HF 733 (LSB 2748HV (2) 88)

HOUSE FILE 733

BY  COMMITTEE ON AGRICULTURE

(SUCCESSOR TO HSB 241)

A BILL FOR

An Act relating to hemp, including the regulation of hemp, providing for enforcement and the confiscation and destruction or disposal of certain property, providing for fees, making appropriations, including penalties, and providing implementation and effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
IOWA HEMP ACT

    Section 1.  NEW SECTION.  204.1  Short title.
   This chapter shall be known as the “Iowa Hemp Act”.
    Sec. 2.  NEW SECTION.  204.2  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Controlled substance” means the same as defined in section 124.101.
   2.  “Conviction” means a conviction for an indictable offense and includes a guilty plea, deferred judgment from the time of entry of the deferred judgment until the time the defendant is discharged by the court without entry of judgment, or other finding of guilt by a court of competent jurisdiction.
   3.  “Crop site” or “site” means a single contiguous parcel of agricultural land suitable for the planting, growing, or harvesting of hemp, if the parcel does not exceed forty acres.
   4.  “Department” means the department of agriculture and land stewardship.
   5.  “Federal hemp law” means that part of Tit. X of the Agriculture Improvement Act of 2018, Pub. L. No. 115-334, that authorizes hemp production according to a state plan approved by the United States department of agriculture, as provided in §10113 of that Act, amending the Agricultural Marketing Act of 1946, 7 U.S.C. §1621 et seq., including by adding §§297A through 297E. 
   6.  “Hemp” means the plant cannabis sativa L. and any part of that plant, including the seeds thereof, and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than three-tenths of one percent on a dry weight basis. 
   7.  “Hemp license” or “license” means a hemp license issued pursuant to section 204.4.
   8.  a.  “Hemp product” means an item derived from or made by processing hemp or parts of hemp.
   b.  “Hemp product” includes but is not limited to any item manufactured from hemp, including but not limited to cloth, cordage, fiber, food, fuel, paint, paper, particle board, plastic, hemp seed, seed meal, or seed oil.
   c.  “Hemp product” does not include hemp seed that is capable of germination.
   9.  “Licensee” means a person who obtains a hemp license from the department under this chapter.
   10.  “Local law enforcement agency” means an office of county sheriff or a municipal police department.
    Sec. 3.  NEW SECTION.  204.3  State plan —— implementing rules.
   1.  The department shall prepare a state plan to be submitted to the United States secretary of agriculture under the federal hemp law. The department of public safety shall assist the department in preparing the plan. 
   2.  Upon approval of the state plan, the department shall assume primary regulatory authority over the production of hemp in this state as provided in this chapter. However, nothing in this chapter affects the powers and duties of the department of public safety or local law enforcement agencies from detecting or preventing criminal activity. The department of public safety shall be the chief criminal enforcement agency under this chapter.
   3.  The department, with assistance from the department of public safety, may prepare any number of amended state plans or any number of amendments to an existing state plan to be submitted for approval by the United States secretary of agriculture. 
   4.  a.  The department shall prepare the state plan, any amended state plan, or amendment to an approved state plan, by adopting rules pursuant to chapter 17A. 
   b.  In assisting the department of agriculture and land stewardship, the department of public safety shall adopt rules as required to administer and enforce the criminal provisions of this chapter and chapter 124 which shall be included as part of the state plan to the extent required by the federal hemp law. 
   c.  A department described in this subsection may adopt the rules on an emergency basis as provided in section 17A.4, subsection 3, and section 17A.5, subsection 2, and the rules shall be effective immediately upon filing unless a later date is specified in the rules.
    Sec. 4.  NEW SECTION.  204.4  Hemp license —— requirements.
   1.  The department shall establish and administer a process to receive, evaluate, and approve or disapprove applications for a hemp license.
