NY State Senate Bill 2023-S159

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to investigations and government operations
Jan 04, 2023	referred to investigations and government operations

co-Sponsors

2023-S159 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§494 & 496-c, add §§496-d & 1814-b, Tax L; amd §16, Cannabis L; amd §222.00, Pen L
Versions Introduced in 2021-2022 Legislative Session:: S9452

2023-S159 (ACTIVE) - Summary

Authorizes the commissioner of taxation and finance to revoke the certificate of registration of the sale of adult-use cannabis; increases certain penalties relating to the sale of illicit cannabis; authorizes the commissioner of taxation and finance and the duly authorized representatives of the office of cannabis management to provide enforcement; makes it a class A misdemeanor for a distributor of adult-use cannabis products or a retail seller of adult-use cannabis products to sell any such products while not registered to do so.

2023-S159 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S159

SPONSOR: KRUEGER
 
TITLE OF BILL:

An act to amend the tax law, in relation to making certain technical
corrections to tax on adult-use cannabis pursuant to article 20-C of
such law; to amend the cannabis law, in relation to certain penalties;
and to amend the penal law, in relation to clarifying the definition of
selling cannabis

 
SUMMARY OF PROVISIONS:

Section 1: Amends subdivisions (b) and (f) of section 494 of the Tax Law
to give the Tax department the power to revoke the certificate to
collect the adult use cannabis tax if: An individual has another canna-
bis tax registration suspended or revoked, are convicted of a crime
under the Tax Law, or if they willfully fail to collect tax, fail to
file a required report, or file a false report or other instrument. The
Tax Department is also granted the authority to revoke the certificate
of authority to collect sales taxes from anyone found possessing or
selling illicit cannabis

Section 2: Amends section 496-c of the Tax Law, to double the current
civil penalties for possessing illicit cannabis. This section also gives
the Tax Department and the Office of Cannabis Management (0CM) the power
to seize illicit cannabis from any person engaged in the cultivation,
processing, distribution, storage or sale of adult-use cannabis, or from
any vehicle, or location, or person in control of such vehicle or
location, that is connected to the cultivation, processing, distrib-
ution, storage or sale of adult-use cannabis.

Section 3: Article 20-c of the Tax Law is amended by adding new section
496d, an Enforcement section. This section declares that it is the
intent of the legislature for the adult cannabis industry to be a highly
regulated industry and gives the Tax Department or OCM the power to
conduct regulatory inspections of places or vehicles connected to the
cultivation, processing, distribution, storage or sale of adult-use
cannabis, or inspect the books and records of any person involved in the
cultivation, processing, distribution, storage or sale of adult-use
cannabis.

Section 4: Article 37 of the Tax Law is amended by adding new section
1814-b that makes selling illicit cannabis by someone who is not regis-
tered and should have been registered under the Tax law a class A misde-
meanor. Someone who violates this provision within five years of having
previously been convicted of it would be guilty of an E felony.

Section 5: Amends subdivision 1 of section 16 of the Cannabis Law, to
increase the possible civil penalty allowed for anyone who violates,
disobeys or disregards any portion of the Cannabis Law or a lawful
notice provided to them in a case where another civil or criminal penal-
ty is not already laid out in statute. Currently the civil penalty
cannot exceed $5,000. This would amend that to say such a penalty can be
up to $50,000.

Section 6: Amends Subdivision 3 of section 222.00 of the Penal Law,
changing the definition of what it means to sell cannabis in order to
capture situations in which cannabis is exchanged or bartered for
commodity, object or anything of any type, rent, lease or license to use
or consume conditional or otherwise, in any manner or by any means what-
soever for a consideration or any agreement therefore, or dispose of the
cannabis for compensation, including through a membership program or
through some other indirect means.

