[Federal Register Volume 88, Number 36 (Thursday, February 23, 2023)]
[Proposed Rules]
[Pages 11516-11553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02484]



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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:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting 
comments. The https://www.regulations.gov electronic filing system will 
accept comments until 11:59 p.m. Eastern Time at the end of May 24, 
2023.
     Regular U.S. Mail: WIC Vendor and Technology Branch, 
Policy Division, Food and Nutrition Service, P.O. Box 2885, Fairfax, 
Virginia 22031-0885.
     Overnight, Courier, or Hand Delivery: Patricia Bailey, WIC 
Vendor and Technology Branch, Policy Division, Food and Nutrition 
Service, 1320 Braddock Place, 3rd Floor, Alexandria, Virginia 22314.
     All written comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the substance of the comments and 
the identity of the individuals or entities submitting the comments 
will be subject to public disclosure. FNS will make the written 
comments publicly available on the internet via https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Patricia Bailey, Chief, WIC Vendor and 
Technology Branch, Policy Division, Supplemental Nutrition and Safety 
Programs, Food and Nutrition Service, USDA, 1320 Braddock Place, 
Alexandria, Virginia 22314, (703) 305-2435 or [email protected].

SUPPLEMENTARY INFORMATION: 

I. Overview

    The retail grocery industry has changed over the past several years 
and online shopping has become an increasingly common method to shop 
for groceries. Advances in technology related to online shopping and 
the development of new payment types have greatly influenced the way 
Americans shop and pay for food. To ensure that participants in the 
Special Supplemental Nutrition Program for Women, Infants, and Children 
(WIC) have equal access to available shopping options and can transact 
their WIC benefits as the retail marketplace innovates and evolves, the 
Department proposes to remove barriers to innovation and to modernize 
certain WIC food delivery regulations. To accompany these proposed 
changes, the Department proposes additional measures to meet the needs 
of a modern, data-driven program that uses current technologies for 
food delivery.
    Specifically, this rulemaking proposes to:
    (1) Remove barriers to online ordering and internet-based 
transactions in WIC, including a current prohibition of the 
authorization of internet-based vendors. The proposed revisions would 
provide State agencies the flexibility to offer online shopping to 
participants in a way that maintains program integrity. The revisions 
support oversight measures and policies appropriate for current and 
future technologies and security requirements and also support program 
integrity as the retail marketplace innovates.
    (2) Streamline and modernize WIC food delivery. The proposed 
revisions are intended to reflect the Program's near-complete 
transition to electronic benefit transfer (EBT), support current 
technology and future innovation, and expand opportunities for the 
retail grocery industry to innovate in ways that benefit WIC 
participants. The proposed revisions would also allow State agencies to 
develop and test new types of food instruments (e.g., mobile payments) 
and allow for the remote issuance of WIC benefits.
    (3) Meet the needs of a modern, data-driven program that uses 
current technologies for food delivery by updating reporting 
requirements and introducing new staff positions intended to support 
the operational capacity of WIC State agencies.
    In the development of this proposed rule, the Department 
prioritized equity and access for WIC participants. However, the 
Department recognizes that the proposed rule would impact WIC State 
agencies, including Indian Tribal Organizations (ITOs), as well as 
local agencies, clinics, and vendors in ways that could affect 
participants' access to benefits. To mitigate any potential civil 
rights-related impacts of the proposed rule, FNS intends to provide 
State agencies with technical assistance to implement and communicate 
program changes in alternative languages and formats that are 
accessible to all participants and vendors, and to enable small 
vendors, especially small, minority- and Tribal-owned stores, to engage 
with online shopping.
    The Department's overarching goal is to advance nutrition security 
by improving the WIC shopping experience and ensuring that WIC 
participants have equitable access to nutritious foods. At the same 
time, the Department recognizes the importance of maintaining security 
and oversight measures at the Federal and State agency levels. This 
rule represents a major transition for the WIC Program and is expected 
to increase participant satisfaction and, ultimately, participation and 
retention while preserving program integrity.

II. Background

    This part provides key terms used throughout this preamble, an 
overview of the WIC Program, challenges of the current WIC shopping 
experience, and a summary of information used to develop this proposed 
rule. Proposed regulatory changes are discussed in detail in part III.

A. Introduction of Key Terms

    For the purposes of this proposed rule preamble, the Department 
will use the following terms:

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     ``WIC shopper'' means a person shopping using WIC benefits 
(i.e., a WIC participant, proxy, or a parent or caretaker of an infant 
or child participant).
     ``Online shopping'' means the general use of an online, 
internet-based ordering system, platform, or site. It can encompass 
online ordering with or without internet-based transactions (i.e., the 
transaction can occur via the internet, in store, curbside, or at the 
point of delivery).
     ``Online ordering'' means the process a customer 
(including a WIC shopper) uses to select food items for purchase via an 
internet-based ordering system, platform, or site.
     ``Transaction'' means the process by which a WIC shopper 
exchanges their WIC benefits for supplemental foods.
     ``Internet-based transaction'' means a transaction where 
the WIC payment is completed through the payment section of the online 
ordering system, platform, or site. This terminology is being used in 
lieu of ``online transaction'' to avoid confusion with transactions 
that occur using online EBT technology.
     ``Redemption'' means the process in which a vendor submits 
records of electronic benefits for redemption and the State agency (or 
its financial agent) makes payment to the vendor.

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: https://fns-prod.azureedge.net/sites/default/files/resource-files/WICEligibles2019-Volume1.pdf.
    \2\ U.S. Department of Agriculture Food and Nutrition Service, 
``WIC Data Tables,'' 2021. Available online at: https://www.fns.usda.gov/pd/wic-program.
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    The Department provides Federal grants to WIC State agencies to 
provide supplemental foods, health care referrals, and nutrition 
education, including breastfeeding promotion and support, to WIC 
participants. WIC participants typically access supplemental foods 
through a retail food delivery system. In such systems, a WIC shopper 
goes to a WIC-authorized vendor (i.e., a retail store authorized by the 
State agency), selects foods available in their benefit balance, and 
uses an EBT card to purchase the items. In FY 2020, there were 
approximately 40,000 WIC-authorized vendors nationwide, and nearly 93 
percent of WIC participants received WIC benefits via EBT.

C. Challenges of the Current WIC Shopping Experience

    Currently, WIC regulations at 7 CFR 246.12(r)(4) require 
participants to pick up food instruments (e.g., paper food instruments, 
cash-value vouchers (CVVs), or EBT cards) in person. While WIC State 
agencies are required to develop plans per Sec.  246.4(a)(23) to 
``minimize the time participants and applicants must spend away from 
work'' and issue food instruments and CVVs ``through means other than 
direct participant pick-up,'' participants report that the time and 
money spent traveling to a WIC clinic to pick up food instrument(s) 
remains a barrier to participation. The proposed rule would encourage 
State agencies to remotely issue electronic benefits and mail EBT cards 
whenever possible, potentially reducing the number of clinic visits 
that WIC participants are required to make.
    Additionally, WIC regulations generally only allow WIC State 
agencies to authorize vendors with a single, fixed location (Sec.  
246.2, Vendor) and require the WIC shopper to sign food instruments or 
enter a Personal Identification Number (PIN) in the presence of a 
cashier (Sec.  246.12(h)(3)(vi)). These two provisions require that the 
WIC transaction occurs in the physical space of a brick-and-mortar 
store.
    These in-person requirements present challenges to families, 
particularly those with limited mobility or access to transportation, 
those who live in remote or rural communities, and/or those with 
special dietary needs who require supplemental food substitutions that 
may not be readily available at the closest WIC-authorized grocery 
store. WIC households, which are less likely to use a personal vehicle 
for grocery shopping than higher-income non-WIC households,\3\ are 
expected to benefit from additional flexibilities around both benefit 
issuance and pickup and the shopping experience.
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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: https://www.ers.usda.gov/publications/pub-details/?pubid=79791.
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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:
     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: https://static1.squarespace.com/static/58a4dda16a49633eac5e02a1/t/60c8ea51296905287a9420eb/1623779922155/Blueprint+for+WIC+Online+Ordering.pdf.
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     The Task Force on Supplemental Foods Delivery (the ``Task 
Force''), authorized by the Consolidated Appropriations Act for Fiscal 
Year 2021 (Pub. L. 116-260), consisted of WIC stakeholders convened to 
independently ``study measures to streamline the redemption of 
supplemental foods benefits that promote convenience, safety, and 
equitable access to supplemental foods, including infant formula.'' The 
Task Force consisted of 18 member organizations from multiple sectors 
to ensure a diverse range of input from: WIC providers, retailers, 
manufacturers, EBT processing companies, advocacy organizations, WIC 
participants, and additional stakeholders. The Task Force submitted its 
recommendation report to FNS on September 30, 2021.\5\
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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: 
https://www.fns.usda.gov/wic/food-delivery-task-force-recommendations-report.
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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: https://www.fns.usda.gov/wic/operations-impact-federal-waivers-during-covid-19-pandemic.
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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: https://s3.amazonaws.com/aws.upl/nwica.org/nwamulti-state-wic-participant-satisfaction-surveynationalreportfinal.pdf.
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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

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proposes similar edits to Sec.  246.12(v)(1)(iv), which would ensure 
that transactions at authorized farmers and farmers' markets also occur 
in accordance with the procedures established by the State agency and 
developed according to standards established by the Department.
    b. Create New Types of Vendors [Sec.  246.2].
    The Department proposes creating separate definitions for different 
types of vendors at Sec.  246.2. The Department proposes new 
definitions for ``brick-and-mortar vendors,'' ``internet vendors,'' and 
``mobile vendors.'' Creating new types of vendors would provide State 
agencies with flexibility to authorize the types of vendors needed to 
support program modernization while ensuring participant access to 
supplemental foods throughout their jurisdictions. To ensure continued 
and effective State agency management and oversight, all authorized 
vendors, no matter the type, would be subject to all regulations 
governing vendors.
    The Department proposes the following changes to:
    (i) Create a new definition for ``brick-and-mortar vendor.''
    The Department proposes a definition for ``brick-and-mortar 
vendor,'' which would allow this type of vendor to be defined 
separately and distinctly from other vendor types (e.g., internet or 
mobile vendors). Historically, vendors authorized under a retail food 
delivery system were required to be brick-and-mortar vendors. The 
Department proposes to clarify that ``all transactions that take place 
at a brick-and-mortar vendor will be assigned to that vendor'' to 
reinforce that the location of the transaction (e.g., at a single, 
physical, fixed location; via an internet-based transaction; or at 
mobile vendor) is used to classify vendors by vendor type, not the 
location where the order was made or fulfilled.
    (ii) Create a new definition for ``internet vendor.''
    The Department proposes a new definition of ``internet vendor'' to 
distinguish vendors operating through an online platform with internet-
based transactions from brick-and-mortar vendors. The proposed 
definition for ``internet vendor'' is based, in part, on SNAP's working 
definition of ``internet retailer,'' and would be implemented 
consistently with SNAP's definition, to the extent possible, to ensure 
that cross-program integrity efforts may continue without interruption.
    (iii) Create a new definition for ``mobile vendor.''
    The Department proposes to create a separate definition of ``mobile 
vendor'' to distinguish mobile vendors with transactions that take 
place at a truck, bus, pushcart, or other mobile vehicle. This is 
different from vendors operating a brick-and-mortar location with 
transactions at the physical, fixed location.
    (iv) Update the definition of ``above-50-percent vendors.''
    The Department proposes to revise this definition to ensure that 
any type of authorized vendor (e.g., brick-and-mortar, internet, or 
mobile) could also be classified as an above-50-percent vendor if it 
meets the conditions of the definition.
    c. Modernize the Definition of ``Vendor'' [Sec. Sec.  246.2 & 
246.4(a)(14)(xv)].
    The Department proposes to modernize the current definition of 
``vendor'' to allow State agencies the flexibility to authorize more 
types of vendors (e.g., ``internet vendors,'' and ``mobile vendors'').
    The Department proposes the following changes to:
    (i) Remove language from the definition of ``vendor'' that 
currently only allows WIC State agencies to authorize vendors with a 
``single, fixed location'' (i.e., brick-and-mortar vendors).
    The Department proposes to remove this requirement to allow for the 
creation of distinct vendor type definitions, including ``brick-and-
mortar,'' ``internet,'' and ``mobile'' vendors, as described in more 
detail above. The proposed revision would allow State agencies the 
flexibility to authorize vendors that would provide supplemental foods 
through means other than a single, fixed location.
    (ii) Simplify the definition of ``vendor'' by replacing current 
regulatory language delineating different business structures that a 
vendor may have (i.e., a sole proprietorship, partnership, cooperative 
association, corporation, or other business entity) with the term 
``business entity.'' This simplified language would clarify that any 
type of business entity may be authorized as long as it meets the State 
agency's selection criteria. This would remove the burden of proving or 
determining business structure from vendor applicants and WIC State 
agencies during the vendor authorization process.
    (iii) Remove a clause in the definition of ``vendor'' requiring a 
special needs justification for mobile vendors.
    The Department proposes removing the requirement for a State agency 
to justify the authorization of mobile vendors in its State Plan. This 
would allow State agencies to authorize mobile vendors more easily and 
would remove the burden of providing justification to FNS for such 
authorizations. This change is in alignment with the proposed removal 
of the related provision at Sec.  246.4(a)(14)(xv).
    (iv) Clarify that all vendors must be authorized separately.
    The Department proposes to clarify that all vendors, regardless of 
type, must be authorized by the State agency separately. To ensure that 
an authorization in SNAP is related to only one WIC authorization per 
State agency, vendors with a unique SNAP authorization number must be 
authorized as unique vendors by any WIC State agency that authorizes 
them. This allows for coordination of vendor/retailer activities 
between the two programs, supports the ability for the programs to move 
forward consistently, to the extent possible, and ensures that cross-
program integrity efforts continue without interruption (e.g., 
reciprocal disqualifications, etc.).
    For vendors with store locations that are not SNAP authorized, the 
Department proposes that each single, separate location is considered a 
unique vendor from all other store locations and, therefore, must be 
authorized separately. This is consistent with how the WIC Program 
currently authorizes vendors.
    The proposed revision also clarifies that a vendor providing 
supplemental foods through any means other than a single, fixed 
location must be authorized separately from brick-and-mortar vendors, 
even if operated by the same business entity. This is consistent with 
SNAP's current retailer authorization practices.
    The Task Force encouraged FNS to explore ``the option for a 
national authorization process, with State opt-ins, that could 
streamline multistate authorization for virtual vendor platforms.'' 
However, as section (c)(2)(A) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(c)(2)(A)) obligates the Secretary to ``make cash grants to 
State agencies for the purpose of administering the program,'' the 
Department does not have authority to authorize vendors in the WIC 
Program. This activity, along with all other vendor management 
functions, is delegated to WIC State agencies. The Department's 
proposed provisions aim to streamline and modernize WIC food delivery 
wherever possible, while remaining within the scope and purpose of the 
Program.
    d. Allow Vendors to Return Benefits to a Participant's Benefit 
Balance [Sec. Sec.  246.12(h)(3)(ii) introductory text, (h)(3)(ii)(A) 
and (C), (x)(2)(iii), (x)(4) introductory text, and (x)(4)(i)].

[[Page 11520]]

    The Department proposes revisions to allow electronic benefits to 
be returned to the participant's benefit balance when an item requested 
through the online ordering process is not fulfilled as ordered, while 
reinforcing that cash refunds continue to be prohibited. The proposed 
revisions would also provide changes to support the electronic benefit 
return process, including providing additional time for participants to 
use their returned electronic benefits to purchase supplemental foods. 
This is intended to ensure that WIC shoppers who attempt to order items 
online close to the last date of use for those benefits do not lose 
them if the vendor is unable to fulfill the order. These changes would 
support the participant's ability to fully transact their electronic 
benefits for supplemental foods (i.e., to allow the use of the benefit 
balance at a later date or at another vendor) and ensure that the State 
agency is only charged for foods received by the participant. These 
flexibilities are expected to be particularly important to support the 
purchase of fruits and vegetables with cash-value benefits (CVBs), 
since those items are often priced by weight.
    The differences proposed in this rule between food instruments, 
electronic benefits, CVVs, and CVBs are discussed in more detail with 
the Department's proposal to permit the remote issuance of electronic 
benefits to a participant's benefit balance (section 2.a.).
    The Department proposes the following changes to:
    (i) Clarify that cash refunds are still prohibited and update 
exchange policy to accommodate recalls.
    The Department proposes adding ``cash'' to the sentence, ``[n]o 
substitutions, cash, credit, cash refunds, or exchanges'' in Sec.  
246.12(h)(3)(ii) to ensure that cash refunds would continue to be 
prohibited. The proposed provision would clarify that the vendor must 
not provide cash in exchange for electronic benefits, nor a cash refund 
for supplemental foods purchased with benefits.
    The Department proposes additional changes to Sec.  
246.12(h)(3)(ii) introductory text and (3)(ii)(A), and to introduce 
Sec.  246.12(h)(3)(ii)(C). First, the Department proposes to clarify 
when language refers to paper food instruments and CVVs versus 
electronic benefits throughout the provision. Second, the Department 
proposes adding ``type'' and ``physical form'' to the list of 
characteristics to ensure that exchanges are limited to identical 
authorized supplemental food items. Lastly, the Department proposes to 
introduce language at Sec.  246.12(h)(3)(ii)(C) to ensure that all 
customers, including WIC shoppers, are treated the same in the event 
that an authorized supplemental food is recalled. The Department 
proposes introducing this vendor agreement provision to ensure that 
WIC-authorized vendors include WIC shoppers in their recall exchange 
policies, including policies related to replacements (which may 
include, but are not limited to, the same product, a substitute 
product, store credit, or a cash refund). Under this new provision, WIC 
shoppers would be able to exchange recalled product like all other 
consumers.
    (ii) Allow for the return and use of electronic benefits when an 
online order cannot be fulfilled.
    The Department proposes to add the provisions at Sec.  246.12(x)(4) 
to allow for the return and use of electronic benefits when an online 
order cannot be fulfilled. This proposed provision would support 
participants' ability to fully transact their benefits for supplemental 
foods, and to ensure that the State agency is only charged for foods 
received by the participant.
    (iii) Allow for the return and use of electronic benefits not 
successfully transacted before the last date of use.
    To address issues that may arise as transactions approach the last 
date of use, the Department proposes Sec.  246.12(x)(4)(i) to allow the 
return of electronic benefits, and to provide time for subsequent 
transactions to occur. This provision would provide the participant 
with no less than 7 calendar days to transact the returned benefits 
when electronic benefits are returned to a participant's benefit 
balance. This would promote full benefit redemption for participants, 
while establishing an expectation for the length of time electronic 
benefits would remain available after the original last date of use.
    This proposed creation of these provisions would necessitate a 
revision to Sec.  246.12(x)(2)(iii) to reference the proposed provision 
that addresses the return of benefits after the last date of use Sec.  
246.12(x)(4)(i). The Department expects that WIC State agencies will 
require additional time to develop and refine the technological 
solutions needed to meet these provisions and is proposing an extended 
implementation timeframe of eighteen months from publication of the 
final rule.
    e. Allow State Agencies to Develop Virtual Methods of Oversight 
[Sec. Sec.  246.2 and 246.12(g)(5) and (j)(6)(ii)(B)].
    The Department proposes revising current WIC regulations to allow 
State agencies to develop virtual methods of oversight to ensure that 
their monitoring and investigative methods are appropriate for the 
types of vendors authorized (e.g., internet vendors) and current 
environmental conditions (e.g., during a pandemic). WIC State agencies 
are responsible for all vendor management and oversight, and the 
Department proposes to provide the flexibility necessary to use 
technology to streamline these efforts and develop new methods of 
oversight for new types of vendors.
    The Department proposes the following changes to:
    (i) Update the definitions of ``routine monitoring'' and 
``compliance buy.''
    The Department proposes removing the requirement that routine 
monitoring visits and compliance buys occur on site from the definition 
of each term in Sec.  246.2. The purposes of monitoring visits and 
investigations would remain unchanged, as well as the minimum number of 
vendors that must be monitored and investigated annually, as outlined 
at Sec.  246.12(j)(2) and (4).
    Removing this requirement would also require the Department to 
clarify the documentation requirements outlined in Sec.  
246.12(j)(6)(ii)(B). The proposed revision adds the phrase ``if 
applicable'' to the requirement to document the cashier involved in a 
compliance buy to accommodate situations in which no cashier is present 
(e.g., an internet-based transaction). All other documentation 
requirements at Sec.  246.12(j)(6) would remain applicable regardless 
of the location of the transaction or type of vendor.
    (ii) Introduce virtual visits as an allowable type of 
preauthorization visit.
    The Department proposes to add virtual visits to the types of 
allowable preauthorization visits established at Sec.  246.12(g)(5) to 
provide WIC State agencies the flexibility to streamline such visits 
and to develop procedures that are appropriate for the types of vendors 
authorized under their jurisdiction.
    f. Permit WIC Shoppers to Pay for Fees Associated with Online 
Shopping [Sec. Sec.  246.12(h)(3)(xxxiii) and (v)(1)(ix) and 
246.14(b)(1)(i) and (c)(4)].
    The Department proposes to add a new provision at Sec.  
246.12(h)(3)(xxxiii) to clarify that WIC-authorized vendors must not 
charge the State agency for fees associated with online ordering (e.g., 
delivery, service, convenience, bag fees). If such fees are assessed to 
non-WIC customers using the same services, WIC participants must be 
allowed to pay them using another tender type. A similar provision is 
proposed for farmers and farmers' markets at Sec.  246.12(v)(1)(ix).
    This proposed change would work in combination with the revisions

[[Page 11521]]

proposed at Sec.  246.14(b)(1)(i) and (c)(4), both of which clarify 
that State agencies operating home food delivery or direct distribution 
systems may continue to pay for the cost of transporting food under 
these food delivery systems. Costs in home food delivery and direct 
distribution are different from fees associated with online shopping in 
a retail food delivery system, which would only occur if the WIC 
shopper chooses online shopping.
    The Department is specifically requesting comment on whether State 
agencies should have the option to pay for fees associated with online 
shopping in a retail food delivery system with either (1) non-Federal 
funding at State agency discretion and/or (2) Federal funding in 
situations where it is deemed necessary to meet special needs (e.g., 
participant access or other needs as identified by the State agency). 
The Department requests input from stakeholders that includes a 
discussion of how this option would impact equitable access to online 
shopping for WIC participants, the rationale for State agencies to pay 
these fees (e.g., to ensure participant access to online shopping in 
certain areas within the State agency's jurisdiction, to transition 
from a direct distribution or home food delivery system), possible 
models for paying for such fees (including whether there should be any 
limits on the amount of delivery fees paid by the WIC State agency), 
and any considerations necessary to pay for fees for different vendor 
types (e.g., above-50-percent, internet, brick-and-mortar).

