2014 -- S 2379

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LC003859

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO FOOD AND DRUGS

     Introduced By: Senators Miller, Nesselbush, Sosnowski, and Crowley

     Date Introduced: February 12, 2014

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 21 of the General Laws entitled "FOOD AND DRUGS" is hereby

amended by adding thereto the following chapter:

CHAPTER 28.9

MARIJUANA REGULATION, CONTROL, AND TAXATION ACT

     21-28.9-1. Short title. -- This chapter shall be known and maybe cited as the "Marijuana

Regulation, Control, and Taxation Act."

     21-28.9-2. Legislative findings. -- The general assembly hereby finds and declares that:

     (1) More than seven (7) decades of arresting marijuana users has failed to prevent

marijuana use; a study published in the American journal of public health compared marijuana

usage rates in the United States with rates in the Netherlands, where adults' marijuana use and

sales are de facto legal, found "no evidence to support claims that criminalization reduces

[marijuana] use."

     (2) More than one hundred million (100,000,000) adults in the United States, including

the last three (3) presidents, have used marijuana, and data from the 2012 monitoring the future

survey show that, despite prohibition, more than eighty percent (80%) of twelfth graders find

marijuana "fairly easy" to obtain.

     (3) Overdose death from prescription drug abuse, opiates, and heroin are at a crisis level

throughout the northeast region. Marijuana has never been shown to cause a fatal overdose, but

relegating sales to the illicit market has resulted in deadly outcomes.

     (4) More than sixty thousand (60,000) people have been killed by drug cartel and

crackdown-related violence since the beginning of the crackdown on cartels in Mexico in 2006,

and, a significant portion of drug cartel profits come from marijuana sales in the United States.

     (5) The lack of marijuana market regulation ensures that marijuana production and

distribution are in the hands of unlicensed growers, who are untaxed, unmonitored, and often

cultivate on state or federal lands, and the product is not controlled or regulated for safety

concerns.

     (6) Over seven thousand six hundred (7,600) suspects were booked by federal law

enforcement in 2010, approximately one percent (1%) of all marijuana arrests, demonstrating that

nearly all marijuana arrests occurs on the state level, and thus, state legislative action has the

capacity to significantly change policy.

     (7) There is an alarming racial disparity in marijuana arrests in Rhode Island, with

African Americans arrested at over two and one-half (2½) times the rate of whites in 2010,

although their marijuana usage rates were very similar.

     (8) Removing state criminal penalties for persons aged twenty-one (21) and older who

use or cultivate small amounts of marijuana, and from regulated providers, would allow police to

spend more time preventing and investigating serious crimes like murder, rape, assault, robbery,

burglary, and driving under the influence of alcohol and other drugs and would create substantial

savings.

     (9) States are not required to enforce federal law or to prosecute people for engaging in

activities prohibited by federal law, and may choose whether or not to impose state criminal

penalties on conduct.

     (10) The voters of Colorado and Washington have repealed their states' prohibitions on

adults using, possessing, and, in Colorado cultivating, marijuana for personal use. Both states

have set up a system of regulated marijuana retail distribution to adults twenty-one (21) and older

and have imposed taxes at both the wholesale and retail level. Rhode Island joins these states in

replacing marijuana prohibition with regulation and taxation.

     21-28.9-3. Definitions. -- For purposes of this chapter:

     (1) "Department" means the state of Rhode Island department of business regulation.

     (2) "Marijuana" means all parts of the plant of the genus cannabis; whether growing or

not; the seeds thereof; the resin extracted from any part of the plant; and every compound,

manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. It does not

include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the

seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of

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the mature stalks (except the resin extracted from it), fiber, oil, or cake, or the sterilized seed of

the plant that is incapable of germination.

     (3) "Marijuana paraphernalia" means equipment, products, and materials which are used

or intended for use in planting, propagating, cultivating, growing, harvesting, manufacturing,

compounding, converting, producing, processing, preparing, testing, analyzing, packaging,

repackaging, storing, containing, concealing, ingesting, inhaling, or otherwise introducing

marijuana into the human body.

     (4) "Marijuana products" means concentrated marijuana products and marijuana products

that are comprised of marijuana and other ingredients that are intended for use or consumption,

such as, but not limited to, edible products, ointments, and tinctures.

     (5) "Public place" means any street, alley, park, sidewalk, public building other than

individual dwellings, or any place of business or assembly open to or frequented by the public,

and other place to which the public has access.

     (6) "Retailer" means an entity that is either:

     (i) Registered pursuant to § 21-28.10-2, to be exempt from state penalties for purchasing

marijuana from marijuana cultivation facilities, manufacturing marijuana products and marijuana

paraphernalia; and selling marijuana, marijuana products, and marijuana paraphernalia to

customers who are twenty-one (21) years of age or older; or

     (ii) Exempt from state penalties under the Rhode Island general laws due to the

department not issuing registrations.

     (7) "Safety compliance facility" means an entity that is either:

     (i) Registered pursuant to chapter 28.10 of this title to be exempt from state penalties for

providing one or both of the following services: training, including that related to cultivation of

marijuana, safe handling of marijuana, and security and inventory procedures; or testing

marijuana and marijuana products for potency and contaminants; or

     (ii) Exempt from state penalties under chapter 28.10 of this title due to the department not

issuing registrations.

     (8) "Smoking" means heating to at least the point of combustion, causing plant material

to burn. It does not include vaporing, which means heating below the point of combustion and

resulting in a vapor or mist.

     (9) "State prosecution" means prosecution initiated or maintained by the state of Rhode

Island or an agency or political subdivision of the state of Rhode Island.

     (10) "Marijuana cultivation facility" means an entity that is either:

     (i) Registered pursuant to § 21-28.10-2 to be exempt from state penalties for cultivating,

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preparing, packaging, and selling marijuana to a retailer or another marijuana cultivation facility,

but not for manufacturing or selling marijuana products or selling marijuana to the general public;

or

     (ii) Exempt from state penalties under chapter 28.10 of this title due to the department not

issuing registrations.

     21-28.9-4. Exempt activities. -- Except as otherwise provided in this chapter:

     (1) A person who is twenty-one (21) years of age or older is exempt from arrest, civil or

criminal penalty, seizure or forfeiture of assets, discipline by any state or local licensing board,

and state prosecution for the following acts:

     (i) Actually and constructively using, obtaining, purchasing, transporting, or possessing

one ounce (1 oz.) or less of marijuana, not including hashish.

     (ii) Actually and constructively using, obtaining, purchasing, transporting, or possessing

marijuana products, including up to five (5) grams or less of hashish, sixteen (16) ounces of

marijuana-infused product in solid form and seventy-two (72) ounces of marijuana-infused

product in liquid form.

     (iii) Controlling any premises or vehicle where persons who are twenty-one (21) years of

age or older possess, process, or store amounts of marijuana and marijuana products that are legal

under state law under paragraphs (i) and (ii);

     (iv) Using, obtaining, manufacturing, producing, purchasing, transporting, or possessing,

actually or constructively, marijuana paraphernalia;

     (v) Selling, delivering, or transferring, marijuana seeds to a marijuana establishment or to

a person who is twenty-one (21) years of age or older;

     (vi) Selling, delivering, or transferring, marijuana paraphernalia to marijuana

establishments or persons who are twenty-one (21) years of age or older;

     (vii) Giving away without consideration the amounts of marijuana and marijuana

products that are legal under state law under paragraphs (i) and (ii) if the recipient is a person who

is twenty-one (21) years of age or older;

     (viii) Transferring or delivering marijuana products or up to one ounce (1 oz.) of

marijuana to a safety compliance facility;

     (ix) Aiding and abetting another person who is twenty-one (21) years of age or older in

the actions allowed under this chapter;

     (x) Cultivating, possessing, growing, processing, or transporting no more than two (2)

marijuana plants, with one or fewer being a mature, flowering plant;

     (xi) Controlling any premises where other persons twenty-one (21) years of age or older

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cultivate marijuana plants, with the total number of mature, flowering plants not exceeding three

(3) in any dwelling unit;

     (xii) Assisting with the cultivation of marijuana plants that are cultivated at the same

location for persons twenty-one (21) years of age or older, with the total number of mature,

flowering plants not exceeding three (3) in any dwelling unit; and

     (xiii) Any combination of the acts described within paragraphs (i) to (xii), inclusive.

     (2) Except as provided in this chapter and chapter 28.10 of this title, a retailer or any

person who is twenty-one (21) years of age or older and acting in his or her capacity as an owner,

principal officer, partner, board member, employee, or agent of a retailer is exempt from arrest,

civil or criminal penalty, seizure of forfeiture of assets, discipline by any state or local licensing

board, and state prosecution for the following acts:

     (i) Transporting or possessing, actually or constructively, marijuana, including seedlings

or cuttings, that was purchased from a marijuana cultivation facility or retailer;

     (ii) Manufacturing, possessing, or producing marijuana products;

     (iii) Transporting or possessing, actually or constructively, marijuana products that were

purchased from a retailer;

     (iv) Obtaining or purchasing marijuana from a marijuana cultivation center or marijuana

and marijuana products from retailer;

     (v) Selling, delivering, or transferring marijuana or marijuana products to another retailer;

     (vi) Manufacturing, possessing, producing, obtaining, or purchasing marijuana

paraphernalia;

     (vii) Selling, transferring, or delivering marijuana, including seedlings or cuttings,

marijuana products, or marijuana paraphernalia to any person who is twenty-one (21) years of age

or older;

     (viii) Transferring or delivering marijuana or marijuana products to a safety compliance

facility;

     (ix) Controlling any premises or vehicle where marijuana, marijuana products and

marijuana paraphernalia is possessed, sold, or deposited in a manner that is not in conflict with

this chapter or department regulations; and

     (x) Any combination of the acts described within paragraphs (i) to (ix), inclusive.

     (3) Except as provided in this chapter and chapter 28.6 of this title, a marijuana

cultivation facility or any person who is twenty-one (21) years of age or older and acting in his or

her capacity as an owner, principal officer, partner, board member, employee, or agent of a

marijuana cultivation facility is exempt from arrest, civil or criminal penalty, seizure or forfeiture

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of assets, discipline by any state or local licensing board, and state prosecution for the following

acts:

     (i) Cultivating, packing, processing, transporting, or manufacturing marijuana, but not

marijuana products;

     (ii) Transporting or possessing marijuana that was produced by the marijuana cultivation

facility or another marijuana cultivation facility;

     (iii) Transporting or possessing marijuana seeds;

     (iv) Possessing, transporting, or producing marijuana paraphernalia;

     (v) Selling, delivering, or transferring marijuana to a retailer or a marijuana cultivation

facility;

     (vi) Purchasing marijuana from a marijuana cultivation facility;

     (vii) Purchasing marijuana seeds from a person who is twenty-one (21) years of age or

older;

     (viii) Delivering or transferring marijuana to a safety compliance facility;

     (ix) Controlling any premises or vehicle where marijuana and marijuana paraphernalia is

possessed, manufactured, sold, or deposited; and

     (x) Any combination of the acts described within paragraphs (i) to (ix), inclusive.

