House File 754 - Introduced HOUSE FILE 754 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 733) (SUCCESSOR TO HSB 241) A BILL FOR An Act relating to hemp, including the regulation of hemp, 1 providing for enforcement and the confiscation and 2 destruction or disposal of certain property, providing 3 for fees, making appropriations, including penalties, and 4 providing implementation and effective date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2748HZ (3) 88 da/rn
H.F. 754 DIVISION I 1 IOWA HEMP ACT 2 Section 1. NEW SECTION . 204.1 Short title. 3 This chapter shall be known as the “Iowa Hemp Act” . 4 Sec. 2. NEW SECTION . 204.2 Definitions. 5 As used in this chapter, unless the context otherwise 6 requires: 7 1. “Controlled substance” means the same as defined in 8 section 124.101. 9 2. “Conviction” means a conviction for an indictable offense 10 and includes a guilty plea, deferred judgment from the time of 11 entry of the deferred judgment until the time the defendant is 12 discharged by the court without entry of judgment, or other 13 finding of guilt by a court of competent jurisdiction. 14 3. “Crop site” or “site” means a single contiguous parcel 15 of agricultural land suitable for the planting, growing, or 16 harvesting of hemp, if the parcel does not exceed forty acres. 17 4. “Department” means the department of agriculture and land 18 stewardship. 19 5. “Federal hemp law” means that part of Tit. X of the 20 Agriculture Improvement Act of 2018, Pub. L. No. 115-334, that 21 authorizes hemp production according to a state plan approved 22 by the United States department of agriculture, as provided in 23 §10113 of that Act, amending the Agricultural Marketing Act 24 of 1946, 7 U.S.C. §1621 et seq., including by adding §§297A 25 through 297E. 26 6. a. “Hemp” means the plant cannabis sativa L. and 27 any part of that plant, including the seeds thereof, and 28 all derivatives, extracts, cannabinoids, isomers, acids, 29 salts, and salts of isomers, whether growing or not, with a 30 delta-9 tetrahydrocannabinol concentration of not more than 31 three-tenths of one percent on a dry weight basis. 32 b. “Hemp” also means a plant of the genus cannabis other 33 than cannabis sativa L., but only to the extent allowed by the 34 department in accordance with applicable federal law, including 35 -1- LSB 2748HZ (3) 88 da/rn 1/ 27
H.F. 754 the federal hemp law. 1 7. “Hemp license” or “license” means a hemp license issued 2 pursuant to section 204.4. 3 8. a. “Hemp product” means an item derived from or made by 4 processing hemp or parts of hemp. 5 b. “Hemp product” includes but is not limited to any item 6 manufactured from hemp, including but not limited to cloth, 7 cordage, fiber, food, fuel, paint, paper, particle board, 8 plastic, hemp seed, seed meal, or seed oil. 9 c. “Hemp product” does not include any item or part of an 10 item with a maximum delta-9 tetrahydrocannabinol concentration 11 that exceeds three-tenths of one percent on a dry weight basis. 12 d. “Hemp product” does not include hemp seed that is capable 13 of germination. 14 9. “Licensee” means a person who obtains a hemp license from 15 the department under this chapter. 16 10. “Local law enforcement agency” means an office of county 17 sheriff or a municipal police department. 18 11. “Negligent violation program” or “program” means the 19 program that may be established by the department to allow 20 a licensee to correct certain violations of this chapter as 21 provided in section 204.14. 22 12. “Produce” means to provide for the planting, raising, 23 cultivating, managing, harvesting, and storing a crop. 24 Sec. 3. NEW SECTION . 204.3 State plan —— implementing 25 rules. 26 1. The department shall prepare a state plan to be submitted 27 to the United States secretary of agriculture under the federal 28 hemp law. 29 2. Upon approval of the state plan, the department shall 30 assume primary regulatory authority over the production of hemp 31 in this state as provided in this chapter. However, nothing in 32 this chapter affects the powers and duties of the department of 33 public safety or local law enforcement agencies from enforcing 34 any law within its purview or jurisdiction. The department of 35 -2- LSB 2748HZ (3) 88 da/rn 2/ 27
H.F. 754 public safety shall be the chief criminal enforcement agency 1 under this chapter. 2 3. The department may prepare any number of amended state 3 plans or any number of amendments to an existing state plan to 4 be submitted for approval by the United States secretary of 5 agriculture. 6 4. a. The department shall prepare the state plan, any 7 amended state plan, or amendment to an approved state plan, by 8 adopting rules pursuant to chapter 17A. 9 b. The department may adopt the rules on an emergency basis 10 as provided in section 17A.4, subsection 3, and section 17A.5, 11 subsection 2, and the rules shall be effective immediately upon 12 filing unless a later date is specified in the rules. 13 Sec. 4. NEW SECTION . 204.4 Hemp license —— requirements. 14 1. The department shall establish and administer a process 15 to receive, evaluate, and approve or disapprove applications 16 for a hemp license. 17 2. The department shall prepare and publish one or more hemp 18 license application forms in cooperation with the department of 19 public safety. A completed application form submitted to the 20 department shall contain all of the following: 21 a. The applicant’s full name and residence address. 22 b. A legal description and map of each crop site where the 23 applicant proposes to produce the hemp including its global 24 positioning system location. 25 c. The number of crop acres to be used for hemp production. 26 d. The name of the hemp variety. 27 e. The results of a national criminal history record check 28 of an applicant as may be required by the department. The 29 department shall inform an applicant if a national criminal 30 history record check will be conducted. If a national criminal 31 history record check is conducted, the applicant shall provide 32 the applicant’s fingerprints to the department. The department 33 shall provide the fingerprints to the department of public 34 safety through the state criminal history repository to the 35 -3- LSB 2748HZ (3) 88 da/rn 3/ 27
