| 1 | 1 | | THE SENATE S.B. NO. 719 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT relating to sugar-sweetened beverages. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: |
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| 3 | 3 | | THE SENATE S.B. NO. 719 |
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| 4 | 4 | | THIRTY-THIRD LEGISLATURE, 2025 |
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| 5 | 5 | | STATE OF HAWAII |
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| 7 | 7 | | THE SENATE |
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| 9 | 9 | | S.B. NO. |
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| 11 | 11 | | 719 |
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| 13 | 13 | | THIRTY-THIRD LEGISLATURE, 2025 |
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| 17 | 17 | | STATE OF HAWAII |
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| 31 | 31 | | A BILL FOR AN ACT |
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| 37 | 37 | | relating to sugar-sweetened beverages. |
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| 43 | 43 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: |
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| 47 | 47 | | SECTION 1. The legislature finds that there is a need to continue to invest in the health of Hawaii's keiki and ohana. Sugar-sweetened beverages are the largest source of excess sugar in the American diet, contributing excess calories with little or no nutritional value. Sugar-sweetened beverage consumption is associated with negative health effects such as obesity, which amounts to an estimated $470,000,000 annually in obesity-related health care costs statewide. The consumption of sugar-sweetened beverages is also linked to other serious health problems, including weight gain, prediabetes, diabetes, tooth decay, heart disease, and other health conditions. Statewide, one out of four middle and high school students, and more than half of all adults, are overweight or obese. Sixty-one per cent of adults in Hawaii are living with at least one chronic disease such as diabetes, heart disease, or cancer. A 2016 report found that the State has the highest prevalence of tooth decay among third graders in the nation, as seventy-one per cent of third graders were affected by tooth decay. The State also received a failing grade in a series of oral health report cards released by the Pew Center on the States. The legislature also finds that a fee on sugar-sweetened beverages is a viable method to reduce sugar-sweetened beverage consumption, improve health, and generate revenue for the State to support public health, prevent chronic disease, and address root causes of disparities in Hawaii. A 2017 study conducted by the Harvard T.H. Chan School of Public Health and the department of health found that a sugar-sweetened drink fee has the potential for major cost-savings. Passage of a two-cent-per-ounce sugar-sweetened beverage fee is projected to result in lower levels of sugar-sweetened beverage consumption, fewer cases of obesity, fewer deaths, and health care savings greater than $59,000,000 over a ten-year period. According to the Rudd Center Revenue Calculator for Sugary Drink Taxes, a two-cent-per-ounce fee would have raised as much as $65,800,000 in 2020. The legislature also finds that sugar-sweetened beverage consumption is a health equity issue, as rates of consumption are greatest among individuals with lower incomes and people of color, due in part to issues surrounding a lack of access to healthy foods and the targeted marketing by the sugar-sweetened beverage industry. Lower-income populations and people of color also have higher rates of chronic disease due to other social determinants of health, including food and housing insecurity, lack of access to health care, and lack of spaces for safe physical activity. The COVID-19 pandemic has drawn attention to these health and social inequities in the State. COVID-19 has most severely impacted the Pacific Islander, Filipino, and Native Hawaiian populations, who have the highest rates of chronic disease and sugar-sweetened drink consumption. Additionally, regulations to mitigate the spread of COVID‑19 have created economic hardships for the people of Hawaii, especially for these vulnerable populations. An opportunity exists to implement a sugar-sweetened beverage fee to discourage sugary drink consumption and to help reduce chronic disease risks, significantly save on health care costs, and generate revenue that can be used to minimize health disparities and support health promotion programs during projected post-COVID-19 challenges. Over the last several years, sugar-sweetened beverage tax policies have been enacted in several cities throughout the United States and dozens of countries globally. Sugar-sweetened beverage tax policies involve the collection of a tax or fee from sugar-sweetened beverage distributors that is passed on to consumers in the form of price increases that influence purchasing behavior. Jurisdictions with sugar-sweetened beverage taxes such as Berkeley, California, and Philadelphia, Pennsylvania, have seen a reduction in sugar-sweetened beverage consumption, while sales of bottled water and other healthier options increased. Further evaluation results from these jurisdictions show that overall sales and revenue were not harmed by a fee at the distributor level. A sugar-sweetened beverage fee has instead provided a source of revenue that has generated millions of dollars to aid in reducing health and socioeconomic disparities. Recently, some of these locations reallocated their funding to specifically address critical needs resulting from COVID-19, such as assisting low-income families facing food insecurity. Accordingly, the purpose of this Act is to enact a fee on sugar-sweetened beverages in Hawaiʻi to improve the health of its residents and generate revenues for the State to support health, prevent chronic disease, and address root causes of health disparities in Hawaii. This Act shall be known and cited as the Healthy Ohana Act of 2025. SECTION 2. Chapter 321, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows: "PART . SUGAR-SWEETENED BEVERAGE FEE PROGRAM §321-A Definitions. As used in this part: "Auditor" means the office of the auditor. "Bottle" means any closed or sealed container regardless of size or shape, including those made of glass, metal, paper, plastic, or any other material or combination of materials. "Bottled sugar-sweetened beverage" means any sugar-sweetened beverage contained in a bottle that is ready for consumption without further processing, such as dilution or carbonation. "Caloric sweetener" means any substance that: (1) Is suitable for human consumption and perceived by humans as sweet; (2) Adds five or more calories per serving to the diet of a person who consumes that substance; (3) Includes, without limitation, sucrose, fructose, glucose, other sugars, and fruit juice concentrates; and (4) Does not include non-caloric sweeteners. "Consumer" means a person who purchases a sugar-sweetened beverage for consumption and not for sale to another. "Department" means the department of health. "Dietary aid" means: (1) A liquid product manufactured for use as an oral nutritional therapy for persons who cannot absorb or metabolize dietary nutrients from food or beverages; (2) A source of necessary nutrition used due to a medical condition; or (3) An oral electrolyte solution for infants and children that is formulated to prevent dehydration due to illness. "Director" means the director of health. "Distributor" means any person, including a manufacturer or a wholesale dealer, who receives, stores, manufactures, bottles, or distributes bottled sugar-sweetened beverages, syrup, or powder for sale to a retailer doing business in the State regardless of whether that person is also a retailer as defined in this section. "Infant formula" means a food that purports to be or is represented for special dietary use solely as a food for infants by reason of its simulation of human milk or its suitability as a complete or partial substitute for human milk. "Milk substitute without caloric sweetener" means a plant-based beverage in which the principal ingredients by weight are water and grains, nuts, legumes, or seeds. "Milk substitute" includes soy milk, almond milk, rice milk, coconut milk, oat milk, hazelnut milk, and flax milk. "Milk without added caloric sweetener" means any beverage of which the principal ingredient by weight is natural liquid milk as secreted by an animal, regardless of animal source or butterfat content, or natural milk concentrate and dehydrated natural milk, whether or not reconstituted. "Non-alcoholic beverage" means any beverage that contains less than one-half of one per cent alcohol per volume. "Non-caloric sweetener" means any substance that: (1) Is suitable for human consumption and perceived by humans as sweet; (2) Contains fewer than five calories per serving; (3) Includes aspartame, saccharin, stevia, and sucralose; and (4) Does not include caloric sweeteners. "One hundred per cent fruit juice or vegetable juice" means any liquid consisting of one hundred per cent fruit juice or vegetable juice having no added sugar, corn syrup, or caloric sweetener. "Person" means any natural person, partnership, cooperative association, limited liability company, corporation, personal representative, receiver, trustee, assignee, or any other legal entity. "Powder" means any solid mixture of ingredients that: (1) Contains a caloric sweetener; and (2) Is used in making, mixing, or compounding sugar-sweetened beverages by combining the powder with any one or more other ingredients. "Retailer" means any person who sells or otherwise dispenses in the State a sugar-sweetened beverage to a consumer regardless of whether that person is also a distributor as defined in this section. "Sale" or "sell" means the transfer of title or