Date: 09/08/2014

Final
Committee Discussion of Bill Requests and Recommendation

MARIJUANA SALES TAX REVENUES

Votes: View--> Action Taken:
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11:26 AM -- Committee Discussion of Bill Requests and Recommendation

Representative Pabon called the meeting back to order and discussed the committee process for legislation. He stated that the committee could vote on two draft bills today, but more likely will schedule a fourth meeting for later in September to allow for members to work on amendments and additional bills to be drafted.

Commissioner Pace came to the table to present two bill drafts that he had worked on. The first (Attachment D) concerns local government taxes, and the second (Attachment E) deals with medical marijuana. The local government tax bill clarifies the ability of local governments, with voter approval, to enact sales tax on retail marijuana. It also adds the ability of local governments to enact an excise tax. He stated that counties like Pueblo have relatively low retail sales, but many grow operations. The excise tax is capped at 7.5 percent. Commissioner Pace discussed feedback from Department of Revenue (DOR) and the fact that cities, unlike counties, may not need additional statutory authority concerning sales tax. Representative Singer thanked Commissioner Pace for clarifying the intent of Proposition AA and giving local governments control. Representative Singer asked if excise tax was the only type of tax that could be applied to wholesale transactions. Representative Pace stated that excise tax was selected for ease of administration. Ms. Nicole Myers from OLLS came to the table and deferred to the DOR on different types of taxes that could be implemented. Phillip Horowitz from the DOR came to the table and discussed different types of taxes that could be applied at the wholesale level.

14Marijuana0908AttachD.pdf14Marijuana0908AttachD.pdf 14Marijuana0908AttachE.pdf14Marijuana0908AttachE.pdf

Kevin Bommer asked about scenarios that could arise under the bill where a county opts out of retail sales, but still collects taxes on sales in municipalities in its jurisdiction. Commissioner Pace stated that was not his intent and would discuss the issue further. Representative Pabon asked about jurisdictions' ability to cover the collection costs using the revenue collected and how this differed from the state system. He then asked about the ability of counties to put collected revenue in the county general fund or other special funds, and whether this eliminated the nexus between marijuana revenue and marijuana-related costs. Mr. Bommer stated that he was uncomfortable about aspects of the bill.


11:45 AM

Commissioner Pace then began his presentation on the second bill on medical marijuana. He stated that here are several goals in the bill, including ending the one-time exemption from wholesale excise tax when transferring medical marijuana stock to retail stock. He then discussed potential amendments for the bill that could be made. Representative Pabon asked about potential revenue that could be raised under the bill. Another goal of the bill is tightening requirements around extended plant counts for medical marijuana. He stated his concern about large grow operations that have started around the state and the need to limit extended plant counts to only the patients that truly need them. Representative Pabon raised his concern about the Department of Public Health and Environment's (CDPHE) ability to enforce the requirements of the bill. Commissioner Pace stated that other aspects of the bill address this, and he elaborated on the current systems in CPHE and DOR and changes made in the bill. Commissioner Pace then discussed changes to the bill that should be made after further discussions with CDPHE and DOR. He discussed the limitations in tracking caregivers and how the bill addresses the ability of DOR and CDPHE to share information. He described how the bill will result in one shared registry that could be access by state departments and law enforcement.

Chief Vasquez commented that DOR has no oversight of caregivers, other than tracking registered caregiver grow operations. He stated that this would require either CDPHE to have stronger enforcement or it would be passed on to local law enforcement. Commissioner Pace stated that he did not think this was a new mandate on local law enforcement, but rather, allowed them to access more information. Mr. Bommer then pointed out a discrepancy between current statute and a section of the bill concerning local governments' ability to access certain information relating to the medical marijuana registry. Karin McGowan from DPHE then stated her department's perspective on what type of information can and cannot be shared concerning the medical marijuana registry. She stated that there could be difficulties in implementing this type of shared database, based on their interpretation of the privacy requirements. She then discussed the difficulties in determining medical necessity. Commissioner Pace responded that he was most concerned with keeping the multiple physican requirement in the bill and stated that he could be more flexible about other aspects of the bill on how departments meet the goal of the bill. Kevin Bommer stated that a key concern of the Amendment 64 Task Force was closing potential loopholes in enforcement to avoid federal action.

Ms. Anderle then discussed the role of the Colorado Bureau of Investigation who could be impacted by the bill. Representative Singer discussed concerns of the patient community and stated that the interim process allows more time to get their feedback. Representative Pabon thanked Commissioner Pace for his efforts and thinks the intent of the bill is good, but that there are details that need to work out. Representative Pabon stated that now was not the right time to take a vote on the legislation and that he wants to schedule a fourth meeting. He then discussed the interim committee process for bill drafts.