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AB-764 Sugar-sweetened beverages: nonsale distribution incentives.(2019-2020)

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Date Published: 04/11/2019 09:00 PM
AB764:v97#DOCUMENT

Amended  IN  Assembly  April 11, 2019
Amended  IN  Assembly  March 21, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 764


Introduced by Assembly Member Bonta
(Coauthors: Assembly Members Chiu, Mark Stone, Wicks, and Wood)
(Coauthors: Senators Monning and Wiener)

February 19, 2019


An act to add Article 5 (commencing with Section 104700) to Chapter 2 of Part 3 of Division 103 of the Health and Safety Code, relating to public health.


LEGISLATIVE COUNSEL'S DIGEST


AB 764, as amended, Bonta. Sugar-sweetened beverages: nonsale distribution incentives.
Existing law establishes the State Department of Public Health, which, among other things, administers various programs to prevent disease and promote health. Existing law also regulates certain advertising and promotion practices related to specific products, including by prohibiting the nonsale distribution of smokeless tobacco or cigarettes in designated places and the giving away of premiums, gifts, or free goods in connection with the sale or distribution of alcoholic beverages, except as specified.
This bill would regulate promotion and marketing activities related to sugar-sweetened beverages by prohibiting a beverage company, as defined, manufacturer, or distributor, as defined, from giving or offering incentives or other financial support to compensate distributors or retailers for the cost of promotional offers, coupons, or other incentives offered to consumers for branded products of the beverage company. The bill would authorize local governments and the Attorney General to impose civil penalties for a violation of that prohibition, as specified. The bill would state the intent of the Legislature that these provisions not be construed to preempt or prohibit the adoption and implementation of local ordinances that are more restrictive of promotion and marketing activities related to sugar-sweetened beverages. The bill would state that these provisions do not preempt or prohibit the adoption and implementation of local ordinances related to promotional and marketing activities for sugar-sweetened beverages that are not inconsistent with these requirements, including ordinances that impose additional or more restrictive requirements on those activities.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Article 5 (commencing with Section 104700) is added to Chapter 2 of Part 3 of Division 103 of the Health and Safety Code, to read:
Article  5. Sugar-Sweetened Beverages

104700.
 (a) The Legislature finds and declares that, each year, thousands of Californians require medical and dental treatment because of their consumption of sugar-sweetened beverages.
(b) It is the intent of the Legislature, by enacting this article, to support evidence of the link between obesity, diabetes, dental disease, and heart disease and the consumption of sugar-sweetened beverages. The purpose of this article is to restrict beverage companies from offering and funding promotional and marketing activities that lower the price of sugar-sweetened beverages.

