Florida Senate - 2019 SB 1116
By Senator Taddeo
40-00900A-19 20191116__
1 A bill to be entitled
2 An act relating to banking services for medical
3 marijuana treatment centers; providing legislative
4 findings and intent; amending s. 655.005, F.S.;
5 revising the definition of the term “financial
6 institution” to include a medical marijuana limited
7 charter bank or credit union licensed under the
8 Marijuana Limited Charter Banking and Credit Union
9 Law; creating s. 655.97, F.S.; providing a short
10 title; defining terms; creating s. 655.971, F.S.;
11 establishing the Medical Marijuana Limited Charter
12 Bank and Credit Union Advisory Board within the Office
13 of Financial Regulation; specifying the composition of
14 the board; specifying requirements for the board;
15 requiring the Department of Health and the office to
16 submit certain reports to the board; requiring the
17 board to submit certain recommendations to the
18 Financial Services Commission and the Legislature;
19 creating s. 655.972, F.S.; prohibiting persons from
20 providing banking services to medical marijuana
21 treatment centers without a medical marijuana limited
22 charter bank or credit union license; prohibiting the
23 transfer or assignment of licenses; providing
24 application requirements; requiring the commission to
25 adopt rules, and authorizing the commission to adopt
26 emergency rules; creating s. 655.973, F.S.; providing
27 requirements for medical marijuana limited charter
28 banks and credit unions; specifying requirements,
29 limitations, and authorized actions relating to
30 special purpose checks issued by medical marijuana
31 limited charter banks and credit unions; providing
32 authorized and prohibited acts by medical marijuana
33 limited charter banks and credit unions; requiring the
34 commission and the department to adopt certain rules;
35 authorizing the commission and the department to adopt
36 emergency rules; providing an effective date.
37
38 Be It Enacted by the Legislature of the State of Florida:
39
40 Section 1. Legislative findings and intent.—
41 (1) In November 2016, Florida voters passed Amendment 2,
42 creating s. 29, Article X of the State Constitution, authorizing
43 the medical use of marijuana for individuals with debilitating
44 medical conditions as determined by a licensed Florida
45 physician. Under the amendment, medical marijuana treatment
46 centers are created to serve the needs of the medical marijuana
47 community.
48 (2) Cannabis remains illegal under federal law. The United
49 States Drug Enforcement Administration classifies cannabis as a
50 Schedule I drug. As a result, the majority of financial
51 institutions that take deposits, including banks, thrifts, and
52 credit unions, do not serve medical marijuana treatment centers.
53 This status precludes medical marijuana treatment centers from
54 depositing income in, or engaging in other banking-related
55 activities with, federally insured and regulated financial
56 institutions and from using a federal clearinghouse to process
57 their payments.
58 (3) Since the majority of financial institutions will not
59 serve medical marijuana treatment centers because of the
60 conflict of federal law with state law, the centers are unable
61 to open and use checking accounts, make or receive electronic
62 payments, or accept credit or debit cards.
63 (4) While income from the sale of cannabis products is
64 deemed ill-gotten gains by the federal government, the income is
65 still taxable. The Internal Revenue Service specifically states
66 in Publication 525, Taxable and Nontaxable Income, that “Income
67 from illegal activities, such as money from dealing illegal
68 drugs, must be included in your income on Schedule 1 (Form
69 1040), line 21, or on Schedule C (Form 1040) or Schedule C-EZ
70 (Form 1040) if from your self-employment activity.”
71 (5) The lack of banking services has created both
72 regulatory and public safety issues. This state must be able to
73 audit and perform accounting and other accountability functions
74 affecting medical marijuana treatment centers. This is made
75 significantly more difficult when the majority of transactions
76 are completed with cash.
77 (6) Because of the unavailability of financial services,
78 medical marijuana treatment centers are less able to pay taxes
79 and follow regulations governing medical marijuana in this
80 state.
81 (7) Additionally, the lack of access to financial services
82 has created public safety issues for medical marijuana treatment
83 centers that need to pay high security costs to safeguard their
84 income and their employees, who risk being robbed when managing
85 and transporting cash.
86 (8) Florida voters have spoken in support of medical
87 marijuana laws. In furtherance of the will of the voters, the
88 Legislature has a responsibility to enact appropriate
89 legislation implementing s. 29, Article X of the State
90 Constitution. The current conflict with federal law creates a
91 significant problem requiring legislative attention. The
92 Legislature has a duty to provide a mechanism to help medical
93 marijuana treatment centers gain access to banking services
94 which is consistent with the will of Florida voters.