H.F. 754 federal bureau of investigation. The applicant shall pay the 1 actual cost of conducting any national criminal history record 2 check to the department of agriculture and land stewardship. 3 The department shall pay the actual cost of conducting the 4 national criminal history record check to the department of 5 public safety from moneys deposited in the hemp fund pursuant 6 to section 204.6. The department of public safety shall treat 7 such payments as repayment receipts as defined in section 8.2. 8 The results of the national criminal history check shall not be 9 considered a public record under chapter 22. 10 f. Any other information required in order to administer and 11 enforce the provisions of this chapter. 12 3. As a condition for issuance of a hemp license, the 13 licensee consents to the department, the department of public 14 safety, or a local law enforcement agency entering upon a crop 15 site as provide in section 204.9. 16 4. The department may do all of the following: 17 a. Require that all or some licenses expire on the same 18 date. 19 b. Provide a different application form and requirements 20 relating to the submission, evaluation, and approval or 21 disapproval of an application for a renewed hemp license 22 consistent with federal law. 23 5. An applicant shall not be issued a hemp license unless 24 the applicant agrees to comply with all terms and conditions 25 relating to the regulation of a licensee as provided in this 26 chapter. 27 6. A person may hold any number of licenses at the same 28 time. However, the person shall not hold a legal or equitable 29 interest in a licensed crop site, if the total number of acres 30 of all licensed crop sites in which the person holds all such 31 interests equals more than forty acres. 32 7. An initial hemp license expires one year from the date 33 of issuance and may be issued on a renewal basis annually. The 34 department may require that a licensee apply for an amended or 35 -4- LSB 2748HZ (3) 88 da/rn 4/ 27
H.F. 754 new initial license if information contained in the existing 1 application is no longer accurate or is incomplete. 2 8. The department and the department of public safety shall 3 cooperate to develop procedures for the sharing of information 4 regarding applicants, including information required to be 5 completed on application forms. Upon request, the department 6 or the department of public safety shall provide information 7 regarding an applicant to a department of agriculture or law 8 enforcement agency in another state. 9 9. Information received on an application form shall be 10 maintained by the department for not less than three years. 11 10. The department shall disapprove the application of a 12 person for good cause, which shall include, but is not limited 13 to, any of the following: 14 a. A conviction for committing a criminal offense punishable 15 as a felony within the prior ten years, or a conviction for 16 committing a criminal offense in another state punishable as a 17 felony if so classified by that state during the same period. 18 b. A conviction for committing a criminal offense involving 19 a controlled substance within the prior ten years, or a 20 conviction for committing a criminal offense involving a 21 controlled substance in another state during the same period. 22 If the conviction is punishable as a felony, the department 23 shall disapprove any application of a person for a ten-year 24 period following the date of the person’s last conviction. 25 c. A third violation of a provision of this chapter in 26 a five-year period. The department shall disapprove any 27 application of a person for a five-year period following the 28 date of the person’s last violation in the same manner as 29 provided in section 204.14. 30 d. The revocation of a hemp license under section 204.11, 31 or the revocation of a license, permit, registration, or other 32 authorization to produce hemp in any other state. 33 11. A hemp license shall be suspended or revoked as provided 34 in section 204.11. 35 -5- LSB 2748HZ (3) 88 da/rn 5/ 27
H.F. 754 Sec. 5. NEW SECTION . 204.5 Hemp fees. 1 1. The department shall impose, assess, and collect the 2 following hemp fees: 3 a. A license fee which shall be paid by a person being 4 issued a hemp license as provided in section 204.4. 5 b. An inspection fee which shall be paid by a licensee for 6 the inspection of the licensee’s crop site, including obtaining 7 samples of plants to conduct a test, as provided in section 8 204.8. 9 2. a. For each hemp license, the license fee shall be 10 imposed on an interim basis until June 30, 2022. The amount of 11 the license fee shall not be more than the following: 12 (1) Five hundred dollars plus five dollars per acre, for 13 each site that is five acres or less. 14 (2) Seven hundred and fifty dollars, plus five dollars per 15 acre, for each site that is more than five acres but not more 16 than ten acres. 17 (3) One thousand dollars plus five dollars per acre, for 18 each site that is more than ten acres. 19 b. For conducting an inspection and official test as 20 provided in section 204.8, the department shall charge an 21 inspection fee on an interim basis until June 30, 2022, as 22 follows: 23 (1) In the case of an annual inspection and official test, a 24 base fee of not more than one thousand dollars. The department 25 may charge a supplemental fee in an amount determined by the 26 department for conducting an inspection and official test of 27 any additional variety of hemp produced on the same crop site. 28 (2) In the case of any other inspection and official test, 29 conducted at the request of the licensee, the department shall 30 charge a base fee or special fee in the same manner as provided 31 in subparagraph (1). 32 c. This subsection is repealed on July 1, 2022. 33 3. a. The department shall adopt rules to establish hemp 34 fees for the issuance of a hemp license pursuant to section 35 -6- LSB 2748HZ (3) 88 da/rn 6/ 27
