BILL ANALYSIS Ó
AB 199
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 199 (Holden) - As Introduced: January 29, 2013
Policy Committee:
AccountabilityVote:12 - 1
Agriculture 7 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires state agencies to purchase agricultural
products that are grown, manufactured, or produced in California
as long as the cost is not more than 5% above the lowest costs
of out-of-state products. Specifically, this bill:
1)Requires that state-owned and state-run institutions, except
for schools, purchase agriculture products that are grown in
California instead of those grown elsewhere only if the costs
of California products are no more than 5% higher than the
costs of the lowest bid or price quoted for out-of-state
products.
2)If no California-grown agriculture products meet the above
criteria, the bid shall go to the California company that
packs or processes its products in the state, as long as the
costs do not exceed the cost of the lowest bid or price quoted
for out-of-state products by more than 5%.
3)Requires public schools and school districts to purchase
agriculture products grown in California instead of
out-of-state products if the costs of the California products
do not exceed the lowest bid or price quoted for out-of-state
products.
FISCAL EFFECT
1)Given all of the state agencies, including the California
Department of Corrections and Rehabilitation, University of
California (UC), California State Universities (CSU) and
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various state hospitals, and the over 1,000 school districts
that purchase food, workload costs associated with monitoring
the purchase of food, finding vendors that provide California
food, ensuring that the quality is comparable to imported food
and the cost is no more than 5% more than the cost of imported
food would likely cost in excess of $5 million per year.
2)Unknown, likely significant costs in excess of $1 million, in
on-going costs associated with the potential 5% increase in
the cost of food purchased by the state.
COMMENTS
1)Purpose . The intent of this bill is to give California
businesses that produce agricultural products an advantage
over out-of state producers even if the California products
are more expensive. According to the author, this pricing
advantage would likely mean an increase in the state's
purchases of California-grown and California-processed
agricultural products. The author hopes that such an increase
would positively impact the state's agricultural economy.
Supporters state that with the current economic climate, it is
important to keep state tax dollars local. Supporters also
state that this preference will give local farmers a fair
chance to sell their products within the state, and give a
boost to the California farming economy. Supporters further
note that California farmers are faced with a competitive
disadvantage due to subsidized imported produce and
regulations that they claim are more restrictive than other
states' and countries' regulations.
2)Agricultural Products . Under current law, an agricultural
product is defined as any fowl, animal, vegetable, or other
stuff, product, or article which is customary food, or which
is proper for food for human beings (Food and Agricultural
Code, Chapter 5, Section 58501 (a)). As currently written,
this bill applies to all agricultural products.
3)CSU Experience . Because of the volume of food purchased by the
CSU system, they work with several large food service
establishments across the state. A cursory review of the
produce purchased by CSU shows that most of the produce
purchased by the university is not only from out of state, but
also outside of the country. California grown produce tends
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to be limited to lettuce, broccoli, and oranges. Given the
amount of food purchased, the workload associated with
implementing the provisions of this bill within the CSU system
alone would be significant.
4)Related Legislation . AB 1960 (Ma), of 2010, encouraged the
State of California and its agencies to purchase California
produced, or produced and processed, fruit, nuts and
vegetables if the price is equal to or less than, imported
fruits, nuts and vegetables. This bill was held in the Senate
Rules committee.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081