to directly increase the Federal cost of
the WIC food package. For this analysis, the Department uses IRI's
recent estimate to project that, on average, WIC food items
purchased online will be about 13 percent more expensive than in-
store prices. Although the CVB is transacted as a set dollar amount,
rather than per food item like other WIC foods, the Department
estimates the same 13 percent price increase for online CVB
redemptions, on average.\17\ Because WIC participants transact
around 72 percent of their CVB in an average month, a 13 percent
increase in food prices online may be reflected as an apparent
increase in the CVB redemption rate, as participants would need to
use 13 percent more of their CVB to purchase the same amount of
fruits and vegetables that they would in brick-and-
[[Page 11542]]
mortar vendors. The Department will continue to collect data on
price differences as it becomes available. The Department presents a
range of cost estimates based on different pricing variations in the
Uncertainties section of this analysis.
---------------------------------------------------------------------------
\16\ The term ``fresh foods'' in this context includes items
classified by retailers as bakery, dairy, deli, fresh produce, fresh
meat and seafood, and meat alternatives. Although some WIC approved
foods fall outside of this definition (including infant formula),
this analysis applies the estimated 13 percent increase in online
prices as an average across all WIC food types due to a lack more
detailed and available industry data on food specific variations.
For information see: Information Resources, Inc. and 210 Analytics.
``Grocery E-Commerce--Opportunity Remains,'' 2021. Available online
at: https://www.iriworldwide.com/IRI/media/Library/IRI-Ecommerce-Update-May-2021.pdf.
\17\ Note that these estimates and the analysis are based on the
average WIC shopper redeeming 72 percent of their CVB prior to the
proposed rule. WIC shoppers that currently spend all or nearly all
of their CVB may find that they cannot purchase the same quantity of
fruits and vegetables online as they can afford in brick-and-mortar
stores.
\18\ Estimated $45.64 monthly per person food costs assumes an
average online WIC shopper is using 50 percent of their transacted
benefits online and 50 percent in-store.
Table 6--Projected Uptake of Online Shopping and Impact on Monthly per Person Food Package Cost
[FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
Fiscal year
-------------------------------------------------------------------------------
2024 2025 2026 2027 2028
----------------------------------------------------------------------------------------------------------------
Projected number of State 7 45 68 89 89
agencies offering WIC online
shopping.......................
Percentage of participants 12 14 16 18 20
making at least one WIC
purchase online, within
participating State agencies...
Average percentage of WIC 50 50 50 50 50
benefits used online among
online shoppers................
Expected increase in total 10 10 10 10 10
redemptions among online WIC
shoppers.......................
Expected increase in online 13 13 13 13 13
retail food prices, compared to
in-store.......................
Total WIC participation......... 6,564,789 6,743,971 6,931,795 6,931,795 6,931,795
Number of participants making at 61,960 477,382 847,392 1,247,723 1,386,359
least one WIC purchase online..
Baseline monthly per person WIC $43.60 $44.43 $45.28 $47.46 $49.78
food cost \ a\.................
Projected monthly WIC food cost 51.08 52.05 53.05 55.60 58.32
among online shoppers \ a\ \b\.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Food cost inflation is estimated for FY 2024 through FY 2028 using the Office of Management and Budget's
(OMB) food at home projections used in the most recent President's Budget request.
\b\ The projected monthly food cost among online shoppers includes both in-store and online shopping with the
assumption that half of benefits are transacted in-store and half online. The half of benefits transacted
online are then increased by 13 percent to reflect the projected increase in prices for online food items.
The projected 10 percent increase in total redemptions among
online shoppers and the estimated 13 percent increase in retail unit
prices for online food items would collectively increase the
expected monthly per person WIC food costs from a baseline of $43.60
among exclusively in-store shoppers to $51.08 among average online
shoppers in FY 2024.\18\ Table 6 summarizes the expected uptake of
WIC online shopping among participants and provides annual estimates
for monthly per person food package costs, adjusted for annual
inflation.
The cost impact of online shopping will continue to increase as
more WIC State agencies offer online shopping and as use among WIC
shoppers in those State agencies increases. In FY 2024, online
shopping is only expected to increase total Federal WIC food
spending by about $5.6 million because the Department estimates that
just 12 percent of participants in seven State agencies will
transact WIC benefits online. The annual cost is expected to rise to
$121.9 million in FY 2027 and $142.0 million in FY 2028 when WIC
online shopping is expected to be offered by all 89 State agencies
and used by an increasing share of participants (see Table 7).
Table 7--Estimated Impact of Online Shopping on Federal WIC Food Spending
[FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total food costs, online shoppers....................... $38.0 $298.2 $539.4 $832.5 $970.1 $2,678.3
Total food costs, in-store shoppers..................... 3,402.5 3,341.4 3,306.3 3,237.4 3,312.5 16,600.1
Total food costs, all shoppers.......................... 3,440.5 3,639.6 3,845.7 4,070.0 4,282.6 19,278.4
Baseline food costs without online shopping............. 3,434.9 3,595.9 3,766.8 3,948.1 4,140.6 18,886.4
Increase in WIC food costs due to online shopping....... 5.6 43.7 79.0 121.9 142.0 392.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.
Online Shopping System Development and Maintenance
Spending associated with EBT system development and maintenance
is estimated to increase WIC State agency costs by around $27
million in total over 5 years between FY 2024 and FY 2028.
Implementation of WIC online shopping would initially require new
costs to State agencies associated with systems design, development,
and testing of new processes for transacting WIC electronic benefits
online. In addition to these initial costs, State agencies would
incur new ongoing costs required to pay EBT processor fees
associated with monthly support and maintenance of EBT systems to
allow for online transaction of benefits. The State agency costs
detailed below assume the same implementation timeline presented
previously in Table 6.
[[Page 11543]]
The Department expects that State agencies would be able to
absorb these EBT processor costs using existing NSA funds. State
agencies are generally allowed considerable flexibility in how they
spend NSA funds. The estimates in Table 8 represent an initial
assessment of projected costs. As mentioned above, the Department is
testing these activities through the GSCN sub-grant projects and
will collect information on actual costs incurred during the
projects to better understand future implementation expenses. The
Department also seeks public comment from State agencies, EBT
processors, and WIC-authorized vendors on expected costs associated
with these and any unforeseen, required system updates to help
refine the estimates below.
The estimate of WIC State agency costs includes both initial
costs and ongoing costs. To estimate initial costs, the Department
has estimated EBT processor costs to design, develop, and test new
technology solutions that would allow participants and vendors to
transact WIC electronic benefits online. The Department estimates
that the costs for EBT processors to design, develop, and test new
online shopping solutions will be spread over 2 years and total
$2.20 million across all current EBT processors (see Table 8). The
same small number of EBT processors contract with multiple State
agencies.\19\ Therefore, these initial costs to design, develop, and
test new online shopping solutions are expected to be shared across
multiple State agencies using common EBT processors. Initial costs
would also include separate start-up costs paid to EBT processors
each time a new State agency is added to an online shopping
solution. The Department estimates that, once EBT processors have
developed online shopping solutions, there will be an average one-
time cost of $90,000 (in FY 2022 dollars, adjusted annually for
inflation) for each State agency to update its EBT system to
implement online shopping (see Table 8). As new State agencies
gradually implement online shopping solutions, the Department
estimates $8.26 million in start-up costs over 5 years for EBT
updates to implement online shopping in 82 State agencies, in
addition to the $2.20 million estimate for design, development, and
testing.\20\
---------------------------------------------------------------------------
\19\ See latest ``WIC EBT Detail Status Report'' for more
information: https://www.fns.usda.gov/wic/wic-ebt-activities.
\20\ The estimate of $8.26 million is based on a cost of $90,000
each for 82 State agencies, adjusted annually for inflation. This
assumes that these start-up costs would not be needed in the 7 State
agencies that are developing internet-based transactions while
participating in the Gretchen Swanson Center for Nutrition WIC
online shopping sub-grant projects.
Table 8--Estimated EBT Processor Costs To Implement WIC Online Shopping
[FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
----------------------------------------------------------------------------------------------------------------
Initial Costs:
Design, develop, and test new $0.80 $1.40 $0.00 $0.00 $0.00 $2.20
online shopping solutions....
