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HomeMy WebLinkAbout03-06-2023 City Council Work Session Packet CITY COUNCIL WORK SESSION Mayor Amáda Márquez Simula Councilmembers Connie Buesgens Kt Jacobs Rachel James Justice Spriggs City Manager Kelli Bourgeois Public Safety Bldg—Training Room, 825 41st Ave NE Monday, March 06, 2023 6:00 PM AGENDA ATTENDANCE INFORMATION FOR THE PUBLIC Members of the public who wish to attend may do so in-person, by calling 1-312-626-6799 and entering meeting ID 861 4690 4172 or by Zoom at https://us02web.zoom.us/j/86146904172. For questions please call the Administration Department at 763-706-3610. CALL TO ORDER/ROLL CALL WORK SESSION ITEMS 1. Sustainability Commission Draft Ordinance and Interview Questions. (20 Minutes) 2. THC Moratorium Update and State Legalization Overview. (10 Minutes) 3. NIMS Training for Council. (5 Minutes) 4. Introduction to Property Maintenance and Rental Licensing. (45 Minutes) 5. Single Family Rental Moratorium, Density Cap, and Accessory Dwelling Unit (ADU) Discussion. (30 Minutes) 6. Discuss Special Services District for Central Avenue Snow Removal. (10 Minutes) 7. SACA Relocation and Deadline for City Owned Lot. (10 Minutes) 8. Youth Commission Membership Number and Appointment Process. (10 Minutes) 9. Board and Commission Interviews Scheduled for March 13th and 14th. (5 Minutes). ADJOURNMENT Auxiliary aids or other accommodations for individuals with disabilities are available upon request when the request is made at least 72 hours in advance. Please contact Administration at 763-706-3610 to make arrangements. 1 CITY COUNCIL MEETING AGENDA SECTION WORK SESSION MEETING DATE MARCH 6, 2023 ITEM: Sustainability Commission Draft Ordinance and Interview Questions. DEPARTMENT: Public Works BY/DATE: Sulmaan Khan / March 1, 2023 CITY STRATEGY: (please indicate areas that apply by adding a bold “X” in front of the selected text below) _Safe Community _Diverse, Welcoming “Small-Town” Feel _Economic Strength _Excellent Housing/Neighborhoods _Equity and Affordability _Strong Infrastructure/Public Services _Opportunities for Play and Learning X Engaged, Multi-Generational, Multi-Cultural Population BACKGROUND: The Columbia Heights City Council has made a decision to establish a new Sustainability Commission within the City. Assistant City Engineer, Sulmaan Khan, will share and discuss a new draft City Ordinance for the Sustainability Commission as well as share and discuss a draft Sustainability Commission Overview and Job Description. ATTACHMENT: Draft Sustainability Commission Ordinance Draft Sustainability Commission Overview and Job Description 2 Item 1. Sustainability Commission City Ordinance § 3.3XX SUSTAINABILITY COMMISSION. (A) Establishment. A Sustainability Commission is hereby established. (B) Membership. The Sustainability Commission shall be composed of nine members. The Public Works Director, or a person designated by the Public Works Director, shall serve as an ex officio member of the Commission. (C) Authority and Duties. The Sustainability Commission shall serve as an advisory body to the Council and the administrative service of the city. The Commission shall advise and make recommendations to the City Council on how to operate in an environmentally, socially, and economically sustainable manner within the city on its own initiative, or as referred to the Commission by the Council or the administrative service of the city. The Commission shall conduct public hearings as are necessary to give full consideration to such matters. Written recommendations shall be forwarded to the Council and the Manager. (D) Following Council action, the City Manager shall direct the administrative service to act on said recommendation(s). (E) The Sustainability Commission shall recommend improvements or initiatives related to sustainability as may be necessary and desirable, but shall at all times be subject to the direction and authority of the Council, and the right of the Council to direct that the Commission recommendations be modified or not pursued. (F) Where required by the laws of the State of Minnesota, consent of any applicable agency officials for recommendations and findings that have impacts to right of way not within the exclusive jurisdiction of the City shall be obtained prior to formal Council action on the Commission's recommendations. 3 Item 1. Columbia Heights Sustainability Commission Commission Overview and Member Position Description Sustainability Commission Overview The Traffic Commission is a voluntary resident advisory commission whose purpose is to advise and make recommendations on how to operate in an environmentally, socially, and economically sustainable manner. Meeting Date and Time: TBD Membership: Nine Columbia Heights residents appointed by the City Council for three-year terms. The Public Works Director, or person designated by the Public Works Director, will serve as an ex-officio member of this commission. A City Council member serves as liaison to the City Council. Sustainability Commission Member Position Description Terms: 3 years from April 1 to March 31. Members are limited to two consecutive full terms. Necessary Qualifications: Be a current resident of the City of Columbia Heights. Desired Qualifications: The Sustainability Commission is ideally made up of a diverse array of community members with different skills, experiences, and talents. Some combination of the following qualifications is ideal:  A willingness and ability to engage with the public and to understand and represent the views and opinions of diverse community members  The ability to function well in group discussions, and to work in a flexible way with others who have a diversity of opinions and interests  The ability to assess information and make important decisions  Excellent communication skills  A strong sense of legal and ethical conduct appropriate to the position  The courage to state one’s views on important issues and speak openly and directly, though always respectfully, with staff and other commission members  Some basic understanding of the broader structures of city governance in Columbia Heights and of the issues facing the City Requirements and Expectations:  Read distributed materials before each meeting  Attend and participate in monthly meetings (length varies but typically 1 hour or less) and let the staff liaison know if you are unable to attend  Reviews, drafts, and recommends sustainability proposals including, but not limited to developing policies and programs related to reducing carbon emissions, conserving natural resources, promoting social equity, and ensuring economic prosperity  Hold public hearings to hear the views regarding sustainability proposals  Seek public input  Educate the public and promote sustainable measures and practices within the City 4 Item 1. CITY COUNCIL WORK SESSION AGENDA SECTION WORK SESSION ITEMS MEETING DATE 3/6/23 ITEM: THC Moratorium Update and State Legalization Overview DEPARTMENT: Community Development BY/DATE: Mitchell Forney, 2/23/23 CITY STRATEGY: X Safe Community _Diverse, Welcoming “Small-Town” Feel _Economic Strength _Excellent Housing/Neighborhoods _Equity and Affordability _Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population THC LEGISLATIVE BACKGROUND AND CITY RESPONSE: Towards the end of the 2022 legislative session, the State of Minnesota passed a law amending state statute which legalized the sale of edible cannabinoids derived from hemp. In reaction to the new law, the City placed a temporary moratorium on the production and sale of hemp derived THC food and bevera ges. Staff have continued work on the goals of the moratorium and would like to update the new Council on the current state of THC regulations not only within the City but also within the state. Effective July 1, 2022, state law amended MN state statute Ch. 151.72 subd.1-6 and chapter 152.02 to legalize the sale and production of edible cannabinoid products. Products defined in the amendment are not considered controlled substances and have been removed from the schedule 1 drug classification under state law. These products must meet a variety of requirements but most importantly they cannot contain more than 0.3 percent of any tetrahydrocannabinol and must not contain more than five milligrams of any tetrahydrocannabinol in a single serving, and no more th an a total of 50 milligrams of any tetrahydrocannabinol per package. The new law established a variety of testing procedures and labeling requirements with regard to the allowed amount of THC and prescribed packaging . Under the new law, enforcement of the state regulations falls on the Minnesota Board of Pharmacy. Packaging and laboratory reports are not required to be submitted to the board but are only required if the Board of Pharmacy requests them. The Minnesota Board of Pharmacy is not proactively reviewing products but will conduct required actions upon receiving a complaint. On August 22, 2022, the City Council passed Ordinance 1679 placing a moratorium on the production and sale of hemp derived THC food and beverages. The purpose of establishing a moratorium was to put a hold on new THC related business from entering the City. This space was meant to give staff the time necessary to establish zoning and licensing procedures related to the new products. To accomplish the goals of the moratorium Community Development staff put together a THC work group. The work group consisted of police and fire department staff, the manager of the liquor store s, and three local business owners. Before the first work group meeting, staff created a draft ordinance based off of other communities ordinances and current Columbia Heights liquor and tobacco ordinances. At the work group session, the group walked through the draft ordinance and created a plan for adjusting it to fit with the 5 Item 2. City of Columbia Heights - Council Letter Page 2 community. Some of the major concerns brought up by the work group were making sure that the establishments were far enough away from schools, playgrounds, etc., and ensuring that there were not any major barriers to entry for small businesses. Staff made edits to the ordinance and presented the ordinance as seen in your packet as the final draft before bringing it to the Council. The attached ordinance establishes the licensing procedures for hemp derived THC involved businesses. The ordinance follows very closely the policies and procedures used in our tobacco and alcohol licensing. Staff found that the City’s zoning code was already comprehensive enough to limit THC related business to commercial areas. Which makes a zoning code amendment not necessary currently. Staff also worked with the work group to create a THC Containing Beverage License. That Ordinance would have allowed for that license to be added on to beer and wine license holders. The THC Containing Beverage ordinance has not been included as it is in rough draft form and has been rendered irrelevant due to recent state actions. The THC Containing Beverage License was established from current beer and wine license requirements along with those rules outlined in the attached draft ordinance. NEW LEGALIZATION LEGISLATION: Early in the 2023 legislative session, Representative Stephenson introduced House File 100 (H.F. 100). H.F. 100 is considered the main text with regards to the legalization of cannabis and THC Containing products. There is also a senate file moving through the senate paralleling the path of H.F. 100. As it stand s, H.F. 100 legalizes cannabis, establishes the office of cannabis management, and hashes out all related aspects of regulating the industry. The bill itself is 321 pages long and covers almost every aspect of state regulation. Currently H.F. 100 has made its way through 10 of the 14 planned committee hearings, receiving testimony and deliberating amendments along the way. As it affects cities, H.F. removes a lot of control from all counties and municipalities. Until a recent amendment, cities had no control over zoning, licensing, or outright outlawing these products. To ensure a universal standard, all licensing will be done by the state in the current draft of the bill. However, a recent an amendment to the bill established local registration. If approved with this amendment, local registration would be required to sell cannabinoid products and municipalities could charge up to $200 for a registration fee. By inserting cities into the registration process, the law allows cities to have leverage over businesses that are not operating within the confines of state law. While not an entire licensing program, local registration moves closer to allowing cities some control over these businesses. The entirety of the city’s powers can be found in attachment three, which is the amendment that was adopted to H.F.100. RECOMMENDATION: Considering recent developments at the state level with H.F. 100, Community Development staff recommend holding off on any THC related decisions until the state identifies a clearer path forward regarding the regulation of THC and cannabis. As stated above, the current house file has been thoroughly amended and still has a long way to go before it becomes law. Cities have been given a degree of licensing authority recently, but it is still up in the air on how much a city will b e responsible for. Holding off on pushing any THC related ordinance forward will save staff time and prevent confusion from local businesses. By the time a THC resolution or licensing program would take effect, the state will have changed at least a portion of the licensing program, which could result in THC related businesses being billed for a license that will become obsolete. Part of the state law creates a route for the newly established commission to assist local governments in establishing ordinances after the law is changed. Staff recommend maintaining the moratorium until the state and city establish a congruent licensing procedure or the moratorium lapses on 6 Item 2. City of Columbia Heights - Council Letter Page 3 August 22nd, 2023. This topic can be revisited if the council would like to reconsider its path ahead in June, especially if the state fails to pass any guidance. ATTACHMENT(S):  Draft THC Licensing Ordinance  House Research HF 100 Summary  H.F. 100 Amendment A47 7 Item 2. §XXXX DEFINITIONS. Except as may otherwise be provided or clearly implied by context, all terms shall be given their commonly accepted definitions. For the purpose of this article, the following definitions shall apply unless the context clearly indicates or requires a different meaning. Compliance Checks. The system the City uses to investigate and ensure that those authorized to sell licensed products are following and complying with the requirements of this article. Compliance checks shall involve the use of persons under 21 who purchase or attempt to purchase licensed products. Compliance checks may also be conducted by the City or other units of government for educational, research, and training purposes, or for investigating or enforcing Federal, State, or local laws and regulations relating to licensed products. Licensed THC Containing Product or Licensed Product. Any product that contains tetrahydrocannabinol and that meets the requirements to be sold for human or animal consumption under Minnesota Statutes, section 151.72, as may be amended from time to time. Licensed product does not include medical cannabis as defined in Minnesota Statutes, section 152.22, subdivision 6, as may be amended from time to time. Moveable Place of Business. Any form of business operated out of a kiosk, truck, van, automobile, or other type of vehicle or transportable shelter and not a fixed address storefront or other permanent type of structure authorized for sales transactions Retail Establishment. Any place of business where licensed products are available for sale to the general public, including, but not be limited to, grocery stores, tobacco products shops, CBD stores, convenience stores, gasoline service stations, bars, and restaurants. Sale. Any transfer of goods for money, trade, barter, or other consideration. Self-Service Merchandising. Open displays of licensed products in any manner where any person has access to the licensed products without the assistance or intervention of the licensee or the licensee's employee. Assistance or intervention means the actual physical exchange of the licensed product between the customer and the licensee or employee. Vending Machine. Any mechanical, electric, or electronic, or other type of device that dispenses licensed products upon the insertion of money, tokens, or other form of payment directly into the machine by the person seeking to purchase the licensed product. §XXXX LICENSE. (A) License Required. No person shall directly or indirectly deal in, sell, or keep for sale any licensed THC containing products, without first having received an off-sale THC containing product license as provided in this section. (B) Licensed Retailors. Only businesses that are defined below shall be allowed to obtain a license to sell licensed products as established in this chapter. (1) Businesses that have obtained a Smoke shop license. Or; 8 Item 2. (2) Businesses that derive at least 80% of the annual gross receipts from the sale of licensed THC containing products (as defined above), and products containing legal cannabinoids. (B) Number of Licenses. At any given time, there shall be no more than _ licensed THC containing product shops throughout the city, all with off-sale THC containing product licenses. (C) Application. An application for a license to sell licensed products shall be made on a form provided by the City and filed, along with all required fees, with the City’s licensing clerk. Upon receipt of a completed application, the Clerk shall forward the application to the Police Department for a background and record check prior to formal review by the City Council. If the Clerk shall determine that an application is incomplete, they shall return the application to the applicant with notice of the information necessary to make the application complete. The investigation fee is applied to the city's costs of the background investigation of the retail establishment and all person or entities that have at least a five percent financial interest in the retail establishment. The property must be in compliance with all applicable laws and ordinances. The public safety department shall conduct the background investigation before consideration by the city. All applications shall thereafter be considered and approved or denied by the city council. All applicants: (1) Whether the applicant/owner is an individual, corporation, partnership, or other form of organization; (2) Full name, address, date and place of birth, and telephone number of the applicant, all owners and operators, including the designated on-site manager or agent of the applicant; (3) The address of the premises where the retail establishment is to be located if proposed to have a fixed location in which the retail services are provided and if the applicant does not own the premises, a copy of the lease agreement to occupy the premises; (4) Statement of whether all taxes and special assessments due and owing on the premises on which the applicant proposes to operate the licensed business are current, and if taxes are delinquent, the years for which the taxes on the premises are delinquent (this information is required by the applicant only if the applicant or other entity in which the applicant has an interest has the legal duty to pay said property taxes or assessments due and owing); (5) The name of the business if the business is to be operated under a name or designation other than the name of the applicant. This shall be accompanied by a certified copy of the certificate required by Minn. Stats. §§ 333.01 and 333.02; (6) Proof of general liability insurance; (7) The applicant shall produce at time of filing application the applicant's proof of identification which may be established only by one of the following: 9 Item 2. (a)A valid driver's license or identification card issued by Minnesota, another state, or a province of Canada, and including the photograph and date of birth of the license person; (b) A valid military identification card issued by the United States Department of Defense; (c) A valid passport issued by the United States; or (d) In the case of a foreign national, by a valid passport. For purposes of proof of identification, the "applicant" shall mean the onsite manager or agent for a retail establishment filing the application and the natural person signing the application for a cannabinoid product license; (8) The application shall identify the full name, address, date and place of birth, and telephone number of the natural person, designated by the applicant as the cannabinoid product business's on-site manager or agent, along with the notarized written consent of such a person to: (a) take full responsibility for the conduct of the license premises operation; (b) serve as agent for service of notices and other process relating to the licenses; (9) With respect to the owner, operator, or any person who has a five percent financial interest in the proposed licensed cannabinoid product sales business and the appointed on-site manager or agent of the applicant, (10) information as to any and all criminal convictions of any state, county, or local law or regulation; (11) Proof of Workers' Compensation Insurance as required by Minnesota law; and (12) Information as to any and all criminal conviction(s) of any state, county, or local law or regulation; (13) Such other information as the city shall require. Individual(s) (sole proprietor): (1) The full name, address, date and place of birth, and telephone number of theapplicant; (2) Whether the applicant and on-site manager or agent have ever used or have been known by a name other than his or her name on the application, and if so, the name or names used and information concerning dates and places were used; (3) Whether the applicant is a United States citizen or is legally permitted to be in the United States and providing proof thereof; 10 Item 2. (4) The street and city addresses at which the applicant and on-site manager or agent lived during the preceding ten years; (5) Names, addresses, and date of the applicant's and on-site manager's or agent's employers for the preceding ten years; (6) Whether the applicant and on-site manager or agent have ever been engaged in the operation of cannabinoid and/or tobacco product sales. If so, they shall furnish information as to the name, place, and length of time of the involvement in such an establishment; and (7) Such other information as the city shall require. Partnerships: (1) The full name(s), address(s), date and place of birth, financial interest of all general partners and all of the information concerning each general partner that is required of applicants in provision (2) of this section; (2) The full names(s), addresses, date and place of birth, and telephone number of the manager partner(s) and the interest of each managing partner in the business; (3) A copy of the partnership agreement shall be submitted with the application. The license shall be issued in the name of the partnership; and (4) Such other information as the city shall require. Corporations and other organizations: (1) The name of the corporation or business firm, and if incorporated, the state of incorporation; (2) A copy of the certificate of incorporation shall be attached to the application. If the applicant is a foreign corporation, a certificate of authority as required by Minn. Stats. § 303.06, shall be attached; (3) The name of the manager(s), proprietor(s) or other agents(s) in charge of the business and all of the information concerning each manager, proprietor, or agent that is required of applicants in provision (2) of this section; (4) A list of all persons who own or have a five percent or more interest in the corporation or organization or who are officers of said corporation or organization, together with their addresses and all the information regarding such persons as is required in paragraph (2) of this section; and (5) Such other information as the city shall require. It is the duty of each business licensee to notify the City Clerk in writing of any change in ownership in the business. Any change in the ownership or control of the business shall be deemed equivalent to a transfer of the license, and any such license shall be revoked 30 days after any such change in ownership 11 Item 2. or control unless the licensee has notified the Council of the change in ownership by submitting a new license application for the new owners, and the Council has approved the transfer of the license by appropriate action. Any time an additional investigation is required because of a change in ownership or control of a business, the licensee shall pay an additional investigation fee to be determined by the City. The City may at any reasonable time examine the transfer records and minute books of any business licensee to verify and identify the owners, and the City may examine the business records of any other licensee to the extent necessary to disclose the interest which persons