Bill Text: IA SF329 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to industrial hemp, including the regulation of its production as part of a research program, marketing for purposes of manufacturing industrial hemp products, providing for fees, making appropriations, providing for enforcement and the confiscation and destruction of certain property, and including penalties. (See SF 2398.)
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2017-03-23 - Subcommittee recommends amendment and passage. [SF329 Detail]
Download: Iowa-2017-SF329-Introduced.html
Senate File 329 - Introduced SENATE FILE BY KINNEY and KAPUCIAN A BILL FOR 1 An Act relating to industrial hemp, including the regulation 2 of its production as part of a research program, marketing 3 for purposes of manufacturing industrial hemp products, 4 providing for fees, making appropriations, providing for 5 enforcement and the confiscation and destruction of certain 6 property, and including penalties. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 2172SS (4) 87 da/nh PAG LIN 1 1 Section 1. Section 124.401, subsection 5, Code 2017, is 1 2 amended by adding the following new unnumbered paragraph: 1 3 NEW UNNUMBERED PARAGRAPH Notwithstanding this subsection 1 4 or any other provision of this chapter to the contrary, a 1 5 person may produce, possess, deliver, transport, process, 1 6 and use industrial hemp in accordance with the provisions of 1 7 chapter 188. 1 8 Sec. 2. NEW SECTION. 188.1 Short title. 1 9 This chapter shall be known and may be cited as the "Iowa 1 10 Industrial Hemp Act". 1 11 Sec. 3. NEW SECTION. 188.2 Definitions. 1 12 As used in this chapter, unless the context otherwise 1 13 requires: 1 14 1. "Certified industrial hemp seed" means industrial hemp 1 15 seed that has been certified by the department pursuant to 1 16 section 188.17. 1 17 2. "Council" means the industrial hemp council established 1 18 in section 188.11. 1 19 3. "Department" means the department of agriculture and land 1 20 stewardship. 1 21 4. "Industrial hemp" means any part of the Cannabis 1 22 sativa plant, whether growing or not, with a concentration of 1 23 delta=9 tetrahydrocannabinol that does not exceed the maximum 1 24 concentration for the plant as determined pursuant to section 1 25 188.7. 1 26 5. "Industrial hemp plant" means all nonseed parts of 1 27 industrial hemp, whether growing or not. 1 28 6. a. "Industrial hemp product" means any item manufactured 1 29 from industrial hemp, including but not limited to cloth, 1 30 cordage, fiber, food, fuel, paint, paper, particleboard, 1 31 plastic, industrial hemp seed, seed meal, or seed oil. 1 32 b. "Industrial hemp product" does not include industrial 1 33 hemp seed that is capable of germination. 1 34 7. "Industrial hemp seed" means seed produced by industrial 1 35 hemp regardless of whether the seed is capable of germination. 2 1 8. "Licensee" means a person who obtains a license from 2 2 the department under section 188.15 to participate in the 2 3 industrial hemp commodity program established pursuant to 2 4 section 188.13 or the industrial hemp production program 2 5 established pursuant to section 188.14. 2 6 9. "Production" means any part of planting, cultivating, or 2 7 harvesting industrial hemp. 2 8 10. "Regents institution" means the university of Iowa, Iowa 2 9 state university of science and technology, or the university 2 10 of northern Iowa governed by the state board of regents under 2 11 section 262.7. 2 12 11. "Registrant" means a regents institution that registers 2 13 with the department to administer the industrial hemp 2 14 production program established in section 188.14. 2 15 Sec. 4. NEW SECTION. 188.3 Report. 2 16 The council shall prepare and submit an annual report to 2 17 the governor and general assembly not later than January 2 18 10. The report shall evaluate the success of the industrial 2 19 hemp commodity program established in section 188.13 and 2 20 the industrial hemp production program established pursuant 2 21 to section 188.14. The council may establish performance 2 22 benchmarks and make recommendations for consideration by the 2 23 general assembly in order to meet the purposes of the programs 2 24 in compliance with the requirements of 7 U.S.C. {5940. 2 25 Sec. 5. NEW SECTION. 188.4 Rules and forms. 2 26 The department shall adopt all rules and prepare and publish 2 27 all forms required to administer this chapter and comply with 2 28 7 U.S.C. {5940. The department may require the mandatory use 2 29 of a form and refuse to accept a document that is not prepared 2 30 using a mandatory form. 2 31 Sec. 6. NEW SECTION. 188.5 Compliance with federal law. 2 32 1. The purpose of this chapter is to fully implement the 2 33 provisions of 7 U.S.C. {5940. 2 34 2. The programs established under this chapter and any 2 35 projects administered under those programs are for the 3 1 exclusive purpose of growing, cultivating, and marketing 3 2 industrial hemp in a manner that complies with the programs and 3 3 projects described in 7 U.S.C. {5940. 3 4 3. a. The department shall seek to obtain any necessary 3 5 approval by the drug enforcement administration of the United 3 6 States department of justice in order to obtain industrial hemp 3 7 seeds for certification pursuant to section 188.17 as part of 3 8 the industrial hemp commodity program as provided in section 3 9 188.13 or the industrial hemp production program as provided 3 10 in section 188.14. 3 11 b. A registrant may seek approval by the drug enforcement 3 12 administration of the United States department of justice in 3 13 order to obtain seeds for certification necessary to produce 3 14 industrial hemp as part of the industrial hemp production 3 15 program. 