86R2396 TSR-F
 
  By: King of Uvalde H.B. No. 1325
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the production and regulation of hemp and products made
  from hemp; requiring authorization to produce hemp; authorizing
  penalties; authorizing fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  This Act may be cited as the Hemp Farming Act.
         SECTION 2.  (a)  It is the policy of this state that hemp is a
  viable agricultural crop and an agricultural commodity in this
  state.
         (b)  It is the purpose of this Act to:
               (1)  promote cultivating and processing hemp and
  develop new commercial markets for farmers and businesses through
  the sale of hemp products;
               (2)  promote the expansion of this state's hemp
  industry to the maximum extent permitted by law allowing farmers
  and businesses to cultivate, handle, and process hemp and sell hemp
  products for commercial purposes;
               (3)  encourage and empower research into hemp
  production and hemp products at institutions of higher education
  and in the private sector; and
               (4)  move this state and its citizens to the forefront
  of the hemp industry.
         SECTION 3.  Section 12.020(c), Agriculture Code, is amended
  to read as follows:
         (c)  The provisions of law subject to this section and the
  applicable penalty amounts are as follows:
 
 
Provision Amount of Penalty  
 
 
Chapters 13, 14A, 17, 18, 19, 41, 46, 61, 72, 73, 74, 76, 94, 95, 101, 102, 103,  125, 132,    
 
Chapters 13, 14A, 17, 18, 19, 41, 46, 61, 72, 73, 74, 76, 94, 95, 101, 102, 103,  125, 132,    
 
Chapters 13, 14A, 17, 18, 19, 41, 46, 61, 72, 73, 74, 76, 94, 95, 101, 102, 103, 113, 125, 132,    
 
and 134 not more than $5,000
 
 
 
