BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Deborah V. Ortiz, Chair
BILL NO: AB 2384
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AUTHOR: Leno
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AMENDED: June 15, 2006
HEARING DATE: June 21, 2006
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FISCAL: Appropriations
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CONSULTANT:
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Patterson / ak
SUBJECT
Nutrition: Healthy Food Purchase Pilot Program
SUMMARY
This bill establishes a "Healthy Food Purchase" pilot
program (pilot program) to increase the sale and purchase
of fresh fruits and vegetables in low-income communities.
ABSTRACT
Existing law:
1.Requires the Department of Health Services (DHS) to
establish and implement, to the extent funds other than
state general funds are available, a "5 A Day - For
Better Health" program to promote public awareness of the
need to increase the consumption of fruits and vegetables
as part of a low-fat, high-fiber diet in order to improve
health and prevent major chronic diseases, including
diet-related cancers.
2.Establishes the California Fresh Start Pilot Program
within the California Department of Education (CDE), to
be administered by CDE in consultation with the
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Department of Food and Agriculture (CDFA) and DHS, to
promote the consumption of nutritious fruits and
vegetables by school-age children.
3.Establishes the Women, Infants and Children (WIC) program
as a nutrition program that helps pregnant women, new
mothers and young children eat well and stay healthy
through the use of special checks to buy healthy foods
and provides nutritional counseling and support to
mothers of young children and resources on breastfeeding
and referrals to health coverage programs.
This bill:
1.Makes legislative findings and declarations on the
importance of eating healthy and making available fresh
fruits and vegetables.
2.Requires DHS, in consultation with CDFA, to develop up to
seven pilot programs with the following components:
a. Strategies aimed at small grocers in targeted
low-income neighborhoods to increase the offerings of
fresh fruits and vegetables in those communities,
including support or assistance to obtain refrigerated
produce display cases, and technical assistance on the
purchase, storage, marketing and display of fresh
produce. Requires DHS to use federal funds for
technical assistance, where appropriate.
b. Strategies aimed at food stamp recipients to
increase their purchase of fresh fruits and vegetables
by making those products more affordable, including
the development and implementation of financial
incentives. Requires DHS to seek any necessary
federal government approvals to allow use of the Food
Stamp Electronic Benefits Card, as specified.
3.Requires DHS, in developing the program, to include the
following:
a. At least one county that is above the food stamp
average county participation and at least one county
that is below the food stamp average county
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participation.
b. At least one county with high above-average rates
of poverty, food insecurity, or obesity.
c. At least one urban county.
d. At least one rural county.
4.Requires DHS to consider the following in choosing
counties to participate in the program:
a. Level of need in the community.
b. Size of food stamp population.
c. Need for geographic diversity.
d. Availability of technology in targeted food
retailers to collect the data necessary to evaluate
the program.
5.Requires DHS to seek all necessary approvals to establish
the pilot program, and apply for available federal
matching funds to support the work of the pilot program.
6.Requires DHS, in consultation with the United States
Department of Agriculture's Economic Research Service, to
develop a process for evaluating the effectiveness of the
pilot program, and for DHS to contract with an
independent external evaluator for the evaluation.
7.Requires the evaluation to examine the impact of the
various strategies employed in the pilot program on the
purchase of fresh produce and on any increase in retailer
space devoted to the sale of fresh fruits and vegetables,
and the effect this has on retailer profitability.
Requires the evaluation test alternatives to the reliance
on uniform product codes for identification of fresh
produce deemed eligible for financial incentives.
8.Requires DHS to make recommendations to the Legislature
regarding the continuation of the pilot program, and any
state and federal policy changes needed to support the
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goals of the pilot program.
9.Makes implementation of this bill contingent upon an
appropriation in the annual Budget Act or another statute
or the receipt of federal funding.
10. Sunsets the provisions of this bill on January 1,
2011.
FISCAL IMPACT
According to the Assembly Appropriations Committee:
1.Assuming implementation, unknown General Fund (GF) costs,
likely in the millions of dollars annually, for
implementation of the pilot program depending upon the
counties chosen, number of grants provided and the amount
and type of incentives provided to food stamp recipients.
For example, if $5,000 in assistance were provided to
100 small grocers and an additional $10 per month were
provided to 20,000 Food Stamp recipients to encourage the
purchase of fresh fruits and vegetables, GF costs would
be $2.9 million. Additional amounts would be required
for system changes and DHS program administration.
2.One-time GF costs of approximately $100,000 for the
required evaluation and report to the Legislature.
3.Implementation of this bill is contingent upon an
appropriation in the annual Budget Act or another statute
or the receipt of federal funding.