3 16 4. The department or a registrant may seek a waiver of a 3 17 federal regulation promulgated by the United States department 3 18 of agriculture or the drug enforcement administration of the 3 19 United States department of justice if necessary to fully 3 20 implement the provisions of this chapter. 3 21 Sec. 7. NEW SECTION. 188.6 General prohibitions. 3 22 1. A person shall not produce, handle, transport, 3 23 market, or process industrial hemp in this state unless the 3 24 industrial hemp has been produced pursuant to the industrial 3 25 hemp commodity program established in section 188.13 or the 3 26 industrial hemp production program established pursuant to 3 27 section 188.14. 3 28 2. Nothing in this chapter prevents a person from producing, 3 29 handling, transporting, marketing, or processing an industrial 3 30 hemp product. 3 31 Sec. 8. NEW SECTION. 188.7 Maximum concentration of 3 32 tetrahydrocannabinol. 3 33 1. A test of a Cannabis sativa plant under this chapter 3 34 shall be conducted by the department or a qualified public 3 35 or private laboratory approved by the department. The 4 1 department shall establish protocols for testing Cannabis 4 2 sativa plants produced pursuant to the provisions of this 4 3 chapter, including for obtaining test samples for delivery to 4 4 the laboratory, and the receipt of test results delivered to 4 5 the department, a registrant, or licensee. In order to qualify 4 6 as industrial hemp, the maximum concentration of delta=9 4 7 tetrahydrocannabinol present in the plant as analyzed on a 4 8 dry weight basis shall not exceed three=tenths of one percent 4 9 delta=9 tetrahydrocannabinol. 4 10 2. In testing a crop comprised of Cannabis sativa plants 4 11 produced under this chapter, a composite test result greater 4 12 than three=tenths of one percent delta=9 tetrahydrocannabinol 4 13 as analyzed on a dry weight basis is deemed conclusive that 4 14 the crop exceeds the maximum concentration. However, the 4 15 department may determine that the results of a first test 4 16 are inconclusive if the maximum concentration of delta=9 4 17 tetrahydrocannabinol does not exceed a threshold established 4 18 by the department which does not exceed one percent delta=9 4 19 tetrahydrocannabinol as analyzed on a dry weight basis. 4 20 Sec. 9. NEW SECTION. 188.11 Industrial hemp council == 4 21 establishment, membership, procedures. 4 22 1. An industrial hemp council is established under the 4 23 purview of the department. 4 24 2. a. The council shall consist of the following voting 4 25 members: 4 26 (1) An individual who has experience in the regulation 4 27 of industrial hemp production, appointed by the secretary of 4 28 agriculture. 4 29 (2) An individual who is a member of an agricultural 4 30 cooperative association as defined in section 502.102, 4 31 appointed by the secretary of agriculture. 4 32 (3) Two employees of the department appointed by the 4 33 secretary of agriculture. The employees shall be knowledgeable 4 34 regarding the production of agricultural crops. One employee 4 35 may be the state entomologist. One employee may be an employee 5 1 knowledgeable about procedures and practices relating to the 5 2 import of agricultural seeds or inputs. 5 3 (4) One employee of the department of natural resources 5 4 appointed by the director of the department of natural 5 5 resources. The employee must be knowledgeable regarding 5 6 agricultural practices and environmental regulations. 5 7 (5) One employee of the department of public safety 5 8 appointed by the director of the department. The person must 5 9 be knowledgeable regarding federal and state drug enforcement 5 10 policies. 5 11 (6) One employee of a registrant appointed by the president 5 12 of the registrant's regents institution. The employee must 5 13 be knowledgeable regarding plant sciences. Until such a 5 14 registrant is appointed, one employee of Iowa state university 5 15 appointed by the president of the university shall serve as a 5 16 member. The employee must be knowledgeable regarding plant 5 17 sciences. 5 18 b. The council shall also include four members of the 5 19 general assembly appointed to serve in an ex officio, nonvoting 5 20 capacity. The legislative members shall be selected, one 5 21 member each, by the majority leader of the senate, the 5 22 minority leader of the senate, the speaker of the house of 5 23 representatives, and the minority leader of the house of 5 24 representatives. 5 25 3. A public member shall be confirmed by the senate pursuant 5 26 to section 2.32. 5 27 4. A public member is eligible to receive compensation as 5 28 provided in section 7E.6 and shall be reimbursed for actual and 5 29 necessary expenses incurred in the discharge of the member's 5 30 duties. The moneys used to pay expenses and compensation 5 31 shall be paid from moneys in the industrial hemp commodity 5 32 fund established in section 188.25. A legislative member is 5 33 eligible to receive a per diem and expenses as provided in 5 34 section 2.10. 5 35 5. a. A public member shall serve a three=year staggered 6 1 term commencing and ending as provided in section 69.19. A 6 2 state employee member shall serve at the pleasure of the 6 3 appointing authority. 6 4 b. The voting members shall elect a chairperson and vice 6 5 chairperson annually from the voting membership. A majority of 6 6 the voting members constitutes a quorum. If the chairperson 6 7 and vice chairperson are unable to preside over the council, a 6 8 majority of the voting members present may elect a temporary 6 9 chairperson. 6 10 6. A vacancy on the council shall be filled in the same 6 11 manner as the original appointment. A member appointed to fill 6 12 a vacancy created other than by expiration of a term shall be 6 13 appointed for the remainder of the unexpired term. 6 14 7. The council shall be housed within the department and the 6 15 department, in cooperation with Iowa state university, shall 6 16 furnish the council with a meeting place and all articles, 6 17 supplies, and services necessary to enable the council to 6 18 perform its duties. Iowa state university or the office of 6 19 attorney general may provide any technical or legal assistance 6 20 requested by the council or department. 