Senate File 2398 - Introduced SENATE FILE 2398 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 329) A BILL FOR An Act relating to industrial hemp, including the regulation 1 of its production as part of a research program, marketing 2 for purposes of manufacturing industrial hemp products, 3 providing for fees, making appropriations, providing for 4 enforcement and the confiscation and destruction of certain 5 property, and including penalties. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2172SV (3) 87 da/rj

S.F. 2398 Section 1. Section 124.401, subsection 5, Code 2018, is 1 amended by adding the following new unnumbered paragraph: 2 NEW UNNUMBERED PARAGRAPH . Notwithstanding this subsection 3 or any other provision of this chapter to the contrary, a 4 person may produce, possess, deliver, transport, process, 5 and use industrial hemp in accordance with the provisions of 6 chapter 188. 7 Sec. 2. NEW SECTION . 188.1 Short title. 8 This chapter shall be known and may be cited as the “Iowa 9 Industrial Hemp Act” . 10 Sec. 3. NEW SECTION . 188.2 Definitions. 11 As used in this chapter, unless the context otherwise 12 requires: 13 1. “Association” means the Iowa crop improvement association 14 recognized pursuant to section 177.1. 15 2. “Certified industrial hemp seed” means industrial hemp 16 seed that has been certified pursuant to section 188.18. 17 3. “Council” means the industrial hemp council established 18 in section 188.11. 19 4. “Department” means the department of agriculture and land 20 stewardship. 21 5. “Industrial hemp” means any part of the Cannabis 22 sativa plant, whether growing or not, with a concentration of 23 delta-9 tetrahydrocannabinol that does not exceed the maximum 24 concentration for the plant as determined pursuant to section 25 188.8. 26 6. “Industrial hemp plant” means all nonseed parts of 27 industrial hemp, whether growing or not. 28 7. a. “Industrial hemp product” means any item manufactured 29 from industrial hemp, including but not limited to cloth, 30 cordage, fiber, food, fuel, paint, paper, particleboard, 31 plastic, industrial hemp seed, seed meal, or seed oil. 32 b. “Industrial hemp product” does not include industrial 33 hemp seed that is capable of germination. 34 8. “Industrial hemp seed” means seed produced by industrial 35 -1- LSB 2172SV (3) 87 da/rj 1/ 28

S.F. 2398 hemp regardless of whether the seed is capable of germination. 1 9. “Iowa state university” means Iowa state university of 2 science and technology. 3 10. “Law enforcement agency” means the department of public 4 safety, an office of county sheriff, or a city’s police force. 5 11. “Licensee” means a person who obtains a license from 6 the department under section 188.15 to participate in the 7 industrial hemp commodity program established pursuant to 8 section 188.13 or the industrial hemp production program 9 established pursuant to section 188.14. 10 12. “Production” means any part of planting, cultivating, 11 or harvesting industrial hemp. 12 13. “Regents institution” means the university of Iowa, Iowa 13 state university of science and technology, or the university 14 of northern Iowa governed by the state board of regents under 15 section 262.7. 16 14. “Registrant” means a regents institution that registers 17 with the department to administer the industrial hemp 18 production program established in section 188.14. 19 Sec. 4. NEW SECTION . 188.3 Report. 20 1. The department shall prepare and submit an annual report 21 to the governor and general assembly not later than January 10. 22 The report shall evaluate the success of the industrial hemp 23 commodity program established pursuant to section 188.13 and 24 the industrial hemp production program established pursuant 25 to section 188.14. The department, in cooperation with any 26 registrant, may establish performance benchmarks and make 27 recommendations for consideration by the general assembly in 28 order to meet the purposes of the programs in compliance with 29 the requirements of 7 U.S.C. §5940. 30 2. a. In preparing the report, the department may require 31 that a select number of licensees complete and submit a brief 32 survey regarding the licensee’s business operations including 33 the production, handling, transportation, or processing of 34 industrial hemp. 35 -2- LSB 2172SV (3) 87 da/rj 2/ 28

