Senate File 2398 - 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 2018, 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.  “Association” means the Iowa crop improvement association
15recognized pursuant to section 177.1.
   162.  “Certified industrial hemp seed” means industrial hemp
17seed that has been certified pursuant to section 188.18.
   183.  “Council” means the industrial hemp council established
19in section 188.11.
   204.  “Department” means the department of agriculture and land
21stewardship.
   225.  “Industrial hemp” means any part of the Cannabis
23sativa plant, whether growing or not, with a concentration of
24delta-9 tetrahydrocannabinol that does not exceed the maximum
25concentration for the plant as determined pursuant to section
26188.8.
   276.  “Industrial hemp plant” means all nonseed parts of
28industrial hemp, whether growing or not.
   297.  a.  “Industrial hemp product” means any item manufactured
30from industrial hemp, including but not limited to cloth,
31cordage, fiber, food, fuel, paint, paper, particleboard,
32plastic, industrial hemp seed, seed meal, or seed oil.
   33b.  “Industrial hemp product” does not include industrial
34hemp seed that is capable of germination.
   358.  “Industrial hemp seed” means seed produced by industrial
-1-1hemp regardless of whether the seed is capable of germination.
   29.  “Iowa state university” means Iowa state university of
3science and technology.
   410.  “Law enforcement agency” means the department of public
5safety, an office of county sheriff, or a city’s police force.
   611.  “Licensee” means a person who obtains a license from
7the department under section 188.15 to participate in the
8industrial hemp commodity program established pursuant to
9section 188.13 or the industrial hemp production program
10established pursuant to section 188.14.
   1112.  “Production” means any part of planting, cultivating,
12or harvesting industrial hemp.
   1313.  “Regents institution” means the university of Iowa, Iowa
14state university of science and technology, or the university
15of northern Iowa governed by the state board of regents under
16section 262.7.
   1714.  “Registrant” means a regents institution that registers
18with the department to administer the industrial hemp
19production program established in section 188.14.
20   Sec. 4.  NEW SECTION.  188.3  Report.
   211.  The department shall prepare and submit an annual report
22to the governor and general assembly not later than January 10.
23The report shall evaluate the success of the industrial hemp
24commodity program established pursuant to section 188.13 and
25the industrial hemp production program established pursuant
26to section 188.14. The department, in cooperation with any
27registrant, may establish performance benchmarks and make
28recommendations for consideration by the general assembly in
29order to meet the purposes of the programs in compliance with
30the requirements of 7 U.S.C. §5940.
   312.  a.  In preparing the report, the department may require
32that a select number of licensees complete and submit a brief
33survey regarding the licensee’s business operations including
34the production, handling, transportation, or processing of
35industrial hemp.
-2-
   1b.  A registrant shall assist the department in preparing
2and compiling the results of the survey. Until a regents
3institution is registered under section 188.14, Iowa state
4university shall act in lieu of the registrant.
   53.  The report may include the compilation of data, but
6shall not disclose any information that is confidential under
7section 188.9, including the identity of a licensee or the
8location of any facility used by the licensee in the production
9of industrial hemp. This subsection shall not preclude the
10disclosure of information to the extent that the licensee
11voluntarily agrees in writing that such information is to be
12considered a public record under section 188.9.
13   Sec. 5.  NEW SECTION.  188.4  Rules and forms.
   14The department shall adopt all rules and prepare and publish
15all forms required to administer this chapter and comply with
167 U.S.C. §5940. The department may require the mandatory use
17of a form and refuse to accept a document that is not prepared
18using a mandatory form.
19   Sec. 6.  NEW SECTION.  188.5  Compliance with federal law.
   201.  The purpose of this chapter is to fully implement the
21provisions of 7 U.S.C. §5940.
   222.  The programs established under this chapter and any
23projects administered under those programs are for the
24exclusive purpose of growing, cultivating, and marketing
25industrial hemp in a manner that complies with the programs and
26projects described in 7 U.S.C. §5940.
   273.  a.  The department shall seek to obtain any necessary
28approval by the drug enforcement administration of the United
29States department of justice in order to obtain industrial hemp
30seeds for certification pursuant to section 188.18 as part of
31the industrial hemp commodity program as provided in section
32188.13 or the industrial hemp production program as provided
33in section 188.14.
   34b.  A registrant may seek to obtain any necessary approval
35by the drug enforcement administration of the United States
-3-1department of justice in order to obtain industrial hemp seeds
2for certification pursuant to section 188.18 as part of the
3industrial hemp production program as provided in section
4188.14.
   54.  The department or a registrant may seek a waiver of a
6federal regulation promulgated by the United States department
7of agriculture or the drug enforcement administration of the
8United States department of justice if necessary to fully
9implement the provisions of this chapter.
10   Sec. 7.  NEW SECTION.  188.6  General prohibitions.
   111.  A person shall not produce, handle, transport, market,
12or process industrial hemp in this state unless the industrial
13hemp has been produced pursuant to the industrial hemp
14commodity program established pursuant to section 188.13 or
15the industrial hemp production program established pursuant to
16section 188.14.
   172.  Nothing in this chapter prevents a person from producing,
18handling, transporting, marketing, or processing an industrial
19hemp product.
20   Sec. 8.  NEW SECTION.  188.7  Cannabidiol production
21prohibited — contingent repeal.
   221.  Industrial hemp shall not be used to produce medical
23cannabidiol as defined in section 124E.2.
