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,
oran 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.