BILL ANALYSIS                                                                                                                                                                                                    Ó






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                       Senator Ed Hernandez, O.D., Chair


          BILL NO:       SB 20                                       
          S
          AUTHOR:        Padilla                                     
          B
          AMENDED:       April 25, 2011                              
          HEARING DATE:  May 4, 2011                                 
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          CONSULTANT:                                                
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          Orr                                                        
                                     SUBJECT
                                         
                         Food facilities: menu labeling


                                     SUMMARY
                                         
          For purposes of menu labeling requirements, revises the 
          definition of "food facility" to mean a food facility that 
          is part of a chain with at least 20 locations doing 
          business under the same name and that offers for sale 
          substantially the same menu items, regardless of the type 
          of ownership.


                             CHANGES TO EXISTING LAW  

          Existing federal law:
          Establishes the United States Food and Drug Administration 
          (FDA) to regulate food, cosmetics, medicines, and medicine 
          products; and ensures that such products are labeled 
          appropriately. 

          Establishes the Nutrition Labeling and Education Act, which 
          requires all packaged foods sold outside of restaurants to 
          include nutritional content information on the packaging.

          Requires restaurants to provide nutritional content 
          information on food items for which a nutrient or 
          health-related claim is made by the restaurant.

                                                         Continued---



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          Establishes the Patient Protection and Affordable Care Act 
          (PPACA) (Public Law 111-148) as amended by the Health Care 
          and Education Reconciliation Act (H.R. 4872).
          Under PPACA, requires restaurants or similar retail 
          establishments with 20 or more locations doing business 
          under the same name and offering for sale substantially the 
          same menu items, to disclose specified nutritional 
          information of the standard menu items, with exceptions.  
          Additionally requires operators of 20 or more vending 
          machines to provide signs disclosing the number of calories 
          for food items in the machines when the Nutrition Facts 
          Panel cannot be viewed by the purchaser. 
            
          Existing state law:
          Establishes the California Retail Food Code (CRFC), which 
          imposes various health and safety requirements on 
          restaurants and makes violations of these requirements 
          subject to criminal penalties.  CRFC establishes the 
          authority of local environmental health jurisdictions to 
          adopt a food safety inspection program with oversight by 
          the California Department of Public Health (CDPH).

          Requires every food facility in this state that operates 
          under common ownership or control, with at least 19 other 
          food facilities with the same name, that sell substantially 
          the same menu items, or operates as a franchised outlet of 
          a parent company with at least 19 other franchises, with 
          the same name, that sell substantially the same menu items, 
          to disclose to consumers specified nutritional information 
          for all standard menu items by January 1, 2011.
          
          For the purpose of menu labeling requirements, defines 
          "food facility" as a food facility in California that 
          operates under common ownership or control with at least 19 
          other food facilities with the same name that sell 
          substantially the same menu items, or operates as a 
          franchised outlet of a parent company with at least 19 
          other franchises with the same name that sell substantially 
          the same menu items.
          
          Excludes certified farmers' markets, commissaries, grocery 
          stores, convenience stores, licensed health care 
          facilities, mobile support units, public and private school 
          cafeterias, restricted food service facilities, retail 
          stores in which a majority of sales are from a pharmacy, 
          and vending machines from the definition of food facility.




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          This bill:
          Revises the definition of "food facility" to one that is 
          part of a chain with at least 20 locations doing business 
          under the same name, regardless of the type of ownership, 
          that offers for sale substantially the same menu items.


                                  FISCAL IMPACT  

          This bill has not been analyzed by a fiscal committee.


                            BACKGROUND AND DISCUSSION  

          The author is introducing SB 20 to conform California's 
          menu labeling standards to federal menu labeling standards. 
          The author states that a previous bill that initiated menu 
          labeling requirement in California, SB 1420 (Padilla, 
          Chapter 600, Statutes of 2008), was part of a comprehensive 
          effort to combat the growing obesity epidemic facing the 
          state and advanced a nationwide conversation regarding the 
          benefits of menu labeling. SB 1420 required restaurant 
          chains with 20 or more locations to provide nutritional 
          information on their menus and menu boards. In addition, SB 
          1420 required restaurant chains with 20 or more locations 
          in California to make nutritional information, including 
          sodium, saturated fat, caloric and carbohydrate content 
          available to customers under specified circumstances.  SB 
          1420 was signed into law in 2008. 
          Menu labeling provisions were subsequently included in 
          PPACA, but with minor differences between PPACA and 
          California's law.  The intent of SB 20 is to conform 
          California's law to federal law on the types of chains 
          subject to menu labeling requirements.  
          