possession for valuable consideration regardless of the manner the transfer is completed. "Sugar-sweetened beverage" means any non-alcoholic beverage, carbonated or noncarbonated, that is intended for human consumption and contains any added caloric sweetener. Sugar-sweetened beverages does not include: (1) Beverages consisting of one hundred per cent fruit juice or vegetable juice with no added caloric sweetener; (2) Milk without added caloric sweetener; (3) Milk substitute without added caloric sweetener; (4) Dietary aids; (5) Infant formula; (6) Sweetened medication such as cough syrup, liquid pain relievers, fever reducers and similar products; or (7) Any product commonly used exclusively to mix with alcohol that may exceed five grams or more per serving of caloric sweetener per twelve ounces of fluid that is not a sugar sweetened beverage, including without limitation margarita mix, bloody mary mix, daiquiri mix, or similar products. "Syrup" means a liquid mixture of ingredients that: (1) Contains a caloric sweetener; and (2) Is used in making, mixing, or compounding sugar-sweetened beverages by combining the syrup with any one or more other ingredients. §321-B Registration required. (a) Beginning July 1, 2026, every distributor shall register with the department on forms to be prescribed, prepared, and furnished by the department. (b) No retailer may sell at retail, or hold out or display for sale at retail, any sugar-sweetened beverage acquired by the retailer after June 30, 2026, unless the sugar-sweetened beverage was acquired by the retailer from a registered distributor in the State. §321-C Sugar-sweetened beverage fee. (a) Beginning July 1, 2026, every distributor selling sugar-sweetened beverages in the State shall pay the department a sugar-sweetened beverage fee that is imposed at the following rates: (1) Two cents per fluid ounce of bottled sugar-sweetened beverages sold or offered for sale to a retailer for sale in the State to a consumer; and (2) Two cents per fluid ounce of sugar-sweetened beverage that can be produced from syrup or powder, calculated according to the manufacturer's specifications for the use of the syrup or powder, sold or offered for sale to a retailer for resale in the State to a consumer. (b) A distributor shall add the amount of the fee imposed by this section to the price of sugar-sweetened beverages, syrups, and powders sold to a retailer, and the retailer shall pass the amount of the fee through to a consumer as a component of the final retail purchase price. The amount of the fee shall be stated separately on all invoices, signs, sales or delivery slips, bills, and statements that advertise or indicate the price of the sugar-sweetened beverages, syrups, and powders. §321-D Exemptions. The following shall be exempt from the fee imposed by this part: (1) Bottled sugar-sweetened beverages, syrups, and powder sold by a distributor or retailer expressly for resale or consumption outside the State; and (2) Bottled sugar-sweetened beverages, syrups, and powder sold by a distributor to another distributor who is registered pursuant to section 321-B, if the sales invoice clearly indicates that the sale is exempt. If the sale is to a person who is both a distributor and a retailer, the sale shall also be exempt from the fee and the fee shall be paid when the purchasing distributor who is also a retailer resells the product to a retailer or a consumer. This exemption shall not apply to any other sale to a retailer. §321-E Payment. (a) Beginning July 1, 2026, every distributor or retailer subject to the fee imposed by this part shall file with the department a form identifying all sales of sugar-sweetened beverages made on a periodic basis as determined by the department and pay to the department the fees imposed pursuant to section 321-C on the sales made during the period. The form shall be prescribed by the department and contain any information that the department deems necessary for the proper administration of the sugar-sweetened beverage fee program. (b) The revenues from the fee shall be deposited into the healthy ohana special fund established pursuant to section 321‑F. §321-F Healthy ohana special fund; established. (a) There is established in the state treasury the healthy ohana special fund into which shall be deposited: (1) Appropriations made by the legislature into the fund; (2) All revenues collected from sugar-sweetened beverage fees established under section 321-C; (3) All revenues collected from penalties pursuant to section 321‑M; and (4) All interest and earnings accruing from the investment of moneys in the healthy ohana special fund. (b) The healthy ohana special fund shall be administered by the department. On a periodic basis as determined by the director of finance, the moneys in the healthy ohana special fund shall be expended or deposited as follows: (1) per cent shall be expended by the department for implementation and evaluation of the sugar-sweetened beverage fee program to address obesity prevention and oral health promotion services in the State; (2) per cent shall be expended by the department for the purposes of supporting primary prevention and chronic disease prevention programs and supports; and (3) per cent shall be deposited into the healthy ohana trust fund established pursuant to section 321‑G. (c) For the purposes of this section, costs to implement and evaluate the sugar-sweetened beverage fee program may include: (1) Administrative, contractual, audit, independent evaluation, and compliance activities associated with collection and payment of the sugar-sweetened beverage fee program; (2) Personnel to implement the sugar-sweetened beverage fee program; (3) Communication and education activities to inform the public and distributors about the sugar-sweetened beverage fee program; and (4) Associated office expenses. §321-G Healthy ohana trust fund; established. (a) There is established the healthy ohana trust fund as a separate fund of a nonprofit entity having a board of directors and qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The director, with the concurrence of the governor, shall select, pursuant to chapter 103D, the entity based upon its proven record of accomplishment in administering a similar trust fund. The director, with the concurrence of the governor and in the director's sole discretion, may rescind the selection of the entity that administers the trust fund. If the selection of the entity is rescinded, moneys in the healthy ohana trust fund shall revert to the State and shall be deemed to be trust moneys. (b) The department of budget and finance shall have oversight authority over the healthy ohana trust fund and may make periodic financial audits of the healthy ohana trust fund; provided that the director of finance may contract with a certified public accountancy firm to conduct the financial audits. (c) The entity selected under subsection (a), for each fiscal year, may expend up to ten per cent of the total market value of the healthy ohana trust fund on the preceding June 30, for the prevention and control of obesity and chronic disease on behalf of families in the State. These activities may include comprehensive programs and methods to support access to healthy food, active living and healthy eating, school and work-based health, nutrition and physical education, oral health, programs supporting farm-to-school, locally grown and sustainable agriculture practices, school gardens, and obesity and chronic disease prevention. (d) The healthy ohana trust fund may receive appropriations, contributions, grants, endowments, or gifts in cash or otherwise from any source, including the State, corporations or other businesses, foundations, government, individuals, and other interested parties; provided that any appropriations made by the legislature to the healthy ohana trust fund shall not supplant or diminish the funding of existing chronic disease prevention programs or any health-related programs funded in whole or in part by the State. (e) The assets of the healthy ohana trust fund shall consist of: (1) Moneys deposited pursuant to section 321-F(b)(3); (2) Moneys appropriated to the healthy ohana trust fund by the state, county, or federal government; (3) Private contributions of cash or property; and (4) Income and capital gains earned by the healthy ohana trust fund. (f) The aggregate principal sum deposited in the healthy ohana trust fund shall be invested by the entity selected under subsection (a) in a manner intended to maximize the rate of return on investment of the healthy ohana trust fund consistent with the objective of preserving the healthy ohana trust fund's principal. (g) If the entity selected under subsection (a) is dissolved, the director, with the concurrence of the governor, shall select a successor entity pursuant to chapter 103D. If the healthy ohana trust fund is terminated, the moneys remaining in the healthy ohana trust fund shall revert to the State and shall be deemed to be trust moneys. (h) The healthy ohana advisory committee established pursuant to section 321-R shall provide advice to the department regarding the administration of the healthy ohana trust fund. §321-H Records to be kept. Beginning July 1, 2026, every distributor and retailer, in addition to any requirements under section 321-I, shall prepare or maintain documents involving sugar-sweetened beverages, syrups, and powders, as required by the department. §321-I Examination authority. The records of the distributor and retailer shall be made available, upon request, for inspection by the department, a duly authorized agent of the department, or the auditor; provided that any proprietary information obtained because of an inspection or audit shall be kept confidential and shall not be disclosed to any other person, except: (1) As may be reasonably required in an administrative or judicial proceeding to enforce any provision of this part or any rule adopted