 
JUSTIFICATION:

This legislation is necessary to improve the enforcement of prohibitions
against selling untaxed adult-use cannabis, including by entities lack-
ing the appropriate registration necessary from the Department of Tax
and Finance, and to provide the Tax Department and the Office of Canna-
bis Management with the ability to safeguard the upcoming legal adult-
use cannabis market.

 
LEGISLATIVE HISTORY:

2022: S.9452 - Passed Senate

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S159 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    159
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2023
                                ___________
 
 Introduced  by Sens. KRUEGER, HOYLMAN -- read twice and ordered printed,
   and when printed to be committed to the  Committee  on  Investigations
   and Government Operations
 
 AN  ACT  to  amend  the tax law, in relation to making certain technical
   corrections to tax on adult-use cannabis pursuant to article  20-C  of
   such law; to amend the cannabis law, in relation to certain penalties;
   and  to  amend the penal law, in relation to clarifying the definition
   of selling cannabis
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision (b) of section 494 of the tax law, as added by
 chapter 92 of the laws of 2021, is amended to read as follows:
   (b) [(1)] The commissioner shall refuse  to  issue  a  certificate  of
 registration to any applicant and shall revoke the certificate of regis-
 tration of any such person who does not possess a valid license from the
 office  of cannabis management. (1) The commissioner may refuse to issue
 a certificate of registration to any  applicant  where  such  applicant:
 (i)  has  a  past-due  liability  as that term is defined in section one
 hundred seventy-one-v of this chapter; (ii) has  had  a  certificate  of
 registration  under  this article, a license from the office of cannabis
 management, or any license or registration provided for in this  chapter
 revoked  or  suspended where such revocation or suspension was in effect
 on the date the application was filed or ended within one year from  the
 date  on which such application was filed; (iii) has been convicted of a
 crime provided for in this chapter within one  year  from  the  date  on
 which  such  application  was  filed  or  the certificate was issued, as
 applicable; (iv) willfully fails to file a report or return required  by
 this  article;  (v) willfully files, causes to be filed, gives or causes
 to be given a report, return, certificate or affidavit required by  this
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01101-01-3

