BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:       SB 622
          AUTHOR:        Monning
          AMENDED:       April 15, 2013
          HEARING DATE:  May 1, 2013
          CONSULTANT:    Robinson-Taylor

           SUBJECT  :  Taxation: sweetened beverage tax: Children's Health  
          Promotion Fund.
           
          SUMMARY  :  Enacts the Sweetened Beverage Tax Law, which imposes a  
          one-cent per fluid ounce tax on any beverage that adds caloric  
          sweeteners, such as sodas, energy drinks, sweet teas, and sports  
          drinks.  Requires funds generated by the Sweetened Beverage Tax to  
          be directed to the newly created Children's Health Promotion Fund  
          (Fund) and allocated to statewide childhood obesity prevention  
          activities and programs.

          Existing law:
          1.Establishes the Board of Equalization (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.

          2.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.

          3.Establishes the Department of Public Health (DPH) to protect  
            and improve the health of communities through education,  
            promotion of healthy lifestyles, and research for disease and  
            injury prevention.

          4.Establishes restrictions on the sale of certain beverages in  
            schools by placing restrictions on the types of beverages  
                                                         Continued---



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            allowed to be sold in elementary, middle and junior high  
            schools and high schools.

          5.Requires that at least 35 percent of food choices and  
            one-third of beverage choices in vending machines on state  
            property adhere to accepted nutritional guidelines.

          6.Creates minimum standards for beverages that are served in  
            licensed child day care facilities.  

          7.Requires school districts to provide access to fresh drinking  
            water during meal times in school food service areas.




          This bill:
          Children's Health Promotion Fund.  
          1.Establishes the Children's Health Promotion Fund in the State  
            Treasury.  Requires the Fund to consist of all taxes,  
            interest, penalties, and other amounts collected under the  
            Sweetened Beverage Tax Law less refunds and reimbursement to  
            the BOE for its administrative and tax collection expenses.  

          2.Provides, upon the Legislature's appropriation, allocations  
            for statewide childhood obesity prevention activities and  
            programs, specifically:

                  a.        20 percent to the California Department of  
                    Public Health (DPH) to coordinate and fund statewide  
                    childhood obesity prevention activities and children's  
                    dental programs.  Requires funding to support programs  
                    that achieve the following goals: educational,  
                    environmental, policy, and other public health  
                    approaches that improve access to and consumption of  
                    healthy, safe, and affordable foods and beverages;  
                    reduce access to and consumption of calorie-dense,  
                    nutrient-poor foods; encourage physical activity;  
                    decrease sedentary behavior; and, raise awareness  
                    about the importance of nutrition and physical  
                    activity;

                  b.        35 percent for community-based childhood  
                    obesity prevention programs.  Requires DPH to be  
                    responsible for the distribution of these funds to  
                    community-based organizations and to local health  




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                    departments, with priority given to counties that have  
                    the highest rates of childhood obesity;

                  c.        10 percent to evidence-based prevention, early  
                    recognition, monitoring, and weight management  
                    intervention activities in the medical setting.   
                    Requires DPH to be responsible for identifying  
                    activities and allocating these funds; and,

                  d.        35 percent to elementary and secondary schools  
                    for approaches that promote nutrition and physical  
                    activity, like improving recreational facilities used  
                    for recess, hiring qualified physical education  
                    teachers,  implementing Safe Routes to Schools  
                    programs, improving the quality and nutrition of  
                    school meals, and incorporating nutrition education  
                    into curriculum.  Requires the Superintendent of  
                    Public Instruction to be responsible for these funds'  
                    allocation and distribution.

          3.Requires that the Fund be expended only for purposes specified  
            in the Sweetened Beverage Tax Law and to supplement existing  
            levels of service.  Prohibits any moneys from the Fund from  
            supplanting current federal, state, or local funding for  
            existing levels of service.   

          4.Authorizes the State Public Health Officer and Superintended  
            of Public Instruction to make rules and regulations, which may  
            provide specific programs to be funded, to implement the fund  
            allocation. 
          
          Excise Tax.
          1.Imposes an excise tax on bottled sweetened beverages and  
            concentrates in the state using the following formula:

                  a.        One cent ($0.01) per fluid ounce on bottled  
                    sweetened beverages; and
                  b.        One cent ($0.01) 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.

