Full Text of HB1190 97th General Assembly
HB1190ham001 97TH GENERAL ASSEMBLY | Rep. Karen A. Yarbrough Filed: 3/8/2011
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| 1 | | AMENDMENT TO HOUSE BILL 1190
| 2 | | AMENDMENT NO. ______. Amend House Bill 1190 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Sugar-Sweetened Beverages, Syrups, and Powder Tax Act. | 6 | | Section 5. Findings. The General Assembly finds that over | 7 | | the past 30 years, the obesity rate in the United States has | 8 | | substantially increased. The prevalence of adult obesity has | 9 | | more than doubled during that time. According to statistics | 10 | | compiled by the Centers for Disease Control, nearly 27% of | 11 | | Illinois' adult residents in 2008 were considered obese (having | 12 | | a body mass index of 30 and above) and the rate was even higher | 13 | | among African American (36.4%) and Hispanic (30.7%) residents.
| 14 | | The General Assembly further finds that, for children, the | 15 | | increase in obesity has been even more dramatic, with the | 16 | | obesity rate among children ages 6-11 more than quadrupling |
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| 1 | | over the last 4 decades. The State of Illinois is not immune to | 2 | | the problem. 21% of Illinois children (age 0-17 years) are | 3 | | obese, the fourth worst rate in the nation.
| 4 | | The General Assembly further finds that obese children are | 5 | | at least twice as likely as non-obese children to become obese | 6 | | adults. Research indicates that the likelihood of an obese | 7 | | child becoming an obese adult increases with age; adolescents | 8 | | who are obese have a greater likelihood of being obese in | 9 | | adulthood, as compared to younger children. | 10 | | The General Assembly further finds that the obesity | 11 | | epidemic has led to a dramatic increase in obesity-related | 12 | | health conditions, such as type 2 diabetes, asthma, and heart | 13 | | disease. These health conditions cost each of the states | 14 | | billions of dollars in health care costs and lost productivity. | 15 | | Obesity and weight-related illness accounts for $147 billion in | 16 | | health care costs nationally, or 9% of all medical spending per | 17 | | year. Obesity-related annual medical expenditures in the State | 18 | | of Illinois are estimated at $3.4 billion in 2003 dollars. | 19 | | Almost 60% of these costs are paid by public funds through | 20 | | Medicare and Medicaid. | 21 | | The General Assembly further finds that numerous studies | 22 | | strongly support a link between obesity and consumption of | 23 | | sweetened beverages such as soft drinks, energy drinks, sweet | 24 | | teas and sports drinks. A study of a 5-year period between 1999 | 25 | | and 2004 showed that children and adolescents consumed 10-15% | 26 | | of their daily caloric intake from sweetened beverages, which |
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| 1 | | offer little or no nutritional value and massive quantities of | 2 | | added sugars. For example, a 12-ounce can of soda contains the | 3 | | equivalent of approximately 10 teaspoons of sugar; the U.S. | 4 | | Department of Agriculture recommends that a person eating a | 5 | | 2,200-calorie diet should eat no more than 12 teaspoons of | 6 | | refined sugar in a day. | 7 | | It is the intent of the General Assembly, by adopting this | 8 | | Act and creating the Illinois Health Promotion Fund, to | 9 | | diminish the human and economic costs of obesity in the State | 10 | | of Illinois. This Act is intended to discourage excessive | 11 | | consumption of sugar-sweetened beverages by increasing the | 12 | | price of these products and by creating a dedicated revenue | 13 | | source for programs designed to prevent and treat obesity and | 14 | | reduce the burden of related health conditions. | 15 | | Section 10. Legislative intent. It is the intent of the | 16 | | General Assembly, by adopting this Act and creating the | 17 | | Illinois Health Promotion Fund, to diminish the human and | 18 | | economic costs of obesity in the State of Illinois. This Act is | 19 | | intended to discourage excessive consumption of | 20 | | sugar-sweetened beverages and to create a dedicated revenue | 21 | | source for programs designed to prevent and treat childhood | 22 | | obesity and health conditions which result from it. | 23 | | Section 15. Definitions. For purposes of this Act: | 24 | | "Bottle" means any closed or sealed container regardless of |
