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Senate File 329 - IntroducedA Bill ForAn Act 1relating to industrial hemp, including the regulation
2of its production as part of a research program, marketing
3for purposes of manufacturing industrial hemp products,
4providing for fees, making appropriations, providing for
5enforcement and the confiscation and destruction of certain
6property, and including penalties.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 124.401, subsection 5, Code 2017, is
2amended by adding the following new unnumbered paragraph:
3 NEW UNNUMBERED PARAGRAPH. Notwithstanding this subsection
4or any other provision of this chapter to the contrary, a
5person may produce, possess, deliver, transport, process,
6and use industrial hemp in accordance with the provisions of
7chapter 188.
8 Sec. 2. NEW SECTION. 188.1 Short title.
9This chapter shall be known and may be cited as the “Iowa
10Industrial Hemp Act”.
11 Sec. 3. NEW SECTION. 188.2 Definitions.
12As used in this chapter, unless the context otherwise
13requires:
141. “Certified industrial hemp seed” means industrial hemp
15seed that has been certified by the department pursuant to
16section 188.17.
172. “Council” means the industrial hemp council established
18in section 188.11.
193. “Department” means the department of agriculture and land
20stewardship.
214. “Industrial hemp” means any part of the Cannabis
22sativa plant, whether growing or not, with a concentration of
23delta-9 tetrahydrocannabinol that does not exceed the maximum
24concentration for the plant as determined pursuant to section
25188.7.
265. “Industrial hemp plant” means all nonseed parts of
27industrial hemp, whether growing or not.
286. a. “Industrial hemp product” means any item manufactured
29from industrial hemp, including but not limited to cloth,
30cordage, fiber, food, fuel, paint, paper, particleboard,
31plastic, industrial hemp seed, seed meal, or seed oil.
32b. “Industrial hemp product” does not include industrial
33hemp seed that is capable of germination.
347. “Industrial hemp seed” means seed produced by industrial
35hemp regardless of whether the seed is capable of germination.
-1- 18. “Licensee” means a person who obtains a license from
2the department under section 188.15 to participate in the
3industrial hemp commodity program established pursuant to
4section 188.13 or the industrial hemp production program
5established pursuant to section 188.14.
69. “Production” means any part of planting, cultivating, or
7harvesting industrial hemp.
810. “Regents institution” means the university of Iowa, Iowa
9state university of science and technology, or the university
10of northern Iowa governed by the state board of regents under
11section 262.7.
1211. “Registrant” means a regents institution that registers
13with the department to administer the industrial hemp
14production program established in section 188.14.
15 Sec. 4. NEW SECTION. 188.3 Report.
16The council shall prepare and submit an annual report to
17the governor and general assembly not later than January
1810. The report shall evaluate the success of the industrial
19hemp commodity program established in section 188.13 and
20the industrial hemp production program established pursuant
21to section 188.14. The council may establish performance
22benchmarks and make recommendations for consideration by the
23general assembly in order to meet the purposes of the programs
24in compliance with the requirements of 7 U.S.C. §5940.
25 Sec. 5. NEW SECTION. 188.4 Rules and forms.
26The department shall adopt all rules and prepare and publish
27all forms required to administer this chapter and comply with
287 U.S.C. §5940. The department may require the mandatory use
29of a form and refuse to accept a document that is not prepared
30using a mandatory form.
31 Sec. 6. NEW SECTION. 188.5 Compliance with federal law.
321. The purpose of this chapter is to fully implement the
33provisions of 7 U.S.C. §5940.
342. The programs established under this chapter and any
35projects administered under those programs are for the
-2-1exclusive purpose of growing, cultivating, and marketing
2industrial hemp in a manner that complies with the programs and
3projects described in 7 U.S.C. §5940.
43. a. The department shall seek to obtain any necessary
5approval by the drug enforcement administration of the United
6States department of justice in order to obtain industrial hemp
7seeds for certification pursuant to section 188.17 as part of
8the industrial hemp commodity program as provided in section
9188.13 or the industrial hemp production program as provided
10in section 188.14.
11b. A registrant may seek approval by the drug enforcement
12administration of the United States department of justice in
13order to obtain seeds for certification necessary to produce
14industrial hemp as part of the industrial hemp production
15program.
164. The department or a registrant may seek a waiver of a
17federal regulation promulgated by the United States department
18of agriculture or the drug enforcement administration of the
19United States department of justice if necessary to fully
20implement the provisions of this chapter.
21 Sec. 7. NEW SECTION. 188.6 General prohibitions.
221. A person shall not produce, handle, transport,
23market, or process industrial hemp in this state unless the
24industrial hemp has been produced pursuant to the industrial
25hemp commodity program established in section 188.13 or the
26industrial hemp production program established pursuant to
27section 188.14.
282. Nothing in this chapter prevents a person from producing,
29handling, transporting, marketing, or processing an industrial
30hemp product.
31 Sec. 8. NEW SECTION. 188.7 Maximum concentration of
32tetrahydrocannabinol.
331. A test of a Cannabis sativa plant under this chapter
34shall be conducted by the department or a qualified public
35or private laboratory approved by the department. The
-3-1department shall establish protocols for testing Cannabis
2sativa plants produced pursuant to the provisions of this
3chapter, including for obtaining test samples for delivery to
4the laboratory, and the receipt of test results delivered to
5the department, a registrant, or licensee. In order to qualify
6as industrial hemp, the maximum concentration of delta-9
7tetrahydrocannabinol present in the plant as analyzed on a
8dry weight basis shall not exceed three-tenths of one percent
9delta-9 tetrahydrocannabinol.
102. In testing a crop comprised of Cannabis sativa plants
11produced under this chapter, a composite test result greater
12than three-tenths of one percent delta-9 tetrahydrocannabinol
13as analyzed on a dry weight basis is deemed conclusive that
14the crop exceeds the maximum concentration. However, the
15department may determine that the results of a first test
16are inconclusive if the maximum concentration of delta-9
17tetrahydrocannabinol does not exceed a threshold established
18by the department which does not exceed one percent delta-9
19tetrahydrocannabinol as analyzed on a dry weight basis.
20 Sec. 9. NEW SECTION. 188.11 Industrial hemp council —
21establishment, membership, procedures.
221. An industrial hemp council is established under the
23purview of the department.
242. a. The council shall consist of the following voting
25members:
26(1) An individual who has experience in the regulation
27of industrial hemp production, appointed by the secretary of
28agriculture.
29(2) An individual who is a member of an agricultural
30cooperative association as defined in section 502.102,
31appointed by the secretary of agriculture.
32(3) Two employees of the department appointed by the
33secretary of agriculture. The employees shall be knowledgeable
34regarding the production of agricultural crops. One employee
35may be the state entomologist. One employee may be an employee
-4-1knowledgeable about procedures and practices relating to the
2import of agricultural seeds or inputs.
3(4) One employee of the department of natural resources
4appointed by the director of the department of natural
5resources. The employee must be knowledgeable regarding
6agricultural practices and environmental regulations.
7(5) One employee of the department of public safety
8appointed by the director of the department. The person must
9be knowledgeable regarding federal and state drug enforcement
10policies.
11(6) One employee of a registrant appointed by the president
12of the registrant’s regents institution. The employee must
13be knowledgeable regarding plant sciences. Until such a
14registrant is appointed, one employee of Iowa state university
15appointed by the president of the university shall serve as a
16member. The employee must be knowledgeable regarding plant
17sciences.
18b. The council shall also include four members of the
19general assembly appointed to serve in an ex officio, nonvoting
20capacity. The legislative members shall be selected, one
21member each, by the majority leader of the senate, the
22minority leader of the senate, the speaker of the house of
23representatives, and the minority leader of the house of
24representatives.
253. A public member shall be confirmed by the senate pursuant
26to section 2.32.
274. A public member is eligible to receive compensation as
28provided in section 7E.6 and shall be reimbursed for actual and
29necessary expenses incurred in the discharge of the member’s
30duties. The moneys used to pay expenses and compensation
31shall be paid from moneys in the industrial hemp commodity
32fund established in section 188.25. A legislative member is
33eligible to receive a per diem and expenses as provided in
34section 2.10.
355. a. A public member shall serve a three-year staggered
-5-1term commencing and ending as provided in section 69.19. A
2state employee member shall serve at the pleasure of the
3appointing authority.
4b. The voting members shall elect a chairperson and vice
5chairperson annually from the voting membership. A majority of
6the voting members constitutes a quorum. If the chairperson
7and vice chairperson are unable to preside over the council, a
8majority of the voting members present may elect a temporary
9chairperson.
106. A vacancy on the council shall be filled in the same
11manner as the original appointment. A member appointed to fill
12a vacancy created other than by expiration of a term shall be
13appointed for the remainder of the unexpired term.
