Senate File 329 - Introduced SENATE FILE 329 BY KINNEY and KAPUCIAN 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 2172SS (4) 87 da/nh

S.F. 329 Section 1. Section 124.401, subsection 5, Code 2017, 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. “Certified industrial hemp seed” means industrial hemp 14 seed that has been certified by the department pursuant to 15 section 188.17. 16 2. “Council” means the industrial hemp council established 17 in section 188.11. 18 3. “Department” means the department of agriculture and land 19 stewardship. 20 4. “Industrial hemp” means any part of the Cannabis 21 sativa plant, whether growing or not, with a concentration of 22 delta-9 tetrahydrocannabinol that does not exceed the maximum 23 concentration for the plant as determined pursuant to section 24 188.7. 25 5. “Industrial hemp plant” means all nonseed parts of 26 industrial hemp, whether growing or not. 27 6. a. “Industrial hemp product” means any item manufactured 28 from industrial hemp, including but not limited to cloth, 29 cordage, fiber, food, fuel, paint, paper, particleboard, 30 plastic, industrial hemp seed, seed meal, or seed oil. 31 b. “Industrial hemp product” does not include industrial 32 hemp seed that is capable of germination. 33 7. “Industrial hemp seed” means seed produced by industrial 34 hemp regardless of whether the seed is capable of germination. 35 -1- LSB 2172SS (4) 87 da/nh 1/ 23

S.F. 329 8. “Licensee” means a person who obtains a license from 1 the department under section 188.15 to participate in the 2 industrial hemp commodity program established pursuant to 3 section 188.13 or the industrial hemp production program 4 established pursuant to section 188.14. 5 9. “Production” means any part of planting, cultivating, or 6 harvesting industrial hemp. 7 10. “Regents institution” means the university of Iowa, Iowa 8 state university of science and technology, or the university 9 of northern Iowa governed by the state board of regents under 10 section 262.7. 11 11. “Registrant” means a regents institution that registers 12 with the department to administer the industrial hemp 13 production program established in section 188.14. 14 Sec. 4. NEW SECTION . 188.3 Report. 15 The council shall prepare and submit an annual report to 16 the governor and general assembly not later than January 17 10. The report shall evaluate the success of the industrial 18 hemp commodity program established in section 188.13 and 19 the industrial hemp production program established pursuant 20 to section 188.14. The council may establish performance 21 benchmarks and make recommendations for consideration by the 22 general assembly in order to meet the purposes of the programs 23 in compliance with the requirements of 7 U.S.C. §5940. 24 Sec. 5. NEW SECTION . 188.4 Rules and forms. 25 The department shall adopt all rules and prepare and publish 26 all forms required to administer this chapter and comply with 27 7 U.S.C. §5940. The department may require the mandatory use 28 of a form and refuse to accept a document that is not prepared 29 using a mandatory form. 30 Sec. 6. NEW SECTION . 188.5 Compliance with federal law. 31 1. The purpose of this chapter is to fully implement the 32 provisions of 7 U.S.C. §5940. 33 2. The programs established under this chapter and any 34 projects administered under those programs are for the 35 -2- LSB 2172SS (4) 87 da/nh 2/ 23

S.F. 329 exclusive purpose of growing, cultivating, and marketing 1 industrial hemp in a manner that complies with the programs and 2 projects described in 7 U.S.C. §5940. 3 3. a. The department shall seek to obtain any necessary 4 approval by the drug enforcement administration of the United 5 States department of justice in order to obtain industrial hemp 6 seeds for certification pursuant to section 188.17 as part of 7 the industrial hemp commodity program as provided in section 8 188.13 or the industrial hemp production program as provided 9 in section 188.14. 10 b. A registrant may seek approval by the drug enforcement 11 administration of the United States department of justice in 12 order to obtain seeds for certification necessary to produce 13 industrial hemp as part of the industrial hemp production 14 program. 15 4. The department or a registrant may seek a waiver of a 16 federal regulation promulgated by the United States department 17 of agriculture or the drug enforcement administration of the 18 United States department of justice if necessary to fully 19 implement the provisions of this chapter. 20 Sec. 7. NEW SECTION . 188.6 General prohibitions. 21 1. A person shall not produce, handle, transport, 22 market, or process industrial hemp in this state unless the 23 industrial hemp has been produced pursuant to the industrial 24 hemp commodity program established in section 188.13 or the 25 industrial hemp production program established pursuant to 26 section 188.14. 27 2. Nothing in this chapter prevents a person from producing, 28 handling, transporting, marketing, or processing an industrial 29 hemp product. 30 Sec. 8. NEW SECTION . 188.7 Maximum concentration of 31 tetrahydrocannabinol. 32 1. A test of a Cannabis sativa plant under this chapter 33 shall be conducted by the department or a qualified public 34 or private laboratory approved by the department. The 35 -3- LSB 2172SS (4) 87 da/nh 3/ 23

