AB 2782: Healthy California Fund.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-03-30
Existing law provides for various programs that prevent disease and promote health.
This bill, subject to specified exemptions, would impose a fee on every distributor, as defined, for the privilege of distributing in this state bottled sweetened beverages, at a rate of $0.02 per fluid ounce and for the privilege of distributing concentrate in this state, either as concentrate or as sweetened beverages derived from that concentrate, at the rate of $0.02 per fluid ounce of sweetened beverage to be produced from concentrate. The Board of Equalization would be responsible for administering and collecting the fee and registering the distributors upon whom the fee is imposed. These amounts would be deposited into the Healthy California Fund, created by the bill. The bill would require moneys in the fund, upon appropriation by the Legislature, to be allocated to the State Department of Public Health, the State Department of Health Care Services, the Department of Education, and the Department of Food and Agriculture, as specified, for various purposes related to statewide diabetes and childhood obesity treatment and prevention activities and programs, including awarding competitive grants to local governments, nonprofit organizations, school districts, and other entities for activities in support of the bills objectives. This bill would also authorize the State Public Health Officer, the Director of Health Care Services, the Superintendent of Public Instruction, and the Secretary of Food and Agriculture to establish regulations and provide procedural measures to bring into effect those purposes.
The bill would create the Healthy California Fund Oversight Committee, to advise the affected state departments in implementing the bills requirements. Among other requirements, the committee would evaluate programs and interventions funded under the bill and report to the Legislature annually regarding programs funded by the Healthy California Fund. The committee would produce a comprehensive master plan for implementing diabetes and obesity prevention programs throughout the state, increase healthy eating and active living, reduce food insecurity, and promote sustainable, healthy, resilient communities.
This bill would require the State Department of Public Health, in consultation with the other participating departments, to prepare and adopt an annual program budget, as specified. The bill would establish the Children and Family Health Promotion Administration Account within the fund, to be used, upon appropriation by the Legislature, to reimburse expenditures by the State Department of Public Health in administering and implementing the activities required by the bill, and to repay specified loans from other funds.
This bill would make legislative findings and declarations relating to the consumption of sweetened beverages, diabetes, childhood obesity, and dental disease.
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 XIIIA of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
Existing law requires the State Department of Public Health to establish and implement the 5 A DayFor Better Health program to promote public awareness of the need to eat more fruits and vegetables in order to improve health and prevent major chronic diseases. Existing law provides that nothing shall operate to prohibit contributions to the program by certain marketing organizations and commissions subject to specified provisions.
This bill would make technical, nonsubstantive changes to this provision.
Existing law requires the State Department of Public Health to establish and implement the 5 A DayFor Better Health program to promote public awareness of the need to eat more fruits and vegetables in order to improve health and prevent major chronic diseases. Existing law provides that nothing shall operate to prohibit contributions to the program by certain marketing organizations and commissions subject to specified provisions.
This bill would make technical, nonsubstantive changes to this provision.
The Legislature finds and declares as follows:
(a)Over 2.3 million California adults report have been diagnosed with diabetes, representing one out of every 12 adult Californians. The vast majority of diabetes cases in California are type II, affecting 1.9 million adults.
(b)According to the State Department of Public Health, diabetes is the seventh leading cause of death in California and has been determined to be the underlying cause of death for almost 8,000 people each year.
(c)Adults with type II diabetes more often have other health problems. Half of adults with type II diabetes also have hypertension. This rate of occurrence is twice as high as for those without diabetes. Adults with diabetes are also twice as likely to have cardiovascular disease than adults without diabetes.
(d)Adults with diabetes are 50 percent more likely to have arthritis than adults without diabetes. Over 40 percent of new cases of kidney failure are attributed to diabetes. New cases of kidney failure declined slightly from 2001 to 2007, but began to increase again after 2007.
(e)Hispanics, African Americans, American Indians, Alaska Natives, Asian Americans, Native Hawaiians, and Pacific Islanders have a higher prevalence of type II diabetes than non-Hispanic whites. Hispanics and African Americans have two times higher prevalence: 7 percent of non-Hispanic Whites have type II diabetes, compared with 12 percent of Latinos, 9 percent of Asian Americans, 14 percent of Pacific Islander Americans, 13 percent of African Americans, and 17.5 percent of American Indian and Alaska Native populations. In some populations, type II diabetes remains undiagnosed. For example, more than half of Asian Americans with type II diabetes, and even more Asian Americans with prediabetes, are undiagnosed. Nationally, the lifetime risk of developing diabetes is now 40 percent, or 2 of every 5 adults, and exceeds 50 percent for Hispanic men and women and non-Hispanic black women. If trends are not reversed, it is predicted that 40 percent of Americans and nearly half of Latino and African American children born in the year 2000 will develop type II diabetes in their lifetime.
(f)The prevalence of obesity in the United States has increased dramatically over the past 30 years. In California, obesity rates have increased even more, rising from 8.9 percent in 1984 to 23.8 percent in 2011. Although no group has escaped the epidemic, low-income populations and communities of color are disproportionately affected.
(g)The rate of children who are overweight has also increased dramatically in recent decades. In 2010, 38 percent of California children in grades 5, 7, and 9 were overweight or obese. Thirty-one of Californias 58 counties experienced an increase in childhood obesity from 2005 to 2010.
(h)In 2006, overweight and obesity-related health costs in California were estimated at almost $21 billion. The cost of health care alone for diabetes in California in 2010 is estimated to have been $13 billion.
(i)There is overwhelming evidence of the link between obesity, diabetes, and heart disease and with the consumption of sweetened beverages, including soft drinks, energy drinks, sweet teas, and sports drinks. California adults who drink one or more per day are 27 percent more likely to be overweight or obese, regardless of income or ethnicity.
(j)According to nutritional experts, sweetened beverages, such as soft drinks, energy drinks, sweet teas, and sports drinks, offer little or no nutritional value, but massive quantities of added sugars. A 20-ounce bottle of soda contains the equivalent of approximately 16 teaspoons of sugar, yet the American Heart Association recommends that Americans consume no more than five to nine teaspoons of sugar per day.
(k)Research shows that almost half of the extra calories Americans consume in their diet comes from sugar-sweetened beverages, with the average American drinking nearly 50 gallons of sugar-sweetened beverages a year, the equivalent of 39 pounds of extra sugar every year.
(l)Research shows that 41 percent of California children from 2 to 11 years of age, inclusive, and 62 percent of California teens from 12 to 17 years of age, inclusive, drink soda daily, and for every additional serving of sweetened beverage that a child consumes per day, the likelihood of the child becoming obese increases by 60 percent.
(m)Sugary drinks are a unique contributor to excess caloric consumption. A large body of research shows that calories from sugary drinks do not satisfy hunger the way calories from solid food or beverages containing fat or protein do, such as those containing milk and plant-based proteins. As a result, sugary beverages tend to add to the calories people consume rather than replace them.
(n)Dental caries, commonly referred to as tooth decay, is the most common chronic childhood disease, and by third grade tooth decay affects almost two-thirds of the children in California. Twenty-eight percent of elementary school children some 750,000 have untreated tooth decay. Dental disease caused by tooth decay is linked to broader health problems, including cardiovascular disease, strokes and diabetes. It can lead to serious health, developmental, and social concerns, as well as significantly increased cost of restorative care and reliance on high-cost health care settings like hospital emergency departments.
(o)Research shows that low income and minority populations disproportionately feel the burden of tooth decay, as low-income children suffer twice as much from dental disease as those from higher income families, and their disease is more likely to be untreated. Nationally, 32 percent of Latino children and 28 percent of African American children have untreated tooth decay, compared to only 18 percent of white children. Pain and infection from untreated tooth decay impairs concentration and learning in students and leads to missed schooldays.