147. The council shall be housed within the department and the
15department, in cooperation with Iowa state university, shall
16furnish the council with a meeting place and all articles,
17supplies, and services necessary to enable the council to
18perform its duties. Iowa state university or the office of
19attorney general may provide any technical or legal assistance
20requested by the council or department.
218. The appointments of the public members are subject to the
22requirements of sections 69.16, 69.16A, and 69.19. A public
23member is eligible for reappointment. The secretary may remove
24a public member if the removal is based on the public member’s
25misfeasance, malfeasance, or willful neglect of duty or other
26just cause, after notice and hearing, unless the notice and
27hearing is expressly waived by the public member in writing.
28 Sec. 10. NEW SECTION. 188.12 Industrial hemp council —
29powers and duties.
301. The council, in cooperation with the department and each
31registrant, shall prepare and submit an annual report to the
32governor and general assembly as required in section 188.3.
332. The council shall advise the department and each
34registrant regarding all of the following:
35a. All aspects relating to the administration of the
-6-1industrial hemp commodity program established in section 188.13
2and the industrial hemp production program established pursuant
3to section 188.14.
4b. The process of receiving, evaluating, and approving
5applications for licenses under section 188.15, and the
6selection of licensees to participate in the industrial hemp
7production program.
8c. Methods to acquire industrial hemp seed for certification
9and sale in compliance with the provisions of sections 188.17,
10188.21, and 188.22.
11d. The establishment of sale prices for industrial hemp seed
12offered under sections 188.21 and 188.22.
13e. The establishment of fees assessed, imposed, and
14collected pursuant to sections 188.23 and 188.24.
15f. The management of the industrial hemp commodity fund
16established in section 188.25.
173. The council shall advise the department regarding all of
18the following:
19a. The certification of industrial hemp seed pursuant to
20section 188.17.
21b. The confiscation and destruction of a Cannabis sativa
22plant as required in section 188.32.
23c. Disciplinary action taken against a licensee pursuant to
24section 188.33.
25d. The establishment of a range of civil penalties to be
26imposed, assessed, and collected pursuant to section 188.34.
274. The council shall advise a registrant regarding all of
28the following:
29a. The selection of licensees participating in the
30industrial hemp production program established pursuant to
31section 188.14.
32b. The terms and conditions of contracts entered into with
33selected licensees under section 188.16.
345. The council shall not control policy decisions or direct
35the administration or enforcement of this chapter.
-7-1 Sec. 11. NEW SECTION. 188.13 Industrial hemp commodity
2program — department and licensees.
31. The department shall establish and administer an
4industrial hemp commodity program. The purpose of the
5program is to determine the economic feasibility of producing
6industrial hemp as a profitable commodity in this state and of
7the effective handling, transporting, marketing, and processing
8of the commodity in this state.
92. A person must be licensed pursuant to section 188.15 to
10participate in the program. Under the program, a licensee may
11produce all of the following:
12a. Industrial hemp plants which shall to every extent
13feasible be processed into industrial hemp products for
14marketing in commercial channels.
15b. Industrial hemp seeds which shall to every extent
16feasible be processed into industrial hemp products. A
17licensee may retain industrial hemp seeds capable of
18germination to produce the next crop of industrial hemp only if
19approved by the department after consultation with the council.
203. The department may establish standards for the labeling
21or marketing of industrial hemp produced under this section.
22The standards shall to every extent feasible be in accordance
23with applicable standards in chapter 210.
244. A licensee must regularly test industrial hemp to
25ensure that the industrial hemp does not exceed the maximum
26concentration of delta-9 tetrahydrocannabinol as provided in
27section 188.7.
285. A licensee must immediately report the loss of any
29industrial hemp to the department.
306. A licensee shall retain industrial hemp or transfer
31industrial hemp to another person as specified by rules adopted
32by the department pursuant to section 188.4. The licensee
33shall only transfer industrial hemp seed that is capable
34of germination to the department, a registrant, or another
35licensee as approved by the department or any other person
-8-1authorized by law to receive the industrial hemp seed.
27. a. A licensee must maintain business records regarding
3the production of the industrial hemp or the transfer of the
4industrial hemp to another person. The department shall
5inspect the business records during normal business hours.
6b. The department may inspect a licensee’s facilities where
7industrial hemp is produced, stored, handled, transported,
8marketed, or processed. The department may inspect the
9facilities and collect a sample of the crop for testing under
10section 188.7 at least twice during the growing period. A
11test of a collected sample of the crop must be conducted by a
12licensee or by the department at least once within thirty days
13prior to harvest.
14c. The business operations of a licensee are considered a
15closely regulated industry and a search warrant is not required
16to conduct an inspection.
17 Sec. 12. NEW SECTION. 188.14 Industrial hemp production
18program — registrants and licensees.
191. A regents institution, or two or more regents
20institutions acting jointly, may establish and administer
21an industrial hemp production program. The purpose of the
22program shall be to determine the feasibility of increasing
23the production acreage and yield of industrial hemp as a
24profitable crop and reducing the concentration of delta-9
25tetrahydrocannabinol in the industrial hemp.
262. In order to administer a program, the regents institution
27or regents institutions acting jointly must register with
28the department according to requirements established by the
29department. The registration shall include a research plan
30that summarizes the quantifiable short-term and long-term goals
31of the research. A copy of the registration shall also be
32filed with the council, the governor, and the general assembly.
333. The department has all the same powers to regulate
34a licensee under this program as the department does in
35regulating a licensee under the industrial hemp commodity
-9-1program pursuant to section 188.13. A licensee participating
2in this program shall comply with the same requirements as
3a licensee participating in the industrial hemp production
4program under section 188.13, unless the department provides
5otherwise in rules adopted pursuant to section 188.4.
64. Only a registrant, including a licensee acting under
7the supervision of the registrant, may participate in the
8program. Under the program, a registrant may produce any of
9the following:
10a. Industrial hemp plants which may be processed into
11industrial hemp products.
12b. Industrial hemp seeds which may be processed into
13industrial hemp products. A registrant may retain industrial
14hemp seeds capable of germination to produce the next crop of
15industrial hemp or transfer the seeds to another person for
16purposes of scientific research. The registrant shall retain
17or transfer the seeds after consulting with the council.
185. A registrant may transfer industrial hemp to another
19person only after the registrant consults with the council.
206. A registrant must regularly test the industrial hemp to
21ensure that the industrial hemp does not exceed the maximum
22concentration of delta-9 tetrahydrocannabinol as provided in
23section 188.7.
247. A registrant must immediately report the loss of any
25industrial hemp produced by the registrant to the department.
268. A registrant must maintain records regarding production
27and transfer of the industrial hemp by the registrant. The
28records shall to every extent practicable contain the same type
29of information contained in records maintained by licensees
30under section 188.13.
31 Sec. 13. NEW SECTION. 188.15 Industrial hemp commodity
32license — requirements.
331. The department shall establish and administer a process
34to receive, evaluate, and approve applications for industrial
35hemp commodity licenses by persons seeking to participate in
-10-1the industrial hemp commodity program under section 188.13 or
2the industrial hemp production program under section 188.14.
3A license expires three years from the date of issuance. An
4expired license may be renewed for three additional years. The
5department may require that a licensee apply for an amended
6or new license if information contained in the existing
7application is no longer accurate or is incomplete.
82. An applicant shall not be issued a license unless the
9applicant agrees to comply with all terms and conditions
10relating to the department’s regulation of the licensee.
113. The department shall disapprove the application of a
12person for good cause, which may include any of the following:
13a. The conviction of a felony within the prior ten years or
14any drug offense within the same period, regardless of whether
15the conviction is in this state or another state.
16b. The revocation of a license under section 188.33, or
17the revocation of a license, permit, registration, or other
18authorization to produce industrial hemp in any other state.
194. The department may do all of the following:
20a. Limit the number of applications that it accepts or
21limit the period or periods when applications will be received,
22evaluated, or accepted each year.
23b. Establish criteria required to participate in the
24program which may be based on the qualifications or good
25character of the applicant, the applicant’s proposed investment
26in industrial hemp production, and the type and size of the
27applicant’s existing agricultural operation. The department
28may prepare and publish guidelines to assist persons in
29determining eligibility requirements.
30c. Require the issuance of different types of licenses or
31require an applicant to obtain more than one license based
32on criteria established by the department, including but not
33limited to whether production is proposed on noncontiguous
34parcels of land, the commercial production of industrial
35hemp plants or industrial hemp seeds, or the applicant’s
-11-1participation in the industrial hemp production program under
2section 188.14.
3d. Require that all or some licenses expire on the same
4date.
5e. Provide a different application and requirements for
6the submission, evaluation, and approval or disapproval of an
7application for a renewed license.
85. The department shall prepare and publish license
9application forms. A completed application form submitted to
10the department shall contain all of the following:
11a. The applicant’s full name and residence address.
