BILL ANALYSIS Ó SENATE COMMITTEE ON EDUCATION Carol Liu, Chair 2013-2014 Regular Session BILL NO: AB 626 AUTHOR: Skinner AMENDED: May 15, 2013 FISCAL COMM: Yes HEARING DATE: June 19, 2013 URGENCY: No CONSULTANT:Lynn Lorber NOTE : This bill has been referred to the Committees on Education and Health. A "do pass" motion should include referral to the Committee on Health. SUBJECT : School nutrition. SUMMARY This bill makes numerous changes to school nutrition standards to conform with the federal Healthy and Hunger Free Kids Act, implements recommendations of a Senate report relative to use of cafeteria funds, and deletes obsolete provisions. BACKGROUND After school programs Current law establishes the After School Education and Safety (ASES) program, consisting of before and after school academic enrichment for pupils in kindergarten through grade 9. ASES programs consist of two elements: 1) An educational and literacy element in which tutoring or homework assistance is provided. 2) An educational enrichment element that may include fine arts, career technical education, recreation, physical fitness, and prevention activities. ASES programs must agree (through the application approved by the California Department of Education) that snacks made available through the program conform to the nutrition standards for K-12 schools. Before school programs are required to offer a breakfast meal that meets federal child AB 626 Page 2 nutrition program regulations. (Education Code § 8482.3 and § 49531) http://www.cde.ca.gov/ls/nu/as/afterschoolnutstan.asp Food during the schoolday Current law requires each school district to provide each needy pupil one nutritionally adequate, free or reduced-price meal during each schoolday, and defines a "nutritionally adequate meal" as one that qualifies for reimbursement under the federal child nutrition program regulations. (EC § 49550 and § 49553) Sale of food in elementary schools Current law: 1) Limits, beginning July 1, 2007, the sale of food during the schoolday to full meals and individually sold portions of nuts, nut butters, seeds, eggs, cheese, fruit, vegetables that have not been deep fried, and legumes. 2) Authorizes an individually sold dairy or whole grain food item to be sold (outside of the meal program) if it meets all of the following standards: a) Up to 35% of its total calories are to be from fat. b) Up to 10% of its total calories are to be from saturated fat. c) Up to 35% of its total weight is to be composed of sugar, including naturally occurring and added sugar. d) Up to 175 calories per individual food item. 3) Authorizes schools to permit the sale of food that does not comply, as part of a school fundraising event, in any of the following circumstances: a) The items are sold by pupils and the sale takes place off of and away from school premises. b) The items are sold by pupils and the sale takes place at least one-half hour after the end of the schoolday. (EC § 49431) AB 626 Page 3 Sale of food in middle and high schools Current law: 1) Requires, beginning July 1, 2007, snack sold (outside of the meal program) to meet all of the following standards: a) Up to 35% of its total calories are to be from fat (doesn't apply to nuts, nut butters, seeds, eggs, cheese, fruits, vegetables that have not been deep fried, or legumes). b) Up to 10% of its total calories are to be from saturated fat (doesn't apply to eggs or cheese). c) Up to 35% of its total weight is to be composed of sugar, including naturally occurring and added sugars (doesn't apply to fruits or vegetables that have not been deep fried). d) Up to 250 calories per individual food item. 2) Prohibits, beginning July 1, 2007, entrée items sold (outside of the meal program) from containing more than 400 calories per entrée, and more than 4 grams of fat per 100 calories in each entrée. These entrée items are to be categorized as entrée items in the School Breakfast Program or National School Lunch Program. 3) Authorizes schools to permit the sale of food items that do not comply in any of the following circumstances: a) The sale takes place off of and away from school premises. b) The sale takes place on school premises at least one-half hour after the end of the schoolday. c) The sale occurs during a school-sponsored pupil activity after the end of the schoolday. AB 626 Page 4 (EC § 49431.2) Sale of beverages in elementary schools Current law: 1) Prohibits, regardless of the time of day, beverages to be sold other than: a) Fruit-based drinks that are composed of at least 50% fruit juice and have no added sweetener. b) Vegetable-based drinks that are composed of at least 50% vegetable juice and have no added sweetener. c) Drinking water with no added sweetener. d) Two-percent fat milk, one-percent fat milk, nonfat milk, soy milk, rice milk, and other similar non-dairy milk. 2) Authorizes schools to permit the sale of beverages that do not comply, as part