HB2914 100TH GENERAL ASSEMBLY

LRB100 09641 HLH 19810 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2914

Introduced , by Rep. Robyn Gabel

SYNOPSIS AS INTRODUCED:

New Act
35 ILCS 1010/1-45
30 ILCS 105/5.878 new

Creates the Healthy Eating Active Living (HEAL) Act. Imposes a tax on distributors of sugar-sweetened beverages in the State at the rate of $0.01 per ounce. Contains provisions concerning the distribution of the proceeds from the tax. Creates a multi-sector Advisory Council for Health and Wellness to govern the distribution of the proceeds. Amends the State Finance Act to create the Illinois Wellness Fund. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Healthy Eating Active Living (HEAL) Act.

Section 5. Findings and purpose. The General Assembly finds that:

Over the past 30 years, the obesity rate in the United States has substantially increased. The prevalence of adult obesity has more than doubled during that time. According to statistics compiled by the Trust for America's Health, nearly 31% of Illinois' adult residents in 2015 were considered obese (body mass index (BMI) of 30 and above) and the rate was even higher among African American (40.7%) and Hispanic (36%) residents.

For children, the increase in obesity has been even more dramatic, with the obesity rate among children ages 6-11 more than quadrupling over the last 4 decades. The State of Illinois is not immune to the problem. Over 19% of Illinois children who are 10 to 17 years of age are obese, the ninth worst rate in the nation.

Obese children are at least twice as likely as non-obese children to become obese adults. Research indicates that the likelihood of an obese child becoming an obese adult increases with age; adolescents who are obese have a greater likelihood of being obese in adulthood as compared to younger children.

The obesity epidemic has led to a dramatic increase in obesity-related health conditions, such as type 2 diabetes, asthma, and heart disease. These health conditions cost the nation billions of dollars in health care costs and lost productivity. Overweight and obesity account for $147 billion in health care costs nationally, or 9% of all medical spending per year. Obesity-related annual medical expenditures in the State of Illinois are estimated at $6.3 billion dollars, with over $1 billion of that as a cost to the State Medicaid program.

Numerous studies have established a link between obesity and consumption of sugar-sweetened beverages such as soft drinks, energy drinks, sweet teas, and sports drinks. One study found that just one sugary drink per day increased a child's odds of becoming obese by 60%. Rigorous scientific studies show that consuming sugary drinks leads to obesity and diabetes more than any other food category. One meta analysis of 8 studies examining the role of sugar-sweetened beverage consumption on health found that consumption was significantly associated with type 2 diabetes based on over 15,000 reported cases of this condition. Additionally, consumption of sugar-sweetened beverages has been linked to several diseases independent of a person's weight status, including type 2 diabetes and heart disease, making sugary drinks especially harmful to a person's health. A 2014 study showed that regular consumption of sugary drinks (at least 7 drinks per week) was associated with an increased risk for death from cardiovascular disease. Adults who drink 1 to 2 servings of sugary drinks per day are 26% more likely to develop type 2 diabetes than those who drink 0 to 1 per month. A 2015 study in the journal Circulation suggested that sugar-sweetened beverages are linked to 25,000 American deaths per year.

Research has found that sugary drinks have a unique and harmful effect on health. Liquid calories don't trigger a person's sense of feeling "full", and contribute to excess calorie consumption without the person being aware.

Consumption of sugar-sweetened beverages has gone up over 500% in the last 50 years, and those beverages are now the number one source of added sugar in the American diet (51% of added sugars when considering soda, energy drinks, sports drinks, fruit drinks, and sweetened teas). A study of a 5-year period between 1999 and 2004 showed that children and adolescents consumed 10-15% of their daily caloric intake from sugar-sweetened beverages, which offer little or no nutritional value and massive quantities of added sugars. For example, a single 12-ounce can of soda contains the equivalent of approximately 10 teaspoons of sugar; the American Heart Association recommends that children over the age of 2 and women consume no more than 6 teaspoons of added sugar per day and men consume no more than 9 teaspoons of added sugar per day. The World Health Organization recommends limiting added sugar intake to no more than 10% of an individual's total energy intake. Teenagers and young adults drink more sugary drinks than other age groups, and low-income persons consume more sugary drinks in relation to their overall diet than those with higher income.

In its adult and pediatric nutrition recommendations, the American Heart Association recommends that no-calorie and low-calorie beverages like water, diet soft drinks, fat free or low fat milk, and other beverages that have 5 grams or less of added caloric sweetener per 12 fluid ounces are better choices than full calorie soft drinks, and Americans should limit the amount of added sugars in the foods they eat. The U.S.D.A. 2010 Dietary Guidelines for Americans also recommends limiting added sugars in the diet and reducing intake of sugar-sweetened beverages.

