BILL ANALYSIS Ó
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 152
A
AUTHOR: Fuentes
B
AMENDED: May 27, 2011
HEARING DATE: June 22, 2011
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REFERRAL: Human Services
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Governance and Finance
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CONSULTANT:
Orr
SUBJECT
Food banks: grants: voluntary contributions: income tax
credits
SUMMARY
Establishes the State Emergency Food Assistance Program
(SEFAP) in statute within the Department of Social Services
(DSS) and allows for federal contributions to SEFAP for the
purchase of California grown fresh fruits or vegetables.
Provides a tax credit to California growers for the costs
of fresh fruits or vegetables donated to California food
banks. Directs the California Department of Public Health
(CDPH) to apply for specified federal funding for obesity
prevention and promotion of healthy eating.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes The Emergency Food Assistance Program (TEFAP)
which supplements the diets of low-income Americans,
including elderly people, by providing them with emergency
food and nutrition assistance at no cost.
Continued---
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Existing state law:
Establishes the Emergency Food Assistance Program Fund
(Fund) until January 1, 2014, to receive voluntary
contributions from taxpayers when they file their taxes.
Establishes the Personal Income Tax Law which allows
taxpayers, until January 1, 2014, to designate on their tax
returns that a specified amount in excess of their tax
liability be contributed to the Fund, to be allocated by
DSS for direct services for TEFAP.
Authorizes through the Personal Income Tax Law and the
Corporation Tax Law various credits against the taxes
imposed by those laws.
Requires, until January 1, 2013, CDPH to develop a "Healthy
Food Purchase" pilot program in conjunction with the
Department of Food and Agriculture (DFA), in no more than
seven counties, to increase the sale and purchase of fresh
fruits and vegetables in low-income communities, as
specified.
This bill:
Authorizes CDPH to apply for specified federal funding for
obesity prevention and promotion of healthy eating.
Directs CDPH to provide in-kind support and award grants to
local governments and nonprofit organizations deemed
eligible to implement programs and initiatives for these
purposes, upon receipt of such federal funds.
Grants a 10 percent tax credit for persons who plant,
manage, and harvest food crops for the cost of fresh fruits
or vegetables donated to food banks located in California
for taxable years beginning on or after January 1, 2012,
and before January 1, 2017. Defines a "qualified taxpayer"
as the person responsible for planting a crop, managing the
crop, and harvesting the crop from land.
Until December 1, 2017, provides that, if the credit is
claimed, any deduction otherwise allowed for that amount of
the cost that is eligible for the credit shall be reduced
by the amount of the credit. If the tax credit exceeds the
"net tax," the excess may be carried over to reduce the
"net tax" in the following year, and for the six succeeding
years if necessary, until the credit has been exhausted.
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Until December 1, 2017, requires that, upon receipt of the
donated fresh fruits or fresh vegetables, the nonprofit
organization provide a certificate to the donor containing
a signed statement that the product is donated. The
certificate must contain the type and quantity of product
donated, the name of the donor or donors, and the name and
address of the recipient of the donation.
Requires the Franchise Tax Board (FTB) to report to the
Legislature on or before December 1, 2014, and each year
thereafter until January 1, 2016, regarding the utilization
of this credit.
Establishes SEFAP within DSS to provide emergency food and
funding for emergency food bank networks and related
organizations.
Creates the State Emergency Food Assistance Program Account
within the Fund to receive General Fund monies, federal
funds and voluntary donations or contributions allocated to
DSS for the purpose of SEFAP, to be used for the purchase,
storage, and transportation of food grown or produced in
California. Excludes monies from this account from being
used for DSS administrative costs.
Makes various declarations and findings regarding healthy
eating, preventing obesity and the consequences of food
insecurity.
FISCAL IMPACT
According to the Assembly Appropriations Committee analysis
of AB 152, FTB estimates lost tax revenue of $200,000 for
the first two years, with an ongoing annual revenue loss of
$400,000 due to farmers taking advantage of the 10 percent
tax credit. DSS already administers the TEFAP to
distribute U.S. Department of Agriculture (USDA)
commodities. There are no additional costs associated with
codifying that program and requiring that future funding,
when available, be used to purchase California grown and
produced food. Costs associated with CDPH investigating
potential funding opportunities would be minor and
absorbable within existing resources.
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BACKGROUND AND DISCUSSION
The author has introduced AB 152 to allow contributions
from the state or from the federal government to a state
emergency food assistance program for the purchase of
California grown and produced food. Once funded, the author
claims AB 152 will allow California food banks to purchase
and distribute a greater number of healthy food items like
fruits and vegetable to low-income Californians. AB 152
also provides a 10 percent tax credit as an incentive for
California growers to donate fresh produce to local food
banks.