other than the licensee have in the licensed business. The Council may revoke any license issued upon its determination that a change of ownership of a licensee has actually resulted in the change of control of the licensed business so as materially to affect the integrity and character of its management and its operation, but no such action shall be taken until after a hearing by the Council on notice to the licensee. (C) Action. The City Council may either approve or deny the license, or it may delay action for such reasonable period of time as necessary to complete any investigation of the application or the applicant it deems necessary. If the City Council shall approve the license, the Clerk shall issue the license to the applicant. If the City Council denies the license, notice of the denial shall be given to the applicant along with notice of the applicant's right to appeal the City Council's decision. (D) Term. All licenses issued under this article shall follow the calendar year with an expiration date of December 31 of each year and are not pro-rated. (E) Revocation or suspension. Any license issued under this article may be revoked or suspended as provided in § 5.313. (F) Transfers. All licenses issued under this article shall be valid only on the premises for which the license was issued and only for the person or business to whom the license was issued. The transfer of any license to another location, business, or person is prohibited. (G) Moveable place of business. No license shall be issued to a moveable place of business. Only fixed location businesses shall be eligible to be licensed under this article. (H) Display. All licenses shall be posted and displayed in plain view of the general public on the licensed premise. (I) Renewals. The renewal of a license issued under this section shall be handled in the same manner as the original application. The request for a renewal shall be made at least 30 days but no more than 60 days before the expiration of the current license. (J) Issuance as privilege and not a right. The issuance of a license issued under this article shall be considered a privilege and not an absolute right of the applicant and shall not entitle the holder to an automatic renewal of the license. §XXXX FEES. No license will be issued under this article until the appropriate license fee and a non-refundable investigation fee is be paid in full. The license fee and investigation fee under this article shall be established by the City Council and adopted in the City fee schedule, which may be amended from time to time. 12 Item 2. §XXXX BASIS FOR DENIAL OF LICENSE. (A) Grounds for denying the issuance or renewal of a license under this article include, but are not limited to, the following: (1) The applicant is under the age of 21 years. (2) The applicant is prohibited by Federal, State, or other local law, ordinance, or other regulation from holding a license. (3) The applicant is a business that does not have an operating officer or manager who is eligible pursuant to the provisions of this article. (4) The applicant has been convicted within the past five years for any violation of a Federal, State, or local law, other ordinance, provision, or other regulation relating to the licensed products. (5) The applicant has had a license to sell licensed products suspended or revoked during the 12 months preceding the date of application, or the applicant has or had an interest in another premises authorized to sell licensed products, whether in the City or in another jurisdiction, that has had a license to sell licensed products suspended or revoked during the same time period, provided the applicant had an interest in the premises at the time of the revocation or suspension, or at the time of the violation that led to the revocation or suspension. (6) The applicant fails to provide any information required on the application or provides false or misleading information. Any false statement on an application, or any willful omission of any information called for on such application form, shall cause an automatic refusal of license, or if already issued, shall render any license issued pursuant thereto void and of no effect to protect the applicant from prosecution for violation of this chapter, or any part thereof. (B) No license shall be issued to any applicant for a location within 300 feet of any school, church, playground, or athletic field, unless such license has been previously approved when no school, church, playground, or athletic field was so situated. (C) No license shall be granted or renewed for operation on any premises on which real estate taxes, assessments, or other financial claims of the City or of the State are due, delinquent, or unpaid. If an action has been commenced pursuant to the provisions of Minnesota Statutes, Chapter 278, questioning the amount or validity of taxes, the Council may, on application by the licensee, waive strict compliance with this provision; no waiver may be granted, however, for taxes, or any portion thereof, which remain unpaid for a period exceeding one year after becoming due unless such one-year period is extended through no fault of the licensee. (D) If a license is mistakenly issued or renewed to a person, it shall be revoked upon the discovery that the person was ineligible for the license under this article. The City will provide the license holder with notice of the revocation, along with information on the right to appeal. §XXXX PROHIBITED ACTS 13 Item 2. (A) In General. (1) No person shall sell or offer to sell any licensed product: (a) By means of any type of vending machine. (b) By means of self-service merchandising. (c) By any other means, to any other person, or in any other manner or form prohibited by federal, state or other local law, ordinance provision, or other regulation. (d) Before 8:00 a.m. and after 10:00 p.m. daily. (2) No person shall sell or offer for sale a product containing THC that does not meet all the requirements of Minnesota Statutes, section 151.72, subdivision 3. (B) Legal Age. No person shall sell any licensed product to any person under the age of 21. (1) Age verification. Licensees shall verify by means of government issued photographic identification that the purchaser is at least 21 years of age. Verification is not required for a person over the age of 30. That the person appeared to be 30 years of age or older does not constitute a defense to a violation of this subsection. (2) Delivery. Licensees shall verify by means of government issued photographic identification that the purchaser and person receiving the delivery are at least 21 years of age. The licensee shall confirm the age of the person receiving the delivery in person before leaving licensed products. (C) Samples Prohibited. Sampling of cannabinoid products Within any retail establishment licensed under this ordinance is prohibited. No person shall distribute samples of any cannabinoid products free of charge or at a nominal cost. The distribution of cannabinoid products as a free donation or free via coupon is prohibited. §XXXX LICENSE HOLDER RESPONSIBILITY All licensees are responsible for the actions of their employees regarding the sale, offer to sell, and furnishing of licensed products on the licensed premises. The sale, offer to sell, or furnishing of any licensed product by an employee shall be considered an act of the licensee. Nothing in this section shall be construed as prohibiting the City from also subjecting the employee to any civil penalties that the City deems to be appropriate under this ordinance, state or federal law, or other applicable law or regulation. §XXXX COMPLIANCE CHECKS AND INSPECTIONS All premises licensed under this subdivision shall be open to inspection by the City during regular business hours. From time to time, but at least once per year, the City shall conduct compliance checks. 14 Item 2. No person used in compliance checks shall attempt to use a false identification misrepresenting their age. All persons lawfully engaged in a compliance check shall answer all questions about their age asked by the licensee or their employee, and produce any identification, if any exists, for which they are asked. The City will conduct a compliance check that involves the participation of a person at least 18 years of age, but under the age of 21 to enter the licensed premises to attempt to purchase the licensed products. Persons used for the purpose of compliance checks shall be supervised by law enforcement or other designated personnel. Nothing in this article shall prohibit compliance checks authorized by state or federal laws for educational, research, or training purposes, or required for the enforcement of a particular State or Federal law. Additionally, from time to time, the City will conduct inspections to determine compliance with any or all other aspects of this ordinance. §XXXX VIOLATIONS AND PENALTY (A) Violations. (1) Notice. Upon discovery of a suspected violation, the alleged violator shall be issued, either personally or by mail, a citation that sets forth the alleged violation and which shall inform the alleged violator of his right to be heard on the accusation. (2) Hearings. If a person accused of violating this article so requests, a hearing shall be scheduled, the time and place of which shall be published and provided to the accused violator. (3) Hearing Officer. The City Council, or representative designated by the City Council, shall serve as the hearing officer. (4) Decision. If the hearing officer determines that a violation of this article did occur, that decision, along with the hearing officers’ reasons for finding a violation and the penalty to be imposed under division (B) of this section, shall be recorded in writing, a copy of which shall be provided to the accused violator. Likewise, if the hearing officer finds that no violation occurred or finds grounds for not imposing any penalty, such findings shall be recorded, and a copy provided to the acquitted accused violator. (5) Appeals. Appeals of any decision made by the hearing officer shall be filed in the district court for the city in which the alleged violation occurred. (6) Misdemeanor prosecution. Nothing in this section shall prohibit the city from seeking prosecution as a misdemeanor for any alleged violation of this article. (7) Continued violation. Each violation, and every day in which a violation occurs or continues, shall constitute a separate offense. (B) Administrative procedures. (1) Minimum penalty. The purpose of this section is to establish a standard by which the City Council determines the civil fine, the length of license suspensions and the propriety of revocations, shall apply to all premises licensed under this chapter. These penalties are 15 Item 2. presumed to be appropriate for every case, however, the Council may deviate in an individual case where the Council finds that there exist certain extenuating or aggravating circumstances, making it more appropriate to deviate, such as, but not limited to, a licensee’s efforts in combination with the state or city to prevent the sale of licensed products to minors or, in the converse, when a licensee has a history of repeated violations of state or local laws. When deviating from these standards, the Council will provide written findings that support the penalty selected. When a violation occurs, the staff shall provide information to the City Council to either assess the presumptive penalty or depart upward or downward based on extenuating or aggravating circumstances. The staff shall notify the licensee of the information being considered and acted upon by the City Council. (2) Misdemeanor. Nothing in this section shall prohibit the city from seeking criminal prosecution under Minnesota Statutes. Whoever violates any provision of this article shall be guilty of a misdemeanor. If the city elects to seek misdemeanor prosecution, no administrative penalty shall be imposed. (3) Licensees. Any licensee found to have violated this article, or whose employee shall have violated this article, shall subject the licensee to the following administrative citation; licensee will be charged an administrative fine of $1,000 for a first violation of this article; $1,500 and a 3 day suspension of the license for a second offense under the same license holder within a 24- month period; $2,000 and a 5 day suspension for a third offense under the same license holder within a 24-month period; the revocation of the license for a fourth offense under the same license holder within a 24-month period. (a) Except as otherwise provided in this Chapter, the following violations will subject the licensee to the following administrative penalties: Type of Violation 1st Violation 2nd Violation 3rd Violation 4th Violation Refusal to allow city inspectors or police admission to premises $1,000 and 7 days suspension $2,000 and 14 days suspension Revocation N/A After hours sale of licensed products $1,000 and 7 days suspension $2,000 and 14 days suspension Revocation N/A Commission of a felony related to licensed activity Revocation N/A N/A N/A Sale of licensed products while license is under suspension Revocation N/A N/A N/A (b) Any prior violation that occurred more than 24 calendar months immediately preceding the most current violation will not be considered in determining successive violations. (c) The nature of the most current violation will determine the appropriate penalty as established above, provided, however, that any and all violations occurring within 24 16 Item 2. months immediately preceding the most current violation will be considered in determining successive violations. (d) Any licensee who fails to pay an administrative fine or adhere to a suspension, whether imposed by this section or the City Council, within the allotted time period will be subject to an additional suspension of the license for a period of time as determined by the City Council, but not to exceed 60 consecutive days. Any licensee who fails to comply with a City Council imposed license suspension resulting from a prior non- compliance with the administrative penalties imposed by this chapter is subject to license revocation. (4) Other individuals. Other individuals, other than minors regulated by division (B)(3) of this section, found to be in violation of this article shall be charged an administrative fee of $250. 17 Item 2. Bill Summary H.F. 100 Sixth engrossment Subject Adult -use cannabis Authors Stephenson and others Analyst Ben Johnson (Articles 1 and 3 -9) Alexandra Haigler (Article 2 ) Date February 14 , 2023 Overview This bill establishes a regulatory framework for adult-use cannabis and lower- dose cannabinoid products, moves the medical cannabis program under the newly created Office of Cannabis Management, establishes taxes on adult-use cannabis, creates grants to assist individuals entering into the legal cannabis market, amends criminal penalties, provides for expungement and resentencing of certain convictions, provides for temporary regulation of hemp-derived edible cannabinoid products, reschedules marijuana, and appropriates money. Article 1: Regulation of Adult -Use Cannabis This article establishes the Office of Cannabis Management to oversee the regulation of cannabis flower, cannabis products (including lower-potency cannabinoid products), and hemp- derived consumer products; specifies licensure categories for cannabis businesses and requirements and procedures for licensure and operations; establishes legal limitations on the use, possession, and transportation of cannabis flower, cannabis products, and hemp-derived consumer products; transfers the medical cannabis registry program from the Department of Health to the Office of Cannabis Management; and establishes the cannabis industry community renewal grant program. Section Description – Article 1: Regulation of Adult-Use Cannabis Definitions. Defines terms including “adult-use cannabis flower,” “adult-use cannabis concentrate,” “adult-use cannabinoid product,” “artificially derived cannabinoid,” “batch,” “cannabinoid profile,” “cannabis business,” “edible cannabis product,” “hemp-derived consumer product,” “labor peace agreement,” “medical cannabis flower,” “medical cannabis product,” “patient,” “qualifying medical condition,” “statewide monitoring system,” “synthetic cannabinoid,” and “visiting patient” as used in the new chapter of law. 18 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 2 Section Description – Article 1: Regulation of Adult-Use Cannabis Office of Cannabis Management. Establishes the Office of Cannabis Management. Tasks the office with overseeing the regulation of the production and sale of cannabis flower, cannabinoid products, and hemp-derived consumer products. Establishes the powers, duties, and guiding principles for the office. Transfers the medical cannabis program to the office. Directs that office to enter into interagency agreements with the Department of Agriculture to assure that edible products meet appropriate standards related to food safety. Gives the office temporary expedited rulemaking authority. Directs the office to hire a director and other employees as needed and prohibits the director from being a person who served in the legislature or held a constitutional office in the previous four years. Establishes a division of social equity to administer grants and act as an ombudsperson for the board. Cannabis Advisory Council. Establishes an advisory council consisting of individuals with experience and expertise in subjects that are likely to be affected by legalization of cannabis flower and cannabinoid products. Directs the council to meet monthly or at the call of the chair and provides that the meetings are subject to chapter 13D. Directs the council to perform duties including reviewing national cannabis policy, examining the effectiveness of state cannabis policy, reviewing developments in information about cannabis, and taking public testimony. Prohibits members of the advisory council from working as lobbyists while on the council or for two years after leaving the council. 4 Studies; reports. Directs the office to conduct multiple studies to determine the expected size and growth of the regulated cannabis industry; the size and makeup of the illicit cannabis industry; the impact of second-hand cannabis smoke; and the impact, if any, of cannabis flower and cannabinoid products on the prevalence of impaired driving. Provides that the initial reports must be made to the legislature by January 15, 2024, and final reports must be made by January 15, 2025. Requires a study on the rate at which the state’s mental health and substance use disorder programs are accessed and requires a report by January 15, 2027. Also requires a report to the legislature on January 15 of each year on the status of the regulated cannabis industry; the illicit cannabis market; proposals for legislative action; and suggestions for legislative funding for social equity grants, education and prevention programs, and training for peace officers. 5 Statewide monitoring system. Directs the office to contract with an outside vendor to establish a statewide monitoring system to track all cannabis flower, cannabinoid products, and artificially 19 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 3 Section Description – Article 1: Regulation of Adult-Use Cannabis derived cannabinoids from seed or immature plant to disposal or sale to a patient or customer. 6 Approval of cannabis flower, products, and cannabinoids. Directs the office to approve all types of cannabis flower, cannabinoid products, and hemp-derived consumer products other than topical products for sale by rule. Prohibits the approval of products that are, or resemble, certain candies and snacks commonly consumed by children. Prohibits the office from approving cannabis flower, cannabinoid products, or hemp-derived consumer products designed for smoking or inhaling through vapor that contains an added flavor. 7 Agricultural and food safety practices; rulemaking. Requires the office, in consultation with the commissioner of agriculture, to establish requirements for the methods used to grow cannabis plants and hemp plants. Prohibits approving methods that involve genetically engineered seed, cuttings, or cultures. Directs the office to consult with the commissioner of agriculture and representatives from the University of Minnesota Extension Service to establish best practices for growing cannabis plants and hemp plants. Requires the office to consult with the commissioner of agriculture to establish an edible cannabinoid product handler endorsement to assure that edible cannabinoid products are manufactured and handled in ways that are comparable to the manufacture and handling of food products. 8 Establishment of environmental standards. Directs the office, in consultation with the commissioner of the Pollution Control Agency, to establish appropriate standards for water use and disposal for cannabis businesses. Directs the office, in consultation with the commissioner of commerce, to establish standards for energy use by cannabis businesses. Directs the office to establish appropriate standards for the disposal of solid waste related to the regulated cannabis industry. Directs the office to establish limitations on the odors produced by cannabis businesses. Establishes that rules must comply with relevant federal laws and that the office must consult with state agencies with expertise or a regulatory interest in the subject of the rule. 9 Personal adult use of cannabis. Provides legal limitations on the use, possession, and transportation of cannabis and cannabis products and establishes civil penalties for violations. States that a person age 21 or older may: ▪ use, possess, or transport cannabis paraphernalia; ▪ possess two ounces or less of cannabis flower in a public place; ▪ possess five pounds or less of cannabis flower in a person’s residence; 20 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 4 Section Description – Article 1: Regulation of Adult-Use Cannabis ▪ possess or transport eight grams or less of adult-use cannabis concentrate; ▪ possess or transport edible products infused with a total of 800 mg or less of tetrahydrocannabinol; ▪ give away cannabis flower and cannabinoid products in an amount that is legal for a person to possess in public; ▪ use cannabis flower and cannabinoid products in private areas; and ▪ cultivate up to eight cannabis plants, of which four or fewer may be mature, flowering plants. Prohibits smoking cannabis flower or cannabinoid products in places where smoking is prohibited under the Clean Indoor Air Act. Contains other prohibitions including using cannabis flower or cannabinoid products in state correctional facilities, operating a motor vehicle while under the influence of cannabis flower or cannabinoid products, giving cannabis flower or cannabinoid products to a person under the age of 21, or giving cannabis flower or cannabinoid products as a promotional gift. Requires certain disclosures by the proprietors of day care programs that operate within a part of a family home that are similar to requirements related to smoking tobacco. Prohibits the use of a volatile solvent to extract cannabis concentrate, sell cannabis flower or cannabinoid products, or import hemp-derived products without an appropriate license. Establishes non-criminal financial penalties for violations. 10 Licenses; types. Establishes categories of licenses. License categories are: ▪ cannabis cultivator; ▪ cannabis manufacturer; ▪ cannabis retailer; ▪ cannabis wholesaler; ▪ cannabis transporter; ▪ cannabis testing facility; ▪ cannabis microbusiness; ▪ cannabis event organizer; ▪ cannabis delivery service; ▪ lower-potency edible retailer; ▪ medical cannabis cultivator; ▪ medical cannabis processor; and ▪ medical cannabis retailer. 21 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 5 Section Description – Article 1: Regulation of Adult-Use Cannabis 11 Licenses; fees. Prohibits charging a fee, other than an application fee, for an annual license issued under this chapter. 12 Licenses; transfers; adjustments. Prohibits transferring licenses issued under this chapter and defines what actions constitute a transfer. Requires licenses to be renewed annually. Permits license holders to petition to adjust the tier of a license issued within a license category. Permits the office to allow a license holder to relocate and limits the application fee for relocation to $250. 