BILL NUMBER: AB 2312	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  MAY 10, 2012

INTRODUCED BY   Assembly Member Ammiano
   (Coauthors: Assembly Members Chesbro, Huffman, and Skinner)
   (Coauthor: Senator Leno)

                        FEBRUARY 24, 2012

   An act to amend Sections 11362.775, 11362.81, and 11362.83 of, and
to add Article 2.8 (commencing with Section 11362.84) to Chapter 6
of Division 10 of, the Health and Safety Code, and to add Chapter 4
(commencing with Section 7294) to Part 1.7 of Division 2 of the
Revenue and Taxation Code, relating to controlled substances, and
making an appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2312, as amended, Ammiano. Controlled substances.
   (1) Existing law provides that qualified patients, persons with
valid identification cards, and the designated primary caregivers of
qualified patients and persons with identification cards who
associate within the State of California in order to cultivate
marijuana for medical purposes, collectively or cooperatively, shall
not, solely on that basis, be subject to state criminal sanctions for
the possession, sale, transport, or other proscribed acts relating
to marijuana.
   This bill instead authorizes qualified patients, persons with
valid identification cards, and the designated primary caregivers of
qualified patients and persons with identification cards, to
associate within the State of California as collectives,
cooperatives, and other business entities to cultivate, acquire,
process, possess, transport, test, sell, and distribute marijuana for
medical purposes. The bill would provide that these persons shall
not be subject to arrest, prosecution, or specified sanctions for
possessing, selling, transporting, or engaging in other proscribed
acts relating to marijuana, unless they are not in compliance with
the registration requirements described in this bill.
   (2) Existing law makes it a misdemeanor offense to, among other
things, fraudulently use or obtain a medical marijuana identification
card.
   This bill also would make it a misdemeanor offense to knowingly
produce, issue, utilize, or sell a falsified, forged, or fraudulent
physician's recommendation for medical marijuana. By creating a new
crime, the bill would impose a state-mandated local program.
   (3) Existing law, the Compassionate Use Act of 1996, an initiative
measure, prohibits prosecution for the possession or cultivation of
marijuana of a patient or a patient's primary caregiver who possesses
or cultivates marijuana for the personal medical purposes of the
patient upon the written or oral recommendation or approval of a
physician. Existing law, the Medical Marijuana Program Act, exempts
qualified patients who hold an identification card issued pursuant to
the program, and the caregivers of those persons, from certain state
criminal sanctions related to the possession, cultivation,
transportation, processing, or use of limited amounts of marijuana,
as specified.
   This bill would establish the Medical Marijuana Regulation and
Control Act for the purposes of regulating and controlling medical
marijuana activities. The bill would establish the Board of Medical
Marijuana Enforcement in the Department of Consumer Affairs, and
require the board to perform specified duties relating to the
regulation of medical marijuana facilities, as defined. The governing
body of the board would consist of 9 members, appointed by the
Governor, the Senate Committee on Rules, and the Speaker of the
Assembly. The duties of the board would include, but not be limited
to, issuing or denying registration applications, establishing fees
for administering these provisions, adopting regulations in
connection with these provisions, and issuing fines and penalties for
the violation of these provisions.
   The bill would preempt local laws regarding the regulation and
control of medical marijuana and would prohibit a medical marijuana
facility, as defined, from operating without state-approved
registration, except as specified. The bill would generally require a
city or county to permit no fewer than one medical marijuana
dispensary, as defined, per 50,000 residents, provided that a city or
county would be permitted to opt out of this requirement, pursuant
to certain procedures. The bill would exempt from the bill's
provisions individual patients and caregivers cultivating marijuana
at their residences who do not sell or charge for the cultivation.
   The bill would require the board to make available mandatory
registration application forms no later than July 1, 2013, and to
make a thorough investigation to determine whether the applicant
meets specified criteria. The bill would require that all
registration applications be approved unless the applicant fails to
meet the criteria. The bill would require a registration application
to be approved or denied no later than 180 days after the application
is filed with the board, and, if the board fails to act within this
time, would require that the application be deemed approved. The bill
would require a person applying for the renewal of an existing
registration to apply no less than 60 days prior to the expiration,
and would require the board to act upon a timely filed registration
renewal application no later than 10 days prior to the expiration of
the registration.
   This bill would create the Medical Marijuana Fund and would
require that all moneys collected pursuant to the act be deposited
into the Medical Marijuana Fund and would, except for moneys derived
from penalties, continuously appropriate moneys in the fund for the
purposes of implementing, enforcing, and administering the program.
   (4) Existing law authorizes the board of supervisors of a county
and the governing body of a city to levy, increase, or extend a
transactions and use tax at a rate of 0.25%, or a multiple thereof,
at a combined rate not to exceed 2% if approved by the required vote
of the board or governing body and the required vote of qualified
voters.