S.F. 329 department shall establish protocols for testing Cannabis 1 sativa plants produced pursuant to the provisions of this 2 chapter, including for obtaining test samples for delivery to 3 the laboratory, and the receipt of test results delivered to 4 the department, a registrant, or licensee. In order to qualify 5 as industrial hemp, the maximum concentration of delta-9 6 tetrahydrocannabinol present in the plant as analyzed on a 7 dry weight basis shall not exceed three-tenths of one percent 8 delta-9 tetrahydrocannabinol. 9 2. In testing a crop comprised of Cannabis sativa plants 10 produced under this chapter, a composite test result greater 11 than three-tenths of one percent delta-9 tetrahydrocannabinol 12 as analyzed on a dry weight basis is deemed conclusive that 13 the crop exceeds the maximum concentration. However, the 14 department may determine that the results of a first test 15 are inconclusive if the maximum concentration of delta-9 16 tetrahydrocannabinol does not exceed a threshold established 17 by the department which does not exceed one percent delta-9 18 tetrahydrocannabinol as analyzed on a dry weight basis. 19 Sec. 9. NEW SECTION . 188.11 Industrial hemp council —— 20 establishment, membership, procedures. 21 1. An industrial hemp council is established under the 22 purview of the department. 23 2. a. The council shall consist of the following voting 24 members: 25 (1) An individual who has experience in the regulation 26 of industrial hemp production, appointed by the secretary of 27 agriculture. 28 (2) An individual who is a member of an agricultural 29 cooperative association as defined in section 502.102, 30 appointed by the secretary of agriculture. 31 (3) Two employees of the department appointed by the 32 secretary of agriculture. The employees shall be knowledgeable 33 regarding the production of agricultural crops. One employee 34 may be the state entomologist. One employee may be an employee 35 -4- LSB 2172SS (4) 87 da/nh 4/ 23

S.F. 329 knowledgeable about procedures and practices relating to the 1 import of agricultural seeds or inputs. 2 (4) One employee of the department of natural resources 3 appointed by the director of the department of natural 4 resources. The employee must be knowledgeable regarding 5 agricultural practices and environmental regulations. 6 (5) One employee of the department of public safety 7 appointed by the director of the department. The person must 8 be knowledgeable regarding federal and state drug enforcement 9 policies. 10 (6) One employee of a registrant appointed by the president 11 of the registrant’s regents institution. The employee must 12 be knowledgeable regarding plant sciences. Until such a 13 registrant is appointed, one employee of Iowa state university 14 appointed by the president of the university shall serve as a 15 member. The employee must be knowledgeable regarding plant 16 sciences. 17 b. The council shall also include four members of the 18 general assembly appointed to serve in an ex officio, nonvoting 19 capacity. The legislative members shall be selected, one 20 member each, by the majority leader of the senate, the 21 minority leader of the senate, the speaker of the house of 22 representatives, and the minority leader of the house of 23 representatives. 24 3. A public member shall be confirmed by the senate pursuant 25 to section 2.32. 26 4. A public member is eligible to receive compensation as 27 provided in section 7E.6 and shall be reimbursed for actual and 28 necessary expenses incurred in the discharge of the member’s 29 duties. The moneys used to pay expenses and compensation 30 shall be paid from moneys in the industrial hemp commodity 31 fund established in section 188.25. A legislative member is 32 eligible to receive a per diem and expenses as provided in 33 section 2.10. 34 5. a. A public member shall serve a three-year staggered 35 -5- LSB 2172SS (4) 87 da/nh 5/ 23

