BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:       AB 626
          AUTHOR:        Skinner and Lowenthal
          AMENDED:       June 25, 2013
          HEARING DATE:  July 3, 2013
          CONSULTANT:    Robinson-Taylor

           SUBJECT  :  School nutrition.
           
          SUMMARY  :  Makes numerous changes to current law related to  
          school nutrition, mostly to conform to the federal Healthy  
          Hunger-Free Kids Act of 2010.

          Existing law:
          1.Limits the foods that may be sold to students at an  
            elementary, middle, or high school during the school day to  
            full meals and individually sold portions of nuts, nut  
            butters, seeds, eggs, cheese packaged for individual sale,  
            fruit, vegetables that have not been deep fried, and legumes.   
            Establishes nutrition standards for individually sold food  
            portions sold in schools, as specified.

          2.Regardless of the time of day, limits the beverages allowed to  
            be sold to students at an elementary school to unsweetened  
            fruit- or vegetable-based drinks, as specified; unsweetened  
            drinking water; or milk and milk substitutes, as specified. 

          3.From one-half hour before the start of the school day until  
            one-half hour after the end of the school day, limits the  
            beverages that may be sold to students at a middle, junior, or  
            high school to unsweetened fruit- or vegetable-based drinks,  
            as specified; unsweetened drinking water; milk and milk  
            substitutes, as specified; or electrolyte replacement  
            beverages, as specified.

          4.Prohibits a school or school district, from one-half hour  
            before until one-half hour after school hours, from selling  
            food containing artificial trans-fat, as specified, unless the  
            food is provided as part of a United States Department of  
            Agriculture (USDA) meal program.

          5.Creates an exception from the requirements in 1) and 2) above  
            for elementary schools' fundraising events, provided that the  
            food items are sold by pupils of the school and the sale takes  
                                                         Continued---



          AB 626 | Page 2




            place either away from school premises or at least one-half  
            hour after the end of the school day.

          6.Creates an exception from the requirement in 1) above for  
            middle, junior, or high schools where:

               a. The sale of food items takes place off of and away from  
          school premises;
                b. The sale of food items takes place on school premises  
                 at least one-half hour after the end of the school day;  
                 or,
                c. The sale of food items occurs during a school-sponsored  
                 pupil activity after the end of the school day.

          7.Creates an exception from the requirement in 3) above for  
            middle, junior, or high schools where: 

                 a. The sale occurs during a school-sponsored event and  
                  takes place at least one-half hour after the end of the  
                  school day; and, 
                 b. Vending machines, pupil stores, and cafeterias are  
                  used later than one-half hour after the end of the  
                  school day.

          8.Establishes the After School Education and Safety program  
            (ASES) to serve pupils in kindergarten and grades one to nine,  
            inclusive, and requires an entity that applies to operate a  
            program to agree that snacks made available by the program  
            conform to the nutrition standards in 1) above.  Requires an  
            ASES applicant to certify in their application the inclusion  
            of a nutritional snack.

          9.Establishes the 21st Century High School After School Safety  
            and Enrichment for Teens program (High School ASSETs) to serve  
            pupils in high school, and requires an entity that applies to  
            operate a program to agree that snacks made available by the  
            program conform to the nutrition standards in 1) above.

          10.Authorizes the governing board of a school district to  
            establish cafeterias in the schools under its jurisdiction;  
            authorizes the moneys received for the sale of food or for any  
            services performed by the cafeterias to be paid into the  
            county treasury to the credit of the cafeteria fund of the  
            particular school district; and creates requirements for  
            cafeteria funds, as specified. 





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          3


          

          This bill:
          After school education programs.
          1.Requires that meals provided during the High School ASSETs and  
            the ASES to conform to specified nutritional standards.

          Contract review.
          2.Deletes an obsolete option to review a beverage or food  
            contract at a public hearing by a Child Nutrition and Physical  
            Activity Advisory Committee for school districts to satisfy  
            the public hearing requirement prior to entering a contract.

          Cafeteria funds.
          3.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;
                  b.        Transfer, replenish and deposit funds between  
                    the cafeteria fund and a cafeteria revolving account;  
                    and,
                  c.        Make expenditures from the cafeteria fund for  
                    the construction, alteration, or improvement of a  
                    central food processing plant.

          4.Modifies the authority for a school district or two or more  
            school districts' governing 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 alterations incidental to the  
            installation of the equipment.  Grants authority for the lease  
            or purchase of vehicles used solely in connection with a  
            kitchen or central food processing plant.

          5.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 a  
            contract generated from the joint sale of items between the  
            cafeteria and an associated student body run store.