95 Section 2. Paragraph (i) of subsection (1) of section
96 655.005, Florida Statutes, is amended to read:
97 655.005 Definitions.—
98 (1) As used in the financial institutions codes, unless the
99 context otherwise requires, the term:
100 (i) “Financial institution” means a state or federal
101 savings or thrift association, bank, savings bank, trust
102 company, international bank agency, international banking
103 corporation, international branch, international representative
104 office, international administrative office, international trust
105 entity, international trust company representative office,
106 qualified limited service affiliate, credit union, or an
107 agreement corporation operating pursuant to s. 25 of the Federal
108 Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act corporation
109 organized pursuant to s. 25(a) of the Federal Reserve Act, 12
110 U.S.C. ss. 611 et seq., or a medical marijuana limited charter
111 bank or credit union licensed under the Marijuana Limited
112 Charter Banking and Credit Union Law.
113 Section 3. Section 655.97, Florida Statutes, is created to
114 read:
115 655.97 Medical Marijuana Limited Charter Banking and Credit
116 Union Law; definitions.—
117 (1) SHORT TITLE.—Sections 655.97-655.973 may be cited as
118 the “Medical Marijuana Limited Charter Banking and Credit Union
119 Law.”
120 (2) DEFINITIONS.—As used in ss. 655.97-655.973, the term:
121 (a) “Applicant” means an entity that submits an application
122 to the office pursuant to s. 655.972 to be licensed as a medical
123 marijuana limited charter bank or credit union.
124 (b) “Banking services” means the provision of depository
125 services with respect to cash or other funds and the issuance
126 and acceptance of special purpose checks, including the
127 acceptance and maintenance of deposit proceeds, consistent with
128 the requirements and limitations under the financial
129 institutions codes.
130 (c) “Board” means the Medical Marijuana Limited Charter
131 Bank and Credit Union Advisory Board established under s.
132 655.971.
133 (d) “Medical marijuana limited charter bank or credit
134 union” means an entity that is licensed by the office pursuant
135 to s. 655.972.
136 (e) “Medical marijuana treatment center” means an entity
137 licensed by the Department of Health pursuant to s. 381.986(8).
138 Section 4. Section 655.971, Florida Statutes, is created to
139 read:
140 655.971 Medical Marijuana Limited Charter Bank and Credit
141 Union Advisory Board.—
142 (1) The Medical Marijuana Limited Charter Bank and Credit
143 Union Advisory Board is established within the office. The board
144 shall be composed of a member designated by the Chief Financial
145 Officer, a member designated by the State Surgeon General, and a
146 member designated by the Commissioner of Agriculture. The
147 Commissioner of Financial Regulation, or his or her designee,
148 shall serve as an ex officio nonvoting member. Board members may
149 not be compensated for their services.
150 (2) The board shall ensure that the Medical Marijuana
151 Limited Charter Banking and Credit Union Law provides a safe and
152 efficient way for medical marijuana treatment centers to pay
153 state and local taxes and fees, to pay rent on the medical
154 marijuana treatment center, to issue special purpose checks, and
155 to legally invest in the economy of this state, while reducing
156 burdens placed on local government resulting from collecting and
157 managing large sums of cash.
158 (3) The Department of Health and the office shall submit
159 reports of enforcement activities under s. 381.986 and the
160 financial institutions codes to the board for review annually or
161 as the board may require. The board shall meet at its
162 discretion, but at least once a year, to review enforcement
163 activity reports from the Department of Health and the office.
164 Meetings must be noticed and open to public comment in
165 accordance with chapter 286. The board shall evaluate the
166 reports and the comments of the public and draft recommendations
167 for legislation or rules. Such recommendations must be submitted
168 to the Financial Services Commission, the President of the
169 Senate, and the Speaker of the House of Representatives.
170 (4) The board shall provide guidance and education to
171 dealers and investment advisers registered under chapter 517 to
172 accommodate account holders at medical marijuana limited charter
173 banks and credit unions in purchasing, holding, and selling any
174 of the investments described in s. 655.973(2)(b)4.
175 Section 5. Section 655.972, Florida Statutes, is created to
176 read:
177 655.972 Medical marijuana limited charter banks or credit
178 unions; licensing.—
179 (1) A person may not provide banking services to a medical
180 marijuana treatment center unless licensed as a medical
181 marijuana limited charter bank or credit union under this
182 section. A license issued under this section may not be
183 transferred or assigned.
184 (2) An applicant shall submit a completed application to
185 the office in a form prescribed by commission rule. The
186 applicant shall elect to form as a state bank or state trust
187 company under chapter 658 or a state credit union under chapter
188 657 and is subject to the licensing requirements and procedures
189 of those chapters as applicable.
190 (3) The commission shall adopt rules to administer this
191 section. The commission may, and all conditions are deemed met
192 to, adopt emergency rules pursuant to s. 120.54(4) to administer
193 this section.
