HOUSE OF REPRESENTATIVES

H.B. NO.

449

TWENTY-NINTH LEGISLATURE, 2017

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to marijuana.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to title 19 to be appropriately designated and to read as follows:

"Chapter A

marijuana

     §A-1  Definitions.  As used in this chapter:

     "Consumer" means a person twenty-one years of age or older who purchases marijuana or marijuana products for personal use from persons twenty-one years or age or older, but not for resale to others.

     "Department" means the department of health.

     "Marijuana" includes "marijuana", as defined in section 329-1, and "marijuana concentrate", as defined in section 712-1240.

     "Marijuana accessories" means any equipment, products, or materials of any kind which are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, composting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, or vaporizing marijuana or for ingesting, inhaling, or otherwise introducing marijuana into the human body.

     "Marijuana cultivation facility" means an entity licensed to cultivate, prepare, package, and sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities, and to other marijuana cultivation facilities, but not to consumers.

     "Marijuana establishment" means a marijuana cultivation facility, a marijuana testing facility, a marijuana product manufacturing facility, or a retail marijuana store.

     "Marijuana product manufacturing facility" means an entity licensed to purchase marijuana; manufacture, prepare, and package marijuana products; and sell marijuana and marijuana products to other marijuana product manufacturing facilities and to retail marijuana stores, but not to consumers.

     "Marijuana products" means concentrated marijuana products and marijuana products that comprise marijuana and other ingredients and are intended for use or consumption, including but not limited to edible products, ointments, and tinctures.

     "Marijuana testing facility" means an entity licensed to analyze and certify the safety and potency of marijuana.

     "Retail marijuana store" means an entity licensed to purchase marijuana from marijuana cultivation facilities, purchase marijuana and marijuana products from marijuana product manufacturing facilities, and sell marijuana and marijuana products to consumers.

     "Unreasonably impracticable" means that the measures necessary to comply with regulations require such a high investment of risk, money, time, or any other resource or asset that the operation of a marijuana establishment is not worthy of being carried out in practice by a reasonably prudent businessperson.

     §A-2  Personal use of marijuana.  Notwithstanding any other state law to the contrary, the following acts shall neither be a criminal offense under Hawaii law nor a basis for seizure or forfeiture of assets under Hawaii law for persons twenty-one years of age or older:

     (1)  Possessing, using, displaying, purchasing, or transporting marijuana accessories or one ounce or less of marijuana;

     (2)  Possessing, growing, processing, or transporting up to five marijuana plants and possession of the marijuana produced by the plants on the premises where the plants were grown; provided that the plants are grown in a secured space, the plants are not grown openly or publicly, and are not made available for sale;

     (3)  Transfer of one ounce or less of marijuana without remuneration to a person who is twenty-one years of age or older;

     (4)  Consumption of marijuana; provided that nothing in this section shall permit consumption that is conducted openly and publicly or in a manner that endangers others; and

     (5)  Assisting another person who is twenty-one years of age or older in any of the acts described in paragraphs (1) through (4).

     §A-3  Lawful operation of marijuana-related facilities.  Notwithstanding any other state law to the contrary, the following acts shall neither be a criminal offense under Hawaii law nor a basis for seizure or forfeiture of assets under Hawaii law for persons twenty-one years of age or older:

     (1)  Manufacture, sale, purchase, or possession of marijuana accessories;

     (2)  Possessing, displaying, or transporting marijuana or marijuana products; purchase of marijuana from a marijuana cultivation facility; purchase of marijuana or marijuana products from a marijuana product manufacturing facility; or sale of marijuana or marijuana products to consumers if the person conducting the activities described in this paragraph holds a valid license to operate a retail marijuana store or is acting in the person's capacity as an owner, employee, or agent of a licensed retail marijuana store;

     (3)  Cultivating, harvesting, processing, packaging, transporting, displaying, or possessing marijuana; delivery or transfer of marijuana to a marijuana testing facility; selling marijuana to a marijuana cultivation facility, a marijuana product manufacturing facility, or a retail marijuana store; or the purchase of marijuana from a marijuana cultivation facility, if the person conducting the activities described in this paragraph holds a valid license to operate a marijuana cultivation facility or is acting in the person's capacity as an owner, employee, or agent of a licensed marijuana cultivation facility;