H.F. 754 204.4. 1 b. The department shall adopt rules to establish hemp fees 2 for conducting inspections and obtaining samples of plants 3 to conduct tests, including but not limited to an annual 4 inspection and official test, pursuant to section 204.8. 5 c. The total amount of hemp fees collected by the department 6 pursuant to this subsection shall not be more than the 7 department’s estimate of the total amount of revenues necessary 8 to administer and enforce the provisions of this chapter based 9 on the expected revenue collected from the hemp fees and the 10 costs to be incurred by the department in administering and 11 enforcing the provisions of this chapter for the succeeding 12 twelve-month period. 13 d. The department may establish different rates for any 14 category of hemp fees based on criteria determined relevant by 15 the department, which may include the number of acres of the 16 crop site and the type of hemp license issued. 17 e. (1) The rules shall first take effect immediately after 18 the repeal of subsection 2. 19 (2) This paragraph “e” is repealed immediately after the 20 rules described in subparagraph (1) take effect. 21 4. The license fee and any annual inspection fee shall 22 be collected by the department at the time the hemp license 23 application is submitted. 24 5. Any hemp fee collected by the department under this 25 section shall be deposited in the hemp fund established 26 pursuant to section 204.6. 27 6. The department may refund all or any part of a hemp fee 28 collected under this section to an applicant. 29 Sec. 6. NEW SECTION . 204.6 Hemp fund. 30 1. A hemp fund is established in the state treasury under 31 the management and control of the department. 32 2. The hemp fund shall include moneys collected by the 33 department from hemp fees imposed and assessed under section 34 204.5 and moneys appropriated by the general assembly for 35 -7- LSB 2748HZ (3) 88 da/rn 7/ 27
H.F. 754 deposit in the hemp fund. The hemp fund may include other 1 moneys available to and obtained or accepted by the department, 2 including moneys from public or private sources. 3 3. Moneys in the hemp fund are appropriated to the 4 department and shall be used exclusively to carry out the 5 responsibilities conferred upon the department under this 6 chapter as determined and directed by the department, and 7 shall not require further special authorization by the general 8 assembly. 9 4. a. Notwithstanding section 12C.7, interest or earnings 10 on moneys in the hemp fund shall be credited to the hemp fund. 11 b. Notwithstanding section 8.33, moneys credited to the 12 hemp fund that remain unexpended or unobligated at the end of a 13 fiscal year shall not revert to any other fund. 14 Sec. 7. NEW SECTION . 204.7 Regulations —— exemption for 15 certain criminal offenses. 16 1. The Iowa crop improvement association recognized in 17 chapter 177 shall adopt procedures to certify hemp seed capable 18 of germination. 19 2. A person who materially falsifies any information 20 contained in an application under section 204.4 shall be 21 ineligible to produce hemp under this chapter. 22 3. A licensee convicted of a felony relating to a controlled 23 substance before, on, or after the implementation date of this 24 chapter shall be ineligible to produce hemp under this chapter 25 for a ten-year period following the date of conviction. 26 4. The department shall adopt rules regulating the 27 production of hemp, including but not limited to inspection 28 and testing requirements under section 204.8 or 204.9, and the 29 issuance of a certificate of crop inspection under section 30 204.8. The department shall adopt rules as necessary to 31 administer the negligent violation program. The department may 32 adopt other rules as necessary or desirable to administer and 33 enforce the provisions of this chapter relating to hemp or hemp 34 products. 35 -8- LSB 2748HZ (3) 88 da/rn 8/ 27
H.F. 754 5. a. A person may engage in the retail sale of a hemp 1 product if the hemp was produced in another state in compliance 2 with applicable federal law, including the federal Food, Drug, 3 and Cosmetic Act, 21 U.S.C. §301 et seq. A person may engage 4 in the retail sale of a hemp product if the hemp was produced 5 in another jurisdiction in compliance with applicable federal 6 law and the laws of the other jurisdiction, if such law is 7 substantially the same as applicable federal law. 8 b. To the extent consistent with applicable federal law, 9 including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 10 §301 et seq., a derivative of hemp, including hemp-derived 11 cannabidiol, may be added to cosmetics, personal care products, 12 and products intended for human or animal consumption. The 13 addition of such a derivative shall not be considered an 14 adulteration of the product, unless otherwise provided in 15 applicable federal law. 16 c. A person may transport a hemp product through this 17 state and may export a hemp product to any foreign nation, if 18 consistent with applicable federal law, including the federal 19 Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq., and the 20 law of the foreign nation. 21 d. A hemp product complying with this subsection is not a 22 controlled substance under chapter 124 or 453B. 23 6. A licensee is not subject to a criminal offense 24 under chapter 124 or 453B for producing, possessing, using, 25 harvesting, handling, manufacturing, marketing, transporting, 26 delivering, or distributing hemp, if all of the following 27 apply: 28 a. The hemp is or was produced at the licensee’s crop site. 29 b. The department, the department of public safety, or 30 a local law enforcement agency is allowed to access the 31 licensee’s crop site as part of an inspection as provided in 32 sections 204.8 and 204.9, including by obtaining a sample of 33 plants to conduct a test pursuant to section 204.8. 34 c. The department has issued a certificate of crop 35 -9- LSB 2748HZ (3) 88 da/rn 9/ 27
H.F. 754 inspection to the licensee covering the harvested hemp as 1 provided in section 204.8. 2 7. A person other than a licensee is not subject to a 3 criminal offense under chapter 124 or 453B for possessing, 4 handling, using, manufacturing, marketing, transporting, 5 delivering, or distributing hemp, if all of the following 6 applies: 7 a. The hemp was produced at a licensee’s crop site. 8 b. The person holds a certificate of crop inspection 9 covering the harvested hemp as provided in section 204.8. 10 c. The person is acting in compliance with the federal hemp 11 law and other applicable federal law, including the federal 12 Food, Drug, and Cosmetic Act, 21 U.S.C. §301 et seq. 13 8. A person is not subject to a criminal offense under 14 chapter 124 or 453B for possessing, using, harvesting, 15 handling, manufacturing, marketing, transporting, delivering, 16 or distributing hemp produced in another state in compliance 17 with the federal hemp law and other applicable federal law, 18 including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 19 §301 et seq. 20 Sec. 8. NEW SECTION . 204.8 Inspections and tests —— 21 certificate of crop inspection. 22 1. a. The department shall conduct an annual inspection 23 of a licensee’s crop site to determine if the crop produced 24 at the site qualifies as hemp under this section. The annual 25 inspection shall include obtaining a sample of plants that 26 are part of the crop and providing for an official test of 27 that sample. The inspection shall be conducted as provided in 28 section 204.9. 29 b. A licensee shall deliver a notice to the department 30 stating the expected harvest date for the crop produced at the 31 licensee’s crop site. The department must receive the notice 32 at least thirty days prior to the expected harvest date. The 33 department shall conduct the annual inspection of the site 34 within thirty days prior to the actual harvest date. 35 -10- LSB 2748HZ (3) 88 da/rn 10/ 27