     (4) Except as provided in this chapter and chapter 28.6 of this title, a safety compliance

facility or any person who is twenty-one (21) years of age or older and acting in his or her

capacity as an owner, principal officer, owner, partner, board member, employee, or agent of a

safety compliance facility shall not be subject to state prosecution; search, except by the

department pursuant to § 21-28.10-17; seizure; or penalty in any manner or be denied any right or

privilege, including, but not limited to, civil penalty or disciplinary action by a court or business

licensing board or entity for the following acts:

     (i) Acquiring, transporting, storing, or possessing marijuana or marijuana products;

     (ii) Returning marijuana and marijuana products to marijuana cultivation facilities and

retailers, or, if the quantity is not more than the amounts allowed under § 21-28.9-4, to

individuals twenty-one (21) years of age or older;

     (iii) Delivering marijuana to other safety compliance facilities;

     (iv) Receiving compensation for analytical testing, including for contaminants or

potency; and

     (v) Any combination of the acts described within subdivisions (4)(i) through (4) (iv),

inclusive.

     (5) The acts listed in subdivisions (1) through (4), when undertaken in compliance with

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the provisions of this chapter, are lawful under Rhode Island law.

     (6) Except as otherwise provided in subdivision (7), in a prosecution for selling,

transferring, delivering, giving, or otherwise furnishing marijuana, marijuana products or

marijuana paraphernalia to any person who is under twenty-one (21) years of age, it is a complete

defense if:

     (i) The person who sold, gave, or otherwise furnished marijuana, marijuana products, or

marijuana paraphernalia to a person who is under twenty-one (21) years of age was a retailer or

was acting in his or her capacity as an owner, employee, or agent of a retailer at the time the

marijuana or marijuana paraphernalia was sold, given, or otherwise furnished to the person; and

     (ii) Before selling, giving, or otherwise furnishing marijuana, marijuana products or

marijuana paraphernalia to a person who is under twenty-one (21) years of age, the person who

sold, gave, or otherwise furnished the marijuana products or marijuana paraphernalia, or a staffer

or agent of the retailer, was shown a document which appeared to be issued by an agency of a

federal, state, tribal, or foreign sovereign, government and which indicated that the person to

whom the marijuana products or marijuana paraphernalia was sold, given, or otherwise furnished

was twenty-one (21) years of age or older at the time the marijuana products or marijuana

paraphernalia was sold, given, or otherwise furnished to the person.

     (7) The complete defense set forth in subdivision (6) does not apply if:

     (i) The document which was shown to the person who sold, gave, or otherwise furnished

the marijuana, marijuana products, or marijuana paraphernalia was counterfeit, forged, altered, or

issued to a person other than the person to whom the marijuana, marijuana products or marijuana

paraphernalia was sold, given, or otherwise furnished; and

     (ii) Under the circumstances, a reasonable person would have known or suspected that

the document was counterfeit, forged, altered, or issued to a person other than the person to

whom the marijuana, marijuana products, or marijuana paraphernalia was sold, given, or

otherwise furnished.

     21-28.9-5. Authorized activities. -- (a) Any person who is twenty-one (21) years of age

or older is authorized to manufacture, produce, use, obtain, purchase, transport, or possess,

actually or constructively, marijuana paraphernalia.

     (b) Any person who is twenty-one (21) years of age or older is authorized to distribute or

sell marijuana paraphernalia to marijuana establishments or persons who are twenty-one (21)

years of age or older.

     21-28.9-6. Public or unsecured cultivation of marijuana - Penalty. -- The manufacture

or cultivation of two (2) or fewer marijuana plants by any person who is twenty-one (21) years of

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age or older in a location that is contrary to this section is a misdemeanor punishable by a fine of

up to one thousand dollars ($1,000), up to ten (10) days in jail, or both.

     (1) Cultivation shall not occur in a location where the marijuana plants are subject to

public view without the use of binoculars, aircraft, or other optical aids.

     (2) Marijuana that is cultivated outdoors must be cultivated in an enclosed, locked,

location, such as a locked fenced-in area.

     (3) Cultivation may only occur on property lawfully in possession of the cultivator or

with the consent of the person in lawful possession of the real property.

     (4) If one or more persons under twenty-one (21) years of age live in or are guests at the

property where marijuana is cultivated, reasonable precautions must be taken to prevent their

access to marijuana plants. For purposes of illustration and not limitation, cultivating marijuana in

a locked closet, room, or fully enclosed area to which the person or persons under twenty-one

(21) years of age do not possess a key, constitutes reasonable precautions.

     21-28.9-7. Activities not exempt. -- The provisions of this chapter do not exempt any

person from arrest, civil or criminal penalty, seizure or forfeiture of assets, discipline by any state

or local licensing board, and state prosecution for, not may he or she establish an affirmative

defense based on this chapter to charges arising from, any of the following acts:

     (1) Driving, operating, or being in actual physical control of a vehicle or a vessel under

power or sail while impaired by marijuana or marijuana products; or

     (2) Possessing marijuana or marijuana products if the person is a prisoner; or

     (3) Possessing marijuana or marijuana products in any local detention facility, county jail,

state prison, reformatory, or other correctional facility, including, without limitation, any facility

for the detention of juvenile offenders.

     21-28.9-8. Smoking marijuana shall be prohibited in all public places. -- (a) A person

who smokes marijuana in an indoor public place shall be guilty of a petty misdemeanor, and may

be punished as follows:

     (1) By a fine of not more than two hundred fifty dollars ($250), imprisonment for a term

not exceeding ten (10) days, or both, for the first violation;

     (2) By a fine of not more than five hundred dollars ($500), imprisonment for a term not

exceeding thirty (30) days, or both, for the second or subsequent violation.

     (b) A person who smokes marijuana in an outdoor public place shall be liable for a civil

penalty of one hundred fifty dollars ($150).

     (c) Municipalities may impose additional fines equivalent to state fines for the

consumption of alcohol in an outdoor public place.

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     21-28.9-9. Places of employment. – The provisions of this chapter do not require

employers to accommodate the use or possession of marijuana, or being under the influence of

marijuana, in a place of employment.

     21-28.9-10. Rental premises. – The provisions of this chapter do not prevent a landlord

from prohibiting the cultivation of marijuana on the rental premises.

     21-28.9-11. Hotels and motels. – A landlord or innkeeper may prohibit the smoking of

marijuana on the rented property or in rooms if the landlord or innkeeper posts a notice.

     21-28.9-12. False age representation. – Any person who falsely represents

himself/herself to be twenty-one (21) years of age or older in order to obtain any marijuana,

marijuana products, or marijuana paraphernalia pursuant to this chapter is guilty of a

misdemeanor.

     21-28.9-13. Expungement. – This chapter shall, by operation of law, expunge the

conviction of anyone previously convicted of possession of one ounce (1 oz.) or less of marijuana

or possession of marijuana paraphernalia, provided that person was twenty-one (21) years of age

or older at the time of conviction.

     21-28.9-14. Medical use. – Nothing contained herein shall be construed to repeal or

modify any law concerning the medical use of marijuana or tetrahydrocannabinol in other forms,

such as Marinol.

     SECTION 2. Title 21 of the General Laws entitled "FOOD AND DRUGS" is hereby

amended by adding thereto the following chapter:

CHAPTER 28.10

TAXATION AND REGULATION OF MARIJUANA

     21-28.10-1. Definitions. – As used in this chapter:

     (1) "Marijuana" means all parts of the plant of the genus cannabis, whether growing or

not; the seeds thereof; the resin extracted from any part of the plant; and every compound,

manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. It does not

include the mature stalks of the plant, fiber produced from the stalks, oils or cake made from the

seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of

the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of

the plant that is incapable of germination.

     (2) "Marijuana cultivation facility" means an entity that is either:

     (i) Registered pursuant to § 21-28.10-2, to be exempt from state penalties for cultivating,

preparing, packaging, and selling marijuana to a retailer or another marijuana cultivation facility,

but not for manufacturing or selling marijuana products or selling marijuana to the general public;

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or

     (ii) Exempt from state penalties under this chapter due to the department not issuing

registrations.

     (3) "Marijuana establishment" means a marijuana cultivation facility, retailer, or safety

compliance facility.

     (4) "Marijuana products" means concentrated marijuana products and marijuana products

that are comprised of marijuana and other ingredients and are intended for use or consumption,

such as, but not limited to, edible products, ointments, and tinctures.

     (5) "Retailer" means an entity that is either:

     (i) Registered pursuant to § 21-28.10-2, to be exempt from state penalties for purchasing

marijuana from marijuana cultivation facilities, manufacturing marijuana products and marijuana

paraphernalia, and selling marijuana, marijuana products, and marijuana paraphernalia to

customers who are twenty-one (21) years of age or older; or

     (ii) Exempt from state penalties under this chapter due to the department not issuing

registrations.

     (6) "Safety compliance facility" means an entity that is either:

     (i) Registered pursuant to this chapter, to be exempt from state penalties for providing

one or both of the following services: training, including that related to cultivation of marijuana,

safe handling of marijuana, and security and inventory procedures; or testing marijuana for

potency and contaminants; or

     (ii) Exempt from state penalties under this chapter due to the department not issuing

registrations.

     21-28.10-2. Retailer registration. – Except as otherwise provided in § 21-28.10-5:

     (1) A person or an entity may apply, in accordance with the provisions of this chapter and

the regulations adopted pursuant thereto, for the issuance of a registration exempting the entity

from state prosecution and penalties for operating as a retailer pursuant to the provisions of this

chapter.

     (2) Each applicant for a retailer registration shall submit application materials required by

the department and a non-refundable fee in an amount determined by the department, not to

exceed five thousand dollars ($5,000).

     (3) Six (6) months after the effective date of this chapter, the department shall issue a

retailer registration to any person or entity that is properly registered as a compassion center

pursuant to § 21-28.6-12, is in compliance with all applicable rules and regulations, and that

submits a statement to the department notifying it of its intent to operate as a retailer.

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     (4) Eighteen (18) months after the effective date of this chapter, the department shall

have issued ten (10) retailer registrations, provided a sufficient number of qualified applicants

exist. If more qualifying applicants apply than the department will register, the department shall

implement a competitive scoring process to determine to which applicants to grant registrations,

which may be varied to account for geographic distribution, population density, or both. The

scoring system shall take into account the applicant and managing officers' applicable experience,

training, and expertise; the applicant's plan for security and diversion prevention; and criminal,

civil, or regulatory issues encountered by other entities the applicant and managing officers have

controlled or managed; and the suitability of the proposed location. A compassion center

registered under § 21-28.6-12 of the Rhode Island general laws shall be given priority over the

other applicants in any competitive application process.

     (5) If at any time after two (2) years after the effective date of this chapter, there are

fewer than ten (10) valid retail registrations, the department shall accept and process applications

for retailer registrations.

     (6) The fee for the initial issuance of a registration as a retailer is ten thousand dollars

($10,000).

     (7) A registration as a retailer may be renewed annually for a ten thousand dollar

($10,000) fee. The renewal application may be submitted up to one hundred twenty (120) days

before the expiration of the retailer registration. If the department fails to approve a valid renewal

application, it shall be deemed granted sixty (60) days after its submission.

     (8) Nothing in this section shall prohibit an entity registered as a retailer or seeking

retailer registration from also holding a marijuana cultivation facility registration or seeking

registration as a marijuana cultivation facility pursuant to § 21-28.10-3.