S.F. 329 term commencing and ending as provided in section 69.19. A 1 state employee member shall serve at the pleasure of the 2 appointing authority. 3 b. The voting members shall elect a chairperson and vice 4 chairperson annually from the voting membership. A majority of 5 the voting members constitutes a quorum. If the chairperson 6 and vice chairperson are unable to preside over the council, a 7 majority of the voting members present may elect a temporary 8 chairperson. 9 6. A vacancy on the council shall be filled in the same 10 manner as the original appointment. A member appointed to fill 11 a vacancy created other than by expiration of a term shall be 12 appointed for the remainder of the unexpired term. 13 7. The council shall be housed within the department and the 14 department, in cooperation with Iowa state university, shall 15 furnish the council with a meeting place and all articles, 16 supplies, and services necessary to enable the council to 17 perform its duties. Iowa state university or the office of 18 attorney general may provide any technical or legal assistance 19 requested by the council or department. 20 8. The appointments of the public members are subject to the 21 requirements of sections 69.16, 69.16A, and 69.19. A public 22 member is eligible for reappointment. The secretary may remove 23 a public member if the removal is based on the public member’s 24 misfeasance, malfeasance, or willful neglect of duty or other 25 just cause, after notice and hearing, unless the notice and 26 hearing is expressly waived by the public member in writing. 27 Sec. 10. NEW SECTION . 188.12 Industrial hemp council —— 28 powers and duties. 29 1. The council, in cooperation with the department and each 30 registrant, shall prepare and submit an annual report to the 31 governor and general assembly as required in section 188.3. 32 2. The council shall advise the department and each 33 registrant regarding all of the following: 34 a. All aspects relating to the administration of the 35 -6- LSB 2172SS (4) 87 da/nh 6/ 23

S.F. 329 industrial hemp commodity program established in section 188.13 1 and the industrial hemp production program established pursuant 2 to section 188.14. 3 b. The process of receiving, evaluating, and approving 4 applications for licenses under section 188.15, and the 5 selection of licensees to participate in the industrial hemp 6 production program. 7 c. Methods to acquire industrial hemp seed for certification 8 and sale in compliance with the provisions of sections 188.17, 9 188.21, and 188.22. 10 d. The establishment of sale prices for industrial hemp seed 11 offered under sections 188.21 and 188.22. 12 e. The establishment of fees assessed, imposed, and 13 collected pursuant to sections 188.23 and 188.24. 14 f. The management of the industrial hemp commodity fund 15 established in section 188.25. 16 3. The council shall advise the department regarding all of 17 the following: 18 a. The certification of industrial hemp seed pursuant to 19 section 188.17. 20 b. The confiscation and destruction of a Cannabis sativa 21 plant as required in section 188.32. 22 c. Disciplinary action taken against a licensee pursuant to 23 section 188.33. 24 d. The establishment of a range of civil penalties to be 25 imposed, assessed, and collected pursuant to section 188.34. 26 4. The council shall advise a registrant regarding all of 27 the following: 28 a. The selection of licensees participating in the 29 industrial hemp production program established pursuant to 30 section 188.14. 31 b. The terms and conditions of contracts entered into with 32 selected licensees under section 188.16. 33 5. The council shall not control policy decisions or direct 34 the administration or enforcement of this chapter. 35 -7- LSB 2172SS (4) 87 da/nh 7/ 23

S.F. 329 Sec. 11. NEW SECTION . 188.13 Industrial hemp commodity 1 program —— department and licensees. 2 1. The department shall establish and administer an 3 industrial hemp commodity program. The purpose of the 4 program is to determine the economic feasibility of producing 5 industrial hemp as a profitable commodity in this state and of 6 the effective handling, transporting, marketing, and processing 7 of the commodity in this state. 8 2. A person must be licensed pursuant to section 188.15 to 9 participate in the program. Under the program, a licensee may 10 produce all of the following: 11 a. Industrial hemp plants which shall to every extent 12 feasible be processed into industrial hemp products for 13 marketing in commercial channels. 14 b. Industrial hemp seeds which shall to every extent 15 feasible be processed into industrial hemp products. A 16 licensee may retain industrial hemp seeds capable of 17 germination to produce the next crop of industrial hemp only if 18 approved by the department after consultation with the council. 19 3. The department may establish standards for the labeling 20 or marketing of industrial hemp produced under this section. 21 The standards shall to every extent feasible be in accordance 22 with applicable standards in chapter 210. 23 4. A licensee must regularly test industrial hemp to 24 ensure that the industrial hemp does not exceed the maximum 25 concentration of delta-9 tetrahydrocannabinol as provided in 26 section 188.7. 27 5. A licensee must immediately report the loss of any 28 industrial hemp to the department. 29 6. A licensee shall retain industrial hemp or transfer 30 industrial hemp to another person as specified by rules adopted 31 by the department pursuant to section 188.4. The licensee 32 shall only transfer industrial hemp seed that is capable 33 of germination to the department, a registrant, or another 34 licensee as approved by the department or any other person 35 -8- LSB 2172SS (4) 87 da/nh 8/ 23