 
Subchapters A, B, and C, Chapter 71 not more than $5,000
 
Chapter 14 not more than $10,000
 
Chapter 1951, Occupations Code not more than $5,000
 
Chapter 153, Natural Resources    
 
Code not more than $5,000
 
Section 91.009 not more than $5,000.
         SECTION 4.  The heading to Subtitle E, Title 5, Agriculture
  Code, is amended to read as follows:
  SUBTITLE E. PRODUCTION, PROCESSING, AND SALE OF FIBER PRODUCTS
         SECTION 5.  Subtitle E, Title 5, Agriculture Code, is
  amended by adding Chapters 112 and 113 to read as follows:
  CHAPTER 112. STATE HEMP PRODUCTION PLAN
         Sec. 112.001.  DEFINITION. In this chapter, "hemp" means
  the plant Cannabis sativa L. and any part of that plant, including
  the seeds of the plant and all derivatives, extracts, cannabinoids,
  isomers, acids, salts, and salts of isomers, whether growing or
  not, with a delta-9 tetrahydrocannabinol concentration of not more
  than 0.3 percent on a dry weight basis.
         Sec. 112.002.  LEGISLATIVE INTENT. It is the intent of the
  legislature that this state have primary regulatory authority over
  the production of hemp in this state.
         Sec. 112.003.  DEPARTMENT RULES. (a)  The department, after
  consulting with the governor and attorney general, shall adopt
  rules consistent with Chapter 113 providing:
               (1)  a practice to maintain relevant information
  regarding land on which hemp is produced in this state, including a
  legal description of the land, for a period of at least three
  calendar years;
               (2)  a procedure for testing, using
  post-decarboxylation or another similarly reliable method, the
  delta-9 tetrahydrocannabinol concentration of hemp produced in
  this state;
               (3)  a procedure for the effective disposal of plants,
  whether growing or not, that are produced in violation of Subtitle
  G, Agricultural Marketing Act of 1946 (7 U.S.C. Chapter 38,
  Subchapter VII), and products derived from those plants;
               (4)  a procedure to comply with the enforcement
  procedures described by Section 297B(e), Agricultural Marketing
  Act of 1946 (7 U.S.C. Section 1639p(e));
               (5)  a procedure for conducting annual inspections of,
  at a minimum, a random sample of hemp producers to verify that hemp
  is not produced in violation of Subtitle G, Agricultural Marketing
  Act of 1946 (7 U.S.C. Chapter 38, Subchapter VII);
               (6)  a procedure for submitting the information
  described in Section 297C(d)(2), Agricultural Marketing Act of 1946
  (7 U.S.C. Section 1639q(d)(2)), as applicable, to the secretary of
  the United States Department of Agriculture not later than the 30th
  day after the date the information is received; and
               (7)  standards for certifying that this state has the
  resources and personnel to carry out the practices and procedures
  described by Subdivisions (1) through (6).
         (b)  The department shall attempt to adopt rules under
  Subsection (a) that will, in substance, meet the requirements for
  approval as a state plan under Section 297B, Agricultural Marketing
  Act of 1946 (7 U.S.C. Section 1639p).
         Sec. 112.004.  SUBMISSION OF STATE PLAN. (a)  The
  department, after consulting with the governor and attorney
  general, shall submit to the secretary of the United States
  Department of Agriculture a state plan for monitoring and
  regulating the production of hemp in this state as provided by
  Section 297B, Agricultural Marketing Act of 1946 (7 U.S.C. Section
  1639p).
         (b)  The plan shall include the rules adopted under Section
  112.003 and any other required information.
         (c)  If a plan submitted by the department is disapproved by
  the secretary of the United States Department of Agriculture, the
  department, after consulting with the governor and attorney
  general, shall amend the rules under Section 112.003 as needed to
  obtain approval and submit an amended plan.
         (d)  The department shall, as necessary, seek technical
  assistance from the secretary of the United States Department of
  Agriculture in adopting rules under Section 112.003 and otherwise
  developing the plan.
  CHAPTER 113. PRODUCTION OF HEMP
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 113.001.  DEFINITIONS. In this chapter:
               (1)  "Commercial sale" means the sale of a product in
  the stream of commerce at retail, at wholesale, or on the Internet.
               (2)  "Cultivate" means to plant, water, grow, or
  harvest a plant or crop.
               (3)  "Federally defined THC level for hemp" means a
  delta-9 tetrahydrocannabinol concentration of not more than 0.3
  percent:
                     (A)  on a dry weight basis for hemp; or
                     (B)  in a hemp product.
               (4)  "Handle" means to possess or store a hemp plant:
                     (A)  on premises owned, operated, or controlled by
  a hemp producer for any period of time; or
                     (B)  in a vehicle for any period of time other than
  during the actual transport of the plant from a premises owned,
  operated, or controlled by a hemp producer to a premises owned,
  operated, or controlled by another hemp producer.
