Amended in Assembly March 30, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2782


Introduced by Assembly Member Bloom

(Coauthors: Assembly Members Chiu and Wood)

February 19, 2016


begin delete An act to amend Section 104655 of the Health and Safety Code, relating to nutrition. end deletebegin insertAn act to add Chapter 5 (commencing with Section 104895.50) to Part 3 of Division 103 of the Health and Safety Code, relating to public health. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2782, as amended, Bloom. begin deleteHealthy food.end deletebegin insert Healthy California Fund.end insert

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Existing law provides for 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 Healthy California Fund, created by the bill. The bill would require moneys in the fund, upon appropriation by the Legislature, to be allocated to the State Department of Public Health, the State Department of Health Care Services, the Department of Education, and the Department of Food and Agriculture, as specified, for various purposes related to statewide diabetes and childhood obesity treatment and prevention activities and programs, including awarding competitive grants to local governments, nonprofit organizations, school districts, and other entities for activities in support of the 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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The bill would create the Healthy California Fund Oversight Committee, to advise the affected state departments in implementing the bill’s requirements. Among other requirements, the committee would evaluate programs and interventions funded under the bill and report to the Legislature annually regarding programs funded by the Healthy California Fund. The committee would produce a comprehensive master plan for implementing diabetes and obesity prevention programs throughout the state, increase healthy eating and active living, reduce food insecurity, and promote sustainable, healthy, resilient communities.

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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 include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

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Existing law requires the State Department of Public Health to establish and implement the 5 A Day--For Better Health program to promote public awareness of the need to eat more fruits and vegetables in order to improve health and prevent major chronic diseases. Existing law provides that nothing shall operate to prohibit contributions to the program by certain marketing organizations and commissions subject to specified provisions.

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This bill would make technical, nonsubstantive changes to this provision.

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

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

P3    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

The Legislature finds and declares as follows:

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begin insert

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

end insert
begin insert

6
(b) According to the State Department of Public Health, diabetes
7is the seventh leading cause of death in California and has been
8determined to be the underlying cause of death for almost 8,000
9people each year.

end insert
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10
(c) Adults with type II diabetes more often have other health
11problems. Half of adults with type II diabetes also have
12hypertension. This rate of occurrence is twice as high as for those
13without diabetes. Adults with diabetes are also twice as likely to
14have cardiovascular disease than adults without diabetes.

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begin insert

15
(d) Adults with diabetes are 50 percent more likely to have
16arthritis than adults without diabetes. Over 40 percent of new
17cases of kidney failure are attributed to diabetes. New cases of
18kidney failure declined slightly from 2001 to 2007, but began to
19increase again after 2007.

end insert
begin insert

20
(e) Hispanics, African Americans, American Indians, Alaska
21Natives, Asian Americans, Native Hawaiians, and Pacific Islanders
22have a higher prevalence of type II diabetes than non-Hispanic
23whites. Hispanics and African Americans have two times higher
24prevalence: 7 percent of non-Hispanic Whites have type II diabetes,
25compared with 12 percent of Latinos, 9 percent of Asian
26Americans, 14 percent of Pacific Islander Americans, 13 percent
27of African Americans, and 17.5 percent of American Indian and
28Alaska Native populations. In some populations, type II diabetes
29remains undiagnosed. For example, more than half of Asian
30Americans with type II diabetes, and even more Asian Americans
31with prediabetes, are undiagnosed. Nationally, the lifetime risk of
P4    1developing diabetes is now 40 percent, or 2 of every 5 adults, and
2exceeds 50 percent for Hispanic men and women and non-Hispanic
3black women. If trends are not reversed, it is predicted that 40
4percent of Americans and nearly half of Latino and African
5American children born in the year 2000 will develop type II
6diabetes in their lifetime.

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begin insert

7
(f) The prevalence of obesity in the United States has increased
8dramatically over the past 30 years. In California, obesity rates
9have increased even more, rising from 8.9 percent in 1984 to 23.8
10percent in 2011. Although no group has escaped the epidemic,
11low-income populations and communities of color are
12disproportionately affected.

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13
(g) The rate of children who are overweight has also increased
14dramatically in recent decades. In 2010, 38 percent of California
15children in grades 5, 7, and 9 were overweight or obese. Thirty-one
16of California’s 58 counties experienced an increase in childhood
17obesity from 2005 to 2010.

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begin insert

18
(h) In 2006, overweight and obesity-related health costs in
19California were estimated at almost $21 billion. The cost of health
20care alone for diabetes in California in 2010 is estimated to have
21been $13 billion.

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22
(i) There is overwhelming evidence of the link between obesity,
23diabetes, and heart disease and with the consumption of sweetened
24beverages, including soft drinks, energy drinks, sweet teas, and
25sports drinks. California adults who drink one or more per day
26are 27 percent more likely to be overweight or obese, regardless
27of income or ethnicity.

