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Tax on Sugar-Sweetened Beverage Products
City of Berkeley
Ordinance - Majority Approval Required
Pass: 29540 / 76.17% Yes votes ...... 9243 / 23.83% No votes
Index of all Measures
|Results as of Dec 28 11:38am, 100.00% of Precincts Reporting (107/107)|
|Information shown below: Arguments | Full Text|
Shall an ordinance imposing a 1˘ per ounce general tax on the distribution of sugar-sweetened beverages (e.g., sodas, energy drinks, presweetened teas) and sweeteners used to sweeten such drinks, but exempting: (1) sweeteners (e.g., sugar, honey, syrups) typically used by consumers and distributed to grocery stores; (2) drinks and sweeteners distributed to very small retailers; (3) diet drinks, milk products, 100% juice, baby formula, alcohol, or drinks taken for medical reasons, be adopted?
California Secretary of State's Office
East Bay Express
|Arguments For Measure D||Arguments Against Measure D|
|Vote Yes on Measure D to protect our children's health.
Overwhelming scientific evidence shows that consumption of sugary drinks causes widespread health problems, starting in childhood. One-third of all children, and nearly half of African-American and Latino children, are predicted to develop diabetes in their lifetimes. In addition to diabetes, tooth decay and heart disease are also linked to sugary drink consumption.
Big Soda spends hundreds of millions of dollars to aggressively market sugary drinks to children--even bypassing parents by texting teenagers directly.
Measure D places a tax on distributors (not on consumers) of high-calorie, low-nutrition sugary drinks and syrups to make them. It does not tax natural fruit or vegetable juices, milk products, baby formula, or drinks taken for health reasons. Measure D is not a sales tax.
Measure D establishes a panel of health professionals and educators to advise the City Council on how best to support programs to reduce sugary drink consumption in Berkeley and address the effects of consumption.
A wide range of Berkeley citizens, organizations, and health care professionals endorse Measure D, including the Berkeley NAACP, Berkeley Federation of Teachers, City Council, School Board, Latinos Unidos de Berkeley, Ecology Center, Telegraph Business Improvement District, Berkeley Dental Society, Alice Waters, and Michael Pollan.
Big Soda has spent millions of dollars to confuse and manipulate voters and is trying to do so again. Don't be fooled. Look closely--you will see that primary opposition comes from outside Berkeley, led by the American Beverage Association. The real costs and suffering for families come from health problems linked to sugary drinks.
Berkeley has always been a leader on important issues. Together with San Francisco we will become the first of many U.S. cities to tax sugary drinks.
Vote yes on Measure D
Loni Hancock, State Senator
Look closer: Measure D is riddled with loopholes.
Some stores will pay the tax but others won't. For example, retailers who pick up their beverages outside of Berkeley won't pay the tax.
Measure D makes no sense:
Chocolate milk, 100% juice drinks, alcoholic beverages, and some coffee drinks will not be taxed--no matter how much sugar or how many calories they contain. Organic local root beer will be taxed, but diet soda is exempt. An iced tea is taxed if it is pre-sweetened, but not if the customer adds the sugar.
As for the panel that's supposed to advise the city on managing the funds:
Measure D is written so that City Council can ignore those recommendations and spend the tax revenue on anything they want. A similar measure in San Francisco specifically dedicates beverage tax funds for health and wellness programs. That's not the case with Measure D.
We can't tax our way to health with a measure that provides absolutely zero accountability in terms of how revenue is spent:
This tax is not about health, it's about raising more money for the city. The fact is nothing in this measure will prevent future City Councils from shifting the money to other things. Measure D comes with too many loopholes, too many exemptions, and too few safeguards.
That's why you should vote No on D.
Ted Mundorff, CEO/President Landmark Theaters
Some want you to believe Measure D will make Berkeley healthier--but look closer and you'll see that's just not the case.
Right now, San Franciscans are voting on a similar proposal that specifically dedicates beverage tax funds for health and wellness programs.
