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AB-2466 California Community Health Fund.(2019-2020)

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Date Published: 04/27/2020 09:00 PM
AB2466:v98#DOCUMENT

Amended  IN  Assembly  May 04, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2466


Introduced by Assembly Member Bloom

February 19, 2020


An act to amend Section 104250 of the Health and Safety Code, relating to diabetes. add Chapter 5 (commencing with Section 104895.50) to Part 3 of Division 103 of the Health and Safety Code, relating to health.


LEGISLATIVE COUNSEL'S DIGEST


AB 2466, as amended, Bloom. Diabetes. California Community Health Fund.
Existing law provides for various programs that prevent disease and promote health. Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities. The Fee Collection Procedures Law provides procedures for the collection of certain fees and surcharges and establishes criminal penalties for specified acts, including making it a misdemeanor to knowingly or willfully file a false return and making it a felony to willfully evade or attempt to evade or defeat the payment of a fee.
This bill, subject to specified exemptions, would impose a fee on every distributor, as defined, for the privilege of distributing bottled sugary drinks and concentrate in the state, at a rate of $0.02 per fluid ounce and for the privilege of distributing syrups and powders 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 bill would require the California Department of Tax and Fee Administration to administer and collect the fee pursuant to the Fee Collection Procedures Law and to register the distributors upon whom the fee is imposed, and would authorize the department to promulgate and enforce regulations related to administration of the fee. The bill would require the fee revenue to be deposited into the California Community Health Fund, created by the bill. The bill would require moneys in the fund, upon appropriation by the Legislature, to be allocated to specified entities to promote health equity, to reduce health disparities, to improve oral health, and to prevent the leading causes of illness, injury, and premature death. The bill would establish the California Community Health Fund Oversight and Accountability Committee to distribute funds locally, monitor the distribution and implementation of local grants, and provide oversight to ensure the local projects are fulfilling their goals and outcomes. The bill would authorize state departments to award competitive grants to specified entities in support of the bill’s objectives.
Because the bill would expand the application of the Fee Collection Procedures Law, the violation of which is a crime, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would 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 2/3 of the membership of each house of the Legislature.

Existing law establishes the State Department of Public Health and sets forth its powers and duties pertaining to, among other things, protecting, preserving, and advancing public health, including disseminating information regarding diseases, including diabetes. Existing law makes findings about the impact of diabetes in California and states the intent of the Legislature to require the department to submit information to the Legislature as specified, on diabetes prevention and management activities and expenditures of the department.

This bill would makes technical, nonsubstantive changes to those provisions.