12b. A legal description, global positioning system location,
13and map of the site where the applicant proposes to produce the
14industrial hemp.
15c. Information required by the department to conduct a
16background check of the applicant’s criminal history.
17d. Any other information required by the department in order
18to administer this chapter.
196. If a license is issued under this section, the department
20shall deliver a copy of the approved application to the office
21of the county sheriff in the county where the industrial hemp
22is approved to be produced.
237. A licensee’s license shall be suspended or revoked as
24provided in section 188.33.
25 Sec. 14. NEW SECTION. 188.16 Industrial hemp production
26contract — requirements.
27A registrant may enter into an industrial hemp production
28contract with a licensee to produce industrial hemp under the
29supervision of the registrant. The registrant shall supervise
30the production of the industrial hemp in cooperation with the
31department. The contract shall provide for the regulation of
32the licensee and the industrial hemp produced by the licensee
33in the same manner as provided in section 188.13, unless
34otherwise provided in rules adopted by the department in
35consultation with the registrant under section 188.4.
-12-1 Sec. 15. NEW SECTION. 188.17 Industrial hemp seed capable
2of germination — certification.
31. The department shall certify industrial hemp seed
4capable of germination for use by a licensee as part of
5the industrial hemp commodity program under section 188.13
6or a registrant as part of the industrial hemp production
7program under section 188.14. The department may provide
8different certification processes, including for industrial
9hemp seed produced or obtained by a registrant or obtained
10from a qualified and reputable industrial hemp seed source and
11supplier.
122. The department’s certification protocols may be based on
13standards promulgated by independent organizations including
14but not limited to the association of seed certifying agencies
15and verifications offered by qualified and reliable persons in
16the business of providing such seed.
173. A licensee may import industrial hemp seed for
18certification only if allowed by the department acting in
19consultation with the council. A registrant may import
20industrial seed for certification after consulting with the
21council.
22 Sec. 16. NEW SECTION. 188.21 Industrial hemp seed capable
23of germination — sale by the department.
241. The department shall offer certified industrial hemp
25seed for sale to licensees participating in the industrial
26hemp commodity program established in section 188.13. The
27department may offer certified industrial hemp seed for sale to
28a registrant participating in the industrial hemp production
29program established pursuant to section 188.14 after consulting
30with the council.
312. Moneys collected by the department from the sale of
32certified industrial hemp seed shall be deposited into the
33industrial hemp commodity fund established in section 188.25.
34 Sec. 17. NEW SECTION. 188.22 Industrial hemp seed capable
35of germination — sale by a registrant.
-13- 11. A registrant may offer certified industrial hemp seed
2for sale to the department, or a licensee participating in the
3industrial hemp production program established pursuant to
4section 188.14, only after consulting with the council.
52. All moneys received by a registrant under subsection 1
6shall be handled in the same manner as repayment receipts as
7defined in section 8.2, and shall be used by the registrant
8exclusively for the registrant’s administration of the
9industrial hemp production program.
10 Sec. 18. NEW SECTION. 188.23 Fees assessed by department.
111. The department shall assess and collect all of the
12following:
13a. An application fee to be paid by a person seeking to
14obtain an industrial hemp commodity license as provided in
15section 188.15.
16b. A license fee to be paid by a person being issued an
17industrial hemp commodity license as provided in section
18188.15.
19c. An inspection fee to be paid by a licensee as part of
20an inspection of the facilities where the industrial hemp is
21produced as provided in section 188.13.
22d. A laboratory fee to be paid by a licensee if the
23department takes samples of industrial hemp for testing by a
24laboratory as provided in section 188.7.
252. The fees described in subsection 1 are nonrefundable.
263. The total amount of fees collected pursuant to this
27section shall not exceed the department’s estimate of the total
28amount of revenues necessary to administer and enforce the
29provisions of this chapter. Prior to the beginning of a fiscal
30year, the department shall establish an estimated total amount
31based on the expected costs to be incurred by the department
32in administering and enforcing the provisions of this chapter
33during the subsequent fiscal year.
344. The department may establish different rates for any
35category of fees described in subsection 1 based on criteria
-14-1determined relevant by the department, which may include the
2type of license issued and the number of acres set aside for
3industrial hemp production by a licensee.
45. All fees collected by the department under this section
5shall be deposited into the industrial hemp commodity fund
6established pursuant to section 188.25.
7 Sec. 19. NEW SECTION. 188.24 Fees assessed by registrants.
81. A registrant may assess and collect fees from licensees
9participating in the registrant’s industrial hemp production
10program as provided in section 188.14. The total amount
11of fees paid shall not exceed the expenses incurred by the
12registrant in selecting licensees to participate in the
13program, conducting inspections of facilities where the
14industrial hemp is produced, and taking samples of industrial
15hemp to be tested by a laboratory as provided in section 188.7.
162. All moneys received by a registrant under this section
17shall be handled in the same manner as repayment receipts as
18defined in section 8.2, and shall be used by the registrant
19exclusively for the registrant’s administration of the
20industrial hemp production program.
21 Sec. 20. NEW SECTION. 188.25 Industrial hemp commodity fund
22— appropriation.
231. An industrial hemp commodity fund is established in
24the state treasury under the management and control of the
25department.
262. The fund shall include moneys collected by the department
27from the sale of certified seed under section 188.21, fees
28collected under section 188.23, and moneys appropriated by the
29general assembly for deposit in the fund. The fund may include
30other moneys available to and obtained or accepted by the
31department, including moneys from public or private sources.
323. Moneys in the fund are appropriated to the department
33and shall be used exclusively to carry out the responsibilities
34conferred upon the department under this chapter as determined
35and directed by the department, and shall not require further
-15-1special authorization by the general assembly.
24. a. Notwithstanding section 12C.7, interest or earnings
3on moneys in the fund shall be credited to the fund.
4b. Notwithstanding section 8.33, moneys credited to the fund
5that remain unexpended or unobligated at the end of a fiscal
6year shall not revert to any other fund.
7 Sec. 21. NEW SECTION. 188.31 Cooperation with department
8of public safety.
91. The department of agriculture and land stewardship and a
10registrant shall cooperate with the department of public safety
11in order to administer this chapter.
122. The department of public safety shall assist the
13department of agriculture and land stewardship in conducting
14background checks of applicants applying for licenses under
15section 188.15.
163. The department of agriculture and land stewardship and
17a registrant shall upon request or as part of routine process
18inform the department of public safety regarding the industrial
19hemp commodity program under section 188.13 and the industrial
20hemp production program under section 188.14, including all of
21the following:
22a. The status of the production and the results of any test
23of a crop produced by a licensee under this chapter.
24b. The date and time of an inspection of a licensee’s
25facilities or records.
26c. The confiscation and destruction of a crop under section
27188.32.
28 Sec. 22. NEW SECTION. 188.32 Confiscation and destruction.
291. A Cannabis sativa plant exceeding the maximum
30concentration of delta-9 tetrahydrocannabinol as provided
31in section 188.7 and that is produced under the industrial
32hemp commodity program established in section 188.13 shall be
33confiscated by the department.
342. A Cannabis sativa plant exceeding the maximum
35concentration of delta-9 tetrahydrocannabinol as provided in
-16-1section 188.7 and that is produced under the industrial hemp
2production program established pursuant to section 188.14
3shall be confiscated by the registrant in cooperation with the
4department.
53. The department or registrant may request assistance from
6the department of public safety or a local law enforcement
7authority necessary to carry out this section. The department
8or registrant upon request shall deliver any sample of the
9plant to the department of public safety or any local law
10enforcement authority.
11 Sec. 23. NEW SECTION. 188.33 Disciplinary action.
121. The department may suspend or revoke the license obtained
13under section 188.15 by a person who does any of the following:
14a. Provides false or misleading information on an
15application for an industrial hemp commodity license as
16provided in section 188.15.
17b. Provides false or misleading information to the
18department as part of the industrial hemp commodity program
19under section 188.13 or to a registrant or the department as
20part of the industrial hemp production program under section
21188.14.
22c. Fails to comply with or violates any provision of this
23chapter, including a rule adopted by the department under
24section 188.4, a condition of an application for the issuance
25of a license under section 188.15, or a condition of a contract
26entered into with a registrant under section 188.16.
27d. Fails to comply with an order issued by the department or
28a registrant under this chapter.
292. The suspension or revocation of a license is in addition
30to the confiscation and destruction of a Cannabis sativa plant
31under section 188.32, a civil penalty under section 188.34, or
32any other civil or criminal penalty that may be imposed on the
33person under state or federal law.
34 Sec. 24. NEW SECTION. 188.34 Civil penalties.
351. A person who violates a provision of this chapter is
-17-1subject to a civil penalty of not less than five hundred
2dollars and not more than two thousand five hundred dollars.