   242.  Nothing in this chapter shall be construed to authorize
25a person to recommend, possess, use, dispense, deliver,
26transport, or administer medical cannabidiol.
   273.  This section is repealed on July 1, 2022, unless the
28“Medical Cannabidiol Act” codified in chapter 124E is no longer
29in effect on that date.
30   Sec. 9.  NEW SECTION.  188.8  Maximum concentration of
31tetrahydrocannabinol.
   321.  A test of a Cannabis sativa plant under this chapter
33shall be conducted by the department or a qualified public or
34private laboratory approved by the department. The department
35shall establish protocols for sampling and testing Cannabis
-4-1sativa plants produced pursuant to the provisions of this
2chapter, including for obtaining test samples for delivery to
3the laboratory, and the receipt of test results delivered to
4the department, a registrant, or a licensee. The concentration
5of delta-9 tetrahydrocannabinol present in a Cannabis sativa
6plant shall be measured on a dry weight basis in the same
7manner as provided under 7 U.S.C. §5940 unless subsequent
8controlling federal law provides otherwise.
   92.  The maximum concentration of delta-9
10tetrahydrocannabinol present in a Cannabis sativa plant in
11order for the plant to qualify as industrial hemp shall be
12established by the department. The department’s established
13maximum concentration shall be the same as the maximum
14concentration allowed to be present to qualify as industrial
15hemp under 7 U.S.C. §5940 or any subsequent controlling federal
16law.
   173.  In testing Cannabis sativa plants which comprise a crop,
18a composite test result that exceeds the maximum concentration
19of delta-9 tetrahydrocannabinol as provided in subsections 1
20and 2 is deemed conclusive that the crop exceeds the maximum
21concentration for industrial hemp.
22   Sec. 10.  NEW SECTION.  188.9  Confidential information —
23exceptions.
   241.  a.  All of the following information is confidential:
   25(1)  A completed license application, or information which
26is part of such application, acquired by the department,
27a registrant, or a law enforcement agency under section
28188.15. For purposes of this subparagraph, a completed license
29application does not include the results of a national criminal
30history record check acquired by the department from the
31department of public safety pursuant to section 188.15.
   32(2)  A license issued by the department to the applicant
33under section 188.15.
   34(3)  Any information acquired by the department or a
35registrant from a licensee participating in or seeking to
-5-1participate in the industrial hemp commodity program under
2section 188.13 or the industrial hemp production program under
3section 188.14.
   4(4)  A certification of industrial hemp seed issued by the
5association to the department, a registrant, or a licensee
6under section 188.18.
   7(5)  A survey acquired by the department or by Iowa state
8university from the department under section 188.3.
   9(6)  Information relating to the inspection of a licensee
10participating in the industrial hemp commodity program under
11section 188.13 or the industrial hemp production program under
12section 188.14.
   13(7)  The results of any test sample of an industrial hemp
14crop regardless of whether the test was conducted by the
15department, a registrant, or a licensee participating in the
16industrial hemp commodity program under section 188.13 or the
17industrial hemp production program under section 188.14.
   18(8)  Any other information that identifies the business
19location, operations, management, practices, or finances of a
20licensee participating in the industrial hemp commodity program
21under section 188.13 or the industrial hemp production program
22under section 188.14.
   23b.  The confidential information may be in a printed or
24electronic format as part of a document, other tangible medium,
25or accessible by a computer or similar device.
   262.  The confidential information described in subsection
271 is not a public record and is not otherwise subject to
28disclosure under chapter 22. Such information that is
29subsequently disclosed to a person under this chapter retains
30its confidentiality in the manner provided in this section.
   313.  The department shall establish requirements and
32procedures for the disclosure of confidential information
33described in subsection 1, including to any of the following:
   34a.  To a person authorized to receive the confidential
35information under this chapter.
-6-
   1b.  A federal agency or another state’s agency as part of
2the process to evaluate the approval or renewal of a license
3under section 188.15 or the licensee’s participation in the
4industrial hemp commodity program under section 188.13 or the
5industrial hemp production program under section 188.14.
   6c.  A law enforcement agency or a federal agency which
7requests the confidential information in order to respond
8to an emergency situation, a criminal complaint, or an
9ongoing criminal investigation, subject to any applicable
10confidentiality requirements for public records under section
1122.7.
   12d.  The department in conducting a disciplinary action
13against a licensee under section 188.26.
   14e.  A party in any judicial or administrative proceeding
15involving discovery, so long as the disclosure is made upon
16subpoena, or other means of legal compulsion for release.
   17f.  Any person making a request to the custodian of the
18confidential information in the same manner as provided in
19section 22.2 to the extent that the licensee voluntarily agrees
20in writing that such information is to be considered a public
21record subject to chapter 22.
22   Sec. 11.  NEW SECTION.  188.10  Liability.
   23The department or a registrant is not liable for the actions
24of a licensee regardless of the department’s or registrant’s
25legal relationship with the licensee, including but not limited
26to any relationship as an agent, principal, fiduciary, or party
27to a contract.
28   Sec. 12.  NEW SECTION.  188.11  Industrial hemp council —
29establishment, membership, procedures.
   301.  An industrial hemp council is established under the
31purview of the department.
   322.  a.  The council shall consist of the following voting
33members:
   34(1)  An individual who has experience in the regulation
35of industrial hemp production, appointed by the secretary of
-7-1agriculture.
   2(2)  An individual who is a member of an agricultural
3cooperative association as defined in section 502.102,
4appointed by the secretary of agriculture.
