[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2772 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 2772
To amend the Internal Revenue Code of 1986 to impose an excise tax on
sugary drinks, to dedicate the revenues from such tax to the
prevention, treatment, and research of diet-related health conditions
in disproportionately impacted populations, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 22, 2021
Ms. DeLauro introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and Labor, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to impose an excise tax on
sugary drinks, to dedicate the revenues from such tax to the
prevention, treatment, and research of diet-related health conditions
in disproportionately impacted populations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Sugary Drinks Tax Act of 2021'' or
as the ``SWEET Act''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that:
(1) The prevalence of obesity in the United States has
increased dramatically over the past 40 years. From the 1960s
to the late 1970s, the prevalence was relatively constant, with
about 15 percent of the population classified as obese. After
the 1970s, these rates began to climb. According to the Centers
for Disease Control and Prevention, well over one-third of
adults--42.4 percent (2017-18)--and 18.5 percent (2015-2016) of
youth in the United States were obese. Although no group has
escaped the epidemic, low-income people and communities of
color are disproportionately affected. Nearly half (49.6
percent) of African-American adults were obese and 44.8 percent
of Hispanic adults were obese in 2017-2018.
(2) The percentage of children who are overweight has also
increased dramatically in recent decades. After being
relatively constant from the 1960s to the 1970s, the prevalence
of overweight children has more than tripled among children
between 6 and 11 years of age and nearly quadrupled among those
between 12 and 19 years of age. Despite significant public and
private investment, childhood obesity rates among young people
aged 2-19 remain high affecting about 13.7 million children.
(3) There are significant racial and age disparities in
obesity prevalence among children and adolescents. In 2015-
2016, obesity prevalence was higher among Hispanics (25.8
percent) and non-Hispanic Black youth (22.0 percent) than non-
Hispanic White youth (14.1 percent). The prevalence of obesity
was lower in non-Hispanic Asian youth (11.0 percent) than in
youth who were non-Hispanic White, non-Hispanic Black, or
Hispanic.
(4) Overweight and obesity are responsible for an estimated
$190 billion in health care costs nationally, or approximately
five to ten percent of all medical spending--with more than 20
percent of these costs paid publicly through the Medicare and
Medicaid programs. The medical costs for people with obesity
are dramatically higher than those without obesity.
(5) The obesity epidemic is of particular concern because
obesity increases the risk of diabetes, heart disease, certain
types of cancer, arthritis, asthma, and breathing problems.
Depending on their level of obesity, from 60 percent to more
than 80 percent of obese adults have type 2 diabetes, high
blood cholesterol, high blood pressure, or other related
conditions. According to the CDC, nearly 60 percent of
overweight children have at least one risk factor for heart
disease.
(6) Overweight and obesity increase the risk for several
types of common cancers, including postmenopausal breast,
colorectal, endometrial, kidney, pancreatic, esophageal, and
gall bladder cancer. Up to one in four of all cancer cases and
one in three cancer deaths are due to poor nutrition, physical
inactivity, and overweight and obesity.
(7) There is overwhelming evidence of the link between the
consumption of sugary drinks, such as non-diet soft drinks,
energy drinks, sweet teas, and sports drinks, and obesity and
diabetes. Sugary drinks are the only food or beverage shown to
increase the risk of overweight and obesity. Adults who drink
one sugary drink or more per day are 27 percent more likely to
be overweight or obese, regardless of income or ethnicity.
After six months, daily consumption of one liter of sugary
drinks increases fat deposits in the liver by 150 percent,
which directly contributes to both diabetes and heart disease.
Over 10 years, about two million type 2 diabetes cases in the
United States are attributable to consumption of sugary drinks.
(8) According to nutrition experts, sugary drinks, such as
soft drinks, energy drinks, sweet teas, and sport drinks, offer
little or no nutritional value, but massive quantities of added
sugars. A 20-ounce bottle of soda contains about 16 teaspoons
of sugars. Yet, the American Heart Association recommends that
Americans consume no more than six to nine teaspoons of sugar
per day from all food and beverage sources.
(9) The 2020 Dietary Guidelines states that sugary drinks
are the top source of added sugars in the American diet. For
adults, sugary drinks (e.g., soda, sports drinks, energy
drinks, fruit drinks) and sweetened coffees and teas (including
ready-to-drink varieties) contribute over 40 percent of daily
intake of added sugars. In childhood, sugary drinks make up
about 15 to 25 percent of total added sugars intake. By
adolescence, their contribution is 32 percent and even higher
when considering coffee and tea beverages with added sugars (an
additional 7 percent). The Dietary Guidelines Advisory
Committee recommended that no more than 6 percent of daily
calories come from added sugars.
(10) Though sugary drink consumption is declining modestly
as people learn about their harmful health effects, Americans
are still consuming twice as much of these products as they did
in the 1970s. Reports show that in recent years sugary drink
purchasing has only gone down 6 calories per person per day
since 2014. Five percent of Americans consume at least 567 kcal
from sugar drinks on any given day--equal to more than four 12-
ounce cans of soft drink. On average, children consume more
than 30 gallons of sugary drinks every year. This is enough to
fill a bathtub.