     (9) Nothing in this section shall prohibit an entity registered as a retailer or seeking

retailer registration from also holding a compassion center registration or seeking registration as a

compassion center pursuant to § 21-28.6-12.

     21-28.10-3. Marijuana cultivation facility registration. – Except as otherwise provided

in § 21-28.10-5:

     (1) An entity may apply, in accordance with the provisions of this chapter and the

regulations adopted pursuant thereto, for the issuance of a registration exempting the entity from

state prosecution and penalties for operating as a marijuana cultivation facility pursuant to the

provisions of this chapter.

     (2) Each applicant for a marijuana cultivation facility registration shall submit application

materials required by the department and a nonrefundable fee in an amount determined by the

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department, not to exceed five thousand dollars ($5,000).

     (3) Three (3) months after the effective date of this chapter, the department shall issue a

marijuana cultivation facility registration to any person or entity that is properly registered as a

compassion center pursuant to § 21-28.6-12, is in compliance with all applicable rules and

regulations, and that submits a statement to the department notifying it of its intent to operate as a

marijuana cultivator.

     (4) The department shall accept and process applications for marijuana cultivation facility

registrations at any time after the effective date of this chapter, if it is determined the existing

marijuana cultivation facilities are unlikely to be able to meet demand.

     (5) If the department decides to accept additional applicants for marijuana cultivation

registrations in order to meet demand, and if more qualifying applicants apply than the

department will register, the department shall implement a competitive scoring process to

determine to which applicants to grant registration. The scoring system shall take into account the

applicant and managing officers' applicable experience, training, and expertise; the applicant's

plan for security and diversion prevention; any criminal, civil, or regulatory issues encountered

by other entities the applicant and managing officers have controlled or managed; and the

suitability of the proposed location. A compassion center that cultivates marijuana and is

registered under § 21-28.6-12 shall be given priority over the applicants in any competitive

application process.

     (6) Each marijuana cultivation facility shall pay a fee for the initial issuance of a

registration and for annual renewal in an amount determined by the department. The department

shall set a tiered system of fees, which vary depending on the size of the marijuana cultivation

facility. The highest fee may not exceed twenty thousand dollars ($20,000) per year.

     (7) A registration as a marijuana cultivation facility may be renewed annually. The

renewal application may be submitted up to one hundred twenty (120) days before the expiration

of the marijuana cultivation facility registration. If the department fails to approve a valid renewal

application, it shall be deemed granted sixty (60) days after its submission.

     (8) If at any time beginning eighteen (18) months after the effective date of this chapter,

the department has failed to begin issuing marijuana cultivation facility registrations or has

ceased issuing marijuana cultivation facility registrations in accordance with this chapter, a

marijuana cultivation facility registration shall not be required to operate as a marijuana

cultivation facility for any person or entity that is properly registered as a compassion center

pursuant to § 21-28.6-12.

     (9) Nothing in this section shall prohibit an entity registered as a marijuana cultivation

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facility or seeking marijuana cultivation facility registration from also holding retailer registration

or seeking registration as a retailer pursuant to § 21-28.10-2.

     (10) Nothing in this section shall prohibit an entity registered as a marijuana cultivation

facility or seeking marijuana cultivation facility registration from also holding a compassion

center registration or seeking registration as a compassion pursuant to § 21-28.6-12.

     21-28.10-4. Safety compliance facility registration. – Except as otherwise provided in §

21-28.10-6:

     (1) An entity may apply, in accordance with the provisions of this chapter and the

regulations adopted pursuant thereto, for the issuance of a registration exempting the entity from

state prosecution and penalties for operating as a safety compliance facility pursuant to the

provisions of this chapter.

     (2) Each applicant for a safety compliance facility registration shall submit application

materials required by the department and a nonrefundable fee in an amount determined by the

department, not to exceed five thousand dollars ($5,000).

     (3) If a qualified applicant exists, the department shall grant a two (2) year registration to

at least two (2) safety compliance facilities within one year of the effective date of this chapter,

provided that each facility pays a five thousand dollar ($5,000) fee. If more qualifying applicants

apply than the department will register, the department shall implement a competitive scoring

process to determine to which applicants to grant registrations, which may be varied for

geographic distribution. The scoring system shall take into account the applicant and managing

officers' applicable experience, training, and expertise; the applicant's plan for security and

diversion prevention; any criminal, civil, or regulatory issues encountered by other entities the

applicant and managing officers controlled or managed; the applicant's plan for services; and the

suitability of the proposed location.

     (4) If at any time after two (2) years after the effective date of this chapter, there are

fewer than two (2) valid safety compliance facility registrations, the department shall accept and

process applications for safety compliance facility registrations. In addition, the department may,

at its discretion, grant additional safety compliance facility registrations.

     (5) A safety compliance facility registration may be renewed biennially for a five

thousand dollar ($5,000) fee. The renewal application may be submitted up to one hundred

twenty (120) days before the expiration of the registration. If the department fails to approve a

valid renewal application, it shall be deemed granted sixty (60) days after its submission.

     21-28.10-5. Ineligibility for registration. – A marijuana establishment may not operate,

and a prospective marijuana establishment may not apply for a registration if any of the following

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are true:

     (1) The entity would be located within one thousand feet (1,000 ') of the property line of

a pre-existing public school, private school, or structure used primarily for religious services or

worship; or

     (2) The entity sells intoxicating liquor for consumption on the premises.

     21-28.10-6. Municipalities. – Nothing shall prohibit municipalities from enacting

ordinances or regulations not in conflict with this section or with department rules regulating the

time, place, and manner of marijuana establishments' operations, provided that no local

government may prohibit any type of marijuana establishments' operation altogether, either

expressly or through the enactment of ordinances or regulations which make any type of

marijuana establishments' operation impracticable. Nothing shall prohibit municipalities from

imposing civil and criminal penalties on the violation of ordinances enacted pursuant to this

section.

     21-28.10-7. Advertising and product placement. – (a) No marijuana establishment or

other person may advertise the sale of marijuana in a manner contrary to the regulations

established by the department.

     (b) Film, television, production, and other entertainment companies are prohibited from

accepting payment for the product placement or marijuana or marijuana products in any

production filmed in Rhode Island.

     21-28.10-8. Retailer safety insert. – A retailer shall:

     (1) Include a safety insert with all marijuana and marijuana products sold. The safety

insert may, at the department's discretion, be developed and approved by the department and

include, but not be limited to, information on:

     (i) Methods of administering marijuana;

     (ii) Any potential dangers stemming from the use of marijuana; and

     (iii) How to recognize what may be problematic usage of marijuana and obtain

appropriate services or treatment for problematic usage.

     (2) Sell marijuana in its original marijuana cultivation facility packaging without making

any change or repackaging.

     (3) Sell marijuana products in its original retail packaging without making any changes or

repackaging.

     21-28.10-9. Warning label on marijuana and marijuana products. – (a) A marijuana

cultivation facility must create a unique package and label for its marijuana identifying itself as

the producer.

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     (b) A marijuana retailer that produces marijuana products must create a unique package

and label for its marijuana products identifying itself as the producer.

     (1) The name or registration number of the marijuana cultivation facility that produced

the marijuana, and, in the case of marijuana products, the retailer that produced the marijuana

products.

     (2) If a safety compliance facility is operational, the potency of the marijuana, as

determined by testing by a safety compliance facility, represented by the percentage of

tetrahydrocannabinol by mass.

     (3) A "produced on" date.

     (4) Warnings that state: "Consumption of marijuana impairs your ability to drive a car or

operate machinery", "Keep away from children," and, unless federal or state laws have changed,

"Possession of marijuana is illegal outside of Rhode Island and under federal law."

     21-28.10-10. Marijuana cultivation facilities. – (a) All marijuana cultivated by

marijuana cultivation facilities shall be cultivated only in one or more enclosed, locked facilities.

Each of the facilities must have been registered with the department, unless the department has

ceased issuing or failed to begin issuing registrations.

     (b) An "enclosed, locked facility" may include a building, room, greenhouse, fully

enclosed fenced-in area, or other location enclosed on all sides and equipped with locks or other

security devices that permit access only by:

     (1) Employees, agents, or owners of the marijuana cultivation facility, all of whom must

be twenty-one (21) years of age or older;

     (2) Government employees performing their official duties;

     (3) Contractors performing labor that does not include marijuana cultivation packaging,

or processing; contractors must be accompanied by an employee, agent, or owner of the

marijuana cultivation facility when they are in areas where marijuana is being grown or stored; or

     (4) Members of the media, elected officials, and individuals over the age of twenty-one

(21) touring the facility, if they are accompanied by an employee, agent, or owner of the

marijuana cultivation facility.

     21-28.10-11. Transportation of marijuana. – A marijuana establishment or any person

who is acting in his or her capacity as an owner, employee, or agent of a marijuana establishment

must have documentation when transporting marijuana on behalf of the marijuana establishment

that specifies the amount of marijuana being transported, the registry identification number of the

marijuana establishment, the date the marijuana is being transported, and, if the marijuana is

being transported to another marijuana establishment, the registry identification number of the

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intended marijuana establishment the marijuana is being transported to. If the marijuana

establishment does not have a registration number because the department has ceased issuing

registry identification certificates or has failed to begin issuing registry identification certificates,

the marijuana establishment may instead use a number of its choosing that it consistently uses on

documentation in place of registry identification number.

     21-28.10-12. Minors on the premises of marijuana establishment. – (a) A marijuana

establishment shall not allow any person who is under twenty-one (21) years of age to be present

inside any room where marijuana or marijuana products are stored, produced, or sold by the

marijuana establishment unless the person who is under twenty-one (21) years of age is:

     (1) A government employee performing his or her official duties;

     (2) An elected official, a member of the media, a contractor performing labor that does

not include marijuana cultivation, manufacturing, packaging, or processing; or

     (3) If the marijuana establishment is a retailer, a medical marijuana patient registered

pursuant to chapter 21-28.6, if the marijuana establishment is also a compassion center registered

under § 21-28.6-12.

     (b) Except as otherwise provided in this subsection, in a prosecution for a violation of this

section, it is a complete defense that before allowing a person who is under twenty-one (21) years

of age into the room where marijuana is sold or stored, a staff member for the marijuana

establishment was shown a document which appeared to be issued by an agency of a federal,

state, tribal, or foreign sovereign government and which indicated that the person who was

allowed onto the premises of the marijuana establishment was twenty-one (21) years of age or

older at the time the person was allowed onto the premises. The complete defense set forth in this

subsection does not apply if:

     (1) The document which was shown to the person who allowed the person who is under

twenty-one (21) years of age onto the premises of the retailer was counterfeit, forged, altered, or

issued to a person other than the person who was allowed onto the premises of the retailer; and

     (2) Under the circumstances, a reasonable person would have known or suspected that the

document was counterfeit, forged, altered, or issued to a person other than the person who was

allowed onto the premises.

     21-28.10-13. Retailer violations. – (a) A retailer shall not:

     (1) Sell, give, deliver, or otherwise furnish marijuana, marijuana products, or marijuana

paraphernalia to any person who is under twenty-one (21) years of age unless the retailer is also

registered as a compassion center pursuant to § 21-28.6-12 and the individual under twenty-one

(21) is a qualifying patient registered under chapter 21-28.6.

