Senate File 599 - IntroducedA Bill ForAn Act 1relating to hemp, including the regulation of hemp,
2providing for enforcement and the confiscation and
3destruction or disposal of certain property, providing for
4fees, including penalties, and providing implementation and
5effective date provisions.
2Iowa Hemp Act
3   Section 1.  NEW SECTION.  204.1  Short title.
   4This chapter shall be known as the “Iowa Hemp Act”.
5   Sec. 2.  NEW SECTION.  204.2  Definitions.
   6As used in this chapter, unless the context otherwise
   81.  “Controlled substance” means the same as defined in 21
9U.S.C. §§802 and 812, including as those sections are amended
10in §12619 of the federal hemp law or as that phrase is defined
11in Tit.IV, subtitle 1 of this Code.
   122.  “Conviction” means a conviction for an indictable offense
13and includes a guilty plea, deferred judgment from the time of
14entry of the deferred judgment until the time the defendant is
15discharged by the court without entry of judgment, or other
16finding of guilt by a court of competent jurisdiction.
   173.  “Crop site” or “site” means a single contiguous parcel
18of agricultural land suitable for the planting, growing, or
19harvesting of hemp, if the parcel does not exceed forty acres.
   204.  “Department” means the department of agriculture and land
   225.  “Federal hemp law” means that part of Tit.X of the
23Agriculture Improvement Act of 2018, Pub.L. No.115-334, that
24authorizes hemp production according to a state plan approved
25by the United States department of agriculture, as provided in
26§10113 of that Act, amending the Agricultural Marketing Act
27of 1946, 7 U.S.C.§1621 et seq., including by adding §§297A
28through 297E.
   296.  “Hemp” means a plant that meets the definition of hemp
30under federal hemp law, or another plant of the same genus but
31only to the extent allowed under federal hemp law.
   327.  “Hemp license” or “license” means a hemp license issued
33pursuant to section 204.4.
   348.  a.  “Hemp product” means an item derived from or made by
35processing hemp or parts of hemp.
   1b.  “Hemp product” does not include hemp seed that is capable
2of germination.
   39.  “Law enforcement agency” means the department of public
4safety, an office of county sheriff, or a municipal police
   610.  “Licensee” means a person who obtains a hemp license
7from the department under this chapter.
8   Sec. 3.  NEW SECTION.  204.3  State plan.
   91.  The department shall prepare a state plan to be
10submitted to the United States secretary of agriculture under
11the federal hemp law. Upon approval of the state plan, the
12department shall assume primary regulatory authority over the
13production of hemp in this state as provided in this chapter.
14The department may submit any number of amended state plans
15to the United States secretary of agriculture or any number
16of amendments to a state plan approved by the United States
17secretary of agriculture.
   182.  The department shall prepare the state plan, any amended
19state plan, or amendment to an approved state plan, by adopting
20rules pursuant to chapter 17A. The department may adopt the
21rules on an emergency basis as provided in section 17A.4,
22subsection 3, and section 17A.5, subsection 2, and the rules
23shall be effective immediately upon filing unless a later date
24is specified in the rules.
25   Sec. 4.  NEW SECTION.  204.4  Hemp license — requirements.
   261.  The department shall establish and administer a process
27to receive, evaluate, and approve or disapprove applications
28for a hemp license.
   292.  The department shall prepare and publish one or more
30hemp license application forms. A completed application form
31submitted to the department shall contain all of the following:
   32a.  The applicant’s full name and residence address.
   33b.  A legal description and map of each crop site where the
34applicant proposes to produce the hemp.
   35c.  The number of crop acres to be used for hemp production.
   1d.  The name of the hemp variety.
   2e.  Any other information required by the department in order
3to administer and enforce the provisions of this chapter.
   43.  The department may do all of the following:
   5a.  Require that all or some hemp licenses expire on the same
   7b.  Provide a different application form and requirements
8relating to the submission, evaluation, and approval or
9disapproval of an application for a renewed hemp license
10consistent with federal law.