The Institute of Medicine recommends a multi-pronged approach to obesity prevention, including: integrating physical activity opportunities into communities, making healthy food and beverages available everywhere, adopting policies and practices to reduce sugar-sweetened beverage consumption, improving marketing and messaging to the public regarding adopting a healthy lifestyle, expanding the role of health care providers, insurers, and employers in obesity prevention, and working to improve school health and wellness. Studies have shown that, when compared with more affluent communities, low-income communities have less access to fresh, affordable food, contain more fast food places in the communities and near their schools, and have less access to safe places to get physical activity, including access to fewer adequate sidewalks. Additionally, the American Medical Association adopted Clinical Practice Guidelines for the treatment of pediatric overweight, which the American Academy of Pediatrics has adopted and recommends to providers.

A study by researchers at the University of Chicago found that a penny-per-ounce excise tax on sugar-sweetened beverages in Illinois could result in a 23.5% reduction in sugar-sweetened beverage consumption, 185,127 fewer obese Illinoisans (a 9.3% reduction in youth obesity and 5.2% reduction in adult obesity), 3,442 fewer incidences of diabetes, and a $150.8 million reduction in obesity-related healthcare costs in the first year. Another study found that reducing obesity by 5% in Illinois could save Illinois $9 billion over the next 10 years. The World Health Organization recommends that governments impose a tax on sugar-sweetened beverages to address obesity. The tax is estimated to raise over $600 million in the first year in Illinois.

It is the intent of the General Assembly, by adopting this Act and creating an Illinois Wellness Fund to provide targeted prevention initiatives in Illinois communities and additional health and prevention funding to Medicaid, to diminish the human and economic costs of sugar-sweetened beverages, obesity, and related chronic disease in the State of Illinois. This Act is intended to create a dedicated revenue source for programs designed to prevent and treat obesity and related chronic diseases by creating and implementing expanded opportunities for Illinoisans to be healthy, especially in high-need communities, and to discourage excessive consumption of sugar-sweetened beverages by increasing the price of these products, thereby reducing the health and economic burden of sugar-sweetened drinks in Illinois.

Section 10. Definitions. For purposes of this Act:

"Advisory Council" means the Advisory Council for Health and Wellness established under Section 70.

"Bottle" means any closed or sealed container regardless of size or shape, including, without limitation, 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, without limitation, dilution or carbonation.

"Caloric sweetener" means any caloric substance suitable for human consumption which adds calories to the diet of a person who consumes that substance, is used as an ingredient of a beverage, syrup, or powder, and includes, without limitation, sucrose, fructose, glucose, fruit juice concentrate, or other sugars. "Caloric sweetener" excludes 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 Revenue.

"Distribute" means the act, by any person, including manufacturers and wholesale dealers, of receiving, storing, manufacturing, or bottling sugar-sweetened beverages, syrups, or powders for sale to retailers doing business in the State, whether or not that person also sells those products to consumers.

"Distributor" means any person, including manufacturers and wholesale dealers, who distributes bottled sugar-sweetened beverages, syrups, or powders, for sale to retailers doing business in the State, whether or not that person also sells such products to consumers.

"Fund" means the Illinois Wellness Fund, established pursuant to Section 55.

"High-need population" means a population or community, defined geographically or as a group, designated as a high-need population by the Department of Public Health by rule pursuant to subsection (b) of Section 60 of this Act.

"Non-caloric sweetener" means any non-caloric substance suitable for human consumption which does not add calories to the diet of a person who consumes that substance, is used as an ingredient of a beverage, syrup, or powder, and includes, without limitation, aspartame, saccharin, stevia, and sucralose. "Non-caloric sweetener" excludes caloric sweeteners.

"Person" means any natural person, partnership, cooperative association, limited liability company, corporation, personal representative, receiver, trustee, assignee, or any other legal entity.

"Place of business" means any place where sugar-sweetened beverages, syrups, or powders are manufactured or received for sale in the State.

"Powders" means any solid mixture of ingredients used in making, mixing, or compounding sugar-sweetened beverages by mixing the powder with any one or more other ingredients, including without limitation water, ice, syrup, simple syrup, fruits, vegetables, fruit juice, vegetable juice, carbonation or other gas. A powder which indicates on the label that it can be mixed with water is subject to the tax. Notwithstanding any other provision, a powder is not subject to the tax if the label contains either or both of the following instructions: (1) that the powder should not be mixed with water; or (ii) that the powder is intended by the manufacturer to be mixed only with alcohol or milk.

"Retailer" means any person who sells or otherwise dispenses in the State a sugar-sweetened beverage to a consumer whether or not that person is also a distributor as defined in this Section.

"Sale" means the transfer of title or possession for valuable consideration regardless of the manner by which the transfer is completed.

"Simple syrup" means a substance comprised of one or more caloric sweeteners and water or ice.

"State" means the State of Illinois.