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     (2) Sell, deliver, give, or otherwise furnish more than the following quantities of

marijuana or marijuana products to a person in a single transaction unless the person is a

qualifying patient or primary caregiver registered under chapter 21-28.6 and the retailer is also

registered as a compassion center pursuant to § 21-28.6-12:

     (i) More than one ounce (1 oz.) of marijuana, not including hashish;

     (ii) Two (2) immature marijuana plants;

     (iii) Five (5) grams of hashish;

     (iv) Sixteen ounces (16 oz.) of marijuana-infused product in solid form; and

     (v) Seventy-two ounces (72 oz.) of marijuana-infused product in liquid form.

     (3) Knowingly and willfully sell, give, or otherwise furnish an amount of marijuana to a

person that would cause that person to possess more than the quantities listed in subdivision (2)

unless the retailer has verified that the person is a qualifying patient or primary caregiver

registered under chapter 21-28.6 and the amount of marijuana dispensed is within the patient's

limits;

     (4) Purchase marijuana, other than marijuana seeds, from any person other than a

marijuana cultivation facility or retailer;

     (5) Purchase marijuana products from any person other than a marijuana retailer;

     (6) Violate regulations issued by the department;

     (b) In addition to any other penalty provided pursuant to specific statutes, a retailer who

violates this section is guilty of a misdemeanor and shall be punished by a fine of not more than

one thousand dollars ($1,000).

     (c) As used in this section, "marijuana paraphernalia" means equipment, products, and

materials, which are used or intended for use in plating, propagating, cultivating, growing,

harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing,

analyzing, packaging, repackaging, storing, containing, concealing, ingesting, inhaling, or

otherwise introducing marijuana into the human body.

     21-28.10-14. Marijuana cultivation facility violations. – (a) A marijuana cultivation

facility shall not:

     (1) Manufacture, sell, give, or otherwise distribute marijuana products;

     (2) Sell, deliver, give, or otherwise furnish marijuana to any person other than a

marijuana establishment or an agent or staff member acting on behalf of a marijuana

establishment;

     (3) Purchase marijuana, other than marijuana seeds, from any person other than a

marijuana cultivation facility; or

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     (4) Purchase or sell, deliver, give, or otherwise furnish marijuana in any manner other

than as is exempted from state penalties pursuant to the provisions of this chapter and any

regulations adopted pursuant thereto.

     (b) In addition to any other penalty provided pursuant to specific statutes, a person who

violates this section is guilty of a misdemeanor and shall be punished by a fine of not more than

one thousand dollars ($1,000).

     21-28.10-15. Suspension or termination of registration. – (a) The department may

suspend or terminate the registration of a marijuana establishment that commits multiple or

serious violations of this chapter or reasonable regulations issued pursuant to it.

     (b) If the department has ceased issuing registrations or has not begun issuing

registrations, and marijuana establishment lacks a registration as a result, any city or town where

the retailer, marijuana cultivation facility, of safety compliance facility is operating may file for

an injunction in district court if the retailer has committed multiple or serious violations of this act

or regulations issued pursuant to it.

     21-28.10-16. Excise tax. – An excise tax is hereby levied upon marijuana cultivation

facilities and must be collected respecting all marijuana sold or transferred to retailers. The dried

flowers of the marijuana plant shall be taxed at the rate of either fifty dollars ($50.00) per ounce

or proportionate part thereof, or an amount that the department may set that adjusts the initial fifty

dollars ($50.00) per ounce rate for inflation or deflation based on the consumer price index. All

other parts of the marijuana plant that are sold or transferred by marijuana cultivation facilities to

retailers, including, but not limited to, the dried leaves, shall be taxed at the rate of either ten

dollars ($10.00) per ounce or proportionate part thereof, or an amount that the department may set

that adjusts the initial ten dollar ($10.00) per ounce rate for inflation or deflation based on the

consumer price index.

     21-28.10-17. Distribution of funds. – The department shall apportion the money

remitted to the department from registration fees and taxes collected pursuant to this chapter in

the following manner:

     (1) The department shall retain sufficient money to defray the entire cost of

administration of this chapter.

     (2) The department shall remit to the department of health an amount sufficient to cover

the costs associated with any health and safety inspections made necessary by this chapter.

     (3) After retaining sufficient money to defray the entire cost of administration of this

chapter pursuant to subdivision (1) and remitting sufficient money to the department of health

pursuant to subdivision (2), the department shall remit the remaining money to the general fund,

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forty percent (40%) of which must be distributed to the department of health for use in voluntary

programs for the prevention or treatment of the abuse of alcohol, tobacco, or controlled

substances, and ten percent (10%) of which must be spent on clinical research into the medical

efficacy of marijuana by medical researchers working in Rhode Island.

     21-28.10-18. Department regulations. – (a) The department is responsible for

administering and carrying out the provisions of this chapter.

     (b) The department may adopt regulations that are necessary and convenient to

administer and carry out the provisions of this chapter.

     (c) The department shall adopt regulations that:

     (1) Set forth the procedures for the application for and issuance of registrations to

marijuana establishments, including the content and form for application;

     (2) Establish qualifications for registration that are directly and demonstrably related to

the operation of a marijuana establishment;

     (3) Specify the procedures for the collection of taxes levied pursuant to this chapter;

     (4) Specify the content, form, and timing of reports, which must be completed by each

marijuana establishment and which must be available for inspection by department. The reports

shall include information on sales, expenses, inventory, and taxes and shall be retained for at least

one year after the completion of the forms;

     (5) Specify the requirements for the packaging and labeling of marijuana, including those

in § 21-28.10-9;

     (6) Specify the requirements for the safety insert to be included with marijuana by

retailers, including those in § 21-28.10-8, if the department chooses to do so;

     (7) Establish reasonable security requirements for marijuana establishments;

     (8) Require the posting or display of marijuana establishments' registrations;

     (9) Establish restrictions on advertising for the sale of marijuana. The restrictions shall:

     (i) Be in compliance with the United States Constitution and the Rhode Island

Constitution; and

     (ii) Include a prohibition on advertising reasonably considered aimed at minors;

     (iii) Be at least as restrictive as limitations on advertising tobacco products, provided that

the regulations may not prevent appropriate signs on the property of the marijuana establishment,

listings in business directories including phone books, listings in publication focused on

marijuana, or the sponsorship of health or not-for-profit charity or advocacy events;

     (10) Establish procedures for inspecting and auditing the records or premises of a

marijuana establishment;

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     (11) Set a schedule of civil fines for violations of this chapter and regulations issued

pursuant to this chapter.

     (12) Set forth the procedures for hearings on civil fines and suspensions and revocation of

a registration as a retailer, marijuana cultivation facility, or safety compliance facility for a

violation of a provision of this chapter or the regulations adopted pursuant to this chapter.

     (13) Establish reasonable environmental controls to ensure that any registered marijuana

establishment minimizes any harm to the environment, adjoining and nearby landowners, and

persons passing by. This may include restrictions on the use of pesticides;

     (14) Establish rules requiring marijuana cultivation facilities and retailers to create

identification cards for their employees and providing for the contents of the identification cards;

and

     (15) Establish rules for the safe transportation of marijuana.

     (d) The department shall make available free of charge all forms for applications and

reports.

     (e) The department shall issue all registrations as required by chapter 28.10 of this title

and chapter 49 of title 44.

     (f) The department shall keep the name and address of each owner, employee, or agent of

a marijuana establishment confidential and refuse to disclose this information to any individual or

public or private entity, except as necessary for authorized employees of the department to

perform official duties of the department pursuant to this chapter.

     (g) The department shall not require:

     (1) An individual consumer to provide a retailer with personal information other than

government-issued identification to determine the individual's age; or

     (2) A retailer to acquire and record personal information about individual customers other

than information typically acquired in a financial transaction conducted at a retail liquor store.

     21-28.10-19. Failure of department to adopt regulations. – (a) The department shall

adopt regulations to implement this chapter. Within three (3) months of the effective date of this

chapter, the department shall begin accepting applications for marijuana establishments from

persons or entities who hold current compassion center registrations pursuant to § 21-28.6-12.

     (b) Within eighteen (18) months of the effective date of this chapter, the department shall

begin accepting applications for marijuana establishments from persons or entities who do not

hold current compassion center registrations pursuant to § 21-28.6-12.

     (c) If the department fails to adopt regulations to implement this chapter or fails to begin

processing applications for marijuana establishments within one hundred eighty (180) days of the

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effective date of this chapter, any citizen may commence an action in a court of competent

jurisdiction to compel the department to perform the actions mandated pursuant to the provisions

of this chapter.

     21-28.10-20. Advisory committee. – (a) A twelve (12) member advisory committee shall

be appointed as follows:

     (1) The governor shall appoint ten (10) members to the advisory committee comprised of:

one representative of the department; one physician with experience in medical marijuana issues;

one economist; one board member or principal officer of a registered safety compliance facility;

one individual with experience in policy development or implementation in the field of marijuana

policy; one public health professional; one sociologist; one attorney familiar with first

amendment law; one expert in criminal justice; and one researcher.

     (2) The speaker of the house shall appoint one member to the advisory committee.

     (3) The senate president shall appoint one member to the advisory committee.

     (b) The advisory committee shall meet at least two (2) times per year for the purpose of

collecting information, evaluating the effects of this chapter, and making recommendations to the

department, including:

     (1) The content of safety inserts;

     (2) Whether additional warning labels should be added;

     (3) Strategies for educating physicians and the public about research relating to

marijuana's benefits and risks;

     (4) Any effect on organized crime in the state;

     (5) Any effect on criminal sales of marijuana in middle and high schools;

     (6) Quality control and labeling standards;

     (7) Recommendations on restrictions on advertising;

     (8) Recommendations for reporting and data monitoring related to beneficial and adverse

effects of marijuana;

     (9) Recommendations regarding possible adjustments to the excise tax rates that would

further the goals of reducing the use of marijuana, by minors, generating revenues, and

undercutting illegal market prices; and

     (10) An update on the latest research related to driving under the influence of marijuana,

along with recommendations regarding policies for roadside sobriety tests and any recommended

changes to driving under the influence statutes.

     (c) The department shall submit to the legislature an annual report by the first Thursday

of every year, which shall include:

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     (1) The direct revenue and costs related to implementing this chapter, including revenue

from taxes, fines, and fees;

     (2) The number of registrations suspended and revoked, and the nature of revocations;

and

     (3) The findings and recommendations of the oversight committee.

     SECTION 3. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 69

SPECIAL SALES TAX ON RETAIL MARIJUANA

     44-69-1. Imposition of special sales tax on retail marijuana. – (a) Except as provided

for in subsection (b), a sales tax rate of ten percent (10%) shall be imposed on all retail sales of

marijuana in accordance with the laws of, and regulations enacted through the authority of, title

21 of the general laws.

     (b) The special sales tax does not apply to marijuana sales from a registered compassion

center to a registered qualifying patient or a registered primary caregiver pursuant to § 21-28.6-

12.

     SECTION 4. Section 44-18-7 of the General Laws in Chapter 44-18 entitled "Sales and

Use Taxes – Liability and Computation" is hereby amended to read as follows:

     44-18-7. Sales defined. -- "Sales" means and includes:

     (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or

otherwise, in any manner or by any means of tangible personal property for a consideration.