(p)Sugar is the primary and necessary factor in the development of tooth decay. In addition to sugar, the acids found in beverages like soda, energy drinks, and juice erode tooth enamel, making sweetened beverage consumption one of the most significant contributors to dental caries in children. Children from families of low socioeconomic status have a significantly higher consumption of soda and other types of sugary beverages.
(q)It is the intent of the Legislature in creating the Healthy California Fund to diminish the human and economic costs of diabetes, obesity, heart disease, and dental disease in California. The fund is intended to create a dedicated revenue source for 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.
SEC. 2.Chapter 5 (commencing with Section 104895.50) is added to Part 3 of Division 103 of the Health and Safety Code, to read:5.Healthy California Fund104895.50.The following definitions shall apply for purposes of this chapter:
(a)(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) of the Orphan Drug Act (Public Law 97-414; at 21 U.S.C. 360ee(b)(3)), medical food means a food that is formulated to be consumed or administered enterally 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.
(3)Beverage for medical use does not include drinks commonly referred to as sports drinks, or any other derivative or similar terms.
(b)Board means the State Board of Equalization.
(c)Bottle means any closed or sealed container, regardless of size or shape, including, without limitation, those made of glass, metal, paper, plastic, or any other material or combination of materials.
(d)Bottled sugar-sweetened beverage means any sugar-sweetened beverage contained in a bottle that is ready for consumption without further processing, such as dilution or carbonation.
(e)Caloric sweetener means any caloric substance suitable for human consumption that humans perceive as sweet, including, but not limited to, sucrose, fructose, glucose, fruit juice concentrate, or other sugars. Caloric sweetener excludes noncaloric sweeteners. For purposes of this definition, caloric means a substance that adds calories to the diet of a person who consumes that substance.
(f)Consumer means a person who purchases a sugar-sweetened beverage for consumption and not for sale to another.
(g)Distributor means any 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 these activities, whether or not that person also sells those products to consumers.
(h)Fund means the Healthy California Fund.
(i)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.
(j)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.
(k)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.
(l)Noncaloric sweetener means any noncaloric substance suitable for human consumption that humans perceive as sweet, including, but not limited to, aspartame, acesulfame-K, neotame, saccharin, sucralose, and stevia. Noncaloric sweetener excludes caloric sweeteners. For purposes of this definition, noncaloric means a substance that contains fewer than five calories per serving.
(m)Person means a natural person, partnership, cooperative association, limited liability company, corporation, personal representative, receiver, trustee, assignee, or other legal entity.
(n)Place of business means any place where sugar-sweetened beverages, syrups, or powders are manufactured or received for sale in the state.
(o)Powder means any solid mixture of ingredients used in making, mixing, or compounding sugar-sweetened beverages by mixing the powder with one or more other ingredients, including, but not limited to, water, ice, syrup, simple syrup, fruits, vegetables, fruit juice, vegetable juice, or carbonation or other gas.
(p)Retailer means any 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.
(q)Sale means the transfer of title or possession for valuable consideration, regardless of the manner by which the transfer is completed.
(r)State means the State of California.
(s)(1) Sugar-sweetened beverage means any nonalcoholic beverage, carbonated or noncarbonated, that is sold for human consumption and contains added caloric sweetener. As used in this subdivision, nonalcoholic beverage means any 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)Bottled sugar-sweetened beverages, syrups, and powders sold by a distributor to another distributor that is registered pursuant to Section 104895.58 if the sales invoice clearly indicates that the sale is exempt. If the sale is to a person who is both a distributor and a retailer, the sale shall also be fee-exempt and the fee shall be paid when the purchasing distributor or retailer resells the product to a retailer or a consumer. This exemption does not apply to any other sale to a retailer.
(C)Beverages sweetened solely with noncaloric sweeteners.
(D)Beverages consisting of 100 percent natural fruit or vegetable juice, with no added caloric sweetener.
(E)Beverages in which milk, or soy, rice, or similar milk substitute, is the primary ingredient or the first listed ingredient on the label of the beverage.
(F)Beverages with fewer than five grams of added sugar or other caloric sweeteners per 12 ounces.
(G)Coffee or tea without added caloric sweetener.
(H)Infant formula.
(I)Beverages for medical use.
(J)Water without any caloric sweetener.
(t)Syrup means a liquid 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.
(u)Water includes nonflavored water, or water flavored with noncaloric natural fruit essence or natural flavor. The source of the water may be artesian, mineral, spring, or well. The type of water may also include carbonated, such as sparkling, club, or seltzer, and still, distilled, or purified, such as demineralized, deionized, or reverse osmosis.
(v)Culturally and linguistically appropriate means meeting the requirements of paragraphs (1) and (2) of subdivision (c) of Section 2190.1 of the Business and Professions Code.
104895.51.(a)(1)The Healthy California Fund is hereby established in the State Treasury with the purpose of diminishing the human and economic costs of diabetes, obesity, heart disease, and dental disease in California. The fund shall support culturally and linguistically appropriate programs and interventions that use educational, environmental, policy, and systems change, and other public health approaches to improve access to, and consumption of, healthy and affordable foods and beverages, reduce access to, and consumption of, calorie-dense and nutrient-poor foods, encourage physical activity and decrease sedentary behavior, improve oral health literacy, raise awareness about the importance of nutrition and physical activity in the prevention of obesity and diabetes, and raise awareness of the impact of nutrition and oral health habits on dental disease.
(2)The majority of expenditures shall be directed to support comprehensive policy, systems, and environmental change approaches that promote healthy eating, active living, and improved oral health, including, but not limited to, those recommended by the Institute of Medicine and the federal Centers of Disease Control and Prevention. The fund shall consist of all fees, interest, penalties, and other amounts collected pursuant to this chapter, less refunds and reimbursement for expenses incurred in the administration and collection of the fees.
(b)Fifty-one percent of the moneys in the fund shall be allocated to the State Department of Public Health and distributed for the following purposes:
(1)Twenty-seven percent to develop and administer a regular grant program to all county and city health departments, or their nonprofit designee, seeking to invest in obesity, diabetes, and dental disease prevention activities. Funds shall be distributed in a reasonable proportion for prevention activities across the three chronic diseases and pursuant to the Target Population Funding Criteria under Section 104895.52.
(2)Twenty-eight percent to develop and administer a competitive grant program for nonprofit and community based organizations seeking to invest in obesity, diabetes, and dental disease prevention activities. At least 15 percent and up to 20 percent of these funds shall be used to support nonprofit organizations working statewide, including those that provide capacity building and technical assistance services. At least 8 percent of these funds shall be used for statewide priority population leadership networks, including African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian and Pacific Islander and low socioeconomic status populations. Grants to community-based organizations shall be distributed in a reasonable proportion for prevention activities across the three chronic diseases and shall meet the Target Population Funding Criteria pursuant to Section 104895.52.
(3)Twenty-eight percent to develop and administer a competitive grant program for clinics licensed under subdivision (a) of Section 1204 to invest in a comprehensive approach to obesity, diabetes, and dental disease prevention and treatment activities. In addition to direct services, funding shall support programs that use culturally and linguistically appropriate educational and other public health approaches that raise awareness about the importance of nutrition and physical activity in the prevention of childhood obesity, diabetes, and dental disease. Funds shall be distributed in a reasonable proportion for prevention activities across the three chronic diseases and pursuant to the target population funding criteria specified in Section 10895.52.
(4)Seven percent to the department or its nonprofit partners for statewide advertising and media campaigns, including social media initiatives, to change social and cultural norms around risk factors for chronic diseases, including diet and physical activity, and dental disease prevention. The statewide advertising and media campaigns shall be guided by a subcommittee of the Oversight Committee pursuant to Section 104895.53 and ensure that advertising and media campaigns are tailored for the populations most affected, as listed in subdivision (a) of Section 104895.52.