2. Streamline and Modernize WIC Food Delivery

    The proposed revisions in this section are intended to reflect the 
Program's near-complete transition to EBT, support current technology 
and future innovation, and expand opportunities for the retail grocery 
industry to innovate in ways that benefit WIC participants. The 
proposed revisions would also allow State agencies to develop and test 
new types of food instruments (e.g., mobile payments) and allow for the 
remote issuance of WIC benefits. As the Program completes the 
transition to EBT and innovates further, FNS will continue to support 
State agencies in their efforts to use current technologies to provide 
adequate participant access to supplemental foods.
    The following is a discussion of each proposed provision.
    a. Permit the Remote Issuance of Electronic Benefits to a 
Participant's Benefit Balance [Sec. Sec.  246.4(a)(23), 
246.7(f)(2)(iv), and 246.12(r)(2), (4), and (5)].
    The Department proposes to remove barriers by revising Sec.  
246.12(r)(4) to specifically apply to paper food instruments and CVVs, 
and by creating Sec.  246.12(r)(5) for the issuance of EBT cards and 
electronic benefits. This proposed provision would encourage WIC State 
agencies to allow for the remote issuance of electronic benefits (i.e., 
the loading of electronic benefits to an EBT card, or other access 
device or technology, without requiring the participant to travel to a 
clinic) and for the mailing of EBT cards. The provision would require 
that State agencies do so in a way that ensures that participants are 
offered nutrition education in accordance with Sec.  246.11(a)(2) and 
that their EBT cards and electronic benefits are issued within the 
processing timeframe requirements at Sec.  246.7(f)(2)(iv), without 
jeopardizing the integrity of program services or program 
accountability.
    Section (f)(6)(B) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(f)(6)(B)) states that a State agency may provide for delivery of 
vouchers to participants not scheduled for nutrition education and 
breastfeeding counseling or recertification. Since this legislation 
requires WIC participants to pick up paper food instruments when 
scheduled for an in-person nutrition education or subsequent 
certification appointment, that requirement would remain in 
regulations, as revised, at Sec.  246.12(r)(4).
    This proposed revision to Sec.  246.12(r)(4) and the proposed 
creation of Sec.  246.12(r)(5) would necessitate revisions to Sec.  
246.7(f)(2)(iv), to update processing timeframe requirements to support 
remote issuance of electronic benefits, and to Sec. Sec.  246.12(r)(2) 
and 246.4(a)(23) for clarity.
    To ensure clarity related to how these provisions apply to food 
instruments, CVVs, and electronic benefits, the Department proposes to 
create a new definition of ``electronic benefits'' in Sec.  246.2. This 
new definition clarifies that electronic benefits are separate and 
distinct from food instruments. Electronic benefits are the WIC 
benefits for supplemental foods prescribed to a participant and 
contained within the participant's benefit balance. This definition 
complements the electronic benefit requirements established at Sec.  
246.12(x).
    Similarly, the Department proposes to update the definition of 
cash-value voucher to remove the clause, ``Cash-value voucher is also 
known as cash-value benefit, or CVB, in an EBT environment,'' and 
create an independent definition of CVB as a type of electronic benefit 
that is a fixed-dollar amount used to obtain authorized fruits and 
vegetables. Additionally, the Department proposes to remove 
``electronic benefit transfer (EBT) card'' as a type of CVV to ensure 
that the modern definitions of food instrument, electronic benefits, 
and cash-value benefit work together. The proposed modernization of the 
definition of food instrument is described in more detail below.
    Lastly, the Department proposes modifying the State Plan 
requirements described under Sec.  246.4(a)(23) to focus this 
requirement on how the State agency will improve access for all 
participants and prospective applicants (with an additional focus on 
those who are employed and/or reside in rural areas), including 
measures to improve access through the remote issuance of food 
instruments, CVVs, and/or electronic benefits. The Department also 
proposes edits to ensure that this provision remains consistent with 
Sec.  246.12(r)(4) and (5).
    b. Expand the Definition of Food Instrument [Sec.  246.2].
    The Department proposes adding ``other electronic benefit access 
device or technology'' to the definition of ``food instrument'' to 
allow WIC State agencies to explore and adopt new technologies beyond 
the EBT card (e.g., mobile payment) while ensuring that key program 
integrity requirements apply to these new technologies. In addition, 
the proposed revision would better match the proposed definition of 
``EBT'' which includes ``other electronic benefit access device or 
technology.''
    c. Update the Uniform Food Delivery Systems Provision to Support 
State Agency Innovation [Sec. Sec.  246.2 and 246.12(b)].
    Current WIC regulations require each food delivery system to be 
procedurally uniform throughout the State agency's jurisdiction, and 
that when used, food instruments must be uniform within each type of 
system.
    The Department proposes the following changes to:
    (i) Allow State agencies to develop and test new WIC food 
instrument types.
    The Department proposes introducing conditions for when non-uniform 
food instruments may be used within a single food delivery system, such 
as when necessary to meet special needs described in the State agency's 
State Plan per Sec.  246.4(a)(14)(i), or when transitioning from one 
type of food instrument to another. This proposed flexibility would 
provide State agencies the ability to address needs specific to their 
jurisdictions, and to test and

[[Page 11522]]

smoothly transition to new food instrument types, as needed.
    (ii) Clarify uniform food delivery systems and system combinations.
    The Department proposes clarifying in Sec.  246.12(b) that State 
agencies may use a combination of retail, home food delivery, and 
direct distribution systems, and that this combination of systems 
together must ensure adequate participant access to supplemental foods.
    Legislation (42 U.S.C. 1786 (h)(12)(A)(i)) defines EBT as a ``food 
delivery system that provides benefits using a card or other access 
device approved by the Secretary that permits electronic access to 
program benefits,'' although it is more precisely described as a 
benefit delivery method. Therefore, the Department proposes to update 
the definition of ``Electronic Benefit Transfer'' to clarify that it is 
a benefit delivery method, and to introduce ``other electronic benefit 
access device or technology'' to allow WIC State agencies to explore 
and adopt new technologies beyond the EBT card.
    Further, the Department proposes to clarify in Sec.  246.12(b) that 
there are three types of food delivery systems (retail, home food 
delivery, and direct distribution), and that these three must be 
procedurally uniform within a State agency's jurisdiction. When used, 
food instruments must be uniform within each type of system, except 
when the use of non-uniform food instruments (e.g., introducing a 
mobile app for certain participants while others use EBT cards) is 
necessary to meet the special needs described and approved in the State 
agency's State Plan per Sec.  246.4(a)(14)(i), or when transitioning 
from one type of food instrument to another. These changes are intended 
to provide clarity and flexibility to State agencies as they work to 
ensure participant access to supplemental foods.
    d. Streamline Food Delivery Operations by Recognizing that EBT Data 
are a Sufficient Replacement for Routine Shelf Price Collection [Sec.  
246.12(g)(4) introductory text, (g)(4)(ii)(B), and (g)(9)].
    The Department proposes to revise the requirement at Sec.  
246.12(g)(4)(ii)(B) so that State agencies with access to EBT data do 
not have to collect shelf prices from vendors every six months or seek 
an exemption from FNS. With EBT, State agencies receive current data 
about vendors' prices at least daily and no longer need to either 
formally collect these prices through administratively burdensome 
surveys or take the time to request an exemption from FNS. State 
agencies without access to electronic benefit redemption data must 
continue to collect vendor shelf prices at least every six months or 
seek an exemption from FNS. These changes are expected to reduce burden 
on authorized vendors and State agencies without negatively impacting 
program integrity or vendor cost containment practices.
    This proposed change would necessitate similar updates to Sec.  
246.12(g)(4) and (9), to allow State agencies to use other types of 
appropriate price data to meet requirements of vendor authorization and 
cost containment provisions.
    e. Extend Vendor Application and Agreement Periods [Sec.  
246.12(g)(8) and (h)(1)(i)].
    The Department proposes to increase the maximum length of vendor 
agreements (Sec.  246.12(h)(1)(i)) and the minimum frequency that State 
agencies must accept and process applications (Sec.  246.12(g)(8)) from 
three to five years. The proposed change would reduce the 
administrative burden on vendors and State agencies without sacrificing 
program integrity, as time periods for vendor monitoring, training, and 
investigations would be unchanged.
    f. Allow State Agencies Using a Non-Retail, Home Food Delivery 
System to Ship Supplemental Foods to a Location Designated by 
Participants [Sec. Sec.  246.2 and 246.12(m)].
    The Department proposes revising the definition of ``home food 
delivery contractor'' at Sec.  246.2 to allow supplemental foods to be 
delivered to ``a location designated by the participant or State 
agency'' instead of limiting the delivery to the participant's home. 
This revision would increase flexibility for both WIC State agencies 
and participants to determine the most appropriate delivery location 
and would provide more equitable access to participants in remote areas 
without mail service at all homes. The revision to this provision would 
necessitate a similar change to Sec.  246.12(m). The State agency must 
continue to ensure the accountable delivery of authorized supplemental 
foods to participants per Sec.  246.12(m)(2).
    Additionally, to be consistent with revisions to the definition of 
``vendor,'' the Department proposes replacing the specific examples of 
business entities from the definition of ``home food delivery 
contractor'' with ``business entity.''

3. Meet the Needs of a Modern, Data-Driven Program

    The Department proposes updating reporting requirements to align 
with data reporting via the Food Delivery Portal (FDP), which replaced 
The Integrity Profile (TIP) in FY 2022, and expanding State agency 
staffing requirements to support modernizing and streamlining WIC food 
delivery and customer service to participants.
    The Department has heard from State agencies that identifying and 
recruiting top talent are key to the success of the WIC Program. This 
is especially important as WIC continues to evolve to better serve 
participants through the use of current and future technologies, 
including by providing electronic benefits and implementing online 
ordering. The ability to hire staff who can focus on food delivery and 
customer service would help WIC State agencies to ensure that program 
modernization efforts support meaningful access to program information 
for all participants.
    The following is a discussion of each proposed provision.
    a. Update Reporting Requirements for Federal Oversight [Sec.  
246.12(j)(5)].
    The Department proposes to revise Sec.  246.12(j)(5) to reflect the 
types of data that have been collected for Federal oversight of State 
agency food delivery management since 2005, and to align with the 
transition in reporting systems from TIP to FDP. The TIP system, which 
WIC State agencies have used since 2005, was upgraded to use current 
technology and renamed the Food Delivery Portal in FY 2022. Since 2005, 
there have been changes to requirements, policies, technology, and 
guidance that the TIP system could not support. FDP uses a more robust 
data collection system to align with current security protocols and 
compliance guidance, support data storage and web components, ensure 
cost effectiveness, allow for more data-driven decision making through 
increased data analytic functionality, enhance FNS reporting 
capabilities, reduce grantee burden through automated calculations and 
consolidated reporting, and add data validation features to reduce 
reporting errors.
    Additionally, current WIC regulations require the State agency to 
send ``a summary of the results of its vendor monitoring containing 
information stipulated by FNS'' to FNS once a year. The Department 
proposes updating this reporting requirement to ensure that WIC State 
agencies report to FDP on all the entities that provide supplemental 
foods to WIC participants: vendors, home food delivery and direct 
distribution contractors, farmers, and farmers' markets. The 
modifications would also remove language that requires a report to be 
sent on each fiscal year by February 1 of the following fiscal year to 
FNS. This would allow the Department to set data

[[Page 11523]]

submission timelines as appropriate for the modern system and reporting 
needs, which may be as frequent as quarterly but not less than 
annually. The reporting requirements, including data fields and 
submission timelines, will be provided to WIC State agencies with 
advance notification via policy guidance. Reporting timelines for FDP 
have already been set via WIC Policy Memorandum #2021-9: Transition 
from The Integrity Profile to the Food Delivery Portal through 
reporting year FY 2024.
    b. Create Two New WIC State Agency Staff Positions to Reflect the 
Staffing Needs of a Modern, Innovative Program [Sec.  246.3(e)(5) and 
(6)].
    Current WIC regulations at Sec.  246.3(e)(3) outline the 
requirements for State agencies to employ a State WIC Nutrition 
Coordinator with certain qualifications, and to employ a number of 
Program Specialists, based on caseload. The Department proposes 
introducing staffing standards for two new State agency staff 
positions, the WIC Food Delivery and WIC Customer Service coordinators, 
at Sec.  246.3(e)(5) and (6), respectively. The Department proposes 
that these positions be staffed with one full-time or equivalent staff 
when the monthly participation is more than 7,000, or a half-time or 
equivalent staff when the monthly participation exceeds 500 (and, in 
the case of the WIC Food Delivery Coordinator, if the State agency 
manages its own vendor cost containment system). At these thresholds, 
sixteen of the smallest State agencies (i.e., those with under 500 
monthly participants on average) would not be impacted. The proposed 
revisions also include the ability for State agencies to request an 
exception to these qualifications to allow for existing personnel or 
for special circumstances.
    Given the importance of WIC food delivery, the Program's near-
complete transition to EBT, and the special skills necessary to 
effectively operate and monitor a retail food delivery system in 
accordance with Federal vendor cost containment requirements, the 
Department proposes to develop stronger standards for the position of 
the WIC Food Delivery Coordinator.
    The Department expects that adding this position would ensure that 
WIC State agencies have the staff in place to make the data-driven 
decisions necessary for a modern, efficient WIC Program that uses 
current technologies for food delivery.
    Additionally, the Department proposes adding standards to create a 
WIC Customer Service Coordinator to support WIC State agencies as they 
work to hire staff who are well-equipped to support program 
improvements related to participant-facing activities, particularly 
those that involve emergent technologies and future innovations, 
potentially including those related to modernized WIC food delivery. 
WIC State agencies currently use participant-facing technologies to 
provide WIC services in a customer-centered manner. State agencies have 
indicated, though, that they do not always have the ability to hire 
staff with the necessary technical and procurement-related skills to 
procure, operate, and update these technologies. The Department expects 
that establishing a WIC Customer Service Coordinator position will help 
WIC State agencies as they work to recruit and retain staff that can 
manage current technology projects and continue WIC modernization work 
through the assessment and implementation of future technologies. These 
proposed provisions would formalize both the staffing requirement and 
the expected education and experience levels required for the two 
positions. To ensure that equity is considered in the development of 
these standards, the standards allow certain work experience to be 
treated the same as certain higher educational requirements. The 
Department expects that these provisions will help WIC State agencies 
to recruit and retain staff with the skills necessary to manage and 
modernize their food delivery systems, and to adopt new technologies to 
improve the participant experience. The WIC Food Delivery and WIC 
Customer Service coordinators would also play an important role in 
ensuring that program modernization efforts and improvements to 
participant-facing technologies are completed in a manner that ensures 
accessible and meaningful access to program information for all 
participants.
    The Department is specifically requesting comments on whether the 
staffing standards proposed at Sec.  246.3(e)(5) and (6) would support 
State agencies' search for qualified personnel. The Department asks 
stakeholders to include a discussion of the State agency's ability to 
recruit and fill these positions as described (considering both the 
recruitment and hiring of staff with the proposed credentials), an 
assessment of any challenges and costs associated with the adoption of 
these provisions, necessary timeline to operationalize such 
requirements, and any recommendations for changes to the standards 
along with related rationale.

4. Request for Public Comment on Key Topic Areas

    The Department encourages stakeholders to provide comment on 
potential civil rights impacts of the proposed rule. Further, in 
addition to proposed regulatory changes described previously, the 
Department seeks comment on the below topic for consideration in this 
or a future rule. The Department will review and revise all proposed 
provisions, as needed, prior to submission of a final rule, considering 
both public comments and relevant publications by regulatory agencies.
    a. Exceptions to Minimum Stocking Requirements.
    The Department seeks comment on whether there is a need to 
authorize vendors that sell a specific subset of supplemental foods 
(e.g., dairies, bakeries, produce sellers) but would not meet the 
minimum variety and quantity of supplemental foods, as required by WIC 
regulations (i.e., two different fruits, two different vegetables, and 
at least one whole grain cereal per Sec.  246.12(g)(3)(i)). The 
Department requests input from stakeholders that includes a discussion 
of:
     Whether the authorization of these specialty store types 
would improve WIC participant access to supplemental foods, with EBT 
shopping patterns and habits in mind. If so, please describe how this 
would improve access, equity, and/or nutrition security for 
participants.
     If there are any special needs or access issues that would 
necessitate the authorization of these store types. If so, please 
describe the need and how this would improve access, equity, and/or 
nutrition security for participants.
     An assessment of the impact on vendor oversight and 
monitoring, including any changes that would be needed to ensure 
effective oversight and program integrity.
     Any concerns around including stores that only provide 
certain types of foods including those relating to State agency 
capacity to oversee the stores.

IV. Implementation

    Because the majority of the revisions proposed are introducing 
opportunities for increased flexibility for WIC State agencies, the 
Department proposes that the proposed rule would take effect 30 days 
after publication of the final rule, except for the following listed 
provisions where State agencies would have 18 months from publication 
of the final rule to implement: Sec.  246.12(x)(4) introductory text 
and (x)(4)(i), the provisions that propose to allow for the

[[Page 11524]]

return and use of benefits when an online order could not be fulfilled, 
and Sec.  246.3(e)(5) and (6), which would create two new WIC State 
agency staff positions. For Sec.  246.12(x)(4) introductory text and 
(x)(4)(i), the 18 months would provide WIC State agencies the time to 
develop and refine the technological solutions needed to meet these 
provisions. For Sec.  246.3(e)(5) and (6), the 18 months would provide 
WIC State agencies the necessary time to prepare for any significant 
changes in State agency-level hiring structures and the State agency's 
specific staffing requirements. The Department seeks comments from 
State agencies on the type and scope of the administrative burden that 
may be associated with implementing the provisions in this proposed 
rule in this manner.

Procedural Matters

Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    This proposed rule has been determined to be significant and was 
reviewed by the Office of Management and Budget (OMB) in conformance 
with Executive Order 12866.

Regulatory Impact Analysis Summary

    As required for all rules that have been designated as Significant 
by the Office of Management and Budget, a Regulatory Impact Analysis 
(RIA) was developed for this proposed rule. The complete RIA follows 
this proposed rule as an Appendix. The following summarizes the 
conclusions of the regulatory impact analysis:

Need for Action

    To ensure that WIC participants have equal access to available 
shopping options, with the expansion of online shopping in the retail 
grocery industry and the development of new payment types, the 
Department proposes to remove barriers to online shopping and to 
modernize certain food delivery regulations in the WIC Program through 
this rulemaking. The proposed measures would complement the Program's 
near-complete transition to EBT and aim to meet the needs of a modern, 
data-driven program that uses current technologies for food delivery. 
These changes are expected to improve nutrition security among WIC 
participants by increasing equity and access to available shopping 
options.

Costs

    The Department estimates that the provisions under this proposed 
rule would collectively result in $404 million in costs and Federal 
transfers over 5 years from FY 2024 through FY 2028 (Table 1). This 
estimate includes increases in Federal Government WIC spending, 
increased net costs to WIC State agencies, and a savings for WIC retail 
vendors.
    The Department estimates that allowing WIC online shopping will 
increase Federal WIC food spending, in the form of transfers, by a 
total of $392 million over 5 years. This is driven by an understanding 
that shoppers typically pay higher prices for online groceries and an 
expectation that online shopping would moderately increase WIC benefit 
redemption by making the WIC shopping experience more convenient for 
some participants.
    The Department estimates that the proposed rule would also result 
in around $30 million in net WIC State agency costs from FY 2024 to FY 
2028. State agency costs include nearly $27 million in total 5-year 
expenses required to update State agency systems to enable online 
transaction of WIC electronic benefits and $55 million in total 5-year 
costs for increased staffing expenses due to the proposed changes to 
State agency staffing requirements. State agency costs would be 
partially offset by a large reduction in State agency reporting burden 
and recordkeeping burden, which is estimated to result in a savings of 
$52 million over 5 years and is largely attributable to the removal of 
shelf price collection requirements for EBT State agencies and the 
extension of vendor agreement and application periods. These State 
agency costs are considered allowable expenses for State agencies under 
their annually awarded Nutrition Services and Administration (NSA) 
grants. In general, the Department believes that State agencies would 
be able to absorb the costs associated with implementing the provisions 
under this proposed rule with current NSA funds.

                          Table 1--Summary of Estimable Impacts on Transfers and Costs
                                                 [FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
                                                               Fiscal year (millions)
                                   -----------------------------------------------------------------------------
                                        2024         2025         2026         2027         2028        Total
----------------------------------------------------------------------------------------------------------------
                                                Federal Transfers
----------------------------------------------------------------------------------------------------------------
Impact of online shopping on               $5.6        $43.7        $79.0       $121.9       $142.0       $392.1
 Federal WIC food spending........
----------------------------------------------------------------------------------------------------------------
                                               State Agency Costs
----------------------------------------------------------------------------------------------------------------
Systems development and                     1.1          7.5          6.0          7.1          5.1         26.9
 maintenance for online shopping..
Changes to reporting and                   -9.7        -10.0        -10.3        -10.6        -10.9        -51.5
 recordkeeping burden.............
New State agency staff positions..          5.9         11.9         11.9         12.3         12.7         54.7
----------------------------------------------------------------------------------------------------------------
                                                WIC Vendor Costs
----------------------------------------------------------------------------------------------------------------
Changes to reporting burden.......         -3.6         -3.6         -3.7         -3.8         -3.9        -18.4
                                   -----------------------------------------------------------------------------
    Total Estimated Impact........         -0.6         49.5         83.0        127.0        145.0        403.8
----------------------------------------------------------------------------------------------------------------


[[Page 11525]]

    Finally, the removal of shelf price collection requirements and the 
extension of vendor application and agreement periods are also expected 
to significantly reduce burden on WIC vendors. The Department estimates 
that the reductions in vendor reporting burden under the proposed rule 
would save WIC vendors $18 million over 5 years.

Benefits

    The provisions under this proposed rule aim to modernize the ways 
that WIC participants can receive and transact their electronic 
benefits, creating opportunities to improve equity and accessibility in 
the Program as a result. An estimated 14 percent of the U.S. population 
lives in low-income census tracts with limited access to food stores 
\8\ and 21 percent of WIC participants report using a means of 
transportation other than a personal car to travel to a vendor to use 
their WIC benefits.\9\ Once at the vendor, participants also report 
challenges shopping for WIC foods. Recent USDA survey data indicate 
that finding the right WIC-approved products in stores, WIC-approved 
products being out of stock, and feeling embarrassed shopping for WIC 
foods are some of the most cited challenges among WIC participants who 
report difficulties shopping for WIC supplemental foods.\10\ Online 
shopping may alleviate some of these issues for WIC participants and 
has the potential to provide benefits during supply chain disruptions. 
Enabling online shopping in WIC under this proposed rule is expected to 
reduce barriers to WIC Program services, ensure that WIC participants 
have an equitable shopping experience as the retail marketplace 
innovates, and increase participant purchases of supplemental foods. 
These regulatory changes would ensure that WIC participants have the 
ability to transact benefits online as an increasing share of U.S. 
consumers prefer to shop for groceries online. The proposed rule would 
further make WIC more convenient and accessible by encouraging State 
agencies to remotely issue electronic benefits and mail EBT cards 
whenever possible, potentially reducing the number of clinic visits 
that WIC participants are required to make. The proposed rule also 
includes provisions that would streamline and modernize WIC food 
delivery by promoting innovation and ensuring that State agencies have 
enough qualified staff meet the needs of a modern, data-driven program. 
These provisions provide necessary measures to ensure that State 
agencies can deliver a more efficient and effective program for WIC 
participants.
---------------------------------------------------------------------------

    \8\ U.S. Department of Agriculture, Economic Research Service, 
``State-Level Estimates of Low Income and Low Access Populations,'' 
last updated September 30, 2019. Available online at: https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/.
    \9\ U.S. Department of Agriculture, Food and Nutrition Service, 
``Brief Report #6: WIC Participant Satisfaction and Shopping 
Experience,'' Third National Survey of WIC Participants, by Magness, 
A., et al., prepared by Capital Consulting Corporation and 2M 
Research Services, contract No. AG-3198-K-15-0077, Project Officer 
Karen Castellanos-Brown, Alexandria, VA: December 2021. Available 
online at: https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
    \10\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers 
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research, 
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
---------------------------------------------------------------------------

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies 
to analyze the impact of rulemaking on small entities and consider 
alternatives that would minimize any significant impacts on a 
substantial number of small entities. Pursuant to that review, it has 
been certified that this proposed rule would not have a significant 
impact on a substantial number of small entities.
    The provisions of this proposed rule would primarily affect WIC 
State agencies and WIC-authorized vendors. The staffing standards 
proposed at Sec.  246.3(e)(5) and (6) would not apply to smaller State 
agencies, which have fewer resources. Otherwise, the proposed 
provisions would apply to all State agencies administering the WIC 
Program, regardless of size, and would largely be implemented at State 
agency option. The Department does not expect the proposed rule to have 
a significant impact on small State agencies. Large retailers may be 
able to implement WIC online shopping more readily than other store 
types. However, the Department does not expect the proposed rule to 
have a lasting or significant negative impact on smaller WIC vendors as 
WIC sales represent a relatively small share of these stores' revenue. 
The Department's most recent available estimates of WIC redemptions by 
vendor size found that in fiscal year 2012, 76 percent of WIC retail 
redemptions occurred at larger stores (super stores, supermarkets, or 
large grocery stores), 10 percent occurred at smaller stores (small 
grocery stores, medium grocery stores, or convenience stores), 9 
percent occurred at WIC-only and above-50-percent stores, and 5 percent 
occurred at other stores (other retail stores, combination grocery/
other stores, commissaries, or unknown store types).\11\
---------------------------------------------------------------------------

    \11\ U.S. Department of Agriculture, Economic Research Service, 
``Where Do WIC Participants Redeem Their Food Benefits? An Analysis 
of WIC Food Dollar Redemption Patterns by Store Type,'' EIB-152, by 
L. Tiehen, and E. Fraz[atilde]o: April 2016. Available online at: 
https://www.ers.usda.gov/publications/pub-details/?pubid=44076.
---------------------------------------------------------------------------

    WIC sales make up a relatively small fraction of the revenue for 
smaller stores. Among convenience stores, for example, WIC sales only 
made up about 0.12 percent of non-fuel sales in 2012.\12\ Therefore, 
the Department expects any revenue that convenience stores and other 
small vendors (such as small and medium grocery stores) may lose to 
online shopping at large WIC vendors to be relatively minor. The 
Department will provide technical assistance to State agencies when 
necessary to help small vendors engage with online shopping in the WIC 
Program.
---------------------------------------------------------------------------

    \12\ Statista, ``Sales of the convenience store industry in the 
United States from 2011 to 2020, by format,'' January 2022. 
Available online at: https://www.statista.com/statistics/308767/sales-of-the-us-convenience-store-industry-by-format/.
---------------------------------------------------------------------------

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under section 202 of the UMRA, the 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local, or Tribal 
governments, in the aggregate, or the private sector, of $146 million 
or more (when adjusted for inflation; GDP deflator source: Table 1.1.9 
at https://www.bea.gov/iTable) in any one year. When such a statement 
is needed for a rule, section 205 of the UMRA generally requires the 
Department to identify and consider a reasonable number of regulatory 
alternatives and adopt the most cost effective or least burdensome 
alternative that achieves the objectives of the rule.
    This proposed rule does not contain Federal mandates (under the 
regulatory provisions of Title II of the UMRA) for State, local, and 
Tribal governments or the private sector of $146 million or more in any 
one year. Thus, the proposed rule is not subject to the requirements of 
sections 202 and 205 of the UMRA.

[[Page 11526]]

Executive Order 12372

    This Special Supplemental Nutrition Program for Women, Infants, and 
Children is listed in the Catalog of Federal Domestic Assistance under 
Number 10.557 and is subject to Executive Order 12372, which requires 
intergovernmental consultation with State and local officials. (See 2 
CFR chapter IV.)

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132.
    The Department has considered the impact of this proposed rule on 
State and local governments and has determined that this proposed rule 
does not have federalism implications. Therefore, under section 6(b) of 
the Executive order, a federalism summary is not required.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is intended to have preemptive effect 
with respect to any State or local laws, regulations or policies which 
conflict with its provisions or which would otherwise impede its full 
and timely implementation. This proposed rule is not intended to have 
retroactive effect unless so specified in the DATES section of the 
final rule. Prior to any judicial challenge to the provisions of the 
final rule, all applicable administrative procedures must be exhausted.

Civil Rights Impact Analysis (CRIA)

    FNS has reviewed the proposed rule, in accordance with the 
Department Regulation 4300-004 ``Civil Rights Impact Analysis,'' to 
identify and address any major civil rights impacts the proposed rule 
might have on participants on the basis of race, sex, national origin, 
disability, or age. The requirements outlined in the proposed rule aim 
to remove barriers to online ordering and internet-based transactions, 
streamline and modernize WIC food delivery, and meet the needs of a 
modern, data-driven program that uses current technologies for food 
delivery. The proposed changes would impact WIC State agencies, 
including ITOs, WIC local agencies and clinics, and WIC vendors in ways 
that are expected to increase equity and access for WIC participants 
while enhancing the overall shopping experience.
    In particular, the proposed rule would allow State agencies, 
including ITOs, to authorize new types of vendors and explore modern 
payment technologies and authentication methods. To comply with revised 
regulations and implement the proposed changes, staff at State 
agencies, local agencies, and WIC clinics would need to update 
operations and communicate these changes to participants. The rule 
would increase the number of WIC-authorized vendors by allowing 
different types of vendors (e.g., internet and mobile vendors) to 
participate in WIC, and eliminate the requirement for vendors to 
collect shelf-price data, thereby expanding participant shopping 
options. WIC participants would further benefit from fewer in-person 
requirements.
    To mitigate potential impacts on program access for Limited English 
Proficiency populations and persons with disabilities, FNS will provide 
State agencies with technical assistance aimed at ensuring that online 
shopping platforms and communications about program changes are 
available in appropriate languages and in alternative formats for 
persons with disabilities. FNS will also support State agencies as they 
work to engage small vendors in online shopping in the WIC Program. 
After reviewing the potential impacts, FNS does not believe the 
proposed rule would result in civil rights impacts on protected groups 
of WIC participants and applicants. However, the FNS Civil Rights 
Division will propose further outreach and mitigation strategies to 
alleviate any unforeseen impacts, if deemed necessary.