6 21 8. The appointments of the public members are subject to the 6 22 requirements of sections 69.16, 69.16A, and 69.19. A public 6 23 member is eligible for reappointment. The secretary may remove 6 24 a public member if the removal is based on the public member's 6 25 misfeasance, malfeasance, or willful neglect of duty or other 6 26 just cause, after notice and hearing, unless the notice and 6 27 hearing is expressly waived by the public member in writing. 6 28 Sec. 10. NEW SECTION. 188.12 Industrial hemp council == 6 29 powers and duties. 6 30 1. The council, in cooperation with the department and each 6 31 registrant, shall prepare and submit an annual report to the 6 32 governor and general assembly as required in section 188.3. 6 33 2. The council shall advise the department and each 6 34 registrant regarding all of the following: 6 35 a. All aspects relating to the administration of the 7 1 industrial hemp commodity program established in section 188.13 7 2 and the industrial hemp production program established pursuant 7 3 to section 188.14. 7 4 b. The process of receiving, evaluating, and approving 7 5 applications for licenses under section 188.15, and the 7 6 selection of licensees to participate in the industrial hemp 7 7 production program. 7 8 c. Methods to acquire industrial hemp seed for certification 7 9 and sale in compliance with the provisions of sections 188.17, 7 10 188.21, and 188.22. 7 11 d. The establishment of sale prices for industrial hemp seed 7 12 offered under sections 188.21 and 188.22. 7 13 e. The establishment of fees assessed, imposed, and 7 14 collected pursuant to sections 188.23 and 188.24. 7 15 f. The management of the industrial hemp commodity fund 7 16 established in section 188.25. 7 17 3. The council shall advise the department regarding all of 7 18 the following: 7 19 a. The certification of industrial hemp seed pursuant to 7 20 section 188.17. 7 21 b. The confiscation and destruction of a Cannabis sativa 7 22 plant as required in section 188.32. 7 23 c. Disciplinary action taken against a licensee pursuant to 7 24 section 188.33. 7 25 d. The establishment of a range of civil penalties to be 7 26 imposed, assessed, and collected pursuant to section 188.34. 7 27 4. The council shall advise a registrant regarding all of 7 28 the following: 7 29 a. The selection of licensees participating in the 7 30 industrial hemp production program established pursuant to 7 31 section 188.14. 7 32 b. The terms and conditions of contracts entered into with 7 33 selected licensees under section 188.16. 7 34 5. The council shall not control policy decisions or direct 7 35 the administration or enforcement of this chapter. 8 1 Sec. 11. NEW SECTION. 188.13 Industrial hemp commodity 8 2 program == department and licensees. 8 3 1. The department shall establish and administer an 8 4 industrial hemp commodity program. The purpose of the 8 5 program is to determine the economic feasibility of producing 8 6 industrial hemp as a profitable commodity in this state and of 8 7 the effective handling, transporting, marketing, and processing 8 8 of the commodity in this state. 8 9 2. A person must be licensed pursuant to section 188.15 to 8 10 participate in the program. Under the program, a licensee may 8 11 produce all of the following: 8 12 a. Industrial hemp plants which shall to every extent 8 13 feasible be processed into industrial hemp products for 8 14 marketing in commercial channels. 8 15 b. Industrial hemp seeds which shall to every extent 8 16 feasible be processed into industrial hemp products. A 8 17 licensee may retain industrial hemp seeds capable of 8 18 germination to produce the next crop of industrial hemp only if 8 19 approved by the department after consultation with the council. 8 20 3. The department may establish standards for the labeling 8 21 or marketing of industrial hemp produced under this section. 8 22 The standards shall to every extent feasible be in accordance 8 23 with applicable standards in chapter 210. 8 24 4. A licensee must regularly test industrial hemp to 8 25 ensure that the industrial hemp does not exceed the maximum 8 26 concentration of delta=9 tetrahydrocannabinol as provided in 8 27 section 188.7. 8 28 5. A licensee must immediately report the loss of any 8 29 industrial hemp to the department. 8 30 6. A licensee shall retain industrial hemp or transfer 8 31 industrial hemp to another person as specified by rules adopted 8 32 by the department pursuant to section 188.4. The licensee 8 33 shall only transfer industrial hemp seed that is capable 8 34 of germination to the department, a registrant, or another 8 35 licensee as approved by the department or any other person 9 1 authorized by law to receive the industrial hemp seed. 9 2 7. a. A licensee must maintain business records regarding 9 3 the production of the industrial hemp or the transfer of the 9 4 industrial hemp to another person. The department shall 9 5 inspect the business records during normal business hours. 9 6 b. The department may inspect a licensee's facilities where 9 7 industrial hemp is produced, stored, handled, transported, 9 8 marketed, or processed. The department may inspect the 9 9 facilities and collect a sample of the crop for testing under 9 10 section 188.7 at least twice during the growing period. A 9 11 test of a collected sample of the crop must be conducted by a 9 12 licensee or by the department at least once within thirty days 9 13 prior to harvest. 