AB506: Bill Text

LRB-4468/1

CMH/JK/MCP/JPC:cjs

2023 - 2024 LEGISLATURE

2023 Assembly BILL 506

October 18, 2023 - Introduced by Representatives Madison, Shelton, Ohnstad, C. Anderson, J. Anderson, Baldeh, Bare, Clancy, Conley, Considine, Drake, Emerson, Goyke, Haywood, Hong, Jacobson, Joers, Moore Omokunde, Myers, Neubauer, Ortiz-Velez, Palmeri, Ratcliff, Sinicki, Snodgrass and Stubbs, cosponsored by Senators Agard, L. Johnson, Carpenter, Hesselbein, Larson, Pfaff, Roys, Smith, Spreitzer and Taylor. Referred to Committee on State Affairs.

AB506,2,5 An Act to repeal 94.55 (2t), 961.11 (4g), 961.14 (4) (t), 961.32 (2m), 961.38 (1n), 961.41 (1) (h), 961.41 (1m) (h), 961.41 (1q), 961.41 (3g) (e), 961.571 (1) (a) 7., 961.571 (1) (a) 11. e., 961.571 (1) (a) 11. k. and L. and 967.055 (1m) (b) 5.; to renumber and amend 115.35 (1), 961.01 (14) and 961.34; to amend 20.115 (7) (gc), 49.148 (4) (a), 49.79 (1) (b), 59.54 (25) (title), 59.54 (25) (a) (intro.), 66.0107 (1) (bm), 111.35 (2) (e), 114.09 (2) (bm) 1. (intro.), 114.09 (2) (bm) 4., 157.06 (11) (i), 175.35 (2g) (c) 4. a., 289.33 (3) (d), 349.02 (2) (b) 4., 961.41 (1r), 961.41 (1x), 961.41 (3g) (c), 961.41 (3g) (d), 961.41 (3g) (em), 961.47 (1), 961.48 (3), 961.48 (5), 961.49 (1m) (intro.), 961.571 (1) (a) 11. (intro.), 971.365 (1) (a), 971.365 (1) (b), 971.365 (1) (c) and 971.365 (2); and to create 16.282, 20.115 (7) (ge), 20.192 (1) (t), 20.255 (2) (r), 20.395 (5) (db), 20.435 (1) (s), 20.437 (3) (r), 20.505 (1) (t), 20.566 (1) (bn), 20.835 (2) (eq), 25.316, 48.47 (20), 66.04185, 73.17, 77.54 (71), 94.56, 94.57, 100.145, 108.02 (18r), 108.04 (5m), 111.32 (9m), 111.32 (11m), subchapter IV of chapter 139 [precedes 139.97], 157.06 (11) (hm), 175.35 (2g) (b) 3., 238.139, 250.22 and subchapter VIII of chapter 961 [precedes 961.70] of the statutes; relating to: legalizing the possession of marijuana; medical marijuana; regulating the production, processing, and sale of marijuana; expunging or redesignating past convictions for marijuana-related crimes; equity grants; making an appropriation; and providing a penalty.

Analysis by the Legislative Reference Bureau

Marijuana legalization and regulation

Under this bill, a person who is at least 21 years old may legally possess marijuana for recreational purposes. A person of any age may possess marijuana for medical purposes. Under the bill, a person may produce, process, or sell marijuana if the person has a permit. This bill creates an excise tax for the privilege of producing, processing, distributing, or selling marijuana in this state, and 60 percent of the revenue collected from the tax is deposited into a segregated fund called the “community reinvestment fund.” Under the bill, a person who may possess medical marijuana is not subject to sales or excise taxes on the purchase or use of the marijuana. The bill does not affect federal law, which generally prohibits persons from manufacturing, delivering, or possessing marijuana and applies to both intrastate and interstate violations.

Legalizing the possession of marijuana

Current law prohibits a person from manufacturing, distributing, or delivering marijuana; possessing marijuana with the intent to manufacture, distribute, or deliver it; possessing or attempting to possess marijuana; using drug paraphernalia; or possessing drug paraphernalia with the intent to produce, distribute, or use a controlled substance. The bill changes state law to allow a person who is at least 21 to possess not more than five ounces of marijuana. The bill also allows a qualifying patient to possess marijuana for medical purposes. Under the bill, a qualifying patient is an individual of any age who has been diagnosed by a physician as having or undergoing a debilitating medical condition or treatment. The bill also eliminates the prohibition on possessing or using drug paraphernalia that relates to marijuana consumption.