Executive Order 13175

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes. On November 30, 2021, FNS 
held a consultation with Tribal leaders and representatives on key 
issues related to the proposed rule. Tribal leaders were generally 
supportive of online ordering for WIC, which may increase access to 
food benefits for those with limited access to a physical store. Tribal 
leaders provided substantive feedback that was taken into consideration 
during the development of this proposed rule, including the importance 
of continuing to support brick-and-mortar vendors and small, Tribal-
owned stores, and concern for the barriers that fees related to online 
ordering could pose to participants who want to use WIC online shopping 
options. FNS will explore additional opportunities for engagement as 
needed.
    Once the proposed rule is published in the Federal Register, FNS 
will encourage stakeholders representing Indian Tribal Organizations to 
provide input on whether the proposed rule poses any adverse Tribal 
implications. If a Tribe requests additional consultation in the 
future, FNS will work with the Office of Tribal Relations to ensure 
meaningful consultation is provided. FNS is unaware of any current 
Tribal laws that could be in conflict with this proposed rule.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR part 
1320) requires the Office of Management and Budget (OMB) to approve all 
collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number.
    This proposed rule impacts existing information collection 
requirements that are contained in OMB Control Number 0584-0043 Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC) 
Program Regulations--Reporting and Recordkeeping (expiration date 
December 31, 2023) which are subject to review and approval by OMB in 
accordance with the Paperwork Reduction Act of 1995. Additionally, this 
proposed rule impacts existing reporting requirements that are approved 
under OMB Control Number 0584-0401 Food Delivery Portal (FDP) Data 
Collection (expiration date December 31, 2024), which are subject to 
review and approval by OMB in accordance with the Paperwork Reduction 
Act of 1995. Therefore, FNS is submitting for public comment the 
changes in the information collection burdens in OMB Control Numbers 
0584-0043 and 0584-0401 that would result from adoption of the 
proposals in the rule.
    Comments on the information collection for this proposed rule must 
be received by April 24, 2023.

[[Page 11527]]

    Comments may be sent to: Patricia Bailey, Food and Nutrition 
Service, U.S. Department of Agriculture, 1320 Braddock Place, 3rd 
Floor, Alexandria, VA 22314. Comments will also be accepted through the 
Federal eRulemaking Portal. Go to https://www.regulations.gov, and 
follow the online instructions for submitting comments electronically.
    Comments are invited on: (a) whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Department, including whether the information shall have practical 
utility; (b) the accuracy of the Department's estimate of the burden of 
the proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    All responses to this notification will be summarized and included 
in the request for OMB approval. All comments will also become a matter 
of public record.
a. Revisions to OMB Control Number 0584-0043
    Title: Special Supplemental Nutrition Program for Women, Infants, 
and Children (WIC) Program Regulations--Reporting and Recordkeeping 
Burden.
    OMB Number: 0584-0043.
    Expiration Date: 12/31/2023.
    Type of Request: Revision of a currently approved collection.
    Abstract: This is a revision of existing information collection 
requirements in the information collection under OMB Control Number 
0584-0043 that are affected by this proposed rulemaking. Under this 
proposed rule, the Department proposes to remove regulatory barriers to 
online ordering and internet-based transactions in the WIC Program, 
streamline and modernize WIC food delivery, and meet the needs of a 
modern, data-driven program that uses current technologies for food 
delivery. This proposed rule impacts the burden associated with 
reporting requirements for State agencies, individuals and households, 
and vendors, as well as the burden associated with recordkeeping 
requirements for State agencies. This proposed rule may also result in 
additional financial costs to WIC participants and State agencies.
(i) Burden Revisions Related to Internet Vendor Authorization, 
Monitoring and Oversight, and Training
    The proposed rule would allow State agencies to authorize internet 
vendors, in addition to brick-and-mortar vendors and mobile vendors. 
Using the new definitions proposed, all vendors authorized under 
current WIC regulations would be classified as brick-and-mortar vendors 
with the exception of one mobile vendor. FNS estimates that 800 
internet vendors in 80 State agencies with online EBT systems will be 
authorized initially following the rulemaking (due to technological 
constraints, offline EBT systems would not be able to support online 
transactions), increasing the total number of WIC-authorized vendors 
from 41,164 in the previous information collection submission to 41,964 
vendors.
    WIC regulations at Sec.  246.12(g)(5) require that State agencies 
visit a vendor prior to their initial authorization in the Program. 
During an on-site preauthorization visit, State agency staff spend 
approximately 40 minutes verifying information provided by the vendor 
applicant and 20 minutes traveling to and from the vendor.\13\ FNS is 
seeking approval for the requirement for on-site initial 
preauthorization visits and its associated burden through a separate 
revision to OMB Control Number 0584-0043. While the proposed rule would 
allow initial preauthorization visits of internet vendors to take place 
virtually, therefore not requiring travel time for State agency staff, 
the initial authorization of 800 internet vendors would add 536.00 
reporting burden hours for both State agencies and vendors.
---------------------------------------------------------------------------

    \13\ The estimate of State agency travel time to visit a vendor 
is based on the amount of time WIC participants reported traveling 
to the store where WIC foods are purchased. U.S. Department of 
Agriculture, Food and Nutrition Service, ``Appendix G. Program 
Experiences Survey Tables.'' Third National Survey of WIC 
Participants, Alexandria, VA: 2021, Table 4h. Available online at: 
https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
---------------------------------------------------------------------------

    The Department is proposing to increase the maximum length of 
vendor agreements and the minimum frequency that State agencies must 
accept and process applications from three to five years. FNS estimates 
that currently, State agencies spend approximately 45 minutes 
reviewing, processing, and approving vendor applications and agreements 
from one-third of the WIC-authorized vendors per year, for a total of 
10,188.09 hours.\14\ Proposed changes to the definition of ``vendor'' 
would remove the requirement that State agencies determine a vendor 
applicant's business structure, decreasing the amount of time it takes 
a State agency to review a vendor application by 5 minutes, from 45 to 
40 minutes. This change, along with extending vendor agreement periods 
from three to five years and adding internet vendors, would result in a 
net decrease of State agencies' reporting burden of 4,592.89 hours due 
to the proposed rule, resulting in a total 5,595.20 hours.
---------------------------------------------------------------------------

    \14\ FNS is seeking approval for the State agency requirement to 
review and process vendor agreements and its associated burden 
through a separate revision to OMB Control Number 0584-0043.
---------------------------------------------------------------------------

    Additionally, the proposed increase to the length of vendor 
agreement periods and the addition of internet vendors would overall 
result in fewer vendors submitting vendor agreements and applications 
for review each year (one-fifth of vendors rather than one-third), 
decreasing vendors' associated reporting burden by 5,191.32 hours, from 
13,584.12 to 8,392.80 hours. These changes would also affect the 
existing State agency burden for maintaining records of vendor 
applications and agreements, decreasing this burden on net by 5,191.32 
hours, from 13,584.12 to 8,392.80 hours. The number of respondents and 
frequency of responses for the State agency recordkeeping burden 
associated with vendor applications and agreements have also been 
adjusted to correct for clerical errors in this information collection. 
Under current regulations, the number of respondents is 89.00, rather 
than 13,584.12 State agencies, and the frequency of responses is 152.63 
rather than 1 response per year. These clerical corrections do not 
affect the existing State agency recordkeeping burden as the underlying 
math is unchanged. As noted, the longer vendor agreement periods 
proposed in this rule would decrease the number of vendor agreements 
that each State agency collects and records each year from 152.63 to 
94.30, resulting in the 5,191.32 hour decrease in the associated State 
agency recordkeeping burden.
    Although the proposed rule would not change procedures for vendor 
oversight, the rulemaking would allow routine vendor monitoring and 
compliance investigations to be conducted virtually so that State 
agencies may use oversight methods appropriate for vendors. As with 
initial vendor preauthorization visits, FNS estimates that it takes 
State agency staff an average of 20 minutes round trip to travel to a 
brick-and-mortar or mobile vendor.

[[Page 11528]]

    Considering the additional virtual routine monitoring visits on 
internet vendors authorized under the proposed rule would add 40.00 
more hours to State agencies' reporting burden. FNS is seeking approval 
for the requirement for on-site routine vendor monitoring and its 
associated burden through a separate revision to OMB Control Number 
0584-0043. The overall increase in the number of WIC-authorized vendors 
would increase the State agency recordkeeping burden for routine vendor 
monitoring by 20.00 hours, from 1,029.10 to 1,049.10 hours.
    State agency staff conduct on-site compliance investigations of 
five percent of vendors each year, which requires 20 minutes of travel 
time and two hours to complete an investigation of a brick-and-mortar 
or mobile vendor. FNS is seeking approval for the State agency 
requirement to conduct on site compliance investigations and its 
associated burden through a separate revision to OMB Control Number 
0584-00343. State agencies would also be required to conduct virtual 
compliance investigations of internet vendors each year, resulting in 
80.00 additional burden hours. The overall increase in the number of 
WIC-authorized vendors would increase the State agency recordkeeping 
burden for compliance investigations by 80.00 hours.
    The addition of 800 internet vendors under the proposed rule would 
also increase State agencies' reporting burden for vendor training, 
increasing associated burden hours by 1,600.00 hours per year. It takes 
two hours for vendors to attend the annual training provided by State 
agencies. FNS is seeking approval for the requirement for annual vendor 
training and its associated burden through a separate revision to OMB 
Control Number 0584-0043. Authorizing 800 internet vendors under the 
proposed rule would result in an additional 1,600.00 hours of reporting 
burden for those new vendors to receive training.
    Further, FNS estimates that the increase in the overall number of 
WIC-authorized vendors will result in proportionate increases in both 
the number of vendors classified as ``above-50-percent'' vendors and 
the number of vendors that demonstrate a pattern of violations during 
investigations. These changes would result in associated increases in: 
the State agency reporting burden related to assessing a vendor's food 
sales data to determine if they are an ``above-50-percent'' vendor 
(288.00 additional hours); the vendor reporting burden required to 
provide such sales data (144.00 additional hours); the reporting burden 
for above-50-percent vendors who request approval from their State 
agency to provide incentive items to WIC shoppers (7.60 additional 
hours); the State agency recordkeeping burden to collect information on 
above-50-percent vendors' incentive items (7.60 additional hours); and 
the State agency recordkeeping burden to notify vendors in writing of 
violations revealed during an investigation (10.00 additional hours).
    The number of respondents and frequency of responses for the State 
agency recordkeeping burden associated with collecting information on 
above-50-percent vendors' incentive items have also been adjusted to 
correct for clerical errors in this information collection. Under 
current regulations, the number of respondents is 4, rather than 389.20 
State agencies, and the frequency of responses is 97.30, rather than 1 
response per year. These clerical corrections do not affect the 
existing State agency recordkeeping burden as the underlying math is 
unchanged. As noted, the expected increase in the number of above-50-
vendors with the addition of internet vendors in this proposed rule 
would increase the number of above-50-vendors that each State agency 
collects information from each year from 97.30 to 99.20, resulting in 
the 7.60 hour increase in the associated State agency recordkeeping 
burden stated in the previous paragraph.
(ii) Burden Revisions Related to Program Modernization
    In recognition of the efficiency of using electronic benefit 
redemption data to analyze the prices vendors charge for supplemental 
foods, the proposed rule would remove the requirement that State 
agencies with access to EBT data collect shelf prices from vendors on a 
biannual basis or seek an exemption from FNS. Until all State agencies 
have fully implemented EBT systems, FNS estimates that four State 
agencies will continue to be required to collect shelf prices from WIC-
authorized vendors each year, and that one of these State agencies will 
request an exemption to this collection requirement from FNS. Removing 
the shelf price collection requirement for State agencies with access 
to EBT data would significantly decrease the reporting burden for WIC 
State agencies (-158,997.93 hours for collecting shelf prices and -
37.33 hours for preparing exemption requests) and WIC-authorized 
vendors (-140,497.26 hours).
    State agencies are required to submit requests for approval for 
costs of capital expenditures per Sec.  246.14(d). FNS estimates that 
implementing updates to State agency systems to allow for online 
ordering and transactions will cost approximately $90,000 per State 
agency. Therefore, the proposed rule is expected to increase the number 
of State agencies submitting such requests during online shopping 
implementation from 20 to 30 per year, which would increase the 
associated reporting burden by 1,600.00 hours.
    The proposed rule would allow State agencies to adopt EBT 
transaction authentication technologies other than PIN authentication. 
State agencies would be required to develop transaction authentication 
policies that are appropriate for the authentication technology they 
choose to adopt and in accordance with standards established by the 
Department. FNS estimates that five State agencies will adopt a new 
transaction authentication method each year, requiring them to spend an 
estimated 25 hours developing a new transaction authentication policy. 
This would add 125.00 hours to State agencies' reporting burden.
    The proposed rule would encourage State agencies to issue 
electronic benefits remotely and mail EBT cards to participants to 
reduce the number of clinic visits households make to receive benefits. 
FNS expects that this proposal will decrease the burden associated with 
picking up food instruments and cash-value vouchers outside of a 
certification clinic visit by 1,049,334.86 hours. These estimates 
assume that: on average, WIC households consist of two WIC 
participants,\15\ requiring only one trip to the clinic to pick up both 
participants' benefits; currently, households in State agencies without 
an online EBT system are required to travel to a clinic to pick up 
paper food instruments and CVVs or reload offline EBT cards three times 
a year outside of another scheduled appointment; and currently, new 
participants in State agencies with online EBT systems are required to 
pick up their EBT card in person. With the proposed rule, only 
participants who need to reload an offline EBT card would be required 
to travel to a clinic to pick up benefits in person. FNS estimates that 
on average, picking up benefits in person takes a household 30 minutes, 
including 26 minutes of round-trip travel time and 4 minutes to obtain 
the benefits.\16\ FNS is

[[Page 11529]]

seeking approval for the burden for participants to visit a clinic to 
pick up food instruments and CVVs outside of a scheduled appointment 
and its associated burden through a separate revision to OMB Control 
Number 0584-0043.
---------------------------------------------------------------------------

    \15\ U.S. Department of Agriculture, ``WIC Participant and 
Program Characteristics 2020 Appendices.'' WIC Participant and 
Program Characteristics 2020, Alexandria, VA: February 2022, Table 
C.14. Available online at: https://www.fns.usda.gov/wic/participant-program-characteristics-2020.
    \16\ This estimate is based on the amount of time WIC 
participants reported traveling to the WIC clinic. U.S. Department 
of Agriculture, Food and Nutrition Service, ``Appendix G. Program 
Experiences Survey Tables.'' Third National Survey of WIC 
Participants, Alexandria, VA: 2021, Table 5c.2. Available online at: 
https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
---------------------------------------------------------------------------

    Finally, the proposed rule would make small adjustments to the 
information that State agencies are required to submit annually to FNS 
in their State Plans. FNS estimates that one State agency currently 
provides justification to authorize a mobile vendor in their State Plan 
which requires approximately one hour to complete. Therefore, across 
all State agencies, the removal of the requirement to justify 
authorization of mobile vendors would result in less than a one-minute 
decrease in the number of hours that an average WIC State agency spends 
preparing their State Plan each year (from 134.62 to 134.61 hours; 1 
hour / 89 State agencies = 0.01 hours). This change to the State Plan 
requirement would result in a small overall decrease in State agencies' 
reporting burden of 0.89 hours.
    Additionally, the proposed rule would allow State agencies to use 
non-uniform food instruments within a food delivery system when 
justified in their State Plan. FNS estimates that five State agencies 
will pursue using non-uniform food instruments through their State Plan 
as they either transition from offline to online EBT systems or test 
alternative payment technologies. These justifications each would 
require an estimated one hour to complete, resulting in an increase to 
State agencies' total reporting burden of 5.00 hours.
(iii) Costs Associated With the Proposed Rule and OMB Control Number 
0584-0043
    In addition to the changes to the information collection burdens 
discussed in this section, implementing the proposed rule is expected 
to create additional costs for State agencies and WIC participants. As 
previously noted, FNS estimates that it will cost each of the 89 WIC 
State agencies approximately $90,000 to update their EBT system to 
implement online shopping. Altogether, these one-time implementation 
costs would total $8.01 million. After implementation, the Department 
anticipates that maintenance of such systems will cost approximately 
$4,000 per month. Therefore, in an average year following 
implementation of online shopping in all State agencies, these ongoing 
maintenance costs would total $4.27 million per year.
    The proposed rule would add staffing standards at Sec.  246.3(e) 
for two new State agency positions: the WIC Food Delivery Coordinator 
and the WIC Customer Service Coordinator. FNS estimates that 51 State 
agencies have over 7,000 monthly participants and would be required to 
employ full-time or equivalent staff persons for both proposed 
positions, and that current staff meet the requirements for the WIC 
Food Delivery Coordinator at 13 State agencies, and for the WIC 
Customer Service Coordinator at 3 State agencies. Additionally, 22 
State agencies with monthly participation above 500 but below 7,000 
would need to employ a half-time or equivalent staff person for these 
two new positions, equivalent to 11 additional full-time WIC Food 
Delivery Coordinators and 11 additional full-time WIC Customer Service 
Coordinators. Therefore, FNS estimates that in response to the proposed 
staffing standards, State agencies would need to fill 108 new full-time 
positions (49 WIC Food Delivery Coordinators and 59 WIC Customer 
Service Coordinators). Altogether, FNS estimates that these new part-
time and full-time staffing standards would cost State agencies 
approximately $117,590 for each full-time position, or $12.7 million 
total, in staffing costs per year.\17\
---------------------------------------------------------------------------

    \17\ Hourly compensation is based on the hourly total 
compensation for all State and local workers from calculated by the 
U.S. Bureau of Labor Statistics for FY 2021 (U.S. Bureau of Labor 
Statistics, ``Total compensation cost per hour worked for state and 
local government workers.'' Available online at: https://data.bls.gov/timeseries/CMU3010000000000D.), adjusted for inflation. 
Total annual compensation for a full-time position is calculated by 
multiplying hourly compensation by 1,767 hours (Organisation for 
Economic Co-operation and Development (OECD) Labour Force 
Statistics, ``2020 Average annual hours actually worked per worker 
in United States.'' Available online at: https://stats.oecd.org/index.aspx?DataSetCode=ANHRS.).
---------------------------------------------------------------------------

    The proposed rule would add a provision at Sec.  
246.12(h)(3)(xxxiii) that would allow WIC participants who choose to 
shop for supplemental foods online to pay for fees associated with such 
services using another tender type, as long as those fees are also 
assessed to non-WIC customers using the same services. FNS estimates 
that an average online grocery order in 2024 will be assessed $9.59 in 
delivery and service fees. Additionally, FNS estimates that once online 
shopping has been implemented across all State agencies, 20 percent of 
WIC households (consisting of two WIC participants, on average) would 
make one online WIC order each month and that 33 percent of WIC online 
shopping orders will be placed for home delivery. Therefore, FNS 
estimates that approximately 229,000 households would place an online 
order for home delivery each month, costing WIC participants a total of 
about $26.4 million per year if all State agencies implemented online 
shopping.
(iv) Summary of Revisions to OMB Control Number 0584-0043
    The current approved burden for OMB Control Number 0584-0043 is 
4,547,099 hours and 48,798,800 total responses. The baseline current 
burden discussed here and in the tables below includes revisions to OMB 
Control Number 0584-0043 that FNS is seeking separately. The updated 
current burden for this information collection is 6,144,866 hours and 
51,864,053 total responses. Changes to the burden due to the rulemaking 
decrease the total burden by 1,357,162 hours, resulting in a revised 
burden of 4,787,704 hours. The proposed rule is estimated to decrease 
the revised total number of responses by 2,260,446 resulting in 
49,603,607 total responses. The estimated addition of 800 internet 
vendors due to the proposed rule is expected to increase the total 
number of respondents for this information collection from 6,913,189 to 
6,913,989. One-time costs associated with the proposed rule are 
expected to total $8.01 million and annual costs and fees following 
implementation of online shopping are estimated to total $47.64 
million. The average burden per response, the annual burden hours, and 
the total fees and costs related to this proposed rule are explained 
below and summarized in the tables which follow.
    The change in burden hours to OMB Control Number 0584-0043 and 
costs associated with the proposed rule are best estimates. The 
Department requests comments on the burden and all proposed changes. 
Comments received in response to the proposed rule and burden estimates 
will inform the final burden estimates.
    Respondents: State agencies, including Indian Tribal Organizations 
and U.S. Territories (note that burden estimates for local agencies are 
not affected by this proposed rule).
    Estimated Number of Respondents: 89.
Reporting
    Estimated Number of Reporting Responses per Respondent: 651.22.
    Estimated Number of Responses: 57,958.17.

[[Page 11530]]

    Estimated Hours per Reporting Response: 2.21.
    Estimated Total Annual Reporting Burden Hours for Respondents: 
127,802.22.
Recordkeeping
    Estimated Number of Recordkeeping Responses per Respondent: 151.80.
    Estimated Number of Responses: 13,510.00.
    Estimated Hours per Recordkeeping Response: 1.08.
    Estimated Total Annual Recordkeeping Burden Hours for Respondents: 
14,559.10.
    Respondents: Individuals and households.
Reporting
    Estimated Number of Respondents: 347,366.
    Estimated Number of Responses per Respondent: 2.63.
    Estimated Number of Responses: 911,835.81.
    Estimated Hours per Response: 0.50.
    Estimated Total Annual Burden on Respondents: 455,917.90.
    Respondents: WIC-authorized vendors.
Reporting
    Estimated Number of Respondents: 41,964 (41,163 brick-and-mortar 
vendors, 800 internet vendors, and 1 mobile vendor).
    Estimated Number of Responses per Respondent: 1.39.
    Estimated Number of Responses: 58,145.63.
    Estimated Hours per Response: 1.83.
    Estimated Total Annual Burden on Respondents: 106,437.67.
    Estimated Capital, Start-up, Operation, Maintenance and 
Implementation Costs and Fees:

                               Summary of Costs Associated With the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                     Number of    One-time costs   Annual costs     Total costs
               Description of cost                  respondents     (millions)      (millions)      (millions)
----------------------------------------------------------------------------------------------------------------
                                                 State Agencies
----------------------------------------------------------------------------------------------------------------
Systems development and maintenance for online                89            8.01            4.27           12.28
 shopping.......................................
New State agency staff positions: WIC Customer               108            0.00           12.70           12.70
 Service and Food Delivery coordinators.........
----------------------------------------------------------------------------------------------------------------
                                           Individuals and Households
----------------------------------------------------------------------------------------------------------------
Fees associated with online shopping............         229,000            0.00           26.40           26.40
                                                 ---------------------------------------------------------------
    Total Costs.................................  ..............            8.01           47.64           55.65
----------------------------------------------------------------------------------------------------------------


                  Table 3--Estimated Annual Reporting and Recordkeeping Burden for OMB #0584-0043 as a Result of Proposed Rule Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Estimated
                                                         Estimated    Frequency                    Average    Estimated  Current burden     change in
       Regulatory citation            Description of     number of       of       Total annual     burden       total     hours in OMB     burden hours
                                        activities      respondents   responses     responses     hours per    burden     #0584-0043 *        due to
                                                                                                  response      hours                       rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               REPORTING BURDEN ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.4............................  State Plan.........        89.00        1.00           89.00      134.61   11,980.29       11,981.18            -0.89
246.4(a)(14)(i)..................  State Plan:                 5.00        1.00            5.00        1.00        5.00            0.00             5.00
                                    Justification for
                                    non-uniform food
                                    instruments.
246.12(g)(4)(i)..................  Vendor food sales          89.00       42.28        3,763.00        4.00   15,052.00       14,764.00           288.00
                                    data.
246.12(g)(4)(ii)(B)..............  Vendor shelf prices         3.00      943.01        2,829.03        2.00    5,658.07      164,656.00      -158,997.93
246.12(g)(4)(ii)(B)..............  Vendor shelf prices         1.00        0.33            0.33        8.00        2.67           40.00           -37.33
                                    exemption.
246.12(g)(5).....................  Vendor initial             80.00       10.00          800.00        0.67      536.00            0.00           536.00
                                    preauthorization
                                    visits (virtual).
246.12(h)(1)(i)..................  Vendor applications        89.00       94.30        8,392.80        0.67    5,595.20     * 10,188.09        -4,592.89
                                    & agreements.
246.12(i)(1).....................  Vendor training....        89.00      471.51       41,964.00        2.00   83,928.00       82,328.00            1,600
246.12(j)(2).....................  Routine vendor             80.00        0.50           40.00        1.00       40.00            0.00            40.00
                                    monitoring
                                    (virtual).
246.12(j)(4).....................  Vendor compliance          80.00        0.50           40.00        2.00       80.00            0.00            80.00
                                    investigations
                                    (virtual).
246.12(bb)(2)....................  Transaction                 5.00        1.00            5.00       25.00      125.00            0.00           125.00
                                    authentication
                                    policy development.
246.14(d)........................  ADP proposals--            30.00        1.00           30.00      160.00    4,800.00        3,200.00         1,600.00
                                    Costs allowable
                                    with approval.
                                                       -------------------------------------------------------------------------------------------------
  Subtotal Reporting: State        ...................        89.00      651.22       57,958.17        2.21  127,802.22    * 287,157.27      -159,355.05
   Agencies.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 11531]]

 
                                      Affected Public: Individuals and Households: Applicants for Program Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(r)(4) & (r)(5)............  Food instrument and   347,366.02        2.63      911,835.81        0.50  455,917.90  * 1,505,252.76    -1,049,334.86
                                    cash-value voucher
                                    pick up (non-
                                    certification
                                    clinic visits).
                                                       -------------------------------------------------------------------------------------------------
  Subtotal Reporting: Individuals/ ...................   347,366.02        2.63      911,835.81        0.50  455,917.90  * 1,505,252.76    -1,049,334.86
   Households.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Affected Public: Business: Retail Vendors (WIC-Authorized Food Stores)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(g)(4)(i)..................  Vendor food sales       3,763.00        1.00        3,763.00        2.00    7,526.00        7,382.00           144.00
                                    data for A50s.
246.12(g)(4)(ii)(B)..............  Vendor shelf prices     1,414.52        2.00        2,829.03        2.00    5,658.07      146,155.33      -140,497.26
246.12(g)(5).....................  Vendor initial            800.00        1.00          800.00        0.67      536.00            0.00           536.00
                                    preauthorization
                                    visits (virtual).
246.12(h)........................  Vendor applications     8,392.80        1.00        8,392.80        1.00    8,392.80       13,584.12        -5,191.32
                                    & Agreements.
246.12(h)(8)(i)..................  Vendor incentive          396.80        1.00          396.80        1.00      396.80          389.20             7.60
                                    items.
246.12(i)(1).....................  Vendor training....    41,964.00        1.00       41,964.00        2.00   83,928.00     * 82,328.00         1,600.00
                                  ----------------------------------------------------------------------------------------------------------------------
  Subtotal Reporting: Retail       ...................    41,964.00        1.39       58,145.63        1.83  106,437.67    * 249,838.65      -143,400.98
   Vendors.
                                                       -------------------------------------------------------------------------------------------------
      Grand Subtotal: Reporting..  ...................   389,419.02        2.64    1,027,939.61        0.67  690,157.80    2,042,248.68    -1,352,090.88
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             RECORDKEEPING BURDEN ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(h)(1)(i)..................  Vendor applications        89.00       94.30        8,392.80        1.00    8,392.80       13,584.12        -5,191.32
                                    & agreements.
246.12(h)(8)(i)..................  Vendor incentive            4.00       99.20          396.80        1.00      396.80          389.20             7.60
                                    items.
246.12(j)(6).....................  Routine vendor             89.00       23.58        2,098.20        0.50    1,049.10        1,029.10            20.00
                                    monitoring.
246.12(j)(6)(ii).................  Vendor compliance          89.00       23.58        2,098.20        2.00    4,196.40        4,116.40            80.00
                                    investigations.
246.12(l)(3).....................  Vendor notice of           89.00        5.89          524.00        1.00      524.00          514.00            10.00
                                    violations.
                                                       -------------------------------------------------------------------------------------------------
  Subtotal: Recordkeeping........  ...................        89.00      151.80       13,510.00        1.08   14,559.10       19,632.82        -5,073.72
                                                       -------------------------------------------------------------------------------------------------
      Grand Total: Reporting and   ...................   389,419.02        2.67    1,041,449.61        0.68  704,716.90  * 2,061,881.50    -1,357,164.60
       Recordkeeping due to
       Rulemaking.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* To capture the estimated changes to the burden from the proposed rule as accurately as possible, the current hours reflect a baseline burden that
  includes revisions to OMB Control Number 0584-0043 that FNS is seeking separately.

