Bill Summary – FastDemocracy

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 Chairman Phil Mendelson                                        Councilmember Brianne K. Nadeau

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 Councilmember Anita Bonds                                      Councilmember Mary M. Cheh

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 _____________________________                                  _____________________________

 Councilmember Elissa Silverman                                 Councilmember Charles Allen

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                                               A BILL

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                     IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

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 To establish nutrition standards and requirements for meals served in shelters, to encourage local

        foods to be served in shelters, to establish monitoring requirements for food services, to

        expressly permit the use of donated and recovered food at shelters; and to amend Title 47

        of the District of Columbia Official Code by adding a new Chapter 52 to implement an

        excise tax of 1.5 cents per ounce tax on the distribution of sugary drinks in the District, to

        establish a procedure for administration and collection of said tax, to establish a Nutrition

        Equity Catalyst Fund to be administered by the Food Policy Director, to establish a

        priority of funding allocations for revenue generated from the tax, to require the Food

        Policy Director to publish an annual report and the Office of Planning to contract with an

        academic partner to publish policy impact evaluation reports, to give the Food Policy

        Council grantmaking authority, and to repeal the currently existing tax on soft drinks.

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        BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this

 act may be cited as the Nutrition Equity Amendment Act of 2021.

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 TITLE I. HEALTHY SHELTERS

        Sec. 101. Definitions.

        For the purposes of this act, the term:

               (1) Child and Adult Care Food Program means the program authorized by

 section 17 of the National School Lunch Act, approved October 7, 1975 (89 Stat. 522; 42 U.S.C.

  1766).

               (2) DHS means the Department of Human Services.

               (3) Family has the same meaning as  4-751.041(16).

               (4) Food service vendor means a vendor providing food services to a shelter or

 transitional housing overseen by the Department of Human Services.

               (5) Locally grown means grown in Delaware, the District of Columbia,

 Maryland, New Jersey, North Carolina, Pennsylvania, Virginia, or West Virginia.

               (6) Shelter shall have the same meaning as provided in  4-751.01(37).

               (7) Summer Food Service Program means the program authorized by section 13

 of the National School Lunch Act, approved October 7, 1975 (89 Stat. 522; 42 U.S.C.  1761).

               (8) Transitional housing shall have the same meaning as provided in  4-

 751.01(41).

        Sec. 102. Nutritional standards and requirements for meals served in shelters.

        (a) All breakfast, lunch, and supper meals served at shelters shall reflect the

 recommendations in the Dietary Guidelines for Americans (Dietary Guidelines) published by

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 the United States Department of Health and Human Services and United States Department of

 Agriculture.

        (b) Food service vendors shall provide menus one week in advance in a manner and form

 accessible to shelter residents, with room for substitutions and variations based on the nature of

 local sourcing and food recovery practices such as donations.

        (c) Shelters eligible for the Child and Adult Care Food Program and Summer Food

 Service Program shall enroll in these programs, to ensure that children have access to quality

 nutrition during out-of-school hours.

        Sec. 103. Shelter meal contracting, reporting, and compliance.

        All contracts for shelter and transitional housing food services shall:

        (a) Expressly permit the use of donated and recovered food, provided that the food

 service vendor demonstrates the capacity to ensure such donations or recovered foods are used in

 ways that meet nutritional and food safety guidelines;

        (b) Designate clear roles and responsibilities between shelter providers and food service

 vendors and shelters and transitional housing, such as for food delivery, food handling, and food

 preparation;

        (c) Provide an additional 25 cents per meal reimbursement to food service vendors when

 at least one component of a meal is composed predominantly of locally grown produce;

 provided, that the food service vendors report the name and address of the farms where the

 locally grown produce were grown to DHS; and

        (d) Include monitoring requirements, which shall include:

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                 (1) Quarterly meetings between DHS and food service vendors to discuss issues

 related to the contract, including but not limited to:

                        (A) Required meal counts, including meal counts for residents with dietary

 restrictions;

                        (B) Practices for shelters and transitional housing facilities receiving

 meals, including food delivery and storage;

                        (C) Sourcing of local food items and ensuring menu compliance with

 Dietary Guidelines;

                        (D) Resident feedback on menus, quality, and quantity; and

                        (E) Meal service plans involving emergency or hypothermia conditions;

                 (2) Biannual walk-throughs of food service vendor kitchens and shelters and

 transitional housing facilities by DHS, vendor, and shelter and transitional housing facility staff,

 as well as periodic spot-checks by DHS to ensure that performance meets the terms of the

 contract; and

                 (3) Performance management requirements, including complaint logs.

         Sec. 104. Rulemaking.

         The Mayor, pursuant to Title I of the District of Columbia Administrative Procedure Act,

 approved October 21, 1968 (82 Stat. 1204; D.C. Official Code  2-501 et seq.), may issue rules

 to implement the provisions of Title I of the Nutrition Equity Amendment Act of 2021, as

 introduced on March 24, 2021 (Bill 22-XXX)..