13 Local control. Provides that local units of government may not prohibit the possession, transportation, or use of cannabis flower or cannabinoid products authorized under the chapter. Provides that local units of government may not prohibit the establishment of a cannabis business licensed under this chapter. Permits local units of government to establish reasonable restrictions on the time, place, and manner of operations and directs the office to work with local units of government to establish a model ordinance. Establishes that reasonable restrictions can prohibit operating a cannabis business within 1,000 feet of places that include schools, day care facilities, and certain parks. Permits local units of government to conduct studies on establishing reasonable limitations on the time, place, and manner of the operation of cannabis businesses and permits local governments to prohibit a cannabis business from opening until January 1, 2025, if the local government is conducting such a study, has authorized a study, or is considering adopting or amending allowed restrictions on the operation of a cannabis business. Directs local units of government to review applications sent by the office and certify whether the application complies with local ordinances. Directs the office to seek input on applications from local governments and permits the local governments to provide any information it believes is relevant to the office’s decision. Requires the office to establish an expedited complaint process for complaints made by local governments, including a requirement that the office respond to certain reports within 24 hours . 14 License application and renewal; fees. Directs the office to establish forms and procedures for the processing of licenses issued under this chapter. Establishes minimum requirements for the information collected by the office including information about the applicant, the ownership and control of the business, the security plan for the bu siness, and an attestation that the entity has entered into a labor peace agreement. Provides for a national criminal history check for applicants. Permits the board to charge an application fee of $250. 22 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 6 Section Description – Article 1: Regulation of Adult-Use Cannabis 15 Social equity applicants. Defines a social equity applicant as (1) a veteran who lost honorable status due to a cannabis related offense, (2) someone who has lived for the past five years in an area that experienced a disproportionately large amount of cannabis enforcement as determined by the office, or (3) someone who has lived for the last five years in low- income areas (defined similarly to the federal Opportunity Zones). 16 License selection criteria. Directs the office to issue the number of licenses necessary to assure a sufficient supply of cannabis and cannabis products, provide market stability, and limit the sale of unregulated cannabis. Directs the office to prioritize the issuance of microbusiness licenses and craft cultivator licenses. Prohibits the issuance of bulk cultivator licenses until July 1, 2028, unless the office determines that such licenses are necessary to assure sufficient supply. Permits the office to allow full vertical integration of businesses to assure sufficient supply during the first calendar year in which adult- use cannabis flower and adult-use cannabinoid products are legally sold to customers, but terminates that exception after that year. Directs the office to score applications in multiple categories, including the status as a social equity applicant. 17 Inspection; license violations; penalties. Establishes that the office may enter and inspect cannabis businesses and records at reasonable hours. Gives the office the power to issue subpoenas, issue oaths, take depositions, require the production of records, detain or embargo items, and enter into laboratory analysis agreements with the commissioner of agriculture. Permits the office to conduct inspections at any time. Requires the office to prioritize inspections based on suspected violations that pose an imminent danger to customers or the public. Further directs the office to prioritize inspections based on complaints from local units of government. Permits the office to issue administrative orders directing cannabis businesses to take specific action, permits businesses to appeal those orders, and allows the office to assess administrative penalties of up to $10,000 for each violation. Provides that certain data related to complaints and investigations are not public and may not be shared with any federal entity without a court order. 18 License suspension or revocation; hearing. Permits the office to revoke or not renew a license issued under this chapter. Requires the office to provide a business with notice and an opportunity for a hearing before revoking or not renewing a license. Permits the office to temporarily suspend the license and operating privilege of any licensed business for up to 90 days if continued operation would threaten the health or safety of any person. Permits the office to extend the suspension for an additional 90 days if it notifies the business of 23 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 7 Section Description – Article 1: Regulation of Adult-Use Cannabis an intent to revoke or not renew the business’s license and the required hearing has not taken place. 19 Adult-use cannabis business; general ownership disqualifications and requirements. Establishes general ownership and operation requirements that apply to all cannabis businesses. Provides for a national criminal history check. Establishes disqualifications for certain criminal offenses that last either for the person’s lifetime, or for one, five, or ten years following the discharge of a sentence. Permits an applicant to apply for a set-aside of the prohibitions related to convictions. Establishes requirements for holding a license including that a license holder be at least 21; reside in Minnesota or be a business with Minnesota ownership of at least 75 percent; not be employed by the office or work as a peace officer; never have had a revocation of a license issued under this chapter; and have filed and paid appropriate business taxes. 20 Cannabis business; general operational requirements and prohibitions. Establishes general operation requirements including prohibitions on hiring a person under 21 years of age or allowing a person under 21 years of age into most parts of a cannabis business unless the person is a patient in the registry program; prohibiting consumption of cannabis flower and cannabinoid products within a cannabis business except as authorized for quality control or pursuant to an endorsement permitting consumption on site; having restricted access to areas where cannabis is grown, manufactured, or stored; having adequate ventilation and filtration systems; maintaining certain records; providing a diversity report; using the statewide monitoring system; having adequate security; and prohibiting sharing customer information with the federal government unless ordered to do so by a court . 21 Retailers; local registration and enforcement. Requires cannabis retailers, cannabis microbusinesses with a retail operations endorsement, lower potency edible product retailers, and medical cannabis retailers to register with the local unit of government in which the retail establishment is located. Permits a local unit of government to charge a registration fee of $200 and an annual renewal fee of $200. Requires the local unit of government to issue a registration to a licensed business that has paid the registration fee, has been found to be compliant in any preliminary inspection, and is current on any property taxes for the retail location. Requires the local unit of government to perform annual inspections of the retail establishments, including an inspection related to age verification compliance. Permits the local unit of government to suspend a registration if a violation is found. Directs the local unit of government to notify the Office of Cannabis Management and permits the local unit of government to impose 24 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 8 Section Description – Article 1: Regulation of Adult-Use Cannabis a civil penalty of up to $2,000 for every sale made when the business does not have a valid registration. 22 Cannabis cultivator licensing. Provides that a cannabis cultivator license entitles the license holder to grow and harvest the approved amount of cannabis plants. Establishes two license tiers including a craft cultivator license for facilities of not more than 10,000 feet of plant canopy and a bulk cultivator license for facilities of not more than 30,000 feet of plant canopy. Authorizes the office to increase the limit on craft cultivation canopy to 15,000 feet. Requires applicants for a cannabis cultivator license to provide information regarding business operations. Permits an entity holding a cannabis cultivator license to also hold a cannabis manufacturing license, medical cannabis cultivator license, medical cannabis manufacturer license, a license to grow industrial hemp, and a cannabis event organizer license. Permits a cannabis cultivator to transport cannabis flower to a cannabis manufacturer licensed to the same entity and located on the same premises. Establishes prohibitions on relationships between cannabis cultivators and health care practitioners who certify qualifying medical conditions for patients. 23 Cannabis cultivator operations. Requires cannabis cultivators to establish and maintain records for each batch of cannabis plants that is cultivated, comply with limitations on the use of agricultural chemicals, and establish and follow an operation plan that includes a description of water usage, recycling, solid waste disposal, and pest management. Requires compliance with pesticide laws and rules and prohibits adulterating cannabis. Permits both indoor and outdoor cultivation subject to security, fencing, and lighting requirements. Prohibits genetically engineered seeds. 24 Cannabis manufacturer licensing. Provides that a cannabis manufacturer license entitles the license holder to purchase cannabis flower, cannabinoid products, hemp plant parts, hemp concentrate, and artificially derived cannabinoids; accept up to two ounces of cannabis flower from an unlicensed person over the age of 21; extract tetrahydrocannabinol and other raw materials from cannabis flower; make cannabis and hemp concentrate; manufacture artificially derived cannabinoids; manufacture products for public consumption; package and label cannabinoid products for sale to other cannabis businesses; and perform other actions approved by the office. Requires applicants for a cannabis manufacturer license to provide information regarding business operations. Permits an entity holding a cannabis manufacturer license to also hold a cannabis cultivator license, medical cannabis license, and a cannabis event organizer license. Establishes prohibitions on relationships between cannabis manufacturers and health care practitioners who certify qualifying medical conditions for patients. 25 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 9 Section Description – Article 1: Regulation of Adult-Use Cannabis 25 Cannabis manufacturer operations. Requires that cannabis manufacturing must take place in an enclosed, locked facility that is used exclusively for the manufacture of cannabinoid products except that a business that also holds a cannabis cultivator license may operate in a facility that shares general office space, bathrooms, entryways, and walkways. Requires cannabis manufacturers wishing to perform extraction and concentration, or manufacture of artificially derived cannabinoids, to provide specific information on operations to obtain a license endorsement. Requires cannabis manufacturers that wish to process cannabis for private individuals to use dedicated equipment, provide the cannabis concentrate only to the person who provided the cannabis flower, and comply with applicable health and safety rules. Requires cannabis manufacturers wishing to produce customer products to provide specific information on operations to obtain a license endorsement. Limits the use of trademarked food products in producing products for customers. 26 Cannabis retailer licensing. Provides that a cannabis retailer license entitles the license holder to sell immature cannabis plants and seedlings, adult-use cannabis flower, adult-use cannabinoid products, hemp-derived consumer products, and other products authorized by law to customers. Requires applicants for a cannabis retailer license to provide information regarding business operations. Permits an entity holding a cannabis retailer license to also hold a cannabis delivery service license, a medical cannabis retailer license, and a cannabis event organizer license. Permits, but does not require, a city or county to operate cannabis stores. Establishes prohibitions on relationships between cannabis retailers and health care practitioners who certify qualifying medical conditions for patients. 27 Cannabis retailer operations. Prohibits the sale of cannabis plants, adult-use cannabis flower, or adult-use cannabinoid products to individuals under 21 years of age. Permits the sale of adult- use cannabis flower, adult-use cannabinoid products, and hemp-derived consumer products within the limits established by the chapter; hemp-derived topical products; cannabis paraphernalia, including childproof storage containers; certain drinks; books, videos, and magazines related to information on cannabis cultivation and cannabis products; multiple use bags; certain clothing; and other hemp products. Requires cannabis retailers to verify the age of customers before selling products. Limits the display of cannabis flower and cannabinoid products. Requires cannabis retailers to post notices announcing product recalls, warning of the dangers of driving while under the influence; and stating that consumption is intended only for individuals who are 21 years of age or older. Prohibits cannabis retailers from operating between 2:00 a.m. and 8:00 a.m. Monday through Friday, or between 2:00 a.m. and 10:00 a.m. on Sunday unless operation is permitted under ordinance. 26 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 10 Section Description – Article 1: Regulation of Adult-Use Cannabis Permits a local city or county to adopt an ordinance permitting additional hours of operation. Requires cannabis retailers to comply with local building ordinances, maintain security, maintain adequate lighting, and accept deliveries through limited access areas. Prohibits sales to a person who is visibly intoxicated; selling more than an individual is permitted to possess; giving away cannabis plants, cannabis flower, cannabinoid products, or hemp-derived consumer products; operating a drive- through window; operating a vending machine containing cannabis flower, cannabinoid products, or hemp-derived consumer products; or selling cannabis plants, cannabis flower, or cannabinoid products when a security system, or the statewide monitoring system, is not working. Permits a cannabis retailer to sell medical cannabis from a portion of its premises that is distinct from the remainder of the premises and contains space for consultation with a pharmacist. 28 Cannabis wholesaler licensing. Provides that a cannabis wholesaler license entitles the license holder to purchase immature cannabis plants and seedlings, cannabis flower, cannabinoid products, hemp-derived consumer products, and other products authorized by law from cannabis manufacturers and cultivators. Provides that a cannabis wholesaler license entitles the license holder to sell immature cannabis plants and seedlings, cannabis flower, cannabinoid products, hemp-derived consumer products, and other products authorized by law to cannabis retailers. Provides that a cannabis wholesaler license entitles the license holder to import hemp-derived consumer products and lower- dose edible products that contain tetrahydrocannabinol derived from hemp. Requires applicants for a cannabis wholesaler license to provide information regarding business operations. Permits an entity holding a cannabis wholesaler license to also hold a cannabis transporter license, a cannabis delivery service license, and a cannabis event organizer license. 29 Cannabis wholesaler operations. Requires a cannabis wholesaler to maintain separation betwee n cannabis flower and cannabinoid products and hemp plant parts and hemp-derived consumer products. Requires cannabis wholesalers to maintain appropriate records and assure that labels remain affixed to products. Requires that a cannabis wholesaler comply with state and local building codes. Permits the sale of cannabis paraphernalia and the sale of other products for which no license is required or for which the cannabis wholesaler holds a license. Permits a cannabis wholesaler to sell certain products manufactured outside of Minnesota provided those products meet the Minnesota requirements and limits. Provides that it is not a defense in a civil or criminal suit that a cannabis wholesaler relied on a label or similar information provided by a manufacturer that is not licensed in Minnesota. 27 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 11 Section Description – Article 1: Regulation of Adult-Use Cannabis 30 Cannabis transporter licensing. Provides that a cannabis transporter license entitles the license holder to transport immature cannabis plants and seedlings, cannabis flower, cannabinoid products, artificially derived cannabinoids, hemp plant parts, and hemp-derived consumer products. Requires applicants for a cannabis transporter license to provide information regarding business operations and proof of insurance. Permits an entity holding a cannabis transporter license to also hold a cannabis wholesaler license, a cannabis delivery service license, and a cannabis event organizer license. 31 Cannabis transporter operations. Requires cannabis transporters to obtain manifests and establish and retain specific records. Requires that all cannabis-related materials be transported in a locked compartment that is not visible from outside the vehicle, and prohibits using identifying logos or business names on a vehicle. Requires deliveries to be randomized and requires all transporters to have multiple employees involved in the delivery to assure that at least one employee remains with the vehicle at all times that the vehicle contains cannabis-related materials. Prohibits permitting nonemployees in the vehicle as passengers, requires all drivers to carry a valid driver’s license, and provides that all vehicles are subject to inspection at any time during transportation of cannabis-related materials. 32 Cannabis testing facility licensing. Provides that a cannabis testing facility license entitles a license holder to obtain and test immature cannabis plants and seedlings, cannabis flower, cannabinoid products, hemp plant parts, artificially derived cannabinoids, and hemp-derived consumer products. Requires applicants for a cannabis testing facility license to provide information regarding business operations and proof of accreditation. Prohibits an entity holding a cannabis testing facility license from holding any other license. 33 Cannabis testing facility operations. Requires a testing facility to comply with rules adopted by the office establishing testing protocols, record retention, and disposal of cannabis flower and cannabinoid products. 34 Cannabis microbusiness licensing. Provides that a cannabis microbusiness license entitles the license holder to grow cannabis plants; extract tetrahydrocannabinol and other raw materials from cannabis flower; create cannabis concentrate; manufacture edible cannabis products for public consumption; purchase cannabis concentrate and hemp concentrate; sell immature cannabis plants and seedlings, cannabis flower, and cannabinoid products; and operate an establishment that permits on-site consumption of edible cannabinoid products. Requires applicants for a cannabis microbusiness license to 28 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 12 Section Description – Article 1: Regulation of Adult-Use Cannabis provide information regarding business operations. Permits an entity holding a cannabis microbusiness license to also hold a cannabis event organizer license. 35 Cannabis microbusiness operations. Establishes endorsements for cannabis microbusiness license holders to cultivate cannabis, extract and concentrate tetrahydrocannabinol and other raw materials from cannabis, produce consumer products, operate a retail establishment, and operate an on-site consumption facility. Requires a cannabis microbusiness to comply with other operation requirements established under this chapter. 36 Cannabis event organizer licensing. Provides that a cannabis event organizer license entitles the license holder to organize a temporary cannabis event lasting no more than four days. Requires applicants for a cannabis event organizer license to provide information regarding the planned event including a physical layout of the event, the dates and hours of planned operation, the businesses that will participate, and proof of local approval. Permits an entity holding a cannabis event organizer license to hold any license other than a testing facility license. 37 Cannabis event organizer operations. Requires a cannabis event organizer to obtain local approval for a cannabis event. Permits a cannabis event organizer to charge an entrance fee and a fee for event participants. Requires event organizers to provide security and limit access to individuals who are at least 21 years old. Requires an event organizer to assure that cannabis and cannabis products are disposed of in an approved manner. Requires event organizers to comply with transportation and sales requirements. Permits on - site consumption at a cannabis event if approved by the local unit of government. 38 Cannabis delivery service licensing. Provides that a cannabis delivery service license entitles the license holder to obtain purchased adult-use and medical cannabis flower, cannabinoid products, and hemp- derived consumer products and deliver them to customers. Requires applicants for a cannabis delivery service license to provide information regarding the planned operations including a list of vehicles that will be used in the business. Permits an entity holding a cannabis delivery service license to hold a cannabis wholesaler license, a cannabis transporter license, or a cannabis retailer license. 39 Cannabis delivery service operations. Requires cannabis delivery services to verify the age of customers and, when applicable, that the customer is enrolled in the medical cannabis program, and requires those businesses to retain records including proof of age verification. Directs the office to establish limits on the amount to be transported. Requires entry of 29 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 13 Section Description – Article 1: Regulation of Adult-Use Cannabis products in the statewide monitoring system. Requires that all cannabis-related materials be transported in a locked compartment that is not visible from outside the vehicle, and prohibits using identifying logos or business names on a vehicle. Requires all delivery services to have multiple employees involved in the delivery to assure that at least one employee remains with the vehicle at all times that the vehicle contains cannabis-related materials. Prohibits permitting nonemployees in the vehicle as passengers and provides that all vehicles are subject to inspection at any time during delivery of cannabis-related materials. 40 Lower-potency edible product retailer licensing. Provides that a lower-potency edible product retailer license entitles the license holder to purchase lower-potency edible products from licensed manufacturers and wholesalers, sell those products to consumers, and perform other actions as approved by the office. Exempts these licenses from certain requirements and criteria that apply to other cannabis businesses. Requires applicants to submit to a background check. Provides that license holders must be at least 21, register with the statewide monitoring system, not be employed by the office, and not be disqua lified based on criminal offenses. Establishes that licenses must be renewed annually and permits the charging of a $250 license processing fee. Prohibits transferring licenses. Prohibits a license holder from holding any other cannabis business license, but permits the license holder to possess a liquor license. 41 Lower-potency edible product retailer operations. Establishes that license holders may sell lower-potency edible products obtained from a licensed Minnesota business, but may not sell cannabis flower or other cannabinoid products. Provides that a license holder may sell other products for which no license is required or for which the license holder possesses a license. Requires the license holder to verify that customers are at least 21. Requires that products be kept behind the counter or in another secure area. Establishes that compliant products cannot contain more than 5mg of tetrahydrocannabinol or 25mg of cannabidiol or cannabigerol per serving, do not contain more than a total of 0.5mg of all other cannabinoids; do not contain artificially derived cannabinoids other than delta-9 THC, and that individual packaging is indicated by individual wrapping or scoring or similar indicators that appear on the edible product. Provides that packages can contain multiple servings provided the total package does not contain more than 50mg of tetrahydrocannabinol or 250mg of cannabidiol or cannabigerol. Permits on-site consumption of lower-potency edible products that are intended to be consumed as a beverage on the premises of a business that holds a liquor license. Requires that drinks sold for on-site consumption be sold in their packaging and indicates that consumers may remove them from packaging. Prohibits any sale to a person under age 21 or to a person who is visibly intoxicated. Requires all sales to be recorded in the statewide monitoring system. Requires the posting of notices as required for cannabis retailers. Provides that the office has the same enforcement 30 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 14 Section Description – Article 1: Regulation of Adult-Use Cannabis authority over lower-potency edible product retailers as it does for other cannabis businesses. 