Bill Text: CA SB987 | 2015-2016 | Regular Session | Amended
Bill Title: Medical marijuana: Marijuana User Fee Act.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-11-30 - From Assembly without further action. [SB987 Detail]
Download: California-2015-SB987-Amended.html
BILL NUMBER: SB 987 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 13, 2016
AMENDED IN SENATE MAY 31, 2016
AMENDED IN SENATE MARCH 15, 2016
INTRODUCED BY Senator McGuire
FEBRUARY 10, 2016
An act to amen d Sections 11362.715, 11362.72, and
11362.735 of the Health and Safety Code, and to add Part 17
(commencing with Section 37001) to Division 2 of the Revenue and
Taxation Code, relating to medical marijuana, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 987, as amended, McGuire. Medical marijuana: Marijuana User Fee
Act.
Existing law, the Compassionate Use Act of 1996, an initiative
measure enacted by the approval of Proposition 215 at the November 5,
1996, statewide general election, allows the use of
marijuana for medical purposes. exempts from specified
criminal penalties the possession or cultivation of medical
marijuana by patients and primary caregivers. The Medical
Marijuana Program requires the State Department of Public Health to
establish and maintain a voluntary program for the issuance of
identification cards to qualified patients who satisfy specified
requirements with respect to the use of medical marijuana. The
Medical Marijuana Regulation and Safety Act, operative beginning on
January 1, 2016, provides for the licensure and regulation of
commercial medical marijuana activity, as specified. The Fee
Collection Procedures Law, the violation of which is a crime,
provides procedures for the collection of certain fees and
surcharges. fees.
This bill would require an identification card issued pursuant to
the Medical Marijuana Program to contain an indication that the
cardholder has low income if that person's income is less than 200%
of the federal poverty guidelines.
This bill would enact the Marijuana User Fee Act. The bill, on and
after January 1, 2018, unless a specified initiative is passed by
the voters at the November 8, 2016, statewide general election, would
impose a fee on the consumption or other use in this state of
medical marijuana purchased from any retailer for the consumption or
other use in this state at the rate of 15%
10% of the sales price of the medical marijuana. This bill
would provide that a purchaser is liable for that fee unless the
purchaser has an identification card indicating that the purchaser
has low income, as described above, and would require every
retailer engaged in business in this state and making sales of
medical marijuana to a purchaser for the consumption or other use in
this state to separately state and collect the fee from a purchaser,
unless the purchaser presents that identification card, as
specified. This bill would also make specific violations of this
bill a crime, thereby imposing a state-mandated local program.
This bill would require the State Board of Equalization to
administer and collect the fee in accordance with the Fee Collection
Procedures Law. By expanding the application of the Fee Collection
Procedures Law, the violation of which is a crime, this bill would
impose a state-mandated local program. The bill would require a
retailer to register for a permit with the board, to prepare and file
with the board returns, and to remit the fee quarterly. The bill
would require that all revenues, less refunds, be remitted to the
State Board of Equalization board and
deposited in the Marijuana User Fee Fund, which the bill would
establish.
This bill would require moneys in the Marijuana User Fee Fund to
be allocated by the Controller in specified percentages to the
General Fund and, upon appropriation by the Legislature, to the
Bureau of Medical Marijuana Regulation for the administration of a
grant program to distribute grants to local agencies, as defined,
that oversee or are affected by the regulation of cultivating,
processing, manufacturing, distributing, and selling of medical
marijuana, or that undertake enforcement activities pertaining to the
cultivation of marijuana; the Department of Parks and Recreation for
the stewardship, operation, maintenance, and preservation of state
park units; and to counties, as defined, for drug and alcohol
treatment programs. The bill, commencing in 2018, and at least every
other year thereafter, would require the Legislative Analyst to
review and evaluate the fee, and provide a report on the fee to
specified committees of the Legislature. The bill would also require
funds to be advanced to the Marijuana User Fee Fund as a General Fund
or special fund loan, would authorize the Director of Finance to
provide an initial operating loan from the General Fund, and would
appropriate to the board funds so advanced or loaned to the board for
the implementation and administration of the act.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that edible cannabis
products, as defined in Section 19300.5 of the Business and
Professions Code and as applicable to Section 2 of this act, are not
considered a food product for purposes of Section 34 of Article XIII
of the California Constitution.
