Amended in Assembly April 29, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1357


Introduced by Assembly Member Bloom

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(Coauthors: Assembly Members Chiu and Rendon)

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February 27, 2015


An act to add Chapter 5 (commencing with Sectionbegin delete 104895.5)end deletebegin insert 104895.50)end insert to Part 3 of Division 103 of the Health and Safety Code, relating to publicbegin delete health.end deletebegin insert health, and declaring the urgency thereof, to take effect immediately.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1357, as amended, Bloom. Children and Family Health Promotion Program.

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Existing law provides various programs that prevent disease and promote health.

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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 Children and Family Health Promotion Trust 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 of 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 bill’s 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.

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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.

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This bill would make legislative findings and declarations relating to the consumption of sweetened beverages, diabetes, childhood obesity, and dental disease.

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This bill would declare that it is to take effect immediately as an urgency statute.

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Existing law provides various programs that prevent disease and promote health.

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This bill would establish the Children and Family Health Promotion Program in the Department of Public Health. This bill would require the program to consist of a competitive grant process in which grants are awarded by the department to counties, cities, nonprofit organizations, community-based organizations, and licensed clinics that seek to invest in childhood obesity and diabetes prevention activities and oral health programs. The bill would authorize the department to award a grant to any entity that will use the grant to support programs that use educational, environmental, policy, and other public health approaches to achieve specified goals.

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This bill would require the department to develop an application and application process for the program, and would provide that the program will be funded by moneys appropriated by the Legislature to the department for this purpose.

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This bill would make legislative findings and declarations relating to the consumption of sweetened beverages, childhood obesity, and dental disease.

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Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P3    1begin insert

begin insertSECTION 1.end insert  

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begin insertThe Legislature finds and declares all of the
2following:end insert

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3(a) Over 2.3 million California adults report having been
4diagnosed with diabetes, representing one out of every 12 adult
5Californians. The vast majority of diabetes cases in California are
6type 2, representing 1.9 million adults.

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7(b) According to the State Department of Public Health, diabetes
8is the seventh leading cause of death in California, and has been
9determined to be the underlying cause of death for almost 8,000
10people each year.

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11(c) Adults with type 2 diabetes more often have other health
12problems. One-half of adults with Type 2 diabetes also have
13hypertension. This rate of occurrence is twice as high as for those
14without diabetes. Adults with diabetes are also twice as likely to
15have cardiovascular disease than adults without diabetes.

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16(d) Adults with diabetes are 50 percent more likely to have
17arthritis than adults without diabetes. Over 40 percent of new
18cases of kidney failure are attributed to diabetes. New cases of
19kidney failure declined slightly from 2001 to 2007, but began to
20increase again after 2007.

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21(e) Hispanics, African Americans, Native Americans, and
22Asian/Pacific Islanders have higher prevalence of type 2 diabetes
23than non-Hispanic whites. Hispanics and African Americans have
24two times higher prevalence: 7 percent of non-Hispanic Whites
25have type 2 diabetes, compared with 12 percent of Latinos, 9
26percent of Asian Americans, 14 percent of Pacific Islander
27Americans, 13 percent of African Americans, and 17.5 percent of
28Native American populations. If trends are not reversed, it is
29predicted that one in three children and nearly one-half of Latino
P4    1and African American children born in the year 2000 will develop
2type 2 diabetes in their lifetime.

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3(f) The prevalence of obesity in the United States has increased
4dramatically over the past 30 years. In California, obesity rates
5have increased even more, rising from 8.9 percent in 1984 to 23.8
6percent in 2011. Although no group has escaped the epidemic, low
7income and communities of color are disproportionately affected.

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8(g) The rate of children who are overweight has also increased
9dramatically in recent decades. In 2010, 38 percent of California
10children in grades 5, 7, and 9 were overweight or obese. Thirty-one
11of California’s 58 counties experienced an increase in childhood
12obesity from 2005 to 2010.

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13(h) In 2006, California overweight and obesity-related health
14costs were estimated at almost $21 billion.

