[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 776 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
1st Session
S. 776
To amend the Internal Revenue Code of 1986 to provide for the taxation
and regulation of marijuana products, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 30, 2017
Mr. Wyden introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for the taxation
and regulation of marijuana products, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Marijuana Revenue
and Regulation Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--TAXATION
Sec. 101. Establishment of taxes relating to marijuana products.
TITLE II--REGULATION
Subtitle A--Amendments To Decriminalize Marijuana at the Federal Level
Sec. 201. Decriminalization of marijuana.
Sec. 202. Application of the Controlled Substances Act and Controlled
Substances Import and Export Act to
marijuana.
Sec. 203. Conforming and ancillary amendments.
Subtitle B--Federal Marijuana Licensing and Related Matters
Sec. 211. Federal marijuana administration.
Sec. 212. Addition of marijuana to certain legal authorities relating
to intoxicating liquors.
Subtitle C--Other Amendments Relating to Federal Authority Regarding
Marijuana
Sec. 221. Food and Drug Administration.
Sec. 222. Transferring agency functions with regard to marijuana.
Sec. 223. Unfair advertising practices.
Sec. 224. Comptroller General review of laws and regulations.
TITLE III--FUNDING
Sec. 301. Funding for the Alcohol, Tobacco, and Marijuana Tax and Trade
Bureau.
TITLE I--TAXATION
SEC. 101. ESTABLISHMENT OF TAXES RELATING TO MARIJUANA PRODUCTS.
(a) In General.--Subtitle E of title I of the Internal Revenue Code
of 1986 is amended by adding at the end the following new chapter:
``CHAPTER 56--MARIJUANA PRODUCTS
``subchapter a. tax on marijuana products
``subchapter b. occupational tax
``subchapter c. bond and permits
``subchapter d. operations
``subchapter e. penalties
``Subchapter A--Tax on Marijuana Products
``Sec. 5901. Imposition of tax.
``Sec. 5902. Definitions.
``Sec. 5903. Liability and method of payment.
``Sec. 5904. Exemption from tax.
``Sec. 5905. Credit, refund, or drawback of tax.
``SEC. 5901. IMPOSITION OF TAX.
``(a) Imposition of Tax.--There is hereby imposed on any marijuana
product produced in or imported into the United States a tax equal to--
``(1) for any such product sold during the first 5 calendar
years in which this chapter becomes effective, the applicable
percentage of the price for which such product is sold, and
``(2) for any product sold during any calendar year after
the period described in paragraph (1), the applicable
equivalent rate.
``(b) Applicable Percentage.--For purposes of subsection (a)(1),
the applicable percentage shall be determined as follows:
``(1) For any marijuana product sold during the first 2
calendar years in which this chapter becomes effective, 10
percent.
``(2) For any marijuana product sold during the calendar
year after the period described in paragraph (1), 15 percent.
``(3) For any marijuana product sold during the calendar
year after the period described in paragraph (2), 20 percent.
``(4) For any marijuana product sold during the calendar
year after the period described in paragraph (3), 25 percent.
``(c) Applicable Equivalent Rate.--
``(1) In general.--For purposes of subsection (a)(2), the
applicable equivalent rate for each calendar year shall be
equal to--
``(A) in the case of any marijuana product not
described in subparagraph (B) which is sold during such
year, the applicable rate per ounce of such product
(and a proportionate tax at the like rate on all
fractional parts of an ounce of such product), and
``(B) in the case of any marijuana product
containing a marijuana derivative which is sold during
such year, the applicable rate per gram of
tetrahydrocannabinol in such product (and a
proportionate tax at the like rate on all fractional
parts of a gram of tetrahydrocannabinol in such
product).
``(2) Applicable rate.--
``(A) In general.--For purposes of paragraph
(1)(A), the applicable rate per ounce for any calendar
year shall be equal to 25 percent of the prevailing
sales price of marijuana sold in the United States
during the 12-month period ending one calendar quarter
before such calendar year, expressed on a per ounce
basis, as determined by the Secretary.
``(B) Marijuana derivatives.--For purposes of
paragraph (1)(B), the applicable rate per gram of
tetrahydrocannabinol shall be equal to the quotient
obtained by dividing--
``(i) the applicable rate per ounce (as
determined under subparagraph (A)), by
``(ii) 2.83495.
``(d) Time of Attachment on Marijuana Products.--The tax under this
section shall attach to any marijuana product as soon as such product
is in existence as such, whether it be subsequently separated or
transferred into any other substance, either in the process of original
production or by any subsequent process.
``SEC. 5902. DEFINITIONS.
``For purposes of this chapter:
``(1) Export warehouse.--The term `export warehouse' means
a bonded internal revenue warehouse for the storage of
marijuana products, upon which the internal revenue tax has not
been paid--
``(A) for subsequent shipment to a foreign country,
Puerto Rico, the Virgin Islands, or a possession of the
United States, or
``(B) for consumption beyond the jurisdiction of
the internal revenue laws of the United States.
``(2) Export warehouse proprietor.--The term `export
warehouse proprietor' means any person who operates an export
warehouse.
``(3) Importer.--The term `importer' means any person who--
``(A) is in the United States and to whom
nontaxpaid marijuana products, produced in a foreign
country, Puerto Rico, the Virgin Islands, or a
possession of the United States, are shipped or
consigned,
``(B) removes marijuana products for sale or
consumption in the United States from a customs bonded
warehouse, or
``(C) smuggles or otherwise unlawfully brings
marijuana or marijuana products into the United States.
``(4) Marijuana.--The term `marijuana' has the meaning
given the term `marihuana' under section 102(16) of the
Controlled Substances Act (21 U.S.C. 802(16)).
``(5) Marijuana derivative.--The term `marijuana
derivative' means any article containing marijuana, or any
derivative thereof, which is not a naturally grown and
unadulterated marijuana flower.
``(6) Marijuana enterprise.--The term `marijuana
enterprise' means a producer, export warehouse proprietor, or
importer.
``(7) Marijuana product.--
``(A) In general.--Except as provided in
subparagraph (B), the term `marijuana product' means
any article which contains marijuana or any marijuana
derivative.
``(B) Exceptions.--
``(i) In general.--The term `marijuana
product' shall not include--
``(I) any article containing
marijuana which has been approved by
the Food and Drug Administration for
sale for therapeutic purposes and is
marketed and sold solely for such
purpose, or
``(II) industrial hemp.
``(ii) Industrial hemp.--For purposes of
clause (i)(II), the term `industrial hemp'
means the plant Cannabis sativa L. and any part
of such plant, whether growing or not, with a
delta-9 tetrahydrocannabinol concentration of
not more than 0.3 percent on a dry weight
basis.
``(8) Marijuana production facility.--The term `marijuana
production facility' means an establishment which is qualified
under subchapter C to perform any operation for which such
qualification is required under such subchapter.
``(9) Producer.--The term `producer' means any person who--
``(A) plants, cultivates, harvests, or otherwise
produces marijuana or marijuana products, or
``(B) manufactures, compounds, converts, processes,
prepares, or packages marijuana products.
``(10) Removal; remove.--The terms `removal' or `remove'
mean--
``(A) the removal of marijuana products from the
premises of a producer, or from internal revenue bond
under section 5904, as the Secretary shall by
regulation prescribe,
``(B) release of such products from customs
custody, or
``(C) smuggling or other unlawful importation of
such products into the United States.
``(11) Retailer.--The term `retailer' means a person who
sells marijuana products to consumers.
``SEC. 5903. LIABILITY AND METHOD OF PAYMENT.