of a school fundraising event, in any of the following circumstances: a) The items are sold by pupils and the sale takes place off of and away from school premises. b) The items are sold by pupils and the sale takes place at least one-half hour after the end of the schoolday. (EC § 49431.5) Sale of beverages in middle schools Current law: 1) Prohibits, from one-half hour before the start of the schoolday to one-half hour after the end of the schoolday, beverages to be sold other than: a) Fruit-based drinks that are composed of at least 50% fruit juice and have no added sweetener. AB 626 Page 5 b) Vegetable-based drinks that are composed of at least 50% vegetable juice and have no added sweetener. c) Drinking water with no added sweetener. d) Two-percent fat milk, one-percent fat milk, nonfat milk, soy milk, rice milk, and other similar non-dairy milk. e) An electrolyte replacement beverage that contains up to 42 grams of added sweetener per 20-ounce serving. 2) Authorizes schools to permit the sale of beverages that do not comply, as part of a school event, if the sale meets all of the following criteria: a) The sale occurs during a school-sponsored event and takes place at the location of that event at least one-half hour after the end of the schoolday. b) Vending machines, pupil stores, and cafeterias are used later than one-half hour after the end of the schoolday. (EC § 49431.5) Sale of beverages in all schools Current law prohibits, beginning July 1, 2009, the sale of all beverages from one-half hour before the start of the schoolday until one-half hour after the end of the schoolday, other than: 1) Fruit-based drinks that are composed of at least 50% fruit juice and have no added sweetener. 2) Vegetable-based drinks that are composed of at least 50% vegetable juice and have no added sweetener. 3) Drinking water with no added sweetener. 4) Two-percent fat milk, one-percent fat milk, nonfat milk, soy milk, rice milk, and other similar non-dairy milk. AB 626 Page 6 5) An electrolyte replacement beverage that contains up to 42 grams of added sweetener per 20-ounce serving. (EC § 49431.5) Trans fat Current law: 1) Beginning July 1, 2009, prohibits a school or school district to make available through a vending machine or school food service establishment during school hours and one-half hour before and one-half hour after school, food containing artificial trans fat. Schools and school districts are also prohibited from using food containing artificial trans fat in the preparation of food served to pupils. 2) Defines food containing artificial trans fat as food that contains vegetable shortening, margarine, or any kind of partially hydrogenated vegetable oil (unless the manufacturer's label lists the trans fat content as less than 0.5 grams of trans fat per serving). (EC § 49431.7) Contracts for the sale of non-nutritious food and beverages Current law prohibits school districts from entering into a contract that grants advertising rights, or the right to sell carbonated beverages or non-nutritious beverages or food, unless the district governing board does both of the following: 1) Adopts a policy after a public hearing of the board to ensure the district has internal controls in place, as specified. 2) Provide for public comment on the contract through a public hearing during a regularly scheduled board meeting. School boards may meet the public hearing requirement by an annual public hearing or through a review of the contract at a public hearing by a Child Nutrition and Physical Activity Advisory Committee. (EC § 35182.5) Use of cafeteria fund AB 626 Page 7 Current law: 1) Provides that cafeteria funds are to be used only for expenditures authorized by the school district governing board as necessary for the operation of school cafeterias, including for the lease or purchase of additional cafeteria equipment for the central food processing plant, vending machines and their installation and housing, and computer equipment and related software. 2) Authorized the governing board to authorize the establishment of one or more cafeteria revolving accounts. Transfers, replenishments, and deposits between the cafeteria fund and a cafeteria revolving account are allowed. A cafeteria revolving account may receive and spend funds in the same manner and for the same purposes as authorized for a cafeteria account. 3) Authorizes the governing board of any school district, or of two or more districts governed by the boards of identical personnel, to make expenditures from the cafeteria fund for the construction, alteration, or improvement of a central food processing plant, for the installation of additional cafeteria equipment for the central food processing plant, and for the lease or purchase of vehicles used primarily in connection with the central food processing plant. 