Title II — S. 421 (Introduced in Senate)

Sec. 201 Allowance of deductions and credits relating to expenditures in connection with marijuana sales conducted in compliance with State law

(a)

Short title— This section may be cited as the “Small Business Tax Equity Act of 2019”.

(b)

Allowance— Section 280E of the Internal Revenue Code of 1986 is amended by inserting before the period at the end the following: “, unless such trade or business consists of marijuana sales conducted in compliance with State law or the law of the Indian tribe, as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304), that has jurisdiction over the Indian country, as defined in section 1151 of title 18, where the trade or business is conducted”.

(c)

Effective date— The amendment made by this section shall apply with respect to taxable years ending after the date of the enactment of this Act.

Sec. 202 Marijuana print advertising

(a)

Short title— This section may be cited as the “Marijuana Advertising In Legal States Act” or the “MAILS Act”.

(b)

Marijuana print advertising— Section 403(c)(1) of the Controlled Substances Act (21 U.S.C. 843(c)(1)) is amended by adding at the end the following: “This paragraph does not apply to an advertisement to the extent that the advertisement relates to an activity, involving marihuana, that is in compliance with the law of the State or the law of the Indian tribe, as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304), that has jurisdiction over the Indian country, as defined in section 1151 of title 18, United States Code, in which that activity takes place.”.

Sec. 203 Safe harbor for marijuana broadcast advertising

(a)

Communications Act of 1934— Section 309 of the Communications Act of 1934 (47 U.S.C. 309) is amended by adding at the end the following:

“(m) Safe harbor for marijuana broadcast advertising

“(1) Definitions—In this subsection—

“(A) the term covered activity means the production, possession, sale, distribution, dispensation, administration, processing, or laboratory testing of marijuana;

“(B) the term Indian country has the meaning given the term in section 1151 of title 18, United States Code;

“(C) the term Indian tribe has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304);

“(D) the term marijuana has the meaning given the term in section 102 of the Controlled Substances Act (21 U.S.C. 802); and

“(E) the term media of mass communications has the meaning given the term in subsection (i)(3)(C).

“(2) Safe harbor—In determining whether to grant an application for a license or permit (including for the renewal of a license or permit) under this section, the Commission shall not consider the broadcast by any medium of mass communications of any advertising or other information pertaining to any aspect of a covered activity to be contrary to the public interest, convenience, and necessity, if the covered activity, and the advertising thereof, does not violate the law of—

“(A) the State, or the Indian tribe that has jurisdiction over the Indian country, in which the transmission point of the subject medium of mass communications is located; or

“(B) with respect to a radio or television station, the State, or the Indian tribe that has jurisdiction over the Indian country, in which the station's community of license is or is proposed to be located.”

(b)

Controlled Substances Act— Section 708 of the Controlled Substances Act (21 U.S.C. 903), as amended by section 101, is amended—

(1)

in subsection (a), by striking “subsection (b)” and inserting “subsections (b) and (c)”;

(2)

in subsection (b), by striking “Notwithstanding” and inserting “Subject to subsection (c) and notwithstanding”; and

(3)

by adding at the end the following:

“(c) Compliance with State or tribal law relating to marijuana broadcast advertising

“(1) In general—Except as provided in paragraph (2) and notwithstanding any other provision of law, the provisions of this title relating to marijuana shall not apply to the broadcast by any medium of mass communications of any advertising or other information pertaining to any aspect of a covered activity if the covered activity, and the advertising thereof, does not violate the law of—

“(A) the State, or the Indian tribe that has jurisdiction over the Indian country, in which the transmission point of the subject medium of mass communications is located; or

“(B) with respect to a radio or television station, the State, or the Indian tribe that has jurisdiction over the Indian country, in which the station’s community of license is located.

“(2) Broadcasts calculated to induce travel from non-legal jurisdictions—Paragraph (1) shall not apply to the broadcast by any medium of mass communications of any advertising or other information pertaining to any aspect of a covered activity that is calculated to induce residents of a non-legal jurisdiction to travel to another State or other area of Indian country to purchase marijuana.