   2.  The department shall prepare and publish one or more hemp license application forms in cooperation with the department of public safety. A completed application form submitted to the department shall contain all of the following:
   a.  The applicant’s full name and residence address.
   b.  A legal description and map of each crop site where the applicant proposes to produce the hemp including its global positioning system location.
   c.  The number of crop acres to be used for hemp production.
   d.  The name of the hemp variety.
   e.  Any other information required in order to administer and enforce the provisions of this chapter.
   f.  The results of a national criminal history record check of the applicant. The national criminal history record check shall be conducted by the department of public safety. The applicant shall provide the applicant’s fingerprints to the department of public safety for analysis through the state criminal history repository to the federal bureau of investigation. The applicant shall pay the department of public safety the actual costs of conducting the national criminal history check, if any. The department of public safety shall transmit the results of the national criminal history check to the department of agriculture and land stewardship which will be part of the completed application.
   g.  As a condition for issuance of a hemp license, the licensee consents to the department of agriculture and land stewardship, the department of public safety, or a local law enforcement agency entering upon a crop site at any time. 
   3.  The department may do all of the following:
   a.  Require that all or some licenses expire on the same date.
   b.  Provide a different application form and requirements relating to the submission, evaluation, and approval or disapproval of an application for a renewed hemp license consistent with federal law. 
   4.  An applicant shall not be issued a hemp license unless the applicant agrees to comply with all terms and conditions relating to the regulation of a licensee as provided in this chapter. 
   5.  A person may hold any number of licenses at the same time. However, the person shall not hold a legal or equitable interest in a licensed crop site, if the total number of acres of all licensed crop sites in which the person holds all such interests equals more than forty acres. 
   6.  An initial hemp license expires one year from the date of issuance and may be issued on a renewal basis annually. The department may require that a licensee apply for an amended or new initial license if information contained in the existing application is no longer accurate or is incomplete.
   7.  The department and the department of public safety shall cooperate to develop procedures for the sharing of information regarding applicants, including information required to be completed on application forms. Upon request, the department or the department of public safety shall provide information regarding an applicant to a department of agriculture or law enforcement agency in another state. 
   8.  Information received on an application form shall be maintained by the department for not less than three years.
   9.  The department shall disapprove the application of a person for good cause, which shall include, but is not limited to, any of the following:
   a.  A conviction for committing a criminal offense punishable as a felony within the prior ten years, or a conviction for committing a criminal offense in another state punishable as a felony if so classified by that state during the same period.
   b.  A conviction for committing a criminal offense involving a controlled substance within the prior ten years, or a conviction for committing a criminal offense involving a controlled substance in another state during the same period. 
   c.  The revocation of a hemp license under section 204.11, or the revocation of a license, permit, registration, or other authorization to produce hemp in any other state.
   10.  A hemp license shall be suspended or revoked as provided in section 204.11.
    Sec. 5.  NEW SECTION.  204.5  Hemp fees.
   1.  The department shall impose, assess, and collect the following hemp fees:
   a.  A license fee which shall be paid by a person being issued a hemp license as provided in section 204.4.
   b.  An inspection fee which shall be paid by a licensee for an inspection of a licensee’s crop site as provided in section 204.8.
   2.  a.  For each hemp license, the license fee shall be imposed on an interim basis until June 30, 2022. The amount of the license fee shall not be more than the following:
   (1)  Five hundred dollars plus five dollars per acre, for each site that is five acres or less.
   (2)  Seven hundred and fifty dollars, plus five dollars per acre, for each site that is more than five acres but less than ten acres.
   (3)  One thousand dollars plus five dollars per acre, for each site is more than ten acres.
   b.  For an annual inspection, an inspection fee shall be imposed on an interim basis until June 30, 2022. The amount of the inspection fee shall not be more than one thousand dollars. The department, during the interim period, may charge an additional inspection fee of not more than one thousand dollars for each inspection of a licensee’s crop site, if the inspection is conducted upon the request of the licensee.
   c.  This subsection is repealed on July 1, 2022.
