BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 626
                                                                  Page  1

          Date of Hearing:   May 24, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 626 (Skinner) - As Amended:  May 15, 2013 

          Policy Committee:                              Education  
          Vote:6-0
                        Health                                18-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill makes the following changes to school nutrition  
          requirements, primarily for the purpose of conforming to the  
          federal Healthy Hunger-Free Kids Act of 2010 (HHFK Act): 

          1)Requires meals made available under the After School Education  
            and Safety (ASES) program to conform to the United States  
            Department of Agriculture's (USDA) nutrition standards for  
            at-risk afterschool meal component or the National School  
            Lunch (NSL) program.  

          2)Repeals a school district's authority to do the following  
            related to its cafeteria fund (CF): 

             a)   Establish one or more accounts within its CF. 
             b)   Make expenditures from the CF for the construction,  
               alteration, or improvement of a central food processing  
               plan, and for the lease or purchase of vehicles used  
               primarily in connection with the plant.  

          3)Authorizes a school district or two or more school districts  
            governed by boards of identical personnel to make expenditures  
            from the CF for the purchase and installation of additional  
            preparation, cooking, or service equipment for a kitchen,  
            including the lease or purchase of vehicles solely used in  
            connection with a kitchen or central food processing plant, as  
            specified.  

          4)Repeals statute authorizing a school district with an average  
            daily attendance of over 100,000 to expend money from its CF  








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            generated from the joint sale of items between the cafeteria  
            and an associated student body store, as specified.  

           FISCAL EFFECT  

          GF/98 cost pressure, likely in the hundreds of thousands to low  
          millions, to backfill school districts for costs associated with  
          the lease, purchase, or maintenance of cafeteria equipment.  To  
          the extent districts were using CF reserves for this purpose and  
          this bill now prohibits this use, district may seek additional  
          funds from the state.  

           SUMMARY CONTINUED  

          5)Requires the cost of the lease or purchase of cafeteria  
            equipment and of vending machines (installation and housing of  
            them) to be a charge against the CF.  Further requires the  
            school district to only approve reimbursement for vending  
            machines if one, or both, of the following apply: 

             a)   The vending machines are owned and operated by the  
               school food services department, sell meals that qualify  
               for federal meal program reimbursement, and are equipped  
               with appropriate point of service meal counting software.  
             b)   The vending machines sell only food, or only beverages,  
               or both that comply with state and federal competitive food  
               laws and regulations.  

          6)Authorizes a school district to apply the costs of telephone  
            charges against the CF provided the district complies with  
            federal and state law.  

          7)Repeals statute authorizing school districts to maintain a CF  
            reserve for purchase, lease, maintenance, or replacement of  
            cafeteria equipment, which enables these funds to be  
            accumulated from year to year until expended for these  
            purposes.   

          8)Clarifies the sale of food and beverages that comply with  
            state and federal nutrition standards are to be sold at  
            elementary, middle and, high schools from one-half hour before  
            the start of the schoolday to one-half hour after the  
            schoolday.  Conversely, this bill requires all non-compliant  
            food and beverages sold at these schools to be sold beginning  
            at least one-half hour after the end of the schoolday and off  








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            premises.  

          9)Repeals nutrition standards compliance requirements related to  
            monitoring and reporting conducted by the Superintendent of  
            Public Instruction (SPI) and instead, requires the State  
            Department of Education (SDE) to conduct compliance monitoring  
            in conformity with USDA's administrative review process as  
            defined in January 2012.   

          10)Repeals the Linking Education, Activity, and Food Pilot grant  
            program.  
           
           COMMENTS  

           1)Background  . Existing law requires each school district or  
            county office of education maintaining any of grades K-12 to  
            provide one nutritionally adequate free or reduced-price meal  
            to a needy pupil during each schoolday. Statute further  
            defines nutritionally adequate meal as a breakfast or lunch  
            that qualifies for reimbursement under the federal child  
            nutrition program. 