   114.  An applicant shall not be issued a hemp license unless
12the applicant agrees to comply with all terms and conditions
13relating to the department’s regulation of a licensee.
   145.  A person may hold any number of hemp licenses at the same
15time. However, the person shall not hold a legal or equitable
16interest in a licensed crop site, if the total number of acres
17of all licensed crop sites in which the person holds all such
18interests equals more than forty acres.
   196.  An initial hemp license expires one year from the date
20of issuance and may be issued on a renewal basis annually. The
21department may require that a licensee apply for an amended or
22new initial license if information contained in the existing
23application is no longer accurate or is incomplete.
   247.  Information received on an application form shall be
25maintained by the department for not less than three years.
   268.  The department shall disapprove the application of a
27person for good cause, which shall include, but is not limited
28to, any of the following:
   29a.  The conviction of a felony within the prior ten years or
30any conviction of a controlled substance offense within that
31same period, regardless of whether either type of conviction is
32in this state or another state.
   33b.  The revocation of a hemp license under section 204.11,
34or the revocation of a license, permit, registration, or other
35authorization to produce hemp in any other state.
   19.  A hemp license shall be suspended or revoked as provided
2in section 204.11.
3   Sec. 5.  NEW SECTION.  204.5  Hemp fees.
   41.  The department shall impose, assess, and collect the
5following hemp fees:
   6a.  A license fee which shall be paid by a person being
7issued a hemp license as provided in section 204.4.
   8b.  An inspection fee which shall be paid by a licensee for
9an inspection of a licensee’s crop site as provided in section
   112.  a.  For each hemp license, the license fee shall be
12imposed on an interim basis until June 30, 2022. The amount of
13the license fee shall not be more than the following:
   14(1)  Five hundred dollars plus five dollars per acre, for
15each site that is five acres or less.
   16(2)  Seven hundred and fifty dollars, plus five dollars per
17acre, for each site that is more than five acres but less than
18ten acres.
   19(3)  One thousand dollars plus five dollars per acre, for
20each site is more than ten acres.
   21b.  For an annual inspection, an inspection fee shall be
22imposed on an interim basis until June 30, 2022. The amount
23of the inspection fee shall not be more than one thousand
24dollars. The department, during the interim period, may charge
25an additional inspection fee of not more than one thousand
26dollars for each inspection of a licensee’s crop site, if the
27inspection is conducted upon the request of the licensee.
   28c.  This subsection is repealed on July 1, 2022.
   293.  a.  The department shall adopt rules to establish hemp
30fees for the issuance of a hemp license pursuant to section
   32b.  The department shall adopt rules to establish hemp fees
33for the annual inspection of a licensee’s crop site pursuant
34to section 204.8. The rules may provide that the department
35charge an additional inspection fee for each inspection of a
-4-1licensee’s crop site, if the inspection is conducted upon the
2request of the licensee.
   3c.  The total amount of hemp fees collected by the
4department pursuant to this section shall not be more than the
5department’s estimate of the total amount of revenues necessary
6to administer and enforce the provisions of this chapter based
7on the expected revenue collected from the hemp fees and the
8costs to be incurred by the department in administering and
9enforcing the provisions of this chapter for the succeeding
10twelve-month period.
   11d.  The department may establish different rates for any
12category of hemp fees based on criteria determined relevant by
13the department, which may include the number of acres of the
14crop site and the type of hemp license issued.
   15e.  (1)  The rules shall first take effect immediately after
16the repeal of subsection 2.
   17(2)  This paragraph “e” is repealed immediately after the
18rules described in this subsection take effect.
   194.  The license fee and any annual inspection fee shall
20be collected by the department at the time the hemp license
21application is submitted.
   225.  Any hemp fee collected by the department under this
23section shall be deposited in the hemp fund established
24pursuant to section 204.6.
   256.  The department may refund all or any part of a hemp fee
26collected under this section.
27   Sec. 6.  NEW SECTION.  204.6  Hemp fund.
   281.  A hemp fund is established in the state treasury under
29the management and control of the department.