          2.Requires a distributor to include on each receipt, invoice, or  
            other form of accounting for the bottled sweetened beverages  
            or concentrate's distribution, the following:




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                  a.        The distributor's name and address;
                  b.        The purchaser's name and address;
                  c.        The date of sale and invoice number;
                  d.        The kind, quantity, size, and capacity of  
                    packages of bottled sweetened beverages, sweetened  
                    beverages, or concentrate;
                  e.        The amount of excise tax due to the BOE from  
                    the distributor; and, 
                  f.        Any other information required by the BOE.

          3.Requires taxes to be due and payable to the BOE on or before  
            the last day of the month after each quarterly period.

          Tax exemptions and credit.
          4.Provides the following exemptions to the tax to prevent  
            double-taxation and taxation on sales shipped out of state by  
            a distributor to:

                  a.        A distributor registered with the BOE, as  
                    supported by a completed exemption certificate;
                  b.        A person when the bottled sweetened beverages  
                    or concentrate are required to be shipped outside the  
                    state by the distributor, as specified; or, 
                  c.        A person where the state is prohibited from  
                    taxing the sale, use, or consumption under the State  
                    Constitution, United States Laws, or United States  
                    Constitution.

          5.Provides that a distributor who has paid an excise tax, either  
            directly to California or another registered distributor, and  
            makes a subsequent distribution of bottled sweetened beverages  
            or concentrate is permitted to claim a credit on its return  
            for the period when that subsequent sale or distribution  
            occurs. 

          BOE's administration.  
          6.Requires the BOE to administer and collect the tax according  
            to the Fee Collection Procedures Law in existing law.   
            Clarifies the following definitions in the Fee Collection  
            Procedures Law:

                  a.         "Fee" means the tax imposed by the Sweetened  
                    Beverage Tax Law; and,
                  b.        "Feepayer" means a person required to pay the  
                    tax as imposed by the Sweetened Beverage Tax Law.




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          7.Authorizes the BOE to prescribe, adopt, and enforce  
            regulations, including emergency regulations as necessary,  
            related to the Sweetened Beverage Tax Law's administration and  
            enforcement, including: collections, reporting, refunds, and  
            appeals.  Requires any emergency regulation to be adopted  
            according to state law, and requires the Office of  
            Administrate Law to consider the regulation as necessary for  
            the immediate preservation of the public peace, health,  
            safety, and general welfare. 

          8.Requires that on or before the last day of the month following  
            each quarterly calendar quarter of three month, a distributor  
            must file a return for the preceding calendar quarter.   
            Requires a return for the preceding calendar quarter to be  
            filed using electronic media.  Requires that taxes under the  
            Sweetened Beverage Tax Law are due on or before the last day  
            of each month following each calendar quarter.

          9.Authorizes the BOE to prescribe forms and reporting  
            requirements, including information on the total amount of  
            bottled sweetened beverages and concentrate sold and the  
            amount of tax due.  Requires the BOE to authenticate returns. 

          10.Requires every person, who must pay the excise tax, to  
            register with the BOE.  Requires every registration  
            application to include the name under which the applicant  
            transacts or intends to transact business, the location of the  
            places of business, and other information as the BOE may  
            require.  Requires the BOE to also authenticate an  
            application. 

          Definitions.  
          11.Provides several definitions including , but not limited, the  
            following:

                  a.        A "sweetened beverage" means any sweetened  
                    non-alcoholic beverage sold for human consumption that  
                    has caloric sweeteners and contains more than 25  
                    calories per 12 ounces, including soda water, ginger  
                    ale, root beer, beverages referred to as cola, lime,  
                    lemon, lemon-lime, and other flavored beverages  
                    including any fruit or vegetable beverage containing  
                    less than 50 percent natural fruit or vegetable juice;  
                    and, all other drinks referred to as "soda," "soda  




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                    pop," "soft drinks," "sports drinks," "energy drinks,"  
                     "juice drinks," "iced teas," and "vitamin fortified  
                    waters."  Specifies that a sweetened beverage does  not   
                    include any of the following:

