BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 152|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 152
Author: Fuentes (D), et al.
Amended: 8/30/11 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 7-1, 6/22/11
AYES: Hernandez, Strickland, Alquist, Blakeslee, De León,
DeSaulnier, Wolk
NOES: Anderson
NO VOTE RECORDED: Rubio
SENATE HUMAN SERVICES COMMITTEE : 7-0, 6/28/11
AYES: Liu, Emmerson, Berryhill, Hancock, Strickland,
Wright, Yee
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 7/6/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/25/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
ASSEMBLY FLOOR : 76-0, 6/1/11 - See last page for vote
SUBJECT : Food banks: grants: voluntary contributions:
income tax credits
SOURCE : Author
CONTINUED
AB 152
Page
2
DIGEST : This bill establishes a new tax credit for
farmers who donate fresh fruits and vegetables to food
banks, require the Department of Social Services to
establish and administer a State Emergency Food Assistance
Program, and require the Department of Public Health to
apply for federal funds available for promoting healthy
eating and preventing obesity.
ANALYSIS : Existing law:
1. Establishes the scope of functions and responsibilities
of the State Department of Public Health (DPH).
2. Establishes the Emergency Federal Assistance Program
(TEFAP), a federal program that supplements the diets of
low-income needy persons, including elderly people, by
providing them with emergency food and nutrition
assistance.
3. Authorizes, via the Personal Income Tax Law and the
Corporation Tax Law, various tax credits against the
taxes imposed by the bill.
4. 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 Department of Social Services (DSS) for
TEFAP.
Specifics of this bill
Food Bank Tax Credit
Under current law, charitable donations to nonprofit
organizations may be deducted against income for state and
federal tax purposes. There are special rules for
contributions of food inventory and the charitable
contribution deduction for donations of food inventory is
limited to 10 percent of a taxpayer's net income. From
1989 through 1991, state law authorized a tax credit equal
to 10 percent of the inventory cost of agricultural
products, both animal and vegetable, donated to a
California food bank.
CONTINUED
AB 152
Page
3
This bill authorizes crop farmers to claim a tax credit
equal to 10 percent of the inventory cost of fresh fruits
and vegetables donated to a California food bank through
the 2016 tax year. This bill requires that in cases where
both a deduction and a credit would be allowed for the same
contribution, the deduction is reduced by the amount of the
credit claimed. The nonprofit food bank would provide
certification to the taxpayer indicating the type,
quantity, and value of donated produce, the name of the
donor, and the name and address of the food bank. The
Franchise Tax Board (FTB) would report information on the
utilization of the credit to the Legislature, as specified.
The credit authorized by this bill is similar to the
program that was operative from 1989 until 1992, except the
credit in this bill is only available for donations of
fresh fruits and vegetables while the previous credit
included donations of agricultural products, including
fowl, animal, vegetable, or other products. In addition,
the definition of eligible taxpayer is much narrower in
this bill. For the 1991 tax year, FTB reported food
donation credit claims of $1.5 million. FTB estimates that
the credit authorized by this bill results in tax revenue
losses of approximately $200,000 in 2011-12 and 2012-13,
and $400,000 annually thereafter.
The State Emergency Food Assistance Program
Currently DSS serves as the state distributing agency for
TEFAP, which was established in 1981 as a mechanism for
reducing food inventories and storage costs while assisting
the needy. Through TEFAP, the United States Department of
Agriculture's (USDA) Food and Nutrition Service makes food
products available to states for distribution to qualifying
emergency food organizations, including food banks, church
pantries, soup kitchens, emergency shelters, and community
action agencies. These organizations in turn distribute
the food directly to those in need or use it to prepare
meals. 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. The amount of food distributed to California
has fluctuated in recent years, from 97 million pounds of
CONTINUED
AB 152
Page
4
food in 2001-02, to 54 million pounds in 2007-08, to just
over 95 million pounds (the equivalent of 74 million meals)
in 2008-09.
In Fiscal Year (FY) 2010, Congress appropriated $297.5
million for TEFAP - $248 million for food purchases and
$49.5 million for administrative support for state and
local agencies. Congress also provided $6 million in FY
2010 through the TEFAP infrastructure grants for emergency
feeding organizations participating in TEFAP to improve and
expand their capacity and infrastructure. The program is
also supplemented by funds donated through the Emergency
Food for Families Fund, a tax checkoff fund that appears on
California income tax returns until 2014. In 2010,
California taxpayers donated $487,333 for the program.
This bill establishes the State Emergency Food Assistance
Program (SEFAP), administered by DSS to provide food and
funding for the provision of emergency food to food banks
established under TEFAP whose primary function is to
facilitate the distribution of food to low-income
households. This bill also establishes the SEFAP Account
in the Emergency Food Assistance Program Fund for deposits
of federal funds, and voluntary contributions. SEFAP
Account funds would be allocated to DSS, upon appropriation
by the Legislature, and any state funds would be used for
the purchase, storage, and transportation of food grown or
produced in California. Funds appropriated to DSS may also
be used to pay for DSS costs to administer SEFAP.
DSS indicates that since they already administer the
federal TEFAP, and that SEFAP would build upon that
existing program that distributes food and resources
through established networks, this bill does not require
any new DSS staff.
