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A03278 Summary:

BILL NOA03278
 
SAME ASNo Same As
 
SPONSOROrtiz
 
COSPNSR
 
MLTSPNSR
 
Add Art 15 330 - 340, Tax L; add 99-ff, St Fin L
 
Enacts the "sweetened beverage tax law" and establishes the "children's health promotion fund" to fund statewide childhood obesity prevention activities and programs.
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A03278 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3278
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 29, 2019
                                       ___________
 
        Introduced  by M. of A. ORTIZ -- read once and referred to the Committee
          on Ways and Means
 
        AN ACT to amend the tax law, in  relation  to  enacting  the  "sweetened
          beverage  tax law"; and to amend the state finance law, in relation to
          establishing the children's health promotion fund

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. This act shall be known and may be cited as the "sweetened
     2  beverage tax law".
     3    § 2. The tax law is amended by adding a new  article  15  to  read  as
     4  follows:
     5                                  ARTICLE 15
     6                         SWEETENED BEVERAGE TAX LAW
     7  Section 330. Definitions.
     8          331. Excise tax.
     9          332. Distribution information.
    10          333. Exemption.
    11          334. Exemption certificate.
    12          335. Credit.
    13          336. Collection of tax.
    14          337. Rules and regulations.
    15          338. Taxes due.
    16          339. Electronic filing.
    17          340. Registration.
    18    § 330. Definitions. For purposes of this article:
    19    (a)  "Beverage container" means any closed or sealed container regard-
    20  less of size or shape, including,  without  limitation,  those  made  of
    21  glass,  metal,  paper,  plastic, or any other material or combination of
    22  materials.
    23    (b) "Bottled sweetened beverage" means a sweetened beverage  contained
    24  in a beverage container.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07223-01-9

        A. 3278                             2

     1    (c)  "Beverage  dispensing  machine" means a device that mixes concen-
     2  trate with any one or more other ingredients and dispenses the resulting
     3  mixture into an open container as a ready-to-drink beverage.
     4    (d) "Caloric sweetener" means any caloric substance suitable for human
     5  consumption  that humans perceive as sweet and includes, without limita-
     6  tion,  sucrose,  fructose,  including  high  fructose  corn   sweetener,
     7  glucose,  other sugars, and fruit juice concentrates.  "Caloric" means a
     8  substance that adds calories to the diet of a person who  consumes  that
     9  substance.
    10    (e)  "Concentrate" means a syrup, powder, or base product that is used
    11  for mixing, compounding, or making sweetened  beverages  in  a  beverage
    12  dispensing  machine.  For  purposes of this part, "concentrate" does not
    13  include any of the following:
    14    (1) Any product that is solely used in preparing coffee or tea.
    15    (2) Any product for consumption  by  infants  and  which  is  commonly
    16  referred to as "infant formula."
    17    (3) Any product for use for weight reduction.
    18    (4) Milk or milk products.
    19    (5)  Any  frozen concentrate or freeze-dried concentrate to which only
    20  water is added to produce a  sweetened  beverage  containing  more  than
    21  fifty  percent  natural  fruit  juice or more than fifty percent natural
    22  vegetable juice or more than fifty percent combined natural fruit  juice
    23  and natural vegetable juice.
    24    (6)  Any  product  that  is  sold  and  is intended to be used for the
    25  purpose of an individual consumer mixing a sweetened beverage.
    26    (7) Medical food.
    27    (8) Any product to which no caloric sweeteners have been added.
    28    (f) "Consumer" means a person who purchases a bottled sweetened bever-
    29  age or concentrate for a purpose  other  than  resale  in  the  ordinary
    30  course of business.
    31    (g) "Distribution" includes:
    32    (1)  The  sale  of  bottled  sweetened  beverages  or concentrate to a
    33  retailer.
    34    (2) The receipt of untaxed bottled sweetened beverages or  concentrate
    35  in this state from an unregistered out-of-state distributor by a retail-
    36  er.
    37    (3)  The retail sale of untaxed bottled sweetened beverages, sweetened
    38  beverages, or concentrate in this state.
    39    (4) The use or consumption of untaxed bottled sweetened  beverages  or
    40  concentrate  in this state by a distributor or retailer. For purposes of
    41  this paragraph, "use or consumption" includes the exercise of any  right
    42  or power over bottled sweetened beverages or concentrate incident to the
    43  ownership  thereof,  except  that  it  does not include the sale of that
    44  property or the keeping or retention thereof by a distributor or retail-
    45  er for the purpose of sale.
    46    (h) "Distributor" means any person who makes a distribution of bottled
    47  sweetened beverages, sweetened beverages, or concentrate in  the  state,
    48  whether or not that person also sells these products to consumers.
    49    (i)  "Medical  food"  means  any  product that meets the definition of
    50  medical food in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec.
    51  360ee(b)(3)).
    52    (j) "Milk" means natural liquid milk, regardless of animal  source  or
    53  butterfat  content,  natural  milk concentrate, whether or not reconsti-
    54  tuted, regardless of animal source, plant source, or butterfat  content,
    55  or  dehydrated natural milk, whether or not reconstituted and regardless
    56  of animal source or butterfat content.