9 14 c. The business operations of a licensee are considered a 9 15 closely regulated industry and a search warrant is not required 9 16 to conduct an inspection. 9 17 Sec. 12. NEW SECTION. 188.14 Industrial hemp production 9 18 program == registrants and licensees. 9 19 1. A regents institution, or two or more regents 9 20 institutions acting jointly, may establish and administer 9 21 an industrial hemp production program. The purpose of the 9 22 program shall be to determine the feasibility of increasing 9 23 the production acreage and yield of industrial hemp as a 9 24 profitable crop and reducing the concentration of delta=9 9 25 tetrahydrocannabinol in the industrial hemp. 9 26 2. In order to administer a program, the regents institution 9 27 or regents institutions acting jointly must register with 9 28 the department according to requirements established by the 9 29 department. The registration shall include a research plan 9 30 that summarizes the quantifiable short=term and long=term goals 9 31 of the research. A copy of the registration shall also be 9 32 filed with the council, the governor, and the general assembly. 9 33 3. The department has all the same powers to regulate 9 34 a licensee under this program as the department does in 9 35 regulating a licensee under the industrial hemp commodity 10 1 program pursuant to section 188.13. A licensee participating 10 2 in this program shall comply with the same requirements as 10 3 a licensee participating in the industrial hemp production 10 4 program under section 188.13, unless the department provides 10 5 otherwise in rules adopted pursuant to section 188.4. 10 6 4. Only a registrant, including a licensee acting under 10 7 the supervision of the registrant, may participate in the 10 8 program. Under the program, a registrant may produce any of 10 9 the following: 10 10 a. Industrial hemp plants which may be processed into 10 11 industrial hemp products. 10 12 b. Industrial hemp seeds which may be processed into 10 13 industrial hemp products. A registrant may retain industrial 10 14 hemp seeds capable of germination to produce the next crop of 10 15 industrial hemp or transfer the seeds to another person for 10 16 purposes of scientific research. The registrant shall retain 10 17 or transfer the seeds after consulting with the council. 10 18 5. A registrant may transfer industrial hemp to another 10 19 person only after the registrant consults with the council. 10 20 6. A registrant must regularly test the industrial hemp to 10 21 ensure that the industrial hemp does not exceed the maximum 10 22 concentration of delta=9 tetrahydrocannabinol as provided in 10 23 section 188.7. 10 24 7. A registrant must immediately report the loss of any 10 25 industrial hemp produced by the registrant to the department. 10 26 8. A registrant must maintain records regarding production 10 27 and transfer of the industrial hemp by the registrant. The 10 28 records shall to every extent practicable contain the same type 10 29 of information contained in records maintained by licensees 10 30 under section 188.13. 10 31 Sec. 13. NEW SECTION. 188.15 Industrial hemp commodity 10 32 license == requirements. 10 33 1. The department shall establish and administer a process 10 34 to receive, evaluate, and approve applications for industrial 10 35 hemp commodity licenses by persons seeking to participate in 11 1 the industrial hemp commodity program under section 188.13 or 11 2 the industrial hemp production program under section 188.14. 11 3 A license expires three years from the date of issuance. An 11 4 expired license may be renewed for three additional years. The 11 5 department may require that a licensee apply for an amended 11 6 or new license if information contained in the existing 11 7 application is no longer accurate or is incomplete. 11 8 2. An applicant shall not be issued a license unless the 11 9 applicant agrees to comply with all terms and conditions 11 10 relating to the department's regulation of the licensee. 11 11 3. The department shall disapprove the application of a 11 12 person for good cause, which may include any of the following: 11 13 a. The conviction of a felony within the prior ten years or 11 14 any drug offense within the same period, regardless of whether 11 15 the conviction is in this state or another state. 11 16 b. The revocation of a license under section 188.33, or 11 17 the revocation of a license, permit, registration, or other 11 18 authorization to produce industrial hemp in any other state. 11 19 4. The department may do all of the following: 11 20 a. Limit the number of applications that it accepts or 11 21 limit the period or periods when applications will be received, 11 22 evaluated, or accepted each year. 11 23 b. Establish criteria required to participate in the 11 24 program which may be based on the qualifications or good 11 25 character of the applicant, the applicant's proposed investment 11 26 in industrial hemp production, and the type and size of the 11 27 applicant's existing agricultural operation. The department 11 28 may prepare and publish guidelines to assist persons in 11 29 determining eligibility requirements. 11 30 c. Require the issuance of different types of licenses or 11 31 require an applicant to obtain more than one license based 11 32 on criteria established by the department, including but not 11 33 limited to whether production is proposed on noncontiguous 11 34 parcels of land, the commercial production of industrial 11 35 hemp plants or industrial hemp seeds, or the applicant's 12 1 participation in the industrial hemp production program under 12 2 section 188.14. 12 3 d. Require that all or some licenses expire on the same 12 4 date. 12 5 e. Provide a different application and requirements for 12 6 the submission, evaluation, and approval or disapproval of an 12 7 application for a renewed license. 