Bill Text: AZ SB1337 | 2017 | Fifty-third Legislature 1st Regular | Engrossed


Bill Title: Industrial hemp; licensing

Spectrum: Bipartisan Bill

Status: (Engrossed) 2017-03-16 - House LARA Committee action: Do Pass Amended, voting: (7-1-0-0-0-0) [SB1337 Detail]

Download: Arizona-2017-SB1337-Engrossed.html

 

 

 

Senate Engrossed

 

 

 

State of Arizona

Senate

Fifty-third Legislature

First Regular Session

2017

 

 

SENATE BILL 1337

 

 

 

AN ACT

 

Amending title 3, chapter 2, Arizona Revised Statutes, by adding article 4.1; amending section 13‑3405, Arizona Revised Statutes; appropriating monies; relating to agricultural licensing.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 


Be it enacted by the Legislature of the State of Arizona:

Section 1.  Title 3, chapter 2, Arizona Revised Statutes, is amended by adding article 4.1, to read:

ARTICLE 4.1.  INDUSTRIAL HEMP

START_STATUTE3-311.  Definitions

In this article, unless the context otherwise requires:

1.  "Crop" means any industrial hemp grown under a single industrial hemp grower or processor license.

2.  "Grower" means an individual, a partnership, a company or a corporation that produces industrial hemp for commercial purposes.

3.  "Hemp products" means all products made from industrial hemp, including cloth, cordage, fiber, fuel, paint, paper, construction materials and plastics and food that can be made only from hemp seed or hemp seed oil.

4.  "Hemp seed" means any cannabis sativa L. seed that produces industrial hemp plants, that meets any labeling, quality and other standards set forth in article 2 of this chapter and that is intended for sale or is sold to, or purchased by, a licensed grower for planting.

5.  "Industrial hemp" means the plant cannabis sativa L. and any part of such plant, whether growing or not, with a delta‑9 tetrahydrocannabinol concentration of not more than three‑tenths percent on a dry weight basis.

6.  "Processor" means an individual, a partnership, a company or a corporation that receives industrial hemp for processing into commodities, hemp products or hemp seed. END_STATUTE

START_STATUTE3-312.  Legislative findings; purpose; authorization

A.  The legislature finds and determines that the development and use of industrial hemp can improve the economy and agricultural vitality of this state and that the production of industrial hemp can be regulated so as not to interfere with strict regulation of marijuana in this state.

B.  The purpose of this article is to promote the economy and agriculture in this state by allowing the development and regulation of industrial hemp, which is authorized by the agricultural act of 2014 (P.L. 113‑79; 128 Stat. 649; 7 United States Code section 5940), while maintaining strict control of marijuana.

C.  Industrial hemp production, processing, manufacturing, distribution and commerce are authorized in this state.  Industrial hemp is an agricultural product that is subject to regulation by the department. END_STATUTE

START_STATUTE3-313.  Rulemaking; fees

A.  The director shall adopt rules pursuant to title 41, chapter 6 to oversee the licensing, production and management of industrial hemp and hemp seed in this state pursuant to this article.

B.  The director shall adopt fees by rule to recover the costs of the department's activities in licensing, testing and supervising industrial hemp production.

C.  The director may not prohibit or adopt a rule that prohibits a person from growing industrial hemp based on the legal status of industrial hemp under federal law. END_STATUTE

START_STATUTE3-314.  Industrial hemp grower or processor license; application; fees; fingerprinting requirements; renewal; revocation

A.  A grower or processor shall obtain an industrial hemp grower or processor license from the department.

B.  A grower or processor shall apply for a grower or processor license pursuant to the rules adopted by the director not later than one hundred twenty days after the effective date of this section.

C.  An application for an original and renewal industrial hemp grower or processer license shall:

1.  Be in a form and include information prescribed by the director.

2.  Be accompanied by the license fee prescribed by the director. The director shall deposit, pursuant to sections 35‑146 and 35‑147, fees collected under this paragraph in the industrial hemp trust fund established by section 3‑315.

D.  An applicant for an original grower or processor license shall submit a full set of fingerprints to the Arizona department of agriculture for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and public law 92‑544.  The department of public safety may exchange this fingerprint data with the federal bureau of investigation.  Criminal records information provided to the Arizona department of agriculture under this section is confidential.  The director may use the records only to determine whether an applicant is eligible to receive a grower or processor license.

E.  A grower or processor license issued pursuant to this section is valid for two years, unless revoked, and may be renewed as provided by the department.

F.  The department may revoke or refuse to issue or renew a license or processor license for a violation of any rule adopted by the director that relates to agricultural operations or activities other than industrial hemp growing or processing. END_STATUTE

START_STATUTE3-315.  Industrial hemp trust fund

A.  The industrial hemp trust fund is established for the exclusive purpose of implementing, continuing and supporting industrial hemp licensing.  The trust fund consists of monies received from legislative appropriations, licensing fees and all other sources under this article.  The monies collected constitute a separate and permanent fund for use by the director in administering and enforcing this article.