“(d) Definitions—For purposes of this section—

“(1) the term covered activity means the production, possession, sale, distribution, dispensation, administration, processing, or laboratory testing of marijuana;

“(2) the term Indian country has the meaning given the term in section 1151 of title 18, United States Code;

“(3) the term Indian tribe has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304);

“(4) the term media of mass communications has the meaning given the term in section 309(i)(3)(C) of the Communications Act of 1934 (47 U.S.C. 309(i)(3)(C)); and

“(5) the term non-legal jurisdiction means—

“(A) a State in which the purchase of marijuana is prohibited under State law; or

“(B) Indian country in which the purchase of marijuana is prohibited under the law of the Indian tribe that has jurisdiction over the Indian country.”

Sec. 204 Access to banking

(a)

Definitions— In this section—

(1)

the term Federal banking regulator means each of the Board of Governors of the Federal Reserve System, the Bureau of Consumer Financial Protection, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, or any Federal agency or department that regulates banking or financial services, as determined by the Secretary of the Treasury;

(2)

the term financial service means a financial product or service as defined in section 1002 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5481);

(3)

the term manufacturer means a person who manufactures, compounds, converts, processes, prepares, or packages marijuana or marijuana products; and

(4)

the term producer means a person who plants, cultivates, harvests, or in any way facilitates the natural growth of marijuana.

(b)

Safe harbor for depository institutions— A Federal banking regulator may not—

(1)

terminate or limit the deposit insurance of a depository institution under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) or the Federal Credit Union Act (12 U.S.C. 1751 et seq.) solely because the depository institution provides or has provided financial services to a marijuana-related business;

(2)

prohibit, penalize, or otherwise discourage a depository institution from providing financial services to a marijuana-related business;

(3)

recommend, incentivize, or encourage a depository institution not to offer financial services to a person, or to downgrade or cancel the financial services offered to a person solely because—

(A)

the person is a manufacturer or producer of marijuana;

(B)

the person is the owner, operator, or an employee of a marijuana-related business;

(C)

the person later becomes an owner, operator, or employee of a marijuana-related business; or

(D)

the depository institution was not aware that the person is the owner, operator, or an employee of a marijuana-related business; or

(4)

take any adverse or corrective supervisory action on a loan to an owner, operator, or employee of—

(A)

a marijuana-related business solely because the owner, operator, or employee is an owner, operator, or employee of a marijuana-related business; or

(B)

real estate or equipment that is leased to a marijuana-related business solely because the owner or operator of the real estate or equipment leased the real estate or equipment to a marijuana-related business.

(c)

Prohibition on denying master accounts to depository institutions because of marijuana-Related funds— Notwithstanding any other provision of law, the Board of Governors of the Federal Reserve System may not deny a master account to a depository institution solely on the basis that the depository institution accepts deposits of funds from marijuana-related businesses.

(d)

Protections under Federal law—

(1)

Investigation and prosecution— A depository institution that provides financial services to a marijuana-related business, or the officers, directors, and employees of that business, shall be immune from Federal criminal prosecution or investigation for providing those services.

(2)

Federal criminal law— A depository institution that provides financial services to a marijuana-related business, or the officers, directors, and employees of that business, shall not be subject to a criminal penalty under any Federal law solely for providing those services or for further investing any income derived from such services.

(3)

Forfeiture— A depository institution that has a legal interest in the collateral for a loan made to an owner, operator, or employee of a marijuana-related business, or to an owner or operator of real estate or equipment that is leased to a marijuana-related business, shall not be subject to criminal, civil, or administrative forfeiture of that legal interest pursuant to any Federal law for providing such loan.

(e)

Rule of construction— Nothing in this section requires a depository institution to provide financial services to a marijuana-related business.

Sec. 205 Requirements for filing suspicious activity reports

(a)

Definition— In this section, the term deposit account records—

(1)

means account ledgers, signature cards, certificates of deposit, passbooks, corporate resolutions authorizing accounts in the possession of the depository institution, and other books and records of the depository institution, including records maintained by computer, which relate to the depository institution's deposit taking function; and

(2)

does not include account statements, deposit slips, items deposited, or cancelled checks.