 S. 159                              2
 
 article which is false; or (vi) willfully fails to collect or truthfully
 account for or pay over any tax imposed by this article.
   (2) THE COMMISSIONER MAY REVOKE THE CERTIFICATE OF REGISTRATION ISSUED
 TO ANY PERSON WHO:  (I) HAS HAD A CERTIFICATE OF REGISTRATION UNDER THIS
 ARTICLE,  OR  ANY  LICENSE  OR REGISTRATION PROVIDED FOR IN THIS CHAPTER
 REVOKED OR SUSPENDED; (II) HAS BEEN CONVICTED OF A CRIME PROVIDED FOR IN
 THIS CHAPTER; (III) WILLFULLY FAILS TO FILE A REPORT OR RETURN  REQUIRED
 BY  THIS  ARTICLE;  (IV)  WILLFULLY  FILES, CAUSES TO BE FILED, GIVES OR
 CAUSES TO BE GIVEN A REPORT, RETURN, CERTIFICATE OR  AFFIDAVIT  REQUIRED
 BY  THIS  ARTICLE  WHICH  IS FALSE; OR (V) WILLFULLY FAILS TO COLLECT OR
 TRUTHFULLY ACCOUNT FOR OR PAY OVER ANY TAX IMPOSED BY THIS ARTICLE.
   (3) In addition to the grounds for revocation in [paragraph (1)] PARA-
 GRAPHS ONE AND TWO of this subdivision,  where  a  person  who  holds  a
 certificate  of  registration  is  determined  to have possessed or sold
 illicit cannabis: [(1)] (I) such registration may be revoked for a peri-
 od of up to one year for the first such possession or sale;  [(2)]  (II)
 for  a  second  such possession or sale within a period of five years by
 such person, the registration of such person may be revoked for a period
 of up to three years; [(3)] (III) for a third such  possession  or  sale
 within  a period of up to five years by such person, the registration of
 such person may be revoked for a period of five years. A certificate  of
 registration  may be revoked pursuant to this paragraph immediately upon
 such person's receipt of written notice of revocation from  the  commis-
 sioner.
   (4)  WHERE  A PERSON WHO HAS BEEN DETERMINED TO HAVE POSSESSED OR SOLD
 ILLICIT CANNABIS DOES NOT POSSESS A CERTIFICATE  OF  REGISTRATION  UNDER
 THIS  SECTION,  THE  COMMISSIONER  MAY REVOKE A CERTIFICATE OF AUTHORITY
 ISSUED TO SUCH PERSON PURSUANT TO SECTION ELEVEN HUNDRED THIRTY-FOUR  OF
 THIS CHAPTER. SUCH CERTIFICATE MAY BE REVOKED: (I) FOR A PERIOD OF UP TO
 ONE  YEAR  FOR THE FIRST SUCH POSSESSION OR SALE; (II) FOR A SECOND SUCH
 POSSESSION OR SALE WITHIN A PERIOD OF FIVE YEARS  BY  SUCH  PERSON,  THE
 REGISTRATION  OF  SUCH PERSON MAY BE REVOKED FOR A PERIOD OF UP TO THREE
 YEARS; (III) FOR A THIRD SUCH POSSESSION OR SALE WITHIN A PERIOD  OF  UP
 TO  FIVE  YEARS  BY  SUCH PERSON, THE REGISTRATION OF SUCH PERSON MAY BE
 REVOKED FOR A PERIOD OF FIVE YEARS.
   § 2. Section 496-c of the tax law, as added by chapter 92 of the  laws
 of 2021, is amended to read as follows:
   §  496-c. Illicit cannabis penalty. (a) In addition to any other civil
 or criminal penalties that may apply, any person knowingly in possession
 of or knowingly having control over  illicit  cannabis,  as  defined  in
 section  four  hundred  ninety-two  of this article, after notice and an
 opportunity for a hearing, shall be liable for a civil  penalty  of  not
 less than [two] FOUR hundred dollars per ounce of illicit cannabis flow-
 er,  [five] TEN dollars per milligram of the total weight of any illicit
 cannabis edible product, [fifty] ONE HUNDRED dollars  per  gram  of  the
 total weight of any product containing illicit cannabis concentrate, and
 [five  hundred] ONE THOUSAND dollars per illicit cannabis plant, but not
 to exceed [four] EIGHT hundred dollars per  ounce  of  illicit  cannabis
 flower,  [ten]  TWENTY  dollars per milligram of the total weight of any
 illicit cannabis edible product, [one] TWO hundred dollars per  gram  of
 the total weight of any product containing illicit cannabis concentrate,
 and  [one]  TWO  thousand dollars per illicit cannabis plant for a first
 violation, and for a second and subsequent violation within three  years
 following  a  prior violation shall be liable for a civil penalty of not
 less than [four] EIGHT hundred dollars per  ounce  of  illicit  cannabis
 flower,  [ten]  TWENTY  dollars per milligram of the total weight of any
 S. 159                              3
 