     (4)  Packaging, processing, transporting, manufacturing, displaying, or possessing marijuana or marijuana products; delivery or transfer of marijuana or marijuana products to a marijuana testing facility; selling marijuana or marijuana products to a retail marijuana store or a marijuana product manufacturing facility; purchase of marijuana from a marijuana cultivation facility; or purchase of marijuana or marijuana products from a marijuana product manufacturing facility, if the person conducting the activities described in this paragraph holds a valid license to operate a marijuana product manufacturing facility or is acting in the person's capacity as an owner, employee, or agent of a licensed marijuana product manufacturing facility;

     (5)  Possessing, cultivating, processing, repackaging, storing, transporting, displaying, transferring, or delivering marijuana or marijuana products if the person holds a valid license to operate a marijuana testing facility or is acting in the person's capacity as owner, employee, or agent of a licensed marijuana testing facility; and

     (6)  Leasing or otherwise allowing the use of property owned, occupied, or controlled by any person, corporation, or other entity for any of the activities described in paragraphs (1) through (5).

     §A-4  Regulation of marijuana.  (a)  Not later than one hundred twenty days after the effective date of this Act, the department shall adopt rules pursuant to chapter 91 necessary to implement this chapter.  The rules shall not prohibit the operation of marijuana establishments either expressly or by making operations unreasonably impracticable.  The rules shall include:

     (1)  Procedures for the issuance, renewal, suspension, and revocation of a license to operate a marijuana establishment;

     (2)  A schedule of application, licensing, and renewal fees;

     (3)  Qualifications for a license that are directly and demonstrably related to the operation of a marijuana establishment;

     (4)  Security requirements for marijuana establishments;

     (5)  Requirements to prevent the sale or diversion of marijuana and marijuana products to persons under the age of twenty-one;

     (6)  Labeling requirements for marijuana and marijuana products sold or distributed by a marijuana establishment;

     (7)  Health and safety regulations and standards for the manufacture of marijuana products and the cultivation of marijuana;

     (8)  Restrictions on the advertising and display of marijuana and marijuana products; and

     (9)  Civil penalties not to exceed $100 per violation for any failure to comply with rules made pursuant to this section.

     (b)  To ensure that individual privacy is protected, notwithstanding subsection (a), the department shall not require a consumer to provide a retail marijuana store with personal information other than government-issued identification to determine the consumer's age.  A retail marijuana store shall not be required to acquire and record personal information about consumers other than information typically acquired in a financial transaction conducted at a retail liquor store.

     (c)  Each application for a license to operate a marijuana establishment shall be submitted to the department.  The department shall:

     (1)  Begin accepting and processing applications by July 1, 2018;

     (2)  Issue a license to the applicant within ninety days of receipt of an application unless the department finds the applicant is not in compliance with rules adopted pursuant to subsection (a); and

     (3)  Upon denial of an application, notify the applicant in writing of the reason or reasons for its denial.

No license issued by the department pursuant to this section shall be valid for more than one year.

     §A-5  Employers; driving; minors; control of property.  Nothing in this part shall be construed to:

     (1)  Require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees;

     (2)  Allow driving under the influence of marijuana or driving while impaired by marijuana or to supersede any law relating to driving under the influence of marijuana or driving while impaired by marijuana, nor shall this part preclude the State from enacting laws and imposing penalties for driving under the influence of or while impaired by marijuana;

     (3)  Permit the transfer of marijuana, with or without remuneration, to a person under the age of twenty-one or to allow a person under the age of twenty-one to purchase, possess, use, transport, grow, or consume marijuana; or

     (4)  Prohibit a person, employer, school, hospital, detention facility, corporation, or any other entity who occupies, owns, or controls property from prohibiting or otherwise regulating the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on or in that property.

     §A-6  Medical marijuana provisions unaffected.  Nothing in this chapter shall limit any privileges or rights of a medical marijuana qualifying patient, primary caregiver, or registered entity as provided in chapter 329, part IX."

     SECTION 2.  Chapter 712, Hawaii Revised Statutes, is amended by adding a new section to part IV be appropriately designated and to read as follows:

     "§712-     Marijuana.  The following acts shall be exempt from arrest, prosecution, and criminal culpability under this part:

     (1)  Any act permitted under section A-2; and

     (2)  Any act permitted under section A-3."