S.F. 329 authorized by law to receive the industrial hemp seed. 1 7. a. A licensee must maintain business records regarding 2 the production of the industrial hemp or the transfer of the 3 industrial hemp to another person. The department shall 4 inspect the business records during normal business hours. 5 b. The department may inspect a licensee’s facilities where 6 industrial hemp is produced, stored, handled, transported, 7 marketed, or processed. The department may inspect the 8 facilities and collect a sample of the crop for testing under 9 section 188.7 at least twice during the growing period. A 10 test of a collected sample of the crop must be conducted by a 11 licensee or by the department at least once within thirty days 12 prior to harvest. 13 c. The business operations of a licensee are considered a 14 closely regulated industry and a search warrant is not required 15 to conduct an inspection. 16 Sec. 12. NEW SECTION . 188.14 Industrial hemp production 17 program —— registrants and licensees. 18 1. A regents institution, or two or more regents 19 institutions acting jointly, may establish and administer 20 an industrial hemp production program. The purpose of the 21 program shall be to determine the feasibility of increasing 22 the production acreage and yield of industrial hemp as a 23 profitable crop and reducing the concentration of delta-9 24 tetrahydrocannabinol in the industrial hemp. 25 2. In order to administer a program, the regents institution 26 or regents institutions acting jointly must register with 27 the department according to requirements established by the 28 department. The registration shall include a research plan 29 that summarizes the quantifiable short-term and long-term goals 30 of the research. A copy of the registration shall also be 31 filed with the council, the governor, and the general assembly. 32 3. The department has all the same powers to regulate 33 a licensee under this program as the department does in 34 regulating a licensee under the industrial hemp commodity 35 -9- LSB 2172SS (4) 87 da/nh 9/ 23

S.F. 329 program pursuant to section 188.13. A licensee participating 1 in this program shall comply with the same requirements as 2 a licensee participating in the industrial hemp production 3 program under section 188.13, unless the department provides 4 otherwise in rules adopted pursuant to section 188.4. 5 4. Only a registrant, including a licensee acting under 6 the supervision of the registrant, may participate in the 7 program. Under the program, a registrant may produce any of 8 the following: 9 a. Industrial hemp plants which may be processed into 10 industrial hemp products. 11 b. Industrial hemp seeds which may be processed into 12 industrial hemp products. A registrant may retain industrial 13 hemp seeds capable of germination to produce the next crop of 14 industrial hemp or transfer the seeds to another person for 15 purposes of scientific research. The registrant shall retain 16 or transfer the seeds after consulting with the council. 17 5. A registrant may transfer industrial hemp to another 18 person only after the registrant consults with the council. 19 6. A registrant must regularly test the industrial hemp to 20 ensure that the industrial hemp does not exceed the maximum 21 concentration of delta-9 tetrahydrocannabinol as provided in 22 section 188.7. 23 7. A registrant must immediately report the loss of any 24 industrial hemp produced by the registrant to the department. 25 8. A registrant must maintain records regarding production 26 and transfer of the industrial hemp by the registrant. The 27 records shall to every extent practicable contain the same type 28 of information contained in records maintained by licensees 29 under section 188.13. 30 Sec. 13. NEW SECTION . 188.15 Industrial hemp commodity 31 license —— requirements. 32 1. The department shall establish and administer a process 33 to receive, evaluate, and approve applications for industrial 34 hemp commodity licenses by persons seeking to participate in 35 -10- LSB 2172SS (4) 87 da/nh 10/ 23

