Senate File 2398 - Reprinted SENATE FILE 2398 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 329) (As Amended and Passed by the Senate April 4, 2018 ) A BILL FOR An Act relating to industrial hemp, including the regulation 1 of its production as part of a research program, marketing 2 for purposes of manufacturing industrial hemp products, 3 providing for fees, making appropriations, providing for 4 enforcement and the confiscation and destruction of certain 5 property, and including penalties. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 SF 2398 (4) 87 da/rj/jh

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

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

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

S.F. 2398 department of justice in order to obtain industrial hemp seeds 1 for certification pursuant to section 188.18 as part of the 2 industrial hemp production program as provided in section 3 188.14. 4 4. The department or a registrant may seek a waiver of a 5 federal regulation promulgated by the United States department 6 of agriculture or the drug enforcement administration of the 7 United States department of justice if necessary to fully 8 implement the provisions of this chapter. 9 Sec. 7. NEW SECTION . 188.6 General prohibitions. 10 1. A person shall not produce, handle, transport, market, 11 or process industrial hemp in this state unless the industrial 12 hemp has been produced pursuant to the industrial hemp 13 commodity program established pursuant to section 188.13 or 14 the industrial hemp production program established pursuant to 15 section 188.14. 16 2. Nothing in this chapter prevents a person from producing, 17 handling, transporting, marketing, or processing an industrial 18 hemp product. 19 Sec. 8. NEW SECTION . 188.7 Cannabidiol production 20 prohibited —— contingent repeal. 21 1. Industrial hemp shall not be used to produce medical 22 cannabidiol as defined in section 124E.2. 23 2. Nothing in this chapter shall be construed to authorize 24 a person to recommend, possess, use, dispense, deliver, 25 transport, or administer medical cannabidiol. 26 Sec. 9. NEW SECTION . 188.8 Maximum concentration of 27 tetrahydrocannabinol. 28 1. A test of a Cannabis sativa plant under this chapter 29 shall be conducted by the department or a qualified public or 30 private laboratory approved by the department. The department 31 shall establish protocols for sampling and testing Cannabis 32 sativa plants produced pursuant to the provisions of this 33 chapter, including for obtaining test samples for delivery to 34 the laboratory, and the receipt of test results delivered to 35 -4- SF 2398 (4) 87 da/rj/jh 4/ 23

S.F. 2398 the department, a registrant, or a licensee. The concentration 1 of delta-9 tetrahydrocannabinol present in a Cannabis sativa 2 plant shall be measured on a dry weight basis in the same 3 manner as provided under 7 U.S.C. §5940 unless subsequent 4 controlling federal law provides otherwise. 5 2. The maximum concentration of delta-9 6 tetrahydrocannabinol present in a Cannabis sativa plant in 7 order for the plant to qualify as industrial hemp shall be 8 established by the department. The department’s established 9 maximum concentration shall be the same as the maximum 10 concentration allowed to be present to qualify as industrial 11 hemp under 7 U.S.C. §5940 or any subsequent controlling federal 12 law. 13 3. In testing Cannabis sativa plants which comprise a crop, 14 a composite test result that exceeds the maximum concentration 15 of delta-9 tetrahydrocannabinol as provided in subsections 1 16 and 2 is deemed conclusive that the crop exceeds the maximum 17 concentration for industrial hemp. 18 Sec. 10. NEW SECTION . 188.9 Confidential information —— 19 exceptions. 20 1. a. All of the following information is confidential: 21 (1) A completed license application, or information which 22 is part of such application, acquired by the department, 23 a registrant, or a law enforcement agency under section 24 188.15. For purposes of this subparagraph, a completed license 25 application does not include the results of a national criminal 26 history record check acquired by the department from the 27 department of public safety pursuant to section 188.15. 28 (2) A license issued by the department to the applicant 29 under section 188.15. 30 (3) Any information acquired by the department or a 31 registrant from a licensee participating in or seeking to 32 participate in the industrial hemp commodity program under 33 section 188.13 or the industrial hemp production program under 34 section 188.14. 35 -5- SF 2398 (4) 87 da/rj/jh 5/ 23