   5(3)  Two employees of the department appointed by the
6secretary of agriculture. The employees shall be knowledgeable
7regarding the production of agricultural crops. One employee
8may be the state entomologist. One employee may be an employee
9knowledgeable about procedures and practices relating to the
10import of agricultural seeds or inputs.
   11(4)  One employee of the department of natural resources
12appointed by the director of the department of natural
13resources. The employee must be knowledgeable regarding
14agricultural practices and environmental regulations.
   15(5)  One employee of the department of public safety
16appointed by the director of the department. The person must
17be knowledgeable regarding federal and state drug enforcement
18policies.
   19(6)  One employee of a registrant appointed by the president
20of the registrant’s regents institution. The employee must
21be knowledgeable regarding plant sciences. Until such a
22registrant is appointed, one employee of Iowa state university
23appointed by the president of the university shall serve as a
24member. The employee must be knowledgeable regarding plant
25sciences.
   26b.  The council shall also include four members of the
27general assembly appointed to serve in an ex officio, nonvoting
28capacity. The legislative members shall be selected, one
29member each, by the majority leader of the senate, the
30minority leader of the senate, the speaker of the house of
31representatives, and the minority leader of the house of
32representatives.
   333.  A voting member who has not been appointed shall be
34confirmed by the senate pursuant to section 2.32.
   354.  A public member is eligible to receive compensation as
-8-1provided in section 7E.6 and shall be reimbursed for actual and
2necessary expenses incurred in the discharge of the member’s
3duties. The moneys used to pay expenses and compensation
4shall be paid from moneys in the industrial hemp commodity
5fund established in section 188.23. A legislative member is
6eligible to receive a per diem and expenses as provided in
7section 2.10.
   85.  a.  A public member shall serve a three-year staggered
9term commencing and ending as provided in section 69.19. A
10state employee member shall serve at the pleasure of the
11appointing authority.
   12b.  The voting members shall elect a chairperson and vice
13chairperson annually from the voting membership. A majority of
14the voting members constitutes a quorum. If the chairperson
15and vice chairperson are unable to preside over the council, a
16majority of the voting members present may elect a temporary
17chairperson.
   186.  A vacancy on the council shall be filled in the same
19manner as the original appointment. A member appointed to fill
20a vacancy created other than by expiration of a term shall be
21appointed for the remainder of the unexpired term.
   227.  The council shall be housed within the department and the
23department, in cooperation with Iowa state university, shall
24furnish the council with a meeting place and all articles,
25supplies, and services necessary to enable the council to
26perform its duties. Iowa state university or the office of
27attorney general may provide any technical or legal assistance
28requested by the council or department.
   298.  The appointments of the public members are subject to the
30requirements of sections 69.16, 69.16A, and 69.19. A public
31member is eligible for reappointment. The secretary may remove
32a public member if the removal is based on the public member’s
33misfeasance, malfeasance, or willful neglect of duty or other
34just cause, after notice and hearing, unless the notice and
35hearing is expressly waived by the public member in writing.
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1   Sec. 13.  NEW SECTION.  188.12  Industrial hemp council —
2powers and duties.
   31.  The council shall advise the department and each
4registrant regarding all of the following:
   5a.  All aspects relating to the administration of the
6industrial hemp commodity program established pursuant to
7section 188.13 and the industrial hemp production program
8established pursuant to section 188.14.
   9b.  The establishment of fees assessed, imposed, and
10collected pursuant to sections 188.21 and 188.22.
   11c.  The management of the industrial hemp commodity fund
12established in section 188.23.
   132.  The council shall advise the department regarding all of
14the following:
   15a.  Disciplinary action taken against a licensee pursuant to
16section 188.26.
   17b.  The establishment of a range of civil penalties to be
18imposed, assessed, and collected pursuant to section 188.27.
   193.  The council shall advise a registrant regarding the
20terms and conditions of contracts entered into with a selected
21licensee under section 188.17.
   224.  The council shall not control policy decisions or direct
23the administration or enforcement of this chapter.
24   Sec. 14.  NEW SECTION.  188.13  Industrial hemp commodity
25program — department and licensees.
   261.  The department shall establish and administer an
27industrial hemp commodity program. The purpose of the
28program is to determine the economic feasibility of producing
29industrial hemp as a profitable commodity in this state and of
30the effective handling, transporting, marketing, and processing
31of the commodity in this state.
   322.  A person must be licensed pursuant to section 188.15 to
33participate in the program. Under the program, a licensee may
34produce all of the following:
   35a.  Industrial hemp plants which shall to every extent
-10-1feasible be processed into industrial hemp products for
2marketing in commercial channels.
   3b.  Industrial hemp seeds which shall to every extent
4feasible be processed into industrial hemp products or used to
5produce a subsequent industrial hemp crop.
   63.  The department may establish standards for the labeling
7or marketing of industrial hemp produced under this section.
8The standards shall to every extent feasible be in accordance
9with applicable standards in chapter 210.
   104.  A licensee must immediately report the loss of any
11industrial hemp to the department.
   125.  A licensee shall retain industrial hemp or transfer
13industrial hemp to another person only as authorized by the
14department. The licensee may retain industrial hemp seeds
15capable of germination only as authorized by the department.
16The licensee shall only transfer industrial hemp seed that is
17capable of germination to the department, a registrant, or
18another licensee as approved by the department or any other
19person authorized by law to receive the industrial hemp seed.
