Vol. 76 Wednesday, No. 66 April 6, 2011

Part III

Department of Health and Human Services

Food and Drug Administration 21 CFR Parts 11 and 101 Food Labeling; Calorie Labeling of Articles of Food in Vending Machines; Proposed Rule

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DEPARTMENT OF HEALTH AND Electronic Submissions 101.9. Regulations implementing the HUMAN SERVICES Submit electronic comments in the NLEA require nutrition information for following way: a food product intended for human Food and Drug Administration Federal eRulemaking Portal: http:// consumption and offered for sale unless www.regulations.gov. Follow the an exemption is provided for the 21 CFR Parts 11 and 101 instructions for submitting comments. product (§ 101.9(a)). The declaration of nutrition information on the label and [Docket No. FDA–2011–F–0171] Written Submissions labeling of food generally must include Submit written submissions in the information about the following nutrients: Total calories, calories from RIN 0910–AG56 following ways: FAX: 301–827–6870. fat (unless the product contains less Food Labeling; Calorie Labeling of Mail/Hand delivery/Courier (for than 0.5 g of fat), total fat, saturated fat, Articles of Food in Vending Machines paper, disk, or CD–ROM submissions): trans fat, cholesterol, sodium, total Division of Dockets Management (HFA– carbohydrate, dietary fiber, sugars, AGENCY: Food and Drug Administration, 305), Food and Drug Administration, protein, and certain vitamins and HHS. 5630 Fishers Lane, rm. 1061, Rockville, minerals (§ 101.9). ACTION: Proposed rule. MD 20852. The NLEA amendments to the FD&C Instructions: All submissions received Act included an exemption from SUMMARY: To implement the vending must include the Agency name and nutrition labeling for food that is served machine labeling provisions of the docket number and Regulatory in restaurants or other establishments in Patient Protection and Affordable Care Information Number (RIN) for this which food is served for immediate Act of 2010 (Affordable Care Act), the rulemaking. All comments received may human consumption or sold for sale or Food and Drug Administration (FDA) is be posted without change to http:// use in such establishments (21 U.S.C. proposing requirements for providing www.regulations.gov, including any 343 (q)(5)(A)(i)). The NLEA calorie information for certain articles of personal information provided. For amendments to the FD&C Act also food sold from vending machines. The additional information on submitting included an exemption from nutrition Affordable Care Act, in part, amended comments, see the ‘‘Comments’’ heading labeling for food that is processed and the Federal Food, Drug and Cosmetic of the SUPPLEMENTARY INFORMATION prepared primarily in a retail Act (FD&C Act) to, among other things, section of this document. establishment, ready for human require that for an article of food sold Docket: For access to the docket to consumption, of the type of food from a vending machine that does not read background documents or described in section 403(q)(5)(A)(i) of permit a prospective purchaser to comments received, go to http:// the FD&C Act, offered for sale to examine the Nutrition Facts Panel www.regulations.gov and insert the consumers but not for immediate before purchasing the article, or does docket number, found in brackets in the human consumption in such not otherwise provide visible nutrition heading of this document, into the establishment, and not offered for sale information at the point of purchase, ‘‘Search’’ box and follow the prompts outside such establishment (21 U.S.C. and is operated by a person engaged in and/or go to the Division of Dockets 343(q)(5)(A)(ii)). However, these the business of owning or operating 20 Management, 5630 Fishers Lane, rm. exemptions were contingent on there or more vending machines, the vending 1061, Rockville, MD 20852. being no nutrient content claims or machine operator must disclose the FOR FURTHER INFORMATION CONTACT: health claims made on the label or number of calories for the article of Daniel Y. Reese, Center for Food Safety labeling, or in the advertising, for the food. Vending machine operators not and Applied Nutrition (HFS–820), Food food. In our regulations implementing subject to the requirements of the and Drug Administration, 5100 Paint these exemptions, we included vending Affordable Care Act may elect to be Branch Pkwy., College Park, MD 20740, machines among the examples of subject to the Federal requirements by 301–436–2371. establishments in which food is served for immediate human consumption that registering with FDA. Providing calorie SUPPLEMENTARY INFORMATION: disclosures for food sold from vending generally are exempt from nutrition machines would assist consumers in I. Background labeling requirements because like the making healthier dietary choices. A. Nutrition Labeling Requirements other examples, vending machines offer food products that are generally DATES: That Currently Apply to Packaged Submit either written or consumed immediately where Foods electronic comments on the proposed purchased or while the consumer is rule by July 5, 2011. Submit comments The Nutrition Labeling and Education walking away. See § 101.9(j)(2). on the information collection issues Act of 1990 (NLEA) amended the FD&C under the Paperwork Reduction Act of Act, in part, by adding section 403(q) B. Requirements of Section 4205 of the 1995 by May 6, 2011, (see the (21 U.S.C. 343(q)), which specifies, in Affordable Care Act ‘‘Paperwork Reduction Act of 1995’’ pertinent part and with certain On March 23, 2010, the Affordable section of this document). exceptions, that a food is considered to Care Act (Pub. L. 111–148) was signed ADDRESSES: You may submit comments, be misbranded unless its label or into law. Section 4205 of the Affordable identified by Docket No. FDA–2011–F– labeling bears nutrition information. See Care Act (section 4205), amends section 0171 and/or RIN 0910–AG56, by any of 21 U.S.C. 343(q)(1). When a food is in 403(q) of the FD&C Act, which governs the following methods, except that package form, the required nutrition nutrition labeling requirements, and comments on information collection information generally must appear on section 403A of the FD&C Act (21 U.S.C. issues under the Paperwork Reduction the label of the food. FDA’s final 343–1), which governs Federal Act of 1995 must be submitted to the regulations establishing nutrition preemption of State and local food Office of Regulatory Affairs, Office of labeling requirements were published in labeling requirements. The Affordable Management and Budget (OMB) (see the 1993 (58 FR 2079, January 6, 1993) and Care Act requires FDA to issue proposed ‘‘Paperwork Reduction Act of 1995’’ are found at Title 21 of the Code of regulations to carry out section section of this document). Federal Regulations (21 CFR) section 403(q)(5)(H) of the FD&C Act no later

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than one year from the date of of these comments were general vending machine operators in section enactment. As amended, section comments on the law itself and either 4205. FDA subsequently withdrew the 403(q)(5)(H)(viii) of the FD&C Act supported or opposed the requirement draft implementation guidance (76 FR requires that if an article of food is sold in section 403(q)(5)(H)(viii) of the FD&C 4360, January 25, 2011). from a vending machine that does not Act that calorie information be provided permit a prospective purchaser to for foods sold from vending machines. II. Legal Authority examine the Nutrition Facts Panel Comments in opposition stated that As stated in section I.C. of this before purchasing the food or does not providing calorie information for foods document, on March 23, 2010, the otherwise provide visible nutrition sold from vending machines would be information at the point of purchase and overly burdensome to the industry. FDA Affordable Care Act was signed into the vending machine is operated by a describes these comments in more detail law. Section 4205 of the Affordable Care person who is engaged in the business and responds to those comments in this Act amended 403(q)(5) of the FD&C Act of owning or operating 20 or more proposal. (21 U.S.C. 343(q)(5)) by amending vending machines, the vending machine On July 23, 2010, FDA published the section 403(q)(5)(A) and by creating new operator must provide calorie Federal Register notice entitled clause (H) to require, in relevant part, information for the food. Specifically, ‘‘Voluntary Registration by Authorized that vending machine operators provide the vending machine operator must Officials of Non-Covered Retail Food calorie information for certain articles of ‘‘provide a sign in close proximity to Establishments and Vending Machine food sold from vending machines. each article of food or the selection Operators Electing to be Subject to the Under section 403(a)(1), such button that includes a clear and Menu and Vending Machine Labeling information must be truthful and conspicuous statement disclosing the Requirements Established by Section nonmisleading. Food to which these number of calories contained in the 4205 of the Patient Protection and requirements apply is deemed article.’’ Affordable Care Act of 2010’’ misbranded if these requirements are Section 403(q)(5)(H)(ix) of the FD&C (‘‘registration notice’’) (75 FR 43182). not met. In addition, under section Act allows vending machine operators FDA issued this registration notice to 201(n) of the FD&C Act (21 U.S.C. not subject to the requirements of provide assistance for voluntary 321(n)), the labeling of food is section 4205 of the Affordable Care Act registration for restaurants, similar retail misleading if it fails to reveal facts that to voluntarily register with FDA to establishments, and vending machine become subject to the Federal operators that are not subject to the are material in light of representations requirements. In the Federal Register of nutrition labeling requirements of actually made in the labeling. Section July 23, 2010, (75 FR 43182), FDA section 4205 (e.g., restaurants and 403(q)(5)(H)(x) requires the Secretary of published a notice in the Federal similar retail food establishments with Health and Human Services (Secretary) Register specifying the terms and fewer than 20 locations, and vending to issue proposed regulations no later conditions for implementation of machine operators with fewer than 20 than 1 year after enactment . Thus, FDA voluntary registration, pending machines). In the registration notice, has the authority to issue this proposed promulgation of final regulations. See FDA specified the terms and conditions rule under sections 201(n), 403(a)(1), 75 FR 43182. for implementation of voluntary and 403(q)(5)(H), as well as under registration, pending promulgation of section 701(a) of the FD&C Act (21 C. FDA Activities Related to regulations. In response to the notice, Implementation of Section 4205 of the U.S.C. 371(a)), which vests the Secretary FDA received 7 comments, none of Affordable Care Act with the authority to issue regulations which addressed registration. for the efficient enforcement of the Section 4205 of the Affordable Care On August 25, 2010, FDA published FD&C Act. Act also requires certain restaurants and a ‘‘Guidance for Industry: Questions and similar retail food establishments to Answers Regarding the Effect of Section FDA is proposing requirements that provide calorie and other nutrition 4205 of the Patient Protection and vending machine operators provide information for standard menu items, Affordable Care Act of 2010 on State calorie information for certain articles of including food on display and self- and Local Menu and Vending Machine food sold from vending machines. FDA service food. Elsewhere in this issue of Labeling Laws’’ (‘‘preemption guidance’’) is also proposing the terms and the Federal Register, FDA is proposing (75 FR 52427, August 25, 2010). The conditions for voluntary registration by requirements to implement the menu preemption guidance discusses the vending machine operators not subject labeling provisions of section 4205. As preemptive effect of section 4205 and to the requirements of section 4205 of discussed in that proposal, FDA has identifies the provisions of amended the Affordable Care Act that elect to published in the Federal Register a section 403(q) of the FD&C Act that become subject the requirements. FDA number of documents concerning became requirements upon enactment. is proposing to set out these provisions section 4205. On July 7, 2010, FDA Our current thinking on the preemptive in new § 101.8. published a notice entitled ‘‘Disclosure effect of section 4205 is set out in of Nutrient Content Information for section VII of this document. III. The Proposal Standard Menu Items Offered for Sale at Also on August 25, 2010, FDA A. Definitions Chain Restaurants or Similar Retail published a ‘‘Draft Guidance for Food Establishments and for Articles of Industry: Questions and Answers We are proposing in the introductory Food Sold from Vending Machines’’ Regarding the Menu Labeling Provisions paragraph of § 101.8(a) that the terms (‘‘docket notice’’) (75 FR 39026, July 7, of Section 4205 of the Patient Protection defined in section 201 of the FD&C Act 2010) to solicit comments and and Affordable Care Act of 2010; are applicable when these terms are suggestions on the new law. In response Availability’’ (‘‘draft implementation used. Additional terms are defined to this notice, FDA received guidance’’) (75 FR 52426, August 25, alphabetically in the proposed codified approximately 875 letters and e-mails. 2010). This draft guidance addressed and are discussed in alphabetical order Of those, approximately 60 contained only the menu labeling provisions of in this section. ‘‘Act’’ is defined as the one or more comments pertaining to section 4205. It did not address the Federal Food, Drug, and Cosmetic Act. vending machine calorie labeling. Many calorie labeling requirements for

