AB 1548, as introduced, Wood. Medical marijuana: taxation: marijuana production and environment mitigation.
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, authorizes the use and cultivation of marijuana for medical purposes. Existing law makes it a crime to plant, cultivate, harvest, dry, or process marijuana, except as otherwise authorized by law. Under existing law, qualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate in order collectively and cooperatively to cultivate marijuana for medical purposes, are not subject to criminal sanctions solely on the basis of that fact.
The Fee Collection Procedures Law, among other things, provides for the administration of fee programs by the State Board of Equalization, establishes procedures for collection, reporting, return, refund, and appeals, and authorizes the board to adopt regulations relating to administration and enforcement of the law. The Fee Collection Procedures Law establishes criminal penalties for specified acts, including making it a misdemeanor to knowingly or willfully file a false return and making it a felony to willfully evade or attempt to evade or defeat the payment of a fee.
This bill would impose a tax in specified amounts on the distribution in this state by a cultivator, as defined, of marijuana flowers, marijuana leaves, and immature marijuana plants to a licensed distributor, as specified, and would require the licensed distributor to collect the tax from the cultivator and remit it to the board. The bill would require the board to collect the tax pursuant to the procedures set forth in the Fee Collection Procedures Law. The bill would require all moneys, less refunds and costs of administration, to be deposited into the Marijuana Production and Environment Mitigation Fund, which this bill would establish in the State Treasury, and would continuously appropriate the moneys in that fund to the board for allocation, as specified.
By expanding the application of the Fee Collection Procedures Law, which imposes criminal penalties for various acts, this bill would impose a state-mandated local program.
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.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.
Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Part 13.5 (commencing with Section 31001) is
2added to Division 2 of the Revenue and Taxation Code, to read:
This part shall be known and may be cited as the
9Medical Marijuana Tax Law.
As used in this part, the following terms have the
3(a) “Cultivator” means a person that is licensed as a cultivator
4for purposes of medical marijuana regulation under the Business
5and Professions Code.
6(b) “Distribution” has the same meaning as that term is defined
7for purposes of medical marijuana regulation in the Business and
9(c) “Licensed distributor” means a person that is licensed as a
10distributor for purposes of medical marijuana regulation under the
11Business and Professions Code.
12(d) “Sale” means the transfer of title or
13consideration in any manner or by any means whatever.
14(e) “Qualified nonprofit organization” means an organization
15exempt from tax as an organization described in Section 501(c)(3)
16of the Internal Revenue Code .
(a) On and after the operative date set forth in Section
2131030, for the privilege of distributing marijuana flowers,
22marijuana leaves, and immature marijuana plants, a tax is hereby
23imposed upon all cultivators at a rate of $9.25 per ounce of
24marijuana flowers, $2.75 per ounce of marijuana leaves, and $1.25
25per immature marijuana plant from the sale of all marijuana
26flowers, marijuana leaves, and immature marijuana plants
27distributed to a licensed distributor in this state.
28(b) The licensed distributor shall collect the tax from the
29cultivator and shall separately state the amount of the tax imposed
30under this part on the purchase order, which shall be given by the
31licensed distributor to the cultivator at the time of sale.
32(c) There are exempted from the taxes imposed by this part,
33sales by a cultivator that the state is prohibited from taxing under
34the Constitution or laws of the United States or the Constitution
35of this state. Any claim for exemption from the tax imposed by
36this part shall be made to the board in the manner prescribed by
The Legislative Analyst’s Office shall regularly review
39the tax levels established under this part, at a minimum of every
40other year, beginning in 2018, and make recommendations to the
P4 1Legislature, as appropriate, regarding adjustments that would
2further the goal of addressing public safety and the environmental
3impacts caused by the proliferation of marijuana cultivation.
(a) The board shall administer and collect the tax
8imposed by this part pursuant to the Fee Collection Procedures
9Law (Part 30 (commencing with Section 55001) of Division 2 of
10the Revenue and Taxation Code) with those changes as may be
11necessary to conform to this section. For purposes of this part, the
12references in the Fee Collection Procedures Law to “fee” shall
13include the tax imposed by this part, and references to “feepayer”
14shall include a person required to pay the tax imposed by this part.
15(b) The tax that is required to be collected by the licensed
16distributor, and any amount unreturned to the medical marijuana
17cultivator that is not owed as part of the tax, but was collected
18from the cultivator under the representation by the licensed
19distributor that it was owed as a tax, constitutes debts owed by the
20licensed distributor to the state.
21(c) A cultivator is liable for the tax until it has been paid to the
22state, except that payment to the licensed distributor relieves the
23cultivator from further liability for the tax. Any tax collected from
24a cultivator that has not been remitted to the board shall be a debt
25owed to the state by the licensed distributor required to collect and
26remit the tax. This part does not impose any obligation upon the
27licensed distributor to take any legal action to enforce the collection
28of the tax imposed by this part.