    Summary of Requested Burden Revisions:

                          Table 4--Summary of Requested Burden Revisions to #0584-0043
----------------------------------------------------------------------------------------------------------------
                                                                     Responses      Respondents     Time burden
----------------------------------------------------------------------------------------------------------------
Current Inventory: * Total Burden...............................      51,864,053       6,913,189       6,144,866
    Current Inventory: * Reporting..............................      24,320,009       6,913,189       5,614,900
    Current Inventory: * Recordkeeping..........................      27,544,044          11,897         529,967
Total Burden Revision Requested.................................      49,603,607       6,913,989       4,787,704
    Burden Revision Requested: Reporting........................      22,064,657       6,913,989       4,262,811
    Burden Revision Requested: Recordkeeping....................      27,538,950          11,897         524,893
        Difference in Total Burden from Rulemaking..............      -2,260,446             800      -1,357,164
----------------------------------------------------------------------------------------------------------------
* To capture the estimated changes to the burden from the proposed rule as accurately as possible, the ``current
  inventory'' reflects a baseline that includes revisions to OMB Control Number 0584-0043 that FNS is seeking
  separately.


[[Page 11532]]

b. Revisions to OMB Control Number 0584-0401
    Title: Food Delivery Portal (FDP) Data Collection.
    OMB Number: 0584-0401.
    Expiration Date: 12/31/2024.
    Type of Request: Revision of a currently approved collection.
    Abstract: This is a revision of existing information collection 
requirements in the information collection under OMB Control Number 
0584-0401 that are affected by this proposed rulemaking. This proposed 
rule would revise regulations around data submission timelines for 
information that State agencies must report to FNS using the Food 
Delivery Portal (FDP). All WIC State agencies are required to submit 
information on their vendor monitoring and investigation activities, in 
accordance with Sec.  246.12(j)(5). The revisions in the proposed rule 
to this section would replace the current, annual submission deadline 
of February 1 of each fiscal year with submission timelines that may be 
as frequent as quarterly but not less than annually, based on system 
capabilities and reporting needs. Therefore, this proposed rule revises 
the frequency of data preparation and submissions to FDP included in 
the current information collection to show the possibility of quarterly 
submissions. Each quarterly submission would contain one-fourth of the 
data typically included in an annual submission (i.e., 3 months of data 
rather than 12 months). FDP reporting requirements, including data 
submission timelines, would be communicated to State agencies with 
advance notice to prepare submissions.
    FNS estimates that 73 of the 89 WIC State agencies enter 
information into FDP using the data upload process. WIC State agencies 
using this option must (1) update redemption data, monitoring 
activities, compliance investigations, sanctions, and administrative 
reviews on existing vendors and (2) complete all data fields for new 
vendors, authorized during the reporting period. In instances where 
data submission timelines are set as quarterly, FNS estimates that it 
will take an average of 7.5 minutes (0.125 hours) for a WIC State 
agency to upload its vendor data. This is approximately a quarter of 
the time that FNS estimates it currently takes State agencies to upload 
annual data. In total, State agencies would spend an estimated 36.50 
hours uploading data annually (73 State agencies x 4 submissions = 292 
annual responses x 0.125 hours per response = 36.50 burden hours). The 
changes to this burden estimate are the frequency of data uploads and 
amount of time each data upload requires. The total hours would not be 
affected.
    FNS currently estimates that each State agency requires 
approximately 10 hours to generate the data for each annual FDP 
submission. With the possibility of quarterly data submissions, FNS 
estimates that it would require each State agency an average of 2.5 
hours per response (10 hours / 4 = 2.5 hours). These responses may need 
to be prepared up to four times a year under the proposed rule. 
Therefore, across all 89 State agencies, 356 data submissions would be 
prepared each year (89 State agencies x 4 submissions per year), 
requiring 890 total burden hours (356 submissions x 2.5 hours per 
submission = 890). The only changes to this burden estimate are the 
frequency of data uploads and amount of time each data upload requires. 
The total hours would not be affected.
    Currently, FNS estimates that 16 WIC State agencies choose to 
manually add or update records in FDP, rather than extracting the 
information from their management information system (MIS) or vendor 
documentation records. While the data reporting frequency for all State 
agencies may be as frequent as quarterly under the proposed rule, FNS 
does not anticipate that the burdens associated with manually adding or 
updating records in FDP would change with the increased frequency of 
submissions, because the same number of State agencies would submit the 
same total number of responses throughout the course of one year.
(i) Summary of Revisions to OMB Control Number 0584-0401
    The current approved burden for OMB Control Number 0584-0401 is 
1,189 hours and 707 total responses. Changes to the burden due to the 
rulemaking have no effect on the total number of burden hours, which 
would remain 1,189 hours. The proposed rule is estimated to increase 
the total number of responses by 486, resulting in 1,139 annual 
responses due to the increased frequency of submissions to FDP. The 
total number of respondents for this information collection is not 
expected to change from 194. The average burden per response and the 
annual burden hours related to this proposed rule are explained below 
and summarized in the tables which follow.
    The change in burden hours to OMB Control Number 0584-0401 
associated with the proposed rule are best estimates. The Department 
requests comments on the burden and all proposed changes. Comments 
received in response to the proposed rule and burden estimates will 
inform the final burden estimates.
    Respondents: State agencies, including Indian Tribal Organizations 
and U.S. Territories.
    Estimated Number of Respondents: 162.
Reporting
    Estimated Number of Reporting Responses per Respondent: 4.
    Estimated Number of Responses: 648.
    Estimated Hours per Reporting Response: 1.43.
    Estimated Total Annual Reporting Burden Hours for Respondents: 
926.50.

                  Table 5--Estimated Annual Reporting and Recordkeeping Burden for OMB #0584-0401 as a Result of Proposed Rule Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Current  OMB      Estimated
                                                              Estimated    Frequency     Total      Average    Estimated     approved        change in
        Regulatory citation              Description of       number of       of        annual      burden       total     burden hours    burden hours
                                           activities        respondents   responses   responses   hours per    burden    in OMB  #0584-      due to
                                                                                                   response      hours         0401         rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               REPORTING BURDEN ESTIMATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Affected Public: State Agencies (including Indian Tribal Organizations and U.S. Territories)
--------------------------------------------------------------------------------------------------------------------------------------------------------
246.12(j)(5).......................  Data Upload...........           73        4.00      292.00       0.125       36.50           36.50            0.00
246.12(j)(5).......................  Data Preparation......           89        4.00      356.00       2.500      890.00          890.00            0.00
                                                            --------------------------------------------------------------------------------------------
    Total: Reporting due to          ......................          162        4.00      648.00        1.43      926.50          926.50            0.00
     Rulemaking.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 11533]]

    Summary of Requested Burden Revisions:

                        Table 6--Summary of Requested Burden Revisions to OMB #0584-0401
----------------------------------------------------------------------------------------------------------------
                                                                     Responses      Respondents     Time burden
----------------------------------------------------------------------------------------------------------------
Current OMB Inventory: Total Burden.............................             707             194           1,189
Total Burden Revision Requested.................................           1,193             194           1,189
    Difference in Total Burden from Rulemaking..................             486               0               0
----------------------------------------------------------------------------------------------------------------

E-Government Act Compliance

    The Department is committed to complying with the E-Government Act 
of 2002, to promote the use of the internet and other information 
technologies to provide increased opportunities for citizen access to 
Government information and services, and for other purposes.

List of Subjects in 7 CFR Part 246

    Administrative practice and procedure, Civil rights, Food 
assistance programs, Foods, Grants administration, Grant programs--
health, Grant programs--social programs, Indians, Infants and children, 
Maternal and child health, Nutrition, Penalties, Public health, 
Reporting and recordkeeping requirements, Women.
    Accordingly, the FNS proposes to amend 7 CFR part 246 as follows:

PART 246--SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS 
AND CHILDREN

0
1. The authority citation for part 246 continues to read as follows:

    Authority:  42 U.S.C. 1786.

0
2. In Sec.  246.2:
0
a. Remove the definition of ``Above-50-percent vendors'' and add in its 
place the definition of ``Above-50-percent vendor'';
0
b. Add the definitions of ``Brick-and-mortar vendor'' and ``Cash-value 
benefit'' in alphabetical order;
0
c. Revise the definitions of ``Cash-value voucher'' and ``Compliance 
buy'';
0
d. Remove the definition of ``Electronic Benefit Transfer'' and add in 
its place the definition of ``Electronic benefit transfer'';
0
e. Add the definition of ``Electronic benefits'' in alphabetical order;
0
f. Revise the definitions of ``Food instrument'' and ``Home food 
delivery contractor'';
0
g. Add the definitions of ``Internet vendor'' and ``Mobile vendor'' in 
alphabetical order; and
0
h. Revise the definitions of ``Routine monitoring'' and ``Vendor''.
    The revisions and additions read as follows:


Sec.  246.2  Definitions.

* * * * *
    Above-50-percent vendor means any type of vendor that derives more 
than 50 percent of its annual food sales revenue from WIC food 
instruments, and new vendor applicants expected to meet this criterion 
under guidelines approved by FNS.
* * * * *
    Brick-and-mortar vendor means a type of vendor authorized to 
provide authorized supplemental foods to participants through 
transactions at a single, physical, fixed location. All transactions 
that take place at the brick-and-mortar vendor will be assigned to that 
vendor.
    Cash-value benefit means a type of electronic benefit that is a 
fixed-dollar amount used to obtain authorized fruits and vegetables.
    Cash-value voucher means a fixed-dollar amount check, voucher, or 
other document which is used to obtain authorized fruits and 
vegetables.
* * * * *
    Compliance buy means a covert investigation in which a 
representative of the Program poses as a participant, parent or 
caretaker of an infant or child participant, or proxy, transacts food 
instruments, cash-value vouchers, or electronic benefits, and does not 
reveal during the visit their identity as a program representative.
* * * * *
    Electronic benefit transfer (EBT) means a benefit delivery method 
that permits electronic access to WIC food benefits using a card or 
other electronic benefit access device or technology approved by the 
Secretary.
    Electronic benefits mean the WIC benefits for supplemental foods 
prescribed to a participant and contained within the participant's 
benefit balance.
* * * * *
    Food instrument means a paper voucher, check, coupon, other 
document; or an EBT card or other electronic benefit access device or 
technology that is used to obtain supplemental foods.
* * * * *
    Home food delivery contractor means a business entity that 
contracts directly with a State agency to deliver authorized 
supplemental foods to a location designated by the participant or State 
agency under a home food delivery system.
* * * * *
    Internet vendor means a type of vendor authorized to provide 
authorized supplemental foods to participants through internet-based 
transactions.
* * * * *
    Mobile vendor means a type of vendor authorized to provide 
authorized supplemental foods to participants through transactions that 
take place at a truck, bus, pushcart, or other mobile vehicle.
* * * * *
    Routine monitoring means overt monitoring during which program 
representatives identify themselves to vendor personnel.
* * * * *
    Vendor means a business entity authorized by the State agency to 
provide authorized supplemental foods to participants under a retail 
food delivery system. Each vendor with a unique SNAP authorization 
number must be authorized separately. For vendors that are not SNAP 
authorized, each single, separate location constitutes a unique vendor 
from other store locations and must be authorized separately. A vendor 
providing supplemental foods through any means other than a single, 
physical, fixed location must be authorized separately from any related 
brick-and-mortar vendors.
* * * * *
0
3. In Sec.  246.3:
0
a. Revise paragraph (e)(5); and
0
b. Redesignate paragraph (e)(6) as paragraph (e)(7) and add a new 
paragraph (e)(6).
    The revision and addition read as follows:


Sec.  246.3  Administration.

* * * * *
    (e) * * *
    (5) For food delivery system management, one full-time or 
equivalent

[[Page 11534]]

staff person when the monthly participation is above 7,000, or a half-
time or equivalent staff when the monthly participation exceeds 500 and 
the State agency manages its own vendor cost containment system. The 
staff person will be named WIC Food Delivery Coordinator and must meet 
State personnel standards and qualifications in paragraph (e)(5)(i) or 
(ii) of this section and have the qualifications in paragraph 
(e)(5)(iii) of this section. Upon request, an exception to these 
qualifications may be granted by FNS to allow for existing personnel or 
for special circumstances. The WIC Food Delivery Coordinator must--
    (i) Hold a Master's degree or higher, with sufficient statistical 
coursework to independently analyze and act upon food delivery data, 
including vendor cost containment data, and have at least one year 
experience in:
    (A) Public health, government administration, or equivalent; or
    (B) A WIC food delivery or vendor management position that involved 
data analysis and vendor cost containment activities; or
    (ii) Hold a Bachelor's degree or equivalent educational experience 
from an accredited four-year institution, with sufficient statistical 
coursework to independently analyze and act upon food delivery data, 
including vendor cost containment data; and have at least three years 
of experience in:
    (A) Public health, government administration, or equivalent; or
    (B) A WIC food delivery or vendor management position that involved 
data analysis and vendor cost containment activities; and
    (iii) Have demonstrated proficiency in at least one of the 
following: Program management skills; experience coordinating with 
information technology contractors; or experience with external 
stakeholder engagement.
    (6) To ensure the State agency's operations are participant-
centered and comply with Federal requirements, one full-time or 
equivalent staff person designated when the monthly participation is 
above 7,000, or a half-time or equivalent staff when the monthly 
participation exceeds 500. The staff person will be named WIC Customer 
Service Coordinator and will be responsible for improvements related to 
participant-facing activities and technologies. The WIC Customer 
Service Coordinator must meet State personnel standards and 
qualifications in paragraph (e)(6)(i) or (ii) of this section and have 
the qualifications in paragraph (e)(6)(iii) of this section. Upon 
request, an exception to these qualifications may be granted by FNS to 
allow for existing personnel or for special circumstances. The WIC 
Customer Service Coordinator must--
    (i) Hold a Master's degree or higher, and have at least one year 
experience in:
    (A) Public health, government administration, or equivalent; 
product or technology management; acquisitions management; or
    (B) A position focused on innovation or modernization with similar 
complexities to the WIC Program; or
    (ii) Hold a Bachelor's degree or equivalent educational experience 
from an accredited four-year institution and have at least three years 
of experience in:
    (A) Public health, government administration, or equivalent; 
product or technology management; acquisitions management; or
    (B) A position focused on innovation or modernization with similar 
complexities to the WIC Program; and
    (iii) Have demonstrated proficiency in at least one of the 
following: Product management or product ownership (to include owning 
business and product vision of technology systems, defining and 
measuring project objectives, and/or communication and collaboration 
across cross-functional teams); experience with user-centered design, 
agile development, DevOps, and other modern technologies, experience 
managing information technology contractors that employ modern 
practices; extensive IT or acquisition management experience; 
experience with contract management.
* * * * *
0
4. In Sec.  246.4:
0
a. Remove and reserve paragraph (a)(14)(xv); and
0
b. Revise paragraph (a)(23).
    The revision reads as follows:


Sec.  246.4  State plan.

* * * * *
    (a) * * *
    (23) A plan to improve access to the Program for participants and 
prospective applicants, with additional focus on those who are employed 
and/or reside in rural areas. The plan must identify and address the 
needs of these individuals, and must include, at a minimum, policies 
and procedures to minimize the time they must spend away from work and 
the distances they must travel. This plan must include measures to 
improve access to the Program through the remote issuance of food 
instruments, cash-value vouchers, and/or electronic benefits, as 
applicable, to participants through means other than direct participant 
pick-up, pursuant to Sec.  246.12(r)(4) and (5). The State agency must 
also describe the State agency's policy for approving transportation of 
participants to and from WIC clinics per Sec.  246.14(c)(7). This plan 
must describe how the State agency will ensure the integrity of Program 
services and fiscal accountability.
* * * * *
0
5. In Sec.  246.7, revise paragraph (f)(2)(iv) to read as follows:


Sec.  246.7  Certification of participants.

* * * * *
    (f) * * *
    (2) * * *
    (iv) Each local agency using a retail food delivery system must 
issue food instruments, cash-value vouchers, or electronic benefits, as 
applicable, to the participant at the same time as notification of 
certification. Such food instruments, cash-value vouchers, and 
electronic benefits must be provided for the current month or the 
remaining portion thereof and must be transactable immediately upon 
receipt by the participant. Local agencies may issue electronic 
benefits remotely or mail the food instruments and cash-value vouchers 
with the notification of certification, as provided in Sec.  
246.12(r)(4) and (5).
* * * * *
0
6. In Sec.  246.12:
0
a. Revise paragraph (b);
0
b. Revise the third sentence of the introductory text of paragraph 
(g)(4), paragraphs (g)(4)(ii)(B) and (g)(5), the first sentence of 
paragraph (g)(8), and the last sentence of paragraph (g)(9);
0
c. Revise the second sentence of paragraph (h)(1)(i) and paragraphs 
(h)(3)(ii), (v), and (vi);
0
d. Add paragraphs (h)(3)(xxxii) and (xxxiii);
0
e. Revise paragraphs (j)(5) and (j)(6)(ii)(B);
0
f. Revise the first sentence of the introductory text of paragraph (m);
0
g. Revise paragraphs (r)(2) and (4);
0
h. Redesignate paragraphs (r)(5) and (6) as paragraphs (r)(6) and (7), 
respectively, and add a new paragraph (r)(5);
0
i. Remove the period at the end of newly redesignated paragraph (r)(6) 
and add ``; and'' in its place;
0
i. Revise paragraphs (v)(1)(iv) and (ix);
0
j. Revise paragraph (x)(2)(iii);
0
k. Add paragraph (x)(4);
0
l. Redesignate paragraphs (bb)(2) and (3) as paragraph (bb)(3) and (4), 
respectively, and add a new paragraph (bb)(2).
    The revisions and additions read as follows:


Sec.  246.12   Food delivery methods.

* * * * *

[[Page 11535]]

    (b) Uniform food delivery systems. The State agency may operate a 
combination of up to three types of food delivery systems under its 
jurisdiction--retail, home food delivery, and direct distribution. 
These three food delivery systems must be procedurally uniform 
throughout the jurisdiction of the State agency and the combination of 
systems used must ensure adequate participant access to supplemental 
foods. When used, food instruments must be uniform within each type of 
system, except when the use of non-uniform food instruments is 
necessary to meet the special needs described and approved in the State 
agency's State Plan per Sec.  246.4(a)(14)(i), or when transitioning 
from one type of food instrument to another.
* * * * *
    (g) * * *
    (4) * * * The State agency must consider a vendor applicant's 
prices for non-WIC customers or the prices it bids for supplemental 
foods, which must not exceed the price charged to non-WIC customers. * 
* *
* * * * *
    (ii) * * *
    (B) The analysis of vendor prices to monitor vendor compliance with 
paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and (g)(4)(iii) of this section 
and to ensure State agency policies and procedures dependent on price 
data are efficient and effective. State agencies without access to 
electronic benefit redemption data must collect vendor shelf prices at 
least every six months to ensure compliance with this paragraph 
(g)(4)(ii)(B). FNS may grant an exemption from the requirement to 
collect shelf prices if the State agency demonstrates to FNS' 
satisfaction that an alternative methodology for monitoring vendor 
compliance with paragraphs (g)(4)(i)(C), (g)(4)(ii)(C), and (g)(4)(iii) 
of this section is efficient and effective and other State agency 
policies and procedures are not dependent on frequent collection of 
shelf price data. Such exemption would remain in effect until the State 
agency no longer meets the conditions on which the exemption was based, 
until FNS revokes the exemption, or for three years, whichever occurs 
first; and
* * * * *
    (5) Preauthorization visit. The State agency must conduct an on-
site or virtual visit prior to or at the time of a vendor's initial 
authorization.
* * * * *
    (8) * * * The State agency may limit the periods during which 
applications for vendor authorization will be accepted and processed, 
except that applications must be accepted and processed at least once 
every five years. * * *
* * * * *
    (9) * * * In addition, if the State agency does not have access to 
electronic benefit redemption data, the State agency must collect the 
vendor applicant's current prices for supplemental foods.
* * * * *
    (h) * * *
    (1) * * *
    (i) * * * The agreements must be for a period not to exceed five 
years. * * *
* * * * *
    (3) * * *
    (ii) No substitutions, cash, credit, cash refunds, or exchanges. 
The vendor may provide only the authorized supplemental foods listed on 
the paper food instrument and cash-value voucher or available in the 
participant's benefit balance.
    (A) Except as specified in paragraph (h)(3)(ii)(C) of this section, 
the vendor must not provide unauthorized food items, nonfood items, 
cash, or credit (including rain checks) in exchange for benefits. The 
vendor must not provide cash refunds or permit exchanges for authorized 
supplemental foods obtained with benefits, except for exchanges of an 
identical authorized supplemental food item when the original 
authorized supplemental food item is defective, spoiled, or has 
exceeded its ``sell by,'' ``best if used by,'' or other date limiting 
the sale or use of the food item. An identical authorized supplemental 
food item means the exact brand, type, physical form, and size as the 
original authorized supplemental food item obtained and returned by the 
participant.
    (B) The vendor may provide only the authorized infant formula which 
the vendor has obtained from sources included on the list described in 
paragraph (g)(11) of this section to participants in exchange for food 
instruments specifying infant formula.
    (C) During a supply chain disruption, as defined in section 
17(b)(24) of the Child Nutrition Act of 1966, as amended, including a 
supplemental food product recall, the vendor must treat all customers, 
including WIC participants, parents or caretakers of infant or child 
participants, and proxies the same. This should be reflected in store 
recall exchange policies, including policies related to replacements 
(which may include, but are not limited to, the same product, a 
substitute product, store credit, or a cash refund).
* * * * *
    (v) Purchase price. The vendor must ensure that the purchase price 
is calculated in accordance with the procedures described in the vendor 
agreement. The purchase price must include only the amount(s) for the 
authorized supplemental food items actually provided, and the WIC 
participant, parent or caretaker of an infant or child participant, or 
proxy must be made aware of the total purchase price of the transaction 
before the transaction is completed.
    (vi) Signature on paper food instruments and cash-value vouchers. 
For paper food instruments and cash-value vouchers, the vendor must 
ensure the participant, parent or caretaker of an infant or child 
participant, or proxy signs the paper food instrument or cash-value 
voucher after the purchase price is entered.
* * * * *
    (xxxii) Transaction authentication. The vendor must authenticate 
transactions in accordance with the policies established by the State 
agency.
    (xxxiii) Fees associated with online ordering. A vendor must not 
charge the State agency for fees associated with online ordering (e.g., 
delivery, service, convenience, bag fees). If such fees are assessed to 
non-WIC customers using the same services, WIC participants must be 
allowed to pay them using another tender type.
* * * * *
    (j) * * *
    (5) Reporting. The State agency must send FNS certain vendor, 
direct distribution contractor, home food delivery contractor, farmer, 
and farmers' market data containing information stipulated by FNS via 
reporting requirements that will be provided to WIC State agencies with 
advance notification. Reporting requirements will include required data 
fields and data submission timelines, which may be as frequent as 
quarterly but not less than annually based on system capabilities and 
reporting needs. Plans for improvement in the coming year must be 
included in the State Plan in accordance with Sec.  246.4(a)(14)(iv).
    (6) * * *
    (ii) * * *
    (B) A description of the cashier involved in each transaction, if 
applicable;
* * * * *
    (m) * * * Home food delivery systems are systems in which 
authorized supplemental foods are delivered to a location designated by 
the participant or State agency. * * *
* * * * *
    (r) * * *

[[Page 11536]]

    (2) Signature requirement. Ensure that the participant, parent or 
caretaker of an infant or child participant, or proxy signs for receipt 
of food instruments, cash-value vouchers, or authorized supplemental 
foods, except as provided in paragraphs (r)(4) and (5) of this section;
* * * * *
    (4) Paper food instrument and cash-value voucher pick up. Require 
participants, parents and caretakers of infant and child participants, 
and proxies to pick up paper food instruments and cash-value vouchers 
in person when scheduled for in-person nutrition education or for an 
in-person appointment to determine whether participants are eligible 
for a second or subsequent certification period. In all other 
circumstances the State agency may opt to mail paper food instruments 
or cash-value vouchers unless FNS determines that it would jeopardize 
the integrity of program services or program accountability;
    (5) EBT card and electronic benefit issuance. Ensure participants 
receive their EBT cards and electronic benefits in accordance with 
Sec. Sec.  246.7(f)(2)(iv) and 246.11(a)(2), without jeopardizing the 
integrity of program services or program accountability. The State 
agency is encouraged to remotely issue electronic benefits and mail EBT 
cards, when possible, unless FNS determines that it would jeopardize 
the integrity of program services or program accountability;
* * * * *
    (v) * * *
    (1) * * *
    (iv) Transact and redeem cash-value vouchers or cash-value benefits 
in accordance with procedures established by the State agency. Such 
procedures must include:
    (A) A requirement for the farmer or farmers' market to allow the 
participant, parent or caretaker of an infant or child participant, or 
proxy to pay the difference when the purchase price of fruits and 
vegetables exceeds the value of the cash-value vouchers or cash-value 
benefits. This is known as a split tender transaction; and
    (B) Procedures to ensure that the WIC participant, parent or 
caretaker of an infant or child participant, or proxy is made aware of 
the total purchase price of the transaction before the transaction is 
completed;
* * * * *
    (ix) Offer WIC participants, parents or caretakers of infant or 
child participants, or proxies the same courtesies as other customers. 
If fees associated with online ordering (e.g., delivery, service, 
convenience, bag fees) are assessed to non-WIC customers using the same 
services, WIC participants must be allowed to pay them using another 
tender type;
* * * * *
    (x) * * *
    (2) * * *
    (iii) Last date of use. The last date on which the electronic 
benefit may be used to obtain authorized supplemental foods. This date 
must be a minimum of 30 days, or in the month of February 28 or 29 
days, from the first date on which it may be used to obtain authorized 
supplemental foods except for the participant's first month of issuance 
when it may be the end of the month or cycle for which the electronic 
benefit is valid. This must be extended, as applicable, per paragraph 
(x)(4)(i) of this section; and
* * * * *
    (4) Return of benefits. If applicable, the State agency must allow 
for the return of electronic benefits to a participant's balance when 
items in an online order are not fulfilled. The return of electronic 
benefits and subsequent purchase must be linked to one or more items in 
the original transaction and must comply with the following 
requirements:
    (i) Return of benefits after the last date of use. When electronic 
benefits are returned to a participant's balance, the State agency must 
provide the participant with no less than 7 calendar days to transact 
the returned benefits.
    (ii) [Reserved]
* * * * *
    (bb) * * *
    (2) The State agency must develop policies to ensure that each 
transaction is authenticated according to standards established by FNS.
* * * * *
0
7. In Sec.  246.14, revise paragraphs (b)(1)(i) and (c)(4) to read as 
follows:


Sec.  246.14  Program costs.

