Bill Text: NY S04602 | 2021-2022 | General Assembly | Amended
Bill Title: Imposes an excise tax on sugary drinks; establishes a community health equity fund to utilize the revenues generated by such tax.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-01-06 - PRINT NUMBER 4602A [S04602 Detail]
Download: New_York-2021-S04602-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 4602--A 2021-2022 Regular Sessions IN SENATE February 5, 2021 ___________ Introduced by Sen. RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -- recommitted to the Committee on Budget and Revenue in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law and the state finance law, in relation to imposing an excise tax on sugary drinks; and to amend the public health law, in relation to community health benefits The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding a new article 17 to read 2 as follows: 3 ARTICLE 17 4 EXCISE TAX ON SUGARY DRINKS 5 Section 400. Definitions. 6 401. Imposition of excise tax. 7 402. Local taxes on sugary drinks by municipalities. 8 403. Report of sales and remittance of tax. 9 404. Deposit and disposition of revenue. 10 405. Records of distributors. 11 406. Exemptions. 12 407. Rules and regulations. 13 408. Severability. 14 § 400. Definitions. As used in this article, the following terms shall 15 have the following meanings: 16 1. "Beverage for medical use" means a beverage suitable for human 17 consumption and manufactured for use as an oral nutritional therapy for 18 persons who cannot absorb or metabolize dietary nutrients from food or 19 beverages, or for use as an oral rehydration electrolyte solution for 20 infants and children formulated to prevent or treat dehydration due to 21 illness. "Beverage for medical use" shall also mean a "medical food" as EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD05927-09-1S. 4602--A 2 1 defined in section 5(b)(3) of the Orphan Drug Act (21 U.S.C. 2 360ee(b)(3)). 3 2. "Bottle" means any closed or sealed container regardless of size or 4 shape, including, without limitation, those made of glass, metal, paper, 5 plastic or any other material or combination of materials. 6 3. "Bottled sugary drink" means any sugary drink contained in a bottle 7 that is ready for consumption without further processing such as, with- 8 out limitation, dilution or carbonation. 9 4. "Consumer" means a person who purchases a sugary drink for consump- 10 tion and not for sale to another. 11 5. "Distributor" means any person, including manufacturers and whole- 12 sale dealers, who receives, stores, manufactures, bottles and/or 13 distributes bottled sugary drinks, syrups or powders, for sale to 14 retailers doing business in the state, whether or not that person also 15 sells such products to consumers. 16 6. "Milk" means natural liquid milk regardless of animal or plant 17 source or butterfat content; natural milk concentrate, whether or not 18 reconstituted; or dehydrated natural milk, whether or not reconstituted. 19 7. "Natural fruit juice" means the original liquid resulting from the 20 pressing of fruits, or the liquid resulting from the dilution with water 21 of dehydrated natural fruit juice. 22 8. "Natural vegetable juice" means the original liquid resulting from 23 the pressing of vegetables, or the liquid resulting from the dilution 24 with water of dehydrated natural vegetable juice. 25 9. "Non-nutritive sweetener" means any non-nutritive substance suit- 26 able for human consumption that humans perceive as sweet and includes, 27 but is not limited to, aspartame, acesulfame-K, neotame, saccharin, 28 sucralose and stevia. "Non-nutritive sweetener" excludes sugars. For 29 purposes of this definition, "non-nutritive sweetener" means a substance 30 that contains fewer than five calories per serving. 31 10. "Person" means any natural person, partnership, cooperative asso- 32 ciation, limited liability company, corporation, personal represen- 33 tative, receiver, trustee, assignee or any other legal entity. 34 11. "Place of business" means any place where sugary drinks, syrups or 35 powders are manufactured or received for sale in the state. 36 12. "Powder" means any solid mixture of ingredients used in making, 37 mixing, or compounding sugary drinks by mixing the powder with any one 38 or more other ingredients, including without limitation water, ice, 39 syrup, simple syrup, fruits, vegetables, fruit juice, vegetable juice, 40 carbonation or other gas. 41 13. "Retailer" means any person who sells or otherwise dispenses in 42 the state a sugary drink to a consumer whether or not that person is 43 also a distributor as defined in this section. 44 14. "Sale" means the transfer of title or possession for valuable 45 consideration regardless of the manner by which the transfer is 46 completed. 47 15. "Sugars" means any monosaccharide or disaccharide nutritive sweet- 48 ener such as glucose, fructose, lactose, and sucrose. Examples include, 49 but are not limited to, cane sugar, beet sugar, high-fructose corn 50 syrup, honey, fruit juice concentrate, and other caloric sweeteners. For 51 purposes of this definition, "nutritive" means a substance that contains 52 five or more calories per serving. 