Vote: MAJORITY2/3   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) California is experiencing a prolonged and accelerating epidemic of diabetes, obesity, and other chronic disease, from which increasing numbers of people are suffering, and from which the state is burdened with unsustainable health care costs.
(2) The prevalence of obesity in the United States has increased dramatically over the past 30 years. In California, obesity rates have increased even more, rising from 8.9 percent in 1984 to 25.8 percent in 2018. Although no group has escaped the epidemic, low-income populations and communities of color are disproportionately affected, in some cases twice as much.
(3) If current trends continue, by 2030, adult obesity in California is projected to rise to 41.5 percent and severe obesity is projected to rise to 18.3 percent of California’s adult population.
(4) The rate of children who are overweight has also increased dramatically in recent decades. In 2010, 38 percent of California children in grades 5, 7, and 9 were overweight or obese. Thirty-one of California’s 58 counties experienced an increase in childhood obesity from 2005 to 2010.
(5) According to the State Department of Public Health, diabetes is the seventh leading cause of death in California and has been determined to be the underlying cause of death for almost 8,000 people in California each year.
(6) By 2014, 9 percent of Californians reported they had been diagnosed with type II diabetes and 46 percent of all adults were estimated to have prediabetes or undiagnosed diabetes. California’s rate of type II diabetes increased 35 percent from 2001 to 2015.
(7) Adults with type II diabetes more often have other health problems. One-half of adults with type II diabetes also have hypertension. This rate of occurrence is twice as high as for those without diabetes. Adults with diabetes are also twice as likely to have cardiovascular disease as adults without diabetes.
(8) Adults with diabetes are 50 percent more likely to have arthritis than adults without diabetes. Over 40 percent of new cases of kidney failure are attributed to diabetes. New cases of kidney failure declined slightly from 2001 to 2007, but began to increase again after 2007.
(9) Dental caries, commonly referred to as tooth decay, is the most common chronic childhood disease, and affects almost two-thirds of children in California. Over one-quarter of California children’s tooth decay is untreated. Untreated dental caries can lead to pain, infection, tooth loss, and, in severe cases, death. In a survey of 25 states, California ranked below all but one other state in tooth decay.
(10) Diagnoses of nonalcoholic fatty liver disease, while still not common, are rising alarmingly, particularly among Hispanic Americans, and the disease exerts a high burden on health and on health care costs.
(11) In 2006, health costs in California related to overweight and obesity were estimated at almost $21 billion. In 2013, direct medical costs attributable to diabetes were $20.5 billion, while additional, indirect costs of diabetes were estimated at $30 billion. Public and private expenditure on dental services totaled $14.7 billion in 2009 and California’s children missed 874,000 days of school due to dental problems, resulting in a reduction in school funding.
(12) Abundant studies conclude that the principal cause of this epidemic is consumption of excess calories and added sugars contained in processed foods and beverages. Sugary drinks are the largest single source of added sugars in the American diet and among the top sources of calories. Further, sources of liquid sugars may be uniquely harmful to health because of the way liquid sugars are metabolized.
(13) Evidence clearly links the consumption of sugary drinks to increased risk of obesity, type II diabetes, and other metabolic dysfunction, including fatty liver disease and insulin resistance; heart disease, including hypertension, dyslipidemia, stroke, coronary and cardiovascular disease; and tooth decay. Recent studies suggest sugary drink consumption may also increase risk of mortality, asthma, and certain cancers.
(14) California adults who drink one or more sweetened beverages per day are 27 percent more likely to be overweight or obese, regardless of income or ethnicity.
(15) Research shows that 41 percent of California children from 2 to 11 years of age, inclusive, and 62 percent of California teens from 12 to 17 years of age, inclusive, consume sugary drinks daily, and for every additional serving of sweetened beverages that a child consumes per day, the likelihood of the child becoming obese increases by 60 percent.
(16) According to nutritional experts, sweetened beverages such as soft drinks, energy drinks, juice drinks, sweet teas, and sports drinks offer little or no nutritional value, but contain large quantities of added sugars. For example, a 20-ounce bottle of soda contains the equivalent of approximately 16 teaspoons of sugar.