     SECTION 3.  Section 46-4, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

     "(f)  Neither this section nor any other law, county ordinance, or rule shall prohibit the use of land for medical marijuana production centers or medical marijuana dispensaries established and licensed pursuant to chapter 329D[;] or marijuana establishments established and licensed pursuant to chapter A; provided that the land is otherwise zoned for agriculture, manufacturing, or retail purposes."

     SECTION 4.  Section 235-2.4, Hawaii Revised Statutes, is amended by amending subsection (r) to read as follows:

     "(r)  Section 280E (with respect to expenditures in connection with the illegal sale of drugs) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that section 280E shall not be operative with respect to the production and sale of [medical]:

     (1)  Medical marijuana and manufactured marijuana products by dispensaries licensed under chapter 329D and their subcontractors, as defined in section 329D-1[.]; and

     (2)  Marijuana and marijuana products by marijuana establishments licensed under chapter A."

     SECTION 5.  Section 237-24.3, Hawaii Revised Statutes, is amended to read as follows:

     "§237-24.3  Additional amounts not taxable.  In addition to the amounts not taxable under section 237-24, this chapter shall not apply to:

     (1)  Amounts received from the loading, transportation, and unloading of agricultural commodities shipped for a producer or produce dealer on one island of this State to a person, firm, or organization on another island of this State.  The terms "agricultural commodity", "producer", and "produce dealer" shall be defined in the same manner as they are defined in section 147-1; provided that agricultural commodities need not have been produced in the State;

     (2)  Amounts received by the manager, submanager, or board of directors of:

         (A)  An association of owners of a condominium property regime established in accordance with chapter 514A or 514B; or

         (B)  A nonprofit homeowners or community association incorporated in accordance with chapter 414D or any predecessor thereto and existing pursuant to covenants running with the land,

          in reimbursement of sums paid for common expenses;

     (3)  Amounts received or accrued from:

         (A)  The loading or unloading of cargo from ships, barges, vessels, or aircraft, whether or not the ships, barges, vessels, or aircraft travel between the State and other states or countries or between the islands of the State;

         (B)  Tugboat services including pilotage fees performed within the State, and the towage of ships, barges, or vessels in and out of state harbors, or from one pier to another; and

         (C)  The transportation of pilots or governmental officials to ships, barges, or vessels offshore; rigging gear; checking freight and similar services; standby charges; and use of moorings and running mooring lines;

     (4)  Amounts received by an employee benefit plan by way of contributions, dividends, interest, and other income; and amounts received by a nonprofit organization or office, as payments for costs and expenses incurred for the administration of an employee benefit plan; provided that this exemption shall not apply to any gross rental income or gross rental proceeds received after June 30, 1994, as income from investments in real property in this State; and provided further that gross rental income or gross rental proceeds from investments in real property received by an employee benefit plan after June 30, 1994, under written contracts executed prior to July 1, 1994, shall not be taxed until the contracts are renegotiated, renewed, or extended, or until after December 31, 1998, whichever is earlier.  For the purposes of this paragraph, "employee benefit plan" means any plan as defined in section 1002(3) of title 29 of the United States Code, as amended;

     (5)  Amounts received for purchases made with United States Department of Agriculture food coupons under the federal food stamp program, and amounts received for purchases made with United States Department of Agriculture food vouchers under the Special Supplemental Foods Program for Women, Infants and Children;

     (6)  Amounts received by a hospital, infirmary, medical clinic, health care facility, pharmacy, or a practitioner licensed to administer the drug to an individual for selling prescription drugs or prosthetic devices to an individual; provided that this paragraph shall not apply to any amounts received for services provided in selling prescription drugs or prosthetic devices.  As used in this paragraph:

              "Prescription drugs" are those drugs defined under section 328-1 and dispensed by filling or refilling a written or oral prescription by a practitioner licensed under law to administer the drug and sold by a licensed pharmacist under section 328-16 or practitioners licensed to administer drugs; provided that "prescription drugs" shall not include marijuana, marijuana products, or manufactured marijuana products authorized pursuant to chapters 329 [and], 329D, and A[[]; and[]]