"Transfer of possession", "lease", or "rental" includes transactions found by the tax administrator

to be in lieu of a transfer of title, exchange, or barter.

     (2) The producing, fabricating, processing, printing, or imprinting of tangible personal

property for a consideration for consumers who furnish either directly or indirectly the materials

used in the producing, fabricating, processing, printing, or imprinting.

     (3) The furnishing and distributing of tangible personal property for a consideration by

social, athletic, and similar clubs and fraternal organizations to their members or others.

     (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks,

including any cover, minimum, entertainment, or other charge in connection therewith.

     (5) A transaction whereby the possession of tangible personal property is transferred, but

the seller retains the title as security for the payment of the price.

     (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate

commerce, of tangible personal property from the place where it is located for delivery to a point

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in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental,

conditional or otherwise, in any manner or by any means whatsoever, of the property for a

consideration.

     (7) A transfer for a consideration of the title or possession of tangible personal property,

which has been produced, fabricated, or printed to the special order of the customer, or any

publication.

     (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam,

refrigeration, and water.

     (9) The furnishing for consideration of intrastate, interstate and international

telecommunications service sourced in this state in accordance with subsections 44-18.1(15) and

(16) and all ancillary services, any maintenance services of telecommunication equipment other

than as provided for in subdivision 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this

title only, telecommunication service does not include service rendered using a prepaid telephone

calling arrangement.

     (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance

with the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 – 126), subject to the

specific exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8

and 44-18-12, mobile telecommunications services that are deemed to be provided by the

customer's home service provider are subject to tax under this chapter if the customer's place of

primary use is in this state regardless of where the mobile telecommunications services originate,

terminate or pass through. Mobile telecommunications services provided to a customer, the

charges for which are billed by or for the customer's home service provider, shall be deemed to be

provided by the customer's home service provider.

     (10) The furnishing of service for transmission of messages by telegraph, cable, or radio

and the furnishing of community antenna television, subscription television, and cable television

services.

     (11) The rental of living quarters in any hotel, rooming house, or tourist camp.

     (12) The transfer for consideration of prepaid telephone calling arrangements and the

recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§

44-18.1-11 and 44-18.1-15. "Prepaid telephone calling arrangement" means and includes prepaid

calling service and prepaid wireless calling service.

     (13) The sale, storage, use or other consumption of over-the-counter drugs as defined in

paragraph 44-18-7.1(h)(ii).

     (14) The sale, storage, use or other consumption of prewritten computer software

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delivered electronically or by load and leave as defined in paragraph 44-18-7.1(v).

     (15) The sale, storage, use or other consumption of medical marijuana as defined in § 21-

28.6-3.

     (16) (15) The furnishing of services in this state as defined in § 44-18-7.3.

     SECTION 5. Sections 21-28-4.01, 21-28-4.01.1, 21-28-4.01.2, 21-28-4.11 and 21-28-

4.14 of the General Laws in Chapter 21-28 entitled "Uniform Controlled Substances Act" are

hereby amended to read as follows:

     21-28-4.01. Prohibited acts A – Penalties. -- (a)(1) Except as authorized by this chapter,

or as exempted from criminal penalties pursuant to chapters 28.9 or 28.10 of this title, or

chapter 49 of title 44, it shall be unlawful for any person to manufacture, deliver, or possess

with intent to manufacture or deliver a controlled substance.

     (2) Any person who is not a drug addicted person, as defined in § 21-28-1.02(18), who

violates this subsection with respect to a controlled substance classified in schedule I or II, except

the substance classified as marijuana, is guilty of a crime and upon conviction may be imprisoned

to a term up to life, or fined not more than five hundred thousand dollars ($500,000) nor less than

ten thousand dollars ($10,000), or both.

     (3) Where the deliverance as prohibited in this subsection shall be the proximate cause of

death to the person to whom the controlled substance is delivered, it shall not be a defense that

the person delivering the substance was at the time of delivery, a drug addicted person as defined

in § 21-28-1.02(18).

     (4) Any person, under twenty-one (21) years of age, except as provided for in

subdivision (2) of this subsection, who violates this subsection with respect to the manufacture of

one mature flowering marijuana plant, or two (2) or fewer total marijuana plants, is guilty of a

crime and upon conviction may be imprisoned for not more than five (5) years, or fined not more

than three thousand dollars ($3,000), or both.

     (5) Any person, except as provided for in subdivision (2) of this subsection, who violates

this subsection with respect to:

     (i) A controlled substance classified in schedule I or II, except the substance classified as

marijuana, is guilty of a crime and upon conviction may be imprisoned for not more than thirty

(30) years, or fined not more than one hundred thousand dollars ($100,000) nor less than three

thousand dollars ($3,000), or both;

     (ii) The manufacture of two (2) or more mature flowering marijuana plants, or

three (3) or more total marijuana plants, is guilty of a crime and upon conviction may be

imprisoned for not more than ten (10) years, or fined not more than one hundred thousand

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dollars ($100,000), or both;

     (iii) The delivery of marijuana is guilty of a crime and upon conviction may be

imprisoned for not more than ten (10) years, or fined not more than one hundred thousand dollars

($100,000) nor less than one thousand dollars ($1,000), or both.

     (ii) (iv) A controlled substance classified in schedule III or IV, is guilty of a crime and

upon conviction may be imprisoned for not more than twenty (20) years, or fined not more than

forty thousand dollars ($40,000), or both; provided, with respect to a controlled substance

classified in schedule III(d), upon conviction may be imprisoned for not more than five (5) years,

or fined not more than twenty thousand dollars ($20,000), or both.

     (iii) (v) A controlled substance classified in schedule V, is guilty of a crime and upon

conviction may be imprisoned for not more than one year, or fined not more than ten thousand

dollars ($10,000), or both.

     (b)(1) Except as authorized by this chapter, it is unlawful for any person to create,

deliver, or possess with intent to deliver, a counterfeit substance.

     (2) Any person who violates this subsection with respect to:

     (i) A counterfeit substance classified in schedule I or II, is guilty of a crime and upon

conviction may be imprisoned for not more than thirty (30) years, or fined not more than one

hundred thousand dollars ($100,000), or both;

     (ii) A counterfeit substance classified in schedule III or IV, is guilty of a crime and upon

conviction may be imprisoned for not more than twenty (20) years, or fined not more than forty

thousand dollars ($40,000), or both; provided, with respect to a controlled substance classified in

schedule III(d), upon conviction may be imprisoned for not more than five (5) years, or fined not

more than twenty thousand dollars ($20,000) or both.

     (iii) A counterfeit substance classified in schedule V, is guilty of a crime and upon

conviction may be imprisoned for not more than one year, or fined not more than ten thousand

dollars ($10,000), or both.

     (c)(1) It shall be unlawful for any person knowingly or intentionally to possess a

controlled substance, unless the substance was obtained directly from or pursuant to a valid

prescription or order of a practitioner while acting in the course of his or her professional

practice, or except as otherwise authorized by this chapter or exempt from arrest pursuant to

chapters 28.9 or 28.10 of this title or chapter 49 of title 44.

     (2) Any person who violates this subsection with respect to:

     (i) A controlled substance classified in schedules I, II and III, IV, and V, except the

substance classified as marijuana, is guilty of a crime and upon conviction may be imprisoned for

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not more than three (3) years or fined not less than five hundred dollars ($500) nor more than five

thousand dollars ($5,000), or both;

     (ii) More than one ounce (1 oz.) of a controlled substance classified in schedule I as

marijuana is guilty of a misdemeanor except for those persons subject to subdivision 21-28-

4.01(a)(1) and upon conviction may be imprisoned for not more than one year or fined not less

than two hundred dollars ($200) nor more than five hundred dollars ($500), or both.

     (iii) Notwithstanding any public, special or general law to the contrary, the possession of

one ounce (1 oz.) or less of marijuana by a person who is eighteen (18) years of age or older, but

who is less than twenty-one (21) years of age, and who is not exempted from penalties pursuant

to chapter 21-28.6 shall constitute a civil offense, rendering the offender liable to a civil penalty

in the amount of one hundred fifty dollars ($150) and forfeiture of the marijuana, but not to any

other form of criminal or civil punishment or disqualification. Notwithstanding any public,

special or general law to the contrary, this civil penalty of one hundred fifty dollars ($150) and

forfeiture of the marijuana shall apply if the offense is the first (1st) or second (2nd) violation

within the previous eighteen (18) months.

     (iv) Notwithstanding any public, special or general law to the contrary, possession of one

ounce (1 oz.) or less of marijuana by a person who is under the age of eighteen (18) years and

who is not exempted from penalties pursuant to chapter 21-28.6 shall constitute a civil offense,

rendering the offender liable to a civil penalty in the amount of one hundred fifty dollars ($150)

and forfeiture of the marijuana; provided the minor offender completes an approved drug

awareness program and community service as determined by the court. If the person under the

age of eighteen (18) years fails to complete an approved drug awareness program and community

service within one year of the offense, the penalty shall be a three hundred dollar ($300) civil fine

and forfeiture of the marijuana, except that if no drug awareness program or community service is

available, the penalty shall be a fine of one hundred fifty dollars ($150) and forfeiture of the

marijuana. The parents or legal guardian of any offender under the age of eighteen (18) shall be

notified of the offense and the availability of a drug awareness and community service program.

The drug awareness program must be approved by the court, but shall, at a minimum, provide

four (4) hours of instruction or group discussion, and ten (10) hours of community service.

Notwithstanding any other public, special or general law to the contrary, this civil penalty shall

apply if the offense is the first (1st) or second (2nd) violation within the previous eighteen (18)

months.

     (v) Notwithstanding any public, special, or general law to the contrary, a person not

exempted from penalties pursuant to chapter 21-28.6 found in possession of one ounce (1 oz.) or

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less of marijuana is guilty of a misdemeanor and upon conviction may be imprisoned for not

more than thirty (30) days or fined not less than two hundred dollars ($200) nor more than five

hundred dollars ($500), or both, if that person has been previously adjudicated on a violation for

possession of less than one ounce (1 oz.) of marijuana under subparagraphs 21-28-4.01(c)(2)(iii)

or 21-28-4.01(c)(2)(iv) two (2) times in the eighteen (18) months prior to the third (3rd) offense.

     (vi) Any unpaid civil fine issued under subparagraphs 21-28-4.01(c)(2)(iii) or 21-28-

4.01(c)(2)(iv) shall double to three hundred dollars ($300) if not paid within thirty (30) days of

the offense. The civil fine shall double again to six hundred dollars ($600) if it has not been paid

within ninety (90) days.

     (vii) No person may be arrested for a violation of subparagraphs 21-28-4.01(c)(2)(iii) or

21-28-4.01(c)(2)(iv) except as provided in this subparagraph. Any person in possession of an

identification card, license, or other form of identification issued by the state or any state, city or

town, or any college or university, who fails to produce the same upon request of a police officer

who informs the person that he or she has been found in possession of what appears to the officer

to be one ounce (1 oz.) or less of marijuana, or any person without any such forms of

identification that fails or refuses to truthfully provide his or her name, address, and date of birth

to a police officer who has informed such person that the officer intends to provide such

individual with a citation for possession of one ounce (1 oz.) or less of marijuana, may be

arrested.