104701.
 For purposes of this article, the following definitions apply:
(a) “Beverage company” means a person who enters into a comprehensive beverage agreement with a bottler, distributor, or retailer for the manufacturing, distribution, or sale of branded beverages or branded beverage products.
(b) (1) “Beverage for medical use” means a beverage 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 or for use as an oral rehydration electrolyte solution for infants and children formulated to prevent or treat dehydration due to illness.
(2) “Beverage for medical use” includes a “medical food.” Consistent with Section 5 (b)(3) 5(b)(3) of the Orphan Drug Act (Public Law 97-414, codified at 21 U.S.C. 360ee(b)(3)), “medical food” means a food that is formulated to be consumed or administered internally under the supervision of a physician and that is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.
(c) “Beverage for medical use” does not include drinks commonly referred to as “sports drinks” or any other derivative or similar terms.
(d) “Caloric” means a substance that adds calories to the diet of a person who consumes that substance.
(e) “Caloric sweetener” means a substance containing calories, suitable for human consumption, that humans perceive as sweet, including, but not limited to, sucrose, fructose, glucose, fruit juice concentrate, or other sugars.
(f) “Distribute” means to sell or otherwise provide a product to a person for resale in the ordinary course of business to a consumer in the state.
(g) “Distributor” means a person, including a manufacturer or wholesale dealer, who receives, stores, manufactures, bottles, or distributes bottled sugar-sweetened beverages, syrups, or powders for sale to retailers doing business in the state, or any combination of those activities, whether or not that person also sells those products to consumers.
(h) “Milk” means natural liquid milk, regardless of animal or plant source or butterfat content, natural milk concentrate, whether or not reconstituted, or dehydrated natural milk, whether or not reconstituted.
(i) “Natural fruit juice” means the original liquid resulting from the pressing of fruits or the liquid resulting from the dilution with water of dehydrated natural fruit juice.
(j) “Natural vegetable juice” means the original liquid resulting from the pressing of vegetables or the liquid resulting from the dilution with water of dehydrated natural vegetable juice.
(k) “Nonsale distribution incentive” means an incentive, or other financial support, given or offered to a distributor or retailer for promotional and marketing activities, consumer incentives, or other similar offers, coupons, or rebate offers for branded products to the consumer.
(l) “Person” means a natural person, partnership, cooperative association, limited liability company, corporation, personal representative, receiver, trustee, assignee, or other legal entity.
(m) “Retailer” means a person who sells or otherwise dispenses in the state a sugar-sweetened beverage to a consumer, whether or not that person is also a distributor.
(n) “Sale” or “sell” means the transfer of title or possession for valuable consideration, regardless of the manner by which the transfer is completed.
(o) (1) “Sugar-sweetened beverage” means a sweetened nonalcoholic beverage, carbonated or noncarbonated, that is intended for human consumption and contains added caloric sweetener. As used in this subdivision, “nonalcoholic beverage” means a beverage that contains less than one-half of 1 percent alcohol per volume.
(2) “Sugar-sweetened beverage” does not include any of the following:
(A) Bottled sugar-sweetened beverages, syrups, and powders sold to the United States government and American Indian tribal governments.
(B) Beverages sweetened solely with noncaloric sweeteners.
(C) Beverages consisting of 100 percent natural fruit or vegetable juice with no added caloric sweetener.
(D) Beverages in which milk, or soy, rice, or a similar milk substitute, is the primary ingredient or the first listed ingredient on the label of the beverage.
(E) Beverages with fewer than five grams of added sugar or other caloric sweeteners per 12 ounces.
(F) Coffee or tea without added caloric sweetener.
(G) Infant formula.
(H) Beverages for medical use.
(I) Water without any caloric sweetener.
(p) “Sugar-sweetened beverage product” means a formula, liquid, or solid mixture of ingredients used in making, mixing, or compounding sugar-sweetened beverages using one or more other ingredients, including, but not limited to, water, ice, powder, simple syrup, fruits, vegetables, fruit juice, vegetable juice, carbonation, or other gas.

104702.
 A beverage company, manufacturer, or distributor shall not give or offer a distributor or retailer a nonsale distribution incentive for a sugar-sweetened beverage or sugar-sweetened beverage product.

104703.
 (a) A city, county, city and county, or the state may impose civil penalties on a person for a violation of this article, if the person knew or reasonably should have known that the person’s actions violated this article, in the amount of one thousand dollars ($1,000) per day for the first violation, two thousand dollars ($2,000) per day for the second violation, and five thousand dollars ($5,000) per day for the third and each subsequent violation.
(b) Any civil penalties collected pursuant to this section shall be paid to the office of the city attorney, city prosecutor, district attorney, or Attorney General, whichever office brought the action.
(c) The penalties collected by the Attorney General pursuant to this section may be expended by the Attorney General, upon appropriation by the Legislature, to enforce this article.

104704.
 It is the intent of the Legislature that nothing in this article does not preempt or prohibit This article does not preempt or prohibit the adoption and implementation of local ordinances related to promotional and marketing activities for sugar-sweetened beverages, except any local ordinance that is inconsistent with this article. An ordinance is not inconsistent with this article if it imposes additional or more restrictive requirements on promotional and marketing activities for sugar-sweetened beverages than the requirements set forth in this article.