                        i.             Any product sold in liquid form for  
                         infant consumption, known as "infant formula" or  
                         any product whose purpose is infant rehydration;
                        ii.            Any product sold in liquid form for  
                         weight production;
                        iii.           Water with no added caloric  
                         sweeteners;
                        iv.            Milk or milk products;
                        v.             Medical food;  and  ,
                        vi.            Any sweetened beverage containing  
                         more than 50 percent of natural fruit or natural  
                         vegetable juice.

                  b.        "Caloric sweetener" means any caloric  
                    substance suitable for consumption that humans  
                    perceive as sweet, including but not limited to  
                    sucrose, fructose, high fructose corn sweetener,  
                    glucose, other sugars, and fruit juice concentrates.

                  c.        "Concentrate" means a syrup, powder, or base  
                    product used for mixing, compounding, or making  
                    sweetened beverages in a dispensing machine.   
                    Concentrate does  not  include any of the following:
                        i.             Any product used solely in coffee  
                         or tea preparation;
                        ii.            Any product for infant consumption,  
                         known as "infant formula;"
                        iii.           Any product for weight reduction;
                        iv.            Milk or milk products;
                        v.             Any frozen concentrate or  
                         freeze-dried concentrate to which water is added  
                         to produce a sweetened beverage containing more  
                         than 50 percent natural fruit juice or more than  
                         50 percent natural vegetable juice or more than  
                         50 percent combined natural fruit juice and  
                         natural vegetable juice;
                        vi.            Any product sold and intended for  
                         an individual consumer mixing a sweetened  
                         beverage;
                        vii.           Medical food, as defined in state  
                         law and meets the definition under the federal  




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                         Food, Drug, and Cosmetic Act;  and  ,
                        viii.          Any product to which no caloric  
                         sweeteners have been added.

                  d.         "Distribution" means:
                        i.             The sale of bottled sweetened  
                         beverages or concentrate to a retailer;
                        ii.            The receipt of untaxed bottled  
                         sweetened beverages or concentrate from an  
                         unregistered, out-of-state distributor by a  
                         retailer;
                        iii.           The retail sale of untaxed bottle  
                         sweetened beverages, sweetened beverages, or  
                         concentrate in California; and,
                        iv.            The use or consumption, as defined,  
                         of untaxed bottled sweetened beverages or  
                         concentrate in California by a distributor or  
                         retailor.  

                  e.        "Distributor" means any person who distributes  
                    bottled sweetened beverages, sweetened beverages, or  
                    concentrates in California, whether or not the person  
                    also sells products to consumers.

                  f.        "Natural fruit juice" means the original  
                    liquid from the fruit pressing, the reconstitution of  
                    natural fruit juice concentrate, or the rehydration of  
                    natural fruit juice. 

                  g.        "Natural vegetable juice" means the liquid  
                    resulting from pressing vegetables, the reconstitution  
                    of natural vegetable juice concentrate, or the  
                    rehydration of natural vegetable juice.

                  h.        "Non-alcoholic beverage" means any beverage  
                    not subject to the Alcoholic Beverage Tax, like beer,  
                    wine, or distilled spirits.

                  i.        "Person" means an individual, trust, firm,  
                    joint stock company, business concern, business trust,  
                    receiver, trustee, syndicate, social club, fraternal  
                    organization, estate, corporation, including a  
                    government corporation, partnership, limited liability  
                    company, and association or any other group or  
                    combination acting as a unit.  "Person" also includes  




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                    any city, county, city and county, district,  
                    commission, California, or any department, agency, or  
                    political subdivision, any interstate body, and the  
                    United States and its agencies and instrumentalities,  
                    as permitted by law.

                  j.        "Powder" or "base product" means a solid or  
                    liquid mixture of ingredients with added caloric  
                    sweetener used in making, mixing, or compounding  
                    sweetened beverages by mixing powder or the base  
                    product with other ingredients like water, ice, syrup,  
                    simple syrup (a mixture of sugar and water), fruits  
                    vegetables, carbonation, or other gas.

                  aa.       "Retail sale" is the sale of sweetened  
                    beverages to a consumer.

                  bb.       "Retailer" means any person who sells  
                    sweetened beverages to a consumer in California.

                  cc.       "Sale" means the transfer of title or  
                    possession for consideration.

                  dd.       "Simple syrup" means a mixture of sugar and  
                    water.

                  ee.       "Syrup" means the liquid mixture used in  
                    making, mixing, or compounding sweetened beverages  
                    using ingredients like water, ice, powder, simple  
                    syrup, fruits, vegetables, fruit or vegetable juice,  
                    carbonation, or other case.