   3.  a.  The department shall adopt rules to establish hemp fees for the issuance of a hemp license pursuant to section 204.4.
   b.  The department, in cooperation with the department of public safety, shall adopt rules to establish hemp fees for the annual inspection of a licensee pursuant to section 204.8. The rules may provide that the department charge an additional inspection fee for each inspection of a licensee’s crop site, if the inspection is conducted upon the request of the licensee.
   c.  The total amount of hemp fees collected by the department pursuant to this section shall not be more than the department’s estimate of the total amount of revenues necessary to administer and enforce the provisions of this chapter based on the expected revenue collected from the hemp fees and the costs to be incurred by the department, and the department of public safety, in administering and enforcing the provisions of this chapter for the succeeding twelve-month period. 
   d.  The department may establish different rates for any category of hemp fees based on criteria determined relevant by the department, which may include the number of acres of the crop site and the type of hemp license issued.
   e.  (1)  The rules shall first take effect immediately after the repeal of subsection 2.
   (2)  This paragraph “e” is repealed immediately after the rules described in subparagraph (1) take effect.
   4.  The license fee and any annual inspection fee shall be collected by the department at the time the hemp license application is submitted.
   5.  Any hemp fee collected by the department under this section shall be deposited in the hemp fund established pursuant to section 204.6.
   6.  The department, in consultation with the department of public safety, may refund all or any part of a hemp fee collected under this section.
    Sec. 6.  NEW SECTION.  204.6  Hemp fund.
   1.  A hemp fund is established in the state treasury under the management and control of the department.
   2.  The hemp fund shall include moneys collected by the department from hemp fees imposed and assessed under section 204.5 and moneys appropriated by the general assembly for deposit in the hemp fund. 
   3.  Moneys in the hemp fund are appropriated to the department and shall be used exclusively to carry out the responsibilities conferred upon the department under this chapter as determined and directed by the department, and shall not require further special authorization by the general assembly.
   4.  The department shall transfer moneys from the hemp fund to the department of public safety in an amount required to reimburse that department for costs of conducting annual inspections and official tests as provided in section 204.8. The departments shall cooperate to establish a system for scheduled transfers. Moneys received by the department of public safety under this section shall be treated as repayment receipts as defined in section 8.2.
   5.  a.  Notwithstanding section 12C.7, interest or earnings on moneys in the hemp fund shall be credited to the hemp fund.
   b.  Notwithstanding section 8.33, moneys credited to the hemp fund that remain unexpended or unobligated at the end of a fiscal year shall not revert to any other fund.
    Sec. 7.  NEW SECTION.  204.7  Regulations.
   1.  a.  The department, in cooperation with the department of public safety, may adopt rules regulating the production, handling, possession, use, transporting, or marketing of hemp produced on a licensee’s crop site. The rules may provide different requirements that apply to nonseed parts of hemp and hemp seed, including the certification of hemp seed.
   b.  The department of public safety, in cooperation with the department of agriculture and land stewardship, shall adopt rules regulating the business operations of a licensee, which may require a licensee to maintain business records.
   c.  The department of agriculture and land stewardship is not required to amend the state plan as provided in section 204.3, when the department of agriculture and land stewardship or the department of public safety adopts rules under this chapter, unless the department of agriculture and land stewardship is required to do so by the federal hemp law.
   2.  A person is not subject to a criminal offense under this Code for producing, possessing, using, handling, transporting, or marketing marijuana, if all of the following apply:
   a.  The marijuana is produced at a licensee’s crop site.
   b.  The department of public safety is allowed to access the licensee’s crop site as part of an inspection, including by obtaining a sample of plants to conduct an official test as provided in sections 204.8 and 204.9.
   c.  No part of a crop produced at the licensee’s crop site is harvested prior to the licensee being notified by the department of public safety that the crop qualifies as hemp pursuant to the results of the official test, unless the department of public safety otherwise consents to the harvest, as provided in section 204.8.
   d.  The official test result indicates that the crop produced on the licensee’s crop site contains a maximum concentration of delta-9 tetrahydrocannabinol not in excess of three-tenths of one percent on a dry weight basis.
   3.  Hemp is not a controlled substance for which a person is subject to a criminal offense under this Code, if the hemp is or was produced in another state in accordance with federal hemp law, including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq. 