Unfortunately for those who live in Berkeley, Measure D just does not come with those guarantees.
Measure D is purposefully written so that tax revenue will not be directed toward health and wellness programs. Rather it will be funneled into the general fund where there is no accountability as to how the money is spent and no guarantee that any revenue will actually benefit nutritional programs.
Obesity and diabetes are important problems, but Measure D takes the wrong approach to solving these problems:
Lawmakers in San Francisco say funds from their proposed measure will go toward health and wellness programs. Berkeley lawmakers just want the tax money for the general fund so they can spend it however they choose--and they want Berkeley taxpayers to pay for it.
That's not fair.
There is a better way, Berkeley--but a beverage tax riddled with exemptions and arbitrary loopholes isn't it. That's why you should vote No on Measure D.
Masamoni Yasumaga, Owner of Seasons of Japan
Big Soda is concerned about the emerging scientific consensus that significant health problems--including diabetes, obesity and dental problems--are linked with drinking sugary drinks. They are concerned that Measure D will spark other communities around the country to tax sugary drinks (Mexico already has).
Here are the facts:
Big Soda knows Measure D taxes distributors of these products, not consumers and Measure D will help educate our children on healthier food choices.
Please join Berkeley teachers, nurses, parents, local Democratic Clubs, restaurants, grocers, and community organizations in supporting Measure D.
Vote Yes on Measure D.
Robert Reich, Chancellor's Professor of Public Policy
|Full Text of Measure D|
|Imposing a General Tax on the Distribution of Sugar-Sweetened Beverage Products
BE IT ORDAINED by the People of the City of Berkeley as follows:
Section 1. Findings
A. Our nation, our state, and our community face a major public health crisis.
B. Diabetes, obesity, and tooth decay have been on the rise for decades. Although no group has escaped these epidemics, children as well as low income communities and communities of color have been and continue to be disproportionately affected.
C. While there is no single cause for the rise in diabetes, obesity, and tooth decay, there is overwhelming evidence of the link between the consumption of sugary drinks and the incidence of diabetes, obesity, and tooth decay.
D. Sugary drinks such as soft drinks, energy drinks, sweetened teas, and sport drinks offer little or no nutritional value, but massive quantities of added sugar. A single 20-ounce bottle of soda, for instance, typically contains the equivalent of approximately 16 teaspoons of sugar.
E. Before the 1950s, the standard soft-drink bottle was 6.5 ounces. In the 1950s, larger size containers were introduced, including the 12-ounce can, which became widely available in 1960. By the early 1990s, 20-ounce plastic bottles had become the norm.
F. At the same time, hundreds of millions of dollars have been spent in an ongoing massive marketing campaign, which particularly targets children and people of color. In 2006 alone, nearly $600 million was spent in advertising to children under 18. African American and Latino children are also aggressively targeted with advertisements to promote sugar-laden drinks.
G. The resulting impact on consumption should not be surprising. The average American now drinks nearly 50 gallons of sugary drinks a year. The problem is especially acute with children in California. From 1989 to 2008, the percentage of children consuming sugary drinks increased from 79% to 91% and the percentage of total calories obtained from sugary drinks increased by 60% in children ages 6 to 11.
H. This level of consumption has had tragic impacts on community health. Type 2 Diabetes + previously only seen among adults + is now increasing among children. If the current obesity trends are not reversed, it is predicted that one in three children and nearly one-half of Latino and African American children born in the year 2000 will develop type 2 diabetes in their lifetimes.
I. An Asian resident of Berkeley is almost 3 times more likely than a white resident to have been diagnosed with diabetes, and an African American resident of Berkeley is 14 times more likely than a white resident to be hospitalized for diabetes.
K. Childhood obesity has more than doubled in children and tripled in adolescents in the past 30 years; in 2010, more than one-third of children and adolescents were overweight or obese.