"Sugar-sweetened beverage" means any nonalcoholic beverage, carbonated or noncarbonated, which is intended for human consumption and contains more than 5 grams of caloric sweetener per 12 fluid ounces. As used in this definition, "nonalcoholic beverage" means any beverage that contains less than one-half of one percent alcohol per volume. The term "sugar-sweetened beverage" does not include:

(1) beverages sweetened solely with non-caloric sweeteners;

(2) beverages sweetened with 5 grams or less of caloric sweeteners per 12 fluid ounces;

(3) beverages consisting of 100% natural fruit or vegetable juice with no caloric sweetener; for purposes of this paragraph, "natural fruit juice" and "natural vegetable juice" mean the original liquid resulting from the pressing of fruits or vegetables, juice concentrate, or the liquid resulting from the dilution with water of dehydrated natural fruit juice or natural vegetable juice;

(4) beverages in which milk, or soy, rice, or similar milk substitute, is the primary ingredient or the first listed ingredient on the label of the beverage; for purposes of this Act, "milk" means natural liquid milk regardless of animal or plant source or butterfat content, natural milk concentrate, whether or not reconstituted, regardless of animal or plant source or butterfat content, or dehydrated natural milk, whether or not reconstituted and regardless of animal or plant source or butterfat content;

(5) coffee or tea without caloric sweetener;

(6) infant formula;

(7) medically necessary foods, as defined in the federal Orphan Drug Act; and

(8) water without any caloric sweeteners.

"Syrup" means a liquid mixture of ingredients used in making, mixing, or compounding sugar-sweetened beverages using one or more other ingredients including, without limitation, water, ice, a powder, simple syrup, fruits, vegetables, fruit juice, vegetable juice, carbonation, or other gas. A syrup which indicates on the label that it can be mixed with water is subject to the tax. Notwithstanding any other provision, a syrup is not subject to the tax if the label contains either or both of the following instructions: (1) that the syrup should not be mixed with water; or (ii) that the syrup is intended by the manufacturer to be mixed only with alcohol or milk.

Section 15. Permit required.

(a) Beginning May 1, 2017, every distributor doing business in the State who wishes to engage in the business of selling sugar-sweetened beverages, syrups, or powders subject to tax under this Act shall file with the Department an application for a permit to engage in such business. An application shall be filed for each place of business owned and operated by the distributor. An application for a permit shall be filed on forms to be furnished by the Department for that purpose. Each such application shall be signed and verified and shall state: (1) the name and federal tax identification number of the applicant; (2) the address of the applicant's principal place of business; (3) the address of the principal place of business from which the applicant engages in the business of distributing sugar-sweetened beverages, syrups, or powders to retailers in this State and the addresses of all other places of business, if any (enumerating such addresses, if any, in a separate list attached to and made a part of the application), from which the applicant engages in the business of distributing sugar-sweetened beverages, syrups, or powders to retailers in this State; (4) the name and address of the person or persons who will be responsible for filing returns and payment of taxes due under this Act; (5) in the case of a corporation, the name, title, and social security number of each corporate officer; (6) in the case of a limited liability company, the name, social security number, and FEIN number of each manager and member; and (7) such other information as the Department may reasonably require. The application shall contain an acceptance of responsibility signed by the person or persons who will be responsible for filing returns and payment of the taxes due under this Act.

(b) The Department may deny a permit to any applicant if a person who is named as the owner, a partner, a manager or member of a limited liability company, or a corporate officer of the applicant on the application for the certificate of registration, is or has been named as the owner, a partner, a manager or member of a limited liability company, or a corporate officer, on the application for the permit or certificate of registration of a retailer under the Retailers' Occupation Tax Act that is in default for moneys due under this Act or any other tax or fee Act administered by the Department. For purposes of this paragraph only, in determining whether a person is in default for moneys due, the Department shall include only amounts established as a final liability within the 20 years prior to the date of the Department's notice of denial of a certificate of registration. The Department, in its discretion, may require that the application for permit be submitted electronically.

(c) Upon receipt of an application and the annual permit fee of $250, the Department may issue to the applicant, for the place of business designated, a permit, authorizing the sale of sugar-sweetened beverages, syrups, and powders in the State. No distributor shall sell any sugar-sweetened beverage, syrup, or powders without first obtaining a permit to do so under this Act. Permits issued pursuant to this Section shall expire one year from the date of issuance and may be renewed annually. Fees shall be deposited into the Tax Compliance and Administration Fund.

(d) A permit may not be transferred or assigned from one person to another, and a permit shall at all times be prominently displayed in a distributor's place of business. The Department may refuse to issue a permit to any person previously convicted of violations of this Act under such procedures as the Department may establish by rule.

(e) The Department may, in its discretion, issue the permit electronically.

Section 20. Tax imposed.

