Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Restaurant Menu and Vending Machine Labeling: Recordkeeping and Mandatory Third Party Disclosure Under Section 4205 of the Patient Protection and Affordable Care Act of 2010, 5380-5384 [2011-1993]

Agencies

• Food and Drug Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 76, Number 20 (Monday, January 31, 2011)]
[Notices]
[Pages 5380-5384]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1993]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0567]


Agency Information Collection Activities; Submission for Office 
of Management and Budget Review; Comment Request; Restaurant Menu and 
Vending Machine Labeling: Recordkeeping and Mandatory Third Party 
Disclosure Under Section 4205 of the Patient Protection and Affordable 
Care Act of 2010

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a 
proposed collection of information has been submitted to the Office of 
Management and Budget (OMB) for review and clearance under the 
Paperwork Reduction Act of 1995.

DATES: Fax written comments on the collection of information by March 
2, 2011.

ADDRESSES: To ensure that comments on the information collection are 
received, OMB recommends that written comments be faxed to the Office 
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, 
FAX: 202-395-7285, or e-mailed to oira_submission@omb.eop.gov. All 
comments should be identified with the OMB control number 0910-0665. 
Also include the FDA docket number found in brackets in the heading of 
this document.

FOR FURTHER INFORMATION CONTACT: Denver Presley, Jr., Office of 
Information Management, Food and Drug Administration, 1350 Piccard Dr., 
PI50-400B, Rockville, MD 20850, 301-796-3793.

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has 
submitted the following proposed collection of information to OMB for 
review and clearance.

Restaurant Menu and Vending Machine Labeling: Recordkeeping and 
Mandatory Third Party Disclosure Under Section 4205 of the Patient 
Protection and Affordable Care Act of 2010--(OMB Control Number 0910-
0665)--Revision

    On March 23, 2010, the President signed into law the Patient 
Protection and Affordable Care Act of 2010 (``Affordable Care Act'') 
(Pub. L. 111-148). Section 4205 of the legislation, which principally 
amends sections 403 and 403A of the Federal Food, Drug, and Cosmetic 
Act (the FD&C Act) (21 U.S.C. 343 and 343-1), requires chain 
restaurants and similar retail food establishments (SRFE) with 20 or 
more locations doing business under the same name and offering for sale 
substantially the same menu items (hereinafter ``chain retail food 
establishments''), as well as operators of 20 or more vending machines 
(hereinafter ``chain vending machine operators''), to disclose certain 
nutrition information for certain food items offered for sale so that 
consumers can make more informed choices about the food they purchase. 
Section 4205 of the Affordable Care Act preempts State and local 
governments from establishing menu labeling requirements for chain 
retail food establishments and vending machine nutrition labeling 
requirements that are not ``identical to'' the section 4205 
requirements.
    Section 4205 became effective on the date the law was signed, March 
23, 2010. The provisions that went into immediate effect are as 
follows:
    For chain retail food establishments:
     Disclosing the number of calories in each standard menu 
item on menus and menu boards,
     Making additional written nutrition information available 
to consumers upon request,
     Providing a statement on menus and menu boards about the 
availability of the written nutrition information, and
     Providing calorie information (per serving or per food 
item) for self-service items and food on display, in a sign adjacent to 
each food item.

For chain vending machine operators:
     Providing a sign in close proximity to each article of 
food (or the selection button) that discloses the number of calories 
contained in the article, unless a prospective purchaser is able to 
examine the Nutrition Facts Panel before purchasing the article, or 
visible nutrition information is otherwise provided at the point of 
purchase.


[[Page 5381]]