SEC. 2. Section 11362.715 of the Health
and Safety Code is amended to read:
11362.715. (a) A person who seeks an identification card shall
pay the fee, as provided in Section 11362.755, and provide all of the
following to the county health department or the county's designee
on a form developed and provided by the department:
(1) The name of the person, and proof of his or her residency
within the county.
(2) Written documentation by the attending physician in the person'
s medical records stating that the person has been diagnosed with a
serious medical condition and that the medical use of marijuana is
appropriate.
(3) The name, office address, office telephone number, and
California medical license number of the person's attending
physician.
(4) The name and the duties of the primary caregiver.
(5) A government-issued photo identification card of the person
and of the designated primary caregiver, if any. If the applicant is
a person under 18 years of age, a certified copy of a birth
certificate shall be deemed sufficient proof of identity.
(6) Documentation of the person's income.
(b) If the person applying for an identification card lacks the
capacity to make medical decisions, the application may be made by
the person's legal representative, including, but not limited to, any
of the following:
(1) A conservator with authority to make medical decisions.
(2) An attorney-in-fact under a durable power of attorney for
health care or surrogate decisionmaker authorized under another
advanced health care directive.
(3) Any other individual authorized by statutory or decisional law
to make medical decisions for the person.
(c) The legal representative described in subdivision (b) may also
designate in the application an individual, including himself or
herself, to serve as a primary caregiver for the person, provided
that the individual meets the definition of a primary caregiver.
(d) The person or legal representative submitting the written
information and documentation described in subdivision (a) shall
retain a copy thereof.
SEC. 3. Section 11362.72 of the Health
and Safety Code is amended to read:
11362.72. (a) Within 30 days of receipt of an application for an
identification card, a county health department or the county's
designee shall do all of the following:
(1) For purposes of processing the application, verify that the
information contained in the application is accurate. If the person
is less than 18 years of age, the county health department or its
designee shall also contact the parent with legal authority to make
medical decisions, legal guardian, or other person or entity with
legal authority to make medical decisions, to verify the information.
(2) Verify with the Medical Board of California or the Osteopathic
Medical Board of California that the attending physician has a
license in good standing to practice medicine or osteopathy in the
state.
(3) Contact the attending physician by facsimile, telephone, or
mail to confirm that the medical records submitted by the patient are
a true and correct copy of those contained in the physician's office
records. When contacted by a county health department or the county'
s designee, the attending physician shall confirm or deny that the
contents of the medical records are accurate.
(4) Take a photograph or otherwise obtain an electronically
transmissible image of the applicant and of the designated primary
caregiver, if any.
(5) Determine whether the applicant has low income. For purposes
of this article, an applicant has low income if the applicant's
income is less than 200 percent of the federal poverty guidelines.
(5)
(6) Approve or deny the application. If an applicant
who meets the requirements of Section 11362.715 can establish that an
identification card is needed on an emergency basis, the county or
its designee shall issue a temporary identification card that shall
be valid for 30 days from the date of issuance. The county, or its
designee, may extend the temporary identification card for no more
than 30 days at a time, so long as the applicant continues to meet
the requirements of this paragraph.
(b) If the county health department or the county's designee
approves the application, it shall, within 24 hours, or by the end of
the next working day of approving the application, electronically
transmit the following information to the department:
(1) A unique user identification number of the applicant.
(2) The date of expiration of the identification card.
(3) The name and telephone number of the county health department
or the county's designee that has approved the application.
(c) The county health department or the county's designee shall
issue an identification card to the applicant and to his or her
designated primary caregiver, if any, within five working days of
approving the application.