(5)Ten percent to the department, of which no more than 3 percent may be used for administration of the Fund to include technical assistance to potential grantees and its prevention activities; a minimum of 3 percent for independent evaluation; 1 percent subgranted to California-based public universities or nonprofits to strengthen chronic disease surveillance, including measures to track economic, racial, and ethnic disparities and health inequities; and 3 percent to the departments Oral Health Program to support statewide coordination and delivery of preventive dental health programs and to ensure that funding is directed to programs in accordance with the implementation of the Oral Health Program.
(c)Four percent to the Expanded Access to Primary Care, Rural Health Services Development, Health of Seasonal Agricultural Migratory Workers, and Indian Health programs in the State Department of Health Care Services. Funds shall be used to support culturally and linguistically appropriate clinic-based obesity and diabetes prevention and related disease management pursuant to subdivision (v) of Section 104895.50 with no more than 3 percent going towards department administrative costs.
(d)Twenty-five percent to the Department of Education and distributed for the following purposes and pursuant to the Target Population Funding Criteria, under Section 104895.52, with no more than three percent to be used for department administrative costs:
(1)Twenty-eight percent to administer a competitive grant program for school districts for educational, environmental, policy, and other public health approaches that promote physical activity. The approaches funded pursuant to this paragraph may include improving or constructing school recreational facilities that are used for recess and physical education, joint-use activities during after hours, providing continuing education training for physical education teachers, hiring qualified physical education teachers, and implementing Safe Routes to School programs.
(2)Thirty-one percent to administer a competitive grant program for school districts for educational, environmental, policy, and other public health approaches that promote improved nutrition and access to healthy foods and beverages. The approaches funded pursuant to this paragraph may include improving the quality and nutrition of school breakfasts, lunches, and snacks, increasing access to federal meal programs for underserved populations, and incorporating practical nutrition education into the curriculum.
(3)Fourteen percent to the California Farm to School Program administered by the department.
(4)Twenty-four percent to administer a competitive grant program for school districts for ensuring access to clean drinking water throughout the schoolday, including, but not limited to, drinking fountains and water bottle refilling stations.
(e)Twenty percent to the Department of Food and Agriculture, to be distributed equally for the following purposes, with no more than 3 percent going towards department administrative costs:
(1)To the Office of Farm to Fork, including, but not limited to, consumer incentive programs, pursuant to Section 49001 of the Food and Agricultural Code.
(2)To the Office of Farm to Fork, Chapter 12 (commencing with Section 49001) of Division 17 of the Food and Agricultural Code, to administer a competitive grant program to aide community food producers, as defined under Section 113752, or socially disadvantaged, beginning, military veteran, or limited resource specialty crop producers that improve the health and resilience of their communities by increasing access to any variety of fresh, canned, dried, or frozen whole or cut fruits and vegetables without added sugars, fats or oils, and salt.
104895.52.(a)The target populations described in paragraphs (1) to (5), inclusive, at a minimum, shall be the focus of the campaign implemented pursuant to this chapter, and all moneys in the fund, including those designated for statewide activities, shall be allocated with no less than 60 percent priority given to communities located in zip codes with the highest 30 percentile of type II diabetes, as reported by the California Health Interview Survey (CHIS) conducted by the University of California, Los Angeles Center for Health Policy Research. Departments shall use the most current survey data available in identifying the following populations:
(1)African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian, and Pacific Islander.
(2)Low socioeconomic status populations.
(3)Zip codes with the top 30th percentile of rates of type II diabetes.
(4)Communities identified as dentally underserved or with high rates of dental disease.
(5)At-risk populations, as determined by the California Health Interview Survey (CHIS) and other data sources.
(b)Pursuant to this chapter, the State Department of Public Health and the State Department of Education shall use the most current survey data available to target all moneys in the fund to address the needs of the identified target populations using the following criteria and methodologies:
(1)For funding to the California Department of Public Health:
(A)(i)Pursuant to the county and local government funding criteria, funding shall be focused and primarily expended on programs and activities with a priority and focus on directly serving communities identified in paragraph (1) of subdivision (a), and where consumption of bottled sugar-sweetened beverages is the highest, in neighborhoods with schools with a high concentration of students who qualify for supplemental and concentration grants, pursuant to Section 2574 of the Education Code, and in neighborhoods with a demonstrated need for services, including a high concentration of Medi-Cal eligible residents.
(ii)The department shall develop a funding formula to provide a minimum base level to all county and city health departments with the additional amount weighted to reflect the number of residents in each jurisdiction living below 150 percent of the federal poverty level. Funding shall be dependent on each local health department submitting an approved implementation plan and maintaining a community coalition to support the objectives of the funding. At least one third of each jurisdictions funds shall be subgranted to community partners selected through a competitive process with a priority and focus on directly serving communities and populations described in paragraph (1) of subdivision (a).
(B)Grants for nonprofit and community-based organizations, pursuant to paragraph (2) of subdivision (b) of Section 104895.51, shall be reserved for providing activities in communities described in paragraph (1) of subdivision (a) and assisting populations that are no more than 150 percent above the poverty level. Priority shall be given to culturally and linguistically appropriate activities, pursuant to subdivision (v) of Section 104895.50. Those activities shall directly serve communities with a demonstrated need for health care services, including those with high levels of limitedEnglish-Proficient residents.
(2)Funding to the State Department of Education shall be focused and primarily expended on campuses located in neighborhoods and serving children, pursuant to paragraph (1) of subdivision (a), with a high density of students who qualify for the National School Lunch Program or the federal School Breakfast Program, more than 50 percent of students who would qualify for supplemental or concentration grants, pursuant to Section 2574 of the Education Code, and a demonstrated need that may include showing that access to fresh fruits and vegetables is limited in the neighborhood surrounding the school.
104895.53.(a)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.
(b)The State Public Health Officer, the Secretary of the Department of Food and Agriculture, the Director of Health Care Services, and the Superintendent of Public Instruction may coordinate to establish regulations and procedural measures necessary to effectuate the purposes of this chapter. The regulations may provide for specific programs to be funded consistent with the allocation of funds as set forth in this chapter. In establishing these regulations, the departments shall give particular consideration to reducing the prevalence of diabetes, as identified by data from the CHIS and other data sources.
(c)The California State Auditors office shall conduct periodic audits to ensure that the annual allocation to individual programs is awarded by the fund in a timely fashion consistent with the requirements of this chapter. The first audit shall be conducted no later than 24 months after the effective date of this section.
104895.54.(a)The Healthy California Fund Oversight Committee is hereby created in state government. The committee shall advise the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education with respect to policy development, integration, and evaluation of the state and local programs funded under this chapter, and shall develop a master plan for the future implementation of diabetes, obesity, and dental disease prevention programs.
(b)The committee shall be composed of 13 members to be appointed as follows, with specific consideration to address the needs of the target populations described in Section 104895.52:
(1)Two members representing nonprofit public health organizations dedicated to healthy eating, active living, and diabetes and obesity prevention, appointed by the Speaker of the Assembly.
(2)One member representing an organization that represents the health center community, appointed by the Senate Rules Committee.
(3)One member of a professional education association, such as an association of teachers, appointed by the Senate Rules Committee.
(4)One representative of a professional dental organization, a nonprofit dental health organization, or representing an organization dedicated to dental disease prevention, appointed by Governor.
(5)One member of a university facility with expertise in programs intended to promote healthy eating, active living, and diabetes and obesity prevention, appointed by the Governor.
(6)Two representatives of a target population group, appointed by the Governor.
(7)One representative of the State Department of Public Health, appointed by the Governor.