* * * * *
    (b) * * *
    (1) * * *
    (i) Purchasing supplemental foods in a retail food delivery system 
using WIC benefits and/or acquiring supplemental foods provided to 
State or local agencies or participants, whichever receives the 
supplemental foods first in a home food delivery system or a direct 
distribution food delivery system;
* * * * *
    (c) * * *
    (4) The cost of administering the food delivery system, including 
the cost of transporting supplemental foods, except as prohibited at 
Sec.  246.12(h)(3)(xxxiii) and (v)(1)(ix).
* * * * *

Cynthia Long,
Administrator, Food and Nutrition Service.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix A--Regulatory Impact Analysis

Statement of Need

    The methods consumers, including those served by the Special 
Supplemental Nutrition Program for Women, Infants, and Children 
(WIC), use to purchase food have changed in response to advances in 
technology as well as changes in purchasing behavior brought on by 
the COVID-19 pandemic. The Department's regulations have not been 
changed to reflect these increased options available to consumers. 
To ensure that WIC participants have equal access to available 
shopping options, with the expansion of online shopping in the 
retail grocery industry and the development of new payment types, 
the Department proposes to remove barriers its current regulations 
impose on online shopping and to modernize certain food delivery 
regulations in the WIC Program through this rulemaking. The proposed 
measures would complement the Program's near-complete transition to 
electronic benefit transfer (EBT) and aim to meet the needs of a 
modern, data-driven program that uses current technologies for food 
delivery. These changes are expected to improve nutrition security 
among WIC participants by increasing equity and access to available 
shopping options.

Background

Introduction of Key Terms

    For the purposes of this proposed rule and analysis, the 
Department will use the following definitions:
     ``WIC shopper'' means a person shopping using WIC 
benefits (i.e., a WIC participant, proxy, or a parent or caretaker 
of an infant or child participant).
     ``Online shopping'' means the general use of an online, 
internet-based ordering system, platform, or site. It can encompass 
online ordering with or without internet-based transactions (i.e., 
the transaction can occur via the internet, in store, curbside, or 
at the point of delivery).
     ``Online ordering'' means the process a customer 
(including a WIC shopper) uses to select food items for purchase via 
an internet-based ordering system, platform, or site.
     ``Transaction'' means the process by which a WIC 
shopper exchanges their WIC benefits for supplemental foods.
     ``internet-based transaction'' means a transaction 
where the WIC payment is completed through the payment section of 
the online ordering system, platform, or site. This terminology is 
being used in lieu of ``online transaction'' to avoid confusion with 
transactions that occur using online EBT technology.
     ``Redemption'' means the process in which a vendor 
submits records of electronic

[[Page 11537]]

benefits for redemption and the State agency (or its financial 
agent) makes payment to the vendor.

Overview of the WIC Program and Shopping Experience

    The WIC Program is administered by 89 WIC State agencies, 
including the 50 States, 33 Indian Tribal Organizations, the 
District of Columbia, and 5 U.S. Territories (American Samoa, the 
Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and 
the U.S. Virgin Islands). WIC serves to safeguard the health of low-
income pregnant, breastfeeding, and non-breastfeeding postpartum 
individuals, and infants and children up to age five who are found 
to be at nutritional risk. In 2019, WIC participants included nearly 
43 percent of all infants in the United States,\1\ and in fiscal 
year (FY) 2020, WIC served an average of 6.25 million 
participants.\2\
---------------------------------------------------------------------------

    \1\ U.S. Department of Agriculture, Food and Nutrition Service, 
``National- and State-Level Estimates of WIC Eligibility and WIC 
Program Reach in 2019: Final Report, Volume I,'' pp. 65, by Kelsey 
Farson Gray et al. Project Officer Grant Lovellette, Alexandria, VA: 
February 2022. Available online at: https://fns-prod.azureedge.net/sites/default/files/resource-files/WICEligibles2019-Volume1.pdf.
    \2\ U.S. Department of Agriculture Food and Nutrition Service, 
``WIC Data Tables,'' 2021. Available online at: https://www.fns.usda.gov/pd/wic-program.
---------------------------------------------------------------------------

    The Department provides Federal grants to WIC State agencies to 
provide supplemental foods, health care referrals, and nutrition 
education, including breastfeeding promotion and support, to WIC 
participants. WIC participants typically access supplemental foods 
through a retail food delivery system. In such systems, a WIC 
shopper goes to a WIC-authorized vendor (i.e., a retail store 
authorized by the State agency), selects foods available in their 
benefit balance, and uses an EBT card to purchase the items. In FY 
2020, there were approximately 40,000 WIC-authorized vendors 
nationwide, and nearly 93 percent of WIC participants received WIC 
benefits via EBT.
    Current WIC regulations were written for a paper-based benefit 
delivery system and restrain State agencies from making use of the 
opportunities that EBT provides, including remotely issuing 
electronic benefits and transacting those benefits online. Current 
regulations that require participants to pick up food benefits in 
person and transact food benefits in the presence of a cashier pose 
challenges to participants with special dietary needs, limited 
mobility or access to transportation, and/or those who live in 
remote or rural communities. These requirements also present unique 
challenges during disasters or public health emergencies, such as 
the COVID-19 pandemic.

Key Information Used in the Development of This Proposed Rule and 
Analysis

    The 2014 Farm Bill (Pub. L. 113-79) mandated that the Department 
conduct a pilot to assess the feasibility and implications of 
allowing retailers authorized under the Supplemental Nutrition 
Assistance Program (SNAP) to accept SNAP benefits for online 
transactions. The SNAP Online Purchasing Pilot initially launched in 
New York in April 2019, then expanded to Washington in January 2020, 
followed by Alabama, Oregon, and Iowa in March 2020, and Nebraska in 
April 2020. The onset of the COVID-19 pandemic spurred a rapid 
expansion of the pilot across 47 States and the District of Columbia 
by early 2021. While online shopping with SNAP benefits is now 
available in nearly all States, WIC shoppers do not yet have 
widespread access to online shopping due in part to barriers under 
current WIC regulations.
    In September 2020, the Department awarded a grant to the 
Gretchen Swanson Center for Nutrition (GSCN) to develop a plan for 
implementing online shopping in WIC. With extensive stakeholder 
input, GSCN developed the Blueprint for WIC Online Ordering Projects 
(the ``Blueprint''), which was published in June 2021.\3\ As a part 
of the grant agreement, GSCN has since awarded sub-grants to State 
agency and vendor partners to fund four projects that will test WIC 
online shopping across seven geographic States and one Indian Tribal 
Organization (ITO).
---------------------------------------------------------------------------

    \3\ Gretchen Swanson Center for Nutrition. ``Blueprint for WIC 
Online Ordering Projects,'' 2021. Available online at: https://www.centerfornutrition.org/wic-online-ordering.
---------------------------------------------------------------------------

    The Consolidated Appropriations Act for Fiscal Year 2021 (Pub. 
L. 116-260) authorized the Department to establish the Task Force on 
Supplemental Foods Delivery (the ``Task Force''). The Task Force was 
charged with assembling WIC stakeholders to independently ``study 
measures to streamline the redemption of supplemental foods benefits 
that promote convenience, safety, and equitable access to 
supplemental foods, including infant formula.'' The Task Force 
submitted its recommendation report to the Department on September 
30, 2021. The Department was then required to report a plan to 
Congress on how the recommendations would be carried out as well as 
whether any legislative changes would be required.\4\
---------------------------------------------------------------------------

    \4\ More information on the WIC Task Force on Supplemental Foods 
Delivery, including links to both the Departmental and Congressional 
reports, is available online at: https://www.fns.usda.gov/wic/task-force-supplemental-foods-delivery.
---------------------------------------------------------------------------

    The proposed Special Supplemental Nutrition Program for Women, 
Infants and Children (WIC): Online Ordering and Transactions and 
Food Delivery Revisions to Meet the Needs of a Modern, Data-Driven 
Program rule is informed by WIC stakeholder input and 
recommendations in both the Blueprint and the final reports of the 
Task Force. The Department has also incorporated lessons learned 
from the SNAP Online Purchasing Pilot. The GSCN sub-grant projects 
will be evaluated over the next year to assess the start-up costs 
required by State agencies and vendors to operationalize WIC online 
shopping and the impact that online shopping has on key outcomes 
including WIC benefit redemption rates. The Department intends to 
review the findings from the GSCN projects and use updated data to 
inform future iterations of this initial impact analysis throughout 
the rulemaking process, especially on implementation costs and 
redemption rate impacts.

Summary of Provisions

    The proposed rule would update WIC regulations to remove current 
regulatory barriers to online ordering and transactions in WIC, 
streamline and modernize food and benefit delivery options for WIC 
participants, and introduce measures intended to meet the needs of a 
modern, data-driven program that uses current technologies for food 
delivery. Specifically, the rule proposes the following changes:
     Remove barriers to online ordering and internet-based 
transactions.
    [cir] Allow vendors and WIC shoppers to complete internet-based 
transactions and allow State agencies to explore and identify 
options to authenticate EBT transactions that are appropriate for 
the specific technologies they choose to adopt.
    [cir] Allow State agencies to authorize new types of vendors to 
give WIC participants more shopping options by:
    [ssquf] Creating definitions for ``brick-and-mortar,'' 
``internet,'' and ``mobile'' vendors.
    [ssquf] Removing language from the definition of ``vendor'' that 
currently only allows State agencies to authorize vendors with a 
``single, fixed location'' (i.e., brick-and-mortar vendors).
    [cir] Allow vendors to return benefits to a participant's 
benefit balance when an item requested through an online order 
cannot be fulfilled.
    [cir] Allow State agencies to develop virtual methods of 
oversight.
    [cir] Permit WIC shoppers to pay for fees related to online 
shopping (e.g., delivery, service, convenience, bag fees) using a 
separate tender type if such fees are assessed to non-WIC customers 
using the same services.
     Streamline and modernize WIC food delivery.
    [cir] Permit the remote issuance of electronic benefits to a 
participant's benefit balance and clarify the definitions of 
``electronic benefits'' and ``cash-value benefit'' as separate and 
distinct from paper food instruments.
    [cir] Add ``other electronic benefit access device or 
technology'' to the definition of a ``food instrument.''
    [cir] Allow State agencies to develop and test new WIC food 
instrument types.
    [cir] Streamline food delivery operations by recognizing that 
EBT data are a sufficient replacement for routine shelf price 
collection.
    [cir] Extend vendor application and agreement periods from three 
to five years.
    [cir] Allow State agencies using a home food delivery system 
(non-retail) to ship supplemental foods to a location designated by 
participants (e.g., Alaska Natives who do not have at-home mail 
service).
     Meet the needs of a modern, data-driven program.
    [cir] Update reporting requirements for Federal oversight to 
align with the transition in reporting systems from The Integrity 
Profile (TIP) to the Food Delivery Portal (FDP).

[[Page 11538]]

    [cir] Create two new WIC State agency staff positions to reflect 
staffing needs of a modern, innovative program.

Summary of Impacts

 Costs

    The Department estimates that the provisions under this proposed 
rule would collectively result in a total of $404 million in costs 
and Federal transfers over 5 years from FY 2024 through FY 2028 
(Table 1). This estimate includes increases in Federal Government 
WIC spending, increased net costs to WIC State agencies, and a 
savings for WIC retail vendors.
    The Department estimates that allowing WIC online shopping will 
increase Federal WIC food spending, in the form of transfers, by a 
total of $392 million over 5 years. This is driven by an 
understanding that shoppers typically pay higher prices for online 
groceries and an expectation that online shopping would moderately 
increase WIC benefit redemption by making the WIC shopping 
experience more convenient for some participants.

                                              Table 1--Summary of Estimable Impacts on Transfers and Costs
                                                                     [FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Fiscal year (millions)
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Federal Transfers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Impact of online shopping on Federal WIC food spending..            $5.6           $43.7           $79.0          $121.9          $142.0          $392.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   State Agency Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Systems development and maintenance for online shopping.             1.1             7.5             6.0             7.1             5.1            26.9
Changes to reporting and recordkeeping burden...........            -9.7           -10.0           -10.3           -10.6           -10.9           -51.5
New State agency staff positions........................             5.9            11.9            11.9            12.3            12.7            54.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    WIC Vendor Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes to reporting burden.............................            -3.6            -3.6            -3.7            -3.8            -3.9           -18.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Estimated Impact..............................            -0.6            49.4            83.0           127.0           145.0           403.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary figures are adjusted for annual inflation.

    The Department estimates that the proposed rule would also 
result in around $30 million in net WIC State agency costs from FY 
2024 to FY 2028. State agency costs include nearly $27 million in 
total 5-year expenses required to update State agency systems to 
enable online transaction of WIC electronic benefits and $55 million 
in total 5-year costs for increased staffing expenses due to the 
proposed changes to State agency staffing requirements. State agency 
costs would be partially offset by a large reduction in State agency 
reporting burden and recordkeeping burden, which is estimated to 
result in a savings of $52 million over 5 years and is largely 
attributable to the removal of shelf price collection requirements 
for EBT State agencies and the extension of vendor agreement and 
application periods. These State agency costs are considered 
allowable expenses for State agencies under their annually awarded 
Nutrition Services and Administration (NSA) grants. The Department 
expects that State agencies would be able to absorb the costs 
associated with implementing the provisions under this proposed rule 
with current NSA funds without any increase in the level of NSA 
grants.
    Finally, the removal of shelf price collection requirements and 
the extension of vendor application and agreement periods are also 
expected to significantly reduce burden on WIC vendors. The 
Department estimates that the reductions in vendor reporting burden 
under the proposed rule would save WIC vendors $18 million over 5 
years.

 Benefits

    The provisions under this proposed rule aim to modernize the 
ways that WIC participants can receive and transact their electronic 
benefits, creating opportunities to improve equity and accessibility 
in the Program as a result. An estimated 14 percent of the U.S. 
population lives in low-income census tracts with limited access to 
food stores,\5\ and 21 percent of WIC participants report using a 
means of transportation other than their own personal car to travel 
to a vendor to use their WIC benefits.\6\ By comparison, 95 percent 
of higher income households (above 185 percent of the Federal 
poverty line) use their own vehicle to travel to a grocery store.\7\ 
Once at the vendor, participants also report challenges shopping for 
WIC foods. Recent USDA survey data indicate that finding the right 
WIC-approved products in stores, WIC-approved products being out of 
stock, and feeling embarrassed shopping for WIC foods are some of 
the most cited challenges among WIC participants who report 
difficulties shopping for WIC supplemental foods.\8\ Online shopping 
may alleviate some of these issues for WIC participants and has the 
potential to provide benefits during supply chain disruptions.
---------------------------------------------------------------------------

    \5\ USDA Economic Research Service. ``State-Level Estimates of 
Low Income and Low Access Populations.'' Last updated September 30, 
2019. Available online at: https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/.
    \6\ Magness, A., Williams, K. Gordon, E., Morrissey, N., Papa, 
F., Garza, A., Okyere, D., Nisar, H., Bajowski, F., & Singer, B. 
(2021). Third National Survey of WIC Participants: WIC Participant 
Satisfaction and Shopping Experience: Brief Report #6. Prepared by 
Capital Consulting Corporation and 2M Research Services. Contract 
No. AG-3198-K-15-0077. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Karen Castellanos-Brown. Available online at: 
https://www.fns.usda.gov/wic/third-national-survey-wic-participants.
    \7\ Ver Ploeg, Michele, Lisa Mancino, Jessica E. Todd, Dawn 
Marie Clay, and Benjamin Scharadin. Where Do Americans Usually Shop 
for Food and How Do They Travel To Get There? Initial Findings From 
the National Household Food Acquisition and Purchase Survey, EIB-
138, U.S. Department of Agriculture, Economic Research Service, 
March 2015. Available online at: https://www.ers.usda.gov/publications/pub-details/?pubid=79791.
    \8\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers 
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research, 
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
---------------------------------------------------------------------------

    Enabling online shopping in WIC under this proposed rule is 
expected to reduce barriers to WIC services, ensure that WIC 
participants have an equitable shopping

[[Page 11539]]

experience as the retail marketplace innovates, and increase 
participant purchases of supplemental foods. Online shopping may 
also expand participant choice in supplemental foods, particularly 
for authorized supplemental food substitutions needed to meet 
certain dietary restrictions, that may not be readily available at 
the closest WIC-authorized grocery stores. These regulatory changes 
would ensure that WIC participants have the ability to transact 
benefits online as an increasing share of U.S. consumers prefer to 
shop for groceries online. The proposed rule would further make WIC 
more convenient and accessible by encouraging State agencies to 
remotely issue electronic benefits and mail EBT cards whenever 
possible, potentially reducing the number of clinic visits that WIC 
participants are required to make. The proposed rule also includes 
provisions that would streamline and modernize WIC food delivery by 
promoting innovation and ensuring that State agencies have enough 
qualified staff meet the needs of a modern, data-driven program. 
These provisions provide necessary measures to ensure that State 
agencies can deliver a more efficient and effective program for WIC 
participants.

Section-by-Section Analysis

A. Baseline for Cost Estimate

Baseline Federal Costs

    The total projected baseline Federal cost of WIC absent the 
proposed rule for FY 2024 through FY 2028 is shown in Table 2 below. 
At the Federal level, WIC expenditures are broadly split between 
grants to State agencies to fund food benefits (``food costs'') and 
NSA grants to fund all approved non-food expenses (``NSA costs''). 
WIC food costs are a function of the number of participants 
receiving each food package, the retail prices of supplemental 
foods, the quantity of WIC foods prescribed to each participant, and 
the percentage of WIC benefits used by participants to purchase the 
supplemental foods that WIC-authorized vendors have submitted for 
reimbursement from the State agency (known as the ``redemption 
rate'').

                                                    Table 2--Projected Baseline Federal WIC Spending
                                                                     [FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Fiscal year (millions)
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Food Costs........................................        $3,434.9        $3,595.9        $3,766.8        $3,948.1        $4,140.6       $18,886.4
Total Nutrition Services & Administration Costs.........         2,157.6         2,224.5         2,293.4         2,364.5         2,437.8        11,477.8
                                                         -----------------------------------------------------------------------------------------------
    Total Federal Spending..............................         5,592.5         5,820.4         6,060.2         6,312.6         6,578.4        30,364.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Totals may not sum due to rounding.

Participation

    This analysis bases WIC participation projections on 
participation changes observed during FY 2020 and FY 2021 (including 
when program flexibilities were implemented in response to the 
COVID-19 pandemic); specifically, a fixed level of participation 
among women and infants and annual increases in participation among 
children. Accordingly, growth in child participation is estimated at 
2.08 percent annually between FY 2021 and FY 2023 and to rise to 
4.82 percent annual growth between FY 2023 and FY 2026 before 
leveling off at the higher participation level in FY 2027 and FY 
2028. In 2019, the most recent data available, only 45 percent of 
eligible children participated in WIC. The share of eligible 
children that do not participate in WIC is considered the ``coverage 
gap.'' \9\ The estimated increases in child participation used in 
this analysis reflect a projected narrowing of the coverage gap 
among WIC-eligible children as a result of current and future 
efforts to improve child retention in WIC. While declining birth 
rates in the U.S. have contributed to a decrease in women and 
infants enrolling in WIC since 2009, the Department projects 
participation of women and infants to level off due to future 
outreach efforts to increase participation among the eligible 
population.\10\
---------------------------------------------------------------------------

    \9\ Gray K., Balch-Crystal E., Giannarelli, L., and Johnson, P. 
(2022). National- and State-Level Estimates of the Special 
Supplemental Nutrition Program for Women, Infants, and Children 
(WIC) Eligibility and WIC Program Reach in 2019. Prepared by Insight 
Policy Research, Contract No. AG-3198-D-16-0095. Alexandria, VA: 
U.S. Department of Agriculture, Food and Nutrition Service, Office 
of Policy Support, Project Officer: Grant Lovellette. Available 
online at: www.fns.usda.gov/research-analysis.
    \10\ Although birthrates increased slightly (by about 1 percent) 
between 2020 and 2021, births continue to be below 2019 levels. 
Source: Martin JA, Hamilton BE, Osterman MJK. Births in the United 
States, 2021. NCHS Data Brief, no. 442. Hyattsville, MD: National 
Center for Health Statistics. 2022. DOI: https://dx.doi.org/10.15620/cdc:119632.

                                 Table 3--Baseline WIC Participation Projections
                                                 [FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
                                                             Fiscal year participants
                                 -------------------------------------------------------------------------------
                                       2024            2025            2026            2027            2028
----------------------------------------------------------------------------------------------------------------
Women...........................       1,381,305       1,381,305       1,381,305       1,381,305       1,381,305
Infants.........................       1,468,664       1,468,664       1,468,664       1,468,664       1,468,664
Children........................       3,714,820       3,894,002       4,081,826       4,081,826       4,081,826
                                 -------------------------------------------------------------------------------
    Total Participants..........       6,564,789       6,743,971       6,931,795       6,931,795       6,931,795
----------------------------------------------------------------------------------------------------------------
Source: Internal USDA estimates.

 Key Assumptions

Adoption of Online Ordering

    While the proposed rule would remove barriers to allow for 
online shopping in WIC, it would not require State agencies to 
implement online shopping. However, due to widespread interest in 
improving the WIC shopping experience, particularly through online 
shopping, this analysis assumes that by FY 2027, all 89 State 
agencies will have implemented WIC online shopping for WIC 
participants. However, like the adoption of EBT, the analysis 
assumes that online shopping will gradually roll out across State

[[Page 11540]]

agencies between FY 2024 and FY 2027, covering around half of WIC 
State agencies by FY 2025. State agencies may vary in the time it 
takes to implement online shopping systems for many reasons, 
including contracting requirements with technology partners, the 
need to coordinate changes with Management Information Systems 
(MIS), or resource allocation constraints due to other State agency 
priorities. The Department also recognizes that implementation of 
online shopping in WIC depends upon authorized vendors offering this 
service to WIC participants. Because the Department is unable to 
predict at this time which State agencies will be the earliest 
adopters of online shopping, the analysis also assumes an even 
distribution of WIC participants across these State agencies (i.e., 
the 51 percent of WIC State agencies offering online shopping in FY 
2025 will also cover 51 percent of WIC participants).

                      Table 4--Estimated Number of State Agencies Using WIC Online Shopping
                                                 [FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year
                                 -------------------------------------------------------------------------------
                                       2024            2025            2026            2027            2028
----------------------------------------------------------------------------------------------------------------
Number of State Agencies........               7              45              68              89              89
(% of Total)....................            (8%)           (51%)           (76%)          (100%)          (100%)
----------------------------------------------------------------------------------------------------------------
Notes: The 7 State agencies expected to offer online shopping in FY 2024 represent the 7 State agencies
  currently participating in the Gretchen Swanson Center for Nutrition WIC Online Purchasing Sub-grant Projects.