S.F. 2398 b. A registrant shall assist the department in preparing 1 and compiling the results of the survey. Until a regents 2 institution is registered under section 188.14, Iowa state 3 university shall act in lieu of the registrant. 4 3. The report may include the compilation of data, but 5 shall not disclose any information that is confidential under 6 section 188.9, including the identity of a licensee or the 7 location of any facility used by the licensee in the production 8 of industrial hemp. This subsection shall not preclude the 9 disclosure of information to the extent that the licensee 10 voluntarily agrees in writing that such information is to be 11 considered a public record under section 188.9. 12 Sec. 5. NEW SECTION . 188.4 Rules and forms. 13 The department shall adopt all rules and prepare and publish 14 all forms required to administer this chapter and comply with 15 7 U.S.C. §5940. The department may require the mandatory use 16 of a form and refuse to accept a document that is not prepared 17 using a mandatory form. 18 Sec. 6. NEW SECTION . 188.5 Compliance with federal law. 19 1. The purpose of this chapter is to fully implement the 20 provisions of 7 U.S.C. §5940. 21 2. The programs established under this chapter and any 22 projects administered under those programs are for the 23 exclusive purpose of growing, cultivating, and marketing 24 industrial hemp in a manner that complies with the programs and 25 projects described in 7 U.S.C. §5940. 26 3. a. The department shall seek to obtain any necessary 27 approval by the drug enforcement administration of the United 28 States department of justice in order to obtain industrial hemp 29 seeds for certification pursuant to section 188.18 as part of 30 the industrial hemp commodity program as provided in section 31 188.13 or the industrial hemp production program as provided 32 in section 188.14. 33 b. A registrant may seek to obtain any necessary approval 34 by the drug enforcement administration of the United States 35 -3- LSB 2172SV (3) 87 da/rj 3/ 28

S.F. 2398 department of justice in order to obtain industrial hemp seeds 1 for certification pursuant to section 188.18 as part of the 2 industrial hemp production program as provided in section 3 188.14. 4 4. The department or a registrant may seek a waiver of a 5 federal regulation promulgated by the United States department 6 of agriculture or the drug enforcement administration of the 7 United States department of justice if necessary to fully 8 implement the provisions of this chapter. 9 Sec. 7. NEW SECTION . 188.6 General prohibitions. 10 1. A person shall not produce, handle, transport, market, 11 or process industrial hemp in this state unless the industrial 12 hemp has been produced pursuant to the industrial hemp 13 commodity program established pursuant to section 188.13 or 14 the industrial hemp production program established pursuant to 15 section 188.14. 16 2. Nothing in this chapter prevents a person from producing, 17 handling, transporting, marketing, or processing an industrial 18 hemp product. 19 Sec. 8. NEW SECTION . 188.7 Cannabidiol production 20 prohibited —— contingent repeal. 21 1. Industrial hemp shall not be used to produce medical 22 cannabidiol as defined in section 124E.2. 23 2. Nothing in this chapter shall be construed to authorize 24 a person to recommend, possess, use, dispense, deliver, 25 transport, or administer medical cannabidiol. 26 3. This section is repealed on July 1, 2022, unless the 27 “Medical Cannabidiol Act” codified in chapter 124E is no longer 28 in effect on that date. 29 Sec. 9. NEW SECTION . 188.8 Maximum concentration of 30 tetrahydrocannabinol. 31 1. A test of a Cannabis sativa plant under this chapter 32 shall be conducted by the department or a qualified public or 33 private laboratory approved by the department. The department 34 shall establish protocols for sampling and testing Cannabis 35 -4- LSB 2172SV (3) 87 da/rj 4/ 28

S.F. 2398 sativa plants produced pursuant to the provisions of this 1 chapter, including for obtaining test samples for delivery to 2 the laboratory, and the receipt of test results delivered to 3 the department, a registrant, or a licensee. The concentration 4 of delta-9 tetrahydrocannabinol present in a Cannabis sativa 5 plant shall be measured on a dry weight basis in the same 6 manner as provided under 7 U.S.C. §5940 unless subsequent 7 controlling federal law provides otherwise. 8 2. The maximum concentration of delta-9 9 tetrahydrocannabinol present in a Cannabis sativa plant in 10 order for the plant to qualify as industrial hemp shall be 11 established by the department. The department’s established 12 maximum concentration shall be the same as the maximum 13 concentration allowed to be present to qualify as industrial 14 hemp under 7 U.S.C. §5940 or any subsequent controlling federal 15 law. 16 3. In testing Cannabis sativa plants which comprise a crop, 17 a composite test result that exceeds the maximum concentration 18 of delta-9 tetrahydrocannabinol as provided in subsections 1 19 and 2 is deemed conclusive that the crop exceeds the maximum 20 concentration for industrial hemp. 21 Sec. 10. NEW SECTION . 188.9 Confidential information —— 22 exceptions. 23 1. a. All of the following information is confidential: 24 (1) A completed license application, or information which 25 is part of such application, acquired by the department, 26 a registrant, or a law enforcement agency under section 27 188.15. For purposes of this subparagraph, a completed license 28 application does not include the results of a national criminal 29 history record check acquired by the department from the 30 department of public safety pursuant to section 188.15. 31 (2) A license issued by the department to the applicant 32 under section 188.15. 33 (3) Any information acquired by the department or a 34 registrant from a licensee participating in or seeking to 35 -5- LSB 2172SV (3) 87 da/rj 5/ 28