BACKGROUND AND DISCUSSION
Purpose of the bill
According to the author, this bill strengthens California's
efforts to prevent obesity by increasing access to fresh
fruit and vegetables in low-income communities where fruit
and vegetables typically are unavailable or costly. This
bill is a pilot program to assess the feasibility of
increasing access to fresh fruits and vegetables by using
state funds to provide refrigerated display cases and
extensive technical assistance to small-scale neighborhood
grocers, and to provide financial incentive and nutrition
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education to participants in the Food Stamp Program to
promote the purchase of fresh fruits and vegetables.
The author states that California, like the other states,
has been struck by an epidemic of obesity. The author goes
on to state that obesity is extremely costly to the state,
already costing California $21.7 billion a year in medical
costs and lost productivity. Physicians, nutritionists and
other experts recognize the importance of a diet rich in
fresh fruits and vegetables as one key strategy in
preventing obesity. Unfortunately, as countless studies
document, residents of low-income neighborhoods generally
lack access to fresh fruits and vegetables.
According to the California Food Policy Advocates, the
sponsor of this bill, AB 2384 strengthens California's
efforts to prevent obesity by increasing access to fresh
fruit and vegetables in low-income communities where fruit
and vegetables typically are unavailable or costly. It
states that there is currently no state law or policy aimed
at increasing the availability of fruit and vegetables in
low-income neighborhoods.
Background
According to the United States Health and Human Services
Department, 64 percent of Americans are overweight or
obese. Obesity is considered a risk factor for a number of
diseases, including diabetes, cardiovascular disease, and
cancer. The Centers for Disease Control and Prevention
(CDC) released a study in 2004 that found that poor diet
and inactivity was linked to 111,909 deaths in the United
States in 2000.
Results from the 1999-2002 National Health and Nutrition
Examination Survey (NHANES) indicate that 16 percent of
-children and adolescents ages six to nine years are
overweight. This represents a 45 percent increase from the
overweight estimates obtained from NHANES III (1988-94).
According to a national study of costs attributed to being
overweight and/or obese, medical expenses accounted for 9.1
percent of total United States medical expenditures in 1998
and may have reached as high as $78.5 billion ($92.6
billion in 2002 dollars). Obesity and being overweight are
chronic conditions, and result from a variety of factors
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including behavior, environment, and genetics. The two
factors that play the largest roles in obesity are behavior
and environment, which are also considered the best areas
for prevention and treatment.
According to the California Center for Public Health
Advocacy (CCPHA), the numbers of overweight and inactive
children have reached an all-time high in California.
CCPHA found that statewide, approximately 27 percent of
children are overweight and 40 percent are unfit.
Research suggests that certain racial or ethnic populations
have higher rates of obesity or overweight. The CDC
reports that adult African American women had age-adjusted
obesity rates of 48.8 percent, compared to 30.7 percent for
adult white women. African American girls and boys also
had higher rates of overweight than white children in the
same age groups.
The Latino Coalition for a Healthy California reports that
Latino adolescents were the most likely to be overweight
and more likely to be at risk for overweight than Asian or
white adolescents, leading to higher risks for overweight
in adulthood. More than one out of three Latino
adolescents in California are overweight or at risk for
overweight increasing their risk for developing chronic,
serious and costly medical problems, such as diabetes,
heart disease and certain cancers.
State obesity-prevention efforts
The state has made efforts to address the problem of
obesity among Californians. For example, the Governor's
2005-2006 budget includes a $6 million general fund
proposal to support a comprehensive obesity prevention
program. A goal of the proposal is to support healthy
school and workplace environments to promote physical
activity and healthy eating. The proposed funding will
also support Medi-Cal managed care efforts to increase
obesity-related screening and counseling and provide
referral and treatment for overweight and
at-risk-for-overweight children.
California Obesity Prevention Initiative (COPI),
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established within DHS, is tasked with physical activity
and healthy eating, addressing the societal, technological,
and environmental influences on obesity to reduce the
prevalence of obesity and its associated health risks among
Californians. COPI's website indicates that its long-term
goals include reducing the life-long complications of
childhood overweight and obesity and their associated
adverse health outcomes, by intervening with children and
youth who are high risk; addressing the disparities in
obesity prevalence and treatment for underserved and
vulnerable populations in California, especially for
children and youth; and, creating environments that support
healthy eating and physical activity for all Californians,
particularly for children and youth.
DHS administers the "California 5 a Day-For Better Health
Program" (5 a Day) as part of DHS' California Nutrition
Network for Healthy, Active Families (Network), a
public/private partnership that delivers nutrition
education activities within targeted low-resource schools
and community sites. Established in 1988 and adopted
nationally in 1991, 5 a Day's purpose is to encourage Food
Stamp eligible Californians to consume fruits and
vegetables every day and be physically active. The annual
budget and staffing information for the Network, including
5 a Day, is $90 million in federal funds.