    In addition to estimating the number of State agencies offering 
online shopping in WIC, this analysis must also estimate how many 
WIC participants will transact any benefits online and, among online 
WIC shoppers, what share of their benefits will be transacted 
online. A recent nationally representative poll conducted in July 
2021 found that 23 percent of Americans reported ordering groceries 
online for pickup or delivery at least once a month.\11\ Online 
grocery sales are estimated to have accounted for about 12 percent 
of total grocery sales in 2021, in terms of total revenue, with 
their market share expected to grow to around 19 percent by 2024 (a 
53 percent increase).\12\ By the end of FY 2021, just over 8 percent 
of SNAP households nationwide made at least one SNAP purchase online 
in a given month, and online redemptions accounted for just under 5 
percent of the total dollar amount of SNAP redemptions between 
August and September 2021.\13\ This analysis assumes that SNAP 
shoppers are a better proxy for WIC shoppers than the general 
population but also estimates that growth in online shopping among 
all shoppers will follow at least the same 53 percent total increase 
that Mercatus predicts for the general population between 2021 and 
2024. Accordingly, by increasing the 8 percent of SNAP households 
redeeming benefits online in 2021 by 53 percent total between 2021 
and 2024, the Department projects that among State agencies 
operating online shopping in WIC, 12 percent of WIC participants 
will transact at least some of their benefits online in FY 2024. As 
online grocery shopping continues to gain popularity, the share of 
WIC participants shopping online is expected to increase each year 
between FY 2024 and FY 2028 within participating State agencies. The 
Mercatus report also projects around a 13 percent relative increase 
in the online grocery shopping market share between 2024 and 2025. 
The Department applies the same 13 percent year-to-year growth rate 
to project the growth of WIC online shopping between FY 2024 and FY 
2028. Beginning in FY 2024, this 13 percent annual growth rate 
amounts to about a 2-percentage point increase each year in the 
share of WIC participants, within participating State agencies, 
using at least some of their WIC benefits online between FY 2024 and 
FY 2028 (see Table 5).
---------------------------------------------------------------------------

    \11\ Brenan, M. ``More in U.S. Grocery Shopping Online, Fewer 
Dining Out.'' Gallup, 10 August 2021. Available online at: https://news.gallup.com/poll/353090/grocery-shopping-online-fewer-dining.aspx.
    \12\ Mercatus. ``eGrocery Transformed: Market projections and 
insight into online grocery's elevated future,'' 2021.
    \13\ Based on internal, unpublished data on monthly online SNAP 
redemptions in FY 2021.

                          Table 5--Estimated Use of WIC Online Shopping Where Available
                                                 [FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year
                                                     -----------------------------------------------------------
                                                         2024        2025        2026        2027        2028
----------------------------------------------------------------------------------------------------------------
Percentage of WIC participants expected to transact         12%         14%         16%         18%         20%
 at least some benefits online......................
----------------------------------------------------------------------------------------------------------------
Notes: Estimates for each year reflect the percentage of participants that will use WIC online shopping only in
  State agencies where it is available at that time.

    Even among online WIC shoppers, it is reasonable to assume some 
level of variation in exactly what percentage of their WIC benefits 
are transacted online. Thus, this analysis assumes that the average 
online WIC shopper will transact about half of their benefits online 
in a given month. This is consistent with initial estimates of SNAP 
online shopping, based on the share of SNAP benefits redeemed 
compared to the share of SNAP households shopping online after 
adjusting for estimated variations in in-store and online retail 
prices (described later in this analysis).

 Cost, Participant, Vendor, and State Agency Impacts

 Remove Barriers to Online Ordering and Internet-Based 
Transactions

Discussion

    While use of online grocery shopping has expanded in recent 
years, including among SNAP shoppers, WIC participants do not have 
widespread access to online shopping with WIC benefits due in part 
to barriers in current WIC regulations. Current regulations require 
that WIC transactions occur in the presence of a cashier, allowing 
WIC shoppers to either sign a paper food instrument or enter a 
Personal Identification Number (PIN) for an EBT transaction. While 
some States agencies, including one ITO, have recently adopted WIC 
online ordering, this in-person requirement has prevented the 
transaction of WIC benefits from occurring online. Current rules 
also typically require WIC vendors to have a single, fixed location 
and require most vendor oversight activities to occur through on-
site visits to those locations. The Department proposes several 
changes under this rule to address these and other regulatory 
barriers to allow WIC shoppers and WIC-approved vendors to complete

[[Page 11541]]

transactions online. Specifically, the proposed rule would:
     Allow vendors and WIC shoppers to complete internet-
based transactions by removing the requirement that participants 
complete WIC transactions in the presence of a cashier. Associated 
new provisions would allow State agencies to explore and identify 
options to authenticate EBT transactions that are appropriate for 
the specific technologies they choose to adopt.
     Allow State agencies to authorize new types of vendors 
to give WIC participants more shopping options by:
    [cir] Creating definitions for ``brick-and-mortar,'' 
``internet,'' and ``mobile'' vendors to distinguish vendors 
operating solely online from stores with a single, fixed location. 
The definitions for ``internet vendor'' and ``mobile vendor'' are 
based on SNAP's definitions of ``internet retailer'' and ``house-to-
house trade route,'' respectively, to ensure that cross-program 
integrity efforts continue without interruption.
    [cir] Removing language from the definition of ``vendor'' that 
currently only allows State agencies to authorize vendors with a 
``single, fixed location'' (i.e., brick-and-mortar vendors).
     Allow vendors to return benefits to a participant's 
benefit balance when an item requested through an online order 
cannot be fulfilled to ensure that WIC benefits are not lost in 
these situations.
     Allow State agencies to develop virtual methods of 
oversight to ensure their monitoring and investigative methods are 
appropriate for the types of vendors authorized (e.g., internet 
vendors) and current environmental circumstances (e.g., during a 
pandemic).
     Permit WIC shoppers to pay for fees associated with 
online shopping by clarifying that WIC-authorized vendors, farmers, 
and farmers' markets must not charge the State agency for fees 
associated with online ordering (e.g., delivery, service, 
convenience, and bag fees). If such fees are assessed to non-WIC 
customers using the same services, WIC participants must be allowed 
to pay them using another tender type. The Department is requesting 
comment on whether State agencies should have the option to pay for 
such fees with either (1) non-Federal funding at State agency 
discretion and/or (2) Federal funding in situations where it is 
deemed necessary to meet special needs (e.g., participant access or 
other needs as identified by the State agency).

Cost

Impact on Federal WIC Food Costs

    Over the 5 years between FY 2024 and FY 2028, the rollout of WIC 
online shopping under this proposed rule is expected to increase 
Federal WIC food costs by $392 million in total. The effect of 
allowing online shopping in WIC on Federal food costs is a function 
of both the effect on total WIC redemptions and the effect on the 
prices of WIC foods. When estimating the impact of online shopping 
on WIC food costs under this proposed rule, the analysis 
collectively considers the effect of each provision required to 
operate a modern online retail system, including allowing electronic 
benefits to be returned to a participant's benefit balance when an 
online order cannot be fulfilled. Because these provisions all 
contribute to enabling online shopping, the Department does not 
provide separate estimates for each provision.
    On average, WIC participants do not use all their WIC benefits 
each month. WIC benefit redemption rates vary by food category. For 
example, in 2020, the estimated redemption rate was 44 percent for 
whole wheat bread and whole grains and about 72 percent for fruits 
and vegetables purchased with the cash-value benefit (CVB).\14\ WIC 
participants report various barriers to using WIC benefits that 
impact these redemption rates, both in terms of traveling to a WIC-
authorized vendor and using their benefits once there.
---------------------------------------------------------------------------

    \14\ Based on internal USDA data collected in March 2021 
covering monthly WIC redemptions for all months in calendar year 
2020.
---------------------------------------------------------------------------

    One USDA study, which surveyed a representative sample of WIC 
participants from 12 State agencies, found that 90 percent of 
respondents reported experiencing at least one negative shopping 
experience while transacting their WIC benefits in stores.\15\ Among 
those, around 77 percent reported they had selected the wrong item 
and were sent back at checkout to find the correct WIC item, around 
72 percent found a WIC item to be out of stock or unavailable in the 
correct container size, and around 34 percent reported they had felt 
embarrassed while using WIC benefits in stores. Traveling to a WIC-
authorized vendor also presents challenges to some participants. In 
the same study, when surveying former WIC participants from three 
State agencies, 15 percent of respondents reported that they lacked 
convenient access to a WIC-authorized vendor.
---------------------------------------------------------------------------

    \15\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers 
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research, 
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
---------------------------------------------------------------------------

    Based on the opportunities that online shopping presents to 
address many of the in-store barriers and challenges that WIC 
shoppers report, as described above, the Department estimates that 
participants who use any WIC benefits online will, on average, 
increase their overall benefit redemption by 10 percent (e.g., a 
participant who previously purchased $30 worth of WIC benefits would 
purchase $33 under this proposed rule), independent of price 
variations. This analysis estimates an overall increase to 
purchases, rather than food category level impacts, because 
sufficient data are not available to project whether some food items 
will be impacted by online shopping more than others.
    In order to better understand and estimate the effect online 
shopping may have on redemption rates, the GSCN sub-grant projects 
will evaluate the impacts of WIC online shopping on redemption 
rates. The Department has provided a range of cost estimates at 
different levels of redemption in the Uncertainties section of this 
analysis. These estimates will be updated, as appropriate, in future 
cost analyses later in the rulemaking process once redemption data 
from the GSCN projects become available. The Department also invites 
public comment on how online shopping in WIC may affect redemption 
rates.
    The Federal WIC food costs associated with the proposed rule are 
also expected to be impacted by differences in the retail prices of 
online groceries compared to in-store options. A recent analysis 
published by Information Resources, Inc. (IRI), a retail market 
research firm, estimates that in May 2021 online grocery shoppers 
paid about 13 percent higher per unit retail prices (i.e., before 
separate delivery or other convenience fees) for fresh foods online 
compared to similar in-store products.\16\ While online and in-store 
price differences tend to vary by vendor, these higher prices often 
reflect the added convenience costs of assembling online orders and 
processing internet-based transactions, which many retailers include 
within the unit costs of food items rather than charging separately 
(unlike delivery fees, which are typically separate and cannot be 
paid for with WIC benefits). WIC benefits are redeemed on a per unit 
basis (e.g., one gallon of milk or one dozen eggs) rather than as a 
set dollar amount, with the exception of the CVB. WIC shoppers are 
not expected to be price sensitive when using WIC benefits, and thus 
higher prices are expected to directly increase the Federal cost of 
the WIC food package. For this analysis, the Department uses IRI's 
recent estimate to project that, on average, WIC food items 
purchased online will be about 13 percent more expensive than in-
store prices. Although the CVB is transacted as a set dollar amount, 
rather than per food item like other WIC foods, the Department 
estimates the same 13 percent price increase for online CVB 
redemptions, on average.\17\ Because WIC participants transact 
around 72 percent of their CVB in an average month, a 13 percent 
increase in food prices online may be reflected as an apparent 
increase in the CVB redemption rate, as participants would need to 
use 13 percent more of their CVB to purchase the same amount of 
fruits and vegetables that they would in brick-and-

[[Page 11542]]

mortar vendors. The Department will continue to collect data on 
price differences as it becomes available. The Department presents a 
range of cost estimates based on different pricing variations in the 
Uncertainties section of this analysis.
---------------------------------------------------------------------------

    \16\ The term ``fresh foods'' in this context includes items 
classified by retailers as bakery, dairy, deli, fresh produce, fresh 
meat and seafood, and meat alternatives. Although some WIC approved 
foods fall outside of this definition (including infant formula), 
this analysis applies the estimated 13 percent increase in online 
prices as an average across all WIC food types due to a lack more 
detailed and available industry data on food specific variations. 
For information see: Information Resources, Inc. and 210 Analytics. 
``Grocery E-Commerce--Opportunity Remains,'' 2021. Available online 
at: https://www.iriworldwide.com/IRI/media/Library/IRI-Ecommerce-Update-May-2021.pdf.
    \17\ Note that these estimates and the analysis are based on the 
average WIC shopper redeeming 72 percent of their CVB prior to the 
proposed rule. WIC shoppers that currently spend all or nearly all 
of their CVB may find that they cannot purchase the same quantity of 
fruits and vegetables online as they can afford in brick-and-mortar 
stores.
    \18\ Estimated $45.64 monthly per person food costs assumes an 
average online WIC shopper is using 50 percent of their transacted 
benefits online and 50 percent in-store.

         Table 6--Projected Uptake of Online Shopping and Impact on Monthly per Person Food Package Cost
                                                 [FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year
                                 -------------------------------------------------------------------------------
                                       2024            2025            2026            2027            2028
----------------------------------------------------------------------------------------------------------------
Projected number of State                      7              45              68              89              89
 agencies offering WIC online
 shopping.......................
Percentage of participants                    12              14              16              18              20
 making at least one WIC
 purchase online, within
 participating State agencies...
Average percentage of WIC                     50              50              50              50              50
 benefits used online among
 online shoppers................
Expected increase in total                    10              10              10              10              10
 redemptions among online WIC
 shoppers.......................
Expected increase in online                   13              13              13              13              13
 retail food prices, compared to
 in-store.......................
Total WIC participation.........       6,564,789       6,743,971       6,931,795       6,931,795       6,931,795
Number of participants making at          61,960         477,382         847,392       1,247,723       1,386,359
 least one WIC purchase online..
Baseline monthly per person WIC           $43.60          $44.43          $45.28          $47.46          $49.78
 food cost \ a\.................
Projected monthly WIC food cost            51.08           52.05           53.05           55.60           58.32
 among online shoppers \ a\ \b\.
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Food cost inflation is estimated for FY 2024 through FY 2028 using the Office of Management and Budget's
  (OMB) food at home projections used in the most recent President's Budget request.
\b\ The projected monthly food cost among online shoppers includes both in-store and online shopping with the
  assumption that half of benefits are transacted in-store and half online. The half of benefits transacted
  online are then increased by 13 percent to reflect the projected increase in prices for online food items.

    The projected 10 percent increase in total redemptions among 
online shoppers and the estimated 13 percent increase in retail unit 
prices for online food items would collectively increase the 
expected monthly per person WIC food costs from a baseline of $43.60 
among exclusively in-store shoppers to $51.08 among average online 
shoppers in FY 2024.\18\ Table 6 summarizes the expected uptake of 
WIC online shopping among participants and provides annual estimates 
for monthly per person food package costs, adjusted for annual 
inflation.
    The cost impact of online shopping will continue to increase as 
more WIC State agencies offer online shopping and as use among WIC 
shoppers in those State agencies increases. In FY 2024, online 
shopping is only expected to increase total Federal WIC food 
spending by about $5.6 million because the Department estimates that 
just 12 percent of participants in seven State agencies will 
transact WIC benefits online. The annual cost is expected to rise to 
$121.9 million in FY 2027 and $142.0 million in FY 2028 when WIC 
online shopping is expected to be offered by all 89 State agencies 
and used by an increasing share of participants (see Table 7).

                                        Table 7--Estimated Impact of Online Shopping on Federal WIC Food Spending
                                                                     [FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Fiscal year (millions)
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total food costs, online shoppers.......................           $38.0          $298.2          $539.4          $832.5          $970.1        $2,678.3
Total food costs, in-store shoppers.....................         3,402.5         3,341.4         3,306.3         3,237.4         3,312.5        16,600.1
Total food costs, all shoppers..........................         3,440.5         3,639.6         3,845.7         4,070.0         4,282.6        19,278.4
Baseline food costs without online shopping.............         3,434.9         3,595.9         3,766.8         3,948.1         4,140.6        18,886.4
Increase in WIC food costs due to online shopping.......             5.6            43.7            79.0           121.9           142.0           392.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.

Online Shopping System Development and Maintenance

    Spending associated with EBT system development and maintenance 
is estimated to increase WIC State agency costs by around $27 
million in total over 5 years between FY 2024 and FY 2028. 
Implementation of WIC online shopping would initially require new 
costs to State agencies associated with systems design, development, 
and testing of new processes for transacting WIC electronic benefits 
online. In addition to these initial costs, State agencies would 
incur new ongoing costs required to pay EBT processor fees 
associated with monthly support and maintenance of EBT systems to 
allow for online transaction of benefits. The State agency costs 
detailed below assume the same implementation timeline presented 
previously in Table 6.

[[Page 11543]]

    The Department expects that State agencies would be able to 
absorb these EBT processor costs using existing NSA funds. State 
agencies are generally allowed considerable flexibility in how they 
spend NSA funds. The estimates in Table 8 represent an initial 
assessment of projected costs. As mentioned above, the Department is 
testing these activities through the GSCN sub-grant projects and 
will collect information on actual costs incurred during the 
projects to better understand future implementation expenses. The 
Department also seeks public comment from State agencies, EBT 
processors, and WIC-authorized vendors on expected costs associated 
with these and any unforeseen, required system updates to help 
refine the estimates below.
    The estimate of WIC State agency costs includes both initial 
costs and ongoing costs. To estimate initial costs, the Department 
has estimated EBT processor costs to design, develop, and test new 
technology solutions that would allow participants and vendors to 
transact WIC electronic benefits online. The Department estimates 
that the costs for EBT processors to design, develop, and test new 
online shopping solutions will be spread over 2 years and total 
$2.20 million across all current EBT processors (see Table 8). The 
same small number of EBT processors contract with multiple State 
agencies.\19\ Therefore, these initial costs to design, develop, and 
test new online shopping solutions are expected to be shared across 
multiple State agencies using common EBT processors. Initial costs 
would also include separate start-up costs paid to EBT processors 
each time a new State agency is added to an online shopping 
solution. The Department estimates that, once EBT processors have 
developed online shopping solutions, there will be an average one-
time cost of $90,000 (in FY 2022 dollars, adjusted annually for 
inflation) for each State agency to update its EBT system to 
implement online shopping (see Table 8). As new State agencies 
gradually implement online shopping solutions, the Department 
estimates $8.26 million in start-up costs over 5 years for EBT 
updates to implement online shopping in 82 State agencies, in 
addition to the $2.20 million estimate for design, development, and 
testing.\20\
---------------------------------------------------------------------------

    \19\ See latest ``WIC EBT Detail Status Report'' for more 
information: https://www.fns.usda.gov/wic/wic-ebt-activities.
    \20\ The estimate of $8.26 million is based on a cost of $90,000 
each for 82 State agencies, adjusted annually for inflation. This 
assumes that these start-up costs would not be needed in the 7 State 
agencies that are developing internet-based transactions while 
participating in the Gretchen Swanson Center for Nutrition WIC 
online shopping sub-grant projects.

                     Table 8--Estimated EBT Processor Costs To Implement WIC Online Shopping
                                                 [FY 2024-2028]
----------------------------------------------------------------------------------------------------------------
                                                               Fiscal year (millions)
                                   -----------------------------------------------------------------------------
                                        2024         2025         2026         2027         2028        Total
----------------------------------------------------------------------------------------------------------------
Initial Costs:
    Design, develop, and test new         $0.80        $1.40        $0.00        $0.00        $0.00        $2.20
     online shopping solutions....
    Start-up cost to implement             0.00         3.74         2.33         2.19         0.00         8.26
     solution across all State
     agencies.....................
Ongoing Costs:
    Monthly support and                    0.34         2.36         3.67         4.95         5.10        16.42
     maintenance costs............
                                   -----------------------------------------------------------------------------
        Total.....................         1.14         7.50         6.00         7.14         5.10        26.88
----------------------------------------------------------------------------------------------------------------
Notes: Monetary values are adjusted annually for inflation based on CPI-W wage projections consistent with the
  FY 23 President's Budget as costs primarily account for labor expenses for start-up and ongoing support.

    New, ongoing operational costs are also expected for each State 
agency offering WIC online shopping. Once State agencies have 
implemented online shopping, the Department estimates an additional 
$4,000 (in FY 2022 dollars, adjusted annually for inflation) in 
ongoing monthly EBT costs per State agency to address new support 
and system maintenance requirements. All projected costs represent 
estimated averages; however, actual costs may vary by State agency. 
In total, as all State agencies implement WIC online shopping 
systems, the Department estimates these ongoing monthly costs to add 
up to $16.4 million in State agency spending over 5 years (see Table 
8). The Department expects that the additional work required to 
adapt State agency policies and oversight methods and resolve 
participant concerns related to online shopping will be addressed by 
the WIC Food Delivery and WIC Customer Service coordinators. The 
estimated costs of these proposed State agency staff positions are 
discussed below.

Effect on WIC Participants

    This proposed rule is primarily intended to remove barriers that 
prevent WIC participants from accessing the benefits of online 
shopping. Enabling WIC participants to shop online is expected to 
increase participant access to WIC foods, address barriers and 
challenges participants report related to shopping for WIC foods, 
and broadly improve equity in the shopping experience.
    Expanding access to WIC online shopping may increase participant 
access to WIC-authorized vendors. A 2018 USDA survey of three WIC 
State agencies found that, among former participants who had a 
negative shopping or vendor experience, 15 percent reported that 
they lacked convenient access to a WIC-approved vendor.\21\ 
According to estimates from the USDA Economic Research Service 
(ERS), nearly 40 million people, or 14 percent of the U.S. 
population, lived in low-income and low-access (LILA) census tracts 
in 2015.\22\ LILA measures define a low-access census tract as one 
where a significant number (at least 500 people) or share (at least 
33 percent) of the population has limited access to a food store 
(supermarket, supercenter, or large grocery store), which is defined 
as living more than 1 mile from a food store in urban areas or more 
than 10 miles in rural areas. A recent study found that among the 
initial eight States participating in the SNAP Online Purchasing 
Pilot, online grocery delivery systems reached around 90 percent of 
LILA census tracts, though this varied substantially between urban 
and rural areas.\23\
---------------------------------------------------------------------------

    \21\ The survey did not define what participants meant by 
``convenient'' so this could be inclusive of factors other than 
geography (e.g., hours of operation). Source: Gleason, S., 
Wroblewska, K., Trippe, C., Kline, N., Meyers Mathieu, K., Breck, 
A., Marr, J., Bellows, D. (2022). WIC Food Cost-Containment 
Practices Study. Prepared by Insight Policy Research, Contract No. 
AG-3198-C-15-0022. Alexandria, VA: U.S. Department of Agriculture, 
Food and Nutrition Service, Office of Policy Support, Project 
Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
    \22\ USDA Economic Research Service. ``State-Level Estimates of 
Low Income and Low Access Populations.'' Last updated September 30, 
2019. Available online at: https://www.ers.usda.gov/data-products/food-access-research-atlas/state-level-estimates-of-low-income-and-low-access-populations/.
    \23\ Brandt EJ, Silvestri DM, Mande JR, Holland ML, et al. 
Availability of grocery delivery to food deserts in states 
participating in the online purchase pilot. JAMA Netw Open. 
2019;2:e1916444.
---------------------------------------------------------------------------

    As noted in the previous section, even WIC participants who are 
able to travel to WIC-authorized vendors report difficulties using 
their WIC benefits. Data discussed earlier from a recent USDA study 
indicate that a majority of WIC shoppers in the 12 State agencies 
covered by the study reported

[[Page 11544]]

having difficulty locating WIC-approved foods in stores.\24\ Another 
study, which collected qualitative data through focus groups and in-
depth interviews of participants across four State agencies, found 
that difficulty identifying WIC-approved items as well as perceived 
stigma during checkout were the primary complaints participants 
reported about the WIC shopping experience.\25\ Online shopping may 
address some of these barriers. For example, an online shopping 
system could be designed to allow WIC shoppers to filter to only 
display items approved for WIC by their State agency or to only show 
the items available to them based on their WIC benefit balance.\26\ 
Participants that find stigma to be a barrier to using their WIC 
benefits may also find more comfort and privacy in transacting 
benefits online. Finally, online shopping may also improve the 
shopping experience for WIC participants that report transportation 
challenges. Data from a nationally representative sample of WIC 
participants indicate that in 2019 around 21 percent of WIC 
participants used some means of transportation other than a personal 
car to travel to a vendor to transact their WIC benefits.\27\ 
Individuals unable to drive themselves to a WIC-authorized vendor 
may prefer transacting WIC benefits online for delivery rather than 
transporting heavier items, such as milk and juice, by foot or on 
public transit. By addressing these barriers, this proposed rule is 
expected to increase benefit redemptions, as described in the 
previous section, and thus increase the amount of nutritious 
supplemental foods consumed by WIC participants.
---------------------------------------------------------------------------

    \24\ Gleason, S., Wroblewska, K., Trippe, C., Kline, N., Meyers 
Mathieu, K., Breck, A., Marr, J., Bellows, D. (2022). WIC Food Cost-
Containment Practices Study. Prepared by Insight Policy Research, 
Contract No. AG-3198-C-15-0022. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Ruth Morgan. Available online at: https://www.fns.usda.gov/wic/wic-food-cost-containment-practices-study.
    \25\ Chauvenet C, De Marco M, Barnes C, Ammerman AS. WIC 
Recipients in the Retail Environment: A Qualitative Study Assessing 
Customer Experience and Satisfaction. J Acad Nutr Diet. 
2019;119(3):416-424.e2. doi:10.1016/j.jand.2018.09.003.
    \26\ Gretchen Swanson Center for Nutrition. ``Blueprint for WIC 
Online Ordering Projects,'' 2021. Available online at: https://www.centerfornutrition.org/wic-online-ordering.
    \27\ Magness, A., Williams, K. Gordon, E., Morrissey, N., Papa, 
F., Garza, A., Okyere, D., Nisar, H., Bajowski, F., & Singer, B. 
(2021). Third National Survey of WIC Participants: WIC Participant 
Satisfaction and Shopping Experience: Brief Report #6. Prepared by 
Capital Consulting Corporation and 2M Research Services. Contract 
No. AG-3198-K-15-0077. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Karen Castellanos-Brown. Available online at: 
https://www.fns.usda.gov/research-and-analysis.
---------------------------------------------------------------------------

    Enabling WIC participants to use their benefits online is also 
expected to improve equity in access to online grocery shopping 
enabling WIC participants greater access to the convenience and 
potential time savings allowed by online grocery shopping. Data 
published in 2020 and 2021 by IRI indicate that low-income shoppers 
are less likely than middle- and high-income shoppers to purchase 
groceries online.\28\ A recent systematic review of online grocery 
shopping among low-income populations found that price and the 
inability to use nutrition assistance benefits like SNAP and WIC are 
barriers to equitable access to online grocery services.\29\ While 
this gap is likely to narrow as the SNAP Online Purchasing Pilot 
continues to expand, this proposed rule would ensure that WIC 
participants will also able to transact their WIC benefits online. 
Recent evidence also suggests that shoppers may make fewer unhealthy 
purchases when shopping online compared to in-stores specifically 
making fewer ``impulse'' purchases on items like sweets and 
candy.\30\ \31\ Therefore, expanding equitable access to online 
grocery shopping for WIC participants may have spillover effects 
into the rest of their grocery shopping if those shoppers move their 
non-WIC grocery shopping online as well.
---------------------------------------------------------------------------