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15 (i)  There is overwhelming evidence of the link between obesity,
16diabetes, and heart disease and the consumption of sweetened
17beverages, such as soft drinks, energy drinks, sweet teas, and sports
18drinks. California adults who drink a soda or more per day are
1927 percent more likely to be overweight or obese, regardless of
20income or ethnicity.

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21(j) According to nutritional experts, sweetened beverages, such
22as soft drinks, energy drinks, sweet teas, and sports drinks, offer
23little or no nutritional value, but massive quantities of added
24sugars. A 20-ounce bottle of soda contains the equivalent of
25approximately 16 teaspoons of sugar. Yet, the American Heart
26Association recommends that Americans consume no more than
27five to nine teaspoons of sugar per day.

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28(k) Research shows that almost one-half of the extra calories
29Americans consume in their diet comes from sugar-sweetened
30beverages, with the average American drinking nearly 50 gallons
31of sugar-sweetened beverages a year, the equivalent of 39 pounds
32of extra sugar every year.

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33(l) Research shows that 41 percent of California children from
342 to 11 years of age, inclusive, and 62 percent of California teens
35from 12 to 17 years of age, inclusive, drink soda daily, and for
36every additional serving of sweetened beverage that a child
37consumes per day, the likelihood of the child becoming obese
38increases by 60 percent.

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39(m) Sugary drinks are a unique contributor to excess caloric
40consumption. A large body of research shows that calories from
P5    1sugary drinks do not satisfy hunger the way calories from solid
2food or beverages containing fat or protein do, such as those
3containing milk and plant-based proteins. As a result, sugary
4beverages tend to add to the calories people consume rather than
5replace them.

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6(n) Dental caries (tooth decay) is the most common chronic
7childhood disease, experienced by more than two-thirds of
8California’s children. Children who frequently or excessively
9consume beverages high in sugar are at increased risk for dental
10caries. Untreated dental caries can lead to pain, infection, tooth
11loss, and in severe cases, even death.

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12(o) It is the intent of the Legislature, by adopting the Children
13and Family Health Promotion Trust Fund to diminish the human
14and economic costs of diabetes, obesity, heart disease, and dental
15disease in California. The fund is intended to create a dedicated
16revenue source for health, education, and wellness programs
17designed to prevent and treat obesity, diabetes, and heart and
18dental disease, and to reduce the burden of attendant health
19conditions that result from the overconsumption of sweetened
20beverages.

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21begin insert

begin insertSEC. 2end insertbegin insert.end insert  

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begin insertChapter 5 (commencing with Section 104895.50) is
22added to Part 3 of Division 103 of the end insert
begin insertHealth and Safety Codeend insertbegin insert, to
23read:end insert

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24 

25Chapter  begin insert5.end insert Children and Family Health Promotion
26Program
27

 

28

begin insert104895.50.end insert  

The following definitions shall apply for purposes
29of this chapter:

30(a) (1) “Beverage for medical use” means a beverage suitable
31for human consumption and manufactured for use as an oral
32nutritional therapy for persons who cannot absorb or metabolize
33dietary nutrients from food or beverages, or for use as an oral
34rehydration electrolyte solution for infants and children formulated
35to prevent or treat dehydration due to illness.

36(2) “Beverage for medical use” includes a “medical food.”
37Consistent with Section 5(b)(3) of the Orphan Drug Act (Public
38Law 97-414; at 21 U.S.C. 360ee(b)(3)), “medical food” means a
39food that is formulated to be consumed or administered internally
40 under the supervision of a physician and that is intended for the
P6    1specific dietary management of a disease or condition for which
2distinctive nutritional requirements, based on recognized scientific
3principles, are established by medical evaluation.

4(3) “Beverage for medical use” does not include drinks
5commonly referred to as “sports drinks,” or any other derivative
6or similar terms.

7(b) “Board” means the State Board of Equalization.

8(c) “Bottle” means any closed or sealed container, regardless
9of size or shape, including, without limitation, those made of glass,
10metal, paper, plastic, or any other material or combination of
11materials.