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1. Authorized Official of a Vending Examples of food dispensed from more machines, and therefore, would be Machine Operator vending machines may include covered by section 403(q)(5)(H) of the We are proposing in § 101.8(a) that prepackaged foods (e.g., candy, snacks, FD&C Act and (2) 70 percent of vending the term ‘‘authorized official of a gum, bottled or canned soft drinks), machine operators have three or fewer vending machine operator’’ means the unpackaged bulk foods (e.g., handful of employees, and would likely be owner, operator, or agent in charge of a gum, candy, or mixed nuts), prepared generating sales less than $500,000. vending machine, or any other person foods (e.g., sandwiches or fresh fruit), FDA is not proposing an exemption authorized by a vending machine multi-serving foods (e.g., gallon of milk), from the vending machine nutrition operator not subject to the requirements or foods prepared in the machine and labeling requirements for small of section 4205 of the Affordable Care dispensed in bulk (e.g., coffee, soup, or businesses. FDA notes that section Act to voluntarily register the vending popcorn). 403(q)(5)(H) of the FD&C Act does not machine operator with FDA to become B. Who Must Comply With This Rule include an exemption from the vending machine nutrition labeling requirements subject to the requirements. For the Section 4205 of the Affordable Care purposes of this definition, the agent in for small businesses. Section Act provides that ‘‘in the case of an 403(q)(5)(D) includes an exemption charge would not be the person who is article of food sold from a vending only in charge or in control of the from the nutrition labeling requirements machine that does not permit a in sections 403(q)(1) through (q)(4) for location where the vending machine is prospective purchaser to examine the located. small businesses. The requirement that Nutrition Facts Panel before purchasing vending machine operators disclose 2. Vending Machine Operator the article, or does not otherwise calories for covered vending machine provide visible nutrition information at We are proposing in § 101.8(a) that food is not found in sections 403(q)(1) the point of purchase, and is operated the term ‘‘vending machine operator’’ through (q)(4); instead, it is found in by a person engaged in the business of means a person that controls or directs section 403(q)(5)(H)(viii). Therefore, the owning or operating 20 or more vending the function of the vending machine, small business exemption in machines, the vending machine including deciding which articles of 403(q)(5)(D) does not apply. We believe operator shall provide a sign in close food are sold from the vending machine that the proposed rule provides proximity to each article of food or the or the placement of the articles of food adequate flexibility to allow these small selection button that includes a clear within the vending machine, and is businesses to comply with the proposed and conspicuous statement disclosing requirements in a cost-effective and compensated for the control or direction the number of calories contained in the equitable way. For example, the of the function of the vending machine. article of food.’’ Consistent with the proposed requirements allow vending Section 201(e) of the FD&C Act defines requirements of section 4205, all ‘‘ ’’ machine operators to choose from person to include an individual, vending machine operators with 20 or various approaches for compliance, partnership, corporation, and more vending machines, as defined in including adopting less expensive association. For example, a vending section III.A.3. of this document, will be measures as discussed below in section machine operator could be a corporation subject to these requirements. Therefore, III.E. and section IV. of this document. that manufacturers beverages and sells FDA is proposing in § 101.8(c)(1)(i)(A) We request comment on additional these products in its machines. A and (B) that the labeling requirements of ways that FDA can make the vending machine operator also could be this proposed rule apply to vending requirements of this rule less an individual or a business that only machine operators that own or operate burdensome on small businesses, while operates and stocks vending machines, 20 or more vending machines that do still meeting the requirements of section such as a private company with onsite not allow a prospective purchaser to 403(q)(5)(H). vending machines. examine the Nutrition Facts Panel prior 3. Vending Machine to purchase or do not otherwise provide The Agency also received comments regarding operators of vending Section 403(q)(5)(H)(viii) of the FD&C visible nutrition information at the point of purchase. As discussed in machines who are blind and operate Act sets forth labeling requirements for vending machines through the Vending certain vending machine food but does below in section III.D. of this document, vending machine operators that are not Facility Program operated by the U.S. not define the term ‘‘vending machine.’’ Department of Education under the We are proposing in § 101.8(a) that the subject to the requirements of the law may elect to be subject to the Federal Randolph-Sheppard Act of 1936, 20 term ‘‘vending machine’’ means a self- U.S.C. 107 et seq. These comments service device that, upon insertion of a requirements by voluntarily registering with FDA. suggested that regardless of the number coin, paper currency, token, card, or of machines that were operated by an key, or by optional manual operation, Several comments requested that FDA apply the small business nutrition operator, all operators of vending dispenses servings of food in bulk, in machines under the Randolph-Sheppard packages, or prepared by the machine, labeling exemption (§ 101.9(j)(1)) to vending machine operators. The Act would be covered. without the necessity of replenishing The Agency wishes to clarify its the device between each vending comments said that: (1) 90–95 percent of vending machine operators have 20 or interpretation of the applicability of operation. This definition is almost section 4205 of the Affordable Care Act identical to the definition of ‘‘vending to vending machine operators who fall 1 that, upon insertion of a coin, paper currency, machine’’ in the FDA Food Code 2009. token, card, or key, or by optional manual under the Randolph-Sheppard Act. operation, dispenses unit servings of food in bulk Section 403(q)(5)(H)(viii) of the FD&C 1 FDA regularly publishes the Food Code, which or in packages without the necessity of replenishing provides guidance on food safety, sanitation, and the device between each vending operation.’’ (U.S. Act sets forth requirements for vending fair dealing that can be uniformly adopted by State Public Health Service, FDA, 2009 Food Code, U.S. machine operators based on the number and local governments for the retail segment of the Department of Health and Human Services, Public of machines that they operate. Thus, as food industry. The Food Code provisions are not Health Service, Food and Drug Administration, with other operators, Randolph- Federal requirements; however, they are designed College Park, MD 20740, chapter 1, section 1–201.) to be consistent with Federal food laws and http://www.fda.gov/Food/FoodSafety/RetailFood Sheppard Act operators would only be regulations. The 2009 Food Code defined the term Protection/FoodCode/FoodCode2009/ covered by the disclosure requirements ‘‘vending machine’’ to mean a ‘‘self-service device ucm186464.htm. if they operate 20 or more vending

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machines that dispense food or if they requirements. The comments argued without selection buttons from the voluntarily register to be covered. that bulk vending machines should be calorie labeling requirements. These comments also stated that distinguished from other vending D. Voluntary Registration by a Vending operators of vending machines who are machines for three reasons. First, they blind ‘‘may place different products in Machine Operator That Is Not Subject to noted that these machines do not have the Requirements of Section 4205 of the the same row due to limited visual selection buttons, and as a result a recognition and the similarity of Affordable Care Act That Elects To Be vending machine operator could not Subject to the Requirements product packaging.’’ These comments place a sign ‘‘in close proximity to * * * requested flexibility for posting calorie the selection button’’ that includes the Section 4205 of the Affordable Care information. Specifically, the comments calorie information required by section Act provides that vending machine requested that the calorie disclosure 403(a)(5)(H)(viii)(I) of the FD&C Act. operators not subject to the requirements permit the ‘‘stacking of Second, they argued that food sold from requirements of section multiple products in the same coil.’’ bulk vending machines represents only 403(q)(5)(H)(viii) 2 of the FD&C Act may FDA is proposing requirements that a small fraction of overall market sales elect to become subject to the provide flexibility for vending machine of the vending machine industry. requirements by registering ‘‘biannually’’ operators to comply with the labeling Finally, the comments stated that there with FDA (21 U.S.C. 343(q)(5)(H)(ix)). requirements for covered vending is no reported association between foods As discussed below, operators that machine food. As discussed later in this sold from bulk vending machines and choose to be subject to the Federal document, the required calorie obesity. requirements would not be subject to information may be posted on a sign non-identical state or local nutrition FDA notes that section adjacent to the vending machine, so labeling laws for food sold from vending 403(q)(5)(H)(viii) of the FD&C Act does long as the sign is visible to the machines. In the proposed rule entitled: prospective purchaser at the same time not limit its applicability to vending Food Labeling; Nutrition Labeling of as the food, its description, or its machines for which there has been a Standard Menu Items in Restaurants selection button is visible. reported association between the food and Similar Retail Food Establishments, vended by the machine and obesity. published elsewhere in this issue of the C. Who Is Not Required to Comply With However, section 403(q)(5)(H)(viii) Federal Register, FDA explains that This Rule provides that for covered vending ‘‘biannual’’ can be defined as occurring FDA is aware that many vending machine food, the vending machine twice every year or as occurring every machine operators operate machines operator must provide a sign disclosing other year. (Ref. 1). FDA tentatively that dispense a variety of articles other the number of calories contained in the concludes that registration every other than articles of food. For example, some food ‘‘in close proximity to each article year is a more reasonable interpretation, vending machines may dispense of food or the selection button.’’ FDA because it does not seem warranted or detergent, compact discs, gift cards or tentatively concludes that the reference necessary for a vending machine toiletries. If a vending machine operator to ‘‘selection button’’ in the statute can operator to tell FDA every 6 months that operated a total of 50 vending machines, be read to mean that the types of the operator wants to be subject to only 15 of which sell articles of food, vending machines subject to Federal requirements. FDA began the vending machine operator would requirements in section accepting registrations on July 21, 2010, not be subject to the requirements of 403(q)(5)(H)(viii) are those with and will continue to accept them on a 403(q)(5)(H)(viii) of the FD&C Act selection buttons. FDA is not aware of continuous basis. FDA is proposing in because the vending machine operator vending machines without selection § 101.8(d) that an authorized official for operates fewer than 20 vending buttons other than bulk vending a vending machine operator that is not machines that sell articles of food. machines that dispense, by use of a subject to the Federal requirements may Further, FDA tentatively concludes crank, single types of unpackaged register with FDA every other year by that vending machines that may articles of food in preselected amounts providing FDA the following dispense food as part of a game or other (e.g., a single piece of gum or a handful information: non-food related activity are not covered of candy or nuts). FDA tentatively • The contact information (including by 403(q)(5)(H) of the FD&C Act. For concludes that vending machines, name, address, phone number, e-mail example, a vending machine may including bulk vending machines, address), for the vending machine contain a variety of items ranging from without any type of selection button are operator; small toys, coins, or individually not covered by section 403(q)(5)(H)(viii). • The address of the location of each wrapped candies that can be picked up However, FDA tentatively concludes vending machine owned or operated by by maneuvering a large claw arm. In this that a bulk vending machine that has a the vending machine operator that is instance, the vending machine does not selection button, regardless of the type being registered; sell articles of food, even though in the of food it dispenses, e.g., unpackaged • Preferred mailing address (if course of maneuvering the arm, candies articles of food such as soup, popcorn, different from the vending machine could be dispensed. The vending or hot or cold beverages, is covered operator address), for purposes of machine is selling the opportunity to under section 403(q)(5)(H)(viii), if it receiving correspondence; and • play the game. FDA seeks comment on meets the other statutory criteria. FDA Certification that the information this tentative conclusion. is proposing in § 101.8(c)(1)(i)(C) that submitted is true and accurate, that the Bulk vending machines dispense the nutrition labeling requirements of person or firm submitting it is unpackaged articles of food in § 101.8 apply to an article of food sold authorized to do so, and that each preselected amounts (e.g. gumball from a vending machine that, among registered vending machine will be machines, mixed nut machines). FDA other things, has a selection button. subject to the requirements of § 101.8. received a few comments suggesting FDA seeks comment on these tentative that bulk vending machines are different conclusions. FDA is also interested in 2 As discussed in section I.B. of this document, ‘‘ comments demonstrating any vending machine operators that own or operate from more modern types of vending fewer than 20 vending machines could elect to be machines,’’ and therefore should be unintended adverse effect resulting from subject to the requirements of 403(q)(5)(H)(viii) of exempt from these disclosure the exclusion of vending machines the FD&C Act by voluntarily registering with FDA.

