SWEET Act

Summary: Sugar-Sweetened Beverages Tax Act of 2014 or the SWEET Act - Amends the Internal Revenue Code to impose an excise tax on the sale or transfer of any specified sugar-sweetened beverage product by the manufacturer, producer, or importer thereof. Establishes the rate of such tax as 1cent per 4.2 grams of caloric sweetener contained in such product. Transfers revenues from such tax to the Prevention and Public Health Fund for the sole purpose of funding programs and research to reduce the human and economic costs of diabetes, obesity, dental caries, and other diet-related health conditions in priority populations. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sugar-Sweetened Beverages Tax Act of 
2014'' 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 30 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, by 2012 more than one-third 
        (34.9 percent) of adults and 17 percent 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. In 2012, nearly half (47.8 
        percent) of African-American adults were obese and 42.5 percent 
        of Hispanic adults were obese.
            (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 remain high. 
        Overall, obesity among our Nation's young people, aged 2-19 
        years, has not changed significantly since 2004 and remains at 
        about 17 percent--equaling 12.5 million children and 
        adolescents.
            (3) There are significant racial and age disparities in 
        obesity prevalence among children and adolescents. In 2011-
        2012, obesity prevalence was higher among Hispanics (22.4 
        percent) and non-Hispanic black youth (20.2 percent) than non-
        Hispanic white youth (14.1 percent). The prevalence of obesity 
        was lower in non-Hispanic Asian youth (8.6 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 
        5 to 10 percent of all medical spending--with over 20 percent 
        of these costs paid publicly through the Medicare and Medicaid 
        programs. The medical costs for people who are obese are 
        dramatically higher ($2,741 per year) than those of normal 
        weight.
            (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 over 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 sugar-sweetened beverages, such as non-diet soft 
        drinks, energy drinks, sweet teas, and sports drinks, and 
        obesity and diabetes. Adults who drink one sugar-sweetened 
        beverage 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 sugar-sweetened 
        beverages increases fat deposits in the liver by 150 percent, 
        which directly contributes to both diabetes and heart disease.
            (8) According to nutrition experts, sugar-sweetened 
        beverages, 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.
            (9) The 2010 Dietary Guidelines stated that almost one-half 
        of the added sugars Americans consume come from sugar-sweetened 
        beverages, with the average American drinking nearly 45 gallons 
        of sugar-sweetened beverages a year, the equivalent of 39 
        pounds of extra sugar every year.
            (10) Though sugar-sweetened beverage 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. 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. According 
        to the National Center for Health Statistics, one-third of 
        calories from added sugars (33 percent) consumed in the United 
        States were from beverages. In children and adolescents, 40 
        percent of the calories from added sugars came from beverages. 
        Children and adolescents consume 10 to 15 percent of their 
        total daily caloric intake from sugar-sweetened beverages.
            (11) In a study of more than 50,000 female nurses, women 
        who increased their sugar-sweetened beverage 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 sugar-sweetened beverage 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 sugar-sweetened beverage 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 beverage.
            (12) Sugar-sweetened beverages are a unique contributor to 
        excess caloric consumption. A large body of research shows that 
        calories from sugar-sweetened beverages 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, sugar-sweetened beverages 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) People who consume an average amount of added sugar 
        equivalent to one 20-ounce soda per day are 30 percent more 
        likely to die from a heart attack over 15 years. People who 
        consume the added sugar equivalent of at least 2-3 20-ounce 
        sodas per day are 2.75 times more likely to die from a heart 
        attack.
            (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.
    (b) Purposes.--It is the intent of the Congress, by adopting the 
Sugar-Sweetened Beverages 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 sugar-sweetened beverages 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 priority populations.

SEC. 3. EXCISE TAX ON CERTAIN SUGAR-SWEETENED BEVERAGES.

    (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--SUGAR-SWEETENED BEVERAGES

``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 sugar-sweetened beverage product by the 
manufacturer, producer, or importer thereof.
    ``(b) Rate of Tax.--The rate of tax imposed under subsection (a) 
shall be equal to one cent per 4.2 grams of caloric sweetener contained 
in such specified sugar-sweetened beverage product.
    ``(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.

``SEC. 4172. DEFINITIONS.

    ``(a) Specified Sugar-Sweetened Beverage Product.--For purposes of 
this part--
            ``(1) In general.--For purposes of this part, the term 
        `specified sugar-sweetened beverage 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 
sugar-sweetened beverage product which is manufactured or produced by 
including one or more other specified sugar-sweetened beverage 
products, no tax shall be imposed under this section on any caloric 
sweetener contained in the resulting specified sugar-sweetened beverage 
product if tax was previously imposed under this section on such 
caloric sweetener when contained in the specified sugar-sweetened 
beverage product so included.
    ``(b) Inflation Adjustment.--In the case of any sale after December 
31, 2015, the one cent amount in section 4171(b) shall be increased by 
an amount equal to--
            ``(1) such amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which such sale 
        occurs, determined by substituting `calendar year 2014' for 
        `calendar year 1992' in subparagraph (B) thereof.
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--Sugar-Sweetened Beverages''.

    (c) Revenues Used for Prevention, Treatment, and Research of Diet-
Related Health Conditions in Priority Populations.--
            (1) Transfer to prevention and public health fund.--There 
        are hereby appropriated to the Prevention and Public Health 
        Fund created under section 4002 of the Patient Protection and 
        Affordable Care Act (in addition to any other amounts 
        appropriated to such Fund) amounts equivalent to 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 amounts 
        appropriated under this paragraph.
            (2) Restriction on use of funds.--Notwithstanding 
        subsections (c) and (d) of section 4002 of the Patient 
        Protection and Affordable Care Act, amounts appropriated to the 
        Prevention and Public Health Fund under paragraph (1) may be 
        transferred to accounts in the Department of Health and Human 
        Services only for the purpose of making expenditures for 
        programs and research designed to reduce the human and economic 
        costs of diabetes, obesity, dental caries, and other diet-
        related health conditions in priority populations (within the 
        meaning of section 901(c) of the Public Health Service Act).
    (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.