(a) The board may prescribe, adopt, and enforce
30regulations relating to the implementation, administration, and
31enforcement of this part, including, but not limited to, applicant
32requirements, collections, reporting, refunds, and appeals.
33(b) The board may prescribe, adopt, and enforce any emergency
34regulations as necessary to implement this part. Any emergency
35regulation prescribed, adopted, or enforced pursuant to this section
36shall be adopted in accordance with Chapter 3.5 (commencing
37with Section 11340) of Part 1 of Division 3 of Title 2 of the
38Government Code, and, for purposes of that chapter, including
39Section 11349.6 of the Government Code, the adoption of the
40regulation is an emergency and shall be considered by the Office
P5 1of Administrative Law as necessary for the immediate preservation
2of the public peace, health and safety, and general welfare.
(a) The tax is due and payable to the board quarterly
4on or before the last day of the month following each calendar
6(b) On or before the last day of the month following each
7calendar quarter, a return for the preceding calendar quarter shall
8be filed with the board.
9(c) Returns shall be authenticated in a form or pursuant to
10methods as may be prescribed by the board.
(a) The Marijuana Production and Environment
12Mitigation Fund is hereby created in the State Treasury. All taxes,
13interest, penalties, and other amounts collected and paid to the
14board pursuant to this part, less payments of refunds and costs of
15administration, shall be deposited in the fund.
16(b) Notwithstanding Section 13340 of the Government Code,
17all moneys deposited in the Marijuana Production and Environment
18Mitigation Fund are hereby continuously appropriated, without
19regard to fiscal years, in the following manner:
20(1) Thirty-five percent to the Department of Food and
21Agriculture for disbursement for local law enforcement-related
22activities pertaining to illegal marijuana cultivation. Funds allocated
23pursuant to this paragraph shall be allocated on a competitive grant
24application process administered by the Department of Food and
25Agriculture. The Department of Food and Agriculture shall
26promulgate guidelines for the grant process as soon as
27administratively possible, but no later than April 1, 2017.
28(2) Thirty-five percent to the Natural Resources Agency to fund
29a competitive grant program for environmental cleanup restoration,
30and protection of public and private lands that have been damaged
31by illegal marijuana cultivation. Where appropriate, the agency
32may administer funds using programs established pursuant to
33Section 5750 of the Public Resources Code, subdivision (a) and
34paragraph (1) of subdivision (l) of Section 75050 of the Public
35Resources Code. Funds allocated pursuant to this paragraph shall
36be prioritized to restoration and cleanup projects, on public or
37private lands, based on the level of damages that have occurred.
38Not less than 35 percent of the funds shall be used for these
39purposes related to public lands, and not less than 20 percent of
40the funds shall be used for these purposes related to private lands.
P6 1The agency shall consult and partner with counties, cities, or cities
2and counties, and may partner with qualified nonprofit
3organizations, other appropriate state agencies, and the appropriate
4federal entities, including, but not limited to, the United States
5Department of Agriculture and the United States Department of
6the Interior, for the purposes of awarding grants to state or local
7government entities and qualified nonprofit organizations that
8engage in environmental cleanup and restoration. The agency shall
9promulgate guidelines for the grant process as soon as
10administratively possible, but no later than April 1, 2017.
11(3) Thirty percent to the multiagency task force, the Department
12of Fish and Wildlife and State Water Resources Control Board
13pilot project, to address the environmental impacts of marijuana
14cultivation on public and private lands in California and other state
15enforcement-related activities from illegal marijuana cultivation.
(a) The board shall submit a report to the Legislature
20on the total amount of revenue that was collected for the two-year
21period commencing on the operative date of this part. The report
22is due to the Legislature on or before the last day of the month
23commencing 180 days after the two-year period commencing on
24the operative date of this part.
25(b) The report required by this section shall be submitted in
26compliance with Section 9795 of the Government Code.
This part shall become operative on or after the first
31day of the first calendar quarter commencing more than 270 days
32after adequate funding has been received by the board to implement
33and administer this part. The board shall post a notice on its Internet
34Web site when this condition has been satisfied.
Funds for the establishment and support of the activities
36required pursuant to this part shall be advanced as a General Fund
37or special fund loan, and shall be repaid by the board from the
38initial proceeds from taxes collected pursuant to this part, no later
39than six months after the operative date specified in Section 31030.
No reimbursement is required by this act pursuant to
2Section 6 of Article XIII B of the California Constitution because
3the only costs that may be incurred by a local agency or school
4district will be incurred because this act creates a new crime or
5infraction, eliminates a crime or infraction, or changes the penalty
6for a crime or infraction, within the meaning of Section 17556 of
7the Government Code, or changes the definition of a crime within
8the meaning of Section 6 of Article XIII B of the California