Bill Summary – FastDemocracy

Division of the Budget
Landon State Office Building                                                                              Phone: (785) 296-2436
900 SW Jackson Street, Room 504                                                                           larry.campbell@ks.gov
Topeka, KS 66612                                  Division of the Budget                                 http://budget.kansas.gov
Larry L. Campbell, Director                                                                             Laura Kelly, Governor


                                                      March 4, 2019


         The Honorable Brenda Landwehr, Chairperson
         House Committee on Health and Human Services
         Statehouse, Room 352-S
         Topeka, Kansas 66612
         Dear Representative Landwehr:
                   SUBJECT:       Fiscal Note for HB 2303 by Representative Finney
                 In accordance with KSA 75-3715a, the following fiscal note concerning HB 2303 is
         respectfully submitted to your committee.
                 HB 2303 would enact the Kansas Safe Access Act which would authorize the establishment
         of a new division within the Kansas Department of Health and Environment (KDHE) which would
         be recognized as the Cannabis Compliance Agency. Provisions in the bill include the following:
         1.        Constitutional reference and definitions to protect the health and safety of citizens;
         2.        Establishes legal protections for possession, cultivation, dispensing and authorizing use by
                   a medical provider, insurance coverage, employment or professional disciplinary action
                   due to medical cannabinoid use;
         3.        Requires continuing education for medical providers of medical cannabis and establishes
                   protections for participation;
         4.        Outlines standards and specifications and processes to issue identification cards for patients
                   and caregivers;
         5.        Establishes non-profit compassion centers where patients would acquire the prescribed
                   product with rules, licensing and enforcement of the centers;
         6.        Requires certification of staff, including identification cards that would be renewed
                   annually;
         7.        Requires creation of cultivation standards, quality standards, quality assurance and annual
                   testing of water and soil purity and other testing for medical cannabis cultivation facilities;
         8.        Permits caregivers and patients to grow their own product within the rules and standards
                   outlined;
         9.        Requires training for employees in the cannabis industry;
The Honorable Brenda Landwehr, Chairperson
Page 2—HB 2303

10.    Outlines public policy to include, considerations for impaired driving prevention, public
       use of cannabis and owner’s rights;
11.    Establishes the Cannabis Resource Commission which would oversee guiding policy for
       patients, medical providers and the public. The Commission would consist of five
       volunteer members to be appointed by the Governor;
12.    Establishes the Cannabis Tax Fund and revenue policies and provides a tax and fee
       schedule;
13.    Establishes the standards and provisions for packaging and labeling of medical cannabis
       products, edible products and concentrates; and
14.    Establishes guidelines for independent testing and certification testing facility programs
       for medical cannabis and medical cannabis products.
         The Kansas Insurance Department indicates HB 2303 would have no fiscal effect on
expenditures for the agency. The bill would require cultivation caregivers to obtain and carry
liability and crop insurance coverage. This would increase the premium tax collected from
insurance companies. The agency retains 1.0 percent of premium taxes collected, while the
remainder is deposited into the State General Fund. If premium taxes increase, State General Fund
revenues would increase, but the precise fiscal effect is unknown.
        The Board of Nursing indicates HB 2303 would require the Board to revise and publish
some regulations that could cost up to $1,000. The Board of Pharmacy indicates there could be
confusion in pharmacies, cannabis facilities and among consumers which could cause and influx
of practice and compliance inquiries for pharmacy inspectors, but a precise fiscal effect cannot be
determined.
        The Kansas Sentencing Commission and the Department of Corrections (DOC) indicate
that HB 2303 would have no fiscal effect on correctional institutions. The bill would enact only
misdemeanor penalties, which are not served in state prisons. The Kansas Bureau of Investigation
and the Office of Judicial Administration state there is a potential for an increase in Driving Under
the Influence samples and diverted marijuana products being submitted to the laboratory for
analysis. The bill would decriminalize actions that could be charged as crimes under current law,
which could result in fewer criminal cases. However, it is not possible to predict the number of
additional cases that would arise or how complex and time-consuming they would be. Therefore,
a precise fiscal effect cannot be determined.
         The Kansas Department of Health and Environment indicates HB 2303 would require
planning for KDHE to establish the Division of Cannabis Compliance. The agency would plan
for a three-year ramp up for the Division to include hiring of 28.00 FTE positions, including 10.00
FTE positions in FY 2020, 10.00 FTE positions in FY 2021 and 8.00 FTE positions in FY 2021.
The salaries, benefits and other operating costs would be $2.4 million for FY 2020, $3.5 million
for FY 2021 and $3.4 million for FY 2022 from the State General Fund. KDHE indicates although
the bill requires fees and taxes to be collected, the agency is unable to provide a precise fiscal
effect on the revenue that would be generated.
The Honorable Brenda Landwehr, Chairperson
Page 3—HB 2303

        The Kansas Department of Revenue (KDOR) indicates HB 2303 would permit compassion
centers and cooperatives to pay taxes by cash, cashier’s check or money orders at the local revenue
office. However, the bill does not mention KDOR collecting the tax imposed. If these payments
are dropped off at local KDOR offices, it would create some security issues. There would need to
be a safe in each office to hold cash, and procedures to get it to the appropriate agency for
processing. There would be no taxes collected by KDOR because the bill prohibits sales tax on
medical cannabis products. Any fiscal effect associated with HB 2303 is not reflected in The FY
2020 Governor’s Budget Report.


                                                      Sincerely,

                                                      Larry L. Campbell
                                                      Director of the Budget


cc: Paul Weisgerber, KBI
    Janie Harris, Judiciary
    Dan Thimmesch, Health & Environment
    Alexandra Blasi, Board of Pharmacy
    Jill Simons, Board of Nursing
    Glenda Haverkamp, Insurance
    Lynn Robinson, Department of Revenue
    Willie Prescott, Office of the Attorney General
    Linda Kelly, Corrections
    Scott Schultz, Sentencing Commission