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28
(j) According to nutritional experts, sweetened beverages, such
29as soft drinks, energy drinks, sweet teas, and sports drinks, offer
30little or no nutritional value, but massive quantities of added
31sugars. A 20-ounce bottle of soda contains the equivalent of
32approximately 16 teaspoons of sugar, yet the American Heart
33Association recommends that Americans consume no more than
34five to nine teaspoons of sugar per day.

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35
(k) Research shows that almost half of the extra calories
36Americans consume in their diet comes from sugar-sweetened
37beverages, with the average American drinking nearly 50 gallons
38of sugar-sweetened beverages a year, the equivalent of 39 pounds
39of extra sugar every year.

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P5    1
(l) Research shows that 41 percent of California children from
22 to 11 years of age, inclusive, and 62 percent of California teens
3from 12 to 17 years of age, inclusive, drink soda daily, and for
4every additional serving of sweetened beverage that a child
5consumes per day, the likelihood of the child becoming obese
6increases by 60 percent.

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begin insert

7
(m) Sugary drinks are a unique contributor to excess caloric
8consumption. A large body of research shows that calories from
9sugary drinks do not satisfy hunger the way calories from solid
10food or beverages containing fat or protein do, such as those
11containing milk and plant-based proteins. As a result, sugary
12beverages tend to add to the calories people consume rather than
13replace them.

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14
(n) Dental caries, commonly referred to as tooth decay, is the
15most common chronic childhood disease, and by third grade tooth
16decay affects almost two-thirds of the children in California.
17Twenty-eight percent of elementary school children- some
18750,000- have untreated tooth decay. Dental disease caused by
19tooth decay is linked to broader health problems, including
20cardiovascular disease, strokes and diabetes. It can lead to serious
21health, developmental, and social concerns, as well as significantly
22increased cost of restorative care and reliance on high-cost health
23care settings like hospital emergency departments.

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begin insert

24
(o) Research shows that low income and minority populations
25disproportionately feel the burden of tooth decay, as low-income
26children suffer twice as much from dental disease as those from
27higher income families, and their disease is more likely to be
28untreated. Nationally, 32 percent of Latino children and 28 percent
29of African American children have untreated tooth decay,
30compared to only 18 percent of white children. Pain and infection
31from untreated tooth decay impairs concentration and learning in
32students and leads to missed schooldays.

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33
(p) Sugar is the primary and necessary factor in the development
34of tooth decay. In addition to sugar, the acids found in beverages
35like soda, energy drinks, and juice erode tooth enamel, making
36sweetened beverage consumption one of the most significant
37contributors to dental caries in children. Children from families
38of low socioeconomic status have a significantly higher
39consumption of soda and other types of sugary beverages.

end insert
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P6    1
(q) It is the intent of the Legislature in creating the Healthy
2California Fund to diminish the human and economic costs of
3diabetes, obesity, heart disease, and dental disease in California.
4The fund is intended to create a dedicated revenue source for
5 health, education, and wellness programs designed to prevent and
6treat obesity, diabetes, and heart and dental disease and to reduce
7the burden of attendant health conditions that result from the
8overconsumption of sugar-sweetened beverages.

end insert
9begin insert

begin insertSEC. 2.end insert  

end insert

begin insertChapter 5 (commencing with Section 104895.50) is
10added to Part 3 of Division 103 of the end insert
begin insertHealth and Safety Codeend insertbegin insert, to
11read:end insert

begin insert

12 

13Chapter  begin insert5.end insert Healthy California Fund
14

 

15

begin insert104895.50.end insert  

The following definitions shall apply for purposes
16of this chapter:

17
(a) (1) “Beverage for medical use” means a beverage suitable
18for human consumption and manufactured for use as an oral
19nutritional therapy for persons who cannot absorb or metabolize
20dietary nutrients from food or beverages, or for use as an oral
21rehydration electrolyte solution for infants and children formulated
22to prevent or treat dehydration due to illness.

23
(2) “Beverage for medical use” includes a “medical food.”
24Consistent with Section 5(b)(3) of the Orphan Drug Act (Public
25Law 97-414; at 21 U.S.C. 360ee(b)(3)), “medical food” means a
26food that is formulated to be consumed or administered enterally
27under the supervision of a physician and that is intended for the
28specific dietary management of a disease or condition for which
29distinctive nutritional requirements, based on recognized scientific
30principles, are established by medical evaluation.

31
(3) “Beverage for medical use” does not include drinks
32commonly referred to as “sports drinks,” or any other derivative
33or similar terms.

34
(b) “Board” means the State Board of Equalization.

35
(c) “Bottle” means any closed or sealed container, regardless
36of size or shape, including, without limitation, those made of glass,
37metal, paper, plastic, or any other material or combination of
38materials.

39
(d) “Bottled sugar-sweetened beverage” means any
40sugar-sweetened beverage contained in a bottle that is ready for
P7    1consumption without further processing, such as dilution or
2carbonation.

