House File 781 - Introduced HOUSE FILE 781 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO HF 754) (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 2748HW (3) 88 da/rn

H.F. 781 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 10 offense, in this state or another state, and includes a guilty 11 plea, deferred judgment from the time of entry of the deferred 12 judgment until the time the defendant is discharged by the 13 court without entry of judgment, or other finding of guilt by a 14 court of competent jurisdiction. 15 3. “Crop site” or “site” means a single contiguous parcel 16 of agricultural land suitable for the planting, growing, or 17 harvesting of hemp, if the parcel does not exceed forty acres. 18 4. “Department” means the department of agriculture and land 19 stewardship. 20 5. “Federal hemp law” means that part of Tit. X of the 21 Agriculture Improvement Act of 2018, Pub. L. No. 115-334, that 22 authorizes hemp production according to a state plan approved 23 by the United States department of agriculture, as provided in 24 §10113 of that Act, amending the Agricultural Marketing Act 25 of 1946, 7 U.S.C. §1621 et seq., including by adding §§297A 26 through 297E. 27 6. a. “Hemp” means the plant cannabis sativa L. and 28 any part of that plant, including the seeds thereof, and 29 all derivatives, extracts, cannabinoids, isomers, acids, 30 salts, and salts of isomers, whether growing or not, with a 31 delta-9 tetrahydrocannabinol concentration of not more than 32 three-tenths of one percent on a dry weight basis. 33 b. “Hemp” also means a plant of the genus cannabis other 34 than cannabis sativa L., but only to the extent allowed by the 35 -1- LSB 2748HW (3) 88 da/rn 1/ 28

H.F. 781 department in accordance with applicable federal law, including 1 the federal hemp law. 2 7. “Hemp license” or “license” means a hemp license issued 3 pursuant to section 204.4. 4 8. a. “Hemp product” means an item derived from or made by 5 processing hemp or parts of hemp. 6 b. “Hemp product” includes but is not limited to any item 7 manufactured from hemp, including but not limited to cloth, 8 cordage, fiber, food, fuel, paint, paper, particle board, 9 plastic, hemp seed, seed meal, or seed oil. 10 c. “Hemp product” does not include any item or part of an 11 item with a maximum delta-9 tetrahydrocannabinol concentration 12 that exceeds three-tenths of one percent on a dry weight basis. 13 d. “Hemp product” does not include hemp seed that is capable 14 of germination. 15 9. “Licensee” means a person who obtains a hemp license from 16 the department under this chapter. 17 10. “Local law enforcement agency” means an office of county 18 sheriff or a municipal police department. 19 11. “Negligent violation program” or “program” means the 20 program that may be established by the department to allow 21 a licensee to correct certain violations of this chapter as 22 provided in section 204.14. 23 12. “Produce” means to provide for the planting, raising, 24 cultivating, managing, harvesting, and storing a crop. 25 Sec. 3. NEW SECTION . 204.3 State plan —— implementing 26 rules. 27 1. The department shall prepare a state plan to be submitted 28 to the United States secretary of agriculture under the federal 29 hemp law. 30 2. Upon approval of the state plan, the department shall 31 assume primary regulatory authority over the production of hemp 32 in this state as provided in this chapter. However, nothing in 33 this chapter affects the powers and duties of the department of 34 public safety or local law enforcement agencies from enforcing 35 -2- LSB 2748HW (3) 88 da/rn 2/ 28

