SSB 1260 (LSB 2397XC (1) 86)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON SENG)

A BILL FOR

An Act relating to the production, marketing, and distribution of industrial hemp and related plant materials, and providing for penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  LEGISLATIVE FINDINGS —— PURPOSE.  The general assembly finds that a trend exists among states to consider the economic importance of industrial hemp, which is a major crop in other nations. Industrial hemp historically has contributed to the economic welfare of this country, and is a renewable natural resource manufactured for textiles, pulp, paper, oil, building materials, and other products. The purpose of this Act is to promote the economy of this state by providing for research necessary to develop industrial hemp as a viable crop.
    Sec. 2.  Section 124.401, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  Notwithstanding subsection 5, a person may knowingly or intentionally recommend, possess, use, dispense, deliver, transport, or administer industrial hemp, if the recommendation, possession, use, dispensing, delivery, transporting, or administering is in accordance with the provisions of chapter 159B. For purposes of this subsection, “industrial hemp” means the same as defined in section 159B.1.
    Sec. 3.  NEW SECTION.  124D.6A  Exception —— industrial hemp.

   This chapter does not apply to the possession or use of industrial hemp as provided in chapter 159B.
    Sec. 4.  NEW SECTION.  159B.1  Definitions.

   As used in this chapter, unless the context otherwise requires:

   1.  “Department” means the department of agriculture and land stewardship.
   2.  “Industrial hemp” means cannabis sativa L. which has a percentage of tetrahydrocannabinol of not more than three-tenths of one percent, as provided by rules which shall be adopted by the department.
   3.  “Regents institution” means the university of northern Iowa, the university of Iowa, or Iowa state university of science and technology.
    Sec. 5.  NEW SECTION.  159B.2  Administration.

   The department, in cooperation with the department of public safety, regents institutions, and community colleges established under chapter 260C, shall administer this chapter. The department of agriculture and land stewardship shall cooperate with other law enforcement agencies. The department shall also collaborate with agencies of the United States government, including but not limited to the drug enforcement administration of the United States department of justice, in order to provide for the production, harvesting, marketing, and distribution of industrial hemp according to the terms and conditions required by federal law. The department may execute a memorandum of understanding with a United States government agency in order to administer this chapter.
    Sec. 6.  NEW SECTION.  159B.3  Licensing and regulation —— fees —— production under regents or community college pilot program.
   1.  a.  To the extent permitted by federal law, the department shall issue licenses to persons for the production, harvesting, marketing, and distribution of industrial hemp, notwithstanding any section of this chapter or chapter 159 to the contrary. A person must possess a license pursuant to this section to possess industrial hemp. The department shall limit the number of licenses that it issues each year in order to ensure that the department, in cooperation with the department of public safety, may strictly enforce compliance with the requirements of this chapter. A license shall expire not later than one year following the date of issuance.
   b.  A person applying for a license shall file an application on a form prescribed by the department of agriculture and land stewardship according to procedures required by the department. The department may charge an application fee which shall not exceed five hundred dollars. An applicant and each employee of the applicant must satisfy eligibility requirements of the department, which shall include but not be limited to all of the following:
   (1)  Be eighteen years of age or older.
   (2)  Never have been convicted of a felony, an aggravated misdemeanor, or any other offense related to the possession of a controlled substance.
   (3)  Not be addicted to the use of alcohol or a controlled substance.
   (4)  Be of good moral character and not have been found guilty of a crime involving moral turpitude.
   c.  The licensee shall maintain accurate records, as required by the department, which shall contain information relating to the licensee’s operation, including but not limited to the production site, the time and manner of harvest, and persons involved in the production, harvesting, marketing, and distribution of the industrial hemp.
   2.  Notwithstanding chapter 124, the licensee may produce, harvest, market, and distribute industrial hemp. However, the licensee must act in strict conformance with this chapter.
   3.  a.  A licensee shall not produce, harvest, market, or distribute industrial hemp until completing an agricultural pilot program certified by a regents institution or community college that administers the program. The program must develop optimal agricultural practices for producing industrial hemp.
   b.  Under the program, a licensee must produce industrial hemp on a demonstration plot located on land controlled by the regents institution or community college for at least three years. In addition, the licensee may produce, harvest, market, or distribute industrial hemp on land not controlled by a regents institution or community college subject to the following:
   (1)  For the first year, the licensee shall not produce industrial hemp on more than one hundred fifty acres of land that is not a demonstration plot.
   (2)  For the second year, the licensee shall not produce industrial hemp on more than five hundred acres of land that is not a demonstration plot.
   c.  Any plant material derived from the production of industrial hemp under the program, other than plant material retained for breeding and propagation, must be destroyed or marketed and distributed in commercial channels as required by the department. The licensee may provide for the marketing and distribution of the plant materials inside or outside the state. A licensee who distributes plant materials outside the state must complete and submit to the department an annual report detailing the amount and type of plant material distributed, and the state where the distribution was made. However, the licensee shall not be required to disclose information that identifies a person receiving the plant material.
   d.  A licensee who does not comply with the requirements of this subsection shall not complete the program.
    Sec. 7.  NEW SECTION.  159B.4  Use of seed or cultivar.