53 16. "Sugary drink" means any nonalcoholic beverage, carbonated or 54 noncarbonated, which is intended for human consumption and contains any 55 added sugars. As used in this definition, "nonalcoholic beverage" meansS. 4602--A 3 1 any beverage that contains less than one-half of one percent alcohol per 2 volume. 3 17. "Syrup" means a liquid mixture of ingredients used in making, 4 mixing, or compounding sugary drinks using one or more other ingredients 5 including, without limitation, water, ice, a powder, simple syrup, 6 fruits, vegetables, fruit juice, vegetable juice, carbonation or other 7 gas. 8 18. "Water" means no-calorie liquid water, which is either non-fla- 9 vored or flavored without the use of sugars. "Water" may be carbonated 10 (including but not limited to club soda and seltzer), still, distilled 11 and/or purified. 12 § 401. Imposition of excise tax. 1. There are hereby levied and 13 imposed on a distributor excise taxes at the following rates: 14 (a) Beverages: 15 (i) Beverages with seven and a half grams of sugars or less per twelve 16 fluid ounces shall not be taxed. 17 (ii) Beverages with more than seven and a half grams but less than 18 thirty grams of sugars per twelve fluid ounces shall be taxed at a rate 19 of one cent per ounce. 20 (iii) Beverages with thirty grams of sugars or more per twelve fluid 21 ounces shall be taxed at a rate of two cents per ounce. 22 (b) Syrups and powders sold or offered for sale to a retailer for sale 23 in the state to a consumer, either as syrup or powder or as a sugary 24 drink derived from such syrup or powder: 25 (i) If the beverages made from the syrup or powder have seven and a 26 half grams of sugars or less per twelve fluid ounces, such syrup or 27 powder shall not be taxed. 28 (ii) If the beverages made from the syrup or powder have more than 29 seven and a half grams but less than thirty grams of sugars per twelve 30 fluid ounces, such syrup or powder shall be taxed at a rate equal to one 31 cent per ounce of sugary drink produced from that syrup or powder. 32 (iii) If the beverages made from the syrup or powder have thirty grams 33 of sugars or more per twelve fluid ounces, such syrup or powder shall be 34 taxed at a rate equal to two cents per ounce of sugary drink produced 35 from that syrup or powder. 36 (c) For purposes of calculating the tax imposed pursuant to paragraph 37 (b) of this subdivision, the volume of sugary drink produced from syrups 38 or powders shall be the larger of (i) the largest volume resulting from 39 use of the syrups or powders according to the manufacturer's 40 instructions, or (ii) the volume actually produced by the retailer, as 41 reasonably determined by the commissioner. 42 2. The nutrition facts product label, as required by the food and drug 43 administration, shall be used to determine the amount of sugars per 44 twelve ounces of sugary drink by referencing the "serving size" and 45 "sugars" or "total sugars" lines on the label. 46 3. The tax rates set forth in this section shall be reviewed annually 47 and adjusted periodically by the commissioner as needed to maintain a 48 consistent effect relative to inflation. 49 4. Manufacturers, bottlers, wholesalers or distributors shall add the 50 amount of the tax imposed by this section to the retail price of sugary 51 drinks. 52 5. A retailer who sells bottled sugary drinks, syrups or powders in 53 the state to a consumer, on which the tax imposed by this section has 54 not been paid by a distributor, is liable for the tax imposed in subdi- 55 vision one of this section at the point of sale to a consumer.S. 4602--A 4 1 6. The taxes imposed by this section are in addition to any other 2 taxes that may apply to persons or products subject to this chapter. 3 § 402. Local taxes on sugary drinks by municipalities. 1. Any city or 4 municipality in this state acting through its local legislative body, 5 is hereby authorized and empowered to adopt and amend local laws impos- 6 ing in any such municipality an excise tax on a distributor on the 7 following products: 8 (a) Beverages with more than seven and a half grams of sugars per 9 twelve fluid ounces. 10 (b) Syrups and powders sold or offered for sale to a retailer for sale 11 in the state to a consumer, either as syrup or powder or as a sugary 12 drink derived from such syrup or powder if the beverages made from 13 the syrup or powder have more than seven and a half grams of sugars per 14 twelve fluid ounces. 15 2. All the provisions of this article shall apply to the taxes author- 16 ized by subdivision one of this section, so far as such article can be 17 made applicable to the taxes authorized by this section with such limi- 18 tations as set forth in this section and such modifications as may be 19 necessary in order to adapt such language to the local taxes authorized 20 by this section. Provided, however, in every case where the words "this 21 state" appear, such words "this state" shall be read as "this munici- 22 pality" for purposes of the taxes authorized by this section. Where the 23 word "state" is used in a phrase referring to the sale or use of sugary 24 drinks in this state, such word "state" shall be read as "municipality" 25 for purposes of the taxes authorized by this section, unless the word 26 "municipality" clearly is not applicable. 