H.F. 470 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. Section 124.401, Code 2015, is amended by adding the 10 following new subsection: 11 NEW SUBSECTION . 6. Notwithstanding subsection 5, a person 12 may knowingly or intentionally recommend, possess, use, 13 dispense, deliver, transport, or administer industrial hemp, 14 if the recommendation, possession, use, dispensing, delivery, 15 transporting, or administering is in accordance with the 16 provisions of chapter 159B. For purposes of this subsection, 17 “industrial hemp” means the same as defined in section 159B.1. 18 Sec. 3. NEW SECTION . 124D.6A Exception —— industrial hemp. 19 This chapter does not apply to the possession or use of 20 industrial hemp as provided in chapter 159B. 21 Sec. 4. NEW SECTION . 159B.1 Definitions. 22 As used in this chapter, unless the context otherwise 23 requires: 24 1. “Department” means the department of agriculture and land 25 stewardship. 26 2. “Industrial hemp” means cannabis sativa L. which 27 has a percentage of tetrahydrocannabinol of not more than 28 three-tenths of one percent, as provided by rules which shall 29 be adopted by the department. 30 3. “Regents institution” means the university of northern 31 Iowa, the university of Iowa, or Iowa state university of 32 science and technology. 33 Sec. 5. NEW SECTION . 159B.2 Administration. 34 The department, in cooperation with the department of 35 -1- LSB 2397YH (5) 86 da/nh 1/ 7

H.F. 470 public safety, regents institutions, and community colleges 1 established under chapter 260C, shall administer this chapter. 2 The department of agriculture and land stewardship shall 3 cooperate with other law enforcement agencies. The department 4 shall also collaborate with agencies of the United States 5 government, including but not limited to the drug enforcement 6 administration of the United States department of justice, in 7 order to provide for the production, harvesting, marketing, 8 and distribution of industrial hemp according to the terms and 9 conditions required by federal law. The department may execute 10 a memorandum of understanding with a United States government 11 agency in order to administer this chapter. 12 Sec. 6. NEW SECTION . 159B.3 Licensing and regulation —— 13 fees —— production under regents or community college pilot 14 program. 15 1. a. To the extent permitted by federal law, the 16 department shall issue licenses to persons for the production, 17 harvesting, marketing, and distribution of industrial hemp, 18 notwithstanding any section of this chapter or chapter 159 to 19 the contrary. A person must possess a license pursuant to this 20 section to possess industrial hemp. The department shall limit 21 the number of licenses that it issues each year in order to 22 ensure that the department, in cooperation with the department 23 of public safety, may strictly enforce compliance with the 24 requirements of this chapter. A license shall expire not later 25 than one year following the date of issuance. 26 b. A person applying for a license shall file an application 27 on a form prescribed by the department of agriculture and land 28 stewardship according to procedures required by the department. 29 The department may charge an application fee which shall not 30 exceed five hundred dollars. An applicant and each employee 31 of the applicant must satisfy eligibility requirements of the 32 department, which shall include but not be limited to all of 33 the following: 34 (1) Be eighteen years of age or older. 35 -2- LSB 2397YH (5) 86 da/nh 2/ 7

H.F. 470 (2) Never have been convicted of a felony, an aggravated 1 misdemeanor, or any other offense related to the possession of 2 a controlled substance. 3 (3) Not be addicted to the use of alcohol or a controlled 4 substance. 5 (4) Be of good moral character and not have been found 6 guilty of a crime involving moral turpitude. 7 c. The licensee shall maintain accurate records, as required 8 by the department, which shall contain information relating 9 to the licensee’s operation, including but not limited to 10 the production site, the time and manner of harvest, and 11 persons involved in the production, harvesting, marketing, and 12 distribution of the industrial hemp. 13 2. Notwithstanding chapter 124, the licensee may produce, 14 harvest, market, and distribute industrial hemp. However, the 15 licensee must act in strict conformance with this chapter. 16 3. a. A licensee shall not produce, harvest, market, or 17 distribute industrial hemp until completing an agricultural 18 pilot program certified by a regents institution or community 19 college that administers the program. The program must develop 20 optimal agricultural practices for producing industrial hemp. 21 b. Under the program, a licensee must produce industrial 22 hemp on a demonstration plot located on land controlled by 23 the regents institution or community college for at least 24 three years. In addition, the licensee may produce, harvest, 25 market, or distribute industrial hemp on land not controlled 26 by a regents institution or community college subject to the 27 following: 28 (1) For the first year, the licensee shall not produce 29 industrial hemp on more than one hundred fifty acres of land 30 that is not a demonstration plot. 31 (2) For the second year, the licensee shall not produce 32 industrial hemp on more than five hundred acres of land that is 33 not a demonstration plot. 34 c. Any plant material derived from the production of 35 -3- LSB 2397YH (5) 86 da/nh 3/ 7

