BILL ANALYSIS                                                                                                                                                                                                    







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          |Hearing Date:April 12, 2004    |Bill No:SB                |
          |                               |1580                      |
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                    SENATE COMMITTEE ON BUSINESS AND PROFESSIONS
                             Senator Liz Figueroa, Chair

                        Bill No:        SB 1580Author:  Bowen
                                 As Amended:  April 12, 2004          
          Fiscal:      Yes

          
          SUBJECT:  Food product advertising:  trans fatty acids. 
          
          SUMMARY:  Requires manufacturers to accompany claims of  
          "low saturated fat" or "reduced saturated fat" with the  
          phrase "Contains Trans Fat" if the product contains trans  
          fat. 

          Existing law: 
          
          1)Regulates false and misleading advertising generally, and  
            subjects violators to both civil and criminal penalties.

          2)Establishes the Sherman Food, Drug, and Cosmetic Law  
            which governs packaging, labeling, advertising,  
            manufacture and sale of foods and drugs, and is  
            administered by the State Department of Health Services. 

          3)Specifies that any food is misbranded if its labeling is  
            false or misleading in any particular.

          Existing federal law, the Federal Food, Drug, Cosmetic Act  
          and the Nutrition Labeling and Education Act of 1990:
          
          1)Requires the Federal Drug Administration (FDA) to  
            regulate nutritional labeling information and provides,  
            among other things, that certain nutrients and food  
            components be included in nutrition labeling. 

          2)Sets nutrient content claims for fat and fatty acids and  
            specifies that a claim about the level of fat and fatty  
            acids in a food may only be used in accordance with the  





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            definition of that term.  Specifically, prescribes  
            conditions under which the terms "low saturated fat" and  
            "reduced saturated fat" can be used. 

          3)Requires food manufacturers to list trans fat on the  
            Nutrition Facts panel immediately under saturated fat on  
            the nutrition label by January 1, 2006. 

          4)Provides for national uniform nutrition labeling by  
            providing for the preemption of certain types of state  
            and local labeling requirements that are not identical to  
            applicable federal requirements, including food  
            standards, nutrition labeling, health claims and  
            ingredient declaration.  However, permits states to  
            petition FDA for exemption of state requirements from  
            federal preemption of state food labeling, which may be  
            granted if the state shows that the state requirement: 1)  
            would not cause any food to be in violation of any  
            applicable requirement under federal law; 2) would not  
            unduly burden interstate commerce; and 3) is designed to  
            address a particular need for information which is not  
            met by federal law. 

          5)Defines labeling to mean all labels and other written,  
            printed, or graphic matter upon any article or any of its  
            containers or wrappers, or accompanying such article.
          
          This bill:

          1)Makes it unlawful for a manufacturer, wholesaler,  
            distributor, or other person to place a claim upon a  
            product declaring the content of the product to be "low  
            saturated fat" or "reduced saturated fat" without also  
            including the phrase "Contains Trans Fat" if the product  
            contains trans fat.  

          2)Requires the trans fat disclosure to be in the same  
            typeface as the claim. 

          3)Makes it false and misleading advertising for a  
            manufacturer, wholesaler, distributor, or other person  
            that packages products containing trans fatty acids to  
            willfully or negligently fail to include in a claim that  
            trans fatty acids are present in a product. 

          4)Specifies that this requirement is only applicable when  





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            there is a claim made on a product about the low level of  
            saturated fat, as permitted under federal law, when the  
            amount of saturated fat contained in the product does not  
            exceed a specified maximum amount. 

          5)Defines "hydrogenation" as a process of adding hydrogen  
            to liquid oils, enabling liquid oils to solidify, which  
            increases the shelf life and flavor stability of the  
            liquid oils and the foods that contain those liquid oils.  


          6)Defines "trans fatty acids" as acids made through the  
            process of hydrogenation that solidifies liquid oils,  
            thereby increasing the shelf life of processed foods  
            containing the liquid oils. 

          7)Specifies that the intent of the Legislature is to enable  
            California consumers to make knowledgeable choices about  
            food consumption based on the disclosure of information  
            concerning the makeup of that food and cites findings  
            from a report on trans fat, as specified. 