3The department may assess and collect the civil penalty. Each
4day that a continuing violation occurs shall be considered a
5separate offense.
62. The department shall establish a schedule of civil
7penalties for violations of this chapter.
83. A civil penalty shall not be assessed against a
9licensee for a violation that results in the confiscation and
10destruction of the licensee’s crop under section 188.32, unless
11the composite test result is greater than two percent delta-9
12tetrahydrocannabinol as determined in section 188.7.
134. All civil penalties collected under this section shall be
14deposited into the general fund of the state.
15 Sec. 25. NEW SECTION. 188.35 Criminal penalties.
16A person who knowingly or intentionally produces the
17Cannabis sativa plant and who is not the department, a
18registrant, or a licensee participating in the industrial
19hemp commodity program established in section 188.13 or the
20industrial hemp production program established pursuant to
21section 188.14 is subject to the provisions in chapters 124 and
22453B.
23 Sec. 26. NEW SECTION. 262.80 Industrial hemp production
24program.
25The board of regents may consult with Iowa state university
26of science and technology, the university of Iowa, and the
27university of northern Iowa to provide for the participation
28of those universities in administering an industrial hemp
29production program in cooperation with the department of
30agriculture and land stewardship as provided in chapter 188.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34OVERVIEW. This bill creates the “Iowa Industrial Hemp Act”
35authorizing the production and marketing of industrial hemp
-18-1as part of an industrial hemp commodity program administered
2by the department of agriculture and land stewardship and an
3industrial hemp production program administered by one or
4more regents institutions (Iowa state university of science
5and technology, the university of Iowa, or the university of
6northern Iowa) acting in cooperation with the department.
7According to the bill, industrial hemp refers to the plant
8classified as Cannabis sativa (plant) having a concentration of
9delta-9 tetrahydrocannabinol (THC) not to exceed three-tenths
10of 1 percent according to tests conducted by a laboratory
11approved by the department. The bill also provides that the
12two programs are established for the exclusive purpose of
13growing, cultivating, and marketing industrial hemp in a manner
14that complies with the programs and projects described in 7
15U.S.C. §5940.
16FEDERAL LAW. The purpose of the programs is to determine
17the commercial viability of industrial hemp as described in
18federal legislation, section 7606 of the Agricultural Act of
192014 (7 U.S.C. §5940), which legalizes the possession and
20use of industrial hemp if regulated by a state department of
21agriculture administering a pilot program. The federal law
22also authorizes an institution of higher education (registrant)
23to produce industrial hemp in order to advance academic
24research. The federal law does not authorize a federal agency
25to implement or oversee the program. However, it also does
26not expressly supersede other federal laws that restrict items
27designated as controlled substances including the federal
28“Controlled Substances Import and Export Act” (21 U.S.C. §951
29et seq.), requiring that cannabis seeds capable of germination
30only be imported into a state by persons registered with the
31drug enforcement administration of the United States department
32of justice (DEA).
33IOWA’S UNIFORM CONTROLLED SUBSTANCES ACT. A person who
34produces industrial hemp under one of the two programs is
35exempted from state criminal law included in the “Uniform
-19-1Controlled Substances Act” (Code chapter 124) which prohibits
2persons from knowingly or intentionally possessing a controlled
3substance (Code section 124.401) including the plant referred
4to as marijuana included as a schedule I controlled substance
5(Code section 124.204). “Marijuana” includes all parts of
6the plant without regard to THC concentration (Code section
7124.101).
8GENERAL — PARTICIPATION IN A PROGRAM REQUIRED. A person
9is prohibited from producing, handling, transporting,
10marketing, or processing industrial hemp in this state unless
11the industrial hemp has been produced under one of the two
12programs. There is no prohibition for marketing an industrial
13hemp product.
14GENERAL — TESTING. In order to qualify as industrial hemp,
15the maximum concentration of delta-9 tetrahydrocannabinol
16present in the plant cannot exceed three-tenths of 1 percent
17as analyzed on a dry weight basis. During production (from
18planting to harvest), a crop must be tested by a qualified
19public or private laboratory approved by the department. A
20licensee must test the crop as required by the department or
21registrant. The department or registrant may test a crop under
22its program. In any case, a test must be conducted 30 days
23prior to harvest.
24ADMINISTRATION — COUNCIL, DEPARTMENT, AND REGISTRANTS.
25 An industrial hemp council is created comprised of private
26and public members, including employees of the department,
27the department of natural resources, the department of public
28safety, and a regents institution registrant (or Iowa state
29university of science and technology until a university is
30registered). The council also includes four legislative
31members. The council is to advise the department and the
32registrant regarding the administration and enforcement of the
33bill, including the two programs, the issuance of licenses,
34and the selection of program participants, the importation
35and certification of seed, the generation of revenue from the
-20-1sale of seed and fees, and enforcement actions taken against
2licensees. The council is also responsible for preparing
3an annual report regarding the success of the programs for
4submission to the governor and general assembly.
5ADMINISTRATION — PROGRAMS. Under the industrial hemp
6commodity program, industrial hemp must be produced by a person
7licensed by the department, and under the industrial hemp
8production program, industrial hemp must be produced either by
9the registrant or by a licensee selected by the registrant.
10The bill also provides for requirements for the selection of
11licensees to participate in a program, including the processing
12of applications for licenses, the terms and conditions of
13a contract to participate in an industrial hemp production
14program, the inspection of a licensee’s records, the inspection
15of a licensee’s facilities, and testing of the licensee’s crop.
16ADMINISTRATION — CERTIFICATION AND SALE OF SEED. The
17department is responsible for certifying industrial hemp seed
18capable of germination. Either the department or a registrant
19may obtain authorization by DEA to import seed for departmental
20certification and either administrative entity may sell the
21seed to the other entity or a licensee participating in one of
22the programs.
23FINANCE — MONEYS COLLECTED AND EXPENDED BY THE
24ADMINISTRATIVE ENTITIES. Moneys collected from the sale of
25seed are retained by either the department or the registrant
26acting as the seller and must be used to administer their
27respective programs. Each administrative entity may also
28collect fees associated with administering their program and
29regulating licensees. These fees include an application
30fee, licensee fee, inspection fee, and laboratory fee. The
31amount of the fee must be based on an estimate of expenses
32necessary to administer the administrative entity’s program.
33Moneys collected by the department from certified seed sales
34and fees must be deposited into an industrial hemp commodity
35fund which are appropriated to the department to administer
-21-1its program. Moneys paid to a registrant are retained by the
2registrant and treated as repayment receipts for costs incurred
3in administering its program.
4ENFORCEMENT — COOPERATION WITH THE DEPARTMENT OF PUBLIC
5SAFETY. The department and a registrant must cooperate with
6the department of public safety in administering and enforcing
7the provisions of the bill.
8ENFORCEMENT — CONFISCATION. If a licensee produces
9a plant exceeding the maximum allowed concentration of
10delta-9 tetrahydrocannabinol, the plant must be confiscated
11and destroyed by the department or registrant supervising
12production and with assistance by the department of public
13safety or a local law enforcement authority.
14ENFORCEMENT — DISCIPLINARY ACTION. The department may
15suspend or revoke a person’s license for providing false
16or misleading information on an application prior to being
17selected or to the department or a registrant after being
18selected. The department may also suspend or revoke a license
19for failing to comply with a program requirement as set forth
20in statute, a rule adopted by the department, or an industrial
21hemp production contract.
22ENFORCEMENT — CIVIL PENALTIES. A person who violates a
23provision of the bill is subject to a civil penalty of not less
24than $500 and not more than $2,500 as assessed and collected by
25the department. Each day that a continuing violation occurs
26is considered a separate offense. The department is required
27to establish a schedule of civil penalties for violations.
28A civil penalty cannot be imposed against a licensee for a
29violation that results in the confiscation and destruction of
30the licensee’s crop unless the composite test result for the
31crop is a concentration greater than 2 percent.
32ENFORCEMENT — CRIMINAL PENALTIES. A person who knowingly
33or intentionally produces the plant and who is not the
34department, a registrant, or a licensee participating in a
35program is subject to the criminal penalties described in Code
-22-1chapters 124 and 453B. A person who knowingly or intentionally
2possesses marijuana as a first offense is punishable by
3imprisonment in the county jail for not more than six months or
4by a fine of not more than $1,000 (Code section 124.401). For a
5second offense, the person is guilty of a serious misdemeanor,
6punishable by confinement for no more than one year and a fine
7of at least $315 but not more than $1,875. For a third or
8subsequent offense, the person is guilty of a class “D” felony,
9punishable by confinement for no more than five years and a
10fine of at least $750 but not more than $7,500. A person acting
11in violation of Code chapter 453B for failing to pay an excise
12tax on the sale of marijuana (Code section 453B.7) is also
13guilty of a class “D” felony (Code section 453B.12).