          Obesity epidemic 
          Obesity has reached epidemic proportions in the United 
          States, affecting one-third of all adults, 27 percent of 
          children, and 21 percent of adolescents.  Former Surgeon 
          General David Satcher has stated that, "Overweight and 
          obesity may soon cause as much preventable disease and 
          death as cigarette smoking." Data published by the Centers 
          for Disease Control and Prevention (CDC) indicate that 68 
          percent of the adult U.S. population is overweight or 
          obese, including 34 percent who are considered obese.




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          For adults, being overweight or obese increases the risk 
          for a number of chronic diseases, including coronary heart 
          disease, type 2 diabetes, stroke, hypertension, arthritis, 
          and 
          certain types of cancer. Body mass index (BMI) over 35 is 
          associated with excess mortality, primarily from 
          cardiovascular disease, diabetes, and certain types of 
          cancer.

          CDC data indicate that about 32 percent of children and 
          adolescents, ages 2 to 19, are 
          overweight or obese. In some school districts in 
          California, 50 percent of the students are overweight. 
          Overweight youth face increased risks of many serious 
          health problems that traditionally have not commonly 
          occurred during childhood, including type 2 diabetes, high 
          blood pressure, arthritis, and osteoporosis.  More than 80 
          percent of obese adolescents remain obese as adults with 
          even more severe consequences, including higher risks of 
          heart disease and cancer.

          Eating out
          Studies have shown that eating out more frequently is 
          associated with obesity, higher body fat or higher BMI, and 
          that eating more fast food meals is linked to eating more 
          calories, more saturated fat, fewer fruits and vegetables, 
          and less milk.  According to a report issued by the Center 
          for Science in the Public Interest (CSPI) in 2003, 
          Americans spent about 46 percent of their food dollars at 
          restaurants, compared with 26 percent in 1970.  According 
          to the USDA, calories consumed at restaurants (or 
          away-from-home foods) as a part of the diet had doubled 
          from 18 percent to 34 percent by 1995. 

          A report from the UC Berkeley Center for Weight and Health 
          (CWH) entitled "Potential Impact of Menu Labeling of Fast 
          Foods in California" claims that the largest single source 
          of food consumed away from home is fast food. CWH estimates 
          there are around 15,000 fast food establishments in 
          California-- nearly 4 times as many as there are grocery 
          stores.  

          California Obesity Prevention Plan
          In September 2006, the Department of Health Services 
          released the California Obesity Prevention Plan to serve as 
          a guide for each sector of society to take part in creating 




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          the shift to healthy eating and active living.  The plan 
          identifies recommendations for action for all sectors to 
          make sustainable changes in physical activity and food 
          environments. The plan organizes strategic actions around 
          four goals, including supporting local assistance grants 
          and implementing multi-sectoral policy strategies to create 
          healthy eating and active living community environments. 
          Within the framework of this larger goal, the plan 
          recommends posting calorie information per serving on all 
          menus and menu boards at restaurants and encourage healthy 
          food options on all menus. 

          
          Food labeling
          The federal Nutrition Labeling and Education Act of 1990 
          (NLEA) amended the Food, Drug, and Cosmetic Act (FD&C Act) 
          in part, by specifying with certain exceptions, that a food 
          is considered to be misbranded unless its label or labeling 
          bears nutrition information. The NLEA amendments to the 
          FD&C Act included exemptions for nutrition labeling for 
          food that is:
                 Served in restaurants or other establishments in 
               which food is served for immediate human consumption; 
                 Sold for sale or use in such establishments;
                 Primarily processed and prepared in a retail 
               establishment, ready for human consumption; or
                 Offered for sale to consumers but not for immediate 
               human consumption in such establishment and which is 
               not offered for sale outside such establishment. 
          Under the NLEA, restaurants and other establishments that 
          make either a nutrient content claim or health claim about 
          the food served must also provide certain nutrition 
          information upon request.