S.F. 2398 participate in the industrial hemp commodity program under 1 section 188.13 or the industrial hemp production program under 2 section 188.14. 3 (4) A certification of industrial hemp seed issued by the 4 association to the department, a registrant, or a licensee 5 under section 188.18. 6 (5) A survey acquired by the department or by Iowa state 7 university from the department under section 188.3. 8 (6) Information relating to the inspection of a licensee 9 participating in the industrial hemp commodity program under 10 section 188.13 or the industrial hemp production program under 11 section 188.14. 12 (7) The results of any test sample of an industrial hemp 13 crop regardless of whether the test was conducted by the 14 department, a registrant, or a licensee participating in the 15 industrial hemp commodity program under section 188.13 or the 16 industrial hemp production program under section 188.14. 17 (8) Any other information that identifies the business 18 location, operations, management, practices, or finances of a 19 licensee participating in the industrial hemp commodity program 20 under section 188.13 or the industrial hemp production program 21 under section 188.14. 22 b. The confidential information may be in a printed or 23 electronic format as part of a document, other tangible medium, 24 or accessible by a computer or similar device. 25 2. The confidential information described in subsection 26 1 is not a public record and is not otherwise subject to 27 disclosure under chapter 22. Such information that is 28 subsequently disclosed to a person under this chapter retains 29 its confidentiality in the manner provided in this section. 30 3. The department shall establish requirements and 31 procedures for the disclosure of confidential information 32 described in subsection 1, including to any of the following: 33 a. To a person authorized to receive the confidential 34 information under this chapter. 35 -6- LSB 2172SV (3) 87 da/rj 6/ 28

S.F. 2398 b. A federal agency or another state’s agency as part of 1 the process to evaluate the approval or renewal of a license 2 under section 188.15 or the licensee’s participation in the 3 industrial hemp commodity program under section 188.13 or the 4 industrial hemp production program under section 188.14. 5 c. A law enforcement agency or a federal agency which 6 requests the confidential information in order to respond 7 to an emergency situation, a criminal complaint, or an 8 ongoing criminal investigation, subject to any applicable 9 confidentiality requirements for public records under section 10 22.7. 11 d. The department in conducting a disciplinary action 12 against a licensee under section 188.26. 13 e. A party in any judicial or administrative proceeding 14 involving discovery, so long as the disclosure is made upon 15 subpoena, or other means of legal compulsion for release. 16 f. Any person making a request to the custodian of the 17 confidential information in the same manner as provided in 18 section 22.2 to the extent that the licensee voluntarily agrees 19 in writing that such information is to be considered a public 20 record subject to chapter 22. 21 Sec. 11. NEW SECTION . 188.10 Liability. 22 The department or a registrant is not liable for the actions 23 of a licensee regardless of the department’s or registrant’s 24 legal relationship with the licensee, including but not limited 25 to any relationship as an agent, principal, fiduciary, or party 26 to a contract. 27 Sec. 12. NEW SECTION . 188.11 Industrial hemp council —— 28 establishment, membership, procedures. 29 1. An industrial hemp council is established under the 30 purview of the department. 31 2. a. The council shall consist of the following voting 32 members: 33 (1) An individual who has experience in the regulation 34 of industrial hemp production, appointed by the secretary of 35 -7- LSB 2172SV (3) 87 da/rj 7/ 28