              "Prosthetic device" means any artificial device or appliance, instrument, apparatus, or contrivance, including their components, parts, accessories, and replacements thereof, used to replace a missing or surgically removed part of the human body, which is prescribed by a licensed practitioner of medicine, osteopathy, or podiatry and that is sold by the practitioner or that is dispensed and sold by a dealer of prosthetic devices; provided that "prosthetic device" shall not mean any auditory, ophthalmic, dental, or ocular device or appliance, instrument, apparatus, or contrivance;

     (7)  Taxes on transient accommodations imposed by chapter 237D and passed on and collected by operators holding certificates of registration under that chapter;

     (8)  Amounts received as dues by an unincorporated merchants association from its membership for advertising media, promotional, and advertising costs for the promotion of the association for the benefit of its members as a whole and not for the benefit of an individual member or group of members less than the entire membership;

     (9)  Amounts received by a labor organization for real property leased to:

         (A)  A labor organization; or

         (B)  A trust fund established by a labor organization for the benefit of its members, families, and dependents for medical or hospital care, pensions on retirement or death of employees, apprenticeship and training, and other membership service programs.

          As used in this paragraph, "labor organization" means a labor organization exempt from federal income tax under section 501(c)(5) of the Internal Revenue Code, as amended;

    (10)  Amounts received from foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes; and

    (11)  Amounts received as rent for the rental or leasing of aircraft or aircraft engines used by the lessees or renters for interstate air transportation of passengers and goods.  For purposes of this paragraph, payments made pursuant to a lease shall be considered rent regardless of whether the lease is an operating lease or a financing lease.  The definition of "interstate air transportation" is the same as in title 49 [U.S.C.] United States Code section 40102."

     SECTION 6.  Section 321-30.1, Hawaii Revised Statutes, is amended by amending its title and subsections (a) and (b) to read as follows:

     "§321-30.1  [Medical marijuana] Marijuana registry and regulation special fund; established.  (a)  There is established within the state treasury the [medical] marijuana registry and regulation special fund.  The fund shall be expended at the discretion of the director of health:

     (1)  To establish and regulate a system of medical marijuana dispensaries in the State;

     (2)  To offset the cost of the processing and issuance of patient registry identification certificates and primary caregiver registration certificates;

     (3)  To fund positions and operating costs authorized by the legislature;

     (4)  To establish and manage a secure and confidential database;

     (5)  To fund public education as required by section 329D‑26;

     (6)  To fund substance abuse prevention and education programs; [and]

     (7)  To regulate marijuana establishments in the State pursuant to chapter A; and

    [(7)] (8)  For any other expenditure necessary, consistent with this chapter [and], chapter 329D, and chapter A, to implement medical marijuana registry and regulation programs[.] and marijuana establishment regulation programs.

     (b)  The fund shall consist of all moneys derived from fees collected pursuant to subsection (c) [and], section 329D-4[.], and chapter A.  There is established within the [medical] marijuana registry and regulation special fund:

     (1)  A medical marijuana registry program sub-account, into which shall be deposited all fees collected pursuant to subsection (c); [and]

     (2)  A medical marijuana dispensary program sub-account, into which shall be deposited all fees collected pursuant to section 329D-4[.]; and

     (3)  A marijuana establishment program sub-account, into which shall be deposited all fees collected pursuant to chapter A."

     SECTION 7.  Section 329-43.5, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

     "(e)  Subsections (a) and (b) shall not apply to a person who is authorized to:

     (1)  Acquire, possess, cultivate, use, distribute, or transport marijuana pursuant to the definition of "medical use" under section 329-121, while the person is facilitating the medical use of marijuana by a qualifying patient; [or]

     (2)  Dispense, manufacture, or produce marijuana or manufactured marijuana products pursuant to and in compliance with chapter 329D, while the person is facilitating the medical use of marijuana by a qualifying patient pursuant to part IX of chapter 329[.]; or

     (3)  Grow, process, possess, transfer, display, transport, or use marijuana or marijuana products pursuant to and in compliance with chapter A."

PART II

     SECTION 8.  The Hawaii Revised Statutes is amended by adding a new chapter to title 14 to be appropriately designated and to read as follows:

"Chapter B

marijuana tax

     §B-1  Definitions.  Wherever used in this chapter, unless the context otherwise requires:

     "Dealer" means the holder of a medical marijuana production center license, a medical marijuana dispensary license, or a marijuana establishment license under chapter 329D or A.