(17) Research shows that almost one-half of the added sugars Americans consume in their diet comes from sugary drinks, including soft drinks, juice drinks, energy drinks, sweet teas, and sports drinks. The average American drinks nearly 50 gallons of sugary drinks per year, the equivalent of 39 pounds of extra sugar every year.
(18) Sugary drinks are a unique contributor to excess caloric consumption. A large body of research shows that calories from sugary drinks do not satisfy hunger the way calories from solid food or beverages containing fat or protein do, such as those containing milk and plant-based proteins. As a result, sugary beverages tend to add to the calories people consume rather than replace them.
(19) The prevalence and burden of disease related to sugary drinks is disproportionately experienced in low-income communities and communities of color.
(20) Hispanics, African Americans, Native Americans, Alaska Natives, Asian Americans, Native Hawaiians, and Pacific Islanders have a higher prevalence of type II diabetes than non-Hispanic Whites. Hispanics and African Americans have two times higher prevalence: 7 percent of non-Hispanic Whites have type II diabetes, compared with 12 percent of Hispanics, 9 percent of Asian Americans, 14 percent of Pacific Islanders, 13 percent of African Americans, and 17.5 percent of Native American and Alaska Native populations. If trends are not reversed, it is predicted that 40 percent of Americans and nearly one-half of Latino and African American children born in the year 2000 will develop type II diabetes in their lifetimes.
(21) Sugary drinks impact our environment, both directly, through the life cycle of the sugary drink, including resource extraction, manufacturing of ingredients and containers, transport, refrigeration, and disposal of containers, and indirectly, through the environmental impact of the increase in health care costs and lost productivity due to added sugar-related noncommunicable diseases.
(22) Sugary drink excise taxes have been shown to be the most effective intervention to lower consumption of these beverages, preventing related diabetes and other diseases, and protecting the state’s treasury and environment.
(23) Evidence is emerging that sugary drink consumption is declining and water consumption is increasing in municipalities that have a sugary drink tax in place.
(24) Studies on the taxation of sugary drinks have estimated a 55 to 1 return on investment in health care savings. Governmental entities that have implemented a sugary drink tax have not seen negative impacts on food sector employment or revenue. Data from the City of Berkeley shows a 7.2 percent growth in food sector employment and a 15 percent growth in sales tax revenue following the implementation of a sugary drink tax in the city. Mexico and Philadelphia, Pennsylvania, have also found continued growth in beverage sector employment subsequent to tax implementation.
(25) The reduction of consumption of sugary drinks and the expected drop in rates of obesity, type II diabetes, fatty liver disease, heart disease, and stroke, especially among the populations most affected by these diseases, can lower the state’s cost of health care.
(26) Revenues from a statewide sugary drink excise tax should be allocated to the communities experiencing the worst health outcomes related to the overconsumption of sugary drinks, including obesity, type II diabetes, fatty liver disease, heart disease, stroke, and tooth decay, and should support addressing local health priorities in a manner that authentically engages community residents, organizations, and providers and includes community-led and informed efforts.
(27) Revenues from a statewide tax on sugary drinks should be focused upon the most highly impacted communities to increase access to safe, appealing, and affordable drinking water and more fresh fruits and vegetables that will help reduce the prevalence of disease and increase life expectancy. Those tax revenues should additionally be focused upon schools to ensure access to safe and affordable drinking water, more nutritious meals, and increased opportunities for physical activity, so students can achieve higher academic performance.
(b) It is, therefore, the intent of the Legislature to establish the California Community Health Fund, and, upon appropriation by the Legislature, for moneys in the fund to be used to diminish the human and economic costs of diabetes, obesity, heart disease, and dental disease in California. The fund is intended to support health, education, and wellness programs designed to prevent and treat obesity, diabetes, and heart and dental disease, and to reduce the burden of the attendant health conditions that result from the overconsumption of sugary drinks.