S.F. 2398 agriculture. 1 (2) An individual who is a member of an agricultural 2 cooperative association as defined in section 502.102, 3 appointed by the secretary of agriculture. 4 (3) Two employees of the department appointed by the 5 secretary of agriculture. The employees shall be knowledgeable 6 regarding the production of agricultural crops. One employee 7 may be the state entomologist. One employee may be an employee 8 knowledgeable about procedures and practices relating to the 9 import of agricultural seeds or inputs. 10 (4) One employee of the department of natural resources 11 appointed by the director of the department of natural 12 resources. The employee must be knowledgeable regarding 13 agricultural practices and environmental regulations. 14 (5) One employee of the department of public safety 15 appointed by the director of the department. The person must 16 be knowledgeable regarding federal and state drug enforcement 17 policies. 18 (6) One employee of a registrant appointed by the president 19 of the registrant’s regents institution. The employee must 20 be knowledgeable regarding plant sciences. Until such a 21 registrant is appointed, one employee of Iowa state university 22 appointed by the president of the university shall serve as a 23 member. The employee must be knowledgeable regarding plant 24 sciences. 25 b. The council shall also include four members of the 26 general assembly appointed to serve in an ex officio, nonvoting 27 capacity. The legislative members shall be selected, one 28 member each, by the majority leader of the senate, the 29 minority leader of the senate, the speaker of the house of 30 representatives, and the minority leader of the house of 31 representatives. 32 3. A voting member who has not been appointed shall be 33 confirmed by the senate pursuant to section 2.32. 34 4. A public member is eligible to receive compensation as 35 -8- LSB 2172SV (3) 87 da/rj 8/ 28

S.F. 2398 provided in section 7E.6 and shall be reimbursed for actual and 1 necessary expenses incurred in the discharge of the member’s 2 duties. The moneys used to pay expenses and compensation 3 shall be paid from moneys in the industrial hemp commodity 4 fund established in section 188.23. A legislative member is 5 eligible to receive a per diem and expenses as provided in 6 section 2.10. 7 5. a. A public member shall serve a three-year staggered 8 term commencing and ending as provided in section 69.19. A 9 state employee member shall serve at the pleasure of the 10 appointing authority. 11 b. The voting members shall elect a chairperson and vice 12 chairperson annually from the voting membership. A majority of 13 the voting members constitutes a quorum. If the chairperson 14 and vice chairperson are unable to preside over the council, a 15 majority of the voting members present may elect a temporary 16 chairperson. 17 6. A vacancy on the council shall be filled in the same 18 manner as the original appointment. A member appointed to fill 19 a vacancy created other than by expiration of a term shall be 20 appointed for the remainder of the unexpired term. 21 7. The council shall be housed within the department and the 22 department, in cooperation with Iowa state university, shall 23 furnish the council with a meeting place and all articles, 24 supplies, and services necessary to enable the council to 25 perform its duties. Iowa state university or the office of 26 attorney general may provide any technical or legal assistance 27 requested by the council or department. 28 8. The appointments of the public members are subject to the 29 requirements of sections 69.16, 69.16A, and 69.19. A public 30 member is eligible for reappointment. The secretary may remove 31 a public member if the removal is based on the public member’s 32 misfeasance, malfeasance, or willful neglect of duty or other 33 just cause, after notice and hearing, unless the notice and 34 hearing is expressly waived by the public member in writing. 35 -9- LSB 2172SV (3) 87 da/rj 9/ 28

S.F. 2398 Sec. 13. NEW SECTION . 188.12 Industrial hemp council —— 1 powers and duties. 2 1. The council shall advise the department and each 3 registrant regarding all of the following: 4 a. All aspects relating to the administration of the 5 industrial hemp commodity program established pursuant to 6 section 188.13 and the industrial hemp production program 7 established pursuant to section 188.14. 8 b. The establishment of fees assessed, imposed, and 9 collected pursuant to sections 188.21 and 188.22. 10 c. The management of the industrial hemp commodity fund 11 established in section 188.23. 12 2. The council shall advise the department regarding all of 13 the following: 14 a. Disciplinary action taken against a licensee pursuant to 15 section 188.26. 16 b. The establishment of a range of civil penalties to be 17 imposed, assessed, and collected pursuant to section 188.27. 18 3. The council shall advise a registrant regarding the 19 terms and conditions of contracts entered into with a selected 20 licensee under section 188.17. 21 4. The council shall not control policy decisions or direct 22 the administration or enforcement of this chapter. 23 Sec. 14. NEW SECTION . 188.13 Industrial hemp commodity 24 program —— department and licensees. 25 1. The department shall establish and administer an 26 industrial hemp commodity program. The purpose of the 27 program is to determine the economic feasibility of producing 28 industrial hemp as a profitable commodity in this state and of 29 the effective handling, transporting, marketing, and processing 30 of the commodity in this state. 31 2. A person must be licensed pursuant to section 188.15 to 32 participate in the program. Under the program, a licensee may 33 produce all of the following: 34 a. Industrial hemp plants which shall to every extent 35 -10- LSB 2172SV (3) 87 da/rj 10/ 28