     "Manufactured marijuana product" shall have the same meaning as in section 329D-1.

     "Marijuana" shall have the same meaning as in section 329-121.

     "Marijuana establishment" shall have the same meaning as in section A-1.

     "Marijuana products" shall have the same meaning as in section A-1.

     "Medical marijuana dispensary" shall have the same meaning as in section 329D-1.

     "Medical marijuana production center" shall have the same meaning as in section 329D-1.

     "Permittee" means the holder of a permit provided for in section B-2.

     "Person" means an individual, firm, corporation, partnership, association, or any form of business or legal entity.

     "Sale" means any transfer of title or possession, or both, exchange, or barter, in any manner or by any means whatsoever, for a consideration.

     §B-2  Permit.  (a)  It shall be unlawful for any dealer to sell marijuana, marijuana products, or manufactured marijuana products unless a permit has been issued to the dealer as hereinafter prescribed, and the permit is in full force and effect.

     (b)  The department of health shall certify to the department of taxation from time to time and within forty-eight hours after a license is issued pursuant to chapter A the name of every dealer, together with the dealer's place of business and the period covered by the dealer's license.  The department of taxation thereupon shall issue its permit to that person for the period covered by the person's license upon the payment of a permit fee of $          .  The permit shall be issued by the department of taxation as of the date when the department of health issued the license.

     (c)  Any permit issued under this chapter shall not be assignable.  The permit shall be conspicuously displayed on the premises of the permittee covered by the permit; it shall expire on June 30 next succeeding the date upon which it is issued, unless sooner suspended, surrendered, or revoked for cause by the department of taxation; and it shall be renewed annually before July 1, upon fulfillment of all requirements as in the case of an original permit and the payment of a renewal fee of $          .  Whenever a permit is defaced, destroyed, or lost, or the licensed premises are relocated, the department of taxation may issue a duplicate permit to the permittee upon the payment of a fee of          .

     (d)  The department of taxation may suspend, or, after hearing, revoke, any permit issued by it under this chapter whenever it finds that the permittee has failed to comply with this chapter, or any rule of the department adopted under this chapter.  Upon suspending or revoking any permit, the department of taxation shall request the permittee to surrender to it immediately the permit, or any duplicate thereof issued to the permittee, and the permittee shall surrender the permit promptly to the department as requested.  Whenever the department of taxation suspends a permit, it shall notify the permittee immediately and afford the permittee a hearing, if desired, and if a hearing has not already been afforded.  After the hearing, the department of taxation shall either rescind its order of suspension, or good cause appearing therefor, shall continue the suspension or revoke the permit.

     §B-3  Cooperation between department of taxation and department of health.  (a)  The department of taxation and the department of health, if the department of health exercises its authority under this chapter, shall cooperate in the enforcement of this chapter.

     (b)  The department of taxation shall notify the department of health of the name and address of every permittee whose permit has been revoked, and any license issued to the permittee under chapter 329D or A thereupon shall be deemed forfeited.

     (c)  The department of taxation may notify the department of health of the name and address of every person who has failed to file any return required, or to pay any tax prescribed, or to secure a permit, or to perform any other duty or act imposed under this chapter, and the department of health shall thereupon suspend any license which may have been issued to that person under chapter 329D or A until such time as the person complies with this chapter.

     (d)  The department of health, if it exercises its authority under this chapter, shall provide to the department of taxation the results of any examination the department of health has undertaken pursuant to section B-9 and, upon request, shall furnish to the department of taxation any information in its possession relative to any person having a license issued by it, and its records shall be open to examination of the department of taxation.

     §B-4  Tax.  Every person engaged in the business of selling marijuana, marijuana products, or manufactured marijuana products shall pay an excise tax equal to          per cent of the gross proceeds of sales of marijuana, marijuana products, and manufactured marijuana products.

     §B-5  Return; form; contents.  Every taxpayer, on or before the twentieth day of each month, shall file with the department of taxation in the taxation district in which the taxpayer's business premises are located, or with the department in Honolulu, a return showing all sales of marijuana, marijuana products, and manufactured marijuana products defined in section B-1 and taxed under section B-4 made by the taxpayer during the preceding month, showing separately the amount of the nontaxable sales, and the amount of the taxable sales, and the tax payable thereon.  The form of return shall be prescribed by the department and shall contain the information that it may deem necessary for the proper administration of this chapter.

