House File 468 - Introduced HOUSE FILE 468 BY COMMITTEE ON PUBLIC SAFETY (SUCCESSOR TO HSB 55) A BILL FOR An Act relating to the excise tax on unlawful dealing in 1 certain substances by adding new taxable substances and tax 2 rates, modifying the taxation and rates of currently taxable 3 substances, and making penalties applicable. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1209HV (1) 85 mm/sc

H.F. 468 Section 1. Section 453B.1, subsection 3, paragraph a, Code 1 2013, is amended by adding the following new subparagraphs: 2 NEW SUBPARAGRAPH . (5) One or more grams of an imitation 3 controlled substance or a controlled substance listed in 4 section 124.204, subsection 4, paragraph “ai” , or subsection 6, 5 paragraph “i” . 6 NEW SUBPARAGRAPH . (6) One or more dosage units of an 7 imitation controlled substance or a controlled substance listed 8 in section 124.204, subsection 4, paragraph “ai” , or subsection 9 6, paragraph “i” , which is not sold by weight. 10 Sec. 2. Section 453B.1, Code 2013, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 6A. “Imitation controlled substance” means 13 the same as defined in section 124A.2. 14 Sec. 3. Section 453B.1, subsection 10, Code 2013, is amended 15 to read as follows: 16 10. “Taxable substance” means a controlled substance, a 17 counterfeit substance, a simulated controlled substance, an 18 imitation controlled substance, or marijuana, or a mixture of 19 materials that contains a controlled substance, counterfeit 20 substance, simulated controlled substance, imitation controlled 21 substance, or marijuana. 22 Sec. 4. Section 453B.4, Code 2013, is amended to read as 23 follows: 24 453B.4 Measurements. 25 For purposes of measurements under this chapter , the 26 weight of a taxable substance shall be measured by its weight 27 in metric grams in the dealer’s possession. If a taxable 28 substance consists of a mixture containing both marijuana and 29 another substance or combination of substances listed in the 30 definition of taxable substance in section 453B.1 , the taxable 31 substance shall be taxed under section 453B.7, subsection 2 , 32 unless the mixture contains a taxable substance listed in 33 section 453B.1, subsection 3, paragraph “a” , subparagraph 34 (5), in which case the taxable substance shall be taxed under 35 -1- LSB 1209HV (1) 85 mm/sc 1/ 4

H.F. 468 section 453B.7, subsection 5 . 1 Sec. 5. Section 453B.7, Code 2013, is amended to read as 2 follows: 3 453B.7 Tax imposed —— rate of tax. 4 An excise tax is imposed on dealers at the following rates: 5 1. On each gram of processed marijuana, or each portion of a 6 gram, five eight dollars. 7 2. On each gram or portion of a gram of any taxable 8 substance sold by weight other than marijuana, two hundred 9 fifty an imitation controlled substance, or a controlled 10 substance listed in section 124.204, subsection 4, paragraph 11 “ai” , or subsection 6, paragraph “i” , four hundred dollars. 12 3. On each unprocessed marijuana plant, seven hundred fifty 13 one thousand two hundred dollars. 14 4. On each ten dosage units of any taxable substance, other 15 than unprocessed marijuana plants, an imitation controlled 16 substance, or a controlled substance listed in section 124.204, 17 subsection 4, paragraph “ai” , or subsection 6, paragraph “i” , 18 that is not sold by weight, or portion thereof, four six 19 hundred forty dollars. 20 5. On each gram or portion of a gram of an imitation 21 controlled substance, or a controlled substance listed in 22 section 124.204, subsection 4, paragraph “ai” , or subsection 6, 23 paragraph “i” , that is sold by weight, one thousand two hundred 24 dollars. 25 6. On each dosage unit of an imitation controlled substance, 26 or a controlled substance listed in section 124.204, subsection 27 4, paragraph “ai” , or section 6, paragraph “i” , that is not 28 sold by weight, or portion thereof, one thousand two hundred 29 dollars. 30 EXPLANATION 31 This bill relates to the excise tax on unlawful dealing in 32 certain substances. 33 The bill adds imitation controlled substances, as defined 34 in Code section 124A.2, to the list of taxable substances 35 -2- LSB 1209HV (1) 85 mm/sc 2/ 4

H.F. 468 and rates in Code section 453B.7, and amends the definition 1 of “dealer” to include a person who ships, transports, or 2 imports into this state or acquires, purchases, possesses, 3 manufactures, or produces in this state one or more grams or 4 dosage units of an imitation controlled substance. 5 The definition of “dealer” is also amended to lower from 6 seven grams or 10 dosage units to one gram or one dosage 7 unit, the threshold at which a person is labeled a “dealer” 8 if that person ships, transports, or imports into this state 9 or acquires, purchases, possesses, manufactures, or produces 10 in this state a controlled substance listed in Code section 11 124.204, subsection 4, paragraph “ai”, (certain hallucinogenic 12 substances), or subsection 6, paragraph “i”, (certain 13 stimulants). 14 The bill amends the rates of tax on dealers to tax imitation 15 controlled substances and the controlled substances listed in 16 Code section 124.204, subsection 4, paragraph “ai”, (certain 17 hallucinogenic substances), and subsection 6, paragraph “i”, 18 (certain stimulants), at $1,200 per gram or dosage unit, and 19 increases the other rates of tax as follows: On each gram 20 of processed marijuana, from $5 to $8; on each unprocessed 21 marijuana plant, from $750 to $1,200; on each gram of all other 22 taxable substances, from $250 to $400; and on each 10 dosage 23 units of all other taxable substances, from $400 to $640. 24 The bill also amends Code section 453B.4 to require that 25 any mixture of taxable substances containing an imitation 26 controlled substance or a controlled substance listed in 27 Code section 124.204, subsection 4, paragraph “ai”, (certain 28 hallucinogenic substances), and subsection 6, paragraph “i”, 29 (certain stimulants), shall be taxed at $1,200 per gram instead 30 of $400 per gram. 31 Under current law, dealers who violate Code chapter 453B are 32 subject to the tax imposed in the Code chapter and a penalty 33 equal to the tax. In addition, dealers who possess taxable 34 substances without a tax stamp or who create counterfeit tax 35 -3- LSB 1209HV (1) 85 mm/sc 3/ 4

H.F. 468 stamps or possess a previously used or expired tax stamp are 1 guilty of a class “D” felony. A class “D” felony is punishable 2 by confinement for no more than five years and a fine of at 3 least $750 but no more than $7,500. 4 -4- LSB 1209HV (1) 85 mm/sc 4/ 4