        A. 3278                             3
 
     1    (k) "Natural fruit juice" means the original liquid resulting from the
     2  pressing of fruit, the  liquid  resulting  from  the  reconstitution  of
     3  natural fruit juice concentrate, or the liquid resulting from the resto-
     4  ration of water to dehydrated natural fruit juice.
     5    (l) "Natural vegetable juice" means the original liquid resulting from
     6  the pressing of vegetables, the liquid resulting from the reconstitution
     7  of natural vegetable juice concentrate, or the liquid resulting from the
     8  restoration of water to dehydrated natural vegetable juice.
     9    (m)  "Nonalcoholic  beverage" means any beverage that does not contain
    10  alcohol.
    11    (n) "Person" means an individual, trust, firm,  joint  stock  company,
    12  business  concern,  business trust, receiver, trustee, syndicate, social
    13  club, fraternal organization, estate, corporation,  including,  but  not
    14  limited  to,  a  government  corporation, partnership, limited liability
    15  company, and association or any other group or combination acting  as  a
    16  unit.  "Person"  also  includes  any  city,  county,  city  and  county,
    17  district, commission, the state, or any department, agency, or political
    18  subdivision thereof, any interstate body, and the United States and  its
    19  agencies and instrumentalities to the extent permitted by law.
    20    (o)  "Powder"  or  "base  product"  means a solid or liquid mixture of
    21  ingredients with added caloric sweetener  used  in  making,  mixing,  or
    22  compounding  sweetened  beverages  by  mixing the powder or base product
    23  with any one or more other ingredients, including,  without  limitation,
    24  water,  ice, syrup, simple syrup, fruits, vegetables, fruit juice, vege-
    25  table juice, or carbonation or other gas.
    26    (p) "Retail sale" means the sale of sweetened beverages to a consumer.
    27    (q) "Retailer" means any person who  sells  in  this  state  sweetened
    28  beverages  to a consumer, whether or not that person is also a distribu-
    29  tor as defined in this section.
    30    (r) "Sale" means the transfer of title or possession for consideration
    31  in any manner or by any means whatever.
    32    (s) "Simple syrup" means a mixture of sugar and water.
    33    (t) (1) "Sweetened beverage" means any sweetened nonalcoholic beverage
    34  sold for human consumption that has caloric sweeteners and contains more
    35  than twenty-five calories per twelve ounces, including, but not  limited
    36  to,  the  following:  soda  water,  ginger ale, root beer, all beverages
    37  commonly referred  to  as  cola,  lime,  lemon,  lemon-lime,  and  other
    38  flavored beverages, including any fruit or vegetable beverage containing
    39  less  than  fifty percent natural fruit juice or natural vegetable juice
    40  or combined natural fruit juice and natural  vegetable  juice,  and  all
    41  other  drinks  and beverages commonly referred to as "soda," "soda pop,"
    42  "soft drinks," "sports drinks," "energy drinks,"  "juice  drinks,"  "ice
    43  teas," and "vitamin fortified waters."
    44    (2) "Sweetened beverage" does not include any of the following:
    45    (A)  Any product sold in liquid form for consumption by infants, which
    46  is commonly referred to as "infant formula" or any product whose purpose
    47  is infant rehydration.
    48    (B) Any product sold in liquid form for use for weight reduction.
    49    (C) Water, to which no caloric sweeteners have been added.
    50    (D) Milk or milk products.
    51    (E) Medical food.
    52    (F) Any sweetened beverage containing fifty percent or more of natural
    53  fruit juice or natural vegetable juice or combined natural  fruit  juice
    54  and natural vegetable juice.
    55    (u)  "Syrup"  means  the liquid mixture of ingredients used in making,
    56  mixing, or compounding sweetened  beverages  using  one  or  more  other

