BILL ANALYSIS �
AB 727
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Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 727 (Mitchell) - As Amended: April 25, 2011
Policy Committee: Business and
Professions Vote: 5-4
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases the percentage of food and beverage items
sold from vending machines on state property that must meet
specified nutritional standards and requires state cafeterias
and concessions to enhance nutritional standards. Specifically,
this bill:
1)Increases, from 35% for food items and one-third for beverage,
to 50% by January 1, 2014, and to 100% by January 1, 2016, the
percentage of food items and beverage items offered for sale
in vending machines on state property that are required to
meet "accepted nutritional guidelines" as defined in current
law and modified in this bill.
2)Requires, beginning January 1, 2014, food sold at food
concessions and cafeterias in state-owned or leased-buildings
to at least meet food and nutrition guidelines for concessions
as determined by the specified federal agencies.
3)Requires the Department of General Services (DGS), when
approving contracts for food to be sold at concessions,
cafeterias, and vending operations on state-owned and
state-leased buildings to give preference to:
a) Food items grown, packaged, or produced in California.
b) Purchasing food items meeting sustainability guidelines
as determined by specified federal agencies.
4)Requires DGS, when performing the function in (3), to not
include disincentives for purchasing food items meeting the
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criteria of (3)(a) or (3)(b).
FISCAL EFFECT
1)DGS will incur one-time costs of about $80,000 to modify food
contract specifications and to disseminate nutritional
guidelines for food purchasing, and ongoing costs of at least
$150,000 regarding enhanced oversight and compliance with food
purchasing and vending contracts, including vendor and
contractor protests concerning compliance.
2)The state Department of Rehabilitation (DOR) administers the
operation of concessions, including vending machines located
on state property through the Business Enterprise Program
(BEP) and through a contracting program. Concessions are
operated by blind vendors. Revenues are deposited into the
Vending Stand Fund (VSF) and the BEP Vending Machine Account
(BEVMA) in the Special Deposit Fund. The program currently
encompasses 3,300 vending machines at 474 state-owned or
-leased properties. This includes 151 sites where 57 BEP
vendors provide direct concession services, including vending
machines.
The increased restrictions on the types of foods and beverages
allowed to be sold could impact sales volumes and revenues
into the VSF and the BEVMA. A 25% loss of sales could result
revenue losses of $750,000 to the VSF and $90,000 to the
BEVMA. In addition, the DOR would incur increased
administrative costs for monitoring and compliance with the
content requirements.
3)Departments with large food service operations, such as the
Departments of Corrections and Rehabilitation and Mental
Health could see significant increased food costs.
COMMENTS
1)Purpose. According to the author, "AB 727 will require the
state to provide healthier food options in vending machines,
concessions and cafeterias located in state buildings, based
on nutritional standards established within the "Health and
Sustainability Guidelines for Federal Concessions and Vending
Operations" by DHHS and U.S. GSA."
2)In support , the Consumers Union states, "California is
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uniquely positioned to establish a model for other states, and
other government entities, in making the nutritious food
option the easy one?Adopting food procurement policies for
state buildings that emphasize nutritious offerings will
broaden healthy choices for state workers and visitors to
state-run facilities. Healthy procurement policies for all
state buildings will help promote obesity prevention and
thereby support reduction of the ever-upward spiraling health
system costs for obesity-associated disease."
3)Prior Legislation . SB 441 (Torlakson)/Chapter 597 of 2008,
requires vendors operating vending machines on state property
to offer in any machine at least 35% of food items and at
least one-third of beverages that meet "accepted nutritional
guidelines," as defined.
4)Opposition . The California Automatic Vendors Council is
opposed to the increases to 50% and 100% for nutritional
products, fearing a resulting loss of revenue.
5)How much is enough ? Since state law already requires at least
one-third of the food and beverage choices in state vending
machines to meet certain nutritional standards, is it
necessary to further limit the choices made by those (mainly
adults) who use those machines, and might not many
individuals, when faced with more limited choices at state
facilities, simply go across the street to buy what they want?
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081