H.F. 754 c. The department shall provide the department of public 1 safety any official test results that indicate a sample exceeds 2 the maximum concentration of three-tenths of one percent on a 3 dry weight basis. 4 d. A licensee shall not harvest any portion of a crop 5 produced at the crop site unless the department has issued the 6 licensee a certificate of crop inspection. The department 7 shall issue a verified copy of the certificate to any other 8 person upon request of the licensee. The certificate shall be 9 published by the department as an official form. To the extent 10 allowed by the federal hemp law, the certificate shall be proof 11 that the harvested crop described on the form qualifies as hemp 12 pursuant to the results of an official test. 13 2. The department may conduct official tests for additional 14 varieties of hemp located on the same crop site. The 15 department may conduct additional inspections and tests upon 16 the request of a licensee. 17 3. The official test shall be a composite test of the plants 18 obtained by the department from a licensee’s crop site during 19 the annual inspection and shall be conducted by a laboratory 20 designated by the department. The sample must have a maximum 21 concentration of delta-9 tetrahydrocannabinol that does not 22 exceed three-tenths of one percent on a dry weight basis. 23 4. The department of public safety or a local law 24 enforcement agency may conduct an inspection of a licensee’s 25 crop site in order to determine that the licensee is complying 26 with the criminal provisions of this chapter as well as 27 chapters 124 and 453B. The department of public safety or a 28 local law enforcement agency may conduct a test of the plants 29 obtained by that department or local law enforcement agency 30 from the licensee’s crop site during the inspection according 31 to procedures adopted by the department of public safety. 32 Sec. 9. NEW SECTION . 204.9 Right of access. 33 1. a. The department, including an authorized inspector, 34 employee, or agent of the department, may enter onto a crop 35 -11- LSB 2748HZ (3) 88 da/rn 11/ 27
H.F. 754 site during reasonable hours to determine whether a licensee is 1 acting in compliance with the requirements under this chapter. 2 The department may also obtain an administrative search warrant 3 under section 808.14 to enter into any structure if all of the 4 following apply: 5 (1) The structure is not a dwelling. 6 (2) The structure is located on or in close proximity to the 7 crop site, and the use of such structure is directly related to 8 the production of hemp, including but not limited to a barn, 9 machine shed, greenhouse, or storage crib. 10 b. The department may require the licensee to produce 11 business records, including books, accounts, records, files, 12 and any other documents in print or electronic media that the 13 department deems relevant to an inquiry conducted under this 14 chapter. 15 c. The department may request the department of public 16 safety or a local law enforcement agency accompany the 17 department of agriculture and land stewardship when conducting 18 an inspection. 19 2. a. The department of public safety or a local law 20 enforcement agency may conduct an inspection of a licensee’s 21 crop site in order to determine that the licensee is complying 22 with any applicable criminal provisions under chapter 124, this 23 chapter, or chapter 453B. The department of public safety or a 24 local law enforcement agency may also enter into any structure 25 if the use of such structure is related to the licensee’s 26 business operations. However, a subpoena or a warrant is 27 required for inspection of private records, a private business 28 office, or attached living quarters, consistent with the laws 29 of this state and the United States, including Article I, 30 section 8, of the Constitution of the State of Iowa, or the 31 fourth amendment to the Constitution of the United States. 32 b. The department of public safety or a law enforcement 33 agency may obtain a sample of plants that are part of the 34 crop and provide for a test of that sample as provided in 35 -12- LSB 2748HZ (3) 88 da/rn 12/ 27
H.F. 754 section 204.8. The department of public safety or a local 1 law enforcement agency may require the licensee to produce 2 business records. The department of public safety or a local 3 law enforcement agency shall not assess or collect a fee for 4 conducting an inspection or test under this section. 5 c. The department of public safety, or a local law 6 enforcement agency, conducting an inspection under this section 7 shall notify the department of agriculture and land stewardship 8 of its findings, including the results of a test conducted 9 pursuant of section 204.8. The department of public safety 10 may require that any findings of the department or local 11 law enforcement agency that may be the basis for a criminal 12 investigation or prosecution be treated by the department of 13 agriculture and land stewardship as a confidential record under 14 chapter 22. 15 3. All persons who enter onto the property of the licensee 16 under this section shall present appropriate identification to 17 the licensee or the licensee’s representative if the licensee 18 or representative is available. However, this subsection does 19 not apply to undercover criminal investigations conducted by 20 the department of public safety or a local law enforcement 21 agency. 22 4. A person shall not prevent the department, the department 23 of public safety, or a local law enforcement agency from 24 administering and enforcing the provisions of this section by 25 any means, including but not limited to any act, including 26 a refusal to allow entry, misrepresentation, omission, or 27 concealment of facts. 28 5. A licensee shall not harvest any portion of a crop 29 produced at a crop site if the department, the department of 30 public safety, or a local law enforcement agency has been 31 prevented from accessing the site under this section. 32 Sec. 10. NEW SECTION . 204.10 Order of disposal. 33 1. If a crop that is produced at a licensee’s crop site does 34 not qualify as hemp according to an official test conducted 35 -13- LSB 2748HZ (3) 88 da/rn 13/ 27