27 3. Any taxes imposed pursuant to the authority of this section shall 28 be administered and collected by the tax commission in the same manner 29 as the taxes imposed under section four hundred one of this article 30 subject to all provisions of this article as may be applicable. The 31 state tax commission is hereby empowered to make such provisions as it 32 deems necessary for the joint administration and collection of the state 33 and local taxes imposed and authorized by this article. Nothing in this 34 article which requires payment of both state and local taxes to the tax 35 commission shall be construed as the payment of either tax more than 36 once. 37 4. A local law imposing taxes pursuant to the authority of this 38 section or repealing or suspending such taxes must go into effect only 39 on the first day of a calendar month. No such local law shall be effec- 40 tive unless a certified copy of such law is mailed by registered mail to 41 the state tax commission at its office in Albany at least sixty days 42 prior to the date it is to become effective. However, the tax commis- 43 sion, by resolution, may waive and reduce such sixty day minimum notice 44 requirement to a mailing of such certified copy by registered mail with- 45 in a period of not less than thirty days prior to such effective date if 46 it deems such action to be consistent with its duties under this 47 section. 48 5. Certified copies of any local law described in this section shall 49 also be filed with the clerk of the municipality, the secretary of state 50 and the state comptroller within five days after the date it is enacted. 51 6. All taxes, penalties and interest imposed by a municipality under 52 the authority of this section, which are collected by the state tax 53 commission, shall be deposited daily with such responsible banks, bank- 54 ing houses or trust companies, as may be designated by the state comp- 55 troller, to the credit of the comptroller, in trust for such munici- 56 pality imposing the tax. Such deposits shall be kept separate and apartS. 4602--A 5 1 from all other monies in the possession of the comptroller. The comp- 2 troller shall require adequate security from all such depositories of 3 such revenue collected by the tax commission. The comptroller shall 4 retain in his hands such amount as the commissioner of taxation and 5 finance may determine to be necessary for refunds in respect of the 6 taxes imposed under the authority of this section, and for reasonable 7 costs of the state tax commission in administering, collecting and 8 distributing such taxes, out of which the comptroller shall pay any 9 refunds of such taxes to which taxpayers shall be entitled under the 10 provisions of this article. The amount so payable shall be certified to 11 the comptroller by the president of the state tax commission or his 12 delegate, who shall not be held liable for any inaccuracy in such 13 certificate. Where the amount so paid over to such municipality in any 14 such distribution is more or less than the amount then due to such muni- 15 cipality, the amount of the overpayment or underpayment shall be certi- 16 fied to the comptroller by the president of the state tax commission or 17 his delegate, who shall not be held liable for any inaccuracy in such 18 certificate. The amount of the overpayment or underpayment shall be so 19 certified to the comptroller as soon after the discovery of the overpay- 20 ment or underpayment as reasonably possible and subsequent payments and 21 distributions by the comptroller to such municipality shall be adjusted 22 by subtracting the amount of any such overpayment from or by adding the 23 amount of any such underpayment to such number of subsequent payments 24 and distributions as the comptroller and the president of the state tax 25 commission shall consider reasonable in view of the amount of the over- 26 payment or underpayment and all other facts or circumstances. 27 7. As used in this section, "municipality" shall mean any county, 28 town, village or city within the state. 29 § 403. Report of sales and remittance of tax. Any distributor or 30 retailer liable for the tax imposed by this article shall, on or before 31 the last day of March, June, October, and December of each year, file 32 with the department a return, on forms to be prescribed by the commis- 33 sioner and furnished by the department, stating the quantity of sugary 34 drinks, syrups and powders subject to the excise tax imposed by this 35 article sold or offered for sale in the three months immediately preced- 36 ing the month in which the report is due, and any other information 37 required by the commissioner, along with the tax due. 38 § 404. Deposit and disposition of revenue. All taxes collected or 39 received by the department under this article shall be deposited in the 40 community health equity fund established pursuant to the provisions of 41 section ninety-nine-oo of the state finance law; provided, however, that 42 the provisions of this section shall not apply to taxes collected or 43 received pursuant to any tax imposed pursuant to the provisions of 44 section four hundred two of this article. 