(8)One representative of the State Department of Health Care Services, appointed by the Governor.
(9)One representative of the Department of Food and Agriculture, appointed by the Governor.
(10)One representative of the State Department of Education, appointed by the Superintendent of Public Instruction.
(11)One representative of local health departments, appointed by the Governor.
(c)Members shall serve for a term of three years, renewable at the option of the appointing authority, with up to two consecutive terms. The initial appointments of members shall be for two or three years, to be drawn by random lot at the first meeting. The committee shall be staffed by the coordinator of the State Department of Public Health programs created pursuant to subdivision (b) of Section 104895.51.
(d)The committee shall meet as often as it deems necessary, but not fewer than four times per year.
(e)The members of the committee shall serve without compensation, but shall be reimbursed for necessary travel expenses incurred in the performance of the duties of the committee.
(f)An equity subcommittee shall be established as part of the Oversight Committee to ensure progress on advancing health equity.
104895.55.The committee shall be advisory to the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education, for the following purposes:
(a)Evaluating programs and interventions funded under this chapter as necessary in order to assess the overall effectiveness of efforts made by the program to promote healthy eating and active living and to prevent diabetes and obesity. In order to evaluate programs, the committee shall seek the cooperation and assistance of the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, the State Department of Education, the University of California, local health departments, local education agencies, administrative representatives, target populations, school officials, nongovernmental organizations, and researchers. A principal measurement of effectiveness shall be the reduction of diabetes and obesity and the increased consumption of healthy foods and levels of physical activity among a given target population.
(b)Facilitating programs directed at promoting healthy eating and active living and preventing diabetes and obesity that are operated jointly by more than one agency or entity. The committee shall propose strategies for the coordination of proposed programs administered by the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education, and local lead agencies, in order to avoid the duplication of services and to maximize the public benefit of the programs.
(c)Making recommendations to the Department of Public Health, the Department of Health Care Services, the Department of Food and Agriculture, and State Department of Education regarding the most appropriate selection criteria for, and standards of, the operation and the types of programs to be funded under this chapter.
(d)(1)Notwithstanding Section 10231.5 of the Government Code, reporting to the Legislature on or before January 1 of each year on the number and scope of programs funded by the Healthy California Fund created by Section 104895.51, the amount of money in the fund, any moneys previously appropriated to the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education, but unspent by the departments, a description and assessment of all programs funded under this chapter, and recommendations for any necessary policy changes or improvements for program interventions and strategies.
(2)A report submitted pursuant to paragraph (1) shall be submitted in compliance with Section 9795 of the Government Code.
(e)Ensuring that the most current research findings regarding diabetes and obesity prevention are applied in designing the programs administered by the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education. The departments shall apply the most current findings and recommendations of research and best practice.
(f)Based on the results of programs supported by this chapter and any other proven methodologies available to the committee, producing a comprehensive master plan for implementing diabetes and obesity prevention programs throughout the state to increase healthy eating and active living, reduce food insecurity, and promote sustainable, healthy, resilient communities. The master plan shall include longitudinal data on obesity prevalence and incidence rates, data on diabetes prevalence and incidence rates, and longitudinal information on sweetened beverage consumption rates across the state population. The master plan shall also include implementation strategies for programs to address the needs of underserved and at-risk target populations throughout this state. The Healthy California Fund Oversight Committee shall submit the master plan to the Legislature biennially, in compliance with Section 9795 of the Government Code. The master plan and its revisions shall include recommendations for administrative arrangements, funding priorities and integration and coordination of approaches by the Department of Public Health, the Department of Health Care Services, the Department of Food and Agriculture, and State Department of Education and their support systems, local lead agencies, and nongovernmental organizations, as well as progress reports relating to the needs of specific target populations.
104895.56.(a)A health impact fee is hereby imposed on every distributor for the privilege of distributing bottled sweetened beverages and concentrate in the state, for deposit into the fund. The fees shall be calculated as follows:
(1)The fee on bottled sweetened beverages distributed in this state shall be two cents ($0.02) per fluid ounce.
(2)The fee on concentrates distributed in the state either as concentrate or as a sweetened beverage derived from that concentrate shall be equal to two cents ($0.02) per fluid ounce of sweetened beverage produced from that concentrate. For purposes of calculating the fee for concentrate, the volume of sweetened beverage to be produced from concentrate shall be the largest volume resulting from use of the concentrate according to any manufacturers instructions.
(b)In each transaction described in subdivision (a), the distributor shall include the following information on each receipt, invoice, or other form of accounting for the distribution of bottled sweetened beverages or concentrate:
(1)The name and address of the distributor.
(2)The name and address of the purchaser.
(3)The date of sale and invoice number.
(4)The kind, quantity, size, and capacity of packages of bottled sweetened beverages, sweetened beverages, or concentrate sold.
(5)The amount of fees due from the distributor on the sale of the bottled sweetened beverages, sweetened beverages, or concentrate.
(6)Any other information, as required by the board.
(c)The program shall develop reimbursement criteria to enable participating departments to recover administrative costs associated with collecting the charge.
(d)This section shall not preempt a city or county from enacting or enforcing an ordinance related to taxation of sugar-sweetened beverages if the ordinance is more stringent than this section.
104895.57.(a)(1) No later than July 1, 2017, and annually thereafter, the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education shall commence preparation of a program budget for the following calendar year. The budgets shall include all of the following information:
(A)Anticipated revenues and costs of implementing the program, including related programs, projects, contracts, and administrative expenses.
(B)A recommended funding level sufficient to cover the programs budgeted costs and to operate the program over a multiyear period in a prudent and responsible manner.
(C)The amount of the health impact fees, as described in Section 104895.56, and itemization of costs that the fees cover.
(2)The State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education shall solicit feedback on their proposed budgets from the Healthy California Fund Oversight Committee before adopting a final budget.
(3)The departments shall adopt final program budgets for purposes of this chapter by October 1 of each year.
(b)The fund shall reimburse the State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education for administration and implementation costs the departments incur pursuant to this chapter, as provided in subdivision (c). The reimbursement shall not exceed the departments direct costs to implement and enforce this chapter.
(c)The State Department of Public Health, the State Department of Health Care Services, the Department of Food and Agriculture, and the State Department of Education shall deposit all moneys submitted for reimbursement costs by the program into the Healthy California Fund Administration Account, which is hereby established within the fund. Upon appropriation by the Legislature, moneys in the account shall be expended by the departments to administer and enforce this chapter and to repay any outstanding loans made from other funds used to finance startup costs of the departments activities pursuant to this chapter.
104895.58.(a)The board 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). The board may use no more than 3 percent of the revenues generated to cover its administrative costs in collecting the fees imposed under this chapter.
(b)The board may prescribe, adopt, and enforce regulations relating to the administration and enforcement of this chapter, including, but not limited to, collections, reporting, refunds, and appeals.
(c)The board may adopt regulations to implement this chapter. The adoption, amendment, repeal, or readoption of a regulation authorized by this section is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the board is hereby exempted for this purpose from the requirements of subdivision (b) of Section 11346.1 of the Government Code.
104895.59.The fees imposed by this chapter are due and payable to the board on or before the last day of the first month following each calendar quarter.
104895.60.(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 with the board using electronic media.
(b)The board may prescribe those forms and reporting requirements as are necessary to implement the fees, including, but not limited to, information regarding the total amount of bottled sweetened beverages and concentrate sold and the amount due.
(c)Returns shall be authenticated in a form or pursuant to methods prescribed by the board.
104895.61.A distributor required to pay the fees imposed under this chapter shall register with the board. An application for registration shall be made upon a form prescribed by the board and shall set forth the name under which the applicant transacts or intends to transact business, the location or locations of each place of business, and any other information required by the board. An application for an account under this section shall be authenticated in a form, or pursuant to methods, prescribed by the board.