B.  The director shall administer the trust fund as trustee.  The state treasurer shall accept, separately account for and hold in trust any monies deposited in the state treasury, which are considered to be trust monies as defined in section 35-310 and may not be commingled with any other monies in the state treasury except for investment purposes.  On notice from the director, the state treasurer shall invest and divest any trust fund monies deposited in the state treasury as provided by sections 35-313 and 35-314.03, and monies earned from investment shall be credited to the trust fund.

C.  The director may accept and spend federal monies and private grants, gifts, contributions and devises to assist in carrying out the purposes of this article.

D.  The beneficiary of the trust is the industrial hemp program established by this article.

E.  Any monies remaining unexpended in the fund on June 30 of each year shall be carried forward to the following year and do not revert to the general fund. END_STATUTE

START_STATUTE3-316.  Recordkeeping, inspection, transportation and distribution requirements

A.  Every grower or processor that is licensed pursuant to this article shall keep and maintain records as required by rule.  The director or the director's designee may inspect or audit the records during normal business hours to ensure compliance with this article or any department rule.  The director or the director's designee shall provide at least three days' notice to the grower or processor before inspecting or auditing the records.

B.  The director or the director's designee may physically inspect an industrial hemp site to ensure compliance with this article or any department rule.  During any physical inspection of an industrial hemp site, the director or the director's designee may take a representative sample for analysis by the state agricultural laboratory.  If a crop contains an average delta‑9 tetrahydrocannabinol concentration that exceeds three‑tenths percent on a dry weight basis, the department may order the crop to be destroyed and issue a cease and desist order pursuant to section 3‑317.

C.  Only a licensed grower or processor, or a licensed grower's or processor's designee or agent, may transport industrial hemp off the industrial hemp production site.  When transporting industrial hemp off the production site, the licensed grower or processor, or the licensed grower's or processor's designee or agent, shall carry the licensing documents as evidence that the industrial hemp was grown and processed by a licensed grower or processer.  This subsection does not apply to the transportation of hemp products.

D.  A licensed grower or processor shall notify the director of the sale or distribution of any industrial hemp grown under the license including the name and address of the person or entity receiving the industrial hemp and the amount of the industrial hemp sold. END_STATUTE

START_STATUTE3-317.  Cease and desist order; hearing

A.  The director may issue and enforce a written cease and desist order against a grower or processor of any industrial hemp that the director finds is in violation of this article.  The order shall prohibit the further sale, processing or transportation of the industrial hemp except on approval of the director.

B.  The grower or processor of the industrial hemp that has been denied further sale, processing or transportation may request a hearing pursuant to title 41, chapter 6, article 10.

C.  This section does not limit the right of the director to proceed as authorized by this article. END_STATUTE

START_STATUTE3-318.  Seizure and disposition of noncomplying industrial hemp

A.  Any industrial hemp that does not comply with this article is subject to seizure on complaint of the director to a court of competent jurisdiction in the locality in which the industrial hemp is located.

B.  If the court finds the industrial hemp violates this article and orders the condemnation of the industrial hemp, the industrial hemp shall be destroyed.

C.  Before the court orders disposition pursuant to subsection B of this section, the court shall first give the grower or processor an opportunity to apply to the court for release of the industrial hemp or for permission to process and relabel the industrial hemp to bring the industrial hemp into compliance with this article. END_STATUTE

START_STATUTE3-319.  Violations; civil penalties

In addition to any liability established by this article or any penalty provided by law, the director may impose a civil penalty of not more than five thousand dollars for a violation of any of the following:

1.  A licensing requirement.

2.  A grower or processor license term or condition.

3.  A rule adopted by the director that relates to the growing or processing of industrial hemp. END_STATUTE

START_STATUTE3-320.  Affirmative defense

A.  It is an affirmative defense to any prosecution for the possession or cultivation of marijuana pursuant to title 13, chapter 34 that the defendant is a grower or processor, or a designee or agent of a grower or processor, who is licensed and in compliance with this article.

B.  This section is not a defense to a charge of possession, sale, transportation or distribution of marijuana pursuant to title 13, chapter 34 that does not meet the definition of industrial hemp. END_STATUTE

Sec. 2.  Section 13-3405, Arizona Revised Statutes, is amended to read:

START_STATUTE13-3405.  Possession, use, production, sale or transportation of marijuana; classification; exception

A.  A person shall not knowingly:

1.  Possess or use marijuana.

2.  Possess marijuana for sale.

3.  Produce marijuana.

4.  Transport for sale, import into this state or offer to transport for sale or import into this state, sell, transfer or offer to sell or transfer marijuana.

B.  A person who violates:

1.  Subsection A, paragraph 1 of this section involving an amount of marijuana not possessed for sale having a weight of less than two pounds is guilty of a class 6 felony.