S.F. 2398 feasible be processed into industrial hemp products for 1 marketing in commercial channels. 2 b. Industrial hemp seeds which shall to every extent 3 feasible be processed into industrial hemp products or used to 4 produce a subsequent industrial hemp crop. 5 3. The department may establish standards for the labeling 6 or marketing of industrial hemp produced under this section. 7 The standards shall to every extent feasible be in accordance 8 with applicable standards in chapter 210. 9 4. A licensee must immediately report the loss of any 10 industrial hemp to the department. 11 5. A licensee shall retain industrial hemp or transfer 12 industrial hemp to another person only as authorized by the 13 department. The licensee may retain industrial hemp seeds 14 capable of germination only as authorized by the department. 15 The licensee shall only transfer industrial hemp seed that is 16 capable of germination to the department, a registrant, or 17 another licensee as approved by the department or any other 18 person authorized by law to receive the industrial hemp seed. 19 6. The department shall conduct an inspection of the 20 licensee’s facilities and business records as provided in 21 section 188.16. 22 Sec. 15. NEW SECTION . 188.14 Industrial hemp production 23 program —— registrants and licensees. 24 1. A regents institution, or two or more regents 25 institutions acting jointly, may establish and administer 26 an industrial hemp production program. The purpose of the 27 program shall be to determine the feasibility of increasing 28 the production acreage and yield of industrial hemp as a 29 profitable crop and reducing the concentration of delta-9 30 tetrahydrocannabinol in the industrial hemp. 31 2. In order to administer a program, the regents institution 32 or regents institutions acting jointly must register with 33 the department according to requirements established by the 34 department. The registration shall include a research plan 35 -11- LSB 2172SV (3) 87 da/rj 11/ 28

S.F. 2398 that summarizes the quantifiable short-term and long-term goals 1 of the research. A copy of the registration shall also be 2 filed with the council, the governor, and the general assembly. 3 3. The department has all the same powers to regulate 4 a licensee under this program as the department does in 5 regulating a licensee under the industrial hemp commodity 6 program pursuant to section 188.13. A licensee participating 7 in this program shall comply with the same requirements as a 8 licensee participating in the industrial hemp commodity program 9 under section 188.13, unless the department provides otherwise. 10 4. Only a registrant, including a licensee acting under 11 the supervision of the registrant, may participate in the 12 program. Under the program, a registrant may produce any of 13 the following: 14 a. Industrial hemp plants which may be processed into 15 industrial hemp products. 16 b. Industrial hemp seeds which may be processed into 17 industrial hemp products. A registrant may retain industrial 18 hemp seeds capable of germination to produce the next crop of 19 industrial hemp or transfer the seeds to another person for 20 purposes of scientific research. The registrant shall retain 21 or transfer the seeds after consulting with the department. 22 5. A registrant must regularly test the industrial hemp to 23 ensure that the industrial hemp does not exceed the maximum 24 concentration of delta-9 tetrahydrocannabinol as provided in 25 section 188.8. 26 6. A registrant must immediately report the loss of any 27 industrial hemp produced by the registrant to the department. 28 7. A registrant must maintain records regarding production 29 and transfer of the industrial hemp by the registrant. The 30 records shall to every extent practicable contain the same type 31 of information contained in records maintained by licensees 32 under section 188.13. 33 8. A registrant’s inspection of a licensee’s facilities 34 may be conducted as provided in the industrial hemp production 35 -12- LSB 2172SV (3) 87 da/rj 12/ 28

