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128th MAINE LEGISLATURE |
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LD 1650 |
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LR 2395(02) |
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An Act To Amend
the Marijuana Legalization Act |
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Fiscal Note for
Bill as Amended by Committee Amendment "A" |
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Committee: Marijuana Legalization
Implementation |
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Fiscal Note Required: Yes |
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| Fiscal Note |
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FY 2017-18 |
FY 2018-19 |
Projections FY 2019-20 |
Projections FY 2020-21 |
| Net Cost
(Savings) |
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General Fund |
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$3,021,383 |
$10,164,998 |
($110,332) |
($8,090,037) |
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Highway Fund |
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$0 |
$23,962 |
$24,656 |
$25,369 |
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| Appropriations/Allocations |
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General Fund |
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$767,383 |
$2,746,358 |
$3,325,668 |
$3,428,843 |
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Highway Fund |
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$0 |
$23,962 |
$24,656 |
$25,369 |
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Other Special Revenue Funds |
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$200,000 |
$1,908,959 |
$4,324,757 |
$6,135,719 |
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| Revenue |
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General Fund |
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($2,254,000) |
($7,418,640) |
$3,436,000 |
$11,518,880 |
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Other Special Revenue Funds |
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$154,000 |
$1,727,715 |
$4,573,075 |
$6,890,195 |
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| Transfers |
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Other Special Revenue Funds |
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$0 |
$0 |
$0 |
$0 |
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| Fiscal Detail
and Notes |
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This bill
implements the recommendations of the Joint Standing Committee on Marijuana
Legalization Implementation regarding the establishment of a regulated
marketplace in the State for the adult use of marijuana under the Marijuana
Legalization Act (MLA). The bill retains the division of regulatory
authority, with the Department of Administrative and Financial Services
(DAFS) designated as the primary regulatory authority in the implementation,
administration and enforcement of the MLA and the Department of Agriculture,
Conservation and Forestry (ACF) retaining regulatory authority concerning the
cultivation, manufacture, testing, packaging and labeling of adult use of
marijuana and marijuana products. It clarifies the roles and
responsibilities, including the respective rulemaking authorities, of DAFS
and ACF related to the MLA. |
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This bill
increases the sales tax rate on marijuana from 10% to 20% and distributes 12%
of the sales tax revenue received to the Adult Use Marijuana Public Health
and Safety Fund (see next paragraph) and 6% to municipalities. Maine Revenue
Services has assumed a delay in the effective date of the sales tax to
January 1, 2019. General Fund revenue is reduced by $2,254,000 in fiscal year
2017-18 and by $7,418,640 in fiscal year 2018-19 and Local Government Fund
revenue is reduced by $46,000 in fiscal year 2017-18 and by $138,000 in
fiscal year 2018-19. The bill includes an Other Special Revenue Funds
allocation of $228,000 in fiscal year 2018-19 to DAFS in order to remit a
portion of the sales tax to municipalities. |
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The bill
establishes the Adult Use Marijuana Public Health and Safety Fund to
facilitate public health and safety awareness and education programs,
initiatives, campaigns and activities and enhanced law enforcement training
programs for local, county and state law enforcement officers. The 12% of
sales tax revenue dedicated to this fund should generate $428,640 in fiscal
year 2018-19 and $3,147,120 by fiscal year 2020-21. |
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The bill also
creates the Adult Use Marijuana Regulatory Coordination Fund and transfers
the balance of the Retail Marijuana Regulatory Coordination Fund, currently
$1,224,246, into it. |
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The bill creates
manufacturing, retail store, social club, testing and tiered cultivation
licenses and sets the fee structure that DAFS may charge for each license. In
fiscal year 2017-18 license revenue is estimated to generate $200,000 in
Other Special Revenue Funds revenue; in fiscal year 2018-19 this revenue is
estimated to increase to $1,209,075. |
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The bill includes
General Fund appropriations to DAFS of $172,815 in fiscal year 2017-18 and
$1,984,225 in fiscal year 2018-19 for 26 permanent positions. The bill also
includes Other Special Revenue Funds allocations to DAFS of $175,000 in
fiscal year 2017-18 and $600,000 in fiscal year 2018-19 for All Other costs
associated with these positions. The bill also includes a one-time
appropriation of $550,000 in fiscal year 2017-18 to DAFS for Tracking System
and Licensing System software. The bill includes General Fund appropriations
to ACF of $94,568 in fiscal year 2017-18 and $595,481 in fiscal year 2018-19
for 7 permanent positions. The bill also includes Other Special Revenue Funds
allocations to ACF of $25,000 and $507,319 in fiscal year 2018-19 for 5
permanent positions and related All Other costs. |
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If marijuana use
increases because of legalization, the number of child welfare cases reported
to the Department of Health and Human Services could rise. Any increase in
the number of investigations is not expected to increase costs to the
department significantly.
This bill may lead to a reduction in the number of Maine Medical Marijuana
Program licenses, as some licensees may decide to participate only in the
non-medical marijuana industry. If this occurs it would reduce revenue from
license fees that is now credited to the Maine Medical Use of Marijuana Fund
to support that program. Any such reduction is expected to be minor.
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The bill includes
a General Fund appropriation of $43,701 and a Highway Fund allocation of
$23,962 in fiscal year 2018-19 to the Department of Public Safety for one
Identification Specialist II position and related costs to process criminal
history background checks for marijuana establishment operators. Other
Special Revenue Funds revenue to the Department of Public Safety will be
increased by the amount charged for each background check. The amount of the
increased revenue has not been determined at this time. |
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This bill
includes General Fund deappropriations of $50,000 in fiscal year 2017-18 and
$75,000 in fiscal year 2018-19 from the Maine Commission on Indigent Legal
Services to reflect savings from a reduction in the cost of assigned counsel
related to marijuana violations.
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General Fund fine
revenue is expected to be reduced from fewer marijuana violations. Costs to
the Department of the Attorney General may be reduced as well. No estimate of
these changes is made at this time. |
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Additional costs
to the Department of Labor to consult with DAFS and ACF regarding workplace,
employment or other labor matters can be absorbed within existing budgeted
resources. |
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The bill includes
an Other Special Revenue Funds allocation of $145,000 to DAFS in fiscal year
2018-19 to reimburse the Maine Criminal Justice Academy for enhanced law
enforcement training for marijuana enforcement. |
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The bill includes
a General Fund appropriation of $197,951 in fiscal year 2018-19 to DAFS for
two Tax Examiner positions, related programming and All Other costs to
process and audit income tax filings. Two additional Senior Revenue Agent
positions will be required beginning in fiscal year 2019-20. |
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