        A. 3278                             4
 
     1  ingredients  including, without limitation, water, ice, a powder, simple
     2  syrup, fruits, vegetables, fruit juice, vegetable juice, or  carbonation
     3  or other gas.
     4    §  331.  Excise  tax.  There  is hereby imposed an excise tax on every
     5  distributor for the privilege of distributing bottled sweetened beverag-
     6  es and concentrate in the state, calculated as follows:
     7    (a) The tax on bottled sweetened beverages distributed in  this  state
     8  shall be one cent ($0.01) per fluid ounce.
     9    (b)  The  tax  on  concentrates  distributed  in  this state either as
    10  concentrate or as a sweetened beverage derived  from  that  concentrate,
    11  shall be equal to one cent ($0.01) per fluid ounce of sweetened beverage
    12  produced  from that concentrate. For purposes of calculating the tax for
    13  concentrate, the volume  of  sweetened  beverage  to  be  produced  from
    14  concentrate  shall  be  the  largest  volume  resulting  from use of the
    15  concentrate according to any manufacturer's instructions.
    16    § 332. Distribution information. Each distributor  shall  include  the
    17  following  information  on  each  receipt,  invoice,  or  other  form of
    18  accounting for  the  distribution  of  bottled  sweetened  beverages  or
    19  concentrate:
    20    (a) The name and address of the distributor.
    21    (b) The name and address of the purchaser.
    22    (c) The date of sale and invoice number.
    23    (d)  The  kind,  quantity,  size,  and capacity of packages of bottled
    24  sweetened beverages, sweetened beverages, or concentrate sold.
    25    (e) The amount of excise  taxes  due  to  the  commissioner  from  the
    26  distributor  on  the  sale of the bottled sweetened beverages or concen-
    27  trate.
    28    (f) Any other information as required by the commissioner.
    29    § 333. Exemption. There is exempt from the taxes imposed by this arti-
    30  cle the distribution  of  bottled  sweetened  beverages  or  concentrate
    31  distributed by a distributor to:
    32    (a)  A distributor registered with the commissioner under this article
    33  when supported by a properly completed exemption certificate.
    34    (b) To a person when, pursuant to the contract of  sale,  the  bottled
    35  sweetened  beverages  or concentrates are required to be shipped and are
    36  shipped to a point outside of this state by the distributor by means  of
    37  any of the following:
    38    (1) Facilities operated by the distributor.
    39    (2)  Delivery  by  the  distributor  to  a carrier, customs broker, or
    40  forwarding agent, whether hired by the purchaser or not, for shipment to
    41  the out-of-state point.
    42    (c) To a person where the state is prohibited from taxing  that  sale,
    43  use,  or consumption under the constitution or laws of the United States
    44  or under the constitution of this state.
    45    § 334. Exemption certificate. The exemption certificate to be provided
    46  by a distributor to another distributor as required by  subdivision  (a)
    47  of section three hundred thirty-three of this article shall consist of a
    48  statement  that  is  signed  under  penalty  of perjury by a person with
    49  authority to bind the distributor. The certificate shall  be  dated  and
    50  include  the  distributor's  name  and account number. A new certificate
    51  shall be given if any information in the  current  certificate  changes.
    52  The certificate may be included as part of any business records normally
    53  used to document a sale or distribution.
    54    §  335.  Credit.  A distributor who has paid a tax, either directly to
    55  the state or to another distributor registered under this  article,  and
    56  makes  a  subsequent  distribution  of  bottled  sweetened  beverages or