   This bill would additionally authorize the board of supervisors of
a county and the governing body of a city to levy, increase, or
extend a transactions and use tax on the  retail  sale of or
storage, use, or other consumption of, medical marijuana or medical
marijuana-infused products for general and specified purposes, as
provided, at a combined rate not to exceed  2.5%. This bill
would authorize the board of supervisors to levy, increase, or extend
the tax at a rate of ____ percent, or a multiple thereof. This bill
would authorize the governing body of a city to levy, increase, or
extend the tax at a rate of ____ percent, or a multiple thereof
  5%  .
   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: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  This act shall be known, and may be cited, as the
Medical Marijuana Regulation and Control Act.
  SEC. 2.  (a) The Legislature finds and declares all of the
following:
   (1) In 1996, the people of the State of California enacted the
Compassionate Use Act of 1996, codified in Section 11362.5 of the
Health and Safety Code. The people of the State of California
declared that their purpose in enacting the measure was, among other
things, "t]o ensure that seriously ill Californians have the right to
obtain and use marijuana for medical purposes where that medical use
is deemed appropriate and has been recommended by a physician who
has determined that the person's health would benefit from the use of
marijuana in the treatment of cancer, anorexia, AIDS, chronic pain,
spasticity, glaucoma, arthritis, migraine, or any other illness for
which marijuana provides relief."
   (2) The Compassionate Use Act of 1996 called on state government
to implement a plan for the safe and affordable distribution of
marijuana to all patients in medical need of marijuana.
   (3) In 2003, the Legislature enacted the Medical Marijuana Program
Act (MMPA), codified in Article 2.5 (commencing with Section
11362.7) of Chapter 6 of Division 10 of the Health and Safety Code.
Under the guidance of the MMPA, approximately 60 California cities
and counties have created medical marijuana access ordinances that
can act as a guide for the state. However, many other cities and
counties are calling for more guidance and regulation from the state
and have passed bans or moratoria on medical marijuana cultivation
and distribution while awaiting such guidance.
   (4) Greater certainty and uniformity are urgently needed regarding
the rights and obligations of medical marijuana facilities, and for
the imposition and enforcement of regulations to prevent unlawful
cultivation and the diversion of marijuana to nonmedical use.
   (5) Despite the passage of the Compassionate Use Act of 1996 and
the MMPA, because there is no effective statewide system for
regulating and controlling medical marijuana, local law enforcement
officials have been confronted with uncertainty about the legality of
some medical marijuana cultivation and distribution activities, and
many cities and counties have passed local ordinances that in some
cases ban the cultivation or distribution of medical marijuana.
   (6) Marijuana has widely accepted medical applications that make
it inappropriate to classify it as a Schedule I controlled substance
in the State of California. Furthermore, current marijuana laws
require costly, mandatory felony penalties for minor marijuana
offenses, imposing excessive legal costs in minor medical marijuana
cases and unduly burdening the state's law enforcement and prison
system.
   (7) For the protection of all Californians, the state must act to
regulate and control medical marijuana. Cities and counties should be
allowed to impose reasonable local taxes and enact reasonable zoning
regulations and other restrictions applicable to the cultivation and
distribution of medical marijuana based on local needs.
   (8) A state board shall be created to regulate and control the
mandatory registration of all individuals and entities involved in
the commercial cultivation, processing, manufacturing, testing,
transportation, distribution, and sale of medical marijuana in this
state.
   (9) The provisions of this act are enacted pursuant to the powers
reserved to the State of California and its people under the Tenth
Amendment to the United States Constitution.
   (b) It is therefore the intent of the Legislature, in enacting
this act, to accomplish all of the following:
   (1) To establish a statewide system for regulating and controlling
medical marijuana activities by creating a state board to enact and
enforce regulations governing the cultivation, processing,
manufacturing, testing, transportation, distribution, and sale of
medical marijuana.
   (2) To allow cities and counties to enact reasonable zoning
regulations or other restrictions applicable to the cultivation,
processing, manufacturing, testing, and distribution of medical
marijuana based on local needs.
   (3) To prohibit the issuance and use of fraudulent or forged
physician's recommendations for medical marijuana.
   (4) To establish the Board of Medical Marijuana Enforcement to be
located within the Department of Consumer Affairs to provide a
governmental agency that will ensure the strict, honest, impartial,
and uniform administration and enforcement of the medical marijuana
laws throughout the state.
   (5) To fulfill the promise of the Compassionate Use Act of 1996 to
"implement a plan for the safe and affordable distribution of
marijuana to all patients in medical need of marijuana."
   (6) To support the creation of a more appropriate schedule for
marijuana that recognizes its medical use in the State of California.