``(a) Liability for Tax.--
``(1) Original liability.--The producer or importer of any
marijuana product shall be liable for the taxes imposed thereon
by section 5901.
``(2) Transfer of liability.--
``(A) In general.--When marijuana products are
transferred, without payment of tax, pursuant to
section 5904, the liability for tax shall be
transferred in accordance with the provisions of this
paragraph.
``(B) Transfer between producer and export
warehouse proprietor.--In the case of marijuana
products which are transferred between the bonded
premises of producers and export warehouse proprietors,
the transferee shall become liable for the tax upon
receipt by the transferee of such articles, and the
transferor shall thereupon be relieved of their
liability for such tax.
``(C) Transfer from customs custody to producer.--
In the case of marijuana products which are released in
bond from customs custody for transfer to the bonded
premises of a producer, the transferee shall become
liable for the tax on such articles upon release from
customs custody, and the importer shall thereupon be
relieved of their liability for such tax.
``(D) Returned to bond.--All provisions of this
chapter applicable to marijuana products in bond shall
be applicable to such articles returned to bond upon
withdrawal from the market or returned to bond after
previous removal for a tax-exempt purpose.
``(b) Method of Payment of Tax.--
``(1) In general.--
``(A) Determination and payment of tax.--The taxes
imposed by section 5901 shall be determined at the time
of removal of the marijuana products. Such taxes shall
be paid on the basis of return. The Secretary shall, by
regulations, prescribe the period or the event for
which such return shall be made and the information to
be furnished on such return.
``(B) Postponement.--Any postponement under this
subsection of the payment of taxes determined at the
time of removal shall be conditioned upon the filing of
such additional bonds, and upon compliance with such
requirements, as the Secretary may prescribe for the
protection of the revenue. The Secretary may, by
regulations, require payment of tax on the basis of a
return prior to removal of the marijuana products where
a person defaults in the postponed payment of tax on
the basis of a return under this subsection or
regulations prescribed thereunder.
``(C) Administration and penalties.--All
administrative and penalty provisions of this title,
insofar as applicable, shall apply to any tax imposed
by section 5901.
``(2) Time for payment of taxes.--
``(A) In general.--Except as otherwise provided in
this paragraph, in the case of taxes on marijuana
products removed during any semimonthly period under
bond for deferred payment of tax, the last day for
payment of such taxes shall be the 14th day after the
last day of such semimonthly period.
``(B) Imported articles.--In the case of marijuana
products which are imported into the United States, the
following provisions shall apply:
``(i) In general.--The last day for payment
of tax shall be the 14th day after the last day
of the semimonthly period during which the
article is entered into the customs territory
of the United States.
``(ii) Special rule for entry of
warehousing.--Except as provided in clause
(iv), in the case of an entry for warehousing,
the last day for payment of tax shall not be
later than the 14th day after the last day of
the semimonthly period during which the article
is removed from the first such warehouse.
``(iii) Foreign trade zones.--Except as
provided in clause (iv) and in regulations
prescribed by the Secretary, articles brought
into a foreign trade zone shall,
notwithstanding any other provision of law, be
treated for purposes of this subsection as if
such zone were a single customs warehouse.
``(iv) Exception for articles destined for
export.--Clauses (ii) and (iii) shall not apply
to any article which is shown to the
satisfaction of the Secretary to be destined
for export.
``(C) Marijuana products brought into the united
states from puerto rico.--In the case of marijuana
products which are brought into the United States from
Puerto Rico, the last day for payment of tax shall be
the 14th day after the last day of the semimonthly
period during which the article is brought into the
United States.
``(D) Special rule where due date falls on
saturday, sunday, or holiday.--Notwithstanding section
7503, if, but for this subparagraph, the due date under
this paragraph would fall on a Saturday, Sunday, or a
legal holiday (as defined in section 7503), such due
date shall be the immediately preceding day which is
not a Saturday, Sunday, or such a holiday.
``(E) Special rule for unlawfully produced
marijuana products.--In the case of any marijuana
products produced in the United States at any place
other than the premises of a producer that has filed
the bond and obtained the permit required under this
chapter, tax shall be due and payable immediately upon
production.
``(3) Payment by electronic fund transfer.--Any person who
in any 12-month period, ending December 31, was liable for a
gross amount equal to or exceeding $5,000,000 in taxes imposed
on marijuana products by section 5901 (or section 7652) shall
pay such taxes during the succeeding calendar year by
electronic fund transfer (as defined in section 5061(e)(2)) to
a Federal Reserve Bank. Rules similar to the rules of section
5061(e)(3) shall apply to the $5,000,000 amount specified in
the preceding sentence.
``(c) Definition of Price.--
``(1) Containers, packing and transportation charges.--In
determining, for the purposes of this chapter, the price for
which an article is sold, there shall be included any charge
for coverings and containers of whatever nature, and any charge
incident to placing the article in condition packed ready for
shipment, but there shall be excluded the amount of tax imposed
by this chapter, whether or not stated as a separate charge. A
transportation, delivery, insurance, installation, or other
charge (not required by the preceding sentence to be included)
shall be excluded from the price only if the amount thereof is
established to the satisfaction of the Secretary in accordance
with regulations.
``(2) Constructive sale price.--
``(A) In general.--If an article is sold directly
to consumers, sold on consignment, or sold (otherwise
than through an arm's length transaction) at less than
the fair market price, or if the price for which the
article sold cannot be determined, the tax under
section 5901(a) shall be computed on the price for
which such articles are sold, in the ordinary course of
trade, by producers thereof, as determined by the
Secretary.
``(B) Arm's length.--
``(i) In general.--For purposes of this
section, a sale is considered to be made under
circumstances otherwise than at arm's length
if--
``(I) the parties are members of
the same controlled group, whether or
not such control is actually exercised
to influence the sale price, or
``(II) the sale is made pursuant to
special arrangements between a producer
and a purchaser.
``(ii) Controlled groups.--
``(I) In general.--The term
`controlled group' has the meaning
given to such term by subsection (a) of
section 1563, except that `more than 50
percent' shall be substituted for `at
least 80 percent' each place it appears
in such subsection.
``(II) Controlled groups which
include nonincorporated persons.--Under
regulations prescribed by the
Secretary, principles similar to the
principles of subclause (I) shall apply
to a group of persons under common
control where one or more of such
persons is not a corporation.
``(d) Partial Payments and Installment Accounts.--
``(1) Partial payments.--In the case of--
``(A) a contract for the sale of an article wherein
it is provided that the price shall be paid by
installments and title to the article sold does not
pass until a future date notwithstanding partial
payment by installments,
``(B) a conditional sale, or
``(C) a chattel mortgage arrangement wherein it is
provided that the sales price shall be paid in
installments,
there shall be paid upon each payment with respect to the
article a percentage of such payment equal to the rate of tax
in effect on the date such payment is due.
``(2) Sales of installment accounts.--If installment
accounts, with respect to payments on which tax is being
computed as provided in paragraph (1), are sold or otherwise
disposed of, then paragraph (1) shall not apply with respect to
any subsequent payments on such accounts (other than subsequent
payments on returned accounts with respect to which credit or
refund is allowable by reason of section 6416(b)(5)), but
instead--
``(A) there shall be paid an amount equal to the
difference between--
``(i) the tax previously paid on the
payments on such installment accounts, and
``(ii) the total tax which would be payable
if such installment accounts had not been sold
or otherwise disposed of (computed as provided
in paragraph (1)), except that
``(B) if any such sale is pursuant to the order of,
or subject to the approval of, a court of competent
jurisdiction in a bankruptcy or insolvency proceeding,
the amount computed under subparagraph (A) shall not
exceed the sum of the amounts computed by multiplying--
``(i) the proportionate share of the amount
for which such accounts are sold which is
allocable to each unpaid installment payment,
by
``(ii) the rate of tax under this chapter
in effect on the date such unpaid installment
payment is or was due.