42 Medical cannabis business licensing. Establishes three categories of medical cannabis licenses: (1) medical cannabis cultivator; (2) medical cannabis processor; and (3) medical cannabis retailer. Permits a single entity to hold a medical cannabis manufacturer and medical cannabis processor license. An entity that holds either of those may also hold a cannabis cultivator license, a cannabis manufacturer license, and a cannabis event organizer license. A medical cannabis retailer license holder may also hold a cannabis retailer license, a cannabis delivery service license, and a cannabis event organizer license. Provides that the registration of the two in-state medical cannabis manufacturers in business now will expire on July 1, 2024. Prohibits health care practitioners who certify qualifying medical conditions from holding certain positions in a medical cannabis business, and establishes limits on remuneration from or to health care practitioners who certify qualifying medical conditions. 43 Medical cannabis business applications. Requires applicants for any medical cannabis business license to provide additional information related to the proposed operations of the business. 44 Medical cannabis cultivators. Establishes that a medical cannabis cultivator license entitles the licen se holder to cultivate cannabis plants, harvest cannabis flower, package and label cannabis flower as medical cannabis flower, sell medical cannabis flower to medical cannabis processors and retailers, and transport medical cannabis flower to a medical cannabis processor licensed to the same person and operating on the same premises. Requires a medical cannabis cultivator to comply with the requirements that apply to cannabis cultivators. Requires medical cannabis cultivators to verify that medical cannabis flower has passed all safety-related tests. 45 Medical cannabis processors. Establishes that a medical cannabis processor license, in conjunction with the appropriate endorsement, entitles the license holder to purchase medical cannabis flower, medical cannabinoid products, hemp plant parts, and hemp concentrate from other medical cannabis businesses and industrial hemp growers; make cannabis concentrate and hemp concentrate; manufacture medical cannabinoid products; package and label medical cannabinoid products for sale to retailers; and perform other actions as approved by the office. Requires a medical cannabis processor to comply with the requirements related to cannabis manufacturers. Requires medical cannabis processors to verify that medical cannabis products have passed all safety- related tests. 31 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 15 Section Description – Article 1: Regulation of Adult-Use Cannabis 46 Medical cannabis retailers. Establishes that a medical cannabis retailer license authorizes the license holder to purchase medical cannabis flower and medical cannabinoid products from licensed cannabis businesses and sell those products to consumers. Requires medical cannabis retailers to verify that medical cannabis products have passed all safety - related tests. Requires medical cannabis retailers to verify that a customer is a patient enrolled in the registry and apply patient-specific labels to delivered medical cannabis flower and products. Requires patients to consult with a pharmacist before delivery, limits sales to no more than a 90-day supply, permits delivery to patients in motor vehicles, and requires separation of space if a license holder operates as both a cannabis retailer and a medical cannabis retailer. 47 Patient registry program. Establishes the medical cannabis registry program, administered by the Division of Medical Cannabis, in which patients diagnosed with a qualifying medical condition who enroll in the patient registry are eligible to obtain medical cannabis flower and medical cannabinoid products. Provides for an application procedure, including an application procedure for veterans. Establishes enrolment qualifications; timelines for approval or denial; a process for registry verification; an enrollment period; approved cannabinoids and delivery methods; procedures for designated caregivers and parents, legal guardians, and spouses; an enrollment fee; and notification requirements related to a change of name or address. (The current patient registry program is administered by the commissioner of health.) 48 Duties of Office of Cannabis Management; registry program. Authorizes the office, on the office’s initiative, upon a petition, or as directed by law, to add an allowable form of medical cannabis flower or medical cannabinoid product, and to add to or modify the list of qualifying medical conditions. Requires the office to notify certain members of the legislature if the office wants to add an allowable form or add or modify the list of qualifying medical conditions, and makes the addition or modification effective August 1 unless the legislature provides otherwise by law. 49 Duties of Division of Medical Cannabis; registry program. Lists duties of the Division of Medical Cannabis related to health care practitioners, administering the registry program, conducting or contracting for research and studies, and providing reports to the legislature. 50 Duties of health care practitioners; registry program. Specifies duties of health care practitioners participating in the registry program. 32 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 16 Section Description – Article 1: Regulation of Adult-Use Cannabis Subd. 1. Duties prior to a patient’s enrollment in the registry program. Before a patient enrolls in the registry program, requires a health care practitioner to certify a patient’s qualifying medical condition, advise patients and others on patient support groups, provide explanatory information on the experimental nature of the therapeutic use of medical cannabis, provide a Tennessen warning, and agree to continue treating the patient’s qualifying medical condition and report findings to the Division of Medical Cannabis. Subd. 2. Duties upon patient’s enrollment in th e registry program. After a patient enrolls in the registry program, requires a health care practitioner to participate in the patient registry reporting system, report patient health records to the Division of Medical Cannabis, annually issue a new certification of a patient’s qualifying medical condition, and otherwise comply with requirements of the board and the Office of Medical Cannabis. Subd. 3. Participation not required. Provides that health care practitioners are not required to participate in the registry program. Subd. 4. Data. Classifies certain patient data reported to the registry program and allows this data to be used in aggregated, nonidentifiable form for research or in the creation of summary data. Subd. 5. Exception. Establishes an exception for patients who receive care from the United States Department of Veterans Affairs and requires those patients to meet certification requirements developed by the Division of Medical Cannabis. 51 Limitations. Establishes limitations on the times and places medical cannabis flower and medical cannabinoid products may be consumed, including allowing penalties for undertaking certain tasks while under the influence of cannabis; possession or consumption on a school bus or in a correctional facility; and vaporizing or smoking medical cannabis flower or medical cannabis products in a place where smoking is prohibited under the Clean Indoor Air Act. Further permits health care facilities licensed by the commissioner of health to adopt reasonable restrictions on medical cannabis flower and medical cannabinoid products. 52 Protections for registry program participants. Subd. 1. Presumption. Establishes a presumption that a patient enrolled in the registry program is engaged in the authorized use of medical cannabis flower and medical cannabinoid products, and specifies how that presumption may be rebutted. Subd. 2. Civil and criminal protections. Lists acts that are not violations of chapter 152 or chapter 342, acts that do not subject the actors to civil penalties 33 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 17 Section Description – Article 1: Regulation of Adult-Use Cannabis or disciplinary action, and acts for which certain actors are not civilly or criminally liable. Prohibits law enforcement authorities from accessing the registry without a search warrant, prohibits public employees from releasing data about a patient enrolled in the registry program except as authorized in law, and prohibits information obtained from a patient under statutes governin g the registry program from being admitted as evidence in a criminal proceeding unless the certain criteria are met. States that possession of a registry verification or application does not constitute probable cause or reasonable suspicion and cannot be used to support a search or inspection. Subd. 3. School enrollment; rental property. Prohibits a school from refusing to enroll a patient as a student, or a landlord from refusing to lease to a patient, because the patient is enrolled in the registry program, unless one of the listed conditions is met. Subd. 4. Medical care. States a patient’s use of medical cannabis and medical cannabis products does not disqualify a patient from needed medical care. Subd. 5. Employment. Prohibits an employer from discriminating against a person in hiring, termination, or terms or conditions of employment based on a person’s enrollment in the registry program or a person’s positive drug test for cannabis, unless one of the listed conditions is met. Allows an employee who is a patient to present the employee’s registry verification to explain a positive drug test. Subd. 6. Custody; visitation; parenting time. Prohibits a person from being denied custody of a child, visitation rights, or parenting time based on the person’s enrollment in the registry program. Subd. 7. Action for damages. Provides that a person injured by a violation of subdivision 3, 4, or 5 may bring an action to recover those damages or a civil penalty of $100, whichever is greater. Also permits recovery of attorney fees. 53 Violation by health care practitioner; criminal penalty. Establishes a misdemeanor penalty for a health care practitioner who knowingly refers patients to a cannabis retailer or medical cannabis business or to a designated caregiver; who advertises as a medical cannabis business; or who issues certifications of a qualifying medical condition while holding a financial interest in a cannabis retailer or medical cannabis business. 54 Data practices. Classifies patient health records maintained by the office or the Division of Medical Cannabis and government data in patient health records maintained by a health care practitioner. Specifies allowable uses of these records and data, and prohibits these 34 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 18 Section Description – Article 1: Regulation of Adult-Use Cannabis records and data maintained by the office or division from being used for any purpose not authorized in the statutes governing the registry program. 55 Clinical trials. Authorizes the Division of Medical Cannabis to conduct or award grants to conduct clinical trials on the use of medical cannabis flower and medical cannabinoid products to treat a specific health condition. 56 Testing. Requires a cannabis business to comply with testing requirements in this section and in rule before selling, offering for sale, or transferring cannabis flower, cannabinoid products, artificially derived cannabinoids, or hemp-derived consumer products and establishes duties related to testing for the office. Subd. 1. Testing required. Requires a cannabis business to comply with the testing requirements in this section before selling, offering for sale, or transferring cannabis or cannabis products. Subd. 2. Procedures and standards established by office. Directs the office to establish procedures and standards governing testing, the contaminants that must be tested for, potency and homogeneity, and cannabis and cannabis products that fail to meet testing standards. Subd. 3. Standards established by Office of Cannabis Management. Directs the office to establish standards for allowable levels of contaminants, and lists contaminants for which the commissioner must establish allowable levels. Subd. 4. Testing of samples; disclosures. Requires a cannabis business to make samples from each batch of cannabis or cannabis product grown or manufactured by the cannabis business available to a cannabis testing facility, and requires the cannabis testing facility to select and test representative samples from each batch. Requires a cannabis business to disclose all known fertilizers, solvents, or other foreign materials applied or added to a batch submitted for testing. Lists contaminants that must be tested for. Subd. 5. Test results. If a tested sample meets the applicable testing standards, allows the tested batch to be sold, offered for sale, or transferred to another cannabis business, customers, or patients. If a tested sample does not meet the applicable testing standards, requires the batch to be dealt with according to procedures established by the board. Requires test results to be maintained for at least five years after testing and to be available to the public upon request. 35 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 19 Section Description – Article 1: Regulation of Adult-Use Cannabis 57 Packaging. Requires cannabis flower, cannabinoid products, and hemp-derived consumer products sold to customers or patients to comply with the packaging requirements in this section and in rule. Establishes requirements including the use of plain, child - resistant, tamper-evident containers. Establishes prohibitions on the use of packaging designed to appeal to children or those under the age of 21. Also prohibits the use of packaging that is coated with any perfluoroalkyl substance and, for edible products, prohibits the use of packaging that has not been approved for food. 58 Labeling. Requires cannabis flower, cannabinoid products, and hemp-derived consumer products sold to customers or patients to comply with the labeling requirements in this section and in rules. Identifies the information a label must contain, including information about the cultivator or manufacturer, batch number, and cannabinoid profile. Requires certain warnings and the phone number of the poison control system. Requires labels on medical cannabis flower and medical cannabinoid products to contain information about the patient. Requires labels on hemp-derived topical products to contain information relevant to those products. Requires the office to review scientific and medical literature to determine if additional warnings should be required, and authorizes the office to require such warnings. Specifically requires the office to consider warnings related to pregnant and breastfeeding individuals. Permits certain additional information to be posted or affixed to packaging instead of being contained on the label. 59 Advertisement. Establishes requirements and limitations for advertisements for cannabis flower, cannabinoid products, cannabis businesses, and hemp-derived consumer products. Subd. 1. Limitations applicable to all advertisements. Prohibits advertisements from containing false or misleading statements, containing unverified claims, promoting overconsumption, depicting persons under 21 consuming cannabis or a cannabis product, or including an image likely to appeal to person s under 21. Subd. 2. Outdoor advertisements; cannabis business signs . Prohibits outdoor advertisement. Allows up to two fixed outdoor signs that satisfy the criteria in paragraph (b). Subd. 3. Audience under age 21. Prohibits advertisements via a medium in which 30 percent or more of the audience is reasonably expected to be under age 21. Subd. 4. Certain unsolicited advertising. Prohibits using unsolicited pop-up advertisements on the Internet. 36 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 20 Section Description – Article 1: Regulation of Adult-Use Cannabis Subd. 5. Advertising using direct, individualized communication or dialogue. Requires a cannabis business or other person to verify a recipient is 21 or older before using direct, individualized communication or dialogue to advertise. Lists allowable methods of age affirmation. Subd. 6. Advertising using location-based devices. Lists criteria that must be met for a cannabis business or other person to advertise with advertising directed toward location-based devices such as cell phones. Subd. 7. Advertising restrictions for health care practitioners under the medical cannabis program. Lists statements, information, and symbols that cannot be included in advertising by health care practitioners participating in the medical cannabis program. If the office finds a health care practitioner violated this subdivision, the practitioner is prohibited from certifying patient qualifying medical conditions for the registry program. 60 Industrial hemp. Establishes that nothing in the new chapter of law limits the ability of a person licensed under chapter 18K to grow, process, sell, and manufacture industrial hemp and products from industrial hemp. Establishes that the term “processing” does not include creating artificially derived cannabinoids. 61 Hemp-derived topical products. Provides for the manufacture, marketing, distribution, and sale of hemp-derived topical products. Limits the types of cannabinoids that hemp -derived topical products may contain and permits the office to identify nonintoxicating cannabinoids that may be used in topical products. Establishes that products may only be intended for external use. Prohibits certain products from being considered topical products and prohibits sale of products that do not comply with the limits established in the section or with certain health and safety requirements. Prohibits sale of hemp- derived topical products to an individual under 21 years of age. Provides that the office may enforce the section under the enforcement powers that apply to cannabis businesses. 62 Legal assistance to cannabis businesses. Provides that an attorney must not be subject to disciplinary action for providing legal assistance to prospective or licensed cannabis businesses. 63 Cannabis industry community renewal grants. Creates the CanRenew grant program, run by the Cannabis Management Board, to give grants for investments in low-income communities where residents are eligible to be social equity applicants. 37 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 21 Section Description – Article 1: Regulation of Adult-Use Cannabis 64 Substance use treatment, recovery, and prevention grants. Establishes an account in the special revenue fund for use in issuing grants. Of the money in the account, 75 percent is for grants for substance use treatment and recovery; 20 percent is for substance use disorder prevention; and five percent is for education related to substance use by women who are pregnant, breastfeeding, or who may become pregnant. Directs the board to consult with other agencies and councils regarding the grants and requires an annual report to the legislature. 65 Cannabis grower grants. Creates the CanGrow grant program, run by the office in consultation with the Department of Agriculture, to give grants to provide farmers with (1) assistance navigating regulations, and (2) subsidized loans for expanding into legal cannabis. Loans under the program do not require matching funds, bu t a much higher loan amount is allowed if funds are matched by private investment, and full or partial forgiveness of loans is allowed after three years of satisfactory performance. 66 Substance Use Disorder Advisory Council. Establishes the Substance Use Disorder Advisory Council to develop and implement a comprehensive approach to substance use disorder prevention and treatment. Lists the members of the council and requires an annual report. 67 Lawful activities. Provides that actions in compliance with the new chapter are lawful. 68 Civil actions. Establishes a civil cause of action that matches the dram shop law for alcohol. 69 Adult-Use Cannabis Substance Use Disorder Advisory Council first meeting. Requires the commissioner of human services to convene the first meeting of the Adult-Use Cannabis Substance Use Disorder Advisory Council no later than October 1, 2023; specifies that members will elect a chair at the first meeting. 70 Effective date. Provides that the provisions of this article other than the portions regarding the medical cannabis program are effective July 1, 2023. Makes the portions of the article regarding the medical cannabis program effective January 1, 2024. 38 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 22 Article 2: Taxes Article 2 of this bill provides the tax structure for the retail sale of recreational cannabis. The article does the following: ▪ Allows a business income tax subtraction for business-related expenses for any business licensed under chapter 342. ▪ Imposes an eight percent gross receipts tax on the retail sale of recreational cannabis and lower-potency edible products. ▪ Subjects recreational cannabis products and lower-potency edible products to the state sales tax and any local sales taxes. ▪ Clarifies that medical cannabis is not subject to the gross receipts tax, state sales tax, or any local sales taxes. ▪ Clarifies that property used to cultivate and process cannabis plants is classified as Class 3a commercial-industrial property. ▪ Amends the statutes relating to the controlled substances tax to account for legalized recreational cannabis. For the purposes of this article the term “recreational cannabis” includes the following items: adult-use cannabis flower, adult-use cannabinoid products, adult-use cannabinoid solution products, and lower-potency edible products as defined in chapter 342. Section Description – Article 2: Taxes Class 3. Establishes that property used for raising, cultivating, processing, or storage of recreational cannabis, medical cannabis, or medical cannabis products for sale is classified as commercial and industrial property. Effective for property taxes payable in 2024 and thereafter. Commercial-industrial tax capacity. Ensures that property used for raising, cultivating, processing, or storage of recreational cannabis, medical cannabis, or medical cannabis products for sale is treated as commercial and industrial property for the purposes of the state general property tax levy. Effective for property taxes payable in 2024 and thereafter. Filing requirements and due dates; special rules. Exempts cannabis businesses from the requirement to file returns and remit taxes electronically. Effective the day following final enactment. 