   (7) To establish a statewide registration process to identify for
law enforcement which individuals and entities are exempt from state
law criminal penalties.
   (8) To reduce the cost of medical marijuana enforcement by
providing law enforcement guidelines to more easily determine whether
or not a person is acting in conformance with the state's medical
marijuana laws and by providing courts and prosecutors flexibility in
the punishment of minor marijuana offenses.
  SEC. 3.  Section 11362.775 of the Health and Safety Code is amended
to read:
   11362.775.  Qualified patients, persons with valid identification
cards, and the designated primary caregivers of qualified patients
and persons with identification cards, may associate within the State
of California as collectives, cooperatives, and other business
entities to cultivate, acquire, process, possess, transport, test,
sell, and distribute marijuana for medical purposes, and shall not be
subject to arrest, prosecution, or sanctions under Section 11357,
11358, 11359, 11360, 11366, 11366.5, 11379.6, or 11570 on the basis
of that fact, unless those persons are not in compliance with the
registration requirements of Section 11362.91. This section applies
to all members of an entity formed pursuant to this section
regardless of whether those members contribute to any of the
activities of the entity. This section applies regardless of whether
the registration procedure described in Section 11362.91 is being
implemented.
  SEC. 4.  Section 11362.81 of the Health and Safety Code is amended
to read:
   11362.81.  (a) A person specified in subdivision (b) shall be
subject to the following penalties:
   (1) For the first offense, imprisonment in the county jail for no
more than six months or a fine not to exceed one thousand dollars
($1,000), or both.
   (2) For a second or subsequent offense, imprisonment in the county
jail for no more than one year, or a fine not to exceed one thousand
dollars ($1,000), or both.
   (b) Subdivision (a) applies to any of the following:
   (1) A person who fraudulently represents a medical condition or
fraudulently provides any material misinformation to a physician,
county health department or the county's designee, or state or local
law enforcement agency or officer, for the purpose of falsely
obtaining an identification card.
   (2) A person who steals or fraudulently uses any person's
identification card in order to acquire, possess, cultivate,
transport, use, produce, or distribute marijuana.
   (3) A person who counterfeits, tampers with, or fraudulently
produces an identification card.
   (4) A person who breaches the confidentiality requirements of this
article to information provided to, or contained in the records of,
the department or of a county health department or the county's
designee pertaining to an identification card program.
   (5) A person who knowingly produces, issues, utilizes, or sells a
falsified, forged, or fraudulent physician's recommendation for
medical marijuana.
   (c) In addition to the penalties prescribed in subdivision (a),
any person described in subdivision (b) may be precluded from
attempting to obtain, or obtaining or using, an identification card
for a period of up to six months at the discretion of the court.
   (d) In addition to the requirements of this article, the Attorney
General shall develop and adopt appropriate guidelines to ensure the
security and nondiversion of marijuana grown for medical use by
patients qualified under the Compassionate Use Act of 1996.
  SEC. 5.  Section 11362.83 of the Health and Safety Code is amended
to read:
   11362.83.  Nothing in this article shall prevent a city or other
local governing body from adopting and enforcing any of the
following:
   (a) Adopting local ordinances that regulate the location,
operation, or establishment of a medical marijuana cooperative or
collective, consistent with this article and Article 2.8 (commencing
with Section 11362.84).
   (b) The civil and criminal enforcement of local ordinances
described in subdivision (a).
   (c) Enacting other laws consistent with this article.
  SEC. 6.  Article 2.8 (commencing with Section 11362.84) is added to
Chapter 6 of Division 10 of the Health and Safety Code, to read:

      Article 2.8.  Medical Marijuana Regulation and Control


   11362.84.  For purposes of this article, the following definitions
apply:
   (a) "Act" means the Medical Marijuana Regulation and Control Act.
   (b) "Board" means the Board of Medical Marijuana Enforcement.
   (c) "Executive director" means the Executive Director of the Board
of Medical Marijuana Enforcement.
   (d) "Financial institution" means a bank, savings and loan
association, or credit union chartered under the laws of this state
or the United States.
   (e) "Fund" means the Medical Marijuana Fund.
   (f) "Mandatory registrant" means a person required to register
with the board pursuant to the provisions of this article.
   (g) "Mandatory registration" means a registration issued by the
board pursuant to this article.
   (h) "Medical marijuana dispensary" means any facility, building,
structure, or location where medical marijuana is sold to qualified
patients, primary caregivers, or persons with identification cards
issued pursuant to Article 2.5 (commencing with Section 11362.7).
   (i) "Medical marijuana facility" means any facility, building,
structure, or location where medical marijuana is grown, processed,
stored, manufactured, tested, or sold, other than a location or
building in which a patient or a patient's primary caregiver is
growing medical marijuana for the patient's own medical use and not
for sale.