-23-da/nh
2of its production as part of a research program, marketing
3for purposes of manufacturing industrial hemp products,
4providing for fees, making appropriations, providing for
5enforcement and the confiscation and destruction of certain
6property, and including penalties.
7BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 124.401, subsection 5, Code 2017, is
2amended by adding the following new unnumbered paragraph:
3 NEW UNNUMBERED PARAGRAPH. Notwithstanding this subsection
4or any other provision of this chapter to the contrary, a
5person may produce, possess, deliver, transport, process,
6and use industrial hemp in accordance with the provisions of
7chapter 188.
8 Sec. 2. NEW SECTION. 188.1 Short title.
9This chapter shall be known and may be cited as the “Iowa
10Industrial Hemp Act”.
11 Sec. 3. NEW SECTION. 188.2 Definitions.
12As used in this chapter, unless the context otherwise
13requires:
141. “Certified industrial hemp seed” means industrial hemp
15seed that has been certified by the department pursuant to
16section 188.17.
172. “Council” means the industrial hemp council established
18in section 188.11.
193. “Department” means the department of agriculture and land
20stewardship.
214. “Industrial hemp” means any part of the Cannabis
22sativa plant, whether growing or not, with a concentration of
23delta-9 tetrahydrocannabinol that does not exceed the maximum
24concentration for the plant as determined pursuant to section
25188.7.
265. “Industrial hemp plant” means all nonseed parts of
27industrial hemp, whether growing or not.
286. a. “Industrial hemp product” means any item manufactured
29from industrial hemp, including but not limited to cloth,
30cordage, fiber, food, fuel, paint, paper, particleboard,
31plastic, industrial hemp seed, seed meal, or seed oil.
32b. “Industrial hemp product” does not include industrial
33hemp seed that is capable of germination.
347. “Industrial hemp seed” means seed produced by industrial
35hemp regardless of whether the seed is capable of germination.
-1- 18. “Licensee” means a person who obtains a license from
2the department under section 188.15 to participate in the
3industrial hemp commodity program established pursuant to
4section 188.13 or the industrial hemp production program
5established pursuant to section 188.14.
69. “Production” means any part of planting, cultivating, or
7harvesting industrial hemp.
810. “Regents institution” means the university of Iowa, Iowa
9state university of science and technology, or the university
10of northern Iowa governed by the state board of regents under
11section 262.7.
1211. “Registrant” means a regents institution that registers
13with the department to administer the industrial hemp
14production program established in section 188.14.
15 Sec. 4. NEW SECTION. 188.3 Report.
16The council shall prepare and submit an annual report to
17the governor and general assembly not later than January
1810. The report shall evaluate the success of the industrial
19hemp commodity program established in section 188.13 and
20the industrial hemp production program established pursuant
21to section 188.14. The council may establish performance
22benchmarks and make recommendations for consideration by the
23general assembly in order to meet the purposes of the programs
24in compliance with the requirements of 7 U.S.C. §5940.
25 Sec. 5. NEW SECTION. 188.4 Rules and forms.
26The department shall adopt all rules and prepare and publish
27all forms required to administer this chapter and comply with
287 U.S.C. §5940. The department may require the mandatory use
29of a form and refuse to accept a document that is not prepared
30using a mandatory form.
31 Sec. 6. NEW SECTION. 188.5 Compliance with federal law.
321. The purpose of this chapter is to fully implement the
33provisions of 7 U.S.C. §5940.
342. The programs established under this chapter and any
35projects administered under those programs are for the
-2-1exclusive purpose of growing, cultivating, and marketing
2industrial hemp in a manner that complies with the programs and
3projects described in 7 U.S.C. §5940.
43. a. The department shall seek to obtain any necessary
5approval by the drug enforcement administration of the United
6States department of justice in order to obtain industrial hemp
7seeds for certification pursuant to section 188.17 as part of
8the industrial hemp commodity program as provided in section
9188.13 or the industrial hemp production program as provided
10in section 188.14.
11b. A registrant may seek approval by the drug enforcement
12administration of the United States department of justice in
13order to obtain seeds for certification necessary to produce
14industrial hemp as part of the industrial hemp production
15program.
164. The department or a registrant may seek a waiver of a
17federal regulation promulgated by the United States department
18of agriculture or the drug enforcement administration of the
19United States department of justice if necessary to fully
20implement the provisions of this chapter.
21 Sec. 7. NEW SECTION. 188.6 General prohibitions.
221. A person shall not produce, handle, transport,
23market, or process industrial hemp in this state unless the
24industrial hemp has been produced pursuant to the industrial
25hemp commodity program established in section 188.13 or the
26industrial hemp production program established pursuant to
27section 188.14.
282. Nothing in this chapter prevents a person from producing,
29handling, transporting, marketing, or processing an industrial
30hemp product.
31 Sec. 8. NEW SECTION. 188.7 Maximum concentration of
32tetrahydrocannabinol.
331. A test of a Cannabis sativa plant under this chapter
34shall be conducted by the department or a qualified public
35or private laboratory approved by the department. The
-3-1department shall establish protocols for testing Cannabis
2sativa plants produced pursuant to the provisions of this
3chapter, including for obtaining test samples for delivery to
4the laboratory, and the receipt of test results delivered to
5the department, a registrant, or licensee. In order to qualify
6as industrial hemp, the maximum concentration of delta-9
7tetrahydrocannabinol present in the plant as analyzed on a
8dry weight basis shall not exceed three-tenths of one percent
9delta-9 tetrahydrocannabinol.
102. In testing a crop comprised of Cannabis sativa plants
11produced under this chapter, a composite test result greater
12than three-tenths of one percent delta-9 tetrahydrocannabinol
13as analyzed on a dry weight basis is deemed conclusive that
14the crop exceeds the maximum concentration. However, the
15department may determine that the results of a first test
16are inconclusive if the maximum concentration of delta-9
17tetrahydrocannabinol does not exceed a threshold established
18by the department which does not exceed one percent delta-9
19tetrahydrocannabinol as analyzed on a dry weight basis.
20 Sec. 9. NEW SECTION. 188.11 Industrial hemp council —
21establishment, membership, procedures.
221. An industrial hemp council is established under the
23purview of the department.
242. a. The council shall consist of the following voting
25members:
26(1) An individual who has experience in the regulation
27of industrial hemp production, appointed by the secretary of
28agriculture.
29(2) An individual who is a member of an agricultural
30cooperative association as defined in section 502.102,
31appointed by the secretary of agriculture.
32(3) Two employees of the department appointed by the
33secretary of agriculture. The employees shall be knowledgeable
34regarding the production of agricultural crops. One employee
35may be the state entomologist. One employee may be an employee
-4-1knowledgeable about procedures and practices relating to the
2import of agricultural seeds or inputs.
3(4) One employee of the department of natural resources
4appointed by the director of the department of natural
5resources. The employee must be knowledgeable regarding
6agricultural practices and environmental regulations.
7(5) One employee of the department of public safety
8appointed by the director of the department. The person must
9be knowledgeable regarding federal and state drug enforcement
10policies.
11(6) One employee of a registrant appointed by the president
12of the registrant’s regents institution. The employee must
13be knowledgeable regarding plant sciences. Until such a
14registrant is appointed, one employee of Iowa state university
15appointed by the president of the university shall serve as a
16member. The employee must be knowledgeable regarding plant
17sciences.
18b. The council shall also include four members of the
19general assembly appointed to serve in an ex officio, nonvoting
20capacity. The legislative members shall be selected, one
21member each, by the majority leader of the senate, the
22minority leader of the senate, the speaker of the house of
23representatives, and the minority leader of the house of
24representatives.
253. A public member shall be confirmed by the senate pursuant
26to section 2.32.
274. A public member is eligible to receive compensation as
28provided in section 7E.6 and shall be reimbursed for actual and
29necessary expenses incurred in the discharge of the member’s
30duties. The moneys used to pay expenses and compensation
31shall be paid from moneys in the industrial hemp commodity
32fund established in section 188.25. A legislative member is
33eligible to receive a per diem and expenses as provided in
34section 2.10.
355. a. A public member shall serve a three-year staggered
-5-1term commencing and ending as provided in section 69.19. A
2state employee member shall serve at the pleasure of the
3appointing authority.
4b. The voting members shall elect a chairperson and vice
5chairperson annually from the voting membership. A majority of
6the voting members constitutes a quorum. If the chairperson
7and vice chairperson are unable to preside over the council, a
8majority of the voting members present may elect a temporary
9chairperson.
106. A vacancy on the council shall be filled in the same
11manner as the original appointment. A member appointed to fill
12a vacancy created other than by expiration of a term shall be
13appointed for the remainder of the unexpired term.
147. The council shall be housed within the department and the
15department, in cooperation with Iowa state university, shall
16furnish the council with a meeting place and all articles,
17supplies, and services necessary to enable the council to
18perform its duties. Iowa state university or the office of
19attorney general may provide any technical or legal assistance
20requested by the council or department.