            In December 2010, the federal government enacted the HHFK Act,  
            which establishes new nutritional requirements for the school  
            breakfast program (beginning July 1, 2013) and the national  
            school lunch program (beginning July 1, 2012). The new  
            requirements include more of an emphasis on whole grain,  
            fruits and vegetable offerings and narrow caloric count  
            requirements determined for age groups. For example, local  
            education agencies (LEAs) must meet a weekly requirement of  
            vegetable subgroup offerings (i.e., dark green, orange,  
            legumes) for these meal programs. Also, students are required  
            to select a fruit or vegetable to receive reimbursement for a  
            breakfast or lunch meal.  This bill updates state statute to  
            reflect the vegetable subgroup offerings.  

            Under the existing federal Child and Adult Care Food Program,  
            after school programs have been able to be reimbursed for  
            serving healthy snacks.  The HHFK Act expanded federal  
            reimbursement through this program to also include meals.  
            Under current state law, ASES Programs must agree to provide  
            snacks that conform to the state's current nutrition standards  
            for competitive foods. However, the law is silent on meals  
            provided through these programs. This bill requires meals  
            served through the ASES program to conform to the nutrition  








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            standards of the at-risk afterschool component or the National  
            School Lunch program. 

           2)Purpose  . The author argues this bill, sponsored by the  
            Superintendent of Public Instruction, is necessary to conform  
            to the federal HHFK Act.  Specifically, the author states:  
            "Improving child nutrition is one of the focal points of the  
            HHFK Act. Across the country, schools serve meals on a daily  
            basis to more than 31 million children. Unfortunately, one out  
            of every three children is now considered overweight or obese.  
            The HHFK Act represents the nation's continued commitment to  
            provide all children with nutritious food in schools, with an  
            emphasis on foods that are healthy.

            "In addition to setting nutritional standards, the HHFK Act  
            also regulates how nutritional programs operate. For example,  
            [it] sets policies on what expenses are allowable using  
            cafeteria funds and limits the amount of reserves in cafeteria  
            funds. The HHFK Act also sets improved oversight policies that  
            will ensure that students are being provided with nutritious  
            meals."

           3)Senate Office of Oversight and Outcomes (SOOO) report on  
            Cafeteria Funds (CFs)  .  In February 2013, SOOO released a  
            report entitled: Food Fight: Small Team of State Examiners No  
            Match for Schools that Divert School Meal Funds.  The report  
            charges school districts are "illegally dipping into student  
            meal funds, misappropriating millions of dollars intended to  
            feed California's poorest children."  Specifically, the report  
            states: SDE "has ordered eight districts to repay nearly $170  
            million to student meal programs. Perhaps more troubling,  
            department officials candidly acknowledge they have no idea  
            how big the problem may be and fear they may have uncovered  
            only a hint of the ongoing abuse?"  Furthermore, SOOO states  
            California must pay the federal government if funding cannot  
            be recouped. As highlighted by the report, "if the state fails  
            to force repayment of misappropriations or refunds due from  
            food service accounts, the federal government collects the  
            unpaid amount from SDE. Over the past two decades, the  
            department has had to pay the USDA more than $3 million that  
            it could not recoup from food service accounts. Those bad  
            debts often involved agencies, such as child or adult care  
            centers, which had gone out of business."  

            Likewise, SOOO identified the following state statutes that  








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            were in conflict with federal law but have remained on the  
            books. 

            Existing law permits CF revenue sharing with associated  
            student bodies. Federal regulations no longer permit such  
            revenue sharing with student groups.  This bill repeals this  
            statute in accordance with the HHFK Act.  
            Current law authorizes districts to establish CF for equipment  
            with reserves from their meal programs. The USDA does not  
            recognize such accounts and strictly limits cafeteria fund  
            surpluses to three months average expenditures of the program.  
             This bill repeals this state law. 

           Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916)  
          319-2081