SWEET Act

I 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 preven- tion, treatment, and research of diet-related health conditions in dis- proportionately 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 Com- mittee on Ways and Means, and in addition to the Committee on Edu- cation 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 im- pacted populations, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Sugary Drinks Tax 4 Act of 2021’’ or as the ‘‘SWEET Act’’. 5 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 2772 IH SEC. 2. FINDINGS AND PURPOSES. 1 (a) FINDINGS.—The Congress finds that: 2 (1) The prevalence of obesity in the United 3 States has increased dramatically over the past 40 4 years. From the 1960s to the late 1970s, the preva- 5 lence was relatively constant, with about 15 percent 6 of the population classified as obese. After the 7 1970s, these rates began to climb. According to the 8 Centers for Disease Control and Prevention, well 9 over one-third of adults—42.4 percent (2017–18)— 10 and 18.5 percent (2015–2016) of youth in the 11 United States were obese. Although no group has es- 12 caped the epidemic, low-income people and commu- 13 nities of color are disproportionately affected. Nearly 14 half (49.6 percent) of African-American adults were 15 obese and 44.8 percent of Hispanic adults were 16 obese in 2017–2018. 17 (2) The percentage of children who are over- 18 weight has also increased dramatically in recent dec- 19 ades. After being relatively constant from the 1960s 20 to the 1970s, the prevalence of overweight children 21 has more than tripled among children between 6 and 22 11 years of age and nearly quadrupled among those 23 between 12 and 19 years of age. Despite significant 24 public and private investment, childhood obesity 25 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 2772 IH rates among young people aged 2–19 remain high 1 affecting about 13.7 million children. 2 (3) There are significant racial and age dispari- 3 ties in obesity prevalence among children and adoles- 4 cents. In 2015–2016, obesity prevalence was higher 5 among Hispanics (25.8 percent) and non-Hispanic 6 Black youth (22.0 percent) than non-Hispanic White 7 youth (14.1 percent). The prevalence of obesity was 8 lower in non-Hispanic Asian youth (11.0 percent) 9 than in youth who were non-Hispanic White, non- 10 Hispanic Black, or Hispanic. 11 (4) Overweight and obesity are responsible for 12 an estimated $190 billion in health care costs na- 13 tionally, or approximately five to ten percent of all 14 medical spending—with more than 20 percent of 15 these costs paid publicly through the Medicare and 16 Medicaid programs. The medical costs for people 17 with obesity are dramatically higher than those with- 18 out obesity. 19 (5) The obesity epidemic is of particular con- 20 cern because obesity increases the risk of diabetes, 21 heart disease, certain types of cancer, arthritis, asth- 22 ma, and breathing problems. Depending on their 23 level of obesity, from 60 percent to more than 80 24 percent of obese adults have type 2 diabetes, high 25 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 2772 IH blood cholesterol, high blood pressure, or other re- 1 lated conditions. According to the CDC, nearly 60 2 percent of overweight children have at least one risk 3 factor for heart disease. 4 (6) Overweight and obesity increase the risk for 5 several types of common cancers, including post- 6 menopausal breast, colorectal, endometrial, kidney, 7 pancreatic, esophageal, and gall bladder cancer. Up 8 to one in four of all cancer cases and one in three 9 cancer deaths are due to poor nutrition, physical in- 10 activity, and overweight and obesity. 11 (7) There is overwhelming evidence of the link 12 between the consumption of sugary drinks, such as 13 non-diet soft drinks, energy drinks, sweet teas, and 14 sports drinks, and obesity and diabetes. Sugary 15 drinks are the only food or beverage shown to in- 16 crease the risk of overweight and obesity. Adults 17 who drink one sugary drink or more per day are 27 18 percent more likely to be overweight or obese, re- 19 gardless of income or ethnicity. After six months, 20 daily consumption of one liter of sugary drinks in- 21 creases fat deposits in the liver by 150 percent, 22 which directly contributes to both diabetes and heart 23 disease. Over 10 years, about two million type 2 dia- 24 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 2772 IH betes cases in the United States are attributable to 1 consumption of sugary drinks. 