   (j) "Medical marijuana industry union" means a labor union, which
has at its core retail, agriculture, food and processing, or
textiles, whose members work in the medical marijuana industry.
   (k) "Person" includes any individual, partnership, joint venture,
association, limited liability company, corporation, estate, trust,
receiver, syndicate, or any other group or combination thereof acting
as a unit.
   11362.85.  This article shall not apply to, and shall have no
diminishing effect on, the rights and protections currently granted
to individual patients and primary caregivers pursuant to Section
11362.5 or Article 2.5 (commencing with Section 11362.7).
   11362.86.  A medical marijuana facility shall operate in
accordance with this article. Individual patients and caregivers
cultivating marijuana at their private residences for the patient's
use who do not sell or charge for the cultivation of marijuana are
not considered medical marijuana facilities, and are exempt from
mandatory registration.
   11362.87.  (a) It is the intent of the Legislature that each city,
county, and city and county permit the development of sufficient
numbers and types of medical marijuana facilities as are commensurate
with local needs, consistent with the provisions of this article.
   (b) Except as provided in subdivision (d), (e), or (f), the
provisions of this article shall preempt all local ordinances or
regulations relating to the regulation and control of medical
marijuana and shall apply equally to a charter city or county.
   (c) Except as provided in subdivision (d), (e), or (f), a city or
county shall not prohibit the operation of persons registered
pursuant to this article or restrict their location or operation to
frustrate the provisions of this article, to render the application
or enforcement of this article impractical or impossible, or to
restrict the location of medical marijuana dispensaries so as to
authorize fewer than one medical marijuana dispensary per 50,000
residents.
   (d) A city or county with a population of at least 50,000 may
prohibit the establishment of medical marijuana dispensaries within
its jurisdiction, or limit the number of allowed medical marijuana
dispensaries to a number below one per 50,000 residents, if an
ordinance or regulation authorizing that restriction has been
 approved by the voters of   lawfully enacted by
 the city, county, or city and county  in accordance
with the provisions of Chapter 2 (commencing with Section 9100) or
Chapter 3 (commencing with Section 9200) of Division 9 of the
Elections Code  . In no event may a city, county, or city
and county enact legislation that impairs the rights granted to
qualified patients and their caregivers pursuant to Section 11362.5
or Article 2.5 (commencing with Section 11362.7).
   (e) A city or county with a population of less than 50,000
residents may prohibit the establishment of a medical marijuana
dispensary within its jurisdiction provided that the legislative body
of a city or county make a written finding to the board supported by
evidence adduced during at least one public hearing that medical
marijuana is reasonably available to its residents by other means.
   (f) (1) A legislative body of a city or county with existing
medical marijuana regulations may provide to the board a list of
regulated persons that it finds to be in good standing under its
local medical marijuana regulations in force as of the effective date
of the act adding this article, which shall be accompanied by a
certified copy of any ordinance regulating the location or operation
of medical marijuana facilities in that jurisdiction. These persons
shall automatically be deemed successful mandatory registrants for
purposes of this article, and shall be exempt from renewal procedures
for three years from the effective date of the act adding this
article.
   (2) Any person found to not be in good standing by the legislative
body of a city, county, or city and county pursuant to paragraph (1)
shall not automatically be deemed a successful mandatory registrant
for purposes of this article.
   (g) If a city or county does not enact a medical marijuana
dispensary zoning ordinance, medical marijuana dispensaries and
facilities in that jurisdiction shall be wholly regulated by the
board pursuant to this article, and medical marijuana dispensaries
and facilities that are mandatory registrants may locate in that
jurisdiction in any location that the board finds to be appropriately
zoned, subject to the restrictions of Section 11362.768.
   11362.88.  There is within the Department of Consumer Affairs a
Board of Medical Marijuana Enforcement. The board shall be
administered by a governing body as prescribed by Section 11362.881
and a civil executive officer, who shall be appointed by, and serve
at the pleasure of, the Director of Consumer Affairs, and who shall
be known as the Executive Director of the Board of Medical Marijuana
Enforcement. Funds for the establishment and support of the board
shall be advanced as a loan by the Department of Consumer Affairs and
shall be repaid by the initial proceeds from fees collected pursuant
to paragraph (7) of subdivision (a) of Section 11362.882.
   11362.881.  (a) The governing body of the board shall consist of
nine members appointed as follows:
   (1) Three members who are residents of California shall be
appointed, one of whom shall be appointed by the Governor, one of
whom shall be appointed by the Speaker of the Assembly, and one of
whom shall be appointed by the Senate Committee on Rules.
   (2) Two members, who are licensed physicians and have experience
with clinical applications of medical marijuana, shall be appointed
by the Governor.
   (3) One member, who is a full-time peace officer, shall be
appointed by the Governor.