   4.  Nothing in this chapter prohibits a person from producing, possessing, using, handling, transporting, marketing, or processing a hemp product.
   5.  Nothing in this chapter shall be construed to authorize a person to recommend, possess, use, dispense, deliver, transport, or administer medical cannabidiol as defined in section 124E.2.
    Sec. 8.  NEW SECTION.  204.8  Annual inspection and official test.
   1.  The department of public safety shall conduct an annual inspection of a licensee’s crop site to determine if the crop produced at the site qualifies as hemp under this section. The annual inspection shall include obtaining a sample of plants that are part of the crop and providing for an official test of that sample. The inspection shall be conducted as provided in section 204.9.
   2.  A licensee shall deliver a notice to the department stating the expected harvest date for the crop produced at the licensee’s crop site. The department must receive the notice at least thirty days prior to the expected harvest date. The department shall transmit a copy of the notice to the department of public safety, unless the department of agriculture and land stewardship requires the applicant to submit the notice to the department of public safety instead.
   3.  The department of public safety shall conduct the annual inspection of the site within thirty days prior to the actual harvest date. If the department of agriculture and land stewardship elects not to participate in the annual inspection of the licensee’s crop site, the department of public safety shall provide the department of agriculture and land stewardship with a summary of its findings, including the results of the official test. The licensee shall not harvest any portion of a crop produced at the site unless the department of public safety notifies the licensee that the crop qualifies as hemp pursuant to the results of an official test or that department otherwise consents to the harvest. 
   5.  The official test shall be a composite test of the plants obtained by the department of public safety from the licensee’s crop site during the annual inspection and shall be conducted by the laboratory designated by that department, in consultation with the department of agriculture and land stewardship. The sample must have a maximum concentration of delta-9 tetrahydrocannabinol that does not exceed three-tenths of one percent on a dry weight basis. The laboratory’s official test results indicating that a sample exceeds that percentage shall be conclusive evidence that the crop produced at a site is a controlled substance.
    Sec. 9.  NEW SECTION.  204.9  Right of access.
   1.  The department, including an authorized inspector, employee, or agent of the department, may enter onto a crop site during reasonable hours to determine whether a licensee is acting in compliance with the requirements under this chapter. The department may also obtain an administrative search warrant under section 808.14 to enter into any structure, other than a dwelling, if the structure is located on or in close proximity to the crop site, and the use of such structure is directly related to the planting, growing, or harvesting of hemp, including but not limited to a barn, machine shed, greenhouse, or storage crib.
   2.  The department of public safety or a local law enforcement agency may conduct an inspection of a licensee’s crop site in order to determine that the licensee is complying with the criminal provisions of this chapter and chapter 124. The department of public safety or a local law enforcement agency may also enter into any structure if the use of such structure is related to the licensee’s business operations. However, a subpoena or a warrant is required for inspection of private records, a private business office, or attached living quarters, consistent with the laws of this state and the United States, including Article I, section 8, of the Constitution of the State of Iowa, or the fourth amendment to the Constitution of the United States.
   3.  The department of public safety may obtain a sample of plants that are part of the crop and provide for an official test of that sample in the same manner as provided in section 204.8 even though the department of public safety is not conducting an annual inspection. The department of agriculture and land stewardship shall not assess or collect a fee, other than a hemp fee as provided in section 204.5.
   4.  All persons who enter onto the property of the licensee under this section shall present appropriate identification to the licensee or the licensee’s representative if the licensee or representative is available. However, this subsection does not apply to undercover criminal investigations conducted by the department of public safety or a local law enforcement agency.
   5.  If the department of agriculture and land stewardship elects not to accompany the department of public safety when accessing a crop site under this section, the department of public safety shall notify the department of agriculture and land stewardship of its findings, including the results of an official test conducted pursuant of section 204.8. The department of public safety may require that any findings made by the department that may be the basis for a criminal investigation or prosecution be treated by the department of agriculture and land stewardship as a confidential record under chapter 22.