218. The appointments of the public members are subject to the
22requirements of sections 69.16, 69.16A, and 69.19. A public
23member is eligible for reappointment. The secretary may remove
24a public member if the removal is based on the public member’s
25misfeasance, malfeasance, or willful neglect of duty or other
26just cause, after notice and hearing, unless the notice and
27hearing is expressly waived by the public member in writing.
28 Sec. 10. NEW SECTION. 188.12 Industrial hemp council —
29powers and duties.
301. The council, in cooperation with the department and each
31registrant, shall prepare and submit an annual report to the
32governor and general assembly as required in section 188.3.
332. The council shall advise the department and each
34registrant regarding all of the following:
35a. All aspects relating to the administration of the
-6-1industrial hemp commodity program established in section 188.13
2and the industrial hemp production program established pursuant
3to section 188.14.
4b. The process of receiving, evaluating, and approving
5applications for licenses under section 188.15, and the
6selection of licensees to participate in the industrial hemp
7production program.
8c. Methods to acquire industrial hemp seed for certification
9and sale in compliance with the provisions of sections 188.17,
10188.21, and 188.22.
11d. The establishment of sale prices for industrial hemp seed
12offered under sections 188.21 and 188.22.
13e. The establishment of fees assessed, imposed, and
14collected pursuant to sections 188.23 and 188.24.
15f. The management of the industrial hemp commodity fund
16established in section 188.25.
173. The council shall advise the department regarding all of
18the following:
19a. The certification of industrial hemp seed pursuant to
20section 188.17.
21b. The confiscation and destruction of a Cannabis sativa
22plant as required in section 188.32.
23c. Disciplinary action taken against a licensee pursuant to
24section 188.33.
25d. The establishment of a range of civil penalties to be
26imposed, assessed, and collected pursuant to section 188.34.
274. The council shall advise a registrant regarding all of
28the following:
29a. The selection of licensees participating in the
30industrial hemp production program established pursuant to
31section 188.14.
32b. The terms and conditions of contracts entered into with
33selected licensees under section 188.16.
345. The council shall not control policy decisions or direct
35the administration or enforcement of this chapter.
-7-1 Sec. 11. NEW SECTION. 188.13 Industrial hemp commodity
2program — department and licensees.
31. The department shall establish and administer an
4industrial hemp commodity program. The purpose of the
5program is to determine the economic feasibility of producing
6industrial hemp as a profitable commodity in this state and of
7the effective handling, transporting, marketing, and processing
8of the commodity in this state.
92. A person must be licensed pursuant to section 188.15 to
10participate in the program. Under the program, a licensee may
11produce all of the following:
12a. Industrial hemp plants which shall to every extent
13feasible be processed into industrial hemp products for
14marketing in commercial channels.
15b. Industrial hemp seeds which shall to every extent
16feasible be processed into industrial hemp products. A
17licensee may retain industrial hemp seeds capable of
18germination to produce the next crop of industrial hemp only if
19approved by the department after consultation with the council.
203. The department may establish standards for the labeling
21or marketing of industrial hemp produced under this section.
22The standards shall to every extent feasible be in accordance
23with applicable standards in chapter 210.
244. A licensee must regularly test industrial hemp to
25ensure that the industrial hemp does not exceed the maximum
26concentration of delta-9 tetrahydrocannabinol as provided in
27section 188.7.
285. A licensee must immediately report the loss of any
29industrial hemp to the department.
306. A licensee shall retain industrial hemp or transfer
31industrial hemp to another person as specified by rules adopted
32by the department pursuant to section 188.4. The licensee
33shall only transfer industrial hemp seed that is capable
34of germination to the department, a registrant, or another
35licensee as approved by the department or any other person
-8-1authorized by law to receive the industrial hemp seed.
27. a. A licensee must maintain business records regarding
3the production of the industrial hemp or the transfer of the
4industrial hemp to another person. The department shall
5inspect the business records during normal business hours.
6b. The department may inspect a licensee’s facilities where
7industrial hemp is produced, stored, handled, transported,
8marketed, or processed. The department may inspect the
9facilities and collect a sample of the crop for testing under
10section 188.7 at least twice during the growing period. A
11test of a collected sample of the crop must be conducted by a
12licensee or by the department at least once within thirty days
13prior to harvest.
14c. The business operations of a licensee are considered a
15closely regulated industry and a search warrant is not required
16to conduct an inspection.
17 Sec. 12. NEW SECTION. 188.14 Industrial hemp production
18program — registrants and licensees.
191. A regents institution, or two or more regents
20institutions acting jointly, may establish and administer
21an industrial hemp production program. The purpose of the
22program shall be to determine the feasibility of increasing
23the production acreage and yield of industrial hemp as a
24profitable crop and reducing the concentration of delta-9
25tetrahydrocannabinol in the industrial hemp.
262. In order to administer a program, the regents institution
27or regents institutions acting jointly must register with
28the department according to requirements established by the
29department. The registration shall include a research plan
30that summarizes the quantifiable short-term and long-term goals
31of the research. A copy of the registration shall also be
32filed with the council, the governor, and the general assembly.
333. The department has all the same powers to regulate
34a licensee under this program as the department does in
35regulating a licensee under the industrial hemp commodity
-9-1program pursuant to section 188.13. A licensee participating
2in this program shall comply with the same requirements as
3a licensee participating in the industrial hemp production
4program under section 188.13, unless the department provides
5otherwise in rules adopted pursuant to section 188.4.
64. Only a registrant, including a licensee acting under
7the supervision of the registrant, may participate in the
8program. Under the program, a registrant may produce any of
9the following:
10a. Industrial hemp plants which may be processed into
11industrial hemp products.
12b. Industrial hemp seeds which may be processed into
13industrial hemp products. A registrant may retain industrial
14hemp seeds capable of germination to produce the next crop of
15industrial hemp or transfer the seeds to another person for
16purposes of scientific research. The registrant shall retain
17or transfer the seeds after consulting with the council.
185. A registrant may transfer industrial hemp to another
19person only after the registrant consults with the council.
206. A registrant must regularly test the industrial hemp to
21ensure that the industrial hemp does not exceed the maximum
22concentration of delta-9 tetrahydrocannabinol as provided in
23section 188.7.
247. A registrant must immediately report the loss of any
25industrial hemp produced by the registrant to the department.
268. A registrant must maintain records regarding production
27and transfer of the industrial hemp by the registrant. The
28records shall to every extent practicable contain the same type
29of information contained in records maintained by licensees
30under section 188.13.
31 Sec. 13. NEW SECTION. 188.15 Industrial hemp commodity
32license — requirements.
331. The department shall establish and administer a process
34to receive, evaluate, and approve applications for industrial
35hemp commodity licenses by persons seeking to participate in
-10-1the industrial hemp commodity program under section 188.13 or
2the industrial hemp production program under section 188.14.
3A license expires three years from the date of issuance. An
4expired license may be renewed for three additional years. The
5department may require that a licensee apply for an amended
6or new license if information contained in the existing
7application is no longer accurate or is incomplete.
82. An applicant shall not be issued a license unless the
9applicant agrees to comply with all terms and conditions
10relating to the department’s regulation of the licensee.
113. The department shall disapprove the application of a
12person for good cause, which may include any of the following:
13a. The conviction of a felony within the prior ten years or
14any drug offense within the same period, regardless of whether
15the conviction is in this state or another state.
16b. The revocation of a license under section 188.33, or
17the revocation of a license, permit, registration, or other
18authorization to produce industrial hemp in any other state.
194. The department may do all of the following:
20a. Limit the number of applications that it accepts or
21limit the period or periods when applications will be received,
22evaluated, or accepted each year.
23b. Establish criteria required to participate in the
24program which may be based on the qualifications or good
25character of the applicant, the applicant’s proposed investment
26in industrial hemp production, and the type and size of the
27applicant’s existing agricultural operation. The department
28may prepare and publish guidelines to assist persons in
29determining eligibility requirements.
30c. Require the issuance of different types of licenses or
31require an applicant to obtain more than one license based
32on criteria established by the department, including but not
33limited to whether production is proposed on noncontiguous
34parcels of land, the commercial production of industrial
35hemp plants or industrial hemp seeds, or the applicant’s
-11-1participation in the industrial hemp production program under
2section 188.14.
3d. Require that all or some licenses expire on the same
4date.
5e. Provide a different application and requirements for
6the submission, evaluation, and approval or disapproval of an
7application for a renewed license.
85. The department shall prepare and publish license
9application forms. A completed application form submitted to
10the department shall contain all of the following:
11a. The applicant’s full name and residence address.
12b. A legal description, global positioning system location,
13and map of the site where the applicant proposes to produce the
14industrial hemp.