H.F. 781 any law within its purview or jurisdiction. The department of 1 public safety shall be the chief criminal enforcement agency 2 under this chapter. 3 3. The department may prepare any number of amended state 4 plans or any number of amendments to an existing state plan to 5 be submitted for approval by the United States secretary of 6 agriculture. 7 4. The department may provide for the receipt, filing, 8 processing, and return of documents described in this chapter 9 in an electronic format, including but not limited to the 10 transmission of documents by the internet. The department 11 shall provide for the authentication of official forms in an 12 electronic format that may include electronic signatures as 13 provided in chapter 554D. An official form in an electronic 14 format shall have the same validity and is discoverable and 15 admissible in evidence if given under penalty of perjury in the 16 same manner as an original printed form. The department shall 17 provide for the issuance of certificates of crop inspection in 18 an electronic format as provided in section 204.8. 19 5. a. The department shall prepare the state plan, any 20 amended state plan, or amendment to an approved state plan, by 21 adopting rules pursuant to chapter 17A. 22 b. The department may adopt the rules on an emergency basis 23 as provided in section 17A.4, subsection 3, and section 17A.5, 24 subsection 2, and the rules shall be effective immediately upon 25 filing unless a later date is specified in the rules. 26 Sec. 4. NEW SECTION . 204.4 Hemp license —— requirements. 27 1. The department shall establish and administer a process 28 to receive, evaluate, and approve or disapprove applications 29 for a hemp license. 30 2. The department shall prepare and publish one or more hemp 31 license application forms in cooperation with the department of 32 public safety. A completed application form submitted to the 33 department shall contain all of the following: 34 a. The applicant’s full name and residence address. 35 -3- LSB 2748HW (3) 88 da/rn 3/ 28

H.F. 781 b. A legal description and map of each crop site where the 1 applicant proposes to produce the hemp including its global 2 positioning system location. 3 c. The number of crop acres to be used for hemp production. 4 d. The name of the hemp variety. 5 e. The results of a national criminal history record check 6 of an applicant as may be required by the department. The 7 department shall inform an applicant if a national criminal 8 history record check will be conducted. If a national criminal 9 history record check is conducted, the applicant shall provide 10 the applicant’s fingerprints to the department. The department 11 shall provide the fingerprints to the department of public 12 safety through the state criminal history repository to the 13 federal bureau of investigation. The applicant shall pay the 14 actual cost of conducting any national criminal history record 15 check to the department of agriculture and land stewardship. 16 The department shall pay the actual cost of conducting the 17 national criminal history record check to the department of 18 public safety from moneys deposited in the hemp fund pursuant 19 to section 204.6. The department of public safety shall treat 20 such payments as repayment receipts as defined in section 8.2. 21 The results of the national criminal history check shall not be 22 considered a public record under chapter 22. 23 f. Any other information required in order to administer and 24 enforce the provisions of this chapter. 25 3. As a condition for issuance of a hemp license, the 26 licensee consents to the department, the department of public 27 safety, or a local law enforcement agency entering upon a crop 28 site as provide in section 204.9. 29 4. The department may do all of the following: 30 a. Require that all or some licenses expire on the same 31 date. 32 b. Provide a different application form and requirements 33 relating to the submission, evaluation, and approval or 34 disapproval of an application for a renewed hemp license 35 -4- LSB 2748HW (3) 88 da/rn 4/ 28

H.F. 781 consistent with federal law. 1 5. An applicant shall not be issued a hemp license unless 2 the applicant agrees to comply with all terms and conditions 3 relating to the regulation of a licensee as provided in this 4 chapter. 5 6. A person may hold any number of licenses at the same 6 time. However, the person shall not hold a legal or equitable 7 interest in a licensed crop site, if the total number of acres 8 of all licensed crop sites in which the person holds all such 9 interests equals more than forty acres. 10 7. An initial hemp license expires one year from the date 11 of issuance and may be issued on a renewal basis annually. The 12 department may require that a licensee apply for an amended or 13 new initial license if information contained in the existing 14 application is no longer accurate or is incomplete. 15 8. The department and the department of public safety shall 16 cooperate to develop procedures for the sharing of information 17 regarding applicants, including information required to be 18 completed on application forms. Upon request, the department 19 or the department of public safety shall provide information 20 regarding an applicant to a department of agriculture or law 21 enforcement agency in another state. 22 9. Information received on an application form shall be 23 maintained by the department for not less than three years. 24 10. The department shall disapprove the application of a 25 person for good cause, which shall include, but is not limited 26 to, any of the following: 27 a. A conviction for committing a criminal offense involving 28 a controlled substance as described in section 204.7. 29 b. A third violation of a provision of this chapter in 30 a five-year period. The department shall disapprove any 31 application of a person for a five-year period following the 32 date of the person’s last violation in the same manner as 33 provided in section 204.15. 34 c. The revocation of a hemp license under section 204.11, 35 -5- LSB 2748HW (3) 88 da/rn 5/ 28