   6.  A person shall not prevent the department of agriculture and land stewardship, the department of public safety, or a local law enforcement agency from administering and enforcing the provisions of this section by any means, including but not limited to any act, including a refusal to allow entry, misrepresentation, omission, or concealment of facts.
   7.  A licensee shall not harvest any portion of a crop produced at the crop site if the department of agriculture and land stewardship, the department of public safety, or a local law enforcement agency has been prevented from accessing the site under this section.
    Sec. 10.  NEW SECTION.  204.10  Order of disposal.
   1.  If a crop that is produced at a licensee’s crop site is a controlled substance according to an official test conducted pursuant to section 204.8, the department of public safety, in consultation with the department of agriculture and land stewardship, shall order the disposal of the crop by destruction at the site or if necessary require the crop to be removed to another location for destruction.
   2.  The department of public safety may request assistance from a local law enforcement agency necessary to carry out the provisions of this section. The department upon request shall deliver any sample of the crop to the local law enforcement agency.
   3.  The licensee shall pay the department of public safety for all actual and reasonable costs of the destruction. If the department of public safety assumes any amount of the costs, it may charge that amount to the licensee. If the licensee fails to reimburse any of that amount to the department of public safety, the department may report the amount to the county treasurer. The amount shall be placed upon the tax books, and collected with interest and penalties after due, in the same manner as other unpaid property taxes. The county shall reimburse the department of public safety within thirty days from the collection of the property taxes.
   4.  To the extent allowed by applicable federal law, the department of public safety may provide for the disposal of the mature stalks of the crop confiscated by the department for the licensee’s on-farm use and at the licensee’s expense. 
    Sec. 11.  NEW SECTION.  204.11  Disciplinary action.
   1.  The department may suspend or revoke a hemp license obtained under section 204.4 by a person who does any of the following:
   a.  Provides false or misleading information to the department under this chapter, including by submitting a false application.
   b.  Fails to comply with or violates any provision of this chapter, including a rule adopted by the department, the department of public safety, or a condition of an application for the issuance of a hemp license under section 204.4. 
   c.  Fails to comply with an order issued by the department under this chapter.
   2.  The suspension or revocation of a hemp license is in addition to an order of disposal under section 204.10; the imposition of a civil penalty under section 204.12, subject to the provisions of section 204.14; or the imposition of any other civil or criminal penalty authorized under state law.
    Sec. 12.  NEW SECTION.  204.12  Civil penalties.
   1.  A person who violates a provision of this chapter is subject to a civil penalty of not less than five hundred dollars and not more than two thousand five hundred dollars. The department shall assess and collect the civil penalty. Each day that a continuing violation occurs may be considered a separate offense. 
   2.  Notwithstanding subsection 1, a civil penalty shall not be assessed against a licensee for a violation that results in the disposal of the licensee’s crop under section 204.10, if the department of public safety obtains a sample of the crop produced on the licensee’s crop site and the official test results of the sample conducted pursuant to section 204.8 indicates a maximum concentration of delta-9 tetrahydrocannabinol not in excess of two percent on a dry weight basis.
   3.  All civil penalties collected under this section shall be deposited into the general fund of the state.
    Sec. 13.  NEW SECTION.  204.13  Injunctive relief.
   The department, in cooperation with the department of public safety, or the attorney general acting on behalf of the department may apply to the district court for injunctive relief in order to restrain a person from acting in violation of this chapter. In order to obtain injunctive relief, the department shall not be required to post a bond or prove the absence of an adequate remedy at law unless the court for good cause otherwise orders. The court may order any form of prohibitory or mandatory relief that is appropriate under principles of equity, including but not limited to issuing a temporary or permanent restraining order.
    Sec. 14.  NEW SECTION.  204.14  Negligent violations.
   1.  a.  The department may find that a licensee has negligently violated a provision of this chapter by doing any of the following:
   (1)  Completing an application for a license without providing a legal description of the crop site pursuant to section 204.4.
   (2)  Failing to renew a hemp license or obtain a license for a new crop site pursuant to section 204.4. 
