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F I S C A L I M P A C T R E P O R T

SPONSOR Feldman

DATE TYPED 3/10/05

HB

SHORT TITLE Competitive Foods in School Act

SB 295

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

None

Conflicts with HB 61,

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department

SUMMARY

Synopsis of Bill

SB 295 creates a new section of the Public School Code called the “Competitive Food in Schools

Act.” The Act:

1.

Defines “competitive beverage” and “competitive food” as beverage/food offered or sold

at school other than those served through the federal school breakfast or lunch program.

2.

Requires the PED to “approve a list of competitive foods and competitive beverages ap-

proved for offer or sale at public schools and charter schools.” This approval must be

based on the provisions of the Act.

3.

Forbids contracts for food and beverage vending to be bound by exclusive or multi-year

provisions.

4.

Forbids schools to utilize coupons for food and beverages to be utilized as rewards or be

withheld as punishment for individual students or groups of students.

5.

Excludes graphics that do not promote “one hundred percent fruit and vegetable juices,

water, milk, physical activity and health” from vending machines located on school prop-

erty.

Senate Bill 295-- Page 2

6.

Requires school personnel to eat food and drink beverages that comply with the Act when

eating with their students at school.

7.

Restricts the time for sale of competitive foods on an elementary school campus. Com-

petitive foods may not be sold in elementary schools from one hour before school starts

through one-half hour after school ends. Celebrations and nutrition education lessons are

exempt from this section.

8.

Sets requirements for the types of competitive food that may be sold at middle and high

schools from one hour before school starts through one-half hour after school ends.

Celebrations and nutrition education lessons are exempt from this section.

9.

Requires the PED, in conjunction with the Department of Health, to adopt and promul-

gate rules by August 1, 2005 for compliance with the act and provides specifics as to

what the rules must require, as follows:

a.

A preference for New Mexico-grown foods

b.

A preference for minimally processed, naturally nutrient-dense-per-calorie food

and beverages

c.

A preference for school fundraising activities that use nonfood items and to re-

quire that when used, food must meet the provisions in the Act.

d.

Require districts to involve students in creating school wellness policies,

limits school celebrations that involve the use of food and beverages, and require

that food and beverages at celebrations comply with the standards of the Act.

Significant Issues

•

Many schools currently have business partner relationships in their local community that

provide food and beverage coupons for rewards for individual students or groups. SB 295

would forbid schools from continuing this practice.

•

Many current contracts between schools and venders allow schools to choose the graph-

ics utilized in vending machines. Section 6 of the bill would set limitations on the types

of graphics that may be utilized by excluding non-conforming graphics. The PED be-

lieves this provision brings the bill into the area of constitutional law referred to as

“commercial speech” and may implicate the 1

st

Amendment to the U.S. Constitution.

•

Section 7 of the bill sets limitations at to what school personnel may eat when eating with

students. The PED believes this provision poses several issues. If a school district has

entered into a bargaining agreement with a labor union, such a provision could be griev-

able since arguably failure to eat what the law says could be considered misconduct and

result in discipline. A more significant problem with this section is a combined reading

of portions of the School Personnel Act. Sections 22-10A-2(A), (D), 22-10A-4(A), (F),

22-10A-24 and 22-10A-27 will not permit a school district to terminate or discharge a

tenured licensed employee except for just cause. By statute, "just cause means a reason

that is rationally related to an employee's competence or turpitude or the proper perform-

ance of his duties and that is not in violation of the employee's civil or constitutional

rights.” The PED believes Section 7 may be subject to challenge under this provision.

•

SB 295 restricts the time for sale of competitive foods on an elementary school campus.

This does not allow for provisions in areas in which students cannot access competitive

food, such as teacher/staff lounges.

Senate Bill 295-- Page 3

PERFORMANCE IMPLICATIONS

PED is concerned that given these multi-year and exclusive contracts with vending companies,

whether a school district could withstand a challenge based upon Article II, Section 19 of the

New Mexico Constitution, which states, “No ex post facto law, bill of attainder nor law impair-

ing the obligation of contracts shall be enacted by the legislature.”

Improved physical activity and eating habits will impact public school performance measures

and benchmarks regarding reading/language arts and math testing proficiency.

FISCAL IMPLICATIONS

Many schools currently have multi-year and exclusive contracts with vending companies. These

typically result in additional dollars to schools on top of the vending sales dollars (exclusive

rights fees). Albuquerque Public Schools receives approximately $ million annually in exclusive

rights fees. SB 295 would impact on this funding for schools. PED estimates a loss of approxi-

mately $3 million annually if exclusive right fees are not allowed.

Over time, the provisions of the bill may positively impact public health and reduce the health

care costs associated with poor nutrition and obesity.

ADMINISTRATIVE IMPLICATIONS

The PED staff would be required to adopt and promulgate rules to be in compliance with the Act.

Given that the PED must hold public hearings to adopt rules, the bill’s deadline of August 1,

2005 may be difficult to meet.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Conflicts with HB 61, which requires the PED to develop regulations for competitive food standards. SB

295 will provide those standards as part of statute and require PED to adopt and promulgate rules to be in

compliance with the Act.

TECHNICAL ISSUES

Page 3, lines 19-21, and page 4, lines 4-5, exempt celebrations and nutrition education lessons

from the time restrictions on competitive foods in the act; however, page 6, lines 16 – 19, re-

quires the PED to promulgate rules that require food and beverages used during celebrations

comply with the standards in the Act.

OTHER SUBSTANTIVE ISSUES

Eighty percent of school districts sell food that competes with school meal programs; most of the

food is low in nutrients and high in calories.

$12 to 14 billion are spent each year to market unhealthy food to children by the food industry.

The New Mexico Action for Healthy Kids, the New Mexico Pediatric Society, the New Mexico

Coalition to Promote Physical Activity and Nutrition and over 30 other New Mexico organiza-

Senate Bill 295-- Page 4

tions support measures to assure that schools create a healthy environment where children can

learn and develop lifelong habits of good nutrition and physical activity. All food and beverages

sold or served in all public schools should meet the nutrition standards set forth by the U.S. De-

partment of Agriculture Dietary Guidelines for Americans.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The PED will use other statutory authority for regulating competitive foods in schools.

AHO/lg