Start-up cost to implement 0.00 3.74 2.33 2.19 0.00 8.26
solution across all State
agencies.....................
Ongoing Costs:
Monthly support and 0.34 2.36 3.67 4.95 5.10 16.42
maintenance costs............
-----------------------------------------------------------------------------
Total..................... 1.14 7.50 6.00 7.14 5.10 26.88
----------------------------------------------------------------------------------------------------------------
Notes: Monetary values are adjusted annually for inflation based on CPI-W wage projections consistent with the
FY 23 President's Budget as costs primarily account for labor expenses for start-up and ongoing support.
New, ongoing operational costs are also expected for each State
agency offering WIC online shopping. Once State agencies have
implemented online shopping, the Department estimates an additional
$4,000 (in FY 2022 dollars, adjusted annually for inflation) in
ongoing monthly EBT costs per State agency to address new support
and system maintenance requirements. All projected costs represent
estimated averages; however, actual costs may vary by State agency.
In total, as all State agencies implement WIC online shopping
systems, the Department estimates these ongoing monthly costs to add
up to $16.4 million in State agency spending over 5 years (see Table
8). The Department expects that the additional work required to
adapt State agency policies and oversight methods and resolve
participant concerns related to online shopping will be addressed by
the WIC Food Delivery and WIC Customer Service coordinators. The
estimated costs of these proposed State agency staff positions are
discussed below.
Effect on WIC Participants
This proposed rule is primarily intended to remove barriers that
prevent WIC participants from accessing the benefits of online
shopping. Enabling WIC participants to shop online is expected to
increase participant access to WIC foods, address barriers and
challenges participants report related to shopping for WIC foods,
and broadly improve equity in the shopping experience.
Expanding access to WIC online shopping may increase participant
access to WIC-authorized vendors. A 2018 USDA survey of three WIC
State agencies found that, among former participants who had a
negative shopping or vendor experience, 15 percent reported that
they lacked convenient access to a WIC-approved vendor.\21\
According to estimates from the USDA Economic Research Service
(ERS), nearly 40 million people, or 14 percent of the U.S.
population, lived in low-income and low-access (LILA) census tracts
in 2015.\22\ LILA measures define a low-access census tract as one
where a significant number (at least 500 people) or share (at least
33 percent) of the population has limited access to a food store
(supermarket, supercenter, or large grocery store), which is defined
as living more than 1 mile from a food store in urban areas or more
than 10 miles in rural areas. A recent study found that among the
initial eight States participating in the SNAP Online Purchasing
Pilot, online grocery delivery systems reached around 90 percent of
LILA census tracts, though this varied substantially between urban
and rural areas.\23\
---------------------------------------------------------------------------
\21\ The survey did not define what participants meant by
``convenient'' so this could be inclusive of factors other than
geography (e.g., hours of operation). Source: Gleason, S.,
Wroblewska, K., Trippe, C., Kline, N., Meyers Mathieu, K., Breck,
A., Marr, J., Bellows, D. (2022). WIC Food Cost-Containment
Practices Study. Prepared by Insight Policy Research, Contract No.
AG-3198-C-15-0022. Alexandria, VA: U.S. Department of Agriculture,
Food and Nutrition Service, Office of Policy Support, Project
Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
\22\ USDA Economic Research Service. ``State-Level Estimates of
Low Income and Low Access Populations.'' Last updated September 30,
2019. Available online at: https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/.
\23\ Brandt EJ, Silvestri DM, Mande JR, Holland ML, et al.
Availability of grocery delivery to food deserts in states
participating in the online purchase pilot. JAMA Netw Open.
2019;2:e1916444.
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As noted in the previous section, even WIC participants who are
able to travel to WIC-authorized vendors report difficulties using
their WIC benefits. Data discussed earlier from a recent USDA study
indicate that a majority of WIC shoppers in the 12 State agencies
covered by the study reported
[[Page 11544]]
having difficulty locating WIC-approved foods in stores.\24\ Another
study, which collected qualitative data through focus groups and in-
depth interviews of participants across four State agencies, found
that difficulty identifying WIC-approved items as well as perceived
stigma during checkout were the primary complaints participants
reported about the WIC shopping experience.\25\ Online shopping may
address some of these barriers. For example, an online shopping
system could be designed to allow WIC shoppers to filter to only
display items approved for WIC by their State agency or to only show
the items available to them based on their WIC benefit balance.\26\
Participants that find stigma to be a barrier to using their WIC
benefits may also find more comfort and privacy in transacting
benefits online. Finally, online shopping may also improve the
shopping experience for WIC participants that report transportation
challenges. Data from a nationally representative sample of WIC
participants indicate that in 2019 around 21 percent of WIC
participants used some means of transportation other than a personal
car to travel to a vendor to transact their WIC benefits.\27\
Individuals unable to drive themselves to a WIC-authorized vendor
may prefer transacting WIC benefits online for delivery rather than
transporting heavier items, such as milk and juice, by foot or on
public transit. By addressing these barriers, this proposed rule is
expected to increase benefit redemptions, as described in the
previous section, and thus increase the amount of nutritious
supplemental foods consumed by WIC participants.
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\24\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research,
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of Policy Support,
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
\25\ Chauvenet C, De Marco M, Barnes C, Ammerman AS. WIC
Recipients in the Retail Environment: A Qualitative Study Assessing
Customer Experience and Satisfaction. J Acad Nutr Diet.
2019;119(3):416-424.e2. doi:10.1016/j.jand.2018.09.003.
\26\ Gretchen Swanson Center for Nutrition. ``Blueprint for WIC
Online Ordering Projects,'' 2021. Available online at: https://www.centerfornutrition.org/wic-online-ordering.
\27\ Magness, A., Williams, K. Gordon, E., Morrissey, N., Papa,
F., Garza, A., Okyere, D., Nisar, H., Bajowski, F., & Singer, B.
(2021). Third National Survey of WIC Participants: WIC Participant
Satisfaction and Shopping Experience: Brief Report #6. Prepared by
Capital Consulting Corporation and 2M Research Services. Contract
No. AG-3198-K-15-0077. Alexandria, VA: U.S. Department of
Agriculture, Food and Nutrition Service, Office of Policy Support,
Project Officer: Karen Castellanos-Brown. Available online at:
https://www.fns.usda.gov/research-and-analysis.
---------------------------------------------------------------------------
Enabling WIC participants to use their benefits online is also
expected to improve equity in access to online grocery shopping
enabling WIC participants greater access to the convenience and
potential time savings allowed by online grocery shopping. Data
published in 2020 and 2021 by IRI indicate that low-income shoppers
are less likely than middle- and high-income shoppers to purchase
groceries online.\28\ A recent systematic review of online grocery
shopping among low-income populations found that price and the
inability to use nutrition assistance benefits like SNAP and WIC are
barriers to equitable access to online grocery services.\29\ While
this gap is likely to narrow as the SNAP Online Purchasing Pilot
continues to expand, this proposed rule would ensure that WIC
participants will also able to transact their WIC benefits online.
Recent evidence also suggests that shoppers may make fewer unhealthy
purchases when shopping online compared to in-stores specifically
making fewer ``impulse'' purchases on items like sweets and
candy.\30\ \31\ Therefore, expanding equitable access to online
grocery shopping for WIC participants may have spillover effects
into the rest of their grocery shopping if those shoppers move their
non-WIC grocery shopping online as well.
---------------------------------------------------------------------------
\28\ Information Resources, Inc. ``Winning in CPG e-Commerce:
Part 4,'' March 26, 2021. Available online at: https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Demand-Pockets-Part-4-CPG-E-Commerce-03-29-21.pdf.
\29\ Trude, A., Lowery, C., Ali, S., Vedovato, G. An equity-
oriented systematic review of online grocery shopping among low-
income populations: implications for policy and research, Nutrition
Reviews, 2022; nuab122, https://doi.org/10.1093/nutrit/nuab122.
\30\ Harris-Lagoudakis, K. (2022). '' Online shopping and the
healthfulness of grocery purchases.'' American Journal of
Agricultural Economics 104(3): 1050-1076. https://doi.org/10.1111/ajae.12262.