The sum of the amounts payable under this subsection in
respect of the sale of any article shall not exceed the
total tax.
``SEC. 5904. EXEMPTION FROM TAX.
``(a) In General.--Marijuana products on which the internal revenue
tax has not been paid or determined may, subject to such regulations as
the Secretary shall prescribe, be withdrawn from the bonded premises of
any producer in approved containers free of tax and not for resale for
use--
``(1) exclusively in scientific research by a laboratory,
``(2) by a proprietor of a marijuana production facility in
research, development, or testing (other than consumer testing
or other market analysis) of processes, systems, materials, or
equipment, relating to marijuana or marijuana operations, under
such limitations and conditions as to quantities, use, and
accountability as the Secretary may by regulations require for
the protection of the revenue, or
``(3) by the United States or any governmental agency
thereof, any State, any political subdivision of a State, or
the District of Columbia, for nonconsumption purposes.
``(b) Marijuana Products Transferred or Removed in Bond From
Domestic Factories and Export Warehouses.--
``(1) In general.--Subject to such regulations and under
such bonds as the Secretary shall prescribe, a producer or
export warehouse proprietor may transfer marijuana products,
without payment of tax, to the bonded premises of another
producer or export warehouse proprietor, or remove such
articles, without payment of tax, for shipment to a foreign
country, Puerto Rico, the Virgin Islands, or a possession of
the United States, or for consumption beyond the jurisdiction
of the internal revenue laws of the United States.
``(2) Labeling.--Marijuana products may not be transferred
or removed under this subsection unless such products bear such
marks, labels, or notices as the Secretary shall by regulations
prescribe.
``(c) Marijuana Products Released in Bond From Customs Custody.--
Marijuana products imported or brought into the United States may be
released from customs custody, without payment of tax, for delivery to
a producer or export warehouse proprietor if such articles are not put
up in packages, in accordance with such regulations and under such bond
as the Secretary shall prescribe.
``(d) Marijuana Products Exported and Returned.--Marijuana products
classifiable under item 9801.00.10 of the Harmonized Tariff Schedule of
the United States (relating to duty on certain articles previously
exported and returned), as in effect on the date of the enactment of
the Marijuana Revenue and Regulation Act, may be released from customs
custody, without payment of that part of the duty attributable to the
internal revenue tax for delivery to the original producer of such
marijuana products or to the export warehouse proprietor authorized by
such producer to receive such products, in accordance with such
regulations and under such bond as the Secretary shall prescribe. Upon
such release such products shall be subject to this chapter as if they
had not been exported or otherwise removed from internal revenue bond.
``SEC. 5905. CREDIT, REFUND, OR DRAWBACK OF TAX.
``(a) Credit or Refund.--
``(1) In general.--Credit or refund of any tax imposed by
this chapter or section 7652 shall be allowed or made (without
interest) to the producer, importer, or export warehouse
proprietor on proof satisfactory to the Secretary that the
claimant producer, importer, or export warehouse proprietor has
paid the tax on--
``(A) marijuana products withdrawn from the market
by the claimant, or
``(B) such products lost (otherwise than by theft)
or destroyed, by fire, casualty, or act of God, while
in the possession or ownership of the claimant.
``(2) Marijuana products lost or destroyed in bond.--
``(A) Extent of loss allowance.--No tax shall be
collected in respect of marijuana products lost or
destroyed while in bond, except that such tax shall be
collected--
``(i) in the case of loss by theft, unless
the Secretary finds that the theft occurred
without connivance, collusion, fraud, or
negligence on the part of the proprietor of
marijuana production facility, owner,
consignor, consignee, bailee, or carrier, or
their employees or agents,
``(ii) in the case of voluntary
destruction, unless such destruction is carried
out as provided in paragraph (3), and
``(iii) in the case of an unexplained
shortage of marijuana products.
``(B) Proof of loss.--In any case in which
marijuana products are lost or destroyed, whether by
theft or otherwise, the Secretary may require the
proprietor of a marijuana production facility or other
person liable for the tax to file a claim for relief
from the tax and submit proof as to the cause of such
loss. In every case where it appears that the loss was
by theft, the burden shall be upon the proprietor of
the marijuana production facility or other person
responsible for the tax under section 5901 to establish
to the satisfaction of the Secretary that such loss did
not occur as the result of connivance, collusion,
fraud, or negligence on the part of the proprietor of
the marijuana production facility, owner, consignor,
consignee, bailee, or carrier, or their employees or
agents.
``(C) Refund of tax.--In any case where the tax
would not be collectible by virtue of subparagraph (A),
but such tax has been paid, the Secretary shall refund
such tax.
``(D) Limitations.--Except as provided in
subparagraph (E), no tax shall be abated, remitted,
credited, or refunded under this paragraph where the
loss occurred after the tax was determined. The
abatement, remission, credit, or refund of taxes
provided for by subparagraphs (A) and (C) in the case
of loss of marijuana products by theft shall only be
allowed to the extent that the claimant is not
indemnified against or recompensed in respect of the
tax for such loss.
``(E) Applicability.--The provisions of this
paragraph shall extend to and apply in respect of
marijuana products lost after the tax was determined
and before completion of the physical removal of the
marijuana products from the bonded premises.
``(3) Voluntary destruction.--The proprietor of a marijuana
production facility or other persons liable for the tax imposed
by this chapter or by section 7652 with respect to any
marijuana product in bond may voluntarily destroy such
products, but only if such destruction is under such
supervision and under such regulations as the Secretary may
prescribe.
``(4) Limitation.--Any claim for credit or refund of tax
under this subsection shall be filed within 6 months after the
date of the withdrawal from the market, loss, or destruction of
the products to which the claim relates, and shall be in such
form and contain such information as the Secretary shall by
regulations prescribe.
``(b) Drawback of Tax.--There shall be an allowance of drawback of
tax paid on marijuana products, when shipped from the United States, in
accordance with such regulations and upon the filing of such bond as
the Secretary shall prescribe.
``Subchapter B--Occupational Tax
``Sec. 5911. Imposition and rate of tax.
``Sec. 5912. Payment of tax.
``Sec. 5913. Provisions relating to liability for occupational taxes.
``Sec. 5914. Application to State laws.
``SEC. 5911. IMPOSITION AND RATE OF TAX.
``(a) In General.--Any person engaged in business as a producer or
an export warehouse proprietor shall pay a tax of $1,000 per year
(referred to in this subchapter as an `occupational tax') in respect of
each premises at which such business is carried on.
``(b) Penalty for Failure To Register.--Any person engaged in
business as a producer or an export warehouse proprietor who willfully
fails to pay the occupation tax shall be fined not more than $5,000, or
imprisoned not more than 2 years, or both, for each such offense.
``SEC. 5912. PAYMENT OF TAX.
``(a) Condition Precedent to Carrying on Business.--No person shall
be engaged in or carry on any trade or business subject to the
occupational tax until such person has paid such tax.
``(b) Computation.--
``(1) In general.--The occupational tax shall be imposed--
``(A) as of on the first day of July in each year,
or
``(B) on commencing any trade or business on which
such tax is imposed.