S.F. 329 the industrial hemp commodity program under section 188.13 or 1 the industrial hemp production program under section 188.14. 2 A license expires three years from the date of issuance. An 3 expired license may be renewed for three additional years. The 4 department may require that a licensee apply for an amended 5 or new license if information contained in the existing 6 application is no longer accurate or is incomplete. 7 2. An applicant shall not be issued a license unless the 8 applicant agrees to comply with all terms and conditions 9 relating to the department’s regulation of the licensee. 10 3. The department shall disapprove the application of a 11 person for good cause, which may include any of the following: 12 a. The conviction of a felony within the prior ten years or 13 any drug offense within the same period, regardless of whether 14 the conviction is in this state or another state. 15 b. The revocation of a license under section 188.33, or 16 the revocation of a license, permit, registration, or other 17 authorization to produce industrial hemp in any other state. 18 4. The department may do all of the following: 19 a. Limit the number of applications that it accepts or 20 limit the period or periods when applications will be received, 21 evaluated, or accepted each year. 22 b. Establish criteria required to participate in the 23 program which may be based on the qualifications or good 24 character of the applicant, the applicant’s proposed investment 25 in industrial hemp production, and the type and size of the 26 applicant’s existing agricultural operation. The department 27 may prepare and publish guidelines to assist persons in 28 determining eligibility requirements. 29 c. Require the issuance of different types of licenses or 30 require an applicant to obtain more than one license based 31 on criteria established by the department, including but not 32 limited to whether production is proposed on noncontiguous 33 parcels of land, the commercial production of industrial 34 hemp plants or industrial hemp seeds, or the applicant’s 35 -11- LSB 2172SS (4) 87 da/nh 11/ 23

S.F. 329 participation in the industrial hemp production program under 1 section 188.14. 2 d. Require that all or some licenses expire on the same 3 date. 4 e. Provide a different application and requirements for 5 the submission, evaluation, and approval or disapproval of an 6 application for a renewed license. 7 5. The department shall prepare and publish license 8 application forms. A completed application form submitted to 9 the department shall contain all of the following: 10 a. The applicant’s full name and residence address. 11 b. A legal description, global positioning system location, 12 and map of the site where the applicant proposes to produce the 13 industrial hemp. 14 c. Information required by the department to conduct a 15 background check of the applicant’s criminal history. 16 d. Any other information required by the department in order 17 to administer this chapter. 18 6. If a license is issued under this section, the department 19 shall deliver a copy of the approved application to the office 20 of the county sheriff in the county where the industrial hemp 21 is approved to be produced. 22 7. A licensee’s license shall be suspended or revoked as 23 provided in section 188.33. 24 Sec. 14. NEW SECTION . 188.16 Industrial hemp production 25 contract —— requirements. 26 A registrant may enter into an industrial hemp production 27 contract with a licensee to produce industrial hemp under the 28 supervision of the registrant. The registrant shall supervise 29 the production of the industrial hemp in cooperation with the 30 department. The contract shall provide for the regulation of 31 the licensee and the industrial hemp produced by the licensee 32 in the same manner as provided in section 188.13, unless 33 otherwise provided in rules adopted by the department in 34 consultation with the registrant under section 188.4. 35 -12- LSB 2172SS (4) 87 da/nh 12/ 23

S.F. 329 Sec. 15. NEW SECTION . 188.17 Industrial hemp seed capable 1 of germination —— certification. 2 1. The department shall certify industrial hemp seed 3 capable of germination for use by a licensee as part of 4 the industrial hemp commodity program under section 188.13 5 or a registrant as part of the industrial hemp production 6 program under section 188.14. The department may provide 7 different certification processes, including for industrial 8 hemp seed produced or obtained by a registrant or obtained 9 from a qualified and reputable industrial hemp seed source and 10 supplier. 11 2. The department’s certification protocols may be based on 12 standards promulgated by independent organizations including 13 but not limited to the association of seed certifying agencies 14 and verifications offered by qualified and reliable persons in 15 the business of providing such seed. 16 3. A licensee may import industrial hemp seed for 17 certification only if allowed by the department acting in 18 consultation with the council. A registrant may import 19 industrial seed for certification after consulting with the 20 council. 21 Sec. 16. NEW SECTION . 188.21 Industrial hemp seed capable 22 of germination —— sale by the department. 23 1. The department shall offer certified industrial hemp 24 seed for sale to licensees participating in the industrial 25 hemp commodity program established in section 188.13. The 26 department may offer certified industrial hemp seed for sale to 27 a registrant participating in the industrial hemp production 28 program established pursuant to section 188.14 after consulting 29 with the council. 30 2. Moneys collected by the department from the sale of 31 certified industrial hemp seed shall be deposited into the 32 industrial hemp commodity fund established in section 188.25. 33 Sec. 17. NEW SECTION . 188.22 Industrial hemp seed capable 34 of germination —— sale by a registrant. 35 -13- LSB 2172SS (4) 87 da/nh 13/ 23

