Bill Details - HB722 (2019)

HB 722-FN - AS INTRODUCED

 

 

2019 SESSION

19-0547

04/03

 

HOUSE BILL 722-FN

 

AN ACT relative to the retail sale and taxation of marijuana.

 

SPONSORS: Rep. Hunt, Ches. 11

 

COMMITTEE: Criminal Justice and Public Safety

 

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ANALYSIS

 

This bill permits the purchase or sale of marijuana from locally-permitted marijuana retail establishments to persons 21 years of age or older without criminal penalty.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0547

04/03

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to the retail sale and taxation of marijuana.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Tax on Rooms and Meals; Definitions.  Amend RSA 78-A:3, IV to read as follows:

IV.  "Operator" means any person operating a hotel, charging for a taxable meal, or receiving gross rental receipts, whether as owner or proprietor or lessee, sublessee, mortgagee, licensee, or otherwise.  "Operator" shall also include any person who operates a retail marijuana establishment as authorized in RSA 674:32-b, II.

2  New Paragraph; Tax on Meals and Rooms; Imposition of Tax.  Amend RSA 78-A:6 by inserting after paragraph II-a the following new paragraph:

II-b.  A tax of 8 percent is imposed upon the retail sale price of marijuana as authorized in RSA 674:32-b, II.

3  Alcohol or Drug Impairment; Possession of Drugs.  Amend RSA 265-A:43 to read as follows:

265-A:43  Possession of Drugs.  Any person who drives on any way a vehicle while knowingly having in his or her possession or in any part of the vehicle a controlled drug or controlled drug analog in violation of the provisions of RSA 318-B shall be guilty of a misdemeanor, and his or her license shall be revoked or his or her right to drive denied for a period of 60 days and at the discretion of the court for a period not to exceed 2 years.  This section shall not apply to the possession of marijuana or hashish as provided in RSA 318-B:2-c, [or] a personal-use amount of a regulated marijuana-infused product as defined in RSA 318-B:2-c, I(b), or marijuana purchased from a permitted location pursuant RSA 674:32-c, I-a.

4  Personal Possession of Marijuana.  Amend RSA 318-B:2-c, II-IV to read as follows:

II.  Except as provided in RSA 126-X and RSA 674:32-c, I-a, any person who knowingly possesses 3/4 of an ounce or less of marijuana, including adulterants or dilutants, shall be guilty of a violation, and subject to the penalties provided in paragraph V.

III.  Except as provided in RSA 126-X, any person who knowingly possesses 5 grams or less of hashish, including adulterants or dilutants, shall be guilty of a violation, and subject to the penalties provided in paragraph V.

IV.  Except as provided in RSA 126-X and RSA 674:32-c, I-a, any person 21 years of age or older possessing a personal-use amount of a regulated marijuana-infused product shall be guilty of a violation, and subject to the penalties provided in paragraph V.  Persons 18 years of age or older and under 21 years of age who knowingly possess marijuana-infused products shall be guilty of a misdemeanor.

5  New Paragraph; Controlled Drug Act; Penalties.  Amend RSA 318-B:26 by inserting after paragraph XIII the following new paragraph:

XIV.  This section shall not apply to retail purchase or sale of marijuana at a location permitted under RSA 674:32-b, II.

6  Agricultural Uses of Land; Existing Agricultural Uses.  Amend RSA 674:32-b, II to read as follows:

II.  Any new establishment, re-establishment after abandonment, or significant expansion of a farm stand, retail operation, or other use involving on-site transactions with the public, including agritourism as defined in RSA 21:34-a and retail sales of marijuana as permitted in RSA 674:32-c, I-a, may be made subject to applicable special exception, building permit, or other local land use board approval and may be regulated to prevent traffic and parking from adversely impacting adjacent property, streets and sidewalks, or public safety.  No municipality shall adopt an ordinance, bylaw, definition, or policy regarding agritourism activities that conflicts with the definition of agritourism in RSA 21:34-a.

7  New Paragraph; Agricultural Uses of Land; General Provisions.  Amend RSA 674:32-c by inserting after paragraph I the following new paragraph:

I-a.  The growing and harvesting of marijuana, including the leaves, stems, flowers, and seeds of all species of the plant genus cannabis, but not including the resin extracted from any part of such plant, and every compound, manufacture, salt, derivative, mixture, or preparation from such resin including hashish, and further, not including the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks, fiber, oil or cake, or the sterilized seed of such plant which is incapable of germination, as a primary or accessory use, for sale to any person 21 years of age or older, shall not be prohibited in any district.  Nothing in this subdivision shall be construed to legalize or decriminalize the possession or use of marijuana.

8  Effective Date.  This act shall take effect January 1, 2020.

 

LBAO

19-0547

Revised 2/13/19

 

HB 722-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to the retail sale and taxation of marijuana.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

   Expenditures

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [    ] Other

 

 

 

 

 

COUNTY:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

   Expenditures

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

 

METHODOLOGY:

This bill permits the purchase or sale of marijuana from locally-permitted marijuana retail establishments to persons 21 years of age or older without criminal penalty.