        A. 3278                             5
 
     1  concentrate may claim a credit on its return for the period in which the
     2  subsequent sale or distribution occurs.
     3    §  336.  Collection  of  tax.    The commissioner shall administer and
     4  collect the tax imposed by this article.
     5    § 337. Rules and regulations. The commissioner is hereby authorized to
     6  promulgate rules and regulations  relating  to  the  administration  and
     7  enforcement of this article, including, but not limited to, collections,
     8  reporting, refunds, and appeals.
     9    §  338. Taxes due. The taxes imposed by this article are due and paya-
    10  ble to the commissioner on or before the last day of the month following
    11  each tax quarter.
    12    § 339. Electronic filing. (a) On or before the last day of  the  month
    13  following each tax quarter, a return for the preceding tax quarter shall
    14  be filed using electronic media with the commissioner.
    15    (b)  The commissioner may prescribe those forms and reporting require-
    16  ments as are necessary to implement the tax, including, but not  limited
    17  to, information regarding the total amount of bottled sweetened beverag-
    18  es and concentrate sold and the amount of tax due.
    19    (c) Returns shall be authenticated in a form or pursuant to methods as
    20  may be prescribed by the commissioner.
    21    §  340.  Registration.  Every  person  required to pay the tax imposed
    22  under this article shall register with the commissioner. Every  applica-
    23  tion  for  registration  shall  be  made  upon  a form prescribed by the
    24  commissioner and shall set forth the  name  under  which  the  applicant
    25  transacts  or  intends  to transact business, the location of his or her
    26  place or places of business, and such other information as  the  commis-
    27  sioner may require. An application for an account shall be authenticated
    28  in a form or pursuant to methods as may be prescribed by the commission-
    29  er.
    30    § 3. The state finance law is amended by adding a new section 99-ff to
    31  read as follows:
    32    §  99-ff.  Children's health promotion fund. 1. There is hereby estab-
    33  lished in the joint custody of the comptroller and the  commissioner  of
    34  taxation  and  finance  a  fund  to  be  known as the "children's health
    35  promotion fund". The children's health promotion fund shall  consist  of
    36  all  taxes, interest, penalties, and other amounts collected pursuant to
    37  article fifteen of the tax law.
    38    2. All moneys in the children's  health  promotion  fund  shall,  upon
    39  appropriation  by  the  legislature,  be  allocated  for the purposes of
    40  statewide  childhood  obesity  prevention  activities  and  programs  as
    41  follows:
    42    (a) Twenty percent to the department of health to coordinate statewide
    43  childhood  obesity  prevention activities and to fund state-level child-
    44  hood obesity prevention and children's dental programs.    This  funding
    45  shall  support programs that use educational, environmental, policy, and
    46  other public health approaches that achieve the following goals: improve
    47  access to and consumption of healthy, safe,  and  affordable  foods  and
    48  beverages;  reduce access to and consumption of calorie-dense, nutrient-
    49  poor foods; encourage physical activity;  decrease  sedentary  behavior;
    50  and  raise  awareness  about  the  importance  of nutrition and physical
    51  activity to childhood obesity prevention.
    52    (b)  Thirty-five  percent  for   community-based   childhood   obesity
    53  prevention programs. This funding shall support programs that use educa-
    54  tional,  environmental,  policy, and other public health approaches that
    55  achieve the following goals: improve access to and consumption of  heal-
    56  thy,  safe,  and  affordable  foods  and beverages; reduce access to and

        A. 3278                             6
 
     1  consumption of calorie-dense, nutrient-poor  foods;  encourage  physical
     2  activity;  decrease  sedentary  behavior;  and raise awareness about the
     3  importance of nutrition  and  physical  activity  to  childhood  obesity
     4  prevention.  The  commissioner  of  health  shall be responsible for the
     5  distribution of these funds  to  community-based  organizations  and  to
     6  local  health departments, with priority given to counties that have the
     7  highest rates of childhood obesity.
     8    (c) Ten percent to evidence-based prevention, early recognition, moni-
     9  toring, and weight management intervention  activities  in  the  medical
    10  setting. The commissioner of health shall be responsible for identifying
    11  activities and allocating these funds.
    12    (d) Thirty-five percent to elementary and secondary schools for educa-
    13  tional,  environmental,  policy  and other public health approaches that
    14  promote nutrition and physical activity. The approaches funded  pursuant
    15  to  this paragraph can include improving or building school recreational
    16  facilities that are used for recess and  physical  education;  providing
    17  continuing  education  training  for physical education teachers; hiring
    18  qualified physical education teachers; improving the quality and  nutri-
    19  tion  of  school  breakfasts,  lunches, and snacks; ensuring free, clean
    20  drinking water access throughout the school day; and incorporating prac-
    21  tical nutrition education  into  the  curriculum.  The  commissioner  of
    22  education  is  responsible  for the allocation and distribution of these
    23  funds.
    24    3. All moneys  in  the  children's  health  promotion  fund  shall  be
    25  expended  only  for the purposes expressed in this section, and shall be
    26  used only to supplement existing levels of service and not  to  supplant
    27  current federal, state, or local funding for existing levels of service.
    28    4.  The  commissioner  of health and the commissioner of education are
    29  hereby authorized to promulgate such rules and regulations, and  provide
    30  such  procedural  measures,  as  shall bring into effect the purposes of
    31  this section.  The  rules  and  regulations  may  provide  for  specific
    32  programs  to be funded consistent with the allocation of funds set forth
    33  in this section.
    34    § 4. This act shall take effect July 1,  2020.  Effective  immediately
    35  the  addition,  amendment and/or repeal of any rule or regulation neces-
    36  sary for the implementation of  this  act  on  its  effective  date  are
    37  authorized to be made and completed on or before such date.
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