H.F. 781 or the revocation of a license, permit, registration, or other 1 authorization to produce hemp in any other state. 2 11. A hemp license shall be suspended or revoked as provided 3 in section 204.11. 4 Sec. 5. NEW SECTION . 204.5 Hemp fees. 5 1. The department shall impose, assess, and collect the 6 following hemp fees: 7 a. A license fee which shall be paid by a person being 8 issued a hemp license as provided in section 204.4. 9 b. An inspection fee which shall be paid by a licensee for 10 the inspection of the licensee’s crop site, including obtaining 11 samples of plants to conduct a test, as provided in section 12 204.8. 13 2. a. For each hemp license, the license fee shall be 14 imposed on an interim basis until June 30, 2022. The amount of 15 the license fee shall not be more than the following: 16 (1) Five hundred dollars plus five dollars per acre, for 17 each site that is five acres or less. 18 (2) Seven hundred and fifty dollars, plus five dollars per 19 acre, for each site that is more than five acres but not more 20 than ten acres. 21 (3) One thousand dollars plus five dollars per acre, for 22 each site that is more than ten acres. 23 b. For conducting an inspection and official test as 24 provided in section 204.8, the department shall charge an 25 inspection fee on an interim basis until June 30, 2022, as 26 follows: 27 (1) In the case of an annual inspection and official test, a 28 base fee of not more than one thousand dollars. The department 29 may charge a supplemental fee in an amount determined by the 30 department for conducting an inspection and official test of 31 any additional variety of hemp produced on the same crop site. 32 (2) In the case of any other inspection and official test, 33 conducted at the request of the licensee, the department shall 34 charge a base fee or special fee in the same manner as provided 35 -6- LSB 2748HW (3) 88 da/rn 6/ 28

H.F. 781 in subparagraph (1). 1 c. This subsection is repealed on July 1, 2022. 2 3. a. The department shall adopt rules to establish hemp 3 fees for the issuance of a hemp license pursuant to section 4 204.4. 5 b. The department shall adopt rules to establish hemp fees 6 for conducting inspections and obtaining samples of plants 7 to conduct tests, including but not limited to an annual 8 inspection and official test, pursuant to section 204.8. 9 c. The department shall calculate the rates, or a range of 10 rates, of the hemp fees to be effective for each successive 11 twelve-month period. The total amount of hemp fees collected 12 by the department pursuant to this subsection shall not be 13 more than the department’s estimate of the total amount of 14 revenues necessary to administer and enforce the provisions 15 of this chapter based on the expected revenue collected from 16 the hemp fees and the costs to be incurred by the department 17 in administering and enforcing the provisions of this chapter 18 during that period. The department may adjust the rates within 19 the range throughout the period as the department determines 20 necessary to comply with this paragraph. 21 d. The department may establish different rates for any 22 category of hemp fees based on criteria determined relevant by 23 the department, which may include the number of acres of the 24 crop site and the type of hemp license issued. 25 e. (1) The rules shall first take effect immediately after 26 the repeal of subsection 2. 27 (2) This paragraph “e” is repealed immediately after the 28 rules described in subparagraph (1) take effect. 29 4. The license fee and any annual inspection fee shall 30 be collected by the department at the time the hemp license 31 application is submitted. 32 5. Any hemp fee collected by the department under this 33 section shall be deposited in the hemp fund established 34 pursuant to section 204.6. 35 -7- LSB 2748HW (3) 88 da/rn 7/ 28