          12.Operative date.  Requires this bill to become operative on  
            July 1, 2014.

          13.Findings and declarations.  Makes several findings and  
            declarations to support its purpose. 

           FISCAL EFFECT  :  This bill has not been analyzed by a fiscal  
          committee.

           COMMENTS  :  
           1.Author's statement.  The medical and scientific evidence is  
            clear, sweetened beverages are the leading cause of obesity  
            and preventable chronic diseases among children.  These trends  
            constitute a public health crisis that is costing the State of  




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            California billions of dollars in health care costs and lost  
            economic output.  SB 622, much like California's world  
            renowned tobacco taxes, will reduce the prevalence of obesity  
            and diabetes by increasing the price of sugar-sweetened  
            beverages (SSB) and generate $1.7 billion annually to fund  
            childhood obesity and diabetes prevention and treatment  
            programs.

          2.Obesity epidemic.  According to the federal Centers for  
            Disease Control and Prevention (CDC), more than one-third of  
            U.S. adults (35.7 percent) are obese and approximately 12.5  
            million children and adolescents (17 percent) ages 2-19 years  
            are now obese.  Obesity-related conditions include heart  
            disease, stroke, type-2-diabetes and certain types of cancer,  
            all among the leading causes of death for Americans.  Many  
            obese children are now diagnosed with health problems  
            previously considered to be "adult" illnesses, such as type 2  
            diabetes and high blood pressure.  Obesity can affect a  
            person's joints, breathing, sleep, mood and energy levels.  It  
            can also cause complications for other unrelated health  
            conditions that may require longer hospital stays, longer  
            recovery times, and increase risk to patients experiencing  
            co-morbidities.  Mounting evidence suggests that effectively  
            curbing the epidemic statewide and reversing the upward trend  
            will require comprehensive approaches across sectors involving  
            stakeholders at the local, state, and federal level, similar  
            to the state's efforts to curb tobacco usage. 

          3.SSBs.  According to the U.S. Department of Agriculture, in  
            2009, Americans consumed 13.8 billion gallons of SSBs which  
            equates to nearly 45 gallons per capita annually of soda,  
            fruit punch, sweetened teas, sports drinks, and other  
            beverages with added caloric sweeteners.  According to the  
            UCLA Center for Health Policy Research, in California, 62  
            percent of adolescents ages 12-17 and 41 percent of children  
            ages 2-11 drink at least one soda or other sweetened beverage  
            every day.  In addition, 24 percent of adults drink at least  
            one soda or other sweetened beverage on an average day.   
            Adults who drink soda occasionally (not every day) are 15  
            percent more likely to be overweight or obese, and adults who  
            drink one or more sodas per day are 27 percent more likely to  
            be overweight or obese than adults who do not drink soda.   
            Academic studies find that raising the price of a soda by  
            twenty cents would reduce net caloric intake, translating to  
            weight loss and reduced obesity prevalence among adults and  




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            children's at-risk-of-overweight prevalence.  According to a  
            report produced by the Robert Wood Johnsons Scholar's Program,  
            soft drinks were the single largest contributor to energy  
            intake during the last decade and soft drink consumption has  
            increased by almost 500 percent during the past 50 years.  

          4.Economic benefits of preventing disease.  Community-based  
            prevention saves money and improves lives, according to the  
            report, Prevention for a Healthier California, produced  
            through a partnership between the Prevention Institute, Trust  
            for America's Health and The California Endowment.  The report  
            examined community-based obesity prevention strategies such  
            as: keeping schools open after hours where children can play  
            with adult supervision; providing access to fresh produce  
            through farmers' markets; making nutritious foods more  
            affordable and accessible in low-income areas; and, requiring  
            clear calorie and nutrition labeling of foods.  The Prevention  
            for a Healthier California report demonstrated the following:
               
               a.     Prevention can produce significant health care  
                 savings in California:  An investment of $10 per person  
                 per year, in programs to increase physical activity,  
                 improve nutrition, and prevent tobacco use could save the  
                 state more than $1.7 billion in annual health care costs  
                 within five years.
          
               b.     Focusing prevention investments on communities with  
                 the most compromised health status could potentially lead  
                 to even greater returns:  The report presents cumulative  
                 savings based on investments made statewide per capita,  
                 but if those investments were targeted toward communities  
                 with the highest rates of target conditions, the return  
                 on investment would likely be much greater.
               
               c.     Prevention has a number of financial and health  
                 benefits beyond the heath care sector: improved health  
                 has broad positive economic consequences such as improved  
                 productivity, reduced disability and increased school  
                 attendance.
            