S.F. 2398 contract entered into by the registrant and licensee under 1 section 188.17. The registrant may request that the department 2 assign an official or that a law enforcement agency assign an 3 officer to accompany the registrant during the inspection. 4 Sec. 16. NEW SECTION . 188.15 Industrial hemp commodity 5 license —— requirements. 6 1. The department shall establish and administer a process 7 to receive, evaluate, and approve applications for industrial 8 hemp commodity licenses by persons seeking to participate in 9 the industrial hemp commodity program under section 188.13 or 10 the industrial hemp production program under section 188.14. 11 A license expires one year from the date of issuance. An 12 expired license may be renewed for three additional years. The 13 department may require that a licensee apply for an amended 14 or new license if information contained in the existing 15 application is no longer accurate or is incomplete. 16 2. An applicant shall not be issued a license unless the 17 applicant agrees to comply with all terms and conditions 18 relating to the department’s regulation of the licensee. 19 3. The department shall disapprove the application of 20 a person for good cause, which shall include any of the 21 following: 22 a. The conviction of a felony within the prior ten years or 23 any drug offense within the same period, regardless of whether 24 the conviction is in this state or another state. 25 b. The revocation of a license under section 188.26, or 26 the revocation of a license, permit, registration, or other 27 authorization to produce industrial hemp in any other state. 28 4. The department shall not issue a license until the 29 applicant has furnished a surety bond to the department in 30 an amount of not more than ten thousand dollars. The surety 31 bond shall insure payment of any amount that the licensee is 32 legally obligated to pay for any costs associated with the 33 confiscation and destruction of the licensee’s industrial hemp 34 crop under section 188.25. The surety bond shall be maintained 35 -13- LSB 2172SV (3) 87 da/rj 13/ 28

S.F. 2398 at all times during the period of licensure. The department 1 shall be notified ten days prior to any reduction in the amount 2 of the surety bond made at the request of the applicant or 3 cancellation of the surety bond by the surety. The total and 4 aggregate liability of the surety shall be limited to the face 5 amount of the surety bond. 6 5. The department may do all of the following: 7 a. Limit the number of applications that it accepts or 8 limit the period or periods when applications will be received, 9 evaluated, or accepted each year. 10 b. Establish criteria required to participate in a program 11 which may be based on the qualifications or good character 12 of the applicant, the applicant’s proposed investment in 13 industrial hemp production, the applicant’s experience in 14 commercial crop production, and the type and size of the 15 applicant’s existing agricultural operation. The department 16 may prepare and publish guidelines to assist persons in 17 determining eligibility requirements. 18 c. Require the issuance of different types of licenses or 19 require an applicant to obtain more than one license based 20 on criteria established by the department, including but not 21 limited to whether the proposed industrial hemp production is 22 to occur on noncontiguous parcels of land, whether industrial 23 hemp plants or industrial hemp seeds are proposed to be 24 produced, or whether the applicant is proposing to participate 25 in the industrial hemp commodity program under section 188.13 26 or the industrial hemp production program under section 188.14. 27 d. Require that all or some licenses expire on the same 28 date. 29 e. Provide a different application and requirements for 30 the submission, evaluation, and approval or disapproval of an 31 application for a renewed license. However, the department 32 shall require a check of the applicant’s national criminal 33 history record to be conducted under this section each time a 34 license is issued or renewed. 35 -14- LSB 2172SV (3) 87 da/rj 14/ 28

S.F. 2398 6. The department shall prepare and publish license 1 application forms. A completed application form submitted to 2 the department shall contain all of the following: 3 a. The applicant’s full name and residence address. 4 b. A legal description, global positioning system location, 5 and map of the site where the applicant proposes to produce the 6 industrial hemp. 7 c. Information required by the department to conduct a check 8 of the applicant’s criminal history record. The department 9 shall require an applicant to submit pictures, fingerprints, 10 and descriptions of physical characteristics on forms required 11 by the department of public safety. The department of 12 agriculture and land stewardship shall submit the applicant’s 13 fingerprints and other necessary information to the department 14 of public safety, division of criminal investigation, for the 15 purpose of conducting a national criminal history record check 16 through the federal bureau of investigation. The department 17 of public safety shall notify the department of agriculture 18 and land stewardship of the results of the national criminal 19 history record check. The results shall be considered a 20 confidential record under chapter 22 and shall not be released 21 without the consent of the department of public safety. The 22 department of agriculture and land stewardship shall reimburse 23 the department of public safety for costs associated with 24 conducting the national criminal history record check. 25 d. Any other information required by the department in order 26 to administer this chapter. 27 7. The department of agriculture and land stewardship shall 28 deliver a copy of an approved application for a license to 29 the department of public safety and the office of the county 30 sheriff in the county where the industrial hemp is approved 31 to be produced by the licensee in order to participate in the 32 industrial hemp commodity program under section 188.13 or the 33 industrial hemp production program under section 188.14. 34 8. A license shall be suspended or revoked as provided in 35 -15- LSB 2172SV (3) 87 da/rj 15/ 28