\31\ Zatz, L.Y., Moran, A.J., Franckle, R.L., Block, J.P., Hou,
T., Blue, D., Greene, J.C., Gortmaker, S., Bleich, S.N., Polacsek,
M., Thorndike, A.N., & Rimm, E.B. (2021). Comparing Online and In-
Store Grocery Purchases. Journal of Nutrition Education and
Behavior, 53(6). https://doi.org/10.1016/j.jneb.2021.03.001.
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Effect on Vendors
The provisions included in the proposed rule are expected to
increase opportunities for innovation in the retail grocery industry
and may provide opportunities for increased revenue for vendors that
offer online shopping for WIC participants using WIC benefits. For
some WIC vendors, the opportunity to transact WIC electronic
benefits online could expand their customer base by reaching WIC
shoppers who had not previously shopped at the vendor's brick-and-
mortar locations. Other vendors may see an increase in revenue from
existing WIC shoppers who prefer to use their online shopping
platforms and increase their purchases of supplemental foods, as
described in the previous section. However, the expansion of WIC
online shopping is not expected to have the same impact on all
vendors. The Distributive Impacts section of this analysis includes
further discussion around potential disparate impacts for certain
types of vendors.
The overall national increase in online grocery shopping is
expected to impact the number and types of jobs employed in the
retail food industry. Specifically, one group of university
researchers estimates a shift towards fewer cashier positions and an
increase in jobs associated with assembling, fulfilling, and
delivering online grocery orders.\32\ Because WIC redemptions
accounted for only about 0.6 percent of total U.S. food at home
expenditures in 2019, the Department does not expect this proposed
rule to have a significant impact on the food retail employment
landscape beyond what is already projected in the market as a
whole.\33\
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\32\ Benner, C., Mason, S., Carr[eacute], F., and Tilly, C.
Delivering Insecurity: E-commerce and the Future of Work in Food
Retail. Berkeley: UC Berkeley Labor Center and Working Partnerships
USA. 2020. https://laborcenter.berkeley.edu/delivering-insecurity/.
\33\ Based the sum of WIC food costs and rebates issued in FY
2019 (https://www.fns.usda.gov/pd/wic-program) as a share of USDA
ERS Food at Home expenditures, nominal dollars, in 2019 (https://www.ers.usda.gov/data-products/food-expenditure-series/food-expenditure-series/#Current%20Food%20Expenditure%20Series).
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Under the proposed rule, providing online shopping to WIC
participants would be optional to vendors, and therefore the
Department only expects vendors to participate in WIC online
shopping if the vendor believes it to be in their best interest.
Aside from the benefits described above, there may also be some
upfront development costs for vendors who choose to update their
online grocery platforms to be compatible with transacting WIC
benefits online. The Department does not have the necessary data to
provide even approximate estimates of these costs. To the extent
possible, the Department intends to use development cost data
collected in the GSCN sub-grant projects described above to better
understand potential costs to vendors. The Department also
recognizes that recent industry reporting suggests lower profit
margins for grocery sales online compared to in-store and that
vendors continue to explore ways to minimize the cost of fulfilling
online orders to improve these margins.\34\ So while improving
equitable access to online shopping for WIC participants is expected
to bring some WIC redemptions from in-store to online, because WIC
redemptions account for such a small share of total U.S. food at
home expenditures (as cited above) the Department does not expect
this proposed rule to be meaningfully disruptive to the trajectory
of e-commerce in the grocery industry as a whole.
---------------------------------------------------------------------------
\34\ McKinsey. ``Achieving profitable online grocery order
fulfillment.'' May 18, 2022. Available online at: https://www.mckinsey.com/industries/retail/our-insights/achieving-profitable-online-grocery-order-fulfillment.
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Effect on State Agencies
In addition to the State agency costs discussed above, the
provisions in the proposed rule related to implementing online
shopping in WIC are expected to create some additional, short-term
actions as State agencies elect to participate. Initially, the
rollout of online ordering systems is likely to require increased
State agency staff time devoted to establishing contract changes
with EBT processors, processing any necessary updates to State
agency MIS data and systems, developing expertise in monitoring and
oversight of internet-based transactions and vendors, and
communicating the
[[Page 11545]]
program changes to WIC participants. However, the Department does
not expect these up-front efforts to be significant and they would
be far outweighed by reductions in burden discussed later in this
analysis. The additional staffing standards discussed later in this
analysis would also help State agencies to adapt to online shopping.
Over time, the provisions allowing for remote vendor oversight
are expected to decrease staff burden and travel costs. The
Department does not specifically track State agency expenses
associated with travel and on-site monitoring or investigative
activities and cannot provide an estimate for the level of savings.
Internal data from a survey of WIC State agencies that utilized the
Vendor Preauthorization Visits waiver, authorized under the Families
First Coronavirus Response Act of 2020 (FFCRA, Pub. L. 116-127),
found that over half of State agencies reported saving staff time by
using the waiver to conduct preauthorization visits remotely.\35\
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\35\ Unpublished data collected in March 2021 to fulfill FFCRA
waiver reporting requirements. For more information: https://www.fns.usda.gov/programs/fns-disaster-assistance/fns-responds-covid-19/wic-covid-19-waivers.
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Streamline and Modernize WIC Food Delivery
Discussion
Current WIC regulations were written within the context of a
paper-based voucher environment (prior to the advent of EBT), that
envisioned a WIC participant traveling to a WIC clinic to pick up a
paper voucher and then traveling to a WIC vendor to use their paper
voucher in person. In the past two decades, much has changed in
terms of technology, security, innovation, and WIC participant
preferences to make these paper-based voucher assumptions obsolete.
The proposed rule complements the Program's near-complete transition
to EBT by modernizing and streamlining WIC food delivery regulations
to reflect recent technological innovations in electronic benefit
issuance, transaction, and redemption, and food delivery options to
promote further innovation; to decrease burden on WIC participants,
WIC vendors, and State and local agencies; to increase WIC
participant choice; to improve program equity; and to reduce stigma
experienced by WIC participants, while maintaining the WIC Program's
high standards of program services and program accountability.
Specifically, the proposed rule would:
Permit the remote issuance of electronic benefits to a
participant's benefit balance (e.g., load electronic benefits on to
an EBT card, or other access device or technology, without requiring
the participant to travel to a clinic). To clarify how remote
issuance applies to food instruments, cash-value vouchers, and
electronic benefits, associated provisions would add definitions for
``electronic benefits'' and ``cash-value benefit'' that are separate
and distinct from the paper food instruments.
Add ``other electronic benefit access device or
technology'' to the definition of ``food instrument'' to support
innovation in benefit delivery methods and enable WIC State agencies
to explore and adopt new technologies beyond the EBT card (e.g.,
mobile payment) while ensuring that key program integrity
requirements apply to these new technologies.
Allow State agencies to develop and test new WIC food
instrument types by eliminating a provision that only allows one
type of food instrument to be used within a State agency's
jurisdiction at a time.
Streamline food delivery operations by recognizing that
EBT data are a sufficient replacement for routine shelf price
collection and eliminating certain collection requirements.
Extend vendor agreement periods to reduce the
application burden on potential WIC vendors and State agencies. The
revisions would extend the maximum vendor authorization period from
three to five years, consistent with SNAP.
Allow State agencies using a home food delivery system
(non-retail) to ship supplemental foods to a location designated by
participants to better serve participants in remote areas (e.g.,
Alaska Natives who do not have at-home mail service).
The benefits of these proposed revisions extend to WIC
participants, State agencies, and WIC vendors. Remote issuance of
electronic benefits would save some WIC participants time and money
by decreasing the number of trips they must make to their local WIC
clinic, which may prove particularly beneficial to those WIC
participants who face transportation barriers. If WIC participants
are able to purchase and consume more of their WIC foods, and/or if
more WIC-eligible individuals are able to participate in WIC for
longer periods of time, then more participants will receive the
health benefits offered by consumption of the nutritious
supplemental foods provided by the WIC Program.
Extending vendor application and agreement periods would
decrease administrative burden on both WIC vendors and WIC State
agencies. The other proposed provisions either decrease the burden
on State agencies or promote innovation in the WIC benefit delivery
space while maintaining the Program's high standards for transaction
authentication, program services and program accountability, and
participant privacy.