``(2) Period.--In the case of a tax imposed under
subparagraph (A) of paragraph (1), the occupational tax shall
be reckoned for 1 year, and in the case of subparagraph (B) of
such paragraph, it shall be reckoned proportionately, from the
first day of the month in which the liability to such tax
commenced, to and including the 30th day of June following.
``(c) Method of Payment.--
``(1) Payment by return.--The occupational tax shall be
paid on the basis of a return under such regulations as the
Secretary shall prescribe.
``(2) Stamp denoting payment of tax.--After receiving a
properly executed return and remittance of any occupational
tax, the Secretary shall issue to the taxpayer an appropriate
stamp as a receipt denoting payment of the tax. This paragraph
shall not apply in the case of a return covering liability for
a past period.
``SEC. 5913. PROVISIONS RELATING TO LIABILITY FOR OCCUPATIONAL TAXES.
``(a) Partners.--Any number of persons doing business in
partnership at any one place shall be required to pay a single
occupational tax.
``(b) Different Businesses of Same Ownership and Location.--
Whenever more than one of the pursuits or occupations described in this
subchapter are carried on in the same place by the same person at the
same time, except as otherwise provided in this subchapter, the
occupational tax shall be paid for each according to the rates
severally prescribed.
``(c) Businesses in More Than One Location.--
``(1) Liability for tax.--The payment of the occupational
tax shall not exempt from an additional occupational tax the
person carrying on a trade or business in any other place than
that stated in the register kept in the office of the official
in charge of the internal revenue district.
``(2) Storage.--Nothing contained in paragraph (1) shall
require imposition of an occupational tax for the storage of
marijuana products at a location other than the place where
such products are sold or offered for sale.
``(3) Place.--
``(A) In general.--For purposes of this section,
the term `place' means the entire office, plant or area
of the business in any one location under the same
proprietorship.
``(B) Divisions.--For purposes of this paragraph,
any passageways, streets, highways, rail crossings,
waterways, or partitions dividing the premises shall
not be deemed sufficient separation to require an
additional occupational tax, if the various divisions
are otherwise contiguous.
``(d) Death or Change of Location.--
``(1) In general.--In addition to the person who has paid
the occupational tax for the carrying on of any business at any
place, any person described in paragraph (2) may secure the
right to carry on, without incurring any additional
occupational tax, the same business at the same place for the
remainder of the taxable period for which the occupational tax
was paid.
``(2) Eligible persons.--The persons described in this
paragraph are the following:
``(A) The surviving spouse or child, or executor or
administrator or other legal representative, of a
deceased taxpayer.
``(B) A husband or wife succeeding to the business
of his or her living spouse.
``(C) A receiver or trustee in bankruptcy, or an
assignee for benefit of creditors.
``(D) The partner or partners remaining after death
or withdrawal of a member of a partnership.
``(3) Change of location.--When any person moves to any
place other than the place for which occupational tax was paid
for the carrying on of any business, such person may secure the
right to carry on, without incurring additional occupational
tax, the same business at the new location for the remainder of
the taxable period for which the occupational tax was paid. To
secure the right to carry on the business without incurring
additional occupational tax, the successor, or the person
relocating their business, must register the succession or
relocation with the Secretary in accordance with regulations
prescribed by the Secretary.
``(e) Federal Agencies or Instrumentalities.--Any tax imposed by
this subchapter shall apply to any agency or instrumentality of the
United States unless such agency or instrumentality is granted by
statute a specific exemption from such tax.
``SEC. 5914. APPLICATION TO STATE LAWS.
``The payment of any tax imposed by this subchapter for carrying on
any trade or business shall not be held to--
``(1) exempt any person from any penalty or punishment
provided by the laws of any State for carrying on such trade or
business within such State, or in any manner to authorize the
commencement or continuance of such trade or business contrary
to the laws of such State or in places prohibited by municipal
law, or
``(2) prohibit any State from placing a duty or tax on the
same trade or business, for State or other purposes.
``Subchapter C--Bond and Permits
``Sec. 5921. Establishment and bond.
``Sec. 5922. Application for permit.
``Sec. 5923. Permit.
``SEC. 5921. ESTABLISHMENT AND BOND.
``(a) Prohibition on Production Outside of Bonded Marijuana
Production Facility.--
``(1) In general.--Except as authorized by the Secretary or
on the bonded premises of a marijuana production facility duly
authorized to produce marijuana products according to law--
``(A) no marijuana may be planted, cultivated,
harvested, or grown in any building or on any premises,
and
``(B) no marijuana product may be manufactured,
compounded, converted, processed, prepared, or packaged
in any building or on any premises.
``(2) Authorized producers only.--No person other than a
producer which has filed the bond required under subsection (b)
and received a permit described in section 5923 may produce any
marijuana product.
``(b) Bond.--
``(1) When required.--Every person, before commencing
business as a producer or an export warehouse proprietor, shall
file such bond, conditioned upon compliance with this chapter
and regulations issued thereunder, in such form, amount, and
manner as the Secretary shall by regulation prescribe. A new or
additional bond may be required whenever the Secretary
considers such action necessary for the protection of the
revenue.
``(2) Approval or disapproval.--No person shall engage in
such business until he receives notice of approval of such
bond. A bond may be disapproved, upon notice to the principal
on the bond, if the Secretary determines that the bond is not
adequate to protect the revenue.
``(3) Cancellation.--Any bond filed hereunder may be
canceled, upon notice to the principal on the bond, whenever
the Secretary determines that the bond no longer adequately
protects the revenue.
``SEC. 5922. APPLICATION FOR PERMIT.
``(a) In General.--Every person, before commencing business as a
marijuana enterprise, and at such other time as the Secretary shall by
regulation prescribe, shall make application for the permit provided
for in section 5923. The application shall be in such form as the
Secretary shall prescribe and shall set forth, truthfully and
accurately, the information called for on the form. Such application
may be rejected and the permit denied if the Secretary, after notice
and opportunity for hearing, finds that--
``(1) the premises on which it is proposed to conduct the
marijuana enterprise are not adequate to protect the revenue,
``(2) the activity proposed to be carried out at such
premises does not meet such minimum capacity or activity
requirements as the Secretary may prescribe, or
``(3) such person (including, in the case of a corporation,
any officer, director, or principal stockholder and, in the
case of a partnership, a partner)--
``(A) is, by reason of their business experience,
financial standing, or trade connections or by reason
of previous or current legal proceedings involving a
felony violation of any other provision of Federal
criminal law relating to marijuana or marijuana
products, not likely to maintain operations in
compliance with this chapter,
``(B) has been convicted of a felony violation of
any provision of Federal or State criminal law relating
to marijuana or marijuana products, or
``(C) has failed to disclose any material
information required or made any material false
statement in the application therefor.
``SEC. 5923. PERMIT.
``(a) Issuance.--A person shall not engage in business as a
marijuana enterprise without a permit to engage in such business. Such
permit, conditioned upon compliance with this chapter and regulations
issued thereunder, shall be issued in such form and in such manner as
the Secretary shall by regulation prescribe. A new permit may be
required at such other time as the Secretary shall by regulation
prescribe.
``(b) Suspension or Revocation.--
``(1) Show cause hearing.--If the Secretary has reason to
believe that any person holding a permit--
``(A) has not in good faith complied with this
chapter, or with any other provision of this title
involving intent to defraud,
``(B) has violated the conditions of such permit,
``(C) has failed to disclose any material
information required or made any material false
statement in the application for such permit,
``(D) has failed to maintain their premises in such
manner as to protect the revenue,
``(E) is, by reason of previous or current legal
proceedings involving a felony violation of any other
provision of Federal criminal law relating to
marijuana, not likely to maintain operations in
compliance with this chapter, or
``(F) has been convicted of a felony violation of
any provision of Federal or State criminal law relating
to marijuana or marijuana products,
the Secretary shall issue an order, stating the facts charged,
citing such person to show cause why their permit should not be
suspended or revoked.