(11) In a study of more than 50,000 female nurses, women
who increased their sugary drink consumption from no more than
one per week to at least one per day gained an average of 10
pounds over four years. Research also shows a significant link
between sugary drink consumption and weight gain in children.
In a randomized double-blind controlled trial of roughly 640
children, those who were given one 8-ounce serving of a sugary
drink a day gained more weight and body fat over 1\1/2\ years
than those who got one 8-ounce serving of a sugar-free drink.
(12) 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 fat or protein-containing beverages
such as those containing milk and plant-based proteins. As a
result, sugary drinks tend to add to the calories people
consume rather than replace calories from other foods and
beverages.
(13) Overweight children have a much greater chance of
being obese as adults, with all the health risks that entails.
(14) Type 2 diabetes, previously only seen among adults, is
now increasing among children. Data show that almost a quarter
of teens now have either diabetes or prediabetes. If the
current 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 lifetime.
(15) A 2015 review found that increasing sugary drink
consumption by one serving per day increased the risk of heart
disease by 17 percent and hypertension by 8 percent. In 2012,
50,000 deaths were associated with drinking too many sugary
drinks. Of that, 40,000 deaths in the U.S. were attributed to
heart problems and 10,000 deaths were attributed to type 2
diabetes caused specifically by consuming too many sugary
drinks.
(16) Tooth decay (dental caries) is the single most common
chronic childhood disease, experienced by more than one-fourth
of United States children aged 2-5 years and half of those aged
12-15 years. About half of all children and two-thirds of
adolescents aged 12-19 years from lower-income families have
had decay. According to the American Academy of Pediatric
Dentistry, children who frequently or excessively consume
beverages high in sugar are at increased risk for dental
caries. Untreated dental caries can lead to pain, infection,
tooth loss, and in severe cases, even death. It can slow normal
growth and development by restricting nutritional intake.
Children who are missing teeth may have chewing problems that
limit their food choices and result in nutritionally inadequate
diets.
(17) Local sugary drink taxes that have been implemented
and evaluated in the United States have consistently decreased
sales of taxed beverages by a range of 10 to 39 percent. They
have also raised millions of dollars for community priorities.
(b) Purposes.--It is the intent of the Congress, by adopting the
Sugary Drinks Tax Act (also known as the SWEET Act), to diminish the
human and economic costs of diabetes, obesity, dental caries, and other
diet-related health conditions. This Act is intended to discourage
excessive consumption of sugary drinks by increasing the price of these
products and by creating a dedicated revenue source for programs and
research designed to reduce the human and economic costs of diabetes,
obesity, dental caries, and other diet-related health conditions in
disproportionately impacted populations.
SEC. 3. EXCISE TAX ON CERTAIN SUGARY DRINKS.
(a) In General.--Subchapter D of chapter 32 of the Internal Revenue
Code of 1986 is amended by inserting after part I the following new
part:
``PART II--SUGARY DRINKS
``Sec. 4171. Imposition of tax.
``Sec. 4172. Definitions.
``Sec. 4173. Special rules.
``SEC. 4171. IMPOSITION OF TAX.
``(a) In General.--There is hereby imposed a tax on the sale or
transfer of any specified sugary drink product by the manufacturer,
producer, or importer thereof.
``(b) Rate of Tax.--The rate of tax imposed under subsection (a) in
such specified sugary drink products shall be calculated using the
following tiered system:
``(1) For sugary drinks in cans, bottles, plastic or other
containers:
``(A) Tier 1: Drinks with fewer than 7.5g of sugars
per 12 fluid ounces will not be taxed.
``(B) Tier 2: Drinks with 7.5g to fewer than 30g of
sugars per 12 fluid ounces will be taxed at a rate of
$0.02 per ounce.
``(C) Tier 3: Drinks with more than 30g of sugars
per 12 fluid ounces will be taxed at a rate of $0.03
per ounce.
``(2) For syrups and powders sold or offered for sale to a
retailer for sale to a consumer, either as syrup or powder or
as a sugary drink derived from that syrup or powder, are
taxable:
``(A) Syrups and powders shall be taxed using the
following tiered system:
``(i) Tier 1: If the drink made from the
syrup or powder have fewer than 7.5g of sugars
per 12 fluid ounces, the syrup or powder will
not be taxed.
``(ii) Tier 2: If the drink made from the
syrup or powder have 7.5g to fewer than 30g of
sugars per 12 fluid ounces, the syrup or powder
will be taxed at a rate equal to $0.02 per
ounce of sugary beverage produced from that
syrup or powder.
``(iii) Tier 3: If the drink made from the
syrup or powder have more than 30g of sugars
per 12 fluid ounces, the syrup or powder will
be taxed at a rate equal to $0.03 per ounce of
sugary drink produced from that syrup or
powder.
``(B) For purposes of calculating the tax, the
volume of sugary drink produced from syrups or powders
shall be the larger of (1) the largest volume resulting
from use of the syrups or powders according to any
manufacturer's instructions, or (2) the volume actually
produced by the retailer, as reasonably determined by
the Secretary.