          Food labeling is currently required for most prepared 
          foods, such as breads, cereals, canned and frozen foods, 
          snacks, desserts, drinks, etc. Nutrition labeling for raw 
          produce (fruits and vegetables) and fish is voluntary. 
          Americans now consume about one-third of their total 
          calories from foods prepared outside the home. According to 
          CWH, research shows that consumers routinely underestimate 
          the amount of calories in food. However, since nutrition 
          labeling of packaged foods was mandated by the FDA in 
          the1990s, nearly one half (48 percent) of American adults 
          report that reading the nutrition information on food 
          labels has helped them change their purchasing habits. 




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          In recent years, there has been growing support among 
          public health experts for providing calorie and other 
          nutrition information on restaurant menus in order to help 
          consumers make more informed food choices. There is also 
          evidence of consumer 
          preference for calorie information on menus. CWH cites that 
          more than two-thirds of respondents to a 2003 national 
          telephone survey of adults supported the idea of listing 
          calorie information on restaurant menus. 

          Food labeling provisions in PPACA 
          Section 4205 of the PPACA amends the Federal FD&C Act to 
          impose new nutritional labeling requirements for foods that 
          are a standard menu item offered for sale in a restaurant 
          or similar retail food establishment that is part of a 
          chain with 20 or more locations doing business under the 
          same name and offering for sale substantially the same menu 
          items.  Specifically, the following information must be 
          provided for standard menu items that are sold in chain 
          retail food establishments: 
                 The number of calories contained in each standard 
               menu item as usually prepared and offered for sale on 
               a menu or menu board. The calorie declaration must be 
               adjacent to the name of the standard menu item, so as 
               to be clearly associated with the item); 
                 A succinct statement concerning suggested daily 
               caloric intake, posted prominently on the menu or menu 
               board, designed to enable the public to understand, in 
               the context of a total daily diet, the significance of 
               the calorie information provided on menus and menu 
               boards; 
                 Additional nutrition information for standard menu 
               items in a written form available on the premises, 
               which must be made available to consumers upon 
               request; 
                 A prominent, clear, and conspicuous statement on 
               the menu or menu board regarding the availability of 
               the written nutrition information; and 
                 The number of calories per item or per serving on a 
               sign adjacent to self-service food and food on 
               display. This food includes food sold at salad bars, 
               buffet lines, cafeteria lines or similar self-service 
               facilities, and self-service beverages and food on 
               display that is visible to consumers.
          Under PPACA, the Secretary of Health and Human Services 




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          (HHS) may require the disclosure of additional information. 


          The requirements also apply to drive-throughs, 
          self-service, and foods on display. Restaurants and similar 
          retail food establishments not otherwise covered by the law 
          may elect to become subject to the federal requirements by 
          registering every other year with the FDA. Regulations to 
          implement these provisions were to be proposed by March 23, 
          2011. 

          The FDA recently submitted proposed regulations, which will 
          define the scope of the establishments covered by this law, 
          define menus and menu boards, determine the foods covered 
          by this law, establish requirements for daily caloric 
          intake disclosure statements, and establish standards for 
          determining and disclosing the nutrient content for 
          standard menu items. 

          Some establishments are already posting nutrition 
          information, but the nutrition labeling requirements won't 
          be finalized until FDA completes the rulemaking process. 
          Although many of these provisions became requirements at 
          the time the law was signed on March 23, 2010, FDA has 
          previously announced that they intend to exercise their 
          enforcement discretion until their final rule is published 
          and in effect. FDA is hoping to issue the final rules by 
          the end of this year and is proposing that the final rules 
          become effective six months from the date of publication 
          for covered restaurants and similar retail food 
          establishments and one year from the date of publication 
          for covered vending machines.  

          California menu labeling law
          SB 1420 (Padilla, Chapter 600, Statutes of 2008) requires 
          every food facility in the state that operates under common 
          ownership or control or operates as a franchised outlet of 
          a parent company, with at least 19 other food facilities or 
          franchises with the same name that sell substantially the 
          same menu items, to disclose to consumers specified 
          nutritional information for all standard menu items.  SB 
          1420 excludes specified facilities, such as grocery stores, 
          convenience stores, public and private school cafeterias, 
          and vending machines from these requirements. It also 
          provides definitions for calorie content information, 
          drive-through, menu board, and others, for the purpose of 




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          the bill, and describes nutritional information to include 
          total number of calories, grams of carbohydrates, grams of 
          saturated fat; and milligrams of sodium. 

