BILL NUMBER: SB 1210	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 14, 2010

INTRODUCED BY   Senator Florez
    (   Principal coauthor:   Assembly Member
  Monning   ) 
    (   Coauthors:   Assembly Members 
 Coto   and Torlakson   ) 

                        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 amended, Florez. Taxation: sweetened beverage 
tax.   tax: Children's Health Promotion Fund. 

   Existing law imposes various taxes, including taxes on the
privilege of engaging in certain activities. The Fee Collection
Procedures Law, the violation of which is a crime, provides
procedures for the collection of certain fees and surcharges. 

   This bill would, on and after January 1, 2011, impose a tax at the
rate of $0.01 per teaspoon of caloric sweetener in bottled sweetened
beverage or concentrate upon every person who makes the first sale
in this state of bottled sweetened beverage or concentrate and on
every person who uses or consumes, or places into a vending machine
or retail stock, untaxed bottled sweetened beverage or concentrate,
as provided. This bill would exempt from the tax the sale of bottled
sweetened beverage that was made with tax-paid concentrate, as
provided, and any sale, use, or consumption which the state is
prohibited from taxing, as provided. The tax would be administered by
the State Board of Equalization and would be collected pursuant to
the procedures set forth in the Fee Collection Procedures Law. 

   The bill would require the board to deposit all taxes, penalties,
and interest collected, less refund and administrative costs, in the
Children's Health Promotion Fund, which this bill would create. This
bill would require all moneys in the fund, upon appropriation by the
Legislature, to be allocated to the State Department of Public Health
for distribution of grants to eligible school districts for the
purposes of statewide childhood obesity prevention activities and
programs.  
   Because this bill would expand the application of the Fee
Collection Procedures Law, the violation of which is a crime, it
would impose a state-mandated local program.  
   This bill would make legislative findings and declarations
relating to the consumption of sweetened beverages, childhood
obesity, and dental disease.  
   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.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   This bill would take effect immediately as a tax levy. 

   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   yes  .


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.

   SECTION 1.    (a) The Legislature finds and declares
that over the past 30 years, there has been a substantial increase in
the prevalence of obesity among adults in the United States. From
the 1960s to the late 1970s, prevalence was relatively constant, with
about 15 percent of the population classified as obese. After the
1970s these rates began to climb. By 2006, 23.3 percent of Americans
were considered obese. In California, obesity rates have increased
even more, rising from only 8.9 percent in 1984 to 24.3 percent in
2008. Although no group has escaped the epidemic, ethnic minorities
and the poor are disproportionately affected.  
   (b) The Legislature further finds that the rates of overweight
among children have also increased dramatically in recent decades.
After being relatively constant from the 1960s to the 1970s, the
prevalence of overweight has more than quadrupled among children
between six and 11 years of age and nearly tripled among those
between 12 and 19 years of age. Among California children in grades
5, 7, and 9, 28 percent are overweight, including 34 percent of boys
and 22 percent of girls, with rates in some communities much higher.
 
   (c) The Legislature further finds that the obesity epidemic is of
particular concern because it increases the risk of diabetes, heart
disease, certain types of cancer, arthritis, asthma, and breathing
problems. Depending on their level of obesity, from 60 percent to
over 80 percent of obese adults have type 2 diabetes, high blood
cholesterol, high blood pressure, or other related conditions. It has
been reported that up to 60 percent of obese children aged five to
10 years of age have early signs of heart disease.  
   (d) The Legislature further finds that type 2 diabetes, previously
only seen among adults, is now increasing among children. If the
current obesity trends are not reversed, it is predicted that one in
three children and nearly one-half of Latino and African American
children born in the year 2000 will develop type 2 diabetes in their
lifetime. Research shows that overweight children have a much greater
chance of being obese as adults, with all the health risks that
entails.  
   (e) The Legislature further finds that overweight and obesity
account for $147 billion in health care costs nationally, or 9
percent of all medical spending, per year.  
   (f) The Legislature further finds that in 2006 overweight and
obesity-related costs in California were estimated at almost $21
billion.  
   (g) The Legislature further finds that there is overwhelming
evidence of the link between obesity and consumption of sweetened
beverages such as soft drinks, energy drinks, sweet teas, and sports
drinks. California adults who drink a soda or more per day are 27
percent more likely to be overweight or obese, regardless of income
or ethnicity.  
   (h) The Legislature further finds that 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. For example, a 20-ounce
bottle of soda contains the equivalent of approximately 17 teaspoons
of sugar. Yet, the American Heart Association recommends that
Americans consume no more than five to nine teaspoons of sugar per
day.  
   (i) The Legislature further finds that research shows that almost
one-half of the extra calories Americans have been consuming since
the 1970s could come from soda, with the average American drinking
nearly 50 gallons of sweetened beverages a year, the equivalent of 39
pounds of extra sugar every year.  
   (j) The Legislature further finds that 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 a day. Children and adolescents
now consume 10 to 15 percent of their daily caloric intake from
sweetened beverages.  
   (k) The Legislature further finds that research shows that 41
percent of California children two to 11 years of age and 62 percent
of California teens 12 to 17 years of age drink soda daily and for
every additional serving of sweetened beverage that a child consumes
a day, the likelihood of the child becoming obese increases by 60
percent.  
   (l) Dental caries (tooth decay) is the most common chronic
childhood disease, experienced by more than two-thirds of California'
s children. Children who frequently or excessively consume beverages
high in sugar are at increased risk for dental caries. Untreated
dental caries can lead to pain, infection, tooth loss and in severe
cases, even death. It can slow normal growth and development by
restricting nutritional intake. Children who are missing teeth may
have chewing problems that limit their food choices and result in
nutritionally inadequate diets.  
   (m) 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 and dental
disease. 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 dental disease 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"   sweetened
beverage"  means a sweetened beverage contained in a beverage
container. 
   (c) "Caloric sweetener" means any caloric substance suitable for
human consumption that humans perceive as sweet and includes, without
limitation, sucrose, fructose, including high fructose corn
sweetener, glucose, other sugars, and fruit juice concentrates. For
purposes of this subdivision, "caloric" means a substance that adds
calories to the diet of a person who consumes that substance. 

