SB 281 — Enacts provisions relating to certain products containing hemp. (BDR 32-974)

REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 10, 11) (Reprinted with amendments adopted on April 19, 2021) FIRST REPRINT S.B.

prohibiting a person from selling or offering to sell a consumable hemp product unless the product satisfies certain requirements established by the State Department of Agriculture;Health and Human Services;

Existing law providesprohibits fora theperson regulationfrom ofselling growersor andoffering handlersto ofsell hempany andcommodity producersor ofproduct agriculturalcontaining hemp seedwhich byis intended for human consumption unless the Statecommodity or product has been tested and labeled in accordance with requirements the Department ofto Agriculture.adopt regulations establishing such requirements.

and(NRS Human439.532) ServicesSection to40 establish requirements for the testing and labeling of commoditiesthis andbill productsrepeals thatthose containprovisions hempthat: which are intended for human consumption.

(NRS(1) 439.532)prohibit Sectionthe 40sale ofor thisoffering billfor repealssale theof requirementa thatcommodity theor Departmentproduct ofthat Healthcontains andhemp Humanthat Servicesis regulateintended commoditiesfor andhuman productsconsumption thatunless containthe hempcommodity whichor areproduct intendedmeets forcertain humanrequirements; consumption.

Sectionsand 25-37(2) ofrequire thisthe Department ofto Agriculture.adopt regulations establishing such requirements.

Section“consumable hemp products,” which are defined in section 26 of this bill definesgenerallyto “consumable- hempe*SB281_R1* State– product”2 generally– tohemp meanthat athe commodityUnited orStates productFood thatand containsDrug hempAdministration has determined to be safe for human consumption, and:

(1) has -a *SB281*THC –concentration 2that –does not exceed the maximum THC concentration for hemp established by federal law;

SectionSections 3125-37 of thisthe bill prohibitsprovide afor personthe fromregulation sellingof or offering to sell a consumable hemp productproducts unless the product has been tested and labeled in accordance with requirements set forth by the StateDepartment. Department of Agriculture.

Section 3234 of this bill requiresauthorizes the Department and a personlocal whoboard wishesof health to sellinvestigate aapparent consumableviolations hempof productthe toprovisions firstof submitsections that25-37 productand toauthorizes representatives of the Department orand a cannabislocal independentboard testingof laboratoryhealth forto testing.inspect any authorizes the Department to bring an action to enjoin violations of the provisions of sections 25-37.

Section 39 of this bill authorizes a cannabis Department to adopt certain regulations relating to the testing of consumable hemphe products and the standards that such products must satisfy.

Section 33 of this bill requires the Department to adopt regulations establishing requirements for the labeling of consumable hemp products.

Section 34 of this bill authorizes the Department to investigate apparent violations of the provisions of sections 25-37 and authorizes representatives of the Department to inspect any premises at which a consumable hemp product is sold.

violations of the provisions of sections 25-37.

Section 38 of this bill makes a conforming change to reflect the repeal of the previous authority of the Department of Health and Human Services to regulate commodities and products that contain hemp.hemp and the addition of sections 25-37 governing the regulation of consumable hemp products by Section 4 of this bill defines “consumable hemp product retailer” to mean a person who makes any retail sales of consumable hemp products.

Section 411 of this bill defines “consumable hemp product retailer” to mean a bill imposes an excise tax on each retail sale of consumable hemp products by aisa consumable hemp product retailer at the rate of 13 percent of the sales price of the consumable hemp products.

(1) to the State Department of AgricultureHealth and Human Services in an amount necessary to carry out the provisions of sections 25-37;25- the provisions of existing law governing the regulation of growers and handlers of hemp and producers of agricultural hemp seed;

and (2)(3) if any money remains, to the State Education Fund.

Sections 2-10 and 12-20 of this bill provide generally for the administration and enforcement of the excise tax on consumable hemp products.

Section 8 of this bill adopts by reference provisions of general applicability relating to the payment, collection,require administrationa consumable hemp product retailer to maintain certain records and enforcementprovidel for the inspection of taxes.those records by the Department of Taxation.

