BILL NUMBER: SB 1210 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Florez
FEBRUARY 18, 2010
An act to add Part 14.5 (commencing with Section 32600) to
Division 2 of the Revenue and Taxation Code, relating to taxation, to
take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1210, as introduced, Florez. Taxation: sweetened beverage tax.
The Sales and Use Tax Law imposes a tax on the retail sale in this
state of, and on the storage, use, or other consumption in this
state of, tangible personal property based on a specified percentage
of the gross receipts from the sale of, or sales price of, that
property.
This bill would impose a tax upon every sweetened beverage
manufacturer, concentrate manufacturer, or other person who makes the
first sale in this state of a sweetened beverage or concentrate of a
rate of $0.01 per teaspoon of sugar placed into the sweetened
beverage or equivalent amount of concentrate. The revenues collected
from this tax would be deposited in the Childhood Obesity Fund, which
the bill would create, for appropriation by the Legislature.
This bill would result in a change in state taxes for the purpose
of increasing state revenues 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 take effect immediately as a tax levy, but its
operative date would depend on its effective date.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Over the past 30 years, the obesity rate in the United States
has more than doubled. According to statistics compiled by the United
States Centers for Disease Control, in 2008, 26.7 percent of the
country's adult population was considered obese (body mass index
(BMI) of 30 and above).
(b) For children the increase in obesity has been even more
dramatic, with the obesity rate among schoolage children ages 6 to 11
years of age, inclusive, quadrupling over the last four decades.
(c) Obese children are at least twice as likely as nonobese
children to become obese adults.
(d) The obesity epidemic has led to a dramatic increase in
obesity-related health conditions, including, but not limited to,
early onset of type 2 diabetes, asthma, heart disease, cancer, and
strokes. These health conditions cost billions of dollars in health
care costs and lost productivity. In an eight-year study, women who
consumed one or more servings of sweetened beverages per day had
twice the risk of developing type 2 diabetes and a 23 percent higher
risk of coronary heart disease than women who consumed less than one
serving of sweetened beverages per month.
(e) Overweight and obesity account for $147 billion in health care
costs nationally, or 9 percent of all medical spending, per year.
(f) According to nutritional standards, sweetened beverages,
including, but not limited to, soft drinks, energy drinks, sweet
teas, and sports drinks offer little or no nutritional value but
massive quantities of added sugars. For example, a 12-ounce serving
of soda contains the equivalent of approximately 10 teaspoons of
sugar; the United States Department of Agriculture recommends that a
person eating a 2,200-calorie diet should consume no more than 12
teaspoons of refined sugar per day.
(g) Numerous studies strongly support a link between obesity and
consumption of sweetened beverages, including, but not limited to,
soft drinks, energy drinks, sweet teas, and sports drinks. Long-term
studies have shown that women who increased their consumption of
sweetened beverages for four years gained an average of 17.6 pounds,
whereas women who decreased their consumption of sweetened beverages
for four years gained only 6.2 pounds. The effect of sweetened
beverage consumption in children is even more staggering. For every
additional serving of sweetened beverage that a child consumes per
day, the likelihood of the child becoming obese increases by 60
percent.
(h) Americans are drinking more sweetened beverages than ever
before. From 1977 to 2002, Americans doubled the amount of sweetened
beverages they consumed. Currently, children and adult Americans
consume 172 and 175 calories respectively from sweetened beverages
per day. Children and adolescents now consume 10 to 15 percent of
their daily caloric intake from sweetened beverages.
(i) It is the intent of the Legislature, by adopting the Sweetened
Beverage Tax Law and creating the Children's Health Promotion Fund,
to diminish the human and economic costs of obesity. This act is
intended to discourage excessive consumption of sweetened beverages
by increasing the price of these products and by creating a dedicated
revenue source for programs designed to prevent and treat childhood
obesity and reduce the burden of attendant health conditions.
SEC. 2. Part 14.5 (commencing with Section 32600) is added to
Division 2 of the Revenue and Taxation Code, to read:
PART 14.5. SWEETENED BEVERAGE TAX LAW
32600. This part shall be known and may be cited as the Sweetened
Beverage Tax Law.
32601. For purposes of this part:
(a) "Beverage container" means any closed or sealed glass, metal,
paper, plastic, or any other type of container regardless of the size
or shape of the container.
(b) "Bottled soft drink" means a sweetened beverage contained in a
beverage container.
(c) "Concentrate" means a sweetened beverage syrup, simple syrup,
powder, or base product for mixing, compounding, or making sweetened
beverages.
(d) "Concentrate manufacturer" means any person that manufactures
concentrate for sale to distributors, dealers, consumers, or others
in this state.
