BILL ANALYSIS �
AB 459
Page 1
Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 459 (Mitchell) - As Amended: April 18, 2013
Policy Committee: B&P Vote:9-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases the percentage of food and beverage items
sold from vending machines on state property that must meet
specified nutritional standards and requires state cafeterias
and concessions to enhance nutritional standards. Specifically,
this bill:
1)Increases, from 35% to 50% by January 1, 2015, to 75% by
January 1, 2016, and to 100% by January 1, 2017, the
percentage of food items offered for sale in vending machines
on state property that are required to meet "accepted
nutritional guidelines" as defined in current law and modified
in this bill.
2)Increases, from 33% currently to 100% on or after January 1,
2016, the percentage of beverages offered in those vending
machines that must meet accepted nutritional guidelines.
3)Requires, beginning January 1, 2015 or upon expiration of an
existing contract, that food sold at food concessions and
cafeterias in state-owned or leased- buildings at least meet
food and nutrition guidelines for concessions as determined by
specified federal agencies.
4)Encourages vendors for concessions, cafeterias, and vending
operations on state-owned and state-leased buildings to sell
items grown, packaged, or produced in California and that meet
sustainability guidelines as determined by specified federal
agencies.
5)Requires the Department of General Services (DGS), in
assisting state agencies regarding environmentally preferable
AB 459
Page 2
purchasing pursuant to current law, to provide information on
federal guidelines to promote health, sustainable purchasing.
FISCAL EFFECT
1)The state Department of Rehabilitation (DOR) administers the
operation of concessions, including vending machines located
on state property through the Business Enterprise Program
(BEP) and through a contracting program. Concessions are
operated by blind vendors. Revenues are deposited into the
Vending Stand Fund (VSF) and the BEP Vending Machine Account
(BEVMA) in the Special Deposit Fund. The program currently
encompasses 2,375 vending machines at 594 state-owned or
-leased properties. This includes 312 sites where 71 BEP
vendors provide direct concession services, including vending
machines.
The increased restrictions on the types of foods and beverages
allowed to be sold could impact sales volumes and revenues
into the VSF and the BEVMA. Based on current revenues, just a
10% reduction in sales would result revenue losses of $150,000
to the VSF and $28,000 to the BEVMA. According to DOR, the
average net income to BEP vendors is under $4,000 per month
per location. Depending on the extent of any sales loss, some
locations may no longer be viable. In addition, the DOR
indicates it could incur increased administrative costs for
monitoring and compliance with the more stringent and
prescriptive content requirements.
Supporters counter that, for local governments that have
adopted similar requirements, the drop in sales was only
temporary and monitoring has been relatively easy. The
sponsors provided a lengthy list of current food and beverage
products that would meet the bill's nutritional standards.
2)Any costs to DGS would by minor and absorbable.
3)CalPERS indicates that, to the extent the bill leads to some
members eating more healthy snacks and adopting better eating
habits, there is a potential for long-term health care cost
savings to the system, particularly related to a reduction in
chronic health conditions. CalPERS notes that only a 1%
reduction in chronic conditions could save the system $3.6
million annually.
AB 459
Page 3
COMMENTS
1)Purpose . According to the author, given the increase in
obesity and resulting health care cost impacts, AB 459 is
intended to promote healthy eating by providing healthier food
options in vending machines on state property. This bill is
co-sponsored by the American Heart Association, the Center for
Public Health Advocacy, and the California Pan-Ethic Health
Network.
2)The American Heart Association writes in support, "This bill
will improve and update the current nutritional standards for
foods and beverages sold in vending machines in state
buildings, [and encourage] food and beverages sold on state
property in concessions and cafeterias to meet specified
nutrition standards. With more than 130 million Americans
employed across the United States each year, the workplace is
a key environment for maintaining the health of the U.S.
population."
Under current law, vendors operating vending machines on state
property are required to offer food and beverages meeting
state accepted nutritional guidelines. The updated nutritional
guidelines as specified in this bill are a combination of
nutritional information developed by the American Heart
Association and the federal government.
3)Opposition . The California Automatic Vendors Council (CAVC)
argues the bill's requirements will reduce sales, hurting the
small business vendors that service state buildings. The CAVC
indicates that, where vendors elsewhere have stocked 50% of
machine items with healthy foods, these products only make up
one-third of total sales. The California Nevada Soft Drink
Association voices similar concerns, and argues that vendors
determine products to offer based on consumer demand, and that
the state's current standard provides a sufficient choice of
healthy snacks.
4)Prior Legislation . AB 727 (Mitchell) of 2011, initially a
substantially similar bill, was amended in this committee to
require at least 50% of food and beverage items in a vending
machine on state property to meet accepted nutritional
guidelines. AB 727 was held on Suspense in Senate
Appropriations.
AB 459
Page 4
SB 441 (Torlakson)/Chapter 597 of 2008, established the
current requirement for vending machines on state property to
contain at least 35% of food items and at least one-third of
beverages meeting accepted nutritional guidelines.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081