(d) In any case involving an incomplete application, the applicant
shall assume responsibility for rectifying the deficiency. The
county shall have 14 days from the receipt of information from the
applicant pursuant to this subdivision to approve or deny the
application.
SEC. 4. Section 11362.735 of the Health
and Safety Code is amended to read:
11362.735. (a) An identification card issued by the county health
department shall be serially numbered and shall contain all of the
following:
(1) A unique user identification number of the cardholder.
(2) The date of expiration of the identification card.
(3) The name and telephone number of the county health department
or the county's designee that has approved the application.
(4) A 24-hour, toll-free telephone number, to be maintained by the
department, that will enable state and local law enforcement
officers to have immediate access to information necessary to verify
the validity of the card.
(5) Photo identification of the cardholder.
(6) An indication that the cardholder has low income, if
applicable.
(b) A separate identification card shall be issued to the person's
designated primary caregiver, if any, and shall include a photo
identification of the caregiver.
SEC. 2. SEC. 5. Part 17 (commencing
with Section 37001) is added to Division 2 of the Revenue and
Taxation Code, to read:
PART 17. Marijuana User Fee Act
37001. This part is known, and may be cited, as the "Marijuana
User Fee Act."
37002. For purposes of this part, the following definitions shall
apply:
(a) "Local agency" includes any city, county, special district,
authority, or other political subdivision of the state.
(b) "Medical marijuana" means medical cannabis as defined in
Section 19300.5 of the Business and Professions Code.
(c) "Person" means person as defined in Section 55002.
(d) "Primary caregiver" means a person who is exempt from the
licensure requirements of the Medical Marijuana Regulation and Safety
Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of
the Business and Professions Code) pursuant to subdivision (b) of
Section 19319 of the Business and Professions Code.
(e) "Purchaser" means a person that purchases medical marijuana
for consumption or other use in this state.
(f) "Qualified patient" means a person who is entitled to the
protections of the Compassionate Use Act of 1996 (Section 11362.5 of
the Health and Safety Code).
(g) "Retail sale" or "sale at retail" means a sale for any purpose
other than resale in the regular course of business in the form of
medical marijuana.
(h) (1) "Retailer" includes every person that makes any retail
sale or sales of medical marijuana. "Retailer" also includes a person
holding a dispensary license issued pursuant to the Medical
Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with
Section 19300) of Division 8 of the Business and Professions Code).
(2) Every person making more than two retail sales of medical
marijuana during any 12-month period shall be considered a retailer
within the provisions of this part.
(i) "Retailer engaged in business in this state" means any
retailer that has substantial nexus with this state for purposes of
the commerce clause of the United States Constitution and any
retailer upon whom federal law permits this state to impose a fee
collection duty.
(j) (1) "Sale" or "purchase" means and includes any transfer of
title or possession, exchange, or barter, conditional or otherwise,
in any manner or by any means whatsoever, of medical marijuana for a
consideration. "Transfer of possession" includes only transactions
found by the board to be in lieu of a transfer of title, exchange, or
barter.
(2) Notwithstanding paragraph (1), "sale" or "purchase" does not
include the transfer of title or possession, exchange, or barter of
medical marijuana for a consideration between a qualified patient and
his or her primary caregiver.
(k) "Sales price" means the total amount for which medical
marijuana is sold, valued in money, whether paid in money or
otherwise, without any deduction on account of the cost of any
expenses.
(l) "Use" includes the exercise of any right or power over medical
marijuana incident to the ownership of that medical marijuana,
except that it does not include the sale of that medical marijuana in
the regular course of business.
37003. On and after January 1, 2018, there is hereby imposed a
fee on the consumption or other use in this state of medical
marijuana purchased from any retailer for the consumption or other
use in this state at the rate of 15 10
percent of the sales price of the medical marijuana.
37004. (a) (1) Every purchaser consuming or
otherwise using in this state medical marijuana that the purchaser
purchased from a retailer for consumption or other use in this state
is liable for the fee imposed by Section 37003. That purchaser's
liability is not extinguished until the fee has been paid to this
state except that a receipt from a retailer engaged in business in
this state given to a purchaser pursuant to paragraph (2) of
subdivision (b) is sufficient to relieve the purchaser from further
liability for the fee to which the receipt refers.