   (4) One member, who is a medical marijuana patient advocate, shall
be appointed by the Speaker of the Assembly.
   (5) One member, who is a qualified medical marijuana patient,
shall be appointed by the Senate Committee on Rules.
   (6) One member, who is a representative from a medical marijuana
industry union, as defined in subdivision (j) of Section 11362.84,
shall be appointed by the Speaker of the Assembly.
   (b) In making appointments pursuant to this article, the Governor,
the Senate Committee on Rules, and the Speaker of the Assembly shall
make good faith efforts to ensure that their appointments reflect
the economic, social, and geographic diversity of the state.
   (c) The authority responsible for appointing a member of the
governing body of the board shall appoint each member within 90 days
of the effective date of the act adding this article.
   (d) A majority of the total appointed membership of the governing
body of the board shall constitute a quorum. Any action taken by the
governing body of the board under this article requires a majority
vote of the members present at the meeting of the governing body of
the board, with a quorum being present, unless otherwise specifically
provided for in this article.
   (e) The governing body of the board shall elect a chairperson and
vice chairperson from among its members and shall meet at least
quarterly on call of the executive director, the chairperson, or
three members of the governing body of the board.
   (f) The terms of office of the members of the governing body of
the board shall be as follows:
   (1) Except as provided in paragraph (2), the terms of the members
of the governing body of the board shall be three calendar years,
commencing January 1 of the year of appointment. No member shall
serve more than two consecutive full terms; provided, however, that a
term or part of a term served pursuant to subparagraph (A) or (B) of
paragraph (2) shall not be included in this limitation.
   (2) The terms of the members of the governing body of the board
shall be staggered as follows:
   (A) The first members appointed on or after January 1 of the year
following the effective date of this article pursuant to paragraph
(1) of subdivision (a) shall serve from the date of appointment to
the end of that calendar year, plus one additional year.
   (B) The first members appointed on or after January 1 of the year
following the effective date of this article pursuant to paragraphs
(2) and (3) of subdivision (a) shall serve from the date of
appointment to the end of that calendar year, plus two additional
years.
   (C) The first members appointed on or after January 1 of the year
following the effective date of this article pursuant to paragraphs
(4) to (6), inclusive, of subdivision (a) shall serve from the date
of appointment to the end of that calendar year, plus three
additional years.
   (3) If a vacancy occurs prior to the expiration of the term for
the vacated seat, the appointing authority of that vacant seat shall
appoint a replacement member for the remainder of the unexpired term
within 30 days after the occurrence of the vacancy.
   (g) Each member of the governing body of the board shall be paid
one hundred dollars ($100) per day plus travel expenses, including
expenses for lodging and meals, which are incurred in the attendance
at board meetings or in conducting the business of the board. All per
diem and expense claims are subject to approval by the executive
director.
   11362.882.  (a) The board shall do all of the following:
   (1) (A) Commencing September 1, 2013, approve or deny mandatory
registration applications for the cultivation, processing,
manufacturing, testing, transportation, distribution, and sale of
medical marijuana as provided by state law.
   (B) Suspend, fine, restrict, or revoke registration upon a
violation of this article or a rule or regulation promulgated
pursuant to this article.
    (C) Impose any penalty authorized by this article or any rule or
regulation promulgated pursuant to this article.
   (D) Take any reasonable action with respect to a mandatory
registration application in accordance with procedures established
pursuant to this article.
   (2) Commencing July 1, 2013, adopt, amend, and rescind reasonable
regulations, special rulings, and findings as necessary for the
regulation and control of the cultivation, processing, manufacturing,
testing, transportation, distribution, and sale of medical
marijuana, and to govern the procedures of the board to exercise the
powers and perform the duties conferred upon it by this article, in
accordance with the provisions of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
   (3) (A) Hear and determine at a public hearing any appeals of a
mandatory registration application denial or renewal application
denial and any complaints against a registered person.
   (B) Administer oaths and issue subpoenas to require the presence
of individuals and the production of papers, books, and records
necessary to the determination of any hearing. Any hearing under this
section shall be conducted in accordance with Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code.
   (4) Maintain the confidentiality of any information obtained from
a registered person related to medical marijuana patients or
caregivers in strict compliance with the federal Health Insurance
Portability and Accountability Act (42 U.S.C. Sec. 1320d et seq.),
the Confidentiality of Medical Information Act (Part 2.6 (commencing
with Section 56) of Division 1 of the Civil Code), and the Insurance
Information and Privacy Protection Act (Article 6.6 (commencing with
Section 791) of Chapter 1 of Part 2 of Division 1 of the Insurance
Code).
   (5) Develop any forms, identification cards, and applications that
are necessary or convenient in the reasonable discretion of the
board for the administration of this article or any of the rules or
regulations promulgated pursuant to this article.
