Bill Text: CA AB138 | 2019-2020 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: California Community Health Fund.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Failed) 2020-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB138 Detail]
Download: California-2019-AB138-Amended.html
MAJORITY2/3
Chapter 5 (commencing with Section 104895.50) is added to Part 3 of Division 103 of the Health and Safety Code, to read:104895.50.
Bill Title: California Community Health Fund.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Failed) 2020-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB138 Detail]
Download: California-2019-AB138-Amended.html
|
Amended
IN
Assembly
March 25, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Assembly Bill | No. 138 |
| Introduced by Assembly Member Bloom (Coauthors: Assembly Members Bonta, Chiu, McCarty, Nazarian, and Wicks) (Coauthors: Senators Monning and Wiener) |
December 07, 2018 |
An act to add Chapter 5 (commencing with Section 104895.50) to Part 3 of Division 103 of the Health and Safety Code, relating to the California Community Health Fund.
LEGISLATIVE COUNSEL'S DIGEST
AB 138, as amended, Bloom.
California Community Health Fund.
Existing law establishes the State Department of Public Health, which administers, among other things, provides for various programs that prevent disease and promote health.
Existing law imposes various taxes, including taxes of the privilege of engaging in certain activities. The Fee Collection Procedures Law provides procedures for the collection of certain fees and surcharges and establishes criminal penalties for specified acts, including making it a misdemeanor to knowingly or willfully file a false return and making it a felony to willfully evade or attempt to evade
or defeat the payment of a fee.
This bill, subject to specified exemptions, would impose a fee on every distributor, as defined, for the privilege of distributing bottled sugary drinks and concentrate in the state, at a rate of $0.02 per fluid ounce and for the privilege of distributing syrups and powders concentrate in this state, either as concentrate or as sweetened beverages derived from that concentrate, at the rate of $0.02 per fluid ounce of sweetened beverage to be produced from concentrate. The bill would require the California Department of Tax and Fee Administration to administer and collect the fee pursuant to the Fee Collection Procedures Law, to register the distributors upon whom the fee is imposed, and would authorize the California Department of Tax and Fee Administration to promulgate and enforce regulations related to administration of the fee. The bill would require the fees to be deposited into the California Community Health Fund, created by
the bill. The bill would require moneys in the fund, upon appropriation by the Legislature, to be allocated to specified entities, including the State Department of Public Health, the State Department of Health Care Services, and the State Department of Education, to promote health equity, to reduce health disparities, to improve oral health, and to prevent the leading causes of illness, injury, and premature death, and would authorize state departments to award competitive grants to local organizations in support of the bill’s objectives.
Because the bill would expand the application of the Fee Collection Procedures Law, the violation of which is a crime, it would impose a state-mandated local program.
This bill would make legislative findings and declarations relating to the consumption of sweetened beverages,
diabetes, childhood obesity, and dental disease.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
This bill would express the intent of the Legislature to establish the California Community Health Fund in the State Treasury, and would require moneys in the fund to be used to diminish the human and economic costs of diabetes, obesity, and heart and dental disease in California.
Digest Key
Vote:(2) According to the State Department of Public Health, diabetes is the seventh leading cause of death in California and has been determined to be the underlying
cause of death for almost 8,000 people in California each year.
(3) Adults with type II diabetes more often have other health problems. Half of adults with type II diabetes also have hypertension. This rate of occurrence is twice as high as for those without diabetes. Adults with diabetes are also twice as likely to have cardiovascular disease as adults without diabetes.
(4) Adults with diabetes are 50 percent more likely to have arthritis than adults without diabetes. Over 40 percent of new cases of kidney failure are attributed to diabetes. New cases of kidney failure declined slightly from 2001 to 2007, but began to increase again after 2007.