39 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 23 Section Description – Article 2: Taxes Disallowed section 280E expenses; medical cannabis manufacturers; individual income tax. Allows nonmedical cannabis businesses to subtract business expenses, deductions which are disallowed under federal tax law. Under current state law, medical cannabis businesses are also allowed to subtract these expenses. Effective for taxable years beginning after December 31, 2022. Disallowed section 280E expenses; medical cannabis manufacturers; corporate franchise tax. Allows nonmedical cannabis businesses to subtract business expenses, deductions which are disallowed under federal tax law. Under current state law, medical cannabis businesses are also allowed to subtract these expenses. Effective for taxable years beginning after December 31, 2022. Adult-use cannabis flower and adult-use cannabinoid products gross receipts tax. Subd. 1. Definitions. Provides definitions of terms relevant to the sale of recreational cannabis. Subd. 2. Gross receipts tax imposed. Imposes an eight percent gross receipts tax on retail and on-site sales of recreational cannabis. This tax functions similarly to the gross receipts tax currently imposed on liquor. This is an additional tax that applies to retail and on-site sales, and is in addition to state sales tax and any locally imposed sales taxes. Subd. 3. Use tax imposed; credit for taxes paid. Imposes an equivalent use tax for recreational cannabis that is bought in another state, but used in Minnesota. Provides a credit for taxes paid in the other jurisdiction. Subd. 4. Exemptions. Exempts medical cannabis from the gross receipts tax, as well as exempts from the gross receipts use tax recreational cannabis brought into Minnesota if the products have an aggregate cost of $100 or less each month. This exemption is similar to the use tax exemption provided to tobacco products and liquor. Subd. 5. Tax collection required. Requires out-of-state retailers with nexus in Minnesota to collect the use tax from purchasers and remit to the commissioner of revenue. Subd. 6. Taxes paid to another state or any subdivision thereof; credit. Provides a credit to retailers that have paid taxes to another jurisdiction if taxes are owed in Minnesota. The credit is equal to the amount of tax paid. 40 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 24 Section Description – Article 2: Taxes Subd. 7. Sourcing of sales. Provides that the rules governing the sourcing of sales that apply to state sales tax also apply to the tax imposed by this section. Subd. 8. Administration. Dictates that the statutes that govern the administration of the state sales tax also apply to this tax. Subd. 9. Returns; payment of tax. Dictates that the payment of tax by retailers will be on a form prescribed by the commissioner of revenue and all funds collected from this tax must be deposited into the general fund. Subd. 10. Deposit of revenues. Requires the commissioner of revenue to deposit all proceeds from the tax into the general fund. Requires that five percent of the funds deposited beginning in fiscal year 2026 must be credited to the substance use disorder treatment and prevention grant account . Subd. 11. Personal debt. Dictates that the person responsible for filing the return incurs the debt of any unpaid taxes. Effective for gross receipts received after December 31, 2023. Sale and purchase. Clarifies that the definition of “sale and purchase” provided in the state sales tax chapter includes the sale and purchase of recreational cannabis, thus subjecting these sales to state sales tax. Effective for sales and purchases made after December 31, 2023. Food and food ingredients. Clarifies that recreational cannabis is not included in the definition of “food and food products” within the sales tax chapter. Effective for sales and purchases made after December 31, 2023. Drugs; medical devices. Clarifies that recreational cannabis is not included in the definition of “drugs” within the sales tax chapter. Effective for sales and purchases made after December 31, 2023. Sales to government. Clarifies that the purchase by a government entity of recreational cannabis is not exempt from state sales tax. 41 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 25 Section Description – Article 2: Taxes Effective for sales and purchases made after June 30, 2023. Nursing homes and boarding care homes. Clarifies that the purchase by nursing homes and boarding care homes of recreational cannabis is not exempt from state sales tax. Effective for sales and purchases made after June 30, 2023. Adult-use cannabis local tax prohibited. Prohibits local governments from imposing a local sales tax solely on recreational cannabis. Effective the day following final enactment. Definitions. Subd. 1. Illegal cannabis. Updates the existing definition of “marijuana” to exclude recreational cannabis products in this bill. Subd. 2. Controlled substance. Updates the definition of “controlled substance” to exclude illegal cannabis. Subd. 3. Tax obligor or obligor. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to this section. Effective January 1, 2025. Tax payment required for possession. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Pharmaceuticals. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Measurement. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. 42 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 26 Section Description – Article 2: Taxes Effective January 1, 2025. Tax rate. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Credit for previously paid taxes. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Criminal penalty; sale without affixed stamps. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Stamp price. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Payment due. Removes the term “marijuana” from the controlled substances tax chapter in accordance with the changes made to section 13. Effective January 1, 2025. Article 3: Business Development Establishes grant programs to support cannabis businesses. Section Description – Article 3: Business Development Cannabis industry startup financing grants. Creates the CanStartup grant program, run by the Department of Employment and Economic Development, to give grants to nonprofit corporations to subsidize startup 43 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 27 Section Description – Article 3: Business Development loans to new legal cannabis businesses. Loans under the program do not require matching funds, but a much higher loan amount is allowed if funds are matched by private investment, and full or partial forgiveness of loans is allowed after three years of satisfactory performance. Loans can be renewed annually for up to six years. Cannabis industry navigation grants. Creates the CanNavigate grant program, run by the Department of Employment and Economic Development, to give grants to organizations to help individuals figure out how to set up a legal cannabis business through technical assistance and navigation services for regulations. Cannabis industry training grants. Creates the CanTrain grant program, run by the Department of Employment and Economic Development, to give grants to (1) organizations to train people for cannabis jobs, and (2) individuals to subsidize getting training for cannabis jobs. Both types of grants favor programs that result in an industry-relevant credential or include hands-on or on-site experiences in the industry. The grants to individuals are designed to be made by lottery after a very simple application, with DEED publishing all the information necessary to find an appropriate training program, and funds can be used for external barriers to training like child care and transportation as well as formal tuition and materials. The amount for individual grants is currently blank. Article 4: Criminal Penalties Establishes new crimes related to the possession, sale, and cultivation of cannabis and cannabis products. Section Description – Article 4: Criminal Penalties Artificially derived cannabinoid. Adopts the definition from chapter 342 into chapter 152 (controlled substances). Cannabinoid product. Adopts the definition from chapter 342 into chapter 152 (controlled substances). Cannabis concentrate. Adopts the definition from chapter 342 into chapter 152 (controlled substances). Cannabis flower. Adopts the definition from chapter 342 into chapter 152 (controlled substances). 44 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 28 Section Description – Article 4: Criminal Penalties Cannabis plant. Adopts the definition from chapter 342 into chapter 152 (controlled substances). Edible cannabinoid product. Adopts the definition from chapter 342 into chapter 152 (controlled substances). Sale crime. Makes a conforming change, eliminating the controlled substance offense in the first degree related to the sale of marijuana. Possession crimes. Amends the controlled substance offense in the first degree related to the possession of marijuana to provide that a person commits the offense if the person possesses more than 50 kilograms of cannabis flower, more than ten kilograms of cannabis concentrate, or cannabinoid products infused with more than one kilogram of tetrahydrocannabinol, and eliminates the controlled substance offense in the first degree related to the possession of 500 or more marijuana plants . Sale crimes. Makes a conforming change, eliminating the controlled substance offense in the second degree related to the sale of marijuana. Possession crimes. Amends the controlled substance offense in the third degree related to the possession of marijuana to provide that a person commits the offense if the person possesses more than 25 kilograms of cannabis flower, more than five kilograms of cannabis concentrate, or cannabinoid products infused with more than 500 grams of tetrahydrocannabinol and eliminates the controlled substance offense in the second degree related to the possession of 100 or more marijuana plants. Sale crimes. Makes a conforming change, eliminating the controlled substance offense in the third degree related to the sale of marijuana. Possession crimes. Amends the controlled substance offense in the third degree related to the possession of marijuana to provide that a person commits the offense if the person possesses more than ten kilograms of cannabis flower, more than two kilograms of cannabis concentrate, or cannabinoid products infused with more than 200 grams of tetrahydrocannabinol. 45 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 29 Section Description – Article 4: Criminal Penalties Sale crimes. Makes a conforming change, eliminating the controlled substance offense in the fourth degree related to the sale of marijuana in a school zone, park zone, public housing zone, or a drug treatment center. Sale crimes. Makes a conforming change, eliminating the controlled substance offense in the fifth degree related to the sale of marijuana. Possession and other crimes. Makes a conforming change, eliminating the controlled substance offense in the fifth degree related to the possession of marijuana, cannabis, or cannabis products. Cannabis possession crimes. Establishes petty misdemeanor, misdemeanor, gross misdemeanor, and felony crimes for possessing cannabis and cannabis products in excess of the amounts that would be legal under this bill. Permits local units of government to establish ordinances prohibiting use of cannabis in public places provided the ordinance establishes only a petty misdemeanor penalty. Cannabis sale crimes. Establishes petty misdemeanor, misdemeanor, gross misdemeanor, and felony crimes for selling cannabis and cannabis products without a license. Includes increased penalties for repeat offenders; sale to a minor; or sale in a school zon e, park zone, public housing zone, or drug treatment facility. Establishes a petty misdemeanor offense for the first-time sale by a minor. Cannabis cultivation crimes. Establishes gross misdemeanor and felony crimes for cultivating cannabis without a license and in excess of the amounts that would be legal under this bill. Prescription requirements for Schedule III or IV controlled substances. Makes a conforming change related to the provision in current law that requires a prescription to dispense or sell a Schedule III controlled substance. Artificially derived cannabinoid. Adopts the definition from chapter 342 into chapter 169A (driving under the influence). 46 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 30 Section Description – Article 4: Criminal Penalties Cannabinoid product. Adopts the definition from chapter 342 into chapter 169A (driving under the influence). Cannabis flower. Adopts the definition from chapter 342 into chapter 169A (driving under the influence). Hemp-derived consumer product. Adopts the definition from chapter 342 into chapter 169A (driving under the influence). Driving while impaired crime; motor vehicle. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of DWI law and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of DWI law. Open package law. Establishes an open package law similar to the state’s open bottle law. Prohibits use of cannabis flower, cannabinoid products, or any product containing an artificially derived cannabinoid and possession of an open package containing any of those by a driver or passenger in a motor vehicle. Establishes liability for the owner of certain motor vehicles. Establishes exceptions for transporting an open package in the trunk of a vehicle or a similar area that is not accessible to the driver, and for limousines, certain buses, and certain vehicles operated by pedaling. Implied consent; conditions; election of test. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of DWI law and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of DWI law. Requirement of urine or blood test. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of DWI law and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of DWI law. Driver education programs. Requires driver’s education programs to include information about the effects of cannabis flower, cannabinoid products, and tetrahydrocannabinol derived from any 47 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 31 Section Description – Article 4: Criminal Penalties source. Requires information on the hazards of operating under the influence of a controlled substance or intoxicating substance, and on the legal penalties for such operation. Rules. Requires a chemical use assessment before a supervising agent can prohibit a person under supervision from using cannabis. Prohibits the commissioner from revoking supervision for use of medical cannabis if the person is on the medical cannabis registry. Terms and conditions. Requires a chemical use assessment before a court can prohibit a person under supervision from using cannabis. Prohibits the court from imposing a condition of release that prevents a person from participating in the medical cannabis program . Criminal vehicular homicide. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of criminal laws related to causing death or harm to another while operating under the influence, and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of those laws. Great bodily harm. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of criminal laws related to causing death or harm to another while operating under the influence, and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of those laws. Substantial bodily harm. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of criminal laws related to causing death or harm to another while operating under the influence, and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of those laws. Bodily harm. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of criminal laws related to causing death or harm to another while operating under the influence, and cannabinoid products or 48 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 32 Section Description – Article 4: Criminal Penalties tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of those laws. Death to an unborn child. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of criminal laws related to causing death or harm to another while operating under the influence, and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of those laws. Injury to an unborn child. Clarifies that cannabis flower and cannabinoid products derived from cannabis are a controlled substance for purposes of criminal laws related to causing death or harm to another while operating under the influence, and cannabinoid products or tetrahydrocannabinol derived from hemp is an intoxicating substance for purposes of those laws. Controlled substances. Makes a conforming change. Property subject to administrative forfeiture; presumption. Makes a conforming change. Controlled substances. Makes a conforming change. Oral fluid preliminary testing; pilot project authorized. Directs the commissioner of public safety to design and implement a pilot project to determine the efficacy of oral fluid roadside testing to determine the presence of a controlled or intoxicating substance in drivers. Prohibits use of the test in any cour t action. Permits other screening tests to be required consistent with current Minnesota law. Provides that the section is effective on August 1, 2023, and expires on July 31, 2025. Article 5: Expungement Provides for automatic expungement of petty misdemeanor and misdemeanor marijuana convictions. Establishes a Cannabis Expungement Board to review other cannabis convictions and determine whether a person is eligible for expungement, resentencing, or neithe r. Directs the Cannabis Expungement Board to consider whether an offense involved violence or a victim, 49 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 33 the amount of marijuana involved in an offense, and whether expungement or resentencing is in the public interest. Requires public meetings, but further requires that the identity of a person being considered and any identified victim be private. Section Description – Article 5: Expungement Expungement of criminal records. Makes a conforming change. Nature of remedy; standard. Makes a conforming change. Stay of order; appeal. Makes a conforming change. Automatic expungement of certain cannabis offenses. Subd. 1. Eligibility; dismissal, exoneration, or conviction of nonfelony cannabis offenses. Provides that a person is eligible for an order vacating any conviction, dismissing charges, and expunging criminal justice records if proceedings against the person for violations alleging that the person possessed marijuana or tetrahydrocannabinols were dismissed or resolved in the person’s favor, or if the person was convicted or received a stayed sentence for possessing a small amount of marijuana or possessing marijuana in a motor vehicle. Subd. 2. Bureau of Criminal Apprehension to identify eligible i ndividuals. Directs the Bureau of Criminal Apprehension to identify individuals eligible for expungement under subdivision 1 and provide notice to the judicial branch. Directs the Bureau of Criminal Apprehension to grant expungement of records the bureau maintains without requiring an application. Directs the bureau to notify law enforcement agencies of the expungement and requires those agencies to seal their records. Requires the bureau to make a reasonable effort to notify an individual whose information is sent to the judicial branch under this section. Directs the bureau to provide relevant information to the commissioner of human services regarding records that were expunged. Subd. 3. Order of expungement. Directs the judicial branch to issue an order vacating convictions, dismissing charges, and expunging records for eligible individuals. Provides that provisions under section 609A.03, subdivision 6, regarding cases that received a stay of adjudication pursuant to section 152.18 apply. Provides that the limitations under section 609A.03, subdivision 7a, paragraph (b), do not apply and orders issued under this section . Directs the court to provide a list of expunged cases to the commissioner of human services and the Professional Educator Licensing and Standards Board. 50 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 34 Section Description – Article 5: Expungement Subd. 4. Report. Requires the Bureau of Criminal Apprehension to submit a report to the legislative committees with jurisdiction over public safety upon completion of its work under this section. Expungement and resentencing of felony cannabis offenses. Subd. 1. Cannabis Expungement Board. Establishes the Cannabis Expungement Board which consists of the following five members: the chief justice of the supreme court or a designee, the attorney general or a des ignee, one public defender, one commissioner, and one public member. Provides that the board will have the power and duty to review records, determine whether a person should receive an expungement, and determine whether a person should be resentenced to a lesser offense. The Cannabis Expungement Board must complete its work by June 30, 2028. Subd. 2. Eligibility; possession of cannabis. Provides that a person is eligible to have a conviction vacated, charges dismissed, and records expunged, or resentencing if the person was convicted of, or received a stayed sentence for, a felony offense involving the possession of marijuana, the offense did not involve a dangerous weapon or harm to another, the act for which the person was sentenced would be a lesser offense or no longer be criminal under changes to law, and the person has no existing right to an appeal. Subd. 3. Bureau of Criminal Apprehension to identify eligible records . Directs the Bureau of Criminal Apprehension to identify convictions that qualify for review under the standards established in subdivision 2. Subd. 4. Access to records. Provides that the Cannabis Expungement Board will have access to all records of any type related to a conviction for possession of a controlled substance held by law enforcement agencies, prosecuting authorities, and court administrators. Subd. 5. Meetings; anonymous identifier. Requires the Cannabis Expungement Board to meet at least monthly. Provides that meetings are subject to chapter 13D. Permits crime victims and law enforcement agencies to submit written or oral statements. Requires the board to use anonymous identifiers when discussing an individual’s records. Subd. 6. Review and determination. Directs the Cannabis Expungement Board to review available records to determine whether the conviction or stay of adjudication is eligible for expungement or resentencing. Provides that expungement under this section is presumed to be in the public interest unless there is clear and convincing evidence that expungement or resentencing would create a risk to public safety. Directs the board to determine whether limitations on expungement apply to each individual case and, if expungement is not 51 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 35 Section Description – Article 5: Expungement appropriate, whether resentencing is appropriate. Directs the board to consider factors including public safety in making its determination. Subd. 7. Annual report. Requires the Cannabis Expungement Board to submit an annual report describing its activities, including the number of cases reviewed in the previous year, the number of cases remaining to be reviewed, and the outcomes of the cases reviewed. Subd. 8. Notice to judicial branch and offenders. Directs the Cannabis Expungement Board to provide notice to the judicial branch of individuals eligible to have a conviction vacated, charges dismissed, and records expunged, or to receive resentencing. Directs the board to make a reasonable effort to notify an individual whose information is sent to the judicial branch under this section. Subd. 9. Data classification. Provides that all data collected, created, received, maintained, or disseminated by the Cannabis Expungement Boa rd in which each victim of a crime and person whose conviction or stay of adjudication the Cannabis Expungement Board reviews is or can be identified as the subject of the data is classified as private data on individuals. Subd. 10. Order of expungement. Directs the courts to issue an order vacating a conviction, dismissing charges, and expunging records consistent with the findings of the Cannabis Expungement Board upon receipt of information from the board. Subd. 11. Resentencing. Provides that, if the Cannabis Expungement Board determined that a person is eligible for resentencing, the court shall proceed as if the appellate court directed a reduction of the conviction to an offense of lesser degree pursuant to rule 28.02, subdivision 12 of the Rules of Criminal Procedure. Permits the court to issue an order without holding a hearing if the person completed or was discharged from the sentence. Directs the court to issue an order restoring the person's right to possess firearms and ammunition where applicable. Article 6: Miscellaneous Provisions This article requires the governor to negotiate compacts with Indian Tribes regarding medical cannabis and adult-use cannabis, makes conforming changes, requires education programs on cannabis use, requires the commissioner of health to collect data on cannabis use in the state, adds provisions governing workplace testing for cannabis, modifies eligibility requirements for certain public assistance programs for persons with a drug offense conv iction, and repeals existing statutes and rules governing the medical cannabis registry program. 52 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 36 Section Description – Article 6: Miscellaneous Provisions Medical cannabis; compacts to be negotiated. Authorizes the governor, or the governor’s designee to enter into compacts with Indian Tribes to permit the Tribes to provide medical cannabis. Identifies the issues all compacts must address, including rates of assessment and revenue sharing, and provides that acts performed pursuant to a valid contract are immune from civil or criminal prosecution. Requires the governor to publish all compacts and report to the legislature. Adult-use cannabis; compacts to be negotiated. Authorizes the governor, or the governor’s designee to enter into compacts with Indian Tribes to permit the Tribes to provide adult -use cannabis. Identifies the issues all compacts must address, including rates of assessment and revenue sharing, and provides that acts performed pursuant to a valid contract are immune from civil or criminal prosecution. Requires the governor to publish all compacts and report to the legislature. Cannabis business. Makes a conforming change in chapter 13 noting that data submitted to the Cannabis Management Board for a cannabis business license and data relating to investigations and disciplinary proceedings involving cannabis businesses licensed by the Cannabis Management Board are classified under section 324.17, subdivision 7. 4 Cannabis Expungement Board records. Makes a conforming change in chapter 13 noting that data collected, created, received, maintained, or disseminated by the Cannabis Expungement Board are classified under section 609A.06, subdivision 8. 