3
(e) “Caloric sweetener” means any caloric substance suitable
4for human consumption that humans perceive as sweet, including,
5but not limited to, sucrose, fructose, glucose, fruit juice
6concentrate, or other sugars. “Caloric sweetener” excludes
7noncaloric sweeteners. For purposes of this definition, “caloric”
8means a substance that adds calories to the diet of a person who
9consumes that substance.

10
(f) “Consumer” means a person who purchases a
11sugar-sweetened beverage for consumption and not for sale to
12another.

13
(g) “Distributor” means any person, including a manufacturer
14or wholesale dealer, who receives, stores, manufactures, bottles,
15or distributes bottled sugar-sweetened beverages, syrups, or
16powders for sale to retailers doing business in the state, or any
17 combination of these activities, whether or not that person also
18sells those products to consumers.

19
(h) “Fund” means the Healthy California Fund.

20
(i) “Milk” means natural liquid milk, regardless of animal or
21plant source or butterfat content, natural milk concentrate, whether
22or not reconstituted, or dehydrated natural milk, whether or not
23reconstituted.

24
(j) “Natural fruit juice” means the original liquid resulting
25from the pressing of fruits, or the liquid resulting from the dilution
26with water of dehydrated natural fruit juice.

27
(k) “Natural vegetable juice” means the original liquid resulting
28from the pressing of vegetables, or the liquid resulting from the
29dilution with water of dehydrated natural vegetable juice.

30
(l) “Noncaloric sweetener” means any noncaloric substance
31suitable for human consumption that humans perceive as sweet,
32including, but not limited to, aspartame, acesulfame-K, neotame,
33saccharin, sucralose, and stevia. “Noncaloric sweetener” excludes
34caloric sweeteners. For purposes of this definition, “noncaloric”
35means a substance that contains fewer than five calories per
36serving.

37
(m) “Person” means a natural person, partnership, cooperative
38association, limited liability company, corporation, personal
39representative, receiver, trustee, assignee, or other legal entity.

P8    1
(n) “Place of business” means any place where sugar-sweetened
2beverages, syrups, or powders are manufactured or received for
3sale in the state.

4
(o) “Powder” means any solid mixture of ingredients used in
5making, mixing, or compounding sugar-sweetened beverages by
6mixing the powder with one or more other ingredients, including,
7but not limited to, water, ice, syrup, simple syrup, fruits, vegetables,
8fruit juice, vegetable juice, or carbonation or other gas.

9
(p) “Retailer” means any person who sells or otherwise
10dispenses in the state a sugar-sweetened beverage to a consumer
11whether or not that person is also a distributor.

12
(q) “Sale” means the transfer of title or possession for valuable
13consideration, regardless of the manner by which the transfer is
14completed.

15
(r) “State” means the State of California.

16
(s) (1) “Sugar-sweetened beverage” means any nonalcoholic
17beverage, carbonated or noncarbonated, that is sold for human
18consumption and contains added caloric sweetener. As used in
19this subdivision, “nonalcoholic beverage” means any beverage
20that contains less than one-half of 1 percent alcohol per volume.

21
(2) “Sugar-sweetened beverage” does not include any of the
22following:

23
(A) Bottled sugar-sweetened beverages, syrups, and powders
24sold to the United States government and American Indian tribal
25governments.

26
(B) Bottled sugar-sweetened beverages, syrups, and powders
27sold by a distributor to another distributor that is registered
28pursuant to Section 104895.58 if the sales invoice clearly indicates
29that the sale is exempt. If the sale is to a person who is both a
30distributor and a retailer, the sale shall also be fee-exempt and
31the fee shall be paid when the purchasing distributor or retailer
32resells the product to a retailer or a consumer. This exemption
33does not apply to any other sale to a retailer.

34
(C) Beverages sweetened solely with noncaloric sweeteners.

35
(D) Beverages consisting of 100 percent natural fruit or
36vegetable juice, with no added caloric sweetener.

37
(E) Beverages in which milk, or soy, rice, or similar milk
38substitute, is the primary ingredient or the first listed ingredient
39on the label of the beverage.

P9    1
(F) Beverages with fewer than five grams of added sugar or
2other caloric sweeteners per 12 ounces.

3
(G) Coffee or tea without added caloric sweetener.

4
(H) Infant formula.

5
(I) Beverages for medical use.

6
(J) Water without any caloric sweetener.

7
(t) “Syrup” means a liquid mixture of ingredients used in
8making, mixing, or compounding sugar-sweetened beverages using
9one or more other ingredients, including, but not limited to, water,
10ice, powder, simple syrup, fruits, vegetables, fruit juice, vegetable
11juice, carbonation, or other gas.

12
(u) “Water” includes nonflavored water, or water flavored with
13noncaloric “natural fruit essence” or “natural flavor.” The source
14of the water may be artesian, mineral, spring, or well. The type of
15water may also include carbonated, such as sparkling, club, or
16seltzer, and still, distilled, or purified, such as demineralized,
17deionized, or reverse osmosis.

