BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 912 (Mitchell) - Vending machines on state property.
Amended: April 21, 2014 Policy Vote: GO 8-1
Urgency: No Mandate: No
Hearing Date: April 28, 2014
Consultant: Mark McKenzie
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: SB 912 would eliminate the January 1, 2015 sunset
date on provisions that require vendors operating vending
machines on state property to offer at least 35 percent of food
items and at least one-third of beverages that meet specified
nutritional guidelines.
Fiscal Impact: Unknown, likely minor impact on state special
fund revenues derived from vending machine receipts. (Vending
Stand Fund and Business Enterprise Vending Machine Account)
Background: The state Department of Rehabilitation administers
the operation of vending machines located on state property
through the blind vendor Business Enterprise Program (BEP) and
through a contracting program. Revenues from vending machines
are deposited into the Vending Stand Fund (VSF) and the Business
Enterprise Vending Machine Account (BEVMA) in the Special
Deposit Fund. Specifically, existing law requires that up to
six percent of gross sales from the operation of vending
machines be deposited into the VSF to support the maintenance
and replacement of equipment, the purchase of new equipment, the
construction of new vending facilities, the functions of the
committee of blind vendors, and specified personnel-related
costs.
The department also enters into contracts based on sales with
approximately 200 non BEP vendors at other state facilities. A
portion of these contracts is paid into the BEVMA. Existing law
requires the department, upon a finding that the BEP vendors'
retirement program is actuarially sound and fiscally solvent, to
contribute to an annuity plan for BEP vendors licensed by the
department from vending machine operations by non-BEP vendors.
SB 912 (Mitchell)
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Existing law, as enacted by SB 441 (Torlakson) Chap 597 of 2008,
requires vendors operating vending machines on state property to
offer at least 35 percent of food items and one-third of
beverages that meet specified accepted nutritional guidelines.
A separate one-third of beverages must either meet the
nutritional guidelines or be flavored milk, beverages containing
less than 20 calories per 12 ounce serving, or beverages
composed of at least 50 percent fruit juice that may contain
noncaloric sweetener. These provisions are scheduled to sunset
on January 1, 2015.
Proposed Law: SB 912 would eliminate the sunset on provisions
enacted by SB 441 that require vendors operating vending
machines on state property to offer at least 35 percent of food
items and one-third of beverages that meet accepted nutritional
guidelines, as specified.
Related Legislation: AB 727 (Mitchell), which was held on this
Committee's Suspense File in 2011, would have, among other
things, required at least 50 percent of food and beverages
offered in vending machines and cafeterias on state property to
meet specified nutritional guidelines by 2014.
Staff Comments: The impact of continuing requirements that
vending machines offer food and beverages meeting specified
nutritional guidelines is unknown. The department does not have
data to determine whether or not the requirements to offer
healthier alternatives in vending machines on state property
have had an impact on sales. Any impact on sales would have a
corresponding impact, either positive or negative, on deposits
to the VSF and BEVMA that fund the capital facilities
maintenance program and pension and health obligations.
The department indicated that revenues attributable to the
operation of vending machines on state property were over $9.5
million in the most recent fiscal year, resulting in deposits of
over $510,000 to the VSF. These amounts do not include vending
machines on state property which are combined with cafeterias,
snack bars, or vending stands, nor do they include vending
routes that contain a combination of state, federal, or county
locations. The amounts for these could not reasonably be
determined. The department also indicates that commissions from
state locations resulted in deposits of $176,303 to the BEVMA.
SB 912 (Mitchell)
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Staff notes that although the impacts of continuing requirements
for provision of healthier options in state vending machines is
unknown, the impacts on vending machine sales would have to
exceed $1 million in order for the state fiscal impacts on the
VSF and the BEVMA that approach the Committee's Suspense File
threshold of $150,000 in a fiscal year.