          FISCAL EFFECT:  Unknown

          COMMENTS:
          
          1.Purpose.  This bill is sponsored by the Author.   
            According to the Author, SB 1580 will ensure that  
            consumers who rely on "low fat" advertising claims know  
            exactly what is in the food they are buying.  This bill  
            requires manufacturers that want to make a "low saturated  
            fat" or "reduced saturated fat" claim to also include as  
            part of the claim that the product contains trans fat. 

          As explained by the Author, there are two types of  
            artery-clogging fats which can be found in foods that  
            many people eat every day.  Consumers depend on  
            "Nutrition Facts" labels which FDA requires manufacturers  
            to put on products, and they assume it is an accurate  
            assessment of what they are eating.  Currently,  
            nutritional fact panels only list one type of bad fat --  
            saturated  fat -- but the other type of bad fat, trans  
            fat, is not disclosed on the package.   

          The author cites a 1999 cost benefit analysis prepared for  
            FDA that estimated acknowledging trans fat content on  





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            labels would save an estimated $3 million to $8 million  
            annually in preventing heart disease costs and save  
            approximately 2,000 to 5,000 lives a year.  

          Other countries are also addressing the issue of trans fats  
            in foods.  Last year in Denmark, a law was enacted  
            limiting the amount of trans fat in processed foods.   
            Similarly, a bill has been introduced in Canada that  
            proposes that trans fats be limited to no more than 2% of  
            the total fats in processed foods.

          2.Background on Trans fat.  Trans fatty acids, or trans  
            fat, are made through the process of hydrogenation that  
            solidifies liquid oils.  Hydrogenation increases the  
            shelf life and flavor stability of these oils and foods  
            that contain them.  It is found in vegetable shortenings,  
            some margarines, crackers, cookies, salted snack foods,  
            and other foods.  Hydrogenation is what turns liquid oil  
            into Crisco or stick margarines.
            
          Higher intakes of saturated and trans fats and dietary  
            cholesterol raise low density lipoprotein (LDL or "bad")  
            cholesterol in the blood.  Trans fat also lowers high  
            density lipoprotein (HDL or "good") cholesterol in the  
            blood. 

          3.FDA Issued Rule Requiring Disclosure of Trans Fat in July  
            2003.  In 1994, the Center for Science in the Public  
            Interest (CSPI), a consumer advocacy organization, filed  
            a petition (amended in July 1998) with FDA requesting  
            that the agency take steps to require trans fat to be  
            listed on nutrition labels and claims.  In response to  
            the CSPI petition, FDA issued a proposed rule in the  
            Federal Register in November 1999 to amend the  
            regulations to address the issue of disclosing trans fat  
            content and the rule became final in July 2003.  The  
            ruling requires that trans fat be listed on nutrition  
            labels immediately under saturated fat by January 1,  
            2006.  

          However, because the final rule did not address nutrient  
            content or health claims for trans fat, FDA has issued an  
            advance notice of proposed rulemaking to:  1) solicit  
            information and data that potentially could be used to  
            establish new nutrient content claims about trans fat; 2)  
            establish qualifying criteria for trans fat in current  





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            nutrient content claims for saturated fat and  
            cholesterol, lean and extra lean claims, and health  
            claims that contain a message about cholesterol-raising  
            lipids; and 3) establish disclosure and disqualifying  
            criteria to help consumers make heart-healthy food  
            choices.  FDA is also requesting comments on whether it  
            should consider statements about trans fat, either alone  
            or in combination with saturated fat and cholesterol, as  
            a footnote in the Nutrition Facts panel or as a  
            disclosure statement in conjunction with claims to  
            enhance consumers' understanding about such  
            cholesterol-raising lipids and how to use the information  
            to make healthy food choices.  

          This open comment period ends April 15, 2004.

          4.Benefits of Disclosing Trans Fat.  FDA estimates that  
            three years after the January 1, 2006 effective date,  
            trans fat labeling would annually prevent from 600 to  
            1,200 heart attacks and save 250 to 500 lives.  Based on  
            this estimate, the trans fat labeling requirement will  
            realize a cost savings of $900 million to $1.8 billion  
            per year in medical costs, lost productivity, and pain  
            and suffering.