5 Food. Makes a conforming change. 6 Education on cannabis use and substance use. Requires the commissioner of education to identify model programs to educate middle and high school students about the health effects of cannabis use and substance use, and requires school districts and charter schools to implement an education program on cannabis use and substance use for middle and high school students beginning in the 2026-2027 school year. 7 Cannabis data collection and biennial reports. Requires the commissioner of health to collect data and report on the prevalence of the use of cannabis and cannabis products using a baseline assessment and providing updates. Requires a report at least every two years beginning January 1, 2025 . 53 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 37 Section Description – Article 6: Miscellaneous Provisions 8 Cannabis education programs. Requires the commissioner of health to conduct an education program on the top three adverse health effects of the use of cannabis or cannabis products by persons under 21. Requires the commissioner to conduct an education program to educate pregnant women, breastfeeding women, and women who may become pregnant on the adverse health effects of prenatal exposure or exposure by infants and children to cannabis and cannabis products. Requires the commissioner to provide training and technical assistance to home visiting programs regarding safe and unsafe uses of cannabis and cannabis products in homes with infants and young children. Directs the commissioner to issue grants to qualified agencies and programs to provide education and training to substance use disorder treatment providers on the signs of and treatments for substance use disorder. 9 Remedies available. Makes a conforming change. 10 Application of other law. Makes a conforming change. 11 Duties; goal. Provides that the dual-training programs overseen by the commissioner of labor and industry can include occupations in the legal cannabis industry. 12 Prohibited practice. Adds cannabis to state definition of “lawful consumable product,” meaning an employer cannot fire, discipline, or refuse to hire someone for their use or enjoyment of cannabis or cannabis products outside of work during nonworking hours. 13-18 Cannabis testing in the workplace definitions. These sections add a new definition for “cannabis testing,” and make conforming changes to current definitions for workplace drug and alcohol testing. ▪ Section 13, defines “confirmatory test” and “confirmatory retest” to include a cannabis test is separate from a drug test . ▪ Sections 14 and 15 remove cannabis as a “drug” subject to current “drug and alcohol testing,” but provide for exceptions, including section 18. ▪ Section 16 defines “cannabis testing” separate from existing workplace testing. Applies existing methods and definitions unless stated. ▪ Section 17 defines “initial screening test” to in clude a cannabis test. ▪ Section 18 includes cannabis impairment under “safety-sensitive position.” 54 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 38 Section Description – Article 6: Miscellaneous Provisions 19 Limitations on cannabis testing. Prohibits cannabis testing of job applicants or using cannabis test results to make hiring decisions. Prohibits all random cannabis testing. Allows cannabis testing of current employees based on reasonable suspicion an employee: (1) is impaired by cannabis at work or on work property; (2) violated the employer’s valid written cannabis policy; or (3) sustained an injury or caused a work-related injury or accident. Existing law and testing safeguards apply. 20 Cannabis testing exceptions. Provides exceptions to limitations on cannabis testing. Existing drug and alcohol testing requirements continue to apply to: 1) a safety-sensitive position; 2) a peace officer; 3) a firefighter; 4) a position working directly with children, vulnerable adults, or health care patients; 5) a position requiring a commercial driver’s license or requiring testing for motor vehicle operation; 6) a federally funded grant position; or 7) any other position where state or federal law require testing. 21 Cannabis policy. Allows employers to create written policies prohibiting cannabis use, possession, sale, transfer, or impairment at work or on work property, and outlining cannabis testing requirements and discipline, subject to existing law. Requires prior written notice to affected employees and refusal, confirmation, and appeal procedures. 22 Reliability and fairness safeguards. Makes conforming changes to clarify that existing testing standards and protections under the workplace drug and alcohol statute apply if an employer requests or requires an employee to undergo cannabis testing under section 13. These include use of certain qualified laboratories, reporting, retention, and chain of custody procedures, notice of and right to receive test results, certain employee protections before undergoing testing or if they test positive, confirmatory retests, and limits on discipline and discharge related to a positive cannabis test. Adds subdivision 10a providing additional limitations on discipline or discharge for cannabis. Authorizes discipline, discharge, or other adverse personnel action by an employer for a cannabis violation at work or on work property, if an employee: 1) is impaired by cannabis at work; 55 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 39 Section Description – Article 6: Miscellaneous Provisions 2) has a verified positive test for cannabis; 3) violates an employer’s valid written cannabis policy; or 4) as provided under other state or federal law. 23 Privacy, confidentiality, and privilege safeguards. Makes conforming changes clarifying that privacy, confidentiality, and privilege provisions in the workplace drug and alcohol statute apply to cannabis testing. 24-25 Interaction with collective bargaining agreements and federal law. Allows for consistent cannabis testing policies in collective bargaining agreements that meet or exceed employee protections for workplace testing provisions. Recognizes federal preemption of state cannabis testing law where specified. 26 Background studies conducted by Department of Human Services. Prohibits the commissioner of human services from considering a conviction for possession of marijuana that has been expunged or any information related to a record that has been expunged when determining if a person is disqualified under a background study. 27 Drug convictions. Modifies the information the court administrator must periodically report to the commissioner of human services and removes obsolete language. 28 Drug formulary. Makes a conforming change. 29 Person convicted of drug offenses. Allows a person with a drug offense conviction to continue to be eligible for general assistance if the conviction is related to cannabis, marijuana, or THC. Specifies a positive drug test result must be for an illegal controlled substance under chapter 152 (drugs; controlled substances). Modifies the definition of “drug offense.” 30 Fleeing felons. Makes a technical change. 31 Person convicted of drug offenses. Allows a person with a drug offense conviction to continue to be eligible for MFIP if the conviction is related to cannabis, marijuana, or THC. Specifies a positive drug test result must be for an illegal controlled substance under chapter 152 (drugs; controlled substances). Modifies the definition of “drug offense.” 56 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 40 Section Description – Article 6: Miscellaneous Provisions 32 Fleeing felons. Makes a technical change. 33 Retail license not prohibited; lower potency edible products. Prohibits the revocation or suspension of a retail liquor license, or imposition of a licensing penalty, solely because a licensee holds a lower potency edible product retailer license. 34 Exclusive liquor stores. Permits exclusive liquor stores to sell lower potency edible products. 35 Mandatory expungement. Directs a court to expunge an eviction case if the tenant could receive an automatic expungement of a criminal offense related to cannabis or marijuana, or if the breach was based solely on the possession of marijuana or tetrahydrocannabinols. 36 Terms of covenant. Provides that a landlord cannot prohibit a tenant from legally possessing or using, and a tenant cannot waive the right to legally possess or use, any cannabinoid products or hemp-derived consumer products other than those consumed through smoking, vaping, or a similar manner. 37 Covenants; sober homes. Permits a sober housing program for people with substance use disorders to prohibit people in the program from possessing or using cannabinoid products or hemp - derived consumer products. 38 Benefit eligibility. Allows a person with a drug offense conviction to continue to be eligible for general assistance and SSI if the conviction is related to cannabis, marijuana, or THC. Specifies a positive drug test result must be for an illegal controlled subst ance under chapter 152 (drugs; controlled substances). Modifies the definition of “drug offense.” 39 Drug offenders; random testing; sanctions. Excludes convictions related to cannabis, marijuana, and tetrahydrocannabinols from the offenses that require random drug testing in order to receive certain MFIP benefits. 40-46 Definitions. Incorporates definitions related to adult-use cannabis and medical cannabis into provisions relating to firearm possession. 57 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 41 Section Description – Article 6: Miscellaneous Provisions 47 Ineligible persons. Establishes that the use of medical cannabis flower or medical cannabinoid products does not constitute the unlawful use of a controlled substance for the purpose of the right to possess a firearm. 48 Granting and denial of permits. Provides that enrollment in the medical cannabis program or use of medical cannabis flower or medical cannabinoid products may not be used as the basis to deny an application for a permit to carry a firearm. 49 Acts prohibited. Prohibits a person from carrying a pistol in a public place if the person knows or has reason to know that the use of medical cannabis flower or medical cannabinoid products has the capacity to cause impairment in the person. 50 Standardized forms. Directs the commissioner of public safety to include notice that a person does not need to disclose the use of medical cannabis flower or medical cannabinoid products by a person in the registry program in any form used for the purpose of approving or disapproving a person from owning, possessing, or carrying a firearm. 51 Lawful cannabis users. Provides that a person may not be denied the right to own, possess, or carry firearms based on the person’s status as a patient in the medical cannabis registry program and prohibits state and local agencies from accessing certain information or requesting certain information if the purpose is to prohibit a person in the registry program from owning, possessing, or carrying a firearm. 52 Repealer. Paragraph (a) repeals existing rules governing the medical cannabis registry program. Paragraph (b) repeals existing statutes governing the medical cannabis registry program. Paragraph (c) repeals section 152.027, subdivisions 3 and 4, which establish criminal penalties for possession of marijuana in a motor vehicle and the possession or sale of small amounts of marijuana. This paragraph is effective August 1, 2023. Paragraph (d) repeals the THC Therapeutic Research Act. 58 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 42 Article 7: Temporary Regulation of Certain Products This article directs the Department of Health to temporarily regulate products containing hemp-derived cannabinoids, including products that contain CBD and edible products that contain up to 5 milligrams of THC per serving. All sections other than the repealer are effective the day following final enactment. Section Description – Article 7: Temporary Regulation of Certain Products Food. Makes a conforming change. Sale of certain cannabinoid products. Subd. 1. Definitions. Defines additional terms including “artificially derived cannabinoid,” “batch,” “commissioner,” “distributer,” and “synthetic cannabinoid.” Subd. 2. Scope. Makes a conforming change to clarify that the commissioner of health will have regulatory authority over products under this section. Subd. 3. Sale of cannabinoids derived from hemp. Maintains current law. Subd. 4. Testing requirements. Requires persons seeking testing of hemp- derived cannabinoids and products containing those products to disclose any foreign substances, including pesticides, applied to the hemp or product. Permits the commissioner to determine that a testing laboratory does not meet minimum requirements. Subd. 5. Labeling requirements. Adds “batch number” to the information a label must contain. Subd. 5a. Additional requirements for edible cannabinoid products . Replaces the term “trace amounts” with a limit of 0.25 milligrams of THC in relation to the amount of THC certain beverages can contain. Requires indications of serving size to appear on an edible cannabinoid product. Limits the cannabinoids an edible cannabinoid product can contain to delta-8 THC and delta-9 THC and specifically prohibits other artificially derived cannabinoids and synthetic cannabinoids. Subd. 5b. Registration; prohibitions. Requires businesses selling edible cannabinoid products to register with the commissioner of health by October 1, 2023. Prohibits charging a fee for registration. Prohibits on-site consumption of edible cannabinoid products. Prohibits giving away edible cannabinoid products except as an incentive to purchase a storage container designed to prevent access by a person under age 21. 59 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 43 Section Description – Article 7: Temporary Regulation of Certain Products Subd. 5c. Age verification. Requires businesses to verify the age of a customer before selling edible cannabinoid products and identifies valid forms of identification. Subd. 6. Noncompliant products; enforcement. Establishes that products sold or held for sale in this state are considered noncompliant products when they fail to meet certain health and safety requirements. Permits the commissioner to assume that a product in this state is intended for sale in the state if similar products have been sold to customers in the state. Permits the commissioner to enforce this section under the Health Enforcement Consolidation Act. Permits the commissioner to enter into agreements with the Office of Cannabis Management to perform inspections and take enforcement action. Subd. 7. Violations; criminal penalties. Establishes gross misdemeanor penalties for certain sales of edible cannabinoid products, including the knowing sale of noncompliant products or sales to a person under age 21. Exclusive liquor stores. Permits exclusive liquor stores to sell edible cannabinoid products. Edible cannabinoid products; enforcement. Establishes that the Department of Health has enforcement authority over section 151.72 and can exercise the powers in the Health Enforcement Consolidation Act of 1993. Provides that, when the powers and duties of the Office of Medical Cannabis transfer to the Office of Cannabis Management, enforcement of section 151.72 also transfers. Repealer. Repeals section 151.72, which provides for the temporary regulation of edible cannabinoid products, effective July 1, 2024. Article 8: Scheduling of M arijuana Reschedules marijuana from Schedule I to Schedule III. Article 9: Appropriations Appropriates money to pay for establishing the regulatory structure for adult -use cannabis and other costs that will be incurred before the legal sale of adult-use cannabis. 60 Item 2. H.F. 100 Sixth engrossment Minnesota House Research Department Page 44 Minnesota House Research Department provides nonpartisan legislative, legal, and information services to the Minnesota House of Representatives. This document can be made available in alternative formats. www.house.mn/hrd | 651-296-6753 | 155 State Office Building | St. Paul, MN 55155 61 Item 2. 1.1 .................... moves to amend H.F. No. 100, the fourth engrossment, as follows:​ 1.2 Page 3, line 32, after "using" insert "heat, pressure,"​ 1.3 Page 9, delete lines 20 to 23 and insert:​ 1.4 "(4) consists of servings that contain no more than five milligrams of delta-9​ 1.5 tetrahydrocannabinol, 25 milligrams of cannabidiol, 25 milligrams of cannabigerol, or any​ 1.6 combination of those cannabinoids that does not exceed the identified amounts;"​ 1.7 Page 9, line 25, after "cannabinoids" insert "per serving"​ 1.8 Page 16, after line 13, insert:​ 1.9 "(d) The director shall not have been a member of the Minnesota legislature or held a​ 1.10 constitutional office for at least four years before appointment."​ 1.11 Page 30, line 7, after the period, insert "Nothing in this section prohibits a local unit of​ 1.12 government from charging the retailer registration fee established in section 342.215."​ 1.13 Page 31, line 4, after "(b)" insert "Except as provided in section 342.215,"​ 1.14 Page 31, line 9, delete "or"​ 1.15 Page 31, line 10, after "grounds" insert ", or a public park that includes a playground,​ 1.16 athletic field, or other attraction regularly used by minors"​ 1.17 Page 31, delete lines 11 to 13 and insert:​ 1.18 "(d) The office shall work with local units of government to:​ 1.19 (1) develop model ordinances for reasonable restrictions on the time, place, and manner​ 1.20 of the operation of a cannabis business;​ 1.21 (2) develop standardized forms and procedures for issuance of a retail registration​ 1.22 pursuant to section 342.215; and​ 1​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 62 Item 2. 2.1 (3) develop model policies and procedures for the performance of compliance checks​ 2.2 required under section 342.215."​ 2.3 Page 32, line 7, after the period, insert "If a local unit of government notifies the office​ 2.4 that a cannabis business other than a cannabis retailer, cannabis microbusiness with a retail​ 2.5 operations endorsement, lower potency edible product retailer, or medical cannabis retailer​ 2.6 poses an immediate threat to the health or safety of the public, the office must respond​ 2.7 within 24 hours and may take any action described in section 342.18 or 342.19."​ 2.8 Page 40, line 5, after the period, insert "Inspections must take place within 24 hours of​ 2.9 receipt of a credible report."​ 2.10 Page 48, after line 28, insert:​ 2.11 "Sec. .... [342.215] RETAILERS; LOCAL REGISTRATION AND ENFORCEMENT.​ 2.12 Subdivision 1.Registration required.Before making retail sales to customers or patients,​ 2.13 a cannabis retailer, cannabis microbusiness with a retail operations endorsement, lower​ 2.14 potency edible product retailer, or medical cannabis retailer must register with the local unit​ 2.15 of government in which the retail establishment is located.​ 2.16 Subd. 2.Registration fee.A local unit of government may charge an initial retail​ 2.17 registration fee of up to $200. The local unit of government may also charge a renewal fee​ 2.18 of up to $200. A cannabis business with a cannabis retailer license and a medical cannabis​ 2.19 retailer license for the same location may only be charged a single registration fee. The​ 2.20 registration fee is nonrefundable.​ 2.21 Subd. 3.Issuance of registration.(a) A local unit of government shall issue a retail​ 2.22 registration to a cannabis retailer, cannabis microbusiness with a retail operations​ 2.23 endorsement, lower potency edible product retailer, or medical cannabis retailer that:​ 2.24 (1) has a valid license issued by the office;​ 2.25 (2) has paid the registration fee or renewal fee pursuant to subdivision 2;​ 2.26 (3) is found to be in compliance with the requirements of this chapter at any preliminary​ 2.27 compliance check that the local unit of government performs; and​ 2.28 (4) if applicable, is current on all property taxes and assessments at the location where​ 2.29 the retail establishment is located.​ 2.30 (b) Before issuing a retail registration, the local unit of government may conduct a​ 2.31 preliminary compliance check to ensure that the cannabis business is in compliance with​ 2​Sec. .​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 63 Item 2. 3.1 the applicable operation requirements and the limits on the types of cannabis flower,​ 3.2 cannabinoid products, and hemp-derived consumer products that may be sold.​ 3.3 (c) The local unit of government shall renew the retail registration when the office renews​ 3.4 the license of the cannabis business.​ 3.5 (d) A retail registration issued under this section may not be transferred.​ 3.6 Subd. 4.Compliance checks.(a) A local unit of government shall conduct compliance​ 3.7 checks of every cannabis business with a retail registration issued by the local unit of​ 3.8 government. The checks shall assess compliance with age verification requirements; the​ 3.9 applicable operation requirements; and the applicable limits on the types of cannabis flower,​ 3.10 cannabinoid products, and hemp-derived consumer products being sold.​ 3.11 (b) The local unit of government must conduct unannounced age verification compliance​ 3.12 checks at least once each calendar year. Age verification compliance checks must involve​ 3.13 persons at least 17 years of age, but under the age of 21, who, with the prior written consent​ 3.14 of a parent or guardian if the person is under the age of 18, attempt to purchase cannabis​ 3.15 flower, cannabinoid products, or hemp-derived consumer products under the direct​ 3.16 supervision of a law enforcement officer or an employee of the local unit of government.​ 3.17 (c) Checks to ensure compliance with the applicable operation requirements and the​ 3.18 limits on the types of cannabis flower, cannabinoid products, and hemp-derived consumer​ 3.19 products that may be sold must be performed at least once each calendar year and may be​ 3.20 performed by a law enforcement officer or an employee of the local unit of government.​ 3.21 Subd. 5.Registration suspension and cancellation; notice to office; penalties.(a) If​ 3.22 a local unit of government determines that a cannabis business with a retail registration​ 3.23 issued by the local unit of government is not operating in compliance with the requirements​ 3.24 of this chapter or that the operation of the business poses an immediate threat to the health​ 3.25 or safety of the public, the local unit of government may suspend the retail registration. The​ 3.26 local unit of government must immediately notify the office of the suspension and shall​ 3.27 include a description of the grounds for the suspension.​ 3.28 (b) The office shall review the retail registration suspension and may order reinstatement​ 3.29 of the retail registration or take any action described in section 342.18 or 342.19.​ 3.30 (c) The retail registration suspension shall be for up to 30 days unless the office suspends​ 3.31 the license and operating privilege of the cannabis business for a longer period or revokes​ 3.32 the license.​ 3​Sec. .​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 64 Item 2. 4.1 (d) The local unit of government may reinstate the retail registration if the local unit of​ 4.2 government determines that any violation has been cured. The local unit of government​ 4.3 must reinstate the retail registration if the office orders reinstatement.​ 4.4 (e) No cannabis retailer, cannabis microbusiness with a retail operations endorsement,​ 4.5 lower potency edible product retailer, or medical cannabis retailer may make any sale to a​ 4.6 customer or patient without a valid retail registration. The local unit of government may​ 4.7 impose a civil penalty of up to $2,000 for each violation of this paragraph."​ 4.8 Page 59, delete lines 23 to 25 and insert:​ 4.9 "(b) A city or county may adopt an ordinance to prohibit sales for any period between​ 4.10 9:00 p.m. and 2:00 a.m. the following day, or between 8:00 a.m. and 10:00 a.m. on the days​ 4.11 of Monday through Saturday."​ 4.12 Page 79, delete subdivision 5 and insert:​ 4.13 "Subd. 5.Compliant products.(a) A lower potency edible product retailer shall ensure​ 4.14 that all lower potency edible products offered for sale comply with the limits on the amount​ 4.15 and types of cannabinoids that a lower potency edible product can contain, including but​ 4.16 not limited to the requirement that lower potency edible products:​ 4.17 (1) consist of servings that contain no more than five milligrams of delta-9​ 4.18 tetrahydrocannabinol, 25 milligrams of cannabidiol, 25 milligrams of cannabigerol, or any​ 4.19 combination of those cannabinoids that does not exceed the identified amounts;​ 4.20 (2) do not contain more than a combined total of 0.5 milligrams of all other cannabinoids​ 4.21 per serving; and​ 4.22 (3) do not contain an artificially derived cannabinoid other than delta-9​ 4.23 tetrahydrocannabinol.​ 4.24 (b) If a lower potency edible product is packaged in a manner that includes more than​ 4.25 a single serving, the lower potency edible product must indicate each serving by scoring,​ 4.26 wrapping, or other indicators that appear on the lower potency edible product designating​ 4.27 the individual serving size.