Amended in Assembly January 19, 2016

Amended in Assembly July 7, 2015

Amended in Senate June 2, 2015

Amended in Senate April 6, 2015

Senate BillNo. 435


Introduced by Senator Pan

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(Principal coauthor: Assembly Member Wood)

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February 25, 2015


An act tobegin delete add Chapter 3.5 (commencing with Section 24300) to Division 20 of the Health and Safety Code, relating to health care.end deletebegin insert amend Section 11362.777 of the Health and Safety Code, relating to medical marijuana.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 435, as amended, Pan. begin deleteMedical home: health care delivery model. end deletebegin insertMedical Marijuana: personal cultivation.end insert

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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 of marijuana for medical purposes. Existing law, enacted by the Legislature, provides for the licensing and regulation by both state and local entities of medical marijuana and its cultivation.

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Existing law requires the Department of Food and Agriculture to establish a Medical Cannabis Cultivation Program. The program prohibits a person from cultivating medical marijuana without first obtaining a state license issued by the department and a license, permit, or other entitlement specifically permitting cultivation pursuant to the program from the city, county, or city and county in which the cultivation will occur, as specified. Existing law exempts certain persons from these licensure requirements under specified conditions, but authorizes a city, county, or city and county to regulate or ban the cultivation, storage, manufacture, transport, provision, or other activity by the exempt person.

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This bill would instead provide that an exemption from these licensure requirements does not limit or prevent a city, county, or city and county from exercising its police power authority under a specified provision of the California Constitution.

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Existing law requires the Office of Statewide Health Planning and Development to perform various functions and duties with respect to health policy and planning and health professions development. Existing law states the Legislature’s finding that there is a need to improve the effectiveness of health care delivery systems. Existing law generally defines a medical home as a single provider, facility, or team that coordinates an individual’s health care services.

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This bill would require the Secretary of California Health and Human Services to convene a working group of public payers, private health insurance carriers, 3rd-party purchasers, health care providers, and health care consumer representatives to identify appropriate payment methods to align incentives in support of patient centered medical homes. The bill would prescribe the powers and duties of the working group, including consulting with, and providing recommendations to, the Legislature and relevant state agencies on matters relating to the implementation of the patient centered medical home care model. The bill would require the secretary to convene the working group only after making a determination that sufficient nonstate funds have been received to pay for all costs of implementing the bill.

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This bill would make legislative findings and declarations regarding the intent of the Legislature to exempt and immunize activities undertaken in connection with patient centered medical homes from state and federal antitrust laws, as specified.

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Vote: majority. Appropriation: no. Fiscal committee: begin deleteyes end deletebegin insertnoend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

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begin insertSection 11362.777 of the end insertbegin insertHealth and Safety Codeend insert
2begin insert is amended to read:end insert

P3    1

11362.777.  

(a) The Department of Food and Agriculture shall
2establish a Medical Cannabis Cultivation Program to be
3administered by thebegin delete secretary,end deletebegin insert secretary and,end insert except as specified
4in subdivision (c), shall administer this section as it pertains to the
5cultivation of medical marijuana. For purposes of this section and
6Chapter 3.5 (commencing with Section 19300)begin insert of Division 8end insert of
7the Business and Professions Code, medical cannabis is an
8agricultural product.

9(b) (1) A person or entity shall not cultivate medical marijuana
10without first obtaining both of the following:

11(A) A license, permit, or other entitlement, specifically
12permitting cultivation pursuant to these provisions, from the city,
13county, or city and county in which the cultivation will occur.

14(B) A state license issued by the department pursuant to this
15section.

16(2) A person or entity shall not submit an application for a state
17license issued by the department pursuant to this section unless
18that person or entity has received a license, permit, or other
19entitlement, specifically permitting cultivation pursuant to these
20provisions, from the city, county, or city and county in which the
21cultivation will occur.

22(3) A person or entity shall not submit an application for a state
23license issued by the department pursuant to this section if the
24proposed cultivation of marijuana will violate the provisions of
25any local ordinance or regulation, or if medical marijuana is
26prohibited by the city, county, or city and county in which the
27cultivation is proposed to occur, either expressly or otherwise
28under principles of permissive zoning.