S.F. 329 1. A registrant may offer certified industrial hemp seed 1 for sale to the department, or a licensee participating in the 2 industrial hemp production program established pursuant to 3 section 188.14, only after consulting with the council. 4 2. All moneys received by a registrant under subsection 1 5 shall be handled in the same manner as repayment receipts as 6 defined in section 8.2, and shall be used by the registrant 7 exclusively for the registrant’s administration of the 8 industrial hemp production program. 9 Sec. 18. NEW SECTION . 188.23 Fees assessed by department. 10 1. The department shall assess and collect all of the 11 following: 12 a. An application fee to be paid by a person seeking to 13 obtain an industrial hemp commodity license as provided in 14 section 188.15. 15 b. A license fee to be paid by a person being issued an 16 industrial hemp commodity license as provided in section 17 188.15. 18 c. An inspection fee to be paid by a licensee as part of 19 an inspection of the facilities where the industrial hemp is 20 produced as provided in section 188.13. 21 d. A laboratory fee to be paid by a licensee if the 22 department takes samples of industrial hemp for testing by a 23 laboratory as provided in section 188.7. 24 2. The fees described in subsection 1 are nonrefundable. 25 3. The total amount of fees collected pursuant to this 26 section shall not exceed the department’s estimate of the total 27 amount of revenues necessary to administer and enforce the 28 provisions of this chapter. Prior to the beginning of a fiscal 29 year, the department shall establish an estimated total amount 30 based on the expected costs to be incurred by the department 31 in administering and enforcing the provisions of this chapter 32 during the subsequent fiscal year. 33 4. The department may establish different rates for any 34 category of fees described in subsection 1 based on criteria 35 -14- LSB 2172SS (4) 87 da/nh 14/ 23

S.F. 329 determined relevant by the department, which may include the 1 type of license issued and the number of acres set aside for 2 industrial hemp production by a licensee. 3 5. All fees collected by the department under this section 4 shall be deposited into the industrial hemp commodity fund 5 established pursuant to section 188.25. 6 Sec. 19. NEW SECTION . 188.24 Fees assessed by registrants. 7 1. A registrant may assess and collect fees from licensees 8 participating in the registrant’s industrial hemp production 9 program as provided in section 188.14. The total amount 10 of fees paid shall not exceed the expenses incurred by the 11 registrant in selecting licensees to participate in the 12 program, conducting inspections of facilities where the 13 industrial hemp is produced, and taking samples of industrial 14 hemp to be tested by a laboratory as provided in section 188.7. 15 2. All moneys received by a registrant under this section 16 shall be handled in the same manner as repayment receipts as 17 defined in section 8.2, and shall be used by the registrant 18 exclusively for the registrant’s administration of the 19 industrial hemp production program. 20 Sec. 20. NEW SECTION . 188.25 Industrial hemp commodity fund 21 —— appropriation. 22 1. An industrial hemp commodity fund is established in 23 the state treasury under the management and control of the 24 department. 25 2. The fund shall include moneys collected by the department 26 from the sale of certified seed under section 188.21, fees 27 collected under section 188.23, and moneys appropriated by the 28 general assembly for deposit in the fund. The fund may include 29 other moneys available to and obtained or accepted by the 30 department, including moneys from public or private sources. 31 3. Moneys in the fund are appropriated to the department 32 and shall be used exclusively to carry out the responsibilities 33 conferred upon the department under this chapter as determined 34 and directed by the department, and shall not require further 35 -15- LSB 2172SS (4) 87 da/nh 15/ 23