(5) Hispanics, African Americans, Native Americans, Alaska Natives, Asian Americans, Native Hawaiians, and Pacific Islanders have a higher prevalence of type II diabetes than
non-Hispanic Whites. Hispanics and African Americans have two times higher prevalence: 7 percent of non-Hispanic Whites have type II diabetes, compared with 12 percent of Hispanics, 9 percent of Asian Americans, 14 percent of Pacific Islanders, 13 percent of African Americans, and 17.5 percent of Native American and Alaska Native populations. If trends are not reversed, it is predicted that 40 percent of Americans and nearly one-half of Latino and African American children born in the year 2000 will develop type II diabetes in their lifetimes.
(6) The prevalence of obesity in the United States has increased dramatically over the past 30 years. In California, obesity rates have increased even more, rising from 8.9 percent in 1984 to 23.8 percent in 2011. Although no group has escaped the epidemic, low-income populations and communities of color are disproportionately affected.
(7) The rate of children who are overweight has also increased dramatically in recent decades. In 2010, 38 percent of California children in grades 5, 7, and 9 were overweight or obese. Thirty-one of California’s 58 counties experienced an increase in childhood obesity from 2005 to 2010.
(8) In 2006, overweight and obesity-related health costs in California were estimated at almost $21 billion.
(9) There is overwhelming evidence of the link between obesity, diabetes, and heart disease and with the consumption of sweetened beverages, including soft drinks, energy drinks, sweet teas, and sports drinks. California adults who drink one or more sweetened beverages per day are 27 percent more likely to be overweight or obese, regardless of income or ethnicity.
(10) According to nutritional experts, sweetened
beverages such as soft drinks, energy drinks, sweet teas, and sports drinks offer little or no nutritional value, but contain massive quantities of added sugars. A 20-ounce bottle of soda contains the equivalent of approximately 16 teaspoons of sugar, yet the American Heart Association recommends that Americans consume no more than 5 to 9 teaspoons of sugar per day.
(11) Research shows that almost one-half of the extra calories Americans consume in their diet comes from sugar-sweetened beverages, with the average American drinking nearly 50 gallons of sugar-sweetened beverages per year, the equivalent of 39 pounds of extra sugar every year.
(12) Research shows that 41 percent of California children from 2 to 11 years of age, inclusive, and 62 percent of California teens from 12 to 17 years of age, inclusive, drink soda daily, and for every additional serving of sweetened beverages
that a child consumes per day, the likelihood of the child becoming obese increases by 60 percent.
(13) Sugary drinks are a unique contributor to excess caloric consumption. A large body of research shows that calories from sugary drinks do not satisfy hunger the way calories from solid food or beverages containing fat or protein do, such as those containing milk and plant-based proteins. As a result, sugary beverages tend to add to the calories people consume rather than replace them.
(14) Dental caries, commonly referred to as tooth decay, is the most common chronic childhood disease, and affects almost two-thirds of the children in California. Children who frequently or excessively consume beverages high in sugar are at an increased risk for dental caries. Untreated dental caries can lead to pain, infection, tooth loss, and in severe cases,
death.
(15) Studies on the taxation of sugary drinks have estimated a 55 to 1 return on investment in health care savings. Governmental entities that have implemented a sugary drink tax have not seen negative impacts on food sector employment or revenue. Data from the City of Berkeley shows a 7.2% growth in food sector employment and a 15% growth in sales tax revenue following the implementation of a sugary drink tax in the city. Mexico and Philadelphia, Pennsylvania, have also found continued growth in the beverage sector employment subsequent to the tax implementation.
(b) It is therefore the intent of the Legislature to establish the California Community Health Fund, and upon appropriation by the Legislature, moneys in the fund shall be used to diminish the human and
economic costs of diabetes, obesity, heart disease, and dental disease in California. The fund is intended to support health, education, and wellness programs designed to prevent and treat obesity, diabetes, and heart and dental disease and to reduce the burden of attendant health conditions that result from the overconsumption of sugar-sweetened beverages.
SECTION 1.SEC. 2.