4) Authorizes the governing board of any school district with an average daily attendance of over 100,000 may allow as an expenditure from the cafeteria fund or account a share of money agreed upon pursuant to a contract, which is generated from the joint sale of items between the cafeteria and an associated student body student store. The expenditure must result from an agreement entered into by the cafeteria and the associated student body in which pupils will participate in the operation of the store. (EC § 38091and § 38092) Charge against district funds or charge against cafeteria funds AB 626 Page 8 Current law: 1) Provides that the cost of housing and equipping cafeterias is a charge against the funds of the school district. However, when the governing board of a school district deems it necessary, the board may make the cost of the lease or purchase of additional cafeteria equipment for a central food processing plant, and of vending machines and their installation and housing, a charge against cafeteria funds. Governing boards may at any time within five years after the expenditure reimburse school district funds from cafeteria funds. 2) Authorizes a school district governing board to, by resolution, make the cost of maintenance of the physical plant used in connection with cafeterias, the cost of replacement of equipment and the cost of telephone charges, water, electricity, gas, coal, wood, fuel oil, and garbage disposal a charge against the funds of the school district. 3) Authorizes a school district governing board, or of two or more districts governed by boards of identical personnel, to also make the cost of the construction, alteration, or improvement of a central food processing plant and the installation of additional cafeteria equipment a charge against cafeteria funds. Governing boards may at any time within five years after the expenditure reimburse district funds from cafeteria funds. (EC § 38100) Cafeteria funds reserve Current law authorizes a school district governing board to establish and maintain a cafeteria funds reserve for the purchase, lease, maintenance or replacement of cafeteria equipment, to be known as the cafeteria equipment reserve. These funds are to be derived from the sales of food in the school cafeterias in an amount to be determined by the governing board and may be accumulated from year to year until expended for this purpose. These funds may only be used for the purchase, lease, maintenance, or replacement of cafeteria equipment. (EC § 38102) AB 626 Page 9 Pilot program Current law requires the California Department of Education to establish a three-year pilot program (beginning in the 2002-03 school year) of at least 10 high school or middle schools, for the purpose of implementing high nutrition standards and receiving a higher meal reimbursement rate. Schools participating in the pilot are authorized to convene a Child Nutrition and Physical Activity Advisory Committee to develop and recommend to the governing board of the district policies on nutrition and physical activity. (EC § 49433-49433.9) Compliance monitoring and reporting Current law requires: 1) School districts to report to the Superintendent of Public Instruction regarding the extent to which it has complied with nutrition standards. 2) The California Department of Education to monitor the implementation of nutrition standards in schools and the pilot program and report to the Legislature by May 1, 2005, its evaluation of the effect of the policies and recommendations for improvements. (EC § 49434 and § 49436) Federal Healthy, Hunger-Free Kids Act The federal Healthy, Hunger-Free Kids Act and related regulations establish 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 a greater emphasis on whole grain, fruits and vegetable offerings and limits on caloric intake for specific age groups. For example, schools must meet a weekly requirement of vegetable subgroup offerings (i.e., dark green, orange, legumes) for these meal programs. Schools are also required to provide a serving of fruit or vegetable daily for the breakfast or lunch meal to count as a reimbursable meal. This bill updates state statute to reflect the vegetable subgroup offerings, and a greater emphasis whole grain. California's school nutrition standards already meet many of the requirements contained in the federal Healthy, Hunger-Free Kids Act. AB 626 Page 10 ANALYSIS This bill makes numerous changes to school nutrition standards to conform with the federal Healthy and Hunger Free Kids Act, implements recommendations of a Senate report relative to use of cafeteria funds, and deletes obsolete provisions. Specifically, this bill: After School Education and Safety programs Requires meals made available under the After School Education and Safety (ASES) program to conform to the United States Department of Agriculture's nutrition standards for at-risk after school meal component or the National School Lunch program. This does not require ASES programs to offer meals; it requires ASES programs that choose to offer meals to ensure those meals meet specific nutrition standards. Sale of food in elementary schools 1) Clarifies that the requirements for the only food allowed to be sold during the schoolday (full meals and individually sold portions of nuts, nut butters, seeds, eggs, cheese, fruit, vegetables that have not been deep fried, and legumes) apply from one-half hour before the start of the schoolday to one-half hour after the schoolday. (Essentially restricts the sale of food, other than full meals and the list of individual items above, from one-half hour before school to one-half hour after school, rather than just "during the schoolday.") 