Sections 912-14, 21 and 1022 of this bill requireadopt aprovisions consumablegoverning hemppenalties productfor retailerfailures to maintainpay, certainclaims recordsfor refunds and providecredits forand the inspectionpayment of thoseinterest recordson byany overpayment of the Departmentexcise oftax Taxation.on consumable hemp products.

SectionsSection 12-14,15 21 and 22 of this bill adoptsets provisionsforth governing penalties for failures to pay, claims for refunds and credits and the payment of interest on any overpayment of procedure by which the denial of a claim for a refund or credit may be appealed to the Nevada Tax Commission.

Section 16 of this bill denies standing to commence or maintain a proceeding for judicial review to anyone other than the person who madeproceeding, section 17 of this bill provides for the disputedallowance payment.and computation of interest on the amount found to have been erroneously or illegally collected.

IfSection judgment18 isof renderedthis forbill theprohibits claimantproceedings into suchprevent aor proceeding,enjoin sectionthe 17collection of thisthe billtax providesand forrequires thethat allowancea andtimely computationclaim offor interesta onrefund theor amountcredit foundbe made as a prerequisite to haveany beenproceeding erroneouslyfor orthe illegallyrecovery collected.of a refund.

Section 1819 of this bill prohibitsmakes proceedingsit a gross misdemeanor for any person to preventfile a false or enjoinfraudulent return or engage in other conduct with intent to defraud the collectionState or evade payment of prerequisitethe toadministration anyof proceedingthe fortax are cumulative.t the recoveryremedies of athe refund.State relating to the - *SB281_R1* – 3 – THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 19 of this bill makes it a gross misdemeanor for any person to file a false or fraudulent return or engage in other conduct with intent to defraud the State or evade payment of the tax.

Section 20 of this bill provides that the remedies of the State relating to the administration of the tax are cumulative.

- *SB281* – 3 – THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

To verify the accuracy of any return filed by a consumable hemp product retailer or, if no return is filed, to determine the amount required to be paid, the Department, or any - *SB281**SB281_R1* – 4 – person authorized in writing by the Department, may examine the books, papers and records of any person who may be liable for the excise tax on consumable hemp products.

An excise tax is hereby imposed on each retail sale in this State of consumable hemp products by a consumable hemp product retailer at the rate of 13 percent of the sales price of the consumable hemp products.

(a) The State Department of AgricultureHealth and Human Services in an amount determined to be necessary by the State Department of AgricultureHealth and Human Services to pay the costs of carrying out the provisions of the chapter consisting of sections 25 to 37, inclusive, of this act;

and (b) IfThe anyState moneyDepartment remainsof afterAgriculture thein revenuesan areamount distributeddetermined pursuant to paragraphbe (a),necessary toby the State TreasurerDepartment toof beAgriculture deposited to pay the creditcosts of carrying out the Stateprovisions Educationof Fund.chapter 557 of NRS;

and (c) If any money remains after the revenues are distributed pursuant to paragraphs (a) and (b), to the State Treasurer to be deposited to the credit of the State Education Fund.

If approved by the State Board of Examiners, the excess - *SB281_R1* – 5 – amount collected or paid must, after being credited against any amount then due from the person in accordance with NRS 360.236, be refunded to the person or his or her successors in interest.

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Except as otherwise provided in this section, NRS 360.320 or any other specific statute, and notwithstanding the provisions of NRS 360.2935, interest must be paid upon an overpayment of any tax provided for in chapter 362, 363A, 363B, - *SB281* – 7 – 363C, 369, 370, 372, 372B, 374, 377, 377A, 377C or 377D of NRS [,] or the chapter consisting of sections 2 to 20, inclusive, of this act, any of the taxes provided for in NRS 372A.290, any fee provided for in NRS 444A.090 or 482.313, or any assessment provided for in NRS 585.497, at the rate of 0.25 percent per month from the last day of the calendar month following the period for which the overpayment was made.

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