SEC. 2.

 Chapter 5 (commencing with Section 104895.50) is added to Part 3 of Division 103 of the Health and Safety Code, to read:
CHAPTER  5. California Community Health Fund

104895.50.
 The following definitions apply for purposes of this chapter:
(a) “California Native American tribe” means any California Indian tribe, band, nation, or other organized group or community that appears on the consultation contact list maintained by the Native American Heritage Commission, which includes tribes not recognized as eligible for the special programs and services provided by the United States to Native Americans because of their status as Indians.
(b) “California tribal organization” means the recognized governing body of any California Native American tribe or any legally established organization of Native Americans that is controlled, sanctioned, or chartered by a governing body or is democratically elected by the adult members of the California Native American community to be served by the organization, and includes the maximum participation of Native Americans in all phases of its activities.
(c) “Caloric sweetener” means any substance or combination of substances that contains calories, that is suitable for human consumption, and that humans perceive as sweet. Caloric sweetener includes, but is not limited to, sugar, sucrose, dextrose, fructose, glucose, monosaccharide and disaccharide, corn syrup or high-fructose corn syrup, or honey.
(d) “Committee” means the California Community Health Fund Oversight and Accountability Committee.
(e) “Concentrate” means liquid, gel, powder, frozen, or solid form with a mixture of ingredients, including, but not limited to, caloric sweeteners, that is intended to be mixed with water or another liquid for purposes of human consumption.
(f) “Cultural and linguistic competency” means a set of integrated attitudes, knowledge, and skills that enables an organization to interact effectively with individuals from diverse cultures, groups, and communities and the ability to communicate with individuals who do not speak English, have limited ability to speak English, or for whom English is not their primary language.
(g) “Distributor” means any person, including a manufacturer or wholesale dealer, who distributes sugary drinks or concentrates for sale to retailers that operate business in the state, regardless of whether the person sells those products to consumers.
(h) “Distribution” or “distribute” means to supply to a distributor or retailer, deliver to a retailer, facilitate acquisition by a retailer, or transport into the state for the purpose of selling any sugary drink product in the state, or any combination of these activities. “Distribution” or “distribute” does not mean retail sale to a consumer.
(i) “Fund” means the California Community Health Fund.
(j) “Person” means an individual, trust, firm, joint stock company, business concern, business trust, government, receiver, trustee, syndicate, social club, fraternal organization, estate, corporation, including, but not limited to, a limited liability company, and association, or any group or combination acting as a unit.
(k) “Powder” means any solid mixture, containing one or more caloric sweeteners as an ingredient, intended to be used in making, mixing, or compounding a sugary drink by combining the powder with one or more other ingredients.
(l) “Retailer” means any person who serves sugary drink products to a consumer.
(m) “Retail sale” means any compensated transaction from a retailer to a consumer.
(n) “Sale” means a transaction between two parties where compensation is traded for a sugary drink or ingredients specifically formulated and premeasured to produce a sugary drink.
(o) (1) “Sugary drink” means either of the following:
(A) A nonalcoholic beverage intended for human consumption that contains any added caloric sweetener. A nonalcoholic beverage means any beverage that is not subject to tax under Part 14 (commencing with Section 32001) of Division 2 of the Revenue and Taxation Code.
(B) A concentrate, whether in liquid, gel, powder, frozen, or solid form with a mixture of ingredients, that meets both of the following criteria:
(i) It contains a caloric sweetener.
(ii) It is intended for use as an ingredient in a liquid described in subparagraph (A).
(2) The following liquid or concentrate product is not a sugary drink for purposes of this chapter:
(A) A beverage that includes, as a primary ingredient, milk, soy, rice, or a similar plant-based milk substitute.
(B) The original liquid is either the result from the pressing of fruit or vegetables or from the reconstitution of pure fruit or vegetable juice concentrate.
(C) The liquid is the result of the restoration of water to dehydrated fruit or vegetable juice.
(D) Infant formula.
(E) A beverage for medical use suitable for human consumption and manufactured for use as an oral nutritional therapy for persons who cannot absorb or metabolize dietary nutrients from food or beverages. “Beverage for medical use” also means “medical food” as defined in Section 360ee(b)(3) of Title 21 of the United States Code. “Beverage for medical use” excludes drinks commonly referred to as “sports drinks” or any other common names that are derivations thereof.
(F) Any beverage designed as supplemental, meal replacement, or sole-source nutrition that includes proteins, carbohydrates, and multiple vitamins and minerals.
(G) An oral electrolyte solution for infants and children formulated to prevent dehydration due to illness.
(H) A sugary drink product with fewer than 25 calories per 12 fluid ounces.

104895.51.
 (a) The California Community Health Fund is hereby established in the State Treasury.
(b) Upon appropriation by the Legislature, all moneys in the fund shall be expended only for the purposes expressed in this chapter and shall be used only to supplement existing levels of service. Moneys in the fund shall not supplant any federal, state, or local funding for existing levels of service.
(c) The fund shall consist of all fees, interest, penalties, and other amounts collected pursuant to this chapter. Refunds and reimbursements for expenses incurred in the administration and collection of the fees and required allocations to other agencies shall be payable from the fund, upon appropriation by the Legislature.

104895.52.
 (a) There is hereby imposed, except as otherwise provided in this chapter, a fee on every distributor for distributing bottled sugary drinks and concentrate in the state for deposit into the fund. The fees shall be calculated as follows:
(1) The fee on sugary drinks and concentrate shall be calculated at a rate of two cents ($0.02) per ounce that is sold or offered to a retailer for sale in the state to a consumer.
(2) The fee on syrups and powders sold or offered to a retailer for sale in the state to a consumer, either as syrup or powder or as a sugary drink derived from that syrup or powder, shall be calculated at a rate of two cents ($0.02) per ounce of sugary drink produced from that syrup or powder.
(3) For purposes of calculating the fee, the volume of sugary drink produced from syrups or powders shall be the greater of either the largest volume resulting from use of the syrups or powders according to any manufacturer’s instructions, or the volume actually produced by the retailer, as reasonably determined by the California Department of Tax and Fee Administration.
(b) The distributor shall be liable for the fee imposed pursuant to this chapter. The fee shall be paid upon the first nonexempt distribution of a sugary drink product in the state. However, if a distributor or a retailer receives taxable products on which the fee has not been paid, the distributor or retailer shall be liable for the fee.
(c) The California Department of Tax and Fee Administration shall adjust the fees, as described in subdivision (a), for inflation every other year.