pursuant to this part; or (2) Under an order issued by a court or administrative agency hearings officer. §321-J Contract for administrative services. The department may contract the services of a third party to administer the sugar-sweetened beverage fee program. §321-K Management and financial audit. The auditor shall conduct a management and financial audit of the sugar-sweetened beverage fee program for fiscal year 2026 to 2027 and fiscal year 2027 to 2028, and for each fiscal year ending in an odd-numbered year. The auditor shall submit the audit report to the legislature and the department no later than twenty days prior to the convening of the subsequent regular session. The auditor may contract the audit services of a third party to conduct the audit. §321-L Administration; rules. No later than December 31, 2027, the department shall adopt rules pursuant to chapter 91 to effectuate this part. §321-M Civil penalties. (a) Any person subject to this part who: (1) Fails to pay the entire fee imposed by this part by the date that payment is due; (2) Fails to register as a distributor as required by section 321-B; (3) Fails to file a form that identifies all sales of sugar-sweetened beverages during the time specified by the department as required by section 321-E; (4) Fails to make payment to the department at the time specified by the department as required by section 321-E; (5) Fails to prepare or maintain records required by this part; or (6) Violates any other provision of this part, shall be liable for the fee that is due, a penalty equal to fifty per cent of the fee due, and administrative fees and costs incurred by the department in enforcing this part. (b) The director may determine the amount of the fee and the penalty due under subsection (a) in the event of any nonpayment or underpayment and demand payment of all sugar-sweetened beverage fees and penalties. Interest shall accrue on nonpayment or underpayment of the fee at a rate of eight per cent per year from the date the fee was due, until paid. The director shall have the authority to revoke the distributor registration as a penalty under subsection (a). (c) Any criminal penalties for a violation of this part shall not be deemed to preclude the State from recovering additional civil penalties. §321-N Enforcement; notice; contested case hearing; civil action. (a) If the director determines that the sugar-sweetened beverage fee, penalties, or interest are due, the director shall notify the person of the amount by certified mail. (b) Any notice issued under subsection (a) shall become final thirty-one days after the notice is mailed, unless no later than thirty days after the notice is mailed, the person named in the notice requests in writing a hearing before the director. Whenever a hearing is requested, the amount owed shall become due and payable only upon completion of all review proceedings and the issuance of a final order confirming the fee, interest, and penalty in whole or in part. Upon request for a hearing, the director shall require the requestor to appear before the director for a hearing at the time and place specified in a notice of the hearing. (c) Any hearing conducted under this section shall be conducted as a contested case under chapter 91. If, after a hearing held pursuant to this section, the director finds that all or a portion of the fee, interest, or penalty is due, the director shall take action to collect the amount due as provided by subsection (d). (d) If the amount of any fee, interest, or penalty is not paid to the department within thirty days after it becomes due and payable, the director may institute a civil action in the name of the State to collect the fee, interest, and penalty. In any proceeding to collect the fee, interest, or penalty imposed, the director need only show that: (1) Notice was given; (2) A hearing was held, or the time granted for requesting a hearing expired without a request for a hearing; (3) The fee, interest, or penalty was imposed; and (4) The fee, interest, or penalty remains unpaid. (e) In connection with any hearing held pursuant to this section, the director shall have the power to subpoena the attendance of witnesses and the production of evidence on behalf of all parties. §321-O Distribution of revenues. One hundred per cent of revenues collected from the sugar-sweetened beverage fee program, interest payments, and penalty payments imposed pursuant to this part shall be deposited into the healthy ohana special fund. §321-P Evaluation. The department shall develop criteria and components for an independent evaluation to assess the impact of the sugar-sweetened beverage fee on consumption of products subject to the fee. The evaluation shall seek to determine the impact of the fee on sugar-sweetened beverage prices, consumer purchasing behavior, and health outcomes. The reasonable costs of evaluation shall be paid from the healthy ohana special fund and be considered an implementation cost of this part. §321-Q Annual reports. The department shall provide annual reports of its findings and recommendations on the sugar-sweetened beverage fee program, including any proposed legislation, to the legislature and governor no later than twenty days prior to the convening of each regular session beginning with the regular session of 2027. The reports shall contain: (1) Measures of effectiveness; (2) An accounting of the receipts of and expenditures from the healthy ohana special fund in the previous fiscal year; and (3) Status of program activities. If administration of the program is contracted to a third party pursuant to section 321-J, a copy of the contract shall be appended to the next applicable report, and the contractor shall also abide by these reporting requirements. §321-R Healthy ohana trust fund advisory committee. (a) There is established a healthy ohana trust fund advisory committee within the department for administrative purposes. (b) Members of the committee shall: (1) Be appointed by the director, and shall serve at the director's pleasure; and (2) Have background and expertise in chronic disease prevention. (c) The healthy ohana trust fund advisory committee shall advise the department on the administration of the healthy ohana trust fund. (d) The healthy ohana trust fund advisory committee, in collaboration with the department, shall develop a strategic plan for chronic disease prevention, including: (1) Developing and implementing effective and cost-efficient policies and programs, including health promotion and disease prevention; (2) Developing adequate standards and benchmarks by which measures of chronic disease prevention policies and programs may be appropriately evaluated; and (3) Assessing the effectiveness of policies and programs engaged in chronic disease prevention. (e) A simple majority of the committee members shall constitute quorum." SECTION 3. No later than June 30, 2026, the department of health shall adopt interim rules without regard to chapters 91 and 201M, Hawaii Revised Statutes, to implement the sugar-sweetened beverage fee program. The interim rules shall remain in effect until January 1, 2028, or until rules are adopted pursuant to section 321-L, Hawaii Revised Statutes, whichever occurs sooner. SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the healthy ohana special fund established pursuant to section 321-F, Hawaii Revised Statutes. SECTION 5. There is appropriated out of the healthy ohana special fund the sum of $250,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to carry out the purposes of section 2 of this Act, including the establishment and hiring of full-time equivalent ( FTE) positions and hiring of contractors. The sums appropriated shall be expended by the department of health for the purposes of this Act. SECTION 6. No later than July 1, 2027, the department of health shall establish a repayment plan and schedule to repay the general fund for the sums deposited into the healthy ohana special fund established pursuant to section 321-F, Hawaii Revised Statutes. The department of health shall use only moneys from the healthy ohana special fund to repay the general fund. SECTION 7. No later than March 15, 2026, the director of health, or the director's designee, shall submit a report and provide an informational briefing to the legislature concerning the progress of implementing the provisions in this Act, including the status of rulemaking by the department of health pertaining to the sugar-sweetened beverage fee program. SECTION 8. For the purposes of effectuating this Act, the personnel hired and the contracts entered into by the department of health, pursuant to this Act, shall be exempt from chapter 76, Hawaii Revised Statutes, for a period beginning on July 1, 2025, and ending on June 30, 2027; provided that: (1) All personnel actions taken pursuant to this Act by the department of health after June 30, 2027, shall be subject to chapter 76, Hawaii Revised Statutes, as appropriate; and (2) Any employee hired by the department of health to effectuate this Act, who occupies a position exempt from civil service on July 1, 2027, shall: (A) Be appointed to a civil service position; and (B) Not suffer any loss of prior service credit, vacation or sick leave credits previously earned or other employee benefits or privileges; provided that the employee possesses the minimum qualifications and public employment requirements for the class or position to which appointed; provided further that subsequent changes in status shall be made pursuant to applicable civil service and compensation laws. SECTION 9. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable. SECTION 10. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act. SECTION 11. This Act shall take effect on July 1, 2025. INTRODUCED BY: _____________________________ |