     §B-6  Payment of tax; penalties.  (a)  At the time of the filing of the return required under section B-5 and within the time prescribed therefor, each taxpayer shall pay to the department of taxation the tax imposed by this chapter, required to be shown by the return.

     (b)  Penalties and interest shall be added to and become a part of the tax, when and as provided by section 231-39.

     §B-7  Determination of tax, additional assessments, credit, and refunds.  (a)  As soon as practicable after each return has been filed, the department of taxation shall cause the return to be examined and shall compute and determine the amount of the tax payable thereon.

     (b)  If it should appear upon the examination or thereafter within five years after the filing of the return, or at any time if no return has been filed, as a result of the examination or as a result of any examination of the records of the taxpayer or of any other inquiry or investigation, that the correct amount of the tax is greater than that shown on the return, or that any tax imposed by this chapter has not been paid, an assessment of the tax may be made in the manner provided in section 235-108(b).  The amount of the tax for the period covered by the assessment shall not be reduced below the amount determined by an assessment so made, except upon appeal or in a proceeding brought pursuant to section 40-35.

     (c)  If the taxpayer has paid or returned with respect to any month more than the amount determined to be the correct amount of tax for that month, the amount of the tax so returned and any assessment of tax made pursuant to the return may be reduced, and any overpayment of tax may be credited upon the tax imposed by this chapter, or at the election of the taxpayer, the taxpayer not being delinquent in the payment of any taxes owing to the State, may be refunded in the manner provided in section 231-23(c); provided that no reduction of tax may be made when forbidden by subsection (b) or more than five years after the filing of the return.

     §B-8  Records to be kept.  (a)  Every dealer shall keep a record of all sales of marijuana, marijuana products, and manufactured marijuana products defined in section B-1 and taxed under section B-4 made by the dealer, in the form that the department of taxation may prescribe.  Every person holding a license under chapter 329D or A, shall keep a record of all purchases by the person of marijuana, marijuana products, and manufactured marijuana products defined in section B-1 and taxed under section B-4, in the form that the department of taxation may prescribe.  All the records shall be offered for inspection and examination at any time upon demand by the department of taxation or department of health and shall be preserved for a period of five years, except that the department of taxation may in writing consent to their destruction within the period or may require that they be kept longer.

     The department of taxation may by rule require the dealer to keep any other records that it may deem necessary for the proper enforcement of this chapter.

     (b)  If any dealer or any other taxpayer fails to keep records from which a proper determination of the tax due under this chapter may be made, the department of taxation may fix the amount of tax for any period from the best information obtainable by it, and assess the tax as hereinbefore provided.

     §B-9  Inspection.  (a)  The director of taxation, the director of health, or the duly authorized agent of either, may examine all records required to be kept under this chapter, and books, papers, and records of any person engaged in the sale of marijuana, marijuana products, or manufactured marijuana products to verify the accuracy of the payment of the tax imposed by this chapter and other compliance with this chapter and rules adopted pursuant thereto.  Every person in possession of the books, papers, and records and the person's agents and employees shall give the director of taxation, the director of health, or the duly authorized agent of either of them, the means, facilities, and opportunities for the examination.

     (b)  The authority granted to the director of health under this section shall not conflict with section 231-18 and shall not extend to the inspection of any documents not directly related to this chapter.

     §B-10  Tax in addition to other taxes.  The tax imposed by this chapter shall be in addition to any other tax imposed upon the business of selling marijuana, marijuana products, or manufactured marijuana products, or upon any of the transactions, acts, or activities taxed by this chapter.

     §B-11  Appeals.  Any person aggrieved by any assessment of the tax imposed by this chapter may appeal from the assessment in the manner and within the time and in all other respects as provided in the case of income tax appeals by section 235-114.  The hearing and disposition of the appeal, including the distribution of costs shall be as provided in chapter 232.