2) Adds individually sold dairy or whole grain foods to the list of food that may be sold from one-half hour before the start of the schoolday to one-half hour after the schoolday. 3) Adds restrictions on the sale of individually sold portions (not part of a full meal) of nuts, nut butters, seeds, eggs, cheese, fruit, vegetables that have not been deep fried, and legumes that currently exist for individually sold dairy or whole grain food, as follows: AB 626 Page 11 a) Individually sold portions of nuts, nut butters, seeds, fruit, vegetables that have not been deep fried, and legumes may have up to 35% of its total calories be from fat (exempts eggs and cheese). b) Individually sold portions of nuts, nut butters, seeds, eggs, cheese, and legumes may have up to 35% of its total weight composed of sugar (exempts fruit and vegetables that have not been deep fried). {(a) and (b) mirror current law for middle and high schools} c) Individually sold portions of nuts, nut butters, seeds, eggs, cheese, fruit, vegetables that have not been deep fried, and legumes may have up to 175 calories per individual food item. 4) Allows people other than pupils to sell food items that do not comply with the standards described above if the sale takes place off of and away from school grounds or at least one-half hour after the end of the schoolday. Snacks and entrees sold in middle or high school 1) Clarifies that standards for fat, sugar and calories for the sale of snacks and entrees (outside of the meal program) apply from one-half hour before the start of the schoolday to one-half hour after the schoolday. 2) Eliminates the condition that the sale of food items not in compliance occur during a school-sponsored pupil activity after the end of the schoolday. Beverages sold in elementary schools Eliminates the condition that the sale of beverages not in compliance be sold by pupils of the school. (Those sales would still need to be part of a school fundraising event, be sold off and away from school grounds, and at least one-half hour after the end of the schoolday.) Beverages sold in middle or high schools AB 626 Page 12 1) Modifies the conditions that the sale of beverages not in compliance be sold, as follows: a) The sale takes place off and away from the premises of the school. (Currently, sales must be during a school-sponsored event that takes place at the location of that event at least one-half hour after the end of the schoolday.) b) The sale takes place on school premises at least one-half hour after the end of the schoolday. (Currently, sales in vending machines, pupil stores, and cafeterias must be later than one-half hour after the end of the schoolday.) 2) Deletes an obsolete provision that requires, beginning July 1, 2007, at least 50% of all beverages sold from one-half hour before the start of the schooday until one-half hour after the end of the schoolday to meet beverage standards described in the Background section of this analysis. 3) Deletes the requirement that, beginning July 1, 2009, all beverages sold (in all schools) from one-half hour before the start of the schoolday until one-half hour after the end of the schoolday to meet beverage standards described in the Background section of this analysis. This provision is now obsolete because beverage standards for high schools are identical to those for middle schools, and elementary schools have separate standards that do not allow for the sale of electrolyte replacement beverages. Trans fat 1) Expands the existing restrictions on the sale of food containing artificial trans fat to clarify that the standards apply to all food sold, not only food sold through a vending machine. 