S.F. 329 special authorization by the general assembly. 1 4. a. Notwithstanding section 12C.7, interest or earnings 2 on moneys in the fund shall be credited to the fund. 3 b. Notwithstanding section 8.33, moneys credited to the fund 4 that remain unexpended or unobligated at the end of a fiscal 5 year shall not revert to any other fund. 6 Sec. 21. NEW SECTION . 188.31 Cooperation with department 7 of public safety. 8 1. The department of agriculture and land stewardship and a 9 registrant shall cooperate with the department of public safety 10 in order to administer this chapter. 11 2. The department of public safety shall assist the 12 department of agriculture and land stewardship in conducting 13 background checks of applicants applying for licenses under 14 section 188.15. 15 3. The department of agriculture and land stewardship and 16 a registrant shall upon request or as part of routine process 17 inform the department of public safety regarding the industrial 18 hemp commodity program under section 188.13 and the industrial 19 hemp production program under section 188.14, including all of 20 the following: 21 a. The status of the production and the results of any test 22 of a crop produced by a licensee under this chapter. 23 b. The date and time of an inspection of a licensee’s 24 facilities or records. 25 c. The confiscation and destruction of a crop under section 26 188.32. 27 Sec. 22. NEW SECTION . 188.32 Confiscation and destruction. 28 1. A Cannabis sativa plant exceeding the maximum 29 concentration of delta-9 tetrahydrocannabinol as provided 30 in section 188.7 and that is produced under the industrial 31 hemp commodity program established in section 188.13 shall be 32 confiscated by the department. 33 2. A Cannabis sativa plant exceeding the maximum 34 concentration of delta-9 tetrahydrocannabinol as provided in 35 -16- LSB 2172SS (4) 87 da/nh 16/ 23

S.F. 329 section 188.7 and that is produced under the industrial hemp 1 production program established pursuant to section 188.14 2 shall be confiscated by the registrant in cooperation with the 3 department. 4 3. The department or registrant may request assistance from 5 the department of public safety or a local law enforcement 6 authority necessary to carry out this section. The department 7 or registrant upon request shall deliver any sample of the 8 plant to the department of public safety or any local law 9 enforcement authority. 10 Sec. 23. NEW SECTION . 188.33 Disciplinary action. 11 1. The department may suspend or revoke the license obtained 12 under section 188.15 by a person who does any of the following: 13 a. Provides false or misleading information on an 14 application for an industrial hemp commodity license as 15 provided in section 188.15. 16 b. Provides false or misleading information to the 17 department as part of the industrial hemp commodity program 18 under section 188.13 or to a registrant or the department as 19 part of the industrial hemp production program under section 20 188.14. 21 c. Fails to comply with or violates any provision of this 22 chapter, including a rule adopted by the department under 23 section 188.4, a condition of an application for the issuance 24 of a license under section 188.15, or a condition of a contract 25 entered into with a registrant under section 188.16. 26 d. Fails to comply with an order issued by the department or 27 a registrant under this chapter. 28 2. The suspension or revocation of a license is in addition 29 to the confiscation and destruction of a Cannabis sativa plant 30 under section 188.32, a civil penalty under section 188.34, or 31 any other civil or criminal penalty that may be imposed on the 32 person under state or federal law. 33 Sec. 24. NEW SECTION . 188.34 Civil penalties. 34 1. A person who violates a provision of this chapter is 35 -17- LSB 2172SS (4) 87 da/nh 17/ 23

S.F. 329 subject to a civil penalty of not less than five hundred 1 dollars and not more than two thousand five hundred dollars. 2 The department may assess and collect the civil penalty. Each 3 day that a continuing violation occurs shall be considered a 4 separate offense. 5 2. The department shall establish a schedule of civil 6 penalties for violations of this chapter. 7 3. A civil penalty shall not be assessed against a 8 licensee for a violation that results in the confiscation and 9 destruction of the licensee’s crop under section 188.32, unless 10 the composite test result is greater than two percent delta-9 11 tetrahydrocannabinol as determined in section 188.7. 12 4. All civil penalties collected under this section shall be 13 deposited into the general fund of the state. 14 Sec. 25. NEW SECTION . 188.35 Criminal penalties. 15 A person who knowingly or intentionally produces the 16 Cannabis sativa plant and who is not the department, a 17 registrant, or a licensee participating in the industrial 18 hemp commodity program established in section 188.13 or the 19 industrial hemp production program established pursuant to 20 section 188.14 is subject to the provisions in chapters 124 and 21 453B. 22 Sec. 26. NEW SECTION . 262.80 Industrial hemp production 23 program. 24 The board of regents may consult with Iowa state university 25 of science and technology, the university of Iowa, and the 26 university of northern Iowa to provide for the participation 27 of those universities in administering an industrial hemp 28 production program in cooperation with the department of 29 agriculture and land stewardship as provided in chapter 188. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 OVERVIEW. This bill creates the “Iowa Industrial Hemp Act” 34 authorizing the production and marketing of industrial hemp 35 -18- LSB 2172SS (4) 87 da/nh 18/ 23