 illicit cannabis edible product, [one] TWO hundred dollars per  gram  of
 the total weight of any product containing illicit cannabis concentrate,
 and  [one]  TWO  thousand dollars per illicit cannabis plant, but not to
 exceed [five hundred] ONE THOUSAND dollars per ounce of illicit cannabis
 flower,  [twenty] FORTY dollars per milligram of the total weight of any
 illicit cannabis edible product, [two] FOUR hundred dollars per gram  of
 the total weight of any product containing illicit cannabis concentrate,
 and [two] FOUR thousand dollars per illicit cannabis plant.
   (b)  No enforcement action taken under this section shall be construed
 to limit any other criminal or civil liability of anyone  in  possession
 of illicit cannabis.
   (c)  The  penalty  imposed  by this section shall not apply to persons
 lawfully in possession of less than two ounces of adult-use cannabis  or
 ten  grams  of concentrated cannabis in accordance with the cannabis law
 or penal law.
   (D) THE COMMISSIONER OR HIS OR HER DULY AUTHORIZED REPRESENTATIVES, OR
 THE DULY AUTHORIZED REPRESENTATIVES OF THE OFFICE  OF  CANNABIS  MANAGE-
 MENT,  SHALL  SEIZE  ANY ILLICIT CANNABIS FOUND ON ANY PERSON ENGAGED IN
 THE CULTIVATION, PROCESSING, DISTRIBUTION OR SALE OF ADULT-USE  CANNABIS
 PRODUCTS;  OR  IN  ANY  PREMISES  OR  VEHICLE  WHERE  ADULT-USE CANNABIS
 PRODUCTS ARE CULTIVATED, PROCESSED, DISTRIBUTED, PLACED, STORED, SOLD OR
 OFFERED FOR SALE; OR ON ANY PERSON IN POSSESSION, CONTROL  OR  OCCUPANCY
 OF SUCH PREMISES OR VEHICLE.
   §  3.  The tax law is amended by adding a new section 496-d to read as
 follows:
   § 496-D. ENFORCEMENT. FOR PURPOSES OF THE EFFICIENT ADMINISTRATION  OF
 THE  TAXES  IMPOSED BY THIS ARTICLE, IT IS THE INTENT OF THE LEGISLATURE
 THAT THE CULTIVATION, PROCESSING, DISTRIBUTION  AND  SALE  OF  ADULT-USE
 CANNABIS  PRODUCTS  BE  DEEMED  A HEAVILY REGULATED INDUSTRY, SUBJECT TO
 SUPERVISION BY THE COMMISSIONER AND THE OFFICE OF  CANNABIS  MANAGEMENT.
 THE  COMMISSIONER OR HIS OR HER DULY AUTHORIZED REPRESENTATIVES, AND THE
 DULY AUTHORIZED REPRESENTATIVES OF THE OFFICE OF CANNABIS MANAGEMENT ARE
 HEREBY AUTHORIZED: (1) TO CONDUCT REGULATORY  INSPECTIONS  IN  THE  SAME
 MANNER  AS  A  REGULATORY  INSPECTION PURSUANT TO ARTICLE TWENTY OF THIS
 CHAPTER OF ANY PERSON ENGAGED IN THE CULTIVATION,  PROCESSING,  DISTRIB-
 UTION  OR  SALE  OF ADULT-USE CANNABIS PRODUCTS, ANY PREMISES OR VEHICLE
 WHERE ADULT-USE CANNABIS IS CULTIVATED, PROCESSED, DISTRIBUTED,  PLACED,
 STORED,  SOLD OR OFFERED FOR SALE, AND ANY PERSON IN POSSESSION, CONTROL
 OR OCCUPANCY OF SUCH PREMISES OR VEHICLE;  (2)  TO  EXAMINE  THE  BOOKS,
 PAPERS,  INVOICES  AND OTHER RECORDS OF ANY PERSON ENGAGED IN THE CULTI-
 VATION, PROCESSING, DISTRIBUTION OR SALE OF ADULT-USE CANNABIS PRODUCTS,
 ANY PREMISES OR VEHICLE WHERE ADULT-USE  CANNABIS  PRODUCTS  ARE  CULTI-
 VATED,  PROCESSED, DISTRIBUTED, PLACED, STORED, SOLD OR OFFERED FOR SALE
 AND ANY PERSON IN POSSESSION, CONTROL OR OCCUPANCY OF ANY PREMISES WHERE
 ADULT-USE CANNABIS PRODUCTS ARE PLACED,  STORED,  SOLD  OR  OFFERED  FOR
 SALE.  EACH  SUCH  PERSON IS HEREBY DIRECTED AND REQUIRED UPON DEMAND TO
 GIVE TO THE COMMISSIONER OR HIS OR HER DULY AUTHORIZED  REPRESENTATIVES,
 OR THE DULY AUTHORIZED REPRESENTATIVES OF THE OFFICE OF CANNABIS MANAGE-
 MENT, THE MEANS, FACILITIES AND OPPORTUNITY FOR SUCH EXAMINATIONS.
   §  4. The tax law is amended by adding a new section 1814-b to read as
 follows:
   § 1814-B. PENALTIES. ANY PERSON REQUIRED TO BE REGISTERED PURSUANT  TO
 ARTICLE  TWENTY-C OF THIS CHAPTER AS A DISTRIBUTOR OF ADULT-USE CANNABIS
 PRODUCTS, OR AS A RETAIL SELLER  OF  ADULT-USE  CANNABIS  PRODUCTS,  WHO
 SELLS  ADULT-USE  CANNABIS  PRODUCTS  WHILE  NOT SO REGISTERED, SHALL BE
 GUILTY OF A CLASS A MISDEMEANOR. ANY PERSON WHO VIOLATES  THE  PROVISION
 S. 159                              4
 