2) Deletes the prohibition on using food containing artificial trans fat in the preparation of a food item served to pupils. Striking this provision is appropriate because expanding the prohibition on the AB 626 Page 13 sale of food with trans fat means that all food sold, including food that is prepared by the school, cannot contain artificial trans fat at or above 0.5 grams per serving. Contract for the sale of carbonated beverages or non-nutritious beverages or non-nutritious food Removes one of the current options for school districts to satisfy the public hearing requirement prior to entering into a contract. The option to review the contract at a public hearing by a Child Nutrition and Physical activity Advisory Committee is obsolete, as that committee is authorized pursuant to an obsolete pilot program (which is repealed by this bill). Pilot program Repeals the obsolete three-year pilot program (beginning in the 2002-03 school year) that was designed for the purpose of implementing high nutrition standards and receiving a higher meal reimbursement rate. Monitoring 1) Repeals the authority for the Superintendent of Public Instruction to monitor school districts for compliance with nutrition standards and instead, requires the California Department of Education (CDE) to monitor compliance in conformity with USDA's administrative review process, as published in the Federal Register on January 26, 2012. 2) Repeals the obsolete requirement that the CDE monitor the implementation of nutrition standards and report to the Legislature by May 1, 2005 an evaluation of various aspects of the requirements for nutrition standards. Cafeteria funds 1) Repeals a school district's authority to do the following related to its cafeteria fund: a) Establish one or more revolving accounts within its cafeteria fund. AB 626 Page 14 b) Transfer, replenish and deposit funds between the cafeteria fund and a cafeteria revolving account. c) Make expenditures from the cafeteria fund for the construction, alteration, or improvement of a central food processing plant. 2) Modifies authority for a school district or two or more school districts governed by boards of identical personnel to make expenditures from the cafeteria fund to allow for the purchase and installation of additional preparation, cooking, or service equipment for a kitchen or central food processing plant, including necessary alternations incidental to the installation of the equipment (currently funds may be used for the construction, alteration, or improvement of a central food processing plant, and for the installation of additional cafeteria equipment for the central food processing plant). Authority is also granted for the lease or purchase of vehicles used solely in connection with a kitchen or central food processing plant (currently for vehicles used primarily in connection with the central food processing plant). 3) Repeals authority for a school district with an average daily attendance of over 100,000 to spend money from its cafeteria fund or cafeteria account a share of money agreed upon by contract generated from the joint sale of items between the cafeteria and an associated student body run store. AB 86 (Committee on Budget), the education trailer bill, also deletes this provision. 4) Repeals authority for a school district governing board to establish and maintain a cafeteria fund reserve (accumulated from year to year) for the purchase, lease, maintenance, or replacement of cafeteria equipment. AB 86 (Committee on Budget), the education trailer bill, also deletes this provision. District funds vs cafeteria funds AB 626 Page 15 1) Removes the cost of cafeteria equipment from a charge against district funds and instead requires the cost of the lease or purchase of cafeteria equipment and of vending machines and their installation and housing to be charged against cafeteria funds. (Current law provides that the cost of housing and equipping cafeterias is a charge against the funds of the school district. However, districts may charge against cafeteria funds for the lease or purchase of additional cafeteria equipment for a central food processing plant, and of vending machines and their installation and housing.) 2) Changes from cafeteria funds to district funds, the source that may be used for the lease or purchase of cafeteria equipment for a kitchen or central food processing plant, and vending machines and their installation and housing. 3) Reduces from within five years, to the same fiscal year, the amount of time in which a school district governing board may reimburse school district funds from cafeteria funds. 4) Limits the authority of school districts to approve reimbursement for vending machines to situations where 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. 5) Changes from district funds to cafeteria funds, the source that may be used for maintenance of the kitchen facilities, equipment, telephone charges, water, drinking water, electricity, gas, coal, wood, fuel, oil, and garbage disposal related to food service and delivery. Adds the condition that the school district complies with all applicable state and federal laws and regulations. AB 626 Page 16 6) Repeals the authority of a school district governing board to make the cost of the construction, alteration, or improvement of a central food processing plant and the installation of additional cafeteria equipment a charge against cafeteria funds. STAFF COMMENTS 1) Need for the bill . According to the author, "The California Department of Education is required to ensure that local educational agencies participating in federal School Nutrition Programs comply with all applicable state and federal laws and regulations. The federal Healthy and Hunger Free Kids Act (HHFKA) has a new set of nutritional standards for elementary, middle and high schools. In addition to healthier nutritional standards, the HHFKA also aims at increasing access for students and improving oversight of nutritional programs. This bill makes changes to current state laws in order to comply with the new federal laws and regulations set forth by the HHFKA." 