Chapter 5 (commencing with Section 104895.50) is added to Part 3 of Division 103 of the Health and Safety Code, to read:CHAPTER 5. California Community Health Fund
It is the intent of the Legislature to establish the California Community Health Fund in the State Treasury, and upon appropriation of the Legislature, moneys in the fund shall be used to diminish the human and economic costs of diabetes, obesity, and heart and dental disease in California. It is also the intent of the Legislature that moneys in the fund support health, education, and wellness programs designed to prevent and treat diabetes, obesity, and heart and dental disease, thereby reducing the burden of health conditions related to the overconsumption of sugar-sweetened beverage products.
104895.50.
The following definitions apply for purposes of this chapter:(a) “California Native American Tribe” means any California Indian tribe, band, nation, or other organized group or community that appears on the consultation contact list maintained by the Native American Heritage Commission, which includes tribes not recognized as eligible for the special programs and services provided by the United States to Native Americans because of their status as Indians.
(b) “California tribal organization” means the recognized governing body of any California Native American Tribe, any legally established organization of Native Americans which is controlled, sanctioned, or chartered by a governing body or
is democratically elected by the adult members of the California Native American community to be served by the organization, and includes the maximum participation of Native Americans in all phases of its activities.
(c) “Caloric sweetener” means any substance or combination of substances that contains calories, is suitable for human consumption, and that humans perceive as sweet. Caloric sweetener includes, but is not limited to, sugar, sucrose, dextrose, fructose, glucose, monosaccharide and disaccharide, corn syrup or high-fructose corn syrup, or honey.
(d) “Cultural and linguistic competency” means a set of integrated attitudes, knowledge, and skills that enables an organization to interact effectively with individuals from diverse cultures, groups, and communities and the ability to communicate with individuals who do not speak English, have limited ability to speak English,
or for whom English is not their primary language.
(e) “Distributor” means any person, including a manufacturer or wholesale dealer, who distributes sugary drinks or concentrates for sale to retailers that operate business in the state, regardless of whether the person sells those products to consumers.
(f) “Distribution” or “distribute” means to supply to a distributor or retailer, deliver to a retailer, acquisition by a retailer, or to transport into the state for the purpose of selling any sugary drink product in the state, or any combination of these activities. “Distribution” or “distribute” shall not mean the retail sale to a consumer.
(g) “Fund” means the California Community Health Fund.
(h) (1) “Sugary drink” means either
of the following:
(A) A nonalcoholic beverage intended for human consumption which contains any added caloric sweetener. A nonalcoholic means any beverage that is not subject to tax under Part 14 (commencing with Section 32001) of Division 2 of the Revenue and Taxation Code.
(B) A concentrate, whether in liquid, gel, powder, frozen, or solid form with a mixture of ingredients, which meets both of the following criteria:
(i) It contains a caloric sweetener.
(ii) It is intended for use as an ingredient in a liquid described in subparagraph (A).
(2) The following liquid or concentrate product is not a sugary drink for purposes of this chapter:
(A) A beverage that includes, as a primary ingredient, milk, soy, rice, or a similar plant-based milk substitute.
(B) The original liquid is either the result from the pressing of fruit or vegetables or from the reconstitution of pure fruit or vegetable juice concentrate.
(C) The liquid is the result from the restoration of water to dehydrated fruit or vegetable juice.
(D) Infant formula.
(E) A beverage for medical use suitable for human consumption and manufactured for use as an oral nutritional therapy for persons who cannot absorb or metabolize dietary nutrients from food or beverages. “Beverage for medical use” also means “medical food” as defined in subsection 3 of Section 360ee of Title 21
of the United States Code. “Beverage for medical use” excludes drinks commonly referred to as “sports drinks” or any other common names that are derivations thereof.
(F) Any beverage designed as supplemental, meal replacement, or sole-source nutrition that includes proteins, carbohydrates, and multiple vitamins and minerals.
(G) An oral electrolyte solution for infants and children formulated to prevent dehydration due to illness.
(H) A sugary drink product with fewer than 25 calories per 12 fluid ounces.
104895.51.