          6.Repeals authority for a school district governing board to  
            establish and maintain a cafeteria fund reserve for the  
            purchase, lease or purchase of cafeteria equipment.

          District funds vs. cafeteria funds.




          AB 626 | Page 4




          7.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.  

          8.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.

          9.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.

          10.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; or,
                  b.        The vending machines sell only food, or  
                    beverages, or both, that comply with state and federal  
                    competitive food laws and regulations.

          11.Changes from district funds to cafeteria funds, the source  
            that is permitted to 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.

          12.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.

          Sale of food in elementary, middle and high schools. 
          13.Defines "full meal" as a combination of food items that meet  
            USDA-approved School Breakfast Program or National School  
            Lunch Program meal pattern requirements.




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          5


          

             
          14.Clarifies what food items can be sold one-half hour before  
            school and one-half hour after school at an elementary school,  
            middle school, and high schools.

          15.Authorizes the sale of food items to elementary school,  
            middle school and high school pupils that do not comply with  
            state and federal nutrition requirements to be sold by anyone  
            if those sales occur off school premises or on school premises  
            at least one-half hour after the end of the school day.

          16.Prohibits the sale of food items to middle school and high  
            school pupils that do not comply with state and federal  
            nutrition requirements during a school-sponsored activity  
            after the end of the school day.

          Beverages sold in elementary schools, middles schools and high  
          schools.
          17.Changes the type of milk allowed to be sold at elementary,  
            middle and high schools from two-percent to one-percent.

          18.Authorizes the sale of beverages to elementary school, middle  
            school and high school pupils that do not comply with state  
            and federal nutrition requirements, to be sold by anyone if  
            those sales occur off school premises or on school premises at  
            least one-half hour after the end of the school day.

          19.Prohibits the sale of beverages to middle school and high  
            school pupils that do not comply with state and federal  
            nutrition requirements during a school-sponsored activity  
            after the end of the school day.

          20.Deletes an obsolete provision that requires at least 50  
            percent of all beverages sold from one-half hour before the  
            start of the school day until one-half hour after the end of  
            the school day to meet specified beverage standards.

          Trans-fat.
          21.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.

          22.Deletes the prohibition on using food containing artificial  
            trans-fat in the preparation of a food item served to pupils. 




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          Pilot program.
          23.Repeals an obsolete three-year pilot program that was  
            designed for the purpose of implementing high nutrition  
            standards and receiving a higher meal reimbursement rate.

          24.Repeals the provisions authorizing the Child Nutrition and  
            Physical Activity Advisory Committee.

          Monitoring compliance.
          25.Repeals the obsolete 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.

          26.Repeals an obsolete requirement that CDE monitor the  
            implementation of nutrition standards and by May 2005 provide  
            to the Legislature an evaluation of various aspects of the  
            requirements for nutrition standards.

          Miscellaneous.
          27.Finds and declares that the provisions of this bill further  
            the purposes of the ASES.

          28.Deletes obsolete code sections.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee analysis, this bill will result in General Fund  
          (Proposition 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, districts may seek additional funds from the  
          state.  

           PRIOR VOTES  :  
          Senate Education:   9-0
          Assembly Education: 6- 0
          Assembly Health:    18- 1
          Assembly Appropriations:15- 2
          Assembly Floor:     72- 3
           
          COMMENTS  :  




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           1.Author's statement.  California has been a national leader in  
            enacting state laws that strengthen the integrity of the school  
            meal programs and improve the nutritional quality of foods offered  
            in schools. In light of the federal regulations recently enacted  
            by the Healthy Hunger-Free Kids Act of 2010 (HHFKA), some of these  
            state statutes are confusing, ambiguous, or now insufficient.   
            According to the author, enacting this bill will ensure that  
            sections of the California Education Code that relate to the  
            operation of child nutrition programs are aligned with the HHFKA.   
            The author maintains that this bill will update specific sections  
            of the California Education Code in order to codify recent federal  
            requirements.  These sections relate to the maintenance and  
            appropriate use of the cafeteria fund, in which a district's  
            school food revenues are held, as well as details about  
            competitive foods sold outside of the formal school meal program.   
            Simply put, this bill aligns state law with federal regulations to  
            ensure clarity of interpretation; ease of implementation; and ease  
            of enforcement by CDE.  