2.  Subsection A, paragraph 1 of this section involving an amount of marijuana not possessed for sale having a weight of at least two pounds but less than four pounds is guilty of a class 5 felony.

3.  Subsection A, paragraph 1 of this section involving an amount of marijuana not possessed for sale having a weight of four pounds or more is guilty of a class 4 felony.

4.  Subsection A, paragraph 2 of this section involving an amount of marijuana having a weight of less than two pounds is guilty of a class 4 felony.

5.  Subsection A, paragraph 2 of this section involving an amount of marijuana having a weight of at least two pounds but not more than four pounds is guilty of a class 3 felony.

6.  Subsection A, paragraph 2 of this section involving an amount of marijuana having a weight of more than four pounds is guilty of a class 2 felony.

7.  Subsection A, paragraph 3 of this section involving an amount of marijuana having a weight of less than two pounds is guilty of a class 5 felony.

8.  Subsection A, paragraph 3 of this section involving an amount of marijuana having a weight of at least two pounds but not more than four pounds is guilty of a class 4 felony.

9.  Subsection A, paragraph 3 of this section involving an amount of marijuana having a weight of more than four pounds is guilty of a class 3 felony.

10.  Subsection A, paragraph 4 of this section involving an amount of marijuana having a weight of less than two pounds is guilty of a class 3 felony.

11.  Subsection A, paragraph 4 of this section involving an amount of marijuana having a weight of two pounds or more is guilty of a class 2 felony.

C.  If the aggregate amount of marijuana involved in one offense or all of the offenses that are consolidated for trial equals or exceeds the statutory threshold amount, a person who is sentenced pursuant to subsection B, paragraph 5, 6, 8, 9 or 11 of this section is not eligible for suspension of sentence, probation, pardon or release from confinement on any basis until the person has served the sentence imposed by the court, the person is eligible for release pursuant to section 41‑1604.07 or the sentence is commuted.

D.  In addition to any other penalty prescribed by this title, the court shall order a person who is convicted of a violation of any provision of this section to pay a fine of not less than seven hundred fifty dollars or three times the value as determined by the court of the marijuana involved in or giving rise to the charge, whichever is greater, and not more than the maximum authorized by chapter 8 of this title.  A judge shall not suspend any part or all of the imposition of any fine required by this subsection.

E.  A person who is convicted of a felony violation of any provision of this section for which probation or release before the expiration of the sentence imposed by the court is authorized is prohibited from using any marijuana, dangerous drug or narcotic drug except as lawfully administered by a practitioner and as a condition of any probation or release shall be required to submit to drug testing administered under the supervision of the probation department of the county or the state department of corrections as appropriate during the duration of the term of probation or before the expiration of the sentence imposed.

F.  If the aggregate amount of marijuana involved in one offense or all of the offenses that are consolidated for trial is less than the statutory threshold amount, a person who is sentenced pursuant to subsection B, paragraph 4, 7 or 10 and who is granted probation by the court shall be ordered by the court that as a condition of probation the person perform not less than two hundred forty hours of community restitution with an agency or organization providing counseling, rehabilitation or treatment for alcohol or drug abuse, an agency or organization that provides medical treatment to persons who abuse controlled substances, an agency or organization that serves persons who are victims of crime or any other appropriate agency or organization.

G.  If a person who is sentenced pursuant to subsection B, paragraph 1, 2 or 3 of this section is granted probation for a felony violation of this section, the court shall order that as a condition of probation the person perform not less than twenty‑four hours of community restitution with an agency or organization providing counseling, rehabilitation or treatment for alcohol or drug abuse, an agency or organization that provides medical treatment to persons who abuse controlled substances, an agency or organization that serves persons who are victims of crime or any other appropriate agency or organization.

H.  If a person is granted probation for a misdemeanor violation of this section, the court shall order as a condition of probation that the person attend eight hours of instruction on the nature and harmful effects of narcotic drugs, marijuana and other dangerous drugs on the human system, and on the laws related to the control of these substances, or perform twenty‑four hours of community restitution.

I.  This section does not apply to a person who is licensed pursuant to title 3, chapter 2, article 4.1 and who possesses, uses, sells, produces, manufactures or transports industrial hemp as defined in section 3‑311. END_STATUTE

Sec. 3.  Exemption from rulemaking

For the purposes of this act, the Arizona department of agriculture is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act.

Sec. 4.  Appropriations; Arizona department of agriculture

A.  The sum of $250,000 and 3 FTE positions are appropriated from the state general fund in fiscal year 2017-2018 to the Arizona department of agriculture plant services division for the purposes provided in this act.

B.  The sum of $422,000 is appropriated from the state general fund in fiscal year 2017-2018 to the Arizona department of agriculture for the state agricultural laboratory for the purposes provided in this act.

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