   206.  The department shall conduct an inspection of the
21licensee’s facilities and business records as provided in
22section 188.16.
23   Sec. 15.  NEW SECTION.  188.14  Industrial hemp production
24program — registrants and licensees.
   251.  A regents institution, or two or more regents
26institutions acting jointly, may establish and administer
27an industrial hemp production program. The purpose of the
28program shall be to determine the feasibility of increasing
29the production acreage and yield of industrial hemp as a
30profitable crop and reducing the concentration of delta-9
31tetrahydrocannabinol in the industrial hemp.
   322.  In order to administer a program, the regents institution
33or regents institutions acting jointly must register with
34the department according to requirements established by the
35department. The registration shall include a research plan
-11-1that summarizes the quantifiable short-term and long-term goals
2of the research. A copy of the registration shall also be
3filed with the council, the governor, and the general assembly.
   43.  The department has all the same powers to regulate
5a licensee under this program as the department does in
6regulating a licensee under the industrial hemp commodity
7program pursuant to section 188.13. A licensee participating
8in this program shall comply with the same requirements as a
9licensee participating in the industrial hemp commodity program
10under section 188.13, unless the department provides otherwise.
   114.  Only a registrant, including a licensee acting under
12the supervision of the registrant, may participate in the
13program. Under the program, a registrant may produce any of
14the following:
   15a.  Industrial hemp plants which may be processed into
16industrial hemp products.
   17b.  Industrial hemp seeds which may be processed into
18industrial hemp products. A registrant may retain industrial
19hemp seeds capable of germination to produce the next crop of
20industrial hemp or transfer the seeds to another person for
21purposes of scientific research. The registrant shall retain
22or transfer the seeds after consulting with the department.
   235.  A registrant must regularly test the industrial hemp to
24ensure that the industrial hemp does not exceed the maximum
25concentration of delta-9 tetrahydrocannabinol as provided in
26section 188.8.
   276.  A registrant must immediately report the loss of any
28industrial hemp produced by the registrant to the department.
   297.  A registrant must maintain records regarding production
30and transfer of the industrial hemp by the registrant. The
31records shall to every extent practicable contain the same type
32of information contained in records maintained by licensees
33under section 188.13.
   348.  A registrant’s inspection of a licensee’s facilities
35may be conducted as provided in the industrial hemp production
-12-1contract entered into by the registrant and licensee under
2section 188.17. The registrant may request that the department
3assign an official or that a law enforcement agency assign an
4officer to accompany the registrant during the inspection.
5   Sec. 16.  NEW SECTION.  188.15  Industrial hemp commodity
6license — requirements.
   71.  The department shall establish and administer a process
8to receive, evaluate, and approve applications for industrial
9hemp commodity licenses by persons seeking to participate in
10the industrial hemp commodity program under section 188.13 or
11the industrial hemp production program under section 188.14.
12A license expires one year from the date of issuance. An
13expired license may be renewed for three additional years. The
14department may require that a licensee apply for an amended
15or new license if information contained in the existing
16application is no longer accurate or is incomplete.
   172.  An applicant shall not be issued a license unless the
18applicant agrees to comply with all terms and conditions
19relating to the department’s regulation of the licensee.
   203.  The department shall disapprove the application of
21a person for good cause, which shall include any of the
22following:
   23a.  The conviction of a felony within the prior ten years or
24any drug offense within the same period, regardless of whether
25the conviction is in this state or another state.
   26b.  The revocation of a license under section 188.26, or
27the revocation of a license, permit, registration, or other
28authorization to produce industrial hemp in any other state.
   294.  The department shall not issue a license until the
30applicant has furnished a surety bond to the department in
31an amount of not more than ten thousand dollars. The surety
32bond shall insure payment of any amount that the licensee is
33legally obligated to pay for any costs associated with the
34confiscation and destruction of the licensee’s industrial hemp
35crop under section 188.25. The surety bond shall be maintained
-13-1at all times during the period of licensure. The department
2shall be notified ten days prior to any reduction in the amount
3of the surety bond made at the request of the applicant or
4cancellation of the surety bond by the surety. The total and
5aggregate liability of the surety shall be limited to the face
6amount of the surety bond.
   75.  The department may do all of the following:
   8a.  Limit the number of applications that it accepts or
9limit the period or periods when applications will be received,
10evaluated, or accepted each year.
   11b.  Establish criteria required to participate in a program
12which may be based on the qualifications or good character
13of the applicant, the applicant’s proposed investment in
14industrial hemp production, the applicant’s experience in
15commercial crop production, and the type and size of the
16applicant’s existing agricultural operation. The department
17may prepare and publish guidelines to assist persons in
18determining eligibility requirements.
   19c.  Require the issuance of different types of licenses or
20require an applicant to obtain more than one license based
21on criteria established by the department, including but not
22limited to whether the proposed industrial hemp production is
23to occur on noncontiguous parcels of land, whether industrial
24hemp plants or industrial hemp seeds are proposed to be
25produced, or whether the applicant is proposing to participate
26in the industrial hemp commodity program under section 188.13
27or the industrial hemp production program under section 188.14.
   28d.  Require that all or some licenses expire on the same
29date.
   30e.  Provide a different application and requirements for
31the submission, evaluation, and approval or disapproval of an
32application for a renewed license. However, the department
33shall require a check of the applicant’s national criminal
34history record to be conducted under this section each time a
35license is issued or renewed.