Section 4205 of the legislation requires recordkeeping--for the calorie 
analysis--and a third party disclosure--for the menu and vending 
machine labeling.
    In the Federal Register of August 25, 2010 (75 FR 52427), FDA 
published a notice of availability of the guidance document entitled 
``Guidance for Industry: Questions and Answers Regarding the Effect of 
Section 4205 of the Patient Protection and Affordable Care Act of 2010 
on State and Local Menu and Vending Machine Labeling Laws.'' The 
guidance is intended to clarify section 4205's effect on State and 
local menu and vending machine labeling laws, and to ensure that 
industry and State and local government understand the immediate 
effects of the law. Persons with access to the Internet may obtain the 
guidance at the following Web site: https://www.cfsan.fda.gov/~dms/
guidance.html.
    FDA published a second notice of availability in the Federal 
Register of August 25, 2010 (75 FR 52426), announcing the availability 
of a draft guidance document entitled ''Draft Guidance for Industry: 
Questions and Answers Regarding Implementation of the Menu Labeling 
Provisions of Section 4205 of the Patient Protection and Affordable 
Care Act of 2010.'' In the Federal Register of January 25, 2011 (76 FR 
4360), FDA announced the withdrawal of this draft guidance and its 
intention to complete the notice-and-comment rulemaking process for 
section 4205 before initiating enforcement activities based, in part, 
on extensive comments on the draft guidance submitted to the Agency.
    Menu and vending machine labeling will be used by consumers to 
assess the calorie content of their purchases. The purpose of the 
disclosure is to allow consumers to choose foods that are appropriate 
for their energy needs. Because consumers do not observe the 
preparation of food prepared by restaurants or SRFE, and because many 
of these foods were exempted from nutrition labeling requirements under 
the National Labeling Education Act (NLEA), consumers were not able to 
ascertain the calorie content of this food, and therefore could not 
make informed decisions about how that food fits their calorie 
requirements without the disclosure. The calorie information will be 
collected and recorded by the chain retail food establishments and 
chain vending machine operators that are required to disclose calorie 
information to their customers. The covered entities will use the 
records to ensure that calorie information that they disclose is 
accurate.
    Description of Respondents: Respondents to this collection of 
information include chain retail food establishments and chain vending 
machine operators.
    In accordance with 5 CFR 1320.8(d), in the Federal Register of 
November 5, 2010 (75 FR 68361) (November 5, 2010 notice), FDA published 
a 60-day notice requesting public comment on the proposed collection of 
information. FDA received 20 letters in response to the notice, each 
containing 1 or more comments.
    (Comment 1) FDA received several comments on the utility of the 
vending machine labeling provisions of section 4205 of the Affordable 
Care Act. Some comments argued that the Affordable Care Act's vending 
machine labeling provisions have very little utility because the 
consumer is already familiar with the calorie content of vending 
machine products. Other comments stated that vending machine labeling 
would be useful to the consumer because grouping items in vending 
machines into categories (e.g., beverages, chips, gums) on a menu would 
help consumers select items by comparing similar items.
    (Response) As noted previously, section 4205 of the Affordable Care 
Act amends section 403(q) of the FD&C Act to, among other things, 
require vending machine operators that own or operate 20 or more 
vending machines to disclose nutrient content for certain food articles 
sold from vending machines; thus, this requirement is imposed by the 
law itself. Congress required FDA to publish a proposed rule by March 
23, 2011, explaining how it will implement the law. Comments such as 
these on the utility of the provisions of the law are being considered 
by FDA in developing the proposed rules. FDA will also accept comments 
on the proposed rule and will consider them fully in developing final 
rules.
    (Comment 2) Several comments suggested ways in which the burden of 
disclosing calorie content of vending machine products could be 
lessened. One comment suggested that vendors be permitted to post a 
sheet or menu on vending machines that lists the caloric contents of 
all their products. Another comment proposed electronic posting of 
calorie information, similar to the way that some vending machines post 
prices (the consumer looks it up by pressing the item number before 
making a purchase). Several other comments suggested ways in which the 
burden of disclosing calorie content on restaurant menus could be 
lessened. For example, comments suggested that restaurants be allowed 
flexibility with menu labeling because of the many types of menus and 
menu boards, citing the need for different menus for full service vs. 
quick service, drive-through service, carryout orders, and self-service 
food or buffets. Suggestions for flexibility included permitting the 
calorie disclosures on handouts or placards; permitting disclosures to 
be brief, only required on one page of the menu or one panel of the 
menu board, and combined with other required statements and 
disclosures; permitting calorie disclosure for self-service beverages 
on the menu board as opposed to at the beverage fountain; and 
permitting a standard per ounce calorie disclosure for standardized 
beverages such as coffee and orange juice.
    (Response) The requirement that affected chain retail food 
establishments and vending machine operators disclose certain nutrition 
information for certain food items offered for sale is imposed by 
section 4205 of the Affordable Care Act. Comments such as these on 
minimizing the burden of the law are being considered by FDA in 
developing the proposed rule. FDA will also accept comments on the 
proposed rules and will consider them fully in developing final rules.
    (Comment 3) Several comments argued that FDA underestimated the 
burden hours and costs associated with complying with the provisions of 
section 4205 of the Affordable Care Act. Several comments argued that 
the annual burden hours will be higher than FDA's estimate. One comment 
argued that FDA did not fully consider the time needed to acquire the 
required nutrition information. One comment suggested that FDA provide 
estimated burden hours individualized for each industry (i.e., 
convenience stores, restaurants, and grocery stores). Some comments 
argued that FDA underestimated the number of affected businesses in the 
United States and their rate of growth. Other comments argued that the 
percentages of the industries that will be impacted will be higher.
    (Response) FDA appreciates the data and suggestions provided in the 
comments. However, the Agency stands by its preliminary estimate of the 
paperwork burden resulting from section 4205 of the Affordable Care 
Act. Thus, FDA has not changed the burden hour estimates in tables 1 
and 2 of this document. This rough estimate of 14 million recurring 
hours in annual burden was a preliminary figure designed to cover a 
range of possible, non-specific requirements. During the upcoming 
rulemaking process, FDA