            According to the April 15, 2013 BOE analysis of this  
            legislation, by levying an excise tax, SB 622 will generate  
                                                                                $2.62 billion in revenue that will directly fund obesity  
            prevention services, physical activity programs, and nutrition  
            education.  Proponents of a SSB tax find a parallel to tobacco  
            taxes, which contributed to reduced smoking rates.  Public  




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            health advocates believe that taxation will help reduce SSB  
            consumption, and in turn, reduce health care costs.  Research  
            estimates that the SSB would reduce the incidence  
            type-2-diabetes by 2.6 percent and obesity prevalence by 1.5  
            percent.  These percentage reductions would result in 95,000  
            fewer instances of coronary heart disease, 8,000 fewer  
            strokes, and 26,000 fewer premature deaths across the nation.   
            Epidemiological research shows the case for assessing an  
            excise tax: the societal costs, like lost productivity and  
            health care costs of obesity are linked with SSBs but not paid  
            for by the consumer, representing an externality not accounted  
            in the price system. According to the author, SB 622 attempts  
            to correct this market failure by taxing SSBs at a price to  
            account for the societal costs.

          5.Smoking Cessation - A Case Study for Community Health  
            Promotion and Disease Prevention.  In the not-so-distant past,  
            smoking had been a part of everyday life for most Californians  
            and Americans, primarily due to the popularity of cigarette  
            smoking pre- and post-World Wars I and II.  People could smoke  
            everywhere, including in restaurants, airplanes, and in  
            hospitals.  According to the American Lung Association, the  
            incidence and mortality attributed to lung cancer had also  
            been rising steadily since the 1930s.  Lung cancer was quickly  
            becoming the leading cause of cancer deaths among men in the  
            early 1950s and, in 1987, surpassed breast cancer to become  
            the leading cause of cancer deaths among women in the United  
            States. 

          In response to growing concerns and awareness about the negative  
            health effects of tobacco use and smoking, California voters  
            passed the Tobacco Tax and Health Promotion Act in 1988.   
            Typically known as Proposition 99, this initiative raised  
            taxes on cigarettes in an effort to discourage smoking.  The  
            tax revenue was used to create the California Tobacco Control  
            Program (CTCP), which is currently housed within the  
            California Department of Public Health.  Five cents of the  
            25-cent tax funds California's tobacco control efforts,  
            including providing funding for local health departments and  
            community organizations, supporting a groundbreaking media  
            campaign and performing tobacco-related evaluation and  
            surveillance.  Since Proposition 99 was passed, California has  
            implemented a variety of grassroots efforts to educate  
            consumers about the harmful effects of tobacco use including  
            aggressive enforcement of anti-tobacco laws, such as, local  




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            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. 

          At CTCP's inception, more than one in five adults in California  
            smoked cigarettes; today, that number is less than one in  
            eight.  Similarly, the number of cigarettes smoked by  
            Californians has fallen by more than 62 percent.  Estimated  
            smoking prevalence in California declined on average by 0.35  
            percentage points per year between 1990 and 2008, compared to  
            an average 0.24 percentage points per year decline in the rest  
            of the United States.  Several studies have shown tobacco  
            control efforts in California have effectively decreased the  
            number of people that start smoking, increased the number of  
            young adults that quit smoking, and decreased cigarette  
            consumption among continuing smokers. 

          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.

          6.Tax Implications.  SB 622 would impact more than 350 bottled  
            and fountain beverages in California, including traditional  
            sodas, sweetened iced teas, fruit drinks, sports drinks, and  
            energy drinks.  According to the Senate Governance and Finance  
            Committee analysis, the excise tax would add $0.72 per  
            six-pack, $1.44 per 12-pack, and $2.88 per case of 12 ounce  
            cans.  With the five cent California Redemption Value (CRV)  
            deposit, a six-pack's additional cost would be $1.02, $2.04  
            per 12-pack, and $4.08 per case.  
               