104895.53.
 (a) A fee shall not be imposed pursuant to this chapter on a distributor for a sugary drink product if the fee has already been paid.
(b) If a sugary drink product is either manufactured or produced by including one or more other sugary drink products, a fee shall not be imposed pursuant to this chapter on a caloric sweetener contained in the resulting sugary drink product if a fee was previously imposed pursuant to this chapter on that caloric sweetener.
(c) A retailer is liable for the fee imposed pursuant to this chapter upon a sugary drink product only if the fee on that product has not been previously paid by the distributor.
(d) The distribution of sugary drinks or concentrate by a distributor to either of the following persons shall be exempt from the fee imposed by this chapter:
(1) A person to whom the bottled sugary drink or concentrate is contractually obligated to be shipped, and is shipped, to a point outside of California by the distributor, by means of either of the following:
(A) Delivery to a facility operated by the distributor.
(B) Delivery by the distributor to a carrier, customs broker, or forwarding agent, regardless of whether the distributor was hired by the purchaser, for shipment to the out-of-state point.
(2) A person who is otherwise exempt from the fee of that sale, use, or consumption pursuant to the United States Constitution, federal law or regulation, or the California Constitution.
(e) Pursuant to subdivision (d), a purchasing distributor shall be required to issue an exemption certificate to a selling distributor.

104895.54.
 (a) There is hereby established a California Community Health Fund Oversight and Accountability Committee within the state government to distribute funds locally, monitor the distribution and implementation of local grants funded by the fund, and provide oversight to ensure the local projects are fulfilling their goals and outcomes.
(b) The committee shall be comprised of 15 members, with diverse and relevant background in health equity and prevention, appointed by the Governor and Legislature. The members of the committee shall be appointed as follows:
(1) Seven members shall be appointed by the Governor.
(2) Four members shall be appointed by the Speaker of the Assembly.
(3) Four members shall be appointed by the Senate Committee on Rules.
(c) The committee shall use no more than ____ percent of the revenues generated to cover its administrative costs.
(d) The committee shall report annually to the Legislature the amount of funds, appropriations, unspent funds, and a description of all programs funded and recommendations for improvement.
(e) A report submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