Under the bill, a person who is at least 21 who possesses more than five ounces of marijuana is subject to a penalty, which varies depending on the amount of overage. Under the bill, if the overage is not more than one ounce, the person is subject to a forfeiture of not more than $100; if the overage is more than one ounce but not more than 16 ounces, the person is guilty of a misdemeanor and subject to a fine of not more than $500; and if the overage is more than 16 ounces, the person is guilty of a misdemeanor and subject to a fine of not more than $1,000 or a sentence of imprisonment for not more than 90 days or both. In the last described case, the person is guilty of a Class I felony if the person also takes action to hide the amount of marijuana he or she has and has in place a security system to alert him or her to the presence of law enforcement or a method to intimidate, or a system that could injure or kill, a person approaching the area containing the marijuana.

Under the bill, a person who is under 21 who possesses marijuana is subject to a penalty, which varies depending on the amount possessed. If the violation involves not more than one-quarter of an ounce, the person is subject to a forfeiture of not more than $50; if the violation involves more than one-quarter of an ounce but not more than five ounces, the person is subject to a forfeiture of not more than $100; and if the violation involves more than five ounces, the person is subject to a forfeiture of not more than $200.

Regulating the production, processing, and selling marijuana

Under the bill, with certain exceptions, no person may sell or distribute, or possess with the intent to sell or distribute, marijuana unless the person has a permit from the Department of Revenue. The penalties for violating the prohibition vary depending on the recipient, the age of the violator, and the amount of marijuana involved.

If a person who is at least 21 violates the prohibition on selling, or possessing with the intent to sell, marijuana, the person is guilty of a misdemeanor and subject to a fine of not more than $500 if the violation involves not more than one ounce of marijuana, the person is guilty of a misdemeanor and subject to a fine of not more than $1,000 if the violation involves more than one ounce but not more than 10 ounces, the person is guilty of a misdemeanor and subject to a fine of not more than $5,000 if the violation involves more than 10 ounces but not more than 15 ounces, and the person is guilty of a Class I felony if the violation involves more than 15 ounces. If a person who is at least 21 violates the prohibition on selling, or possessing with the intent to sell, marijuana and the recipient is under 21 and at least three years younger than the person, then the person is guilty of a misdemeanor and subject to fine of not more than $1,000 or imprisonment for up to 90 days or both if the violation involves not more than five ounces and is guilty of a Class H felony if the violation involves more than five ounces. If a person who is under 21 violates the prohibition on selling, or possessing with the intent to sell, marijuana, the person is subject to a forfeiture of not more than $100 if the violation involves not more than five ounces, guilty of a misdemeanor and subject to a fine of not more than $500 if the violation involves more than five ounces but not more than 20 ounces, and guilty of a misdemeanor and subject to a fine of not more than $1,000 or imprisonment for not more than 90 days or both if the violation involves more than 20 ounces. The prohibition on sales does not apply to a sale of not more than one-quarter of an ounce to a person who is at least 21 if the compensation the seller receives for the sale is less than or equal to the amount the seller paid for the marijuana.

If a person who is at least 21 violates the prohibition on distributing, or possessing with the intent to distribute, marijuana, the person is subject to a forfeiture of not more than $250 if the violation involves not more than five ounces of marijuana, and the person is guilty of a misdemeanor and subject to a fine of not more than $500 if the violation involves more than five ounces. If a person who is at least 21 violates the prohibition on distributing, or possessing with the intent to distribute, marijuana and the recipient is under 21 and at least three years younger than the person, then the person is guilty of a misdemeanor and subject to a fine of not more than $1,000 or imprisonment for up to 90 days or both if the violation involves not more than five ounces and is guilty of a Class H felony if the violation involves more than five ounces. If a person who is under 21 violates the prohibition on distributing, or possessing with the intent to distribute, marijuana, the person is subject to a forfeiture of not more than $100 if the violation involves not more than five ounces, guilty of a misdemeanor and subject to a fine of not more than $500 if the violation involves more than five ounces but not more than 20 ounces, and guilty of a misdemeanor and subject to a fine of not more than $1,000 or imprisonment for not more than 90 days or both if the violation involves more than 20 ounces. The prohibition on distribution does not apply if the distribution involves not more than one-quarter of an ounce and is to a person who is at least 21 or if the distribution involves less than five ounces and is made to a person who cohabitates with the distributor.