Cost
Remote Issuance of Electronic Benefits
Remote electronic benefit issuance would decrease
transportation, childcare, and/or other costs (e.g., loss of work
hours) currently borne by WIC participants in the process of picking
up their WIC food instruments in person at a WIC clinic. As
explained in the burden adjustment estimates published with this
proposed rule, the Department estimates that remotely issuing
benefits would save WIC participants a combined 1,049,335 hours per
year in time spent traveling to and waiting to receive WIC benefits
in person.
Remote issuance of electronic benefits may slightly increase WIC
participation by retaining some WIC participants who may have
otherwise dropped off the Program due to transportation, or other
access challenges, but would now be able to receive their benefits
remotely and shop online. If WIC participation increases, there will
be a related increase in Federal costs to provide these participants
with their WIC benefits. However, the Department expects the
participation impact of this particular provision to be relatively
small, and any increase in participation solely attributable to this
provision is extremely difficult to disentangle from the expected
increase in WIC participation as a result of the $390 million in
additional WIC funding made available in the American Rescue Plan
Act of 2021 (ARPA, Pub. L. 117-2) to carry out outreach, innovation,
and program modernization efforts to increase participation and
redemption of benefits. Therefore, the Department does not provide a
separate estimate of the cost of this provision as a result of
increased participation, but the public will have the opportunity to
provide feedback on participation impacts due to remote issuance
during the comment period. See below for additional discussion of
participation impacts of this proposed rule.
Decrease in State Agency and Vendor Burden
As explained in the annual burden adjustment estimates published
with this proposed rule, the Department expects the proposed rule
would substantially decrease reporting and recordkeeping burden
hours on both WIC State agencies and WIC vendors. The Department
estimates a net decrease in reporting burden hours to State agencies
of approximately 159,354 hours per year, which is almost entirely
attributable to the proposed provision to remove shelf price
collection requirements for State agencies operating an EBT system.
State agency recordkeeping burden is also expected to decrease by an
estimated 5,074 hours per year, primarily as a result of the
proposed extension of vendor application and agreement periods.
Reductions in State agency reporting and recordkeeping burden are
collectively expected to result in a 5-year savings to State
agencies of $51.5 million in administrative costs.\36\ Removing
shelf price collection requirements in State agencies with EBT
systems and extending vendor application and agreement periods are
expected to have a similar effect on WIC vendor burden. The
Department estimates a net decrease in reporting burden hours to WIC
vendors of 143,401 hours per year, resulting in a 5-year savings to
WIC vendors of $18.4 million in administrative costs.\37\
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\36\ Cost savings associated with State agency burden hours are
calculated using the hourly total compensation for all State and
Local workers from the Bureau of Labor and Statistics (BLS) for FY
2021 and inflated according to the CPI-W increase in OMB's economic
assumptions for the FY2023 President's Budget for years FY2024-
FY2028 (https://data.bls.gov/timeseries/CMU3010000000000D).
\37\ Cost savings associated with vendor burden hours are
calculated using the hourly total compensation for all retail
workers from the Bureau of Labor and Statistics (BLS) for FY 2021
and inflated according to the CPI-W increase in OMB's economic
assumptions for the FY2023 President's Budget for years FY2024-
FY2028 (https://data.bls.gov/timeseries/CMU2014120000000D).
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[[Page 11546]]
Effect on WIC Participants
The provisions in this proposed rule are expected to decrease
the burden on WIC participants and would make participating in the
Program more convenient. Remote issuance of electronic benefits
would decrease the number of visits that participants must make to
their WIC clinics, saving these participants time and money as
described above. A recent USDA study found that among surveyed
participants with children who left WIC before age 5, around 40
percent reported inconvenience as a reason for leaving WIC
early.\38\ In an unpublished USDA study, 52 percent of surveyed WIC
clinic staff reported that ``difficulty being physically present for
appointments'' was a reason that child participants leave the
Program between ages 2 to 4.\39\ Remote issuance of electronic
benefits may result in a small number of child participants who
might otherwise drop off of the Program as they age to remain on the
Program for longer, enabling these participants to receive more
supplemental foods and nutrition education.
---------------------------------------------------------------------------
\38\ Borger, C., Zimmerman, T., Vericker, T., et al. (2022). WIC
Infant and Toddler Feeding Practices Study-2: Fifth Year Report.
Prepared by Westat, Contract No. AG-3198-K-15-0033 and AG-3198-K-15-
0050. Alexandria, VA: U.S. Department of Agriculture, Food and
Nutrition Service, Office of Policy Support, Project Officer:
Courtney Paolicelli. Available online at: https://www.fns.usda.gov/resource/wic-infant-and-toddler-feeding-practices-study-2-itfps-2-fifth-year-report.
\39\ Unpublished data from a USDA survey of clinic-level WIC
staff from a nationally representative sample of local agencies,
collected in March 2020.
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The provisions that provide State agencies with additional
flexibility in the exact type of food instruments used would allow
State agencies to innovate with service delivery, enabling them to
provide the best experience to WIC participants at the lowest cost
as technological advancements and WIC participant preferences
continue to evolve in future years.
Effect on Vendors
Extending vendor application and agreement periods would
decrease the administrative burden on vendors to provide this
information to State agencies. WIC vendor error is already very low
(estimated at 0.30 percent of total WIC food outlays).\40\ EBT
technology allows State agencies to receive current data about
vendor prices at least daily, eliminating the need for additional
burdensome reporting. Removing the requirement to collect shelf
prices would result in a substantial decrease in administrative
costs to vendors, as noted above.
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\40\ See the 2021 Annual Improper Payment Dataset, available at
https://www.cfo.gov/payment-accuracy/FY2021%20Payment%20Accuracy%20Dataset_3_1_2022.xlsx (accessed March
8. 2022).
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Effect on State Agencies
The proposed revisions would streamline and modernize WIC food
delivery regulations to reflect current EBT technologies and provide
space for future innovation by State agencies. Adding ``other
electronic benefit access device or technology'' to the definition
of ``food instrument'' would enable WIC State agencies to explore
and adopt new technologies beyond the EBT card (e.g., mobile
payment) while ensuring that key program integrity requirements
apply to these new technologies. This revision would allow State
agencies to deliver WIC benefits in a secure, cost-effective, and
convenient manner. Similarly, updating the uniform food delivery
systems provision would provide State agencies the ability to test
new food instrument types that align with innovations in the retail
market, and to smoothly transition to new types of food instruments.
Removing the requirement to collect shelf prices, or obtain an
exemption, for State agencies that use EBT would decrease their
administrative burden while allowing them to continue to meet the
requirements of the vendor authorization and cost containment
provisions. Receiving price information via EBT transaction data
serves as a substitute for the burdensome practice of collecting
shelf prices from WIC vendors. As discussed above, extending vendor
application and agreement periods would also decrease burden on
State agencies without sacrificing program accountability, as time
periods for vendor monitoring, training, and investigations would
remain unchanged.
Meet the Needs of a Modern, Data-Driven Program
Discussion
The Department proposes several provisions that are intended to
meet the needs of a modern, data-driven program that uses current
technologies for food delivery. Specifically, the proposed rule
would:
Update reporting requirements for Federal oversight to
align with the transition in reporting systems from TIP to FDP,
which is now the system of record for WIC vendor management data.
Create two new WIC State agency staff positions to
reflect the staffing needs of a modern, innovative program. The
revisions include staffing standards for WIC Food Delivery and WIC
Customer Service coordinators. These proposed staff would be in
addition to the minimum number of staff currently required by
regulations. As State agencies move to adopt new technologies and
modern food delivery methods, these provisions are necessary to
ensure State agencies have staff capable of meeting those demands.
Under current rules, WIC State agencies are required to have at
least one full-time or equivalent Program Specialist for each 10,000
participants above 1,500, but not more than eight Program
Specialists, unless the State agency considers it necessary.
The proposed rule would require that, in addition to current
requirements for Program Specialists, State agencies must create two
new staff positions: a WIC Food Delivery Coordinator and a WIC
Customer Service Coordinator, based on the below monthly
participation thresholds. The Department proposes to develop
stronger standards for the position of the WIC Food Delivery
Coordinator to manage the State agency's food delivery system, which
likely includes the management and oversight of WIC-authorized
vendors in a retail food delivery system, to ensure that WIC State
agencies have the staff in place to make the data-driven decisions
necessary for a modern, efficient WIC Program that uses current
technologies for food delivery. The Department also proposes adding
standards to create a WIC Customer Service Coordinator to support
program improvements related to participant-facing activities,
particularly those that involve emergent technologies and future
innovations. These staffing requirements would vary depending on the
State agency's participant caseload:
State agencies with monthly participation above 7,000
would be required to employ one full-time or equivalent WIC Food
Delivery Coordinator and one full-time or equivalent WIC Customer
Service Coordinator.