S.F. 2398 (4) A certification of industrial hemp seed issued by the 1 association to the department, a registrant, or a licensee 2 under section 188.18. 3 (5) A survey acquired by the department or by Iowa state 4 university from the department under section 188.3. 5 (6) Information relating to the inspection of a licensee 6 participating in the industrial hemp commodity program under 7 section 188.13 or the industrial hemp production program under 8 section 188.14. 9 (7) The results of any test sample of an industrial hemp 10 crop regardless of whether the test was conducted by the 11 department, a registrant, or a licensee participating in the 12 industrial hemp commodity program under section 188.13 or the 13 industrial hemp production program under section 188.14. 14 (8) Any other information that identifies the business 15 location, operations, management, practices, or finances of a 16 licensee participating in the industrial hemp commodity program 17 under section 188.13 or the industrial hemp production program 18 under section 188.14. 19 b. The confidential information may be in a printed or 20 electronic format as part of a document, other tangible medium, 21 or accessible by a computer or similar device. 22 2. The confidential information described in subsection 23 1 is not a public record and is not otherwise subject to 24 disclosure under chapter 22. Such information that is 25 subsequently disclosed to a person under this chapter retains 26 its confidentiality in the manner provided in this section. 27 3. The department shall establish requirements and 28 procedures for the disclosure of confidential information 29 described in subsection 1, including to any of the following: 30 a. To a person authorized to receive the confidential 31 information under this chapter. 32 b. A federal agency or another state’s agency as part of 33 the process to evaluate the approval or renewal of a license 34 under section 188.15 or the licensee’s participation in the 35 -6- SF 2398 (4) 87 da/rj/jh 6/ 23

S.F. 2398 industrial hemp commodity program under section 188.13 or the 1 industrial hemp production program under section 188.14. 2 c. A law enforcement agency or a federal agency which 3 requests the confidential information in order to respond 4 to an emergency situation, a criminal complaint, or an 5 ongoing criminal investigation, subject to any applicable 6 confidentiality requirements for public records under section 7 22.7. 8 d. The department in conducting a disciplinary action 9 against a licensee under section 188.26. 10 e. A party in any judicial or administrative proceeding 11 involving discovery, so long as the disclosure is made upon 12 subpoena, or other means of legal compulsion for release. 13 f. Any person making a request to the custodian of the 14 confidential information in the same manner as provided in 15 section 22.2 to the extent that the licensee voluntarily agrees 16 in writing that such information is to be considered a public 17 record subject to chapter 22. 18 Sec. 11. NEW SECTION . 188.10 Liability. 19 The department or a registrant is not liable for the actions 20 of a licensee regardless of the department’s or registrant’s 21 legal relationship with the licensee, including but not limited 22 to any relationship as an agent, principal, fiduciary, or party 23 to a contract. 24 Sec. 12. NEW SECTION . 188.11 Industrial hemp council —— 25 establishment, membership, procedures. 26 1. An industrial hemp council is established under the 27 purview of the department. 28 2. a. The council shall consist of the following voting 29 members: 30 (1) An individual who has experience in the regulation 31 of industrial hemp production, appointed by the secretary of 32 agriculture. 33 (2) An individual who is a member of an agricultural 34 cooperative association as defined in section 502.102, 35 -7- SF 2398 (4) 87 da/rj/jh 7/ 23

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

S.F. 2398 shall be paid from moneys in the industrial hemp commodity 1 fund established in section 188.23. A legislative member is 2 eligible to receive a per diem and expenses as provided in 3 section 2.10. 4 5. a. A public member shall serve a three-year staggered 5 term commencing and ending as provided in section 69.19. A 6 state employee member shall serve at the pleasure of the 7 appointing authority. 8 b. The voting members shall elect a chairperson and vice 9 chairperson annually from the voting membership. A majority of 10 the voting members constitutes a quorum. If the chairperson 11 and vice chairperson are unable to preside over the council, a 12 majority of the voting members present may elect a temporary 13 chairperson. 14 6. A vacancy on the council shall be filled in the same 15 manner as the original appointment. A member appointed to fill 16 a vacancy created other than by expiration of a term shall be 17 appointed for the remainder of the unexpired term. 18 7. The council shall be housed within the department and the 19 department, in cooperation with Iowa state university, shall 20 furnish the council with a meeting place and all articles, 21 supplies, and services necessary to enable the council to 22 perform its duties. Iowa state university or the office of 23 attorney general may provide any technical or legal assistance 24 requested by the council or department. 25 8. The appointments of the public members are subject to the 26 requirements of sections 69.16, 69.16A, and 69.19. A public 27 member is eligible for reappointment. The secretary may remove 28 a public member if the removal is based on the public member’s 29 misfeasance, malfeasance, or willful neglect of duty or other 30 just cause, after notice and hearing, unless the notice and 31 hearing is expressly waived by the public member in writing. 32 Sec. 13. NEW SECTION . 188.12 Industrial hemp council —— 33 powers and duties. 34 1. The council shall advise the department and each 35 -9- SF 2398 (4) 87 da/rj/jh 9/ 23

