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 2 CONSULTANT: 0 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--- STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 2 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. STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 3 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. STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 4 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 STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 5 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. STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 6 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 STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 7 (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 STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 8 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 STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 9 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 STAFF ANALYSIS OF SENATE BILL 20 (Padilla) Page 10 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 --