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An authorized official of a vending condiment, such as mayonnaise, the (often these machines are turnstile machine operator who elects to be calorie declaration must include the type). FDA believes that such machines subject to the Federal requirements can number of calories contained in the do not present a unique situation where register by visiting http://www.fda.gov/ sandwich and the package of the proposed options for declaring menulabeling. FDA has created a form mayonnaise. FDA also tentatively calorie information would not be that contains fields requesting the concludes that the number of calories appropriate. FDA tentatively concludes, information in § 101.8(d) and made the declared for the article of food must be therefore, that calorie ranges are not form available at this Web site. identical to the number of calories that necessary within the context of vending Registrants must use this form to ensure are declared in the Nutrition Facts, if machines because a vending machine that complete information is submitted. present. If the food contains multiple operator would be able to disclose servings and bears a Nutrition Facts calorie information under other options, E. Requirements for Vending Machine Panel, FDA tentatively concludes that as explained below (e.g., use of signs Operators Subject to This Rule and the number of calories declared must be including posters). Operators That Elect To Be Subject to equal to the total number of calories b. Determination of calorie content. If the Rule When Calorie Declarations Are contained in the food item as dispensed. a covered vending machine food does Required The total number of calories can be not bear Nutrition Facts, FDA Calorie Declaration for a Covered determined by multiplying the number anticipates that the manufacturer or Vending Machine Food of calories per serving by the number of supplier of the food may provide the servings in the package. For example, if number of total calories for the food to a. Calorie declaration. Section the Nutrition Facts states 80 calories per the vending machine operator so that 403(q)(5)(H)(viii) of the FD&C Act serving and 3 servings per container, the the operator has the necessary calorie provides that, for a covered vending total number of calories in the entire information to meet the calorie machine food, the vending machine package would be 240 calories. FDA disclosure requirements of section ‘‘ operator must provide a sign in close tentatively concludes that for a covered 403(q)(5)(H)(viii) of the FD&C Act. FDA proximity to the article of food or the vending machine food that contains notes that covered vending machine selection button that includes a clear multiple servings, a vending machine operators must ensure that the calorie and conspicuous statement disclosing operator may voluntarily disclose declaration is truthful and not the number of calories contained in the calories per serving in addition to total misleading in accordance with section article.’’ FDA is proposing in calories for the food. 403(a)(1) of the FD&C Act. In the event § 101.8(c)(2)(i)(A) to require that for a Several comments requested that FDA the calorie information is not available covered vending machine food, the permit the use of calorie ranges, similar from the manufacturer of the food, FDA statement of the number of calories in to those provided for restaurants and seeks comments on whether a vending the food must be expressed to the similar retail food establishments under machine operator may use nutrient nearest 5-calorie increment up to and section 403(q)(5)(H)(v) of the FD&C Act, databases, cookbooks, laboratory including 50 calories, and 10-calorie in declaring calorie information for analyses, and other reasonable means. increment above 50 calories. For a covered vending machine foods that FDA notes that such flexibility is covered vending machine food that has come in different flavors and varieties, provided in § 101.10 and section fewer than 5 calories, the calorie e.g., coffee which comes in different 403(q)(5)(H)(iv). Further, FDA seeks declaration may be expressed as zero. flavors, brew strength, serving size, comment on whether vending machine These rounding rules are consistent sweeteners or different types of operators should be required to provide with the declaration of calories for sandwiches or fruit. The comments FDA the information on which they packaged foods as provided in discussed the need for flexibility to relied to determine the total calories § 101.9(c)(1). provide calorie ranges for such items. posted for the vending machine food. In addition, FDA tentatively FDA acknowledges that some articles c. Placement and prominence of concludes that the number of calories of food sold from vending machines calorie declarations. Section must be accompanied by a term, e.g., come in varieties, such as different 403(q)(5)(H)(viii) of the FD&C Act ‘‘calories,’’ to make clear what that flavors and types of hot beverages (e.g., provides that for a covered vending number refers to. Consequently, FDA is coffee or hot chocolate). For some of machine food, the vending machine proposing in § 101.8(c)(2)(i)(B) that the these varieties, there could be a large operator must provide a sign in close term ‘‘Calories’’ or ‘‘Cal’’ must appear range for calories. For example, calories proximity to the article of food or the adjacent to the number of calories for for coffee could range from zero calories selection button that includes a clear the covered vending machine food. This for a plain brewed coffee to over 400 and conspicuous statement disclosing is the ‘‘calorie declaration.’’ We calories for a large mocha coffee with the number of calories contained in the tentatively conclude that permitting the whole milk and whipped cream. We food. FDA is interpreting the use of the abbreviation ‘‘Cal’’ will point out, however, that a vending requirement that a sign be placed in provide flexibility for vending machine machine operator could post a calorie close proximity to the article to mean operators, especially those that have declaration in close proximity to the that the sign is placed either in or on the limited space on their machines, in selection button for a food that comes in vending machine itself or adjacent to meeting the proposed requirements. different varieties and flavors that is the vending machine and near the food, Because section 403(q)(5)(H)(viii) of sold in a vending machine that has its price, its selection number, or its the FD&C Act refers to ‘‘an article of selection buttons corresponding to the selection button. food sold from a vending machine,’’ different options. For example, if there Section 403(q)(5)(H)(viii) also requires FDA tentatively concludes that calorie is a button to select cream for a coffee, that the calorie declaration be clear and information must include the total a vending machine operator would be conspicuous. FDA notes that to be clear calories present in the covered vending able to post a calorie declaration for that and conspicuous the calorie declaration machine food as it is vended. For cream item in close proximity to the must be in a font size large enough to example, if a covered vending machine selection button. FDA has considered be seen and easily readable. However, food, such as a sandwich, is dispensed vending machines that typically FDA recognizes that vending machines with a single serving unit of a dispense fresh sandwiches and fruit come in a variety of sizes, shapes, and

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styles. We also understand that vending consumer unless the calorie information F. When Calorie Declaration Is Not machines will often have limited space. were posted immediately next to each Required We think that it is important to provide food item. The comments stated that 1. Examination of the Nutrition Facts businesses with flexibility while, at the ‘‘vending menus’’ (such as a menu poster Panel same time, fulfilling the requirements of for a bank of vending machines) would the statute. Therefore, we think it would not provide the buyer with easy access If the Nutrition Facts Panel of an not be appropriate to require one to the calorie information. article of food sold from a vending specific type size and font for calorie FDA agrees with the comments that a machine may be examined by a declarations for all covered vending sign that is a poster may be an prospective purchaser before purchasing machine food. Generally, if a calorie appropriate medium to convey the the article, the vending machine declaration is in a similar color as and required calorie declarations, so long as operator is not required to provide the a type size no smaller than the name 3 the sign is in close proximity to the calorie information. FDA is interpreting of the food, price of the food, or the covered vending machine food or the term ‘‘Nutrition Facts Panel’’ to mean selection number (e.g., A9 or E4), selection button. The Agency tentatively the nutrition information in the format consumers should be able to read the concludes that ‘‘close proximity’’ could required in § 101.9(c) and (d) on the calories in the same manner as they read mean adjacent to the vending machine, label of the food. FDA tentatively the name and price of the food item. but not necessarily attached, so long as concludes in order for the Nutrition Therefore, FDA is proposing in the sign adjacent to the machine is clear Facts Panel to be examined, it must be § 101.8(c)(2)(i)(C) that if the calorie and conspicuous at the same time as the visible in full, without obstruction, declaration is in or on the vending food, its name, or its selection button or before purchase. For example, a vending machine itself, the calorie declaration selection number is visible. The Agency machine’s automatic dispensing coil that holds the food in place or the for a covered vending machine food requests comments on this tentative placement of the package in the must be in a type size no smaller than conclusion. FDA is also proposing in machine must not obscure, cover, or the name, selection number, or price of § 101.8(c)(2)(ii)(B) that if the sign cause to be covered any portion of the the food as displayed on the vending required by section 403(q)(5)(H)(viii) of Nutrition Facts Panel. To enable the machine, whichever is smallest. In the FD&C Act is placed adjacent to the prospective buyer to obtain the total addition, to help ensure that the calorie vending machine, the calorie number of calories of the article of food, declaration is clear and conspicuous, declaration must be in type that is all the information that would be required FDA is proposing in § 101.8(c)(2)(i)(B) black or one color printed on a white or to be made available on a sign by the and § 101.8(c)(2)(i)(C) that the calorie other neutral background that contrasts declaration be made in the same color, vending machine operator if the with the type color. The Agency is not provisions of section or in a color at least as conspicuous, as proposing a minimum type size for the the color of the name, price, or selection 403(q)(5)(H)(viii)(I)(aa) are not met, the calorie declaration, but we request agency notes that, in most cases, the number of the food. Further, FDA comment on this tentative decision. proposes that the calorie declaration on prospective purchaser must use several Comments should provide a rationale parts of the panel to determine the total the machine must have the same supporting their position and any number of calories for the article of contrasting background as the name or supporting data, including consumer food. This is one reason that it is critical price or selection number it is in closest research. Where the vending machine that no portion of the Nutrition Facts proximity to. FDA notes that if a calorie only displays a vignette (i.e., picture of Panel be obscured. declaration is presented in a color that the food) or name of the food item, FDA In addition, the Nutrition Facts Panel is not sufficiently contrasted with its is proposing in § 101.8(c)(2)(ii)(D) that must be in a size that permits the background or the declaration is in a the calorie disclosure sign must be in prospective purchaser to easily read the type size that is too small to be read by close proximity to the vignette or name nutrition information while the food is a prospective purchaser, FDA or in close proximity to the selection in the vending machine. FDA tentatively concludes that the calorie button. regulations allow certain foods to bear declaration for a covered vending For electronic vending machines (e.g., Nutrition Facts in a modified or smaller machine food is not disclosed in a clear machines with digital or electronic or format based on the composition of the and conspicuous manner, and the liquid crystal display (LCD) displays), food, the size of the food package or declaration would not be in compliance FDA tentatively concludes that the other factors (see § 101.9(d), (e), (f), (h) with the requirements of section calorie disclosure sign required by the and (j)). Where the Nutrition Facts Panel 403(q)(5)(H)(viii)(I). FDA requests statute may be displayed when the is in a smaller format consistent with comment on whether these selection numbers are entered but before the regulations, a prospective purchaser requirements meet the conditions for the selection is confirmed, as proposed is unlikely to be able to easily read it on ‘‘clear and conspicuous’’ or whether the in § 101.8(c)(2)(ii)(E). the label of the article of food in the requirements should be more or less FDA tentatively concludes, that for vending machine prior to purchase. In prescriptive. certain types of vending machines with such cases, the Agency tentatively A number of comments suggested that a limited number of selections, (e.g., concludes that the prospective calorie information be provided on a popcorn with or without added butter), purchaser is not able to examine the poster or sign near the machine, such as the sign with the statement of calories Nutrition Facts Panel prior to purchase. for a bank of several vending machines may appear anywhere on the front (or FDA requests comment on these that may use a common singular face) of the vending machine. A sign tentative conclusions. payment acceptor. However, several may consist of a handwritten sticker in FDA recognizes that ordinarily the comments noted a concern that calorie permanent marking that is affixed to the vending machine operator is not information would not be read by the machine, provided that the statement is responsible for the printing of the prominent, not crowded by other Nutrition Facts Panel. Nor is the 3 Here the discussion of ‘‘name’’ refers to the name labeling on the machine and in a type vending machine operator required by of the food on or in the vending machine and not the name of the food on the label of the food size reasonably related to the largest section 403(q)(5)(H)(viii)(I) to make package. print on the vending machine. examination of the Nutrition Facts