(e) "Milk" means natural liquid milk, regardless of animal source
or butterfat content, natural milk concentrate, whether or not
reconstituted, regardless of animal source or butterfat content, or
dehydrated natural milk, whether or not reconstituted.
(f) "Natural fruit juice" means the original liquid resulting from
the pressing of fruit, the liquid resulting from the reconstitution
of natural fruit juice concentrate, or the liquid resulting from the
restoration of water to dehydrated natural fruit juice.
(g) "Natural vegetable juice" means the original liquid resulting
from the pressing of vegetables, the liquid resulting from the
reconstitution of natural vegetable juice concentrate, or the liquid
resulting from the restoration of water to dehydrated natural
vegetable juice.
(h) "Nonalcoholic beverage" means all beverages not subject to tax
under Part 14 (commencing with Section 32001).
(i) (1) "Powder" or "base product" means a mixture of ingredients
in other than liquid form, used in making, mixing, or compounding
sweetened beverages by mixing this product with water, ice, syrup, or
simple syrup, fruits, vegetables, fruit juice, vegetable juice, or
any other product suitable to make a sweetened beverage.
(2) "Powder" or "base product" does not include any of the
following:
(A) Any product sold in powder or other nonliquid mixture form
that is solely used in preparing coffee or tea.
(B) Any product sold in powder form for consumption by infants and
which is commonly referred to as "infant formula."
(C) Any product sold in powder form for use for weight reduction.
(D) Any product containing milk or milk products.
(E) Any frozen concentrate or freeze-dried concentrate to which
only water is added to produce a sweetened beverage containing more
than 10 percent natural fruit juice or more than 10 percent natural
vegetable juice.
(F) Any powder or other base product that is sold and used for the
purpose of an individual consumer mixing a sweetened beverage.
(j) "Sale" means the transfer of title or possession for
consideration in any manner or by any means whatever.
(k) "Simple syrup" means a mixture of sugar and water.
(l) (1) "Sweetened beverage" means any sweetened nonalcoholic
beverage sold for human consumption including, but not limited to,
the following: soda water, ginger ale, root beer, all beverages
commonly referred to as cola, lime, lemon, lemon-lime, and other
flavored beverages, including any fruit or vegetable beverage
containing 10 percent or less natural fruit juice or natural
vegetable juice, and all other drinks and beverages commonly referred
to as "soda," "soda pop," and "soft drinks."
(2) "Sweetened beverage" does not include any of the following:
(A) Any nonalcoholic beverage sweetened entirely with artificial
sweeteners that do not add calories to the beverage.
(B) Any product sold in liquid form for consumption by infants,
which is commonly referred to as "infant formula."
(C) Any product sold in liquid form for use for weight reduction.
(D) Water, to which no natural sweeteners have been added.
(E) Any product containing milk or milk products.
(m) "Sweetened beverage manufacturer" means any person who
bottles, cans, or otherwise fills bottled sweetened beverages, or
imports bottled sweetened beverages.
(n) "Syrup" means the liquid mixture of ingredients used in
making, or mixing, compounding sweetened beverages by mixing the
syrup with water, simple syrup, ice, fruits, vegetables, fruit juice,
vegetable juice, or any other product suitable to make a sweetened
beverage.
32602. A tax is hereby imposed upon every sweetened beverage
manufacturer or concentrate manufacturer, or other person who makes
the first sale in this state of a sweetened beverage or concentrate
at a rate of $0.01 per teaspoon of sugar placed into the sweetened
beverage or equivalent amount of concentrate.
32605. (a) The board shall collect the tax pursuant to the Fee
Collection Procedures Law Part 30 (commencing with Section 55001) of
Division 2 of the Revenue and Taxation Code. For purposes of
administration of the tax pursuant to this part, references in the
Fee Collection Procedures Law to "feepayer" and "fee" shall include
"taxpayer" and "tax."
(b) The tax imposed by this part shall be due and payable to the
board quarterly on or before the last day of the month next
succeeding each quarterly period.
(c) The board may adopt rules and regulations for the proper
administration of this tax.
32606. There is hereby created a trust fund in the State Treasury
called the Children's Health Promotion Fund. The Children's Health
Promotion Fund shall consist of moneys collected pursuant to the
taxes imposed by this part. All costs to implement this part shall be
paid from moneys deposited in the Children's Health Promotion Fund.
All revenue to the state derived from the tax on sweetened beverages
pursuant to this part, shall be deposited into this fund.
32607. (a) All moneys in the Children's Health Promotion Fund
shall, upon appropriation by the Legislature, be allocated for the
purposes of statewide childhood obesity prevention activities and
programs.
(b) The State Department of Public Health shall adopt rules and
regulations, and provide procedural measures to implement this
section.
SEC. 3. This bill would take effect immediately as a tax levy, but
its operative date would depend on its effective date.