104895.55.
 (a) Fifty percent of the fund revenues shall be distributed to the State Department of Public Health, the State Department of Health Care Services, the State Department of Education, the Department of Food and Agriculture, and the State Water Resources Control Board to promote health equity, to reduce health disparities, to improve oral health, and to prevent the leading causes of illness, injury, and premature death, especially those caused by sugary drink consumption. Illnesses include obesity and diseases exacerbated by obesity, such as diabetes, heart disease, and cancer, that are caused by sugary drink consumption. Those moneys shall be allocated as follows:
(1) ____ percent to the State Department of Public Health to support health equity and prevention efforts, support health in all policies work, surveillance of chronic disease and injury, statewide media campaigns, and oral health programs.
(2) ____ percent as annual allocations to all local health departments and to the system of tribal organizations to advance health equity and prevention. Allocations should be based on a defined formula proportional to county or tribal population and the absolute number of residents living in poverty, equally weighted, and required presentation of plans congruent with fund priorities and with demonstrated community participation, with a floor allocation of ____ dollars ($____) and a requirement that each jurisdiction shall prioritize underserved populations at greatest risk using approved indices. These funds may be used only for the defined purposes and shall not be used to supplant existing funding.
(3) ____ percent for competitive grants to community-based, statewide, and regional nonprofit entities to advance and strengthen locally determined priorities to create long-term, sustained conditions for greater equity in health. In the case of statewide and regional nonprofit entities, this funding may include provision of technical assistance and capacity building.
(4) ____ percent for competitive grants to community health centers and school-based health centers for promotion of health equity and prevention of childhood obesity, diabetes, dental disease or to address other sources of health inequity.
(5) ____ percent to the State Department of Health Care Services to support health equity and prevention efforts for underserved communities including:
(A) ____ percent to expand access to primary care programs.
(B) ____ percent for nutrition counseling, and diabetes and prediabetes education and exercise and fitness classes.
(C) ____ percent to promote the National Diabetes Prevention Program by raising awareness of the benefit and supporting activities that promote enrollment in that program.
(6) ____ percent to the State Department of Education to support health equity and prevention efforts, administer a competitive grant program for school districts for educational, environmental, policy, and other public health approaches that promote nutrition, physical activity and help address health inequities in school children or improve, supply, construct, or staff recreational facilities. These shall include the funding to support all of the following:
(A) ____ percent drinking water infrastructure, including drinking fountains, water bottle refilling stations, and other infrastructure to ensure access to clean drinking water throughout the school day.
(B) ____ percent to Farm-to-School activities to help schools provide healthier food to children, support local farmers, and reduce greenhouse gas emissions.
(C) ____ percent to Safe Routes to School activities that make it possible for children to safely walk, bike, or use public transportation to school.
(D) ____ percent to support for physical education and activity, including physical education and physical activity programs, afterschool activities, coaches, equipment, physical education teachers, or joint-use programs.
(7) ____ percent to the State Water Resources Control Board to support health equity and prevention efforts including all of the following:
(A) ____ percent to a competitive grant program to communities for safe and affordable drinking water to secure increased access to quality water, including community drinking fountains, water bottle filling stations, and any needed filter systems to assure removal of contaminants in affected areas.
(B) ____ percent to ensure quality water for schools and other community sites, such as parks, streets, plazas, bus or train stops, and senior centers.
(C) ____ percent for infrastructure investments to improve drinking water supplies in disadvantaged communities, to be administered through competitive grants to public agencies and community organizations.
(8) ____ percent to the Department of Food and Agriculture Office of Farm to Fork to support health equity and prevention efforts and administer a competitive grant program to communities for all of the following:
(A) ____ percent to healthy food incentive programs for fruit and vegetable incentives.
(B) ____ percent to community food projects and to aid community food producers, as defined under Section 113752, or socially disadvantaged, beginning, military veteran, or limited resource specialty crop producers that improve the health and resilience of their communities by increasing access to any variety of fresh, canned, dried, or frozen whole or cut fruits and vegetables without added sugars, fats or oils, and salt.
(9) ____ percent to the University of California Office of the President to administer a competitive grant program to California-based institutions, to design, test, and evaluate interventions to improve health equity or to reduce the negative effects of sugary drinks on health and health equity.
(A) All research funds shall be awarded on the basis of scientific merit as determined by an open, competitive peer review process that assures objectivity, consistency, and high quality. All qualified investigators, regardless of institutional affiliation, shall have equal access and opportunity to compete for 70 percent of the funding allocated under this paragraph.
(B) Thirty percent of the funding allocated under this paragraph shall be administered through competitive grants to nonprofit and community-based research institutes and organizations that are representative of underserved and priority populations or have demonstrated experience working with those groups through participatory engagement.
(b) Fifty percent of the fund revenues generated shall be distributed to the committee and shall be made available to communities and community-based organizations through competitive grants.

104895.56.
 (a) A state department that receives funds pursuant to this chapter may administer grants or allocations to local organizations to achieve the objectives specified in subdivision (a) of Section 104895.55. If a department administers grant programs, funds shall be distributed in communities or institutions serving those with the highest rates of health inequities with a particular focus on all of the following target populations:
(1) African American, Hispanic, Native American and Alaska Native, Asian American, and Native Hawaiian and Pacific Islanders.
(2) Residents living below 150 percent of the federal poverty limit.
(3) Communities identified as underserved with regard to dental health services or that have high rates of dental disease.
(4) Communities identified with other marked health disparities to be addressed.
(b) State departments that receive funding pursuant to this chapter shall use the most current data available to target moneys in the fund to address the needs of the identified priority populations and to reach the greatest number of residents in the identified priority groups.
(c) (1) Notwithstanding subdivisions (a) and (b), most community-level investments shall be targeted. However, funds may be employed by recipients to pursue media campaigns, as described in paragraph (2) that may benefit all residents of a community or jurisdiction.
(2) (A) Media campaigns shall support health, education, and wellness programs designed to prevent and treat obesity, diabetes, and heart and dental disease and to reduce the burden of attendant health conditions that result from the overconsumption of sugary drinks.
(B) A media campaign shall be reviewed and approved by the state entity that is directly administering the competitive grant program.
(d) Grantees shall employ culturally and linguistically competent approaches appropriate to their communities.
(e) The state entity that is responsible for administering the competitive grant program shall conduct biennial financial audits to ensure that the annual allocation to grantees is awarded by the fund consistent with the requirements of this chapter.
(f) Revenues deposited in the fund that are unexpended at the end of a fiscal year shall remain in the fund and shall not revert to the General Fund.
(g) The award of contracts, grants, or funding allocations entered into or amended pursuant to subdivision (a) shall be exempt from Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and is exempt from approval by the Department of General Services prior to their execution.