(a) Beginning on May 1, 2017, there is imposed a tax on every distributor for the privilege of selling the products governed by this Act in the State. The tax shall be imposed at the rate of $0.01 per ounce of bottled sugar-sweetened beverages distributed to a retailer in the State. The tax on syrup and powder distributed to a retailer in the State, either as syrup or powder or as a sugar-sweetened beverage derived from that syrup or powder, is equal to $0.01 per ounce for each ounce of sugar-sweetened beverage produced from that syrup or powder. For purposes of calculating the tax, the volume of sugar-sweetened beverage produced from syrup or powder shall be the larger of (i) the largest volume resulting from use of the syrup or powder according to any manufacturer's instructions or (ii) the volume actually produced by the retailer. The taxes imposed by this Section are in addition to any other taxes that may apply to persons or products subject to this Act.

(b) If and only if the tax imposed under subsection (a), or the application thereof to any person or circumstance, shall, for any reason, be adjudged by a court of competent jurisdiction to violate the Constitution of the United States or the Constitution of the State of Illinois, or otherwise be adjudged invalid, the following language shall be used to replace subsection (a) for the purpose of arriving at satisfactory implementation of the Act:

(1) The tax shall be imposed at the rate of $0.004 per gram of caloric sweetener in bottled sugar-sweetened beverages containing more than 5 grams of caloric sweetener per 12 ounces of liquid (or 0.41 grams per ounce) sold or transferred to a retailer in the State.

(2) The tax on syrup and powder sold or transferred to a retailer in the State, either as syrup or powders or as a sugar-sweetened beverage derived from that syrup or powders, is equal to $0.004 per gram of caloric sweetener in sugar-sweetened beverages that contains more than 5 grams of caloric sweetener per 12 ounces of liquid (or 0.41 grams per ounce) produced from that syrup or powder; for purposes of calculating the tax, the volume of sugar-sweetened beverage produced from syrup or powders shall be the larger of (i) the largest volume resulting from use of the syrup or powder according to any manufacturer's instructions or (ii) the volume actually produced by the retailer.

(c) A retailer that sells bottled sugar-sweetened beverages, syrups, or powders in the State to a consumer, on which the tax imposed by this Section has not been paid by a distributor, is liable for the tax imposed in subsection (a) or (b), as applicable, at the time of sale to a consumer.

Section 30. Report of sales and tax remittances.

(a) Any distributor or retailer liable for the tax imposed by this Act shall, on or before the twentieth day of each calendar month, return to the Department a statement containing its name and place of business, the quantity of sugar-sweetened beverages, syrup, and powders subject to the tax imposed by this Act sold or offered for sale in the month preceding the month in which the report is due, and any other information required by the Department, along with the tax due.

(b) If the taxpayer's average monthly tax liability to the Department under this Act, was $20,000 or more during the preceding 4 complete calendar quarters, he shall file a return with the Department each month by the twentieth day of the next month following the month during which such tax liability is incurred and shall make payment to the Department on or before the 7th, 15th, 22nd, and last day of the month during which such liability is incurred.

(c) The Department, in its discretion, may require that returns be submitted and payments be made electronically.

Section 35. Records of distributors. Every distributor and every retailer subject to this Act shall maintain for not less than 4 years accurate books and records, showing all transactions that gave rise, or may have given rise, to tax liability under this Act. Such records are subject to inspection by the Department at all reasonable times during normal business hours.

Section 40. Exemptions. The following shall be exempt from the tax imposed under this Act:

(1) Bottled sugar-sweetened beverages, syrups, and powders sold by a distributor or a retailer expressly for resale or consumption outside of the State.

(2) Bottled sugar-sweetened beverages, syrups, and powders sold by a distributor to another distributor that holds a permit issued under Section 15. For this exemption to apply, the sales invoice shall clearly indicate that this subsection applies to the sale.

(3) Bottled sugar-sweetened beverages, syrups, and powders sold to a person who is both a distributor and a retailer. For this exemption to apply, the tax shall be levied when the purchasing distributor-retailer resells the product to a retailer or a consumer. This exemption does not apply to any other sale to a retailer.

At no time shall the tax imposed under this Act be imposed more than once per product sold.

Section 45. Penalties.

(a) Any distributor, retailer, or other person subject to the provisions of this Act who fails to pay the entire amount of tax imposed by this Act by the date that payment is due, fails to submit a report or maintain records required by this Act, does business in the State of Illinois without first obtaining a permit as required by this Act, or violates any other provision of this Act, or rules and regulations adopted by the Department for the enforcement of this Act, shall be guilty of a misdemeanor and shall also be liable for the penalties set forth and incorporated by reference into this Section.

(b) Incorporation by reference. All of the provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 8, 9, 10, 11, 11a, and 12 of the Retailers' Occupation Tax Act, and all applicable provisions of the Uniform Penalty and Interest Act that are not inconsistent with this Act, apply to distributors of sugar-sweetened beverages to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean distributors and retailers when used in this Act. References in the incorporated Sections to sales of tangible personal property mean sales of sugar-sweetened beverages, syrups, or powders when used in this Act.