12(d) “Bottled sugar-sweetened beverage” means any
13sugar-sweetened beverage contained in a bottle that is ready for
14 consumption without further processing, such as dilution or
15carbonation.

16(e) “Caloric sweetener” means any caloric substance suitable
17for human consumption that humans perceive as sweet, including,
18but not limited to, sucrose, fructose, glucose, fruit juice
19concentrate, or other sugars. “Caloric sweetener” excludes
20noncaloric sweeteners. For purposes of this definition, “caloric”
21means a substance that adds calories to the diet of a person who
22consumes that substance.

23(f) “Consumer” means a person who purchases a
24sugar-sweetened beverage for consumption and not for sale to
25another.

26(g) “Distributor” means any person, including a manufacturer
27or wholesale dealer, who receives, stores, manufactures, bottles,
28or distributes bottled sugar-sweetened beverages, syrups, or
29powders for sale to retailers doing business in the state, or any
30combination of these activities, whether or not that person also
31sells those products to consumers.

32(h) “Fund” means the Children and Family Health Promotion
33Trust Fund.

34(i) “Milk” means natural liquid milk, regardless of animal or
35plant source or butterfat content, natural milk concentrate, whether
36or not reconstituted, or dehydrated natural milk, whether or not
37reconstituted.

38(j) “Natural fruit juice” means the original liquid resulting
39from the pressing of fruits, or the liquid resulting from the dilution
40with water of dehydrated natural fruit juice.

P7    1(k) “Natural vegetable juice” means the original liquid resulting
2from the pressing of vegetables, or the liquid resulting from the
3dilution with water of dehydrated natural vegetable juice.

4(l) “Noncaloric sweetener” means any noncaloric substance
5suitable for human consumption that humans perceive as sweet,
6including, but not limited to, aspartame, acesulfame-K, neotame,
7saccharin, sucralose, and stevia. “Noncaloric sweetener” excludes
8caloric sweeteners. For purposes of this definition, “noncaloric”
9means a substance that contains fewer than five calories per
10serving.

11(m) “Person” means a natural person, partnership, cooperative
12association, limited liability company, corporation, personal
13representative, receiver, trustee, assignee, or other legal entity.

14(n) “Place of business” means any place where sugar-sweetened
15beverages, syrups, or powders are manufactured or received for
16sale in the state.

17(o) “Powder” means any solid mixture of ingredients used in
18making, mixing, or compounding sugar-sweetened beverages by
19mixing the powder with one or more other ingredients, including,
20but not limited to, water, ice, syrup, simple syrup, fruits, vegetables,
21fruit juice, vegetable juice, or carbonation or other gas.

22(p) “Retailer” means any person who sells or otherwise
23dispenses in the state a sugar-sweetened beverage to a consumer
24whether or not that person is also a distributor.

25(q) “Sale” means the transfer of title or possession for valuable
26consideration, regardless of the manner by which the transfer is
27completed.

28(r) “State” means the State of California.

29(s) (1) “Sugar-sweetened beverage” means any nonalcoholic
30beverage, carbonated or noncarbonated, that is intended for human
31consumption and contains added caloric sweetener. As used in
32this subdivision, “nonalcoholic beverage” means any beverage
33that contains less than one-half of 1 percent alcohol per volume.

34(2) “Sugar-sweetened beverage” does not include any of the
35following:

36(A) Bottled sugar-sweetened beverages, syrups, and powders
37sold to the United States government and American Indian tribal
38governments.

39(B) Bottled sugar-sweetened beverages, syrups, and powders
40sold by a distributor to another distributor that is registered
P8    1pursuant to Section 104895.58, if the sales invoice clearly indicates
2that the sale is exempt. If the sale is to a person who is both a
3distributor and a retailer, the sale shall also be fee-exempt and
4the fee shall be paid when the purchasing distributor or retailer
5resells the product to a retailer or a consumer. This exemption
6does not apply to any other sale to a retailer.

7(C) Beverages sweetened solely with noncaloric sweeteners.

8(D) Beverages consisting of 100 percent natural fruit or
9vegetable juice, with no added caloric sweetener.

