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  







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          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)







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           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.   







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                    (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.








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               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.








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          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  







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          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
           







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          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)








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           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.







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           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:








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               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
           







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          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  







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               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. 







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               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
           







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          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.







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          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  







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               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  







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               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.








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