   (c) 
    (d)  "Concentrate" means a sweetened beverage syrup,
simple syrup, powder, or base product for mixing, compounding, or
making sweetened beverages. 
   (d) 
    (e)  "Concentrate manufacturer" means any person that
manufactures concentrate for sale to distributors, dealers,
consumers, or others in this state. 
   (f) "Medical food" means medical food as defined in Section 109971
of the Health and Safety Code.  
   (e) 
    (g)  "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) 
    (h)  "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) 
    (i)  "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) 
    (j)  "Nonalcoholic beverage" means all beverages not
subject to tax under Part 14 (commencing with Section 32001).

   (i) 
    (k)  (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) 
    (l)  "Sale" means the transfer of title or possession
for consideration in any manner or by any means whatever. 
   (k) 
    (m)  "Simple syrup" means a mixture of sugar and water.

   (l) 
    (n)  (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   caloric
 sweeteners have been added.
   (E) Any product containing milk or milk products. 
   (F) Medical food.  
   (m) 
    (o)  "Sweetened beverage manufacturer" means any person
who bottles, cans, or otherwise fills bottled sweetened beverages, or
imports bottled sweetened beverages. 
   (n) 
    (p)  "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. 
   (q) "Teaspoon" means 4.2 grams.  
   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. 

   32602.  (a) On and after January 1, 2011, a tax is hereby imposed
at the rate of one cent ($0.01) per teaspoon of caloric sweetener in
a bottled sweetened beverage on every person who does the following:
   (1) Makes the first sale in this state of a bottled sweetened
beverage.
   (2) Uses or consumes an untaxed bottled sweetened beverage in this
state.
   (3) Places in this state an untaxed bottled sweetened beverage in
a vending machine or in retail stock for the purpose of selling the
bottled sweetened beverage to consumers.
   (b) On and after January 1, 2011, a tax is hereby imposed at the
rate of one cent ($0.01) per teaspoon of caloric sweetener in the
concentrate on every person who does the following:
   (1) Makes the first sale in this state of concentrate.
   (2) Uses or consumes untaxed concentrate in this state.
   (3) Places in this state untaxed concentrate in a vending machine
or retail stock for the purpose of selling a sweetened beverage to
consumers.
   (c) There is exempt from the tax imposed under subdivision (a),
the sale of bottled sweetened beverage, provided that the bottled
sweetened beverage was made with concentrate on which the tax imposed
under subdivision (b) was paid.  
   32603.  There is exempt from the tax imposed by this part, the
sale, use, or consumption in this state of bottled sweetened
beverages or concentrates where the state is prohibited from taxing
that sale, use, or consumption under the Constitution or laws of the
United States or under the Constitution of this state.  
   32604.  The board shall administer and collect the tax imposed by
this part pursuant to the Fee Collection Procedures Law (Part 30
(commencing with Section 55001)). For purposes of this part, the
references in the Fee Collection Procedures Law to "fee" shall
include the tax imposed by this part and references to "feepayer"
shall include a person required to pay the tax imposed by this part.
 
   32605.  Each person required to pay the tax shall prepare and file
with the board a return in the form prescribed by the board
containing information as the board deems necessary or appropriate
for the proper administration of this part. The return shall be filed
on or before the last day of the calendar month following the
calendar quarter to which it relates, together with a remittance
payable to the board for the amount of tax due for that period. 

   32606.  The board may prescribe those forms and reporting
requirements as are necessary to implement the tax, including, but
not limited to, information regarding the total amount of caloric
sweetener, the total amount of bottled sweetened beverages sold, and
the amount of tax due.  
   32607.  Every payment on a delinquent tax owed pursuant to this
part shall be applied as follows:
   (a) First, to any interest due on the tax.
   (b) Second, to any penalty imposed by this part.
   (c) Third, the balance, if any, to the tax due.  
   32608.  The board shall, upon appropriation, be reimbursed for
expenses incurred in the administration and collection of the tax
imposed by this part.  
   32609.  (a) 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 all taxes, interest,
penalties, and other amounts collected pursuant to this part, less
refunds and reimbursement to the board for expenses incurred in the
administration and collection of the tax.
   (b) 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. 

   SEC. 3.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution. 
   SEC. 4.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.