(a) The California Community Health Fund is hereby established in the State Treasury.(b) Upon appropriation by the Legislature, all moneys in the fund shall be expended only for the purposes expressed in this chapter and shall be used only to supplement existing levels of service. Moneys in the fund shall not supplant any federal, state, or local funding for existing levels of service.
(c) The fund shall consist of all fees, interest, penalties, and other amounts collected pursuant to this chapter. Refunds and reimbursements for expenses incurred in the administration and collection of the fees and required allocations to other agencies shall be payable from the fund,
upon appropriation by the Legislature.
104895.52.
(a) There is hereby imposed, except as otherwise provided in this chapter, a fee on every distributor for distributing bottled sugary drinks and concentrate in the state for deposit into the fund. The fees shall be calculated as follows:(1) The fee on sugary drinks and concentrate shall be calculated at a rate of two cents ($0.02) per ounce that is sold or offered to a retailer for sale in the state to a consumer.
(2) The fee on syrups and powders sold or offered to a retailer for sale in the state to a consumer, either as syrup or power or as a sugary drink derived from that syrup or powder shall be calculated at a rate of two cents ($0.02) per ounce of sugary drink
produced from that syrup or powder.
(3) For purposes of calculating the fee, the volume of sugary drink produced from syrups or powders shall be the greater of either the largest volume resulting from use of the syrups or powders according to any manufacturer’s instructions, or the volume actually produced by the retailer, as reasonably determined by the California Department of Tax and Fee Administration.
(b) The distributor shall be liable for the fee imposed pursuant to this chapter. The fee shall be paid upon the first nonexempt distribution of a sugary drink product in the state. However, if a distributor or a retailer receives taxable products on which the fee has not been paid, the distributor or retailer shall be liable for the fee.
(c) The California Department of Tax and Fee Administration shall adjust the
fees, as described in subdivision (a), for inflation every other year.
104895.53.
(a) A fee shall not be imposed pursuant to this chapter on a distributor for a sugary drink product if the fee has already been paid.(b) If a sugary drink product is either manufactured or produced by including one or more other sugary drink products, a fee shall not be imposed pursuant to this chapter on a caloric sweetener contained in the resulting sugary drink product if a fee was previously imposed pursuant to this chapter on that caloric sweetener.
(c) A retailer is liable for the fee imposed pursuant to this chapter upon a sugary drink product only if the fee on that product has not been previously paid by the distributor.
(d) The distribution of sugary drinks or concentrate by a distributor to either of the following persons shall be exempt from the fee imposed by this chapter:
(1) A person to whom the bottled sugary drink or concentrate is contractually obligated to be shipped, and is shipped, to a point outside of California by the distributor, by means of either of the following:
(A) Delivery to a facility operated by the distributor.
(B) Delivery by the distributor to a carrier, customs broker, or forwarding agent, regardless of whether the distributor was hired by the purchaser, for shipment to the out-of-state point.
(2) A person who is otherwise exempt from the fee of that sale, use, or consumption
pursuant to the United States Constitution, federal law or regulation, or the California Constitution.
104895.54.
The California Community Health Fund revenues shall be distributed to the State Department of Public Health, the State Department of Health Care Services, the State Department of Education, the Department of Food and Agriculture, and the State Water Resources Control Board to promote health equity, to reduce health disparities, to improve oral health, and to prevent the leading causes of illness, injury, and premature death, especially those caused by sugar-sweetened beverage consumption. Illnesses include obesity and diseases exacerbated by obesity, such as diabetes, heart disease, and cancer, which are caused by sugar-sweetened beverage consumption.104895.55.
(a) A state department that receives funds pursuant to this chapter may administer grants or allocations to local organizations to achieve the objectives specified in Section 104895.54. If a department administers grant programs, funds shall be distributed in communities or institutions serving those with the highest rates of health inequities with a particular focus on all of the following target populations:(1) African American, Hispanic, Native American and Alaska Native, Asian American, and Native Hawaiian and Pacific Islanders.
(2) Residents living below 150 percent of the federal poverty limit.
(3) Communities identified as underserved with regard to dental health services or that have high rates of dental disease.
(4) Communities identified with other marked health disparities to be addressed.
(b) State departments that receive funding pursuant to this chapter shall use the most current data available to target moneys in the fund to address the needs of the identified priority populations and to reach the greatest number of residents in the identified priority groups.
(c) (1) Notwithstanding subdivisions (a) and (b), most community-level investments shall be targeted. However, funds may be employed by recipients to pursue media campaigns, as described in paragraph (2), that may benefit all residents of a community or jurisdiction.
(2) (A) Media campaigns shall support health, education, and wellness programs designed to prevent and treat obesity, diabetes, and heart and dental disease and to reduce the burden of attendant health conditions that result from the overconsumption of sugar-sweetened beverages.
(B) Any media campaign shall be reviewed and approved by the state entity that is directly administering the competitive grant program.
(d) Grantees shall employ culturally and linguistically competent approaches appropriate to their communities.
(e) The state entity that is responsible for administering the competitive grant program shall conduct biennial financial audits to ensure that the annual allocation to grantees is awarded by the fund consistent with
the requirements of this chapter.
(f) Revenues deposited in the fund that are unexpended at the end of a fiscal year shall remain in the fund and shall not revert to the General Fund.
(g) The award of contracts, grants, or funding allocations entered into or amended pursuant to subdivision (a) shall be exempt from Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and is exempt from approval by the Department of General Services prior to their execution.
104895.56.
(a) (1) The California Department of Tax and Fee Administration shall administer and collect the charges imposed by this chapter pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001) of Division 2 of the Revenue and Taxation Code).(2) For purposes of this section, “department” means the California Department of Tax and Fee Administration.
(b) The department may use no more than 3 percent of the revenues generated to cover its administrative costs in collecting the fees imposed under this chapter.
(c) (1) The department may
promulgate and enforce regulations relating to the administration and enforcement of this chapter, including matters regarding collections, reporting, refunds, and appeals.
(2) The department may adopt emergency regulations to implement this chapter. The adoption of emergency regulations shall be conclusively presumed to be necessary for the immediate preservation of the public peace, health, safety, or general welfare within the meaning or purposes of Section 11346.1 of the Government Code. The adoption, amendment, repeal, or readoption of a regulation is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the department is hereby exempted for this purpose from the requirements of subdivision (b) of Section 11346.1 of the Government Code.
(d) The department shall develop an internet website and post materials to inform
distributors, retailers, and the general public about the fee and its scope and operation at least two months prior to the effective date.
(e) The fees imposed by this chapter are due and payable to the department on or before the last day of the first month following each calendar quarter.
104895.57.
(a) On or before the last day of the first month following each calendar quarter, a return for the preceding calendar quarter shall be filed, using electronic media, with the California Department of Tax and Fee Administration.(b) The California Department of Tax and Fee Administration may prescribe forms and reporting requirements as are necessary to implement the fees, including information regarding the total amount of sugary drinks and concentrate sold and the amount due.
(c) Returns shall be authenticated in a form or pursuant to methods prescribed by the California Department of Tax and Fee Administration.
104895.58.
A distributor who is required to pay the fees imposed under this chapter shall register with the California Department of Tax and Fee Administration. An application for registration shall be made upon a form prescribed by the California Department of Tax and Fee Administration and shall set forth the name that the applicant transacts or intends to transact business with, the location or locations of each place of business, and any other information as required. An application for an account under this section shall be authenticated in a form or pursuant to methods prescribed by the California Department of Tax and Fee Administration.104895.59.
The distribution of sugary drinks or concentrate by a distributor to either of the following persons shall be exempt from the fees imposed by this chapter:(a) A person who is located out-of-state, and pursuant to a sales contract, receives a shipment of a sugary drink or concentrate from either a facility operated by the distributor or a carrier, customs broker, or forwarding agent, whether hired by the purchaser or not, for shipment to a location out-of-state.
(b) A person who is otherwise exempt from the taxation of that sale, use, or consumption under the United States Constitution, federal law or regulation, or the California Constitution.