H.F. 754 pursuant to section 204.8, the department, in consultation with 1 the department of public safety, shall order the disposal of 2 the crop by destruction at the site or if necessary require the 3 crop to be removed to another location for destruction. 4 2. The department may request assistance from the 5 department of public safety or a local law enforcement agency 6 as necessary to carry out the provisions of this section. The 7 department upon request shall deliver any sample of the crop 8 to the department of public safety or a local law enforcement 9 agency. 10 3. The licensee shall pay the department for all actual 11 and reasonable costs of the destruction of the crop. If the 12 department assumes any amount of the costs, it may charge that 13 amount to the licensee. If the licensee fails to reimburse any 14 of that amount to the department, the department may report the 15 amount to the county treasurer. The amount shall be placed 16 upon the tax books, and collected with interest and penalties 17 after due, in the same manner as other unpaid property taxes. 18 The county shall reimburse the department within thirty days 19 from the collection of the property taxes. 20 4. To the extent allowed by applicable federal law, the 21 department may provide for the disposal of the mature stalks 22 of the crop confiscated by the department for the licensee’s 23 on-farm use and at the licensee’s expense. 24 Sec. 11. NEW SECTION . 204.11 Disciplinary action. 25 1. The department may suspend or revoke a hemp license 26 obtained under section 204.4 by a person who does any of the 27 following: 28 a. Provides false or misleading information to the 29 department under this chapter, including by submitting a false 30 application. 31 b. Fails to comply with or violates any provision of this 32 chapter, including a rule adopted by the department, the 33 department of public safety, or a condition of an application 34 for the issuance of a hemp license under section 204.4. 35 -14- LSB 2748HZ (3) 88 da/rn 14/ 27
H.F. 754 c. Fails to comply with an order issued by the department 1 under this chapter. 2 2. The department shall revoke a license issued pursuant to 3 section 204.4, if any of the following apply: 4 a. The department would disapprove a new application to that 5 person for good cause as provided in section 204.4, subsection 6 9. 7 b. The person submits a materially false application to 8 participate in the negligent violation program. 9 3. The suspension or revocation of a hemp license is in 10 addition to an order of disposal under section 204.10; the 11 imposition of a civil penalty under section 204.12, subject 12 to the provisions of section 204.14; or the imposition of any 13 other civil or criminal penalty authorized under state law. 14 Sec. 12. NEW SECTION . 204.12 Civil penalties. 15 1. A person who violates a provision of this chapter is 16 subject to a civil penalty of not less than five hundred 17 dollars and not more than two thousand five hundred dollars. 18 The department shall impose, assess, and collect the civil 19 penalty. Each day that a continuing violation occurs may be 20 considered a separate offense. 21 2. Notwithstanding subsection 1, a civil penalty shall not 22 be imposed, assessed, or collected against a licensee who is 23 participating in or has successfully completed the negligent 24 violation program pursuant to section 204.14. 25 3. All civil penalties collected under this section shall be 26 deposited into the general fund of the state. 27 Sec. 13. NEW SECTION . 204.13 Injunctive relief. 28 The department, or the attorney general acting on behalf of 29 the department, may apply to the district court for injunctive 30 relief in order to restrain a person from acting in violation 31 of this chapter. In order to obtain injunctive relief, the 32 department, or attorney general, shall not be required to post 33 a bond or prove the absence of an adequate remedy at law unless 34 the court for good cause otherwise orders. The court may order 35 -15- LSB 2748HZ (3) 88 da/rn 15/ 27
H.F. 754 any form of prohibitory or mandatory relief that is appropriate 1 under principles of equity, including but not limited to 2 issuing a temporary or permanent restraining order. 3 Sec. 14. NEW SECTION . 204.14 Negligent violation —— 4 program. 5 1. a. The department may find that a licensee has 6 negligently violated a provision of this chapter by doing any 7 of the following: 8 (1) Completing an application for a license without 9 providing a legal description of the crop site pursuant to 10 section 204.4. 11 (2) Failing to renew a hemp license for an existing crop 12 site or obtain a hemp license for a new crop site pursuant to 13 section 204.4. 14 (3) Producing a crop on the licensee’s crop site with a 15 maximum concentration of delta-9 tetrahydrocannabinol that 16 exceeds three-tenths of one percent according to the results 17 of an official test of a sample obtained from the crop site 18 pursuant to an inspection conducted under section 204.8. 19 b. It is conclusively presumed that a licensee acted 20 with a culpable mental state greater than negligence, if 21 the department obtains a sample of a crop produced on the 22 licensee’s crop site and the official test results of the 23 sample conducted pursuant to section 204.8 indicate a maximum 24 concentration of delta-9 tetrahydrocannabinol in excess of two 25 percent on a dry weight basis. 26 c. If the department determines a licensee violated this 27 chapter with a culpable mental state greater than negligence, 28 the department shall immediately report the licensee’s 29 violation to the department of public safety, the county 30 attorney, and the attorney general, who shall take action as 31 the facts and circumstances warrant. The department shall also 32 report the licensee to the United States attorney general to 33 the extent required by the federal hemp law. 34 2. The department may establish a negligent violation 35 -16- LSB 2748HZ (3) 88 da/rn 16/ 27