Availability of fresh fruits and vegetables in low-income
communities
According to the California Food Policy Advocates (CFPA),
large chain grocery stores often have the best selection
and prices of fresh produce, but many are not located in
low-income areas. While some neighborhoods have numerous
small grocers selling produce, other areas are devoid of
fresh and affordable produce.
Research suggests that socioeconomic and racial disparities
exist with respect to access to fresh fruits and
vegetables. A 2002 study by the Center for Food Justice
reported that middle and upper income communities in Los
Angeles County have 2.3 times as many supermarkets per
capita as low-income communities. They also found that
predominantly Caucasian communities have 3.2 times the
supermarkets of predominantly African American communities,
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and 1.7 times those of predominantly Latino communities. A
multi-state study found that wealthy neighborhoods had over
three times as many supermarkets as low-wealth
neighborhoods.
According to the United States Census Bureau, grocery
stores are scarcer in low-income communities, and many
local residents typically lack transportation options to
easily get to stores located in other parts of town.
Low-income, African American, and Latino households have
less access to private vehicles than higher income and
white households. In a report published by The American
Journal of Public Health, African Americans living in
neighborhoods with at least one supermarket were more
likely to meet dietary guidelines for fruit and vegetable
consumption and for fat intake than African Americans
living in neighborhoods without supermarkets. Additional
nearby supermarkets resulted in even greater fruit and
vegetable consumption.
In a 2005 study, Healthy Food, Healthy Communities,
PolicyLink stated that communities without supermarkets
generally contain a base of smaller grocery stores,
specialty stores, ethnic markets, convenience stores, or
corner stores. These are the only available nearby food
resource for residents with limited or no access to cars,
and they generally do not provide the same selection,
quality, and prices of larger grocery stores. They often
lack produce and other nutritious foods, offer low quality
goods and services, are poorly maintained, and charge high
prices.
In a 2005 health study, the Rand Corporation stated that
the price of fruits and vegetables may be linked to weight
gain in children. The study found that young school-age
children who live in communities where fruits and
vegetables are expensive are more likely to gain excessive
amounts of weight than children who live in areas where
fruits and vegetables cost less. Lower real prices for
vegetables and fruits were found to predict a significantly
lower gain in body mass index between kindergarten and
third grade.
Small grocers
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This bill would require DHS to provide support and
assistance to small stores in low-income communities to
obtain refrigerated produce display cases through a variety
of financing methods including leasing, lending, and/or
small business and economic development support. While
many small grocers already have refrigeration capacity for
other products, the sponsor states that small grocers may
not have the space to accommodate fresh produce, or the
willingness to replace non-perishable products with
perishable products.
This bill also requires DHS to provide technical assistance
to small stores on the purchase, storage, marketing and
display of fresh produce. Many retailers already receive
this assistance for other products such as tobacco or
beverage products. For example, a beverage company
representative or distributor may assist a retailer with
product placement or display techniques to maximize sales.
In Healthy Food, Healthy Communities, PolicyLink states
that improving existing small stores in communities is an
effective way to increase fresh produce consumption.
Smaller stores, particularly those that are independently
owned, have more flexibility than large chain supermarkets
to tailor their merchandise mix to meet customer
preferences. In addition, stores with a long history in
the community often have extensive knowledge about the
specific tastes and desires of residents.
PolicyLink states that improving the quality of a small
store that has historically been viewed as a community
problem-such as a corner store that primarily operates as a
liquor store-into a community asset, can build
relationships between local merchants and residents and
contribute to community revitalization. Improving the
product mix at small stores, and addressing other issues of
viability such as pricing, food quality and freshness, and
customer service, is a strategy to enhance access to
healthy food in underserved communities that builds upon
existing community resources, and may be more feasible in
some communities that face significant challenges.
According to CFPA, small merchants face the same costs of
conducting business as larger grocery stores but do not
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have the same scale advantages that can translate into
lower prices for customers. They purchase in smaller
quantities so they must pay higher wholesale costs, and
they face limited competition, which leaves them with less
incentive to maintain competitive prices. They also have
lower merchandise turnover, which can lead to poor quality
produce and loss due to spoilage.
PolicyLink recommends providing technical assistance and
resources to small stores may offer small stores the
support they need to learn how to sell and market
perishable goods such as fresh produce. PolicyLink
encourages small stores to seek assistance from community
groups or government agencies that may subsidize the
purchase of new equipment and initial produce stock in
order to implement fresh food options. The organization
also recommends that small stores receive technical
assistance on how to purchase, display and market
perishable foods.
Food stamp program
Food stamps can be used to purchase foods for human
consumption and seeds and plants to grow food for household
use. They cannot be used to purchase non-food items such
as pet food, soap, paper products, or household supplies.