 

The Judicial Branch identified three parts of the bill with a potential impact on the Branch.

  • Proposed RSA 674:32-c would allow the growing and harvesting of marijuana for sale to persons twenty-one years of age and older.  This could result in fewer felony prosecutions as the manufacture of marijuana is currently a felony under RSA 318-B:26, I.  The Branch does not have information on how many fewer felony cases may result from the bill, but has information on the estimated average cost of a felony case in the superior court which is $481 in for FY 2020 and $486 for FY 2021.
  • The bill would amend RSA 265-A:43 regarding driving while in possession of marijuana to exempt marijuana purchased from a permitted location.  This would reduce the number of unspecified misdemeanors in the district division of the circuit court.  The Branch has no information on how many fewer cases there may be, but the estimated average cost of a class B misdemeanor is $53 for FY 2020 and $54 for FY 2021. For class A misdemeanors the amounts are $76 for FY 2020 and $77 for FY 2021.
  • Proposed RSA 318-B:26, XIV would make the penalty section of the controlled drug act not apply to marijuana purchased and sold through a permitted location.  This would also reduce the number of felony cases in the superior court by an indeterminate number.

 

It should be noted that average case cost estimates for FY 2020 and FY 2021 are based on data that is more than ten years old and does not reflect changes to the courts over that same period of time or the impact these changes may have on processing the various case types.  An unspecified misdemeanor can be either class A or class B, with the presumption being a class B misdemeanor.

 

The Department of Revenue Administration states the impact of the bill with respect to taxation is indeterminable because the Department has no way of knowing the amount of marijuana that would be sold through permitted establishments or what the price will be.

The Department assumed the following :

  • An 8% tax would be levied upon the retail price of marijuana.
  • The retail price would be between $220 and $330 per ounce.
  • Municipal revenue would increase.  According to RSA 78-A:26 Disposition of Revenues, a portion of taxes collected under RSA is distributed to cities and towns.
  • Census data for ages 21+ is not available.  Data for 20+ is used recognizing it may overstate the results.
  • Amounts assume users would buy legally. The Department has no way to estimate how many will continue to buy illegally.

 

The Department calculated a range of possible tax revenue making estimates, assumptions and using information from New York and other Internet data.  Based on the assumptions, the Department calculated annual tax revenue could range from $11.5 million to $27.4 million.  In order to administer the retail tax on marijuana the Department assumes it would need five additional full-time positions at an estimated annual cost of $233,000 in FY 2020, $465,000 in FY 2021, $486,000 in FY 2022, and $511,000 in FY 2023. Additional compliance officers will also be needed dependant on the number of retail establishments.  The Department estimates it would need an additional $2 million to implement a new tax in the Department's tax system, for additional armored car transportation of deposits, cash counting machines, and other essential items to process the expected increase in cash payments.

 

The New Hampshire Municipal Association indicates this legislation appears to allow any property owner in the state to grow and sell marijuana subject to minimal local regulation.  The Association assumes the bill could lead to increased municipal expenditures for law enforcement, traffic control, and code enforcement.  The Association has no way to estimate the potential costs.  The Association indicates currently, 21% of the meals and rooms tax is distributed annually to cities and towns in proportion to their population.  Subjecting marijuana to the meals and rooms tax would result in increased revenue for municipalities, however it is not possible to estimate the increase in municipal revenue.

 

The Department of Safety assumes, based on information from states that have legalized marijuana, this bill would result in an increase in marijuana-related traffic arrests and deaths.  The Department states there could be indeterminable savings due to fewer arrests made for marijuana possession.  The Department indicates there would be no impact on revenue to the Department.

 

The New Hampshire Association of Counties indicates this bill would reduce county incarceration and prosecution costs, but the amounts cannot be estimated.

 

The Judicial Council assumes many stand-alone, small-quantity marijuana possession prosecutions are currently brought as violations which do not carry a potential jail sentence, and which do not trigger a right to the assistance of counsel at State expense.  Most marijuana-related prosecutions arise incidentally from some other criminal justice matter.  The Council indicates the bill would likely not impact indigent defense expenditures, as  many marijuana cases currently handled by the indigent defense system include a companion charge that qualifies the case for court-appointed counsel.  

 

AGENCIES CONTACTED:

Judicial Branch, Judicial Council, New Hampshire Association of Counties, New Hampshire Municipal Association and the Departments of Safety and Revenue Administration

 

Docket

Date Status
Jan. 3, 2019 Introduced 01/03/2019 and referred to Criminal Justice and Public Safety HJ 3 P. 27
Feb. 20, 2019 ==TIME CHANGE== Public Hearing: 02/20/2019 02:00 pm LOB 204
Feb. 21, 2019 ==TIME CHANGE== Executive Session: 02/21/2019 11:00 am LOB 204
Retained in Committee

Action Dates

Date Body Type
Feb. 20, 2019 House Hearing
Feb. 21, 2019 House Exec Session

Bill Text Revisions

HB722 Revision: 5059 Date: Feb. 13, 2019, 2:24 p.m.