   The department shall not prohibit the use of a seed or cultivar in the production of industrial hemp. The department shall adopt rules that provide for importing industrial hemp seeds into the state for use by licensees. However, a licensee shall not receive more than fifty pounds of industrial hemp seed per acre of land owned or leased for the production of industrial hemp unless the department grants the person a waiver.
    Sec. 8.  NEW SECTION.  159B.5  Inspection.
   1.  The department or the department of public safety may inspect a production, harvesting, or distribution site of a licensee at any time, and may inspect records required to be maintained as provided in section 159B.3. The department of agriculture and land stewardship shall assess and the licensee shall pay the actual costs of the inspection. If the owner or occupant of any property used by the licensee for the production, harvesting, marketing, or distribution refuses admittance onto the property, or if prior to such refusal the department of agriculture and land stewardship or department of public safety demonstrates the necessity for a warrant, the department of agriculture and land stewardship may make application under oath or affirmation to the district court of the county in which the property is located for the issuance of a search warrant. If the court is satisfied from examination of the applicant, of other witnesses, if any, and of the allegations of the application or the existence of the grounds of the application, or that probable cause exists to believe such grounds exist, the court may issue a search warrant.
   2.  The department shall inspect plants produced by a licensee a least once per month. The department shall test plants produced on at least one out of very one hundred acres used to produce industrial hemp to ensure compliance with this chapter. The costs associated with the inspection, including testing, shall be charged to the licensee. The amount received by the department shall be considered repayment receipts as defined in section 8.2, and deposited into the accounts of the department.
    Sec. 9.  NEW SECTION.  159B.6  Enforcement action —— penalty.
   1.  The department may suspend or revoke a license issued under section 159B.3 if the licensee or an employee of the licensee is determined to have committed any of the following:
   a.  Fraud in applying for or obtaining a license.
   b.  A violation of this chapter or rules adopted by the department pursuant to this chapter, including failing to comply with a requirement of this chapter.
   c.  An offense involving moral turpitude, a felony, an aggravated misdemeanor, or any other offense related to the possession of a controlled substance.
   2.  a.  Except as provided in paragraph “b”, an applicant for a license or a licensee who knowingly violates a requirement of this chapter or a rule adopted by the department pursuant to this chapter is subject to a civil penalty of not more than fifty thousand dollars.
   b.  A person who makes a false statement on the application for a license regarding the conviction of a felony, aggravated misdemeanor, or any other offense related to the possession of a controlled substance is guilty of an aggravated misdemeanor.
    Sec. 10.  Section 317.1A, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  “Industrial hemp” which is produced as provided in chapter 159B is not a noxious weed.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the production of industrial hemp which has not more than three-tenths of 1 percent tetrahydrocannabinol.
   The bill requires the department of agriculture and land stewardship, in cooperation with the department of public safety, regents institutions, and community colleges, to administer the chapter. The department of agriculture and land stewardship is responsible for licensing persons involved in industrial hemp production. The bill requires the department to collaborate with agencies of the United States government, including but not limited to the drug enforcement administration, in order to provide for the production, harvesting, marketing, and distribution of industrial hemp according to the terms and conditions required by federal law. The bill provides that to the extent permitted by federal law, the department shall issue licenses to persons, notwithstanding any other provision of Code chapter 124 regulating controlled substances. The bill provides that a licensee must complete an agricultural pilot program as certified by a regents institution or community college that administers the program. Under the program, a licensee must produce industrial hemp on a demonstration plot for three years. The bill requires a licensee to maintain records, restricts the use of seed by licensees, provides for inspections of land and seed, and provides for the suspension or revocation of a license.
   The bill provides that licensees who violate the provisions of the bill are subject to a civil penalty of up to $50,000. The bill provides that a person who makes a false statement on the application for a license regarding a conviction of a felony, aggravated misdemeanor, or any other offense related to the possession of a controlled substance is guilty of an aggravated misdemeanor. An aggravated misdemeanor is punishable by confinement for no more than two years and a fine of at least $625 but not more than $6,250.