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possible by the prospective purchaser is included on the front of the package, information such as serving size prior to purchase. However, food the claim must comply with relevant information or information on the manufacturers may have an incentive to FDA regulations authorizing nutrient nutrients that are required to be work with vending machine operators to content claims (a claim on food labeling disclosed in the Nutrition Facts as find ways to have their packaged food regarding the level of a nutrient, e.g., described in § 101.9 or 21 U.S.C. displayed with the Nutrition Facts low fat) or health claims (a claim on 343(q)(1)(D) and (E). FDA seeks easily readable in the vending machine. food labeling regarding the relationship comment on what other nutrition In this way, potential purchasers would between a substance and a disease, e.g., information, if any, should be required have more information about the calcium and osteoporosis), as if this alternative interpretation were manufacturers’ food than just calories. applicable. adopted. FDA also notes that under this FDA also received a few comments alternative interpretation, the vending 2. Visible Nutrition Information at the stating that the Nutrition Facts Panel machine operator could rely on any Point of Purchase and any ‘‘front of package’’ nutrition ‘‘visible nutrition information at the The second prong of section information may be small and difficult point of purchase’’ that included total 403(q)(5)(H)(viii)(I)(aa) specifies that if a to read in a vending machine. FDA calories in addition to other nutrition vending machine ‘‘otherwise provide[s] recognizes that a consumer may not be information regardless of what entity visible nutrition information at the able to easily read some nutrition supplied the information. point of purchase’’ for an article of food information in a vending machine and Likewise, under the alternative sold from the machine, the vending therefore this information may not approach, ‘‘point of purchase’’ would be machine operator is not required to inform the consumer about the number read to mean that the ‘‘visible nutrition provide the calorie information. As with of total calories in the article of food. information’’ could be provided in the Nutrition Facts Panel this alternative Section 101.8(b) of this proposed rule places other than on the package of the means of satisfying the requirement of sets out the provisions regarding ‘‘visible food in the vending machine, such as on section 403(q)(5)(H)(viii) is optional for nutrition information at the point of the vending machine itself. vending machine operators. purchase’’ discussed above. In the case of the alternative The terms ‘‘visible nutrition Under proposed § 101.8(b), for the interpretation, in which the ‘‘visible information’’ and ‘‘point of purchase’’ in nutrition information on the label to be nutrition information at the point of section 403(q)(5)(H)(viii)(I)(aa) are not considered ‘‘visible,’’ it must be clear purchase’’ appears other than on the defined in the statute. FDA sees two and conspicuous. To ensure that it is label of the article of food, there are also possible ways to understand and apply clear and conspicuous, it must be both the questions of where and through the terms. One approach is to conclude (1) in a type size easily readable from what means the information may be that (1) ‘‘nutrition information’’ in this the distance between the prospective provided. The agency specifically context means total calories in the purchaser and the label and (2) in print requests comment on whether, under article of food, because this is the with sufficient color and contrasting this alternative interpretation, signs information that the vending machine background to be readily (including posters) or booklets would be operator must provide by sign if the distinguishable from other types of sufficient in providing ‘‘otherwise provisions in section information on the label. FDA visible nutrition information at the 403(q)(5)(H)(viii)(I)(aa) are not met; and tentatively concludes that the visible point of purchase’’ and we especially (2) ‘‘otherwise provide[d] * * * at the nutrition information presented on the request any consumer studies or social point of purchase’’ suggests, in the label of the food at the point of purchase scientific data on this issue. context of the provision as a whole, that must be in a type size reasonably related Regardless of the precise location or the information, like the Nutrition Facts to the most prominent printed matter on means of providing the nutrition Panel, should be on the article of food the label and in a color that sufficiently information, under the alternative itself. FDA proposes this approach in contrasts with the background, such that interpretation there would also be a proposed § 101.8(b). a prospective purchaser is able to notice question of ensuring that the FDA received several comments and read the information. Generally, information is adequately ‘‘visible.’’ At a supporting the use of ‘‘front of package’’ FDA has considered ‘‘reasonably minimum, the nutrition information nutrition information contained on the related’’ to mean a type size that is at should be clear and conspicuous and food label as a means of ‘‘providing least 50 percent of the size of the largest noticeable at the point of purchase, in visible nutrition information at the print on the label. (Ref. 2). the context of the surroundings. One point of purchase.’’ For example, some The alternative approach is to way to ensure this visibility if the packaged food manufacturers interpret the words ‘‘otherwise provide nutrition information is not on the label voluntarily place certain nutrition visible nutrition information at the of the article of food would be to information on the principal display point of purchase’’ by concluding that provide the information in type that is panel that includes calorie and other (1) ‘‘nutrition information’’ means all black or one color, printed on a nutrition information about the product. something more than total calories, and white or other neutral background that This type of nutrition information is (2) ‘‘point of purchase’’ means something contrasts with the type color. Another sometimes referred to as ‘‘front of more than on the package of the food way would be to also provide the package’’ by industry, whereas Nutrition itself. Under this interpretation, the information using a minimum type size. Facts typically appear on the non-Nutrition Facts Panel option in the The agency requests comments on these information panel of a food label. FDA statute would include information in and other ways to determine if the tentatively concludes that ‘‘front of addition to total calories because the information is ‘‘visible.’’ package’’ nutrition information could be broader term ‘‘nutrition information’’ Another aspect of whether a way to provide visible nutrition was used instead of ‘‘calories.’’ Just as information that is not on the food itself information, so long as the criteria for the Nutrition Facts Panel contains more is visible to the consumer is where the color, font and type size are met and than calorie information, so too, would information is placed relative to the total calories in the article of food are ‘‘visible nutrition information at the ‘‘point of purchase.’’ FDA requests included. If a nutrient content claim or point of purchase.’’ This could include, comment on the meaning of ‘‘the point a health claim for the article of food also in addition to total calories in the food, of purchase’’ in this context and on all

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aspects of the alternative interpretation machine food does not bear Nutrition 45421), FDA estimates that a significant of ‘‘visible nutrition information at the Facts because it falls under an number of operators impacted by this point of purchase.’’ exemption, the manufacturer or supplier proposed rule are small businesses. As FDA seeks comment on the of the food may provide the number of directed by statute, the requirements of alternative approaches to interpreting total calories for the food to the vending the proposed rule only apply to vending and applying ‘‘otherwise provide visible machine operator so that the operator machine operators that own or operate nutrition information at the point of has the necessary calorie information to 20 or more vending machines. However, purchase.’’ meet the calorie disclosure requirements according to data from the Vending G. Conforming Amendment of section 403(q)(5)(H)(viii)(I). Because Times Census and from the National of the flexibility provided in this Automatic Merchandising Association FDA is proposing to exempt proposed rule, the Agency finds that it (NAMA), the average annual revenue electronic signatures submitted to is reasonable to make the requirements per machine is less than $7,000 (Refs. 3 satisfy the requirements of this effective in 1 year. Based on the and 4). An operator with only 20 proposed section from the requirement comments and on what vending machines may have vending machine to comply with Part 11—Electronic machine operators will need to do to revenue of less than $140,000. In order Records; Electronic Signatures (21 CFR come into compliance, the Agency to exceed the SBA’s definition of a small part 11) and proposing to amend part 11 tentatively finds that making the final vending machine operator, a firm would to reflect this exemption. We expect this rule effective 1 year after publication is need at least $10 million in annual exemption to facilitate the registration practicable. The Agency seeks comment revenue (Ref. 5). This suggests that a process for those vending machine on the appropriateness of this firm with revenue exclusively from operators who voluntarily choose to timeframe. vending machine sales would need register under section 403(q)(5)(H)(ix) of more than 1,400 machines to exceed the IV. Summary Preliminary Regulatory the FD&C Act. definition of small business. Based on Impact Analysis H. Effective Date the latest available U.S. Economic The summary analysis of benefits and Census data that breaks down FDA received a few comments costs included in this document is establishments by revenue, we project regarding the effective date of the final drawn from the detailed Preliminary that 97 percent of firms selling covered rule that would issue based on this Regulatory Impact Analysis which is vending machine food, as that term is proposal. These comments suggested available at http://www.regulations.gov, used in this document, that identify that vending machine operators would Docket No. FDA–2011–F–0171, and is primarily as vending machine operators need 2 years to implement the also available on FDA’s Web site at that are engaged in the business of requirements for calorie labeling for http://www.fda.gov/Food/Labeling owning or operating 20 or more vending vending machines due to the costs of Nutrition/ucm217762.htm. machines would be small businesses as producing posters and driving to each A. Introduction defined by SBA. Therefore, the Agency site to post the information. believes that the proposed rule would FDA is proposing that the final rule FDA has examined the impacts of the have a significant economic impact on become effective one year from the date proposed rule under Executive Orders a substantial number of small entities. of its publication. Because FDA is 13563 and 12866, the Regulatory This impact is discussed further in proposing flexibility for compliance, Flexibility Act (5 U.S.C. 601–612), and section V of this document. i.e., the use of signs in, on, or adjacent the Unfunded Mandates Reform Act of Section 202(a) of the Unfunded to vending machines, vending machine 1995 (Pub. L. 104–4). Executive Orders Mandates Reform Act of 1995 requires operators would be able to choose 13563 and 12866 direct agencies to that agencies prepare a written among a wide variety of less expensive assess all costs and benefits of available statement, which includes an avenues to achieve compliance, regulatory alternatives and, if regulation assessment of anticipated costs and depending on their situation. Many is necessary, to select regulatory benefits, before proposing ‘‘any rule that foods sold from vending machines are approaches that maximize net benefits includes any Federal mandate that may packaged and have Nutrition Facts. (including potential economic, result in the expenditure by State, local, Therefore, vending machine operators environmental, public health and safety and tribal governments, in the aggregate, have the opportunity of orienting the effects, distributive impacts, and or by the private sector, of $100,000,000 food in the vending machine such that equity). Executive Order 13563 or more (adjusted annually for inflation) the prospective customer may examine emphasizes the importance of in any one year.’’ The current threshold the Nutrition Facts Panel. In this case, quantifying both costs and benefits, of after adjustment for inflation is $135 the operators would not need to provide reducing costs, of harmonizing rules, million, using the most current (2009) calorie information required by and of promoting flexibility. This Implicit Price Deflator for the Gross 403(q)(5)(H)(viii)(I) of the FD&C Act. If proposed rule has been designated an Domestic Product. FDA does not expect the operator chooses not to orient the ‘‘economically’’ significant rule, under this proposed rule to result in any 1- food such that the prospective customer section 3(f)(1) of Executive Order 12866. year expenditure that would meet or may examine the Nutrition Facts Panel, Accordingly, the proposed rule has been exceed this amount. or if it is not practicable to do so reviewed by the Office of Management because the vending machine is not of and Budget (OMB). B. Need for This Regulation the type where the food is visible, the The Regulatory Flexibility Act This proposed rule is necessary to operator may obtain the calorie requires agencies to analyze regulatory implement section 4205 of the information from the Nutrition Facts to options that would minimize any Affordable Care Act, which principally place on the signs. Further, the significant impact of a rule on small amends sections 403 and 403A of the proposed rule, if finalized, does not entities. Using the Small Business FD&C Act, and requires operators of 20 require any particular manner of Administration (SBA) definition of or more vending machines to disclose obtaining calorie information. As small vending machine operators as calorie information for covered vending discussed above in this document, FDA classified by the North American machine food. The provision of calorie anticipates that, if a covered vending Industry Classification System (NAICS information for covered vending