H.F. 754 program. The purpose of the program is to allow a 1 participating licensee who has negligently violated a provision 2 of this chapter as described in subsection 1 to comply with a 3 corrective plan established by the department to correct each 4 negligent violation, including by providing for all of the 5 following: 6 a. A reasonable date, established by the department, for the 7 licensee to correct each cause for the violation. 8 b. The filing of periodic reports to the department 9 evidencing that the licensee is complying with the requirements 10 of this chapter. The licensee shall submit the reports to the 11 department according to a schedule required by the department. 12 The licensee shall submit a report to the department for 13 at least two years from the date that the licensee first 14 participated in the program. 15 c. Any other requirement established by the department. 16 3. A licensee shall not participate in the negligent 17 violation program, if a test of a sample of plants that 18 are part of a crop produced on the licensee’s crop site 19 exceeds a maximum concentration of two percent delta-9 20 tetrahydrocannabinol on a dry weight basis. 21 4. A person who has violated a provision of this chapter 22 three times in a five-year period shall be ineligible to 23 participate in the negligent violation program, or produce 24 hemp, for a period of five years beginning on the date of the 25 third violation. 26 5. The department shall certify that a licensee has 27 successfully completed the negligent violation program. The 28 certification shall be published by the department as an 29 official form. The department shall deliver the certification 30 to the licensee which shall be proof of the licensee’s 31 compliance. 32 6. A licensee who is participating in or has successfully 33 completed the negligent violation program shall not be subject 34 to any of the following: 35 -17- LSB 2748HZ (3) 88 da/rn 17/ 27
H.F. 754 a. A civil penalty under section 204.12 for committing a 1 violation of this chapter. 2 b. A criminal offense under chapter 124 or 453B arising 3 out of a negligent violation of this chapter, if the licensee 4 would otherwise be guilty of producing, possessing, using, 5 harvesting, handling, or distributing the plant cannabis 6 pursuant to the results of a test conducted pursuant to section 7 204.8. 8 Sec. 15. NEW SECTION . 204.15 Statutory construction. 9 1. Nothing in this chapter shall be construed or applied to 10 be less stringent than required under the federal hemp law. 11 2. Nothing in this chapter shall be construed or applied to 12 be in conflict with any of the following: 13 a. Applicable federal law, including the federal Food, Drug, 14 and Cosmetic Act, 21 U.S.C. ch. 9 and related regulations. 15 b. Other laws of this state, including any administrative 16 rules, relating to product development, product manufacturing, 17 consumer safety, or public health so long as the state law is 18 compatible with applicable federal law. 19 c. Local law relating to product development, product 20 manufacturing, consumer safety, or public health so long as the 21 local law is consistent with federal and state law. 22 3. Except as provided in section 204.7, nothing in this 23 chapter shall be construed or applied to prohibit a person 24 from possessing, handling, using, manufacturing, marketing, 25 transporting, delivering, or distributing a hemp product. 26 4. Nothing in this chapter shall be construed or applied 27 to authorize a person to manufacture, recommend, possess, use, 28 dispense, deliver, transport, or administer medical cannabidiol 29 pursuant to chapter 124E. 30 Sec. 16. CONTINGENT IMPLEMENTATION. 31 1. Except as provided in subsection 2, the provisions of 32 chapter 204, as enacted in this division of this Act, shall 33 only be implemented, including administered and enforced, 34 by the department of agriculture and land stewardship, 35 -18- LSB 2748HZ (3) 88 da/rn 18/ 27
H.F. 754 the department of public safety, and local law enforcement 1 agencies, beginning on the publication date of the edition of 2 the Iowa administrative bulletin that includes a statement by 3 the secretary of agriculture of the department of agriculture 4 and land stewardship certifying that the United States 5 department of agriculture has approved a state plan as 6 described in section 204.3, as enacted in this division of this 7 Act. The department shall forward a copy of the statement to 8 the Iowa Code editor prior to publication. 9 2. Section 204.3 and this subsection shall be implemented on 10 the effective date of this Act. 11 DIVISION II 12 COORDINATING AMENDMENTS 13 Sec. 17. Section 29B.107A, Code 2019, is amended by adding 14 the following new subsection: 15 NEW SUBSECTION . 3. Notwithstanding subsection 2, 16 “controlled substance” does not include hemp or a hemp product 17 excluded from schedule I of controlled substances as provided 18 in section 124.204, subsection 7. 19 Sec. 18. Section 80.9, subsection 7, Code 2019, is amended 20 to read as follows: 21 7. a. The department shall assist persons who are 22 responsible for the care of private and public land in 23 identifying growing marijuana plants when the plants are 24 reported to the department. The department shall also provide 25 education to the persons regarding methods of eradicating the 26 plants. 27 b. Notwithstanding paragraph “a” , the department is not 28 required to provide such assistance if the marijuana plants are 29 hemp produced in accordance with the provisions of chapter 204. 30 c. The department shall adopt rules necessary to carry out 31 this subsection . 32 Sec. 19. Section 124.204, subsection 4, paragraphs m and u, 33 Code 2019, are amended to read as follows: 34 m. Marijuana, except as otherwise provided by rules of the 35 -19- LSB 2748HZ (3) 88 da/rn 19/ 27
H.F. 754 board for medicinal purposes in subsection 7 . 1 u. (1) Tetrahydrocannabinols, except as otherwise 2 provided by rules of the board for medicinal purposes, 3 meaning tetrahydrocannabinols naturally contained in a plant 4 of the genus Cannabis (Cannabis plant) as well as synthetic 5 equivalents of the substances contained in the Cannabis plant, 6 or in the resinous extractives of such plant, and synthetic 7 substances, derivatives, and their isomers with similar 8 chemical structure and pharmacological activity to those 9 substances contained in the plant, such as the following: 10 (1) (a) 1 cis or trans tetrahydrocannabinol, and their 11 optical isomers. 12 (2) (b) 6 cis or trans tetrahydrocannabinol, and their 13 optical isomers. 14 (3) (c) 3,4 cis or trans tetrahydrocannabinol, and their 15 optical isomers. (Since nomenclature of these substances 16 is not internationally standardized, compounds of these 17 structures, regardless of numerical designation of atomic 18 positions covered.) 19 (2) Subparagraph (1) does not include tetrahydrocannabinol 20 to the extent excluded in subsection 7. 21 Sec. 20. Section 124.204, subsection 7, Code 2019, is 22 amended to read as follows: 23 7. Exclusions. This section does not apply to marijuana, 24 any of the following: 25 a. Marijuana, tetrahydrocannabinols , or chemical 26 derivatives of tetrahydrocannabinol , when utilized for 27 medicinal purposes pursuant to rules of the board. 28 b. (1) Hemp as defined in section 204.2, including 29 any tetrahydrocannabinols, or chemical derivatives of 30 tetrahydrocannabinol contained in hemp that is or was 31 produced in this state or another state in accordance 32 with the provisions of chapter 204 with a maximum delta-9 33 tetrahydrocannabinol concentration that does not exceed 34 three-tenths of one percent on a dry weight basis. 35 -20- LSB 2748HZ (3) 88 da/rn 20/ 27