     (viii) No violation of subparagraphs 21-28-4.01(c)(2)(iii) or 21-28-4.01(c)(2)(iv) shall be

considered a violation of parole or probation.

     (ix) Any records collected by any state agency or tribunal that include personally

identifiable information about violations of subparagraphs 21-28-4.01(c)(2)(iii) or 21-28-

4.01(c)(2)(iv) shall be sealed eighteen (18) months after the payment of said civil fine.

     (3) Jurisdiction. Any and all violations of subparagraphs 21-28-4.01(c)(2)(iii) and 21-28-

4.01(c)(2)(iv) shall be the exclusive jurisdiction of the Rhode Island traffic tribunal. All money

associated with the civil fine issued under subparagraphs 21-28-4.01(c)(2)(iii) or 21-28-

4.01(c)(2)(iv) shall be payable to the Rhode Island traffic tribunal. Fifty percent (50%) of all fines

collected by the Rhode Island traffic tribunal from civil penalties issued pursuant to

subparagraphs 21-28-4.01(c)(2)(iii) or 21-28-4.01(c)(2)(iv) shall be expended on drug awareness

and treatment programs for youth.

     (4) Additionally every person convicted or who pleads nolo contendere under paragraph

(2)(i) of this subsection or convicted or who pleads nolo contendere a second or subsequent time

under paragraph (2)(ii) of this subsection, who is not sentenced to a term of imprisonment to

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serve for the offense, shall be required to:

     (i) Perform, up to one hundred (100) hours of community service;

     (ii) Attend and complete a drug counseling and education program as prescribed by the

director of the department of mental health, retardation and hospitals and pay the sum of four

hundred dollars ($400) to help defray the costs of this program which shall be deposited as

general revenues. Failure to attend may result after hearing by the court in jail sentence up to one

year;

     (iii) The court shall not suspend any part or all of the imposition of the fee required by

this subsection, unless the court finds an inability to pay;

     (iv) If the offense involves the use of any automobile to transport the substance or the

substance is found within an automobile, then a person convicted or who pleads nolo contendere

under paragraphs (2)(i) and (ii) of this subsection shall be subject to a loss of license for a period

of six (6) months for a first offense and one year for each offense after this.

     (5) All fees assessed and collected pursuant to paragraph (3)(ii) of this subsection shall be

deposited as general revenues and shall be collected from the person convicted or who pleads

nolo contendere before any other fines authorized by this chapter.

     (d) It shall be unlawful for any person to manufacture, distribute, or possess with intent to

manufacture or distribute, an imitation controlled substance. Any person who violates this

subsection is guilty of a crime, and upon conviction shall be subject to the same term of

imprisonment and/or fine as provided by this chapter for the manufacture or distribution of the

controlled substance which the particular imitation controlled substance forming the basis of the

prosecution was designed to resemble and/or represented to be; but in no case shall the

imprisonment be for more than five (5) years nor the fine for more than twenty thousand dollars

($20,000).

     (e) It shall be unlawful for a practitioner to prescribe, order, distribute, supply, or sell an

anabolic steroid or human growth hormone for: (1) enhancing performance in an exercise, sport,

or game, or (2) hormonal manipulation intended to increase muscle mass, strength, or weight

without a medical necessity. Any person who violates this subsection is guilty of a misdemeanor

and upon conviction may be imprisoned for not more than six (6) months or a fine of not more

than one thousand dollars ($1,000), or both.

     21-28-4.01.1. Minimum sentence – Certain quantities of controlled substances. --

(a) Except as authorized by this chapter, it shall be unlawful for any person to

manufacture, sell, or possess with intent to manufacture, or sell, a controlled substance classified

in schedules I or II (excluding marijuana) or to possess or deliver the following enumerated

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quantities of certain controlled substances:

     (1) One ounce (1 oz.) to one kilogram (1 kg.) of a mixture or substance containing a

detectable amount of heroin;

     (2) One ounce (1 oz.) to one kilogram (1 kg.) of a mixture or substance containing a

detectable amount of:

     (i) Coca leaves, except coca leaves and extracts of coca leaves from which cocaine,

ecgonine, and derivatives of ecgonine or their salts have been removed;

     (ii) Cocaine, its salts, optical and geometric isomers, and salts of isomers;

     (iii) Ecgonine, its derivatives, their salts, isomers, and salts of isomers; or

     (iv) Any compound, mixture, or preparation which contains any quantity of any of the

substances referred to in paragraphs (i) – (iii) of this subdivision;

     (3) One gram (1 g.) to ten grams (10 gs.) of phencyclidine (PCP) or one hundred (100) to

one thousand (1,000) tablets of a mixture or substance containing a detectable amount of

phencyclidine (PCP); or

     (4) One-tenth of a gram (0.1 g.) to one gram (1 g.) of lysergic acid diethylamide (LSD) or

one hundred (100) to one thousand (1,000) tablets of a mixture or substance containing a

detectable amount of lysergic acid diethylamide (LSD); or.

     (5) One kilogram (1 kg.) to five (5 kgs.) kilograms of a mixture containing a detectable

amount of marijuana.

     (b) Any person who violates this section shall be guilty of a crime, and upon conviction,

may be imprisoned for a term up to fifty (50) years and fined not more than five hundred

thousand dollars ($500,000).

     21-28-4.01.2. Minimum sentence – Certain quantities of controlled substances. --

(a) Except as authorized by the chapter, it shall be unlawful for any person to possess,

manufacture, sell, or deliver the following enumerated quantities of certain controlled substances:

     (1) More than one kilogram (1 kg.) of a mixture or substance containing a detectable

amount of heroin;

     (2) More than one kilogram (1 kg.) of a mixture or substance containing a detectable

amount of

     (i) Coca leaves, except coca leaves and extracts of coca leaves from which cocaine,

ecgonine, and derivatives of ecgonine or their salts have been removed;

     (ii) Cocaine, its salts, optical and geometric isomers, and salts of isomers;

     (iii) Ecgonine, its derivatives, their salts, isomers, and salts of isomers; or

     (iv) Any compound, mixture, or preparation which contains any quantity of any of the

LC003859 - Page 29 of 43

substances referred to in paragraphs (i) – (iii) of this subdivision;

     (3) More than ten grams (10 gs.) of phencyclidine (PCP) or more than one thousand

(1,000) tablets of a mixture or substance containing a detectable amount of phencyclidine (PCP);

or

     (4) More than one gram (1 g.) of lysergic acid diethylamide (LSD); or more than one

thousand (1,000) tablets of a mixture or substance containing a detectable amount of lysergic acid

diethylamide (LSD); or.

     (5) More than five kilograms (5 kgs.) of a mixture containing a detectable amount of

marijuana.

     (b) Any person who violates this section shall be guilty of a crime, and upon conviction,

may be imprisoned for a term up to life and fined not more than one million dollars ($1,000,000).

     SECTION 6. Chapter 21-28 of the General Laws entitled "Uniform Controlled

Substances Act" is hereby amended by adding thereto the following section:

     21-28-4.23. Marijuana exemption.-- The penalties provided for in this chapter do not

apply to those exempted from criminal penalties pursuant to chapters 28.9 or 28.10 of this title, or

chapter 49 of title 44.

     SECTION 7. Section 31-27-2 of the General Laws in chapter 31-27 entitled "Motor

Vehicle Offenses" are hereby amended to read as follows:

     31-27-2. Driving under influence of liquor or drugs. -- (a) Whoever drives or

otherwise operates any vehicle in the state while under the influence of any intoxicating liquor,

drugs, toluene, or any controlled substance as defined in chapter 28 of title 21, or any

combination of these, shall be guilty of a misdemeanor except as provided in subdivision (d)(3)

and shall be punished as provided in subsection (d) of this section.

     (b)(1)Any person charged under subsection (a) of this section whose blood alcohol

concentration is eight one-hundredths of one percent (.08%) or more by weight as shown by a

chemical analysis of a blood, breath, or urine sample shall be guilty of violating subsection (a) of

this section. This provision shall not preclude a conviction based on other admissible evidence.

Proof of guilt under this section may also be based on evidence that the person charged was under

the influence of intoxicating liquor, drugs, toluene, or any controlled substance defined in chapter

28 of title 21, or any combination of these, to a degree which rendered the person incapable of

safely operating a vehicle. The fact that any person charged with violating this section is or has

been legally entitled to use alcohol or a drug shall not constitute a defense against any charge of

violating this section.

     (2) Whoever drives or otherwise operates any vehicle in the state with a blood presence

LC003859 - Page 30 of 43

of any scheduled controlled substance as defined within chapter 28 of title 21, as shown by

analysis of a blood or urine sample, shall be guilty of a misdemeanor and shall be punished as

provided in subsection (d) of this section. A person twenty-one (21) years of age or older or a

person exempt from criminal penalties for the medical use of marijuana pursuant to chapter

28.6 of title 21 shall not be considered under the influence of marijuana solely because of the

presence of marijuana metabolites or components of marijuana unless the concentration of

components of marijuana is proven to be sufficient to cause impairment.

     (c) In any criminal prosecution for a violation of subsection (a) of this section, evidence

as to the amount of intoxicating liquor, toluene, or any controlled substance as defined in chapter

28 of title 21, or any combination of these, in the defendant's blood at the time alleged as shown

by a chemical analysis of the defendant's breath, blood, or urine or other bodily substance shall be

admissible and competent, provided that evidence is presented that the following conditions have

been complied with:

     (1) The defendant has consented to the taking of the test upon which the analysis is made.

Evidence that the defendant had refused to submit to the test shall not be admissible unless the

defendant elects to testify.

     (2) A true copy of the report of the test result was mailed within seventy-two (72) hours

of the taking of the test to the person submitting to a breath test.

     (3) Any person submitting to a chemical test of blood, urine, or other body fluids shall

have a true copy of the report of the test result mailed to him or her within thirty (30) days

following the taking of the test.

     (4) The test was performed according to methods and with equipment approved by the

director of the department of health of the state of Rhode Island and by an authorized individual.

     (5) Equipment used for the conduct of the tests by means of breath analysis had been

tested for accuracy within thirty (30) days preceding the test by personnel qualified as

hereinbefore provided, and breathalyzer operators shall be qualified and certified by the

department of health within three hundred sixty-five (365) days of the test.

     (6) The person arrested and charged with operating a motor vehicle while under the

influence of intoxicating liquor, toluene, or any controlled substance as defined in chapter 28 of

title 21, or, any combination of these in violation of subsection (a) of this section was afforded the

opportunity to have an additional chemical test. The officer arresting or so charging the person

shall have informed the person of this right and afforded him or her a reasonable opportunity to

exercise this right, and a notation to this effect is made in the official records of the case in the

police department. Refusal to permit an additional chemical test shall render incompetent and

LC003859 - Page 31 of 43

inadmissible in evidence the original report.

