BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1400|
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THIRD READING
Bill No: AB 1400
Author: Assembly Jobs, Economic Development, and the Economy
Cmte.
Amended: 9/3/13 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 6/12/13
AYES: Hernandez, Anderson, Beall, De León, DeSaulnier, Monning,
Nielsen, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/30/13
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
ASSEMBLY FLOOR : 70-0, 5/16/13 (Consent) - See last page for
vote
SUBJECT : Export documents: expiration
SOURCE : Author
DIGEST : This bill permits a person requesting an export
document from the Department of Public Health (DPH) to make the
request in electronic format, and requires DPH to accept
requests submitted by email or other electronic methods,
including electronic copies of labels or advertising. This bill
also increases the term of the export document, from six months
to one year after its issue date.
ANALYSIS :
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Existing law:
1.Permits, under the Sherman Food, Drug, and Cosmetic Law, a
person who ships to another state or country a food, drug,
device, or cosmetic manufactured or produced in this state to
request DPH for an export document to reference the shipment.
2.Requires that a person requesting an export document submit
certain information and documents to DPH, including original
labels and advertising affixed to, accompanying, or relating
to the food, drug, device, or cosmetic, and permits DPH to
accept copies if the submission of the original labels or
advertising is impractical.
3.Requires the export document to include certain identifying
information, describe DPH's authority over the product being
shipped, and state that DPH does not object to the sale of the
product in this state or the shipment of the product out of
the state. Requires the export document to expire 180 days
after its issue date.
This bill:
1.Permits a person requesting an export document to make the
request in electronic format, and requires DPH to accept
requests submitted by email or other electronic methods,
including electronic copies of labels or advertising.
2.Requires DPH to develop procedures to expedite approval of
requests for an export document in which the labels, labeling,
and advertising affixed to, accompanying, or relating to the
food, drug, device, or cosmetic remain unchanged from a
previously approved request for an export document for that
food, drug, device, or cosmetic.
3.Requires DPH to accept requests for an export document
submitted by email or other electronic method, and specifies
that for requests submitted by e-mail or facsimile, on or
after January 1, 2014, payment of the fees, as specified, are
to be provided to, and received by, DPH within five business
days after submittal of the request.
4.Requires DPH to suspend processing of a request if payment is
not received within five business days, and resume processing
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once it receives the payment. Clarifies that for requests
submitted using an electronic document request submittal
process developed by DPH and available on the DPH's Internet
Web site, payments are required to be submitted at the time of
the request
5.Increases the term of the export document, from six months to
one year, after its issue date.
6.Makes technical, clarifying changes.
Background
According to DPH, the Export Document Program was established in
1991 for the purpose of allowing California manufactured foods,
drugs, medical devices, and cosmetics to be exported into other
countries. There are two factors that the Food and Drug Branch
(FDB) of the DPH uses to determine whether an export document
should be issued to manufacturers. First, following inspections
of the state's manufacturers, distributors, and wholesalers, FDB
determines whether the system of manufacture and quality control
used to produce the product is adequate. The second factor the
FDB considers is whether the product is misbranded or falsely
advertised, which is determined by a review of the labels,
labeling, and advertising at the time the export document is
requested. The length of time to process an application depends
on the number of labels included with each request.
Applications vary significantly due to the number of
certificates that may be needed and the number of products.
Once the Export Certificate/Document has been issued, it is
mailed immediately via US postal service.
Budget change proposal . According to DPH, foreign countries are
increasingly requiring export documents. In 2001, there were
1,731 requests vs. 9,565 requests in 2012. Although the program
has seen significant increases in export document requests, the
staffing levels have remained at their initial 1991 levels of
one full-time staff service analyst and a half-time office
technician. As part of the Governor's 2013-14 budget, DPH
submitted a proposal to request an additional three positions
that it deems necessary for the Export Document Program to
alleviate the current backlog of export document applications
and reduce the processing time from eight weeks to five days for
future applications. The proposal states that for Fiscal Year
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2013-14, DPH estimates that it will receive 10,145 certificate
requests. DPH has received several complaints from export
businesses applicants alleging the delays have caused businesses
to incur storage fees and postpone shipments of products to
importing countries. The exporting firms report that such
delays impair their ability to service customers and produce
revenue to benefit the economy.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time costs of about $160,000 for upgrades to the existing
information technology system employed by DPH to allow for
electronic applications (Export Fund).
Ongoing costs of about $25,000 to manage the upgraded
information technology system (Export Fund).
SUPPORT : (Verified 9/3/13)
California Chamber of Commerce
California Fisheries and Seafood Institute
California League of Food Processors
California Manufacturers and Technology Association
California Retailers Association
Grocery Manufacturers Association
Herbalife International of America
ARGUMENTS IN SUPPORT : According to the author, this bill
addresses the significant backlog of requests for export
documents from DPH. Statute requires export documents to be
provided within five days, however, DPH admits to delays of up
to five to eight weeks. While businesses are not required to
obtain certificates under California law, other countries often
require the certificates for imported products in order to
certify that the manufacturer and its products are subject to
the health standards required by DPH. Prior to applying for
these export documents, the manufacturer must already hold valid
permits, certificates, registrations, and licenses to produce
products in California. By improving the processing times and
extending the term of the export document, businesses will be
able to arrange export transportation with more certainty and
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thereby reduce costs and meet contractual obligations.
The California Chamber of Commerce states that this bill
improves processing time by accepting required documentation
electronically from businesses and extending the certificate's
validity to one year, which will dramatically improve California
exporters' certainty in business operations. The California
Retailers Association states that the modest changes contained
in this bill will vastly improve trade in California and will
help the state maintain its position as a top exporting state in
the nation. A number of supporters write that these changes will
help in expediting and the approval process and reducing the
current backlog, and in turn, California becomes a more
attractive export market and companies exporting goods from
California can better meet consumer demand.
ASSEMBLY FLOOR : 70-0, 05/16/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Fong, Fox, Frazier, Garcia,
Gatto, Gomez, Gordon, Gorell, Gray, Hagman, Hall, Harkey,
Roger Hernández, Jones, Jones-Sawyer, Levine, Linder, Logue,
Lowenthal, Maienschein, Mansoor, Medina, Mitchell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Allen, Buchanan, Eggman, Beth Gaines, Grove,
Holden, Melendez, Morrell, Stone, Vacancy
JL:nl 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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