10(E) Beverages in which milk, or soy, rice, or similar milk
11substitute, is the primary ingredient or the first listed ingredient
12on the label of the beverage.

13(F) Beverages with fewer than five grams of added sugar or
14other caloric sweeteners per 12 ounces.

15(G) Coffee or tea without added caloric sweetener.

16(H) Infant formula.

17(I) Beverages for medical use.

18(J) Water without any caloric sweetener.

19(t) “Syrup” means a liquid mixture of ingredients used in
20making, mixing, or compounding sugar-sweetened beverages using
21one or more other ingredients, including, but not limited to, water,
22ice, powder, simple syrup, fruits, vegetables, fruit juice, vegetable
23juice, carbonation, or other gas.

24(u) “Water” includes nonflavored water, or water flavored with
25noncaloric “natural fruit essence” or “natural flavor.” The source
26of the water may be artesian, mineral, spring, or well. The type of
27water may also include carbonated, such as sparkling, club, or
28seltzer, and still, distilled, or purified, such as demineralized,
29deionized, or reverse osmosis.

30

begin insert104895.51.end insert  

The Children and Family Health Promotion Trust
31Fund is hereby established in the State Treasury. The fund shall
32consist of all fees, interest, penalties, and other amounts collected
33pursuant to this chapter, less refunds and reimbursement for
34expenses incurred in the administration and collection of the fees.

35(a) Fifty-one percent of the moneys in the fund shall be allocated
36to the State Department of Public Health. Amounts allocated for
37purposes of this subdivision shall be distributed equally, as follows:

38(1)  To administer a competitive grant program for county
39governments seeking to invest in childhood obesity and diabetes
40prevention activities.

P9    1(2) To administer a competitive grant program for nonprofit
2organizations and community based organizations seeking to invest
3in childhood obesity and diabetes prevention activities.

4(3) The department may award a grant to any entity described
5in subparagraphs (A) and (B) that will use the grant to support
6programs that use educational, environmental, policy, and other
7public health approaches to achieve all of the following goals:

8(A) To improve access to, and consumption of, healthy and
9affordable foods and beverages, and reduce access to, and
10consumption of, calorie-dense and nutrient-poor foods.

11(B) To encourage physical activity and decrease sedentary
12behavior.

13(C) To raise awareness about the importance of nutrition and
14physical activity in the prevention of childhood obesity and
15diabetes.

16(4) To the department’s Oral Health Program to support dental
17health programs.

18(5) To administer a competitive grant program for licensed
19clinics to invest in childhood obesity and diabetes prevention and
20treatment activities, and children’s dental programs. Funding shall
21support programs that use educational and other public health
22approaches that raise awareness about the importance of nutrition
23and physical activity in the prevention of childhood obesity and
24diabetes.

25(b) Four percent to the Expanded Access to Primary Care, Rural
26Health Services Development, Seasonal Agricultural Migratory
27Workers, and Indian Health programs in the State Department of
28Health Care Services. Funds shall be used to support clinic-based
29obesity and diabetes prevention and related disease management.

30(c) Twenty-five percent to the Department of Education, to be
31distributed equally for the following purposes:

32(1) To administer a competitive grant program for school
33districts for educational, environmental, policy, and other public
34health approaches that promote physical activity. The approaches
35funded pursuant to this paragraph may include improving or
36constructing school recreational facilities that are used for recess
37and physical education, providing continuing education training
38for physical education teachers, hiring qualified physical education
39teachers, and implementing Safe Routes to School programs.

P10   1(2) To administer a competitive grant program for school
2districts for educational, environmental, policy, and other public
3health approaches that promote nutrition. The approaches funded
4pursuant to this paragraph may include improving the quality and
5nutrition of school breakfasts, lunches, and snacks, and
6incorporating practical nutrition education into the curriculum.

7(3) To the California Farm to School Program administered by
8the department.

9(4) To administer a competitive grant program for school
10districts for ensuring access to clean drinking water throughout
11the schoolday, including, but not limited to, drinking fountains
12and water bottle refilling stations.

