SSB 1177 (LSB 2384XC (2) 89)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON ZAUN)

A BILL FOR

An Act relating to the medical cannabidiol program, including medical cannabidiol registration cards, medical cannabidiol dispensaries, and income tax deductions, and establishing a medical cannabidiol tax fund.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 124E.4, subsection 1, paragraph e, Code 2021, is amended to read as follows:
   e.  Submits a medical cannabidiol registration card fee of one hundred ten dollars to the department. If the patient attests to receiving social security disability benefits, supplemental security insurance payments, or being enrolled in the medical assistance program, the fee shall be twenty-five dollars.
    Sec. 2.  Section 124E.4, subsection 3, paragraph c, Code 2021, is amended to read as follows:
   c.  Submits a medical cannabidiol registration card fee of twenty-five ten dollars to the department.
    Sec. 3.  Section 124E.4, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  Issuance to an institution.  The department shall adopt rules for the issuance of a medical cannabidiol registration card to an institution, including but not limited to a school, university, nursing home, long-term care facility, correctional facility, or jail, allowing employees of the institution to administer medical cannabidiol to qualified patients in the care of the institution.
    Sec. 4.  Section 124E.4, subsection 5, Code 2021, is amended to read as follows:
   5.  Expiration date of card.  A medical cannabidiol registration card issued pursuant to this section shall expire one year two years after the date of issuance and may be renewed.
    Sec. 5.  Section 124E.7, subsection 4, Code 2021, is amended to read as follows:
   4.  A medical cannabidiol manufacturer shall not share office space with, refer patients to, or have any direct financial relationship with a health care practitioner.
    Sec. 6.  Section 124E.8, subsection 1, paragraph a, Code 2021, is amended to read as follows:
   a.  The department shall issue a request for proposals accept applications to select and license by April 1, 2018, up to five medical cannabidiol dispensaries to dispense medical cannabidiol within this state consistent with the provisions of this chapter. The department shall license new medical cannabidiol dispensaries or relicense the existing medical cannabidiol dispensaries by December 1 of each year. 
    Sec. 7.  Section 124E.8, subsection 2, Code 2021, is amended to read as follows:
   2.  As a condition for licensure, a medical cannabidiol dispensary must agree to begin supplying medical cannabidiol to patients by December 1, 2018 within one year of the date of licensure.
    Sec. 8.  Section 124E.8, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  The department shall not issue a license for a medical cannabidiol dispensary to be located in a county with a medical cannabidiol dispensary that was licensed prior to July 1, 2021, or in a bordering county of a county with a medical cannabidiol dispensary that was licensed prior to July 1, 2021.
    Sec. 9.  Section 124E.9, subsection 1, paragraph a, Code 2021, is amended by striking the paragraph.
    Sec. 10.  Section 124E.9, subsection 4, Code 2021, is amended to read as follows:
   4.  A medical cannabidiol dispensary shall not share office space with, refer patients to, or have any direct financial relationship with a health care practitioner.
    Sec. 11.  Section 124E.11, subsection 2, paragraph f, Code 2021, is amended to read as follows:
   f.  Establish and collect annual fees not to exceed two thousand dollars from medical cannabidiol manufacturers and medical cannabidiol dispensaries to cover the costs associated with regulating and inspecting medical cannabidiol manufacturers and medical cannabidiol dispensaries.
    Sec. 12.  Section 124E.11, subsection 2, Code 2021, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  j.  Allow an operator of a medical cannabidiol dispensary to conduct dispensary operations using a mobile location, provided that a mobile dispensary shall not operate in a county with a medical cannabidiol dispensary.
    Sec. 13.  Section 422.7, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  63.  Subtract, to the extent included, the amount of business expense for a medical cannabidiol manufacturer or medical cannabidiol dispensary licensed pursuant to chapter 124E without regard to section 280E of the Internal Revenue Code.
    Sec. 14.  Section 422.35, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  31.  Subtract, to the extent included, the amount of business expense for a medical cannabidiol manufacturer or medical cannabidiol dispensary licensed pursuant to chapter 124E without regard to section 280E of the Internal Revenue Code.
    Sec. 15.  Section 423.2A, subsection 2, Code 2021, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  h.  Beginning the first day of the calendar quarter following July 1, 2021, transfer to the medical cannabidiol tax fund created in section 423.4, subsection 12, the sales tax receipts collected and remitted upon sales of tangible personal property furnished by medical cannabidiol dispensaries or medical cannabidiol manufacturers pursuant to chapter 124E.
    Sec. 16.  Section 423.4, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  12.  a.  There is established within the state treasury under the control of the Iowa department of public health a medical cannabidiol tax fund consisting of the amount of state sales tax revenues transferred pursuant to section 423.2A, subsection 2, paragraph “h”. Moneys in the fund shall be used by the Iowa department of public health only for the following purposes and in the following order of priority:
   (1)  The repayment of fees paid to the state hygienic laboratory at the university of Iowa in Iowa City by a medical cannabidiol manufacturer pursuant to section 124E.7 on or after the effective date of this Act.
   (2)  The repayment of fees paid to a laboratory, as defined in section 124E.2, other than the state hygienic laboratory at the university of Iowa in Iowa City, by a medical cannabidiol manufacturer pursuant to section 124E.7 on or after the effective date of this Act.
   (3)  For other purposes as provided in section 124E.10.
   b.  Notwithstanding section 8.33, moneys appropriated in this subsection that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the medical cannabidiol Act, including medical cannabidiol registration cards and medical cannabidiol dispensaries.
   The bill changes the application fee for a medical cannabidiol registration card to $10. The bill also changes the expiration date of medical cannabidiol registration cards from one year after issuance to two years after issuance. The bill requires the Iowa department of public health (DPH) to develop rules for the issuance of a medical cannabidiol registration card to an institution, which would allow employees of the institution to administer medical cannabidiol to qualified medical cannabidiol patients in the care of the institution.
   The bill requires DPH to accept applications for the licensure of medical cannabidiol dispensaries beyond the five currently allowed in Code beginning July 1, 2021. The bill prohibits the department from issuing such a license to a dispensary in a county where a dispensary is currently located, or in a county bordering such a county. As a condition for licensure, the medical cannabidiol dispensary must agree to begin supplying medical cannabidiol to patients within one year of the date of licensure.
   The bill strikes a provision prohibiting a medical cannabidiol dispensary from referring patients to a health care practitioner. The bill requires DPH to adopt rules allowing the operator of a medical cannabidiol dispensary to conduct dispensary operations from a mobile location, and prohibits a mobile dispensary from operating in a county with a medical cannabidiol dispensary. The bill prohibits DPH from imposing annual fees of greater than $2,000 on medical cannabidiol manufacturers and dispensaries.
   The bill allows individuals and corporations to subtract from net income, to the extent included, business expenses for a medical cannabidiol manufacturer or medical cannabidiol dispensary.
   The bill creates a medical cannabidiol tax fund within the state treasury under the control of DPH. Beginning the first day of the calendar quarter following July 1, 2021, sales tax for the sales of medical cannabidiol shall be transferred to the fund. Moneys in the fund shall be used, in order of priority, for the repayment of fees paid to the state hygienic laboratory at the university of Iowa in Iowa City by a medical cannabidiol manufacturer on or after the effective date of the bill, the repayment of fees paid to other laboratories by a medical cannabidiol manufacturer on or after the effective date of the bill, and the administration of the medical cannabidiol program. Moneys in the fund are not subject to reversion.