H.F. 470 industrial hemp under the program, other than plant material 1 retained for breeding and propagation, must be destroyed or 2 marketed and distributed in commercial channels as required by 3 the department. The licensee may provide for the marketing 4 and distribution of the plant materials inside or outside the 5 state. A licensee who distributes plant materials outside 6 the state must complete and submit to the department an 7 annual report detailing the amount and type of plant material 8 distributed, and the state where the distribution was made. 9 However, the licensee shall not be required to disclose 10 information that identifies a person receiving the plant 11 material. 12 d. A licensee who does not comply with the requirements of 13 this subsection shall not complete the program. 14 Sec. 7. NEW SECTION . 159B.4 Use of seed or cultivar. 15 The department shall not prohibit the use of a seed or 16 cultivar in the production of industrial hemp. The department 17 shall adopt rules that provide for importing industrial hemp 18 seeds into the state for use by licensees. However, a licensee 19 shall not receive more than fifty pounds of industrial hemp 20 seed per acre of land owned or leased for the production of 21 industrial hemp unless the department grants the person a 22 waiver. 23 Sec. 8. NEW SECTION . 159B.5 Inspection. 24 1. The department or the department of public safety may 25 inspect a production, harvesting, or distribution site of a 26 licensee at any time, and may inspect records required to be 27 maintained as provided in section 159B.3. The department of 28 agriculture and land stewardship shall assess and the licensee 29 shall pay the actual costs of the inspection. If the owner 30 or occupant of any property used by the licensee for the 31 production, harvesting, marketing, or distribution refuses 32 admittance onto the property, or if prior to such refusal the 33 department of agriculture and land stewardship or department 34 of public safety demonstrates the necessity for a warrant, 35 -4- LSB 2397YH (5) 86 da/nh 4/ 7

H.F. 470 the department of agriculture and land stewardship may make 1 application under oath or affirmation to the district court of 2 the county in which the property is located for the issuance of 3 a search warrant. If the court is satisfied from examination 4 of the applicant, of other witnesses, if any, and of the 5 allegations of the application or the existence of the grounds 6 of the application, or that probable cause exists to believe 7 such grounds exist, the court may issue a search warrant. 8 2. The department shall inspect plants produced by a 9 licensee a least once per month. The department shall test 10 plants produced on at least one out of very one hundred acres 11 used to produce industrial hemp to ensure compliance with this 12 chapter. The costs associated with the inspection, including 13 testing, shall be charged to the licensee. The amount received 14 by the department shall be considered repayment receipts as 15 defined in section 8.2, and deposited into the accounts of the 16 department. 17 Sec. 9. NEW SECTION . 159B.6 Enforcement action —— penalty. 18 1. The department may suspend or revoke a license issued 19 under section 159B.3 if the licensee or an employee of the 20 licensee is determined to have committed any of the following: 21 a. Fraud in applying for or obtaining a license. 22 b. A violation of this chapter or rules adopted by the 23 department pursuant to this chapter, including failing to 24 comply with a requirement of this chapter. 25 c. An offense involving moral turpitude, a felony, an 26 aggravated misdemeanor, or any other offense related to the 27 possession of a controlled substance. 28 2. a. Except as provided in paragraph “b” , an applicant for 29 a license or a licensee who knowingly violates a requirement 30 of this chapter or a rule adopted by the department pursuant 31 to this chapter is subject to a civil penalty of not more than 32 fifty thousand dollars. 33 b. A person who makes a false statement on the application 34 for a license regarding the conviction of a felony, aggravated 35 -5- LSB 2397YH (5) 86 da/nh 5/ 7

H.F. 470 misdemeanor, or any other offense related to the possession of 1 a controlled substance is guilty of an aggravated misdemeanor. 2 Sec. 10. Section 317.1A, Code 2015, is amended by adding the 3 following new subsection: 4 NEW SUBSECTION . 3. “Industrial hemp” which is produced as 5 provided in chapter 159B is not a noxious weed. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to the production of industrial 10 hemp which has not more than three-tenths of 1 percent 11 tetrahydrocannabinol. 12 The bill requires the department of agriculture and land 13 stewardship, in cooperation with the department of public 14 safety, regents institutions, and community colleges, to 15 administer the chapter. The department of agriculture 16 and land stewardship is responsible for licensing persons 17 involved 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, 21 harvesting, marketing, and distribution of industrial hemp 22 according to the terms and conditions required by federal law. 23 The bill provides that to the extent permitted by federal law, 24 the department shall issue licenses to persons, notwithstanding 25 any other provision of Code chapter 124 regulating controlled 26 substances. The bill provides that a licensee must complete 27 an agricultural pilot program as certified by a regents 28 institution or community college that administers the program. 29 Under the program, a licensee must produce industrial hemp 30 on a demonstration plot for three years. The bill requires 31 a licensee to maintain records, restricts the use of seed by 32 licensees, provides for inspections of land and seed, and 33 provides for the suspension or revocation of a license. 34 The bill provides that licensees who violate the provisions 35 -6- LSB 2397YH (5) 86 da/nh 6/ 7

H.F. 470 of the bill are subject to a civil penalty of up to $50,000. 1 The bill provides that a person who makes a false statement 2 on the application for a license regarding a conviction of a 3 felony, aggravated misdemeanor, or any other offense related 4 to the possession of a controlled substance is guilty of 5 an aggravated misdemeanor. An aggravated misdemeanor is 6 punishable by confinement for no more than two years and a fine 7 of at least $625 but not more than $6,250. 8 -7- LSB 2397YH (5) 86 da/nh 7/ 7