March 26, 2010

Clark Rector Jr., Executive Vice President – Government Affairs
Alaina Flaherty, Federation Intern

• FTC Seeks COPPA Comments
• Child Nutrition Bill Passes Committee
• Taxing Sugary Drinks Gains Momentum
• New York to Repeal Tax Exemptions

FTC Seeks COPPA Comments

The Federal Trade Commission has issued a request for comments on the implementation of the Children's Online Privacy Protection Act COPPA), including the costs and benefits of the Rule and whether certain sections should be kept, eliminated or changed. COPPA became effective in April of 2000. It sets out certain requirements for operators of websites directed to children under the age of 13, or who knowingly collect information from children under 13, including obtaining parental consent before collecting, using or disclosing any personal information from such children.

Comments are due by June 30, 2010. The entire request for comments can be found here.
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Child Nutrition Bill Passes Committee

The Senate Agriculture Committee has passed a five-year reauthorization of the child nutrition programs. The Healthy, Hunger-Free Kids Act of 2010, proposed by Committee Chair Sen. Blanche Lincoln, D-Ark., and supported by ranking minority member Sen. Saxby Chambliss, R-Ga., would allow for a $4.5 billion increase in program spending over the next ten years. The bi-partisan bill would also call on the Department of Agriculture to create new standards for food served in schools, especially in vending machines.

The bill faced some opposition from 15 environmental groups who objected to removing $2.2 billion from the Environmental Quality Incentives Program. The House has yet to act on its version of the proposed bill.
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Taxing Sugary Drinks Gains Momentum

Sold as an effort to fight obesity and raise revenue, many states are considering taxes on sweetened beverages. Arkansas and West Virginia have already taxed soft drinks. Lawmakers in New York and at least eleven other states have introduced similar legislation. For example, the proposed rate in New York would be a penny-per-ounce on sweetened beverages with more than 10 calories, and which are not 100 percent juice. The suggested rate in Philadelphia is two cents-per-ounce, which would be the largest in the nation.

One of the stated reasons for the proposed taxes is reducing obesity. However, a recent university study found that taxes as high as 58 percent resulted in only a negligible reduction in average body mass index.
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New York to Repeal Tax Exemptions

The New York State Assembly released their proposed budget plan this week which includes the repeal of many tax exemptions. Items which would lose their exemptions from the sales and use tax include: promotional materials shipped from New York to customers and potential customers outside the state, services related to mailing lists for promotional materials, and receipts from the sale of promotional materials.

The proposed budget will remove the entire exemption section of the law, as it pertains to promotional materials. The budget approval deadline is April 1, but due to many controversial items, Gov. David Paterson (D) has reported it is unlikely New York will meet that date.

The next issue of Government Report will be during the week of April 12 after the Congressional Easter recess.
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