12 8 5. The department shall prepare and publish license 12 9 application forms. A completed application form submitted to 12 10 the department shall contain all of the following: 12 11 a. The applicant's full name and residence address. 12 12 b. A legal description, global positioning system location, 12 13 and map of the site where the applicant proposes to produce the 12 14 industrial hemp. 12 15 c. Information required by the department to conduct a 12 16 background check of the applicant's criminal history. 12 17 d. Any other information required by the department in order 12 18 to administer this chapter. 12 19 6. If a license is issued under this section, the department 12 20 shall deliver a copy of the approved application to the office 12 21 of the county sheriff in the county where the industrial hemp 12 22 is approved to be produced. 12 23 7. A licensee's license shall be suspended or revoked as 12 24 provided in section 188.33. 12 25 Sec. 14. NEW SECTION. 188.16 Industrial hemp production 12 26 contract == requirements. 12 27 A registrant may enter into an industrial hemp production 12 28 contract with a licensee to produce industrial hemp under the 12 29 supervision of the registrant. The registrant shall supervise 12 30 the production of the industrial hemp in cooperation with the 12 31 department. The contract shall provide for the regulation of 12 32 the licensee and the industrial hemp produced by the licensee 12 33 in the same manner as provided in section 188.13, unless 12 34 otherwise provided in rules adopted by the department in 12 35 consultation with the registrant under section 188.4. 13 1 Sec. 15. NEW SECTION. 188.17 Industrial hemp seed capable 13 2 of germination == certification. 13 3 1. The department shall certify industrial hemp seed 13 4 capable of germination for use by a licensee as part of 13 5 the industrial hemp commodity program under section 188.13 13 6 or a registrant as part of the industrial hemp production 13 7 program under section 188.14. The department may provide 13 8 different certification processes, including for industrial 13 9 hemp seed produced or obtained by a registrant or obtained 13 10 from a qualified and reputable industrial hemp seed source and 13 11 supplier. 13 12 2. The department's certification protocols may be based on 13 13 standards promulgated by independent organizations including 13 14 but not limited to the association of seed certifying agencies 13 15 and verifications offered by qualified and reliable persons in 13 16 the business of providing such seed. 13 17 3. A licensee may import industrial hemp seed for 13 18 certification only if allowed by the department acting in 13 19 consultation with the council. A registrant may import 13 20 industrial seed for certification after consulting with the 13 21 council. 13 22 Sec. 16. NEW SECTION. 188.21 Industrial hemp seed capable 13 23 of germination == sale by the department. 13 24 1. The department shall offer certified industrial hemp 13 25 seed for sale to licensees participating in the industrial 13 26 hemp commodity program established in section 188.13. The 13 27 department may offer certified industrial hemp seed for sale to 13 28 a registrant participating in the industrial hemp production 13 29 program established pursuant to section 188.14 after consulting 13 30 with the council. 13 31 2. Moneys collected by the department from the sale of 13 32 certified industrial hemp seed shall be deposited into the 13 33 industrial hemp commodity fund established in section 188.25. 13 34 Sec. 17. NEW SECTION. 188.22 Industrial hemp seed capable 13 35 of germination == sale by a registrant. 14 1 1. A registrant may offer certified industrial hemp seed 14 2 for sale to the department, or a licensee participating in the 14 3 industrial hemp production program established pursuant to 14 4 section 188.14, only after consulting with the council. 14 5 2. All moneys received by a registrant under subsection 1 14 6 shall be handled in the same manner as repayment receipts as 14 7 defined in section 8.2, and shall be used by the registrant 14 8 exclusively for the registrant's administration of the 14 9 industrial hemp production program. 14 10 Sec. 18. NEW SECTION. 188.23 Fees assessed by department. 14 11 1. The department shall assess and collect all of the 14 12 following: 14 13 a. An application fee to be paid by a person seeking to 14 14 obtain an industrial hemp commodity license as provided in 14 15 section 188.15. 14 16 b. A license fee to be paid by a person being issued an 14 17 industrial hemp commodity license as provided in section 14 18 188.15. 14 19 c. An inspection fee to be paid by a licensee as part of 14 20 an inspection of the facilities where the industrial hemp is 14 21 produced as provided in section 188.13. 14 22 d. A laboratory fee to be paid by a licensee if the 14 23 department takes samples of industrial hemp for testing by a 14 24 laboratory as provided in section 188.7. 14 25 2. The fees described in subsection 1 are nonrefundable. 14 26 3. The total amount of fees collected pursuant to this 14 27 section shall not exceed the department's estimate of the total 14 28 amount of revenues necessary to administer and enforce the 14 29 provisions of this chapter. Prior to the beginning of a fiscal 14 30 year, the department shall establish an estimated total amount 14 31 based on the expected costs to be incurred by the department 14 32 in administering and enforcing the provisions of this chapter 14 33 during the subsequent fiscal year. 14 34 4. The department may establish different rates for any 14 35 category of fees described in subsection 1 based on criteria 15 1 determined relevant by the department, which may include the 15 2 type of license issued and the number of acres set aside for 15 3 industrial hemp production by a licensee. 