``(2) Action following hearing.--If, after hearing, the
Secretary finds that such person has not shown cause why their
permit should not be suspended or revoked, such permit shall be
suspended for such period as the Secretary deems proper or
shall be revoked.
``(c) Information Reporting.--The Secretary may require--
``(1) information reporting by any person issued a permit
under this section, and
``(2) information reporting by such other persons as the
Secretary deems necessary to carry out this chapter.
``(d) Inspection or Disclosure of Information.--For rules relating
to inspection and disclosure of returns and return information, see
section 6103(o).
``Subchapter D--Operations
``Sec. 5931. Inventories, reports, and records.
``Sec. 5932. Packaging and labeling.
``Sec. 5933. Purchase, receipt, possession, or sale of marijuana
products after removal.
``Sec. 5934. Restrictions relating to marks, labels, notices, and
packages.
``Sec. 5935. Restriction on importation of previously exported
marijuana products.
``SEC. 5931. INVENTORIES, REPORTS, AND RECORDS.
``Every producer, importer, and export warehouse proprietor shall--
``(1) make a true and accurate inventory at the time of
commencing business, at the time of concluding business, and at
such other times, in such manner and form, and to include such
items, as the Secretary shall by regulation prescribe, with
such inventories to be subject to verification by any internal
revenue officer,
``(2) make reports containing such information, in such
form, at such times, and for such periods as the Secretary
shall by regulation prescribe, and
``(3) keep such records in such manner as the Secretary
shall by regulation prescribe, with such records to be
available for inspection by any internal revenue officer during
business hours.
``SEC. 5932. PACKAGING AND LABELING.
``(a) Packages.--All marijuana products shall, before removal, be
put up in such packages as the Secretary shall by regulation prescribe.
``(b) Marks, Labels, and Notices.--Every package of marijuana
products shall, before removal, bear the marks, labels, and notices if
any, that the Secretary by regulation prescribes.
``(c) Lottery Features.--No certificate, coupon, or other device
purporting to be or to represent a ticket, chance, share, or an
interest in, or dependent on, the event of a lottery shall be contained
in, attached to, or stamped, marked, written, or printed on any package
of marijuana products.
``(d) Indecent or Immoral Material Prohibited.--No indecent or
immoral picture, print, or representation shall be contained in,
attached to, or stamped, marked, written, or printed on any package of
marijuana products.
``(e) Exceptions.--Subject to regulations prescribed by the
Secretary, marijuana products may be exempted from subsections (a) and
(b) if such products are--
``(1) for experimental purposes, or
``(2) transferred to the bonded premises of another
producer or export warehouse proprietor or released in bond
from customs custody for delivery to a producer.
``SEC. 5933. PURCHASE, RECEIPT, POSSESSION, OR SALE OF MARIJUANA
PRODUCTS AFTER REMOVAL.
``(a) Restriction.--No person shall--
``(1) with intent to defraud the United States, purchase,
receive, possess, offer for sale, or sell or otherwise dispose
of, after removal, any marijuana products--
``(A) upon which the tax has not been paid or
determined in the manner and at the time prescribed by
this chapter or regulations thereunder, or
``(B) which, after removal without payment of tax
pursuant to section 5904, have been diverted from the
applicable purpose or use specified in that section,
``(2) with intent to defraud the United States, purchase,
receive, possess, offer for sale, or sell or otherwise dispose
of, after removal, any marijuana products which are not put up
in packages as required under section 5932 or which are put up
in packages not bearing the marks, labels, and notices, as
required under such section, or
``(3) otherwise than with intent to defraud the United
States, purchase, receive, possess, offer for sale, or sell or
otherwise dispose of, after removal, any marijuana products
which are not put up in packages as required under section 5932
or which are put up in packages not bearing the marks, labels,
and notices, as required under such section.
``(b) Exception.--Paragraph (3) of subsection (a) shall not prevent
the sale or delivery of marijuana products directly to consumers from
proper packages, nor apply to such articles when so sold or delivered.
``(c) Liability to Tax.--Any person who possesses marijuana
products in violation of paragraph (1) or (2) of subsection (a) shall
be liable for a tax equal to the tax on such articles.
``SEC. 5934. RESTRICTIONS RELATING TO MARKS, LABELS, NOTICES, AND
PACKAGES.
``No person shall, with intent to defraud the United States,
destroy, obliterate, or detach any mark, label, or notice prescribed or
authorized, by this chapter or regulations thereunder, to appear on, or
be affixed to, any package of marijuana products before such package is
emptied.
``SEC. 5935. RESTRICTION ON IMPORTATION OF PREVIOUSLY EXPORTED
MARIJUANA PRODUCTS.
``(a) Export Labeled Marijuana Products.--
``(1) In general.--Marijuana products produced in the
United States and labeled for exportation under this chapter--
``(A) may be transferred to or removed from the
premises of a producer or an export warehouse
proprietor only if such articles are being transferred
or removed without tax in accordance with section 5904,
``(B) may be imported or brought into the United
States, after their exportation, only if such articles
either are eligible to be released from customs custody
with the partial duty exemption provided in section
5904(d) or are returned to the original producer of
such article as provided in section 5904(c), and
``(C) may not be sold or held for sale for domestic
consumption in the United States unless such articles
are removed from their export packaging and repackaged
by the original producer into new packaging that does
not contain an export label.
``(2) Alterations by persons other than original
producer.--This section shall apply to articles labeled for
export even if the packaging or the appearance of such
packaging to the consumer of such articles has been modified or
altered by a person other than the original producer so as to
remove or conceal or attempt to remove or conceal (including by
the placement of a sticker over) any export label.
``(3) Exports include shipments to puerto rico.--For
purposes of this section, section 5904(d), section 5941, and
such other provisions as the Secretary may specify by
regulations, references to exportation shall be treated as
including a reference to shipment to the Commonwealth of Puerto
Rico.
``(b) Export Label.--For purposes of this section, an article is
labeled for export or contains an export label if it bears the mark,
label, or notice required under section 5904(b).
``Subchapter E--Penalties
``Sec. 5941. Civil penalties.
``Sec. 5942. Criminal penalties.
``SEC. 5941. CIVIL PENALTIES.
``(a) Omitting Things Required or Doing Things Forbidden.--Whoever
willfully omits, neglects, or refuses to comply with any duty imposed
upon them by this chapter, or to do, or cause to be done, any of the
things required by this chapter, or does anything prohibited by this
chapter, shall in addition to any other penalty provided in this title,
be liable to a penalty of $10,000, to be recovered, with costs of suit,
in a civil action, except where a penalty under subsection (b) or (c)
or under section 6651 or 6653 or part II of subchapter A of chapter 68
may be collected from such person by assessment.
``(b) Failure To Pay Tax.--Whoever fails to pay any tax imposed by
this chapter at the time prescribed by law or regulations, shall, in
addition to any other penalty provided in this title, be liable to a
penalty of 10 percent of the tax due but unpaid.