            
          7.Double referral. This bill was heard in the Senate Governance  
            and Finance Committee on April 24, 2013, and passed with a 5-2  
            vote.

          8.Related legislation. AB 38 (Pérez) creates the Office of Farm  
            to Fork, and a related fund, in the state's Department of Food  
            and Agriculture, to promote food access.  SB 38 is scheduled  
            to be heard by the Assembly Agriculture Committee on May 1,  




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            2013.

          AB 459 (Mitchell) would require that foods in vending machines  
            meet accepted nutritional guidelines by specified benchmarks  
            in 2015, 2016, and 2017.  AB 459 is currently in the Assembly  
            Business, Professions, and Consumer Protection Committee.

          9.Prior legislation. AB 669 (Monning, 2011) was this bill's  
            predecessor.  AB 669 was held in the Assembly Revenue and  
            Taxation Committee.

          AB 2100 (Coto) 2010 would have imposed a one cent tax per  
            teaspoon of added sweetener in a bottled sweetened beverage or  
            in a sweetened concentrate. AB 2100 was held in the Assembly  
            Revenue and Taxation Committee. 

          SB 1210 (Florez) of 2010, was similar measure.  SB 1210 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 and $0.21  
            per gallon of bottled soft drinks, and $0.21 per gallon of  
            soft drink that may be produced from powder, that is sold in  
            this state.  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 non-alcoholic carbonated beverages, except  
            carbonated water and carbonated fruit juice, at the rate of  
            seven cents ($0.07) per gallon.  The provisions of that bill  
            also included an excise tax on the distribution of  
            non-alcoholic carbonated beverage syrup at the rate of fifty  
            cents ($0.50) per gallon of liquid syrup.  AB 105 died in the  
            Assembly Revenue and Taxation Committee.

          10.Support.  According to the Center for Public Health Advocacy  
            (CCPHA), the sponsors of this legislation, overweight,  
            obesity, and physical inactivity cost the state of California  
            an estimated $52 billion annually in health care costs and  
            lost productivity.  An excess of calorie-dense but nutrient  
            poor foods in the market, high prices of fresh produce, and  
            increased consumption of non-satiating SSBs have contributed  
            to the obesity epidemic among adults and children.  According  




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            to CCPHA, there is overwhelming evidence linking the obesity  
            epidemic to the consumption of sugary drinks.  Research shows  
            that in the last 30 years, the average American's daily  
            caloric intake has increased by nearly 300 calories and 43  
            percent of those additional calories come from additional soda  
            consumption.  CCPHA maintains that Californians support taxing  
            sugary drinks.  A 2012 Field Poll found that 68 percent of  
            California voters support a Sweetened Beverage Tax that would  
            fund childhood obesity prevention programs.  Support was even  
            highest amongst Latino (79 percent) and African American  
            voters (70 percent).  CCPHA asserts that SB 622 is a major  
            step forward in the fight against the childhood obesity  
            epidemic.  It will reduce the prevalence of obesity and  
            diabetes by increasing the price of sugary drinks and funding  
            childhood obesity and diabetes prevention and treatment  
            programs.

          The California Association for Health, Physical Education,  
            Recreation and Dance (CAHPERD), writes in support that health  
            education and physical educational programs in our schools can  
            educate and influence our students to adopt active lifestyles  
            and healthy nutritional behaviors - only if they are delivered  
            regularly and by teachers who are well prepared for these  
            content areas.  CAHPERD argues that the proposed tax on SSB  
            would provide funding for these instructional programs and  
            other effective strategies for obesity prevention.

          11.Opposition.  Californians for Food and Beverage Choice  
            (CFBC), a coalition of citizens, businesses and organizations,  
            writes in opposition that this tax doesn't just impact soda,  
            but would ensnare juice drinks, sports drinks, iced teas and  
            even enhanced waters.  CFBC maintains that if SB 622 passes,  
            the result will be higher prices on hundreds of products sold  
            at restaurants, convenience stores and grocery stores.  CFBC  
            asserts that increased prices on so many common grocery items  
            will hit those who can afford it least: middle and lower  
            income California residents.  CFBC argues that singling out  
            one group of products is discriminatory and it will not reduce  
            obesity.  According to CFBC, obesity is a complex problem that  
            has a myriad of contributing factors, and it is unfair and  
            inaccurate to portray SSBs as the main culprit.  According to  
            the California Nevada Soft Drink Association (CNSDA), SB 622  
            endangers good jobs in California.  CNSDA maintains that the  
            beverage industry supports more than 325,000 jobs in  
            California, adding up to $13 billion in wages and benefits,  
            each year.  Taxes paid by beverage industry businesses,  