H.F. 781 6. The department may refund all or any part of a hemp fee 1 collected under this section to an applicant. 2 Sec. 6. NEW SECTION . 204.6 Hemp fund. 3 1. A hemp fund is established in the state treasury under 4 the management and control of the department. 5 2. The hemp fund shall include moneys collected by the 6 department from hemp fees imposed and assessed under section 7 204.5 and moneys appropriated by the general assembly for 8 deposit in the hemp fund. The hemp fund may include other 9 moneys available to and obtained or accepted by the department, 10 including moneys from public or private sources. 11 3. Moneys in the hemp fund are appropriated to the 12 department and shall be used exclusively to carry out the 13 responsibilities conferred upon the department under this 14 chapter as determined and directed by the department, and 15 shall not require further special authorization by the general 16 assembly. 17 4. a. Notwithstanding section 12C.7, interest or earnings 18 on moneys in the hemp fund shall be credited to the hemp fund. 19 b. Notwithstanding section 8.33, moneys credited to the 20 hemp fund that remain unexpended or unobligated at the end of a 21 fiscal year shall not revert to any other fund. 22 Sec. 7. NEW SECTION . 204.7 Regulations —— exemption for 23 certain criminal offenses. 24 1. The Iowa crop improvement association recognized in 25 chapter 177 shall adopt procedures to certify hemp seed capable 26 of germination. Hemp seed certified under this subsection 27 shall be presumed to comply with the requirements for hemp 28 produced under this chapter. 29 2. A person who materially falsifies any information 30 contained in an application under section 204.4 shall be 31 ineligible to produce hemp under this chapter. 32 3. a. A licensee convicted of an offense punishable 33 as a felony, for producing, possessing, using, harvesting, 34 handling, manufacturing, marketing, transporting, delivering, 35 -8- LSB 2748HW (3) 88 da/rn 8/ 28

H.F. 781 or distributing a controlled substance before, on, or after 1 the implementation date of this chapter shall be ineligible to 2 produce hemp under this chapter for a ten-year period following 3 the date of conviction. 4 b. A licensee convicted in another state of an offense, 5 punishable in that state as a felony, substantially 6 corresponding to an offense described in paragraph “a” , before, 7 on, or after the implementation date of this chapter, shall be 8 ineligible to produce hemp under this chapter for a ten-year 9 period following the date of conviction. The department shall 10 recognize the statute of another state which defines such 11 offense substantially equivalent to an offense described in 12 paragraph “a” as a corresponding statute. 13 4. The department shall adopt rules regulating the 14 production of hemp, including but not limited to inspection 15 and testing requirements under section 204.8 or 204.9, and the 16 issuance of a certificate of crop inspection under section 17 204.8. The department shall adopt rules as necessary to 18 administer the negligent violation program. The department may 19 adopt other rules as necessary or desirable to administer and 20 enforce the provisions of this chapter relating to hemp or hemp 21 products. 22 5. a. A person may engage in the retail sale of a hemp 23 product if the hemp was produced in this state or another state 24 in compliance with the federal hemp law or other applicable 25 federal law. A person may engage in the retail sale of a hemp 26 product if the hemp was produced in another jurisdiction in 27 compliance with applicable federal law and the laws of the 28 other jurisdiction, if such law is substantially the same as 29 applicable federal law. 30 b. To the extent consistent with applicable federal law, 31 a derivative of hemp, including hemp-derived cannabidiol, may 32 be added to cosmetics, personal care products, and products 33 intended for human or animal consumption. The addition of such 34 a derivative shall not be considered an adulteration of the 35 -9- LSB 2748HW (3) 88 da/rn 9/ 28

H.F. 781 product, unless otherwise provided in applicable federal law. 1 c. A person may transport a hemp product within and through 2 this state and may export a hemp product to any foreign nation, 3 in accordance with applicable federal law and the law of the 4 foreign nation. 5 d. A hemp product complying with this subsection is not a 6 controlled substance under chapter 124 or 453B. 7 6. A licensee is not subject to a criminal offense 8 under chapter 124 or 453B for producing, possessing, using, 9 harvesting, handling, manufacturing, marketing, transporting, 10 delivering, or distributing hemp, if all of the following 11 apply: 12 a. The hemp is seed delivered to the licensee for planting 13 at the licensee’s crop site, or the hemp is or was produced at 14 the licensee’s crop site. 15 b. The department, the department of public safety, or 16 a local law enforcement agency is allowed to access the 17 licensee’s crop site as part of an inspection as provided in 18 sections 204.8 and 204.9, including by obtaining a sample of 19 plants to conduct a test pursuant to section 204.8. 20 c. The department has issued a certificate of crop 21 inspection to the licensee covering the harvested hemp as 22 provided in section 204.8. 23 7. A person other than a licensee is not subject to a 24 criminal offense under chapter 124 or 453B for producing, 25 possessing, using, harvesting, handling, manufacturing, 26 marketing, transporting, delivering, or distributing hemp, 27 while on the licensee’s crop site, if all of the following 28 applies: 29 a. The hemp is produced at the licensee’s crop site. 30 b. The person is authorized to be on the crop site by the 31 licensee. 32 8. A person other than a licensee is not subject to a 33 criminal offense under chapter 124 or 453B for possessing, 34 handling, using, manufacturing, marketing, transporting, 35 -10- LSB 2748HW (3) 88 da/rn 10/ 28