104895.62.The distribution of bottled sweetened beverages or concentrate by a distributor to either of the following persons shall be exempt from the fees imposed by this chapter:
(a)A person when, pursuant to the contract of sale, the bottled sweetened beverages or concentrate shall be shipped, and are shipped, to a point outside of this state by the distributor by means of either of the following:
(1)Facilities operated by the distributor.
(2)Delivery by the distributor to a carrier, customs broker, or forwarding agent, whether hired by the purchaser or not, for shipment to the out-of-state point.
(b)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.
104895.63.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 bottled sweetened beverages or concentrate may claim a credit on the distributors return for the period in which the subsequent sale or distribution occurs.
SECTION 1.Section 104655 of the Health and Safety Code is amended to read:104655.Notwithstanding any other law, nothing shall operate to prohibit contributions to the program created pursuant to this article by organizations and commissions subject to Division 22 (commencing with Section 63901) of the Food and Agricultural Code.
Notwithstanding any other provision of law, nothing shall operate to prohibit contributions to the program created pursuant to this article by organizations and commissions subject to Division 22 (commencing with Section 64001) 63901) of the Food and Agricultural Code.
|
Date
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Status
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|---|---|
| Feb 19, 2016 | Introduced. To print. |
| Feb 21, 2016 | From printer. May be heard in committee March 22. |
| Feb 22, 2016 | Read first time. |
| Mar 28, 2016 | Referred to Coms. on HEALTH and REV. & TAX. |
| Mar 30, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended. |
| Mar 31, 2016 | Re-referred to Com. on HEALTH. |
| Apr 12, 2016 | In committee: Set, first hearing. Hearing canceled at the request of author. |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
|
Position
|
Date
|
|---|---|---|
| California Association Of Realtors | * Support | Jun 20, 2018 |
| California Building Industry | * Support | Jun 20, 2018 |
| California Chamber Of Commerce | * Support | Jun 20, 2018 |
| California YIMBY | * Support | Jun 20, 2018 |
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
ABPCA Bill Id:AB 2782
Author:(Bloom) – As Amended Ver:March 30, 2016
SUBJECT: Healthy California Fund.
SUMMARY: Imposes a health promotion fee of $0.02 per fluid ounce on bottled sugar sweetened beverages (SSBs) and concentrates. Establishes the Healthy California Fund (Fund) and allocates moneys from the Fund to various state departments for purposes of reducing the incidence and impact of diabetes, obesity, and dental disease in California. Authorizes the Board of Equalization (BOE) to administer and collect the fee and deposit all fees, penalties, and interest collected into the Fund. Specifically, this bill:
- Imposes a health impact fee on bottled SSBs and concentrates in the state using the following formula:
- Two cents ($0.02) per fluid ounce on bottled sweetened beverages; and,
- Two cents ($0.02) per fluid ounce of sweetened beverages produced from concentrate, based on the largest volume resulting from the concentrate's use according to any manufacturer's instructions.
- Establishes the Fund within the State Treasury. Requires the Fund to support culturally and linguistically appropriate programs to improve access to healthy and affordable foods and beverages, reduce access to calorie-dense and nutrient-poor foods, encourage physical activity, and raise awareness of the importance of nutrition and physical activity in the prevention of obesity, diabetes, and dental disease. Specifies the allocation of funds, by percentage, to various entities as follows:
- Fifty-one percent to the Department of Public Health (DPH), to be divided, as specified, among the following activities:
- A regular grant program to all county and city health departments, or their nonprofit designees, seeking to invest in obesity, diabetes, and dental disease prevention activities;
- A competitive grant program to nonprofit organizations and community based organizations seeking to invest in obesity, diabetes, and dental disease prevention activities. Requires a percentage of these funds to be used for the following:
- To support nonprofit organizations working statewide, including those that provide capacity building and technical assistance services; and,
- For statewide priority population leadership networks, including African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian and Pacific Islander and low socioeconomic status populations.
- To support nonprofit organizations working statewide, including those that provide capacity building and technical assistance services; and,
- A competitive grant program for licensed clinics to invest in obesity, diabetes, and dental disease prevention and treatment activities, and to support programs that use education, and other public health approaches that raise awareness about the importance of nutrition and physical activity;
- Statewide advertising and media campaigns, including social media initiatives, to change social and cultural norms around risk factors for chronic diseases, including diet and physical activity, and dental disease prevention;
- Dental health programs through the DPH Oral Health Program; and,
- Administration, independent evaluation, and disease surveillance.
- A regular grant program to all county and city health departments, or their nonprofit designees, seeking to invest in obesity, diabetes, and dental disease prevention activities;
- Twenty-five percent to the Department of Education (CDE), to be divided among the following activities:
- Competitive grant programs for school districts for educational, environmental, policy, and other public health approaches that promote physical activity, improved nutrition and ensure access to clean drinking water throughout the school day. Permits these funds to be used for school recreational facility improvements and improving quality of school meals; and,
- The CDE Farm to School Program.
- Competitive grant programs for school districts for educational, environmental, policy, and other public health approaches that promote physical activity, improved nutrition and ensure access to clean drinking water throughout the school day. Permits these funds to be used for school recreational facility improvements and improving quality of school meals; and,
- Twenty percent to the Office of Farm to Fork in the Department of Food and Agriculture (DFA), to support consumer incentive programs and to administer a competitive grant program to aid community food producers; and,
- Four percent of funds to the Department of Health Care Services (DHCS) for the Expanded Access to Primary Care, Rural Health Services Development, Seasonal Agricultural Migratory Workers, and Indian Health programs. Requires the funds to be used to support clinic-based obesity and diabetes prevention and related disease management.
- Fifty-one percent to the Department of Public Health (DPH), to be divided, as specified, among the following activities:
- Requires target populations to be the focus of the campaign implemented pursuant to this bill, and all moneys in the fund to be allocated with no less than 60% priority given to communities located in zip codes with the highest 30 percentile of type II diabetes, as reported by the California Health Interview Survey (CHIS). Specifies the following target populations:
- African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian, and Pacific Islander;
- Low socioeconomic status populations;
- Zip codes with the top 30th percentile of rates of type II diabetes;
- Communities identified as dentally underserved or with high rates of dental disease; and,
- At-risk populations, as determined by CHIS and other data sources.
- African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian, and Pacific Islander;
- Requires that DPH funding for local government activities be focused and primarily expended on programs directly serving African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian, and Pacific Islander communities and where consumption of bottled sugar-sweetened beverages is the highest, in neighborhoods with schools with a high concentration of students who qualify for supplemental and concentration grants, and in neighborhoods with a demonstrated need for services, including a high concentration of Medi-Cal eligible residents.
- Requires DPH to develop a funding formula to provide a minimum base level to all county and city health departments with the additional amount weighted to reflect the number of residents in each jurisdiction living below 150% of the federal poverty level. Makes funding dependent on each local health department submitting an approved implementation plan and maintaining a community coalition to support the objectives of the funding. Requires at least one third of each jurisdiction’s funds be subgranted to community partners selected through a competitive process with a priority and focus on directly serving African American, Hispanic, American Indian and Alaska Native, Asian American, Native Hawaiian, and Pacific Islander communities.
- Limits administrative expenses to 3% of funds allocated to DPH, DHCS, CDE, and DFA.
- Requires that moneys in the Fund be expended only for purposes specified and to supplement existing levels of service. Prohibits moneys in the Fund from supplanting current federal, state, or local funding for existing levels of service.
- Authorizes the State Public Health Officer, the Secretary of DFA, the Director of DHCS, and the Superintendent of Public Instruction to coordinate to make rules and regulations to implement the Fund allocation.