18
(v) “Culturally and linguistically appropriate” means meeting
19the requirements of paragraphs (1) and (2) of subdivision (c) of
20Section 2190.1 of the Business and Professions Code.

21

begin insert104895.51.end insert  

(a) (1) The Healthy California Fund is hereby
22established in the State Treasury with the purpose of diminishing
23the human and economic costs of diabetes, obesity, heart disease,
24and dental disease in California. The fund shall support culturally
25and linguistically appropriate programs and interventions that
26use educational, environmental, policy, and systems change, and
27other public health approaches to improve access to, and
28consumption of, healthy and affordable foods and beverages,
29reduce access to, and consumption of, calorie-dense and
30nutrient-poor foods, encourage physical activity and decrease
31sedentary behavior, improve oral health literacy, raise awareness
32about the importance of nutrition and physical activity in the
33prevention of obesity and diabetes, and raise awareness of the
34impact of nutrition and oral health habits on dental disease.

35
(2) The majority of expenditures shall be directed to support
36comprehensive policy, systems, and environmental change
37approaches that promote healthy eating, active living, and
38improved oral health, including, but not limited to, those
39recommended by the Institute of Medicine and the federal Centers
40of Disease Control and Prevention. The fund shall consist of all
P10   1fees, interest, penalties, and other amounts collected pursuant to
2this chapter, less refunds and reimbursement for expenses incurred
3in the administration and collection of the fees.

4
(b) Fifty-one percent of the moneys in the fund shall be allocated
5to the State Department of Public Health and distributed for the
6following purposes:

7
(1) Twenty-seven percent to develop and administer a regular
8grant program to all county and city health departments, or their
9nonprofit designee, seeking to invest in obesity, diabetes, and
10dental disease prevention activities. Funds shall be distributed in
11a reasonable proportion for prevention activities across the three
12chronic diseases and pursuant to the Target Population Funding
13Criteria under Section 104895.52.

14
(2) Twenty-eight percent to develop and administer a competitive
15grant program for nonprofit and community based organizations
16seeking to invest in obesity, diabetes, and dental disease prevention
17activities. At least 15 percent and up to 20 percent of these funds
18shall be used to support nonprofit organizations working statewide,
19including those that provide capacity building and technical
20assistance services. At least 8 percent of these funds shall be used
21for statewide priority population leadership networks, including
22African American, Hispanic, American Indian and Alaska Native,
23Asian American, Native Hawaiian and Pacific Islander and low
24socioeconomic status populations. Grants to community-based
25organizations shall be distributed in a reasonable proportion for
26prevention activities across the three chronic diseases and shall
27meet the Target Population Funding Criteria pursuant to Section
28104895.52.

29
(3) Twenty-eight percent to develop and administer a competitive
30grant program for clinics licensed under subdivision (a) of Section
311204 to invest in a comprehensive approach to obesity, diabetes,
32and dental disease prevention and treatment activities. In addition
33to direct services, funding shall support programs that use
34culturally and linguistically appropriate educational and other
35public health approaches that raise awareness about the
36importance of nutrition and physical activity in the prevention of
37childhood obesity, diabetes, and dental disease. Funds shall be
38distributed in a reasonable proportion for prevention activities
39across the three chronic diseases and pursuant to the target
40population funding criteria specified in Section 10895.52.

P11   1
(4) Seven percent to the department or its nonprofit partners
2for statewide advertising and media campaigns, including social
3media initiatives, to change social and cultural norms around risk
4factors for chronic diseases, including diet and physical activity,
5and dental disease prevention. The statewide advertising and media
6campaigns shall be guided by a subcommittee of the Oversight
7Committee pursuant to Section 104895.53 and ensure that
8advertising and media campaigns are tailored for the populations
9most affected, as listed in subdivision (a) of Section 104895.52.

10
(5) Ten percent to the department, of which no more than 3
11percent may be used for administration of the Fund to include
12technical assistance to potential grantees and its prevention
13activities; a minimum of 3 percent for independent evaluation; 1
14percent subgranted to California-based public universities or
15nonprofits to strengthen chronic disease surveillance, including
16measures to track economic, racial, and ethnic disparities and
17health inequities; and 3 percent to the department’s Oral Health
18Program to support statewide coordination and delivery of
19preventive dental health programs and to ensure that funding is
20directed to programs in accordance with the implementation of
21the Oral Health Program.

22
(c) Four percent to the Expanded Access to Primary Care, Rural
23Health Services Development, Health of Seasonal Agricultural
24Migratory Workers, and Indian Health programs in the State
25Department of Health Care Services. Funds shall be used to
26support culturally and linguistically appropriate clinic-based
27obesity and diabetes prevention and related disease management
28pursuant to subdivision (v) of Section 104895.50 with no more
29than 3 percent going towards department administrative costs.