 TITLE II. NUTRITION EQUITY CATALYST TAX

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        Sec. 201. Title 47 of the D.C. Official Code is amended as follows:

        (a) The table of contents is amended by adding a new chapter designation to read as

 follows:

        52. Nutrition Equity Catalyst Tax.

        (b) A new Chapter 52 is added to read as follows:

        Chapter 52. Nutrition Equity Catalyst Tax.

        47-5201. Definitions.

        For the purposes of this chapter, the term:

                (1) Distribution or Distribute means the transfer of possession from one

 business entity to another business entity for consideration, or within a single business entity,

 such as by a wholesale or warehousing unit to a retail outlet or between two or more employees

 or contractors. Distribution or Distribute shall not mean the retail sale to a consumer.

                (2) Distributor means any person who distributes sugary drink.

                (3) Natural common sweetener includes granulated white sugar, brown sugar,

 sucrose, fructose, glucose, and other sugars, including honey, molasses, xylem sap of maple

 trees, or agave nectar.

                (4) Retailer means any person who sells sugary drink to a consumer.

                (5) Sugary drink means any beverage intended for human consumption that

 lists as an ingredient any form of natural common sweetener. Sugary drink does not include

 any:

                           (A) Beverage where milk is the primary ingredient;

                           (B) Beverage for medical use;

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                        (C) Product used to feed infants, including infant formula or baby

 formula;

                        (D) 100% natural fruit or vegetable juice;

                        (E) Alcoholic beverage; or

                        (F) Unsweetened drinks to which a purchaser can add, or can request that

 a seller add, sugar or natural common sweetener at the point of sale.

        47-5202. Excise tax.

        (a) In addition to all other taxes imposed by the District, a tax of $0.015 per fluid ounce

 shall be imposed on the distribution of sugary drinks in the District. Taxable transactions

 include:

                (1) The supply of a sugary drink to a retailer;

                (2) The acquisition of a sugary drink beverage by a retailer;

                (3) The delivery to a retailer in the District of any sugary drink; and

                (4) The transport of any sugary drink into the District by a retailer.

        (b)(1) The volume, in fluid ounces, of a sugary drink shall be calculated as follows:

                        (A) For beverages, the volume in fluid ounces of sugary drinks

 distributed to any person in the course of business; and

                        (B) For syrups and concentrates, the largest volume in fluid ounces that

 would typically be produced from the syrup or concentrate shall be determined based on the

 manufacturers instructions, or if the distributor uses that concentrate or syrup to produce a

 sugary drink, the regular practice of the distributor.

                (2) The tax shall be paid upon the first nonexempt distribution, except for any

 exemptions under subsection (c) of this section, of a sugary drink in the District. Where there is a

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 chain of distribution within the District involving more than one distributor, the tax shall be

 imposed on the first distributor subject to the jurisdiction of the District. If the tax is not paid as

 set forth above for any reason, it shall be paid by subsequent distributors; provided, that the

 distribution of sugary drink may not be taxed more than once in the chain of commerce.

         (c) The tax shall not apply to any:

                 (1) Distributor that is not subject to taxation by the District;

                 (2) Distribution of natural common sweeteners; or

                 (3) Distribution of concentrates or powders for retail sale.

         47-5203. Administration of tax.

         (a) The Office of Tax and Revenue (OTR) may prescribe, adopt, and enforce rules and

 regulations relating to the administration and enforcement of this chapter. Such rules and

 regulations shall include:

                 (1) The reexamination and correction of returns and payments;

                 (2) The reporting of returns and payments;

                 (3) Prescribing the methods, frequency, and schedules for the calculation,

 collection, and payments of the tax;

                 (4) The manner and form in which a distributor must register with the District,

 and report and remit the tax;

                 (5) The manner in which a distributor or retailer who receives a sugary drink

 from a distributor shall report to the District the name of that distributor and the volume of

 sugary drink;

                 (6) The documentation that a distributor or a retailer is required to maintain; and

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                (7) The administrative process and procedures for any person against whom a

 determination is made by OTR under this chapter or any person directly interested in such

 determination shall follow a dispute or otherwise challenge a determination, and the form,

 manner, and time within which a determination may be disputed or challenged.

        (b) OTR shall annually verify that the taxes owed under this chapter have been properly

 applied, exempted, collected, and remitted.

        47-5204. Collection.

        (a) Every person engaged in or about to engage in business as a distributor in the District

 shall register with the District in the manner and form determined by OTR no later than 30 days

 after the date that the tax imposed by this chapter becomes effective. Registration after the date

 the tax becomes effective does not relieve any person from the obligation of the tax on and after

 the date of imposition.