   302.  The hemp fund shall include moneys collected by the
31department from hemp fees imposed and assessed under section
32204.5 and moneys appropriated by the general assembly for
33deposit in the hemp fund. The hemp fund may include other
34moneys available to and obtained or accepted by the department,
35including moneys from public or private sources.
   13.  Moneys in the hemp fund are appropriated to the
2department and shall be used exclusively to carry out the
3responsibilities conferred upon the department under this
4chapter as determined and directed by the department, and
5shall not require further special authorization by the general
   74.  a.  Notwithstanding section 12C.7, interest or earnings
8on moneys in the hemp fund shall be credited to the hemp fund.
   9b.  Notwithstanding section 8.33, moneys credited to the
10hemp fund that remain unexpended or unobligated at the end of a
11fiscal year shall not revert to any other fund.
12   Sec. 7.  NEW SECTION.  204.7  Regulations.
   131.  The department may adopt rules regulating the
14production, handling, transporting, or marketing of hemp
15produced on a licensee’s crop site. The rules may provide
16different requirements that apply to nonseed parts of hemp and
17hemp seed, including the certification of hemp seed.
   182.  a.  Notwithstanding any other provision of law to
19the contrary, hemp that is or was produced in this state in
20compliance with this chapter is in accordance with federal hemp
21law and is not a controlled substance.
   22b.  Notwithstanding any other provision of law to the
23contrary, hemp that is or was produced in another state in
24accordance with federal hemp law is not a controlled substance.
   253.  Nothing in this chapter prohibits a person from
26producing, handling, transporting, marketing, or processing a
27hemp product.
28   Sec. 8.  NEW SECTION.  204.8  Annual inspection and official
   301.  The department shall conduct an annual inspection of
31a licensee’s crop site to determine if the crop produced at
32the site qualifies as hemp under this section. The annual
33inspection shall include obtaining a sample of plants that
34are part of the crop and providing for an official test of
35that sample. The inspection shall be conducted as provided in
-6-1section 204.9.
   22.  A licensee shall deliver a notice to the department
3stating the expected harvest date for the crop produced at the
4licensee’s crop site. The department must receive the notice
5at least thirty days prior to the expected harvest date. The
6department shall conduct an inspection of the site within
7thirty days prior to the actual harvest date. The licensee
8shall not harvest any portion of a crop produced at the site
9unless the department notifies the licensee that the crop
10qualifies as hemp pursuant to the results of an official test.
   113.  The official test shall be a composite test of the
12plants obtained by the department from the licensee’s crop site
13during an inspection and shall be conducted by the laboratory
14designated by the department. The sample must have maximum
15concentration of delta-9 tetrahydrocannabinol that does not
16exceed three-tenths of one percent on a dry weight basis. The
17laboratory’s official test results indicating that a sample
18exceeds that percentage shall be conclusive evidence that the
19crop produced at a site does not qualify as hemp.
20   Sec. 9.  NEW SECTION.  204.9  Right of access.
   211.  The department, including an authorized inspector,
22employee, or agent of the department, may enter onto a crop
23site during reasonable hours to determine whether a licensee
24is acting in compliance with the provisions of this chapter.
25The department may also enter into any structure, other than a
26dwelling, if the structure is located on or in close proximity
27to the crop site, and the use of such structure is directly
28related to the planting, growing, or harvesting of hemp,
29including but not limited to a barn, machine shed, greenhouse,
30or storage crib.
   312.  The department may obtain a sample of plants that are
32part of the crop and provide for an official test of that
33sample in the same manner as provided in section 204.8 even
34though the department is not conducting an annual inspection.
35The department shall not assess or collect a fee, other than a
-7-1hemp fee as provided in section 204.5.
   23.  A person shall not prevent the department from
3administering this section by any means, including but not
4limited to any act, including a refusal to allow entry,
5misrepresentation, omission, or concealment of facts.
   64.  The licensee shall not harvest any portion of a crop
7produced at the crop site if the department has been prevented
8from accessing the site under this section.