30
(d) Twenty-five percent to the Department of Education and
31distributed for the following purposes and pursuant to the Target
32Population Funding Criteria, under Section 104895.52, with no
33more than three percent to be used for department administrative
34costs:

35
(1) Twenty-eight percent to administer a competitive grant
36program for school districts for educational, environmental, policy,
37and other public health approaches that promote physical activity.
38The approaches funded pursuant to this paragraph may include
39improving or constructing school recreational facilities that are
40used for recess and physical education, joint-use activities during
P12   1after hours, providing continuing education training for physical
2education teachers, hiring qualified physical education teachers,
3and implementing Safe Routes to School programs.

4
(2) Thirty-one percent to administer a competitive grant
5program for school districts for educational, environmental, policy,
6and other public health approaches that promote improved
7nutrition and access to healthy foods and beverages. The
8approaches funded pursuant to this paragraph may include
9improving the quality and nutrition of school breakfasts, lunches,
10and snacks, increasing access to federal meal programs for
11underserved populations, and incorporating practical nutrition
12education into the curriculum.

13
(3) Fourteen percent to the California Farm to School Program
14administered by the department.

15
(4) Twenty-four percent to administer a competitive grant
16program for school districts for ensuring access to clean drinking
17water throughout the schoolday, including, but not limited to,
18drinking fountains and water bottle refilling stations.

19
(e) Twenty percent to the Department of Food and Agriculture,
20to be distributed equally for the following purposes, with no more
21than 3 percent going towards department administrative costs:

22
(1) To the Office of Farm to Fork, including, but not limited to,
23consumer incentive programs, pursuant to Section 49001 of the
24Food and Agricultural Code.

25
(2) To the Office of Farm to Fork, Chapter 12 (commencing
26with Section 49001) of Division 17 of the Food and Agricultural
27Code, to administer a competitive grant program to aide
28community food producers, as defined under Section 113752, or
29socially disadvantaged, beginning, military veteran, or limited
30resource specialty crop producers that improve the health and
31resilience of their communities by increasing access to any variety
32 of fresh, canned, dried, or frozen whole or cut fruits and vegetables
33without added sugars, fats or oils, and salt.

34

begin insert104895.52.end insert  

(a) The target populations described in paragraphs
35(1) to (5), inclusive, at a minimum, shall be the focus of the
36campaign implemented pursuant to this chapter, and all moneys
37in the fund, including those designated for statewide activities,
38shall be allocated with no less than 60 percent priority given to
39communities located in zip codes with the highest 30 percentile of
40type II diabetes, as reported by the California Health Interview
P13   1Survey (CHIS) conducted by the University of California, Los
2Angeles Center for Health Policy Research. Departments shall
3use the most current survey data available in identifying the
4following populations:

5
(1) African American, Hispanic, American Indian and Alaska
6Native, Asian American, Native Hawaiian, and Pacific Islander.

7
(2) Low socioeconomic status populations.

8
(3) Zip codes with the top 30th percentile of rates of type II
9diabetes.

10
(4) Communities identified as dentally underserved or with high
11rates of dental disease.

12
(5) At-risk populations, as determined by the California Health
13Interview Survey (CHIS) and other data sources.

14
(b) Pursuant to this chapter, the State Department of Public
15Health and the State Department of Education shall use the most
16current survey data available to target all moneys in the fund to
17address the needs of the identified target populations using the
18following criteria and methodologies:

19
(1) For funding to the California Department of Public Health:

20
(A) (i) Pursuant to the county and local government funding
21criteria, funding shall be focused and primarily expended on
22programs and activities with a priority and focus on directly
23serving communities identified in paragraph (1) of subdivision
24(a), and where consumption of bottled sugar-sweetened beverages
25is the highest, in neighborhoods with schools with a high
26concentration of students who qualify for supplemental and
27concentration grants, pursuant to Section 2574 of the Education
28Code, and in neighborhoods with a demonstrated need for services,
29including a high concentration of Medi-Cal eligible residents.

30
(ii) The department shall develop a funding formula to provide
31a minimum base level to all county and city health departments
32with the additional amount weighted to reflect the number of
33residents in each jurisdiction living below 150 percent of the
34federal poverty level. Funding shall be dependent on each local
35health department submitting an approved implementation plan
36and maintaining a community coalition to support the objectives
37of the funding. At least one third of each jurisdiction’s funds shall
38be subgranted to community partners selected through a
39competitive process with a priority and focus on directly serving
P14   1communities and populations described in paragraph (1) of
2subdivision (a).

3
(B) Grants for nonprofit and community-based organizations,
4pursuant to paragraph (2) of subdivision (b) of Section 104895.51,
5shall be reserved for providing activities in communities described
6in paragraph (1) of subdivision (a) and assisting populations that
7are no more than 150 percent above the poverty level. Priority
8shall be given to culturally and linguistically appropriate activities,
9pursuant to subdivision (v) of Section 104895.50. Those activities
10shall directly serve communities with a demonstrated need for
11health care services, including those with high levels of
12limited-English-Proficient residents.