H.F. 781 delivering, or distributing hemp produced in this state, if all 1 of the following applies: 2 a. The hemp is hemp seed delivered to the licensee for 3 planting at the licensee’s crop site, or the hemp was produced 4 at a licensee’s crop site. 5 b. If the hemp has been harvested, the person holds a 6 certificate of crop inspection covering the harvested hemp as 7 provided in section 204.8. 8 c. The person is acting in compliance with the federal hemp 9 law and other applicable federal law. 10 9. A person is not subject to a criminal offense under 11 chapter 124 or 453B for possessing, using, harvesting, 12 handling, manufacturing, marketing, transporting, delivering, 13 or distributing hemp produced in another state in compliance 14 with the federal hemp law and other applicable federal law. 15 Sec. 8. NEW SECTION . 204.8 Inspections and tests —— 16 certificate of crop inspection. 17 1. a. The department shall conduct an annual inspection 18 of a licensee’s crop site to determine if the crop produced 19 at the site qualifies as hemp under this section. The annual 20 inspection shall include obtaining a sample of plants that 21 are part of the crop and providing for an official test of 22 that sample. The inspection shall be conducted as provided in 23 section 204.9. 24 b. A licensee shall deliver a notice to the department 25 stating the expected harvest date for the crop produced at the 26 licensee’s crop site. The department must receive the notice 27 at least thirty days prior to the expected harvest date. The 28 department shall conduct the annual inspection of the site 29 within thirty days prior to the actual harvest date. 30 c. The department shall provide the department of public 31 safety any official test results that indicate a sample exceeds 32 the maximum concentration of three-tenths of one percent on a 33 dry weight basis. The department shall provide special notice 34 to the department of public safety, the county attorney, and 35 -11- LSB 2748HW (3) 88 da/rn 11/ 28

H.F. 781 the attorney general if a licensee violates this chapter. 1 d. A licensee shall not harvest any portion of a crop 2 produced at the crop site unless the department has issued the 3 licensee a certificate of crop inspection. The department 4 shall issue a verified copy of the certificate to any other 5 person upon request of the licensee. The certificate shall be 6 published by the department as an official form. To the extent 7 allowed by the federal hemp law, the certificate shall be proof 8 that the harvested crop described on the form qualifies as hemp 9 pursuant to the results of an official test. 10 2. The department may conduct official tests for additional 11 varieties of hemp located on the same crop site. The 12 department may conduct additional inspections and tests upon 13 the request of a licensee. 14 3. The official test shall be a composite test of the plants 15 obtained by the department from a licensee’s crop site during 16 the annual inspection and shall be conducted by a laboratory 17 designated by the department. The sample must have a maximum 18 concentration of delta-9 tetrahydrocannabinol that does not 19 exceed three-tenths of one percent on a dry weight basis. 20 4. The department of public safety or a local law 21 enforcement agency may conduct an inspection of a licensee’s 22 crop site in order to determine that the licensee is complying 23 with the criminal provisions of this chapter as well as 24 chapters 124 and 453B. The department of public safety or a 25 local law enforcement agency may conduct a test of the plants 26 obtained by that department or local law enforcement agency 27 from the licensee’s crop site during the inspection according 28 to procedures adopted by the department of public safety. 29 Sec. 9. NEW SECTION . 204.9 Right of access. 30 1. a. The department, including an authorized inspector, 31 employee, or agent of the department, may enter onto a crop 32 site during reasonable hours to determine whether a licensee is 33 acting in compliance with the requirements under this chapter. 34 The department may also obtain an administrative search warrant 35 -12- LSB 2748HW (3) 88 da/rn 12/ 28