29(c) (1) Except as otherwise specified in this subdivision, and
30without limiting any other local regulation, a city, county, or city
31and county, through its current or future land use regulations or
32ordinance, may issue or deny a permit to cultivate medical
33marijuana pursuant to this section. A city, county, or city and
34county may inspect the intended cultivation site for suitabilitybegin delete prior
35toend delete
begin insert beforeend insert issuing a permit. After the city, county, or city and county
36has approved a permit, the applicant shall apply for a state medical
37marijuana cultivation license from the department. A locally issued
38cultivation permit shall only become active upon licensing by the
39department and receiving final local approval. A person shall not
40cultivate medical marijuanabegin delete prior toend deletebegin insert beforeend insert obtaining both a permit
P4    1from the city, county, or city and county and a state medical
2marijuana cultivation license from the department.

3(2) A city, county, or city and county that issues or denies
4conditional licenses to cultivate medical marijuana pursuant to this
5section shall notify the department in a manner prescribed by the
6 secretary.

7(3) A city, county, or city and county’s locally issued conditional
8permit requirements must be at least as stringent as the
9department’s state licensing requirements.

10(4) If a city, county, or city and county does not have land use
11regulations or ordinances regulating or prohibiting the cultivation
12of marijuana, either expressly or otherwise under principles of
13permissive zoning, or chooses not to administer a conditional
14permit program pursuant to this section, then commencing March
151, 2016, the division shall be the sole licensing authority for
16medical marijuana cultivation applicants in that city, county, or
17city and county.

18(d) (1) The secretary may prescribe, adopt, and enforce
19regulations relating to the implementation, administration, and
20enforcement of this part, including, but not limited to, applicant
21requirements, collections, reporting, refunds, and appeals.

22(2) The secretary may prescribe, adopt, and enforce any
23emergency regulations as necessary to implement this part. Any
24emergency regulation prescribed, adopted, or enforced pursuant
25to this section shall be adopted in accordance with Chapter 3.5
26(commencing with Section 11340) of Part 1 of Division 3 of Title
272 of the Government Code, and, for purposes of that chapter,
28including Section 11349.6 of the Government Code, the adoption
29of the regulation is an emergency and shall be considered by the
30Office of Administrative Law as necessary for the immediate
31preservation of the public peace, health and safety, and general
32welfare.

33(3) The secretary may enter into a cooperative agreement with
34a county agricultural commissioner to carry out the provisions of
35this chapter, including, but not limited to, administration,
36investigations, inspections, licensing and assistance pertaining to
37the cultivation of medical marijuana. Compensation under the
38cooperative agreement shall be paid from assessments and fees
39collected and deposited pursuant to this chapter and shall provide
P5    1reimbursement to the county agricultural commissioner for
2associated costs.

3(e) (1) The department, in consultation with, but not limited
4to, the Bureau of Medical Marijuana Regulation, the State Water
5Resources Control Board, and the Department of Fish and Wildlife,
6shall implement a unique identification program for medical
7marijuana. In implementing the program, the department shall
8consider issues, including, but not limited to, water use and
9environmental impacts. In implementing the program, the
10department shall ensure that:

11(A) Individual and cumulative effects of water diversion and
12discharge associated with cultivation do not affect the instream
13flows needed for fish spawning, migration, and rearing, and the
14flows needed to maintain natural flow variability.

15(B) Cultivation will not negatively impact springs, riparian
16wetlands, and aquatic habitats.

17(2) The department shall establish a program for the
18identification of permitted medical marijuana plants at a cultivation
19site during the cultivation period. The unique identifier shall be
20attached at the base of each plant. A unique identifier, such as, but
21not limited to, a zip tie, shall be issued for each medical marijuana
22plant.

23(A) Unique identifiers will only be issued to those persons
24appropriately licensed by this section.

25(B) Information associated with the assigned unique identifier
26and licensee shall be included in the trace and track program
27specified in Section 19335 of the Business and Professions Code.

28(C) The department may charge a fee to cover the reasonable
29costs of issuing the unique identifier and monitoring, tracking, and
30inspecting each medical marijuana plant.

31(D) The department may promulgate regulations to implement
32this section.

33(3) The department shall take adequate steps to establish
34protections against fraudulent unique identifiers and limit illegal
35diversion of unique identifiers to unlicensed persons.

