BILL ANALYSIS
AB 2720
Page 1
ASSEMBLY THIRD READING
AB 2720 (John A. Perez and Bass)
As Amended May 12, 2010
Majority vote
AGRICULTURE 6-0 APPROPRIATIONS 12-5
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|Ayes:|Galgiani, Conway, Fuller, |Ayes:|Fuentes, Ammiano, |
| |Hill, Ma, Yamada | |Bradford, |
| | | |Charles Calderon, Coto, |
| | | |Davis, Monning, Ruskin, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Norby |
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SUMMARY : Requires the California Department of Food and
Agriculture (CDFA), by July 1, 2011, to make recommendations to
the Legislature, after consultation with the State Department of
Public Health (DPH) and the State Department of Social Services
(DSS), on actions needed to promote food access with California
and to maximize funding opportunities provided by the federal
2010 Healthy Food Financing Initiative (HFFI). Further, it
recast the "Healthy Food Purchase" Pilot Project to maximize
available federal funds and authorizes DPH to award grants and
in-kind support to nonprofits to encourage the sale and
consumption of fresh fruits and vegetables until January 1,
2015.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill could cost in excess of $150,000 General
Fund, given the complexity of the report required. The Healthy
Food Purchase Pilot Project is funded exclusively using federal
funding and private grants, therefore, extending the sunset on
the pilot project has no fiscal impact on the state.
COMMENTS : There has been an increasing problem within urban and
rural communities in California, and nation-wide, to maintain
the access to grocery stores and the availability of fresh
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produce, creating what is called "food deserts." To this end,
the Obama Administration (Administration) released details of
an over $400 million HFFI, which will help bring grocery stores
and other healthy food retailers to underserved urban and rural
communities across the nation. The HFFI is a partnership
between the federal Departments of the Treasury, Agriculture,
and Health and Human Services.
HFFI will promote a range of interventions that expand access to
nutritious foods, including developing and equipping grocery
stores and other small businesses and retailers selling healthy
food in communities that currently lack these options.
Residents of these communities, which are sometimes called food
deserts, and are often found in economically distressed areas,
are typically served by fast food restaurants and convenience
stores that offer little or no fresh produce. Lack of healthy,
affordable food options can lead to higher levels of obesity and
other diet-related diseases, such as diabetes, heart disease,
and cancer.
Through this new multi-year HFFI, and by engaging with the
private sector, the Administration intends to work toward
eliminating food deserts across the country within seven years.
The first year of funding proposes to leverage enough
investments to begin expanding healthy foods options into as
many as one-fifth of the nation's food deserts, and create
thousands of jobs in urban and rural communities across the
nation.
The HFFI appears to be modeled after the Pennsylvania Fresh Food
Financing Initiative (FFFI) that the Pennsylvania Legislature
created in 2006. FFFI is an innovative program that increases
the number of supermarkets and grocery stores in underserved
communities across the state of Pennsylvania. Developed as a
public-private partnership, FFFI serves the financing needs of
operators located or locating in communities where
infrastructure costs and credit needs are not met by
conventional financial institutions to increase the availability
of fresh food in low-income neighborhoods. FFFI uses market
analysis, leveraged capital, and public policy to stimulate
supermarket development. Investing in quality food markets in
underserved communities directly benefits low- and
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moderate-income communities.
Pennsylvania appropriated $30 million over three years to the
program. The Reinvestment Fund (TRF), an investment company,
has leveraged the investment to create a $120 million fund for
financing the FFFI. As of December 2009, FFFI has helped
finance 83 supermarket projects in 34 Pennsylvania counties,
ranging in size from 900 to 69,000 square feet. In total, these
projects are expected to create or retain 5,000 jobs and more
than 1.6 million square feet of food retail.
FFFI is designed to meet the financing needs of supermarket
operators that want to operate in these communities, to help new
supermarkets get off the ground and existing ones to refurbish
and replace old capital to improve efficiency and lower costs.
FFFI provides grants and loans to qualified food retail
enterprises for predevelopment costs including, but not limited
to, land acquisition financing, equipment financing, capital
grants for project funding gaps, construction and permanent
finance, and workforce development.
TRF also offers stores technical assistance and financing to
support energy efficiency and conservation measures. FFFI has
become a $120 million one-stop-shop for financing fresh food
retailers in underserved areas.
AB 2720 is intended to coordinate the efforts to maximize HFFI
in California; as such, it is a work-in-progress as additional
comments and suggestions are anticipated in order to better
harmonize with this federal program's purpose.
Related legislation: AB 2726 (Leno), Chapter 466, Statutes of
2008, extends the sunset date of DPH's Healthy Food Purchase
pilot program from January 1, 2011, to January 1, 2013, and
authorizes DPH to implement the pilot program by July 1, 2009,
to the extent that the Department of Finance determines that
sufficient funds are available from any source, as specified.
AB 2384 (Leno), Chapter 236, Statutes of 2006, establishes the
"Healthy Food Purchase" pilot program, not to exceed seven
counties, to increase the sale and purchase of fresh fruits and
vegetables in low-income communities.
AB 2720
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Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084
FN: 0004640