(2) Notwithstanding paragraph (1), a purchaser is not liable for
the tax if the purchaser has an identification card issued pursuant
to Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
Division 10 of the Health and Safety Code indicating that the
purchaser has low income.
(b) (1) Every retailer engaged in business in this state and
making sales of medical marijuana to a purchaser shall, at the time
of making such a sale, collect the fee as a charge separate from, and
not included in, any other fee, charge, or other amount paid by the
purchaser.
(2) Every retailer engaged in business in this state shall collect
the fee from the purchaser and give to the purchaser a receipt
therefor in the manner and form prescribed by the board.
(3) Notwithstanding paragraphs (1) and (2), a retailer engaged in
business in this state shall not collect the tax from a purchaser
who, at the time of the sale, presents the retailer with an
identification card issued pursuant to Article 2.5 (commencing with
Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety
Code indicating that the purchaser has low income.
(c) The board shall administer and collect the fee imposed by this
part pursuant to the Fee Collection Procedures Law (Part 30
(commencing with Section 55001)), except that Article 1.1 (commencing
with Section 55050) of Chapter 3 of that part shall not apply.
(d) (1) The fee required to be collected by the retailer engaged
in business in this state, any fee collected from a purchaser that
has not been remitted to the board, and any amount unreturned to a
purchaser which is not the fee, but was collected from the purchaser
under the representation by the retailer that it was the fee,
constitutes debts owed by the retailer to this state.
(2) A retailer is relieved from liability to collect the fee that
became due and payable, insofar as the measure of the fee is
represented by accounts that have been found to be worthless and
charged off by the retailer in accordance with generally accepted
accounting principles. A retailer that has previously paid the amount
of the fee may, under rules and regulations prescribed by the board,
take as a deduction on its return the amount found worthless and
charged off by the retailer. If these accounts are thereafter in
whole or in part collected by the retailer, the amount collected
shall be included in the first return filed after the collection and
the amount of the fee shall be paid with the return.
(3) The board may by regulation promulgate such other rules with
respect to uncollected or worthless accounts as it shall deem
necessary to the fair and efficient administration of this part.
(e) It is unlawful for any retailer to advertise or hold out or
state to the public or to any purchaser, directly or indirectly, that
the fee or any part thereof will be assumed or absorbed by the
retailer or that it will not be added to the selling price of the
medical marijuana sold or that if added it or any part thereof will
be refunded. Any person violating this subdivision is guilty of a
misdemeanor.
(f) (1) The fee required to be collected by the retailer engaged
in business in this state from the purchaser shall be displayed
separately from the price of the medical marijuana on the sales check
or other proof of sales. Any person violating this paragraph is
guilty of a misdemeanor.
(2) Except as otherwise required by paragraph (1), the fee
required to be collected by the retailer engaged in business in this
state from the purchaser shall be included in any list price, marked
price, or any other advertised or quoted price of medical marijuana
provided or displayed by the retailer engaged in business in this
state.
(g) (1) The board may prescribe, adopt, and enforce regulations
relating to the administration and enforcement of this part.
(2) The board may prescribe, adopt, and enforce any emergency
regulations as necessary to implement this part. Any emergency
regulation prescribed, adopted, or enforced pursuant to this section
shall be adopted in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, and, for purposes of that chapter, including Section 11349.6 of
the Government Code, the adoption of the regulation is an emergency
and shall be considered by the Office of Administrative Law as
necessary for the immediate preservation of the public peace, health
and safety, and general welfare.
(h) (1) The fee imposed by this part is due and payable to the
board quarterly on or before the last day of the month next
succeeding each quarterly period.
(2) On or before the last day of the month following each
quarterly period, a return for the preceding quarterly period shall
be filed using electronic media with the board. Returns shall be
authenticated in a form or pursuant to methods as may be prescribed
by the board.