          SB 1420 was passed into law prior to PPACA, and was 
          implemented January 1, 2011. One major difference between 
          PPACA and existing state menu labeling laws is that PPACA 
          requires operators of 20 or more vending machines to 
          provide signs disclosing the nutritional for food items in 
          the machines when the Nutrition Facts Panel cannot be 
          viewed by the purchaser, whereas state law excludes vending 
          machines from labeling requirements. Since the FDA has not 
          finished issuing their menu labeling regulations yet, it is 
          unknown how closely California laws will match the final 
          federal regulations. At minimum, state laws on menu 
          labeling will be superseded by federal law. However, 
          establishments not covered under the new federal law or its 
          implementing regulations remain subject to existing state 
          and local laws.  

          Related bills
          SB 471 (Rubio) requires the state Department of Social 
          Services (DSS) to expand the list of items that are not 
          allowed to be purchased with CalFresh benefits, as 
          prescribed and to the extent permitted by federal law. 
          Requires DSS to prohibit the use of CalFresh benefits at 
          restaurants, including fast-food restaurants. Modifies the 
          list of allowable food items purchasable under CalFresh to 
          prohibit purchasing sweetened beverages containing more 
          than 10 calories per cup, with specified exceptions.  
          Pending hearing in the Senate Human Services Committee. 

          AB 234 (Weickowski) declares the intent of the Legislature 
          to enact legislation to ensure that all Californians have 
          access to fresh produce and healthy food options.  AB 234 
          has not been referred to a committee.

          AB 1100 (R. Hernandez) declares the intent of the 
          Legislature to enact legislation that would improve the 
          health of children in California by setting healthier 
          standards for children's meals that are accompanied by toys 
          and other incentive items.  AB 1100 has not been referred 
          to a committee.

          Prior legislation
          SB 1420 (Padilla) Chapter 600, Statutes of 2008,  requires 




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          by January 1, 2011, every food facility in the state that 
          operates under common ownership or control, with at least 
          19 other food facilities with the same name, that sell 
          substantially the same menu items, or operates as a 
          franchised outlet of a parent company with at least 19 
          other franchises with the same name, that sell 
          substantially the same menu items, to disclose to consumers 
          specified nutritional information for all standard menu 
          items. 

          AB 2572 (Parra) of 2008 would have required chain 
          restaurants with more than 20 locations in California to 
          disclose prescribed nutrition information for standard food 
          items by several methods within the facility. The bill 
          would have allowed food facilities to provide calorie 
          information only under specified circumstances. The bill 
          would provide for enforcement and penalties after January 
          1, 2010. Held in Senate Appropriations Committee on 
          suspense file. 

          SB 120 (Padilla) of 2007 was identical to SB 1420. This 
          bill was vetoed by the Governor.
          
          SB 180 (Migden) of 2007 would have required a food facility 
          to make nutritional information available to the consumer 
          upon request. These provisions were amended out of the 
          bill.
          
          SB 679 (Ortiz) of 2003 would have required restaurants to 
          make nutritional information immediately available to 
          customers, upon request, in a take-away form, and post a 
          sign stating that the information is available. SB 679 
          failed passage in the Assembly Health Committee.


                                     COMMENTS  

          1.Conformity to PPACA. Current state statutes provide 
            exceptions to the definition of food facilities to which 
            labeling requirements apply. For instance, state law 
            expressly excludes vending machines from the definition 
            of food facilities, whereas PPACA includes vending 
            machines owned by operators with 20 or more machines. 
            Since the FDA has not finished issuing their regulations 
            yet, there is a possibility that it may not exclude or 
            include the same entities as the state, or may not define 




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            foods the same way the state has already defined them in 
            statute. As federal regulations become final, there may 
            be a need for future revisions to state law.


                                    POSITIONS  

          Support:  California Restaurant Association

          Oppose:   None received. 


                                   -- END --