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| 1 | | size or shape, including, without limitation, those made of | 2 | | glass, metal, paper, or plastic, or any other material or | 3 | | combination of materials. | 4 | | "Bottled sugar-sweetened beverage" means any | 5 | | sugar-sweetened beverage contained in a bottle that is ready | 6 | | for consumption without further processing such as, without | 7 | | limitation, dilution or carbonation. | 8 | | "Caloric sweetener" means any caloric substance suitable | 9 | | for human consumption that humans perceive as sweet and | 10 | | includes, without limitation, sucrose, fructose, glucose, or | 11 | | other sugars. "Caloric sweetener" excludes non-caloric | 12 | | sweeteners. For purposes of this definition, "caloric" means a | 13 | | substance which adds calories to the diet of a person who | 14 | | consumes that substance. | 15 | | "Consumer" means a person who purchases a sugar-sweetened | 16 | | beverage for consumption and not for sale to another. | 17 | | "Department" means the Department of Revenue. | 18 | | "Distributor" means any person, including manufacturers | 19 | | and wholesale dealers, who receives, stores, manufactures, | 20 | | bottles, or distributes bottled sugar-sweetened beverages, | 21 | | syrup, or powder, for sale to retailers doing business in the | 22 | | State, whether or not that person also sells those products to | 23 | | consumers. | 24 | | "Fund" means the Illinois Health Promotion Fund | 25 | | established pursuant to Section 40. | 26 | | "Non-caloric sweetener" means any non-caloric substance |
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| 1 | | suitable for human consumption that humans perceive as sweet | 2 | | and includes, without limitation, aspartame, saccharin, | 3 | | stevia, and sucralose. "Non-caloric sweetener" excludes | 4 | | caloric sweeteners. For purposes of this definition, | 5 | | "non-caloric" means a substance that contains fewer than 5 | 6 | | calories per serving. | 7 | | "Person" means any natural person, partnership, | 8 | | cooperative association, limited liability company, | 9 | | corporation, personal representative, receiver, trustee, | 10 | | assignee, or any other legal entity. | 11 | | "Place of business" means any place where sugar-sweetened | 12 | | beverages, syrups, or powder are manufactured or received for | 13 | | sale in the State. | 14 | | "Powder" means any solid mixture of ingredients used in | 15 | | making, mixing, or compounding sugar-sweetened beverages by | 16 | | mixing the powder with any one or more other ingredients, | 17 | | including without limitation water, ice, syrup, simple syrup, | 18 | | fruits, vegetables, fruit juice, vegetable juice, carbonation, | 19 | | or other gas. | 20 | | "Retailer" means any person who sells or otherwise | 21 | | dispenses in the State a sugar-sweetened beverage to a consumer | 22 | | whether or not that person is also a distributor as defined in | 23 | | this Section. | 24 | | "Sale" means the transfer of title or possession for | 25 | | valuable consideration regardless of the manner by which the | 26 | | transfer is completed. |
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| 1 | | "State" means the State of Illinois. | 2 | | "Sugar-sweetened beverage" means any nonalcoholic | 3 | | beverage, carbonated