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machine food may help consumers opportunity cost to the operator of the results of the detailed Preliminary make better informed dietary choices. providing calorie information. That is, Regulatory Impact Analysis (PRIA). Economic justifications for regulatory just as an operator may have to decide Benefits in response to the proposed interventions in private markets rely on which possible foods to leave out of a requirements Obesity is a major public the presence of some market failure. In vending machine with limited space health concern in the United States and the case of food sold from a vending (thus giving up the opportunity to sell one of the top leading health indicators machine, the private market is those items), it must choose which addressed by the United States Healthy particularly robust and competitive. pieces of information about its foods it People 2020 goals. Nationally Thousands of individual firms vie for wants to convey. Adding an additional representative data indicate an increase consumer dollars in millions of vending piece of information means that an in the prevalence of obesity over the machines across the United States (Ref. operator may need to downplay or past three decades (Ref. 12). The 2007– 3). Low entry costs for firms and low remove some other piece of information. 2008 National Health and Nutrition switching costs for customers suggest This opportunity cost of information Examination Survey (NHANES) data that if a sizable fraction of consumers holds true whether the calorie showed that 34 percent of the adult U.S. were willing to pay for—and information is displayed on the machine population is obese and 34 percent are discriminate based on—the visible or, as with an increasing number of overweight (Ref. 13). calorie information at the point of packaged foods, on the principal display Excess body weight has many health purchase then the industry would panel of the package. (Ref. 14), social (Refs. 15 and 16), provide it to them. In fact, some vending The proposed requirements mitigate psychological (Refs. 17 and 18), and machine operators are voluntarily the apparent market failure in economic consequences (Ref. 19) for the providing more healthful choices and information provision stemming from affected individuals. Lower life additional information on machines present-biased preferences, although not expectancy, elevated risk of diabetes, (Refs. 4 and 6). necessarily the tendency of consumers hypertension, stroke and other Although many of the usual market to underutilize that information. cardiovascular diseases have been failures that justify regulatory action, Specifically, for a covered vending documented to rise simultaneously with such as the existence of market power machine food, this proposed rule the increased prevalence of obesity (Ref. or of ill-defined property rights, do not requires that the vending machine 14). The economic impact is especially apply here (Refs. 7 and 8), the primary operator provide a sign in close evident in health-care costs in terms of support for regulatory intervention is proximity to the food or the selection greater health-care utilization and that there are systematic biases in how button, i.e. in, on, or adjacent to the higher medical expenditures (Ref. 20). consumers process information and vending machine, but not necessarily More specifically, medical expenditures weigh current benefits (from consuming attached to the vending machine, so attributable to overweight and obesity higher calorie foods) against future costs long as the sign is visible at the same accounted for more than 9 percent of the (higher probability of obesity and its time as the food, its name, price, or total U.S. medical expenditures in 1998, comorbidities). selection number. This information or between $85.7 billion and $147 The bias is more directly related to must be presented in a color that is billion (Ref. 20). Researchers have the requirements of this proposed rule: sufficiently contrasted with the proposed various factors to explain this Consumer demand for calorie background, must be in close proximity dramatic rise in obesity including information does not create incentives to the vignette or name or in close declining food prices and physical for the provision of calorie information proximity to the selection button when requirements of labor (Refs. 21 and 22), at the vending machine. This market a name or vignette is displayed, and, for declining time costs of food preparation failure occurs because at the time of electronic vending machines, the calorie (Ref. 23), fast-food restaurant density purchase, consumers do not value information may be displayed when the (Ref. 24) and social interactions (Refs. calorie information as much as they do selection numbers are entered but before 25). later, when the effects of excess calorie the selection is confirmed. These Although the relationship between consumption are evident. Studies have requirements are designed so that the obesity and poor dietary choices is shown that consumers have present- calorie information is made available to multi-faceted, there is a general based preferences, meaning that they are consumers before they purchase such agreement in the literature that continually optimistic about the food. Providing the information will reduction in excess calories is helpful in healthfulness of their future choices likely increase consumer awareness preventing or delaying the onset of (Ref. 9, 10 and 11). regarding the calorie content in covered excess weight gain (Ref. 26). Vending These studies suggest that calorie vending machine food and increase the machines are a likely source of high- information often lacks salience, or perceived relevance of that information calorie snack or discretionary foods, as relevance, for consumers at the time of to their decision making. Providing the well as some high-calorie meal items. purchase and consumption, even information may serve to highlight the Industry data indicate that there is though they may experience regret potential future costs of additional approximately one vending machine for about their decisions at a later date. This calorie consumption. This increased every 40 adults in the United States, and tendency may explain why consumers attention to the caloric content of that up to 5 percent of the money have not generally demanded calorie covered vending machine food may consumers spend on food away from and other nutrition information for food then result in an increased availability home is spent on vending machine food sold from vending machines before, or of lower calorie options, and an (Ref. 27). This suggests that providing at, the point of purchase, even if they increased demand for these options. calorie information for covered vending may, at a later point in time, value that machine food to consumers may have a information. Because of competition for C. Summary of Costs and Benefits of the significant effect on calorie intake, the consumer time and attention vending Proposed Requirements and Regulatory prevalence of obesity, and thus the cost machine operators have limited time Options of health care and lost productivity. and space in which to convey In this section FDA describes the To the extent that the proposed information to consumers. These limits bases of benefits and costs of the requirements mitigate the increase in mean that there is a substantial proposed requirements and summarizes the prevalence of obesity and the

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prevalence of these costly co- vending machines’’ to refer to operators percent of all machines—selling morbidities such as hypertension and or machines that sell covered vending packaged confections or snacks. Ten diabetes, society gains the opportunity machine foods. According to the percent sell a variety of hot and cold cost of the averted medical expenditures NAMA, there are approximately 13,500 cup beverages, frozen or fresh food and an increase in productivity from companies that operate vending products and miscellaneous other food averted debilitation and death. In machines in the United States (Ref. 4). products. The final 20 percent of addition to educating consumers about Other estimates put the total closer to machines are bulk candy, nut or gum calorie content, major predicted 10,000 (Ref. 3). This total includes 5,000 machines that are not covered by elements of the consumer and industry firms whose primary business section 403(q)(5)(H)(viii) and the response to this proposed rule are: identification is as vending machine proposed requirements because they 1. Increased awareness regarding the operators (NAICS 4542), plus a variety lack selection buttons. While these bulk caloric content in covered vending of other firms that operate vending machines form a large percentage of machine foods, and the perceived machines, but do not primarily identify vending machines, they account for less relevance of that information to decision as such. These other companies include, than 0.5 percent of vending machine making, which may help reduce the for example, beverage manufacturers sales (Ref. 4). present-bias in preferences, and thus and food service contractors. Because of Summary of costs and benefits of the encourage the consumption of lower the difficulty in determining which proposed rule and regulatory options In calorie options. firms are covered, and because FDA has this section we briefly summarize the 2. Increased consumer interest in no data on the potentially significant costs and benefits of the proposed rule lower calorie options, and greater number of covered vending machine that are analyzed in the detailed PRIA. transparency in the caloric content of operators that self-identify as businesses These estimates are collected in table 1. foods sold in vending machines, which outside the food industry, we take Costs of complying with the proposed may give manufacturers an incentive to: NAMA’s higher estimate of 13,500 firms requirements have been estimated for a. Reduce the calorie content of foods as the number of covered firms. three major areas: Cost of nutrition sold in vending machines through FDA estimates that 97 percent of firms analysis, cost of new signs, including reformulation or by decreasing portion selling covered vending machine food posters, and labor costs. In the case of size. that identify primarily as vending the proposed rule, FDA estimates that b. Provide additional items with machine operators that are engaged in there would be approximately 10,800 lower calorie formulations. the business of owning or operating 20 operators under the proposed These changes may reduce or more vending machines are small requirements, controlling between 4 consumers’ caloric intake from food businesses as defined by the SBA. Other million and 5.6 million machines that sold in vending machines. Note that any estimates indicate that more than 90 sell covered vending machine foods. reduction in calorie intake in these percent of the firms covered by the The initial mean estimated cost of settings may be at least partially offset proposed rule are defined as small complying with the proposed by increases in calorie intake during businesses (Ref. 3). This percentage may requirements is $25.8 million, with an other meals or snacks. Because FDA be lower for firms that have primary estimated mean ongoing cost of $24.0 lacks data on how consumers will business identification other than as million. Mean annualized costs are substitute among caloric sources, the vending machine operators, but the $24.5 million at a 7 percent discount benefit estimations given here may be majority of covered businesses will rate, and $24.2 million at 3 percent higher or lower than those that will be likely still be defined as small discount rate. Per operator costs are realized if the rule is finalized as businesses. Because very small, estimated to be $2,400. FDA estimates proposed. informal businesses that are not that average per machine costs are less Coverage of the proposed rule and captured by economic census data than $10 annually. industry overview. The proposed rule might operate 20 or more machines, FDA has not estimated the actual covers certain vending machine these figures may underestimate the benefits associated with proposed operators that are engaged in the number of affected small businesses. requirements. Food choice and business of owning or operating 20 or Conversely, approximately 72 percent of consumption decisions are complex and more vending machines and those industry revenue—and thus a FDA is unaware of any comprehensive vending machine operators that comparably large fraction of data allowing accurate predictions of voluntarily register with FDA to become consumption—comes from firms with the effect of the proposed requirements subject to the Federal requirements. The more than $10 million in annual sales, on consumer choice and vended foods. proposed rule does not cover vending and 85 percent comes from firms with Therefore, FDA has constructed a machines without a selection button, more than $5 million in revenue plausible individual effect of the including bulk vending machines that (Ref. 3). proposed rule, and has conducted a dispense gum, candy and nuts. Vending Vending machine operators together break-even analysis in order to machines are operated both by food operate an estimated 5 to 7 million determine the proportion of the U.S. service firms and by firms in other machines (Refs. 3 and 4) in at least 1.5 obese adult population that would need businesses that operate machines for the million locations (Ref. 3). to attain this minimal response in order benefit of their customers or employees Approximately 70 percent of these for the proposed requirement to yield a and do not identify as vending machine machines sell packaged food, including positive net benefit. Using a 100 calorie operators. Because this latter group beverages, that are required to bear per week reduction in intake as the cannot be accurately counted, published nutrition labeling under section benchmark effect, FDA estimates that at estimates of the number of vending 403(q)(1) of the FD&C Act and FDA least 0.02 percent of the adult obese machine operators will generally regulations at § 101.9, and thus have population would need to reach this undercount the number of covered Nutrition Facts. This 70 percent is benchmark in order for the rule to break operators under the proposed rule. For comprised mostly of packaged beverage even on the initial total cost. On an the purposes of this preliminary machines, which account for more than ongoing basis, again, at least 0.02 regulatory impact analysis, we will use 50 percent of all vending machines, percent of the adult obese population the term ‘‘covered operators’’ or ‘‘covered with the remainder—approximately 20 would need to reach this benchmark in

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order for the rule to break even on the and the associated preemption from registration constitutes a collection of recurring annual costs. These effects are State or local regulations is voluntary, information under the Paperwork summarized in table 1 of this document. and will only occur to the extent that Reduction Act of 1995. Therefore, FDA Finally, although registration by firms the costs of registration and compliance has also estimated the burden associated wishing to register with FDA in order to with Federal regulation is lower than with this collection of information in come under the proposed requirements that of State or local laws, this the detailed analysis.

TABLE 1—ACCOUNTING STATEMENT: ANNUALIZED COST AND BREAK-EVEN BENEFIT POINT FOR THE PROPOSED REQUIREMENTS

Primary Low High Year Discount Period estimate estimate estimate dollar rate covered

Benefits

Annualized Monetized ($millions/year) ...... Not Quantified

Annualized Quantified:

Qualitative: FDA estimates that at least 0.02 percent of the adult obese population would need to reduce caloric intake by at least 100 calories per week in order for benefits from the proposed requirements to reach a break even point on annualized costs (at either 3% or 7%)

Costs

Annualized Monetized ($millions/year) ...... $24.5 $12.5 $39.8 2009 7% 10 24.2 12.1 39.6 2009 3% 10

Regulatory Options In addition to a on, or adjacent to the vending machine, FDA estimates the cost of individual baseline, FDA has identified four but not necessarily attached to the signs for each article of food or selection regulatory options for this proposed vending machine, so long as the sign is button. rule. The costs and benefits of these visible at the same time as the food, its (3) Option 3, Similar to the proposed options are summarized in table 2 of name, price, or selection number, and rule, but with an additional year in this document. with an effective date of 1 year after compliance period for vendors with less (0) Baseline for the purpose of publication of the final rule. than $500,000 in annual revenue from analysis—No new Federal regulatory (2) Option 2, similar to the proposed vending machines. action. rule, but requiring that calorie (4) Option 4, similar to the proposed (1) Option 1, the proposed rule, declarations be immediately adjacent to rule, but with coverage extended to bulk allowing a sign in close proximity to the the article of food or selection button for vending machines without selection article of food or selection button, i.e. in, all calorie disclosures. For this option, buttons.