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            suppliers and employees total over $6.2 billion annually for  
            the state.  CFBC argues that their products are already  
            subject to the sales tax, the beverage container CRV deposit  
            and, in the case of plastic and glass containers, the  
            processing fee.

          12.Amendments.  To assess whether the Sweetened Beverage Tax  
            reduces childhood obesity rates and increases funding for  
            physical activity and nutrition programs, the author committed  
            to two amendments when SB 622 was before the Senate Governance  
            and Finance Committee that will provide the Legislature with  
            an outcome-based performance and process evaluation: 
               a.     A ten year sunset (July 1, 2024), unless extended;  
                 and,

               b.     A study, conducted by a University of California or  
                 California State University, paid for by proceeds from  
                 the Fund, and provided to the Legislature and relevant  
                 standing policy committees, which examines the SSB Tax's  
                 efficiency, cost-effectiveness, and outcomes, including a  
                 review how moneys in the Fund were allocated annually,  
                 annual and longitudinal data on childhood obesity  
                 prevalence and incidence rates, data on childhood  
                 diabetes prevalence and incidence rates, and longitudinal  
                 information on soda consumption rates across the state  
                 population. 
          
           SUPPORT AND OPPOSITION  :
               Support:California Center for Public Health Advocacy  
               (sponsor)
                    American Federation of State, County, and Municipal  
               Employees, AFL-CIO
                    American Heart Association
                    California Academy of Physician Assistants 
                    California Association of Food Banks
                    California Association for Health, Physical Education,  
                    Recreation and Dance (CAHPERD)
                    California Association of Nutrition and Activity  
               Program 
                    California Black Health Network
                    California Chiropractic Association 
                    California Conference of Local Health Department  
               Nutritionists 
                    California Food Policy Advocates
                    California Optometric Association




          SB 622 | Page 16




                    California Pan-Ethnic Health Network 
                    California Public Health Association - North 
                    California Primary Care Association 
                    California Rural Legal Assistance Foundation
                    California School Health Centers Association 
                    California WIC Association
                    Center for Collaborative Solution 
                    Center for Ecoliteracy
                    Center for Science in the Public Interest 
                    Community Hospital of the Monterey Peninsula
                    County of Santa Clara
                    County of Sonoma Department of Health Services 
                    Edible Schoolyard Project 
                    First 5 Yolo
                    Health Access California 
                    Health Education Council
                    Health Officers Association of California 
                    Health Promotion Policy
                    Latino Coalition for a Healthy California
                    Latino Health Access 
                    Los Olivos School District
                    Lucile Packard Children's Hospital
                    Mayor Andre Quintero, City of El Monte
                    Mission Hospital
                    Prevention Institute
                    Public Health Institute 
                    San Francisco Unified School District 
                    The School Gardens Program
                    Southern California Public Health Association
                    Strategic Alliance for Health Food and Activity  
               Environments
                    2 individuals

          Oppose:   Asian Business Association
                    Brea Chamber of Commerce
                    California Automatic Vendors Council 
                    California Asian Pacific Chamber of Commerce
                    California Beer & Beverage Distributors
                    California Chamber of Commerce
                    California Distributors Association
                    California Grocers Association
                    California Hispanic Chambers of Commerce
                    California Independent Oil Marketers Association
                    California League of Food Processors
                    California Manufacturers and Technology Association
                    California Nevada Soft Drink Association




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          17


          

                    California Restaurant Association
                    California Retailers Association
                    California Service Station and Auto Repair Association
                    California Teamsters Public Affairs Council
                    Empire Bowling Center
                    Grocery Manufacturers Association
                    Howard Jarvis Taxpayers Association
                    Korean American Chamber of Commerce of Los Angeles 
                    National Organization of Theatre Owners of  
               California/Nevada
                    Neighborhood Market Association
                    PepsiCo
                    Producers Dairy





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