State agencies with monthly participation above 500,
but less than 7,001, would be required to employ a half-time or
equivalent WIC Food Delivery Coordinator (if the State agency
manages its own vendor cost containment system) and a half-time or
equivalent WIC Customer Service Coordinator.
Cost
New State Agency Staff Positions
The provisions creating new WIC State agency staff positions are
expected to increase WIC State agency costs by a total of $55
million during FY 2024 to FY 2028. Based on current State agency
monthly participation and staffing estimates, the Department
estimates that a total of 108 new staff positions would be created.
As State agencies would have 18 months from publication of the final
rule to implement these requirements, this estimate assumes a phased
implementation where 50 percent of the positions are filled in FY
2024 and the remainder filled by FY 2025.
Currently there are 51 State agencies with more than 7,000
monthly participants, and each of these State agencies would be
required to employ one full-time or equivalent WIC Food Delivery
Coordinator and one full-time or equivalent WIC Customer Service
Coordinator who meet the new staffing standards. However, the
Department estimates that 13 State agencies already meet the
proposed WIC Food Delivery Coordinator requirements and that 3 State
agencies already meet the proposed WIC Customer Service Coordinator
requirements with current staff and will not need to make new hires
to fill these full-time roles. Therefore, the proposed rule would
result in 38 new full-time or equivalent WIC Food Delivery
Coordinator positions and 48 new full-time or equivalent WIC
Customer Service Coordinator positions.
There are 22 State agencies, including some ITOs and smaller
State agencies, with monthly participation greater than 500 but not
exceeding 7,000, and each of these State agencies would be required
to employ a half-time or equivalent WIC Food Delivery Coordinator
and a half-time or equivalent WIC Customer Service Coordinator,
which is equivalent to 11 new full-time WIC.
[[Page 11547]]
Table 9--Estimated Cost of Creating Two New Staff Positions
[FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------------------------
2024 \a\ 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly Total Compensation \b\........................... $ 59.02 $60.79 $62.61 $64.49 $66.42 N/A
Total Annual Compensation \c\........................... 104,283 107,412 110,634 113,953 117,372 N/A
Cost of 108 New State agency Staff Positions (Millions). 5.6 11.6 11.9 12.3 12.7 $54.2
Cost of Hiring and Recruitment (Millions)............... 0.3 0.3 0.0 0.0 0.0 0.5
-----------------------------------------------------------------------------------------------
Total New Staffing Costs (Millions)................. 5.9 11.9 11.9 12.3 12.7 54.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Numbers may not sum due to rounding.
\a\ Because the proposed staffing standards will not be required until 18 months after the final rule is published, estimates assume a phasing in
effect with only 50 percent of positions filled in FY 2024 and increasing to 100 percent by FY 2025.
\b\ The hourly total compensation for FY 2024-FY 2028 are calculated by taking the hourly total compensation for all State and Local workers from BLS
for FY 2021 (https://data.bls.gov/timeseries/CMU3010000000000D) and inflating that hourly total compensation figure according to the CPI-W increase in
OMB's economic assumptions for the FY 2023 President's Budget for years FY 2024-FY 2028.
\c\ Total annual compensation for a full-time position is calculated by multiplying hourly compensation by 1,767 hours (OECD Labour Force Statistics,
2020 average annual hours actually worked per worker in United States, https://stats.oecd.org/index.aspx?DataSetCode=ANHRS). Total compensation
includes holidays, vacation and sick leave, and the cost of taxes and benefits.
Food Delivery Coordinator positions (assuming each State agency
manages its own vendor cost containment system) and 11 new WIC
Customer Service Coordinator positions. The remaining 16 State
agencies with monthly participation not exceeding 500 would not be
required to create any new positions. See Table 9 for detailed costs
for hourly compensation, full-time annual salary, and annual total
costs.
In addition to the total cost of compensation associated with
the new staffing requirements, State agencies are also expected to
incur some costs routinely associated with recruiting and hiring new
staff. The Society for Human Resource Management estimates that in
2022, organizations spent on average around $4,700 in hiring and
recruitment costs per hire.\41\ Applying CPI-W inflation projects
the Department estimates about $5,000 in hiring and recruitment
costs per hire for the new positions--amounting to around $300,000
in total hiring and recruitment costs each year in FY 2024 and FY
2025 (assuming half of the 108 positions are filled in each of these
years as described above).
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\41\ Navarra, Katie. ``The Real Costs of Recruitment.'' SHRM, 12
Apr. 2022, www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/the-real-costs-of-recruitment.aspx.
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Effect on WIC Participants
The proposal to create two new WIC State agency staff positions
would formalize both the staffing requirement and the expected
education and experience levels needed for the WIC Customer Service
Coordinator and the WIC Food Delivery Coordinator, enabling WIC
State agencies to hire qualified staff to support a modern,
participant-centered program.
The WIC Customer Service Coordinator specifically would play a
key role in future State agency efforts to design and implement
innovative strategies and participant-facing technologies to
increase participation in the WIC Program and the redemption of WIC
benefits (see the below section on Participation Effects for more
information on these efforts).
Effect on Vendors
The proposed revisions to update State agency reporting
requirements and to create two new WIC State agency staff positions
would improve vendor management and oversight, which has grown in
complexity over the past decade. Vendor management and oversight
relies on data analysis and statistical assessments to ensure the
State agency can operate the Program effectively and efficiently.
While these changes are expected to improve State agency vendor
management operations, the Department does not expect that these
provisions would have a measurable impact on vendors themselves.
Effect on State Agencies
These proposed provisions may initially increase burden on State
agencies. First, the proposed revision to update reporting
requirements for Federal oversight would streamline State agency
reporting to FNS and ensure that State agencies report to FDP on all
business entities authorized and monitored by WIC State agencies.
This provision is meant to align WIC regulations with the
information that State agencies are already required to report in
the new FDP system. While the system is designed to be less
burdensome for State agency reporting, some up-front work will be
necessary to develop procedures to comply with the requirements of
FDP.
Second, the proposal to create two new WIC State agency staff
positions would require some State agencies to hire new staff with
the qualifications outlined in the staffing standards, which some
State agencies may find challenging. On the other hand, the
provision may assist some State agencies already seeking support to
increase staffing. Despite potential up-front need of recruiting and
filling these positions, the Department expects these new roles to
be instrumental in supporting State agency efforts to oversee an
increasingly modern and complex WIC Program. The Department is
specifically requesting comments on whether the proposed staffing
standards would support State agencies' search for qualified
personnel, including a discussion of the State agency's ability to
recruit and fill these positions as described (considering both the
recruitment and hiring of staff with the proposed credentials), an
assessment of any challenges and costs associated with the adoption
of these provisions, necessary timeline to operationalize such
requirements, and any recommendations for changes to the standards
along with related rationale.
Participation Impacts
The baseline and revised costs presented in this analysis both
assume a change in WIC participation from historical participation
trends as a result of the $390 million in additional WIC funding
made available in ARPA to carry out outreach, innovation, and
program modernization efforts to increase participation and
redemption of benefits. Implementation of projects made possible by
this ARPA funding assume that participation will remain at current
levels among infants and women, despite further declines in the
birth rate, and an eventual increase in participation among children
followed by a leveling off at the higher rate of child
participation.
Given planned efforts to increase participation and retention
under ARPA, as described above, the Department is uncertain at this
time how much of an increase in participation may be attributable
solely to the proposed rule.
Distributive Impacts
Differences Among Vendors
The largest retailers may be more likely than independent
grocers or smaller stores to initially benefit from a shift to WIC
online shopping. However, due to the recent sales growth of
independent grocers and the relatively small share of small vendor
revenue attributable to WIC, the Department does not expect the
proposed rule to have a lasting or significant negative impact on
these firms.