They also cannot be used to purchase alcohol or tobacco,
vitamins, or medicines. The amount of food stamp benefits
a low-income person or family can receive is based on the
United States Department of Agriculture's (USDA) Thrifty
Food Plan. The plan estimates how much it costs to provide
a household with nutritious, low-cost meals. The estimates
are revised every year to keep pace with changes in food
prices. The average amount of food stamp benefits received
per household is about $200 per month.
Electronic Benefit Transfer, or EBT, is the distribution of
food stamp benefits with a plastic debit card, making the
issuance of state public assistance and federal food stamp
benefits faster and easier through the use of electronic
transactions. By using the EBT card, cardholders can
access food benefits at the point-of-sale terminals of
retailers authorized by USDA to accept food stamp benefits.
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This bill would create an incentive for food stamp
recipients using the EBT card to purchase fresh fruits and
vegetables. According to the sponsor, for every dollar
spent on fresh produce, $0.40 would be placed on the EBT
card for future use. Specifically, an individual who makes
purchases with the EBT card would receive a receipt
highlighting the amount of fresh produce purchases they
made that are eligible for the bonus. The bonus amount
would then be placed back on the EBT card for future use.
All food stamp authorized markets within the county where
the pilot is run could offer the incentive. The incentive
would apply only to purchases of fresh produce, not canned
or frozen fruits and vegetables. According to the sponsor,
the incentive is dependent on four factors:
1. The retailer's ability to identify specific
purchases.
2. The retailer's ability to generate such a receipt.
3. The EBT system's ability to capture the value of
the incentive and make it available on the card.
4. The ability for the transaction to be completed
without creating a stigma against food stamp
recipients or burdensome steps for retailers.
There have been past proposals to create incentives by
using paper coupons for fresh fruit and vegetable
purchases. However, the United States Department of
Agriculture did not approve these proposals, because
coupons may stigmatize recipients and create challenges for
retailers. The federal government sets restrictions on
what can be purchased with food stamps. States cannot
change these restrictions without a federal waiver.
However, CFPA asserts that states can implement
state-funded benefits through the EBT card such as the
incentive proposed by this bill. Nonetheless, this bill
requires DHS to seek all necessary approvals to establish
the pilot program and to seek available federal matching
funds where applicable.
Arguments in support
Supporters state that this bill will directly improve
healthy eating in low-income communities, and make it
easier for small stores to provide access to fresh fruit
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and vegetables in these communities. This bill is a one
solution to the growing obesity problem, and meets the
needs of low-income Californians who face unique challenges
in increasing their produce consumption. California would
be a pioneer in using EBT technology to deliver incentives
for healthy purchases, and the outcomes of this pilot could
create an impetus for national policies to increase
consumption of fruits and vegetables.
Related legislation
SB 1329 (Alquist) - requires the Department of Housing and
Community Development, in partnership with DHS, to
establish the "Healthy Food Retailing Initiative" to
provide residents of underserved communities with retail
markets that would offer healthy, high quality, and
affordable food. This bill is currently in the Assembly
Housing and Community Development Committee.
COMMENTS AND QUESTIONS
1.Farmer's markets. Some farmer's markets throughout
California accept EBT as a form of payment for goods
purchased at the market. Would the incentive provided by
this bill apply to fresh produce purchases at farmer's
markets in piloting counties?
2.Independent external evaluator. On page 4, line 28, the
bill states that "The department shall contract with an
independent external evaluator for this evaluation."
Does this mean that an independent external evaluator
will conduct the evaluation? If so, the author may wish
to make a clarifying amendment to reflect such.
3.Timeline. The author may wish to amend the bill to
include a date or timeline by which DHS shall make
recommendations to the Legislature.
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PRIOR ACTIONS
Assembly Floor: 51 - 29 Pass
Assembly Appropriations: 13 - 5 Do Pass as Amended
Assembly Health: 9 - 3 Do Pass
POSITIONS
Support: California Food Policy Advocates (sponsor)
Alameda County Community Food Bank
Association of California Independent
Grocers and
Convenience Stores
California Catholic Conference
California Center for Public Health Advocacy
California Chiropractic Association
California Dietetic Association
California Food and Justice Coalition
California Hunger Action Coalition
California Immigrant Welfare Collaborative
California Independent Grocers Association
California Medical Association
California Pan-Ethnic Health Network
Central Coast Hunger Coalition
Community Alliance with Family Farmers
County of Santa Cruz
Girl Scouts Council of California
Latino Coalition for a Healthy California
Lieutenant Governor Cruz Bustamante
National Association of Social Workers
PolicyLink
Second Harvest Food Bank
Services, Immigrant Rights and Education
Network
Statewide Youth Board on Obesity Prevention
Western Growers
Oppose: None registered.
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