     (d)(1) Every person found to have violated subdivision (b)(1) of this section shall be

sentenced as follows: for a first violation whose blood alcohol concentration is eight one-

hundredths of one percent (.08%) but less than one-tenth of one percent (.1%) by weight or who

has a blood presence of any scheduled controlled substance as defined in subdivision (b)(2) shall

be subject to a fine of not less than one hundred dollars ($100) nor more than three hundred

dollars ($300), shall be required to perform ten (10) to sixty (60) hours of public community

restitution, and/or shall be imprisoned for up to one year. The sentence may be served in any unit

of the adult correctional institutions in the discretion of the sentencing judge and/or shall be

required to attend a special course on driving while intoxicated or under the influence of a

controlled substance; provided, however, that the court may permit a servicemember or veteran to

complete any court-approved counseling program administered or approved by the Veterans'

Administration, and his or her driver's license shall be suspended for thirty (30) days up to one

hundred eighty (180) days.

     (ii)(i) Every person convicted of a first violation whose blood alcohol concentration is

one-tenth of one percent (.1%) by weight or above but less than fifteen hundredths of one percent

(.15%) or whose blood alcohol concentration is unknown shall be subject to a fine of not less than

one hundred ($100) dollars nor more than four hundred dollars ($400) and shall be required to

perform ten (10) to sixty (60) hours of public community restitution and/or shall be imprisoned

for up to one year. The sentence may be served in any unit of the adult correctional institutions in

the discretion of the sentencing judge. The person's driving license shall be suspended for a

period of three (3) months to twelve (12) months. The sentencing judge shall require attendance

at a special course on driving while intoxicated or under the influence of a controlled substance

and/or alcoholic or drug treatment for the individual; provided, however, that the court may

permit a servicemember or veteran to complete any court-approved counseling program

administered or approved by the Veterans' Administration.

     (iii)(ii) Every person convicted of a first offense whose blood alcohol concentration is

fifteen hundredths of one percent (.15%) or above, or who is under the influence of a drug,

toluene, or any controlled substance as defined in subdivision (b)(1) shall be subject to a fine of

five hundred dollars ($500) and shall be required to perform twenty (20) to sixty (60) hours of

public community restitution and/or shall be imprisoned for up to one year. The sentence may be

served in any unit of the adult correctional institutions in the discretion of the sentencing judge.

The person's driving license shall be suspended for a period of three (3) months to eighteen (18)

months. The sentencing judge shall require attendance at a special course on driving while

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intoxicated or under the influence of a controlled substance and/or alcohol or drug treatment for

the individual; provided, however, that the court may permit a servicemember or veteran to

complete any court-approved counseling program administered or approved by the Veterans'

Administration.

     (2) Every person convicted of a second violation within a five (5) year period with a

blood alcohol concentration of eight one-hundredths of one percent (.08%) or above but less than

fifteen hundredths of one percent (.15%) or whose blood alcohol concentration is unknown or

who has a blood presence of any controlled substance as defined in subdivision (b)(2), and every

person convicted of a second violation within a five (5) year period regardless of whether the

prior violation and subsequent conviction was a violation and subsequent conviction under this

statute or under the driving under the influence of liquor or drugs statute of any other state, shall

be subject to a mandatory fine of four hundred dollars ($400). The person's driving license shall

be suspended for a period of one year to two (2) years, and the individual shall be sentenced to

not less than ten (10) days nor more than one year in jail. The sentence may be served in any unit

of the adult correctional institutions in the discretion of the sentencing judge; however, not less

than forty-eight (48) hours of imprisonment shall be served consecutively. The sentencing judge

shall require alcohol or drug treatment for the individual; provided, however, that the court may

permit a servicemember or veteran to complete any court-approved counseling program

administered or approved by the Veterans' Administration and may prohibit that person from

operating a motor vehicle that is not equipped with an ignition interlock system for a period of

one year to two (2) years following the completion of the sentence as provided in § 31-27-2.8.

     (ii)(i) Every person convicted of a second violation within a five (5) year period whose

blood alcohol concentration is fifteen hundredths of one percent (.15%) or above by weight as

shown by a chemical analysis of a blood, breath, or urine sample or who is under the influence of

a drug, toluene, or any controlled substance as defined in subdivision (b)(1) shall be subject to

mandatory imprisonment of not less than six (6) months nor more than one year, a mandatory fine

of not less than one thousand dollars ($1,000) and a mandatory license suspension for a period of

two (2) years from the date of completion of the sentence imposed under this subsection. The

sentencing judge shall require alcohol or drug treatment for the individual; provided, however,

that the court may permit a servicemember or veteran to complete any court approved counseling

program administered or approved by the Veterans' Administration.

     (3) Every person convicted of a third or subsequent violation within a five (5) year period

with a blood alcohol concentration of eight one-hundredths of one percent (.08%) or above but

less than fifteen hundredths of one percent (.15%) or whose blood alcohol concentration is

LC003859 - Page 33 of 43

unknown or who has a blood presence of any scheduled controlled substance as defined in

subdivision (b)(2) regardless of whether any prior violation and subsequent conviction was a

violation and subsequent conviction under this statute or under the driving under the influence of

liquor or drugs statute of any other state, shall be guilty of a felony and be subject to a mandatory

fine of four hundred ($400) dollars. The person's driving license shall be suspended for a period

of two (2) years to three (3) years, and the individual shall be sentenced to not less than one year

and not more than three (3) years in jail. The sentence may be served in any unit of the adult

correctional institutions in the discretion of the sentencing judge; however, not less than forty-

eight (48) hours of imprisonment shall be served consecutively. The sentencing judge shall

require alcohol or drug treatment for the individual; provided, however, that the court may permit

a servicemember or veteran to complete any court-approved counseling program administered or

approved by the Veterans' Administration, and may prohibit that person from operating a motor

vehicle that is not equipped with an ignition interlock system for a period of two (2) years

following the completion of the sentence as provided in § 31-27-2.8.

     (ii)(i) Every person convicted of a third or subsequent violation within a five (5) year

period whose blood alcohol concentration is fifteen hundredths of one percent (.15%) above by

weight as shown by a chemical analysis of a blood, breath, or urine sample or who is under the

influence of a drug, toluene or any controlled substance as defined in subdivision (b)(1) shall be

subject to mandatory imprisonment of not less than three (3) years nor more than five (5) years, a

mandatory fine of not less than one thousand dollars ($1,000) nor more than five thousand dollars

($5,000) and a mandatory license suspension for a period of three (3) years from the date of

completion of the sentence imposed under this subsection.

     (iii)(ii) In addition to the foregoing penalties, every person convicted of a third or

subsequent violation within a five (5) year period regardless of whether any prior violation and

subsequent conviction was a violation and subsequent conviction under this statute or under the

driving under the influence of liquor or drugs statute of any other state shall be subject, in the

discretion of the sentencing judge, to having the vehicle owned and operated by the violator

seized and sold by the state of Rhode Island, with all funds obtained by the sale to be transferred

to the general fund.

     (4) Whoever drives or otherwise operates any vehicle in the state while under the

influence of any intoxicating liquor, drugs, toluene, or any controlled substance as defined in

chapter 28 of title 21, or any combination of these, when his or her license to operate is

suspended, revoked or cancelled for operating under the influence of a narcotic drug or

intoxicating liquor shall be guilty of a felony punishable by imprisonment for not more than three

LC003859 - Page 34 of 43

(3) years and by a fine or not more than three thousand dollars ($3,000). The court shall require

alcohol and/or drug treatment for the individual; provided, the penalties provided for in

subdivision 31-27-2(d)(4) shall not apply to an individual who has surrendered his or her license,

and served the court ordered period of suspension, but who, for any reason, has not had their

license reinstated after the period of suspension, revocation, or suspension has expired; provided,

further the individual shall be subject to the provisions of paragraphs 31-27-2(d)(2)(i) or (ii) or

31-27-22(d)(3)(i), (ii), or (iii) regarding subsequent offenses, and any other applicable provision

of § 31-27-2.

     (5) For purposes of determining the period of license suspension, a prior violation shall

constitute any charge brought and sustained under the provisions of this section or § 31-27-2.1.

     (ii)(i) Any person over the age of eighteen (18) who is convicted under this section for

operating a motor vehicle while under the influence of alcohol, other drugs, or a combination of

these, while a child under the age of thirteen (13) years was present as a passenger in the motor

vehicle when the offense was committed may be sentenced to a term of imprisonment of not more

than one year and further shall not be entitled to the benefit of suspension or deferment of this

sentence. The sentence imposed under this section may be served in any unit of the adult

correctional institutions in the discretion of the sentencing judge.

     (6) Any person convicted of a violation under this section shall pay a highway assessment

fine of five hundred dollars ($500) which shall be deposited into the general fund. The assessment

provided for by this subsection shall be collected from a violator before any other fines

authorized by this section.

     (ii)(i) Any person convicted of a violation under this section shall be assessed a fee of

eighty-six dollars ($86).

     (7) If the person convicted of violating this section is under the age of eighteen (18)

years, for the first violation he or she shall be required to perform ten (10) to sixty (60) hours of

public community restitution, and the juvenile's driving license shall be suspended for a period of

six (6) months, and may be suspended for a period up to eighteen (18) months. The sentencing

judge shall also require attendance at a special course on driving while intoxicated or under the

influence of a controlled substance and alcohol or drug education and/or treatment for the

juvenile. The juvenile may also be required to pay a highway assessment fine of no more than

five hundred dollars ($500), and the assessment imposed shall be deposited into the general fund.

     (ii)(i) If the person convicted of violating this section is under the age of eighteen (18)

years, for a second or subsequent violation regardless of whether any prior violation and

subsequent conviction was a violation and subsequent under this statute or under the driving

LC003859 - Page 35 of 43

under the influence of liquor or drugs statute of any other state, he or she shall be subject to a

mandatory suspension of his or her driving license until such time as he or she is twenty-one (21)

years of age and may, in the discretion of the sentencing judge, also be sentenced to the Rhode

Island training school for a period of not more than one year and/or a fine of not more than five

hundred dollars ($500).

     (8) Any person convicted of a violation under this section may undergo a clinical

assessment at the community college of Rhode Island 's center for workforce and community

education. Should this clinical assessment determine problems of alcohol, drug abuse, or

psychological problems associated with alcoholic or drug abuse, this person shall be referred to

an appropriate facility, licensed or approved by the department of mental health, retardation and

hospitals for treatment placement, case management, and monitoring. In the case of a

servicemember or veteran, the court may order that the person be evaluated through the Veterans'

Administration. Should the clinical assessment determine problems of alcohol, drug abuse, or

psychological problems associated with alcohol or drug abuse, the person may have their

treatment, case management and monitoring administered or approved by the Veterans'

Administration.

     (e) Percent by weight of alcohol in the blood shall be based upon milligrams of alcohol

per one hundred (100) cubic centimeters of blood.

     (f)(1) There is established an alcohol and drug safety unit within the division of motor

vehicles to administer an alcohol safety action program. The program shall provide for placement

and follow-up for persons who are required to pay the highway safety assessment. The alcohol

and drug safety action program will be administered in conjunction with alcohol and drug

programs licensed by the department of mental health retardation and hospitals.