H.F. 781 under section 808.14 to enter into any structure if all of the 1 following apply: 2 (1) The structure is not a dwelling. 3 (2) The structure is located on or in close proximity to the 4 crop site, and the use of such structure is directly related to 5 the production of hemp, including but not limited to a barn, 6 machine shed, greenhouse, or storage crib. 7 b. The department may require the licensee to produce 8 business records, including books, accounts, records, files, 9 and any other documents in print or electronic media that the 10 department deems relevant to an inquiry conducted under this 11 chapter. 12 c. The department may request the department of public 13 safety or a local law enforcement agency accompany the 14 department of agriculture and land stewardship when conducting 15 an inspection. 16 2. a. The department of public safety or a local law 17 enforcement agency may conduct an inspection of a licensee’s 18 crop site or enter into a structure located on or in close 19 proximity to the crop site and may require a licensee to 20 produce business records, in the same manner and according to 21 the same limitations as the department of agriculture and land 22 stewardship pursuant to subsection 1. 23 b. The department of public safety or a law enforcement 24 agency may obtain a sample of plants that are part of the 25 crop and provide for a test of that sample as provided in 26 section 204.8. The department of public safety or a local law 27 enforcement agency shall not impose, assess, or collect a fee 28 for conducting an inspection or test under this section. 29 3. A person shall not prevent the department, the department 30 of public safety, or a local law enforcement agency from 31 administering and enforcing the provisions of this section by 32 any means, including but not limited to any act, including 33 a refusal to allow entry, misrepresentation, omission, or 34 concealment of facts. 35 -13- LSB 2748HW (3) 88 da/rn 13/ 28

H.F. 781 4. A licensee shall not harvest any portion of a crop 1 produced at a crop site if the department, the department of 2 public safety, or a local law enforcement agency has been 3 prevented from accessing the site under this section. 4 Sec. 10. NEW SECTION . 204.10 Order of disposal. 5 1. If a crop that is produced at a licensee’s crop site does 6 not qualify as hemp according to an official test conducted 7 pursuant to section 204.8, the department, in consultation with 8 the department of public safety, shall order the disposal of 9 the crop by destruction at the site or if necessary require the 10 crop to be removed to another location for destruction. 11 2. The department may request assistance from the 12 department of public safety or a local law enforcement agency 13 as necessary to carry out the provisions of this section. The 14 department upon request shall deliver any sample of the crop 15 to the department of public safety or a local law enforcement 16 agency. 17 3. The licensee shall pay the department for all actual 18 and reasonable costs of the destruction of the crop. If the 19 department assumes any amount of the costs, it may charge that 20 amount to the licensee. If the licensee fails to reimburse any 21 of that amount to the department, the department may report the 22 amount to the county treasurer. The amount shall be placed 23 upon the tax books, and collected with interest and penalties 24 after due, in the same manner as other unpaid property taxes. 25 The county shall reimburse the department within thirty days 26 from the collection of the property taxes. 27 4. To the extent allowed by applicable federal law, the 28 department may provide for the disposal of the mature stalks 29 of the crop confiscated by the department for the licensee’s 30 on-farm use and at the licensee’s expense. 31 Sec. 11. NEW SECTION . 204.11 Disciplinary action. 32 1. The department may suspend or revoke a hemp license 33 obtained under section 204.4 by a person who does any of the 34 following: 35 -14- LSB 2748HW (3) 88 da/rn 14/ 28