[[Page 5382]]

seeks to minimize the regulatory burden on small businesses, and we 
anticipate the actual burden may differ from the preliminary estimate, 
depending upon the specific requirements that will be laid out in the 
final rules.
    (Comment 4) Several comments had suggestions for the upcoming 
rulemaking.
    (Response) FDA appreciates the information provided in the comments 
and will consider them in the upcoming rulemakings.
    (Comment 5) One comment identified our inadvertent omission of the 
capital costs column in table 2 of the November 5, 2010 notice.
    (Response) We have corrected the table in this document by 
inserting the missing capital costs column for comment.
    FDA estimates the burden of this collection of information as 
follows.
    The burden is described in the following paragraphs in two parts: A 
recordkeeping burden associated with discovering and recording the 
calorie count for each menu/vending item and the third party disclosure 
burden associated with communicating that information to the consumer. 
The estimates are also separated for retail food service and vending 
operators. FDA estimates a total of 1,388,010 initial burden hours. 
This number has been divided by three in the following tables in order 
to annualize the burden hours over a 3-year period, yielding 141,222 
initial hours for recordkeeping and 312,448 initial hours for third 
party disclosure, for a sum of 462,670 initial hours. FDA estimates a 
total of 14,068,808 recurring hours, with nearly all of these for 
vending machine operators, including 31,408 recurring hours for 
recordkeeping and 14,037,400 recurring hours for third party 
disclosure.

Recordkeeping Burdens for Chain Retail Food Establishments

    The time burden for calorie analysis on chain retail food 
establishments is the time necessary for creating a record, managing 
the contracts for analysis, and communicating the results of the 
analysis to the outlets. FDA estimates the hourly burden of calorie 
analysis on these firms to be 4 hours per menu item.
    FDA estimates that there are approximately 1,069 restaurant chains, 
with 231,000 outlets, that will be required to disclose calorie 
information. On average, we estimate that a chain has 117 items on its 
menu, and that 48 percent of chain restaurants, or 516, do not already 
have calorie information. The hourly burden for restaurant chains is 
241,488 hours (= 516 chains x 117 items/chain x 4 hours/item).
    FDA estimates that there are 570 covered grocery and convenience 
store chains with an average of 40 standard menu items per chain. The 
hourly burden for grocery store chains is 91,200 hours ( = 570 chains x 
40 items/chain x 4 hours/item).
    FDA estimates that there are 420 other chains that will be covered 
by the proposed rule. With 40 menu items on average, the number of 
hours required to deal with calorie analysis at these other chains is 
67,200 hours ( = 420 chains x 40 items/chain x 4 hours/item).
    FDA has estimated that each of the 1,506 covered chains, on 
average, introduces new items or reformulates existing items 4 times 
per year. The recurring hourly burden of recordkeeping for new items, 
as displayed in the sixth row of table 1 of this document, is 24,096 
hours ( = 1,506 chains x 4 items/chain x 4 hours/item).
    FDA estimates that 30 chains will become newly covered under the 
requirements of the proposed rule each year. With an average number of 
menu items of 60 per chain, this would result in approximately 7,200 
hours ( = 30 chains x 60 items/chain x 4 hours/item). This amount is 
displayed in the seventh row of table 1 of this document.
    The final column of table 1 of this document gives the estimated 
capital costs associated with calorie and nutrition analysis. These are 
the costs of acquiring nutrition analyses. FDA has estimated that the 
average cost of a full analysis is $269 per menu item. These costs are 
calculated by multiplying this per item cost by the number of items in 
column three multiplied by the number of recordkeepers in column two.

