COMMITTEE ON LEGISLATIVE RESEARCH OVERSIGHT DIVISION FISCAL NOTE L.R. No.:1837H.02C Bill No.:HCS for HB 912 Subject:Consumer Protection; Drugs and Controlled Substances; Department of Health and Senior Services Type:Original Date:April 26, 2023Bill Summary:This proposal creates new provisions relating to the sale of kratom products. FISCAL SUMMARY ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on General Revenue $0$0$0 ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on Other State Funds $0$0$0 Numbers within parentheses: () indicate costs or losses. L.R. No. 1837H.02C Bill No. HCS for HB 912 Page 2 of April 26, 2023 HWC:LR:OD ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on All Federal Funds $0$0$0 ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on FTE 000 ☐ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any of the three fiscal years after implementation of the act or at full implementation of the act. ☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of the three fiscal years after implementation of the act or at full implementation of the act. ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0 to (Unknown)$0 to (Unknown)$0 to (Unknown) L.R. No. 1837H.02C Bill No. HCS for HB 912 Page 3 of April 26, 2023 HWC:LR:OD FISCAL ANALYSIS ASSUMPTION §196.1170 – Sale of kratom products Officials from the Missouri Office of Prosecution Services (MOPS) state there is no measurable fiscal impact to MOPS. The enactment of a new crime [196.1170.7] creates additional responsibilities for county prosecutors and the circuit attorney which may in turn result in additional costs which are difficult to determine. Oversight does not have any information to the contrary. Therefore, Oversight will reflect no impact for MOPS for fiscal note purposes. Officials from the Department of Commerce and Insurance, the Department of Health and Senior Services, the Department of Public Safety - Missouri Highway Patrol, the Office of the State Public DefenderCity of Kansas CityCity of Springfield each assume the proposal will have no fiscal impact on their respective organizations. Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for these agencies. In response to similar legislation from the current session (SB 504), officials from the Office of the State Courts Administrator organization. Oversight notes provisions of this bill (§196.1170.3) provides that the General Assembly occupies and preempts the regulation of kratom to the complete exclusion of any order, ordinance, or regulation of any political subdivision of the state and that any political subdivision’s existing or future orders, ordinances or regulations relating to kratom will be void. As Oversight does not have information to the contrary, Oversight will reflect a $0 to (Unknown) potential loss of revenue to local governments. Oversight also notes subsection .7 provides that if a kratom dealer violates certain provisions of this proposal, the dealer is guilty of a class D misdemeanor. Oversight only reflects the responses received from state agencies and political subdivisions; however, other cities and various county officials were requested to respond to this proposed legislation but did not. A listing of political subdivisions included in the Missouri Legislative Information System database is available upon request. L.R. No. 1837H.02C Bill No. HCS for HB 912 Page 4 of April 26, 2023 HWC:LR:OD FISCAL IMPACT – State GovernmentFY 2024 (10 Mo.) FY 2025FY 2026$0$0$0FISCAL IMPACT – Local GovernmentFY 2024 (10 Mo.) FY 2025FY 2026LOCAL GOVERNMENTS – CITIES Revenue Reduction – Cities Potential reduction in licensing fees (§196.1170) $0 to (Unknown) $0 to (Unknown) $0 to (Unknown) ESTIMATED NET EFFECT ON LOCAL GOVERNMENTS - CITIES $0 to (Unknown) $0 to (Unknown) $0 to (Unknown) FISCAL IMPACT – Small Business This proposal may directly impact small businesses that sell kratom products. (§196.1170) FISCAL DESCRIPTION This bill establishes the "Kratom Consumer Protection Act", which requires dealers who prepare, distribute, sell, or expose for sale a food that is represented to be a kratom product to disclose on the product label the basis on which this representation is made. A dealer is prohibited from preparing, distributing, selling, or exposing for sale a kratom product that does not conform to these labeling requirements. The General Assembly preempts the entire field of regulating kratom products to the exclusion of any order, ordinance, or regulation of any political subdivision of the state. Any existing orders, ordinances, or regulations of any political subdivision of the state relating to kratom are void under this bill. A dealer may not prepare, distribute, sell, or expose for sale a kratom product that is adulterated or contaminated with a dangerous non-kratom substance, contains a level of 7- hydroxymitragynine in the alkaloid fraction that is greater than 2% composition of the product, contains any synthetic alkaloids, or does not include on its package or label the amount of mitragynine, 7- hydroxymitragynine, or other synthetically derived compounds of the plant L.R. No. 1837H.02C Bill No. HCS for HB 912 Page 5 of April 26, 2023 HWC:LR:OD Mitragyna speciosa. A dealer may not distribute, sell, or expose for sale a kratom product to anyone under 18 years of age. The bill specifies penalties for a violation of the labeling requirements and allows for a person who is aggrieved by a violation of the labeling requirements to bring a cause of action for damages resulting from the violation. This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. SOURCES OF INFORMATION Department of Commerce and Insurance Department of Health and Senior Services Department of Public Safety – Missouri Highway Patrol Office of the State Public Defender City of Kansas City City of Springfield Missouri Office of Prosecution Services Office of the State Courts Administrator Julie MorffRoss StropeDirectorAssistant DirectorApril 26, 2023April 26, 2023