H.F. 781 a. Provides false or misleading information to the 1 department under this chapter, including by submitting a false 2 application. 3 b. Fails to comply with or violates any provision of this 4 chapter, including a rule adopted by the department, the 5 department of public safety, or a condition of an application 6 for the issuance of a hemp license under section 204.4. 7 c. Fails to comply with an order issued by the department 8 under this chapter. 9 2. The department shall revoke a license issued pursuant to 10 section 204.4, if any of the following apply: 11 a. The department would disapprove a new application to that 12 person for good cause as provided in section 204.4, subsection 13 10. 14 b. The person submits a materially false application to 15 participate in the negligent violation program. 16 3. The suspension or revocation of a hemp license is in 17 addition to an order of disposal under section 204.10; the 18 imposition of a civil penalty under section 204.12, subject 19 to the provisions of section 204.15; or the imposition of any 20 other civil or criminal penalty authorized under state law. 21 Sec. 12. NEW SECTION . 204.12 Civil penalties. 22 1. A person who violates a provision of this chapter is 23 subject to a civil penalty of not less than five hundred 24 dollars and not more than two thousand five hundred dollars. 25 The department shall impose, assess, and collect the civil 26 penalty. Each day that a continuing violation occurs may be 27 considered a separate offense. 28 2. Notwithstanding subsection 1, a civil penalty shall not 29 be imposed, assessed, or collected against a licensee who is 30 participating in or has successfully completed the negligent 31 violation program pursuant to section 204.15. 32 3. All civil penalties collected under this section shall be 33 deposited into the general fund of the state. 34 Sec. 13. NEW SECTION . 204.13 Injunctive relief. 35 -15- LSB 2748HW (3) 88 da/rn 15/ 28

H.F. 781 The department, or the attorney general acting on behalf of 1 the department, may apply to the district court for injunctive 2 relief in order to restrain a person from acting in violation 3 of this chapter. In order to obtain injunctive relief, the 4 department, or attorney general, shall not be required to post 5 a bond or prove the absence of an adequate remedy at law unless 6 the court for good cause otherwise orders. The court may order 7 any form of prohibitory or mandatory relief that is appropriate 8 under principles of equity, including but not limited to 9 issuing a temporary or permanent restraining order. 10 Sec. 14. NEW SECTION . 204.14 Criminal offense. 11 A person is subject to criminal penalties provided under the 12 applicable provisions in chapter 124 or 453B, if all of the 13 following apply: 14 1. The person commits an offense under one of the applicable 15 provisions of chapter 124 or 453B by possessing, handling, 16 using, manufacturing, marketing, transporting, delivering, 17 or distributing the plant cannabis sativa L., regardless 18 of whether the plant was produced in compliance with the 19 provisions of this chapter. 20 2. The person is required to hold a certificate of crop 21 inspection under section 204.8 to possess, handle, use, 22 manufacture, market, transport, deliver, or distribute hemp 23 that has been harvested under this chapter. 24 3. The person knowingly or intentionally does any of the 25 following: 26 a. Falsifies the certificate of crop inspection. 27 b. Acquires the certificate of crop inspection that the 28 person knows has been falsified. 29 Sec. 15. NEW SECTION . 204.15 Negligent violation —— 30 program. 31 1. a. The department may find that a licensee has 32 negligently violated a provision of this chapter by doing any 33 of the following: 34 (1) Completing an application for a license without 35 -16- LSB 2748HW (3) 88 da/rn 16/ 28

H.F. 781 providing a legal description of the crop site pursuant to 1 section 204.4. 2 (2) Failing to renew a hemp license for an existing crop 3 site or obtain a hemp license for a new crop site pursuant to 4 section 204.4. 5 (3) Producing a crop on the licensee’s crop site with a 6 maximum concentration of delta-9 tetrahydrocannabinol that 7 exceeds three-tenths of one percent according to the results 8 of an official test of a sample obtained from the crop site 9 pursuant to an inspection conducted under section 204.8. 10 b. It is conclusively presumed that a licensee acted 11 with a culpable mental state greater than negligence, if 12 the department obtains a sample of a crop produced on the 13 licensee’s crop site and the official test results of the 14 sample conducted pursuant to section 204.8 indicate a maximum 15 concentration of delta-9 tetrahydrocannabinol in excess of two 16 percent on a dry weight basis. 17 c. If the department determines a licensee violated this 18 chapter with a culpable mental state greater than negligence, 19 the department shall immediately report the licensee’s 20 violation to the department of public safety, the county 21 attorney, and the attorney general, who shall take action as 22 the facts and circumstances warrant. The department shall also 23 report the licensee to the United States attorney general to 24 the extent required by the federal hemp law. 25 2. The department may establish a negligent violation 26 program. The purpose of the program is to allow a 27 participating licensee who has negligently violated a provision 28 of this chapter as described in subsection 1 to comply with a 29 corrective plan established by the department to correct each 30 negligent violation, including by providing for all of the 31 following: 32 a. A reasonable date, established by the department, for the 33 licensee to correct each cause for the violation. 34 b. The filing of periodic reports to the department 35 -17- LSB 2748HW (3) 88 da/rn 17/ 28