     §B-12  Other provisions applicable.  All of the provisions of chapters 235 and 237 not inconsistent with this chapter and that may appropriately be applied to the taxes, persons, circumstances, and situations involved in this chapter, including, without prejudice to the generality of the foregoing, provisions as to penalties and interest, provisions granting administrative powers to the director of taxation, and provisions for the assessment, levy, and collection of taxes, shall be applicable to the taxes imposed by this chapter, and to the assessment, levy, and collection thereof, except that returns, return information, or reports under this chapter and relating only to this chapter may be made known to the department of health by the department of taxation, if not in conflict with section 231-18.

     §B-13  Investigations; contempts; fees.  (a)  The director of taxation, and any agent authorized by the director to conduct any inquiry, investigation, or hearing hereunder, shall have power to administer oaths and take testimony under oath relative to the matter of inquiry or investigation.  At any hearing ordered by the director, the director or the director's agent authorized to conduct the hearing may subpoena witnesses and require the production of books, papers, and documents pertinent to the inquiry.  No witness under subpoena authorized to be issued by this section shall be excused from testifying or from producing books or papers on the ground that the testimony or the production of the books or other documentary evidence would tend to incriminate the witness, but the evidence or the books or papers so produced shall not be used in any criminal proceeding against the witness.

     (b)  If any person disobeys the process or, having appeared in obedience thereto, refuses to answer any pertinent question put to the person by the director of taxation or the director's authorized agent or to produce any books and papers pursuant thereto, the director or the agent may apply to the circuit court of the circuit wherein the taxpayer resides or wherein the transaction, act, or activity under investigation has occurred, or to any judge of the circuit court, setting forth the disobedience to process or refusal to answer, and the court or the judge shall cite the person to appear before the court or the judge to answer the question or to produce the books and papers, and, upon the person's refusal to do so, shall commit the person to jail until the person shall testify, but not for a longer period than sixty days.  Notwithstanding the serving of the term of commitment by any person, the director may proceed in all respects with the inquiry and examination as if the witness had not previously been called upon to testify.

     (c)  Officers who serve subpoenas issued by the director of taxation or under the director's authority and witnesses attending hearings conducted by the director hereunder shall receive like fees and compensation as officers and witnesses in the circuit courts of the State, to be paid on vouchers of the director, from any moneys available for litigation expenses of the department of taxation.

     §B-14  Administration by director; rules and regulations.  (a)  The administration of this chapter is vested in the director of taxation who may adopt and enforce rules for the enforcement and administration of this chapter.

     (b)  The rules shall be adopted by the director, subject to chapter 91.

     §B-15  Penalties.  (a)  The penalties provided by this section shall apply to any person whether acting as principal, agent, officer, or director, for oneself, itself, or for another person, and shall apply to each single violation, but shall not apply to any act the punishment for which is elsewhere prescribed by this chapter.

     (b)  Any dealer who sells marijuana, marijuana products, or manufactured marijuana products without a permit as required by this chapter shall be fined not more than $          .

     §B-16  Disposition of revenues.  All moneys collected pursuant to this chapter shall be transmitted to the director of finance for deposit into the education special fund established under section 302A-   ."

     SECTION 9.  Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to part V, subpart B, to be appropriately designated and to read as follows:

     "§302A-     Education special fund.  (a)  There is created in the treasury of the State the education special fund, into which shall be deposited the marijuana tax revenues designated in section B-16.

     (b)  Moneys in the education special fund shall be used solely for the support of early education and public schools."

PART III

     SECTION 10.  In codifying the new chapters added by sections 1 and 8 of this Act, the revisor of statutes shall substitute appropriate chapter numbers for the letters used in designating the new chapters in this Act.

     SECTION 11.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 12.  If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 13.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 14.  This Act shall take effect on July 1, 2017; provided that section 4 shall apply to taxable years beginning after December 31, 2016.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Marijuana; Legalization; Regulation; Taxation

 

Description:

Legalizes under state law the growing, processing, possession, transfer, and personal use of marijuana in a specified quantity to persons at least twenty-one years of age.  Requires licensing to operate marijuana establishments.  Specifies the application and non-application of the Internal Revenue Code to expenses related to the production and sale of marijuana and marijuana products for state income tax purposes.  Specifies that amounts received for the sale of marijuana or marijuana products are not exempt from the state general excise tax.  Establishes a tax on the sale of marijuana, marijuana products, and manufactured marijuana products.  Establishes an education special fund, into which marijuana tax revenues are to be deposited.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.