36(f) (1) A city, county, or city and county that issues or denies
37licenses to cultivate medical marijuana pursuant to this section
38shall notify the department in a manner prescribed by the secretary.

39(2) Unique identifiers and associated identifying information
40administered by a city or county shall adhere to the requirements
P6    1set by the department and be the equivalent to those administered
2by the department.

3(g) This section does not apply to a qualified patient cultivating
4marijuana pursuant to Section 11362.5 if the area he or she uses
5to cultivate marijuana does not exceed 100 square feet and he or
6she cultivates marijuana for his or her personal medical use and
7does not sell, distribute, donate, or provide marijuana to any other
8person or entity. This section does not apply to a primary caregiver
9cultivating marijuana pursuant to Section 11362.5 if the area he
10or she uses to cultivate marijuana does not exceed 500 square feet
11and he or she cultivates marijuana exclusively for the personal
12medical use of no more than five specified qualified patients for
13whom he or she is the primary caregiver within the meaning of
14Section 11362.7 and does not receive remuneration for these
15activities, except for compensation provided in full compliance
16with subdivision (c) of Section 11362.765. For purposes of this
17section, the area used to cultivate marijuana shall be measured by
18the aggregate area of vegetative growth of live marijuana plants
19on the premises. Exemption from the requirements of this section
20does not limit or prevent a city, county, or city and county from
21begin delete regulating or banning the cultivation, storage, manufacture,
22transport, provision, or other activity by the exempt person, or
23impair the enforcement of that regulation or ban.end delete
begin insert exercising its
24police power authority under Section 7 of Article XI of the
25California Constitution.end insert

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26

SECTION 1.  

The Legislature finds and declares as follows:

27(a) It is the intent of the Legislature in enacting this act to
28provide for collaboration among public payers, private health
29insurance carriers, third-party purchasers, health care providers,
30and health care consumer representatives, as necessary, to identify
31consistent appropriate payment methods to support chronic care
32management in, and to align incentives in support of, patient
33centered medical homes.

34(b) It is the intent of the Legislature to exempt from state
35antitrust laws and to provide immunity from federal antitrust laws,
36pursuant to the state action doctrine for, any activities undertaken
37pursuant to this act that otherwise might be constrained by those
38laws. It is not the intent of the Legislature to authorize any person
39or entity to engage in or conspire to engage in any activity that
40would constitute a per se violation of state or federal antitrust laws,
P7    1including, but not limited to, an agreement among competing health
2care providers or health insurance carriers as to the price or specific
3level of payment for a health care service.

4(c) It is the intent of the Legislature that the state shall articulate
5a clear and affirmative policy describing its intent to displace
6competition with respect to the implementation of this act, and
7shall actively supervise anticompetitive conduct and its results
8with ongoing oversight.

9

SEC. 2.  

Chapter 3.5 (commencing with Section 24300) is added
10to Division 20 of the Health and Safety Code, to read:

11 

12Chapter  3.5. Patient Centered Medical Home Health
13Care Delivery Model
14

 

15

24300.  

The Secretary of California Health and Human Services
16shall convene a working group of public payers, private health
17insurance carriers, third-party purchasers, health care providers,
18and health care consumer representatives to identify appropriate
19payment methods to align incentives in support of patient centered
20medical homes.

21

24301.  

(a) The working group convened pursuant to this
22chapter shall consult with, and provide recommendations to, the
23Legislature and relevant state agencies on all matters relating to
24the implementation of a patient centered medical home care model.

25(b) The working group shall have the authority to do all of the
26following:

27(1) Develop consensus on strategies for implementing the patient
28centered medical home care model and service delivery change at
29the practice, community, and health care system level.

30(2) Identify ways to create alignment regarding payment,
31reporting, and infrastructure investments.

32(3) Identify ways to utilize public and private purchasing power
33and ways to enable competing payers to work collaboratively to
34establish common patient centered medical home initiatives.

35(4) Propose participation in relevant federally funded pilot and
36demonstration projects.

37

24302.  

The secretary shall convene the working group only
38after he or she makes a determination that sufficient nonstate funds
P8    1have been received to pay for all costs of implementing this
2chapter.

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