BILL ANALYSIS                                                                                                                                                                                                    Ó

                            SENATE AGRICULTURE COMMITTEE
                         Senator Anthony Cannella, Chairman

          BILL NO:    AB 581                    HEARING:  06/21/11
          AUTHOR:   John A. Pérez               FISCAL:  Yes
          VERSION:  05/27/11                    CONSULTANT:  John Chandler
                             Public health: food access.


          In February 2010, the federal government under the Obama 
          Administration announced the details of an over $400 million 
          Healthy Food Financing Initiative (HFFI), which will bring 
          grocery stores and other healthy food retailers to underserved 
          urban and rural communities across America, also known as "food 
          deserts."  The HFFI is a partnership between the Departments of 
          Treasury, Agriculture, and Health and Human Services to promote 
          a range of interventions that expand access to nutritious foods, 
          including developing and equipping grocery stores and other 
          small businesses and retailers selling healthy food in 
          communities that currently lack these options. 

          Other states, such as the Pennsylvania and New York have 
          programs similar to the federal HFFI program:

                 The Pennsylvania Fresh Food Financing Initiative is 
               designed to meet the financing needs of supermarket 
               operators that want to operate in low- and moderate-income 
               communities where infrastructure costs and credit needs are 
               often higher and unmet by conventional financial 
               institutions. The initiative helps new supermarkets get off 
               the ground and existing ones to refurbish and replace old 
               capital to improve efficiency and lower costs.

                 New York now has two healthy food finance initiatives. 
               The New York Healthy Food & Healthy Communities Fund, 
               operated by the Low Income Investment Fund, is a           
               $30 million innovative financing program that supports 
               supermarkets in underserved communities statewide. The 
               second, which was just announced on June 6, 2011, is a     
               $10 million fund run by the New York City Economic 
               Development Council to provide loans to existing and new 
               food manufacturers to grow their businesses in New York. 

          AB 2750 (Pérez) of 2010, similar to this bill, would have 
          created the California Healthy Food Financing Initiative.  
          Governor Schwarzenegger vetoed this bill with the following 
          message:  "While my Administration shares the same goals as the 


          AB 581 - Page 2

          author when it comes to promoting healthy and affordable food 
          access for low-income communities in California, the Healthy 
          Food Financing Initiative has not yet been acted on by Congress. 
           Unless and until those important federal funding details are 
          known, this bill is both premature and unnecessary."


          PROPOSED LAW

          AB 581 creates the California Healthy Food Financing Initiative. 
           Specifically, the bill would do the following:

                 Require by July 1, 2012, that the California Department 
               of Food and Agriculture (CDFA) in consultation with the 
               State Department of Public Health (DPH) and State 
               Department of Social Services (DSS), prepare 
               recommendations on actions to be taken to promote food 
               access and make those recommendations available to the 

                 Authorize CDFA to establish an advisory group consisting 
               of representatives from the legislature, agriculture 
               industry, grocery industry, food policy advocates, 
               financial institutions, food system researchers, and 
               nonprofit organizations. 

                 Specify that CDFA, in consultation with DPH, DSS, and 
               the Treasurer, may coordinate efforts to maximize funding 
               opportunities provided by the federal 2010 Healthy Food 
               Financing Initiative.

                 Require that CDFA, in consultation with DPH, DSS, and 
               the Treasurer, implement the California Healthy Food 
               Financing Initiative that is modeled after the National 
               Healthy Food Financing Initiative.

                 Require that the California Healthy Food Financing 
               Initiative be implemented with diverse funding from sources 
               including, but not limited to, federal, state, 
               philanthropic, and private resources.

                 Establish the California Healthy Food Financing 
               Initiative Fund in the State Treasury comprised of federal, 
               state, philanthropic, and private funds for the expansion 


          AB 581 - Page 3

               of access to healthy foods in underserved communities; and 
               to the extent possible, leverage the funds with other 
               funding such as new markets, tax credits, federal and 
               foundation grant programs, enterprise zone incentives, the 
               federal Specialty Crop Block Grant Program, and the federal 
               Community Reinvestment Act. 

                 Sunset on January 1, 2015.


          1.According to the author, AB 581 will increase access to 
            healthy and nutritious foods to underserved urban and rural 
            communities in California.  Known as "food deserts," regions 
            of California without access to healthy food generally have a 
            higher incidence of certain types of diseases such as 
            diabetes, cancer, obesity, heart disease, and premature death. 
             AB 581 brings together CDFA and other state agencies to 
            maximize the impact of the California HFFI and leverage 
            funding from federal and other sources to improve the health 
            of          low-income Californians by increasing access to 
            nutritious food. 

          2.AB 581 allows CDFA to establish an advisory group consisting 
            of representatives from specified interest groups and 
            government representatives.  However, the size and makeup of 
            the advisory group is not specified in the bill.  When CDFA 
            secretaries change with new administrations, consistency in 
            the advisory group may be lost.  The committee may wish to 
            consider if the bill should give greater direction to CDFA on 
            the makeup of the advisory group to ensure consistency.

          3.The Senate Rules Committee has double referred this bill to 
            the Senate Health Committee as the second committee of 
            referral.  Therefore, if this measure is approved by this 
            committee, the motion should include an action to re-refer the 
            bill to the Senate Committee on Health.


          Assembly Floor 76-0
          Assembly Appropriations17-0
          Assembly Health     18-0
          Assembly Agriculture  9-0



          AB 581 - Page 4

          California Catholic Conference, Inc. 
          California Center for Rural Policy
          California District of the American Academy of Pediatrics
          California Farm Bureau Federation
          California Food Policy Advocates
          California Medical Association
          California Nurses Association
          California Pan-Ethnic Health Network
          California Physical Therapy Association
          California Primary Care Association
          California Retailers Association
          California State Association of Counties
          California State Grange
          California State PTA
          California Women for Agriculture
          Children NOW
          Children's Defense Fund - California
          Coalition of California Welfare Rights Organizations
          County Health Executive Association of California
          County of Santa Clara Board of Supervisors
          First 5 LA
          Junior League of Los Angeles
          Latino Coalition for a Healthy California
          Western Growers

          None received