TABLE 2—SUMMARY OF ESTIMATED ANNUALIZED COMPLIANCE COSTS FOR EACH OPTION

Proportional Proportional dollar sales of Percent cost relative to restaurant Primary Low estimate High estimate discount rate primary food relative to Summary of options estimate (in millions) (in millions) (10 year estimate of the primary esti- (in millions) horizon) proposed mate of the requirements proposed requirements

(Baseline) ...... N/A N/A N/A N/A N/A Option 1: the Proposed Rule ...... $24.2 $12.1 $39.6 3% 0.0% 0.0% 24.5 12.5 39.8 7% Option 2: Individual Signs ...... 81.8 36.1 140.4 3% +229.2% 0.0% 82.5 36.6 141.1 7% Option 3: Longer Compliance Time for Small Businesses ...... 24.2 12.1 39.6 3% 0.0% 0.0% 24.5 12.5 39.8 7% Option 4: Extended Scope to Include Bulk Machines ...... 30.2 15.1 49.4 3% +25.6% +0.5% 31.0 15.8 50.3 7%

FDA estimates that Option 2, which Averaged over primary, low and high Option 3 which considers a longer would require individual signs or labels estimates, the costs of Option 2 are compliance time for small businesses for each covered vended food, has a ten- 229.2 percent higher than those of the represents only a delay in the costs. year annualized costs of between $36.1 proposed requirements. These changes This delay has a small positive impact million per year and $140.4 million per are discussed more fully in the detailed on the annualized cost, but one that year at a 3 percent discount rate, with analysis. does not change the (rounded) estimate a primary estimate of $81.8 million. of costs for Option 3 from the estimate,

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of costs for Option 1. Option 4, expands additional year to comply. Generally, methodology and assumptions used; (3) the scope of the requirements to include FDA uses the SBA’s definition of ‘‘small ways to enhance the quality, utility, and foods in bulk vending machines without business’’ as it applies to the relevant clarity of the information to be selection buttons, has costs that are 25.6 economic sector, in this case, NAICS collected; and (4) ways to minimize the percent higher than the proposed 4542. However, as noted in the detailed burden of the collection of information option, and covers an additional 0.5 Preliminary Regulatory Impact Analysis, on respondents, including through the percent of sales of vended foods. available at http://www.regulations.gov, use of automated collection techniques, For full documentation and Docket No. FDA–2011–F–0171, and is when appropriate, and other forms of discussion of these estimated costs and also available on FDA’s Web site at information technology. benefits see the detailed Preliminary http://www.fda.gov/Food/Labeling Vending Machine Labeling: Regulatory Impact Analysis, available at Nutrition/ucm217762.htm, SBA defines Recordkeeping and Mandatory Third http://www.regulations.gov, Docket No. a small vending machine operator as Party Disclosure Under Section 4205 of FDA–2011–F–0171, and is also available one with annual revenue less than $10 the Patient Protection and Affordable on FDA’s Web site at http://www. million, and this definition would cover Care Act of 2010—(OMB Control fda.gov/Food/LabelingNutrition/ at least 97 percent of the industry. Number 0910–0665)—Revision ucm217762.htm. Adding flexibility—such as a longer time to come into compliance— Section 4205 of the Affordable Care V. Initial Regulatory Flexibility Act, which amends sections 403(q)(5) Analysis specifically for small firms would mean that most vending machine operators and 403A of the FD&C Act, requires FDA has examined the economic would be given that added flexibility. disclosure of calorie and other nutrition implications of this proposed rule as Therefore FDA has taken the approach information by restaurants and vending required by the Regulatory Flexibility of building substantial flexibility into machine operators. Section 4205 Act (5 U.S.C. 601–612). If a rule has a the proposed rule for most vending became effective on the date the law significant economic impact on a machine operators in order to give the was signed, March 23, 2010. Restaurants substantial number of small entities, the entire industry the opportunity to and vending machine operators not Regulatory Flexibility Act requires comply in the most cost-effective way. subject to the requirements of section agencies to analyze regulatory options 403(q)(5)(H) may elect to become subject that would lessen the economic effect of VI. Paperwork Reduction Act to the requirements of section the rule on small entities consistent This proposed rule contains 403(q)(5)(H) by registering biannually with statutory objectives. FDA information collection provisions that with FDA. Section 4205 required FDA tentatively concludes that this proposed are subject to review by the Office of to publish a notice in the Federal rule will have a significant economic Management and Budget (OMB) under Register within 120 days of the date of impact on a substantial number of small the Paperwork Reduction Act of 1995 enactment of section 4205, providing entities. (44 U.S.C. 3501–3520). A description of information on the terms and conditions However, FDA has built flexibility these provisions is given in the for persons who voluntarily elect to be into the proposed rule. The proposed following paragraphs with an estimate subject to nutrition disclosure rule does not mandate a particular of the annual reporting and requirements specified in the law. method for determining calorie recordkeeping burden. Included in the A. Statutory Compliance disclosure; instead, the proposed rule estimate is the time for reviewing provides options for how vending instructions, searching existing data To comply with the PRA and with the machine operators can determine sources, gathering and maintaining the statutory deadline under the provisions calorie information for covered vending data needed, and completing and of section 4205 for publication of machine food. Further, the proposed reviewing each collection of registration information, FDA initially rule does not prescribe the materials information. obtained a 6-month OMB approval of that may be used by vending machine The information collection provisions the collection of information operators in disclosing calorie for all provisions of this proposed rule requirements under the emergency information; instead, the proposed rule have been submitted to OMB for review processing provisions of the PRA. With provides options for how vending as revisions of collections approved OMB approval of the collection of machine operators can disclose calorie under OMB control numbers 0910–0664 information requirements of section information for covered vending and 0910–0665. Interested persons are 4205, FDA took several actions: (1) machine food. Therefore, vending requested to fax comments regarding Developed an electronic form, ‘‘Menu machine operators may choose among a information collection by May 6, 2011, And Vending Machine Labeling wide variety of less, or more, expensive to the Office of Information and Voluntary Registration,’’ Form FDA avenues to achieve compliance, Regulatory Affairs, OMB. To ensure that 3757, (2) as required by section 4205, depending on their situation. Because comments on information collection are published a notice in the Federal no particular method for compliance is received, OMB recommends that written Register of July 23, 2010 (75 FR 43182) mandated, the proposed rule gives small comments be faxed to the Office of (the July 23, 2010, notice) to explain businesses the leeway to use cheaper Information and Regulatory Affairs, how retail food establishments and solutions that meet the requirements of OMB, Attn: FDA Desk Officer, FAX: vending machine operators not the proposed rule (e.g., stickers). 202–395–5806. otherwise subject to the provisions of A general way to add flexibility for FDA invites comments on: (1) section 4205 may voluntarily elect to small firms during a rulemaking is to Whether the proposed collection of become subject to them, and (3) lengthen the time for these firms to information is necessary for the proper developed and implemented the comply with the rule. An example of a performance of FDA’s functions, guidance entitled, ‘‘Guidance for delayed compliance time for small including whether the information will Industry: Questions and Answers businesses applied to this proposed rule have practical utility; (2) the accuracy of Regarding the Effect of Section 4205 of is the option for vendors with less than FDA’s estimate of the burden of the the Patient Protection and Affordable $500,000 in annual revenue from proposed collection of information, Care Act of 2010 on State and Local vending machine food sales to have an including the validity of the Menu and Vending Machine Labeling

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Laws.’’ This guidance among other C. Consolidation of OMB Control No. already have the calorie information things clarified section 4205’s effect on 0910–0664 Under 0910–0665 available, and because economies of State and local menu and vending The Menu Labeling proposed rule scale exist for the manufacturer. In this machine labeling laws, to ensure that contains a revision request in which the case, vending machine operators will industry and State and local government burden hours for the information not need to keep a record of calorie understood the immediate effects of the collection request under OMB control content. Instead, the burden for most law. FDA’s current thinking on the number 0910–0664, ‘‘Restaurant Menu operators will be limited to that of preemptive effects of section 4205 is set and Vending Machine Labeling: creating records and passing the existing out in the Federalism sections of the Registration for Small Chains Under information on to consumers. FDA estimates that there is an average preamble to the proposed rule Section 4205 of the Patient Protection of 600,000 machines that sell implementing menu labeling and this and Affordable Care Act of 2010’’ are proposed rule. unpackaged products. FDA tentatively being consolidated under the estimates that between 5 and 10 percent FDA has requested a 3-year approval information collection request assigned of all operators of vending machines of the information collection OMB control number 0910– with covered vending machine food, or ’’ requirements under the same assigned 0665, Restaurant Menu and Vending an average of 810 operators, will need OMB Control Nos. 0910–0664 and Machine Labeling: Recordkeeping and to acquire nutrition information for at 0910–0665. In the Federal Register of Mandatory Third Party Disclosure least some covered vending machine January 31, 2011, FDA published two Under Section 4205 of the Patient food. FDA tentatively estimates that notices announcing the submission to Protection and Affordable Care Act of there are between 5 to 10 covered OMB of the information collection 2010.’’ In addition, this proposed rule is vending machine foods that do not requests for No. 0910–0664 (76 FR 5384) a revision request in which these two include nutrition information per and No. 0910–0665 (76 FR 5380). information collection requests will be operator, so that the average number of Elsewhere in this Federal Register, FDA further revised with regard to the possible new calorie analyses would be published a proposed rule entitled estimated burden of the proposed rule 6,480 (8 items/firm x 810 firms). FDA ‘‘Food Labeling; Nutrition labeling of on vending machine operators. The requests comment on these estimates. standard menu items in restaurants and revised information collection request Based on data from FDA’s similar retail food establishments’’ (the for 0910–0665 will be renamed Recordkeeping Cost Model (Ref. 28), we Menu Labeling proposed rule). As ‘‘Restaurant Menu and Vending Machine estimate approximately 4 hours as the noted, the information collection Labeling: Registration, Recordkeeping time per covered vending machine food requests previously submitted sought and Mandatory Third Party Disclosure for creating the record of nutritional OMB approval of the reporting, Under Section 4205 of the Patient information. Although the proposed recordkeeping, and third party Protection and Affordable Care Act of rule does not mandate recordkeeping, disclosure burdens of section 4205, not 2010.’’ Upon approval of this revision vending machine operators will likely the provisions of the Menu Labeling request, the information collection need to be able to ensure that calorie proposed rule. With that proposed rule, request for OMB control number 0910– disclosures for covered vending FDA submitted a revised information 0664 will be discontinued. machine foods are accurate and collection request seeking OMB D. Analysis of Changes in Burden consistent without needing to re-analyze approval of the changes caused by the Estimates Caused by the Proposed Rule these foods. The estimated number of Menu Labeling proposed rule to the hours required for new calorie analysis Description of Respondents: The collections approved under OMB in the first year is then 25,920 hours. likely respondents to this information Control Nos. 0910–0664 and 0910–0665. This number is displayed in the first collection are operators of 20 or more This proposed rule seeks further row of table 3 of this document. vending machines. The following revision of those information collections FDA believes that the subgroup of analysis provides FDA’s estimate of the with regard to the recordkeeping and covered vending machine foods sold in changes caused by this proposed rule to third party disclosure burdens for these vending machines is the previously approved recordkeeping vending machine operators caused by approximately constant. If there is 0.5 and third party disclosure burdens for this proposed rule. percent growth or turnover in the vending machine operators. The number of firms providing these B. Revision of OMB Control No. 0910– analysis of burden included in this unpackaged foods, then approximately 0665 by the Proposed Rule document is drawn from the detailed four new firms will become subject to Preliminary Regulatory Impact Analysis section 4205 of the Affordable Care Act These estimated annual which is available at http:// and the proposed requirements in a recordkeeping burdens have changed www.regulations.gov, Docket No. FDA– given year. The burden associated with from the burdens estimated for the OMB 2011–F–0171, and is also available on these firms would be 128 hours (4 firms control number 0910–0665 30 day FDA’s Web site at http://www.fda.gov/ × 8 items/firm × 4 hours/item). This notice (76 FR 5380, January 31, 2011). Food/LabelingNutrition/ amount is given in second row of table Total initial hours have risen by 1,920 ucm217762.htm. 7 of this document. due to an increase in the estimated Most food sold from vending These estimated annual number of recordkeepers from 600 to machines is subject to nutrition labeling recordkeeping burdens have changed 915 and an increase in the number of requirements under section 403(q) of the from the burdens estimated for the OMB hours per record from 2 hours to 4 FD&C Act and § 101.9, which means control number 0910–0665 30-day hours. The estimated burden of that calorie content is already collected. notice (76 FR 5380, January 31, 2011). recurring hours increased by 8 hours to A likely scenario in response to vending Total initial hours have risen by 1,920 128 hours. This estimate of third party machine labeling is that food due to an increase in the estimated disclosure hours has decreased by manufacturers will include a set of number of recordkeepers from 600 to approximately 13.2 million hours, from calorie label stickers in each case of 915 and an increase in the number of the 14 million hours estimate given in product. This would be efficient both hours per record from 2 hours to the 30-day notice. because most manufacturers will 4 hours. The estimated burden of

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recurring hours increased by 8 hours to increase in the number of initial analysis that FDA was able to collect in 128 hours. This change is due to an recordkeepers), and the increase in the the interim. increase in the estimated number of new number of hours per record. These operators (which stems from the changes are due to additional data and

TABLE 3—ESTIMATED ANNUAL RECORDKEEPING BURDEN: CALORIE ANALYSIS AND RECORDING

Average Number of Number of Total annual burden per Total capital Type of response recordkeepers records per records recordkeeping Total hours costs for recordkeeper (in hours) recordkeeping

Initial hours for vending operators ...... 810 8 6,480 4 25,920 $1.3 million. Recurring hours for vending operators 4 8 32 4 128 $6,400.