45 § 405. Records of distributors. Every distributor, and every retailer 46 subject to this chapter, shall maintain for not less than two years 47 accurate records, showing all transactions that gave rise, or may have 48 given rise, to tax liability under this chapter. Such records are 49 subject to inspection by the commissioner at all reasonable times during 50 normal business hours. 51 § 406. Exemptions. The following shall be exempt from the tax imposed 52 by this chapter: 53 1. Bottled sugary drinks, syrups, and powders sold to the United 54 States government or an Indian nation or tribe. 55 2. Bottled sugary drinks, syrups, and powders sold by a distributor to 56 another distributor if the sales invoice clearly indicates that the saleS. 4602--A 6 1 is exempt. If the sale is to a person who is both a distributor and a 2 retailer, the sale shall also be tax exempt and the tax shall be paid 3 when the purchasing distributor or retailer resells the product to a 4 retailer or a consumer. This exemption does not apply to any other sale 5 to a retailer. 6 3. Beverages sweetened solely with non-nutritive sweeteners. 7 4. Beverages consisting of one hundred percent natural fruit or vege- 8 table juice with no added sugars. 9 5. Beverages in which milk, or soy, rice or similar milk substitute, 10 is the primary ingredient or the first listed ingredient on the label of 11 the beverage. 12 6. Unsweetened drinks to which a purchaser can add, or can request 13 that a seller add, sugar at the point of sale, such as coffee or tea. 14 7. Infant formula. 15 8. Beverages for medical use. 16 9. Water without added sugars. 17 § 407. Rules and regulations. The commissioner shall promulgate any 18 rules and regulations necessary to carry out the provisions of this 19 article. 20 § 408. Severability. If any clause, sentence, paragraph, section or 21 part of this article shall be adjudged by any court of competent juris- 22 diction to be invalid, such judgment shall not affect, impair, or inval- 23 idate the remainder thereof, but shall be confined in its operation to 24 the clause, sentence, paragraph, section, or part thereof directly 25 involved in the controversy in which such judgment shall have been 26 rendered. 27 § 2. The state finance law is amended by adding a new section 99-oo to 28 read as follows: 29 § 99-oo. Community health equity fund. 1. There is hereby established 30 in the joint custody of the comptroller and the commissioner of taxation 31 and finance a fund to be known as the "community health equity fund". 32 The community health equity fund shall consist of all taxes, interest, 33 penalties, and other amounts collected pursuant to article seventeen of 34 the tax law. 35 2. All moneys in the community health equity fund shall, upon appro- 36 priation by the legislature, be allocated for the purposes of statewide 37 programs. Up to five hundred thousand dollars shall be allocated to the 38 community health benefits trust account for the establishment and opera- 39 tion of the community advisory board on health equity, as provided in 40 section two hundred forty-four-b of the public health law. Of the 41 remaining funds, moneys shall be allocated as follows: 42 (a) Fifty percent to supplemental nutrition assistance program (SNAP) 43 incentives. Such funding shall support programs that provide recipients 44 of SNAP with additional moneys or coupons directed to their electronic 45 benefits transfer card when they purchase fruits and vegetables. This 46 allocation of funds shall be used to promote the consumption of fruits 47 and vegetables and foster a healthier community. 48 (b) Fifty percent to be dispersed to the community health benefits 49 trust established pursuant to the provisions of section two hundred 50 forty-four-a of the public health law. 51 3. Moneys shall be payable from the fund on the audit and warrant of 52 the comptroller on vouchers approved and certified by the commissioner 53 of health. 54 § 3. Article 2 of the public health law is amended by adding a new 55 title 3-A to read as follows:S. 4602--A 7 1 TITLE III-A 2 COMMUNITY HEALTH BENEFITS 3 Section 244. Empire state community benefits grant. 4 244-a. Community health benefits trust. 5 244-b. Community advisory board on health equity. 6 § 244. Empire state community benefits grant. The commissioner shall 7 establish a grant program to be administered by the department and to be 8 known as the "empire state community benefits grant". Such grant shall 9 be made available to, but not limited to, community-based programs and 10 organizations related to promoting food access and equity in the commu- 11 nity, improving community nutrition, increasing access to nutrient rich 12 foods in schools, identifying and improving the quality of school-based 13 courts, playgrounds, parks or trails, promoting physical activity and 14 exercise, reducing nutrition related chronic illnesses including 15 diabetes, heart disease, obesity and tooth decay, and targeting communi- 16 ties most affected by adverse health disparities, community-based initi- 17 atives that impact social determiners of health, among other community- 18 based programs and organizations. Such community-based programs and 19 organizations shall submit an application to the department to determine 20 their eligibility. The commissioner shall promulgate rules and regu- 21 lations regarding eligibility, the application process, and awarding of 22 grants pursuant to this section. All moneys for grants awarded pursuant 23 to this section shall be from the community health benefits trust estab- 24 lished pursuant to section two hundred forty-four-a of this title. 