          2.Obesity and the School Environment.  According to a report  
            produced by the Robert Wood Johnson Foundation (RWJ), Schools and  
            Obesity Prevention: Creating School Environments and Policies to  
            Promote Healthy Eating and Physical Activity, schools are  
            identified as a key setting for public health strategies to lower  
            or prevent the prevalence of overweight and obese youth.  While  
            the schools alone cannot solve the childhood obesity epidemic, it  
            also is unlikely that childhood obesity rates can be reversed  
            without strong school-based policies and programs to support  
            healthy eating and physical activity.  The RWJ report cites that  
            children spend more time in schools than in any other environment  
            away from home.  More than 48 million students attend 94,000  
            public elementary, middle, and secondary schools each day, and an  
            additional 5.4 million students attend 30,000 private schools.   
            The report sustains that no other institution has as much  
            continuous and intensive contact and influence on children during  
            their first two decades of life and that schools have an  
            unparalleled opportunity to promote children's health by creating  
            an environment in which children eat healthy foods, engage in  
            regular physical activity, and learn lifelong skills for healthy  
            eating and active living.
               
          3.HHFKA.  On December 13, 2010, President Barack Obama signed the  
            HHFKA, which is part of the reauthorization of funding for child  
            nutrition.  The HHFKA reauthorizes funding for federal school meal  
            and child nutrition programs for five years and includes $4.5  




          AB 626 | Page 8




            billion in new funding for these programs over 10 years.  In  
            addition, the HHFKA requires the USDA to make significant  
            improvements in the nutritional standards of school meals and  
            provides federal grant funding to support nutrition education and  
            obesity prevention for low-income children and families.  

          This bill makes changes to current state laws in order to comply  
            with the new federal laws and regulations set forth by HHFKA.  

          4.Senate Office of Oversight and Outcomes (SOOO) report on  
            cafeteria funds.  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: CDE "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 CDE.  Over the past two decades, CDE  
            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  
            were in conflict with federal law but have remained on the  
            books.  Existing law permits cafeteria fund 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 HHFKA.  Current  
            law authorizes districts to establish cafeteria funds 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. 


          5.Double Referral.  This bill was heard in Senate Education  
            Committee, and was approved on a 9-0 vote. 




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          6.Related legislation.  


               a.     SB 464 (Jackson) establishes nutrition and physical  
                 activity standards for early childhood education, infant  
                 care, and after school programs.  SB 464 is currently in  
                 the Senate Education Committee.


               b.     SB 302 (Canella) makes various changes related to  
                 the oversight of school district's cafeteria funds.  SB  
                 302 is scheduled to be heard before the Assembly  
                 Appropriations Committee on July 3, 2013.


          





          7.Prior legislation. 


               a.     SB 638 (Torlakson), Chapter 380, Statutes of 2006,  
                 requires all snacks served in ASES programs to meet  
                 nutrition standards.


               b.     SB 12 (Escutia), Chapter 235, Statutes of 2005, sets  
                 nutrition standards for competitive foods sold in schools  
                 outside of federally-funded meal programs.


               c.     SB 965 (Escutia), Chapter 237, Statutes of 2005,  
                 sets nutrition standards for beverages sold in schools. 


               d.     SB 19 (Escutia), Chapter 913, Statutes of 2001,  
                 requires the reimbursement a school receives for free and  
                 reduced-price meals sold or served to pupils in  
                 elementary or middle schools to be increased to $0.23,  
                 establishes nutrition standards for competitive foods and  




          AB 626 | Page 10




                 beverages sold in elementary and middle schools, and  
                 creates a pilot program for high schools and middle  
                 schools to voluntarily adopt nutrition standards.  

          
          8.Support.  The CDE, sponsor of this bill, the California School  
            Nutrition Association, and the Los Angeles County Office of  
            Education state this bill will align state law with federal  
            laws and regulations set forth by HHFKA.  The CDE writes that  
            improving child nutrition is one of the focal points of the  
            HHFKA, which is especially relevant because one in three  
            children is now considered overweight or obese.  California  
            Food Policy Advocates write in support that California has  
            been a national leader in enacting state laws that strengthen  
            the integrity of the school meal programs and improve the  
            nutritional quality of foods offered in schools. This bill  
            will update sections of the California Education Code to  
            codify recent federal requirements.

          9.Technical Amendment.  AB 86 (Committee on Budget) of 2013, an  
            education trailer bill, repeals two provisions that are also  
            repealed in this bill, Education Code Sections 38092 and  
            38102.  The author wishes to delete the reference to the  
            repeals in this bill.

           SUPPORT AND OPPOSITION  :
          Support:  California Department of Education (sponsor)
                    Aspiranet
                    California Food Policy Advocates
                    California Optometric Association
                    California School Nutrition Association
                    California State Parent Teacher Association
                    Los Angeles County Office of Education

          Oppose:   None received.


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