13
(2) Funding to the State Department of Education shall be
14focused and primarily expended on campuses located in
15neighborhoods and serving children, pursuant to paragraph (1)
16of subdivision (a), with a high density of students who qualify for
17the National School Lunch Program or the federal School
18Breakfast Program, more than 50 percent of students who would
19qualify for supplemental or concentration grants, pursuant to
20Section 2574 of the Education Code, and a demonstrated need
21that may include showing that access to fresh fruits and vegetables
22is limited in the neighborhood surrounding the school.

23

begin insert104895.53.end insert  

(a) Upon appropriation by the Legislature, all
24moneys in the fund shall be expended only for the purposes
25expressed in this chapter and shall be used only to supplement
26existing levels of service. Moneys in the fund shall not supplant
27any federal, state, or local funding for existing levels of service.

28
(b) The State Public Health Officer, the Secretary of the
29Department of Food and Agriculture, the Director of Health Care
30Services, and the Superintendent of Public Instruction may
31coordinate to establish regulations and procedural measures
32necessary to effectuate the purposes of this chapter. The regulations
33may provide for specific programs to be funded consistent with
34the allocation of funds as set forth in this chapter. In establishing
35these regulations, the departments shall give particular
36consideration to reducing the prevalence of diabetes, as identified
37by data from the CHIS and other data sources.

38
(c) The California State Auditor’s office shall conduct periodic
39audits to ensure that the annual allocation to individual programs
40is awarded by the fund in a timely fashion consistent with the
P15   1requirements of this chapter. The first audit shall be conducted no
2later than 24 months after the effective date of this section.

3

begin insert104895.54.end insert  

(a) The Healthy California Fund Oversight
4Committee is hereby created in state government. The committee
5shall advise the State Department of Public Health, the State
6Department of Health Care Services, the Department of Food and
7Agriculture, and the State Department of Education with respect
8to policy development, integration, and evaluation of the state and
9local programs funded under this chapter, and shall develop a
10master plan for the future implementation of diabetes, obesity, and
11dental disease prevention programs.

12
(b) The committee shall be composed of 13 members to be
13appointed as follows, with specific consideration to address the
14needs of the target populations described in Section 104895.52:

15
(1) Two members representing nonprofit public health
16organizations dedicated to healthy eating, active living, and
17diabetes and obesity prevention, appointed by the Speaker of the
18Assembly.

19
(2) One member representing an organization that represents
20the health center community, appointed by the Senate Rules
21Committee.

22
(3) One member of a professional education association, such
23as an association of teachers, appointed by the Senate Rules
24Committee.

25
(4) One representative of a professional dental organization, a
26nonprofit dental health organization, or representing an
27organization dedicated to dental disease prevention, appointed by
28Governor.

29
(5) One member of a university facility with expertise in
30programs intended to promote healthy eating, active living, and
31diabetes and obesity prevention, appointed by the Governor.

32
(6) Two representatives of a target population group, appointed
33by the Governor.

34
(7) One representative of the State Department of Public Health,
35appointed by the Governor.

36
(8) One representative of the State Department of Health Care
37Services, appointed by the Governor.

38
(9) One representative of the Department of Food and
39Agriculture, appointed by the Governor.

P16   1
(10) One representative of the State Department of Education,
2appointed by the Superintendent of Public Instruction.

3
(11) One representative of local health departments, appointed
4by the Governor.

5
(c) Members shall serve for a term of three years, renewable
6at the option of the appointing authority, with up to two consecutive
7terms. The initial appointments of members shall be for two or
8three years, to be drawn by random lot at the first meeting. The
9committee shall be staffed by the coordinator of the State
10Department of Public Health programs created pursuant to
11subdivision (b) of Section 104895.51.

12
(d) The committee shall meet as often as it deems necessary,
13but not fewer than four times per year.

14
(e) The members of the committee shall serve without
15compensation, but shall be reimbursed for necessary travel
16expenses incurred in the performance of the duties of the
17committee.

18
(f) An equity subcommittee shall be established as part of the
19Oversight Committee to ensure progress on advancing health
20equity.

21

begin insert104895.55.end insert  

The committee shall be advisory to the State
22Department of Public Health, the State Department of Health Care
23Services, the Department of Food and Agriculture, and the State
24Department of Education, for the following purposes:

25
(a) Evaluating programs and interventions funded under this
26chapter as necessary in order to assess the overall effectiveness
27of efforts made by the program to promote healthy eating and
28active living and to prevent diabetes and obesity. In order to
29evaluate programs, the committee shall seek the cooperation and
30assistance of the State Department of Public Health, the State
31Department of Health Care Services, the Department of Food and
32Agriculture, the State Department of Education, the University of
33California, local health departments, local education agencies,
34administrative representatives, target populations, school officials,
35nongovernmental organizations, and researchers. A principal
36measurement of effectiveness shall be the reduction of diabetes
37and obesity and the increased consumption of healthy foods and
38levels of physical activity among a given target population.