104895.57.
 (a) A community or community-based organization that receives a grant from the committee pursuant to this chapter may utilize those funds for the objectives specified in subdivision (a) of Section 104895.55. Grant funds received by communities or community-based organizations shall be distributed in communities or institutions serving those with the highest rates of health inequities with a particular focus on all of the following target populations:
(1) African American, Hispanic, Native American and Alaska Native, Asian American, and Native Hawaiian and Pacific Islanders.
(2) Residents living below 150 percent of the federal poverty limit.
(3) Communities identified as underserved with regard to dental health services or that have high rates of dental disease.
(4) Communities identified with other marked health disparities to be addressed.
(b) Communities or community-based organizations that receive grants from the committee pursuant to this chapter shall use the most current data available to target moneys in the fund to address the needs of the identified priority populations and to reach the greatest number of residents in the identified priority groups.
(c) (1) Notwithstanding subdivisions (a) and (b), most community-level investments shall be targeted. However, funds may be employed by recipients to pursue media campaigns, as described in paragraph (2) that may benefit all residents of a community or jurisdiction.
(2) (A) Media campaigns shall support health, education, and wellness programs designed to prevent and treat obesity, diabetes, and heart and dental disease and to reduce the burden of attendant health conditions that result from the overconsumption of sugary drinks.
(B) Any media campaign that is funded by a grant shall be reviewed and approved by the committee.
(d) Grantees shall employ culturally and linguistically competent approaches appropriate to their communities.
(e) The committee shall conduct biennial financial audits to ensure that the annual allocation to grantees is awarded by the fund consistent with the requirements of this chapter.
(f) Revenues deposited in the fund that are unexpended at the end of a fiscal year shall remain in the fund and shall not revert to the General Fund.
(g) The award of contracts, grants, or funding allocations entered into or amended pursuant to subdivision (a) shall be exempt from Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and is exempt from approval by the Department of General Services prior to their execution.

104895.58.
 (a) (1) The California Department of Tax and Fee Administration shall administer and collect the fees imposed by this chapter pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001) of Division 2 of the Revenue and Taxation Code).
(2) For purposes of this section, “department” means the California Department of Tax and Fee Administration.
(b) The department may use no more than 3 percent of the revenues generated to cover its administrative costs in collecting the fees imposed under this chapter.
(c) (1) The department may promulgate and enforce regulations relating to the administration and enforcement of this chapter, including matters regarding collections, reporting, refunds, and appeals.
(2) The department may adopt emergency regulations to implement this chapter. The adoption of emergency regulations shall be conclusively presumed to be necessary for the immediate preservation of the public peace, health, safety, or general welfare within the meaning or purposes of Section 11346.1 of the Government Code. The adoption, amendment, repeal, or readoption of a regulation is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the department is hereby exempted for this purpose from the requirements of subdivision (b) of Section 11346.1 of the Government Code.
(d) The department shall develop an internet website and post materials to inform distributors, retailers, and the general public about the fee and its scope and operation at least two months prior to the effective date.
(e) The fees imposed by this chapter are due and payable to the department on or before the last day of the first month following each calendar quarter.
(f) The department shall collect the charges imposed by this chapter beginning January 1, 2022.
(g) Upon appropriation in the annual budget, the department shall receive ____ dollars ($____) in the form of startup costs for the purpose of establishing, administering, and collecting the charges imposed by this chapter during the first year of activity.
(h) The department shall require online registration for every distributor in the state who is subject to the fee on the department’s internet website.