13(d) Twenty percent to the Department of Food and Agriculture,
14to be distributed equally for the following purposes:

15(1) To the Office of Farm to Fork for nutritious foods incentive
16programs.

17(2) To administer a grant program to support producers of fresh
18fruits and vegetables and other specialty crops.

19(e) (1) The State Department of Public Health shall develop
20an application and application process for the grant programs
21established pursuant to this section.

22(2) Applicants interested in receiving a grant shall submit an
23application to the department responsible for the individual grant
24program.

25(f) No more than seven percent of the funds received shall be
26used by any department for administrative costs.

27(g) All moneys in the fund shall be allocated with priority given
28to communities exhibiting high prevalence of type 2 diabetes, as
29reported by the California Health Interview Survey (CHIS)
30conducted by the University of California, Los Angeles Center for
31Health Policy Research. Departments shall use the most current
32survey data available.

33(h) Upon appropriation by the Legislature, all moneys in the
34fund shall be expended only for the purposes expressed in this
35chapter, and shall be used only to supplement existing levels of
36service. Moneys in the fund shall not supplant any federal, state,
37or local funding for existing levels of service.

38(i) The State Public Health Officer, the Secretary of the
39Department of Food and Agriculture, the Director of Health Care
40Services, and the Superintendent of Public Instruction may
P11   1coordinate to establish regulations and procedural measures
2necessary to effectuate the purposes of this chapter. The regulations
3may provide for specific programs to be funded consistent with
4the allocation of funds as set forth in this section. In establishing
5these regulations, the department shall give particular
6consideration to reducing the prevalence of diabetes, as identified
7by data from the CHIS.

8(j) The California State Auditor’s office shall conduct periodic
9audits to ensure that the annual allocation to individual programs
10is awarded by the fund in a timely fashion consistent with the
11requirements of this chapter. The first audit shall be conducted no
12later than 24 months after the effective date of this section.

13

begin insert104895.52.end insert  

(a) No later than July 1, 2016, the Director of the
14Department of Public Health shall appoint an advisory committee
15to provide input regarding the implementation of the program.
16The advisory committee shall be a purely advisory body and shall
17have no final decisionmaking authority with respect to the
18implementation of this chapter.

19(b) The advisory committee shall be composed of at least seven
20members as follows:

21(1) The State Department of Public Health, the Department of
22Food and Agriculture, the State Department of Health Care
23Services, and the State Department of Education each shall appoint
24at least one member, for a total of at least four members.

25(2) The Governor, the Speaker of the Assembly, and the
26President pro Tempore of the Senate each shall appoint one
27member with expertise in childhood obesity and diabetes
28prevention, and experience in researching public health issues or
29evaluating public health programs related to diabetes, obesity,
30chronic disease prevention, and sugary drink consumption. At
31least one of those three members shall have experience with a
32community-based chronic disease prevention organization.

33(c) The advisory committee shall conduct an annual study and
34submit a report to the Legislature and all relevant standing
35committees, regarding the process and outcome performance of
36the fund. The study and report may include, but need not be limited
37to, a review of how moneys in the fund were allocated, annual and
38longitudinal data on childhood obesity prevalence and incidence
39rates, data on childhood diabetes and incidence rates, and
40longitudinal information on sweetened beverage consumption rates
P12   1across the state population. The report shall be submitted each
2year.

3

begin insert104895.53.end insert  

(a) A health impact fee is hereby imposed on every
4distributor for the privilege of distributing bottled sweetened
5beverages and concentrate in the state, for deposit into the fund.
6The fees shall be calculated as follows:

7(1) The fee on bottled sweetened beverages distributed in this
8state shall be two cents ($0.02) per fluid ounce.

9(2) The fee on concentrates distributed in the state either as
10concentrate or as a sweetened beverage derived from that
11concentrate shall be equal to two cents ($0.02) per fluid ounce of
12sweetened beverage produced from that concentrate. For purposes
13of calculating the fee for concentrate, the volume of sweetened
14beverage to be produced from concentrate shall be the largest
15volume resulting from use of the concentrate according to any
16manufacturer’s instructions.