-14-
   16.  The department shall prepare and publish license
2application forms. A completed application form submitted to
3the department shall contain all of the following:
   4a.  The applicant’s full name and residence address.
   5b.  A legal description, global positioning system location,
6and map of the site where the applicant proposes to produce the
7industrial hemp.
   8c.  Information required by the department to conduct a check
9of the applicant’s criminal history record. The department
10shall require an applicant to submit pictures, fingerprints,
11and descriptions of physical characteristics on forms required
12by the department of public safety. The department of
13agriculture and land stewardship shall submit the applicant’s
14fingerprints and other necessary information to the department
15of public safety, division of criminal investigation, for the
16purpose of conducting a national criminal history record check
17through the federal bureau of investigation. The department
18of public safety shall notify the department of agriculture
19and land stewardship of the results of the national criminal
20history record check. The results shall be considered a
21confidential record under chapter 22 and shall not be released
22without the consent of the department of public safety. The
23department of agriculture and land stewardship shall reimburse
24the department of public safety for costs associated with
25conducting the national criminal history record check.
   26d.  Any other information required by the department in order
27to administer this chapter.
   287.  The department of agriculture and land stewardship shall
29deliver a copy of an approved application for a license to
30the department of public safety and the office of the county
31sheriff in the county where the industrial hemp is approved
32to be produced by the licensee in order to participate in the
33industrial hemp commodity program under section 188.13 or the
34industrial hemp production program under section 188.14.
   358.  A license shall be suspended or revoked as provided in
-15-1section 188.26.
2   Sec. 17.  NEW SECTION.  188.16  Licensees — inspections by
3department and law enforcement agencies.
   41.  The department may conduct an official inspection of
5a licensee’s facilities where industrial hemp is produced,
6stored, handled, transported, marketed, or processed. The
7department shall conduct an official inspection during regular
8business hours. As part of an official inspection, the
9department shall collect a sample of the crop for testing under
10section 188.8 at least once and within thirty days prior to
11harvest. The department may order or request that a licensee
12independently collect and test one or more samples of the crop
13during the growing period and notify the department of the
14results.
   152.  A licensee shall immediately notify the department of
16the results of any test that exceeds the maximum concentration
17of delta-9 tetrahydrocannabinol as provided in section 188.8,
18regardless of whether the department ordered, requested, or
19knew of the test.
   203.  The department may request that a law enforcement
21agency assign an officer to accompany the department during an
22official inspection of the facilities of a licensee.
   234.  As part of its official inspection, the department
24may examine the licensee’s business records. However, a law
25enforcement officer shall not accompany the department during
26the examination.
27   Sec. 18.  NEW SECTION.  188.17  Industrial hemp production
28contract — requirements.
   29A registrant may enter into an industrial hemp production
30contract with a licensee to produce industrial hemp under the
31supervision of the registrant. The registrant shall supervise
32the production of the industrial hemp in cooperation with the
33department. The contract shall provide for the regulation of
34the licensee and the industrial hemp produced by the licensee
35in the same manner as provided in section 188.13, unless
-16-1otherwise provided by the department in consultation with the
2registrant.
3   Sec. 19.  NEW SECTION.  188.18  Industrial hemp seed capable
4of germination — certification.
   51.  The Iowa crop improvement association shall certify
6industrial hemp seed capable of germination for use by a
7licensee as part of the industrial hemp commodity program
8under section 188.13 or a registrant as part of the industrial
9hemp production program under section 188.14. The association
10may provide different certification processes, including for
11industrial hemp seed produced or obtained by a registrant or
12obtained from a qualified and reputable industrial hemp seed
13source and supplier.
   142.  The association’s certification protocols may be based
15on standards promulgated by independent organizations including
16but not limited to the association of official seed certifying
17agencies and verifications offered by qualified and reliable
18persons in the business of providing such seed.
   193.  The Iowa crop improvement association shall notify the
20department and the registrant, as applicable, of the results of
21a request for the certification of industrial hemp seed.
   224.  A licensee may import industrial hemp seed for
23certification only if allowed by the department acting in
24consultation with the association. A registrant may import
25industrial seed for certification after consulting with the
26department and the association.
27   Sec. 20.  NEW SECTION.  188.19  Industrial hemp seed capable
28of germination — sale by the department.
   291.  The department shall offer certified industrial hemp
30seed for sale to licensees participating in the industrial hemp
31commodity program established pursuant to section 188.13. The
32department may offer certified industrial hemp seed for sale to
33a registrant participating in the industrial hemp production
34program established pursuant to section 188.14.
   352.  Moneys collected by the department from the sale of
-17-1certified industrial hemp seed shall be deposited into the
2industrial hemp commodity fund established in section 188.23.
3   Sec. 21.  NEW SECTION.  188.20  Industrial hemp seed capable
4of germination — sale by a registrant.
   51.  A registrant may offer certified industrial hemp seed
6for sale to the department, or a licensee participating in the
7industrial hemp production program established pursuant to
8section 188.14.
   92.  All moneys received by a registrant under subsection 1
10shall be handled in the same manner as repayment receipts as
11defined in section 8.2, and shall be used by the registrant
12exclusively for the registrant’s administration of the
13industrial hemp production program.
14   Sec. 22.  NEW SECTION.  188.21  Fees assessed by department.
   151.  The department shall assess and collect all of the
16following:
   17a.  An application fee to be paid by a person seeking to
18obtain an industrial hemp commodity license as provided in
19section 188.15.
   20b.  A license fee to be paid by a person being issued an
21industrial hemp commodity license as provided in section
22188.15.