or noncarbonated, which is intended for | 4 | | human consumption and contains any added caloric sweetener. As | 5 | | used in this definition, "nonalcoholic beverage" means any | 6 | | beverage that contains less than one-half of 1% alcohol per | 7 | | volume. The term "sugar-sweetened beverage" does not include: | 8 | | (1) beverages sweetened solely with non-caloric | 9 | | sweeteners; | 10 | | (2) beverages consisting of 100% natural fruit or | 11 | | vegetable juice with no added caloric sweetener; for | 12 | | purposes of this paragraph, "natural fruit juice" and | 13 | | "natural vegetable juice" mean the original liquid | 14 | | resulting from the pressing of fruits or vegetables, or the | 15 | | liquid resulting from the dilution of dehydrated natural | 16 | | fruit juice or natural vegetable juice; | 17 | | (3) beverages in which milk is the primary ingredient | 18 | | or the first listed ingredient on the label of the | 19 | | beverage; for purposes of this Act, "milk" means natural | 20 | | liquid milk regardless of animal or plant source or | 21 | | butterfat content; natural milk concentrate, whether or | 22 | | not reconstituted, regardless of animal or plant source or | 23 | | butterfat content; or dehydrated natural milk, whether or | 24 | | not reconstituted and regardless of animal or plant source | 25 | | or butterfat content; | 26 | | (4) coffee or tea without added caloric sweetener; |
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| 1 | | (5) infant formula; | 2 | | (6) medically necessary foods; and | 3 | | (7) water to which neither carbonation nor any other | 4 | | substance has been added, except for minerals and | 5 | | non-caloric flavoring agents. | 6 | | "Syrup" means a liquid mixture of ingredients used in | 7 | | making, mixing, or compounding sugar-sweetened beverages using | 8 | | one or more other ingredients including, without limitation, | 9 | | water, ice, a powder, simple syrup, fruits, vegetables, fruit | 10 | | juice, vegetable juice, carbonation, or other gas. | 11 | | Section 20. Permit required. | 12 | | (a) Every distributor doing business in the State shall | 13 | | file with the Department an application for a permit to engage | 14 | | in the business of receiving, storing, manufacturing, | 15 | | bottling, or distributing bottled sugar-sweetened beverages, | 16 | | syrup, or powder, for each place of business owned and operated | 17 | | by the distributor before the later of (i) the effective date | 18 | | of this Act or (ii) the distributor's first acts which | 19 | | constitute the doing of business in the State. An application | 20 | | for a permit shall be filed on forms to be furnished by the | 21 | | Department for that purpose. An application must be subscribed | 22 | | and sworn to by a person with legal authority to bind the | 23 | | business. The application shall identify the owners of the | 24 | | applicant, the applicant's mailing address, the place of | 25 | | business to which the permit shall apply, and the nature of the |
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| 1 | | business in which engaged, and any other information the | 2 | | Department may require for the enforcement of this Act. | 3 | | (b) Upon receipt of an application and any permit fee | 4 | | hereafter provided for, the Department may issue to the | 5 | | applicant, for the place of business designated, a | 6 | | non-assignable permit, authorizing the sale of sugar-sweetened | 7 | | beverages, syrups, and powder in the State. No distributor | 8 | | shall sell any sugar-sweetened beverage, syrup, or powder | 9 | | without first obtaining a permit to do so under this Act. | 10 | | Permits issued pursuant to this Section shall expire on January | 11 | | 31 of each year and may be renewed annually. | 12 | | (c) A permit may not be transferred from one person to | 13 | | another, and a permit shall at all times be prominently | 14 | | displayed in a distributor's place of business. The Department | 15 | | may refuse to issue a permit to any person previously convicted | 16 | | of violations of this Act under such procedures as the | 17 | | Department may establish by rule. | 18 | | Section 25. Tax imposed. | 19 | | (a) There is hereby imposed an excise tax on every | 20 | | distributor for the privilege of selling the products governed | 21 | | by this Act in the State, calculated as follows. | 22 | | (1) $1.28 per gallon/$0.01 per ounce of bottled | 23 | | sugar-sweetened beverages sold or offered for sale to a | 24 | | retailer for sale in the State to a consumer. | 25 | | (2) The tax on syrup and powder sold or offered for |