(c) In addition to any other penalty authorized by law, a permit issued pursuant to Section 15 shall be suspended or revoked if any court of competent jurisdiction determines, or the Department finds based on a preponderance of the evidence, after the permittee is afforded notice and an opportunity to be heard, that the permittee, or any of the permittee's agents or employees, has violated any of the requirements, conditions, or prohibitions of this Act. For a first violation of this Act within any 60-month period, the permit shall be suspended for 30 days. For a second violation of this Act within any 60-month period, the permit shall be suspended for 90 days. For a third violation of this Act within any 60-month period, the permit shall be suspended for one year. For a fourth or subsequent violation of this Act within any 60-month period, the license shall be revoked.

(d) A decision of the Department under this Section is a final administrative decision and is subject to review by the Illinois Independent Tax Tribunal.

Section 50. Unpaid taxes a debt. The tax herein required to be paid by any person distributing sugar-sweetened beverages, powders, or syrup for sale to a retailer in the State, and any such tax required to be paid by that person shall constitute a debt owed by that person to this State.

Section 55. Revenue distribution; establishment of Illinois Wellness Fund. The Illinois Wellness Fund is hereby created as a special fund in the State Treasury. All the moneys collection by the Department pursuant to the taxes imposed by Section 20 shall be deposited as follows; 2% shall be deposited into the Tax Compliance and Administration Fund for the administrative costs of the Department, and 98% shall be deposited into the Illinois Wellness Fund. Of the moneys deposited into the Illinois Wellness Fund on a monthly basis, the following amounts shall remain in the fund and be used for the purposes set forth in Section 60 of this Act:

(a)$4,167,000 until June 30, 2018;

(b)$6,250,000 from July 1, 2018 until June 30, 2019; and

(c)$8,334,000 after July 1 2019.

The remainder of the monthly balance shall be deposited into the Healthcare Provider Relief Fund. Beginning July 1, 2019, those funds shall be used for the purposes set forth in Section 65 of this Act.

Section 60. Expenditure of Illinois Wellness Fund for community prevention and wellness initiatives.

(a) The moneys remaining in the Illinois Wellness Fund shall be used to support community prevention and wellness initiatives, as follows:

(1) One-half of one percent (0.5%) shall be dedicated to administration of the Fund by the Department of Public Health, and an additional 0.5% shall be appropriated to the Department of Public Health for the purpose of providing administrative support to the Advisory Council and a Healthy in All Policies coordinator.

(2) At least 1% but not more than 2% shall be dedicated to evaluation of the impact of the Act on the health and wellness of Illinoisans. Evaluation of the Act shall be conducted by an independent evaluator selected by the Department of Public Health in consultation with the Advisory Council. Those funds may also be used to support relevant surveillance systems to support tracking of the impact of the Act. The evaluation shall encompass the impact of the Illinois Wellness Fund and the tax on the consumption of sugar-sweetened beverages and obesity rates, among other indicators. The evaluation shall also include a summary of how moneys in the Illinois Wellness Fund were allocated to eligible entities and spent within the Illinois Medicaid program. The evaluator shall report annually to the Advisory Council on the progress and results of the evaluation.

(3) Two percent shall be dedicated to eligible entities to provide technical assistance to and statewide coordination of strategies and activities of recipients of funding from the Fund, including, but not limited to, training and education around obesity prevention best practices, coordination of strategies across grantees, and quality improvement for obesity prevention and treatment initiatives.

(4) Twenty percent shall be allocated to local health departments via a formula developed by the Illinois Department of Public Health based on population and need. These funds shall not supplant existing State funding. The moneys allocated under this paragraph (4) shall be used for the following activities and services:

(A) conducting evidence-based obesity and chronic disease prevention efforts to achieve at least one of the following goals: eliminating racial, ethnic, and socioeconomic disparities in obesity and chronic disease incidence; improving access to and consumption of healthy, safe, and affordable foods; reducing access to and consumption of calorie-dense, nutrient-poor foods; encouraging physical activity and decreasing sedentary behavior; raising awareness about the importance of nutrition and physical activity for the prevention of chronic diseases; supporting the consumption of foods that are grown or produced locally; supporting the use of evidence-based clinical preventive services; and promoting breastfeeding; and

(B) leading and coordinating the efforts of other organizations in their jurisdictions that are engaged in similar efforts to achieve these goals, whether funded through this Act or otherwise.