194 Section 6. Section 655.973, Florida Statutes, is created to
195 read:
196 655.973 Medical marijuana limited charter banks or credit
197 unions; requirements; special purpose checks; authorized and
198 prohibited acts; rulemaking.—
199 (1) REQUIREMENTS.—
200 (a) A medical marijuana limited charter bank or credit
201 union shall comply with all requirements imposed by this
202 chapter, chapter 657, and chapter 658, as applicable. However,
203 to the extent that any provision in the financial institutions
204 codes is inconsistent with the Medical Marijuana Limited Charter
205 Banking and Credit Union Law, the Medical Marijuana Limited
206 Charter Banking and Credit Union Law shall control.
207 (b) A medical marijuana limited charter bank or credit
208 union shall adopt policies and practices to achieve the
209 principles and goals outlined in the Bank Secrecy Act of 1970,
210 Pub. L. No. 91-508, as amended, and must cooperate with the
211 Financial Crimes Enforcement Network.
212 (c) A medical marijuana limited charter bank or credit
213 union shall obtain and maintain private insurance in an amount
214 acceptable to the commissioner for the medical marijuana limited
215 charter bank or credit union and its assets at all times while
216 it is engaged in providing banking services. Private insurance
217 may not be unsatisfactory to the commissioner. In seeking and
218 retaining private insurance, a medical marijuana limited charter
219 bank or credit union may act and assume and discharge all
220 obligations required of it in accordance with state law.
221 (2) SPECIAL PURPOSE CHECKS.—
222 (a) A medical marijuana limited charter bank or credit
223 union may issue to an account holder special purpose checks that
224 must be valid for only the purposes specified in paragraph (b).
225 The following text must be printed on each check in at least 12
226 point type, with the name of the issuing bank included: “This
227 check is issued by ...(insert name of bank)... and may only be
228 deposited or cashed at this medical marijuana limited charter
229 bank or credit union or another medical marijuana limited
230 charter bank or credit union that agrees to accept the check.”
231 (b) Subject to the limitations of paragraph (d), a special
232 purpose check issued by a medical marijuana limited charter bank
233 or credit union may be used only for any of the following
234 purposes:
235 1. To pay fees or taxes to the state or a local
236 jurisdiction.
237 2. To pay rent on property that is leased by, or on behalf
238 of, the account holder’s medical marijuana treatment center.
239 3. To pay a vendor that is physically located in this state
240 for expenses related to goods and services associated with the
241 account holder’s medical marijuana treatment center.
242 4. To purchase any of the following:
243 a. Bonds, interest-bearing notes, or interest-bearing
244 warrants of this state for which the full faith and credit of
245 this state are pledged for the payment of principal and
246 interest.
247 b. Bonds issued by counties, school boards, districts,
248 authorities, municipalities, and agencies of municipalities in
249 this state.
250 (c) Subject to the limitations of paragraph (d), state and
251 local government offices may accept a special purpose check
252 issued by a medical marijuana limited charter bank or credit
253 union.
254 (d) An individual or entity, private or public, is not
255 required to accept a special purpose check issued by a medical
256 marijuana limited charter bank or credit union pursuant to this
257 section.
258 (e) A medical marijuana limited charter bank or credit
259 union may cash a special purpose check presented to it by a
260 person or entity that is not an account holder if the medical
261 marijuana limited charter bank or credit union previously issued
262 the special purpose check to an account holder and the check was
263 used for one of the authorized purposes specified in paragraph
264 (b).
265 (3) AUTHORIZED ACTS.—A medical marijuana limited charter
266 bank or credit union may:
267 (a) Enter into an agreement with one or more other medical
268 marijuana limited charter banks or credit unions in order to
269 form a banking network. The agreement is subject to the approval
270 of the commissioner. The network must be for the purpose of
271 assisting in providing services to medical marijuana treatment
272 centers and assisting medical marijuana limited charter banks or
273 credit unions in the network. A network formed under this
274 paragraph may not include an institution that is not a medical
275 marijuana limited charter bank or credit union.
276 (b) Provide accounts to individuals and entities other than
277 medical marijuana treatment centers, pursuant to commission
278 rule.
279 (c) Charge fees for the banking services it provides. Each
280 medical marijuana limited charter bank and credit union shall
281 provide to the office a fee schedule listing the types and
282 amounts or rates of fees it charges for the services it
283 provides. The office shall compile the information received
284 under this paragraph and post the information on its website in
285 a format intended to provide transparency. The office may, if
286 requested by any person or if the office deems appropriate,
287 review any fee charged by a medical marijuana limited charter
288 bank or credit union under this paragraph.
289 (4) PROHIBITED ACTS.—A medical marijuana limited charter
290 bank or credit union may not:
291 (a) Engage in banking, trust company, or credit union
292 business with any other financial institution that is not
293 licensed as a medical marijuana limited charter bank or credit
294 union.
295 (b) Engage in any activity under the financial institutions
296 codes except for activity required to accept deposits and
297 perform actions authorized under the Medical Marijuana Limited
298 Charter Banking and Credit Union Law.
299 (5) RULES.—
300 (a) The commission and the Department of Health shall adopt
301 rules specifying:
302 1. Best practices for medical marijuana limited charter
303 banks and credit unions and medical marijuana treatment centers
304 to comply with the Medical Marijuana Limited Charter Banking and
305 Credit Union Law; and
306 2. Technical assistance the office and the Department of
307 Health shall provide to medical marijuana limited charter banks
308 and credit unions and medical marijuana treatment centers to
309 facilitate such compliance.
310 (b) The commission and the Department of Health may, and
311 all conditions are deemed met to, adopt emergency rules pursuant
312 to s. 120.54(4) to administer this section.
313 Section 7. This act shall take effect July 1, 2019.