M. There are also economic costs. In 2006, for instance, overweight and obesity-related costs in California were estimated at almost $21 billion.
N. Our community has not been immune to the challenge of unhealthy weight gain and obesity. In 2008-09, over 40% of Berkeley 9th graders were overweight or obese. These overweight and obese children have a much greater chance of being obese as adults, with all the health risks that entails.
O. Tooth decay, while not as life threatening as diabetes or obesity, still has a meaningful impact, especially on children. In fact, tooth decay is the most common childhood disease, experienced by over 70% of California's 3rd graders. Children who frequently or excessively consume beverages high in sugar are at increased risk for dental cavities. Dental problems are a major cause of missed school days and poor school performance as well as pain, infection, and tooth loss in California.
Section 2. Purpose and Intent
A. Based on the findings set forth above, the purpose of this Ordinance is to diminish the human and economic costs of diseases associated with the consumption of sugary drinks by discouraging their distribution and consumption in Berkeley through a tax. Specifically, the purpose of this ordinance is to tax the distribution of sugary drinks and the products used to make them.
B. This Ordinance is not intended for the purpose of regulation.
C. This Ordinance does not authorize the conduct of any business or activity in the city, but merely provides for the taxation of distribution of specified products as it occurs.
D. This Ordinance imposes a general tax on the distribution of sugar-sweetened beverages such as high-calorie, low-nutrition products, like soda, energy drinks, and heavily presweetened tea, as well as the added caloric sweeteners used to produce these sugar-sweetened beverages, such as the premade syrup used to make fountain drinks. Certain drinks containing sugar are exempted, including infant formula, milk products, and natural fruit and vegetable juice.
E. This Ordinance provides for a small business exemption for Retailers who transport sugar-sweetened beverage products into the City themselves and then sell those products directly to consumers.
F. This general tax will provide revenue to be available for the general governmental needs of the people of Berkeley.
G. This Ordinance provides for a Sugar Sweetened Beverage Product Panel of Experts, composed of experts in the areas of public health, child nutrition, nutrition education, and food access programs. The Panel will make recommendations on how and to what extent the City should fund programs to further reduce the consumption of sugar-sweetened beverages in Berkeley and address the consequences of such consumption.
Section 3. New Berkeley Municipal Code Chapter 7.72
That a new Chapter 7.72 is added to the Berkeley Municipal Code is to read as follows:
Section 7.72.010 Excise Tax
A. In addition to any other taxes imposed by the City, the City hereby levies a tax of one cent ($0.01) per fluid ounce on the privilege of Distributing Sugar-sweetened beverage products in the City.
B. For the purposes of this Chapter, the volume, in ounces, of a Sugar-sweetened beverage product shall be calculated as follows:
C. The tax shall be paid upon the first non-exempt Distribution of a Sugar-sweetened beverage product in the City. To the extent that there is a chain of Distribution within Berkeley involving more than one Distributor, the tax shall be levied on the first Distributor subject to the jurisdiction of the City. To the extent the tax is not paid as set forth above for any reason, it shall be payable on subsequent Distributions and by subsequent Distributors, provided that the Distribution of Sugar-sweetened beverage products may not be taxed more than once in the chain of commerce.
Section 7.72.020 Exemptions
The tax imposed by this Chapter shall not apply:
A. To any Distributor that is not subject to taxation by the City under the laws of the United States or the State of California;
B. To any Distribution of a Sugar-sweetened beverage product to a Retailer with less than $100,000 in annual gross receipts, as defined in Section 9.04.025, in the most recent year;
C. To any Distribution of Natural or common sweeteners; or
D. To any Distribution of Added caloric sweeteners to a Food Products Store as defined in Section 23F.04.010, if the Food Products Store then offers the Added caloric sweetener for sale for later use by customers of that store.
Section 7.72.030 Definitions
A. "Added caloric sweetener" means any substance or combination of substances that meets all of the following four criteria:
B. "Alcoholic beverage" means any beverage subject to tax under Part 14 (commencing with Section 32001) of the California Revenue and Taxation Code, as that Part may be amended from time to time.