9   Sec. 10.  NEW SECTION.  204.10  Order of disposal.
   101.  If a crop that is produced at a licensee’s crop site
11does not qualify as hemp according to an official test
12conducted pursuant to section 204.8, the department shall order
13the disposal of the crop by destruction at the site or if
14necessary require the crop to be removed to another location
15for destruction.
   162.  The department may request assistance from a law
17enforcement agency necessary to carry out this section. The
18department upon request shall deliver any sample of the crop
19to the law enforcement agency.
   203.  The licensee shall pay for all actual and reasonable
21costs of the destruction. If the department assumes any of the
22amount of costs, it may charge that amount to the licensee.
23If the licensee fails to reimburse any of that amount to the
24department, the department may report the amount to the county
25treasurer. The amount shall be placed upon the tax books,
26and collected with interest and penalties after due, in the
27same manner as other unpaid property taxes. The county shall
28reimburse the department within thirty days from the collection
29of the property taxes.
   304.  To the extent allowed by applicable federal law, the
31department may provide for the disposal of the mature stalks
32of the crop confiscated by the department for the licensee’s
33on-farm use and at the licensee’s expense.
34   Sec. 11.  NEW SECTION.  204.11  Disciplinary action.
   351.  The department may suspend or revoke a hemp license
-8-1obtained under section 204.4 by a person who does any of the
   3a.  Provides false or misleading information to the
4department under this chapter, including by submitting a false
   6b.  Fails to comply with or violates any provision of this
7chapter, including a rule adopted by the department or a
8condition of an application for the issuance of a hemp license.
   9c.  Fails to comply with an order issued by the department
10under this chapter.
   112.  The suspension or revocation of a hemp license is in
12addition to an order of disposal under section 204.10; the
13imposition of a civil penalty under section 204.12, subject
14to the provisions of section 204.14; or the imposition of any
15other civil or criminal penalty authorized under state law,
16subject to the provisions of section 204.14.
17   Sec. 12.  NEW SECTION.  204.12  Civil penalties.
   181.  A person who violates a provision of this chapter is
19subject to a civil penalty of not less than five hundred
20dollars and not more than two thousand five hundred dollars.
21The department shall assess and collect the civil penalty.
22Each day that a continuing violation occurs may be considered a
23separate offense.
   242.  Notwithstanding subsection 1, a civil penalty shall not
25be assessed against a licensee for a violation that results
26in the disposal of the licensee’s crop under section 204.10,
27if the department obtains a sample of the crop produced on
28the licensee’s crop site and the official test results of the
29sample conducted pursuant to section 204.8 indicates a maximum
30concentration of delta-9 tetrahydrocannabinol not in excess of
31two percent on a dry weight basis.
   323.  All civil penalties collected under this section shall be
33deposited into the general fund of the state.
34   Sec. 13.  NEW SECTION.  204.13  Injunctive relief.
   35The department or the attorney general acting on behalf of
-9-1the department may apply to the district court for injunctive
2relief in order to restrain a person from acting in violation
3of this chapter. In order to obtain injunctive relief, the
4department shall not be required to post a bond or prove the
5absence of an adequate remedy at law unless the court for
6good cause otherwise orders. The court may order any form
7of prohibitory or mandatory relief that is appropriate under
8principles of equity, including but not limited to issuing a
9temporary or permanent restraining order.
10   Sec. 14.  NEW SECTION.  204.14  Negligent violations.
   111.  a.  The department may find that a licensee has
12negligently violated a provision of this chapter by doing any
13of the following:
   14(1)  Completing an application for a hemp license without
15providing a legal description of the crop site pursuant to
16section 204.4.
   17(2)  Failing to renew a hemp license or obtain a license for
18a new crop site pursuant to section 204.4.
   19(3)  Producing a crop on the licensee’s crop site with a
20maximum concentration of delta-9 tetrahydrocannabinol in excess
21of three-tenths of one percent according to the results of an
22official test conducted of a sample obtained from the crop site
23pursuant to section 204.8.
