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SB-603 Cannabis license deferral and waiver fee program: tax credit.(2021-2022)

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Date Published: 04/19/2021 10:11 AM
SB603:v97#DOCUMENT

Amended  IN  Senate  April 19, 2021
Amended  IN  Senate  March 10, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 603

Introduced by Senator Bradford

February 18, 2021

An act to amend Section 26249 of the Business and Professions Code, and to add Section Sections 17053.71 and 23687.5 to the Revenue and Taxation Code, relating to cannabis.


LEGISLATIVE COUNSEL'S DIGEST


SB 603, as amended, Bradford. Cannabis license deferral and waiver fee program: tax credit.
The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the control and regulation of commercial medicinal and adult-use cannabis activities. MAUCRSA generally divides responsibility for the state licensure and regulation of commercial cannabis activity among the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health. MAUCRSA requires these licensing authorities to establish a scale of application, licensing, and renewal fees, based upon the cost of enforcing MAUCRSA, as specified.
AUMA establishes the California Cannabis Tax Fund as a continuously appropriated fund consisting of specified taxes, interest, penalties, and other amounts imposed by AUMA. AUMA requires the Controller to make, as specified, disbursements from the fund for various purposes, including, among others, administering programs related to community reinvestment, youth education, prevention, early intervention and treatment, environmental restoration and protection, and public health and safety. AUMA prohibits the Legislature, prior to July 1, 2028, from changing the allocations to those programs. Before making those disbursements, AUMA requires the Controller to disburse funds to various state entities for reasonable costs in carrying out their duties under AUMA, including to the state licensing authorities for implementing, administering, and enforcing MAUCRSA to the extent those costs are not reimbursed by the application, licensing, and renewal fees.
MAUCRSA requires the Bureau of Cannabis Control in the Department of Consumer Affairs to administer a grant program to assist with the development of a local jurisdiction’s local equity program or to assist applicants and licensees in a local jurisdiction’s equity program, and authorizes the bureau to provide technical assistance to the local equity program. MAUCRSA defines local equity program for these purposes to mean a program adopted or operated by a local jurisdiction that focuses on inclusion and support of individuals and communities in California’s cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization.
MAUCRSA required a state licensing authority, on or before January 1, 2021, to develop and implement a program to provide a deferral or waiver for an application fee, a licensing fee, or a renewal fee for a needs-based applicant or needs-based licensee, as specified. Existing law made the operation of those provisions contingent upon an appropriation in the annual Budget Act or another statute for purposes of those provisions.
This bill would remove the above-mentioned date and the appropriation condition on the operation of those provisions thereby requiring a state licensing authority to develop and implement that fee deferral or waiver program.
The Personal Income Tax Law allows and the Corporation Tax Law allow various credits against the taxes imposed by that law. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2021, and before January 1, 2026, equal to the amount of state and local cannabis licensing fees paid or incurred by a local equity applicant or a local equity licensee, as those terms are defined by MAUCRSA. MAUCRSA, that are not otherwise reimbursed by a grant or other funds. The bill also would state the intent of the Legislature to comply with the additional information requirement for any bill authorizing a new income tax credit.
AUMA authorizes the Legislature to amend the act to further the purposes and intent of the act with a 2/3 vote of the membership of both houses of the Legislature, except as provided.
This bill would declare that its provisions further the purposes and intent of AUMA.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 26249 of the Business and Professions Code is amended to read:

26249.
 (a) Notwithstanding Sections 26012 and 26180, a licensing authority shall develop and implement a program to provide a deferral or waiver for an application fee, a licensing fee, or renewal fee otherwise required by this division for a needs-based applicant or needs-based licensee.
(b) (1) At least 60 percent of the total dollar amount of deferrals of fees pursuant to the program developed and implemented by a licensing authority pursuant to subdivision (a) shall be allocated to the deferral of fees for local equity applicants and licensees.
(2) At least 60 percent of the total dollar amount of waivers of fees pursuant to the program developed and implemented by a licensing authority pursuant to subdivision (a) shall be allocated to the waiver of fees for local equity applicants and licensees.
(c) A licensing authority may adopt emergency regulations to implement this section. The adoption, amendment, repeal, or readoption of a regulation authorized by this section is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the licensing authorities are hereby exempted from the requirements of subdivision (b) of Section 11346.1 of the Government Code.

SEC. 2.

 Section 17053.71 is added to the Revenue and Taxation Code, to read:

17053.71.
 (a) For each taxable year beginning on or after January 1, 2021, and before January 1, 2026, there shall be allowed against the “net tax,” as defined by Section 17039, a cannabis equity business tax credit equal to the amount of state and local cannabis licensing fees paid or incurred by a qualified taxpayer. taxpayer that are not otherwise reimbursed by a grant or other funds.
(b) For purposes of this section, “qualified taxpayer” means either a local equity applicant or local equity licensee as defined in Section 26240 of the Business and Professions Code.
(c) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding six taxable years if necessary, until the credit is exhausted.

SEC. 3.

 Section 23687.5 is added to the Revenue and Taxation Code, to read:

23687.5.
 (a) For each taxable year beginning on or after January 1, 2021, and before January 1, 2026, there shall be allowed against the “tax,” as defined by Section 23036, a cannabis equity business tax credit equal to the amount of state and local cannabis licensing fees paid or incurred by a qualified taxpayer that are not otherwise reimbursed by a grant or other funds.
(b) For purposes of this section, “qualified taxpayer” means either a local equity applicant or local equity licensee as defined in Section 26240 of the Business and Professions Code.
(c) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following taxable year, and succeeding six taxable years if necessary, until the credit is exhausted.

SEC. 3.SEC. 4.

 It is the intent of the Legislature to comply with Section 41 of the Revenue and Taxation Code.

SEC. 4.SEC. 5.

 The Legislature finds and declares that this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.