15c. Information required by the department to conduct a
16background check of the applicant’s criminal history.
17d. Any other information required by the department in order
18to administer this chapter.
196. If a license is issued under this section, the department
20shall deliver a copy of the approved application to the office
21of the county sheriff in the county where the industrial hemp
22is approved to be produced.
237. A licensee’s license shall be suspended or revoked as
24provided in section 188.33.
25 Sec. 14. NEW SECTION. 188.16 Industrial hemp production
26contract — requirements.
27A registrant may enter into an industrial hemp production
28contract with a licensee to produce industrial hemp under the
29supervision of the registrant. The registrant shall supervise
30the production of the industrial hemp in cooperation with the
31department. The contract shall provide for the regulation of
32the licensee and the industrial hemp produced by the licensee
33in the same manner as provided in section 188.13, unless
34otherwise provided in rules adopted by the department in
35consultation with the registrant under section 188.4.
-12-1 Sec. 15. NEW SECTION. 188.17 Industrial hemp seed capable
2of germination — certification.
31. The department shall certify industrial hemp seed
4capable of germination for use by a licensee as part of
5the industrial hemp commodity program under section 188.13
6or a registrant as part of the industrial hemp production
7program under section 188.14. The department may provide
8different certification processes, including for industrial
9hemp seed produced or obtained by a registrant or obtained
10from a qualified and reputable industrial hemp seed source and
11supplier.
122. The department’s certification protocols may be based on
13standards promulgated by independent organizations including
14but not limited to the association of seed certifying agencies
15and verifications offered by qualified and reliable persons in
16the business of providing such seed.
173. A licensee may import industrial hemp seed for
18certification only if allowed by the department acting in
19consultation with the council. A registrant may import
20industrial seed for certification after consulting with the
21council.
22 Sec. 16. NEW SECTION. 188.21 Industrial hemp seed capable
23of germination — sale by the department.
241. The department shall offer certified industrial hemp
25seed for sale to licensees participating in the industrial
26hemp commodity program established in section 188.13. The
27department may offer certified industrial hemp seed for sale to
28a registrant participating in the industrial hemp production
29program established pursuant to section 188.14 after consulting
30with the council.
312. Moneys collected by the department from the sale of
32certified industrial hemp seed shall be deposited into the
33industrial hemp commodity fund established in section 188.25.
34 Sec. 17. NEW SECTION. 188.22 Industrial hemp seed capable
35of germination — sale by a registrant.
-13- 11. A registrant may offer certified industrial hemp seed
2for sale to the department, or a licensee participating in the
3industrial hemp production program established pursuant to
4section 188.14, only after consulting with the council.
52. All moneys received by a registrant under subsection 1
6shall be handled in the same manner as repayment receipts as
7defined in section 8.2, and shall be used by the registrant
8exclusively for the registrant’s administration of the
9industrial hemp production program.
10 Sec. 18. NEW SECTION. 188.23 Fees assessed by department.
111. The department shall assess and collect all of the
12following:
13a. An application fee to be paid by a person seeking to
14obtain an industrial hemp commodity license as provided in
15section 188.15.
16b. A license fee to be paid by a person being issued an
17industrial hemp commodity license as provided in section
18188.15.
19c. An inspection fee to be paid by a licensee as part of
20an inspection of the facilities where the industrial hemp is
21produced as provided in section 188.13.
22d. A laboratory fee to be paid by a licensee if the
23department takes samples of industrial hemp for testing by a
24laboratory as provided in section 188.7.
252. The fees described in subsection 1 are nonrefundable.
263. The total amount of fees collected pursuant to this
27section shall not exceed the department’s estimate of the total
28amount of revenues necessary to administer and enforce the
29provisions of this chapter. Prior to the beginning of a fiscal
30year, the department shall establish an estimated total amount
31based on the expected costs to be incurred by the department
32in administering and enforcing the provisions of this chapter
33during the subsequent fiscal year.
344. The department may establish different rates for any
35category of fees described in subsection 1 based on criteria
-14-1determined relevant by the department, which may include the
2type of license issued and the number of acres set aside for
3industrial hemp production by a licensee.
45. All fees collected by the department under this section
5shall be deposited into the industrial hemp commodity fund
6established pursuant to section 188.25.
7 Sec. 19. NEW SECTION. 188.24 Fees assessed by registrants.
81. A registrant may assess and collect fees from licensees
9participating in the registrant’s industrial hemp production
10program as provided in section 188.14. The total amount
11of fees paid shall not exceed the expenses incurred by the
12registrant in selecting licensees to participate in the
13program, conducting inspections of facilities where the
14industrial hemp is produced, and taking samples of industrial
15hemp to be tested by a laboratory as provided in section 188.7.
162. All moneys received by a registrant under this section
17shall be handled in the same manner as repayment receipts as
18defined in section 8.2, and shall be used by the registrant
19exclusively for the registrant’s administration of the
20industrial hemp production program.
21 Sec. 20. NEW SECTION. 188.25 Industrial hemp commodity fund
22— appropriation.
231. An industrial hemp commodity fund is established in
24the state treasury under the management and control of the
25department.
262. The fund shall include moneys collected by the department
27from the sale of certified seed under section 188.21, fees
28collected under section 188.23, and moneys appropriated by the
29general assembly for deposit in the fund. The fund may include
30other moneys available to and obtained or accepted by the
31department, including moneys from public or private sources.
323. Moneys in the fund are appropriated to the department
33and shall be used exclusively to carry out the responsibilities
34conferred upon the department under this chapter as determined
35and directed by the department, and shall not require further
-15-1special authorization by the general assembly.
24. a. Notwithstanding section 12C.7, interest or earnings
3on moneys in the fund shall be credited to the fund.
4b. Notwithstanding section 8.33, moneys credited to the fund
5that remain unexpended or unobligated at the end of a fiscal
6year shall not revert to any other fund.
7 Sec. 21. NEW SECTION. 188.31 Cooperation with department
8of public safety.
91. The department of agriculture and land stewardship and a
10registrant shall cooperate with the department of public safety
11in order to administer this chapter.
122. The department of public safety shall assist the
13department of agriculture and land stewardship in conducting
14background checks of applicants applying for licenses under
15section 188.15.
163. The department of agriculture and land stewardship and
17a registrant shall upon request or as part of routine process
18inform the department of public safety regarding the industrial
19hemp commodity program under section 188.13 and the industrial
20hemp production program under section 188.14, including all of
21the following:
22a. The status of the production and the results of any test
23of a crop produced by a licensee under this chapter.
24b. The date and time of an inspection of a licensee’s
25facilities or records.
26c. The confiscation and destruction of a crop under section
27188.32.
28 Sec. 22. NEW SECTION. 188.32 Confiscation and destruction.
291. A Cannabis sativa plant exceeding the maximum
30concentration of delta-9 tetrahydrocannabinol as provided
31in section 188.7 and that is produced under the industrial
32hemp commodity program established in section 188.13 shall be
33confiscated by the department.
342. A Cannabis sativa plant exceeding the maximum
35concentration of delta-9 tetrahydrocannabinol as provided in
-16-1section 188.7 and that is produced under the industrial hemp
2production program established pursuant to section 188.14
3shall be confiscated by the registrant in cooperation with the
4department.
53. The department or registrant may request assistance from
6the department of public safety or a local law enforcement
7authority necessary to carry out this section. The department
8or registrant upon request shall deliver any sample of the
9plant to the department of public safety or any local law
10enforcement authority.
11 Sec. 23. NEW SECTION. 188.33 Disciplinary action.
121. The department may suspend or revoke the license obtained
13under section 188.15 by a person who does any of the following:
14a. Provides false or misleading information on an
15application for an industrial hemp commodity license as
16provided in section 188.15.
17b. Provides false or misleading information to the
18department as part of the industrial hemp commodity program
19under section 188.13 or to a registrant or the department as
20part of the industrial hemp production program under section
21188.14.
22c. Fails to comply with or violates any provision of this
23chapter, including a rule adopted by the department under
24section 188.4, a condition of an application for the issuance
25of a license under section 188.15, or a condition of a contract
26entered into with a registrant under section 188.16.
27d. Fails to comply with an order issued by the department or
28a registrant under this chapter.
292. The suspension or revocation of a license is in addition
30to the confiscation and destruction of a Cannabis sativa plant
31under section 188.32, a civil penalty under section 188.34, or
32any other civil or criminal penalty that may be imposed on the
33person under state or federal law.
34 Sec. 24. NEW SECTION. 188.34 Civil penalties.
351. A person who violates a provision of this chapter is
-17-1subject to a civil penalty of not less than five hundred
2dollars and not more than two thousand five hundred dollars.
3The department may assess and collect the civil penalty. Each
4day that a continuing violation occurs shall be considered a
5separate offense.