               (5)  "Hemp" has the meaning assigned by Section
  112.001.
               (6)  "Hemp producer" means a person authorized by the
  department to cultivate, handle, or process hemp in this state.
               (7)  "Hemp product" means a finished product with a
  delta-9 tetrahydrocannabinol concentration of not more than 0.3
  percent that is derived from or made by processing a hemp plant or
  plant part and prepared in a form available for commercial sale.
  The term includes cosmetics, personal care products, food intended
  for human or animal consumption, cloth, cordage, fiber, fuel,
  paint, paper, particleboard, plastics, and any product containing
  one or more hemp-derived cannabinoids such as cannabidiol.
               (8)  "Institution of higher education" has the meaning
  assigned by Section 61.003, Education Code.
               (9)  "Process" means to convert hemp into a marketable
  form.
         Sec. 113.002.  DEPARTMENT RULES AND PROCEDURES. The
  department may adopt rules and administrative procedures necessary
  to implement this chapter. 
         Sec. 113.003.  STATE HEMP PROGRAM ACCOUNT. (a)  The state
  hemp program account is an account in the general revenue fund
  administered by the department. 
         (b)  The account consists of:
               (1)  appropriations of money to the account by the
  legislature;
               (2)  public or private gifts, grants, or donations,
  including federal funds, received for the account;
               (3)  fees deposited to the account under Section
  113.053; 
               (4)  interest and income earned on the investment of
  money in the account;
               (5)  penalties collected under this chapter; and
               (6)  funds from any other source.
         (c)  The department may accept appropriations and gifts,
  grants, or donations from any source to administer and enforce this
  chapter. Money received under this subsection shall be deposited
  in the account.
         (d)  Money in the account may be appropriated only for the
  administration and enforcement of this chapter.
         Sec. 113.004.  APPLICABILITY OF OTHER LAW. This chapter
  does not authorize a person to violate federal or other state law.
  SUBCHAPTER B. STATE HEMP PROGRAM
         Sec. 113.051.  APPLICABILITY OF SUBCHAPTER TO HEMP PRODUCTS.
  This subchapter does not apply to the possession, transportation,
  or sale of hemp products or extracts, including those containing
  one or more hemp-derived cannabinoids, including cannabidiol.
         Sec. 113.052.  PROGRAM RULES. (a)  The department shall
  adopt rules to establish a state hemp program that:
               (1)  promotes the cultivating and processing of hemp
  and the commercial sale of hemp products; and
               (2)  regulates hemp production in this state.
         (b)  In adopting rules under Subsection (a), the department
  shall consult with:
               (1)  relevant public agencies; and
               (2)  private, nonprofit associations in the hemp
  industry that promote standards, best practices, and
  self-regulation in the production of hemp.
         (c)  Rules adopted under Subsection (a) must:
               (1)  establish requirements by which the department
  authorizes an individual or business entity to participate in the
  state hemp program as a hemp producer;
               (2)  prescribe the manner in which an institution of
  higher education may participate in or be affiliated with the
  program;
               (3)  prescribe sampling and testing procedures to
  ensure that hemp plants cultivated, handled, or processed in this
  state, and hemp products processed in this state, do not exceed the
  federally defined THC level for hemp;
               (4)  provide due process consistent with Chapter 2001,
  Government Code, including an appeals process, to protect hemp
  producers from the consequences of imperfect test results; and
               (5)  prescribe enforcement procedures that are
  consistent with Section 297B(e), Agricultural Marketing Act of 1946
  (7 U.S.C. Section 1639p(e)).
         Sec. 113.053.  FEES. (a) The department by rule shall set
  and collect fees in amounts that are reasonable and necessary to
  cover the costs of administering and enforcing the state hemp
  program. 
         (b)  Fees prescribed by the department under this section are
  not refundable.
         (c)  Fees collected under this section must be deposited in
  the state hemp program account under Section 113.003.
         Sec. 113.054.  DEPARTMENT AUTHORIZATION REQUIRED. (a)  
  Except as provided by Subchapter C, a person or the person's agent
  may not cultivate, handle, or process hemp in this state or
  transport hemp outside of this state unless the person is
  authorized by the department under this section to participate in
  the state hemp program as a hemp producer.
         (b)  A person seeking to participate in the state hemp
  program as a hemp producer must apply to the department on a form
  and in the manner prescribed by the department. The application
  must be accompanied by:
               (1)  a legal description and the global positioning
  system coordinates for each location where the person intends to
  cultivate or process hemp;