          5.Possible Preemption by Federal Law.  FDA has determined  
            that the final rule on trans fat has a preemptive effect  
            on state law.  Section 403A of the Federal Food, Drug and  
            Cosmetic Act (21 U.S.C. 343-1) is an express preemption  
            provision. That section provides that "no State or  
            political subdivision of a State may directly or  
            indirectly establish under any authority or continue in  
            effect as to any food in interstate commerce" certain  
            food labeling requirements, unless an exemption is  
            provided by the Secretary (and, by delegation, FDA).   
            Relevant to this final rule, one such requirement that  
            States and political subdivisions may not adopt is any  
            requirement for nutrition labeling of food that is not  
            identical to federal requirements.  According to FDA,  
            prior to the effective date of the final rule on trans  
            fat, this provision operated to preempt States from  
            imposing nutrition labeling requirements concerning trans  
            fat because no such requirements had been imposed by FDA.  
             Once the rule becomes effective, states will be  
            preempted from imposing any nutritional labeling  
            requirements for trans fat that are not identical to  





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            those required by this rule. 

          6.Will Manufacturers Have Sufficient Time to Comply with  
            this Measure?  Given the January 1, 2005 implementation  
            date in this bill, would manufacturers have enough time  
            to comply with this bill's requirement?  The author may  
            wish to consider giving additional time (i.e., extending  
            the bill's implementation date) for moving out current  
            inventories.

          7.Previous Legislation.  SB 1610 (Bowen) of 2002 would have  
            required manufacturers and producers of food and dietary  
            supplements for human consumption to include on the label  
            information stating the levels of trans fat in the  
            product, when the manufacturer or producer claims the  
            food product is low in saturated fat. 

          8.Arguments in Support.  Consumers Union believes that this  
            bill is necessary to correct a "serious oversight" in  
            FDA's new regulation on the labeling of trans fat.  This  
            omission in the ruling will allow food manufacturers to  
            make that claim that their products are low-fat or  
            fat-free on the front of the food packaging without  
            counting the levels of trans fat in the product.   
            Consumers Union states that such claims are tantamount to  
            deceptive advertising since it is well-known that trans  
            fat lurks in a multitude of "low-fat" foods. 

          The Diabetes Coalition of California (DCC) states that many  
            consumers buy products advertised to be "low fat" because  
            they require a diet low in fat for medical reasons.   
            Hidden trans fats undermine the efforts of individuals to  
            limit unhealthy fat in their diet.  DCC believes that  
            providing individuals with diabetes and other consumers  
            with this information will help them make better food  
            choices, and thereby prevent health problems. 

          9.Arguments in Opposition.  Opponents of this bill state  
            that labeling requirement for food products is a federal  
            issue and that the state is preempted from acting in this  
            area by federal law. 

          Opponents also have stated that they are prepared to label  
            trans fat and support the FDA process.  The food industry  
            asserts that it is actively engaged in the design and  
            manufacturing processes required to ensure that all  





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            products are in compliance with the January 1, 2006  
            deadline.

          There is concern that if California dictates a different  
            standard for labeling, food processors and manufacturers  
            will be subject to a patchwork of conflicting and  
            inconsistent state regulations.  The National Food  
            Processors Association believes that the requirements  
            imposed by the bill would impede commerce. 

          10.Suggested Amendment.  Though this bill adds provisions  
            to the false and misleading advertising section of the  
            Business and Professions Code (Section 17500 et seq.), it  
            only prescribes what can or cannot be on the label and is  
            not applicable to other advertising situations.  

          The Author may wish to expand the disclosure of trans fat  
            to include other types of advertising relating to  
            products (i.e., ads on television or in magazines).  In  
            the event that the current labeling requirement in this  
            bill is preempted by federal law, then advertising which  
            is not preempted would still stand.

          If the Author decides to amend the bill to extend the trans  
            fat disclosure to include  all  advertising, a severability  
            clause should be inserted to ensure that if any provision  
            of the bill is held invalid, that invalidity shall not  
            affect other provisions of the bill.

          NOTE:  Double-referral to Judiciary Committee





















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          SUPPORT AND OPPOSITION:
          
           Support:  

          California Alliance for Consumer Protection 
          Consumers Union  
          Diabetes Coalition of California

            Opposition:  

           California Chamber of Commerce
           California League of Food Processors
           Dairy Institute of California 
           Grocery Manufacturers of America 
           National Food Processors Association 


          Consultant:Robin Hartley