(5) The remaining money shall be used to support the prevention of obesity, diabetes, cardiovascular disease, and cancer, as well as oral health improvements, and shall not be used to supplant existing State funds. At least 50% of the funds allocated under this item (5) shall be allocated to eligible entities serving high-need populations. The Department of Public Health shall adopt rules to designate high-need populations. The rules shall establish the poverty rate as the primary indicator of need, and, to the extent data is available, rates of obesity and nutrition and physical activity-related chronic diseases, sugary drink consumption, and population density as sub-indicators of need for prioritizing funds. The Department shall use the most up-to-date and valid data available. These prevention initiatives shall include, but are not limited to, the following:

(A) funds to support school and early childhood health and wellness, including increased access to healthy foods, increased physical activity and physical education, improved quality of physical education, increased nutrition education, improved health, mental health, oral health, and social services in schools, increased opportunities for home economics courses (cooking and healthy grocery shopping education) and school and early childhood education facility improvements that support health;

(B) funds to support community nutrition and access to healthy foods, including nutrition education, healthy cooking programs, healthy vending initiatives, healthy food procurement, education regarding shopping for healthy foods, increased support for breastfeeding promotion programs, and increasing access to healthy foods, including through reducing the prevalence and effects of food deserts;

(C) funds to support physical activity in communities, including active transportation, community walkability and bike-ability initiatives, multi-use trails, joint-use agreements, safe routes to schools programs, educational programs that promote physical activity, physical activity in after school programs, environmental changes that increase physical activity; initiatives that create physically safe and accessible areas for physical activity and play;

(D) funds to support worksite wellness, including promotion of nutrition, physical activity and preventive services in worksites, workplace policies, and environmental changes that support employee wellness;

(E) funds to support local food systems, including promotion of, access to, and consumption of local foods, farm-to-school and farm-to-institution programs, community gardens, urban agriculture projects, community-supported agriculture programs, farmers markets and double-value coupons programs for SNAP recipients at farmers markets, food hubs, beginning farmer training programs, and farm stands; and

(F) funds to support oral health improvement, including increased access to oral health education, dental sealants for children, and use of community prevention and health education strategies that reduce risk factors for oral and pharyngeal cancers.

(b) All moneys in the Illinois Wellness Fund, spent in accordance with this Section, shall be expended only for the purposes expressed in this Act and shall be used only to supplement existing levels of service and not to supplant current federal, State, or local funding for existing levels of services as provided in fiscal year 2014. Entities that are eligible to receive moneys from this Section include:

(1) community-based health improvement coalitions, including, but not limited to:

(A) schools and early childhood education centers;

(B) non-profit community-based organizations;

(C) Federally Qualified Health Centers, community health centers, and organizations which operate a school-based health center certified by the Illinois Department of Public Health;

(D) non-profit hospitals and health systems, particularly safety net hospitals;

(E) Illinois farms producing primarily fruits, vegetables, and tree nuts for direct human consumption by Illinois residents;

(F) faith-based organizations;

(G) policy, research, or training institutes or centers; and

(H) local public health, planning, and transportation departments, and local park and school districts; and

(2) individual non-profit community-based organizations, including faith-based organizations, working to improve health, as determined by the Advisory Council;

(3) units of local government, including local public health departments, local planning and transportation departments, local school districts, and local park districts;

(4) statewide or regional non-profit organizations, including those with local chapters, members, or affiliates; and

(5) non-profit universities, public universities, and institutions of higher learning.

(c) The Department of Public Health shall distribute the moneys under this Section via grants to eligible entities within 120 days after the start of each fiscal year including:

(1) allocation of funds for staff and resources needed to administer the Fund and Advisory Council, including a Health in All Policies Coordinator;

(2) distribution of funds allocated to local health departments via formula as described in Section 60; and

(3) distribution of the remaining funds to eligible entities as recommended by the Advisory Council for Health and Wellness based on a request for proposal process; at least half of the funds shall be dedicated to entities serving high-need communities.

Funds may be distributed as multi-year grants.

Section 65. Expenditures of the Illinois Wellness Fund for the Illinois Medicaid Program. Beginning July 1, 2019, the moneys collected in the Illinois Wellness Fund and deposited into the Healthcare Provider Relief Fund shall be expended by the Department of Healthcare and Family Services for expanded prevention and obesity treatment services for Medicaid beneficiaries. The Department shall seek all required amendments to the existing State Plan. The Department of Healthcare and Family Services shall submit a report at the end of each State fiscal year to the Advisory Council on the expanded services provided along with the savings and costs associated with these services to the Medicaid program. The Department of Healthcare and Family Services shall cover the following prevention and obesity treatment services for all Medicaid beneficiaries:

(1) all services recommended for pediatric prevention, assessment and treatment of overweight and obesity set forth by the American Academy of Pediatrics (clinical practice guidelines) and those recommended by the U.S. Preventive Services Task Force Grade B Recommendation to screen for obesity in children and adolescents, including clinical pediatric weight management treatment programs; Medicaid benefits must follow these recommendations and reimbursement rates must be set at a level that ensures appropriate access to services outlined in the recommendations;

(2) community-based, evidence-based lifestyle change physical activity and nutrition programs, diabetes and other health-behavior focused chronic disease self-management and chronic disease prevention programs for children and adults, including, but not limited to, participation in the evidence-based Diabetes Prevention Program, MEND program, Chronic Disease Self-Management Program, and Diabetes Self-Management Program;

(3) evidence-based diabetes education programs;

(4) medical nutrition therapy, care coordination, weight management programs, diabetes education and multi-disciplinary obesity treatment programs for overweight and obese children and adults, including coverage for services from dieticians, social workers, psychologists, and pharmacists; and

(5) dental prevention services, including routine oral health screenings, cleanings, and oral health maintenance services for adults.