   (3)  Using seed that could produce a crop on the licensee’s crop site with a maximum concentration of delta-9 tetrahydrocannabinol in excess of three-tenths of one percent according to the results of an official test conducted of a sample obtained from the crop site pursuant to section 204.8.
   b.  If the department determines a licensee violated this chapter with a culpable mental state greater than negligence, the department shall immediately report the licensee’s violation to the department of public safety, the county attorney, and the attorney general, who shall take action as the facts and circumstances warrant. The department shall also report the licensee to the United States attorney general to the extent required by the federal hemp law. 
   2.  A person who materially falsifies any information contained in an application under section 204.4 shall be ineligible to produce hemp under this chapter.
   3.  A licensee convicted of a felony relating to a controlled substance before, on, or after the implementation date of this chapter shall be ineligible to produce hemp under this chapter for a ten-year period following the date of conviction.
    Sec. 15.  NEW SECTION.  204.15  Statutory construction. 
   1.  Nothing in this chapter shall be construed or applied to be less stringent than required under the federal hemp law.
   2.  Nothing in this chapter shall be construed or applied to be in conflict with any of the following:
   a.  Applicable federal law, including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. ch. 9 and related regulations. 
   b.  Other laws of this state, including any administrative rules, relating to product development, product manufacturing, consumer safety, or public health so long as the state law is compatible with applicable federal law.
   c.  Local law relating to product development, product manufacturing, consumer safety, or public health so long as the local law is consistent with federal and state law.
    Sec. 16.  CONTINGENT IMPLEMENTATION.
   1.  Except as provided in subsection 2, the provisions of chapter 204, as enacted in this division of this Act, shall only be implemented, including administered and enforced, by the department of agriculture and land stewardship, the department of public safety, and local law enforcement agencies, beginning on the publication date of the edition of the Iowa administrative bulletin that includes a statement by the secretary of agriculture of the department of agriculture and land stewardship certifying that the United States department of agriculture has approved a state plan as described in section 204.3, as enacted in this division of this Act. The department shall forward a copy of the statement to the Iowa Code editor prior to publication.
   2.  Section 204.3 and this subsection shall be implemented on the effective date of this Act.
DIVISION II
COORDINATING AMENDMENTS

    Sec. 17.  Section 29B.107A, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  Notwithstanding subsection 2, “controlled substance” does not include hemp or a hemp product excluded from schedule I of controlled substances as provided in section 124.204, subsection 7. 
    Sec. 18.  Section 80.9, subsection 7, Code 2019, is amended to read as follows:
   7.  a.  The department shall assist persons who are responsible for the care of private and public land in identifying growing marijuana plants when the plants are reported to the department. The department shall also provide education to the persons regarding methods of eradicating the plants.
   b.  Notwithstanding paragraph “a”, the department is not required to provide such assistance if the marijuana plants are hemp produced in accordance with the provisions of chapter 204.
   c.  The department shall adopt rules necessary to carry out this subsection.
    Sec. 19.  Section 124.204, subsection 4, paragraphs m and u, Code 2019, are amended to read as follows:
   m.  Marijuana, except as otherwise provided by rules of the board for medicinal purposes in subsection 7.
   u.  (1)  Tetrahydrocannabinols, except as otherwise provided by rules of the board for medicinal purposes, meaning tetrahydrocannabinols naturally contained in a plant of the genus Cannabis (Cannabis plant) as well as synthetic equivalents of the substances contained in the Cannabis plant, or in the resinous extractives of such plant, and synthetic substances, derivatives, and their isomers with similar chemical structure and pharmacological activity to those substances contained in the plant, such as the following:
   (1)  (a)  1 cis or trans tetrahydrocannabinol, and their optical isomers.
   (2)  (b)  6 cis or trans tetrahydrocannabinol, and their optical isomers.
   (3)  (c)  3,4 cis or trans tetrahydrocannabinol, and their optical isomers. (Since nomenclature of these substances is not internationally standardized, compounds of these structures, regardless of numerical designation of atomic positions covered.)