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| 1 | | sale to a retailer for sale in the State to a consumer, | 2 | | either as syrup or powder or as a sugar-sweetened beverage | 3 | | derived from that syrup or powder, is equal to $1.28 per | 4 | | gallon/$0.01 per ounce for each gallon or ounce of | 5 | | sugar-sweetened beverage produced from that syrup or | 6 | | powder. For purposes of calculating the tax, the volume of | 7 | | sugar-sweetened beverage produced from syrup or powder | 8 | | shall be the larger of (i) the largest volume resulting | 9 | | from use of the syrup or powder according to any | 10 | | manufacturer's instructions or (ii) the volume actually | 11 | | produced by the retailer, as reasonably determined by the | 12 | | Department. | 13 | | (3) The tax amounts set forth in this Section shall be | 14 | | adjusted annually by the Department in proportion with the | 15 | | Consumer Price Index for All Urban Consumers for All Items | 16 | | for the Midwest Statistical Area, as reported by the United | 17 | | States Bureau of Labor Statistics or any successor to that | 18 | | index. | 19 | | (b) A retailer that sells bottled sugar-sweetened | 20 | | beverages, syrup, or powder in the State to a consumer, on | 21 | | which the tax imposed by this Section has not been paid by a | 22 | | distributor, is liable for the tax imposed in subsection (a) at | 23 | | the time of sale to a consumer. | 24 | | (c) The tax imposed by this Act is in addition to all other | 25 | | occupation or privilege taxes imposed by the State of Illinois, | 26 | | by any political subdivision thereof, or by any municipal |
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| 1 | | corporation. | 2 | | Section 30. Report of sales and tax remittances. | 3 | | (a) Any distributor or retailer liable for the tax imposed | 4 | | by this Act shall, on or before the last day of March, June, | 5 | | October, and December of each year, return to the Department | 6 | | under oath of a person with legal authority to bind the | 7 | | distributor or retailer, a statement containing its name and | 8 | | place of business, the quantity of sugar-sweetened beverages, | 9 | | syrup, and powder subject to the excise tax imposed by this Act | 10 | | sold or offered for sale in the preceding calendar quarter, and | 11 | | any other information required by the Department, along with | 12 | | the tax due. | 13 | | (b) The State Treasurer shall credit the proceeds of the | 14 | | tax to the Illinois Health Promotion Fund. | 15 | | Section 35. Records of distributors. Every distributor and | 16 | | every retailer subject to this Act shall maintain for not less | 17 | | than 2 years accurate records, showing all transactions that | 18 | | gave rise, or may have given rise, to tax liability under this | 19 | | Act. Such records are subject to inspection by the Department | 20 | | at all reasonable times during normal business hours. | 21 | | Section 40. Establishment of Illinois Health Promotion | 22 | | Fund. There is hereby created a trust fund in the State | 23 | | treasury called the Illinois Health Promotion Fund. Fifty |
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| 1 | | percent of moneys collected pursuant to the taxes imposed by | 2 | | this Act, and all interest on those moneys, shall be paid into | 3 | | the Illinois Health Promotion Fund. All costs to implement this | 4 | | Act shall be paid from the Illinois Health Promotion Fund. | 5 | | Section 45. Expenditure of Illinois Health Promotion Fund. | 6 | | (a) All moneys in the Illinois Health Promotion Fund, after | 7 | | tax administration costs have been deducted, shall be | 8 | | appropriated and allocated as follows: | 9 | | (1) Twenty percent to the Illinois Department of Public | 10 | | Health to coordinate grants to State-certified public | 11 | | health departments to improve public health | 12 | | infrastructure. Funded projects will improve workforce and | 13 | | systems development, chronic disease surveillance and | 14 | | monitoring systems, chronic disease program evaluation, | 15 | | and regional coordination that includes networking, | 16 | | coordination, standardization, and cross-jurisdictional | 17 | | cooperation for the efficient delivery of public health | 18 | | services (e.g., resource sharing) to ensure that public | 19 | | health goals are effectively and efficiently met. | 20 | | (2) Thirty percent for community-based childhood | 21 | | obesity prevention programs. This funding shall support | 22 | | programs that use educational, environmental, policy, and | 23 | | other public health approaches that achieve the following | 24 | | goals: eliminate racial, ethnic, and socioeconomic | 25 | | disparities in childhood obesity rates; improve access to |