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| 49 | 49 | | SECTION 1. The legislature finds that there is a need to continue to invest in the health of Hawaii's keiki and ohana. Sugar-sweetened beverages are the largest source of excess sugar in the American diet, contributing excess calories with little or no nutritional value. Sugar-sweetened beverage consumption is associated with negative health effects such as obesity, which amounts to an estimated $470,000,000 annually in obesity-related health care costs statewide. |
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| 51 | 51 | | The consumption of sugar-sweetened beverages is also linked to other serious health problems, including weight gain, prediabetes, diabetes, tooth decay, heart disease, and other health conditions. Statewide, one out of four middle and high school students, and more than half of all adults, are overweight or obese. Sixty-one per cent of adults in Hawaii are living with at least one chronic disease such as diabetes, heart disease, or cancer. A 2016 report found that the State has the highest prevalence of tooth decay among third graders in the nation, as seventy-one per cent of third graders were affected by tooth decay. The State also received a failing grade in a series of oral health report cards released by the Pew Center on the States. |
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| 52 | 52 | | |
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| 53 | 53 | | The legislature also finds that a fee on sugar-sweetened beverages is a viable method to reduce sugar-sweetened beverage consumption, improve health, and generate revenue for the State to support public health, prevent chronic disease, and address root causes of disparities in Hawaii. A 2017 study conducted by the Harvard T.H. Chan School of Public Health and the department of health found that a sugar-sweetened drink fee has the potential for major cost-savings. Passage of a two-cent-per-ounce sugar-sweetened beverage fee is projected to result in lower levels of sugar-sweetened beverage consumption, fewer cases of obesity, fewer deaths, and health care savings greater than $59,000,000 over a ten-year period. According to the Rudd Center Revenue Calculator for Sugary Drink Taxes, a two-cent-per-ounce fee would have raised as much as $65,800,000 in 2020. |
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| 54 | 54 | | |
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| 55 | 55 | | The legislature also finds that sugar-sweetened beverage consumption is a health equity issue, as rates of consumption are greatest among individuals with lower incomes and people of color, due in part to issues surrounding a lack of access to healthy foods and the targeted marketing by the sugar-sweetened beverage industry. Lower-income populations and people of color also have higher rates of chronic disease due to other social determinants of health, including food and housing insecurity, lack of access to health care, and lack of spaces for safe physical activity. The COVID-19 pandemic has drawn attention to these health and social inequities in the State. COVID-19 has most severely impacted the Pacific Islander, Filipino, and Native Hawaiian populations, who have the highest rates of chronic disease and sugar-sweetened drink consumption. |
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| 56 | 56 | | |
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| 57 | 57 | | Additionally, regulations to mitigate the spread of COVID‑19 have created economic hardships for the people of Hawaii, especially for these vulnerable populations. An opportunity exists to implement a sugar-sweetened beverage fee to discourage sugary drink consumption and to help reduce chronic disease risks, significantly save on health care costs, and generate revenue that can be used to minimize health disparities and support health promotion programs during projected post-COVID-19 challenges. |
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| 58 | 58 | | |
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| 59 | 59 | | Over the last several years, sugar-sweetened beverage tax policies have been enacted in several cities throughout the United States and dozens of countries globally. Sugar-sweetened beverage tax policies involve the collection of a tax or fee from sugar-sweetened beverage distributors that is passed on to consumers in the form of price increases that influence purchasing behavior. Jurisdictions with sugar-sweetened beverage taxes such as Berkeley, California, and Philadelphia, Pennsylvania, have seen a reduction in sugar-sweetened beverage consumption, while sales of bottled water and other healthier options increased. Further evaluation results from these jurisdictions show that overall sales and revenue were not harmed by a fee at the distributor level. A sugar-sweetened beverage fee has instead provided a source of revenue that has generated millions of dollars to aid in reducing health and socioeconomic disparities. Recently, some of these locations reallocated their funding to specifically address critical needs resulting from COVID-19, such as assisting low-income families facing food insecurity. |
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| 60 | 60 | | |
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| 61 | 61 | | Accordingly, the purpose of this Act is to enact a fee on sugar-sweetened beverages in Hawaiʻi to improve the health of its residents and generate revenues for the State to support health, prevent chronic disease, and address root causes of health disparities in Hawaii. This Act shall be known and cited as the Healthy Ohana Act of 2025. |
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| 63 | 63 | | SECTION 2. Chapter 321, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows: |
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| 65 | 65 | | "PART . SUGAR-SWEETENED BEVERAGE FEE PROGRAM |
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| 66 | 66 | | |
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| 67 | 67 | | §321-A Definitions. As used in this part: |
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| 68 | 68 | | |
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| 69 | 69 | | "Auditor" means the office of the auditor. |
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| 70 | 70 | | |
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| 71 | 71 | | "Bottle" means any closed or sealed container regardless of size or shape, including those made of glass, metal, paper, plastic, or any other material or combination of materials. |
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| 72 | 72 | | |
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| 73 | 73 | | "Bottled sugar-sweetened beverage" means any sugar-sweetened beverage contained in a bottle that is ready for consumption without further processing, such as dilution or carbonation. |
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| 74 | 74 | | |
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| 75 | 75 | | "Caloric sweetener" means any substance that: |
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| 76 | 76 | | |
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| 77 | 77 | | (1) Is suitable for human consumption and perceived by humans as sweet; |
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| 78 | 78 | | |
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| 79 | 79 | | (2) Adds five or more calories per serving to the diet of a person who consumes that substance; |
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| 80 | 80 | | |
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| 81 | 81 | | (3) Includes, without limitation, sucrose, fructose, glucose, other sugars, and fruit juice concentrates; and |
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| 82 | 82 | | |
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| 83 | 83 | | (4) Does not include non-caloric sweeteners. |
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| 84 | 84 | | |
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| 85 | 85 | | "Consumer" means a person who purchases a sugar-sweetened beverage for consumption and not for sale to another. |
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| 86 | 86 | | |
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| 87 | 87 | | "Department" means the department of health. |
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| 88 | 88 | | |
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| 89 | 89 | | "Dietary aid" means: |
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| 90 | 90 | | |
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| 91 | 91 | | (1) A liquid product manufactured for use as an oral nutritional therapy for persons who cannot absorb or metabolize dietary nutrients from food or beverages; |
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| 92 | 92 | | |
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| 93 | 93 | | (2) A source of necessary nutrition used due to a medical condition; or |
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| 94 | 94 | | |
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| 95 | 95 | | (3) An oral electrolyte solution for infants and children that is formulated to prevent dehydration due to illness. |
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| 96 | 96 | | |
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| 97 | 97 | | "Director" means the director of health. |
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| 98 | 98 | | |
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| 99 | 99 | | "Distributor" means any person, including a manufacturer or a wholesale dealer, who receives, stores, manufactures, bottles, or distributes bottled sugar-sweetened beverages, syrup, or powder for sale to a retailer doing business in the State regardless of whether that person is also a retailer as defined in this section. |
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| 100 | 100 | | |