   23c.  An inspection fee to be paid by a licensee as part of
24an inspection of the facilities where the industrial hemp is
25produced as provided in section 188.16.
   26d.  A laboratory fee to be paid by a licensee if the
27department takes samples of industrial hemp for testing by a
28laboratory as provided in section 188.8.
   292.  The fees described in subsection 1 are nonrefundable.
   303.  The total amount of fees collected pursuant to this
31section shall not exceed the department’s estimate of the total
32amount of revenues necessary to administer and enforce the
33provisions of this chapter. Prior to the beginning of a fiscal
34year, the department shall establish an estimated total amount
35based on the expected costs to be incurred by the department
-18-1in administering and enforcing the provisions of this chapter
2during the subsequent fiscal year.
   34.  The department may establish different rates for any
4category of fees described in subsection 1 based on criteria
5determined relevant by the department, which may include the
6type of license issued and the number of acres set aside for
7industrial hemp production by a licensee.
   85.  All fees collected by the department under this section
9shall be deposited into the industrial hemp commodity fund
10established pursuant to section 188.23.
11   Sec. 23.  NEW SECTION.  188.22  Fees assessed by registrants.
   121.  A registrant may assess and collect fees from licensees
13participating in the registrant’s industrial hemp production
14program as provided in section 188.14. The total amount
15of fees paid shall not exceed the expenses incurred by the
16registrant in selecting licensees to participate in the
17program, conducting inspections of facilities where the
18industrial hemp is produced, and taking samples of industrial
19hemp to be tested by a laboratory as provided in section 188.8.
   202.  All moneys received by a registrant under this section
21shall be handled in the same manner as repayment receipts as
22defined in section 8.2, and shall be used by the registrant
23exclusively for the registrant’s administration of the
24industrial hemp production program.
25   Sec. 24.  NEW SECTION.  188.23  Industrial hemp commodity fund
26— appropriation.
   271.  An industrial hemp commodity fund is established in
28the state treasury under the management and control of the
29department.
   302.  The fund shall include moneys collected by the department
31from the sale of certified seed under section 188.19, fees
32collected under section 188.21, and moneys appropriated by the
33general assembly for deposit in the fund. The fund may include
34other moneys available to and obtained or accepted by the
35department, including moneys from public or private sources.
-19-
   13.  Moneys in the fund are appropriated to the department
2and shall be used exclusively to carry out the responsibilities
3conferred upon the department under this chapter as determined
4and directed by the department, and shall not require further
5special authorization by the general assembly.
   64.  a.  Notwithstanding section 12C.7, interest or earnings
7on moneys in the fund shall be credited to the fund.
   8b.  Notwithstanding section 8.33, moneys credited to the fund
9that remain unexpended or unobligated at the end of a fiscal
10year shall not revert to any other fund.
11   Sec. 25.  NEW SECTION.  188.24  Cooperation with department
12of public safety.
   131.  The department of agriculture and land stewardship and a
14registrant shall cooperate with the department of public safety
15in order to administer this chapter.
   162.  The department of public safety shall assist the
17department of agriculture and land stewardship in conducting
18national criminal history record checks of applicants applying
19for licenses under section 188.15.
   203.  The department of agriculture and land stewardship and
21a registrant shall upon request or as part of routine process
22provide the department of public safety with the following
23information regarding the industrial hemp commodity program
24under section 188.13 and the industrial hemp production program
25under section 188.14:
   26a.  The status of the production and the results of any test
27of a crop produced by a licensee under this chapter.
   28b.  The date and time of an inspection of a licensee’s
29facilities or business records.
   30c.  The confiscation and destruction of a crop under section
31188.25.
32   Sec. 26.  NEW SECTION.  188.25  Confiscation and destruction.
   331.  A Cannabis sativa plant exceeding the maximum
34concentration of delta-9 tetrahydrocannabinol as provided in
35section 188.8 and that is produced under the industrial hemp
-20-1commodity program established pursuant to section 188.13 shall
2be confiscated by the department.
   32.  A Cannabis sativa plant exceeding the maximum
4concentration of delta-9 tetrahydrocannabinol as provided in
5section 188.8 and that is produced under the industrial hemp
6production program established pursuant to section 188.14
7shall be confiscated by the registrant in cooperation with the
8department.
   93.  The department shall provide for the destruction of a
10confiscated Cannabis sativa plant produced under the industrial
11hemp commodity program under section 188.13 or the industrial
12hemp production program under section 188.14. A registrant may
13provide for the destruction of a confiscated Cannabis sativa
14plant produced under the industrial hemp production program
15under section 188.14 in cooperation with the department. The
16department or a registrant shall not confiscate or destroy a
17Cannabis sativa plant unless the results of an official test
18conducted by the department indicate that a sample exceeds
19the maximum concentration of delta-9 tetrahydrocannabinol as
20provided in section 188.8. The department, or a registrant
21acting in cooperation with the department, may require that
22a confiscated Cannabis sativa plant be kept on the premises
23where the plant was confiscated, including where it is
24produced, handled, transported, marketed, or processed, until
25arrangements are made for the plant’s removal and destruction.
26The destruction may also occur on the premises where the
27plant was confiscated if such premises may be reasonably used
28for that purpose as determined by the department or by the
29registrant in cooperation with the department. The destruction
30shall be accomplished by use of a controlled burn.
   314.  The department or registrant may request assistance from
32a law enforcement agency necessary to carry out this section.
