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AB-1003 California Community Health Fund.(2017-2018)

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Date Published: 04/19/2017 09:00 PM
AB1003:v97#DOCUMENT

Amended  IN  Assembly  April 19, 2017
Amended  IN  Assembly  March 28, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1003


Introduced by Assembly Member Bloom

February 16, 2017


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 public health.


LEGISLATIVE COUNSEL'S DIGEST


AB 1003, as amended, Bloom. Healthy California Community Health Fund.
Existing law provides for various programs that prevent disease and promote health.
This bill would establish the Healthy California Community Health Fund in the State Treasury, and would require moneys in the fund to be used, upon appropriation by the Legislature, to diminish the human and economic costs of diabetes, obesity, heart disease, and dental disease disease, and to reduce inequitable disparities in health between population groups, in California.
This bill would, on and after July 1, 2018, impose a tax, except as specified, on the sale or transfer of any sugar-sweetened beverage product, as defined, by the distributor of the product equal to $0.02 per fluid ounce and would deposit all fees, interest, penalties, and other amounts collected pursuant to these provisions into the fund. The bill would also require the State Department of Public Health to create an advisory committee to advise the state on the allocation of revenue and other issues related to this tax.
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.
Vote: MAJORITY2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 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. Healthy California Community Health Fund

104895.50.
 (a) The Healthy California Community Health Fund is hereby established in the State Treasury, 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 disease, and to reduce inequitable disparities in health between population groups, in California.
(b) The fund shall be used to support culturally and linguistically appropriate programs and interventions that use environmental, policy, and systems change, education and other public health approaches to improve access to, and consumption of, healthy and affordable foods, water, and other beverages, reduce consumption of calorie-dense and nutrient-poor foods and beverages, facilitate physical activity and decrease sedentary behavior, improve oral health literacy and oral health, improve access to primary care, address other determinants of health disparities in California communities, and evaluate these efforts.
(c) The majority of resources shall be allocated to activities in communities that demonstrate significant health disparities, including, but not limited to, diabetes mortality. A defined portion of the funds, as appropriated by the Legislature, shall be distributed annually through sustained, regular funding allocations to agencies or organizations to reach each county for this work.
(d) 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 other required allocations shall be payable from the fund, upon appropriation by the Legislature.
(e) The State Department of Public Health shall create an advisory committee representing a range of sectors and expertise, including public health, relevant nonprofits, and most affected communities, to advise the state on the allocation of revenue and other issues related to this tax.

104895.51.
 (a) There is hereby imposed, except as otherwise provided in this chapter, a tax on the sale or transfer of any sugar-sweetened beverage product by the distributor of the product.
(b) The rate of tax imposed pursuant to subdivision (a) shall be equal to two cents ($0.02) per fluid ounce of each sugar-sweetened beverage product.
(c) The volume of a sugar-sweetened beverage product, for purposes of calculating the tax imposed pursuant to this section, is as follows:
(1) For ready-to-drink sugar-sweetened beverage products, the volume of sugar-sweetened beverages distributed in the course of business in the state.
(2) For concentrates, the largest volume of sugar-sweetened beverage that would typically be produced by the amount of concentrate based on the manufacturer’s instructions or, if the distributor uses the concentrate to produce a sugar-sweetened beverage, the regular practice of the distributor.
(d) The distributor referred to in subdivision (a) is liable for the tax imposed pursuant to that subdivision. The tax imposed pursuant to subdivision (a) shall be paid upon the first nonexempt distribution of a sugar-sweetened beverage product in the state. However, if a distributor or a retailer receives taxable products on which the tax has not been paid, the distributor or retailer is liable for the tax.

104895.52.
 (a) A tax shall not be imposed pursuant to this chapter on a distributor for a sugar-sweetened beverage product for which the tax has already been paid.
(b) If a sugar-sweetened beverage product is manufactured or produced by including one or more other sugar-sweetened beverage products, a tax shall not be imposed pursuant to this chapter on a caloric sweetener contained in the resulting sugar-sweetened beverage product if a tax was previously imposed pursuant to this chapter on that caloric sweetener.
(c) A retailer is liable for the tax imposed pursuant to this chapter upon a sugar-sweetened beverage product only if the tax on that product has not been previously paid by the distributor.
(d) The distribution of sugar-sweetened beverages or concentrate by a distributor to either of the following persons shall be exempt from the tax imposed by this chapter:
(1) A person to whom the bottled sugar-sweetened beverage or concentrate is contractually obligated to be shipped, and actually is shipped, to a point outside of this state 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 hired by the purchaser, for shipment to the out-of-state point.
(2) A person who is otherwise exempt from the taxation of that sale, use, or consumption under the Constitution of the United States, federal law or regulation, or the California Constitution.

104895.53.
 The following definitions apply for the purposes of this chapter:
(a) “Caloric sweetener” means monosaccharides, disaccharides, and high-fructose corn syrup.
(b) “Distribution” or “distribute” means supply to a distributor or retailer, deliver to a retailer, acquisition by a retailer, or transport into the state for the purpose of holding out for sale within the state of any sugar-sweetened beverage product, or any combination of these activities. “Distribution” or “distribute” shall not mean the retail sale to a consumer.
(c) “Distributor” means any person, including a manufacturer or wholesale dealer, who distributes sugar-sweetened beverages or concentrates for sale to retailers doing business in the state, regardless of whether that person also sells those products to consumers.
(d) “Fund” means the California Community Health Fund.
(e) (1) A “sugar-sweetened beverage” is either of the following:
(A) A liquid intended for human consumption which contains a caloric sweetener.
(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 products are not sugar-sweetened beverages for purposes of paragraph (1):
(A) A liquid or concentrate, the primary ingredients of which are milk or a soy, rice, or similar plant-based milk substitute.
(B) A liquid or concentrate composed entirely of one or more of the following:
(i) The original liquid resulting from the pressing of fruit or vegetables.
(ii) The liquid resulting from the reconstitution of pure fruit or vegetable juice concentrate.
(iii) The liquid resulting from the restoration of water to dehydrated fruit or vegetable juice.
(C) Infant formula.
(D) A liquid or concentrate product manufactured for use as any of the following:
(i) An oral nutritional therapy for persons who cannot absorb or metabolize dietary nutrients from food or beverages.
(ii) A source of necessary nutrition used due to a medical condition.
(iii) An oral electrolyte solution for infants and children formulated to prevent dehydration due to illness.
(E) A sugar-sweetened beverage product with fewer than 25 calories per 12 fluid ounces.

104895.54.
 This chapter does not limit the authority of counties or cities to impose taxation on sugar-sweetened beverage products.

104895.55.
 This chapter shall become operative on July 1, 2018.