``(3) The Nutrition Facts label, as required by the Food
and Drug Administration, shall be used to determine the amount
of sugars per 12 ounces of sugary drink by referencing the
`Serving Size' and `Total Sugars' lines on the label.
``(c) Persons Liable for Tax.--The manufacturer, producer, or
importer referred to in subsection (a) shall be liable for the tax
imposed by such subsection.
``(1) It is suggested that the amount of tax imposed by
this section be passed along to consumers. Manufacturers,
bottlers, wholesalers, or distributors should add the tax
amount to the distribution price of sugary drinks, and
retailers should add the tax amount to the retail price of
sugary drinks.
``SEC. 4172. DEFINITIONS.
``(a) Specified Sugary Drink Product.--For purposes of this part--
``(1) In general.--For purposes of this part, the term
`specified sugary drink product' means--
``(A) any liquid intended for human consumption
which contains a caloric sweetener, and
``(B) any liquid, or solid mixture of ingredients,
which--
``(i) contains a caloric sweetener, and
``(ii) is intended for use as an ingredient
in a liquid described in subparagraph (A).
``(2) Exceptions.--The following shall not be treated as
liquids described in paragraph (1)(A):
``(A) Any liquid the primary ingredients of which
are milk or soy, rice, or similar plant-based milk
substitute.
``(B) Any liquid composed entirely of one or more
of the following:
``(i) The original liquid resulting from
the pressing of fruit or vegetables.
``(ii) The liquid resulting from the
reconstitution of fruit or vegetable juice
concentrate.
``(iii) The liquid resulting from the
restoration of water to dehydrated fruit or
vegetable juice.
``(C) Infant formula.
``(D) Any liquid products manufactured for use as--
``(i) an oral nutritional therapy for
persons who cannot absorb or metabolize dietary
nutrients from food or beverages,
``(ii) a source of necessary nutrition used
due to a medical condition, or
``(iii) an oral electrolyte solution for
infants and children formulated to prevent
dehydration due to illness.
``(E) Any liquid with respect to which tax is
imposed under chapter 51 (relating to distilled
spirits, wines, and beer) or under section 7652 by
reason of the tax imposed under chapter 51 being
imposed on like articles of domestic manufacture.
``(b) Caloric Sweetener.--For purposes of this part, the term
`caloric sweetener' means monosaccharides, disaccharides, and high-
fructose corn syrup.
``SEC. 4173. SPECIAL RULES.
``(a) Sweetener Taxed Only Once.--In the case of any specified
sugary drink product which is manufactured or produced by including one
or more other specified sugary beverage products, no tax shall be
imposed under this section on any caloric sweetener contained in the
resulting specified sugary drink product if tax was previously imposed
under this section on such caloric sweetener when contained in the
specified sugary drink product so included.
``(b) Inflation Adjustment.--The tax amounts set forth in this
section shall be adjusted annually by the Secretary in proportion with
the Consumer Price Index: All Urban Consumers for All Items for the
Statistical Area as reported by the United States Bureau of Labor
Statistics or any successor to that index. Any increase determined
under this subsection shall be rounded to the nearest multiple of one-
tenth of a cent.''.
(b) Conforming Amendments.--
(1) Section 4221(a) is amended by adding at the end the
following: ``Paragraphs (1), (4), (5), and (6) shall not apply
to the tax imposed under section 4171.''.
(2) The table of parts for subchapter D of chapter 32 of
such Code is amended by inserting after the item relating to
part I the following new item:
``Part II. Sugary Drinks''.
(c) Revenues Used To Improve Nutrition Quality of the School
Breakfast Program.--
(1) Transfer to the school breakfast program.--There are
hereby appropriated to the School Breakfast Program created
under section 4(b) of the Richard B. Russell National School
Lunch Act (42 U.S.C. 1753(b)) (in addition to any other amounts
appropriated to such Program) amounts equivalent to the taxes
received in the Treasury under part II of subchapter D of
chapter 32. Rules similar to the rules of section 9601 of the
Internal Revenue Code of 1986 shall apply with respect to the
amounts appropriated under this paragraph.
(2) Performance-based use of funds.--
(A) The U.S. Department of Agriculture will
promulgate proposed regulations no later than six
months upon enactment to update the meal patterns and
nutrition standards for the School Breakfast Program
established by section 4 of the Child Nutrition Act of
1966 (42 U.S.C. 1773) to be in compliance with the
quantitative recommendations of the most recent Dietary
Guidelines for Americans, including, but not exclusive
of, a first ever standard for added sugars.
(B) Beginning on the promulgation of the
implementing regulations described in subsection
(c)(2)(A), the Secretary shall provide an additional
10-cent reimbursement for each breakfast served by a
school food authority certified by the State to be in
compliance with the interim or final regulations
described in subsection (c)(2)(A).
(3) Failure to comply.--Beginning on the date described in
subsection (c)(2)(A), school food authorities found to be out
of compliance with the meal patterns or nutrition standards
established by the implementing regulations shall not receive
the additional reimbursement for each breakfast served
described in this paragraph.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act.
(2) Excise tax.--The amendments made by subsections (a) and
(b) shall apply to sales after the date of the enactment of
this Act.
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