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| 101 | 101 | | "Infant formula" means a food that purports to be or is represented for special dietary use solely as a food for infants by reason of its simulation of human milk or its suitability as a complete or partial substitute for human milk. |
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| 102 | 102 | | |
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| 103 | 103 | | "Milk substitute without caloric sweetener" means a plant-based beverage in which the principal ingredients by weight are water and grains, nuts, legumes, or seeds. "Milk substitute" includes soy milk, almond milk, rice milk, coconut milk, oat milk, hazelnut milk, and flax milk. |
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| 104 | 104 | | |
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| 105 | 105 | | "Milk without added caloric sweetener" means any beverage of which the principal ingredient by weight is natural liquid milk as secreted by an animal, regardless of animal source or butterfat content, or natural milk concentrate and dehydrated natural milk, whether or not reconstituted. |
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| 106 | 106 | | |
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| 107 | 107 | | "Non-alcoholic beverage" means any beverage that contains less than one-half of one per cent alcohol per volume. |
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| 108 | 108 | | |
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| 109 | 109 | | "Non-caloric sweetener" means any substance that: |
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| 110 | 110 | | |
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| 111 | 111 | | (1) Is suitable for human consumption and perceived by humans as sweet; |
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| 112 | 112 | | |
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| 113 | 113 | | (2) Contains fewer than five calories per serving; |
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| 114 | 114 | | |
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| 115 | 115 | | (3) Includes aspartame, saccharin, stevia, and sucralose; and |
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| 116 | 116 | | |
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| 117 | 117 | | (4) Does not include caloric sweeteners. |
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| 118 | 118 | | |
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| 119 | 119 | | "One hundred per cent fruit juice or vegetable juice" means any liquid consisting of one hundred per cent fruit juice or vegetable juice having no added sugar, corn syrup, or caloric sweetener. |
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| 120 | 120 | | |
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| 121 | 121 | | "Person" means any natural person, partnership, cooperative association, limited liability company, corporation, personal representative, receiver, trustee, assignee, or any other legal entity. |
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| 122 | 122 | | |
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| 123 | 123 | | "Powder" means any solid mixture of ingredients that: |
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| 124 | 124 | | |
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| 125 | 125 | | (1) Contains a caloric sweetener; and |
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| 126 | 126 | | |
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| 127 | 127 | | (2) Is used in making, mixing, or compounding sugar-sweetened beverages by combining the powder with any one or more other ingredients. |
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| 128 | 128 | | |
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| 129 | 129 | | "Retailer" means any person who sells or otherwise dispenses in the State a sugar-sweetened beverage to a consumer regardless of whether that person is also a distributor as defined in this section. |
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| 130 | 130 | | |
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| 131 | 131 | | "Sale" or "sell" means the transfer of title or possession for valuable consideration regardless of the manner the transfer is completed. |
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| 132 | 132 | | |
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| 133 | 133 | | "Sugar-sweetened beverage" means any non-alcoholic beverage, carbonated or noncarbonated, that is intended for human consumption and contains any added caloric sweetener. Sugar-sweetened beverages does not include: |
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| 134 | 134 | | |
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| 135 | 135 | | (1) Beverages consisting of one hundred per cent fruit juice or vegetable juice with no added caloric sweetener; |
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| 136 | 136 | | |
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| 137 | 137 | | (2) Milk without added caloric sweetener; |
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| 138 | 138 | | |
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| 139 | 139 | | (3) Milk substitute without added caloric sweetener; |
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| 140 | 140 | | |
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| 141 | 141 | | (4) Dietary aids; |
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| 142 | 142 | | |
|---|
| 143 | 143 | | (5) Infant formula; |
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| 144 | 144 | | |
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| 145 | 145 | | (6) Sweetened medication such as cough syrup, liquid pain relievers, fever reducers and similar products; or |
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| 146 | 146 | | |
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| 147 | 147 | | (7) Any product commonly used exclusively to mix with alcohol that may exceed five grams or more per serving of caloric sweetener per twelve ounces of fluid that is not a sugar sweetened beverage, including without limitation margarita mix, bloody mary mix, daiquiri mix, or similar products. |
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| 148 | 148 | | |
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| 149 | 149 | | "Syrup" means a liquid mixture of ingredients that: |
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| 150 | 150 | | |
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| 151 | 151 | | (1) Contains a caloric sweetener; and |
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| 152 | 152 | | |
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| 153 | 153 | | (2) Is used in making, mixing, or compounding sugar-sweetened beverages by combining the syrup with any one or more other ingredients. |
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| 154 | 154 | | |
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| 155 | 155 | | §321-B Registration required. (a) Beginning July 1, 2026, every distributor shall register with the department on forms to be prescribed, prepared, and furnished by the department. |
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| 156 | 156 | | |
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| 157 | 157 | | (b) No retailer may sell at retail, or hold out or display for sale at retail, any sugar-sweetened beverage acquired by the retailer after June 30, 2026, unless the sugar-sweetened beverage was acquired by the retailer from a registered distributor in the State. |
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| 158 | 158 | | |
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| 159 | 159 | | §321-C Sugar-sweetened beverage fee. (a) Beginning July 1, 2026, every distributor selling sugar-sweetened beverages in the State shall pay the department a sugar-sweetened beverage fee that is imposed at the following rates: |
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| 160 | 160 | | |
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| 161 | 161 | | (1) Two cents per fluid ounce of bottled sugar-sweetened beverages sold or offered for sale to a retailer for sale in the State to a consumer; and |
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| 162 | 162 | | |
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| 163 | 163 | | (2) Two cents per fluid ounce of sugar-sweetened beverage that can be produced from syrup or powder, calculated according to the manufacturer's specifications for the use of the syrup or powder, sold or offered for sale to a retailer for resale in the State to a consumer. |
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| 164 | 164 | | |
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| 165 | 165 | | (b) A distributor shall add the amount of the fee imposed by this section to the price of sugar-sweetened beverages, syrups, and powders sold to a retailer, and the retailer shall pass the amount of the fee through to a consumer as a component of the final retail purchase price. The amount of the fee shall be stated separately on all invoices, signs, sales or delivery slips, bills, and statements that advertise or indicate the price of the sugar-sweetened beverages, syrups, and powders. |
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| 166 | 166 | | |
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| 167 | 167 | | §321-D Exemptions. The following shall be exempt from the fee imposed by this part: |
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| 168 | 168 | | |
|---|
| 169 | 169 | | (1) Bottled sugar-sweetened beverages, syrups, and powder sold by a distributor or retailer expressly for resale or consumption outside the State; and |
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| 170 | 170 | | |
|---|