``(c) Sale of Marijuana or Marijuana Products for Export.--
``(1) Every person who sells, relands, or receives within
the jurisdiction of the United States any marijuana products
which have been labeled or shipped for exportation under this
chapter,
``(2) every person who sells or receives such relanded
marijuana products, and
``(3) every person who aids or abets in such selling,
relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this
title, be liable for a penalty equal to the greater of $10,000 or 10
times the amount of the tax imposed by this chapter. All marijuana
products relanded within the jurisdiction of the United States shall be
forfeited to the United States and destroyed. All vessels, vehicles,
and aircraft used in such relanding or in removing such marijuana
products from the place where relanded, shall be forfeited to the
United States.
``(d) Applicability of Section 6665.--The penalties imposed by
subsections (b) and (c) shall be assessed, collected, and paid in the
same manner as taxes, as provided in section 6665(a).
``(e) Cross References.--For penalty for failure to make deposits
or for overstatement of deposits, see section 6656.
``SEC. 5942. CRIMINAL PENALTIES.
``(a) Fraudulent Offenses.--Whoever, with intent to defraud the
United States--
``(1) engages in business as a marijuana enterprise without
filing the application and obtaining the permit where required
by this chapter or regulations thereunder,
``(2) fails to keep or make any record, return, report, or
inventory, or keeps or makes any false or fraudulent record,
return, report, or inventory, required by this chapter or
regulations thereunder,
``(3) refuses to pay any tax imposed by this chapter, or
attempts in any manner to evade or defeat the tax or the
payment thereof,
``(4) sells or otherwise transfers, contrary to this
chapter or regulations thereunder, any marijuana products
subject to tax under this chapter, or
``(5) with intent to defraud the United States, purchases,
receives, possesses, offers for sale, or sells or otherwise
disposes of, any marijuana product--
``(A) upon which the tax has not been paid or
determined in the manner and at the time prescribed by
this chapter or regulations thereunder, or
``(B) which, without payment of tax pursuant to
section 5904, have been diverted from the applicable
purpose or use specified in that section,
shall, for each such offense, be fined not more than $10,000, or
imprisoned not more than 5 years, or both.
``(b) Offenses Relating to Retail Transactions.--Any retailer who
sells, in any single transaction, more than 1 ounce of any marijuana
product (or in the case of any marijuana product containing a marijuana
derivative, an equivalent amount, as established by the Secretary)
shall be, upon conviction, fined not more than $10,000, or imprisoned
for not more than 5 years, or both.
``(c) Other Offenses.--Whoever, otherwise than as provided in
subsections (a) and (b) and section 5911(b), violates any provision of
this chapter, or of regulations prescribed thereunder, shall, for each
such offense, be fined not more than $1,000, or imprisoned not more
than 1 year, or both.
``(d) Liability to Tax.--Any person who possesses marijuana
products in violation of subsection (a) shall be liable for a tax equal
to the tax on such articles.''.
(b) Study.--Not later than 2 years after the date of the enactment
of this Act, and every 5 years thereafter, the Secretary of the
Treasury, or the Secretary's delegate, shall--
(1) conduct a study concerning the characteristics of the
marijuana industry, including the number of persons operating
marijuana enterprises at each level of such industry, the
volume of sales, the amount of tax collected each year, and the
areas of evasion, and
(2) submit to Congress recommendations to improve the
regulation of the industry and the administration of the
related tax.
(c) Conforming Amendment.--Section 6103(o)(1)(A) of the Internal
Revenue Code of 1986 is amended by striking ``and firearms'' and
inserting ``firearms, and marijuana''.
(d) Clerical Amendment.--The table of chapters for subtitle E of
title I of the Internal Revenue Code of 1986 is amended by adding at
the end the following new chapter:
``Chapter 56. Marijuana Products''.
(e) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to sales, and applications for permits under section 5922
of the Internal Revenue Code of 1986 (as added by subsection
(a)), after 180 days after the date of the enactment of this
Act.
(2) Special rules for existing businesses.--In the case of
any producer operating under a permit issued on or before the
date of the enactment of this Act under State law, the
requirements under section 5922 of such Code (as so added)
shall apply beginning on the date that is 6 months after the
date of the enactment of this Act.
TITLE II--REGULATION
Subtitle A--Amendments To Decriminalize Marijuana at the Federal Level
SEC. 201. DECRIMINALIZATION OF MARIJUANA.
(a) Removal From Schedule of Controlled Substances.--
Notwithstanding any other provision of the Controlled Substances Act
(21 U.S.C. 801 et seq.), the Attorney General shall, not later than 60
days after the date of the enactment of this Act, issue a final order
that removes marijuana in any form from all schedules under section
202(c) of that Act (21 U.S.C. 812(c)).
(b) Conforming Amendment To Remove Legislative Deadwood.--
Subsection (c) of section 202 of the Controlled Substances Act (21
U.S.C. 812) is amended to read as follows:
``(c) Cross Reference to Schedules of Controlled Substances.--
Schedules I, II, III, IV, and V shall consist of the drugs and other
substances (by whatever official name, common or usual name, chemical
name, or brand name designated) that are set forth in the respective
schedules in part 1308 of title 21, Code of Federal Regulations, as
they may be amended from time to time, or in any successor
regulation.''.
SEC. 202. APPLICATION OF THE CONTROLLED SUBSTANCES ACT AND CONTROLLED
SUBSTANCES IMPORT AND EXPORT ACT TO MARIJUANA.
Part A of the Controlled Substances Act (21 U.S.C. 801 et seq.) is
amended by adding at the end the following:
``SEC. 103. APPLICATION TO MARIHUANA.
``(a) General Nonapplication.--Except as provided in this section,
this title and title III do not apply to marihuana.
``(b) Exception: Prohibition on Certain Transportations and
Shipments.--It shall be unlawful to ship or transport marihuana from
any place outside a State, territory, or district of the United States,
or other place noncontiguous to but subject to the jurisdiction of the
United States, into that State, territory, or district of the United
States, or place, when such marihuana is intended by any person
interested therein to be received, possessed, sold, or in any manner
used, in violation of any law of such State, territory, district, or
place.
``(c) Penalty.--Whoever knowingly violates subsection (b) shall be
fined under title 18, United States Code, or imprisoned not more than
one year, or both.''.
SEC. 203. CONFORMING AND ANCILLARY AMENDMENTS.
(a) Modification of Definition of ``Felony Drug Offense''.--Section
102(44) of the Controlled Substances Act (21 U.S.C. 802(44)) is amended
by striking ``marihuana,''.
(b) Elimination of Marijuana Penalty Provisions.--Part D of the
Controlled Substances Act (21 U.S.C. 841 et seq.) is amended--
(1) in section 401--
(A) by striking subsection (b)(1)(A)(vii);
(B) by striking subsection (b)(1)(B)(vii);
(C) by striking subsection (b)(1)(D); and
(D) by striking subsection (b)(4);
(2) in section 402(c)(2)(B), by striking ``marihuana,'';
(3) in section 403(d)(1), by striking ``marihuana,'';
(4) in section 418(a), by striking the last sentence;
(5) in section 419(a), by striking the last sentence;
(6) in section 422(d), in the matter preceding paragraph
(1), by striking ``marijuana,''; and
(7) in section 422(d)(5), by striking ``, such as a
marihuana cigarette,''.
(c) Removal of Prohibition on Import and Export.--Section 1010 of
the Controlled Substances Import and Export Act (21 U.S.C. 960) is
amended--
(1) by striking subparagraph (G) of subsection (b)(1);
(2) by striking subparagraph (G) of subsection (b)(2); and
(3) by striking paragraph (4) of subsection (b).