The bill requires a person to obtain separate permits from DOR to produce, process, distribute, or sell marijuana or to sell marijuana for on-premises consumption (marijuana lounge), and requires marijuana producers and processors to obtain additional permits from the Department of Agriculture, Trade and Consumer Protection. The requirements for obtaining these permits differ based on whether the permit is issued by DOR or DATCP but, in general, a person may not obtain such a permit if he or she is not a state resident, is under the age of 21, or has been convicted of certain crimes or committed certain offenses. In addition, a person may not operate under a DOR or DATCP permit within 500 feet of a school, playground, recreation facility, child care facility, public park, public transit facility, or library, and a person may not operate a marijuana lounge unless the municipality or county in which the marijuana lounge is located has enacted an ordinance authorizing such operation. A person who holds a permit from DOR must also comply with certain operational requirements.

Under the bill, a permit applicant with 20 or more employees may not receive a permit from DATCP or DOR unless the applicant certifies that the applicant has entered into a labor peace agreement with a labor organization. The labor peace agreement prohibits the labor organization and its members from engaging in any economic interference with persons doing business in this state, prohibits the applicant from disrupting the efforts of the labor organization to communicate with and to organize and represent the applicant's employees, and provides the labor organization access to areas in which the employees work to discuss employment rights and the terms and conditions of employment. Current law prohibits the state and any local unit of government from requiring a labor peace agreement as a condition for any regulatory approval. The permit requirements under the bill are not subject to that prohibition.

The bill also requires DATCP and DOR to use a competitive scoring system to determine which applicants are eligible to receive permits. Each department must issue permits to the highest scoring applicants that it determines will best protect the environment; provide stable, family-supporting jobs to local residents; ensure worker and consumer safety; operate secure facilities; and uphold the laws of the jurisdictions in which they operate. Each department may deny a permit to an applicant with a low score.

The bill prohibits a DOR permittee from selling, distributing, or transferring marijuana to a minor and from allowing a minor to be on premises for which a permit is issued. If a permittee violates one of those prohibitions, the permittee may be subject to a civil forfeiture of not more than $500 and the permit may be suspended for up to 90 days.

Under the bill, a minor, except a minor who is a qualifying patient, who does any of the following is subject to a forfeiture of not more than $250: procures or attempts to procure marijuana from a permittee; falsely represents his or her age or falsely represents that he or she is a qualifying patient to receive marijuana from a permittee; or knowingly enters any premises for which a permit has been issued without being accompanied by his or her parent, guardian, or spouse who is at least 21 years of age.

Under the bill, an individual may cultivate as many as six marijuana plants. Only a person who has a permit from DATCP may produce or process more marijuana plants. A person without a permit who possesses more than six but not more than 12 marijuana plants that have reached the flowering stage is subject to a forfeiture not to exceed twice the permitting fee ($250 under the bill). If the person possesses more than 12 plants that have reached the flowering stage, the person is guilty of a misdemeanor and subject to a fine not to exceed $1,000 or imprisonment not to exceed 90 days or both. The person is guilty of a Class I felony if the person also takes action to hide the number of plants he or she has and the person also has in place a security system to alert him or her to the presence of law enforcement or a method to intimidate, or a system that could injure or kill, a person approaching the area containing the plants.

The bill requires DOR to create and maintain a medical marijuana registry program whereby a person who is a qualifying patient may obtain a registry identification card and purchase marijuana from a retail establishment without having to pay the sales or excise taxes imposed on that sale. A “qualifying patient” is a person who has been diagnosed by a physician as having a debilitating medical condition such as cancer, glaucoma, AIDS, or another specified condition or is undergoing a debilitating medical treatment.

Previous convictions relating to marijuana

The bill requires the director of state courts to review records of acts that have been decriminalized under the bill. If a record is for a conviction for an act that the bill decriminalizes or lessens the penalty for, the sentencing court must be notified. If the act was a misdemeanor, the court must dismiss the conviction and expunge the record or, if applicable, redesignate it to a lesser crime. If the act was a felony, the court must determine if it is in the public interest to dismiss the conviction and expunge the record or, if applicable, redesignate it to a lesser crime. The presumption is that such actions are in the public interest unless there is clear and convincing evidence that the actions would create a risk to public safety. If the felony is expunged or redesignated to a misdemeanor or civil forfeiture, the sentencing court must determine if there is good cause to restore the person's right to possess a firearm. Finally, if the record is for an arrest or a charge for an act that the bill decriminalizes or lessens the penalty for, the director of state courts must expunge such records.

