CHAPTER
5. California Community Health Fund
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.
(a) The California Community Health Fund revenues shall be distributed to the State Department of Social Services, 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.(b) The State Department of Social Services may prioritize California Community Health Fund revenues that it receives to fund the Safe Drinking Water Supplemental Benefit Pilot Program, as described in Section 18901.25 of the Welfare and Institutions Code.
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.
104895.60.
A distributor who has paid a fee, either directly to the state or to another distributor registered under this chapter, and makes a subsequent distribution of sugary drinks or concentrate may claim a credit on the distributor’s return for the period when a subsequent sale or distribution occurs.