   24b.  In making its finding under paragraph “a”, the
25department must determine that the licensee acted with a
26culpable mental state of negligence. It is conclusively
27presumed that a licensee acted with a culpable mental state
28greater than negligence, if the department obtains a sample
29of a crop produced on the licensee’s crop site and the
30official test results of the sample conducted pursuant to
31section 204.8 indicates a maximum concentration of delta-9
32tetrahydrocannabinol in excess of two percent on a dry weight
   34c.  If the department determines a licensee violated this
35chapter with a culpable mental state greater than negligence,
-10-1the department shall immediately report the licensee to the
2county attorney and the attorney general, who shall take action
3as the facts and circumstances warrant. The department shall
4also report the licensee to the United States attorney general
5to the extent required by the federal hemp law.
   62.  The department may establish a negligent violation
7program. The purpose of the program is to allow a
8participating licensee who has negligently violated a provision
9of this chapter as described in subsection 1 to comply with a
10corrective plan established by the department to correct each
11negligent violation, including by providing for all of the
   13a.  A reasonable date, established by the department, for the
14licensee to correct any cause for the violation.
   15b.  That the licensee periodically report to the department
16evidence that the licensee is complying with the requirements
17of this chapter. The licensee shall submit a report to the
18department for at least two years from the date that the
19licensee first participated in the program.
   203.  A licensee who is participating in the negligent
21violation program shall not be subject to criminal enforcement
22action by the state, or the imposition of criminal or civil
23penalties, including as provided in section 204.12.
   244.  A licensee who negligently violates a provision of this
25chapter more than three times in any five-year period shall
26be ineligible to be issued a hemp license pursuant to section
27204.4 for a period of five years beginning on the date of the
28third violation.
   295.  A licensee convicted of a felony relating to a controlled
30substance before, on, or after the implementation date of this
31chapter shall be ineligible to produce hemp under this chapter
32for a ten-year period following the date of conviction.
   336.  Any person who materially falsifies any information
34contained in an application to participate in the negligent
35violation program shall be ineligible to participate in the
2   Sec. 15.  NEW SECTION.  204.15  Statutory construction.
   3Nothing in this chapter shall be construed or applied to be
4less stringent than required under the federal hemp law.
   61.  Except as provided in subsection 2, the provisions of
7chapter 204, as enacted in this division of this Act, shall
8only be implemented, including administered and enforced, by
9the department of agriculture and land stewardship beginning on
10the publication date of the edition of the Iowa administrative
11bulletin that includes a statement by the secretary of
12agriculture of the department of agriculture and land
13stewardship certifying that the United States department of
14agriculture has approved a state plan as described in section
15204.3, as enacted in this division of this Act. The department
16shall forward a copy of the statement to the Iowa Code editor
17prior to publication.
   182.  Section 204.3 and this subsection shall be implemented on
19the effective date of this Act.
20   Sec. 17.  EFFECTIVE DATE.  This division of this Act, being
21deemed of immediate importance, takes effect upon enactment.
24   Sec. 18.  Section 189.1, subsection 1, Code 2019, is amended
25to read as follows:
   261.  “Article” means food, commercial feed, agricultural seed,
27commercial fertilizer, drug, pesticide, hemp, and paint, in the
28sense in which they are defined in the various provisions of
29this subtitle.
30   Sec. 19.  NEW SECTION.  317.1D  Hemp production.
   31This chapter does not apply to a plant or any part of the
32plant qualifying as hemp, if the hemp is produced on a crop
33site regulated by the department of agriculture and land
34stewardship under chapter 204.
35   Sec. 20.  NEW SECTION.  453B.17  Exception — hemp.
   11.  This chapter does not apply to a plant or any part of
2the plant qualifying as hemp, if the hemp is produced or was
3produced on a crop site in compliance with chapter 204 or the
4hemp was produced in another state in accordance with federal
5hemp law as defined in section 204.2.
   62.  Nothing in this chapter applies to a person producing,
7handling, transporting, marketing, or processing a hemp product
8as defined in section 204.2.