104895.59.
 (a) On or before the last day of the first month following each calendar quarter, a return for the preceding calendar quarter shall be filed, using electronic media, with the California Department of Tax and Fee Administration.
(b) The California Department of Tax and Fee Administration may prescribe forms and reporting requirements as are necessary to implement the fees, including information regarding the total amount of sugary drinks and concentrate sold and the amount due.
(c) Returns shall be authenticated in a form or pursuant to methods prescribed by the California Department of Tax and Fee Administration.

104895.60.
 A distributor who is required to pay the fees imposed under this chapter shall register with the California Department of Tax and Fee Administration. An application for registration shall be made upon a form prescribed by the California Department of Tax and Fee Administration and shall set forth the name that the applicant transacts or intends to transact business with, the location or locations of each place of business, and any other information as required. An application for an account under this section shall be authenticated in a form or pursuant to methods prescribed by the California Department of Tax and Fee Administration.

104895.61.
 The distribution of sugary drinks or concentrate by a distributor to either of the following persons shall be exempt from the fees imposed by this chapter:
(a) A person who is located out of state, and pursuant to a sales contract, receives a shipment of a sugary drink or concentrate from either a facility operated by the distributor or a carrier, customs broker, or forwarding agent, whether hired by the purchaser or not, for shipment to a location out of state.
(b) A person who is otherwise exempt from the taxation of that sale, use, or consumption under the United States Constitution, federal law or regulation, or the California Constitution.

104895.62.
 A distributor who has paid a fee, either directly to the state or to another distributor registered under this chapter, and makes a subsequent distribution of sugary drinks or concentrate may claim a credit on the distributor’s return for the period when a subsequent sale or distribution occurs.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.Section 104250 of the Health and Safety Code is amended to read:
104250.

The Legislature finds and declares all of the following:

(a)It is reported that one in seven adult Californians has diabetes, and the numbers are rising rapidly. The actual number of those whose lives are affected by diabetes is unknown and stands to be much higher when factoring in the incidence of type 1 diabetes and undiagnosed gestational diabetes.

(b)California has the highest number of annual new cases of diabetes in the United States.

(c)The incidence of diabetes among all Californians has increased 32 percent over the past decade.

(d)Over 11.4 million people in California have prediabetes, a condition that is a precursor to full onset type 2 diabetes. This suggests that the total population of those diagnosed will continue to rise in the absence of interventions.

(e)The prevalence of diagnosed gestational diabetes in California increased 60 percent in seven years, from 3.3 percent of hospital deliveries in 1998 to 5.3 percent of hospital deliveries in 2005, with the federal Centers for Disease Control and Prevention stating that the diagnosis rate could run as high as 18.3 percent.

(f)The fiscal impact to the State of California, including total health care and related costs for the treatment of diabetes, was over $35.9 billion in 2010.

(g)There is a disproportionate prevalence of type 2 diabetes among Californians who are Black, Hispanic, or of Asian origin compared to the general population. As of 2010, the incidence of diabetes among Black and Hispanic people was nearly double that among non-Hispanic Whites at approximately 14 percent. Asians and Pacific Islanders, in the aggregate, experience higher rates of diabetes than other populations. Certain groups within the Asian and Pacific Islander population experience the highest prevalence and risk overall, including Filipino, South Asians, and Pacific Islanders, who suffer from diabetes at rates of 15 percent, 16 percent, and more than 18 percent, respectively.

(h)A recent study of a large state with a sizable diabetes population found that the rate of diagnosed diabetes in that state’s Medicaid population is nearly double that of its general population.

(i)There is no cure for any type of diabetes; however, there is evidence that diabetes can be prevented or delayed in onset through lifestyle changes and medical intervention.

(j)Diabetes, when left untreated, can lead to serious and costly complications and a reduced lifespan.

(k)Many of these serious complications can be delayed or avoided with timely diagnosis, effective patient self-care, and improved social awareness.

(l)It is the intent of the Legislature to require the State Department of Public Health to provide to the Legislature information, including the annual federal Centers for Disease Control and Prevention progress report, on diabetes prevention and management activities conducted by the department and expenditures associated with diabetes prevention and management activities. These activities are set forth by the department in the California Wellness Plan 2014 and the report dated September 2014 entitled “Burden of Diabetes in California.”