                                   Table 1--Estimated Annual Recordkeeping Burden: Calorie Analysis and Recording \1\
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                                                                Annual frequency     Total
             Type of respondent                   Number of            per           annual     Hours per   Total hours        Total capital costs
                                                recordkeepers     recordkeeping     records       record
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Restaurant chains...........................               516               117       60,372            4      241,488  $16.2 million.
Grocery and Convenience Store chains........               570                40       22,800            4       91,200  $6.1 million.
Other chains................................               420                40       16,800            4       67,200  $4.5 million.
Vending operators...........................               600                20       12,000            2       24,000  $20,000.
Total initial hours.........................  ................  ................  ...........  ...........      423,888  $26.9 million.
New/Reformulated items......................             1,506                 4        6,024            4       24,096  $1.6 million.
New chains..................................                30                60        1,800            4        7,200  $0.5 million.
New vendors.................................                 3                20           60            2          120  $4,000.
    Total recurring hours...................  ................  ................  ...........  ...........       31,416  $2.1 million.
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\1\ There are no operating and maintenance costs associated with this collection of information.

Third Party Disclosure Burdens for Chain Retail Food Establishments

    The third party reporting burden for chain retail food 
establishments is the time necessary to display calorie information on 
menus, menu boards, displayed food, and other required locations. In 
practice, this is the time necessary to change out redesigned menu 
boards, FDA estimates 2 hours of time per menu board change.
    FDA estimates that limited service restaurant chains have an 
average of three menu boards or displays per establishment. With 
135,705 outlets having these displays, the total hourly burden 
estimated for third party disclosure at restaurants is 814,230 hours (= 
135,705 outlets x 3 displays/outlet x 2 hours/display).
    For grocery and convenience store chains, FDA estimates an average 
of 1 major menu board or display per establishment. With 41,945 
outlets, the total hourly burden is 83,890 hours (= 41,945 outlets x 1 
displays/outlet x 2 hours/display).
    For other covered chains, FDA estimates 33,114 covered outlets, 
each with an average of one major display or menu board. At 4 hours per 
disclosure, FDA estimates an hourly burden of 66,228 hours ( = 33,114 
outlets x 1 displays/outlet x 2 hours/display).

[[Page 5383]]

Recurring Disclosure Burdens for Chain Retail Food Establishments

    FDA estimates that the annual number of newly covered chains will 
be 30. At 20 establishments per chain, there will be 600 establishments 
at newly covered chains each year that will need to disclose calorie 
content. Taking an average number of displays equal to 2, the total 
hourly burden for disclosure due to newly covered chains is 2,400 hours 
( = 600 outlets x 2 displays/outlet x 2 hours/display).
    The final column of table 2 of this document gives the estimated 
capital costs associated with third party disclosure. These are the 
costs of acquiring new menu boards or displays. FDA has estimated that 
the average cost of menu board to be $550. These costs are calculated 
by multiplying this per menu board cost by the frequency of disclosures 
in column three multiplied by the number of respondents in column two.
    The estimated capital cost for Other chains decreased from $22 
million to $18.2 million because of an arithmetic error. Correcting 
this error caused the Total initial capital costs to fall from $269.1 
million to $265.3 million. A rounding error in the capital costs for 
''New SRFE outlets'' led to an increase in estimated costs from $0.6 
million to $0.7 million. Correcting this error led to an increase in 
the Total recurring capital costs of $0.1 million, to $3.5 million.

                                      Table 2--Estimated Annual Third Party Disclosure Burden: Calorie Content \1\
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                                                                              Annual
                   Type of respondent                        Number of     frequency of    Total annual      Hours per      Total hours    Total capital
                                                            respondents     disclosure      disclosures     disclosure                         costs
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Restaurants.............................................         135,705               3         407,115               2         814,230   $224 million.
Grocery and Convenience Store chains....................          41,945               1          41,945               2          83,890  $23.1 million.
Other chains............................................          33,114               1          33,114               2          66,228  $18.2 million.
    Total initial hours.................................  ..............  ..............  ..............  ..............         964,348          $265.3
                                                                                                                                                million.
New SRFE outlets........................................             600               2           1,200               2           2,400    0.7 million.
Vending (ongoing).......................................           5,000          56,000     280,000,000            0.05      14,000,000   $2.8 million.
Vending (growth)........................................           5,000             140         700,000            0.05          35,000         $7,000.
    Total recurring hours...............................  ..............  ..............  ..............  ..............      14,037,400   $3.5 million.
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\1\ There are no operating and maintenance costs associated with this collection of information.

Burdens for Chain Vending Machine Operators

    Because almost all vending machines sell food that is previously 
manufactured and packaged, calorie analysis and production of calorie 
analysis displays will be most efficiently done at the manufacturer 
level instead of the operator level. Furthermore, most vended foods are 
subject to NLEA, which means that calorie content is already collected. 
A likely scenario for response to vending machine labeling is that food 
manufacturers include a set of calorie label stickers in each case of 
product. This would be efficient both because most manufacturers will 
already have the calorie information available, and because economies 
of scale exist for the manufacturer. In this case, vending machine 
operators will not need to keep a record of calorie content. Instead, 
the burden for most operators will be limited to that of administering 
records and passing the existing information on to consumers.
    FDA estimates that there are approximately 300,000 beverage 
machines that sell unpackaged products. The manufacturer of the 
ingredients to these foods (hot coffee drinks and sodas) would not 
necessarily have calorie information if the products were not subject 
to NLEA in some form. There are likely a limited number of 
manufacturers of the inputs to the beverage machines. For the purposes 
of this document, FDA estimates that there are 10 manufacturers serving 
these machines, and 20 drinks per manufacturer, so that approximately 
200 drinks would need to have calorie analysis. The cost of this 
calorie analysis will be included in the capital costs below. FDA 
estimates that the recordkeeping burden for these firms is half that 
for restaurants, or two hours per item. If there are 600 firms using 
beverage dispensers, then the hourly burden for recordkeeping is 24,000 
hours ( = 600 firms x 20 items/firm x 2 hours/item).
    FDA believes that the set of items sold in these dispensary 
machines is approximately constant. If there is .5 percent growth in 
the number of firms, then approximately three new firms will become 
covered in this market in a given year. The burden associated with 
these three firms would be 120 hours ( = 3 firms x 20 items/firm x 2 
hours/item). This amount is given in the eighth row of table 1 of this 
document.
    The third party reporting for chain vending machine operators is 
the time necessary to install calorie displays on their vending 
machines. Because there is wide variation in the kinds of vending 
machines used--in materials, display, mechanism--there likely will be a 
variety of solutions. On the high end, a calorie display that is 
integrated with the graphics on the machine may cost several hundred 
dollars or more. On the low end, a set of calorie stickers affixed to 
the front of the machine would cost at most a few dollars per machine. 
Given the low margins in the vending machine industry, and given that 
nearly all of the regulated operators will be small businesses, FDA 
believes that almost all operators will, at least initially, choose the 
sticker option. Because stickers do not require any initial investment 
and because they are not durable, all burden and costs will be on a 
recurring basis. In the long run, the manufacturers of vending 
machines, and the larger vending machine operators, such as the soft 
drink companies, may use the more integrated, and thus expensive, 
solution.
    FDA tentatively estimates a recurring hourly burden of 1 hour per 
machine, two times per year to install the displays. If there are an 
average of 20 items per machine, then the burden per response is .05 
hours ( = 1 hours/machine/20 items/machine). This will be the time 
necessary to decide where to put the displays on the machine, and to 
sort, remove and affix calorie stickers. FDA expects the stickers to 
have a relatively short life, and the mix of product in a machine to 
change over time.
    FDA estimates approximately 7 million machines are serviced by 
5,000 operators, for an average number of machines per operator of 
1,400 machines. If each machine has 20 items, then the average number 
of responses per operator is 28,000. Given that

[[Page 5384]]

stickers will likely need to be replaced twice per year on average, 
this number of responses doubles, to 56,000 responses per operator. The 
total recurring hours needed for third party display is then 14 million 
hours ( = 5,000 firms x 1,400 machines/firm x 20 displays/machine x .05 
hours/display x 2). This amount is recurring in every year, and is 
given in row 7 of table 2 of the document.
    If growth in the vending machine industry is .5 percent, then each 
of the 5,000 respondents will have an average of 7 additional machines 
that would need to report calorie content each year. With an average 
number of items per machine of 20, the number of disclosures per 
respondent is 140. At .05 hours per response, the hours needed to 
disclose calorie content on new machines is 35,000 hours per year ( = 
5,000 firms x 7 machines/firm x 20 items/machine x .05 hours/item). 
This amount is displayed in row 8 of table 2 of this document.

    Dated: January 25, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-1993 Filed 1-28-11; 8:45 am]
BILLING CODE 4160-01-P