Total ...... 26,048 1 There are no operating and maintenance costs associated with this collection of information.

The third party disclosure burden for hours needed for third party disclosure has decreased by approximately 13.2 vending machine operators is the time is then 816,000 hours (10,800 firms × million hours, from the 14 million hours necessary to install calorie displays on 444 machines/firm × 0.17 hours/ estimate given in the 30-day notice. In their vending machines. In the PRIA, display). This amount is recurring in addition, we no longer estimate any FDA estimates an average, recurring every year, and is given in table 4 of this growth in the number of hours, given hourly burden of 0.17 hours per document. that data shows no significant increase machine per year to install and maintain These estimated annual third party in the number of vending machines over the displays. FDA estimates an average disclosure burdens have changed from the last several years. These changes are of 4.8 million machines are serviced by the burdens estimated for the OMB due to additional data and analysis that 10,800 operators, for an average number Control Number 0910–0665 30-day FDA was able to collect in the interim. of machines per operator of 444 notice (76 FR 5380, (Jan. 31, 2011)). This machines. The estimated recurring estimate of third party disclosure hours

TABLE 4—ESTIMATED ANNUAL THIRD PARTY DISCLOSURE BURDEN: CALORIE CONTENT

Number of Average Number of disclosures Total annual burden per Total capital Total operating Type of respondent respondents per disclosures disclosure Total hours costs costs respondent (in hours)

Recurring burden 10,800 444 4,800,000 0.17 816,000 $4.8 million ...... $19.2 million. for vending oper- ators.

The current total reporting burden for agencies to ‘‘construe * * * a Federal voluntary provision of nutrition menu labeling and vending machine statute to preempt State law only where information requirements under [21 operator registration as required by the statute contains an express U.S.C. 343(q)(5)(H)(ix)].’’ (21 U.S.C. 343– section 4205, now under review at OMB preemption provision or there is some 1(a)(4)). If this proposed rule is made under No. 0910–0664, is 820 hours. The other clear evidence that the Congress final, the final rule would create estimated reporting burden under the intended preemption of State law, or requirements for nutrition labeling of Menu Labeling proposed rule is 2,190 where the exercise of State authority food under 21 U.S.C. 343(q) that would hours, an increase of 1,370 hours. As conflicts with the exercise of Federal preempt certain non-identical State and described in the paperwork analysis in authority under the Federal statute.’’ local nutrition labeling requirements. that proposed rule, this increase is due Federal law includes an express Section 4205 of the Affordable Care Act also included a Rule of Construction to an increase in the estimated number preemption provision that preempts providing that ‘‘Nothing in the of respondents. This proposed rule does ‘‘any requirement for nutrition labeling amendments made by [section 4205] not further revise those estimates. of food that is not identical to the In compliance with the PRA, the shall be construed—(1) to preempt any requirement of section [21 U.S.C. agency has submitted the information provision of State or local law, unless 343(q)]’’ (21 U.S.C. 343–1(a)(4)), except collection provisions of this proposed such provision establishes or continues ‘‘ rule to OMB for review. Interested that this provision does not apply to into effect nutrient content disclosures persons are requested to send comments food that is offered for sale in a of the type required under section regarding the information collection to restaurant or similar retail food 403(q)(5)(H) of the Federal Food, Drug, OMB (see DATES and ADDRESSES sections establishment that is not part of a chain and Cosmetic Act [21 U.S.C. of this document). with 20 or more locations doing 343(q)(5)(H)] (as added by subsection(b)) business under the same name and is expressly preempted under VII. Federalism (regardless of the type of ownership of subsection (a)(4) of such section; (2) to FDA has analyzed this proposed rule the locations) and offering for sale apply to any State or local requirement in accordance with the principles set substantially the same menu items respecting a statement in the labeling of forth in Executive Order 13132. Section unless such restaurant or similar retail food that provides for a warning 4(a) of the Executive order requires food establishment complies with the concerning the safety of the food or

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component of the food; or (3) except as An alternative to FDA’s interpretation regulatory gap that would be provided in section 403(q)(5)(H)(ix) of of the provisions of section 4205 of the inconsistent with the purposes of the Federal Food, Drug, and Cosmetic Affordable Care Act related to section 4205. It would also impose a Act [21 U.S.C. 343(q)(5)(H)(ix)] (as preemption could leave less room for restriction and burden on the States and added by subsection (b)), to apply to any States and localities to require nutrition localities that is inconsistent with the restaurant or similar retail food labeling for food sold from vending Federalism principles expressed in establishment other than a restaurant or machines. Under this alternative Executive Order 13132, as well as a similar retail food establishment interpretation, State or local nutrition substantial administrative burden on described in section 403(q)(5)(H)(i) of labeling requirements for food sold from FDA in the event states petition for such Act [21 U.S.C. 343(q)(5)(H)(i)].’’ vending machines would be preempted exemption. (Pub. L. 111–148, § 4205(d), 124 Stat. because such nutrition labeling FDA requests comments on the 119, 576 (2010)0. requirements would be ‘‘nutrition Agency’s interpretation of the FDA interprets the provisions of content disclosures of the type required provisions of section 4205 of the Section 4205 of the Affordable Care Act under [21 U.S.C. 343(q)(5)(H)]’’ and Affordable Care Act related to related to preemption to mean that would not fall within the exception to preemption, as well as on the alternative States and local governments may not preemption in 21 U.S.C. 343–1(a)(4) interpretation described in the impose nutrition labeling requirements (‘‘except that this paragraph does not Federalism section. FDA also requests for food sold in vending machines that apply to food that is offered for sale in comments on the use of the petition must comply with the Federal a restaurant or similar retail food process in the context. In addition, the requirements of 21 U.S.C. 343(q)(5)(H), establishment that is not part of a chain Agency requests comments on other unless the State or local requirements with 20 or more locations * * *’’). potential interpretations that interested are identical to the Federal Under this alternative interpretation, persons identify as appropriate given requirements. In other words, States and States and localities could not have both the preemption-related language of localities cannot have additional or nutrition labeling requirements for section 4205 and the statutory goals. different nutrition labeling requirements vending machines that were not In addition, the express preemption for food sold either (1) from vending identical to the Federal requirements, provisions of 21 U.S.C. 343–1(a)(4) do machines that are operated by a person unless they successfully petitioned not preempt any State or local engaged in the business of owning or FDA. The position that no State or requirement respecting a statement in operating 20 or more vending machines locality may have a vending machine the labeling of food that provides for a subject to the requirements of 21 U.S.C. nutrition labeling requirement not warning concerning the safety of the 343(q)(5)(H)(viii) or (2) from vending identical to the Federal requirements, food or component of the food. This is machines operated by a person not regardless of how many vending clear from both the literal language of 21 subject to the requirements of 21 U.S.C. machines the operator owns or operates, U.S.C. 343–1(a)(4) with respect to the 343(q)(5)(H)(viii) who voluntarily elects was the position in the guidance issued scope of preemption and from the Rule to be subject to those requirements by by FDA on August 25, 2010 (‘‘Guidance of Construction at section 4205(d)(2) of registering biannually under 21 U.S.C. for Industry: Questions and Answers the Affordable Care Act. 343(q)(5)(H)(ix). Regarding the Effect of Section 4205 of VIII. Environmental Impact Otherwise, for food sold from vending the Patient Protection and Affordable The Agency has determined under 21 machines not subject to the nutrition Care Act of 2010 on State and Local CFR 25.30(k) that this action is of a type labeling requirements of 21 U.S.C. Menu and Vending Machine Labeling that does not individually or 343(q)(5)(H)(viiii), States and localities Laws’’ (75 FR 52427)). Federal law cumulatively have a significant effect on may impose nutrition labeling provides that, upon petition, FDA may the human environment. Therefore, requirements. Under FDA’s exempt State or local requirements from neither an environmental assessment interpretation of the Rule of the express preemption provisions of 21 nor an environmental impact statement Construction in section 4205(d)(1) of the U.S.C. 343–1(a) under certain is required. Affordable Care Act, nutrition labeling conditions. 21 U.S.C. 343–1(b). FDA has for food sold from these vending promulgated regulations at 21 CFR IX. Comments machines would not be ‘‘nutrient 100.1 describing the petition process Interested persons may submit to the content disclosures of the type required that is available to State and local Division of Dockets Management (see under [21 U.S.C. 343(q)(5)(H)]’’ and, governments to request such ADDRESSES) either electronic or written therefore, would not be preempted. exemptions from preemption. Under the comments regarding this document. It is Under this interpretation, States and interpretation being proposed by FDA, only necessary to send one set of localities would be able to continue to for food sold from vending machines comments. It is no longer necessary to require nutrition labeling for food sold that is not subject to the nutrition send two copies of mailed comments. from vending machines which are labeling requirements of 21 U.S.C. Identify comments with the docket exempt from nutrition labeling under 21 343(q)(5)(H), States and localities may number found in brackets in the U.S.C. 343(q)(5). This interpretation is establish or continue to impose heading of this document. Received consistent with the fact that Congress nutrition labeling requirements. Under comments may be seen in the Division included vending machine operators in the alternative interpretation described of Dockets Management between 9 a.m. the voluntary registration provision of above, there would be vending and 4 p.m., Monday through Friday. 21 U.S.C. 343(q)(5)(H)(ix). There would machines for which the Federal have been no need to include vending government has not required nutrition X. References machine operators in the provision that labeling and for which States and The following references have been allows opting into the Federal localities would also be precluded from placed on display in the Division of requirements if States and localities establishing such labeling requirements Dockets Management (see ADDRESSES) could not otherwise require non- unless they successfully petitioned FDA and may be seen by interested persons identical nutrition labeling for food sold and a rulemaking was completed. This between 9 a.m. and 4 p.m., Monday from any vending machines. approach would risk creating a through Friday. (FDA has verified the