​ 4.28 (c) A single package containing multiple servings of a lower potency edible product​ 4.29 must contain no more than 50 milligrams of delta-9 tetrahydrocannabinol, 250 milligrams​ 4.30 of cannabidiol, 250 milligrams of cannabigerol, or any combination of those cannabinoids​ 4.31 that does not exceed the identified amounts."​ 4.32 Page 90, delete subdivision 8 and insert:​ 4​Sec. .​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 65 Item 2. 5.1 "Subd. 8.Allowable delivery methods.A patient in the registry program may receive​ 5.2 medical cannabis flower and medical cannabinoid products. The office may approve​ 5.3 additional delivery methods to expand the types of products that qualify as medical​ 5.4 cannabinoid products."​ 5.5 Page 91, delete line 13 and insert:​ 5.6 "(1) be at least:​ 5.7 (i) 18 years of age to obtain or assist with medical cannabinoid products or medical​ 5.8 cannabis paraphernalia; and​ 5.9 (ii) 21 years of age to obtain or assist with medical cannabis flower;"​ 5.10 Page 106, after line 17, insert:​ 5.11 "(10) a warning symbol developed by the office in consultation with the commissioner​ 5.12 of health and the Minnesota Poison Control System that:​ 5.13 (i) is at least three-quarters of an inch tall and six-tenths of an inch wide;​ 5.14 (ii) is in a highly visible color;​ 5.15 (iii) includes a visual element that is commonly understood to mean a person should​ 5.16 stop;​ 5.17 (iv) indicates that the product is not for children; and​ 5.18 (v) includes the phone number of the Minnesota Poison Control System;"​ 5.19 Renumber the clauses in sequence​ 5.20 Page 156, line 5, delete "15" and insert "five"​ 5.21 Page 181, line 17, after the period, insert "Notice shall also clearly state that an order of​ 5.22 expungement or a grant of expungement may not change a person's immigration status and​ 5.23 any person with questions about the effect on the person's immigration status should consult​ 5.24 with an immigration attorney."​ 5.25 Page 196, after line 12, insert:​ 5.26 "Sec. .... Minnesota Statutes 2022, section 144.99, subdivision 1, is amended to read:​ 5.27 Subdivision 1.Remedies available.The provisions of chapters 103I and 157 and sections​ 5.28 115.71 to 115.77; 144.12, subdivision 1, paragraphs (1), (2), (5), (6), (10), (12), (13), (14),​ 5.29 and (15); 144.1201 to 144.1204; 144.121; 144.1215; 144.1222; 144.35; 144.381 to 144.385;​ 5.30 144.411 to 144.417; 144.495; 144.71 to 144.74; 144.9501 to 144.9512; 144.97 to 144.98;​ 5​Sec. .​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 66 Item 2. 6.1 144.992; 152.22 to 152.37; 326.70 to 326.785; 327.10 to 327.131; and 327.14 to 327.28​ 6.2 and all rules, orders, stipulation agreements, settlements, compliance agreements, licenses,​ 6.3 registrations, certificates, and permits adopted or issued by the department or under any​ 6.4 other law now in force or later enacted for the preservation of public health may, in addition​ 6.5 to provisions in other statutes, be enforced under this section.​ 6.6 EFFECTIVE DATE.This section is effective January 1, 2024.​ 6.7 Sec. .... Minnesota Statutes 2022, section 144A.4791, subdivision 14, is amended to read:​ 6.8 Subd. 14.Application of other law.Home care providers may exercise the authority​ 6.9 and are subject to the protections in section 152.34 342.51.​ 6.10 EFFECTIVE DATE.This section is effective January 1, 2024."​ 6.11 Page 224, delete section 2​ 6.12 Page 234, after line 1, insert:​ 6.13 "Sec. .... EDIBLE CANNABINOID PRODUCTS; ENFORCEMENT.​ 6.14 (a) The Department of Health shall enforce the provisions of Minnesota Statutes, section​ 6.15 151.72, and all rules, orders, stipulation agreements, settlements, compliance agreements,​ 6.16 and registrations related to that section adopted or issued by the Office of Medical Cannabis​ 6.17 or the Department of Health pursuant to the Health Enforcement Consolidation Act of 1993​ 6.18 contained in Minnesota Statutes, sections 144.989 to 144.993. The commissioner of health​ 6.19 may assign enforcement responsibilities to the Office of Medical Cannabis.​ 6.20 (b) The enforcement authority under paragraph (a) shall transfer to the Office of Cannabis​ 6.21 Management at any such time that the powers and duties of the Department of Health with​ 6.22 respect to the medical cannabis program under Minnesota Statutes 2022, sections 152.22​ 6.23 to 152.37, are transferred to the Office of Cannabis Management. The director of the Office​ 6.24 of Cannabis Management may assign enforcement responsibilities to the Division of Medical​ 6.25 Cannabis.​ 6.26 (c) This section shall expire on July 1, 2024.​ 6.27 EFFECTIVE DATE.This section is effective the day following final enactment."​ 6.28 Page 259, after line 26, insert:​ 6.29 "Subd. 20.Department of Health; Minnesota Poison Control System.$500,000 in​ 6.30 fiscal year 2024 and $500,000 in fiscal year 2025 are appropriated from the general fund​ 6​Sec. .​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 67 Item 2. 7.1 to the commissioner of health to support the poison control system and award or supplement​ 7.2 grants pursuant to Minnesota Statutes, section 145.93."​ 7.3 Renumber the sections in sequence and correct the internal references​ 7.4 Amend the title accordingly​ 7​Sec. .​ HOUSE RESEARCH BJ/RK H0100A47​02/06/23 05:21 pm ​ 68 Item 2. CITY COUNCIL MEETING AGENDA SECTION WORK SESSION ITEMS MEETING DATE MARCH 6, 2023 ITEM: Introduction to Property Maintenance and Rental Licensing DEPARTMENT: Fire BY/DATE: Dan O’Brien, 3/6/2023 CITY STRATEGY: (please indicate areas that apply by adding a bold “X” in front of the selected text below) _Safe Community _Diverse, Welcoming “Small-Town” Feel _Economic Strength X Excellent Housing/Neighborhoods _Equity and Affordability _Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population BACKGROUND: Assistant Chief O’Brien will present an overview of the Property Maintenance Code and Rental Property Licensing. Topics presented are:  Brief History and the City’s role in the Property Maintenance Code  Inspection and enforcement  Abatements  Rental Licensing  Tenant – Landlords  Revocations Time approx.: 30-45 minutes. RECOMMENDED MOTION(S): MOTION: None ATTACHMENT(S): None. 69 Item 4. CITY COUNCIL WORK SESSION AGENDA SECTION WORK SESSION ITEMS MEETING DATE 3/6/2023 ITEM: Single Family Rental Moratorium, Density Cap, and Accessory Dwelling Unit (ADU) Discussion DEPARTMENT: Community Development BY/DATE: Mitch Forney, and Aaron Chirpich, 3/1/23 CITY STRATEGY: _Safe Community _Diverse, Welcoming “Small-Town” Feel X Economic Strength X Excellent Housing/Neighborhoods _Equity and Affordability _Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population SINGLE-FAMILY RENTAL DENSITY CAP BACKGROUND: In 2022, the city Council expressed an interest in exploring the option of regulating the number of rental licenses for single-family homes within the City. This conversation stemmed from a concern about the amount of investor/corporate owned single-family housing in the City limiting the number of affordable home ownership opportunities for residents of Columbia Heights. In the original report to the Council, the city planner revealed that as of 2022, the current homeownership rate in Columbia Heights was approximately 67% (US Census). According to a rental property list provided to the Community Development Department on February 11, 2022, the City had approximately 422 licensed single -family rental dwellings. This includes both detached single-family homes and attached single-family homes, such as townhomes. Staff compared this to the approximate 6,112 total single-family dwellings in the City, and calculated that roughly 7% of the current single-family housing stock is licensed as a rental property. It is estimated that the City has 705 total duplex/triplex/quad dwellings, which are typically rentals by nature. Also in 2022, the Minneapolis Fed released a report that found that 5.6% of Columbia Heights single-family homes are investor owned. In exploring options to regulate the density of single-family rental dwellings, staff turned to the cities of West St. Paul and Anoka for direction. Both cities have implemented single-family rental density caps which limit rental licenses to 10% for single-family zoning. These limits are designated by residential blocks and maps are maintained on a regular basis. At the time of policy implementation, if a block exceeds the 10% cap on single - family rentals, then the license is still valid. In the case of West Saint Paul, it is treated as a legal nonconformity. In the case of Anoka, the property would lose its license once sold. Both ordinances provide options for temporary rental licenses for unique circumstances. After presenting at the March 7th, 2022, work session, staff worked to develop a draft ordinance for the rental density cap (Attachment 1). During the review of the draft ordinance the council had a discussion regarding how Maple Grove had established a rental moratorium. The council then directed staff to research and draft a similar ordinance. Ordinance 1678 “an interim ordinance establishing a moratorium within the city on new rental license applications for single family homes” held its second reading on August 22nd officially putting into place a 12-month rental license moratorium. 70 Item 5. City of Columbia Heights - Council Letter Page 2 The items below need to be completed before bringing the ordinance forward for two readings and before we can fully implement this ordinance.  Work with GIS and Planning staff to get a thorough count of lots per City block and legal single -family dwellings in all residential zoning districts.  Finalize a Rental Density Map for Single-Family Lots per City block that is maintained and updated on a consistent basis.  Work internally to designate new responsibilities to City staff, such as map updating and temporary rental license application review.  Notify all current single-family rental license holders of ordinance update and what they’re subject to moving forward.  Create a designated City website that provides information of the ordinance change and current Rental Density Map. With new Council members recently being seated, staff wanted to check in and confirm that the Council would still like to move forward with implementation of the single-family rental density cap. ACCESSORY DWELLING UNITS: An accessory dwelling unit, or ADU is a secondary housing unit that is placed on an existing single-family residential lot. ADU’s can be internal to an existing home (duplex), stand alone, or added to an accessory structure (garage). Recently, many communities within the seven-county metropolitan service area have enacted zoning ordinances that introduce ADU’s into neighborhoods zoned for single -family residential development. Staff believe that ADU’s are relevant to the single-family rental density cap conversation, and therefore would like to briefly discuss ADU’s in conjunction. COLUMBIA HEIGHTS ADU HISTORICAL CONTEXT: Columbia Heights has a long history of allowing duplexes (internal ADU’s) in its single-family neighborhoods. Since 1974, large portions of the City have been zoned R2 – One and Two Family Residential. This zoning classification has allowed, and still allows for the development of duplexes in many areas of the City. For context, more than 70 percent of all parcels in the City are currently zoned to accommodate two-family residential properties. Currently, not all parcels zoned to allow two-family dwellings would qualify for the development of a two-family housing unit when other zoning conditions are applied. However, there are many properties in the City where internal ADU’s can still be constructed. Between the years of 1974 and 2005, two-family dwellings (duplexes), were permitted uses in the R-2 zoning district. This meant that the use was permitted by general right and did not require review by the Planning Commission and City Council. In 2005, this designation changed with a zoning amendment that classified two- family dwellings as conditional uses in all zoning districts that allow for the use. This means that two-family dwellings now require full review by the Planning Commission and City Council. The 2005 zoning amendment also changed the standards for what parcels would qualify for the development of a duplex. These changes were in response to concerns that many of Columbia Heights’ R-2 neighborhoods were being overbuilt with duplexes that were popping up on many of the City’s smaller lots, exasperating parking issues and detracting from the character of the surrounding neighborhood. For more information, please refer to the attached planning report from 2005 detailing the changes. 71 Item 5. City of Columbia Heights - Council Letter Page 3 HOW THIS APPLIES TO THE RENTAL DENSITY CAP: If the Council remains committed to the single-family rental density cap, staff believe that the City should not expand the allowability of duplexes or other forms of ADU’s in the City, as the two efforts would oppose one another. ADU’s are rental units by nature. Therefore, limiting one form of rental property and expanding another in the same district(s) would be strategically ineffective. ATTACHMENT(S):  Draft Rental Density Cap Ordinance  Draft Rental Density Cap Map  1974 Zoning Map  Current Zoning Map  2005 R-2 Planning Report 72 Item 5. ORDINANCE NO. XXXX BEING AN ORDINANCE AMENDING CHAPTER 5A ARTICLE IV OF THE COLUMBIA HEIGHTS CITY CODE TO REGULATE RENTAL DENSITY FOR DETACHED SINGLE-FAMILY RENTAL DWELLINGS The City of Columbia Heights does ordain: Section 1 5A.401 of the Columbia Heights City Code is hereby amended to read as follows, to wit: 5A.401 OCCUPANCY LICENSE REQUIRED. (A) No person, firm, government agency or corporation shall own a premises that is rented, leased, let, or used for any type of occupancy in the city City without having first obtained an occupancy license (license) as hereinafter provided and outlined in the Property Maintenance Inspection Policy. Each such license shall register annually with the city City. If the license is denied, no occupancy of a premises, then vacant or which become vacant, is permitted until a license has been issued. Apartment units within an unlicensed apartment building for which a license application has been made and which units are in compliance with this chapter may be occupied provided that the unlicensed units within the apartment building do not create a hazard to the health and safety of persons in occupied units. (B) Rental Density for Detached Single-Family Rental Dwellings. (1) In any R-1, R-2A, R-3, or R-4 zoning district, no more than ten percent of the single-family lots on any block shall be eligible to obtain a rental license, unless a temporary license is granted by the City Council as provided herein. Table 1 indicates how many single-family lots per block are able to be licensed as a rental property based on the number of lots that exist in a block. TABLE 1 Lots/Block Rental Units Allowed 1-14 1 15-24 2 25-34 3 35-44 4 45-54 5 55-64 6 65-74 7 75-84 8 85-94 9 (2) The following guidelines shall apply to determine eligible blocks and lots: (a) For the purposes of this section, a BLOCK shall be defined as an area of land enclosed within the perimeter of streets, watercourses, public parks, municipally owned lots, and City boundaries and further defined by an official map maintained by the City. (b) This section shall apply to legally conforming lots of record and legally nonconforming lots of record. For the purposes of this section, lots of record may also be referred to as PROPERTIES, PROPERTY, or LOTS. 73 Item 5. (c) If a block contains more than one type of zoning district, only R-1, R-2A, R-3, and R-4 zoning district lots shall be included in the calculation of the total number of lots per block. (d) Two-family residential, townhome/twinhome residential, multiple family residential, commercial, public, institutional, and industrial uses located in an R-1, R-2A, R-3, or R-4 zoning district shall not be included in the calculation of the total number of lots per block. (3) If the number of rental properties meets or exceeds the permitted number of rental properties per defined block on the effective date of the ordinance from which this section is derived, no additional rental licenses shall be approved for the block, unless a temporary license is granted by the City Council as provided herein. Existing rental licenses may be renewed; however, should a rental license not be renewed, terminated due to the sale of a property by the current license holder, transfer of property ownership occurs, or if the rental license is revoked or lapses, the rental license shall not be reinstated unless it is in conformance with this section and other applicable sections of the City Code. (4) If the number of rental properties meets or exceeds the permitted number of rental properties per defined block on the effective date of the ordinance from which this section is derived, a property owner may request a temporary license to allow an additional rental property for that block. The property owner must hire a licensed professional property management company to manage the property. The City Council may grant or deny a temporary license in its sole discretion. Persons requesting a temporary license must make an annual application to the City. No property owner shall hold a temporary rental license for the same property for more than two consecutive years. (C) Exception. Owner occupied Single-family home occupancies. (Ord. 1532, passed 11-26-07; Ord. XXXX, passed XX-XX-XX) Section 2 This ordinance shall be in full force and effective from and after 30 days after its passage. First Reading: Offered by: Seconded by: Roll Call: Second Reading: Offered by: Seconded by: Roll Call: Date of Passage: ______________________________________ Amáda Márquez Simula, Mayor 74 Item 5. Attest: ___________________________________ Sara Ion, City Clerk/Council Secretary 75 Item 5. Single-Family Rental Dwellings Date Created: February 28, 2022 Disclaimer: The provider makes no representation or warranties with respect to the reuse of this data.76 Item 5. 77 Item 5. SULLIVAN LAKE(SANDY LAKE) CLOVER POND HIGHLAND LAKE SECONDARY SILVER HART LABELLE JACKSON POND POND POND LAKE LAKE ZUREKPOND 4700 3920 150014601400 800 530 3965 4300 3900 1150 1345 4333 4001 825 721 3839 1555 4301 825 4757 1858 317 637 5100 999 4030 1515 4755 4444 4849 2201 4141 3900 3850 1011 1550 440244044406 434643444342 38103808 4458 4301 3919 965 940 3901 1500 675 4707 4101 4301 5250 455 889 885 4340 4306 3984 UNITS:1-33&101-151 4612 883 881 879877875873871 855 1000 700 637 590 4624 4618 4600 4453 14151235 1070 3844 3705 620 1069 533 3755 5085 5150 950 3801 4729 716 5025 4657 950 3836 1324 UNITS:101 - 124,201 - 224,301 - 324 UNITS:101 - 125,201 - 225,301 - 325 UNITS:101 - 120,201 - 220,301 - 320 4811 682660674 3719 4141 233 900 3930 3701 4111 3813 80 5224 999 5075 4003 3939 3807 3801 4310 4015 4000 3820 4025 3989 3929 4950 4121 1855 4757 4633 4801 230 2300 3905 5055 5280 4605 4326 887 857 38063804 4437 4400 4249 3701 4100 4101 3933 3801 650 4163 635 4025 3817 3825 4111 4205 1675 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4854 4820 4801 4802 4819 4850 4826 4844 4825 786 782 790 794 3812 38013800 3813 335 5 4 6 336 5 3 7 550 570 564 5 3 0 411 5 4 9 412 354 562 353 333 330 355 5 1 0 352 801 805 766 762 758 754 770 750 417 9 415 1 3867 38513851 3815 3803 3800 3814 3801 3864 3850 3866 3867 3821 3802 3850 3820 304 317 313 309 305 37223724 3849 UNITS:101-103&201-203 UNITS:101-103&201-203 UNITS:101-103&201-203 UNITS:101-103&201-203 UNITS:101 - 103&201 - 204 UNITS:101-104&201-204 GARAGES:1-10 UNITS:101-106&201-206UNITS:101-103&201-202 UNITS:101-106&201-204 UNITS:100 - 119, 200 - 209,300 - 320, 400 - 415 UNITS:101-106&201-206 UNITS:101-103&201-203 UNITS:101-103&201-203 UNITS:1-20 408 410 409 407 405 403 401 341 343 345 347 349 351 328 326 324 332 334 350 348 346 344 342 331 329 325 327 351 349 347 345 343 341 330 332 334 344 346 348 326 350 347 345 343 333 331 329 325 327 38053807380938113813 3823382538273829383138333835 38043806380838103812 3822382438263828383038323834 556 624 620 710 3802 3814 3811380938073805 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KORDIAKPARK OF CITY FRIDLEY CITY OF HILLTOP MINNEAPOLIS (WATERWORKS) CITY OF FRIDLEY CITY OF FRIDLEY CITY OF ST. ANTHONY CITY OF NEW BRIGHTON AVE47 1/2 C R E S T HI G H L AN D AVE STINSON 5TH 4TH AVE 6TH AVE50TH AVE AVE47TH PIERCE ST FILLMORE AVE47TH AVE46TH STST STSTST JOHNSON TAYLOR POLK TYLER UPLANDGOLF PL L NMAIDEN AVE45TH AVE44 1/2 ST ST 45 1/2 AVE ST ST STSTSTST AVE ARTHURPL ARTHUR BLVD AVE46TH AVE47TH 45TH ST STSTSTST AVE STST AVE 45TH A V E7TH MC LEOD 43RD 4 4 T H LEANDER ST ROYCE AVE43 1/2 ST AVE AVE 44TH 43RD AVE STINSON LANE 42ND B L V D 41ST FILLMORE AVE42ND AVE STINSONAVE AVE BLVD 5TH 3RD 2ND 6TH 4TH MAIN AVE44TH AVE44TH AVE43RD43RD AVE42ND 42ND ST AVE STST P A S S PLACE TERRACE 51ST COURT PL ST STSTSTSTST D RCHALET DRARGONNE BLVD DR R A I N I E R PASS AVE53RD ST ST ST AVE AVE 51ST 52ND 50 1/2 AVE JEFFERSON PKWY INNSBRUCK JOHNSON PIERCE 50TH TYLER 49 1/2 AVE ST TERRACE ST S T FIL L M O R E LINCOLN JACKSON MONROE MADISON 7TH P K W Y F O R ES TINNSBRUCK PKW Y W E S T PL D RFAIRWAY 49TH ST C I R C L E AVE40TH 40THHAYES S T POLK TYLER RESERVOIR VAN BUREN JACKSON QUINCY MONROE MADISON JEFFERSON WASHINGTON 7TH STSTSTST ST GOULD STSTSTST ST ST ST AVE 39 1/2 BLVD AVE 39TH STST BLVD AVE39TH ST STSTSTSTSTST PKWY H A R T CLEVELAND ARTHUR AVE PETERS AVE 41ST ST ST 6TH ST 4TH 5TH 3 R D 40TH S T ST 3RD AVE40TH L O O K O U T ST AVE 41ST S U M M I T H U S E T ST 39TH 38TH AVE M IL L PL P LCALIFORNIA E D G E M O O R AVE AVE TERRACE BLVD 41ST WASHINGTON 2 1/2 VAN BUREN JACKSON QUINCY MONROE MADISON JEFFERSON POLK BUCHANAN INNSBRUCK PL38TH HAYES ST PIERCE JOHNSON RESERVOIR AVE37TH LINCOLN BUCHANAN POLK TYLER VAN BUREN JACKSON QUINCY 38TH ST MADISON PL MADISON AVE AVE B L V D STINSON AVE37TH P L 3 7 T H ST MAIN 5TH 38TH 37TH2 1/2 3RD 2ND AVE37TH MCKINLEYSTSTST CENTRAL AVE. NE JEFFERSON BENJAMIN ST UNIVERSITY AVE MULCARE B U C H A N A N S T POLK CIR. I N N S C I R . W . ST. IMER DR BOREALIS LN KHYB ER LN CHE ERY LN WASHINGTON S U LLIVANLN SULLIVAN WAY CENTRAL AVE. NE IVANHOE PL RESERVOIR BLVD RESERVOIR BLVD BENJAMIN PL ULYSSES ST UNIVERSITY AVE. NE VAN BUREN JACKSON QUINCY MONROE MADISON JEFFERSON WASHINGTON 7TH STSTSTST STSTSTST ST 6TH ST 4TH 5TH ST F AI R W AY D RI V E CREST NORTH UPLAND S T . M O R I T Z D R . M A TTERHORN D R MOLAN TERR. SULLIV AN DR ST 4TH ST 5TH 48TH 49TH ST WASHINGTON JEFFERSON ST ST 4TH ST 5TH ST WASHINGTON ST JEFFERSON AVE46 1/2 PARK VIE W LN BUCHANAN ST TYLER PL TYLER PL 45TH C H A T H A M R O A D H EI G H T S D RIV E ST ST PIERCE DR PENNINE PL EAST UPLAND CREST WEST UPLAND C R E S T 6TH ST 6TH ST LOMIANKI LN P A R K V I E W PL KEYES ST LABELLE ST MCKENNA ST GUAVITTE ST MAUREEN LN MAUREEN DR KAREN LN KATHY LN 42 1/2 AVE GRAND AVE PARKSIDE LN JOLLY LN LOGACZ LN OR EN DORFF WAY NAEGELE AVE BAKKEN BLVD VETERANS WAY ST 3RD PR OF T PL 5TH LOOKOU T PL GR AN DV IEW C T SULL I VAN DR Project Path: Q:\GIS\GISDATA\PLANNING\PROJECTS\ZONING 36x58.MXD Map Update Date: October 2015 Z O N I N G M A P City ofC O L U M B I A H E I G H T SC O M M U N I T Y D E V E L O P M E N T 68.34 L E G E N D Commercial: Public: Industrial: 2364.34 100.00% Non-City Land: TOTALS: Zoning Designations: Mixed: Acres:% of Total:Residential: 363.06 15.36%R-1 - Single Family Residential District 629.94 26.64% 69.35 2.93% 157.15 6.65% 22.0 0.93% R-2A - One and Two Family Residential District R-2B - Built as Duplexes R-3 - Multiple Family Residential District R-4 - Multiple Family Residential District 24.7 1.04% 25.39 1.07% 90.42 3.82% LB - Limited Business District CBD - Central Business District GB - General Business District 57.34 2.43% 9.7 0.41% I - Industrial District I-2 - Industrial District 168.54 7.13% 503.21 21.28% PO - Public and Open Space Right-of-Way 145.05 6.13%City of Hilltop and Mpls Water Works 30.15 1.28%MXD - Mixed Use D istrict Water Features Revision Date: 1/30/1991 Revision Date: 2/2001 - Engineering Department Review Ordinance Date: August 12, 1974 Revision Date: 3/2001 - New Parcel Coverage Revision Date: 2/2003 - Community Development Department Review Disclaimer: The Zoning Designations found on this map are a graphical representationof the contents of the City of Columbia Heights Zoning Ordinance. Thisedition of this map is designed for the purposes of editing and correction.All questions concerning the Zoning Map should be directed to theCommunity Development Department. Sources:City of Columbia Heights -Community Development DepartmentEngineering Department(G.I.S. Division) Revision Date: 3/2000 - Community Development Department Review Revision Date: 10/2015 - Community Development Department Review Map Compilation Date: March 3, 1998·0 1,400 2,800700 Feet 0 0.2 0.40.1 Miles 1 inch = 300 feet1:3,600RF: 2.89% 78 Item 5. CITY OF COLUMBIA HEIGHTS PLANNING REPORT CASE NUMBER: 2005-1204 DATE: November 23, 2005 TO: Columbia Heights Planning Commission APPLICANT: City of Columbia Heights REQUEST: Zoning Amendment to the Zoning Code as it relates to the R-2, One and Two Family Residential District PREPARED BY: Jeff