S.F. 329 as part of an industrial hemp commodity program administered 1 by the department of agriculture and land stewardship and an 2 industrial hemp production program administered by one or 3 more regents institutions (Iowa state university of science 4 and technology, the university of Iowa, or the university of 5 northern Iowa) acting in cooperation with the department. 6 According to the bill, industrial hemp refers to the plant 7 classified as Cannabis sativa (plant) having a concentration of 8 delta-9 tetrahydrocannabinol (THC) not to exceed three-tenths 9 of 1 percent according to tests conducted by a laboratory 10 approved by the department. The bill also provides that the 11 two programs are established for the exclusive purpose of 12 growing, cultivating, and marketing industrial hemp in a manner 13 that complies with the programs and projects described in 7 14 U.S.C. §5940. 15 FEDERAL LAW. The purpose of the programs is to determine 16 the commercial viability of industrial hemp as described in 17 federal legislation, section 7606 of the Agricultural Act of 18 2014 (7 U.S.C. §5940), which legalizes the possession and 19 use of industrial hemp if regulated by a state department of 20 agriculture administering a pilot program. The federal law 21 also authorizes an institution of higher education (registrant) 22 to produce industrial hemp in order to advance academic 23 research. The federal law does not authorize a federal agency 24 to implement or oversee the program. However, it also does 25 not expressly supersede other federal laws that restrict items 26 designated as controlled substances including the federal 27 “Controlled Substances Import and Export Act” (21 U.S.C. §951 28 et seq.), requiring that cannabis seeds capable of germination 29 only be imported into a state by persons registered with the 30 drug enforcement administration of the United States department 31 of justice (DEA). 32 IOWA’S UNIFORM CONTROLLED SUBSTANCES ACT. A person who 33 produces industrial hemp under one of the two programs is 34 exempted from state criminal law included in the “Uniform 35 -19- LSB 2172SS (4) 87 da/nh 19/ 23

S.F. 329 Controlled Substances Act” (Code chapter 124) which prohibits 1 persons from knowingly or intentionally possessing a controlled 2 substance (Code section 124.401) including the plant referred 3 to as marijuana included as a schedule I controlled substance 4 (Code section 124.204). “Marijuana” includes all parts of 5 the plant without regard to THC concentration (Code section 6 124.101). 7 GENERAL —— PARTICIPATION IN A PROGRAM REQUIRED. A person 8 is prohibited from producing, handling, transporting, 9 marketing, or processing industrial hemp in this state unless 10 the industrial hemp has been produced under one of the two 11 programs. There is no prohibition for marketing an industrial 12 hemp product. 13 GENERAL —— TESTING. In order to qualify as industrial hemp, 14 the maximum concentration of delta-9 tetrahydrocannabinol 15 present in the plant cannot exceed three-tenths of 1 percent 16 as analyzed on a dry weight basis. During production (from 17 planting to harvest), a crop must be tested by a qualified 18 public or private laboratory approved by the department. A 19 licensee must test the crop as required by the department or 20 registrant. The department or registrant may test a crop under 21 its program. In any case, a test must be conducted 30 days 22 prior to harvest. 23 ADMINISTRATION —— COUNCIL, DEPARTMENT, AND REGISTRANTS. 24 An industrial hemp council is created comprised of private 25 and public members, including employees of the department, 26 the department of natural resources, the department of public 27 safety, and a regents institution registrant (or Iowa state 28 university of science and technology until a university is 29 registered). The council also includes four legislative 30 members. The council is to advise the department and the 31 registrant regarding the administration and enforcement of the 32 bill, including the two programs, the issuance of licenses, 33 and the selection of program participants, the importation 34 and certification of seed, the generation of revenue from the 35 -20- LSB 2172SS (4) 87 da/nh 20/ 23