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| 1 | | and consumption of healthy, safe, and affordable foods; | 2 | | reduce access to and consumption of calorie-dense, | 3 | | nutrient-poor foods; encourage physical activity; decrease | 4 | | sedentary behavior; and raise awareness about the | 5 | | importance of nutrition and physical activity to childhood | 6 | | obesity prevention. The Illinois Director of Public Health | 7 | | shall be responsible for the distribution of these funds to | 8 | | community-based organizations and to State-certified | 9 | | public health departments, with priority given to | 10 | | counties, municipalities, and other geographic | 11 | | jurisdictions that have childhood obesity prevention | 12 | | coalitions to build broad-based support for childhood | 13 | | obesity prevention. | 14 | | (3) Thirty percent to elementary and secondary schools | 15 | | for educational, environmental, policy, and other public | 16 | | health approaches that promote nutrition and physical | 17 | | activity. The approaches funded pursuant to this | 18 | | subsection can include improving or building school | 19 | | recreational facilities that are used for recess and | 20 | | physical education; providing continuing education | 21 | | training for physical education teachers; hiring qualified | 22 | | physical education teachers; implementing policies that | 23 | | encourage walking and biking to and from school (i.e. | 24 | | school siting, school travel plans); improving the quality | 25 | | and nutrition of school breakfasts, lunches, and snacks; | 26 | | ensuring free, clean drinking water access throughout the |
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| 1 | | school day; and incorporating practical nutrition | 2 | | education into the curriculum. The State Board of Education | 3 | | is responsible for the allocation and distribution of these | 4 | | funds. | 5 | | (4) Ten percent for chronic disease prevention and | 6 | | treatment programs. Funding shall be focused on | 7 | | prevention, treatment, and community-based services to | 8 | | expand clinical disease prevention and management care. | 9 | | Funding shall support medicaid reimbursement for pediatric | 10 | | specialty care services to improve access for children to | 11 | | medical services. The Director of Public Health shall be | 12 | | responsible for identifying activities and allocating | 13 | | these funds. | 14 | | (5) Ten percent to fund oral health treatments and | 15 | | services to underserved populations. The funds shall be | 16 | | used for the development of new clinics in high need areas | 17 | | throughout Illinois, medicaid reimbursements for direct | 18 | | services with a focus on preventative dental services such | 19 | | as semi-annual office visits and teeth cleaning, and | 20 | | salaries for dentists. The Director of Public Health shall | 21 | | be responsible for coordinate grants to distribute funds. | 22 | | (b) All moneys in the Children's Health Promotion Fund | 23 | | shall be expended only for the purposes expressed in this Act, | 24 | | and shall be used only to supplement existing levels of service | 25 | | and not to supplant current federal, state, or local funding | 26 | | for existing levels of service. |
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| 1 | | (c) The Illinois Director of Public Health and the Illinois | 2 | | State Board of Education are hereby empowered to make such | 3 | | rules and regulations, and provide such procedural measures, as | 4 | | shall bring into effect the purposes of this Section. The rules | 5 | | and regulations may provide for specific programs to be funded | 6 | | consistent with the allocation of funds set forth above.