9   Sec. 21.  CONTINGENT EFFECTIVE DATE.  The amendment to
10section 189.1, subsection 1, and new sections 317.1D and
11453B.17, as enacted in this division of this Act, shall become
12effective upon the date of implementation of chapter 204 as
13described in subsection 1 of the section providing for the
14contingent implementation of that chapter, as enacted in
15division I of this Act.
17The inclusion of this explanation does not constitute agreement with
18the explanation’s substance by the members of the general assembly.
   19OVERVIEW. This bill creates the “Iowa Hemp Act” under Title
20V, subtitle 4, of the Code regulating persons operating under
21licenses issued by the department of agriculture and land
22stewardship (DALS). The bill creates Code chapter 204 and
23authorizes the production of hemp under the DALS’ regulatory
24supervision when acting under the provisions of the Agriculture
25Improvement Act of 2018, Pub.L. No.115-334 (2018 Farm Bill).
26The 2018 Farm Bill defines hemp as a species of Cannabis having
27a maximum concentration of delta-9 tetrahydrocannabinol (THC)
28that does not exceed three-tenths of 1 percent. The 2018 Farm
29Bill authorizes states to assume primary regulatory authority
30over the production of hemp by submitting a state plan (plan)
31for approval by the United States department of agriculture
32(USDA) which has 60 days to approve, disapprove, or amend the
33plan. The 2018 Farm Bill provides that state regulations may
34be more but not less stringent than the federal regulations.
   35HEMP LICENSES AND FEES. DALS is required to accept and
-13-1approve or disapprove applications for the issuance of a hemp
2license (license) on a one-year basis subject to renewal. A
3license covers a crop site which cannot exceed 40 contiguous
4acres. DALS may issue any number of licenses to a single
5applicant. However, a person is prohibited from holding more
6than 40 crop sites under all current licenses issued to the
7person. DALS must assess and collect hemp fees (fees) for the
8issuance of a license and for an annual fall inspection until
9June 30, 2022. After that date, fees are to be established by
10rule based on the amount required to administer and enforce the
11provisions of the bill. Moneys collected from the fees are to
12be deposited into a hemp fund (fund) which are appropriated
13to DALS for purposes of administering and enforcing these
   15REGULATIONS. DALS may adopt rules regulating the
16production, handling, transporting, or marketing of hemp which
17was produced on a licensee’s crop site. In addition, hemp
18produced on a licensed crop site under new Code chapter 204 or
19produced in another state under the federal hemp law is not a
20controlled substance. Generally, production, possession, or
21distribution of a controlled substance is a criminal offense.
22The bill provides that a person is not prohibited from
23producing, handling, transporting, marketing, or processing a
24hemp product. DALS is required to conduct an annual inspection
25of a licensee’s crop site and obtain a sample for official
26testing by a laboratory designated by DALS. In addition to
27an annual inspection, DALS may enter onto a crop site during
28reasonable hours to determine whether a licensee is acting in
29compliance with the bill’s requirements and may obtain a sample
30of the crop for official testing.
   31ENFORCEMENT AND PENALTIES. DALS may order the disposal of
32a crop produced on a licensee’s crop site if official test
33results indicate that a crop does not qualify as hemp. The
34disposal, including the crop’s destruction, must be at the
35licensee’s expense. DALS may also suspend or revoke a license
-14-1if the licensee fails to comply with a requirement of the bill.
2A person who violates a provision of the bill is subject to a
3civil penalty of not less than $500 and not more than $2,500.
4DALS or the attorney general may apply to district court to
5obtain an injunction to enforce the bill’s provisions. DALS
6may establish a program to correct certain violations committed
7negligently by a licensee including producing a crop having a
8maximum THC concentration that does not exceed 2 percent.
10the bill’s provisions are to be implemented when DALS certifies
11USDA has approved DALS’ state plan.
   12EFFECTIVE DATES. The bill takes effect upon enactment
13except for those provisions which make enactment contingent
14upon implementation of Code chapter 204 which take effect on
15July 1, 2019.