     (2) Persons convicted under the provisions of this chapter shall be required to attend a

special course on driving while intoxicated or under the influence of a controlled substance,

and/or participate in an alcohol or drug treatment program; provided, however, that the court may

permit a servicemember or veteran to complete any court-approved counseling program

administered or approved by the Veterans' Administration. The course shall take into

consideration any language barrier which may exist as to any person ordered to attend, and shall

provide for instruction reasonably calculated to communicate the purposes of the course in

accordance with the requirements of the subsection. Any costs reasonably incurred in connection

with the provision of this accommodation shall be borne by the person being retrained. A copy of

any violation under this section shall be forwarded by the court to the alcohol and drug safety

unit. In the event that persons convicted under the provisions of this chapter fail to attend and

LC003859 - Page 36 of 43

complete the above course or treatment program, as ordered by the judge, then the person may be

brought before the court, and after a hearing as to why the order of the court was not followed,

may be sentenced to jail for a period not exceeding one year.

     (3) The alcohol and drug safety action program within the division of motor vehicles

shall be funded by general revenue appropriations.

     (g) The director of the health department of the state of Rhode Island is empowered to

make and file with the secretary of state regulations which prescribe the techniques and methods

of chemical analysis of the person's body fluids or breath, and the qualifications and certification

of individuals authorized to administer this testing and analysis.

     (h) Jurisdiction for misdemeanor violations of this section shall be with the district court

for persons eighteen (18) years of age or older and to the family court for persons under the age

of eighteen (18) years. The courts shall have full authority to impose any sentence authorized and

to order the suspension of any license for violations of this section. All trials in the district court

and family court of violations of the section shall be scheduled within thirty (30) days of the

arraignment date. No continuance or postponement shall be granted except for good cause shown.

Any continuances that are necessary shall be granted for the shortest practicable time. Trials in

superior court are not required to be scheduled within thirty (30) days of the arraignment date.

     (i) No fines, suspensions, assessments, alcohol or drug treatment programs, course on

driving while intoxicated or under the influence of a controlled substance, public community

restitution, or jail provided for under this section can be suspended.

     (j) An order to attend a special course on driving while intoxicated that shall be

administered in cooperation with a college or university accredited by the state, shall include a

provision to pay a reasonable tuition for the course in an amount not less than twenty-five dollars

($25.00), and a fee of one hundred seventy-five dollars ($175), which fee shall be deposited into

the general fund.

     (k) For the purposes of this section, any test of a sample of blood, breath, or urine for the

presence of alcohol, which relies in whole or in part upon the principle of infrared light

absorption is considered a chemical test.

     (l) If any provision of this section or the application of any provision shall for any reason

be judged invalid, such a judgment shall not affect, impair, or invalidate the remainder of the

section, but shall be confined in this effect to the provision or application directly involved in the

controversy giving rise to the judgment.

     (m) For the purposes of this section, "servicemember" means a person who is presently

serving in the armed forces of the United States including the Coast Guard, a reserve component

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thereof, or the National Guard. "Veteran" means a person who has served in the armed forces,

including the Coast Guard of the United States, a reserve component thereof, or the National

Guard, and has been discharged under other than dishonorable conditions.

     SECTION 8. Section 44-11-11 of the General Laws in Chapter 44-11 entitled "Business

Corporation Tax" is hereby amended as follows:

     44-11-11. "Net income" defined. -- (a) "Net income" means, for any taxable year and

for any corporate taxpayer, the taxable income of the taxpayer for that taxable year under the laws

of the United States, except as provided for in § 44-11-11(j), plus:

     (i) Any interest not included in the taxable income;

     (ii) Any specific exemptions;

     (iii) For a captive REIT, an amount equal to the amount of the dividends paid deduction

allowed under the Internal Revenue Code for the taxable year;

     (iv) The tax imposed by this chapter;

     (v) Any deductions required to be added back to net income under the provisions of

paragraph (f) of this section, and minus

     (vi) Interest on obligations of the United States or its possessions, and other interest

exempt from taxation by this state; and

     (vii) The federal net operating loss deduction.

     (2) All binding federal elections made by or on behalf of the taxpayer applicable either

directly or indirectly to the determination of taxable income shall be binding on the taxpayer

except where this chapter or its attendant regulations specifically modify or provide otherwise.

Rhode Island taxable income shall not include the "gross-up of dividends" required by the federal

Internal Revenue Code to be taken into taxable income in connection with the taxpayer's election

of the foreign tax credit.

     (b) A net operating loss deduction shall be allowed which shall be the same as the net

operating loss deduction allowed under 26 U.S.C. § 172, except that:

     (1) Any net operating loss included in determining the deduction shall be adjusted to

reflect the inclusions and exclusions from entire net income required by subsection (a) of this

section and § 44-11-11.1;

     (2) The deduction shall not include any net operating loss sustained during any taxable

year in which the taxpayer was not subject to the tax imposed by this chapter; and

     (3) The deduction shall not exceed the deduction for the taxable year allowable under 26

U.S.C. § 172; provided, that the deduction for a taxable year may not be carried back to any other

taxable year for Rhode Island purposes but shall only be allowable on a carry forward basis for

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the five (5) succeeding taxable years.

     (c) "Domestic international sales corporations" (referred to as DISCs), for the purposes of

this chapter, will be treated as they are under federal income tax law and shall not pay the amount

of the tax computed under § 44-11-2(a). Any income to shareholders of DISCs is to be treated in

the same manner as it is treated under federal income tax law as it exists on December 31, 1984.

     (d) A corporation which qualifies as a "foreign sales corporation" (FSC) under the

provisions of subchapter N, 26 U.S.C. § 861 et seq., and which has in effect for the entire taxable

year a valid election under federal law to be treated as a FSC, shall not pay the amount of the tax

computed under § 44-11-2(a). Any income to shareholders of FSCs is to be treated in the same

manner as it is treated under federal income tax law as it exists on January 1, 1985.

     (e) As used in this section:

     (1) "Affiliated group" has the same meaning as in § 1504 of the Internal Revenue Code.

     (2) "Intangible expenses and costs" includes: (A) expenses, losses and costs for, related

to, or in connection directly or indirectly with the direct or indirect acquisition, use, maintenance

or management, ownership, sale, exchange, or any other disposition of intangible property to the

extent such amounts are allowed as deductions or costs in determining taxable income before

operating loss deduction and special deductions for the taxable year under the Internal Revenue

Code; (B) losses related to or incurred in connection directly or indirectly with factoring

transactions or discounting transactions; (C) royalty, patent, technical and copyright fees; (D)

licensing fees; and (E) other similar expenses and costs.

     (3) "Intangible property" means patents, patent applications, trade names, trademarks,

service marks, copyrights and similar types of intangible assets.

     (4) "Interest expenses and costs" means amounts directly or indirectly allowed as

deductions under § 163 of the Internal Revenue Code for purposes of determining taxable income

under the Internal Revenue Code to the extent such expenses and costs are directly or indirectly

for, related to, or in connection with the direct or indirect acquisition, maintenance, management,

ownership, sale, exchange or disposition of intangible property.

     (5) "Related member" means a person that, with respect to the taxpayer during all or any

portion of the taxable year, is a related entity, as defined in this subsection, a component member

as defined in § 1563(b) of the Internal Revenue Code, or is a person to or from whom there is

attribution of stock ownership in accordance with § 1563(e) of the Internal Revenue Code.

     (6) "Related entity" means: (A) a stockholder who is an individual, or a member of the

stockholder's family enumerated in § 318 of the Internal Revenue Code, if the stockholder and the

members of the stockholder's family own directly, indirectly, beneficially or constructively, in the

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aggregate, at least fifty percent (50%) of the value of the taxpayer's outstanding stock; (B) a

stockholder, or a stockholder's partnership, limited liability company, estate, trust or corporation,

if the stockholder and the stockholder's partnership, limited liability companies, estates, trusts and

corporations own directly, indirectly, beneficially or constructively, in the aggregate, at least fifty

percent (50%) of the value of the taxpayer's outstanding stock; or (C) a corporation, or a party

related to the corporation in a manner that would require an attribution of stock from the

corporation to the party or from the party to the corporation under the attribution rules of section

318 of the Internal Revenue Code, if the taxpayer owns, directly, indirectly, beneficially or

constructively, at least fifty percent (50%) of the value of the corporation's outstanding stock. The

attribution rules on § 318 of the Internal Revenue Code shall apply for purposes of determining

whether the ownership requirements of this subdivision have been met.

     (f) For purposes of computing its net income under this section, a corporation shall add

back otherwise deductible interest expenses and costs and intangible expenses and costs directly

or indirectly paid, accrued or incurred to, or in connection directly or indirectly with one or more

direct or indirect transactions with, one or more related members.

     (1) The adjustments required in subsection (f) of this section shall not apply if the

corporation establishes by clear and convincing evidence that the adjustments are unreasonable,

as determined by the tax administrator or the corporation and the tax administrator agree in

writing to the application or use of an alternative method of apportionment under § 44-11-15.

Nothing in this subsection shall be construed to the limit or negate the tax administrator's

authority to otherwise enter into agreements and compromises otherwise allowed by law.

     (2) The adjustments required in subsection (f) of this section shall not apply to such

portion of interest expenses and costs and intangible expenses and costs that the corporation can

establish by the preponderance of the evidence meets both of the following: (A) the related

member during the same income year directly or indirectly paid, accrued or incurred such portion

to a person who is not a related member; and (B) the transaction giving rise to the interest

expenses and costs or the intangible expenses and costs between the corporation and the related

member did not have as a significant purpose the avoidance of any portion of the tax due under

chapter 44-11.

     (3) The adjustments required in subsection (f) shall not apply if the corporation

establishes by clear and convincing evidence, as determined by the tax administrator, that: (i) a

principal purpose of the transaction giving rise to the payment of interest was not to avoid

payment of taxes due under this chapter; (ii) the interest is paid pursuant to a contract that reflects

an arm's length rate of interest and terms; and (iii) (A) the related member was subject to tax on

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its net income in this state or another state or possession of the United States or a foreign nation;

(B) a measure of said tax included the interest received from the taxpayer; and (C) the effective

rate of tax applied to the interest received by the related member is no less than the effective rate

of tax applied to the taxpayer under this chapter minus 3 percentage points.

     (4) Partial Adjustments. The add back required in subsection (f) shall not be required in

part if a portion of the add back would be unreasonable. A portion of the add back will be

considered unreasonable to the extent that the taxpayer establishes to the tax administrator by

clear and convincing evidence that interest or intangible expense was paid, accrued or incurred to

a related member that is taxed on the corresponding income by a state, U.S. possession or foreign

jurisdiction. An adjustment to the add back will be allowed based on a factor determined by the

apportioned tax rate of the related member in the other jurisdiction compared to the apportioned

tax rate of the taxpayer in this state. A taxpayer that seeks to claim this adjustment must file a

schedule that sets forth the information required by the tax administrator.

     (g) Nothing in this section shall require a corporation to add to its net income more than

once any amount of interest expenses and costs or intangible expenses and costs that the

corporation pays, accrues or incurs to a related member described in subsection (b) of this

section.

     (h) Any taxpayer required to make an adjustment required in subsection (f) for tax years

beginning on or after January 1, 2008, is additionally required to report to the tax administrator,

on forms required by him, the amount of any adjustments that would have been required if the

law applied to tax years beginning on or after January 1, 2007.

     (i) Nothing in this section shall be construed to limit or negate the tax administrator

authority to make adjustments under § 44-11-15.