| 7 | | Section 50. Exemptions. The following are exempt from the | 8 | | tax imposed by this Act: | 9 | | (1) Bottled sugar-sweetened beverages, syrups, and | 10 | | powder sold to the United States Government and American | 11 | | Indian Tribal Governments. | 12 | | (2) Bottled sugar-sweetened beverages, syrups, and | 13 | | powder sold by a distributor or a retailer expressly for | 14 | | resale or consumption outside the State. | 15 | | (3) Bottled sugar-sweetened beverages, syrups, and | 16 | | powder sold by a distributor to another distributor that | 17 | | holds a permit issued pursuant to Section 20 of this Act, | 18 | | if the sales invoice clearly indicates that the sale is | 19 | | exempt. If the sale is to a person who is both a | 20 | | distributor and a retailer, the sale shall also be tax | 21 | | exempt and the tax shall be paid when the purchasing | 22 | | distributor-retailer resells the product to a retailer or a | 23 | | consumer. This exemption does not apply to any other sale | 24 | | to a retailer. |
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| 1 | | Section 55. Penalties. | 2 | | (a) Any person subject to the provisions of this Act who | 3 | | fails to pay the entire amount of tax imposed by this Act by | 4 | | the date that payment is due, fails to submit a report or | 5 | | maintain records required by this Act, does business in the | 6 | | State without first obtaining a permit as required by this Act, | 7 | | or violates any other provision of this Act or rules and | 8 | | regulations promulgated by the Department for the enforcement | 9 | | of this Act, shall be guilty of a misdemeanor and shall also be | 10 | | liable for the penalties set forth and incorporated by | 11 | | reference into this Section. | 12 | | (b) Incorporation by reference. All of the provisions of | 13 | | Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5j, 6, 6a, | 14 | | 6b, 6c, 8, 9, 10, 11, 11a, and 12 of the Retailers' Occupation | 15 | | Tax Act, and all applicable provisions of the Uniform Penalty | 16 | | and Interest Act that are not inconsistent with this Act, apply | 17 | | to distributors of sugar-sweetened beverages to the same extent | 18 | | as if those provisions were included in this Act. References in | 19 | | the incorporated Sections of the Retailers' Occupation Tax Act | 20 | | to retailers, to sellers, or to persons engaged in the business | 21 | | of selling tangible personal property mean distributors, | 22 | | retailers, or both when used in this Act. References in the | 23 | | incorporated Sections to sales of tangible personal property | 24 | | mean sales of sugar-sweetened beverages, syrups, or powder when | 25 | | used in this Act. |
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| 1 | | Section 60. Unpaid taxes a debt. All taxes and penalties | 2 | | imposed under the provisions of this Act remaining due and | 3 | | unpaid shall constitute a debt to the State, which may be | 4 | | collected from the person owing the same by suit or otherwise. | 5 | | Section 65. Records of Department. At the end of each | 6 | | month, the State Auditor General shall check the books and | 7 | | records of the Department and its accounts with any bank or | 8 | | banks, and shall verify the amounts collected pursuant to this | 9 | | Act and paid into the Children's Health Promotion Fund. Any | 10 | | duty herein required of the State Auditor General may be | 11 | | performed by any duly trained clerk in his office, designated | 12 | | by the State Auditor General for that purpose. | 13 | | Section 70. Exercise of powers and duties. Whenever in this | 14 | | Act any reference is made to any power or duty of the | 15 | | Department, the reference is construed to mean that the power | 16 | | or duty shall be exercised by the Department, under the | 17 | | supervision and direction of the Director of Revenue. | 18 | | Section 75. Rules and regulations. The Department is hereby | 19 | | empowered to adopt rules, and provide such procedural measures, | 20 | | in cooperation with the State Auditor General, as may be | 21 | | reasonably necessary to accomplish the purposes of this Act. | 22 | | Section 80. Severability. If any provision of this Act, any |
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| 1 | | rule or regulation made under this Act, or the application of | 2 | | this Act to any person or circumstance is held invalid by any | 3 | | court of competent jurisdiction, the remainder of the Act, | 4 | | rule, or regulation, and the application of the provision to | 5 | | other persons or circumstances shall not be affected. The | 6 | | invalidity of any Section or Sections or parts of any Section | 7 | | of this Act shall not affect the validity of the remainder of | 8 | | the Act. | 9 | | Section 100. The State Finance Act is amended by adding | 10 | | Section 5.786 as follows: | 11 | | (30 ILCS 105/5.786 new) | 12 | | Sec. 5.786. The Illinois Health Promotion Fund. | 13 | | Section 999. Effective date. This Act takes effect January | 14 | | 1, 2012.".
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