Registration for THC testing labs

The bill requires DATCP to register entities as tetrahydrocannabinols (THC)-testing laboratories. The laboratories must test marijuana for contaminants; research findings on the use of medical marijuana; and provide training on safe and efficient cultivation, harvesting, packaging, labeling, and distribution of marijuana, security and inventory accountability, and research on medical marijuana.

Discrimination based on marijuana use

Under the fair employment law, no employer or other person may engage in any act of employment discrimination against any individual on the basis of the individual's use or nonuse of lawful products off the employer's premises during nonworking hours, subject to certain exceptions, one of which is if the use impairs the individual's ability to undertake adequately the job-related responsibilities of that individual's employment. The bill specifically defines marijuana as a lawful product for purposes of the fair employment law, such that no person may engage in any act of employment discrimination against an individual because of the individual's use of marijuana off the employer's premises during nonworking hours, subject to those exceptions.

Under current law, an individual may be disqualified from receiving unemployment insurance benefits if he or she is terminated because of misconduct or substantial fault. The bill specifically provides that an employee's use of marijuana off the employer's premises during nonworking hours does not constitute misconduct or substantial fault unless termination for that use is permitted under one of the exceptions under the fair employment law.

Unless federal law requires otherwise, the bill prohibits a hospital, physician, organ procurement organization, or other person from determining the ultimate recipient of an anatomical gift on the sole basis of a positive test for the use of marijuana by a potential recipient.

Drug screening and testing

The bill exempts THC, including marijuana, from drug testing for certain public assistance programs. Currently, a participant in a community service job or transitional placement under the Wisconsin Works program (W2) or a recipient of the FoodShare program, also known as the food stamp program, who is convicted of possession, use, or distribution of a controlled substance must submit to a test for controlled substances as a condition of continued eligibility. The Department of Health Services is currently required to request a waiver of federal Medicaid law to require drug screening and testing as a condition of eligibility for the childless adult demonstration project in the Medical Assistance program. Current law also requires DHS to promulgate rules to develop and implement a drug screening, testing, and treatment policy for able-bodied adults without dependents in the FoodShare employment and training program. The bill exempts THC from all of those drug-testing requirements and programs. In addition, because THC is not a controlled substance under state law under the bill, the requirement under current law that the Department of Children and Families promulgate rules to create a controlled substance abuse screening and testing requirement for applicants for the work experience program for noncustodial parents under W2 and the Transform Milwaukee Jobs and Transitional Jobs programs does not include THC.

Under current law, the Department of Workforce Development must establish a program to test claimants who apply for unemployment insurance benefits for the presence of controlled substances, as defined under federal law. If a claimant tests positive for a controlled substance, the claimant may be denied UI benefits, subject to certain exceptions and limitations. The bill excludes THC for purposes of this testing requirement. As such, under the bill, an individual who tests positive for THC may not be denied UI benefits.

Equity grants and program for law enforcement training

The bill provides for a number of grants to be paid from the revenue generated from the excise tax on marijuana that is deposited into the community reinvestment fund. For example, the bill requires the Department of Administration to provide grants to public, private, and nonprofit entities in this state that promote diversity and advance equity and inclusion, including promoting the inclusion of women and racial and ethnic minorities in the production and sale of marijuana. In addition, the bill directs DHS to award grants to community organizations to implement community health worker care models. The bill also directs DHS to award grants to community organizations and local or tribal health departments to hire health equity strategists and to implement health equity action plans in small geographic areas.

The bill appropriates $125,000 in fiscal year 2023-24 and $250,000 in fiscal year 2024-25 for the Department of Transportation's Drug Evaluation and Classification Program. The program provides training for law enforcement officers and others in the recognition of drug influence and impairment.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB506,1 Section 1 . 16.282 of the statutes is created to read:

AB506,8,5 16.282 Equity grants. The department shall develop and administer a grants program to provide grants to public, private, and nonprofit entities in this state that promote diversity and advance equity and inclusion, including promoting the inclusion of women and racial and ethnic minorities in the production and sale of marijuana.

AB506,2 Section 2 . 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table - See PDF for table - See PDF for table - See PDF for table - See PDF for table - See PDF for table

AB506,3 Section 3. 20.115 (7) (gc) of the statutes is amended to read:

AB506,9,4 20.115 (7) (gc) Industrial hemp and marijuana. All moneys received under s. 94.55 for regulation of activities relating to industrial hemp under s. 94.55 and to marijuana under s. 94.56.

AB506,4 Section 4 . 20.115 (7) (ge) of the statutes is created to read: