The Real Price Tag of State GRAS Legislation: What California and New York Should Expect

Two states are on the verge of dramatically reshaping how food ingredients are regulated within their borders. California's Assembly Bill 2034 and New York's Food Safety and Chemical Disclosure Act (S1239/A1556) both aim to bring significant new state-level oversight to food substances designated as "Generally Recognized as Safe" — commonly known as GRAS — under federal law. These bills represent some of the most ambitious food safety legislation proposed at the state level in decades.

But ambitious legislation comes with a price. And until now, that price hasn't been fully calculated.

The American Beverage Association asked Policy Navigation Group (PNG) to do exactly that: conduct a rigorous, ground-up economic analysis of what it would actually cost California and New York to implement these bills if they become law. The result is a new report — Costs to Implement State GRAS Substance Disclosure and Safety Review Legislation: California and New York — and the findings deserve attention from lawmakers, industry stakeholders, and anyone who cares about how food safety policy gets made and paid for.

What Are These Bills, and Why Do They Matter?

Under the Federal Food, Drug, and Cosmetic Act, most food substances require FDA pre-market review and approval before they can be added to food. GRAS is a longstanding exception: substances that are "generally recognized as safe" based on expert consensus or common historical use are exempt from that formal approval process. Manufacturers can make "self-determined" GRAS designations without notifying the FDA at all, though a voluntary notification program exists.

Critics have long argued this system lacks transparency and accountability. Both California and New York have advanced legislation designed to address that concern at the state level.

California's AB 2034, introduced in February 2026, would establish a categorical prohibition on carcinogenic food additives, require manufacturers of self-determined GRAS substances to obtain a license from the California Department of Public Health (CDPH) before selling products in the state, mandate CDPH to conduct systematic safety reassessments of at least ten substances every three years beginning in 2030, and require full disclosure of ingredients currently hidden behind umbrella terms like "natural flavor" and "artificial flavor."

New York's S1239/A1556, which passed the Senate for the second time in February 2026, would prohibit three specific additives outright, require manufacturers to submit safety reports to a public state database, and authorize the Commissioner of Agriculture and Markets to modify database entries and pursue enforcement actions.

Both bills would require publicly searchable databases to be operational by July 1, 2027 — a timeline that, as the report makes clear, creates its own set of serious challenges.

The Bottom Line: $55 Million to Start

PNG's analysis estimates that combined initial implementation costs across both states would reach approximately $55 million — $34 million for California and $21 million for New York. Near-term budget costs in the first three years are projected to run $20 million to $30 million per year.

For California, costs break down across three major categories:

• Regulatory development — writing the implementing regulations, guidance documents, and fee structures required by the bill — is estimated at $10 million.

• Database design and construction — building the publicly accessible IT system to collect, store, and display GRAS submissions and ingredient lists — is estimated at another $10 million, based on a median analysis of comparable California state IT projects.

• Labor costs — processing hundreds of thousands of ingredient lists, reviewing approximately 3,600 initial license applications, conducting scientific hazard assessments, managing enforcement, and communicating the new requirements to food companies globally — are estimated at $13.9 to $14.1 million.

Once fully operational in 2030, California's ongoing costs are estimated at a minimum of $15 million per fiscal year.

New York's costs are somewhat lower — approximately $21 million in initial implementation — reflecting a somewhat more targeted scope compared to California's broader licensing and reassessment program.

Why the Costs Are Higher Than You Might Expect

The scope of what these bills require is easy to underestimate. Consider a few of the tasks the PNG analysis walks through in detail.

Building the database is genuinely hard. AB 2034 requires CDPH to have a working public database by July 1, 2027 — giving the agency roughly one year from passage. The problem is that California's standard IT procurement process, the Project Approval Lifecycle (PAL), almost always requires 18 months to three years to complete. Even the legislature seems to acknowledge this mismatch: the bill simultaneously requires CDPH to publish the database by 2027 and to report to the legislature one year later on the "obstacles to the database's implementation." PNG benchmarks the $10 million IT estimate against real comparable California projects — from the CalRecycle Integrated Information System to the Future Disease Surveillance System — with a median project cost of $10.5 million across systems of similar novelty and public-access requirements.

Scientific review is not a checkbox exercise. California's bill would require CDPH to conduct hazard assessments for carcinogenicity and reproductive toxicity on each submitted GRAS substance. PNG compares this to the work of California's Office of Environmental Health Hazard Assessment (OEHHA), which sets Public Health Goals through a rigorous weight-of-evidence review process that typically requires multiple years of effort by scientific experts. CDPH would need resources equivalent to 10 to 30 percent of OEHHA's current budget just to carry out these assessments.

The sheer volume of submissions is staggering. Based on Nielsen data, there are over one million food and beverage items with unique product codes sold in the United States. The analysis estimates approximately 300,000 food items sold in California may contain at least one GRAS substance — all of which would trigger ingredient list submissions. Add to that roughly 3,600 initial license applications across the first two years, each requiring scientific documentation comparable to what the FDA requires for a formal GRAS submission, and the labor burden on state staff becomes substantial fast.

An Important Caveat on Timing

Both California and New York face what the report calls a "structural timing problem." Fee revenue to recover implementation costs will lag well behind the initial expenditures — meaning both states would be fronting tens of millions of dollars before any significant fee income materializes. Budget planners and appropriators would need to account for this gap explicitly.

Why This Report Matters for the Policy Debate

This is a Phase 1 analysis focused specifically on government implementation costs — it does not calculate costs to food manufacturers, retailers, or consumers, which will be the subject of future work. Even so, the findings provide critical inputs for legislative fiscal analyses, regulatory impact assessments, and the broader policy conversation about whether these bills are designed to succeed.

Sound food safety policy requires honest accounting. Understanding what these bills will cost to administer — and whether those costs are feasible given state budget realities and IT procurement timelines — is essential context for legislators, agency leaders, and the public.

The full report provides the methodology, data sources, and underlying assumptions in detail, making it possible to evaluate, stress-test, and build on this analysis. Whether you support stronger state-level oversight of GRAS substances or have concerns about the approach, the numbers in this report are ones policymakers and stakeholders need to engage with.

Read the full report →

2026 PNG GRAS Cost Study Phase 1.pdf

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"Costs to Implement State GRAS Substance Disclosure and Safety Review Legislation: California and New York," prepared by Policy Navigation Group for the American Beverage Association, March 2026.