BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 1381 (Evans) - Food labeling: genetically engineered food. Amended: May 5, 2014 Policy Vote: Health 5-2, Judic. 4-2 Urgency: No Mandate: Yes Hearing Date: May 23, 2014 Consultant: Brendan McCarthy SUSPENSE FILE. Bill Summary: SB 1381 would require most genetically engineered foods offered for sale in the state to be labeled. Fiscal Impact: First year costs of $1.1 million and ongoing costs of $850,000 per year for enforcement of the bill's labelling requirements on manufacturers, distributors, and retailers by the Department of Public Health (General Fund). 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. However, under current practice, no counties are fully enforcing the Sherman Act on retailers. Proposed Law: SB 1381 would require most genetically engineered foods offered for sale in the state to be labeled. Specific provisions of the bill would: Define terms; SB 1381 (Evans) Page 1 Require any raw agricultural commodity or packaged food that is entirely or partially produced with genetic engineering to be labeled; Exempt alcoholic beverages or foods sold at farmer's markets or farm stands; Require manufacturers of raw agricultural commodities packaged for sale to be labeled as genetically engineered; Require retailers to provide a label in the store for genetically engineered raw agricultural products when not sold in a packaged form; Provide that a manufacturer or retailer who acts in good faith shall not be in violation of the bill's requirements, unless the manufacturer or retailer should have known that the product was genetically engineered. Related Legislation: SB 1000 (Monning) would require certain sugar-sweetened beverages to include a specified safety warning on the packaging and/or at the point of sale. That bill is on this committee's Suspense File. 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 is on this committee's Suspense File. Staff Comments: By introducing a warning label for genetically modified foods, it is likely that the demand for such products by consumers will decline. There are indications that such labeling requirements in the European Union have dramatically reduced the presence of such foods in that food market. To the extent that there are economic benefits to producing genetically modified foods (for example, larger yields, less reliance on pesticides, etc.),a reduction in the demand for such food products in the state could put cost pressure on growers and manufacturers. However, given the competitive nature of the international agricultural markets, it is not clear whether such costs could be passed along to California consumers. The only costs that may be incurred by local agencies related to crimes and infractions. Under the California Constitution, such costs are not reimbursable by the state. SB 1381 (Evans) Page 2