In 2020, the National Grocers Association reported that
independent grocers accounted for 33 percent of total U.S. grocery
sales, up
[[Page 11548]]
from 25 percent in 2012.\42\ This trend suggests a resilience among
independent grocers to shifts in the retail landscape as many
independent grocers utilized online shopping platforms when
Americans turned to online grocery shopping in 2020 during the first
year of the COVID-19 pandemic. However, data from IRI estimate that
Walmart, Amazon, Instacart,\43\ Target, and major grocery firms
claimed over 82 percent of the grocery e-commerce market share in
2021, suggesting that the largest retailers and fulfillment
platforms still likely hold a larger stake in the online retail
space than independent grocers do relative to their share in the
total grocery market.\44\ The Department does not routinely track
data necessary to determine how WIC benefit redemptions vary by most
vendor characteristics, including indicators for whether the store
is a small business or independent grocer. USDA's ERS estimated, by
merging WIC and SNAP redemption databases, that 76 percent of WIC
retail redemptions occurred in larger stores (super stores,
supermarkets, or large grocery stores) in FY 2012; however, the
study's definition of supermarkets and large grocery stores is
inclusive of many independent grocers.\45\ The Department does not
have data on the extent to which small businesses and independent
grocers have implemented online shopping to date, but is aware of
products on the market being employed by independent grocers to
provide online ordering currently for WIC participants (with in-
store or curbside transactions).
---------------------------------------------------------------------------
\42\ Redman, R., ``Independent supermarkets drive one-third of
U.S. grocery sales.'' Supermarket News, 15 June 2021. Available
online at: https://www.supermarketnews.com/retail-financial/independent-supermarkets-drive-one-third-us-grocery-sales.
\43\ Note that Instacart is an e-commerce platform and not
generally a direct retailer, therefore IRI data for Instacart sales
likely represents a mix of retailer sizes. Although much of
Instacart's sales are through large chains, the platform also
provides an opportunity for many independent grocers to participate
in e-commerce without developing a platform themselves.
\44\ Information Resources, Inc. ``Winning in CPG e-Commerce:
Part 4,'' March 26, 2021. Available online at: https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Demand-Pockets-Part-4-CPG-E-Commerce-03-29-21.pdf.
\45\ Tiehen, L. and Fraz[atilde]o, E. Where Do WIC Participants
Redeem Their Food Benefits? An Analysis of WIC Food Dollar
Redemption Patterns by Store Type, EIB-152, U.S. Department of
Agriculture, Economic Research Service, April 2016. Available online
at: https://www.ers.usda.gov/webdocs/publications/44073/57246_eib152.pdf?v=0.
---------------------------------------------------------------------------
If smaller WIC vendors (such as convenience stores or small and
medium grocery stores) do not adopt online shopping solutions, then
they may see some of their WIC revenues lost to larger retailers
that provide online shopping. According to ERS data, in FY 2012,
small grocery stores, medium grocery stores, and convenience stores
accounted for 2.9 percent, 3.5 percent, and 3.8 percent of WIC
retail redemptions, respectively. As WIC sales make up a relatively
small fraction of the total revenue of smaller stores, and
especially convenience stores, the Department expects any lost
revenue for smaller vendors that do not adopt an online shopping
solution to be relatively minor. For example, the 3.8 percent of
total WIC benefits transacted at convenience stores in FY 2012
amounts to about $228 million. U.S. convenience stores reported an
estimated $193 billion in total in-store sales, not including fuel,
in 2012, suggesting that WIC redemptions represented only about 0.12
percent of non-fuel sales for convenience stores that year.\46\ As
mentioned earlier, the Department also projects a relatively small
portion of WIC transactions to move online even when fully
implemented in FY 2027 and FY 2028.\47\
---------------------------------------------------------------------------
\46\ Statista. ``Sales of the convenience store industry in the
United States from 2011 to 2020, by format'' 27 January 2022.
Available online at: https://www.statista.com/statistics/308767/sales-of-the-us-convenience-store-industry-by-format/.
\47\ The Department projects that about 18 and 20 percent of WIC
participants will transact any WIC electronic benefits online in FY
2027 and 2028, respectively. Among those transacting any WIC
electronic benefits online, only about half of their redemptions are
expected to be online those years. See Table 6 for more details.
---------------------------------------------------------------------------
The Department will continue to collect more timely information
to better understand the potential impacts of this proposed rule on
independent grocers and smaller vendors. Specifically, the
Department will examine lessons learned from the SNAP Online
Purchasing Pilot and GSCN sub-grant projects and will consider
recommendations related to small vendor challenges published in the
Task Force's Recommendations Report.
Differences Among State Agencies
The Department does not expect the proposed rule to have an
uneven or disproportionate impact on certain WIC State agencies over
others. Many of the provisions in the proposed rule are written as
State agency options, which would allow State agencies to tailor
their approach to innovation around the issuance and redemption of
WIC benefits to best fit their circumstances. The proposed changes
to staffing standards to add new positions for a WIC Food Delivery
Coordinator and WIC Customer Service Coordinator have the potential
to put more strain on smaller State agencies with fewer resources to
dedicate towards staffing. However, the Department is attempting to
alleviate this in part by tiering the proposed staffing standards to
adjust new hiring requirements by WIC caseload. The Department is
specifically requesting comments on whether the proposed staffing
standards would support State agencies' search for qualified
personnel, including a discussion of the State agency's ability to
recruit and fill these positions as described (considering both the
recruitment and hiring of staff with the proposed credentials), an
assessment of any challenges and costs associated with the adoption
of these provisions, necessary timeline to operationalize such
requirements, and any recommendations for changes to the standards
along with related rationale.
Differences Among Participant Subgroups
Early data from research conducted on the implementation of the
SNAP Online Purchasing Pilot in eight States in 2019 suggest that
many individuals living in rural LILA census tracts may fall outside
the service area of online grocery delivery services.\48\ Although
the study found that delivery systems reached around 90 percent of
LILA census tracts, as discussed earlier in this analysis, this
varied substantially between urban and rural areas. Using data from
the eight States, the researchers estimated that grocery delivery
services were available in only 39 percent of rural LILA census
tracts, compared to 94 percent of urban LILA census tracts. Although
online grocery services may have expanded in rural communities since
this data was collected, and particularly following the onset of the
COVID-19 pandemic, these findings suggest that WIC online shopping
may not reach all participants equally, especially at first.
---------------------------------------------------------------------------
\48\ Brandt EJ, Silvestri DM, Mande JR, Holland ML, et al.
Availability of grocery delivery to food deserts in states
participating in the online purchase pilot. JAMA Netw Open.
2019;2:e1916444.
---------------------------------------------------------------------------
Allowing State agencies to adopt online shopping in WIC would
also be less useful for households without internet access.
According to data from the 2019 American Community Survey (ACS),
between 78 to 85 percent of Americans in metro areas and 70 to 79
percent of Americans in non-metro areas between ages 18 to 64 living
below 199 percent of the Federal poverty line had access to internet
at home.\49\ This leaves a significant number of families out of
reach from online shopping services.
---------------------------------------------------------------------------
\49\ Swenson, K. and Ghertner, R. People in Low-Income
Households Have Less Access to internet Services--2019 Update. U.S.
Department of Health & Human Services, Office of the Assistant
Secretary for Planning & Evaluation. March 2021. Available online
at: https://aspe.hhs.gov/sites/default/files/2021-07/internet-access-among-low-income-2019.pdf.
---------------------------------------------------------------------------
Uncertainties
Use of WIC Online Shopping
The impact of the proposed rule provisions that enable online
shopping in WIC will depend largely on how many participants
transact any WIC electronic benefits online. In this impact
analysis, the Department projects that, within State agencies
offering online shopping, 12 percent of participants will transact
benefits online in FY 2024, increasing gradually to reach 20 percent
of participants in FY 2028. These estimates are largely based on the
uptake of the SNAP Online Purchasing Pilot and project outward based
on the predicted growth rate of online grocery shopping among the
general population.
If usage is 5 percentage points higher, starting at 17 percent
in FY 2024, and continues to increase by about 2 percentage points
each year, then the total cost impact would be estimated to be $504
million over 5 years. If usage is 5 percentage points lower,
starting at 7 percent in FY 2024, and maintains a 2-percentage point
increase each year, then the total cost impact would be estimated to
be $280 million over 5 years (see Table 10).