39
(b) Facilitating programs directed at promoting healthy eating
40and active living and preventing diabetes and obesity that are
P17   1operated jointly by more than one agency or entity. The committee
2shall propose strategies for the coordination of proposed programs
3administered by the State Department of Public Health, the State
4Department of Health Care Services, the Department of Food and
5Agriculture, and the State Department of Education, and local
6lead agencies, in order to avoid the duplication of services and to
7maximize the public benefit of the programs.

8
(c) Making recommendations to the Department of Public
9Health, the Department of Health Care Services, the Department
10of Food and Agriculture, and State Department of Education
11regarding the most appropriate selection criteria for, and
12standards of, the operation and the types of programs to be funded
13under this chapter.

14
(d) (1) Notwithstanding Section 10231.5 of the Government
15Code, reporting to the Legislature on or before January 1 of each
16year on the number and scope of programs funded by the Healthy
17California Fund created by Section 104895.51, the amount of
18money in the fund, any moneys previously appropriated to the
19State Department of Public Health, the State Department of Health
20Care Services, the Department of Food and Agriculture, and the
21State Department of Education, but unspent by the departments,
22a description and assessment of all programs funded under this
23chapter, and recommendations for any necessary policy changes
24or improvements for program interventions and strategies.

25
(2) A report submitted pursuant to paragraph (1) shall be
26submitted in compliance with Section 9795 of the Government
27Code.

28
(e) Ensuring that the most current research findings regarding
29diabetes and obesity prevention are applied in designing the
30programs administered by the State Department of Public Health,
31the State Department of Health Care Services, the Department of
32Food and Agriculture, and the State Department of Education.
33The departments shall apply the most current findings and
34recommendations of research and best practice.

35
(f) Based on the results of programs supported by this chapter
36and any other proven methodologies available to the committee,
37producing a comprehensive master plan for implementing diabetes
38and obesity prevention programs throughout the state to increase
39healthy eating and active living, reduce food insecurity, and
40promote sustainable, healthy, resilient communities. The master
P18   1plan shall include longitudinal data on obesity prevalence and
2incidence rates, data on diabetes prevalence and incidence rates,
3and longitudinal information on sweetened beverage consumption
4rates across the state population. The master plan shall also
5include implementation strategies for programs to address the
6needs of underserved and at-risk target populations throughout
7this state. The Healthy California Fund Oversight Committee shall
8submit the master plan to the Legislature biennially, in compliance
9with Section 9795 of the Government Code. The master plan and
10its revisions shall include recommendations for administrative
11arrangements, funding priorities and integration and coordination
12of approaches by the Department of Public Health, the Department
13of Health Care Services, the Department of Food and Agriculture,
14and State Department of Education and their support systems,
15local lead agencies, and nongovernmental organizations, as well
16as progress reports relating to the needs of specific target
17populations.

18

begin insert104895.56.end insert  

(a) A health impact fee is hereby imposed on every
19distributor for the privilege of distributing bottled sweetened
20beverages and concentrate in the state, for deposit into the fund.
21The fees shall be calculated as follows:

22
(1) The fee on bottled sweetened beverages distributed in this
23state shall be two cents ($0.02) per fluid ounce.

24
(2) The fee on concentrates distributed in the state either as
25concentrate or as a sweetened beverage derived from that
26concentrate shall be equal to two cents ($0.02) per fluid ounce of
27sweetened beverage produced from that concentrate. For purposes
28of calculating the fee for concentrate, the volume of sweetened
29beverage to be produced from concentrate shall be the largest
30volume resulting from use of the concentrate according to any
31manufacturer’s instructions.

32
(b) In each transaction described in subdivision (a), the
33distributor shall include the following information on each receipt,
34invoice, or other form of accounting for the distribution of bottled
35sweetened beverages or concentrate:

36
(1) The name and address of the distributor.

37
(2) The name and address of the purchaser.

38
(3) The date of sale and invoice number.

39
(4) The kind, quantity, size, and capacity of packages of bottled
40sweetened beverages, sweetened beverages, or concentrate sold.

P19   1
(5) The amount of fees due from the distributor on the sale of
2the bottled sweetened beverages, sweetened beverages, or
3concentrate.

4
(6) Any other information, as required by the board.

5
(c) The program shall develop reimbursement criteria to enable
6participating departments to recover administrative costs
7associated with collecting the charge.

8
(d) This section shall not preempt a city or county from enacting
9or enforcing an ordinance related to taxation of sugar-sweetened
10beverages if the ordinance is more stringent than this section.

11

begin insert104895.57.end insert  

(a) (1) No later than July 1, 2017, and annually
12thereafter, the State Department of Public Health, the State
13Department of Health Care Services, the Department of Food and
14Agriculture, and the State Department of Education shall
15commence preparation of a program budget for the following
16calendar year. The budgets shall include all of the following
17information:

18
(A) Anticipated revenues and costs of implementing the program,
19including related programs, projects, contracts, and administrative
20expenses.

