S.F. 264 Section 1. LEGISLATIVE FINDINGS —— PURPOSE. The general 1 assembly finds that a trend exists among states to consider the 2 economic importance of industrial hemp, which is a major crop 3 in other nations. Industrial hemp historically has contributed 4 to the economic welfare of this country, and is a renewable 5 natural resource manufactured for textiles, pulp, paper, oil, 6 building materials, and other products. The purpose of this 7 Act is to promote the economy of this state by providing for 8 research necessary to develop industrial hemp as a viable crop. 9 Sec. 2. NEW SECTION . 159.41 Industrial hemp licensing and 10 regulation —— fee —— penalty. 11 1. As used in this section, “industrial hemp” means cannabis 12 sativa L. which has a percentage of tetrahydrocannabinol of 13 not more than one percent, as provided by rules which shall be 14 adopted by the department. 15 2. The department of agriculture and land stewardship, 16 in cooperation with the department of public safety, shall 17 administer this section. The department of agriculture and 18 land stewardship shall cooperate with other law enforcement 19 agencies. The department shall also collaborate with agencies 20 of the United States government, including but not limited 21 to the drug enforcement administration of the United States 22 department of justice, in order to provide for the production 23 and possession of industrial hemp according to the terms and 24 conditions required by the United States government. The 25 department may execute any memorandum of understanding with a 26 United States government agency in order to administer this 27 section. 28 3. a. To the extent permitted by the United States 29 government, the department shall issue licenses to persons 30 for the production and possession of industrial hemp, 31 notwithstanding any section of this chapter to the contrary. 32 A person must possess a license pursuant to this section 33 to produce or possess industrial hemp. The department of 34 agriculture and land stewardship shall limit the number of 35 -1- LSB 2249XS (3) 85 da/nh 1/ 5

S.F. 264 licenses that it grants each year in order to ensure that the 1 department of agriculture and land stewardship, in cooperation 2 with the department of public safety, may strictly enforce 3 compliance with the requirements of this section. A license 4 shall expire not later than one year following the date of 5 issuance. 6 b. A person applying for a license shall file an application 7 on a form prescribed by the department of agriculture and land 8 stewardship according to procedures required by the department. 9 The department may charge an application fee which shall not 10 exceed five hundred dollars. An applicant and each employee 11 of the applicant must satisfy eligibility requirements of the 12 department, which shall include but not be limited to all of 13 the following: 14 (1) Be eighteen years of age or older. 15 (2) Never have been convicted of a felony, an aggravated 16 misdemeanor, or of any other offense related to the possession 17 of a controlled substance. 18 (3) Not be addicted to the use of alcohol or a controlled 19 substance. 20 (4) Be of good moral character and not have been judged 21 guilty of a crime involving moral turpitude. 22 c. The licensee shall maintain accurate records, as required 23 by the department, which shall contain information relating 24 to the licensee’s operation, including but not limited to the 25 production site, the time and manner of harvest, and persons 26 involved in the production, harvesting, and distribution of the 27 industrial hemp. 28 4. Notwithstanding chapter 124, the licensee may produce, 29 harvest, and distribute industrial hemp. However, the licensee 30 must act in strict conformance with this section. The licensee 31 shall raise industrial hemp upon demonstration plots as 32 approved by the department. The demonstration plots must be 33 used to develop optimal agricultural practices for raising 34 industrial hemp. All plant materials from industrial hemp 35 -2- LSB 2249XS (3) 85 da/nh 2/ 5

S.F. 264 grown on demonstration plots, except plant materials retained 1 for breeding and propagation, must be used for commercial uses 2 approved by the department. 3 5. The department of agriculture and land stewardship or 4 the department of public safety may inspect a production or 5 distribution site of a licensee at any time, and may inspect 6 records required to be maintained as provided in this section. 7 The department of agriculture and land stewardship shall assess 8 and the licensee shall pay the actual costs of the inspection. 9 If the owner or occupant of any property used by the licensee 10 for the production or distribution refuses admittance onto 11 the property, or if prior to such refusal the department of 12 agriculture and land stewardship or department of public safety 13 demonstrates the necessity for a warrant, the department of 14 agriculture and land stewardship may make application under 15 oath or affirmation to the district court of the county in 16 which the property is located for the issuance of a search 17 warrant. If the court is satisfied from examination of the 18 applicant, of other witnesses, if any, and of the allegations 19 of the application or the existence of the grounds of the 20 application, or that probable cause exists to believe such 21 grounds exist, the court may issue a search warrant. 22 6. The department may suspend or revoke a license if the 23 licensee or an employee of the licensee is determined to have 24 committed any of the following: 25 a. Fraud in applying for or obtaining a license. 26 b. A violation of this section or rules adopted by the 27 department pursuant to this section, including failing to 28 comply with a requirement of this section. 29 c. An offense involving moral turpitude, a felony, an 30 aggravated misdemeanor, or any other offense related to the 31 possession of a controlled substance. 32 7. a. Except as provided in paragraph “b” , an applicant for 33 a license or a licensee who knowingly violates a requirement 34 of this section or a rule adopted by the department pursuant 35 -3- LSB 2249XS (3) 85 da/nh 3/ 5

S.F. 264 to this section is subject to a civil penalty of not more than 1 fifty thousand dollars. 2 b. A person who makes a false statement on the application 3 for a license regarding the conviction of a felony, aggravated 4 misdemeanor, or any other offense related to the possession of 5 a controlled substance is guilty of an aggravated misdemeanor. 6 Sec. 3. Section 317.1A, Code 2013, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 3. “Industrial hemp” which is produced as 9 provided in section 159.41 is not a noxious weed. 10 EXPLANATION 11 This bill provides for the production of industrial hemp 12 which has a percentage of tetrahydrocannabinol of not more than 13 1 percent. 14 The bill requires the department of agriculture and land 15 stewardship, in cooperation with the department of public 16 safety, to administer a program to license persons involved 17 in industrial hemp production. The bill requires the 18 department to collaborate with agencies of the United States 19 government, including but not limited to the drug enforcement 20 administration in order to provide for the production and 21 possession of industrial hemp according to the terms and 22 conditions required by the United States government. The 23 bill provides that to the extent permitted by the United 24 States government, the department shall issue licenses to 25 persons for the production and possession of industrial 26 hemp, notwithstanding any other provision of Code chapter 27 124 regulating controlled substances. The bill provides 28 requirements for applicants and persons involved in the 29 production or possession of industrial hemp. The bill provides 30 for the inspection of the premises and records of licensees. 31 The bill provides for the suspension or revocation of a 32 license. 33 The bill provides that licensees who violate the provisions 34 of the bill are subject to a civil penalty of up to $50,000. 35 -4- LSB 2249XS (3) 85 da/nh 4/ 5

S.F. 264 The bill provides that a person who makes a false statement 1 on the application for a license regarding a conviction of a 2 felony, aggravated misdemeanor, or any other offense related 3 to the possession of a controlled substance is guilty of 4 an aggravated misdemeanor. An aggravated misdemeanor is 5 punishable by confinement for no more than two years and a fine 6 of at least $625 but not more than $6,250. 7 -5- LSB 2249XS (3) 85 da/nh 5/ 5