   (2)  Subparagraph (1) does not include tetrahydrocannabinol to the extent excluded in subsection 7.
    Sec. 20.  Section 124.204, subsection 7, Code 2019, is amended to read as follows:
   7.  Exclusions.  This section does not apply to marijuana, any of the following: 
   a.  Marijuana, tetrahydrocannabinols, or chemical derivatives of tetrahydrocannabinol, when utilized for medicinal purposes pursuant to rules of the board.
   b.  (1)  Marijuana that is hemp as defined in section 204.2, including any tetrahydrocannabinols, or chemical derivatives of tetrahydrocannabinol contained in hemp that is or was produced in this state or another state in accordance with the provisions of chapter 204.
   (2)  A hemp product as provided in chapter 204.
    Sec. 21.  Section 124.401, Code 2019, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  Notwithstanding any other provision in this section to the contrary, a person may knowingly or intentionally produce, possess, use, manufacture, deliver, or transport any of the following:
   a.  Hemp that is or was produced at a crop site by a person operating under a hemp license issued by the department of agriculture and land stewardship in accordance with the provisions of chapter 204.
   b.  Hemp that is or was produced in another state in accordance with the federal hemp law and other applicable law, including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq. 
   c.  A hemp product as provided in chapter 204. 
    Sec. 22.  Section 124.410, Code 2019, is amended to read as follows:
   124.410  Accommodation offense.
   1.  In a prosecution for unlawful delivery or possession with intent to deliver marijuana, if the prosecution proves that the defendant violated the provisions of section 124.401, subsection 1, by proving that the defendant delivered or possessed with intent to deliver one-half ounce or less of marijuana which was not offered for sale, the defendant is guilty of an accommodation offense and rather than being sentenced as if convicted for a violation of section 124.401, subsection 1, paragraph “d”, shall be sentenced as if convicted of a violation of section 124.401, subsection 5. An accommodation offense may be proved as an included offense under a charge of delivering or possessing with the intent to deliver marijuana in violation of section 124.401, subsection 1. This section does not apply to hashish, hashish oil, or other derivatives of marijuana as defined in section 124.101, subsection 20.
   2.  Subsection 1 does not apply to hemp or a hemp product excluded from schedule I of controlled substances as provided in section 124.204, subsection 7.
    Sec. 23.  Section 124.411, subsection 3, Code 2019, is amended to read as follows:
   3.  This section does not apply to offenses any of the following: 
   a.  An offense under section 124.401, subsection 5.
   b.  Hemp or a hemp product excluded from schedule I of controlled substances as provided in section 124.204, subsection 7.
    Sec. 24.  Section 124.506A, subsection 1, Code 2019, is amended to read as follows:
   1.  a.  Notwithstanding the provisions of section 124.506, if more than ten pounds of marijuana or more than one pound of any other controlled substance is seized as a result of a violation of this chapter, the law enforcement agency responsible for retaining the seized controlled substance may destroy the seized controlled substance if the law enforcement agency retains at least ten pounds of the marijuana seized or at least one pound of any other controlled substance seized for evidence purposes.
   b.  Subsection 1 does not apply to hemp or a hemp product excluded from schedule I of controlled substances as provided in section 124.204, subsection 7.
    Sec. 25.  Section 189.1, subsection 1, Code 2019, is amended to read as follows:
   1.  “Article” means food, commercial feed, agricultural seed, commercial fertilizer, drug, pesticide, hemp, and paint, in the sense in which they are defined in the various provisions of this subtitle.
    Sec. 26.  NEW SECTION.  317.1D  Hemp production.
   This chapter does not apply to a plant or any part of the plant qualifying as hemp, if the hemp is produced on a crop site regulated under chapter 204. 
    Sec. 27.  NEW SECTION.  453B.17  Exemption —— hemp and hemp products.
   This chapter does not apply to any of the following:
   1.  Hemp that is or was produced at a crop site by a person operating under a hemp license issued by the department of agriculture and land stewardship in accordance with the provisions of chapter 204.
   2.  Hemp that is or was produced in another state in accordance with the federal hemp law and other applicable law, including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq. 