- Requires the State Auditor to conduct periodic audits, starting no later than 24 months after the bill's effective date, to ensure annual allocation to individual programs is awarded in a timely fashion consistent with the requirements of this bill.
- Creates the 13-member Healthy California Fund Oversight Committee (Committee) to advise DPH, CDE, DFA, and DHCS with respect to policy development, integration, and evaluation of the state and local programs funded under this bill, and requires the Committee to develop a master plan for the future implementation of diabetes, obesity, and dental disease prevention programs. Requires the Committee to submit to the Legislature an annual report detailing the number and scope of programs enabled by the Fund, the amount of Fund moneys spent and unspent and recommendations, if any for policy changes.
- Requires, by July 1, 2017, and annually thereafter, DPH, DHCS, CDE, and DFA to prepare a program budget for the following year including anticipated revenues and costs of implementing the program, a recommended funding level to operate the program, and the amount of fees collected by the state.
- Creates the Healthy California Fund Administration Account for the purpose of reimbursing DPH, DHCS, CDE, and DFA for administrative and implementation costs of the program.
- Requires the BOE to administer and collect the fees under the Fee Collection Procedures Law. Allows the BOE to adopt regulations and prescribe reporting requirements necessary to implement the fee, including information regarding the total amount of bottled SSB and concentrate sold, and the amount of fee due. Limits BOE’s administrative expenses to 3%.
- Requires distributors subject to the fee to register with BOE.
- Requires fee payers to file with BOE a return on or before the last day of the calendar month following the calendar quarter, together with a remittance for the amount of fee due for that period.
- Provides several definitions including , but not limited to, the following:
- A "sugar-sweetened beverage" means a nonalcoholic beverage, carbonated or not, that contains added caloric sweetener; and,
- Specifies that SSBs do not include:
- Beverages sold to the U.S. government and American Indian tribal governments;
- Certain transactions where beverages are sold by one distributor to another;
- Beverages sweetened with noncaloric sweeteners;
- Beverages sweetened with 100% natural fruit or vegetable juice;
- Beverages in which milk (including plant based milk-substitutes) is the primary or first-listed ingredient;
- Beverages with fewer than five grams of added sugar or other caloric sweeteners per 12 ounces;
- Coffee or tea without added caloric sweetener;
- Infant formula;
- Beverages for medical use; and,
- Water without any caloric sweetener.
- Beverages sold to the U.S. government and American Indian tribal governments;
- A "sugar-sweetened beverage" means a nonalcoholic beverage, carbonated or not, that contains added caloric sweetener; and,
- Makes various findings and declarations regarding the negative impact of sugar on human health.
EXISTING LAW:
- Establishes DPH to protect and improve the health of communities through education, promotion of healthy lifestyles, and research for disease and injury prevention.
- Establishes restrictions on the sale of certain beverages in schools by placing restrictions on the types of beverages allowed to be sold in elementary, middle, and junior high schools and high schools.
- Establishes the BOE to collect California state sales and use tax, as well as fuel, alcohol, and tobacco taxes and fees that provide revenue for state government and essential funding for counties, cities, and special districts.
- Imposes sales tax on the retail sale of tangible personal property. Imposes use tax on the storage, use, or other consumption of tangible personal property from any retailer. Requires the sale or use tax to be computed on the retailer's gross receipts or sales price, respectively, unless the law provides a specific exemption or exclusion. Provides an exemption for the sale of, and the storage, use, or other consumption of, food products for human consumption including, in part, all fruit juices, vegetable juices, and other beverages, including bottled water, but not to include carbonated beverages.
FISCAL EFFECT: This bill has not been analyzed by a fiscal committee.
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, California is facing a diabetes and obesity epidemic, yet spends less than any other state on prevention. There are approximately 2.5 million Californians, about 9% of the state’s population, living with diabetes today. An estimated 13 million Californians, about 46% of the state’s population, have pre-diabetes and up to 70% of these individuals will go on to develop type 2 diabetes in their lifetime. From 1980 to 2010, the national obesity rate more than doubled among adults and tripled among children. These rates are even higher in low-income communities and communities of color and unless current trends are reversed, one out of every three Americans will have diabetes.
The author states that soda and other sugary drinks are the number one source of added sugar in the American diet, and are linked to increased risk of diabetes, heart and liver disease, stroke, obesity, and tooth decay. This bill will create a dedicated revenue source to address the harmful effects of overconsumption of SSBs. The revenues from the fee will go to diabetes prevention programs, as well as oral health programs, programs to increase access to clean drinking water in schools, and physical education programs. This bill will not only help improve public health outcomes, but will also save taxpayers billions of dollars every year on healthcare costs in the long run.
- Obesity, DIABETES, and other chronic diseases. According to the Centers for Disease Control and Prevention, more than one-third of U.S. adults are obese, and approximately 12.5 million children and adolescents ages two to 19 years are obese. Research indicates a tripling in the youth obesity rate over the past three decades. While this increase has stabilized between the years 2005 and 2010, in 2010, 38% of public school children were overweight and obese. Overweight youth face increased risks for many serious detrimental health conditions that do not commonly occur during childhood, including high cholesterol and type 2 diabetes. Additionally, more than 80% of obese adolescents remain obese as adults. Obese children and teenagers also remain at greater risk for developing serious chronic diseases including type 2 diabetes, heart disease, high blood pressure, cancer and other health conditions including asthma, sleep apnea, and psychosocial effects such as decreased self-esteem. In one large study, 61% of overweight five to 10 year-olds already had at least one risk factor for heart disease, and 26% had two or more risk factors. An overweight adolescent has a 70% chance of being overweight or obese as an adult.
According to the September 2014 “Burden of Diabetes in California” report by DPH, over 2.3 million California adults report having been diagnosed with diabetes, representing one out of every 12 adult Californians. The vast majority of diabetes cases in California are type 2, representing 1.9 million adults. The prevalence increases with age—one out of every six adult Californians aged 65 and above have type 2 diabetes—and is higher among ethnic/racial minorities and Californians with low education attainment and/or family income. Compared with non-Hispanic whites, Hispanics and African Americans have twice the prevalence of type 2 diabetes and are twice as likely to die from their disease. Diabetes is the seventh leading cause of death in California, and determined to be the underlying cause of death in almost 8,000 people each year. As diabetes is a contributing factor to many deaths from heart disease and stroke, diabetes may be under-represented as a contributing cause of death.
- THE ECONOMIC BURDEN. The last decade has witnessed a 32% rise in diabetes prevalence, affecting some 3.9 million people and costing upwards of $24 billion per year.
Overall health care spending on obesity continues to significantly burden the nation, however, and the most recent research data available estimate obesity-related health care costs at nearly $150 billion annually. According to the National Conference on State Legislatures, taxpayers fund about half of these costs, at approximately $60 billion, through Medicare and Medicaid. Recent research indicates that if obesity rates are reduced by as little as 5%, health care savings could exceed $29 billion. Childhood obesity also poses a national security challenge, as obesity has become one of the most common disqualifiers for military service; affecting 25% of those who apply to serve.