[[Page 11549]]
Table 10--Projected Cost of Online Shopping at Different Usage Levels
[Fiscal year (millions)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher (+ 5%): Percentage of participants making at 17% 19% 21% 23% 25% ..............
least one WIC purchase online, within participating
State agencies.........................................
Increase in total WIC food costs due to online shopping. $7.9 $59.2 $103.7 $155.7 $177.5 $504.0
Current: Percentage of participants making at least one 12% 14% 16% 18% 20% ..............
WIC purchase online, within participating State
agencies...............................................
Increase in total WIC food costs due to online shopping. $5.6 $43.7 $79.0 $121.9 $142.0 $392.1
Lower (-5%): Percentage of participants making at least 7% 9% 11% 13% 15% ..............
one WIC purchase online, within participating State
agencies...............................................
Increase in total WIC food costs due to online shopping. $3.2 $28.1 $54.3 $88.0 $106.5 $280.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.
Impact of WIC Online Shopping on Redemption
The overall cost impact of enabling online shopping in WIC will
also depend on how much the added convenience leads to an increase
in overall redemptions. As described above, the benefits of online
shopping are expected to address some of the barriers and challenges
that WIC participants report about the current shopping experience.
This analysis expects about a 10 percent increase in WIC electronic
benefit redemptions among participants that transact at least some
WIC electronic benefits online. As shown in Table 11, a 5-percentage
point variation in this effect is estimated to amount to around a
$120 million difference in the 5-year estimate for WIC food costs.
If benefit redemptions do not increase at all under the proposed
rule, then the Department still estimates nearly a $149 million
increase in Federal WIC food costs attributed solely to the expected
13 percent increase in online food prices described earlier in this
analysis.
Table 11--Projected Cost of Online Shopping at Different Redemption Levels
[Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher: 15% Increase in Benefit Redemption for Online $7.3 $57.2 $103.5 $159.7 $186.1 $513.8
Shoppers...............................................
Current: 10% Increase in Benefit Redemption for Online 5.6 43.7 79.0 121.9 142.0 392.1
Shoppers...............................................
Lower: 5% Increase in Benefit Redemption for Online 3.8 30.1 54.5 84.0 97.9 270.3
Shoppers...............................................
Zero: 0% Increase in Benefit Redemption for Online 2.1 16.5 29.9 46.2 53.8 148.6
Shoppers...............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.
Difference in Prices of Online WIC Foods
The overall cost impact of enabling online shopping in WIC would
also be affected by differences in the retail prices consumers pay
online. As described earlier in this analysis, the Department uses
current market estimates to project that WIC shoppers will pay an
average of 13 percent higher retail prices for WIC foods when
transacting benefits online. An increase or decrease in retail
prices of 5 percentage points, relative to in-store prices, would
amount to over a $60 million impact on the overall Federal WIC food
costs associated with this provision of the proposed rule over 5
years (see Table 12). If there is no difference between in-store and
online retail prices of WIC foods, then the proposed rule is still
expected to increase WIC food costs by around $229 million over 5
years attributed solely to the projected 10 percent increase in
redemptions for online WIC shoppers, as described earlier in this
analysis.
Table 12--Projected Cost of Online Shopping at Different Retail Price Variations
[Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher: 18% Increase in Retail Prices for Online $6.5 $50.7 $91.6 $141.4 $164.8 $455.0
Shoppers...............................................
Current: 13% Increase in Retail Prices for Online 5.6 43.7 79.0 121.9 142.0 392.1
Shoppers...............................................
Lower: 8% Increase in Retail Prices for Online Shoppers. 4.7 36.7 66.3 102.3 119.2 329.2
[[Page 11550]]
Zero: 0% Increase in Retail Prices for Online Shoppers.. 3.2 25.5 46.0 71.1 82.8 228.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.
Number of State Agencies That Already Meet New Staffing
Requirements
The overall cost of creating new staff positions based on the
provisions of this proposed rule depend on the Department's estimate
for current State agency staffing capacity. However, it is difficult
to estimate how many State agencies already fulfill the proposed
requirements because the Department does not routinely track State
agencies' staffing qualifications. If an additional 5 percent of
larger State agencies (those with more than 7,000 monthly
participants) already meet the new requirements respectively for
each new staff position, and do not need to hire new staff, only 36
State agencies would be required to hire a full-time WIC Food
Delivery Coordinator and 46 State agencies would be required to hire
a full-time WIC Customer Service Coordinator. Under these
conditions, the above estimate of $55 million for creating 108 new
staff positions during FY 2024 to FY 2028 would decrease to nearly
$53 million for creating 104 new staff positions (including both
costs of total compensation and costs associated with hiring and
recruitment). If an additional 5 percent of larger State agencies
are required to hire new staff for each new staff position, then 41
State agencies would be required to hire a full-time WIC Food
Delivery Coordinator and all 51 larger State agencies would be
required to hire a full-time WIC Customer Service Coordinator. This
increase in hiring would bring the 5-year cost estimate up to $58
million for 114 new staff positions during FY 2024 through FY 2028
(including both costs of total compensation and costs associated
with hiring and recruitment). See Table 13 for annual and total cost
estimates based on the number of new staff positions required.
Table 13--Estimated Cost of Creating Two New Staff Positions
[FY 2024-2028, Variations]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher (+5% of State agencies): 114 New State agency $6.2 $12.5 $12.6 $13.0 $13.4 $57.7
Staff Positions........................................
Current: 108 New State agency Staff Positions........... 5.9 11.9 11.9 12.3 12.7 54.7
Lower (-5% of State agencies): 104 New State agency 5.7 11.4 11.5 11.9 12.2 52.7
Staff Positions........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation. Staffing costs include both total cost of compensation and costs associated with
recruitment and hiring in FY 2024 and FY 2025.
Alternatives
State Agencies Pay for Delivery Fees
The Department is requesting public comment on whether State
agencies should have the option to pay for fees associated with
online shopping in a retail food delivery system with either (1)
non-Federal funding at State agency discretion or (2) Federal
funding in situations where it is deemed necessary to meet special
needs (e.g., participant access or other needs as identified by the
State agency). If State agencies were to pay for these fees for all
WIC online grocery orders using Federal funds, then the cost of the
proposed rule would increase. These additional costs would be a
function of two related cost streams: (1) payments made to cover the
cost of delivery fees, and (2) new costs associated with a projected
increase in usage of online shopping as WIC participants would no
long face a barrier of out-of-pocket delivery fees for WIC orders.
The cost impact of the increase in online shopping is expected to be
the same whether State agencies pay for the delivery fees using
Federal or non-Federal funds.
To analyze the cost impact of this policy alternative, this
analysis focuses on fees associated with grocery delivery services
from internet-based grocery retailers and, in this model, assumes
that all State agencies opt to pay for delivery fees for all WIC
online shopping delivery orders. The Department averaged the typical
delivery and service fees of six of the largest online grocery
firms. After adjusting for annual inflation, the Department
estimates that an average online grocery order in 2024 will be
assessed $9.59 in delivery and service fees, increasing to $10.51,
adjusting for inflation, in FY 2028.
The Department expects an increase in the use of online shopping
in WIC if participants do not have to pay delivery fees. Based on
data from a recent Mercatus report, the Department estimates that,
when faced with delivery fees, 33 percent of WIC online shopping
orders will be placed for home delivery while the remaining 67
percent will opt for in-store or curbside pickup.\50\ While many
shoppers prefer curbside pickup regardless of the fees associated
with delivery, this analysis estimates the share of online WIC
shoppers choosing home delivery will increase from 33 percent to 45
percent if State agencies pay for delivery fees on behalf of
participants. Paying delivery fees on behalf of participants is also
expected to attract more in-store only shoppers to purchase WIC
foods online. While the Department expects about 12 percent of WIC
participants to transact their food benefits online in FY 2024, this
figure is expected to increase slightly to 14 percent if State
agencies pay for delivery fees and continue to steadily increase to
22 percent in FY 2028 (up from the 20 percent projected in Table 6
of this analysis). As discussed previously, the Department expects
the average online WIC shopper would transact about 50 percent of
the WIC food benefits they use online and the other 50 percent in
brick-and-mortar stores. Data from four States in 2012 indicate that
the average WIC participant in those States made 3.2 WIC shopping
trips each month to use their WIC benefits.\51\ National polling
data suggest that individuals who buy groceries online do so less
frequently than in-
[[Page 11551]]
store shopping trips.\52\ Accordingly, the Department estimates that
the average online WIC shopper will make one online WIC order each
month and that the average WIC household will order benefits for two
WIC participants in a single order (e.g., formula for a partially
breastfeeding infant and WIC-approved foods for their partially
breastfeeding parent).\53\
---------------------------------------------------------------------------
\50\ Mercatus. ``eGrocery Transformed: Market projections and
insight into online grocery's elevated future,'' 2021.