| 171 | 171 | | (2) Bottled sugar-sweetened beverages, syrups, and powder sold by a distributor to another distributor who is registered pursuant to section 321-B, if the sales invoice clearly indicates that the sale is exempt. If the sale is to a person who is both a distributor and a retailer, the sale shall also be exempt from the fee and the fee shall be paid when the purchasing distributor who is also a retailer resells the product to a retailer or a consumer. This exemption shall not apply to any other sale to a retailer. |
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| 172 | 172 | | |
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| 173 | 173 | | §321-E Payment. (a) Beginning July 1, 2026, every distributor or retailer subject to the fee imposed by this part shall file with the department a form identifying all sales of sugar-sweetened beverages made on a periodic basis as determined by the department and pay to the department the fees imposed pursuant to section 321-C on the sales made during the period. The form shall be prescribed by the department and contain any information that the department deems necessary for the proper administration of the sugar-sweetened beverage fee program. |
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| 174 | 174 | | |
|---|
| 175 | 175 | | (b) The revenues from the fee shall be deposited into the healthy ohana special fund established pursuant to section 321‑F. |
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| 176 | 176 | | |
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| 177 | 177 | | §321-F Healthy ohana special fund; established. (a) There is established in the state treasury the healthy ohana special fund into which shall be deposited: |
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| 178 | 178 | | |
|---|
| 179 | 179 | | (1) Appropriations made by the legislature into the fund; |
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| 180 | 180 | | |
|---|
| 181 | 181 | | (2) All revenues collected from sugar-sweetened beverage fees established under section 321-C; |
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| 182 | 182 | | |
|---|
| 183 | 183 | | (3) All revenues collected from penalties pursuant to section 321‑M; and |
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| 184 | 184 | | |
|---|
| 185 | 185 | | (4) All interest and earnings accruing from the investment of moneys in the healthy ohana special fund. |
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| 186 | 186 | | |
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| 187 | 187 | | (b) The healthy ohana special fund shall be administered by the department. On a periodic basis as determined by the director of finance, the moneys in the healthy ohana special fund shall be expended or deposited as follows: |
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| 188 | 188 | | |
|---|
| 189 | 189 | | (1) per cent shall be expended by the department for implementation and evaluation of the sugar-sweetened beverage fee program to address obesity prevention and oral health promotion services in the State; |
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| 190 | 190 | | |
|---|
| 191 | 191 | | (2) per cent shall be expended by the department for the purposes of supporting primary prevention and chronic disease prevention programs and supports; and |
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| 192 | 192 | | |
|---|
| 193 | 193 | | (3) per cent shall be deposited into the healthy ohana trust fund established pursuant to section 321‑G. |
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| 194 | 194 | | |
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| 195 | 195 | | (c) For the purposes of this section, costs to implement and evaluate the sugar-sweetened beverage fee program may include: |
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| 196 | 196 | | |
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| 197 | 197 | | (1) Administrative, contractual, audit, independent evaluation, and compliance activities associated with collection and payment of the sugar-sweetened beverage fee program; |
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| 198 | 198 | | |
|---|
| 199 | 199 | | (2) Personnel to implement the sugar-sweetened beverage fee program; |
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| 200 | 200 | | |
|---|
| 201 | 201 | | (3) Communication and education activities to inform the public and distributors about the sugar-sweetened beverage fee program; and |
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| 202 | 202 | | |
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| 203 | 203 | | (4) Associated office expenses. |
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| 204 | 204 | | |
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| 205 | 205 | | §321-G Healthy ohana trust fund; established. (a) There is established the healthy ohana trust fund as a separate fund of a nonprofit entity having a board of directors and qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The director, with the concurrence of the governor, shall select, pursuant to chapter 103D, the entity based upon its proven record of accomplishment in administering a similar trust fund. The director, with the concurrence of the governor and in the director's sole discretion, may rescind the selection of the entity that administers the trust fund. If the selection of the entity is rescinded, moneys in the healthy ohana trust fund shall revert to the State and shall be deemed to be trust moneys. |
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| 206 | 206 | | |
|---|
| 207 | 207 | | (b) The department of budget and finance shall have oversight authority over the healthy ohana trust fund and may make periodic financial audits of the healthy ohana trust fund; provided that the director of finance may contract with a certified public accountancy firm to conduct the financial audits. |
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| 208 | 208 | | |
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| 209 | 209 | | (c) The entity selected under subsection (a), for each fiscal year, may expend up to ten per cent of the total market value of the healthy ohana trust fund on the preceding June 30, for the prevention and control of obesity and chronic disease on behalf of families in the State. These activities may include comprehensive programs and methods to support access to healthy food, active living and healthy eating, school and work-based health, nutrition and physical education, oral health, programs supporting farm-to-school, locally grown and sustainable agriculture practices, school gardens, and obesity and chronic disease prevention. |
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| 210 | 210 | | |
|---|
| 211 | 211 | | (d) The healthy ohana trust fund may receive appropriations, contributions, grants, endowments, or gifts in cash or otherwise from any source, including the State, corporations or other businesses, foundations, government, individuals, and other interested parties; provided that any appropriations made by the legislature to the healthy ohana trust fund shall not supplant or diminish the funding of existing chronic disease prevention programs or any health-related programs funded in whole or in part by the State. |
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| 212 | 212 | | |
|---|
| 213 | 213 | | (e) The assets of the healthy ohana trust fund shall consist of: |
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| 214 | 214 | | |
|---|
| 215 | 215 | | (1) Moneys deposited pursuant to section 321-F(b)(3); |
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| 216 | 216 | | |
|---|
| 217 | 217 | | (2) Moneys appropriated to the healthy ohana trust fund by the state, county, or federal government; |
|---|
| 218 | 218 | | |
|---|
| 219 | 219 | | (3) Private contributions of cash or property; and |
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| 220 | 220 | | |
|---|
| 221 | 221 | | (4) Income and capital gains earned by the healthy ohana trust fund. |
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| 222 | 222 | | |
|---|
| 223 | 223 | | (f) The aggregate principal sum deposited in the healthy ohana trust fund shall be invested by the entity selected under subsection (a) in a manner intended to maximize the rate of return on investment of the healthy ohana trust fund consistent with the objective of preserving the healthy ohana trust fund's principal. |
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| 224 | 224 | | |
|---|
| 225 | 225 | | (g) If the entity selected under subsection (a) is dissolved, the director, with the concurrence of the governor, shall select a successor entity pursuant to chapter 103D. If the healthy ohana trust fund is terminated, the moneys remaining in the healthy ohana trust fund shall revert to the State and shall be deemed to be trust moneys. |
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| 226 | 226 | | |
|---|
| 227 | 227 | | (h) The healthy ohana advisory committee established pursuant to section 321-R shall provide advice to the department regarding the administration of the healthy ohana trust fund. |
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| 228 | 228 | | |
|---|
| 229 | 229 | | §321-H Records to be kept. Beginning July 1, 2026, every distributor and retailer, in addition to any requirements under section 321-I, shall prepare or maintain documents involving sugar-sweetened beverages, syrups, and powders, as required by the department. |
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| 230 | 230 | | |
|---|
| 231 | 231 | | §321-I Examination authority. The records of the distributor and retailer shall be made available, upon request, for inspection by the department, a duly authorized agent of the department, or the auditor; provided that any proprietary information obtained because of an inspection or audit shall be kept confidential and shall not be disclosed to any other person, except: |
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| 232 | 232 | | |
|---|