62. The department shall establish a schedule of civil
7penalties for violations of this chapter.
83. A civil penalty shall not be assessed against a
9licensee for a violation that results in the confiscation and
10destruction of the licensee’s crop under section 188.32, unless
11the composite test result is greater than two percent delta-9
12tetrahydrocannabinol as determined in section 188.7.
134. All civil penalties collected under this section shall be
14deposited into the general fund of the state.
15 Sec. 25. NEW SECTION. 188.35 Criminal penalties.
16A person who knowingly or intentionally produces the
17Cannabis sativa plant and who is not the department, a
18registrant, or a licensee participating in the industrial
19hemp commodity program established in section 188.13 or the
20industrial hemp production program established pursuant to
21section 188.14 is subject to the provisions in chapters 124 and
22453B.
23 Sec. 26. NEW SECTION. 262.80 Industrial hemp production
24program.
25The board of regents may consult with Iowa state university
26of science and technology, the university of Iowa, and the
27university of northern Iowa to provide for the participation
28of those universities in administering an industrial hemp
29production program in cooperation with the department of
30agriculture and land stewardship as provided in chapter 188.
31EXPLANATION
32The inclusion of this explanation does not constitute agreement with
33the explanation’s substance by the members of the general assembly.
34OVERVIEW. This bill creates the “Iowa Industrial Hemp Act”
35authorizing the production and marketing of industrial hemp
-18-1as part of an industrial hemp commodity program administered
2by the department of agriculture and land stewardship and an
3industrial hemp production program administered by one or
4more regents institutions (Iowa state university of science
5and technology, the university of Iowa, or the university of
6northern Iowa) acting in cooperation with the department.
7According to the bill, industrial hemp refers to the plant
8classified as Cannabis sativa (plant) having a concentration of
9delta-9 tetrahydrocannabinol (THC) not to exceed three-tenths
10of 1 percent according to tests conducted by a laboratory
11approved by the department. The bill also provides that the
12two programs are established for the exclusive purpose of
13growing, cultivating, and marketing industrial hemp in a manner
14that complies with the programs and projects described in 7
15U.S.C. §5940.
16FEDERAL LAW. The purpose of the programs is to determine
17the commercial viability of industrial hemp as described in
18federal legislation, section 7606 of the Agricultural Act of
192014 (7 U.S.C. §5940), which legalizes the possession and
20use of industrial hemp if regulated by a state department of
21agriculture administering a pilot program. The federal law
22also authorizes an institution of higher education (registrant)
23to produce industrial hemp in order to advance academic
24research. The federal law does not authorize a federal agency
25to implement or oversee the program. However, it also does
26not expressly supersede other federal laws that restrict items
27designated as controlled substances including the federal
28“Controlled Substances Import and Export Act” (21 U.S.C. §951
29et seq.), requiring that cannabis seeds capable of germination
30only be imported into a state by persons registered with the
31drug enforcement administration of the United States department
32of justice (DEA).
33IOWA’S UNIFORM CONTROLLED SUBSTANCES ACT. A person who
34produces industrial hemp under one of the two programs is
35exempted from state criminal law included in the “Uniform
-19-1Controlled Substances Act” (Code chapter 124) which prohibits
2persons from knowingly or intentionally possessing a controlled
3substance (Code section 124.401) including the plant referred
4to as marijuana included as a schedule I controlled substance
5(Code section 124.204). “Marijuana” includes all parts of
6the plant without regard to THC concentration (Code section
7124.101).
8GENERAL — PARTICIPATION IN A PROGRAM REQUIRED. A person
9is prohibited from producing, handling, transporting,
10marketing, or processing industrial hemp in this state unless
11the industrial hemp has been produced under one of the two
12programs. There is no prohibition for marketing an industrial
13hemp product.
14GENERAL — TESTING. In order to qualify as industrial hemp,
15the maximum concentration of delta-9 tetrahydrocannabinol
16present in the plant cannot exceed three-tenths of 1 percent
17as analyzed on a dry weight basis. During production (from
18planting to harvest), a crop must be tested by a qualified
19public or private laboratory approved by the department. A
20licensee must test the crop as required by the department or
21registrant. The department or registrant may test a crop under
22its program. In any case, a test must be conducted 30 days
23prior to harvest.
24ADMINISTRATION — COUNCIL, DEPARTMENT, AND REGISTRANTS.
25 An industrial hemp council is created comprised of private
26and public members, including employees of the department,
27the department of natural resources, the department of public
28safety, and a regents institution registrant (or Iowa state
29university of science and technology until a university is
30registered). The council also includes four legislative
31members. The council is to advise the department and the
32registrant regarding the administration and enforcement of the
33bill, including the two programs, the issuance of licenses,
34and the selection of program participants, the importation
35and certification of seed, the generation of revenue from the
-20-1sale of seed and fees, and enforcement actions taken against
2licensees. The council is also responsible for preparing
3an annual report regarding the success of the programs for
4submission to the governor and general assembly.
5ADMINISTRATION — PROGRAMS. Under the industrial hemp
6commodity program, industrial hemp must be produced by a person
7licensed by the department, and under the industrial hemp
8production program, industrial hemp must be produced either by
9the registrant or by a licensee selected by the registrant.
10The bill also provides for requirements for the selection of
11licensees to participate in a program, including the processing
12of applications for licenses, the terms and conditions of
13a contract to participate in an industrial hemp production
14program, the inspection of a licensee’s records, the inspection
15of a licensee’s facilities, and testing of the licensee’s crop.
16ADMINISTRATION — CERTIFICATION AND SALE OF SEED. The
17department is responsible for certifying industrial hemp seed
18capable of germination. Either the department or a registrant
19may obtain authorization by DEA to import seed for departmental
20certification and either administrative entity may sell the
21seed to the other entity or a licensee participating in one of
22the programs.
23FINANCE — MONEYS COLLECTED AND EXPENDED BY THE
24ADMINISTRATIVE ENTITIES. Moneys collected from the sale of
25seed are retained by either the department or the registrant
26acting as the seller and must be used to administer their
27respective programs. Each administrative entity may also
28collect fees associated with administering their program and
29regulating licensees. These fees include an application
30fee, licensee fee, inspection fee, and laboratory fee. The
31amount of the fee must be based on an estimate of expenses
32necessary to administer the administrative entity’s program.
33Moneys collected by the department from certified seed sales
34and fees must be deposited into an industrial hemp commodity
35fund which are appropriated to the department to administer
-21-1its program. Moneys paid to a registrant are retained by the
2registrant and treated as repayment receipts for costs incurred
3in administering its program.
4ENFORCEMENT — COOPERATION WITH THE DEPARTMENT OF PUBLIC
5SAFETY. The department and a registrant must cooperate with
6the department of public safety in administering and enforcing
7the provisions of the bill.
8ENFORCEMENT — CONFISCATION. If a licensee produces
9a plant exceeding the maximum allowed concentration of
10delta-9 tetrahydrocannabinol, the plant must be confiscated
11and destroyed by the department or registrant supervising
12production and with assistance by the department of public
13safety or a local law enforcement authority.
14ENFORCEMENT — DISCIPLINARY ACTION. The department may
15suspend or revoke a person’s license for providing false
16or misleading information on an application prior to being
17selected or to the department or a registrant after being
18selected. The department may also suspend or revoke a license
19for failing to comply with a program requirement as set forth
20in statute, a rule adopted by the department, or an industrial
21hemp production contract.
22ENFORCEMENT — CIVIL PENALTIES. A person who violates a
23provision of the bill is subject to a civil penalty of not less
24than $500 and not more than $2,500 as assessed and collected by
25the department. Each day that a continuing violation occurs
26is considered a separate offense. The department is required
27to establish a schedule of civil penalties for violations.
28A civil penalty cannot be imposed against a licensee for a
29violation that results in the confiscation and destruction of
30the licensee’s crop unless the composite test result for the
31crop is a concentration greater than 2 percent.
32ENFORCEMENT — CRIMINAL PENALTIES. A person who knowingly
33or intentionally produces the plant and who is not the
34department, a registrant, or a licensee participating in a
35program is subject to the criminal penalties described in Code
-22-1chapters 124 and 453B. A person who knowingly or intentionally
2possesses marijuana as a first offense is punishable by
3imprisonment in the county jail for not more than six months or
4by a fine of not more than $1,000 (Code section 124.401). For a
5second offense, the person is guilty of a serious misdemeanor,
6punishable by confinement for no more than one year and a fine
7of at least $315 but not more than $1,875. For a third or
8subsequent offense, the person is guilty of a class “D” felony,
9punishable by confinement for no more than five years and a
10fine of at least $750 but not more than $7,500. A person acting
11in violation of Code chapter 453B for failing to pay an excise
12tax on the sale of marijuana (Code section 453B.7) is also
13guilty of a class “D” felony (Code section 453B.12).
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