C. "Beverage for medical use" means a beverage 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, or for use as an oral rehydration electrolyte solution for infants and children formulated to prevent or treat dehydration due to illness. "Beverage for medical use" shall also mean a "medical food" as defined in Section 109971 of the California Health and Safety Code, as that definition may be amended from time to time. "Beverage for medical use" shall not include drinks commonly referred to as "sports drinks" or any other common names that are derivations thereof.
D. "Business Entity" means any Person except for a natural person.
E. "City" means the City of Berkeley, California.
F. "City Manager" means the City Manager of the City of Berkeley or his or her designee.
G. "Consumer" means a natural person who purchases a Sugar-sweetened beverage product in the City for a purpose other than resale in the ordinary course of business.
H. "Distribution" or "Distribute" means the transfer of title or possession (1) from one Business entity to another for consideration or (2) within a single Business entity, such as by a wholesale or warehousing unit to a retail outlet or between two or more employees or contractors. "Distribution" or "Distribute" shall not mean the retail sale to a Consumer.
I. "Distributor" means any Person who Distributes Sugar-sweetened beverage products in the City.
J. "Milk" means natural liquid milk, regardless of animal source or butterfat content, natural milk concentrate, whether or not reconstituted, regardless of animal source or butterfat content, or dehydrated natural milk, whether or not reconstituted and regardless of animal source or butterfat content, and plant-based milk substitutes, that are marketed as milk, such as soy milk and almond milk.
K. "Natural or common sweetener" means granulated white sugar, brown sugar, honey, molasses, xylem sap of maple trees, or agave nectar.
L. "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 other group or combination acting as a unit.
M. "Retailer" means any Person who serves Sugar-sweetened beverage products to a Consumer.
N. "Simple syrup" means a mixture of water and one or more Natural or common sweeteners without any additional ingredients.
O. "Sugar-sweetened beverage" means any beverage intended for human consumption to which one or more Added caloric sweeteners has been added and that contains at least 2 calories per fluid ounce.
a. Any beverage in which milk is the primary ingredient, i.e., the ingredient constituting a greater volume of the product than any other;
P. "Sugar-sweetened beverage product" means a Sugar-sweetened beverage or Added caloric sweetener.
Section 7.72.040 Duties, Responsibilities and Authority of the City Manager
A. It shall be the duty of the City Manager to collect and receive all taxes imposed by this Chapter, and to keep an accurate record thereof.
B. The City Manager is hereby charged with the enforcement of this Chapter, except as otherwise provided herein, and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this Chapter, including provisions for the reexamination and correction of returns and payments, and for reporting. Such rules and regulations may include, but are not limited to, the following:
C. The City Manager shall annually verify that the taxes owed under this Chapter have been properly applied, exempted, collected, and remitted.
Section 7.72.050 Collection
A. The amount of any tax, penalty, and interest imposed under the provisions of this Chapter shall be deemed a debt to the City. Any Distributor owing money under the provisions of this Chapter shall be liable in an action brought in the name of the City for the recovery of such amount.
B. In order to aid in the City's collection of taxes due under this Chapter, any Retailer that receives Sugar-sweetened beverage products from a Distributor shall, in accordance with rules and regulations promulgated by the City Manager pursuant to Section 7.72.040, either:
C. The City Council is authorized to have the taxes imposed by this Chapter collected by the County of Alameda or the California Board of Equalization in conjunction with the collection of other taxes for the City. If the City Council exercises this authorization, the duties and responsibilities of the City Manager shall be given, as appropriate, to the County of Alameda or the California Board of Equalization, which may delegate such duties and responsibilities as necessary and as authorized by law.
Section 7.72.060 Refunds
Whenever any tax under this Chapter has been paid more than once or has been erroneously or illegally collected or received by the City, it may be refunded only as provided in Chapter 7.20 of the Berkeley Municipal Code.