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

S.F. 2398 feasible be processed into industrial hemp products or used to 1 produce a subsequent industrial hemp crop. 2 3. The department may establish standards for the labeling 3 or marketing of industrial hemp produced under this section. 4 The standards shall to every extent feasible be in accordance 5 with applicable standards in chapter 210. 6 4. A licensee must immediately report the loss of any 7 industrial hemp to the department. 8 5. A licensee shall retain industrial hemp or transfer 9 industrial hemp to another person only as authorized by the 10 department. The licensee may retain industrial hemp seeds 11 capable of germination only as authorized by the department. 12 The licensee shall only transfer industrial hemp seed that is 13 capable of germination to the department, a registrant, or 14 another licensee as approved by the department or any other 15 person authorized by law to receive the industrial hemp seed. 16 6. A licensee must regularly test the industrial hemp to 17 ensure that the industrial hemp does not exceed the maximum 18 concentration of delta-9 tetrahydrocannabinol as provided in 19 section 188.8. 20 7. The department shall conduct an inspection of the 21 licensee’s facilities and business records as provided in 22 section 188.16. 23 Sec. 15. NEW SECTION . 188.14 Industrial hemp production 24 program —— registrants and licensees. 25 1. A regents institution, or two or more regents 26 institutions acting jointly, may establish and administer 27 an industrial hemp production program. The purpose of the 28 program shall be to determine the feasibility of increasing 29 the production acreage and yield of industrial hemp as a 30 profitable crop and reducing the concentration of delta-9 31 tetrahydrocannabinol in the industrial hemp. 32 2. In order to administer a program, the regents institution 33 or regents institutions acting jointly must register with 34 the department according to requirements established by the 35 -11- SF 2398 (4) 87 da/rj/jh 11/ 23

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

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

S.F. 2398 crop under section 188.25. The surety bond shall be maintained 1 at all times during the period of licensure. The department 2 shall be notified ten days prior to any reduction in the amount 3 of the surety bond made at the request of the applicant or 4 cancellation of the surety bond by the surety. The total and 5 aggregate liability of the surety shall be limited to the face 6 amount of the surety bond. 7 5. The department may do all of the following: 8 a. Limit the number of applications that it accepts or 9 limit the period or periods when applications will be received, 10 evaluated, or accepted each year. 11 b. Establish criteria required to participate in a program 12 which may be based on the qualifications or good character 13 of the applicant, the applicant’s proposed investment in 14 industrial hemp production, the applicant’s experience in 15 commercial crop production, and the type and size of the 16 applicant’s existing agricultural operation. The department 17 may prepare and publish guidelines to assist persons in 18 determining eligibility requirements. 19 c. Require the issuance of different types of licenses or 20 require an applicant to obtain more than one license based 21 on criteria established by the department, including but not 22 limited to whether the proposed industrial hemp production is 23 to occur on noncontiguous parcels of land, whether industrial 24 hemp plants or industrial hemp seeds are proposed to be 25 produced, or whether the applicant is proposing to participate 26 in the industrial hemp commodity program under section 188.13 27 or the industrial hemp production program under section 188.14. 28 d. Require that all or some licenses expire on the same 29 date. 30 e. Provide a different application and requirements for 31 the submission, evaluation, and approval or disapproval of an 32 application for a renewed license. However, the department 33 shall require a check of the applicant’s national criminal 34 history record to be conducted under this section each time a 35 -14- SF 2398 (4) 87 da/rj/jh 14/ 23

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

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

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

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

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

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