BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 581 (J. Perez)
Hearing Date: 8/25/2011 Amended: 7/11/2011
Consultant: Katie Johnson Policy Vote: Ag. 6-0 Health 6-1
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BILL SUMMARY: AB 581 would establish the California Healthy Food
Financing Initiative which would be intended to expand access to
nutritious foods in underserved, urban and rural communities and
to eliminate food deserts.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
CDFA, CHHS, up to $100 - $200 per entity
General
LWDA Council participation annually
CHFFI expenditures unknown, likely in the millions to
tensGeneral/
of millions of dollars annually
Federal/
Private
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
This bill would establish the California Healthy Food Financing
Initiative (CHFFI) and would require the Department of Food and
Agriculture (CDFA), in consultation with the California
Department of Public Health (CDPH) and the Department of Social
Services (DSS), and the State Treasurer's Office (STO), to
administer the program, which would be modeled off of the
National Healthy Food Financing Initiative. The national
initiative is intended to expand access to nutritious foods in
underserved, urban, and rural communities and to eliminate food
deserts across the country within seven years. CDFA, in
consultation with the departments above, would be permitted to
coordinate efforts to maximize the funding opportunities
provided by the federal 2010 Healthy Food Financing Initiative.
This bill would establish the California Healthy Food Financing
Initiative Fund which would be comprised of federal, state,
philanthropic, and private funds. The monies would be expended,
upon appropriation by the Legislature, for the purposes of
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expanding access to healthy foods in underserved communities and
to leverage other funding, including, but not limited to new
markets tax credits, federal and foundation grant programs,
incentives available to designated enterprise zones, the federal
Specialty Crop Block Grant Program, and the private sector.
This bill would require CDFA, in consultation with CDPH and DSS,
by July 1, 2012, to prepare recommendations on promoting food
access within California. CDFA would be permitted to establish
an advisory group of not more than 21 members.
Fiscal Impact
The scope of the program is broad in its mission and it is
unclear as to what activities the program would undertake.
Therefore, the costs could be minimal or significant, depending
on the type of program CDFA would design. However, a significant
program would likely cost tens of millions of dollars. For
example, Pennsylvania initially invested $30 million over a
three year period in their healthy food initiative and
California's population is roughly 3 times the size of
Pennsylvania's. Costs to CDFA to provide staff to administer the
program would be approximately $120,000 in General Fund annually
ongoing. This program would sunset January 1, 2015.
AB 581 is similar to AB 2720 (J. Perez, 2010), which was vetoed
by Governor Schwarzenegger. The veto message stated, "While my
Administration shares the same goals as the 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."
Federal Healthy Food Financing Initiative
In early 2010, the Obama Administration proposed the Healthy
Foods Financing Initiative, which was to allocate over $340
million to the program to support projects that increased access
to healthy, affordable food in communities that currently lack
those options such as developing and equipping grocery stores,
small retailers, corner stores, and farmers markets with healthy
foods in these areas.
At the federal level, the United States Department of
Agriculture (USDA), United States Treasury, and the Department
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of Health and Human Services (HHS) all have programs that would
work together to eliminate food deserts using existing funding
sources. The USDA is offering $50 million that would leverage
more than $150 million in public and private funding in the form
of loans, grants, promotions, and other programs designed to
create healthy food options in food deserts. The United States
Treasury plans to dedicate $275 million to support private
sector financing of healthy foods in distressed urban and rural
communities through the New Markets Tax Credit and financial
assistance to Treasury-certified community development financial
institutions. HHS proposes up to $20 million in Community
Economic Development program funds for community-based efforts
to improve the economic and physical health of people in
distressed areas through competitive grants to support projects
that finance grocery stores, farmers markets, and other sources
of fresh, nutritious food.
AS PROPOSED TO BE AMENDED. The author's proposed amendments
would:
1) Establish the CHFFI Council within the State Treasurer's
Office (STO) that would consist of the Treasurer (STO) as
chair, The Secretary of CDFA, the Secretary of the
California Health and Human Services Agency (CHHS), and the
Secretary of the Labor and Workforce Development Agency
(LWDA) or their respective designees.
2) The Council would be required to implement CHFFI, which
would be intended to expand access to nutritious foods in
underserved, urban, and rural communities and to eliminate
food deserts in California.
3) The Council would have the following duties: develop
financing options, program parameters, and minimum
eligibility thresholds for participation, define eligible
entities for participation, and establish levels of
financial assistance, partner with federal, state, or local
agencies, non-profit organizations, and philanthropic
programs, and review recommendations made by the advisory
group.
4) Permit the Council to promulgate regulations.
5) Extend the sunset to July 1, 2017.
6) Add several co-authors.
In order for the CDFA, CHHS, and LWDA to participate on the
Council and to administer CHFFI, they could need staff resources
of up to $100,000 - $200,000 each annually General Fund. Costs
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to the STO to participate and to provide financing advice to the
Council would be minor and absorbable.