   (6) Oversee the operation of the Medical Marijuana Fund created
pursuant to Section 11362.89.
   (7) Establish reasonable fees for processing all applications,
registrations, notices, or reports required to be submitted to the
board. The amount of fees shall reflect the direct and indirect costs
of the board in the administration and enforcement of this article
and shall be assessed on a sliding fee scale to reflect the projected
revenue of the particular registrant. Fees assessed pursuant to this
paragraph shall be deposited into the Medical Marijuana Fund.
   (8) Commencing July 1, 2013, develop zoning standards for purposes
of implementing subdivision (g) of Section 11362.87.
   (b) Regulations promulgated pursuant to paragraph (2) of
subdivision (a) shall be reasonable and shall include, but are not
necessarily limited to, the following:
   (1) Procedures and grounds for issuing, renewing, denying,
suspending, issuing fines in connection with, restricting, or
revoking a mandatory registration issued pursuant to this article.
   (2) Civil penalties for violation of the provisions of this
article, including fines imposed pursuant to subdivision (g) of
Section 11362.91.
   (3) Prohibition of misrepresentation and unfair practices.
   (4) Best practices guiding advertisements promoting the purchase
of medical marijuana.
   (5) Security requirements for premises subject to mandatory
registration pursuant to this article, including lighting, physical
security, alarm, and reporting requirements for changes, alterations,
or modifications to the premises.
   (6) Regulations for the storage and transportation of medical
marijuana.
   (7) Requirements for waste disposal and recycling.
   (8) Best practices relating to the labeling, packaging, and
testing of medical marijuana.
   (9) Guidelines regarding cultivation, including use of pesticides
and fungicides and the reduction of environmental impacts.
   (10) Establishment of exemptions from registration or reduced fees
for noncommercial collectives, not-for-profit registrants, and other
qualified persons.
   (11) Protocols to prevent unlawful diversion of marijuana.
   (12) Establishment of a committee to advise the Legislature on the
rescheduling of marijuana under federal law and under Chapter 2
(commencing with Section 11053).
   (13) Any other regulation in furtherance of this article.
   (c) Nothing in this article shall be construed as authorizing the
board to set prices for medical marijuana.
   11362.89.  (a) All moneys collected pursuant to this article shall
be deposited in the Medical Marijuana Fund, which is hereby created
in the State Treasury.
   (b) There is hereby established the Medical Marijuana Enforcement
Penalty Account within the fund, to receive the penalty amounts
collected pursuant to subdivision (g) of Section 11362.91 and any
other penalty amounts levied pursuant to this article. Moneys in the
account shall be available, upon appropriation by the Legislature,
for purposes of this article.
   (c) Notwithstanding Section 16305.7 of the Government Code, the
fund shall also include any interest and dividends earned on money in
the fund.
   (d) Notwithstanding Section 13340 of the Government Code, all
moneys in the fund, except for moneys in the Medical Marijuana
Enforcement Penalty Account, are hereby continuously appropriated,
without regard to fiscal year, to the board solely for the purpose of
fully funding all costs associated with implementing, enforcing, and
administering this article with respect to the purpose for which
those moneys were collected. From moneys in the fund, the board shall
reimburse the Department of Consumer Affairs for its administrative
expenses incurred on behalf of the board.
   11362.90.  All applicable provisions of Division 1 (commencing
with Section 100) of the Business and Professions Code shall govern
and apply to the conduct of the board.
   11362.901.  Except as specified in Section 11362.881, the
executive director shall be the appointing authority of all employees
within the board. All heads of divisions and committees and other
employees within the board shall be responsible to the executive
director for the proper carrying out of the duties and
responsibilities of their respective positions.

11362.902.  The executive director may bring an action to enjoin a
violation or a threatened violation of any provision of this article
with the vote of a majority of the members of the governing body of
the board. The action may be brought in the county in which the
violation occurred or is threatened to occur. Any proceeding brought
pursuant to this section shall conform to the requirements of Chapter
3 (commencing with Section 525) of Title 7 of Part 2 of the Code of
Civil Procedure.
   11362.91.  (a) Except as otherwise provided in this article, a
medical marijuana facility shall not operate until it has filed a
mandatory registration application with the board and the board has
approved the mandatory registration application pursuant to this
article. For the purpose of regulating the cultivation, processing,
manufacturing, testing, transportation, distribution, and sale of
medical marijuana, the board, in its reasonable discretion, may
establish various classes or types of registrations for specific
medical marijuana-related activities, subject to the provisions and
restrictions provided by this article. A mandatory registration
application or renewal shall be approved unless the board determines
that any of the following are true:
   (1) An applicant, or the medical marijuana facility location for
which the applicant is applying for mandatory registration, fails to
meet the requirements of this article or any regulation promulgated
pursuant to this article.