        (b) Any person who fails to pay the tax to the District or any amount of tax required to

 be collected and paid to the District within the time required by the rules and regulation

 established by the Office and Tax and Revenue shall pay a penalty of 25% of the tax or amount

 of the tax, in addition to the tax or amount of delinquent tax, plus interest, computed on the

 amount of delinquent tax, inclusive of penalties at the rate of 1% per month, or fraction thereof,

 from the date on which the tax or the amount of tax required to be collected became due and

 payable to the District and until the date of payment.

        (c) The amount of any tax, penalty, and interest imposed by this chapter shall be deemed

 a debt to the District. Any distributor owing money under the provisions of this chapter shall be

 liable in an action brought in the name of the District for the recovery of such amount.

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        (d) In order to aid the collection of taxes due to the District under this chapter, any

 distributor or retailer that distributes, receives, or sells sugary drinks shall provide information to

 the District regarding the distribution of these products in accordance with rules and regulation

 adopted by OTR.

        47-5205. Refunds.

        (a) Any tax under this Chapter that has been paid more than once or has been

 erroneously or illegally collected or received by the District shall be refunded as determined by

 the OTR.

        (b) Any tax under this Chapter that has been returned to the distributor within 6

 months of the initial distribution and for which the entire purchase price has been refunded in

 cash or credit shall be refunded as determined by OTR.

        (c) Claims must be filed with OTR and determined in accordance with the rules and

 regulations, to be established by OTR, within one year from the date of payment of the tax to

 the District. No refund shall be paid under this section unless a claimant provides written

 documentation.

        47-5206. Not a sales and use tax.

        The tax imposed by this chapter shall be a tax upon the privilege of conducting business,

 specifically, distributing sugary drink products within the District and it shall not be construed as

 a sales, use, or other excise tax on the sale, consumption, or use of sugary drinks.

        47-5207. Nutrition Equity Catalyst Fund administration and allocation.

        (a) There is established, as a special fund, the Nutrition Equity Catalyst Fund (Fund),

 which shall be administered by the Food Policy Director within the Office of Planning, as

 established by section 3 of the Food Policy Council and Director Establishment Act of 2014,

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 effective March 10, 2015 (D.C. Law 20-191; D.C. Official Code  48-312), in accordance with

 subsections (c) and (d) of this section.

        (b) All revenue collected by the tax and penalties imposed in this chapter shall be

 deposited in the Fund.

        (c) Revenue collected in the Fund shall be allocated annually, subject to the availability

 of funding, in the following priority:

                (1) To cover the fiscal impact of the repeal of the sales tax on soft drinks in

 Title IV of the Nutrition Equity Amendment Act of 2021, as introduced on March 24, 2021

 (B23-XXX);

                (2) To cover the fiscal impact of this Act;

                (3) $5,000,000 to the Department of Health Care Finance for programs that

 integrate healthy food access as a core component of health care (also known as Food as

 Medicine interventions);

                (4) $5,000,000 to the Department of Health for programs aimed at reducing and

 preventing nutrition-related chronic diseases such as diabetes, hypertension, and heart disease;

 including chronic disease management and prevention, and wraparound nutrition services;

                (5) $1,000,000 to the Office of the Deputy Mayor for Economic Development

 for the Nourish DC Fund to provide grants, loans, and technical assistance to local food

 businesses in low food access communities;

                (6) $250,000 to the Families First DC program to deliver nutrition education,

 cooking lessons, and healthy shopping lessons at Family Success Centers.

                (7) $250,000 to the Department of Human Services for the establishment of the

 Healthy Family Grants Program to fund programs that deliver nutrition education, cooking

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 lessons, and healthy shopping lessons; programs that promote physical activity, inclusive play,

 and the creation for safe play structures on the grounds of family shelters and transitional

 housing; and building and maintenance of gardens at family shelters and transitional housing.

                (8) $3,500,000 to the Office of the State Superintendent of Education for

 experiential food literacy education for students in Grades Pre-Kindergarten through 5 that gives

 students opportunities to grow, prepare, and eat food, and learn about healthy eating and

 nutrition, to be provided in-house or by outside organizations; and

                (9)(A) Any remaining money in the Fund shall be used to fund and issue grants

 to programs or projects that promote healthy eating and active living and prevent or reduce the

 health consequence of the consumption of sugary drinks in the District.

                        (B) Programs receiving funds or grants shall have a focus on:

                               (i) Food access and equity;

                               (ii) Improving community nutrition and increasing physical

 activity; or

                               (iii) Reducing and preventing nutrition related chronic illnesses

 such as diabetes, hypertension, and heart disease.

                        (C) Special consideration shall be given to programs that target

 communities most affected by health disparities.

                        (D) Recommendations on how to allocate remaining money in the Fund

 shall be included in the Food Policy Councils annual report, pursuant to section 3(c) of the Food

 Policy Council and Director Establ