SB0179: SUMMARY AS PASSED BY THE SENATE (Date Completed: 6-26-23) - TRIBAL MARIJUANA BUSINESS; CRA

TRIBAL MARIJUANA BUSINESS; CRA S.B. 179 & 180 (S-1):

SUMMARY AS PASSED BY THE SENATE

 

 

 

 

 

 

Senate Bill 179 (as passed by the Senate)

Senate Bill 180 (Substitute S-1 as passed by the Senate)

Sponsor: Senator Jeff Irwin (S.B. 179)

Senator Roger Hauck (S.B. 180)

Committee: Regulatory Affairs

 

Date Completed: 6-26-23

 


INTRODUCTION

 

Taken together, the bills would allow Indian tribes to enter into an agreement with the Cannabis Regulatory Agency (CRA) regarding marijuana related business. Under the bills, the sale of marijuana by a qualified tribal business would be exempt from the 10% excise tax. Additionally, if a marijuana retailer or microbusiness was located in Indian lands, certain portions of the Marihuana Regulation Fund that would have been allocated to counties and municipalities would be allocated to the Indian tribe in whose Indian lands the retailer or microbusiness was located.

 

The bills are tie-barred.

 

BRIEF RATIONALE

 

The passage of Proposal 18-1 legalized the commercial sale of marijuana through State-licensed dealers, among other things. The Proposal did not address businesses owned by tribes and operated on tribal land. It has been suggested that the Michigan Regulation and Taxation of Marihuana Act (MRTMA) be amended to create a pathway for tribes to interact with the CRA and State economy while respecting their sovereignty.

 

FISCAL IMPACT

 

Senate Bill 179 would have a significant negative fiscal impact on the Department or State agencies associated with it. The municipalities and counties, each of which currently receive 15% of the unexpended fund balances, would experience a negative fiscal impact because the aggregate 30% of the unexpended funds would no longer be allocated to municipalities or counties and instead be directed toward the Indian tribes whose lands house marijuana retailers or marihuana microbusinesses. Additionally, the Department of Licensing and Regulatory Affairs (LARA) would be required to expend $20.0 million annually for the next two years for further development and research projects.

 

Senate Bill 180 (S-1) would have an indeterminate, but negative fiscal impact on the State and LARA. The State would lose tax revenue by exempting some marijuana businesses from a sales tax. The Department would incur any costs associated with administering and performing regulatory duties required by this bill. The bill would have no fiscal impact on the Department of State Police (MSP), as the bill simply reflects current practice. The MSP currently receives funding for its regulatory duties concerning marijuana from marijuana tax and licensing revenue. The Governor has recommended $7.8 million from the Marijuana Regulatory Fund and $2.6 million from the Marihuana Regulation Fund for this purpose.

 

MCL 333.27964 (S.B. 179) Legislative Analyst: Eleni Lionas

333.27953 et al. (S.B. 180) Fiscal Analyst: Bruce R. Baker

Bobby Canell; Elizabeth Raczkowski

CONTENT

 

Senate Bill 180 (S-1) would amend the MRTMA to do the following:

 

--   Allow the CRA to enter into an agreement with an Indian tribe pertaining to marijuana related business if the agreement and the Indian tribe met certain conditions.

--   Prohibit the CRA from employing any individual with pecuniary interests in tribal marijuana.

--   Specify that sales of marijuana by a tribal marijuana business on Indian lands would be exempt from the State's 10% excise tax on marijuana.

 

Senate Bill 179 would amend the MRTMA Act to do the following:

 

--   Require the Department of Treasury to deposit money into the Marihuana Regulation Fund that was collected under an Indian Tribe Agreement as provided by Senate Bill 180 (S-1).

--   Allocate certain percentages of the unexpended balance of the Fund to an Indian tribe that met certain conditions.

 

Senate Bill 180 (S-1)

 

CRA and Indian Tribe Agreement

Generally, the CRA is responsible for implementing the MTRMA and has the powers and duties necessary to control the commercial distribution of marijuana. Among other things, the CRA may enter i