33The department or registrant upon request shall deliver any
34sample of the plant to the law enforcement agency.
35   Sec. 27.  NEW SECTION.  188.26  Disciplinary action.
-21-
   11.  The department may suspend or revoke the license obtained
2under section 188.15 by a person who does any of the following:
   3a.  Provides false or misleading information on an
4application for an industrial hemp commodity license as
5provided in section 188.15.
   6b.  Provides false or misleading information to the
7department as part of the industrial hemp commodity program
8under section 188.13 or to a registrant or the department as
9part of the industrial hemp production program under section
10188.14.
   11c.  Fails to comply with or violates any provision of this
12chapter, including a rule adopted by the department under
13section 188.4, a condition of an application for the issuance
14of a license under section 188.15, or a condition of a contract
15entered into with a registrant under section 188.17.
   16d.  Fails to comply with an order issued by the department or
17a registrant under this chapter.
   182.  The suspension or revocation of a license is in addition
19to the confiscation and destruction of a Cannabis sativa plant
20under section 188.25, a civil penalty under section 188.27, or
21any other civil or criminal penalty that may be imposed on the
22person under state or federal law.
23   Sec. 28.  NEW SECTION.  188.27  Civil penalties.
   241.  A person who violates a provision of this chapter is
25subject to a civil penalty of not less than five hundred
26dollars and not more than two thousand five hundred dollars.
27The department may assess and collect the civil penalty. Each
28day that a continuing violation occurs shall be considered a
29separate offense.
   302.  The department shall establish a schedule of civil
31penalties for violations of this chapter.
   323.  A civil penalty shall not be assessed against a
33licensee for a violation that results in the confiscation and
34destruction of the licensee’s crop under section 188.25, unless
35the composite test result is greater than two percent delta-9
-22-1tetrahydrocannabinol as determined in section 188.8.
   24.  All civil penalties collected under this section shall be
3deposited into the general fund of the state.
4   Sec. 29.  NEW SECTION.  188.28  Criminal penalties.
   5A person who knowingly or intentionally produces the
6Cannabis sativa plant and who is not the department, a
7registrant, or a licensee participating in the industrial hemp
8commodity program established pursuant to section 188.13 or
9the industrial hemp production program established pursuant to
10section 188.14 is subject to the provisions in chapters 124 and
11453B.
12   Sec. 30.  NEW SECTION.  262.80  Industrial hemp production
13program.
   14The board of regents may consult with Iowa state university
15of science and technology, the university of Iowa, and the
16university of northern Iowa to provide for the participation
17of those universities in administering an industrial hemp
18production program in cooperation with the department of
19agriculture and land stewardship as provided in chapter 188.
20EXPLANATION
21The inclusion of this explanation does not constitute agreement with
22the explanation’s substance by the members of the general assembly.
   23OVERVIEW. This bill creates the “Iowa Industrial Hemp Act”
24authorizing the production and marketing of industrial hemp as
25part of an industrial hemp commodity program administered by
26the department of agriculture and land stewardship (DALS) and
27an industrial hemp production program administered by one or
28more regents institutions (Iowa state university of science
29and technology, the university of Iowa, or the university of
30northern Iowa) (registrant) acting in cooperation with DALS.
31 According to the bill, industrial hemp refers to the plant
32classified as Cannabis sativa (plant) having a concentration of
33delta-9 tetrahydrocannabinol (THC) not to exceed three-tenths
34of 1 percent, as allowed under federal law, according to tests
35conducted by the department or a qualified laboratory approved
-23-1by DALS. The bill also provides that the two programs are
2established for the exclusive purpose of growing, cultivating,
3and marketing industrial hemp in a manner that complies with
4the programs and projects described in 7 U.S.C. §5940.
   5FEDERAL LAW. The purpose of the programs is to determine
6the commercial viability of industrial hemp as described in
7federal legislation, section 7606 of the Agricultural Act of
82014 (7 U.S.C. §5940), which legalizes the possession and
9use of industrial hemp if regulated by a state department of
10agriculture administering a pilot program. The federal law
11also authorizes an institution of higher education to produce
12industrial hemp in order to advance academic research. The
13federal law does not authorize a federal agency to implement
14or oversee the program. However, it also does not expressly
15supersede other federal laws that restrict items designated
16as controlled substances including the federal “Controlled
17Substances Import and Export Act” (21 U.S.C. §951 et seq.),
18requiring that cannabis seeds capable of germination only be
19imported into a state by persons registered with the drug
20enforcement administration of the United States department of
21justice (DEA).
   22IOWA’S UNIFORM CONTROLLED SUBSTANCES ACT. A person who
23produces industrial hemp under one of the two programs is
24exempted from state criminal law included in the “Uniform
25Controlled Substances Act” (Code chapter 124) which prohibits
26persons from knowingly or intentionally possessing a controlled
27substance (Code section 124.401(5)) including the plant
28referred to as marijuana included as a schedule I controlled
29substance (Code section 124.204). “Marijuana” includes all
30parts of the plant without regard to THC concentration (Code
31section 124.101).
   32ADMINISTRATION — COUNCIL, DEPARTMENT, AND REGISTRANTS. An
33industrial hemp council is created comprised of public members
34and representatives of government entities, including employees
35of the department, the department of natural resources,
-24-1the department of public safety, and a regents institution
2registrant (or Iowa state university of science and technology
3until a university is registered). The council also includes
4four nonvoting legislative members. The council is to advise
5the department and the registrant regarding the administration
6and enforcement of the bill, including the two programs, the
7establishment of fees, and disciplinary actions taken against
8licensees.