21
(B) A recommended funding level sufficient to cover the
22program’s budgeted costs and to operate the program over a
23multiyear period in a prudent and responsible manner.

24
(C) The amount of the health impact fees, as described in Section
25104895.56, and itemization of costs that the fees cover.

26
(2) The State Department of Public Health, the State Department
27of Health Care Services, the Department of Food and Agriculture,
28and the State Department of Education shall solicit feedback on
29their proposed budgets from the Healthy California Fund Oversight
30Committee before adopting a final budget.

31
(3) The departments shall adopt final program budgets for
32purposes of this chapter by October 1 of each year.

33
(b) The fund shall reimburse the State Department of Public
34Health, the State Department of Health Care Services, the
35Department of Food and Agriculture, and the State Department
36of Education for administration and implementation costs the
37departments incur pursuant to this chapter, as provided in
38subdivision (c). The reimbursement shall not exceed the
39departments’ direct costs to implement and enforce this chapter.

P20   1
(c) The State Department of Public Health, the State Department
2of Health Care Services, the Department of Food and Agriculture,
3and the State Department of Education shall deposit all moneys
4submitted for reimbursement costs by the program into the Healthy
5California Fund Administration Account, which is hereby
6established within the fund. Upon appropriation by the Legislature,
7moneys in the account shall be expended by the departments to
8administer and enforce this chapter and to repay any outstanding
9loans made from other funds used to finance startup costs of the
10department’s activities pursuant to this chapter.

11

begin insert104895.58.end insert  

(a) The board shall administer and collect the
12charges imposed by this chapter pursuant to the Fee Collection
13Procedures Law (Part 30 (commencing with Section 55001) of
14Division 2 of the Revenue and Taxation Code). The board may use
15no more than 3 percent of the revenues generated to cover its
16administrative costs in collecting the fees imposed under this
17chapter.

18
(b) The board may prescribe, adopt, and enforce regulations
19relating to the administration and enforcement of this chapter,
20including, but not limited to, collections, reporting, refunds, and
21appeals.

22
(c) The board may adopt regulations to implement this chapter.
23The adoption, amendment, repeal, or readoption of a regulation
24authorized by this section is deemed to address an emergency, for
25purposes of Sections 11346.1 and 11349.6 of the Government
26Code, and the board is hereby exempted for this purpose from the
27requirements of subdivision (b) of Section 11346.1 of the
28Government Code.

29

begin insert104895.59.end insert  

The fees imposed by this chapter are due and
30payable to the board on or before the last day of the first month
31following each calendar quarter.

32

begin insert104895.60.end insert  

(a) On or before the last day of the first month
33following each calendar quarter, a return for the preceding
34calendar quarter shall be filed with the board using electronic
35media.

36
(b) The board may prescribe those forms and reporting
37requirements as are necessary to implement the fees, including,
38but not limited to, information regarding the total amount of bottled
39sweetened beverages and concentrate sold and the amount due.

P21   1
(c) Returns shall be authenticated in a form or pursuant to
2methods prescribed by the board.

3

begin insert104895.61.end insert  

A distributor required to pay the fees imposed
4under this chapter shall register with the board. An application
5for registration shall be made upon a form prescribed by the board
6and shall set forth the name under which the applicant transacts
7or intends to transact business, the location or locations of each
8place of business, and any other information required by the board.
9An application for an account under this section shall be
10authenticated in a form, or pursuant to methods, prescribed by the
11board.

12

begin insert104895.62.end insert  

The distribution of bottled sweetened beverages
13or concentrate by a distributor to either of the following persons
14shall be exempt from the fees imposed by this chapter:

15
(a) A person when, pursuant to the contract of sale, the bottled
16sweetened beverages or concentrate shall be shipped, and are
17shipped, to a point outside of this state by the distributor by means
18of either of the following:

19
(1) Facilities operated by the distributor.

20
(2) Delivery by the distributor to a carrier, customs broker, or
21forwarding agent, whether hired by the purchaser or not, for
22shipment to the out-of-state point.

23
(b) A person who is otherwise exempt from the taxation of that
24sale, use, or consumption under the Constitution of the United
25States, federal law or regulation, or the California Constitution.

26

begin insert104895.63.end insert  

A distributor who has paid a fee, either directly to
27the state or to another distributor registered under this chapter
28and makes a subsequent distribution of bottled sweetened
29beverages or concentrate may claim a credit on the distributor’s
30return for the period in which the subsequent sale or distribution
31occurs.

end insert
begin delete32

SECTION 1.  

Section 104655 of the Health and Safety Code
33 is amended to read:

34

104655.  

Notwithstanding any other law, nothing shall operate
35to prohibit contributions to the program created pursuant to this
36article by organizations and commissions subject to Division 22
37(commencing with Section 63901) of the Food and Agricultural
38Code.

end delete


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