Sargent, City Planner BACKGROUND: Due to recent events related to the construction of new duplexes in neighborhoods primarily comprised of single-family homes, the City Council and Planning Commission directed staff to review the zoning regulations governing duplexes. Specifically, the City Council and Planning Commission have expressed concerns over duplexes located in predominately single-family neighborhoods and the scale or size of duplexes being constructed compared to the character of the surrounding neighborhood. Patrick Smith, a former Columbia Heights City Planner, did some research regarding duplexes within the city limits and addressed his conclusions in a memo submitted to the City Council on May 17, 2005. The memo stated that based on rental licenses, there are approximately 354 duplexes located in the City of Columbia Heights. Staff also compared Columbia Heights to 12 similarly developed cities, and concluded that Columbia Heights has the highest percentage of dwelling units that are duplexes, at 6.7%. This is well over the average of 2.3% for the other 12 cities. It was also discovered that Columbia Heights has the second smallest minimum lot size requirement for duplexes at 8,400 square feet, compared to the average lot size for duplexes in the other cities at 12,130 square feet. With this information, it can be interpreted that the City of Columbia Heights has an over-abundance of duplexes, on fairly small pieces of property. When duplexes are constructed on smaller lots, it causes a crowding effect, especially when they are located adjacent to single-family residences. In order to help appease this problem, Staff has recommended that the ordinance be amended establishing a new zoning district specifically for duplex uses. 79 Item 5. City of Columbia Heights Planning Commission November 23, 2005 Text Amendment R-2 District Case # 2005-1204 Page 2 ANALYSIS: The formation of a new zoning district, along with the text amendment requiring a larger minimum lot size for duplexes and twin homes will cause some non - conformity. The existing duplexes will be affected in one of two ways. All current duplexes will be zoned to the R-2B zoning District, which would require a minimum lot size of 5,100 square feet for those duplexes and twin homes constructed prior to January 1, 2005 and 12,000 square feet for those duplexes and twin homes constructed after January 1, 2005. The only duplexes or twin homes that would become legally non - conforming would be those duplexes and twin homes constructed prior to January 1, 2005 that had a lot size of less than 5,100 square feet. All proposed duplexes and twinhomes would be allowed in either the R -2A or R-2B Districts through a Conditional Use Permit. Any newly constructed duplex must be located on a property of at least 12,000 square feet. CONSISTENCY WITH COMPREHENSIVE PLAN: There are two pertinent housing goals stated in the City’s Comprehensive Plan regarding duplexes and single -family neighborhoods. First, the City will “provide a variety of life -cycle housing opportunities within the community”. Second, the City will “promote and preserve the single-family housing stock as the community’s strongest asset”. An implementation strategy for the second goal is that the City will identify non-conforming uses within residential districts and take actions to bring them into compliance. NON-CONFORMING USES: Non-conforming uses may continue indefinitely unless the nonconformity or occupancy is discontinued for a period of more than one year, or the nonconforming use is destroyed by fire or other peril to the exten t of greater than 50% of its market value, and no building permit has been applied for within 180 days of when the property is damaged. In addition, current regulations do not allow non -conforming uses, including duplexes, to expand. FINDINGS OF FACT: The City Council shall make each of the following findings before granting approval of a request to amend the City Code. They are as follows: a) The amendment is consistent with the comprehensive plan. There are two pertinent housing goals stated in the City’s Comprehensive Plan regarding duplexes and single-family neighborhoods. First, the City will “provide a variety of life-cycle housing opportunities within the community”. Second, the City will “promote and preserve the single-family housing stock as the community’s strongest asset”. These proposed amendments would be consistent with the Comprehensive Plan. b) The amendment is in the public interest and is not solely for the benefit of a single property owner. 80 Item 5. City of Columbia Heights Planning Commission November 23, 2005 Text Amendment R-2 District Case # 2005-1204 Page 3 The City of Columbia Heights is proposing these City Code amendments because staff feels that they are beneficial to the community. City staff has received numerous complaints and questions regarding duplexes and twin homes, which the City hopes these Code amendments would help alleviate. c) Where the amendment is to change the zoning classification of a particular property, the existing use of the property and the zoning classification of property within the general area of the property in question are compatible with the proposed zoning classification. The properties that will be rezoned will be rezoned to a zoning classification specific to the properties in question. Therefore, the existing use of the properties and the zoning classifications of property within the general area of the property in question would be compatible. d) Where the amendment is to change the zoning classification of a particular property, there has been a change in the character or trend of development in the general area of the property in question, which has taken place si nce such property was placed in its current zoning classification The trend in this case has been to construct duplexes and twin homes in predominantly single-family districts. The proposed amendments will help protect the single-family housing stock by requiring new duplexes and twin homes to obtain a Conditional Use Permit prior to construction. RECOMMENDATION: Staff recommends rezoning originally constructed duplexes to R-2B and the rest of R-2 to R-2A. Duplexes should be permitted in both R-2B and R-2A as Conditional Uses. Minimum lot size for R-2A should be 12,000 square feet. Minimum lot sizes for R-2B should be 5,100 square feet for lots existing on January 1, 2005, or 12,000 square feet for lots established after January 1, 2005. Motion: The Planning Commission recommends that the City Council approve the text amendments outline in the attached draft ordinance, and the rezoning of those properties pertaining to the matter. Attachments: • Draft Ordinance • Proposed Zoning Map 81 Item 5. CITY COUNCIL WORK SESSION AGENDA SECTION WORKSESSION ITEMS MEETING DATE 3/6/2023 ITEM: Discuss Special Services District for Central Avenue Snow Removal DEPARTMENT: Community Development BY/DATE: Mitchell Forney, 2/28/23 CITY STRATEGY: X Safe Community _Diverse, Welcoming “Small-Town” Feel _Economic Strength _Excellent Housing/Neighborhoods _Equity and Affordability X Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population BACKGROUND: The issue of sidewalk snow removal by commercial property owners on Central Avenue has been considered by multiple City Council’s. Over the years, the City has received multiple complaints regarding continuity of snow removal along the corridor. The topic has been more present this year with the almost record amounts of snow that we have received. Most complaints received during the past winter were related to several businesses along Central Avenue that consistently violated the City's sidewalk snow removal ordinance by not clearing the sidewalks abutting their property. City Code requires property owners to clear all snow and ice from all City public sidewalks 24 hours after the snow stops falling. If the snow is not removed by that time, the condition is considered a nuisance affecting public peace and safety and the City can begin the abatement process. This is the process the City uses at this time, however with limited staff resources and the timeline required for a typical abatement, prompt enforcement and clearing of the sidewalks is difficult. There are a few options for the City Council to consider when discussing sidewalk snow removal, especially as it relates to the Central Avenue corridor. First, is to continue with the current process, as many property owners do comply with the current ordinances. Second, is to increase enforcement using the current ordinance language. There is a pr ovision within the ordinance allowing the City Council to by resolution identify specific violations of the City Code as a public nuisance in which immediate abatement should occur. This provision would streamline the notification process in which property owners are notified and provided an opportunity to clear the sidewalk. With current staffing levels to conduct inspections and enforcement this option is difficult . Staff would propose working with the City Attorney to implement ordinance language or oth er City Council approvals necessary to hire a contractor to conduct both the enforcement and sidewalk clearing activities. An example of this would be: contractor sees a property out of compliance; takes a photo of the noncompliance sidewalk with the property location identifiable in the photo; takes a photo of the property address; clears the sidewalk to bring it into compliance; takes an after photo of the cleared sidewalk with identifying location information in the photo; bills the City for the work; the city pays the bill and invoices the property owner for the contractor's bill and administrative costs; if the property owner doesn't pay the invoice, the cost is assessed to the property. 82 Item 6. City of Columbia Heights - Council Letter Page 2 This option is not perfect but it could improve and speed up the process. Issues to consider include: still requires staff time to enforce, and manage the invoicing and assessing processes. Property owners may complain to staff and City Council about the process, the cost, and that the work wasn't done to an acceptable level. A final option to consider is that of establishing a Special Service District. This would be a District that a minimum of 25% of affected property owners would petition to have established. After the petition, the City would hold a public hearing and adopt an ordinance to establish the district. Once established, the City would contract with a vendor to clear the sidewalks along the entire corridor after each qualifying snow or ice event and assess the costs of the work back to each of the benefitting commercial property owners. This could be a cost effective option for property owners because the contractor would have one large length of sidewalk to do instead of a single property here or there. This would provide for uniform snow removal f or the entire corridor and ensure that the sidewalk is passable for all users. Issues that the City Council will want to consider with this option are the fact that some commercial businesses likely clear the snow themselves so this would be an added cost to them, single family residential properties along the route would receive the benefit of the clearing but by Statute they are not allowed to be charged for the service as part of the Service District, there could again be the complaint from property owners that the clearing isn't done to their standards, and this option is only possible if at least 25% of the property owners (whose net tax capacity is also 25% or more of the total for the District) request it or if enough owners veto the action. Staff would like to seek feedback form the Council regarding this matter and prepare a plan for implementation if the Council directs staff to take action. ATTACHMENT(S):  MN House Research Report on City Special Services Districts  Exempt Properties Map 83 Item 6. INFORMATION BRIEF Research Department Minnesota House of Representatives 600 State Office Building St. Paul, MN 55155 Andrew Biggerstaff, Legislative Analyst andrew.biggerstaff@house.mn Deborah A. Dyson, Legislative Analyst deborah.dyson@house.mn Updated: October 2014 City Special Service Districts One way for a city to provide an increased level of service or infrastructure to its commercial or industrial areas is to create “special service districts.” 1 Special service districts (SSDs) are established at the request of the persons who will pay for the increased level of service. Since the early 1980s, individual cities have been authorized to set up these districts. Since 1996, cities have had general law authority to create SSDs. This information brief describes the history of the law authorizing special service districts, the requirements of the law, and provides a few examples of the use of SSDs. What are special service districts? A special service district is “a defined area within the city where special services are rendered and the costs of the special services are paid from revenues collected from service charges imposed within that area.”2 An SSD may be established anywhere in a city but only business property (i.e., commercial, industrial, utility, or land zoned for commercial or industrial use) will be subject to the service charge. SSDs are commonly used in areas with a concentration of retail stores. 1 Towns and counties may also do this by establishing “subordinate service districts” under Minnesota Statutes, chapters 365A and 375B. While very similar to city special service districts, subordinate service districts are not discussed in this information brief. See the House Research publication, Subordinate Service Districts, January 2014. 2 Minn. Stat. § 428A.01, subd. 4. Copies of this publication may be obtained by calling 651-296-6753. This document can be made available in alternative formats for people with disabilities by calling 651-296-6753 or the Minnesota State Relay Service at 711 or 1-800-627-3529 (TTY). Many House Research Department publications are also available on the Internet at: www.house.mn/hrd/. 84 Item 6. House Research Department Updated: October 2014 City Special Service Districts Page 2 In 1983, Bloomington became the first city authorized to establish an SSD.3 Bloomington’s special law became the basis for later special laws and then the general law. In 1988, the elements of the special laws were codified as Minnesota Statutes, chapter 428A. However, a city still needed special legislation to authorize it to use chapter 428A. In all, 26 cities have been authorized to establish SSDs by special legislation, and in some cases, more than once. Not all cities authorized to establish SSDs have done so. In 1996, the statute was amended to permit any statutory or home rule charter city to establish an SSD by ordinance, without requiring special legislation. This authority originally expired in 2001, but has been extended several times, most recently to 2028. After June 30, 2028, cities will need special legislation to establish SSDs.4 What kinds of services may be provided in an SSD? The city ordinance establishing the SSD specifies what services may be provided. In general, the services are those: •not ordinarily provided throughout the city from general fund revenues of the city, or •provided at an increased level than for the rest of the city.5 Special services authorized in some city ordinances have included street and sidewalk cleaning, snow and ice removal, lighting, signage, parking, parking enforcement, marketing and promotion, landscaping, and security. They may also include capital improvements authorized in the special assessment statute. How is an SSD established? An SSD may be established only if a petition by a certain percentage of potentially affected property owners is filed and the city adopts an ordinance to establish it. Petition. An SSD may be established by petition by the owners of 25 percent or more of the land area that would be subject to the charges and either (i) owners of 25 percent or more of the net tax capacity of property that would be subject to the charges, or (ii) owners, individuals, and business organizations that would be subject to 25 percent or more of a proposed charge.6 Ordinance. If a petition is filed, the city may prepare an ordinance that describes the specific area and lists the services to be provided. The city must notify all business owners in the area prior to the hearing, with information on the nature of the proposed services, an estimated cost of 3 Laws 1983, ch. 361, §§ 2 to 12. 4 Minn. Stat. § 428A.101. 5 Minn. Stat. §§ 428A.01, subd. 3; 428A.02, subd.1. 6 Minn. Stat. § 428A.08. 85 Item 6. House Research Department Updated: October 2014 City Special Service Districts Page 3 improvements, and the amount of the proposed service charges.7 The effective date must be at least 45 days after the city adopts the ordinance.8 The city must hold a public hearing on the proposed ordinance.9 An existing district may be enlarged following the notice and public hearing requirements for establishing a new district.10 Objections. Potentially affected property owners may testify at the hearing. They may also object in writing, and if the city agrees, the property may be excluded or the ordinance itself may be delayed. If the city does not agree, the property owner has 30 days to appeal to district court, which may affirm, modify, or cancel the city’s determination.11 The proposal can be effectively vetoed if owners of 35 percent or more of the land area that would be subject to the charges or owners, individuals, or business organizations subject to 35 percent or more of the charges file an objection to establishing the district before its effective date.12 Advisory board. The city council may create an advisory board for each special service district in the city to advise the governing body in connection with the construction, maintenance, and operation of improvements, and the furnishing of special services in a district.13 How are the services financed? Businesses in the district pay for the increased level of services through service charges.14 The charges must be proportionate to the costs of the services and may be collected through the property tax collection system or through other means if so provided by the ordinance. If the service charge is based on net tax capacity, exempt property is exempt from the service charge. Service charges are not included in calculating levies for purposes of any other law related to levies. The fees may be used to pay off general obligation bonds issued by the city for the capital improvements made in the service district under the ordinance. Bonds issued for service district purposes do not require an election.15 How many cities have established SSDs, and how much money is collected? Since 1996, each city with an SSD is required to submit the SSD ordinance to the Commissioner of Revenue.16 However, the commissioner is not required to do anything with the ordinances 7 Minn. Stat. § 428A.02. 8 Minn. Stat. § 428A.09, subd. 1. 9 Minn. Stat. § 428A.03, subd. 1. 10 Minn. Stat. § 428A.04. 11 Minn. Stat. § 428A.02, subd. 5. 12 Minn. Stat. § 428A.09. 13 Minn. Stat. § 428A.07. 14 Minn. Stat. §§ 428A.02, subd. 3; 428A.05. 15 Minn. Stat. § 428A.06. 16 Minn. Stat. § 428A.02, subd. 1, added by Laws 1996, ch. 471, art. 8, § 5. 86 Item 6. House Research Department Updated: October 2014 City Special Service Districts Page 4 filed and there is no penalty for not filing. The data is not identified separately in any financial report to the state. With no effective statewide reporting, it is difficult to know how many SSDs have been established or how much money is collected for SSD purposes statewide. In addition, due to the method of imposing the charges and the lack of effective reporting, these dollars are not included in analyses of overall tax burdens. The following is a list of some cities that have information about their SSDs on their websites. •Crookston: 1991, to fund downtown storefront improvements; and 1997, to fund citywide flood control •Duluth: 1993, to fund enhanced services and programs, with the goal of improving the safety, cleanliness, and economic vitality of the downtown waterfront •Mankato: 1998, to provide and maintain free parking facilities for customers of businesses in district •Minneapolis: 18 districts as of 2014 (two are inactive), to provide decorative lighting, banners, security, cleaning, snow and ice removal, and landscaping (varies by district) •New Ulm: 1985, to provide free on-street and off-street parking •Rochester: 2005, to fund marketing, physical enhancements, and promotion of special events within the district •Saint Louis Park: Six districts as of 2014, to provide general upkeep, snow removal, landscaping, lighting, banners, and waste removal For more information about special districts, visit the local government area of our website, www.house.mn/hrd/. 87 Item 6. 88 Item 6. CITY COUNCIL WORK SESSION AGENDA SECTION WORK SESSION ITEMS MEETING DATE MARCH 6, 2023 ITEM: SACA Relocation and Deadline for City Owned Lot DEPARTMENT: Community Development BY/DATE: Aaron Chirpich – 3/2/23/ CITY STRATEGY: (please indicate areas that apply by adding a bold “X” in front of the selected text below) _Safe Community _Diverse, Welcoming “Small-Town” Feel X Economic Strength _Excellent Housing/Neighborhoods _Equity and Affordability _Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population BACKGROUND: Now that SACA has shifted focus to the acquisition of an existing industrial building, the City will have to make plans for the vacant City owned lot that was going to be sold to SACA. In the short term, the exit of SACA creates practical site planning issues for the affordable housing developer Reuter Wa lton, as their site plans anticipated a seamless integration with the proposed SACA facility. Reuter Walton is in the process of updating their plans to now accommodate a vacant lot that may not be developed for several years. Staff would like to establish a deadline for the formal withdrawal of the offer to sell the lot to SACA and begin the discussion on how to utilize the lot moving forward. 89 Item 7. CITY COUNCIL MEETING AGENDA SECTION WORK SESSION MEETING DATE MARCH 6, 2023 ITEM: Youth Commission Membership Number and Appointment Process. DEPARTMENT: Administration BY/DATE: Ben Sandell / March 1, 2023 CITY STRATEGY: _ Safe Community _Diverse, Welcoming “Small-Town” Feel _Economic Strength _Excellent Housing/Neighborhoods _Equity and Affordability X Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population BACKGROUND: Staff would like Council to review the membership number and appointment process for the Youth Commission. § 3.315 YOUTH COMMISSION. (A) Establishment. A Youth Commission is hereby established to serve as an advisory body to the Columbia Heights City Council, and other Boards and Commissions as appropriate, inspire and bring to light new ideas from a youth perspective, create an educational environment for youth looking to expand their knowledge of government and leadership functions, and provide experience-building opportunities for area youth seeking increased community and local government engagement. (1) The Youth Commission shall confer with and advise the Council, and other Boards and Commissions as appropriate, on matters concerning youth within the city. (2) The Commission shall execute its duties and authority in accordance with the Youth Commission by- laws and in accordance with the statement of purpose. (B) Membership. The Youth Commission shall be composed of no less than seven members and no more than 20 members. Members must be within the age range of 14 -18 years old and residents of the City of Columbia Heights. Youth Commission members serve two-year, staggered terms. Terms run from October 1 to September 30. Youth Commission members are not subject to term limits as they are limited by age requirements. Youth Commission members are allowed three absences per term. A staff member from the Administration Department shall serve as a non-voting ex officio member of the Commission. (Ord. 1671, passed 10-25-21) 90 Item 8. CITY COUNCIL MEETING AGENDA SECTION WORK SESSION MEETING DATE MARCH 6, 2023 ITEM: Board and Commission Interviews Scheduled for March 13 th and 14th. DEPARTMENT: Administration BY/DATE: Sara Ion / March 1, 2023 CITY STRATEGY: _ Safe Community _Diverse, Welcoming “Small-Town” Feel _Economic Strength _Excellent Housing/Neighborhoods _Equity and Affordability X Strong Infrastructure/Public Services _Opportunities for Play and Learning _Engaged, Multi-Generational, Multi-Cultural Population BACKGROUND: The period for submissions for applications for Boards and Commissions concluded on February 28, 2023. We have received ample applications to move forward with interviews and appointments. STAFF RECOMMENDATION: Per Council’s request interviews for Boards and Commissions have been scheduled for March 13th and 14th so that appointments can be approved by resolution at the March 27th City Council Meeting. Question 5 in the interview packet has been updated to read: “ We Strive to have diverse Board and Commissions representative of our community. What unique qualities, perspectives and life experiences would you bring to this position?” 91 Item 9.