BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1000 (Monning) - Public health: sugar-sweetened beverages:
safety warnings.
Amended: March 27, 2014 Policy Vote: Health 5-2
Urgency: No Mandate: Yes
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE. AS AMENDED.
Bill Summary: SB 1000 would require certain sugar-sweetened
beverages to include a specified safety warning on the packaging
and/or at the point of sale.
Fiscal Impact (as approved on May 23, 2014):
Ongoing costs of about $400,000 per year for the Department
to enforce labelling and public notice requirements (General
Fund). Under current law, the Department enforces
requirements of the Sherman Food, Drug, and Cosmetic Law at
food processing and distribution sites. The Department
indicates it could enforce the provisions of this bill at
those sites using existing resources. However, the bill also
requires enforcement at a very large number of retail food
sale sites. Under current practice, the Department does not
inspect or enforce food safety laws at retail sites. Because
local environmental health officers do not generally have
the legal infrastructure to impose civil penalties, the
Department would likely need to respond to complaints,
conduct spot inspections, and assess civil penalties for
violations of the bill's requirements. To the extent that
local environmental health officers opt to enforce the
bill's provisions at retail food facilities, the costs for
the Department to conduct spot checks at such facilities
would be reduced.
Unknown impacts on state agencies that own or operate
cafeterias, vending machines, or other retail sales
locations (various funds). To the extent that state agencies
would be subject to the regulatory requirements of the bill,
there could be administrative costs to comply. It is not
clear, however, the extent to which state agencies would be
regulated under the bill. Typically, state agencies that
SB 1000 (Monning)
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host food facilities contract out for those services. In
those cases, the costs of compliance should generally be a
responsibility of the vendor. If the costs of compliance are
large, a vendor could seek to pass those costs along to
customers and/or to the contracting state agency. The bill
also requires that owner of premises where covered beverages
are sold or dispensed are obligated to comply with the
bill's requirements. Even if state agencies contract out for
services that sell covered benefits, there could be some
administrative cost to ensure that vendors are complying
with the law.
Unknown potential savings to state health programs (various
funds). Obesity-related health conditions, such as diabetes,
heart disease, and other conditions are a major driver of
health care costs in the United States. There is a clear
association between the increased consumption of
high-calorie, sugar-sweetened beverages and the rise of
obesity in the United States over the last several decades.
If this bill is successful in reducing the consumption of
sugar-sweetened beverages (and consumers do not switch to
other high-sugar beverages not covered by the bill), there
would likely be some long-run reduction in overweight and
obesity rates. The extent of this impact is unknown. To the
extent that the bill is able to reduce overweight and
obesity rates in the state, there are likely to be
corresponding reductions in spending by state health
programs, such as Medi-Cal and CalPERS health care programs.
Background: Under the state Sherman Food, Drug, and Cosmetic
Law, the Department of Public Health is required to regulate the
contents, packaging, labeling and advertising of foods, drugs,
and cosmetics. The Department enforces these requirements at
food processors and distributors. The Sherman Act deems a food
product misbranded if it is offered for sale under the name of
another food. The Department is authorized to assess civil
penalties for violations of the Sherman Act or to seek
misdemeanor penalties through the criminal justice system.
Retail food facilities are regulated by local environmental
health officers under the California Retail Food Code. Under
current law, the Department can authorize requesting counties to
inspect retail food facilities for compliance with the
requirements of the Sherman Act as well.
SB 1000 (Monning)
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Proposed Law: SB 1000 would require certain sugar-sweetened
beverages to include a specified safety warning on the packaging
and/or at the point of sale.
Specific provisions of the bill would:
Define a "sugar-sweetened beverage" to include any
nonalcoholic beverage that has added caloric sweeteners and
contains 75 or more calories per 12 fluid ounces;
Exclude from the definition of "sugar-sweetened beverage"
any beverage with 100% natural fruit or vegetable juice,
specified types of "dietary aids", infant formula, and
beverages whose principal ingredient is milk;
Prohibit a person from distributing or selling a
sugar-sweetened beverage in a sealed container unless the
container includes the label "STATE OF CALIFORNIA SAFETY
WARNING: Drinking beverages with added sugar(s) contributes
to obesity, diabetes, and tooth decay.";
Require any person who owns, leases, or otherwise controls
the premises where a vending machine or beverage dispensing
machine is located to place the safety warning on the
vending machine, on the beverage dispensing machine, and at
the point of purchase;
Require any person that distributes or sells
sugar-sweetened beverages to maintain all records necessary
to determine the quantity and type of beverages sold for two
years;
Make a violation of the bills requirements subject to a
civil penalty from $50 to $500;
Require the Department of Public Health to adopt
implementing regulations.
Related Legislation:
SB 1138 (Padilla) would require the label of fish or
shellfish offered for sale to clearly identify the species
by its common name. That bill will be heard in this
committee.
SB 622 (Monning, 2013) would have imposed a one-cent per
fluid once tax on any beverage with added caloric
sweeteners. That bill was held on this committee's Suspense
File.
AB 669 (Monning, 2011) was substantially similar to SB 622.
That bill was held in the Assembly Revenue and Tax
Committee.
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Staff Comments: The California Constitution requires the state
to reimburse local agencies for costs mandated by state law.
Under current law and practice, the Department of Public Health
can authorize a local environmental health officer to enforce
provisions of the Sherman Act (if requested by the environmental
health officer). By expanding the requirements of the Sherman
Act, this bill could be construed to mandate a higher level of
services for those local agencies. However, because local
environmental health officers are authorized in law to impose
fees on regulated entities to fund their enforcement activities,
the state is generally not obligated to reimburse them for
additional enforcement costs.
Author's amendments: would delete the requirement for the
Department to adopt regulations, delete the record keeping
requirement, and make technical changes.