17(b) In each transaction described in subdivision (a), the
18distributor shall include the following information on each receipt,
19invoice, or other form of accounting for the distribution of bottled
20sweetened beverages or concentrate:

21(1) The name and address of the distributor.

22(2) The name and address of the purchaser.

23(3) The date of sale and invoice number.

24(4) The kind, quantity, size, and capacity of packages of bottled
25sweetened beverages, sweetened beverages, or concentrate sold.

26(5) The amount of fees due from the distributor on the sale of
27the bottled sweetened beverages, sweetened beverages, or
28concentrate.

29(6) Any other information, as required by the board.

30(c) The program shall develop reimbursement criteria to enable
31participating departments to recover administrative costs
32associated with collecting the charge.

33(d) This section shall not preempt a city or county from enacting
34or enforcing an ordinance related to taxation of sugar-sweetened
35beverages if the ordinance is more stringent than this section.

36

begin insert104895.54.end insert  

(a) (1) No later than July 1, 2016, and annually
37thereafter, the State Department of Public Health, in consultation
38with the State Department of Health Care Services, the Department
39of Education, and the Department of Food and Agriculture, shall
P13   1commence preparation of a program budget for the following
2calendar year that includes all of the following information:

3(A) Anticipated revenues and costs of implementing the program,
4including related programs, projects, contracts, and administrative
5expenses.

6(B) A recommended funding level sufficient to cover the
7program’s budgeted costs and to operate the program over a
8multiyear period in a prudent and responsible manner.

9(C) The amount of the health impact fees, as described in Section
10104895.53 and itemization of costs that the fees cover.

11(2) The department shall adopt a final program budget for
12purposes of this chapter by October 1 of each year.

13(b) The fund shall reimburse the department for administration
14and implementation costs the department incurs pursuant to this
15chapter, as provided in subdivision (c). The reimbursement shall
16not exceed the department’s direct costs to implement and enforce
17this chapter.

18(c) The department shall deposit all moneys submitted for
19reimbursement costs by the program into the Children and Family
20Health Promotion Administration Account, which is hereby
21established within the fund. Upon appropriation by the Legislature,
22moneys in the account shall be expended by the State Department
23of Public Health to administer and enforce this chapter, and to
24repay any outstanding loans made from other funds used to finance
25startup costs of the department’s activities pursuant to this chapter.

26

begin insert104895.55.end insert  

(a) The board shall administer and collect the fees
27imposed by this chapter pursuant to the Fee Collection Procedures
28Law (Part 30 (commencing with Section 55001)). For purposes
29of this chapter, the references in the Fee Collection Procedures
30Law to “fee” shall include the fees imposed by this chapter and
31references to “feepayer” shall include a person required to pay
32the fees imposed by this chapter.

33(b) The board may prescribe, adopt, and enforce regulations
34relating to the administration and enforcement of this chapter,
35including, but not limited to, collections, reporting, refunds, and
36appeals.

37(c) The board may adopt regulations to implement this chapter.
38The adoption, amendment, repeal, or readoption of a regulation
39authorized by this section is deemed to address an emergency, for
40purposes of Sections 11346.1 and 11349.6 of the Government
P14   1Code, and the board is hereby exempted for this purpose from the
2requirements of subdivision (b) of Section 11346.1 of the
3Government Code.

4

begin insert104895.56.end insert  

The fees imposed by this chapter are due and
5payable to the board on or before the last day of the first month
6following each calendar quarter.

7

begin insert104895.57.end insert  

(a) On or before the last day of the first month
8following each calendar quarter, a return for the preceding
9calendar quarter shall be filed with the board using electronic
10media.

11(b) The board may prescribe those forms and reporting
12requirements as are necessary to implement the fees, including,
13but not limited to, information regarding the total amount of bottled
14sweetened beverages and concentrate sold and the amount due.

15(c) Returns shall be authenticated in a form or pursuant to
16methods prescribed by the board.