37005. (a) A retailer required to collect the fee imposed under
this part shall register for a permit with the board. Every
application for registration shall be made in a form prescribed by
the board and shall set forth the name under which the applicant
transacts or intends to transact business, the location of the
retailer's place or places of business, and any other information
that the board may require. An application for registration shall be
authenticated in a form or pursuant to methods as may be prescribed
by the board.
(b) The board shall grant and issue to each applicant that
complies with subdivision (a) a separate permit for each place of
business within the state.
(c) A permit issued pursuant to this section is not assignable and
is valid only for the person in whose name it is issued and for the
transaction of business at the place designated therein. It shall at
all times be conspicuously displayed at the place for which it is
issued.
37005.3. Whenever any retailer fails to comply with any provision
of this part or any rules or regulations of the board prescribed and
adopted under this part, the board upon hearing, after giving the
retailer at least 10 days' notice in writing specifying the time and
place of the hearing and requiring the retailer to show cause why the
permit should not be revoked, may revoke or suspend the permit held
by the retailer. The board shall give to the retailer written notice
of the suspension or revocation of any of the retailer's permits. The
notices herein required may be served personally or by mail in the
manner prescribed for service of notice of a deficiency
determination. The board shall not issue a new permit after the
revocation of a permit unless it is satisfied that the former holder
of the permit will comply with the provisions of this part and the
regulations of the board prescribed and adopted under this part.
37005.5. (a) The board may refuse to issue a permit to any person
submitting an application for a permit as required in Section 37005
if the person desiring to engage in or conduct business as a retailer
within this state has an outstanding final liability with the board
for any amount due under this part.
(b) The board may also refuse to issue a permit if the person
desiring to engage in or conduct business as a retailer within this
state is not a natural person or individual and any person
controlling the person desiring to engage in or conduct business as a
seller within this state has an outstanding final liability with the
board as provided in subdivision (a). For the purposes of this
section, "controlling" has the same meaning as defined in Section
22971 of the Business and Professions Code.
(c) For purposes of this section, a liability will not be deemed
to be outstanding if the person has entered into an installment
payment agreement pursuant to Section 55209 for any liability and is
in full compliance with the terms of the installment payment
agreement.
(d) If the person submitting an application for a permit pursuant
to Section 37005 has entered into an installment payment agreement as
provided in subdivision (c) and fails to comply with the terms of
the installment payment agreement, the board may seek revocation of
the person's permit pursuant to this section.
(e) (1) Whenever any person desiring to engage in or conduct
business as a retailer within this state is denied a permit pursuant
to this section, the board shall give to the person written notice of
the denial. The notice of the denial may be served personally, by
mail, or by other means deemed appropriate by the board. If served by
mail, the notice shall be placed in a sealed envelope, with postage
paid, addressed to the person at the address as it appears in the
records of the board. The giving of notice shall be deemed complete
at the time of deposit of the notice at the United States Postal
Service, or a mailbox, subpost office, substation or mail chute, or
other facility regularly maintained or provided by the United States
Postal Service, without extension of time for any reason. In lieu of
mailing, a notice may be served personally by delivering to the
person to be served and service shall be deemed complete at the time
of the delivery. Delivery of notice by other means deemed appropriate
by the board may include, but is not limited to, electronic
transmission. Personal service or delivery by other means deemed
appropriate by the board to a corporation may be made by delivery of
a notice to any person listed on the application as an officer.
(2) Any person that is denied a permit pursuant to this section
may request reconsideration of the board's denial of the permit. This
request shall be submitted in writing within 30 days of the date of
the notice of denial. Timely submission of a written request for
reconsideration shall afford the person a hearing in a manner that is
consistent with a hearing provided for by Section 37005.3. If a
request for reconsideration is not filed within the 30-day period,
the denial becomes final at the end of the 30-day period.
(f) The board shall consider offers in compromise when determining
whether to issue a permit.
37006. (a) The Marijuana User Fee Fund is hereby established in
the State Treasury. All revenues, less refunds, collected pursuant to
this part shall be made in remittances to the board and shall be
deposited in the Marijuana User Fee Fund.