Healthy Eating and Obesity Prevention
This bill also requires DPH to investigate and apply for
federal funding intended to promote healthy eating and
preventing obesity. This bill authorizes DPH to use
available federal funds to provide in-kind support and
award grants to support local assistance to local
governments, nonprofit organizations, and local education
CONTINUED
AB 152
Page
5
agencies deemed eligible to implement programs and
initiatives for these services in underserved and urban and
rural communities.
DPH indicates that any costs to seek and administer federal
funds in this way would be minor and absorbable. Federal
funds received by DPH are currently distributed through a
contract process. This bill provides a more flexible grant
mechanism, which is similar to the way DPH administers
federal smoking cessation funding.
Background
TEFAP . TEFAP was first authorized as the Temporary
Emergency Food Assistance Program in 1981 to distribute
surplus foods to households. The name was changed to The
Emergency Food Assistance Program under the 1990 farm bill.
The program was designed to help reduce Federal food
inventories and storage costs while assisting the needy.
Under TEFAP, USDA makes USDA foods available to state
distributing agencies. The amount of food that each state
receives out of the total amount of food provided is based
on the number of unemployed persons and the number of
people with incomes below the poverty level in the state.
States provide the food to local agencies that they have
selected, usually food banks, which in turn distribute the
food to local organizations, such as soup kitchens and food
pantries that directly serve the public. States also
provide the food to other types of local organizations,
such as community action agencies, which distribute the
foods directly to needy households.
In FY 2010, Congress appropriated $297.5 million for TEFAP
through the normal appropriations process - $248 million to
purchase food, and $49.5 million for administrative support
for state and local agencies. Congress also provided $6
million in FY 2010 through the TEFAP infrastructure grants
for emergency feeding organizations participating in TEFAP
to improve and expand their capacity and infrastructure.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
CONTINUED
AB 152
Page
6
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
New tax credit $200
$200 $400 General
FTB administration $66
General
DSS:
SEFAP admininstration Minor and
absorbable costs
General
DPH: seek federal funds Minor
costs to investigate federal
General
funding opportunities and distribute
grants
SUPPORT : (Verified 8/24/11)
Alameda County Community Food Bank
American Federation of State, County and Municipal
Employees, AFL-CIO
California Association of Food Banks
California Catholic Conference
California Communities United Institute
California Food Policy Advocates
California Hunger Action Coalition
California State PTA
Community Action Agency of Butte County, Inc.
Community Food Bank
Community Food Bank of San Benito County
County Welfare Directors Association
Emergency Food Bank and Family Services Stockton/San
Joaquin
Feeding America San Diego
First 5 Association of California
Food Bank for Monterey County
Food Bank of Contra Costa and Solano
CONTINUED
AB 152
Page
7
Food for People
FOOD Share
Foodbank of Santa Barbara County
Fremont Family Resource Center
HMC Farms
Hunger Action Los Angeles
Imperial County Food Bank
Interfaith Community Services
Interfaith Council of Amador
Los Angeles Regional Foodbank
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
Prima Frutta Packing, Inc.
Prime Time International
Quality Packing
Redwood Empire Food Bank
San Francisco Food Bank
San Joaquin Tomato Growers
Second Harvest Food Bank of Orange County
Second Harvest Food Bank of Santa Clara and San Mateo
Counties
Second Harvest Food Bank of Santa Cruz County
Shasta Senior Nutrition Programs/Food Bank
Simonian Fruit Company
St. Anthony's of San Francisco
T.D. Produce Sales
The Resource Connection
Tradition One-Alcohol/Drug Rehabilitation Program
Tri-City Volunteers
Van Groningen and Sons, Inc.
Vessey and Company, Inc.
Western Growers
ARGUMENTS IN SUPPORT : The author's office states that
California has some of the most productive farmlands in the
world, producing more than 350 commodities, specialty
crops, and other food items. These farmlands are essential
for providing a healthy food supply and guarantee a natural
CONTINUED
AB 152
Page
8
resource for California's future generations. However,
according to a University of California at Los Angeles
survey of Californian's health status, more than 8 million
people live in a household where an adult cannot always
afford enough food. Californians who experience hunger and
food insecurity suffer from poor physical and emotional
health, as well as a diminished capacity to learn and
succeed in the workplace. This can also lead to higher
levels of obesity and other diet-related diseases.
The author's office contends that access to healthy food is
a basic human right. Yet, there is an epidemic of
overweight individuals due to poor diet and lack of
physical activity. Increased risk of chronic disease has
been attributed to low fruit and vegetable intake in the
U.S., accounting for $30 billion in associated health care
costs in 2008 and 2009.
The author's office believes that programs such as TEFAP
and the SEFAP can promote increased access to healthy food
and increased consumption of Californian-grown fresh fruits
and vegetables, whole grains, and low-fat dairy in order to
improve nutrition. Not only do they benefit the community,
especially low-income ones, they also can decrease the
costs found in health care due to the problems caused by
bad diet and health.
ASSEMBLY FLOOR : 76-0, 6/1/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Gatto, Gordon, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Garrick, Gorell, Jeffries, V. Manuel
Pérez
CONTINUED
AB 152
Page
9
CTW:kc 8/30/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED