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F I S C A L I M P A C T R E P O R T

SPONSOR Grubesic

DATE TYPED 3/7/05

HB

SHORT TITLE Genetically Engineered Food Labeling Act

SB 906

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$300.0 - $600.0 Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

New Mexico Department of Environment (NMED)

Department of Corrections (DOC)

No comments were received from the New Mexico Department of Agriculture (NMDA) at the

time this FIR was prepared.

SUMMARY

Synopsis of Bill

Senate Bill 906 would adopt the Genetically Engineered Food Labeling Act, which would re-

quire labeling of genetically engineered foods. The Department of Environment (NMED) would

be responsible for creating a label designating genetically engineered foods and for implementa-

tion of the Act, including promulgation of rules, conducting investigations, and enforcement.

Violation of the Act would be a misdemeanor. The Act would be effective January 1, 2006.

Significant Issues

The public has become more educated about their food and may demand labeling about geneti-

cally engineered food products in the future. There is a movement nationally to protect consum-

ers and the general public from unintended consequences of genetic engineering. SB906 pro

Senate Bill 906 -- Page 2

vides consumers basic information about the presence of genetically engineered materials in

foods.

The Economic Development Department indicated concerns that, if this bill were enacted, dis-

tributors may refuse to ship their products to New Mexico as it is a small portion of their total

sales and that the bill may also be in violation of our federal interstate commerce regulations.

EDD also noted that small food processors in the state may be unable to absorb the added costs

associated with new regulatory and labeling requirements.

According to NMED, some of the techniques that would fall under the definition of genetically

engineered (GE) would be more appropriate for the Department of Agriculture to regulate, i.e.

use of GE-related products; use of GE products that are part of the process, but are not in the fi-

nal product; GE animal feed; and species that have been GE before processing. NMED also

noted that FDA has not promulgated regulations on this issue, though NMED does not know

why. FDA has issued guidance on the subject, but no rules.

FISCAL IMPLICATIONS

If NMED were required to conduct inspections statewide, the agency might require 5-10 addi-

tional inspectors at a cost of about $300,000 - $600,000.

DOC indicated the bill could increase costs to the department by increasing the number of those

incarcerated and on parole/probation. However, the number of convictions is likely to be mini-

mal. Additional costs to DOC might be offset to some degree by increased revenue from proba-

tion/parole fees.

OTHER SUBSTANTIVE ISSUES

NMED and EDD indicated the New Mexico Department of Agriculture (NMDA) is charged

with inspection and monitoring food processes in the state and should be the lead agency for this

bill.

ALTERNATIVES

Regulatory authority could be assigned to NMDA.

DH/yr