15 4 5. All fees collected by the department under this section 15 5 shall be deposited into the industrial hemp commodity fund 15 6 established pursuant to section 188.25. 15 7 Sec. 19. NEW SECTION. 188.24 Fees assessed by registrants. 15 8 1. A registrant may assess and collect fees from licensees 15 9 participating in the registrant's industrial hemp production 15 10 program as provided in section 188.14. The total amount 15 11 of fees paid shall not exceed the expenses incurred by the 15 12 registrant in selecting licensees to participate in the 15 13 program, conducting inspections of facilities where the 15 14 industrial hemp is produced, and taking samples of industrial 15 15 hemp to be tested by a laboratory as provided in section 188.7. 15 16 2. All moneys received by a registrant under this section 15 17 shall be handled in the same manner as repayment receipts as 15 18 defined in section 8.2, and shall be used by the registrant 15 19 exclusively for the registrant's administration of the 15 20 industrial hemp production program. 15 21 Sec. 20. NEW SECTION. 188.25 Industrial hemp commodity fund 15 22 == appropriation. 15 23 1. An industrial hemp commodity fund is established in 15 24 the state treasury under the management and control of the 15 25 department. 15 26 2. The fund shall include moneys collected by the department 15 27 from the sale of certified seed under section 188.21, fees 15 28 collected under section 188.23, and moneys appropriated by the 15 29 general assembly for deposit in the fund. The fund may include 15 30 other moneys available to and obtained or accepted by the 15 31 department, including moneys from public or private sources. 15 32 3. Moneys in the fund are appropriated to the department 15 33 and shall be used exclusively to carry out the responsibilities 15 34 conferred upon the department under this chapter as determined 15 35 and directed by the department, and shall not require further 16 1 special authorization by the general assembly. 16 2 4. a. Notwithstanding section 12C.7, interest or earnings 16 3 on moneys in the fund shall be credited to the fund. 16 4 b. Notwithstanding section 8.33, moneys credited to the fund 16 5 that remain unexpended or unobligated at the end of a fiscal 16 6 year shall not revert to any other fund. 16 7 Sec. 21. NEW SECTION. 188.31 Cooperation with department 16 8 of public safety. 16 9 1. The department of agriculture and land stewardship and a 16 10 registrant shall cooperate with the department of public safety 16 11 in order to administer this chapter. 16 12 2. The department of public safety shall assist the 16 13 department of agriculture and land stewardship in conducting 16 14 background checks of applicants applying for licenses under 16 15 section 188.15. 16 16 3. The department of agriculture and land stewardship and 16 17 a registrant shall upon request or as part of routine process 16 18 inform the department of public safety regarding the industrial 16 19 hemp commodity program under section 188.13 and the industrial 16 20 hemp production program under section 188.14, including all of 16 21 the following: 16 22 a. The status of the production and the results of any test 16 23 of a crop produced by a licensee under this chapter. 16 24 b. The date and time of an inspection of a licensee's 16 25 facilities or records. 16 26 c. The confiscation and destruction of a crop under section 16 27 188.32. 16 28 Sec. 22. NEW SECTION. 188.32 Confiscation and destruction. 16 29 1. A Cannabis sativa plant exceeding the maximum 16 30 concentration of delta=9 tetrahydrocannabinol as provided 16 31 in section 188.7 and that is produced under the industrial 16 32 hemp commodity program established in section 188.13 shall be 16 33 confiscated by the department. 16 34 2. A Cannabis sativa plant exceeding the maximum 16 35 concentration of delta=9 tetrahydrocannabinol as provided in 17 1 section 188.7 and that is produced under the industrial hemp 17 2 production program established pursuant to section 188.14 17 3 shall be confiscated by the registrant in cooperation with the 17 4 department. 17 5 3. The department or registrant may request assistance from 17 6 the department of public safety or a local law enforcement 17 7 authority necessary to carry out this section. The department 17 8 or registrant upon request shall deliver any sample of the 17 9 plant to the department of public safety or any local law 17 10 enforcement authority. 17 11 Sec. 23. NEW SECTION. 188.33 Disciplinary action. 17 12 1. The department may suspend or revoke the license obtained 17 13 under section 188.15 by a person who does any of the following: 17 14 a. Provides false or misleading information on an 17 15 application for an industrial hemp commodity license as 17 16 provided in section 188.15. 17 17 b. Provides false or misleading information to the 17 18 department as part of the industrial hemp commodity program 17 19 under section 188.13 or to a registrant or the department as 17 20 part of the industrial hemp production program under section 17 21 188.14. 17 22 c. Fails to comply with or violates any provision of this 17 23 chapter, including a rule adopted by the department under 17 24 section 188.4, a condition of an application for the issuance 17 25 of a license under section 188.15, or a condition of a contract 17 26 entered into with a registrant under section 188.16. 17 27 d. Fails to comply with an order issued by the department or 17 28 a registrant under this chapter. 17 29 2. The suspension or revocation of a license is in addition 17 30 to the confiscation and destruction of a Cannabis sativa plant 17 31 under section 188.32, a civil penalty under section 188.34, or 17 32 any other civil or criminal penalty that may be imposed on the 17 33 person under state or federal law. 17 34 Sec. 24. NEW SECTION. 188.34 Civil penalties. 