\51\ Phillips, D., Bell, L., Morgan, R., & Pooler, J. (2014).
Transition to EBT in WIC: Review of impact and examination of
participant redemption patterns: Final report. Retrieved from
https://altarum.org/sites/default/files/uploaded-publication-files/Altarum_Transition%20to%20WIC%20EBT_Final%20Report_071614.pdf.
\52\ Brenan, M. ``More in U.S. Grocery Shopping Online, Fewer
Dining Out.'' Gallup, 10 August 2021. Available online at: https://news.gallup.com/poll/353090/grocery-shopping-online-fewer-dining.aspx.
\53\ According to data reported by 80 State agencies in the
Supplemental Data Set of the WIC Participant and Program
Characteristics 2020 Final Report, the average WIC household
includes around 2 individuals receiving WIC benefits.
---------------------------------------------------------------------------
Given these assumptions, the Department estimates that total
delivery fees paid will amount to $124 million between FY 2024 and
FY 2028 (Table 14). The slight expected increase in online shopping
if State agencies pay for delivery fees on behalf of participants is
expected to result in a total 5-year increase of $437 million in
Federal WIC food costs, approximately $45 million higher than the
estimated $392 million increase to food costs over 5 years
attributed to the proposed rule as currently written (Table 7).
Between the projected increase in food costs and the new costs
incurred for delivery fees, the Department estimates that using
Federal funds to pay delivery fees on behalf of participants would
increase the cost of this proposed rule by around $169 million over
5 years (Table 14). If State agencies use only non-Federal funds to
pay for the delivery fees, then the increase to Federal transfers
would only reflect the increase in food costs driven by the
increased uptake in online shopping described above--increasing 5-
year costs by about $45 million.
Table 14--Estimated Impact on Cost of Proposed Rule if State Agencies Pay Delivery Fees
[FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alternative:
Projected increase in Federal food costs due to $6.5 $49.9 $88.8 $135.4 $156.2 $436.9
online shopping if State agencies pay delivery fees
Projected total cost of delivery fees (paid by State 1.9 14.5 25.8 38.4 43.3 123.9
agencies)..........................................
Current:
Projected increase in Federal food costs due to 5.6 43.7 79.0 121.9 142.0 392.1
online shopping if participants pay delivery fees
out-of-pocket (Current)............................
Increase in cost of proposed rule if State agencies 2.8 20.7 35.7 52.0 57.5 168.7
pay delivery fees with Federal funds...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.
Requiring All 89 State Agencies To Create Two New Full-Time Staff
Positions
The Department proposes to adjust the staffing standards based
on the caseload size of the State agency. As an alternative, the
Department could have proposed to require all 89 State agencies to
create two new full-time staffing positions. Under the alternative,
the total number of new staff positions required would be 178, and
the total estimated cost would be $90 million (including both costs
of total compensation and costs associated with hiring and
recruitment). However, the Department ultimately decided to adjust
the staffing requirements based on each State agency's participant
caseload due to resource constraints and to avoid undue burden on
smaller States, Territories, and ITOs. See the Table 15 for annual
and total cost estimates if all State agencies were required to
employ two new full-time staff.
Table 15--Estimated Cost of All State Agencies Creating Two New Staff Positions
[FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year (millions)
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current:
108 New State agency Staff Positions................ $5.9 $11.9 $11.9 $12.3 $12.7 $54.7
Alternative:
178 New State agency Staff Positions (requiring all 9.7 19.6 19.7 20.3 20.9 90.2
State agencies to hire new staff)..................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation. Staffing costs include both total cost of compensation and costs associated with
recruitment and hiring in FY 2024 and FY 2025.
[[Page 11552]]
Accounting Statement
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), the Department has prepared an accounting
statement summarizing the annualized estimates of benefits and costs
associated with the provisions of this proposed rule.
The benefits of the proposed rule include decreasing burden on
WIC participants, WIC vendors, and State agencies; encouraging
innovation by State agencies; and allowing WIC participants to
transact benefits in new and innovative ways.
The net costs or savings (i.e., negative costs) and transfers
associated with provisions of the proposed rule are incurred by the
Federal government, WIC State Agencies, and/or WIC vendors. These
include the following, as described in the full regulatory impact
analysis text:
Costs for new staff positions
Costs associated with updating State agency systems for
online transactions
Decreased administrative burden
Increased WIC food spending
Table 16--Undiscounted Cost and Transfer Stream
[$ millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal Federal transfer stream......................... $5.6 $43.7 $79.0 $121.9 $142.0 $392.1
Nominal State Agency cost stream........................ -2.7 9.4 7.7 8.8 6.9 30.1
Nominal WIC Vendor cost stream.......................... -3.5 -3.6 -3.7 -3.8 -3.8 -18.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Applying 3 percent and 7 percent discount rates to these
undiscounted streams gives present values (in 2022 dollars):
Table 17--Discounted Cost and Transfer Streams
[$ Millions, 2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted Federal transfer stream
3 percent........................................... $5.0 $37.4 $64.3 $94.3 $104.4 $305.5
7 percent........................................... 4.7 33.5 55.4 78.3 83.5 255.3
Discounted State Agency cost stream
3 percent........................................... -2.4 7.9 6.1 6.6 4.8 23.0
7 percent........................................... -2.2 7.0 5.2 5.5 3.9 19.4
Discounted WIC Vendor cost stream
3 percent........................................... -3.3 -3.3 -3.3 -3.2 -3.2 -16.3
7 percent........................................... -3.1 -2.9 -2.8 -2.7 -2.6 -14.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 18 takes the discounted streams from Table 17 and computes
annualized values in FY 2022 dollars.
Table 18--Accounting Statement
----------------------------------------------------------------------------------------------------------------
Discount
Benefits Range Estimate Year dollar rate Period covered
----------------------------------------------------------------------------------------------------------------
Qualitative: Improved shopping experience, increased flexibility and convenience, and decreased burden on WIC
participants; increased flexibility for WIC State Agencies; and increased opportunity for innovation by WIC
State Agencies and WIC vendors.
----------------------------------------------------------------------------------------------------------------
State Agencies, WIC Vendors, and WIC Participants
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/ n.a. n.a. n.a. n.a. FY2024-2028
year).
----------------------------------------------------------------------------------------------------------------
Transfers Range Estimate Year Discount Period
dollar rate covered
----------------------------------------------------------------------------------------------------------------
Federal Government
----------------------------------------------------------------------------------------------------------------
Quantitative: Impact of online shopping on Federal transfers for WIC food spending.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/ n.a $51.1 2022 7% FY2024-2028
year).
.......... $61.1 2022 3%
----------------------------------------------------------------------------------------------------------------
[[Page 11553]]
Table 18--Accounting Statement--Continued
----------------------------------------------------------------------------------------------------------------
Discount
Costs Range Estimate Year dollar rate Period covered
----------------------------------------------------------------------------------------------------------------
State Agencies
----------------------------------------------------------------------------------------------------------------
Quantitative: Net impact of online purchasing system and maintenance, increased staffing costs, and decreased
administrative costs.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/ n.a $3.9 2022 7% FY2024-2028
year).
.......... $4.6 2022 3%
----------------------------------------------------------------------------------------------------------------
WIC Vendors (Negative Costs = Savings)
----------------------------------------------------------------------------------------------------------------
Quantitative: Impact of decreased administrative costs.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/ n.a -$2.8 2022 7% FY2024-2028
year).
.......... -$3.3 2022 3%
----------------------------------------------------------------------------------------------------------------
[FR Doc. 2023-02484 Filed 2-21-23; 8:45 am]
BILLING CODE 3410-30-P