Section 7.72.070 Enforcement
Except as otherwise provided by this Chapter or by rule or regulation promulgated by the City Manager, the tax imposed by this Chapter shall be administered in the same manner as taxes imposed pursuant to Chapter 9.04 and, without limitation, shall be subject to the same delinquency penalties, appeals processes and other enforcement provisions set forth in Chapter 9.04.
Section 7.72.080 Not a Sales and Use Tax
The tax imposed by this Chapter is a tax upon the privilege of conducting business, specifically, Distributing Sugar sweetened beverage products within the City of Berkeley. It is not a sales, use, or other excise tax on the sale, consumption or use of Sugar-sweetened beverage products.
Section 7.72.090 Sugar-Sweetened Beverage Product Panel of Experts
A. There shall be established the Sugar-Sweetened Beverage Product Panel of Experts to make recommendations on how and to what extent the City should establish and/or fund programs to reduce the consumption of sugar-sweetened beverages in Berkeley and to address the effects of such consumption.
B. An officer or employee of the City designated by the City Manager shall serve as secretary of the Panel.
C. In accordance with Chapter 2.04, the Panel shall be composed of nine members appointed by the City Council.
D. Terms shall expire and vacancies shall be filled in accordance with the provisions of Section 2.04.030 through 2.04.145 of this Code.
E. Each member of the Panel must:
F. In accordance with Section 3.02.040, members of the Panel may be reappointed but shall not serve more than eight consecutive years.
G. The Panel shall, by majority vote, do each of the following:
a. recommendations on how to allocate the City's general funds to reduce the consumption of sugar sweetened beverages in Berkeley and to address the results of such consumption;
H. Within 15 days of receipt of the publication of the Panel's annual report, the City Manager shall cause the report to be published on the City's Internet website and to be transmitted to the City Council and the Governing Board of the Berkeley Unified School District.
I. The City Council shall consider, but need not follow, the Panel's recommendations and shall annually inform the Panel as to the extent to which it has implemented the Panel's recommendations.
Section 7.72.100 Increase Appropriations Limits
Pursuant to California Constitution article XIIIB, the appropriation limit for the City is increased by the aggregate sum authorized to be levied by this tax for each of the four fiscal years from 2015-16 through 2018-19.
Section 7.72.110 Amendment
The City Council, without a vote of the people, may, either permanently or temporarily, increase the dollar amount of the threshold for the small-business exemption in Section 7.72.020.B.
Section 4. Duration.
This Ordinance shall be effective on January 1, 2015. The last effective date of this Ordinance shall be December 31, 2026, and it shall terminate as of January 1, 2027.
Section 5. Severability
The People of the City of Berkeley hereby declare that they would have adopted each section, sentence, clause, phrase, word, or portion of this Ordinance, irrespective of the fact that any one or more sections, sentences, clauses, phrases, words, or portions of this Ordinance, or any application thereof, be declared invalid or unenforceable and, to that end, the provisions of this Ordinance are severable. If any section, sentence, clause, phrase, word, or portion of this Ordinance, or any application thereof in any circumstance, is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining sections, sentences, clauses, phrases, words, or portions of this Ordinance, and applications thereof, shall nonetheless remain in full force and effect.
Section 6. Municipal Affair
A. The People of the City of Berkeley hereby declare that the taxation of the privilege of distributing sugar-sweetened beverage products and that the public health impact of sugar-sweetened beverage products separately and together constitute municipal affairs.
B. The People of the City of Berkeley hereby further declare their desire for this measure to coexist with any similar tax adopted at the county or state levels.
Section 7. California Environmental Quality Act Requirements
This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., including without limitation Public Resources Code section 21065, CEQA Guidelines section 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment and pursuant to Public Resources Code section 21080, subdivision (b)(8) and CEQA Guidelines section 15273 as the approval of government revenues to fund existing services.