2 (8) According to nutrition experts, sugary 3 drinks, such as soft drinks, energy drinks, sweet 4 teas, and sport drinks, offer little or no nutritional 5 value, but massive quantities of added sugars. A 20- 6 ounce bottle of soda contains about 16 teaspoons of 7 sugars. Yet, the American Heart Association rec- 8 ommends that Americans consume no more than six 9 to nine teaspoons of sugar per day from all food and 10 beverage sources. 11 (9) The 2020 Dietary Guidelines states that 12 sugary drinks are the top source of added sugars in 13 the American diet. For adults, sugary drinks (e.g., 14 soda, sports drinks, energy drinks, fruit drinks) and 15 sweetened coffees and teas (including ready-to-drink 16 varieties) contribute over 40 percent of daily intake 17 of added sugars. In childhood, sugary drinks make 18 up about 15 to 25 percent of total added sugars in- 19 take. By adolescence, their contribution is 32 per- 20 cent and even higher when considering coffee and 21 tea beverages with added sugars (an additional 7 22 percent). The Dietary Guidelines Advisory Com- 23 mittee recommended that no more than 6 percent of 24 daily calories come from added sugars. 25 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 2772 IH (10) Though sugary drink consumption is de- 1 clining modestly as people learn about their harmful 2 health effects, Americans are still consuming twice 3 as much of these products as they did in the 1970s. 4 Reports show that in recent years sugary drink pur- 5 chasing has only gone down 6 calories per person 6 per day since 2014. Five percent of Americans con- 7 sume at least 567 kcal from sugar drinks on any 8 given day—equal to more than four 12-ounce cans 9 of soft drink. On average, children consume more 10 than 30 gallons of sugary drinks every year. This is 11 enough to fill a bathtub. 12 (11) In a study of more than 50,000 female 13 nurses, women who increased their sugary drink 14 consumption from no more than one per week to at 15 least one per day gained an average of 10 pounds 16 over four years. Research also shows a significant 17 link between sugary drink consumption and weight 18 gain in children. In a randomized double-blind con- 19 trolled trial of roughly 640 children, those who were 20 given one 8-ounce serving of a sugary drink a day 21 gained more weight and body fat over 11⁄2 years 22 than those who got one 8-ounce serving of a sugar- 23 free drink. 24 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 2772 IH (12) Sugary drinks are a unique contributor to 1 excess caloric consumption. A large body of research 2 shows that calories from sugary drinks do not sat- 3 isfy hunger the way calories from solid food or fat 4 or protein-containing beverages such as those con- 5 taining milk and plant-based proteins. As a result, 6 sugary drinks tend to add to the calories people con- 7 sume rather than replace calories from other foods 8 and beverages. 9 (13) Overweight children have a much greater 10 chance of being obese as adults, with all the health 11 risks that entails. 12 (14) Type 2 diabetes, previously only seen 13 among adults, is now increasing among children. 14 Data show that almost a quarter of teens now have 15 either diabetes or prediabetes. If the current trends 16 are not reversed, it is predicted that one in three 17 children and nearly one-half of Latino and African- 18 American children born in the year 2000 will develop 19 type 2 diabetes in their lifetime. 20 (15) A 2015 review found that increasing sug- 21 ary drink consumption by one serving per day in- 22 creased the risk of heart disease by 17 percent and 23 hypertension by 8 percent. In 2012, 50,000 deaths 24 were associated with drinking too many sugary 25 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 2772 IH drinks. Of that, 40,000 deaths in the U.S. were at- 1 tributed to heart problems and 10,000 deaths were 2 attributed to type 2 diabetes caused specifically by 3 consuming too many sugary drinks. 4 (16) Tooth decay (dental caries) is the single 5 most common chronic childhood disease, experienced 6 by more than one-fourth of United States children 7 aged 2–5 years and half of those aged 12–15 years. 