   (2) An applicant, or any of its officers or directors, is under 21
years of age.
   (3) An applicant has knowingly answered a question or request for
information falsely on the application form.
   (4) An applicant, or any of its officers or directors, has been
convicted in the previous five years of a violent felony, as
specified in subdivision (c) of Section 667.5 of the Penal Code, a
serious felony, as specified in subdivision (c) of Section 1192.7 of
the Penal Code, a felony offense involving fraud or deceit, or any
other felony that, in the board's estimation, would impair the
applicant's ability to appropriately operate a medical marijuana
facility.
   (5) An applicant is a licensed physician making patient
recommendations for medical marijuana.
   (6) An applicant, or any of its officers or directors, has been
sanctioned by the board for operating an unregistered medical
marijuana facility or has had a mandatory registration revoked in the
previous three years.
   (b) No later than July 1, 2013, the board shall make available
mandatory registration application forms for all persons subject to
mandatory registration. Upon receipt of an application for mandatory
registration and the applicable fee, the board shall make a thorough
investigation to determine whether the applicant and the premises for
which a mandatory registration is applied qualify for registration,
and comply with local ordinances and zoning, and whether the
provisions of this article have been complied with. The board shall
deny an application for mandatory registration if either the
applicant or the premises for which a registration is applied do not
qualify for registration under this article. A mandatory registration
application shall be approved or denied no later than 180 days after
a mandatory registration application is filed with the board. If the
board fails to act on an application within 180 days, it shall be
deemed approved.
   (c) Each mandatory registration application approved by the board
pursuant to this article is separate and distinct. An applicant may
apply for a mandatory registration in more than one class of specific
medical marijuana activities.
   (d) All mandatory registration applications that are approved by
the board pursuant to this article shall be valid for a period not to
exceed two years from the date of approval unless revoked or
suspended pursuant to this article or the rules or regulations
promulgated pursuant to this article.
   (e) Ninety days prior to the expiration date of an existing
mandatory registration, the board shall notify the person of the
expiration date by first-class mail at the person's address of record
with the board. A person shall apply for the renewal of an existing
mandatory registration to the board not less than 60 days prior to
the expiration. The board, in its discretion and based upon
reasonable grounds, may waive the 60-day time requirement set forth
in this subdivision. The board shall act upon a timely filed
registration renewal application no later than 10 days prior to the
expiration of the registration.
   (f) A medical marijuana facility operating in conformance with
local zoning requirements as of the effective date of this article
may continue its operations until such time as its application for
mandatory registration has been approved or denied.
   (g) Operating a medical marijuana facility without an approved
mandatory registration may result in fines of up to twenty-five
thousand dollars ($25,000), and the board may order the destruction
of any marijuana being cultivated or possessed in violation of this
article. Any fines collected pursuant to this subdivision shall be
deposited into the Medical Marijuana Enforcement Penalty Account
established pursuant to subdivision (b) of Section 11362.89.
   (h) If, at any time after July 1, 2013, the board has not formed,
is not accepting applications for mandatory registration, or is not
granting mandatory registrations in response to valid applications,
then a medical marijuana facility or medical marijuana dispensary
that is operating in compliance with applicable city or county
ordinances may continue to operate without a mandatory registration.
   11362.92.  (a) A person whose mandatory registration application
has been approved by the board, and its agents, officers, directors,
and employees acting on its behalf, shall not be subject to arrest,
prosecution, or other criminal, civil, or administrative sanctions
under state or local law for actions approved by the board in
accordance with its registration application, including, as
applicable, the cultivation, processing, manufacturing, testing,
transportation, distribution, sale, or possession, of medical
marijuana.
   (b) Nothing in this article shall prevent a city, county, or city
and county from enforcing a zoning ordinance or law of general
application, except as specified in this article.
   (c) No funds shall be spent by state or local officials to assist
federal authorities in enforcing marijuana prohibitions with regard
to activities carried out by persons in compliance with the
provisions of this article. Nothing in this article shall be
construed to limit a law enforcement agency's ability to investigate
unlawful activity in relation to a mandatory registrant.
   11362.93.  A financial institution shall not be penalized in any
manner under state law for either of the following:
   (a) Providing lending services to persons whose mandatory
registration application has been approved by the board pursuant to
this article or securing any such loans to those persons with assets
of those persons.
   (b) Owning or possessing medical marijuana or warehouse receipts
as security for an obligation or as a result of enforcement of a
security interest, after permission has been given by the board, or
selling the medical marijuana or warehouse receipts to a registrant
authorized to sell for resale that medical marijuana or those
warehouse receipts.