(d) Limiting the Application of the National Forest System Drug
Control Act of 1986 to Controlled Substances Other Than Marijuana.--The
National Forest System Drug Control Act of 1986 is amended--
(1) in section 15002(a) (16 U.S.C. 559b(a)) by striking
``marijuana and other'';
(2) in section 15003(2) (16 U.S.C. 559c(2)) by striking
``marijuana and other''; and
(3) in section 15004(2) (16 U.S.C. 559d(2)) by striking
``marijuana and other''.
(e) Interception of Communications.--Section 2516 of title 18,
United States Code, is amended--
(1) in subsection (1)(e), by striking ``marihuana,''; and
(2) in subsection (2) by striking ``marihuana,''.
(f) National Youth Anti-Drug Media Campaign.--Section 709 of the
Office of National Drug Control Policy Reauthorization Act of 1998 (21
U.S.C. 1708) is amended by striking subsection (j) (relating to
prevention of marijuana use).
Subtitle B--Federal Marijuana Licensing and Related Matters
SEC. 211. FEDERAL MARIJUANA ADMINISTRATION.
The Federal Alcohol Administration Act (27 U.S.C. 201 et seq.) is
amended by adding at the end the following:
``TITLE III--MARIJUANA
``SEC. 301. UNLAWFUL BUSINESSES WITHOUT MARIJUANA PERMIT.
``(a) Import.--It shall be unlawful, except pursuant to a permit
issued under this title by the Secretary of the Treasury (hereinafter
in this title referred to as the `Secretary')--
``(1) to engage in the business of importing marijuana into
the United States; or
``(2) for any person so engaged to sell, offer or deliver
for sale, contract to sell, or ship, in interstate or foreign
commerce, directly or indirectly or through an affiliate,
marijuana so imported.
``(b) Manufacture and Sale.--It shall be unlawful, except pursuant
to a permit issued under this title by the Secretary--
``(1) to engage in the business of cultivating, producing,
manufacturing, packaging, or warehousing marijuana; or
``(2) for any person so engaged to sell, offer or deliver
for sale, contract to sell, or ship, in interstate or foreign
commerce, directly or indirectly or through an affiliate,
marijuana so cultivated, produced, manufactured, packaged, or
warehoused.
``(c) Resale.--It shall be unlawful, except pursuant to a permit
issued under this title by the Secretary--
``(1) to engage in the business of purchasing marijuana for
resale at wholesale; or
``(2) for any person so engaged to receive or to sell,
offer or deliver for sale, contract to sell, or ship, in
interstate or foreign commerce, directly or indirectly or
through an affiliate, marijuana so purchased.
``(d) Remedies for Violations.--
``(1) Criminal fine.--
``(A) Generally.--Whoever violates this section
shall be fined not more than $1,000.
``(B) Settlement in compromise.--The Secretary may
decide not to refer a violation of this section to the
Attorney General for prosecution but instead to collect
a payment from the violator of no more than $500 for
that violation.
``(2) Civil action for relief.--The Attorney General may,
in a civil action, obtain appropriate relief to prevent and
restrain a violation of this title.
``SEC. 302. PROCEDURE FOR ISSUANCE OF MARIJUANA PERMITS.
``(a) Who Entitled to Permit.--
``(1) Generally.--The Secretary shall issue a permit for
operations requiring a permit under section 301 unless the
Secretary finds that--
``(A) the applicant (or if the applicant is a
corporation, any of its officers, directors, or
principal stockholders) has been convicted of a
disqualifying offense;
``(B) the applicant is, by reason of business
experience, financial standing, or trade connections,
not likely to commence operations within a reasonable
period or to maintain such operations in conformity
with Federal law; or
``(C) the operations proposed to be conducted by
the applicant are in violation of the law of the State
in which they are to be conducted.
``(2) Disqualifying offenses.--For the purposes of
paragraph (1)--
``(A) Generally.--Except as provided in
subparagraph (B) a disqualifying offense is an offense
related to the production, consumption, or sale of
marijuana that is--
``(i) a felony under Federal or State law,
if the conviction occurred not later than 5
years before the date of the application; or
``(ii) a misdemeanor under Federal law, if
the conviction occurred not later than 3 years
before the date of the application.
``(B) Excluded offenses.--A disqualifying offense
does not include a Federal or State offense based on
conduct that--
``(i) was legal under State law in the
State when and where the conduct took place, or
``(ii) is, as of the date of the
application, no longer an offense in that
State.
``(b) Refusal of Permit; Hearing.--If upon examination of any
application for a permit the Secretary has reason to believe that the
applicant is not entitled to such permit, the Secretary shall so notify
the applicant and, upon request by the applicant, afford the applicant
due notice and opportunity for hearing on the application. If the
Secretary, after affording such notice and opportunity for hearing,
still finds that the applicant is not entitled to a permit hereunder,
the Secretary shall by order deny the application stating the findings
which are the basis for the order.
``(c) Form of Application.--
``(1) Generally.--The Secretary shall--
``(A) prescribe the manner and form of applications
for permits under this title (including the facts to be
set forth in the application);
``(B) prescribe the form of such permits;
``(C) specify in any permit the authority conferred
by the permit and the conditions of that permit in
accordance with this title.
``(2) Separate types of applications and permits.--To the
extent deemed necessary by the Secretary for the efficient
administration of this title, the Secretary may require
separate applications and permits with respect to the various
classes of marijuana, and with respect to the various classes
of persons entitled to permits under this title.
``(3) Disclaimer.--The issuance of a permit under this
title does not deprive the United States of any remedy for a
violation of law.
``(d) Conditions.--A permit under this title shall be conditioned
upon--
``(1) compliance with all other Federal laws relating to
production, sale and consumption of marijuana, as well as
compliance with all State laws relating to said activities in
the State in which the permit applicant resides and does
business; and
``(2) payment to the Secretary of a reasonable permit fee
in an amount determined by the Secretary to be sufficient over
time to offset the cost of implementing and overseeing all
aspects of marijuana regulation by the Federal Government.
``(e) Revocation, Suspension, and Annulment.--
``(1) Generally.--After due notice and opportunity for
hearing, the Secretary may order a permit under this title--
``(A) revoked or suspended for such period as the
Secretary deems appropriate, if the Secretary finds
that the permittee has willfully violated any of the
conditions of the permit, but for a first violation of
the conditions the permit shall be subject to
suspension only;
``(B) revoked if the Secretary finds that the
permittee has not engaged in the operations authorized
by the permit for a period of more than 2 years; or
``(C) annulled if the Secretary finds that the
permit was procured through fraud, or
misrepresentation, or concealment of material fact.
``(2) Order to state basis for order.--The order shall
state the findings which are the basis for the order.
``(f) Service of Orders.--Each order of the Secretary with respect
to any denial of application, suspension, revocation, annulment, or
other proceedings, shall be served--
``(1) in person by any officer or employee of the Secretary
designated by him or any internal revenue or customs officer
authorized by the Secretary for the purpose; or
``(2) by mailing the order by registered mail, addressed to
the applicant or respondent at his last known address in the
records of the Secretary.
``(g) Duration.--
``(1) General rule.--Except as otherwise provided in this
subsection, a permit issued under this title shall continue in
effect until suspended, revoked, or annulled as provided in
this title, or voluntarily surrendered.
``(2) Effect of transfer.--If operations under a permit
issued under this title are transferred, the permit
automatically terminates 30 days after the date of that
transfer, unless an application is made by the transferee
before the end of that period for a permit under this title for
those operations. If such an application is made, the
outstanding permit shall continue in effect until such
application is finally acted on by the Secretary.
``(3) Definition of transfer.--For the purposes of this
section, the term `transfer' means any change of ownership or
control, whether voluntary or by operation of law.