 OF THIS SECTION AFTER HAVING PREVIOUSLY BEEN CONVICTED OF A VIOLATION OF
 THIS  SECTION WITHIN THE PRECEDING FIVE YEARS SHALL BE GUILTY OF A CLASS
 E FELONY. FOR PURPOSES OF THIS SECTION, THE  TERMS  "ADULT-USE  CANNABIS
 PRODUCT"  AND  "SALE"  SHALL  HAVE  THE  SAME  MEANING AS SUCH TERMS ARE
 DEFINED IN ARTICLE TWENTY-C OF THIS CHAPTER.
   § 5. Subdivision 1 of section 16 of the cannabis  law  is  amended  to
 read as follows:
   1.  Any  person  who  violates,  disobeys  or  disregards  any term or
 provision of this chapter or of any lawful notice, order  or  regulation
 pursuant  thereto for which a civil or criminal penalty is not otherwise
 expressly prescribed by law, shall be liable to the people of the  state
 for a civil penalty of [not to exceed five] UP TO FIFTY thousand dollars
 for every such violation.
   §  6.  Subdivision  3  of section 222.00 of the penal law, as added by
 chapter 92 of the laws of 2021, is amended to read as follows:
   3. For the purposes of this article, "sell" shall mean to sell, TRANS-
 FER TITLE OR POSSESS OR BOTH, exchange OR BARTER ANY  COMMODITY,  OBJECT
 OR  ANY  THING  OF  ANY  TYPE,  RENT, LEASE OR LICENSE TO USE OR CONSUME
 CONDITIONAL OR OTHERWISE, IN ANY MANNER OR BY ANY MEANS WHATSOEVER FOR A
 CONSIDERATION OR ANY AGREEMENT THEREFOR, or dispose of for compensation,
 INCLUDING THROUGH A MEMBERSHIP PROGRAM OR THROUGH  SOME  OTHER  INDIRECT
 MEANS.    "Sell"  shall  not include the transfer of cannabis or concen-
 trated cannabis between persons twenty-one years of age or older without
 compensation in the quantities authorized in paragraph (b)  of  subdivi-
 sion one of section 222.05 of this article.
   § 7. This act shall take effect immediately.

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Senate Bill S159

Sponsored By

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

co-Sponsors

2023-S159 (ACTIVE) - Details

2023-S159 (ACTIVE) - Summary

2023-S159 (ACTIVE) - Sponsor Memo

2023-S159 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S159

Share this bill

Sponsored By

Liz Krueger

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

co-Sponsors

Brad Hoylman-Sigal

2023-S159 (ACTIVE) - Details

2023-S159 (ACTIVE) - Summary

2023-S159 (ACTIVE) - Sponsor Memo

2023-S159 (ACTIVE) - Bill Text download pdf

Comments