H.F. 754 (2) A hemp product as provided in chapter 204 with a maximum 1 delta-9 tetrahydrocannabinol concentration that does not exceed 2 three-tenths of one percent on a dry weight basis. 3 Sec. 21. Section 124.401, Code 2019, is amended by adding 4 the following new subsection: 5 NEW SUBSECTION . 6. Notwithstanding any other provision in 6 this section to the contrary, a person may produce, possess, 7 use, harvest, handle, manufacture, market, transport, deliver, 8 or distribute any of the following: 9 a. Hemp that is or was produced at a crop site by a person 10 operating under a hemp license issued by the department 11 of agriculture and land stewardship in accordance with the 12 provisions of chapter 204. 13 b. Hemp that is or was produced in another state in 14 accordance with the federal hemp law and other applicable law, 15 including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 16 §301 et seq. 17 c. A hemp product as provided in chapter 204. 18 Sec. 22. NEW SECTION . 124.401H Iowa hemp Act —— negligent 19 violation program. 20 Notwithstanding any provision of this chapter to the 21 contrary, a person shall not be guilty of an offense under 22 this chapter, including under section 124.401 or 124.410, 23 for producing, possessing, using, harvesting, handling, 24 manufacturing, marketing, transporting, delivering, or 25 distributing the plant cannabis, if all of the following apply: 26 1. The person holds a valid hemp license issued by the 27 department of agriculture and land stewardship as provided in 28 chapter 204. 29 2. The plant was produced on the licensee’s crop site as 30 provided in chapter 204. 31 3. The offense arises out of a test of a sample of plants 32 that are part of a crop produced on the crop site and the 33 test indicates that the sample does not qualify as hemp under 34 section 204.8 and does not exceed maximum concentration of two 35 -21- LSB 2748HZ (3) 88 da/rn 21/ 27
H.F. 754 percent delta-9 tetrahydrocannabinol on a dry weight basis. 1 4. The licensee is participating in or has successfully 2 completed the negligent violation program that applies to 3 the crop site described in subsection 3 if such program 4 is established by the department of agriculture and land 5 stewardship pursuant to section 204.14. 6 Sec. 23. Section 124.410, Code 2019, is amended to read as 7 follows: 8 124.410 Accommodation offense. 9 1. In a prosecution for unlawful delivery or possession 10 with intent to deliver marijuana, if the prosecution proves 11 that the defendant violated the provisions of section 124.401, 12 subsection 1 , by proving that the defendant delivered or 13 possessed with intent to deliver one-half ounce or less of 14 marijuana which was not offered for sale, the defendant is 15 guilty of an accommodation offense and rather than being 16 sentenced as if convicted for a violation of section 124.401, 17 subsection 1 , paragraph “d” , shall be sentenced as if 18 convicted of a violation of section 124.401, subsection 5 . An 19 accommodation offense may be proved as an included offense 20 under a charge of delivering or possessing with the intent to 21 deliver marijuana in violation of section 124.401, subsection 22 1 . This section 23 2. Subsection 1 does not apply to hashish, any of the 24 following: 25 a. Hashish, hashish oil, or other derivatives of marijuana 26 as defined in section 124.101, subsection 20 . 27 b. Hemp or a hemp product excluded from schedule I 28 of controlled substances as provided in section 124.204, 29 subsection 7. 30 Sec. 24. Section 124.411, subsection 3, Code 2019, is 31 amended to read as follows: 32 3. This section does not apply to offenses any of the 33 following: 34 a. An offense under section 124.401, subsection 5 . 35 -22- LSB 2748HZ (3) 88 da/rn 22/ 27
H.F. 754 b. Hemp or a hemp product excluded from schedule I 1 of controlled substances as provided in section 124.204, 2 subsection 7. 3 Sec. 25. Section 124.506A, subsection 1, Code 2019, is 4 amended to read as follows: 5 1. a. Notwithstanding the provisions of section 124.506 , if 6 more than ten pounds of marijuana or more than one pound of any 7 other controlled substance is seized as a result of a violation 8 of this chapter , the law enforcement agency responsible for 9 retaining the seized controlled substance may destroy the 10 seized controlled substance if the law enforcement agency 11 retains at least ten pounds of the marijuana seized or at least 12 one pound of any other controlled substance seized for evidence 13 purposes. 14 b. Paragraph “a” does not apply to hemp or a hemp product 15 excluded from schedule I of controlled substances as provided 16 in section 124.204, subsection 7. 17 Sec. 26. Section 189.1, subsection 1, Code 2019, is amended 18 to read as follows: 19 1. “Article” means food, commercial feed, agricultural 20 seed, commercial fertilizer, drug, pesticide, hemp or a hemp 21 product, and paint, in the sense in which they are defined in 22 the various provisions of this subtitle. 23 Sec. 27. NEW SECTION . 317.1D Exemption —— Iowa hemp Act. 24 This chapter does not apply to a plant or any part of the 25 plant qualifying as hemp, if the hemp is produced on a crop 26 site regulated under chapter 204. 27 Sec. 28. NEW SECTION . 453B.17 Exemption —— Iowa hemp Act —— 28 hemp and hemp products. 29 This chapter does not apply to any of the following: 30 1. Hemp that is or was produced at a crop site by a person 31 operating under a hemp license issued by the department 32 of agriculture and land stewardship in accordance with the 33 provisions of chapter 204. 34 2. Hemp that is or was produced in another state in 35 -23- LSB 2748HZ (3) 88 da/rn 23/ 27