17

begin insert104895.58.end insert  

Every distributor required to pay the fees imposed
18under this chapter shall register with the board. An application
19for registration shall be made upon a form prescribed by the board
20and shall set forth the name under which the applicant transacts
21or intends to transact business, the location or locations of each
22place of business, and any other information required by the board.
23An application for an account under this section shall be
24authenticated in a form, or pursuant to methods, prescribed by the
25board.

26

begin insert104895.59.end insert  

The distribution of bottled sweetened beverages
27or concentrate by a distributor to either of the following persons
28shall be exempt from the fees imposed by this chapter:

29(a) To a person when, pursuant to the contract of sale, the
30bottled sweetened beverages or concentrate shall be shipped, and
31are shipped, to a point outside of this state by the distributor by
32means of either of the following:

33(1) Facilities operated by the distributor.

34(2) Delivery by the distributor to a carrier, customs broker, or
35forwarding agent, whether hired by the purchaser or not, for
36shipment to the out-of-state point.

37(b) To a person who is otherwise exempt from the taxation of
38that sale, use, or consumption under the Constitution of the United
39States, federal law or regulation, or the California Constitution.

P15   1

begin insert104895.60.end insert  

A distributor who has paid a fee, either directly to
2the state or to another distributor registered under this part, and
3makes a subsequent distribution of bottled sweetened beverages
4or concentrate may claim a credit on its return for the period in
5which the subsequent sale or distribution occurs.

end insert
6begin insert

begin insertSEC. 3.end insert  

end insert
begin insert

This act is an urgency statute necessary for the
7immediate preservation of the public peace, health, or safety within
8the meaning of Article IV of the Constitution and shall go into
9immediate effect. The facts constituting the necessity are:

end insert
begin insert

10In order to provide timely funding necessary to help mitigate
11the deleterious health effects that result from the overconsumption
12of sweetened beverages, including diabetes, heart disease, and
13oral decay, it is necessary for this act to take effect immediately.

end insert
begin delete
14

SECTION 1.  

The Legislature finds and declares all of the
15following:

16(a) Over 2.3 million California adults report having been
17diagnosed with diabetes, representing one out of every 12 adult
18Californians. The vast majority of diabetes cases in California are
19type 2, representing 1.9 million adults.

20(b) According to the California Department of Public Health,
21diabetes is the seventh leading cause of death in California, and
22determined to be the underlying cause of death in almost 8,000
23people each year. Diabetes may be underreported as a cause of
24death, and is a contributing factor to many deaths from heart
25disease and stroke.

26(c) Adults with type 2 diabetes more often have other health
27problems. One out of every two adults with type 2 diabetes also
28has hypertension. This is two times higher than among those
29without diabetes. Adults with diabetes are also two times more
30likely to have cardiovascular disease than adults without diabetes.

31(d) Hispanics, African Americans, Native Americans, and
32Asian/Pacific Islanders have higher prevalence of type 2 diabetes
33than non-Hispanic Whites. Hispanics and African Americans have
34two times higher prevalence: 7 percent of non-Hispanic Whites
35have type 2 diabetes, compared with 12 percent of Latinos, 9
36percent of Asian Americans, 14 percent of Pacific Islander
37Americans, 13 percent of African Americans, and 17.5 percent of
38Native American populations.

39(e) Type 2 diabetes, previously only seen among adults, is now
40increasing among children. If the current obesity trends are not
P16   1reversed, it is predicted that one in three children and nearly
2one-half of Latino and African American children born in the year
32000 will develop type 2 diabetes in their lifetime. Research shows
4that overweight children have a much greater chance of being
5obese as adults, with all the health risks that entails. Heart disease
6is the leading cause of death in the United States, with diabetes as
7the seventh leading cause of death.

8(f) There is overwhelming evidence of the link between obesity,
9diabetes, and heart disease and the consumption of sweetened
10beverages, such as soft drinks, energy drinks, sweet teas, and sports
11drinks. California adults who drink a soda or more per day are 27
12percent more likely to be overweight or obese, regardless of income
13or ethnicity.

