Analysis and supporting documents used to determine effect on small business
The Department published a solicitation in the Administrative Register, requesting comments on the economic impact of the proposed rule, from August 12th to August 26th, 2019
Effect on small business
Please see economic impact analysis.
Agency contact person
Carrie Coenen, (608) 267-9744, P.O. Box 2659, 1 W. Wilson Street, Madison, WI 53701-2659, carrie.coenen@wi.gov Statement on quality of agency data
The data used by the Department to prepare these proposed rules and analysis comply with s. 227.14 (2m), Wis. Stats. Place where comments are to be submitted and deadline for submission
Comments may be submitted to the agency contact person that is listed above until the deadline given in the upcoming notice of public hearing. The notice of public hearing and deadline for submitting comments will be published in the Wisconsin Administrative Register and to the department’s website, at https://www.dhs.wisconsin.gov/rules/permanent.htm. Comments may also be submitted through the Wisconsin Administrative Rules Website, at: https://docs.legis.wisconsin.gov/code/chr/active. RULE TEXT
SECTION 1. DHS 149.01 (intro.) is amended to read:
DHS 149.01 (intro.) Authority and purpose. This chapter is adopted pursuant to ss. 46.016, 46.028, 227.11 (2) (a) and 253.06 (5) (a), Stats., and a state plan under s. 253.03, Stats., and 7 CFR 246. This chapter establishes the criteria for approval of grocery stores and pharmacies as authorized vendors to sell foods to participants under the special supplemental nutrition program for women, infants and children (WIC). This chapter establishes operation standards for infant formula suppliers. This chapter also establishes criteria for individuals who receive or apply to receive benefits under the WIC program. The WIC program was established under section 17 of the Child Nutrition Act of 1966, as amended, 42 USC 1786 and 7 CFR 246. SECTION 2. DHS 149.02 (intro.) is amended to read:
DHS 149.02 (intro.) Applicability. This chapter applies to applicants for WIC vendor authorization, authorized vendors, applicants for direct distribution center authorization, direct distribution centers, WIC participants, applicants for WIC program benefits, applicants for infant formula supplier authorization, and persons serving as proxies for participants approved infant formula suppliers.
SECTION 3: DHS 149.03 is repealed and recreated to read:
DHS 149.03 (1) “Above-50-percent vendor" means a vendor that derives more than 50 percent of annual food sales revenue from WIC food instruments. It includes vendor applicants applying for initial authorization that estimate they will derive more than 50 percent of annual food sales revenue from WIC food instruments.
DHS 149.03 (2) “Agreement" or “Vendor Agreement” means the document or electronic record entered into by a vendor and the department that contains the terms and conditions under which a vendor or direct distribution center is authorized to provide approved food in exchange for a WIC food instrument.
DHS 149.03 (3) “Approved food" or “authorized supplemental food” has the meaning provided in s. 253.06 (1) (am), Stats. DHS 149.03 (4) “Authorized infant formula supplier list" means the list of wholesalers, distributors, retailers, and manufacturers approved by the department to provide approved infant formula to vendors and direct distribution centers.
DHS 149.03 (5) ”Cardholder” means a person in possession of a food instrument and attendant personal identification number.
DHS 149.03 (6) “Change of ownership" means the transfer of the right to control the assets or management of a vendor or direct distribution center, or any majority changes in ownership interest.
DHS 149.03 (7) “Civil money penalty" means a monetary penalty imposed on a vendor in lieu of disqualification under 7 CFR 246.12 (l) (1) (ix) and (x). DHS 149.03 (8) “Conditional authorization” means additional terms and conditions imposed by the department, including restrictions due to a relationship with an individual with an unacceptable history with WIC or SNAP, or a family member participant.
DHS 149.03 (9) “Contract period" means the period of time stated in the agreement that a vendor or direct distribution center is authorized to provide approved food in exchange for a WIC food instrument.
DHS 149.03 (10) “Customer area" means the portion of a grocery store or pharmacy that is normally frequented by customers and does not include storage or other areas that are normally not frequented by customers.
DHS 149.03 (11) “Department" means the Wisconsin department of health services.
DHS 149.03 (12) “Direct distribution center" means an entity, other than a vendor, that is under contract with the department or a local agency under s. 253.06 (3m), Stats., to distribute approved food to participants. DHS 149.03 (13) “Disqualification" means the act by the department of ending WIC participation of a vendor, direct distribution center, infant formula supplier, or participant because of a program violation.
DHS 149.03 (14) “EBT” or “Electronic benefit transfer system” has the meaning provided in s. 253.06 (1), Stats. DHS 149.03 (15) ”EBT-capable” means a cash register system or payment device, approved by the department, that can accurately and securely obtain the WIC benefit balance associated with a food instrument, maintain the necessary files, such as the approved product list, and successfully complete WIC transactions.