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Web site addresses, but FDA is not Rationality and Society, 18(1): 67–94, Therefore, under the Federal Food, responsible for any subsequent changes 2006. Drug, and Cosmetic Act and under to the Web sites after this document 17. Ali, M.M., H. Fang, and J. Rizzo. (2010b). authority delegated to the Commissioner publishes in the Federal Register.) ‘‘Body Weight, Self-Perception and of Food and Drugs, it is proposed that Mental Health among Adolescents.’’ 1. Merriam Webster Collegiate Dictionary, Journal of Mental Health Policy and 21 CFR parts 11 and 101 be amended as Tenth Edition, 1993. Economics, 13(2): 53–63 (2010b). follows: 2. Food and Drug Administration, Food 18. Puhl, R., and K.D. Brownell. ‘‘Bias, Labeling Guide, pg. 7, 2009. Discrimination, and Obesity.’’ Obesity PART 11—ELECTRONIC RECORDS; http://www.fda.gov/FoodLabelingGuide/ Research, 9(12): 788–805, 2001. ELECTRONIC SIGNATURES accessed, March 28, 2011. 19. Cawley, J. ‘‘The Impact of Obesity on 1. The authority citation for 21 CFR 3. Automatic Merchandiser. ‘‘2010 State of Wages.’’ Journal of Human Resources, the Vending Industry Report.’’ http:// 39(2): 451–474, 2004. part 11 continues to read as follows: www.vendingmarketwatch.com/content/ 20. Finkelstein, E.A., J.G. Trogdon, J.W. Authority: 21 U.S.C. 321–393; 42 U.S.C. reports/ accessed, November 09, 2010. Cohen and W. Dietz. ‘‘Annual Medical 262. 4. National Automatic Merchandising Spending Attributable to Obesity: Payer- Association. ‘‘Comments of: The National and Service-Specific Estimates.’’ Health 2. Section 11.1 is amended by adding Automatic Merchandising Association.’’ Affairs, 28(5): w822–w831, 2009. paragraph (h) to read as follows: Docket No. FDA–2010–N–0298 2010. 21. Lakdawalla, D. and T.J. Philipson. ‘‘The 5. U.S. Small Business Administration. Growth of Obesity and Technological § 11.1 Scope. ‘‘Table of Small Business Size Standards Change: A Theoretical and Empirical * * * * * Matched to North American Industry Examination,’’ NBER Working Paper No. (h) This part does not apply to ’’ Classification System Codes, Effective 8946, 2002. electronic signatures obtained under November 5, 2010. http://www.sba.gov/ 22. Philipson, T.J. and R.A. Posner, ‘‘The _ § 101.8(d) of this chapter. idc/groups/public/documents/sba Long-Run Growth in Obesity as a homepage/serv_sstd_tablepdf.pdf, Function of Technological Change.’’ PART 101—FOOD LABELING accessed 12/10/2010. NBER Working Paper No. 7423, 1999. 6. Jed, E. ‘‘Operators Find Today’s Patrons 23. Cutler, D.M., E.L. Glaeser, and J.M. 3. The authority citation for 21 CFR Favor ‘Better-For-You’ Food Selections Shapiro, ‘‘Why Have Americans Become part 101 continues to read as follows: In Vending,’’ Vending Times, 41:8, 2001. More Obese?’’ Journal of Economic 7. Finkelstein, E.A. and K.L. Strombotne. Perspectives, 17: 93–118, 2003. Authority: 15 U.S.C. 1453, 1454, 1455; 21 ‘‘The Economics of Obesity.’’ American 24. Chou, S-Y., M. Grossman, and H. Saffer. U.S.C. 321, 331, 342, 343, 348, 371; 42 U.S.C. Journal of Clinical Nutrition, 91(5): ‘‘An Economic Analysis of Adult 243, 264, 271. 1520S–1524S, May 2010. Obesity: Results from the Behavioral 4. Section 101.8 is added to subpart 8. Philipson, T. and R. Posner. ‘‘Is the Obesity Risk Factor Surveillance System.’’ A to read as follows: Epidemic a Public Health Problem? A Journal of Health Economics, 23: 565– Decade of Research on the Economics of 587, 2004. § 101.8 Vending machines. Obesity.’’ NBER Working Paper Series, 25. Burke, M. and F. Heiland. ‘‘Social (a) Definitions. The definitions of 14010, May 2008. Dynamics of Obesity.’’ Economic Inquiry, 9. Downs, J.S., G. Loewenstein and J. terms in section 201 of the Federal 45(3), 571–591, 2007. Food, Drug, and Cosmetic Act apply to Wisdom. ‘‘Strategies for Promoting 26. French, S.A., R.W. Jeffery, M. Story, P. Healthier Food Choices.’’ American Hannan, and P. Snyder. ‘‘A Pricing such terms when used in this section. In Economic Review: Papers and Strategy to Promote Low-Fat Snack addition, for the purposes of this Proceedings, 99(2): 1–10, 2009. Choices through Vending Machines’’. section: 10. O’Donoghue, T. and M. Rabin. ‘‘The American Journal of Public Health, 87: Authorized official of a vending Economics of Immediate Gratification.’’ 849–851, 1997. machine operator means the owner, Journal of Behavioral Decision Making, 27. U.S. Department of Agriculture Economic operator, or agent in charge or any other 13(2): 233–250, 2000. Research Service. ‘‘Table 15: Sales of person authorized by the vending ‘‘ 11. O’Donoghue, T. and M. Rabin. Doing it meals and snacks away from home by machine operator to register the vending Now or Later.’’ American Economic type of outlet.’’ Food CPI and Review, 89(1): 103–124, 1999. machine operator, which is not Expenditures: Food Expenditure Tables. otherwise subject to the requirements of 12. Wang, Y., M.A. Beydoun, L. Liang, B. http://www.ers.usda.gov/Briefing/ Cabellero and S.K. Kumanyika, ‘‘Will all CPIFoodAndExpenditures/Data/ section 403(q)(5)(H) of the Federal Food, Americans Become Overweight or Accessed 10/8/2010. Drug, and Cosmetic Act (21 U.S.C. Obese? Estimating the Progression and 28. Eastern Research Group, Inc. ‘‘Evaluation 343(q)(5)(H)) with FDA for purposes of Cost of the US Obesity Epidemic.’’ of Recordkeeping Costs for Food paragraph (d) of this section. Obesity, 16(10): 2323–2330, 2008. Manufacturers, Final Report.’’ Prepared Vending machine means a self-service 13. Ogden, C.L. and M.D. Carroll. ‘‘Prevalence for Andy Estrin and Cristina McLaughlin device that, upon insertion of a coin, of Overweight, Obesity, and Extreme of FDA’s Center for Food Safety and paper currency, token, card, or key, or Obesity Among Adults: United States, Applied Nutrition. Prepared by Aylin by optional manual operation, dispenses Trends 1976–1980 Through 2007–2008.’’ Sertkaya, Ayesha Berlind and Seda National Center for Health Statistics, servings of food in bulk or in packages, Erdem. Contract No. 223–01–2461, Task or prepared by the machine, without the June 2010. Order Number 5, February 2007. 14. Sullivan, P.W., V. Ghusheyan, and R.H. necessity of replenishing the device Ben-Joseph. ‘‘The Effect of Obesity and List of Subjects between each vending operation. Cardiometabolic Risk Factor on Vending machine operator means a 21 CFR Part 11 Expenditures and Productivity in the person(s) or entity that controls or US.’’ Obesity, 16: 2155–2162, 2008. Administrative practice and directs the function of the vending 15. Ali, M.M., A. Amialchuk, and F. Renna. procedure, Computer technology, machine, including deciding which ‘‘Social Network and Weight Reporting and recordkeeping articles of food are sold from the Misperception Among Adolescents’’. Southern Economic Journal, requirements. machine or the placement of the articles of food within the vending machine, Forthcoming, (2010a). 21 CFR Part 101 16. Cawley, J., K. Joyner, and J. Sobal. ‘‘Size and is compensated for the control or Matters: The Influence of Adolescent’s Food labeling, Nutrition, Reporting direction of the function of the vending Weight and Height on Dating and Sex.’’ and recordkeeping requirements. machine.

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(b) Articles of food not covered. (2) Calorie declaration. (i) The (D) Where the vending machine only Articles of food dispensed from a number of calories must be clear and displays a vignette or name of the food vending machine are not covered conspicuous for a covered vending item, the calorie information must be in vending machine food if: machine food and declared in the close proximity to the vignette or name (1) The prospective purchaser can following manner: or in close proximity to the selection view the entire Nutrition Facts Panel on (A) To the nearest 5-calorie increment button. the label of the vended food without an up to and including 50 calories and 10- (E) For electronic vending machines obstruction. The Nutrition Facts Panel calorie increment above 50 calories, (e.g., machines with digital or electronic must be the information in the format except that amounts less than 5 calories or liquid crystal display (LCD) displays), required in § 101.9(c) and (d). The may be expressed as zero. the calorie information may be Nutrition Facts Panel must be in a size (B) The term ‘‘Calories’’ or ‘‘Cal’’ must displayed when the selection numbers that permits the prospective purchaser appear adjacent to the caloric content are entered but before the selection is to be able to easily read the nutrition value for each food in the vending confirmed. information contained in the Nutrition machine. (F) For vending machines with Facts Panel on the label of the article of (C) For calorie declarations in or on limited choices, e.g., popcorn, the food in the vending machine. Smaller the vending machine, the declaration of declaration of calories may appear on formats allowed for nutrition facts for calories must be in a type size no the face of the machine so long as the certain food labeling under FDA smaller than the name of the food on the declaration is prominent, not crowded regulation at § 101.9 are not considered machine, not the label, selection by other labeling on the machine, and to be a size that a prospective purchaser number, or price of the food as the type size is reasonably related to the is able to easily read. displayed on the vending machine, largest print on the vending machine. (2) An article of food sold from a whichever is smallest, with the same (d) Voluntary provision of calorie vending machine provides visible prominence, i.e., the same color, or in a labeling for foods sold from vending nutrition information at the point of color at least as conspicuous, as the machines. purchase. The visible nutrition color of the name, if applicable, or price (1) Applicability. An authorized information at the point of purchase of the food or selection number, and the official of a vending machine operator includes the total number of calories for same contrasting background, as the that is not subject to the requirements of the article of food, as dispensed, at the item it is in closest proximity to, i.e., section 403(q)(5)(H)(viii) of the Federal point of purchase. This visible nutrition name, selection number, or price of the Food, Drug, and Cosmetic Act may information must appear on the food food item as displayed on the machine. voluntarily register with FDA to be label itself. This visible nutrition (D) The number of calories for single- subject to the requirements established information must be clear and serving packaged food declared on the in paragraph (c)(2) of this section. An conspicuous and easily read on the sign must be identical to the number of authorized official of a vending machine article of food while in the vending calories that are declared in the operator that voluntarily registers machine, in a type size reasonably Nutrition Facts, if applicable. cannot be subject to any State or local related to the largest printed matter on (E) The number of calories for nutrition labeling requirements that are the label and with sufficient color and packaged foods that contain multiple not identical to the requirements in contrasting background to other print on servings must include the total calories 403(q)(5)(H) of the Federal Food, Drug, the label to permit the prospective present in the covered vending machine and Cosmetic Act. (2) Who may register? A vending purchaser to clearly distinguish the food. The vending machine operator machine operator that is not otherwise information. may voluntarily disclose calories per subject to the requirements of section (c) Requirements for calorie labeling serving in addition to the total calories 403(q)(5)(H) of the Federal Food, Drug, for certain food sold from vending for the food. machines. and Cosmetic Act may register with (ii) Calorie information for covered (1) Applicability; covered vending FDA. vending machine food must be placed machine food. For the purposes of this (3) What information is required? The prominently in the following manner: section, the term ‘‘covered vending vending machine operator must provide machine food’’ means an article of food (A) This calorie information may be FDA with the following information: that is: placed on a sign in close proximity to (i) The contact information (including (i) Sold from a vending machine that: the article of food or selection button, name, address, phone number, e-mail (A) Does not permit the consumer to i.e., in, on, or adjacent to the vending address), for the vending machine examine the Nutrition Facts Panel prior machine, but not necessarily attached to operator; to purchase as provided in paragraph (b) the vending machine, so long as the sign (ii) The address of the location of each of this section, or otherwise provide is visible at the same time as the food, vending machine owned or operated by visible nutrition information at the its name, price, or selection button or the vending machine operator that is point of purchase as provided in selection number is visible. being registered. paragraph (b); (B) When the calorie information is in (iii) Preferred mailing address (if (B) Is operated by a person engaged in or on the vending machine, the calorie different from the vending machine the business of owning or operating 20 declaration must be in the same color or operator address), for purposes of or more vending machines; and a color at least as conspicuous as the receiving correspondence; and (C) Is a vending machine with a color of the name or the price of the (iv) Certification that the information selection button; or food or selection number. submitted is true and accurate, that the (ii) Sold from a vending machine that (C) When the calorie information is person or firm submitting it is is operated by a vending machine declared on a sign adjacent to the authorized to do so, and that each operator that has voluntarily elected to vending machine, the calorie registered vending machine will be be subject to the requirements of this declaration must be in type that is all subject to the requirements of this section by registering with the FDA black or one color printed on a white or section. under the provisions of paragraph (d) of other neutral background that contrasts (v) Information should be submitted this section. with the type color. by e-mail by typing complete

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information into the portable document register by visiting http://www.fda.gov/ (e) Signatures. Signatures obtained format (PDF) form, saving it on the menulabeling. FDA has created a form under paragraph (d) of this section that registrant’s computer, and sending it by that contains fields requesting the meet the definition of electronic e-mail to [email protected]. information in paragraph (d) of this signatures in § 11.3(b)(7) of this chapter If e-mail is not available, the registrant section and made the form available at are exempt from the requirements of can either fill in the PDF form and print this Web site. Registrants must use this part 11 of this chapter. it out (or print out the blank PDF and form to ensure that complete fill in the information by hand or information is submitted. Dated: March 28, 2011. typewriter), and either fax the (vii) To keep the establishment’s Margaret A. Hamburg, completed form to 301–436–2804 or registration active, the authorized Commissioner of Food and Drugs. mail it to FDA, White Oak Building 22, official of the vending machine operator Kathleen Sebelius, must register every other year within 60 Rm. 0209, 10903 New Hampshire Ave., Secretary of Health and Human Services. Silver Spring, MD 20993. days prior to the expiration of the (vi) Authorized officials of a vending vending machine operator’s current [FR Doc. 2011–8037 Filed 4–1–11; 4:15 pm] machine operator who elects to be registration with FDA. Registration will BILLING CODE 4160–01–P subject to the Federal requirements can automatically expire if not renewed.

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