| 233 | 233 | | (1) As may be reasonably required in an administrative or judicial proceeding to enforce any provision of this part or any rule adopted pursuant to this part; or |
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| 234 | 234 | | |
|---|
| 235 | 235 | | (2) Under an order issued by a court or administrative agency hearings officer. |
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| 236 | 236 | | |
|---|
| 237 | 237 | | §321-J Contract for administrative services. The department may contract the services of a third party to administer the sugar-sweetened beverage fee program. |
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| 238 | 238 | | |
|---|
| 239 | 239 | | §321-K Management and financial audit. The auditor shall conduct a management and financial audit of the sugar-sweetened beverage fee program for fiscal year 2026 to 2027 and fiscal year 2027 to 2028, and for each fiscal year ending in an odd-numbered year. The auditor shall submit the audit report to the legislature and the department no later than twenty days prior to the convening of the subsequent regular session. The auditor may contract the audit services of a third party to conduct the audit. |
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| 240 | 240 | | |
|---|
| 241 | 241 | | §321-L Administration; rules. No later than December 31, 2027, the department shall adopt rules pursuant to chapter 91 to effectuate this part. |
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| 242 | 242 | | |
|---|
| 243 | 243 | | §321-M Civil penalties. (a) Any person subject to this part who: |
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| 244 | 244 | | |
|---|
| 245 | 245 | | (1) Fails to pay the entire fee imposed by this part by the date that payment is due; |
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| 246 | 246 | | |
|---|
| 247 | 247 | | (2) Fails to register as a distributor as required by section 321-B; |
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| 248 | 248 | | |
|---|
| 249 | 249 | | (3) Fails to file a form that identifies all sales of sugar-sweetened beverages during the time specified by the department as required by section 321-E; |
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| 250 | 250 | | |
|---|
| 251 | 251 | | (4) Fails to make payment to the department at the time specified by the department as required by section 321-E; |
|---|
| 252 | 252 | | |
|---|
| 253 | 253 | | (5) Fails to prepare or maintain records required by this part; or |
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| 254 | 254 | | |
|---|
| 255 | 255 | | (6) Violates any other provision of this part, |
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| 256 | 256 | | |
|---|
| 257 | 257 | | shall be liable for the fee that is due, a penalty equal to fifty per cent of the fee due, and administrative fees and costs incurred by the department in enforcing this part. |
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| 258 | 258 | | |
|---|
| 259 | 259 | | (b) The director may determine the amount of the fee and the penalty due under subsection (a) in the event of any nonpayment or underpayment and demand payment of all sugar-sweetened beverage fees and penalties. Interest shall accrue on nonpayment or underpayment of the fee at a rate of eight per cent per year from the date the fee was due, until paid. The director shall have the authority to revoke the distributor registration as a penalty under subsection (a). |
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| 260 | 260 | | |
|---|
| 261 | 261 | | (c) Any criminal penalties for a violation of this part shall not be deemed to preclude the State from recovering additional civil penalties. |
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| 262 | 262 | | |
|---|
| 263 | 263 | | §321-N Enforcement; notice; contested case hearing; civil action. (a) If the director determines that the sugar-sweetened beverage fee, penalties, or interest are due, the director shall notify the person of the amount by certified mail. |
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| 264 | 264 | | |
|---|
| 265 | 265 | | (b) Any notice issued under subsection (a) shall become final thirty-one days after the notice is mailed, unless no later than thirty days after the notice is mailed, the person named in the notice requests in writing a hearing before the director. Whenever a hearing is requested, the amount owed shall become due and payable only upon completion of all review proceedings and the issuance of a final order confirming the fee, interest, and penalty in whole or in part. Upon request for a hearing, the director shall require the requestor to appear before the director for a hearing at the time and place specified in a notice of the hearing. |
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| 266 | 266 | | |
|---|
| 267 | 267 | | (c) Any hearing conducted under this section shall be conducted as a contested case under chapter 91. If, after a hearing held pursuant to this section, the director finds that all or a portion of the fee, interest, or penalty is due, the director shall take action to collect the amount due as provided by subsection (d). |
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| 268 | 268 | | |
|---|
| 269 | 269 | | (d) If the amount of any fee, interest, or penalty is not paid to the department within thirty days after it becomes due and payable, the director may institute a civil action in the name of the State to collect the fee, interest, and penalty. In any proceeding to collect the fee, interest, or penalty imposed, the director need only show that: |
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| 270 | 270 | | |
|---|
| 271 | 271 | | (1) Notice was given; |
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| 272 | 272 | | |
|---|
| 273 | 273 | | (2) A hearing was held, or the time granted for requesting a hearing expired without a request for a hearing; |
|---|
| 274 | 274 | | |
|---|
| 275 | 275 | | (3) The fee, interest, or penalty was imposed; and |
|---|
| 276 | 276 | | |
|---|
| 277 | 277 | | (4) The fee, interest, or penalty remains unpaid. |
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| 278 | 278 | | |
|---|
| 279 | 279 | | (e) In connection with any hearing held pursuant to this section, the director shall have the power to subpoena the attendance of witnesses and the production of evidence on behalf of all parties. |
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| 280 | 280 | | |
|---|
| 281 | 281 | | §321-O Distribution of revenues. One hundred per cent of revenues collected from the sugar-sweetened beverage fee program, interest payments, and penalty payments imposed pursuant to this part shall be deposited into the healthy ohana special fund. |
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| 282 | 282 | | |
|---|
| 283 | 283 | | §321-P Evaluation. The department shall develop criteria and components for an independent evaluation to assess the impact of the sugar-sweetened beverage fee on consumption of products subject to the fee. The evaluation shall seek to determine the impact of the fee on sugar-sweetened beverage prices, consumer purchasing behavior, and health outcomes. The reasonable costs of evaluation shall be paid from the healthy ohana special fund and be considered an implementation cost of this part. |
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| 284 | 284 | | |
|---|
| 285 | 285 | | §321-Q Annual reports. The department shall provide annual reports of its findings and recommendations on the sugar-sweetened beverage fee program, including any proposed legislation, to the legislature and governor no later than twenty days prior to the convening of each regular session beginning with the regular session of 2027. The reports shall contain: |
|---|
| 286 | 286 | | |
|---|
| 287 | 287 | | (1) Measures of effectiveness; |
|---|
| 288 | 288 | | |
|---|
| 289 | 289 | | (2) An accounting of the receipts of and expenditures from the healthy ohana special fund in the previous fiscal year; and |
|---|
| 290 | 290 | | |
|---|
| 291 | 291 | | (3) Status of program activities. |
|---|
| 292 | 292 | | |
|---|
| 293 | 293 | | If administration of the program is contracted to a third party pursuant to section 321-J, a copy of the contract shall be appended to the next applicable report, and the contractor shall also abide by these reporting requirements. |
|---|
| 294 | 294 | | |
|---|
| 295 | 295 | | §321-R Healthy ohana trust fund advisory committee. (a) There is established a healthy ohana trust fund advisory committee within the department for administrative purposes. |
|---|
| 296 | 296 | | |
|---|
| 297 | 297 | | (b) Members of the committee shall: |
|---|
| 298 | 298 | | |
|---|
| 299 | 299 | | (1) Be appointed by the director, and shall serve at the director's pleasure; and |
|---|
| 300 | 300 | | |
|---|
| 301 | 301 | | (2) Have background and expertise in chronic disease prevention. |
|---|
| 302 | 302 | | |
|---|
| 303 | 303 | | (c) The healthy ohana trust fund advisory committee shall advise the department on the administration of the healthy ohana trust fund. |
|---|
| 304 | 304 | | |
|---|
| 305 | 305 | | (d) The healthy ohana trust fund advisory committee, in collaboration with the department, shall develop a strategic plan for chronic disease prevention, including: |
|---|
| 306 | 306 | | |
|---|
| 307 | 307 | | (1) Developing and implementing effective and cost-efficient policies and programs, including health promotion and disease prevention; |
|---|
| 308 | 308 | | |
|---|
| 309 | 309 | | (2) Developing adequate standards and benchmarks by which measures of chronic disease prevention policies and programs may be appropriately evaluated; and |
|---|
| 310 | 310 | | |
|---|
| 311 | 311 | | (3) Assessing the effectiveness of policies and programs engaged in chronic disease prevention. |
|---|
| 312 | 312 | | |
|---|
| 313 | 313 | | (e) A simple majority of the committee members shall constitute quorum." |
|---|