Section 70. Illinois Wellness Fund governance.

(a) The Illinois Wellness Fund shall be governed by a multi-sector Advisory Council for Health and Wellness, with administration by the Department of Public Health and Department of Healthcare and Family Services as described below. The Advisory Council for Health and Wellness shall be established by December 31, 2017 and be comprised of:

(1) one ex officio representative from each of the following Departments: the Department of Public Health, the Department of Human Services, the State Board of Education, the Department on Aging, the Department of Healthcare and Family Services, the Department of Transportation, and the Department of Agriculture, appointed by the Director or Secretary of the respective Department;

(2) one obesity prevention advocate representing a statewide coalition working on reducing obesity through policy, systems, and environmental changes, appointed by the Governor;

(3) one person representing primary or secondary education, or both, appointed by the Governor;

(4) one representative of a statewide organization focusing on chronic disease prevention, appointed by the Governor;

(5) one representative of an organization or coalition focusing on active transportation, appointed by the Governor;

(6) one representative of an organization or coalition focusing on employer wellness initiatives, appointed by the Governor;

(7) one person representing access to healthy foods initiatives, appointed by the Governor;

(8) one person representing community-based obesity prevention programs, appointed by the Governor;

(9) one representative of an association representing hospitals across the State, appointed by the Governor;

(10) one person representing public health departments, appointed by the Governor;

(11) one representative of an association representing public health practitioners, appointed by the Governor;

(12) one representative of an organization representing pediatricians in the State, appointed by the Governor;

(13) one representative of an organization representing primary care providers in the State, appointed by the Governor;

(14) one person representing community based healthy eating-active living coalitions, appointed by the Governor;

(15) one person representing communities of color or communities that are disproportionately impacted by obesity, appointed by the Governor;

(16) one person representing faith-based organizations, appointed by the Governor;

(17) one person representing an organization working in behavioral health, appointed by the Governor;

(18) one person representing the general public, appointed by the Governor; and

(19) four members of the General Assembly, one appointed by each of the following: the Speaker and Minority Leader of the Illinois House of Representatives and the President and Minority Leader of the Illinois Senate; the members appointed by the Speaker and the President of the Senate shall serve as co-chairs of the Advisory Council.

(b) The public members of the Advisory Council for Health and Wellness shall serve 4-year terms, and may be reappointed for consecutive terms. Members whose terms expire shall continue to serve until their successors are appointed and qualified. The legislative members of the Advisory Council for Health and Wellness shall serve 2-year terms that correspond to each General Assembly, except that the incumbent shall continue to serve until reappointed or replaced.

(c) The Advisory Council for Health and Wellness shall have the following powers and duties:

(1) to make recommendations to Department of Public Health on fund allocation categories every 3 years based on the State's current conditions and needs related to nutrition and physical activity-related chronic disease prevention and the results of the Act evaluation report;

(2) to develop and implement a request for proposal (RFP) process for allocating the Illinois Wellness Fund moneys via grants to eligible entities across the State each year (or via multi-year grants);

(3) oversight of the request for proposals process, including advising on the selection of eligible entities to receive funds and submission of funding recommendations to the Department of Public Health for funding for eligible entities for initiatives as described in Section 60 within 120 days of the start of the fiscal year;

(4) to advise on the selection of evaluators and provide input on the evaluation design, goals, and methods at least annually, and to receive and review progress reports on the evaluation;

(5) to annually receive and review the evaluation progress report and Medicaid services, costs, and savings report related to this Act; and

(6) to submit a report to the General Assembly every 3 years on the allocation of the funds and summary results of the impact evaluation of the Illinois Wellness Fund and the tax imposed under this Act.

Section 75. Rulemaking. No later than August 31, 2017, the Department of Public Health shall adopt rules for the distribution of Illinois Wellness Fund moneys for community prevention, pursuant to Section 60. No later than August 31, 2017, the Department of Healthcare and Family Services shall adopt rules for the allocation and distribution of Wellness Fund moneys to support prevention in the Medicaid program pursuant to Section 65. No later than April 30, 2017, the Department of Revenue shall adopt rules to implement the provisions of this Act related to the implementation, collection, and deposition of the tax, so that taxes will be collected beginning May 1, 2017.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 200. The Illinois Independent Tax Tribunal Act of 2012 is amended by changing Section 1-45 as follows:

(35 ILCS 1010/1-45)

Sec. 1-45. Jurisdiction of the Tax Tribunal.

