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Proposed Rule2023-02484

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

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Published

February 23, 2023

Issuing agencies

Agriculture DepartmentFood and Nutrition Service

Abstract

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.

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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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.

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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:
<bullet> Federal eRulemaking Portal: Go to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the online instructions for submitting
comments. The <a href="https://www.regulations.gov">https://www.regulations.gov</a> electronic filing system will
accept comments until 11:59 p.m. Eastern Time at the end of May 24,
2023.
<bullet> Regular U.S. Mail: WIC Vendor and Technology Branch,
Policy Division, Food and Nutrition Service, P.O. Box 2885, Fairfax,
Virginia 22031-0885.
<bullet> 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.
<bullet> 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>.

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 <a href="/cdn-cgi/l/email-protection#dfafbeabadb6bcb6bef1bdbeb6b3baa69faaacbbbef1b8b0a9"><span class="__cf_email__" data-cfemail="12627366607b717b733c70737b7e776b52676176733c757d64">[email&#160;protected]</span></a>.

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]]

<bullet> ``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).
<bullet> ``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).
<bullet> ``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.
<bullet> ``Transaction'' means the process by which a WIC shopper
exchanges their WIC benefits for supplemental foods.
<bullet> ``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.
<bullet> ``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\
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\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: <a href="https://fns-prod.azureedge.net/sites/default/files/resource-files/WICEligibles2019-Volume1.pdf">https://fns-prod.azureedge.net/sites/default/files/resource-files/WICEligibles2019-Volume1.pdf</a>.
\2\ U.S. Department of Agriculture Food and Nutrition Service,
``WIC Data Tables,'' 2021. Available online at: <a href="https://www.fns.usda.gov/pd/wic-program">https://www.fns.usda.gov/pd/wic-program</a>.
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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.
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\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: <a href="https://www.ers.usda.gov/publications/pub-details/?pubid=79791">https://www.ers.usda.gov/publications/pub-details/?pubid=79791</a>.
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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:
<bullet> 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.
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\4\ Gretchen Swanson Center for Nutrition, ``Blueprint for WIC
Online Ordering Projects,'' June 2021. Available online at: <a href="https://static1.squarespace.com/static/58a4dda16a49633eac5e02a1/t/60c8ea51296905287a9420eb/1623779922155/Blueprint+for+WIC+Online+Ordering.pdf">https://static1.squarespace.com/static/58a4dda16a49633eac5e02a1/t/60c8ea51296905287a9420eb/1623779922155/Blueprint+for+WIC+Online+Ordering.pdf</a>.
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<bullet> 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\
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\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:
<a href="https://www.fns.usda.gov/wic/food-delivery-task-force-recommendations-report">https://www.fns.usda.gov/wic/food-delivery-task-force-recommendations-report</a>.
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FNS reviewed the Task Force's recommendation report and the
Blueprint's summary of regulatory barriers, and this proposed rule
addresses the online shopping

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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\
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\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: <a href="https://www.fns.usda.gov/wic/operations-impact-federal-waivers-during-covid-19-pandemic">https://www.fns.usda.gov/wic/operations-impact-federal-waivers-during-covid-19-pandemic</a>.
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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\
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\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: <a href="https://s3.amazonaws.com/aws.upl/nwica.org/nwamulti-state-wic-participant-satisfaction-surveynationalreportfinal.pdf">https://s3.amazonaws.com/aws.upl/nwica.org/nwamulti-state-wic-participant-satisfaction-surveynationalreportfinal.pdf</a>.
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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 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:
<bullet> 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.
<bullet> 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.
<bullet> An assessment of the impact on vendor oversight and
monitoring, including any changes that would be needed to ensure
effective oversight and program integrity.
<bullet> 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: <a href="https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/">https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/</a>.
\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: <a href="https://www.fns.usda.gov/wic/third-national-survey-wic-participants">https://www.fns.usda.gov/wic/third-national-survey-wic-participants</a>.
\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: <a href="https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study">https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study</a>.
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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\
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\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:
<a href="https://www.ers.usda.gov/publications/pub-details/?pubid=44076">https://www.ers.usda.gov/publications/pub-details/?pubid=44076</a>.
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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: <a href="https://www.statista.com/statistics/308767/sales-of-the-us-convenience-store-industry-by-format/">https://www.statista.com/statistics/308767/sales-of-the-us-convenience-store-industry-by-format/</a>.
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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 <a href="https://www.bea.gov/iTable">https://www.bea.gov/iTable</a>) 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>, 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:
<a href="https://www.fns.usda.gov/wic/third-national-survey-wic-participants">https://www.fns.usda.gov/wic/third-national-survey-wic-participants</a>.
---------------------------------------------------------------------------

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.
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\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: <a href="https://www.fns.usda.gov/wic/participant-program-characteristics-2020">https://www.fns.usda.gov/wic/participant-program-characteristics-2020</a>.
\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:
<a href="https://www.fns.usda.gov/wic/third-national-survey-wic-participants">https://www.fns.usda.gov/wic/third-national-survey-wic-participants</a>.
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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\
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\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: <a href="https://data.bls.gov/timeseries/CMU3010000000000D">https://data.bls.gov/timeseries/CMU3010000000000D</a>.), 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: <a href="https://stats.oecd.org/index.aspx?DataSetCode=ANHRS">https://stats.oecd.org/index.aspx?DataSetCode=ANHRS</a>.).
---------------------------------------------------------------------------

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:
<bullet> ``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).
<bullet> ``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).
<bullet> ``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.
<bullet> ``Transaction'' means the process by which a WIC
shopper exchanges their WIC benefits for supplemental foods.
<bullet> ``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.
<bullet> ``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\
---------------------------------------------------------------------------

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: <a href="https://www.centerfornutrition.org/wic-online-ordering">https://www.centerfornutrition.org/wic-online-ordering</a>.
---------------------------------------------------------------------------

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: <a href="https://www.fns.usda.gov/wic/task-force-supplemental-foods-delivery">https://www.fns.usda.gov/wic/task-force-supplemental-foods-delivery</a>.
---------------------------------------------------------------------------

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:
<bullet> 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.
<bullet> 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).
<bullet> 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

<bullet> 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.

<bullet> Benefits

\5\ USDA Economic Research Service. ``State-Level Estimates of
Low Income and Low Access Populations.'' Last updated September 30,
2019. Available online at: <a href="https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/">https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/</a>.
\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:
<a href="https://www.fns.usda.gov/wic/third-national-survey-wic-participants">https://www.fns.usda.gov/wic/third-national-survey-wic-participants</a>.
\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: <a href="https://www.ers.usda.gov/publications/pub-details/?pubid=79791">https://www.ers.usda.gov/publications/pub-details/?pubid=79791</a>.
\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: <a href="https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study">https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study</a>.
---------------------------------------------------------------------------

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: <a href="http://www.fns.usda.gov/research-analysis">www.fns.usda.gov/research-analysis</a>.
\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: <a href="https://dx.doi.org/10.15620/cdc:119632">https://dx.doi.org/10.15620/cdc:119632</a>.

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.

<bullet> 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: <a href="https://news.gallup.com/poll/353090/grocery-shopping-online-fewer-dining.aspx">https://news.gallup.com/poll/353090/grocery-shopping-online-fewer-dining.aspx</a>.
\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).

<bullet> Cost, Participant, Vendor, and State Agency Impacts

<bullet> 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:
<bullet> 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.
<bullet> 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).
<bullet> 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.
<bullet> 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).
<bullet> 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
benefi

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