S.F. 2398 section 188.26. 1 Sec. 17. NEW SECTION . 188.16 Licensees —— inspections by 2 department and law enforcement agencies. 3 1. The department may conduct an official inspection of 4 a licensee’s facilities where industrial hemp is produced, 5 stored, handled, transported, marketed, or processed. The 6 department shall conduct an official inspection during regular 7 business hours. As part of an official inspection, the 8 department shall collect a sample of the crop for testing under 9 section 188.8 at least once and within thirty days prior to 10 harvest. The department may order or request that a licensee 11 independently collect and test one or more samples of the crop 12 during the growing period and notify the department of the 13 results. 14 2. A licensee shall immediately notify the department of 15 the results of any test that exceeds the maximum concentration 16 of delta-9 tetrahydrocannabinol as provided in section 188.8, 17 regardless of whether the department ordered, requested, or 18 knew of the test. 19 3. The department may request that a law enforcement 20 agency assign an officer to accompany the department during an 21 official inspection of the facilities of a licensee. 22 4. As part of its official inspection, the department 23 may examine the licensee’s business records. However, a law 24 enforcement officer shall not accompany the department during 25 the examination. 26 Sec. 18. NEW SECTION . 188.17 Industrial hemp production 27 contract —— requirements. 28 A registrant may enter into an industrial hemp production 29 contract with a licensee to produce industrial hemp under the 30 supervision of the registrant. The registrant shall supervise 31 the production of the industrial hemp in cooperation with the 32 department. The contract shall provide for the regulation of 33 the licensee and the industrial hemp produced by the licensee 34 in the same manner as provided in section 188.13, unless 35 -16- LSB 2172SV (3) 87 da/rj 16/ 28

S.F. 2398 otherwise provided by the department in consultation with the 1 registrant. 2 Sec. 19. NEW SECTION . 188.18 Industrial hemp seed capable 3 of germination —— certification. 4 1. The Iowa crop improvement association shall certify 5 industrial hemp seed capable of germination for use by a 6 licensee as part of the industrial hemp commodity program 7 under section 188.13 or a registrant as part of the industrial 8 hemp production program under section 188.14. The association 9 may provide different certification processes, including for 10 industrial hemp seed produced or obtained by a registrant or 11 obtained from a qualified and reputable industrial hemp seed 12 source and supplier. 13 2. The association’s certification protocols may be based 14 on standards promulgated by independent organizations including 15 but not limited to the association of official seed certifying 16 agencies and verifications offered by qualified and reliable 17 persons in the business of providing such seed. 18 3. The Iowa crop improvement association shall notify the 19 department and the registrant, as applicable, of the results of 20 a request for the certification of industrial hemp seed. 21 4. A licensee may import industrial hemp seed for 22 certification only if allowed by the department acting in 23 consultation with the association. A registrant may import 24 industrial seed for certification after consulting with the 25 department and the association. 26 Sec. 20. NEW SECTION . 188.19 Industrial hemp seed capable 27 of germination —— sale by the department. 28 1. The department shall offer certified industrial hemp 29 seed for sale to licensees participating in the industrial hemp 30 commodity program established pursuant to section 188.13. The 31 department may offer certified industrial hemp seed for sale to 32 a registrant participating in the industrial hemp production 33 program established pursuant to section 188.14. 34 2. Moneys collected by the department from the sale of 35 -17- LSB 2172SV (3) 87 da/rj 17/ 28

S.F. 2398 certified industrial hemp seed shall be deposited into the 1 industrial hemp commodity fund established in section 188.23. 2 Sec. 21. NEW SECTION . 188.20 Industrial hemp seed capable 3 of germination —— sale by a registrant. 4 1. A registrant may offer certified industrial hemp seed 5 for sale to the department, or a licensee participating in the 6 industrial hemp production program established pursuant to 7 section 188.14. 8 2. All moneys received by a registrant under subsection 1 9 shall be handled in the same manner as repayment receipts as 10 defined in section 8.2, and shall be used by the registrant 11 exclusively for the registrant’s administration of the 12 industrial hemp production program. 13 Sec. 22. NEW SECTION . 188.21 Fees assessed by department. 14 1. The department shall assess and collect all of the 15 following: 16 a. An application fee to be paid by a person seeking to 17 obtain an industrial hemp commodity license as provided in 18 section 188.15. 19 b. A license fee to be paid by a person being issued an 20 industrial hemp commodity license as provided in section 21 188.15. 22 c. An inspection fee to be paid by a licensee as part of 23 an inspection of the facilities where the industrial hemp is 24 produced as provided in section 188.16. 25 d. A laboratory fee to be paid by a licensee if the 26 department takes samples of industrial hemp for testing by a 27 laboratory as provided in section 188.8. 28 2. The fees described in subsection 1 are nonrefundable. 29 3. The total amount of fees collected pursuant to this 30 section shall not exceed the department’s estimate of the total 31 amount of revenues necessary to administer and enforce the 32 provisions of this chapter. Prior to the beginning of a fiscal 33 year, the department shall establish an estimated total amount 34 based on the expected costs to be incurred by the department 35 -18- LSB 2172SV (3) 87 da/rj 18/ 28