H.F. 754 accordance with the federal hemp law and other applicable law, 1 including the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 2 §301 et seq. 3 3. A hemp product as provided in chapter 204. 4 Sec. 29. NEW SECTION . 453B.18 Exemption —— Iowa hemp Act 5 —— negligent violation program. 6 Notwithstanding any provision of this chapter to the 7 contrary, a person shall not be guilty of an offense under this 8 chapter for producing or possessing the plant cannabis, if all 9 of the following apply: 10 1. The person holds a valid hemp license issued by the 11 department of agriculture and land stewardship as provided in 12 chapter 204. 13 2. The plant was produced on the licensee’s crop site as 14 provided in chapter 204. 15 3. The offense arises out of a test of a sample of plants 16 that are part of a crop produced on the crop site and the 17 test indicates that the sample does not qualify as hemp under 18 section 204.8 and it does not exceed maximum concentration of 19 two percent delta-9 tetrahydrocannabinol on a dry weight basis. 20 4. The licensee is participating in or has successfully 21 completed the negligent violation program that applies to 22 the crop site described in subsection 3 if such program 23 is established by the department of agriculture and land 24 stewardship pursuant to section 204.14. 25 Sec. 30. CONTINGENT EFFECTIVE DATE. The amendments to 26 sections 29B.107A, 80.9, 124.204, 124.401, 124.410, 124.411, 27 124.506A, and 189.1, and new sections 317.1D, 453B.17, and 28 453B.18, as enacted in this division of this Act, shall become 29 effective upon the date of implementation of chapter 204 as 30 described in subsection 1 of the section providing for the 31 contingent implementation of that chapter, as enacted in 32 division I of this Act. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -24- LSB 2748HZ (3) 88 da/rn 24/ 27
H.F. 754 the explanation’s substance by the members of the general assembly. 1 OVERVIEW. This bill creates the “Iowa Hemp Act” under Title 2 V, subtitle 4, of the Code regulating persons operating under 3 licenses issued by the department of agriculture and land 4 stewardship (DALS). The bill creates Code chapter 204 and 5 authorizes the production of hemp under the DALS’ regulatory 6 supervision when acting under the provisions of the Agriculture 7 Improvement Act of 2018, Pub. L. No. 115-334 (2018 Farm Bill). 8 The 2018 Farm Bill defines hemp as a species of Cannabis having 9 a maximum concentration of delta-9 tetrahydrocannabinol (THC) 10 that does not exceed three-tenths of 1 percent. The 2018 Farm 11 Bill authorizes states to assume primary regulatory authority 12 over the production of hemp by submitting a state plan (plan) 13 for approval by the United States department of agriculture 14 (USDA) which has 60 days to approve, disapprove, or amend the 15 plan. The 2018 Farm Bill provides that state regulations may 16 be more but not less stringent than the federal regulations. 17 The provisions of the bill are also enforced by the department 18 of public safety (DPS) which is designated as the chief 19 criminal enforcement agency and local law enforcement agencies 20 (local law enforcement). 21 HEMP LICENSES AND FEES. DALS is required to accept and 22 approve or disapprove applications for the issuance of a hemp 23 license (license) on a one-year basis subject to renewal. A 24 license covers a crop site which cannot exceed 40 contiguous 25 acres. DALS may issue any number of licenses to a single 26 applicant. However, a person is prohibited from holding more 27 than 40 crop sites under all current licenses issued to the 28 person. DALS must assess and collect hemp fees (fees) for the 29 issuance of a license and for an annual fall inspection until 30 June 30, 2022. After that date, fees are to be established by 31 rule based on the amount required to administer and enforce the 32 provisions of the bill. Moneys collected from the fees are to 33 be deposited into a hemp fund (fund) which are appropriated 34 to DALS for purposes of administering and enforcing these 35 -25- LSB 2748HZ (3) 88 da/rn 25/ 27
H.F. 754 provisions. 1 REGULATIONS. DALS is required to adopt rules regulating 2 the production of hemp, and may adopt rules as necessary or 3 desirable to administer and enforce the Code chapter. The bill 4 allows a person to engage in the retail sale of hemp products 5 produced in another state; the addition of a hemp derivative to 6 cosmetics, personal care products, and products intended for 7 human or animal consumption; and the transport of hemp product 8 through this state. The bill provides that under certain 9 conditions, a person is not subject to a criminal offense 10 for producing, possessing, using, harvesting, manufacturing, 11 marketing, transporting, delivering, or distributing hemp 12 produced on a licensee’s crop site. The bill requires that a 13 person hold a certificate of crop inspection issued by DALS. 14 INSPECTIONS AND TESTS. DALS is required to conduct an 15 annual inspection of a licensee’s crop site and obtain a sample 16 of plants that are part of the crop in order to conduct an 17 official test. DPS or local law enforcement may also conduct 18 an inspection of the crop site and conduct its own test. The 19 bill provides that DALS, DPS, and local law enforcement may 20 enter on a crop site and other associated places in order to 21 conduct an inspection. 22 ENFORCEMENT AND PENALTIES. DALS may suspend or revoke a 23 hemp license for a number of causes, including for a violation 24 of statute or rule. DALS may order the disposal of a crop 25 produced on a licensee’s crop site if official test results 26 indicate that a crop does not qualify as hemp. The disposal, 27 including the crop’s destruction, must be at the licensee’s 28 expense. A person who violates a provision of the bill is 29 subject to a civil penalty of not less than $500 and not 30 more than $2,500. DALS or the attorney general may apply to 31 district court to obtain an injunction to enforce the bill’s 32 provisions. DALS may establish a program to correct certain 33 violations committed negligently by a licensee including 34 producing a crop having a maximum THC concentration that does 35 -26- LSB 2748HZ (3) 88 da/rn 26/ 27
H.F. 754 not exceed 2 percent. 1 CONTINGENT IMPLEMENTATION AND EFFECTIVE DATE. Generally, 2 the bill’s provisions enacting Code chapter 204 are to be 3 implemented when DALS certifies USDA has approved DALS’ state 4 plan. The bill takes effect July 1, 2019, except for those 5 provisions, including criminal offenses, which make enactment 6 contingent upon implementation of Code chapter 204. 7 -27- LSB 2748HZ (3) 88 da/rn 27/ 27