Sen. Ron Calderon introduced the new language to his SB 1131 on Aug. 20, the deadline to amend bills on the floor and just 11 days before the end of the 2009-10 legislative session. Calderon noted that he had been conferring with Jerome Horton, a former lawmaker who currently serves as the vice chairman of the Board of Equalization, the tax collection and appeals agency.
While he was in the Legislature, Horton was known for his work on tax policy, including a 2003 bill that overhauled the way the state licenses and taxes outlets that sell cigarettes.
Calderon said SB 1131 would help the board collect taxes on medical marijuana sales, allowing the state to tap funds it otherwise would miss.
California, he said in a written statement, would “reap upwards of $160 million annually, while helping law enforcement police unlawful dispensaries. For medical marijuana dispensaries that are now abiding by state law and paying sales tax, SB 1131 will level the playing field. This bill neither advocates for or against the use of marijuana, legal or otherwise. Californians have approved the sale and use of marijuana for medicinal purposes. My bill simply creates the means to better assist the BOE to collect the sales tax generated by those sales.”
According to representatives of both Calderon and Horton, the bill is intended to make it easier to enforce existing tax laws on medical marijuana businesses, many of whom reportedly do not pay taxes. It imposes fines ranging up to $500,000 and a year in prison for non-compliance, though most violations would be fined only $1,000. Because they bill does not impose any new taxes, it requires only a majority vote.
They also say that it is aimed at the medical marijuana industry in California, and did not come in response to Proposition 19, an initiative on the November ballot that would legalize recreational marijuana for people over 21. Some of the language of the bill, however, is written to apply to marijuana sales in general, and likely could be applied to non-medical sales if that became necessary.
The new language replaced another somewhat controversial measure, a prohibition on spending state funds on any commercial filmed outside of California. This came in response to revelations that the popular “Happy Cows” spots promoting California dairy farms were filmed in New Zealand.
That bill made it out of the Senate in May on a largely party line vote. The new version of the bill made it off the Assembly floor that same day it was amended, without getting a single Republican vote. It heads next to the Assembly Rules Committee, which meets on Monday.
Republicans aren’t the only ones who don’t like the bill.
On Wednesday, California NORML director Dale Gieringer posted a “Stop SB 1131” alert on the group’s website, urging people to write and call their legislators to oppose the bill – especially Assemblywoman Nancy Skinner, D-Berkeley, who chairs the Assembly Rules Committee.
“SB 1131 would require all commercial growers, retailers, wholesalers, and transporters to register with the state, but would DO NOTHING to legally protect them by changing the law to explicitly legalize wholesale or retail sales,” Gieringer wrote. “The bill would also create an extraordinary, new, complicated system to require wholesalers to pay part of the retailers’ sales tax in advance.”