2) Conforming to federal law . This bill makes several changes to bring California's school cafeteria and nutrition laws into compliance with the recent changes in Federal nutrition regulations. The more significant changes relate to the use of cafeteria funds, as described in Comment #3. Many changes are less significant, such as expansion of the restriction on sugar content that currently applies to whole grain and dairy food items (no more than 35% of total weight from naturally occurring sugar or added sugar) to also include individually sold portions of nuts, nut butters, seeds, eggs, and cheese packaged for individual sale. As these items are not likely to have such a high sugar content, this change will have little effect in practice. 3) Senate Office of Oversight and Outcomes report on cafeteria funds . In February 2013, the Senate Office of Oversight and Outcomes released a report entitled: Food Fight: Small Team of State Examiners No Match for Schools that Divert School Meal Funds. The report found that school districts are "illegally dipping into student meal funds, misappropriating millions of AB 626 Page 17 dollars intended to feed California's poorest children." Specifically, the report states: the California Department of Education "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?" The report states California must repay the federal government if funding cannot be repaid by the school districts. The report states, "if the state fails to force repayment of misappropriations or refunds due from food service accounts, the federal government collects the unpaid amount from department. Over the past two decades, the department has had to pay the United States Department of Agriculture 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." The report identified the following state statutes that were in conflict with federal law but have remained in statute: a) Current law permits cafeteria fund revenue sharing with associated student bodies. Federal regulations no longer permit such revenue sharing with pupil groups. This bill repeals this statute in accordance with federal law. b) Current law authorizes districts to establish cafeteria funds for equipment with reserves from school meal programs. The United States Department of Agriculture does not recognize such accounts and strictly limits cafeteria fund surpluses to three months average expenditures of the program. This bill repeals state law to conform to federal law. http://sooo.senate.ca.gov/sites/sooo.senate.ca.gov /files/Food%20Fight%202%206%2013.pdf 1) Pilot program . This bill deletes provisions relative to the now-obsolete three-year pilot program (began in the 2002-03 school year) that was designed for the purpose of implementing high nutrition standards and AB 626 Page 18 receiving a higher meal reimbursement rate. 2) Trailer bill language . AB 86 (Committee on Budget), an education trailer bill, includes two provisions that are contained in this bill (Education Code sections 38092 and 38102). 3) Fiscal impact . According to the Assembly Appropriations Committee analysis, this bill imposes General Fund (Prop 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 Cafeteria Fund reserves for this purpose and this bill now prohibits this use, district may seek additional funds from the state. 4) Related legislation . SB 464 (Jackson) requires early childhood education, infant care, and after school programs to meet certain nutritional and physical activity standards, and limits "screen time." SB 464 is pending in this Committee. SB 302 (Cannella) implements various recommendations contained in a recent report by the Senate Office of Oversight and Outcomes regarding school cafeteria funds, including the requirements that cafeteria funds be audited and that the Education Audit Appeals Panel revise the audit guide to include guidance on what school districts may or may not do with a cafeteria fund. SB 302 is pending in the Assembly Appropriations Committee. SUPPORT California Black Health Network California Optometric Association Los Angeles County Office of Education San Bernardino County District Advocates for Better Schools San Francisco Unified School District Superintendent of Public Instruction OPPOSITION None on file. AB 626 Page 19