Food insecurity in California
According to a June 2007 UCLA Health Policy Brief on food
insecurity (defined as a disruption in eating patterns and
reduced food intake in the previous year), more than three
quarters of a million adults (775,000) in California were
in households experiencing very low food security in 2005.
Aside from the obvious potential for nutritional
deficiencies, UCLA found that at mild and moderate levels,
food insecurity can also contribute to poor health by
increasing anxiety and worry, and often results in
adjusting the household budget to forego other basic needs
in order to make sure that one's family is fed. Very low
food security results in the disruption of eating patterns
and reduced food intake, according to UCLA. Children in
food-insecure households miss more school and do less well
in school. Both young children and adolescents experience
more emotional problems, and adults in food-insecure
households experience more anxiety and depression.
Individuals in food-insecure households are more likely
than others to put off or omit filling prescriptions for
needed medicine or following up on needed medical care. For
individuals with chronic illnesses such as diabetes or
asthma, this results in increased complications,
hospitalizations and emergency room visits.
State-run food assistance programs in California
California has several programs that provide food and
resources to acquire foods to families experiencing food
insecurity:
The CalFresh Program (formerly the Food Stamp
Program) is a federal program that helps low-income
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persons buy the food they need for good health and
nutrition. CalFresh benefits can be accessed using the
Electronic Benefit Transfer (EBT) card. While CalFresh
serves more than 3 million Californians, this is still
less than half the number of Californians who
potentially qualify for the program;
The Women, Infants and Children (WIC) program is a
nutrition program that helps pregnant women, new
mothers and young children eat well and stay healthy;
TEFAP, overseen by DSS but not codified, provides
emergency food supplies to low-income households and
individuals, as well as mass feeding sites such as
soup kitchens. EFAP provides USDA commodities to a
network of food banks for distribution to eligible
individuals and households within defined service
areas. In order to be eligible for USDA commodities,
a recipient or household must reside in the
geographical area being served and meet established
income guidelines. The amount of food that each state
receives under TEFAP is based on the number of
unemployed persons and the number of people with
incomes below the poverty level in the state. In FFY
2008-09, California received just over 95 million
pounds of food (74 million meals).
In presidentially declared disasters, the food
needs of disaster victims are met through the
Department's Emergency Welfare Services' Mass Care and
Shelter Program. This program provides meals at
shelters and may use mobile feeding units to reach
victims in outlying areas, when large numbers of
people have been forced from their homes and have no
access to cooking facilities.
Other sources for food assistance
Another source of emergency food are food banks and rescue
programs. These can be publicly or privately operated, and
range from small operations serving people spread out
across large rural areas to very large facilities that
store and distribute millions of pounds of food each year.
According to the California Association of Food Banks
(CAFB), California's food bank network distributes over 200
million pounds of food each year to people in need.
Statewide, 43 food banks provide about 5,000 nonprofit
agencies with food. These agencies in turn distribute food
directly to over 2 million families and individuals in the
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state.
In addition, CAFB and other food bank organizations in the
state have developed programs that allow California growers
and packers to connect with the state's food banks. The
Farm to Family Program connects the state's growers and
packers with food banks to deliver fresh, nutritious fruits
and vegetables to families in need. In 2010, this program
distributed 100 million pounds of fresh produce.
Federal funding for emergency food assistance
AB 152 specifically directs CDPH to investigate and seek
the following potential sources of funding for healthy
eating promotion and obesity prevention efforts:
Food, Conservation, and Energy Act of 2008- also
known as the 2008 Farm Bill, was a continuation of the
2002 Farm Bill. The bill continues the United States'
long history of agricultural subsidy, and includes
provisions in areas such as energy, conservation,
rural development, and nutrition. It specifically
included an increase in Food Stamp benefits, and
funding for local food programs such as the Farmers
Market Promotion Program, Community Food Project
grants and the Healthy Food Enterprise Development
Center programs.
American Recovery and Reinvestment Act of 2009
(ARRA)-better known as the stimulus or the recovery
package, ARRA provided $100 million to the USDA to
provide food to local food banks, food pantries and
soup kitchens through TEFAP, and an additional $50
million to ensure timely administration and
distribution. ARRA funding also provided an
additional $100 million in grants to local school
systems in an effort to enhance the nutritional
quality of school meals. ARRA also increased benefits
for all SNAP recipients and provided nearly $300
million to states for Supplemental Nutrition
Assistance Program (SNAP) administrative expenses in
FY 2009 and 2010.
Patient Protection and Affordable Care Act (PPACA)-
requires the federal Secretary of Health and Human
Services to award competitive community transformation
grants to state and local governmental agencies and
community-based organizations for the implementation,
evaluation, and dissemination of evidence-based
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community preventive health activities in order to
reduce chronic disease rates, prevent the development
of secondary conditions, address health disparities,
and develop a stronger evidence base of effective
prevention programming.