| 314 | 314 | | |
|---|
| 315 | 315 | | SECTION 3. No later than June 30, 2026, the department of health shall adopt interim rules without regard to chapters 91 and 201M, Hawaii Revised Statutes, to implement the sugar-sweetened beverage fee program. The interim rules shall remain in effect until January 1, 2028, or until rules are adopted pursuant to section 321-L, Hawaii Revised Statutes, whichever occurs sooner. |
|---|
| 316 | 316 | | |
|---|
| 317 | 317 | | SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the healthy ohana special fund established pursuant to section 321-F, Hawaii Revised Statutes. |
|---|
| 318 | 318 | | |
|---|
| 319 | 319 | | SECTION 5. There is appropriated out of the healthy ohana special fund the sum of $250,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to carry out the purposes of section 2 of this Act, including the establishment and hiring of full-time equivalent ( FTE) positions and hiring of contractors. |
|---|
| 320 | 320 | | |
|---|
| 321 | 321 | | The sums appropriated shall be expended by the department of health for the purposes of this Act. |
|---|
| 322 | 322 | | |
|---|
| 323 | 323 | | SECTION 6. No later than July 1, 2027, the department of health shall establish a repayment plan and schedule to repay the general fund for the sums deposited into the healthy ohana special fund established pursuant to section 321-F, Hawaii Revised Statutes. The department of health shall use only moneys from the healthy ohana special fund to repay the general fund. |
|---|
| 324 | 324 | | |
|---|
| 325 | 325 | | SECTION 7. No later than March 15, 2026, the director of health, or the director's designee, shall submit a report and provide an informational briefing to the legislature concerning the progress of implementing the provisions in this Act, including the status of rulemaking by the department of health pertaining to the sugar-sweetened beverage fee program. |
|---|
| 326 | 326 | | |
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| 327 | 327 | | SECTION 8. For the purposes of effectuating this Act, the personnel hired and the contracts entered into by the department of health, pursuant to this Act, shall be exempt from chapter 76, Hawaii Revised Statutes, for a period beginning on July 1, 2025, and ending on June 30, 2027; provided that: |
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| 328 | 328 | | |
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| 329 | 329 | | (1) All personnel actions taken pursuant to this Act by the department of health after June 30, 2027, shall be subject to chapter 76, Hawaii Revised Statutes, as appropriate; and |
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| 330 | 330 | | |
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| 331 | 331 | | (2) Any employee hired by the department of health to effectuate this Act, who occupies a position exempt from civil service on July 1, 2027, shall: |
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| 332 | 332 | | |
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| 333 | 333 | | (A) Be appointed to a civil service position; and |
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| 334 | 334 | | |
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| 335 | 335 | | (B) Not suffer any loss of prior service credit, vacation or sick leave credits previously earned or other employee benefits or privileges; |
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| 336 | 336 | | |
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| 337 | 337 | | provided that the employee possesses the minimum qualifications and public employment requirements for the class or position to which appointed; provided further that subsequent changes in status shall be made pursuant to applicable civil service and compensation laws. |
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| 338 | 338 | | |
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| 339 | 339 | | SECTION 9. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable. |
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| 340 | 340 | | |
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| 341 | 341 | | SECTION 10. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act. |
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| 342 | 342 | | |
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| 343 | 343 | | SECTION 11. This Act shall take effect on July 1, 2025. |
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| 344 | 344 | | |
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| 345 | 345 | | |
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| 346 | 346 | | |
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| 347 | 347 | | INTRODUCED BY: _____________________________ |
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| 348 | 348 | | |
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| 349 | 349 | | INTRODUCED BY: |
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| 350 | 350 | | |
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| 351 | 351 | | _____________________________ |
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| 352 | 352 | | |
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| 353 | 353 | | |
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| 354 | 354 | | |
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| 355 | 355 | | |
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| 356 | 356 | | |
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| 357 | 357 | | Report Title: DOH; Auditor; Healthy Ohana Act; Sugar-Sweetened Beverage Fee Program; Exemptions; Healthy Ohana Special Fund; Healthy Ohana Trust Fund; Healthy Ohana Trust Fund Advisory Committee; Enforcement; Penalties; Reports; Rules; Appropriations Description: Establishes a Sugar-Sweetened Beverage Fee Program to be administered by the Department of Health that, beginning 7/1/2026, imposes a fee on the distribution and sale of sugar-sweetened beverages in the State. Establishes the Healthy Ohana Special Fund into which revenues generated from the sugar-sweetened beverage fee are deposited. Establishes the Healthy Ohana Trust Fund in the private sector to receive revenues from the Healthy Ohana Special Fund to support prevention and control of obesity and chronic diseases. Allows the Department to contract with a third party to administer the program. Requires the Auditor to conduct a management and financial audit of the program and submit reports to the Legislature. Establishes the Healthy Ohana Trust Fund Advisory Committee to advise the Department on the administration of the trust fund. Requires the Department to adopt interim rules no later than 6/30/2026, and final rules no later than 12/31/2027. Establishes civil penalties. Requires annual reports to the Legislature. Appropriates funds. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent. |
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| 358 | 358 | | |
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| 359 | 359 | | |
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| 360 | 360 | | |
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| 361 | 361 | | |
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| 362 | 362 | | |
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| 363 | 363 | | |
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| 364 | 364 | | |
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| 365 | 365 | | Report Title: |
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| 366 | 366 | | |
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| 367 | 367 | | DOH; Auditor; Healthy Ohana Act; Sugar-Sweetened Beverage Fee Program; Exemptions; Healthy Ohana Special Fund; Healthy Ohana Trust Fund; Healthy Ohana Trust Fund Advisory Committee; Enforcement; Penalties; Reports; Rules; Appropriations |
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| 368 | 368 | | |
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| 369 | 369 | | |
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| 370 | 370 | | |
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| 371 | 371 | | Description: |
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| 372 | 372 | | |
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| 373 | 373 | | Establishes a Sugar-Sweetened Beverage Fee Program to be administered by the Department of Health that, beginning 7/1/2026, imposes a fee on the distribution and sale of sugar-sweetened beverages in the State. Establishes the Healthy Ohana Special Fund into which revenues generated from the sugar-sweetened beverage fee are deposited. Establishes the Healthy Ohana Trust Fund in the private sector to receive revenues from the Healthy Ohana Special Fund to support prevention and control of obesity and chronic diseases. Allows the Department to contract with a third party to administer the program. Requires the Auditor to conduct a management and financial audit of the program and submit reports to the Legislature. Establishes the Healthy Ohana Trust Fund Advisory Committee to advise the Department on the administration of the trust fund. Requires the Department to adopt interim rules no later than 6/30/2026, and final rules no later than 12/31/2027. Establishes civil penalties. Requires annual reports to the Legislature. Appropriates funds. |
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| 374 | 374 | | |
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| 375 | 375 | | |
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| 376 | 376 | | |
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| 377 | 377 | | |
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| 378 | 378 | | |
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| 379 | 379 | | |
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| 380 | 380 | | |
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| 381 | 381 | | The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent. |
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