S.F. 2398 in administering and enforcing the provisions of this chapter 1 during the subsequent fiscal year. 2 4. The department may establish different rates for any 3 category of fees described in subsection 1 based on criteria 4 determined relevant by the department, which may include the 5 type of license issued and the number of acres set aside for 6 industrial hemp production by a licensee. 7 5. All fees collected by the department under this section 8 shall be deposited into the industrial hemp commodity fund 9 established pursuant to section 188.23. 10 Sec. 23. NEW SECTION . 188.22 Fees assessed by registrants. 11 1. A registrant may assess and collect fees from licensees 12 participating in the registrant’s industrial hemp production 13 program as provided in section 188.14. The total amount 14 of fees paid shall not exceed the expenses incurred by the 15 registrant in selecting licensees to participate in the 16 program, conducting inspections of facilities where the 17 industrial hemp is produced, and taking samples of industrial 18 hemp to be tested by a laboratory as provided in section 188.8. 19 2. All moneys received by a registrant under this section 20 shall be handled in the same manner as repayment receipts as 21 defined in section 8.2, and shall be used by the registrant 22 exclusively for the registrant’s administration of the 23 industrial hemp production program. 24 Sec. 24. NEW SECTION . 188.23 Industrial hemp commodity fund 25 —— appropriation. 26 1. An industrial hemp commodity fund is established in 27 the state treasury under the management and control of the 28 department. 29 2. The fund shall include moneys collected by the department 30 from the sale of certified seed under section 188.19, fees 31 collected under section 188.21, and moneys appropriated by the 32 general assembly for deposit in the fund. The fund may include 33 other moneys available to and obtained or accepted by the 34 department, including moneys from public or private sources. 35 -19- LSB 2172SV (3) 87 da/rj 19/ 28

S.F. 2398 3. Moneys in the fund are appropriated to the department 1 and shall be used exclusively to carry out the responsibilities 2 conferred upon the department under this chapter as determined 3 and directed by the department, and shall not require further 4 special authorization by the general assembly. 5 4. a. Notwithstanding section 12C.7, interest or earnings 6 on moneys in the fund shall be credited to the fund. 7 b. Notwithstanding section 8.33, moneys credited to the fund 8 that remain unexpended or unobligated at the end of a fiscal 9 year shall not revert to any other fund. 10 Sec. 25. NEW SECTION . 188.24 Cooperation with department 11 of public safety. 12 1. The department of agriculture and land stewardship and a 13 registrant shall cooperate with the department of public safety 14 in order to administer this chapter. 15 2. The department of public safety shall assist the 16 department of agriculture and land stewardship in conducting 17 national criminal history record checks of applicants applying 18 for licenses under section 188.15. 19 3. The department of agriculture and land stewardship and 20 a registrant shall upon request or as part of routine process 21 provide the department of public safety with the following 22 information regarding the industrial hemp commodity program 23 under section 188.13 and the industrial hemp production program 24 under section 188.14: 25 a. The status of the production and the results of any test 26 of a crop produced by a licensee under this chapter. 27 b. The date and time of an inspection of a licensee’s 28 facilities or business records. 29 c. The confiscation and destruction of a crop under section 30 188.25. 31 Sec. 26. NEW SECTION . 188.25 Confiscation and destruction. 32 1. A Cannabis sativa plant exceeding the maximum 33 concentration of delta-9 tetrahydrocannabinol as provided in 34 section 188.8 and that is produced under the industrial hemp 35 -20- LSB 2172SV (3) 87 da/rj 20/ 28