The medical costs and associated costs of diabetes jumped to $245 billion in 2012, meaning that the diabetes toll on the economy has increased by more than 40% since 2007, according to a recent report from the American Diabetes Association. The 2007 figures were $116 billion for diabetes and the indirect costs (disability, work loss, premature mortality) were $58 billion. According to the California Diabetes Program, total health care and related costs for the treatment of diabetes in California are about $24.5 billion each year. Direct medical costs (e.g., hospitalizations, medical care, treatment, supplies) account for about $18.7 billion, with the other $5.8 billion including indirect costs such as disability payments, time lost from work, and premature death. The average annual treatment cost per case for diagnosed diabetes in the U.S. was nearly $10,000 in 2007. The economic burden of diabetes and prediabetes on the average person is estimated to be over $700 for every man, woman, and child — representing a hidden ‘tax’ paid by all through higher insurance premiums[1]. - CAUSE, CORRELATION, AND RISK. It is very difficult to scientifically prove a direct causal relationship between diet and disease in humans. In laboratory animal studies, a single variable can be changed while all others are held constant to determine a direct cause-and-effect relationship. It is nearly impossible to exert the same level of control in human dietary studies. However, while it may be impossible to completely eliminate alternate hypotheses, a causal relationship between the intake of added sugar and obesity is supported by strong epidemiological evidence. A meta-analysis published in the American Journal of Clinical Nutrition looked at 30 studies of sugary drink consumption published from 1966 to 2005 and found that sugary drink consumption was associated with weight gain and obesity. Another study concluded that sugary drinks are likely to account for at least 20% of the weight gained by Americans between 1977 and 2007. Numerous studies indicate that higher consumption of sugary drinks is associated with higher risk of weight gain and also with higher risk of developing type 2 diabetes.
- EFFORTS TO REDUCE CALORIE CONSUMPTION. Along with increasing physical activity and providing nutritious food, reducing calories from all sources is a necessary component to reduce obesity and associated chronic health conditions. Research shows that people generally underestimate the number of calories in the foods they consume. A recent study asking participants to estimate the caloric content of nine restaurant entrées found that 90% underestimated the caloric content of less healthy items by an average of more than 600 calories. Controlling the intake of added sugars represents an important component of lifestyle management for weight control and maintenance. A recent report by the Institute of Medicine identified sugary drinks as the single largest contributor of calories and added sugars to the U.S. diet. The “2010 Dietary Guidelines for Americans,” published every five years jointly by the U.S. Department of Health and Human Services and the U.S. Department of Agriculture, admonished individuals to reduce consumption of SSBs, recommended that adult Americans should eat a maximum of 10% of their daily calories from added sugars. In March 2015, the World Health Organization’s (WHO) new “Guideline: Sugars Intake for Adults and Children” recommends reduced intake of sugar throughout the life course. In both adults and children, the intake of sugar should be reduced to less than 10% of total energy intake. For a person who consumes 2,000 calories per day that means intake of added sugars should be limited to less than 30 grams (or two tablespoons). WHO found that a further reduction to below 5% of total energy intake would provide additional health benefits.
- POLICY INTERVENTIONS AND UNHEALTHY PRODUCTS. Mounting evidence suggests that effectively curbing the obesity epidemic and reversing the upward trend will require comprehensive approaches across sectors involving public and private stakeholders at the local, state, and federal level. Many believe that the comprehensive approach must be similar to policy efforts previously employed to improve motor vehicle safety or curb usage of alcohol or tobacco. After passage of the California Tobacco Tax and Health Promotion Act of 1988 (Proposition 99), the state created the California Tobacco Control Program (CTCP), implemented a variety of grassroots efforts to educate consumers about the harmful effects of tobacco use, and passed several anti-tobacco laws, such as local and statewide policies to limit smoking in public places, prohibit the incidence of tobacco sales to minors, and restrictions on tobacco advertising; all designed to address smoking prevalence. California's early efforts have shaped best practices for comprehensive tobacco control efforts throughout the nation and the world. According to CTCP, these efforts have so far saved more than one million lives and over $86 billion in health care costs. While tobacco use continues to be pervasive and costly, California has been successful at significantly curbing the burden of tobacco use on California families, our health care system and our economy.
Since the early 1980s, a growing number of economists have examined the impact of the price of alcoholic beverages on alcohol consumption. Studies investigating such a relationship found that alcohol prices were one factor influencing alcohol consumption among youth and young adults. Other studies determined that increases in the total price of alcohol can reduce drinking and driving and its consequences among all age groups; lower the frequency of diseases, injuries, and deaths related to alcohol use and abuse; and, reduce alcohol-related violence and other crime. A large body of research supports the view that increases in the monetary prices of alcoholic beverages, which can be achieved by raising federal, state, and local alcohol taxes, significantly reduce alcohol consumption[2].
- POTENTIAL EFFECT OF SSB FEE. Over the past decade, states and localities have begun to consider taxing SSBs in order to generate revenue, reduce consumption of unhealthy beverages, and promote public health. According to a 2009 issue brief by the Robert Wood Johnson Foundation, emerging studies suggest that small taxes on SSBs are unlikely to affect obesity rates, but they can generate revenue that states can invest in improving public health. In addition, while there is only limited research on the impact of taxes on SSB consumption rates and related weight outcomes, existing research on the impact of prices on food-purchasing behaviors in general suggest that substantive taxes on SSBs could significantly affect consumption patterns and thereby have an impact on overweight and obesity rates.
In October 2013, Mexican President Enrique Peña Nieto approved a one peso (about $0.07) tax per liter of SSB, which national health experts saw as one antidote to Mexico’s alarming diabetes rates. The measure took effect January 1, 2014. A year later, preliminary data suggest consumption rates are falling, though it’s too early to say precisely how much. Mexico’s National Institute of Public Health earliest results suggest that in the first three months of 2014, purchases of sugary drinks dropped by 10% from the same period in 2013. Meanwhile purchases of untaxed drinks, like 100% fruit juice and milk, went up 7%, and purchases of bottled water went up 13%.
- RECENT LOCAL EFFORTS. In November 2014, Berkeley, California became the first city in the nation to adopt a soda tax after 30 other cities and states around the country failed. Its Measure D levied a penny-per-ounce tax on sugar-sweetened drinks. Its revenues were not dedicated to any particular purpose, therefore needing only a simple majority vote to pass. It won the support of 75% of voters. In the first 11 months of implementation Berkeley’s soda tax has generated $1.5 million. In the same election, a similar measure in San Francisco failed. San Francisco's Proposition E would have levied $0.02 per-ounce tax, and it needed two-thirds of the votes to pass because it would have directed revenue to physical education and nutrition programs for children. Proposition E failed to secure two-thirds support, and only received a simple majority, 55%, of votes. In November 2016 a new San Francisco penny-per-once soda tax initiative will be on the ballot. It will require a simple majority for passage.
- SUPPORT. The American Heart Association, cosponsor of this bill, states that SSBs have a direct link to obesity and diabetes, as well as many other diseases and are the largest source of daily calories for adolescents in the U.S. Moreover, SSB consumption is highest among groups that have the highest risk of type 2 diabetes. If nothing is done, it is predicted that 50% of Latino and African American children born since the year 2000 will develop type 2 diabetes during their lifetime. This bill will enable the state to invest in communities disproportionately burdened by diseases related to the consumption of SSBs. The American Diabetes Association (ADA), a cosponsor of this bill, argues that this bill can play an important role in preventing diabetes by deterring consumption of SSBs and appropriating monies from the health impact fee for educational and health purposes in communities hardest hit by the disease. The ADA states that diabetes costs $37.1 billion annually in California alone and argues that California cannot afford to wait to address this growing epidemic. The Latino Coalition for a Healthy California argues that the investment in communities of color made possible by the fee on SSBs, which will raise over $2 billion, will comprehensively address the root causes of poor health outcomes in these communities. The American Academy of Pediatrics, California supports this bill because it will bring awareness of the hazardous effects of SSBs, provide dedicated resources to impacted communities, and reduce SSB consumption.