25 § 244-a. Community health benefits trust. 1. There is hereby estab- 26 lished in the joint custody of the commissioner and the comptroller, a 27 trust fund to be known as the "community health benefits trust". Moneys 28 deposited into the community health benefits trust shall be utilized 29 solely for the purpose of awarding grants pursuant to the provisions of 30 section two hundred forty-four of this title. 31 2. The comptroller shall track and maintain a record of all moneys of 32 the community health benefits trust and shall provide an annual report 33 to the governor, temporary president of the senate and speaker of the 34 assembly outlining how such moneys were allocated, how the allocation of 35 such moneys was determined and how such moneys were ultimately spent. 36 This report shall be submitted to the executive and legislature no later 37 than December thirty-first of each calendar year. This report shall be 38 published and made public on the department's website no later than 39 thirty days after submission. 40 § 244-b. Community advisory board on health equity. 1. A community 41 advisory board on health equity shall be established within the depart- 42 ment to make recommendations on the allocation of funds received pursu- 43 ant to section ninety-nine-oo of the state finance law to support and 44 improve health equity. 45 2. (a) The board shall consist of thirteen members and shall be 46 appointed as follows: 47 (i) five members shall be appointed by the governor; 48 (ii) three members shall be appointed by the temporary president of 49 the senate; 50 (iii) three members shall be appointed by the speaker of the assembly; 51 (iv) one member shall be appointed by the minority leader of the 52 senate; and 53 (v) one member shall be appointed by the minority leader of the assem- 54 bly.S. 4602--A 8 1 (b) Four members of the board shall be representatives of the public 2 health system; three members shall have experience in the implementation 3 of community-based programs and organizations that have a focus on 4 expanding health food access and food security; three members shall have 5 experience in researching or evaluating programs related to the consump- 6 tion of sugary beverages; and three members shall be representative of 7 those communities that have been disproportionately impacted by the 8 effects of sugar-sweetened beverage consumption. 9 (c) For the purposes of this section, communities that have been 10 disproportionately affected by the consumption of sugar-sweetened bever- 11 ages shall be determined by the commissioner by reviewing data which 12 shall include, but is not limited to, the following: 13 (i) the rate of adult or childhood obesity in a community; 14 (ii) the rate of diabetes in a community; 15 (iii) the rate of cardiovascular disease in a community; 16 (iv) the rate of geographic proximity to healthy food and beverage 17 options in a community; 18 (v) the rate of dental decay in a community; and 19 (vi) the rate of liver disease in a community. 20 3. The board shall have its first meeting within six months of the 21 effective date of this section and shall meet every six months thereaft- 22 er. 23 4. A majority of the appointed voting membership of the board shall 24 constitute a quorum, but not less than seven voting members shall be 25 necessary for any action taken by the board. 26 5. The board shall be staffed by the department and may create techni- 27 cal advisory workgroups as deemed necessary. 28 6. Members of the board shall serve for a term of three years, at 29 which point such membership position shall be subject to reappointment. 30 7. Vacancies on the board shall be filled in the same manner as the 31 original appointment upon the expiration of a member's term pursuant to 32 subdivision six of this section, or upon the death, resignation or 33 removal of any such member. 34 8. Community advisory board members shall serve without compensation 35 but shall be reimbursed for their necessary and actual expenses incurred 36 while engaged in the business of the community advisory board. 37 9. The board shall prepare an annual report detailing the amount of 38 funds in the health equity account pursuant to section ninety-nine-oo of 39 the state finance law, including but not limited to any unspent funds, 40 recommendations for the use of any unspent funds, the programs and 41 initiatives implemented with the allocated funding, and an impact evalu- 42 ation of such initiatives. The initial report shall be submitted to the 43 governor, speaker of the assembly and temporary president of the senate 44 no later than two years following the effective date of this section. 45 Such reports shall also be posted on the department's website. 46 § 4. This act shall take effect on the first of January next succeed- 47 ing the date on which it shall have become a law. Effective immediately, 48 the addition, amendment and/or repeal of any rule or regulation neces- 49 sary for the implementation of this act on its effective date are 50 authorized to be made and completed on or before such effective date.