   3.  A hemp product as provided in section 204.2. 
    Sec. 28.  CONTINGENT EFFECTIVE DATE.  The amendments to sections 29B.107A, 80.9, 124.204, 124.401, 124.410, 124.411, 124.506A, and 189.1, and new sections 317.1D and 453B.17, as enacted in this division of this Act, shall become effective upon the date of implementation of chapter 204 as described in subsection 1 of the section providing for the contingent implementation of that chapter, as enacted in division I of this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   OVERVIEW. This bill creates the “Iowa Hemp Act” under Title V, subtitle 4, of the Code regulating persons operating under licenses issued by the department of agriculture and land stewardship (DALS). The bill creates Code chapter 204 and authorizes the production of hemp under the DALS’ regulatory supervision when acting under the provisions of the Agriculture Improvement Act of 2018, Pub. L. No. 115-334 (2018 Farm Bill). The 2018 Farm Bill defines hemp as a species of Cannabis having a maximum concentration of delta-9 tetrahydrocannabinol (THC) that does not exceed three-tenths of 1 percent. The 2018 Farm Bill authorizes states to assume primary regulatory authority over the production of hemp by submitting a state plan (plan) for approval by the United States department of agriculture (USDA) which has 60 days to approve, disapprove, or amend the plan. The 2018 Farm Bill provides that state regulations may be more but not less stringent than the federal regulations. 
   DEPARTMENT OF PUBLIC SAFETY. The department of public safety (DPS) is required to assist DALS in preparing the plan and administering and enforcing the provisions of the Code chapter. DPS is designated the chief criminal enforcement agency under the new Code chapter. The bill also provides for police involvement by local law enforcement agencies.
   HEMP LICENSES AND FEES. DALS is required to accept and approve or disapprove applications for the issuance of a hemp license (license) on a one-year basis subject to renewal. A license covers a crop site which cannot exceed 40 contiguous acres. DALS may issue any number of licenses to a single applicant. However, a person is prohibited from holding more than 40 crop sites under all current licenses issued to the person. DALS must assess and collect hemp fees (fees) for the issuance of a license and for an annual fall inspection until June 30, 2022. After that date, fees are to be established by rule based on the amount required to administer and enforce the provisions of the bill. Moneys collected from the fees are to be deposited into a hemp fund (fund) which are appropriated to DALS for purposes of administering and enforcing these provisions.
   CONTROLLED SUBSTANCE —— REGULATIONS —— HEMP. Marijuana produced on a licensee’s crop site is not a controlled substance, so long as certain conditions are satisfied. Generally, production, possession, or distribution of a controlled substance is a criminal offense. The bill provides that new Code chapter 204 does not prohibit a person from producing, handling, transporting, marketing, or processing a hemp product. Both DALS and DPS are required to adopt rules regulating licensees and are authorized to inspect crop sites. DPS may require a licensee to maintain business records which are also subject to inspection. DPS is required to conduct an annual inspection of a licensee’s crop site and obtain a sample for official testing by a laboratory designated by DPS. A test result that indicates a sample exceeds the maximum concentration of THC is deemed conclusive that the crop is a controlled substance.
   ENFORCEMENT AND PENALTIES. DPS, in cooperation with DALS, may order the disposal of a crop produced on a licensee’s crop site if official test results indicate that a crop is a controlled substance. The disposal, including the crop’s destruction, must be at the licensee’s expense. DALS may also suspend or revoke a license if the licensee fails to comply with a requirement of the bill. A person who violates a provision of the bill is subject to a civil penalty of not less than $500 and not more than $2,500. DALS or the attorney general may apply to district court to obtain an injunction to enforce the bill’s provisions. 
   EFFECTIVE DATES and CONTINGENT IMPLEMENTATION. The new Code chapter authorizing the production of hemp under a federally approved state plan takes effect on July 1, 2019; but is not to be implemented until DALS certifies that USDA has approved the state plan. Coordinating provisions, including amendments to Code chapter 124 regulating controlled substances, take effect upon certification.