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 would require manufacturers of self-determined GRAS substances to obtain a license from the California Department of Public Health before selling products in the state, mandate 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." 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 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 implementing regulations, guidance documents, and fee structures) is estimated at $10 million; database design and construction (building the publicly accessible IT system) is estimated at $10 million; and labor costs (processing hundreds of thousands of ingredient lists, reviewing approximately 3,600 initial license applications, conducting scientific hazard assessments, managing enforcement) 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.