H.F. 781 evidencing that the licensee is complying with the requirements 1 of this chapter. The licensee shall submit the reports to the 2 department according to a schedule required by the department. 3 The licensee shall submit a report to the department for 4 at least two years from the date that the licensee first 5 participated in the program. 6 c. Any other requirement established by the department. 7 3. A licensee shall not participate in the negligent 8 violation program, if a test of a sample of plants that 9 are part of a crop produced on the licensee’s crop site 10 exceeds a maximum concentration of two percent delta-9 11 tetrahydrocannabinol on a dry weight basis. 12 4. A person who has violated a provision of this chapter 13 three times in a five-year period shall be ineligible to 14 participate in the negligent violation program, or produce 15 hemp, for a period of five years beginning on the date of the 16 third violation. 17 5. The department shall certify that a licensee has 18 successfully completed the negligent violation program. The 19 certification shall be published by the department as an 20 official form. The department shall deliver the certification 21 to the licensee which shall be proof of the licensee’s 22 compliance. 23 6. A licensee who is participating in or has successfully 24 completed the negligent violation program shall not be subject 25 to any of the following: 26 a. A civil penalty under section 204.12 for committing a 27 violation of this chapter. 28 b. A criminal offense under chapter 124 or 453B arising 29 out of a negligent violation of this chapter, if the licensee 30 would otherwise be guilty of producing, possessing, using, 31 harvesting, handling, or distributing the plant cannabis 32 pursuant to the results of a test conducted pursuant to section 33 204.8. 34 Sec. 16. NEW SECTION . 204.16 Waivers or variances. 35 -18- LSB 2748HW (3) 88 da/rn 18/ 28

H.F. 781 If the department determines there is a conflict with a 1 regulation or order promulgated by a federal agency and a 2 provision of this chapter, the department may grant a variance 3 or waiver from the provision of this chapter to the extent such 4 variance or waiver is allowed under the federal hemp law and 5 the United States department of agriculture. The waiver or 6 variance shall expire not later than July 1 of the succeeding 7 legislative session. 8 Sec. 17. NEW SECTION . 204.17 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 and related regulations. 14 b. Other laws of this state, including any administrative 15 rules, relating to product development, product manufacturing, 16 consumer safety, or public health so long as the state law is 17 compatible with applicable federal law. 18 c. Local law relating to product development, product 19 manufacturing, consumer safety, or public health so long as the 20 local law is consistent with federal and state law. 21 3. Except as provided in section 204.7, nothing in this 22 chapter shall be construed or applied to prohibit a person 23 from possessing, handling, using, manufacturing, marketing, 24 transporting, delivering, or distributing a hemp product. 25 4. Nothing in this chapter shall be construed or applied 26 to authorize a person to manufacture, recommend, possess, use, 27 dispense, deliver, transport, or administer medical cannabidiol 28 pursuant to chapter 124E. 29 5. Nothing in this chapter shall be construed or applied to 30 infringe upon the ability of the department of public safety 31 or a local law enforcement agency to obtain a search warrant 32 issued by a court, or enter onto any premises in a manner 33 consistent with the laws of this state and the United States, 34 including Article I, section 8, of the Constitution of the 35 -19- LSB 2748HW (3) 88 da/rn 19/ 28