   9REPORT. DALS must prepare and submit an annual report to
10the governor and general assembly evaluating the success of
11the industrial hemp commodity program and the industrial hemp
12production program.
   13ADMINISTRATION — PROGRAMS. A person is prohibited from
14producing, handling, transporting, marketing, or processing
15industrial hemp in this state unless the industrial hemp has
16been produced under one of the two programs. There is no
17prohibition for marketing an industrial hemp product. Under
18the industrial hemp commodity program, industrial hemp must
19be produced by a person licensed by the DALS, and under the
20industrial hemp production program, industrial hemp must be
21produced either by the registrant or by a licensee selected
22by the registrant pursuant to an industrial hemp production
23contract (contract). Neither DALS nor a registrant is liable
24for the actions of a licensee.
   25ADMINISTRATION — LICENSURE. A license applicant must
26not have been convicted of a felony or drug offense within
27the prior 10 years and must furnish DALS a surety bond. The
28department of public safety (DPS) must perform a check of the
29applicant’s national criminal history record. The application
30must include information regarding the applicant and business
31operations, including location of the land used to produce the
32industrial hemp.
   33CONFIDENTIAL INFORMATION. Confidential information includes
34information acquired by DALS or a registrant from an applicant
35or licensee, the results of test samples of a plant, or
-25-1information that identifies the business of a licensee, and the
2results of a national criminal history record check.
   3MEDICAL CANNABIDIOL — PROHIBITION. Industrial hemp cannot
4be used to produce medical cannabidiol which has a limit of 3
5percent THC (Code chapter 124E). The bill’s prohibition is
6repealed on July 1, 2022. However, the bill does not increase
7the maximum concentration of THC authorized to be present in
8industrial hemp.
   9ADMINISTRATION — CERTIFICATION AND SALE OF SEED. The Iowa
10crop improvement association (Code chapter 177) is responsible
11for certifying industrial hemp seed capable of germination. A
12licensee may import seed for certification if allowed by DALS
13acting in consultation with the association. A registrant
14may import the seed for certification after consulting with
15DALS and the association. DALS must offer certified seeds to
16licensees or to a registrant.
   17FINANCE — MONEYS COLLECTED AND EXPENDED BY THE
18ADMINISTRATIVE ENTITIES. Moneys collected from the sale of
19seed are retained by either DALS or the registrant acting as
20the seller and must be used to administer their respective
21programs. Each administrative entity may also collect fees
22associated with administering their program and regulating
23licensees. Fees collected by DALS include an application fee,
24licensee fee, inspection fee, and laboratory fee. The amount
25of the fee must be based on an estimate of expenses necessary
26to administer the administrative entity’s program. Moneys
27collected by DALS from certified seed sales and fees must be
28deposited into an industrial hemp commodity fund which are
29appropriated to the DALS to administer its program. Moneys
30paid to a registrant are retained by the registrant and treated
31as repayment receipts for costs incurred in administering its
32program.
   33ENFORCEMENT — COOPERATION WITH THE DEPARTMENT OF PUBLIC
34SAFETY. The department and a registrant must cooperate with
35the DPS in administering and enforcing the provisions of the
-26-1bill. DALS and a registrant must provide DPS information
2regarding the administration of the programs.
   3ENFORCEMENT — CONFISCATION. If a licensee produces a
4plant exceeding the maximum allowed concentration of delta-9
5tetrahydrocannabinol, the plant must be confiscated and
6destroyed by DALS or a registrant supervising production and
7with assistance by DPS or a local law enforcement authority.
   8ENFORCEMENT — DISCIPLINARY ACTION. DALS may suspend or
9revoke a person’s license for providing false or misleading
10information on an application prior to being selected or to
11the department or a registrant after being selected. The
12department may also suspend or revoke a license for failing to
13comply with a program requirement as set forth in statute, a
14rule adopted by DALS, or a contract.
   15ENFORCEMENT — CIVIL PENALTIES. A person who violates a
16provision of the bill is subject to a civil penalty of not less
17than $500 and not more than $2,500 as assessed and collected
18by DALS. Each day that a continuing violation occurs is
19considered a separate offense. DALS is required to establish a
20schedule of civil penalties for violations. A civil penalty
21cannot be imposed against a licensee for a violation that
22results in the confiscation and destruction of the licensee’s
23crop unless the composite test result for the crop is a
24concentration greater than 2 percent.
   25ENFORCEMENT — CRIMINAL PENALTIES. A person who knowingly
26or intentionally produces the plant and who is not DALS, a
27registrant, or a licensee participating in a program is subject
28to the criminal penalties described in Code chapters 124 and
29453B. A person who knowingly or intentionally possesses
30marijuana as a first offense is punishable by imprisonment in
31the county jail for not more than six months or by a fine of
32not more than $1,000, or by both (Code section 124.401). For a
33second offense, the person is guilty of a serious misdemeanor,
34punishable by confinement for no more than one year and a fine
35of at least $315 but not more than $1,875. For a third or
-27-1subsequent offense, the person is guilty of a class “D” felony,
2punishable by confinement for no more than five years and a
3fine of at least $750 but not more than $7,500. A person acting
4in violation of Code chapter 453B for failing to pay an excise
5tax on the sale of marijuana (Code section 453B.7) is also
6guilty of a class “D” felony (Code section 453B.12).
-28-
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