(a) Except as provided by the Constitution of the United States, the Constitution of the State of Illinois, or any statutes of this State, including, but not limited to, the State Officers and Employees Money Disposition Act, the Tax Tribunal shall have original jurisdiction over all determinations of the Department reflected on a Notice of Deficiency, Notice of Tax Liability, Notice of Claim Denial, or Notice of Penalty Liability issued under the Illinois Income Tax Act, the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, the Cigarette Tax Act, the Cigarette Use Tax Act, the Tobacco Products Tax Act of 1995, the Hotel Operators' Occupation Tax Act, the Motor Fuel Tax Law, the Automobile Renting Occupation and Use Tax Act, the Coin-Operated Amusement Device and Redemption Machine Tax Act, the Gas Revenue Tax Act, the Water Company Invested Capital Tax Act, the Telecommunications Excise Tax Act, the Telecommunications Infrastructure Maintenance Fee Act, the Public Utilities Revenue Act, the Electricity Excise Tax Law, the Aircraft Use Tax Law, the Watercraft Use Tax Law, the Gas Use Tax Law, or the Uniform Penalty and Interest Act, or the Healthy Eating Active Living (HEAL) Act. Except with respect to the Healthy Eating Active Living (HEAL) Act, jurisdiction Jurisdiction of the Tax Tribunal is limited to Notices of Tax Liability, Notices of Deficiency, Notices of Claim Denial, and Notices of Penalty Liability where the amount at issue in a notice, or the aggregate amount at issue in multiple notices issued for the same tax year or audit period, exceeds $15,000, exclusive of penalties and interest. In notices solely asserting either an interest or penalty assessment, or both, the Tax Tribunal shall have jurisdiction over cases where the combined total of all penalties or interest assessed exceeds $15,000.

(b) Except as otherwise permitted by this Act and by the Constitution of the State of Illinois or otherwise by State law, including, but not limited to, the State Officers and Employees Money Disposition Act, no person shall contest any matter within the jurisdiction of the Tax Tribunal in any action, suit, or proceeding in the circuit court or any other court of the State. If a person attempts to do so, then such action, suit, or proceeding shall be dismissed without prejudice. The improper commencement of any action, suit, or proceeding does not extend the time period for commencing a proceeding in the Tax Tribunal.

(c) The Tax Tribunal may require the taxpayer to post a bond equal to 25% of the liability at issue (1) upon motion of the Department and a showing that (A) the taxpayer's action is frivolous or legally insufficient or (B) the taxpayer is acting primarily for the purpose of delaying the collection of tax or prejudicing the ability ultimately to collect the tax, or (2) if, at any time during the proceedings, it is determined by the Tax Tribunal that the taxpayer is not pursuing the resolution of the case with due diligence. If the Tax Tribunal finds in a particular case that the taxpayer cannot procure and furnish a satisfactory surety or sureties for the kind of bond required herein, the Tax Tribunal may relieve the taxpayer of the obligation of filing such bond, if, upon the timely application for a lien in lieu thereof and accompanying proof therein submitted, the Tax Tribunal is satisfied that any such lien imposed would operate to secure the assessment in the manner and to the degree as would a bond. The Tax Tribunal shall adopt rules for the procedures to be used in securing a bond or lien under this Section.

(d) If, with or after the filing of a timely petition, the taxpayer pays all or part of the tax or other amount in issue before the Tax Tribunal has rendered a decision, the Tax Tribunal shall treat the taxpayer's petition as a protest of a denial of claim for refund of the amount so paid upon a written motion filed by the taxpayer.

(e) The Tax Tribunal shall not have jurisdiction to review:

(1) any assessment made under the Property Tax Code;

(2) any decisions relating to the issuance or denial of an exemption ruling for any entity claiming exemption from any tax imposed under the Property Tax Code or any State tax administered by the Department;

(3) a notice of proposed tax liability, notice of proposed deficiency, or any other notice of proposed assessment or notice of intent to take some action;

(4) any action or determination of the Department regarding tax liabilities that have become finalized by law, including but not limited to the issuance of liens, levies, and revocations, suspensions, or denials of licenses or certificates of registration or any other collection activities;

(5) any proceedings of the Department's informal administrative appeals function; and

(6) any challenge to an administrative subpoena issued by the Department.

(f) The Tax Tribunal shall decide questions regarding the constitutionality of statutes and rules adopted by the Department as applied to the taxpayer, but shall not have the power to declare a statute or rule unconstitutional or otherwise invalid on its face. A taxpayer challenging the constitutionality of a statute or rule on its face may present such challenge to the Tax Tribunal for the sole purpose of making a record for review by the Illinois Appellate Court. Failure to raise a constitutional issue regarding the application of a statute or regulations to the taxpayer shall not preclude the taxpayer or the Department from raising those issues at the appellate court level.

(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)

Section 990. The State Finance Act is amended by adding Section 5.878 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Illinois Wellness Fund.

Section 999. Effective date. This Act takes effect upon becoming law.