DHS 149.03 (16) “Enforcement assessment" means the amount added to a forfeiture or recoupment required under s. 253.06 (5) (c), Stats. DHS 149.03 (17) “Family" means a household or economic unit composed of a person or group of persons, related or unrelated who usually live together and whose production of income and consumption of goods are related. Exceptions include residents of a homeless facility or an institution shall not be considered as members of a single family. A foster child is counted as a separate family unit of one.
DHS 149.03 (18) “Food instrument” has the meaning provided in s. 253.06 (1), Stats. DHS 149.03 (19) “Food sales" means the sales of all foods that are eligible items under SNAP.
DHS 149.03 (20) “Forfeiture" means the sum of money required to be paid to the department as a result of a vendor violation as provided in s. 253.06 (5) (b) (4), Stats. DHS 149.03 (21) “Grocery store" means a retail store, or a store authorized by SNAP as a specialty store, that sells a general line of food such as breads, cereals, fruits and vegetables, meats, fish, poultry, and dairy products.
DHS 149.03 (22) “Incident” means one or more compliance buys, as defined in 7 CFR 246.2, conducted on the same date, or one sub-category level designation within the approved product list (APL) as used in an inventory audit, or a program violation observed on one date for discretionary sanctions. DHS 149.03 (23) “Initial authorization" means the authorization of a specific business entity to serve as a vendor at a designated location.
DHS 149.03 (24) “Inventory audit” means the examination of invoices or other proofs of purchase to determine whether a vendor has purchased sufficient quantities of approved foods compared to valid claims for payment.
DHS 149.03 (26) “Local agency" means an entity that has a contract with the department to provide WIC services including preauthorization site visits, eligibility determination, WIC benefit issuance, and nutrition counseling for participants.
DHS 149.03 (27) “Local agency clinic" means a site established by a local agency where WIC participants receive services including the local agency main office or its satellite locations.
DHS 149.03 (28) “Maximum food price" means the maximum amount a vendor within each vendor peer group may charge for an approved food item or for a standardized combination of foods.
DHS 149.03 (29) “Minimum stock requirement" means the food items, categories, approved sizes and quantities of foods that vendors are required to maintain in the customer area as specified in the vendor manual and stock price survey.
DHS 149.03 (30) “Non-sale price" means the price of an item that has not been reduced for a limited time.
DHS 149.03 (31) “Preauthorization site visit" means the on-site review of the vendor to verify that the vendor meets WIC program requirements, including minimum stock requirements, pricing, freshness, and cleanliness.
DHS 149.03 (32) “Participant" means a person who is eligible for and receives services under s. 253.06, Stats., including an infant, child under age 5, and a pregnant, breastfeeding, or postpartum woman within six months of delivery. DHS 149.03 (33) “Pattern” means two or more documented incidents subject to discretionary sanctions.
DHS 149.03 (34) “Pharmacy" means an establishment that is licensed to operate as a pharmacy under s. 450.06, Stats. “Pharmacy" includes a person conducting transactions on behalf of the pharmacy, including the owner, manager, a representative, an employee or any other individual who directly or indirectly participates in the operation of the pharmacy. DHS 149.03 (35) “SNAP" means the federal Supplemental Nutrition Assistance Program under 7 USC 2011 to 2029, formerly known as Food Stamp Program, and known in Wisconsin as FoodShare Program. DHS 149.03 (36) “Sanction" means a penalty imposed by the local agency or department on a vendor, direct distribution center, infant formula supplier or participant because of a violation of this chapter and includes denial of an application, termination of authorization for a vendor or termination of the contract for a direct distribution center, disqualification, recoupment, forfeiture, enforcement assessments under s. 253.06 (5) (b), Stats., or civil money penalties. DHS 149.03 (37) “Standardized combination of foods" means a group of approved foods selected by the department and used for cost containment and vendor eligibility.
DHS 149.03 (38) “Stock price survey" means the department form used to record current vendor non-sale shelf prices for approved foods, which must be submitted with a vendor application when requested by the department.
(Note) The stock price survey may be obtained from the WIC vendor website at http://www.dhs.wisconsin.gov/wic/vendor/application/htm.
DHS 149.03 (39) “USDA" means the United States department of agriculture.
DHS 149.03 (40) “Vendor" means a sole proprietorship, partnership, cooperative association, corporation, or other business entity operating one or more grocery stores or pharmacies authorized by the department to provide approved foods to participants under a retail food delivery system. Each location operated by a business entity constitutes a separate vendor and must be authorized separately from other stores operated by the business entity.
DHS 149.03 (41) “Vendor authorization” means the determination by the department that assesses, selects, and then enters into an agreement with a grocery store or pharmacy that applies or reapplies to be authorized as a vendor.