  SEC. 7.  Chapter 4 (commencing with Section 7294) is added to Part
1.7 of Division 2 of the Revenue and Taxation Code, to read:
      CHAPTER 4.  LOCAL MEDICAL MARIJUANA TAXES



      Article 1.  Counties Medical Marijuana Tax


   7294.   (a)    Notwithstanding any other law,
the board of supervisors of any county may levy, increase, or extend
a transactions and use tax  on the sale of   for
tangible personal property that is  medical marijuana or
medical marijuana-infused products for general purposes  at a
rate of ____ percent, or a multiple thereof,  if the
ordinance proposing that tax is approved by a two-thirds vote of all
members of the board of supervisors and the tax is approved by a
majority vote of the qualified voters of the county voting in an
election on the issue. The board of supervisors may levy, increase,
or extend more than one transactions and use tax under this section,
if the adoption of each tax is in the manner prescribed in this
section.  The 
    (b)     (1)     The 
transactions and use tax shall conform to Part 1.6 (commencing with
Section 7251). 
   (2) Notwithstanding Section 7251.1, the tax rate authorized by
this section shall not be considered for purposes of the combined
rate established by that section. 
   7294.5.  (a) Notwithstanding any other law, the board of
supervisors of any county may levy, increase, or extend a
transactions and use tax  on   for tangible
personal property that is  medical marijuana or medical
marijuana-infused products for specific purposes. The tax may be
levied, increased, or extended  at a rate of ____ percent, or
a multiple thereof,  for the purpose for which it is
established, if all of the following requirements are met:
   (1) The ordinance proposing that tax is approved by a two-thirds
vote of all members of the board of supervisors and is subsequently
approved by a two-thirds vote of the qualified voters of the county
voting in an election on the issue.
   (2)  (A)    The transactions and use tax
conforms to the Transactions and Use Tax Law Part 1.6 (commencing
with Section 7251). 
   (B) Notwithstanding Section 7251.1, the tax rate authorized by
this section shall not be considered for purposes of the combined
rate established by that section. 
   (3) The ordinance includes an expenditure plan describing the
specific projects for which the revenues from the tax may be
expended.
   (b) A county shall be deemed to be an authority for purposes of
Chapter 1 (commencing with Section 55800) of Part 3 of Division 2 of
Title 5 of the Government Code.
   7294.6.  Notwithstanding any other law, the combined rate of all
taxes imposed in any county pursuant to this article and pursuant to
Article 2 (commencing with Section 7295) shall not exceed the rate of
 2.5   5  percent.

      Article 2.  Cities Medical Marijuana Tax


   7295.   (a)    Notwithstanding any other law,
the governing body of any city may levy, increase, or extend a
transactions and use tax  on the sale of   for
tangible personal property that is  medical marijuana or medical
marijuana-infused products for general purposes  at a rate
of ____ percent, or a multiple thereof,  if the ordinance
proposing that tax is approved by a two-thirds vote of all members of
that governing body and the tax is approved by a majority vote of
the qualified voters of the city voting in an election on the issue.
The governing body may levy, increase, or extend more than one
transactions and use tax under this section, if the adoption of each
tax is in the manner prescribed in this section.  The

    (b)     (1)     The 
transactions and use tax shall conform to Part 1.6 (commencing with
Section 7251). 
   (2) Notwithstanding Section 7251.1, the tax rate authorized by
this section shall not be considered for purposes of the combined
rate established by that section. 
   7295.5.  Notwithstanding any other law, the governing body of any
city may levy, increase, or extend a transactions and use tax
 on the sale of   for tangible personal property
that is  medical marijuana or medical marijuana-infused
products for specific purposes. The tax may be levied, increased, or
extended  at a rate of ____ percent, or a multiple thereof,
 for the purpose for which it is established, if all of the
following requirements are met:
   (a) The ordinance proposing that tax is approved by a two-thirds
vote of all members of the governing body and is subsequently
approved by a two-thirds vote of the qualified voters of the city
voting in an election on the issue.
   (b)  (1)    The transactions and use tax
conforms to the Transactions and Use Tax Law Part 1.6 (commencing
with Section 7251). 
   (2) Notwithstanding Section 7251.1, the tax rate authorized by
this section shall not be considered for purposes of the combined
rate established by that section. 
   (c) The ordinance includes an expenditure plan describing the
specific projects for which the revenues from the tax may be
expended.
   7295.6.  (a) The authority of a city to impose transactions and
use taxes under Sections 7295 and 7295.5 shall not exceed the rate of
 1   2  percent.
   (b) An ordinance proposing a tax shall contain a provision that
any person subject to a transactions and use tax under a county
ordinance shall be entitled to credit against the payment of taxes
due under that ordinance in the amount of transactions and use tax
due to any city in the county.
  SEC. 8.  The provisions of this article are severable. If any
provision of this article or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
  SEC. 9.  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.