(b) Except as otherwise provided in Section 37006.3, moneys in the
Marijuana User Fee Fund shall be allocated by the Controller
annually as follows:
(1) Thirty percent to the General Fund.
(2) Thirty percent to the Bureau of Medical Marijuana Regulation
for the administration of a grant program to distribute grants to
local agencies that oversee or are affected by the regulation of
cultivating, processing, manufacturing, distributing, and selling of
medical marijuana, that undertake enforcement activities pertaining
to the cultivation of marijuana in violation of state law or local
ordinance, or that are involved in a fire suppression, emergency
medical, or other "all-risk" response to a marijuana cultivation,
processing, manufacturing, or distribution incident, upon
appropriation by the Legislature. The grants shall be made available
beginning on or before July 1, 2018. No more than 5 percent of any
funds allocated may be used for administrative costs of the grant
program by the bureau or for any administrative costs of the local
agency awarded the grant.
(3) Twenty percent to the Department of Parks and Recreation for
the stewardship, operation, maintenance, and preservation of state
park units, including units operated on behalf of the state by local
or regional agencies or by nonprofit organizations, upon
appropriation by the Legislature. The department shall allocate to
those local or regional agencies or nonprofit organizations a
percentage of the funds received pursuant to this paragraph that is
roughly proportional to the ratio of the number of units operated by
the agencies or organizations to the number of units operated by the
department.
(4) (A) Twenty percent to counties for drug and alcohol treatment
programs, distributed based on the ratio of each county's population
to the total population of all counties, as set forth in the most
recent E-1 Cities, Counties, and the State Population Estimates
published by the Department of Finance, upon appropriation by the
Legislature. Any funds appropriated shall be used for drug and
alcohol treatment and recovery and case management services.
(B) For purposes of this paragraph, "county" means a county mental
health department, two or more county mental health departments
acting jointly, or a city-operated program receiving funds pursuant
to Section 5701.5 of the Welfare and Institutions Code.
37006.3. (a) Funds for the implementation and administration of
this part shall be advanced to the Marijuana User Fee Fund as a
General Fund or special fund loan, and shall be repaid by the initial
revenues, less refunds, collected pursuant to this part.
(b) Funds advanced or loaned to the Marijuana User Fee Fund
pursuant to this section are hereby appropriated to the board for the
implementation and administration of this part.
(c) The Director of Finance may provide an initial operating loan
from the General Fund to the Marijuana User Fee Fund that does not
exceed five million dollars ($5,000,000).
37006.5. Commencing in 2018, and at least every other
year thereafter, the Legislative Analyst shall review and evaluate
the fee imposed by this part, and shall provide to the Senate
Committees on Governance and Finance, Appropriations, and Budget and
Fiscal Review, and to the Assembly Committees on Revenue and
Taxation, Appropriations, and Budget, a report that makes
recommendations regarding the rate of, allocations of revenue from,
and any other adjustments to, the fee imposed by this part. The
report shall include, but not be limited to, all of the following:
(a) Annual revenues.
(b) Annual costs of implementing this part.
(c) Annual amounts allocated to all of the following:
(1) The General Fund.
(2) The Bureau of Medical Marijuana Regulation.
(3) The Department of Parks and Recreation.
(4) Counties, for drug and alcohol programs.
(d) Fee compliance rates.
(e) Board recommendations to improve effective and efficient
administration and enforcement of this part.
37007. Nothing in this part shall be interpreted to preclude a
city, county, or city and county from enacting or continuing to
enforce a local ordinance that imposes any fees, taxes, or other
charges on the consumption or other use of medical marijuana, as may
be otherwise authorized by law.
37008. This part shall only become operative if Secretary of
State Initiative Number 1762, also known as the Control, Regulate and
Tax Adult Use of Marijuana Act, is not approved by the voters at the
November 8, 2016, statewide general election and does not take
effect.
SEC. 3. SEC. 6. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.