DHS 149.03 (42) “Vendor manual" means the electronic or printed manual the department publishes that describes the WIC program and program policies related to the provision of approved food to participants, including program policies, periodic updates and amendments, applicable rules, and other requirements.
DHS 149.03 (43) “Vendor peer group" means a group of 2 or more vendors determined by the department to have similar characteristics and used to set distinct competitive price criteria and allowable reimbursement levels.
DHS 149.03 (44) “WIC" or “WIC Program" means the special supplemental nutrition program for women, infants and children established pursuant to 42 USC 1786, 7 CFR 246, and s. 253.06, Stats. DHS 149.03 (45) “WIC benefit" means a WIC food instrument, approved food available with a food instrument, approved food purchased with a food instrument, or a WIC breast pump.
SECTION 4. DHS 149.04 (title) and (intro.) are amended to read:
DHS 149.04 Food Direct distribution centers. Food Direct distribution centers shall comply with this chapter and s. 253.06, Stats.
SECTION 5. DHS 149.05 is repealed and recreated to read:
DHS 149.05 Minimum requirements for vendor authorization. A vendor may be eligible to become an authorized vendor, or remain an authorized vendor if all of the following conditions are met:
DHS 149.05 (1) The vendor is located in Wisconsin.
DHS 149.05 (2) The vendor has a fixed location unless otherwise allowed by the department, as in the case of a designated disaster or emergency.
DHS 149.05 (3) The vendor is SNAP authorized.
DHS 149.05 (4) The vendor has a current retail food establishment license.
DHS 149.05 (5) The vendor is registered and maintains registration in good standing with the Wisconsin department of financial institutions (DFI).
DHS 149.05 (6) The vendor demonstrates business integrity. Activities that indicate a lack of business integrity include fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or aiding and abetting any of these activities.
DHS 149.05 (7) The vendor and any representative, agent, manager, employee, or other person who directly or indirectly participates in the operation of the grocery store or pharmacy has not been convicted of a crime, or has a civil or criminal judgment entered against them in Wisconsin or any other state during the last 6 years for an activity that would indicate a lack of business integrity, including possession of a controlled substance with intent to deliver.
DHS 149.05 (8) The vendor and any of its representatives, agents, managers, employees or other persons who directly or indirectly participate in the operation of the grocery store or pharmacy, who has current or prior involvement with WIC or SNAP, has an acceptable history with WIC and SNAP. In determining whether the history is acceptable, the department shall consider the person’s history with either WIC or SNAP, including whether the person conducts or has conducted business without authorization by WIC or SNAP as applicable.
DHS 149.05 (9) The vendor demonstrates the business was purchased in good faith with a verifiable form of payment.
DHS 149.05 (10) The vendor is not currently disqualified from SNAP and has not had a SNAP civil money penalty suspended for hardship where the disqualification period that would otherwise have been imposed has not expired.
DHS 149.05 (11) The vendor has not been adjudicated to be delinquent in the payment of taxes under ch. 71, 72, 76, 77, 78 or 139, Stats. DHS 149.05 (12) The vendor has not been sold by its previous owner to another vendor or owner in an attempt to circumvent a WIC sanction. The department may consider such factors as whether the previous owner sold the grocery store or pharmacy to a person who is related by blood or marriage to the previous owner or sold to any individual or organization for less than the grocery store or pharmacy’s fair market value, or is unable to provide verifiable proof of payment.
DHS 149.05 (13) The vendor has no outstanding forfeitures, recoupment assessments, enforcement assessments, or civil money penalties that were levied against that vendor for a violation of this chapter, or for a violation of s. 253.06, Stats., or 7 CFR 246. DHS 149.05 (14) The vendor has an EBT capable cash register system or payment device, approved by the department. The system or device must have acceptable documented testing prior to a WIC participant purchase.
DHS 149.05 (15) The vendor has sufficient EBT capable cash register system terminals or payment devices deployed in accordance with the minimum lane coverage provisions of s. 7 CFR 246.12 (z) (2). DHS 149.05 (16) The vendor is not an above-50-percent vendor at the time of the initial application for authorization to be a WIC vendor.
DHS 149.05 (17) The vendor’s maximum price for a standardized combination of foods is the same or less than the prices charged by other vendors in the vendor’s peer group.
DHS 149.05 (18) The vendor purchases infant formula provided to participants only from a supplier listed on the authorized infant formula supplier list.
DHS 149.05 (19) The vendor has established hours of operation which include a minimum of two 4-hour blocks of time on each of 5 days per week and daily operating hours are consistent from week to week.
DHS 149.05 (20) The vendor has not accepted WIC food instruments before becoming an authorized vendor.
