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.  
          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  

          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)
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              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)
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