17 35 1. A person who violates a provision of this chapter is 18 1 subject to a civil penalty of not less than five hundred 18 2 dollars and not more than two thousand five hundred dollars. 18 3 The department may assess and collect the civil penalty. Each 18 4 day that a continuing violation occurs shall be considered a 18 5 separate offense. 18 6 2. The department shall establish a schedule of civil 18 7 penalties for violations of this chapter. 18 8 3. A civil penalty shall not be assessed against a 18 9 licensee for a violation that results in the confiscation and 18 10 destruction of the licensee's crop under section 188.32, unless 18 11 the composite test result is greater than two percent delta=9 18 12 tetrahydrocannabinol as determined in section 188.7. 18 13 4. All civil penalties collected under this section shall be 18 14 deposited into the general fund of the state. 18 15 Sec. 25. NEW SECTION. 188.35 Criminal penalties. 18 16 A person who knowingly or intentionally produces the 18 17 Cannabis sativa plant and who is not the department, a 18 18 registrant, or a licensee participating in the industrial 18 19 hemp commodity program established in section 188.13 or the 18 20 industrial hemp production program established pursuant to 18 21 section 188.14 is subject to the provisions in chapters 124 and 18 22 453B. 18 23 Sec. 26. NEW SECTION. 262.80 Industrial hemp production 18 24 program. 18 25 The board of regents may consult with Iowa state university 18 26 of science and technology, the university of Iowa, and the 18 27 university of northern Iowa to provide for the participation 18 28 of those universities in administering an industrial hemp 18 29 production program in cooperation with the department of 18 30 agriculture and land stewardship as provided in chapter 188. 18 31 EXPLANATION 18 32 The inclusion of this explanation does not constitute agreement with 18 33 the explanation's substance by the members of the general assembly. 18 34 OVERVIEW. This bill creates the "Iowa Industrial Hemp Act" 18 35 authorizing the production and marketing of industrial hemp 19 1 as part of an industrial hemp commodity program administered 19 2 by the department of agriculture and land stewardship and an 19 3 industrial hemp production program administered by one or 19 4 more regents institutions (Iowa state university of science 19 5 and technology, the university of Iowa, or the university of 19 6 northern Iowa) acting in cooperation with the department. 19 7 According to the bill, industrial hemp refers to the plant 19 8 classified as Cannabis sativa (plant) having a concentration of 19 9 delta=9 tetrahydrocannabinol (THC) not to exceed three=tenths 19 10 of 1 percent according to tests conducted by a laboratory 19 11 approved by the department. The bill also provides that the 19 12 two programs are established for the exclusive purpose of 19 13 growing, cultivating, and marketing industrial hemp in a manner 19 14 that complies with the programs and projects described in 7 19 15 U.S.C. {5940. 19 16 FEDERAL LAW. The purpose of the programs is to determine 19 17 the commercial viability of industrial hemp as described in 19 18 federal legislation, section 7606 of the Agricultural Act of 19 19 2014 (7 U.S.C. {5940), which legalizes the possession and 19 20 use of industrial hemp if regulated by a state department of 19 21 agriculture administering a pilot program. The federal law 19 22 also authorizes an institution of higher education (registrant) 19 23 to produce industrial hemp in order to advance academic 19 24 research. The federal law does not authorize a federal agency 19 25 to implement or oversee the program. However, it also does 19 26 not expressly supersede other federal laws that restrict items 19 27 designated as controlled substances including the federal 19 28 "Controlled Substances Import and Export Act" (21 U.S.C. {951 19 29 et seq.), requiring that cannabis seeds capable of germination 19 30 only be imported into a state by persons registered with the 19 31 drug enforcement administration of the United States department 19 32 of justice (DEA). 19 33 IOWA'S UNIFORM CONTROLLED SUBSTANCES ACT. A person who 19 34 produces industrial hemp under one of the two programs is 19 35 exempted from state criminal law included in the "Uniform 20 1 Controlled Substances Act" (Code chapter 124) which prohibits 20 2 persons from knowingly or intentionally possessing a controlled 20 3 substance (Code section 124.401) including the plant referred 20 4 to as marijuana included as a schedule I controlled substance 20 5 (Code section 124.204). "Marijuana" includes all parts of 20 6 the plant without regard to THC concentration (Code section 20 7 124.101). 20 8 GENERAL == PARTICIPATION IN A PROGRAM REQUIRED. A person 20 9 is prohibited from producing, handling, transporting, 20 10 marketing, or processing industrial hemp in this state unless 20 11 the industrial hemp has been produced under one of the two 20 12 programs. There is no prohibition for marketing an industrial 20 13 hemp product. 20 14 GENERAL == TESTING. In order to qualify as industrial hemp, 20 15 the maximum concentration of delta=9 tetrahydrocannabinol 20 16 present in the plant cannot exceed three=tenths of 1 percent 20 17 as analyzed on a dry weight basis. During production (from 20 18 planting to harvest), a crop must be tested by a qualified 20 19 public or private laboratory approved by the department. A 20 20 licensee must test the crop as required by the department or 20 21 registrant. The department or registrant may test a crop under 20 22 its program. In any case, a test must be conducted 30 days 20 23 prior to harvest. 20 24 ADMINISTRATION == COUNCIL, DEPARTMENT, AND REGISTRANTS. 