    \28\ Information Resources, Inc. ``Winning in CPG e-Commerce: 
Part 4,'' March 26, 2021. Available online at: https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Demand-Pockets-Part-4-CPG-E-Commerce-03-29-21.pdf.
    \29\ Trude, A., Lowery, C., Ali, S., Vedovato, G. An equity-
oriented systematic review of online grocery shopping among low-
income populations: implications for policy and research, Nutrition 
Reviews, 2022; nuab122, https://doi.org/10.1093/nutrit/nuab122.
    \30\ Harris-Lagoudakis, K. (2022). '' Online shopping and the 
healthfulness of grocery purchases.'' American Journal of 
Agricultural Economics 104(3): 1050-1076. https://doi.org/10.1111/ajae.12262.
    \31\ Zatz, L.Y., Moran, A.J., Franckle, R.L., Block, J.P., Hou, 
T., Blue, D., Greene, J.C., Gortmaker, S., Bleich, S.N., Polacsek, 
M., Thorndike, A.N., & Rimm, E.B. (2021). Comparing Online and In-
Store Grocery Purchases. Journal of Nutrition Education and 
Behavior, 53(6). https://doi.org/10.1016/j.jneb.2021.03.001.
---------------------------------------------------------------------------

Effect on Vendors

    The provisions included in the proposed rule are expected to 
increase opportunities for innovation in the retail grocery industry 
and may provide opportunities for increased revenue for vendors that 
offer online shopping for WIC participants using WIC benefits. For 
some WIC vendors, the opportunity to transact WIC electronic 
benefits online could expand their customer base by reaching WIC 
shoppers who had not previously shopped at the vendor's brick-and-
mortar locations. Other vendors may see an increase in revenue from 
existing WIC shoppers who prefer to use their online shopping 
platforms and increase their purchases of supplemental foods, as 
described in the previous section. However, the expansion of WIC 
online shopping is not expected to have the same impact on all 
vendors. The Distributive Impacts section of this analysis includes 
further discussion around potential disparate impacts for certain 
types of vendors.
    The overall national increase in online grocery shopping is 
expected to impact the number and types of jobs employed in the 
retail food industry. Specifically, one group of university 
researchers estimates a shift towards fewer cashier positions and an 
increase in jobs associated with assembling, fulfilling, and 
delivering online grocery orders.\32\ Because WIC redemptions 
accounted for only about 0.6 percent of total U.S. food at home 
expenditures in 2019, the Department does not expect this proposed 
rule to have a significant impact on the food retail employment 
landscape beyond what is already projected in the market as a 
whole.\33\
---------------------------------------------------------------------------

    \32\ Benner, C., Mason, S., Carr[eacute], F., and Tilly, C. 
Delivering Insecurity: E-commerce and the Future of Work in Food 
Retail. Berkeley: UC Berkeley Labor Center and Working Partnerships 
USA. 2020. https://laborcenter.berkeley.edu/delivering-insecurity/.
    \33\ Based the sum of WIC food costs and rebates issued in FY 
2019 (https://www.fns.usda.gov/pd/wic-program) as a share of USDA 
ERS Food at Home expenditures, nominal dollars, in 2019 (https://www.ers.usda.gov/data-products/food-expenditure-series/food-expenditure-series/#Current%20Food%20Expenditure%20Series).
---------------------------------------------------------------------------

    Under the proposed rule, providing online shopping to WIC 
participants would be optional to vendors, and therefore the 
Department only expects vendors to participate in WIC online 
shopping if the vendor believes it to be in their best interest. 
Aside from the benefits described above, there may also be some 
upfront development costs for vendors who choose to update their 
online grocery platforms to be compatible with transacting WIC 
benefits online. The Department does not have the necessary data to 
provide even approximate estimates of these costs. To the extent 
possible, the Department intends to use development cost data 
collected in the GSCN sub-grant projects described above to better 
understand potential costs to vendors. The Department also 
recognizes that recent industry reporting suggests lower profit 
margins for grocery sales online compared to in-store and that 
vendors continue to explore ways to minimize the cost of fulfilling 
online orders to improve these margins.\34\ So while improving 
equitable access to online shopping for WIC participants is expected 
to bring some WIC redemptions from in-store to online, because WIC 
redemptions account for such a small share of total U.S. food at 
home expenditures (as cited above) the Department does not expect 
this proposed rule to be meaningfully disruptive to the trajectory 
of e-commerce in the grocery industry as a whole.
---------------------------------------------------------------------------

    \34\ McKinsey. ``Achieving profitable online grocery order 
fulfillment.'' May 18, 2022. Available online at: https://www.mckinsey.com/industries/retail/our-insights/achieving-profitable-online-grocery-order-fulfillment.
---------------------------------------------------------------------------

Effect on State Agencies

    In addition to the State agency costs discussed above, the 
provisions in the proposed rule related to implementing online 
shopping in WIC are expected to create some additional, short-term 
actions as State agencies elect to participate. Initially, the 
rollout of online ordering systems is likely to require increased 
State agency staff time devoted to establishing contract changes 
with EBT processors, processing any necessary updates to State 
agency MIS data and systems, developing expertise in monitoring and 
oversight of internet-based transactions and vendors, and 
communicating the

[[Page 11545]]

program changes to WIC participants. However, the Department does 
not expect these up-front efforts to be significant and they would 
be far outweighed by reductions in burden discussed later in this 
analysis. The additional staffing standards discussed later in this 
analysis would also help State agencies to adapt to online shopping.
    Over time, the provisions allowing for remote vendor oversight 
are expected to decrease staff burden and travel costs. The 
Department does not specifically track State agency expenses 
associated with travel and on-site monitoring or investigative 
activities and cannot provide an estimate for the level of savings. 
Internal data from a survey of WIC State agencies that utilized the 
Vendor Preauthorization Visits waiver, authorized under the Families 
First Coronavirus Response Act of 2020 (FFCRA, Pub. L. 116-127), 
found that over half of State agencies reported saving staff time by 
using the waiver to conduct preauthorization visits remotely.\35\
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    \35\ Unpublished data collected in March 2021 to fulfill FFCRA 
waiver reporting requirements. For more information: https://www.fns.usda.gov/programs/fns-disaster-assistance/fns-responds-covid-19/wic-covid-19-waivers.
---------------------------------------------------------------------------

 Streamline and Modernize WIC Food Delivery

Discussion

    Current WIC regulations were written within the context of a 
paper-based voucher environment (prior to the advent of EBT), that 
envisioned a WIC participant traveling to a WIC clinic to pick up a 
paper voucher and then traveling to a WIC vendor to use their paper 
voucher in person. In the past two decades, much has changed in 
terms of technology, security, innovation, and WIC participant 
preferences to make these paper-based voucher assumptions obsolete. 
The proposed rule complements the Program's near-complete transition 
to EBT by modernizing and streamlining WIC food delivery regulations 
to reflect recent technological innovations in electronic benefit 
issuance, transaction, and redemption, and food delivery options to 
promote further innovation; to decrease burden on WIC participants, 
WIC vendors, and State and local agencies; to increase WIC 
participant choice; to improve program equity; and to reduce stigma 
experienced by WIC participants, while maintaining the WIC Program's 
high standards of program services and program accountability.
    Specifically, the proposed rule would:
     Permit the remote issuance of electronic benefits to a 
participant's benefit balance (e.g., load electronic benefits on to 
an EBT card, or other access device or technology, without requiring 
the participant to travel to a clinic). To clarify how remote 
issuance applies to food instruments, cash-value vouchers, and 
electronic benefits, associated provisions would add definitions for 
``electronic benefits'' and ``cash-value benefit'' that are separate 
and distinct from the paper food instruments.
     Add ``other electronic benefit access device or 
technology'' to the definition of ``food instrument'' to support 
innovation in benefit delivery methods and enable WIC State agencies 
to explore and adopt new technologies beyond the EBT card (e.g., 
mobile payment) while ensuring that key program integrity 
requirements apply to these new technologies.
     Allow State agencies to develop and test new WIC food 
instrument types by eliminating a provision that only allows one 
type of food instrument to be used within a State agency's 
jurisdiction at a time.
     Streamline food delivery operations by recognizing that 
EBT data are a sufficient replacement for routine shelf price 
collection and eliminating certain collection requirements.
     Extend vendor agreement periods to reduce the 
application burden on potential WIC vendors and State agencies. The 
revisions would extend the maximum vendor authorization period from 
three to five years, consistent with SNAP.
     Allow State agencies using a home food delivery system 
(non-retail) to ship supplemental foods to a location designated by 
participants to better serve participants in remote areas (e.g., 
Alaska Natives who do not have at-home mail service).
    The benefits of these proposed revisions extend to WIC 
participants, State agencies, and WIC vendors. Remote issuance of 
electronic benefits would save some WIC participants time and money 
by decreasing the number of trips they must make to their local WIC 
clinic, which may prove particularly beneficial to those WIC 
participants who face transportation barriers. If WIC participants 
are able to purchase and consume more of their WIC foods, and/or if 
more WIC-eligible individuals are able to participate in WIC for 
longer periods of time, then more participants will receive the 
health benefits offered by consumption of the nutritious 
supplemental foods provided by the WIC Program.
    Extending vendor application and agreement periods would 
decrease administrative burden on both WIC vendors and WIC State 
agencies. The other proposed provisions either decrease the burden 
on State agencies or promote innovation in the WIC benefit delivery 
space while maintaining the Program's high standards for transaction 
authentication, program services and program accountability, and 
participant privacy.

Cost

Remote Issuance of Electronic Benefits

    Remote electronic benefit issuance would decrease 
transportation, childcare, and/or other costs (e.g., loss of work 
hours) currently borne by WIC participants in the process of picking 
up their WIC food instruments in person at a WIC clinic. As 
explained in the burden adjustment estimates published with this 
proposed rule, the Department estimates that remotely issuing 
benefits would save WIC participants a combined 1,049,335 hours per 
year in time spent traveling to and waiting to receive WIC benefits 
in person.
    Remote issuance of electronic benefits may slightly increase WIC 
participation by retaining some WIC participants who may have 
otherwise dropped off the Program due to transportation, or other 
access challenges, but would now be able to receive their benefits 
remotely and shop online. If WIC participation increases, there will 
be a related increase in Federal costs to provide these participants 
with their WIC benefits. However, the Department expects the 
participation impact of this particular provision to be relatively 
small, and any increase in participation solely attributable to this 
provision is extremely difficult to disentangle from the expected 
increase in WIC participation as a result of the $390 million in 
additional WIC funding made available in the American Rescue Plan 
Act of 2021 (ARPA, Pub. L. 117-2) to carry out outreach, innovation, 
and program modernization efforts to increase participation and 
redemption of benefits. Therefore, the Department does not provide a 
separate estimate of the cost of this provision as a result of 
increased participation, but the public will have the opportunity to 
provide feedback on participation impacts due to remote issuance 
during the comment period. See below for additional discussion of 
participation impacts of this proposed rule.

Decrease in State Agency and Vendor Burden

    As explained in the annual burden adjustment estimates published 
with this proposed rule, the Department expects the proposed rule 
would substantially decrease reporting and recordkeeping burden 
hours on both WIC State agencies and WIC vendors. The Department 
estimates a net decrease in reporting burden hours to State agencies 
of approximately 159,354 hours per year, which is almost entirely 
attributable to the proposed provision to remove shelf price 
collection requirements for State agencies operating an EBT system. 
State agency recordkeeping burden is also expected to decrease by an 
estimated 5,074 hours per year, primarily as a result of the 
proposed extension of vendor application and agreement periods. 
Reductions in State agency reporting and recordkeeping burden are 
collectively expected to result in a 5-year savings to State 
agencies of $51.5 million in administrative costs.\36\ Removing 
shelf price collection requirements in State agencies with EBT 
systems and extending vendor application and agreement periods are 
expected to have a similar effect on WIC vendor burden. The 
Department estimates a net decrease in reporting burden hours to WIC 
vendors of 143,401 hours per year, resulting in a 5-year savings to 
WIC vendors of $18.4 million in administrative costs.\37\
---------------------------------------------------------------------------

    \36\ Cost savings associated with State agency burden hours are 
calculated using the hourly total compensation for all State and 
Local workers from the Bureau of Labor and Statistics (BLS) for FY 
2021 and inflated according to the CPI-W increase in OMB's economic 
assumptions for the FY2023 President's Budget for years FY2024-
FY2028 (https://data.bls.gov/timeseries/CMU3010000000000D).
    \37\ Cost savings associated with vendor burden hours are 
calculated using the hourly total compensation for all retail 
workers from the Bureau of Labor and Statistics (BLS) for FY 2021 
and inflated according to the CPI-W increase in OMB's economic 
assumptions for the FY2023 President's Budget for years FY2024-
FY2028 (https://data.bls.gov/timeseries/CMU2014120000000D).

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[[Page 11546]]

Effect on WIC Participants

    The provisions in this proposed rule are expected to decrease 
the burden on WIC participants and would make participating in the 
Program more convenient. Remote issuance of electronic benefits 
would decrease the number of visits that participants must make to 
their WIC clinics, saving these participants time and money as 
described above. A recent USDA study found that among surveyed 
participants with children who left WIC before age 5, around 40 
percent reported inconvenience as a reason for leaving WIC 
early.\38\ In an unpublished USDA study, 52 percent of surveyed WIC 
clinic staff reported that ``difficulty being physically present for 
appointments'' was a reason that child participants leave the 
Program between ages 2 to 4.\39\ Remote issuance of electronic 
benefits may result in a small number of child participants who 
might otherwise drop off of the Program as they age to remain on the 
Program for longer, enabling these participants to receive more 
supplemental foods and nutrition education.
---------------------------------------------------------------------------

    \38\ Borger, C., Zimmerman, T., Vericker, T., et al. (2022). WIC 
Infant and Toddler Feeding Practices Study-2: Fifth Year Report. 
Prepared by Westat, Contract No. AG-3198-K-15-0033 and AG-3198-K-15-
0050. Alexandria, VA: U.S. Department of Agriculture, Food and 
Nutrition Service, Office of Policy Support, Project Officer: 
Courtney Paolicelli. Available online at: https://www.fns.usda.gov/resource/wic-infant-and-toddler-feeding-practices-study-2-itfps-2-fifth-year-report.
    \39\ Unpublished data from a USDA survey of clinic-level WIC 
staff from a nationally representative sample of local agencies, 
collected in March 2020.
---------------------------------------------------------------------------

    The provisions that provide State agencies with additional 
flexibility in the exact type of food instruments used would allow 
State agencies to innovate with service delivery, enabling them to 
provide the best experience to WIC participants at the lowest cost 
as technological advancements and WIC participant preferences 
continue to evolve in future years.

Effect on Vendors

    Extending vendor application and agreement periods would 
decrease the administrative burden on vendors to provide this 
information to State agencies. WIC vendor error is already very low 
(estimated at 0.30 percent of total WIC food outlays).\40\ EBT 
technology allows State agencies to receive current data about 
vendor prices at least daily, eliminating the need for additional 
burdensome reporting. Removing the requirement to collect shelf 
prices would result in a substantial decrease in administrative 
costs to vendors, as noted above.
---------------------------------------------------------------------------

    \40\ See the 2021 Annual Improper Payment Dataset, available at 
https://www.cfo.gov/payment-accuracy/FY2021%20Payment%20Accuracy%20Dataset_3_1_2022.xlsx (accessed March 
8. 2022).
---------------------------------------------------------------------------

Effect on State Agencies

    The proposed revisions would streamline and modernize WIC food 
delivery regulations to reflect current EBT technologies and provide 
space for future innovation by State agencies. Adding ``other 
electronic benefit access device or technology'' to the definition 
of ``food instrument'' would enable WIC State agencies to explore 
and adopt new technologies beyond the EBT card (e.g., mobile 
payment) while ensuring that key program integrity requirements 
apply to these new technologies. This revision would allow State 
agencies to deliver WIC benefits in a secure, cost-effective, and 
convenient manner. Similarly, updating the uniform food delivery 
systems provision would provide State agencies the ability to test 
new food instrument types that align with innovations in the retail 
market, and to smoothly transition to new types of food instruments.
    Removing the requirement to collect shelf prices, or obtain an 
exemption, for State agencies that use EBT would decrease their 
administrative burden while allowing them to continue to meet the 
requirements of the vendor authorization and cost containment 
provisions. Receiving price information via EBT transaction data 
serves as a substitute for the burdensome practice of collecting 
shelf prices from WIC vendors. As discussed above, extending vendor 
application and agreement periods would also decrease burden on 
State agencies without sacrificing program accountability, as time 
periods for vendor monitoring, training, and investigations would 
remain unchanged.

 Meet the Needs of a Modern, Data-Driven Program

Discussion

    The Department proposes several provisions that are intended to 
meet the needs of a modern, data-driven program that uses current 
technologies for food delivery. Specifically, the proposed rule 
would:
     Update reporting requirements for Federal oversight to 
align with the transition in reporting systems from TIP to FDP, 
which is now the system of record for WIC vendor management data.
     Create two new WIC State agency staff positions to 
reflect the staffing needs of a modern, innovative program. The 
revisions include staffing standards for WIC Food Delivery and WIC 
Customer Service coordinators. These proposed staff would be in 
addition to the minimum number of staff currently required by 
regulations. As State agencies move to adopt new technologies and 
modern food delivery methods, these provisions are necessary to 
ensure State agencies have staff capable of meeting those demands.
    Under current rules, WIC State agencies are required to have at 
least one full-time or equivalent Program Specialist for each 10,000 
participants above 1,500, but not more than eight Program 
Specialists, unless the State agency considers it necessary.
    The proposed rule would require that, in addition to current 
requirements for Program Specialists, State agencies must create two 
new staff positions: a WIC Food Delivery Coordinator and a WIC 
Customer Service Coordinator, based on the below monthly 
participation thresholds. The Department proposes to develop 
stronger standards for the position of the WIC Food Delivery 
Coordinator to manage the State agency's food delivery system, which 
likely includes the management and oversight of WIC-authorized 
vendors in a retail food delivery system, to ensure that WIC State 
agencies have the staff in place to make the data-driven decisions 
necessary for a modern, efficient WIC Program that uses current 
technologies for food delivery. The Department also proposes adding 
standards to create a WIC Customer Service Coordinator to support 
program improvements related to participant-facing activities, 
particularly those that involve emergent technologies and future 
innovations. These staffing requirements would vary depending on the 
State agency's participant caseload:
     State agencies with monthly participation above 7,000 
would be required to employ one full-time or equivalent WIC Food 
Delivery Coordinator and one full-time or equivalent WIC Customer 
Service Coordinator.
     State agencies with monthly participation above 500, 
but less than 7,001, would be required to employ a half-time or 
equivalent WIC Food Delivery Coordinator (if the State agency 
manages its own vendor cost containment system) and a half-time or 
equivalent WIC Customer Service Coordinator.

Cost

New State Agency Staff Positions

    The provisions creating new WIC State agency staff positions are 
expected to increase WIC State agency costs by a total of $55 
million during FY 2024 to FY 2028. Based on current State agency 
monthly participation and staffing estimates, the Department 
estimates that a total of 108 new staff positions would be created. 
As State agencies would have 18 months from publication of the final 
rule to implement these requirements, this estimate assumes a phased 
implementation where 50 percent of the positions are filled in FY 
2024 and the remainder filled by FY 2025.
    Currently there are 51 State agencies with more than 7,000 
monthly participants, and each of these State agencies would be 
required to employ one full-time or equivalent WIC Food Delivery 
Coordinator and one full-time or equivalent WIC Customer Service 
Coordinator who meet the new staffing standards. However, the 
Department estimates that 13 State agencies already meet the 
proposed WIC Food Delivery Coordinator requirements and that 3 State 
agencies already meet the proposed WIC Customer Service Coordinator 
requirements with current staff and will not need to make new hires 
to fill these full-time roles. Therefore, the proposed rule would 
result in 38 new full-time or equivalent WIC Food Delivery 
Coordinator positions and 48 new full-time or equivalent WIC 
Customer Service Coordinator positions.
    There are 22 State agencies, including some ITOs and smaller 
State agencies, with monthly participation greater than 500 but not 
exceeding 7,000, and each of these State agencies would be required 
to employ a half-time or equivalent WIC Food Delivery Coordinator 
and a half-time or equivalent WIC Customer Service Coordinator, 
which is equivalent to 11 new full-time WIC.

[[Page 11547]]



                                               Table 9--Estimated Cost of Creating Two New Staff Positions
                                                                     [FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                                                         -----------------------------------------------------------------------------------------------
                                                             2024 \a\          2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly Total Compensation \b\...........................         $ 59.02          $60.79          $62.61          $64.49          $66.42             N/A
Total Annual Compensation \c\...........................         104,283         107,412         110,634         113,953         117,372             N/A
Cost of 108 New State agency Staff Positions (Millions).             5.6            11.6            11.9            12.3            12.7           $54.2
Cost of Hiring and Recruitment (Millions)...............             0.3             0.3             0.0             0.0             0.0             0.5
                                                         -----------------------------------------------------------------------------------------------
    Total New Staffing Costs (Millions).................             5.9            11.9            11.9            12.3            12.7            54.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Numbers may not sum due to rounding.
 \a\ Because the proposed staffing standards will not be required until 18 months after the final rule is published, estimates assume a phasing in
  effect with only 50 percent of positions filled in FY 2024 and increasing to 100 percent by FY 2025.
 \b\ The hourly total compensation for FY 2024-FY 2028 are calculated by taking the hourly total compensation for all State and Local workers from BLS
  for FY 2021 (https://data.bls.gov/timeseries/CMU3010000000000D) and inflating that hourly total compensation figure according to the CPI-W increase in
  OMB's economic assumptions for the FY 2023 President's Budget for years FY 2024-FY 2028.
 \c\ Total annual compensation for a full-time position is calculated by multiplying hourly compensation by 1,767 hours (OECD Labour Force Statistics,
  2020 average annual hours actually worked per worker in United States, https://stats.oecd.org/index.aspx?DataSetCode=ANHRS). Total compensation
  includes holidays, vacation and sick leave, and the cost of taxes and benefits.

    Food Delivery Coordinator positions (assuming each State agency 
manages its own vendor cost containment system) and 11 new WIC 
Customer Service Coordinator positions. The remaining 16 State 
agencies with monthly participation not exceeding 500 would not be 
required to create any new positions. See Table 9 for detailed costs 
for hourly compensation, full-time annual salary, and annual total 
costs.
    In addition to the total cost of compensation associated with 
the new staffing requirements, State agencies are also expected to 
incur some costs routinely associated with recruiting and hiring new 
staff. The Society for Human Resource Management estimates that in 
2022, organizations spent on average around $4,700 in hiring and 
recruitment costs per hire.\41\ Applying CPI-W inflation projects 
the Department estimates about $5,000 in hiring and recruitment 
costs per hire for the new positions--amounting to around $300,000 
in total hiring and recruitment costs each year in FY 2024 and FY 
2025 (assuming half of the 108 positions are filled in each of these 
years as described above).
---------------------------------------------------------------------------

    \41\ Navarra, Katie. ``The Real Costs of Recruitment.'' SHRM, 12 
Apr. 2022, www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/the-real-costs-of-recruitment.aspx.
---------------------------------------------------------------------------

Effect on WIC Participants

    The proposal to create two new WIC State agency staff positions 
would formalize both the staffing requirement and the expected 
education and experience levels needed for the WIC Customer Service 
Coordinator and the WIC Food Delivery Coordinator, enabling WIC 
State agencies to hire qualified staff to support a modern, 
participant-centered program.
    The WIC Customer Service Coordinator specifically would play a 
key role in future State agency efforts to design and implement 
innovative strategies and participant-facing technologies to 
increase participation in the WIC Program and the redemption of WIC 
benefits (see the below section on Participation Effects for more 
information on these efforts).

Effect on Vendors

    The proposed revisions to update State agency reporting 
requirements and to create two new WIC State agency staff positions 
would improve vendor management and oversight, which has grown in 
complexity over the past decade. Vendor management and oversight 
relies on data analysis and statistical assessments to ensure the 
State agency can operate the Program effectively and efficiently. 
While these changes are expected to improve State agency vendor 
management operations, the Department does not expect that these 
provisions would have a measurable impact on vendors themselves.

Effect on State Agencies

    These proposed provisions may initially increase burden on State 
agencies. First, the proposed revision to update reporting 
requirements for Federal oversight would streamline State agency 
reporting to FNS and ensure that State agencies report to FDP on all 
business entities authorized and monitored by WIC State agencies. 
This provision is meant to align WIC regulations with the 
information that State agencies are already required to report in 
the new FDP system. While the system is designed to be less 
burdensome for State agency reporting, some up-front work will be 
necessary to develop procedures to comply with the requirements of 
FDP.
    Second, the proposal to create two new WIC State agency staff 
positions would require some State agencies to hire new staff with 
the qualifications outlined in the staffing standards, which some 
State agencies may find challenging. On the other hand, the 
provision may assist some State agencies already seeking support to 
increase staffing. Despite potential up-front need of recruiting and 
filling these positions, the Department expects these new roles to 
be instrumental in supporting State agency efforts to oversee an 
increasingly modern and complex WIC Program. The Department is 
specifically requesting comments on whether the proposed staffing 
standards would support State agencies' search for qualified 
personnel, including a discussion of the State agency's ability to 
recruit and fill these positions as described (considering both the 
recruitment and hiring of staff with the proposed credentials), an 
assessment of any challenges and costs associated with the adoption 
of these provisions, necessary timeline to operationalize such 
requirements, and any recommendations for changes to the standards 
along with related rationale.

 Participation Impacts

    The baseline and revised costs presented in this analysis both 
assume a change in WIC participation from historical participation 
trends as a result of the $390 million in additional WIC funding 
made available in ARPA to carry out outreach, innovation, and 
program modernization efforts to increase participation and 
redemption of benefits. Implementation of projects made possible by 
this ARPA funding assume that participation will remain at current 
levels among infants and women, despite further declines in the 
birth rate, and an eventual increase in participation among children 
followed by a leveling off at the higher rate of child 
participation.
    Given planned efforts to increase participation and retention 
under ARPA, as described above, the Department is uncertain at this 
time how much of an increase in participation may be attributable 
solely to the proposed rule.