``(h) Judicial Review.--A permittee or applicant for a permit under
this title may obtain judicial review under chapter 7 of title 5,
United States Code, of the denial of the application of that applicant
or, in the case of a permittee, the denial of an application by the
transferee of that permittee.
``(i) Statute of Limitations.--
``(1) In general.--No proceeding for the suspension or
revocation of a permit for violation of any condition thereof
relating to compliance with Federal law shall be instituted by
the Secretary more than 18 months after conviction of the
violation of Federal law, or, if no conviction has been had,
more than 3 years after the violation occurred.
``(2) Compromise.--No permit shall be suspended or revoked
for a violation of any such condition thereof if the alleged
violation of Federal law has been compromised by any officer of
the Government authorized to compromise such violation.
``SEC. 303. DEFINITIONS.
``In this title--
``(1) the term `marijuana' has the meaning given the term
`marihuana' in section 102 of the Controlled Substances Act (21
U.S.C. 802); and
``(2) the term `State' includes the District of Columbia,
Puerto Rico, and any territory or possession of the United
States.''.
SEC. 212. ADDITION OF MARIJUANA TO CERTAIN LEGAL AUTHORITIES RELATING
TO INTOXICATING LIQUORS.
(a) Wilson Act.--The Act of August 8, 1890 (commonly known as the
Wilson Act or the Original Packages Act; 27 U.S.C. 121), is amended--
(1) by inserting ``, or marijuana,'' after ``intoxicating
liquors or liquids''; and
(2) by striking ``such liquids or liquors'' and inserting
``such liquids, liquors, or marijuana''.
(b) Webb-Kenyon Act.--The Act of March 1, 1913 (commonly known as
the Webb-Kenyon Act; 27 U.S.C. 122), is amended--
(1) by inserting ``marijuana or any'' after ``whatsoever,
of any''; and
(2) by inserting ``marijuana or'' after ``which said''.
(c) Victims of Trafficking and Violence Protection Act of 2000.--
Section 2 of the Victims of Trafficking and Violence Protection Act of
2000 (27 U.S.C. 122a) is amended--
(1) in subsection (a)--
(A) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively; and
(B) by inserting after paragraph (2) the following
new paragraph:
``(3) the term `marijuana' has the meaning given the term
`marihuana' in section 102 of the Controlled Substances Act (21
U.S.C. 802);''; and
(2) in subsections (b) and (c), by inserting ``or
marijuana'' after ``intoxicating liquor'' each place it
appears.
Subtitle C--Other Amendments Relating to Federal Authority Regarding
Marijuana
SEC. 221. FOOD AND DRUG ADMINISTRATION.
The Food and Drug Administration shall have the same authorities
with respect to marijuana as the Administration has with respect to
alcohol.
SEC. 222. TRANSFERRING AGENCY FUNCTIONS WITH REGARD TO MARIJUANA.
(a) Transfer of Jurisdiction From Drug Enforcement Administration
to Bureau of Alcohol, Tobacco, Firearms and Explosives.--The functions
of the Attorney General, acting through the Administrator of the Drug
Enforcement Administration relating to marijuana enforcement, shall
hereafter be administered by the Attorney General, acting through the
Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
(b) Redesignation of Bureau of Alcohol, Tobacco, Firearms and
Explosives as Bureau of Alcohol, Tobacco, Marijuana, Firearms and
Explosives.--
(1) Redesignation.--The Bureau of Alcohol, Tobacco,
Firearms and Explosives is hereby renamed the ``Bureau of
Alcohol, Tobacco, Marijuana, Firearms and Explosives''.
(2) References.--Any reference to the Bureau of Alcohol,
Tobacco, Firearms and Explosives in any law, regulation, map,
document, record, or other paper of the United States shall be
deemed to be a reference to the Bureau of Alcohol, Tobacco,
Marijuana, Firearms and Explosives.
(c) Redesignation of Alcohol and Tobacco Tax and Trade Bureau as
Alcohol, Tobacco, and Marijuana Tax and Trade Bureau.--
(1) Redesignation.--The Alcohol and Tobacco Tax and Trade
Bureau is hereby renamed the ``Alcohol, Tobacco, and Marijuana
Tax and Trade Bureau''.
(2) References.--Any reference to the Alcohol and Tobacco
Tax and Trade Bureau in any law, regulation, map, document,
record, or other paper of the United States shall be deemed to
be a reference to the Alcohol, Tobacco, and Marijuana Tax and
Trade Bureau.
SEC. 223. UNFAIR ADVERTISING PRACTICES.
(a) In General.--It shall be unlawful for any person engaged in the
business of importing marijuana into the United States, or cultivating,
producing, manufacturing, packaging, or warehousing marijuana, or
purchasing marijuana for resale at wholesale, directly or indirectly or
through an affiliate, to publish or disseminate or cause to be
published or disseminated by radio broadcast, or in any newspaper,
periodical or other publication or by any sign or outdoor advertisement
or any other printed or graphic matter, any advertisement of marijuana,
if such advertisement is in, or is calculated to induce sales in,
interstate or foreign commerce, or is disseminated by mail, unless such
advertisement is in conformity with such regulations, to be prescribed
by the Secretary of the Treasury, or the Secretary's delegate (referred
to in this section as the ``Secretary''), as will--
(1) prevent deception of the consumer with respect to the
products advertised and as will prohibit, irrespective of
falsity, such statements relating to manufacturing processes,
analyses, guaranties, and scientific or irrelevant matters as
the Secretary finds to be likely to mislead the consumer;
(2) provide the consumer with adequate information as to
the identity and quality of the products advertised, the
characteristics thereof, and the person responsible for the
advertisement;
(3) prohibit statements that are disparaging of a
competitor's products or are false, misleading, obscene, or
indecent; and
(4) prevent statements inconsistent with any statement on
the labeling of the products advertised.
(b) Nonapplication to Publishers and Broadcasters.--The
prohibitions of this section and regulations thereunder shall not apply
to the publisher of any newspaper, periodical, or other publication, or
radio broadcaster, unless such publisher or radio broadcaster is
engaged in the business of importing marijuana into the United States,
or cultivating, producing, manufacturing, packaging, or warehousing
marijuana, or purchasing marijuana for resale at wholesale, directly or
indirectly or through an affiliate.
SEC. 224. COMPTROLLER GENERAL REVIEW OF LAWS AND REGULATIONS.
The Comptroller General shall conduct a review of Federal laws,
regulations, and policies to determine if any changes in them are
desirable in the light of the purposes and provisions of this Act. Not
later than 2 years after the date of the enactment of this Act, the
Comptroller General shall make to Congress and the relevant agencies
such recommendations relating to the results of that review as the
Comptroller General deems appropriate.
TITLE III--FUNDING
SEC. 301. FUNDING FOR THE ALCOHOL, TOBACCO, AND MARIJUANA TAX AND TRADE
BUREAU.
(a) Increased Funding for the Alcohol, Tobacco, and Marijuana Tax
and Trade Bureau.--For necessary expenses of carrying out section
1111(d) of the Homeland Security Act of 2002 (6 U.S.C. 531(d)), there
are authorized to be appropriated--
(1) for fiscal year 2017, $116,439,000, to remain available
until September 30, 2018; and
(2) for fiscal year 2018, $119,081,000, to remain available
until September 30, 2019.
(b) Availability of Funds for Administration of Marijuana
Taxation.--Of the amounts authorized to be appropriated under
subsection (a), for each of fiscal years 2017 and 2018, $10,000,000
shall be for the purpose of carrying out the provisions of this Act and
the amendments made by this Act.
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