8 About half of all children and two-thirds of adoles- 9 cents aged 12–19 years from lower-income families 10 have had decay. According to the American Academy 11 of Pediatric Dentistry, children who frequently or 12 excessively consume beverages high in sugar are at 13 increased risk for dental caries. Untreated dental 14 caries can lead to pain, infection, tooth loss, and in 15 severe cases, even death. It can slow normal growth 16 and development by restricting nutritional intake. 17 Children who are missing teeth may have chewing 18 problems that limit their food choices and result in 19 nutritionally inadequate diets. 20 (17) Local sugary drink taxes that have been 21 implemented and evaluated in the United States 22 have consistently decreased sales of taxed beverages 23 by a range of 10 to 39 percent. They have also 24 raised millions of dollars for community priorities. 25 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 2772 IH (b) PURPOSES.—It is the intent of the Congress, by 1 adopting the Sugary Drinks Tax Act (also known as the 2 SWEET Act), to diminish the human and economic costs 3 of diabetes, obesity, dental caries, and other diet-related 4 health conditions. This Act is intended to discourage ex- 5 cessive consumption of sugary drinks by increasing the 6 price of these products and by creating a dedicated rev- 7 enue source for programs and research designed to reduce 8 the human and economic costs of diabetes, obesity, dental 9 caries, and other diet-related health conditions in dis- 10 proportionately impacted populations. 11 SEC. 3. EXCISE TAX ON CERTAIN SUGARY DRINKS. 12 (a) IN GENERAL.—Subchapter D of chapter 32 of the 13 Internal Revenue Code of 1986 is amended by inserting 14 after part I the following new part: 15 ‘‘PART II—SUGARY DRINKS 16 ‘‘Sec. 4171. Imposition of tax. ‘‘Sec. 4172. Definitions. ‘‘Sec. 4173. Special rules. ‘‘SEC. 4171. IMPOSITION OF TAX. 17 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 18 on the sale or transfer of any specified sugary drink prod- 19 uct by the manufacturer, producer, or importer thereof. 20 ‘‘(b) RATE OF TAX.—The rate of tax imposed under 21 subsection (a) in such specified sugary drink products 22 shall be calculated using the following tiered system: 23 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 2772 IH ‘‘(1) For sugary drinks in cans, bottles, plastic 1 or other containers: 2 ‘‘(A) Tier 1: Drinks with fewer than 7.5g 3 of sugars per 12 fluid ounces will not be taxed. 4 ‘‘(B) Tier 2: Drinks with 7.5g to fewer 5 than 30g of sugars per 12 fluid ounces will be 6 taxed at a rate of $0.02 per ounce. 7 ‘‘(C) Tier 3: Drinks with more than 30g of 8 sugars per 12 fluid ounces will be taxed at a 9 rate of $0.03 per ounce. 10 ‘‘(2) For syrups and powders sold or offered for 11 sale to a retailer for sale to a consumer, either as 12 syrup or powder or as a sugary drink derived from 13 that syrup or powder, are taxable: 14 ‘‘(A) Syrups and powders shall be taxed 15 using the following tiered system: 16 ‘‘(i) Tier 1: If the drink made from 17 the syrup or powder have fewer than 7.5g 18 of sugars per 12 fluid ounces, the syrup or 19 powder will not be taxed. 20 ‘‘(ii) Tier 2: If the drink made from 21 the syrup or powder have 7.5g to fewer 22 than 30g of sugars per 12 fluid ounces, the 23 syrup or powder will be taxed at a rate 24 VerDate Sep 11 2014 19:13 Jun 10, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2772.IH H2772 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 2772 IH equal to $0.02 per ounce of sugary bev- 1 erage produced from that syrup or powder. 2 ‘‘(iii) Tier 3: If the drink made from 3 the syrup or powder have more than 30g 4 of sugars per 12 fluid ounces, the syrup or 5 powder will be taxed at a rate equal to 6 $0.03 per ounce of sugary drink produced 7 from that syrup or powder. 8 ‘‘(B) For purposes of calculating the tax, 9 the volume of sugary drink produced from syr- 10 ups or powders shall be the larger of (1) the 11 largest volume resulting from use of the syrups 12 or powders according to any manufacturer’s in- 13 structions, or (2) the volume actually produced 14 by the retailer, as reasonably determined by the 15 Secretary. 16 ‘‘(3) The Nutrition Facts label, as required by 17 the Food and Drug Administration, shall be used to 18 determine the am [Text truncated for display. Full text available on Congress.gov.]