- OPPOSITION. Californians for Food and Beverage Choice (CFB) argues that this tax does not just impact soda, it also would place a misguided tax on juice drinks, sports drinks, iced teas, and enhanced waters and result in higher prices on hundreds of products sold at convenience and grocery stores and restaurants. These increased prices will especially impact middle- and lower-income Californians. CFB argues that obesity and diabetes are complex health issues so it is unfair and inaccurate to portray SSBs as the main culprit. While obesity and diabetes are serious concerns, consumption of SSBs has steadily declined over the past decade while the rates of obesity and diabetes have increased. The California Restaurant Association argues that this bill is an overreach of government. Singling out and increasing costs on one specific product is a misguided tactic and will likely force higher costs on all drinks. Placing higher taxes on beverages or food will not singularly make people healthier. PepsiCo states that data from the U.S. Department of Agriculture show that over the last 40 years calorie intake from “added fat” and “refined grains” have risen while calories from products with “added sugar” have been flat, with total calories from the former two sources each being larger than calories from added sugar. Pepsi also argues that this bill endangers good jobs in California.
- RELATED LEGISLATION. AB 2696 (Beth Gaines) requires DPH to submit a report to the Legislature on or before January 1, 2018, that includes a summary and compilation of recommendations on diabetes prevention and management.
- PREVIOUS LEGISLATION.
- AB 1357 (Bloom) of 2015 was largely similar to this bill. AB 1357 failed passage in the Assembly Health Committee.
- AB 572 (Beth Gaines) would have required DPH to create a detailed diabetes action plan for the state, and to report the results of the plan to the Legislature biennially. Requirements include the development of a detailed budget blueprint identifying needs, costs, and resources required to implement the plan and a proposed budget for each action step, as well as policy recommendations for the prevention and treatment of diabetes. AB 572 was held on the Suspense File in the Senate Appropriations Committee.
- SB 203 (Monning) of 2015 would have established the Sugar-Sweetened Beverages Safety Warning Act, to be administered by DPH, and required a safety warning on all sealed SSB containers. Would have required the warning label to be posted in a place that is easily visible at the point-of-purchase of an establishment where a beverage container is not filled by the consumer. SB 203 failed passage in the Senate Health Committee.
- SCR 34 (Monning) of 2015 proclaimed the month of September 2015, and each year thereafter, as Childhood Obesity Awareness Month, and expressed the Legislature's support of various programs that work to reduce obesity among children.
- SR 47 (Hall) of 2015 proclaimed November 2016 as Diabetes Awareness Month, and expressed the Senate’s support of aggressive early detection and treatment of diabetes.
- SB 1000 (Monning) of 2014 was largely similar to SB 203. SB 1000 failed passage in the Assembly Health Committee.
- SB 622 (Monning) of 2013 would have imposed $0.01 per fluid ounce tax on bottled SSBs and concentrates. SB 622 was held on the Suspense File in the Senate Appropriations Committee.
- AB 669 (Monning) of 2011 was similar to SB 622. AB 669 was held in the Assembly Revenue and Taxation Committee.
- AB 2100 (Coto) of 2010 would have imposed a $0.01 per teaspoon of added sweetener tax on SSBs and concentrates. AB 2100 was held in the Assembly Revenue and Taxation Committee.
- SB 1210 (Florez) of 2010, a similar measure to AB 2100, was placed on the former Senate Revenue and Taxation Committee’s Suspense File.
- SB 1520 (Ortiz) of 2002 would have imposed an excise tax upon every distributor, manufacturer, or wholesale dealer at a rate of $2 per gallon of soft drink syrup or simple syrup, $0.21 per gallon of bottled soft drinks, and $0.21 per gallon of soft drink produced from powder. The soda tax provisions were removed from the April 29, 2002, version of the bill.
- AB 105 (Moore) of 1983 would have imposed an excise tax on the distribution of nonalcoholic carbonated beverages, except carbonated water and carbonated fruit juice, at the rate of $0.07 per gallon. The provisions of that bill also included an excise tax on the distribution of nonalcoholic carbonated beverage syrup at the rate of $0.50 per gallon of liquid syrup. AB 105 also died in the Assembly Revenue and Taxation Committee.
- TECHNICAL AMENDMENTS.
- On page 12, line 36, insert the word “media” before “campaign” to clarify what campaign this refers to.
- On page 13, it appears that lines 8 and 9 should be deleted as they are duplicative of language already included in this paragraph on page 12, line 39.
- Three technical amendments are recommended related to section 104895.57 of this bill, as follows:
- In order to clarify the definition of “program” as used in section 104895.57 beginning on page 19, line 11 of the bill, the following should be inserted on page 20 after line 10: “(d) For purposes of this section, “program” shall mean all of the activities paid for by the Fund.”
- In section 104895.57 beginning on page 19, line 11, as drafted, this bill requires DPH, DHCS, CDE and DFA to prepare an annual program budget, including the amount of fees that have been paid to BOE. The bill should add BOE to that list of departments which will coordinate to provide the necessary information for preparing the annual budget.
- Paragraph (c) of section 104895.57 beginning on page 20, line 1, states that DPH, DHCS, DFA, and CDE “shall deposit all moneys submitted for reimbursement by the program into the Healthy California Fund Administration Account . . .” The bill should clarify the meaning of this provision or delete it.
- In order to clarify the definition of “program” as used in section 104895.57 beginning on page 19, line 11 of the bill, the following should be inserted on page 20 after line 10: “(d) For purposes of this section, “program” shall mean all of the activities paid for by the Fund.”
- On page 12, line 36, insert the word “media” before “campaign” to clarify what campaign this refers to.
- DOUBLE REFERRAL. This bill has been double-referred. Should this bill pass out of this committee, it will be referred to the Assembly Revenue and Tax Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
American Diabetes Association (cosponsor)
American Heart Association (cosponsor)
California Black Health Network (cosponsor)
California Dental Association (cosponsor)
California Primary Care Association (cosponsor)
Latino Coalition for a Healthy California (cosponsor)
Public Health Institute (cosponsor)
Roots of Change (cosponsor)
100 Black Men of Sacramento
ACT for Women and Girls
AFSMC District Council 36
Agriculture and Land-Based Training Association
Alchemist CDC
Alliance for Rural Community Health
AltaMed Health Services Corporation
American Academy of Pediatrics
American Federation of State, County and Municipal Employees, (AFL-CIO)
Asian Pacific Islander Obesity Prevention Alliance
California Academy of Physician Assistants
California Chronic Care Coalition
California Food Policy Advocates
California Immigrant Policy Center
California Latinas for Reproductive Justice
California Pan-Ethnic Health Network
California Rural Legal Assistance Foundation
California School-Based Health Alliance
California School Nurses Association
Cambodian Family Community Center
Children Now
Community Clinic Association of Los Angeles County
Community Clinic Consortium
Community Health Partnership
Community Water Center
County Health Executives Association of California
Cultiva La Salud
Dignity Health
Ecology Center
Families in Good Health
Farmers Guild
Having our Say!
Health and Life Organization, Inc.
Health Trust
Kheir Center
Long Beach Fresh
Los Angeles Trust for Children's Health
Mathiesen Memorial Health Clinic
Mountain Valleys Health Centers
National Hmong American Farmers
North Coast Clinics Network
North East Medical Services
Orange County Food Access
PDI Surgery Center
Pico Union Project
Sacramento Native American Health Center, Inc.
San Ysidro Health Center
SEIU California
Sonoma County Board of Supervisors
Sonoma County Indian Health Project
South Asian Network
Southeast Asia Resource Action Center
Street Level Health Project
Tiburcio Vasquez Health Center
UFCW Western States Council
United Nurses Association of California
Vision y Compromiso
Opposition
California Restaurant Association
California Teamsters Public Affairs Council
Californians for Food and Beverage Choice
PepsiCo
Analysis Prepared by: John Gilman / HEALTH / (916) 319-2097
Discussed in Hearing
12MIN
Senate Standing Committee on Environmental Quality
Bill Author