14(g) The rate of children who are overweight has also increased
15dramatically in recent decades. After being relatively constant
16from the 1960s to the 1970s, the prevalence of overweight children
17has more than quadrupled among children between 6 and 11 years
18of age and nearly tripled among those between 12 and 19 years of
19age. In California in 2010, 38 percent of children in grades 5, 7,
20and 9 were overweight or obese. Thirty-one of California’s 58
21counties experienced an increase in childhood overweight from
222005 to 2010.

23(h) The obesity epidemic is of particular concern because obesity
24increases the risk of diabetes, heart disease, certain types of cancer,
25arthritis, asthma, and breathing problems. Depending on their level
26of obesity, from 60 percent to over 80 percent of obese adults have
27type 2 diabetes, high blood cholesterol, high blood pressure, or
28other related conditions. It has been reported that up to 60 percent
29of obese children 5 to 10 years of age have early signs of heart
30disease.

31(i) According to nutritional experts, sweetened beverages, such
32as soft drinks, energy drinks, sweet teas, and sport drinks, offer
33little or no nutritional value, but massive quantities of added sugars.
34A 20-ounce bottle of soda contains the equivalent of approximately
3516 teaspoons of sugar. Yet, the American Heart Association
36recommends that Americans consume no more than five to nine
37teaspoons of sugar per day.

38(j) Research shows that almost one-half of the extra calories
39Americans consume in their diet comes from sugar sweetened
40beverages, with the average American drinking nearly 50 gallons
P17   1of sugar-sweetened beverages a year, the equivalent of 39 pounds
2of extra sugar every year.

3(k) Research shows that 41 percent of California children 2 to
411 years of age and 62 percent of California teens 12 to 17 years
5of age drink soda daily, and for every additional serving of
6sweetened beverage that a child consumes a day, the likelihood of
7the child becoming obese increases by 60 percent.

8(l) The proportion of youth drinking at least one sugary beverage
9per day was highest among Latinos at 48 percent, significantly
10higher than among whites at 33 percent. African- American youth,
11at 43 percent, and multi-racial youth, at 46 percent, also had
12significantly higher consumption than whites.

13(m) Dental caries (tooth decay) are the most common chronic
14childhood disease, experienced by more than two-thirds of
15California’s children. Children who frequently or excessively
16consume beverages high in sugar are at increased risk for dental
17caries. Untreated dental caries can lead to pain, infection, tooth
18loss, and in severe cases, even death. It can slow normal growth
19and development by restricting nutritional intake. Children who
20are missing teeth may have chewing problems that limit their food
21choices and result in nutritionally inadequate diets.

22(n) It is the intent of the Legislature to create a program designed
23to prevent and treat obesity, diabetes, heart and dental disease and
24reduce the burden of attendant health conditions that result from
25the overconsumption of sweetened beverages.

26

SEC. 2.  

Chapter 5 (commencing with Section 104895.5) is
27added to Part 3 of Division 103 of the Health and Safety Code, to
28read:

29 

30Chapter  5. Children and Family Health Promotion
31Program
32

 

33

104895.5.  

(a) The Children and Family Health Promotion
34Program is hereby established in the Department of Public Health.

35(b) The program shall consist of a competitive grant process in
36which grants are awarded by the department to counties, cities,
37nonprofit organizations, community-based organizations, and
38clinics licensed pursuant to Chapter 1 (commencing with Section
391200) of Division 2 that seek to invest in childhood obesity and
40diabetes prevention activities and oral health programs.

P18   1(c) The department may award a grant to any entity described
2in subdivision (b) that will use the grant to support programs that
3use educational, environmental, policy, and other public health
4 approaches to achieve all the following goals:

5(1) Improve access to, and consumption of, healthy, safe, and
6affordable foods and beverages.

7(2) Reduce access to, and consumption of, calorie-dense and
8nutrient-poor foods.

9(3) Encourage physical activity and decrease sedentary behavior.

10(4) Raise awareness about the importance of nutrition and
11physical activity to childhood obesity and diabetes prevention.

12(d) The department shall develop an application and application
13process for the program.

14(e) Applicants interested receiving a grant shall submit an
15application to the department.

16(f) The program shall be funded by any moneys appropriated
17by the Legislature to the department for this purpose.

end delete


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