20 25 An industrial hemp council is created comprised of private 20 26 and public members, including employees of the department, 20 27 the department of natural resources, the department of public 20 28 safety, and a regents institution registrant (or Iowa state 20 29 university of science and technology until a university is 20 30 registered). The council also includes four legislative 20 31 members. The council is to advise the department and the 20 32 registrant regarding the administration and enforcement of the 20 33 bill, including the two programs, the issuance of licenses, 20 34 and the selection of program participants, the importation 20 35 and certification of seed, the generation of revenue from the 21 1 sale of seed and fees, and enforcement actions taken against 21 2 licensees. The council is also responsible for preparing 21 3 an annual report regarding the success of the programs for 21 4 submission to the governor and general assembly. 21 5 ADMINISTRATION == PROGRAMS. Under the industrial hemp 21 6 commodity program, industrial hemp must be produced by a person 21 7 licensed by the department, and under the industrial hemp 21 8 production program, industrial hemp must be produced either by 21 9 the registrant or by a licensee selected by the registrant. 21 10 The bill also provides for requirements for the selection of 21 11 licensees to participate in a program, including the processing 21 12 of applications for licenses, the terms and conditions of 21 13 a contract to participate in an industrial hemp production 21 14 program, the inspection of a licensee's records, the inspection 21 15 of a licensee's facilities, and testing of the licensee's crop. 21 16 ADMINISTRATION == CERTIFICATION AND SALE OF SEED. The 21 17 department is responsible for certifying industrial hemp seed 21 18 capable of germination. Either the department or a registrant 21 19 may obtain authorization by DEA to import seed for departmental 21 20 certification and either administrative entity may sell the 21 21 seed to the other entity or a licensee participating in one of 21 22 the programs. 21 23 FINANCE == MONEYS COLLECTED AND EXPENDED BY THE 21 24 ADMINISTRATIVE ENTITIES. Moneys collected from the sale of 21 25 seed are retained by either the department or the registrant 21 26 acting as the seller and must be used to administer their 21 27 respective programs. Each administrative entity may also 21 28 collect fees associated with administering their program and 21 29 regulating licensees. These fees include an application 21 30 fee, licensee fee, inspection fee, and laboratory fee. The 21 31 amount of the fee must be based on an estimate of expenses 21 32 necessary to administer the administrative entity's program. 21 33 Moneys collected by the department from certified seed sales 21 34 and fees must be deposited into an industrial hemp commodity 21 35 fund which are appropriated to the department to administer 22 1 its program. Moneys paid to a registrant are retained by the 22 2 registrant and treated as repayment receipts for costs incurred 22 3 in administering its program. 22 4 ENFORCEMENT == COOPERATION WITH THE DEPARTMENT OF PUBLIC 22 5 SAFETY. The department and a registrant must cooperate with 22 6 the department of public safety in administering and enforcing 22 7 the provisions of the bill. 22 8 ENFORCEMENT == CONFISCATION. If a licensee produces 22 9 a plant exceeding the maximum allowed concentration of 22 10 delta=9 tetrahydrocannabinol, the plant must be confiscated 22 11 and destroyed by the department or registrant supervising 22 12 production and with assistance by the department of public 22 13 safety or a local law enforcement authority. 22 14 ENFORCEMENT == DISCIPLINARY ACTION. The department may 22 15 suspend or revoke a person's license for providing false 22 16 or misleading information on an application prior to being 22 17 selected or to the department or a registrant after being 22 18 selected. The department may also suspend or revoke a license 22 19 for failing to comply with a program requirement as set forth 22 20 in statute, a rule adopted by the department, or an industrial 22 21 hemp production contract. 22 22 ENFORCEMENT == CIVIL PENALTIES. A person who violates a 22 23 provision of the bill is subject to a civil penalty of not less 22 24 than $500 and not more than $2,500 as assessed and collected by 22 25 the department. Each day that a continuing violation occurs 22 26 is considered a separate offense. The department is required 22 27 to establish a schedule of civil penalties for violations. 22 28 A civil penalty cannot be imposed against a licensee for a 22 29 violation that results in the confiscation and destruction of 22 30 the licensee's crop unless the composite test result for the 22 31 crop is a concentration greater than 2 percent. 22 32 ENFORCEMENT == CRIMINAL PENALTIES. A person who knowingly 22 33 or intentionally produces the plant and who is not the 22 34 department, a registrant, or a licensee participating in a 22 35 program is subject to the criminal penalties described in Code 23 1 chapters 124 and 453B. A person who knowingly or intentionally 23 2 possesses marijuana as a first offense is punishable by 23 3 imprisonment in the county jail for not more than six months or 23 4 by a fine of not more than $1,000 (Code section 124.401). For a 23 5 second offense, the person is guilty of a serious misdemeanor, 23 6 punishable by confinement for no more than one year and a fine 23 7 of at least $315 but not more than $1,875. For a third or 23 8 subsequent offense, the person is guilty of a class "D" felony, 23 9 punishable by confinement for no more than five years and a 23 10 fine of at least $750 but not more than $7,500. A person acting 23 11 in violation of Code chapter 453B for failing to pay an excise 23 12 tax on the sale of marijuana (Code section 453B.7) is also 23 13 guilty of a class "D" felony (Code section 453B.12). LSB 2172SS (4) 87 da/nh