(b)

Suspicious activity reports—

(1)

In general— A depository institution or any director, officer, employee, or agent of a depository institution shall not be required to report a suspicious transaction as prescribed by the guidance issued by the Financial Crimes Enforcement Network titled “BSA Expectations Regarding Marijuana-Related Businesses” (FIN–2014–G001; published on February 14, 2014) or section 21.11(c)(4)(1) of title 12, Code of Federal Regulations, if—

(A)

the depository institution reasonably believes, based on customer due diligence, that the marijuana-related businesses to which it is providing financial services does not implicate one of the priorities outlined in the document entitled “Memorandum for All United States Attorneys: Guidance Regarding Marijuana Enforcement” issued by James M. Cole on August 29, 2013, nor violate the laws of the State in which marijuana-related business operates; and

(B)

the deposit account records of the depository institution—

(i)

include—

(I)

identifying information of the account holder and related parties; and

(II)

addresses of the account holder and related parties; and

(ii)

state that—

(I)

the account holder is engaged in a marijuana-related business; and

(II)

no additional suspicious activity has been identified.

(2)

Safe harbor— A depository institution or any director, officer, employee, or agent of a depository institution that reports a suspicious transaction relating to a marijuana-related business shall be considered to have met the requirements of the guidance described in paragraph (1).

Sec. 206 Bankruptcy protection

Notwithstanding any other provision of law, a marijuana-related business shall be entitled to—

(1)

relief under chapter 7, 11, or 13 of title 11, United States Code; and

(2)

convert a case in accordance with section 706, 1112, or 1307 of title 11, United States Code, as applicable.

Sec. 207 Tribal marijuana sovereignty

(a)

In general— The fact that an Indian tribe, a member of an Indian tribe, or a tribal entity is producing, purchasing, or in possession of marijuana in compliance with the law of the Indian tribe that has jurisdiction over the Indian country, as defined in section 1151 of title 18, United States Code, where the conduct occurs shall not be considered when—

(1)

allocating or distributing Federal funds or other Federal benefits to the Indian tribe, a member of an Indian tribe, or the tribal entity;

(2)

determining the eligibility of the Indian tribe or the tribal entity for any contract, grant, or other agreement with the United States, or the renewal or modification thereof, where the legal production, purchase, or possession of marijuana by the Indian tribe or a member of an Indian tribe would otherwise disqualify the Indian tribe from eligibility;

(3)

evaluating the ongoing compliance of the Indian tribe or the tribal entity with any contract, grant, or other agreement with the United States where the legal production, purchase, or possession of marijuana by the Indian tribe or a member of an Indian tribe would otherwise result in the Indian tribe or tribal entity being out of compliance; and

(4)

determining if the Indian tribe or a member of an Indian tribe is eligible for Federal benefits for which the Indian tribe or a member of an Indian tribe would otherwise be eligible.

(b)

Clarification— This subsection shall not prohibit consideration of income from the legal production, purchase, or possession of marijuana to the same extent that the other legal income would be considered when allocating or distributing Federal funds or determining eligibility for Federal benefits.

(c)

Definitions— For purposes of this subsection:

(1)

Tribal entity— The term tribal entity means—

(A)

tribal organizations as defined in section 4(l) of the Indian Self-Determination and Education Assistance Act of 1975 (25 U.S.C. 5304(l));

(B)

tribally designated housing entities as defined in section 4(22) of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103(22)); or

(C)

Indian-owned businesses and tribal enterprises as defined in paragraphs (5) and (8) of section 3 of the Native American Business Development, Trade Promotion, and Tourism Act of 2000 (25 U.S.C. 4302).

(2)

Legally authorized— The term legally authorized means permitted under the laws of—

(A)

the United States;

(B)

the State where the lands held in fee by an Indian tribe or held in trust by the United States for the benefit on behalf of that Indian tribe are located; or

(C)

an Indian tribe.

Title II — Removing business and banking barriers

II Removing business and banking barriers