 Distributive Impacts

Differences Among Vendors

    The largest retailers may be more likely than independent 
grocers or smaller stores to initially benefit from a shift to WIC 
online shopping. However, due to the recent sales growth of 
independent grocers and the relatively small share of small vendor 
revenue attributable to WIC, the Department does not expect the 
proposed rule to have a lasting or significant negative impact on 
these firms.
    In 2020, the National Grocers Association reported that 
independent grocers accounted for 33 percent of total U.S. grocery 
sales, up

[[Page 11548]]

from 25 percent in 2012.\42\ This trend suggests a resilience among 
independent grocers to shifts in the retail landscape as many 
independent grocers utilized online shopping platforms when 
Americans turned to online grocery shopping in 2020 during the first 
year of the COVID-19 pandemic. However, data from IRI estimate that 
Walmart, Amazon, Instacart,\43\ Target, and major grocery firms 
claimed over 82 percent of the grocery e-commerce market share in 
2021, suggesting that the largest retailers and fulfillment 
platforms still likely hold a larger stake in the online retail 
space than independent grocers do relative to their share in the 
total grocery market.\44\ The Department does not routinely track 
data necessary to determine how WIC benefit redemptions vary by most 
vendor characteristics, including indicators for whether the store 
is a small business or independent grocer. USDA's ERS estimated, by 
merging WIC and SNAP redemption databases, that 76 percent of WIC 
retail redemptions occurred in larger stores (super stores, 
supermarkets, or large grocery stores) in FY 2012; however, the 
study's definition of supermarkets and large grocery stores is 
inclusive of many independent grocers.\45\ The Department does not 
have data on the extent to which small businesses and independent 
grocers have implemented online shopping to date, but is aware of 
products on the market being employed by independent grocers to 
provide online ordering currently for WIC participants (with in-
store or curbside transactions).
---------------------------------------------------------------------------

    \42\ Redman, R., ``Independent supermarkets drive one-third of 
U.S. grocery sales.'' Supermarket News, 15 June 2021. Available 
online at: https://www.supermarketnews.com/retail-financial/independent-supermarkets-drive-one-third-us-grocery-sales.
    \43\ Note that Instacart is an e-commerce platform and not 
generally a direct retailer, therefore IRI data for Instacart sales 
likely represents a mix of retailer sizes. Although much of 
Instacart's sales are through large chains, the platform also 
provides an opportunity for many independent grocers to participate 
in e-commerce without developing a platform themselves.
    \44\ Information Resources, Inc. ``Winning in CPG e-Commerce: 
Part 4,'' March 26, 2021. Available online at: https://www.iriworldwide.com/IRI/media/Library/IRI-TL-Demand-Pockets-Part-4-CPG-E-Commerce-03-29-21.pdf.
    \45\ Tiehen, L. and Fraz[atilde]o, E. Where Do WIC Participants 
Redeem Their Food Benefits? An Analysis of WIC Food Dollar 
Redemption Patterns by Store Type, EIB-152, U.S. Department of 
Agriculture, Economic Research Service, April 2016. Available online 
at: https://www.ers.usda.gov/webdocs/publications/44073/57246_eib152.pdf?v=0.
---------------------------------------------------------------------------

    If smaller WIC vendors (such as convenience stores or small and 
medium grocery stores) do not adopt online shopping solutions, then 
they may see some of their WIC revenues lost to larger retailers 
that provide online shopping. According to ERS data, in FY 2012, 
small grocery stores, medium grocery stores, and convenience stores 
accounted for 2.9 percent, 3.5 percent, and 3.8 percent of WIC 
retail redemptions, respectively. As WIC sales make up a relatively 
small fraction of the total revenue of smaller stores, and 
especially convenience stores, the Department expects any lost 
revenue for smaller vendors that do not adopt an online shopping 
solution to be relatively minor. For example, the 3.8 percent of 
total WIC benefits transacted at convenience stores in FY 2012 
amounts to about $228 million. U.S. convenience stores reported an 
estimated $193 billion in total in-store sales, not including fuel, 
in 2012, suggesting that WIC redemptions represented only about 0.12 
percent of non-fuel sales for convenience stores that year.\46\ As 
mentioned earlier, the Department also projects a relatively small 
portion of WIC transactions to move online even when fully 
implemented in FY 2027 and FY 2028.\47\
---------------------------------------------------------------------------

    \46\ Statista. ``Sales of the convenience store industry in the 
United States from 2011 to 2020, by format'' 27 January 2022. 
Available online at: https://www.statista.com/statistics/308767/sales-of-the-us-convenience-store-industry-by-format/.
    \47\ The Department projects that about 18 and 20 percent of WIC 
participants will transact any WIC electronic benefits online in FY 
2027 and 2028, respectively. Among those transacting any WIC 
electronic benefits online, only about half of their redemptions are 
expected to be online those years. See Table 6 for more details.
---------------------------------------------------------------------------

    The Department will continue to collect more timely information 
to better understand the potential impacts of this proposed rule on 
independent grocers and smaller vendors. Specifically, the 
Department will examine lessons learned from the SNAP Online 
Purchasing Pilot and GSCN sub-grant projects and will consider 
recommendations related to small vendor challenges published in the 
Task Force's Recommendations Report.

Differences Among State Agencies

    The Department does not expect the proposed rule to have an 
uneven or disproportionate impact on certain WIC State agencies over 
others. Many of the provisions in the proposed rule are written as 
State agency options, which would allow State agencies to tailor 
their approach to innovation around the issuance and redemption of 
WIC benefits to best fit their circumstances. The proposed changes 
to staffing standards to add new positions for a WIC Food Delivery 
Coordinator and WIC Customer Service Coordinator have the potential 
to put more strain on smaller State agencies with fewer resources to 
dedicate towards staffing. However, the Department is attempting to 
alleviate this in part by tiering the proposed staffing standards to 
adjust new hiring requirements by WIC caseload. The Department is 
specifically requesting comments on whether the proposed staffing 
standards would support State agencies' search for qualified 
personnel, including a discussion of the State agency's ability to 
recruit and fill these positions as described (considering both the 
recruitment and hiring of staff with the proposed credentials), an 
assessment of any challenges and costs associated with the adoption 
of these provisions, necessary timeline to operationalize such 
requirements, and any recommendations for changes to the standards 
along with related rationale.

Differences Among Participant Subgroups

    Early data from research conducted on the implementation of the 
SNAP Online Purchasing Pilot in eight States in 2019 suggest that 
many individuals living in rural LILA census tracts may fall outside 
the service area of online grocery delivery services.\48\ Although 
the study found that delivery systems reached around 90 percent of 
LILA census tracts, as discussed earlier in this analysis, this 
varied substantially between urban and rural areas. Using data from 
the eight States, the researchers estimated that grocery delivery 
services were available in only 39 percent of rural LILA census 
tracts, compared to 94 percent of urban LILA census tracts. Although 
online grocery services may have expanded in rural communities since 
this data was collected, and particularly following the onset of the 
COVID-19 pandemic, these findings suggest that WIC online shopping 
may not reach all participants equally, especially at first.
---------------------------------------------------------------------------

    \48\ Brandt EJ, Silvestri DM, Mande JR, Holland ML, et al. 
Availability of grocery delivery to food deserts in states 
participating in the online purchase pilot. JAMA Netw Open. 
2019;2:e1916444.
---------------------------------------------------------------------------

    Allowing State agencies to adopt online shopping in WIC would 
also be less useful for households without internet access. 
According to data from the 2019 American Community Survey (ACS), 
between 78 to 85 percent of Americans in metro areas and 70 to 79 
percent of Americans in non-metro areas between ages 18 to 64 living 
below 199 percent of the Federal poverty line had access to internet 
at home.\49\ This leaves a significant number of families out of 
reach from online shopping services.
---------------------------------------------------------------------------

    \49\ Swenson, K. and Ghertner, R. People in Low-Income 
Households Have Less Access to internet Services--2019 Update. U.S. 
Department of Health & Human Services, Office of the Assistant 
Secretary for Planning & Evaluation. March 2021. Available online 
at: https://aspe.hhs.gov/sites/default/files/2021-07/internet-access-among-low-income-2019.pdf.
---------------------------------------------------------------------------

 Uncertainties

Use of WIC Online Shopping

    The impact of the proposed rule provisions that enable online 
shopping in WIC will depend largely on how many participants 
transact any WIC electronic benefits online. In this impact 
analysis, the Department projects that, within State agencies 
offering online shopping, 12 percent of participants will transact 
benefits online in FY 2024, increasing gradually to reach 20 percent 
of participants in FY 2028. These estimates are largely based on the 
uptake of the SNAP Online Purchasing Pilot and project outward based 
on the predicted growth rate of online grocery shopping among the 
general population.
    If usage is 5 percentage points higher, starting at 17 percent 
in FY 2024, and continues to increase by about 2 percentage points 
each year, then the total cost impact would be estimated to be $504 
million over 5 years. If usage is 5 percentage points lower, 
starting at 7 percent in FY 2024, and maintains a 2-percentage point 
increase each year, then the total cost impact would be estimated to 
be $280 million over 5 years (see Table 10).

[[Page 11549]]



                                          Table 10--Projected Cost of Online Shopping at Different Usage Levels
                                                                [Fiscal year (millions)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher (+ 5%): Percentage of participants making at                  17%             19%             21%             23%             25%  ..............
 least one WIC purchase online, within participating
 State agencies.........................................
Increase in total WIC food costs due to online shopping.            $7.9           $59.2          $103.7          $155.7          $177.5          $504.0
Current: Percentage of participants making at least one              12%             14%             16%             18%             20%  ..............
 WIC purchase online, within participating State
 agencies...............................................
Increase in total WIC food costs due to online shopping.            $5.6           $43.7           $79.0          $121.9          $142.0          $392.1
Lower (-5%): Percentage of participants making at least               7%              9%             11%             13%             15%  ..............
 one WIC purchase online, within participating State
 agencies...............................................
Increase in total WIC food costs due to online shopping.            $3.2           $28.1           $54.3           $88.0          $106.5          $280.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.

Impact of WIC Online Shopping on Redemption

    The overall cost impact of enabling online shopping in WIC will 
also depend on how much the added convenience leads to an increase 
in overall redemptions. As described above, the benefits of online 
shopping are expected to address some of the barriers and challenges 
that WIC participants report about the current shopping experience. 
This analysis expects about a 10 percent increase in WIC electronic 
benefit redemptions among participants that transact at least some 
WIC electronic benefits online. As shown in Table 11, a 5-percentage 
point variation in this effect is estimated to amount to around a 
$120 million difference in the 5-year estimate for WIC food costs. 
If benefit redemptions do not increase at all under the proposed 
rule, then the Department still estimates nearly a $149 million 
increase in Federal WIC food costs attributed solely to the expected 
13 percent increase in online food prices described earlier in this 
analysis.

                                       Table 11--Projected Cost of Online Shopping at Different Redemption Levels
                                                                       [Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher: 15% Increase in Benefit Redemption for Online               $7.3           $57.2          $103.5          $159.7          $186.1          $513.8
 Shoppers...............................................
Current: 10% Increase in Benefit Redemption for Online               5.6            43.7            79.0           121.9           142.0           392.1
 Shoppers...............................................
Lower: 5% Increase in Benefit Redemption for Online                  3.8            30.1            54.5            84.0            97.9           270.3
 Shoppers...............................................
Zero: 0% Increase in Benefit Redemption for Online                   2.1            16.5            29.9            46.2            53.8           148.6
 Shoppers...............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.

Difference in Prices of Online WIC Foods

    The overall cost impact of enabling online shopping in WIC would 
also be affected by differences in the retail prices consumers pay 
online. As described earlier in this analysis, the Department uses 
current market estimates to project that WIC shoppers will pay an 
average of 13 percent higher retail prices for WIC foods when 
transacting benefits online. An increase or decrease in retail 
prices of 5 percentage points, relative to in-store prices, would 
amount to over a $60 million impact on the overall Federal WIC food 
costs associated with this provision of the proposed rule over 5 
years (see Table 12). If there is no difference between in-store and 
online retail prices of WIC foods, then the proposed rule is still 
expected to increase WIC food costs by around $229 million over 5 
years attributed solely to the projected 10 percent increase in 
redemptions for online WIC shoppers, as described earlier in this 
analysis.

                                    Table 12--Projected Cost of Online Shopping at Different Retail Price Variations
                                                                       [Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher: 18% Increase in Retail Prices for Online                    $6.5           $50.7           $91.6          $141.4          $164.8          $455.0
 Shoppers...............................................
Current: 13% Increase in Retail Prices for Online                    5.6            43.7            79.0           121.9           142.0           392.1
 Shoppers...............................................
Lower: 8% Increase in Retail Prices for Online Shoppers.             4.7            36.7            66.3           102.3           119.2           329.2

[[Page 11550]]

 
Zero: 0% Increase in Retail Prices for Online Shoppers..             3.2            25.5            46.0            71.1            82.8           228.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.

Number of State Agencies That Already Meet New Staffing 
Requirements

    The overall cost of creating new staff positions based on the 
provisions of this proposed rule depend on the Department's estimate 
for current State agency staffing capacity. However, it is difficult 
to estimate how many State agencies already fulfill the proposed 
requirements because the Department does not routinely track State 
agencies' staffing qualifications. If an additional 5 percent of 
larger State agencies (those with more than 7,000 monthly 
participants) already meet the new requirements respectively for 
each new staff position, and do not need to hire new staff, only 36 
State agencies would be required to hire a full-time WIC Food 
Delivery Coordinator and 46 State agencies would be required to hire 
a full-time WIC Customer Service Coordinator. Under these 
conditions, the above estimate of $55 million for creating 108 new 
staff positions during FY 2024 to FY 2028 would decrease to nearly 
$53 million for creating 104 new staff positions (including both 
costs of total compensation and costs associated with hiring and 
recruitment). If an additional 5 percent of larger State agencies 
are required to hire new staff for each new staff position, then 41 
State agencies would be required to hire a full-time WIC Food 
Delivery Coordinator and all 51 larger State agencies would be 
required to hire a full-time WIC Customer Service Coordinator. This 
increase in hiring would bring the 5-year cost estimate up to $58 
million for 114 new staff positions during FY 2024 through FY 2028 
(including both costs of total compensation and costs associated 
with hiring and recruitment). See Table 13 for annual and total cost 
estimates based on the number of new staff positions required.

                                              Table 13--Estimated Cost of Creating Two New Staff Positions
                                                               [FY 2024-2028, Variations]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Fiscal year (millions)
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Higher (+5% of State agencies): 114 New State agency                $6.2           $12.5           $12.6           $13.0           $13.4           $57.7
 Staff Positions........................................
Current: 108 New State agency Staff Positions...........             5.9            11.9            11.9            12.3            12.7            54.7
Lower (-5% of State agencies): 104 New State agency                  5.7            11.4            11.5            11.9            12.2            52.7
 Staff Positions........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation. Staffing costs include both total cost of compensation and costs associated with
  recruitment and hiring in FY 2024 and FY 2025.

Alternatives

State Agencies Pay for Delivery Fees

    The Department is requesting public comment on whether State 
agencies should have the option to pay for fees associated with 
online shopping in a retail food delivery system with either (1) 
non-Federal funding at State agency discretion or (2) Federal 
funding in situations where it is deemed necessary to meet special 
needs (e.g., participant access or other needs as identified by the 
State agency). If State agencies were to pay for these fees for all 
WIC online grocery orders using Federal funds, then the cost of the 
proposed rule would increase. These additional costs would be a 
function of two related cost streams: (1) payments made to cover the 
cost of delivery fees, and (2) new costs associated with a projected 
increase in usage of online shopping as WIC participants would no 
long face a barrier of out-of-pocket delivery fees for WIC orders. 
The cost impact of the increase in online shopping is expected to be 
the same whether State agencies pay for the delivery fees using 
Federal or non-Federal funds.
    To analyze the cost impact of this policy alternative, this 
analysis focuses on fees associated with grocery delivery services 
from internet-based grocery retailers and, in this model, assumes 
that all State agencies opt to pay for delivery fees for all WIC 
online shopping delivery orders. The Department averaged the typical 
delivery and service fees of six of the largest online grocery 
firms. After adjusting for annual inflation, the Department 
estimates that an average online grocery order in 2024 will be 
assessed $9.59 in delivery and service fees, increasing to $10.51, 
adjusting for inflation, in FY 2028.
    The Department expects an increase in the use of online shopping 
in WIC if participants do not have to pay delivery fees. Based on 
data from a recent Mercatus report, the Department estimates that, 
when faced with delivery fees, 33 percent of WIC online shopping 
orders will be placed for home delivery while the remaining 67 
percent will opt for in-store or curbside pickup.\50\ While many 
shoppers prefer curbside pickup regardless of the fees associated 
with delivery, this analysis estimates the share of online WIC 
shoppers choosing home delivery will increase from 33 percent to 45 
percent if State agencies pay for delivery fees on behalf of 
participants. Paying delivery fees on behalf of participants is also 
expected to attract more in-store only shoppers to purchase WIC 
foods online. While the Department expects about 12 percent of WIC 
participants to transact their food benefits online in FY 2024, this 
figure is expected to increase slightly to 14 percent if State 
agencies pay for delivery fees and continue to steadily increase to 
22 percent in FY 2028 (up from the 20 percent projected in Table 6 
of this analysis). As discussed previously, the Department expects 
the average online WIC shopper would transact about 50 percent of 
the WIC food benefits they use online and the other 50 percent in 
brick-and-mortar stores. Data from four States in 2012 indicate that 
the average WIC participant in those States made 3.2 WIC shopping 
trips each month to use their WIC benefits.\51\ National polling 
data suggest that individuals who buy groceries online do so less 
frequently than in-

[[Page 11551]]

store shopping trips.\52\ Accordingly, the Department estimates that 
the average online WIC shopper will make one online WIC order each 
month and that the average WIC household will order benefits for two 
WIC participants in a single order (e.g., formula for a partially 
breastfeeding infant and WIC-approved foods for their partially 
breastfeeding parent).\53\
---------------------------------------------------------------------------

    \50\ Mercatus. ``eGrocery Transformed: Market projections and 
insight into online grocery's elevated future,'' 2021.
    \51\ Phillips, D., Bell, L., Morgan, R., & Pooler, J. (2014). 
Transition to EBT in WIC: Review of impact and examination of 
participant redemption patterns: Final report. Retrieved from 
https://altarum.org/sites/default/files/uploaded-publication-files/Altarum_Transition%20to%20WIC%20EBT_Final%20Report_071614.pdf.
    \52\ Brenan, M. ``More in U.S. Grocery Shopping Online, Fewer 
Dining Out.'' Gallup, 10 August 2021. Available online at: https://news.gallup.com/poll/353090/grocery-shopping-online-fewer-dining.aspx.
    \53\ According to data reported by 80 State agencies in the 
Supplemental Data Set of the WIC Participant and Program 
Characteristics 2020 Final Report, the average WIC household 
includes around 2 individuals receiving WIC benefits.
---------------------------------------------------------------------------

    Given these assumptions, the Department estimates that total 
delivery fees paid will amount to $124 million between FY 2024 and 
FY 2028 (Table 14). The slight expected increase in online shopping 
if State agencies pay for delivery fees on behalf of participants is 
expected to result in a total 5-year increase of $437 million in 
Federal WIC food costs, approximately $45 million higher than the 
estimated $392 million increase to food costs over 5 years 
attributed to the proposed rule as currently written (Table 7). 
Between the projected increase in food costs and the new costs 
incurred for delivery fees, the Department estimates that using 
Federal funds to pay delivery fees on behalf of participants would 
increase the cost of this proposed rule by around $169 million over 
5 years (Table 14). If State agencies use only non-Federal funds to 
pay for the delivery fees, then the increase to Federal transfers 
would only reflect the increase in food costs driven by the 
increased uptake in online shopping described above--increasing 5-
year costs by about $45 million.

                                 Table 14--Estimated Impact on Cost of Proposed Rule if State Agencies Pay Delivery Fees
                                                                     [FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Fiscal year (millions)
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alternative:
    Projected increase in Federal food costs due to                 $6.5           $49.9           $88.8          $135.4          $156.2          $436.9
     online shopping if State agencies pay delivery fees
    Projected total cost of delivery fees (paid by State             1.9            14.5            25.8            38.4            43.3           123.9
     agencies)..........................................
Current:
    Projected increase in Federal food costs due to                  5.6            43.7            79.0           121.9           142.0           392.1
     online shopping if participants pay delivery fees
     out-of-pocket (Current)............................
    Increase in cost of proposed rule if State agencies              2.8            20.7            35.7            52.0            57.5           168.7
     pay delivery fees with Federal funds...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation.

Requiring All 89 State Agencies To Create Two New Full-Time Staff 
Positions

    The Department proposes to adjust the staffing standards based 
on the caseload size of the State agency. As an alternative, the 
Department could have proposed to require all 89 State agencies to 
create two new full-time staffing positions. Under the alternative, 
the total number of new staff positions required would be 178, and 
the total estimated cost would be $90 million (including both costs 
of total compensation and costs associated with hiring and 
recruitment). However, the Department ultimately decided to adjust 
the staffing requirements based on each State agency's participant 
caseload due to resource constraints and to avoid undue burden on 
smaller States, Territories, and ITOs. See the Table 15 for annual 
and total cost estimates if all State agencies were required to 
employ two new full-time staff.

                                     Table 15--Estimated Cost of All State Agencies Creating Two New Staff Positions
                                                                     [FY 2024-2028]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Fiscal year (millions)
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current:
    108 New State agency Staff Positions................            $5.9           $11.9           $11.9           $12.3           $12.7           $54.7
Alternative:
    178 New State agency Staff Positions (requiring all              9.7            19.6            19.7            20.3            20.9            90.2
     State agencies to hire new staff)..................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: All monetary estimates are adjusted for annual inflation. Staffing costs include both total cost of compensation and costs associated with
  recruitment and hiring in FY 2024 and FY 2025.


[[Page 11552]]

Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), the Department has prepared an accounting 
statement summarizing the annualized estimates of benefits and costs 
associated with the provisions of this proposed rule.
    The benefits of the proposed rule include decreasing burden on 
WIC participants, WIC vendors, and State agencies; encouraging 
innovation by State agencies; and allowing WIC participants to 
transact benefits in new and innovative ways.
    The net costs or savings (i.e., negative costs) and transfers 
associated with provisions of the proposed rule are incurred by the 
Federal government, WIC State Agencies, and/or WIC vendors. These 
include the following, as described in the full regulatory impact 
analysis text:

 Costs for new staff positions
 Costs associated with updating State agency systems for 
online transactions
 Decreased administrative burden
 Increased WIC food spending

                                                     Table 16--Undiscounted Cost and Transfer Stream
                                                                      [$ millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nominal Federal transfer stream.........................            $5.6           $43.7           $79.0          $121.9          $142.0          $392.1
Nominal State Agency cost stream........................            -2.7             9.4             7.7             8.8             6.9            30.1
Nominal WIC Vendor cost stream..........................            -3.5            -3.6            -3.7            -3.8            -3.8           -18.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Applying 3 percent and 7 percent discount rates to these 
undiscounted streams gives present values (in 2022 dollars):

                                                     Table 17--Discounted Cost and Transfer Streams
                                                               [$ Millions, 2022 Dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                                                         -----------------------------------------------------------------------------------------------
                                                               2024            2025            2026            2027            2028            Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Discounted Federal transfer stream
    3 percent...........................................            $5.0           $37.4           $64.3           $94.3          $104.4          $305.5
    7 percent...........................................             4.7            33.5            55.4            78.3            83.5           255.3
Discounted State Agency cost stream
    3 percent...........................................            -2.4             7.9             6.1             6.6             4.8            23.0
    7 percent...........................................            -2.2             7.0             5.2             5.5             3.9            19.4
Discounted WIC Vendor cost stream
    3 percent...........................................            -3.3            -3.3            -3.3            -3.2            -3.2           -16.3
    7 percent...........................................            -3.1            -2.9            -2.8            -2.7            -2.6           -14.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 18 takes the discounted streams from Table 17 and computes 
annualized values in FY 2022 dollars.

                                         Table 18--Accounting Statement
----------------------------------------------------------------------------------------------------------------
                                                                              Discount
              Benefits                   Range      Estimate   Year dollar      rate          Period covered
----------------------------------------------------------------------------------------------------------------
Qualitative: Improved shopping experience, increased flexibility and convenience, and decreased burden on WIC
 participants; increased flexibility for WIC State Agencies; and increased opportunity for innovation by WIC
 State Agencies and WIC vendors.
----------------------------------------------------------------------------------------------------------------
                                State Agencies, WIC Vendors, and WIC Participants
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/           n.a.          n.a.         n.a.         n.a.  FY2024-2028
 year).
----------------------------------------------------------------------------------------------------------------
Transfers                                 Range      Estimate         Year     Discount  Period
                                                                    dollar         rate  covered
----------------------------------------------------------------------------------------------------------------
                                               Federal Government
----------------------------------------------------------------------------------------------------------------
Quantitative: Impact of online shopping on Federal transfers for WIC food spending.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/            n.a         $51.1         2022           7%  FY2024-2028
 year).
                                      ..........        $61.1         2022           3%
----------------------------------------------------------------------------------------------------------------


[[Page 11553]]


                                    Table 18--Accounting Statement--Continued
----------------------------------------------------------------------------------------------------------------
                                                                              Discount
                Costs                    Range      Estimate   Year dollar      rate          Period covered
----------------------------------------------------------------------------------------------------------------
                                                 State Agencies
----------------------------------------------------------------------------------------------------------------
Quantitative: Net impact of online purchasing system and maintenance, increased staffing costs, and decreased
 administrative costs.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/            n.a          $3.9         2022           7%  FY2024-2028
 year).
                                      ..........         $4.6         2022           3%
----------------------------------------------------------------------------------------------------------------
                                     WIC Vendors (Negative Costs = Savings)
----------------------------------------------------------------------------------------------------------------
Quantitative: Impact of decreased administrative costs.
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/            n.a         -$2.8         2022           7%  FY2024-2028
 year).
                                      ..........        -$3.3         2022           3%
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2023-02484 Filed 2-21-23; 8:45 am]
BILLING CODE 3410-30-P