Healthy, Hunger-Free Kids Act of 2010 (HHFKA)-
provides for the issuance of federal grants to states
and local educational agencies for various programs
that support the provision of school lunches,
breakfasts, and summer food service and improve the
quality and availability of healthful food in
underserved communities.
Related bills
AB 70 (Monning) would require the California Health and
Human Services Agency to direct the appropriate departments
within the agency to apply for federal community
transformation grants under the PPACA and HHFKA, as
specified. AB 70 is pending in the Assembly Health
Committee.
AB 727 (Mitchell) would require the Department of General
Services to develop nutritional standards that govern the
foods purchased for all state departments, agencies, and
state-run institutions in accordance with the federal
dietary guidelines and to develop prescribed guidelines for
sustainable purchasing practices and procedures that
encourage purchasing from local vendors, farms, and
manufacturers when feasible. AB 727 is awaiting hearing in
the Senate Governmental Organization Committee.
AB 581 (John A. Pérez) would, until January 1, 2015, create
the California Healthy Food Financing Initiative, and would
require, to the extent that federal funds are made
available, DFA to implement the initiative. Would require
DFA, in consultation with CDPH and DSS, to prepare
recommendations regarding actions that need to be taken to
promote food access in the state by July 1, 2012. AB 581 is
awaiting hearing in the Senate Agriculture Committee.
Prior legislation
AB 2720 (John A. Pérez) of the 2009-2010 Session was
substantially similar to AB 581. Vetoed.
AB 727 (Correa) of the 2001-2002 Session would have granted
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a 10 percent tax credit for the cost of agricultural
products donated to a food banks in Fresno, Orange and
Santa Cruz Counties. AB 727 died in the Senate Revenue and
Taxation Committee.
PRIOR ACTIONS
Assembly Health: 19- 0
Assembly Revenue and Taxation:9- 0
Assembly Appropriations: 17- 0
Assembly Floor: 76- 0
Arguments in support
Food banks statewide assert that they have experienced an
unprecedented increase in requests, doubling and in some
cases tripling the numbers of clients served within the
last three years. Interfaith Food Bank of Amador County
claims that more than 20 percent of Californians report
they are unable to afford the food they need, including
many seniors and working parents whose budgets for food
have been squeezed by the economic downturn and slow
recovery. Second Harvest Food Bank of Santa Clara and San
Mateo Counties claim that most healthy foods remain out of
reach to low-income Californians because of their high
cost. The County Welfare Directors Association (CWDA)
notes that assistance programs such as CalFresh have seen
record increases in enrollment during the past few years.
CWDA believes that encouraging California growers to
contribute food by establishing a tax credit program for
them will help to alleviate the food insecurity that so
many Californians are facing today.
Western Growers claims that growers want to do their part
to help the less fortunate eat healthier, but fluctuating
prices of food and tight operating margins often makes it
difficult for farmers to donate. AB 152 will make it easier
for farmers to donate California-grown fresh produce to
food banks and get it into the hands of those who need it
most.
COMMENTS
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1. Triple referral. This bill has also been referred to
both the Senate Human Services Committee and the Senate
Governance and Finance Committee.
POSITIONS
Support: Alameda County Community Food Bank
American Federation of State, County and
Municipal Employees
California Association of Food Banks
California Catholic Conference
California Food Policy Advocates
California Hunger Action Coalition
California State PTA
Community Action Agency of Butte County, Inc.
Community Food Bank
County Welfare Directors Association of
California
Emergency Food Bank and Family Services
Stockton/San Joaquin
Feeding America San Diego
Food Bank of Contra Costa and Solano
Food for People
FOOD Share
Fremont Family Resource Center
HMC Farms
Imperial Valley Food Bank
Interfaith Community Services
Interfaith Food Bank of Amador County
Los Angeles Regional Food Bank
Mariposa Wellness Center
Mendocino Food and Nutrition Program
Meyers Farms Family Trust
Ocean Mist Farms
Ola mo Keriso Church
Orange County Food Bank
Pacific International Marketing
Podesta Packing
Prime Time International
Quality Packing
The Resource Connection
San Francisco Food Bank
San Joaquin Tomato Growers
Second Harvest Food Bank of Orange County
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Second Harvest Food Bank of Santa Clara and San
Mateo Counties
Second Harvest Food Bank of Santa Cruz
Shasta Senior Nutrition Programs/Food Bank
St. Anthony's of San Francisco
Tri-City Volunteers
Van Groningen and Sons, Inc.
Vessey & Company, Inc.
Western Growers
Oppose: None received.
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