               (2)  written consent allowing the department, the
  Department of Public Safety, and any other state or local law
  enforcement agency to enter onto all premises where hemp is
  cultivated, processed, or stored to conduct a physical inspection
  or to ensure compliance with this chapter and rules adopted under
  this subchapter;
               (3)  any fees required by the department; and
               (4)  any other information required by department rule.
         (c)  If the department determines that a person who submits
  an application under this section meets the state hemp program
  participation requirements prescribed by department rule, the
  department shall authorize the person to participate in the program
  as a hemp producer in the manner provided by department rule. 
         Sec. 113.055.  LIMITATION ON PROGRAM PARTICIPATION. (a)  A
  person who is or has been convicted of a felony relating to a
  controlled substance under state or federal law may not participate
  in the state hemp program established under this subchapter or
  produce hemp in this state under any other law for a period of at
  least 10 years after the date of the person's conviction.
         (b)  A person who materially falsifies any information
  contained in an application submitted to the department under
  Section 113.054 may not participate in the state hemp program.
         Sec. 113.056.  ENFORCEMENT. (a)  If the department
  determines that a hemp producer has negligently violated this
  subchapter or a rule adopted under this subchapter, the department
  shall enforce the violation in the manner provided by Section
  297B(e), Agricultural Marketing Act of 1946 (7 U.S.C. Section
  1639p(e)). A hemp producer is not subject to a civil or criminal
  penalty under this subsection.
         (b)  If the department determines that a hemp producer has
  violated this subchapter or a rule adopted under this subchapter
  with a culpable mental state greater than negligence, Subsection
  (a) does not apply and the department shall report the hemp producer
  immediately to:
               (1)  the United States attorney general; and
               (2)  the attorney general of this state, who may:
                     (A)  on behalf of the department, investigate the
  violation and institute proceedings for injunctive or other
  appropriate relief; or
                     (B)  report the matter to an appropriate law
  enforcement agency.
  SUBCHAPTER C.  HEMP PRODUCTS
         Sec. 113.101.  PROCESSING OR MANUFACTURING HEMP PRODUCTS. A
  state agency may not prohibit a person who processes or
  manufactures a product regulated by the agency from applying for or
  obtaining a permit or other authorization to process or manufacture
  the product solely on the basis that the person intends to process
  or manufacture the product with hemp.
         Sec. 113.102.  HEMP-DERIVED ADDITIVES. Notwithstanding any
  other law, derivatives of hemp, including hemp-derived
  cannabidiol, may be added to cosmetics, personal care products, and
  products intended for human or animal consumption, and such an
  addition is not considered an adulteration of those products.
         Sec. 113.103.  POSSESSION, TRANSPORTATION, AND SALE OF HEMP
  PRODUCTS.  (a)  Notwithstanding any other law, a person may possess,
  transport, sell, and purchase legally produced hemp products in
  this state.
         (b)  The department by rule must provide to a retailer of
  hemp products fair notice of a potential violation concerning hemp
  products sold by the retailer and an opportunity to cure a violation
  made unintentionally or negligently.
         Sec. 113.104.  RULES RELATED TO SALE OF HEMP PRODUCTS. The
  department, in consultation with the Department of State Health
  Services, may adopt rules to regulate the sale of hemp products that
  reflect the following principles:
               (1)  hemp-derived cannabinoids, including cannabidiol,
  are not considered controlled substances or adulterants; and
               (2)  products containing one or more hemp-derived
  cannabinoids, such as cannabidiol, intended for ingestion are to be
  considered foods, not controlled substances or adulterated
  products.
         Sec. 113.105.  RETAIL SALE OF OUT-OF-STATE HEMP PRODUCTS.
  Retail sales of hemp products processed outside of this state may be
  conducted in this state when the products and the hemp used in the
  products were processed and cultivated legally in another state or
  jurisdiction that has the same or substantially similar
  requirements for processing hemp products or cultivating hemp as
  provided by this chapter.
         Sec. 113.106.  TRANSPORTATION AND EXPORTATION OF HEMP
  PRODUCTS OUT OF STATE. Hemp products may be legally transported
  across state lines and exported to foreign countries in a manner
  that is consistent with federal law and the laws of respective
  foreign countries.
  SUBCHAPTER D. ENFORCEMENT; PENALTIES
         Sec. 113.151.  PENALTY SCHEDULE. (a)  The department by rule
  shall adopt a schedule of sanctions and penalties for violations of
  this chapter and rules adopted under this chapter that does not
  conflict with Section 297B(e), Agricultural Marketing Act of 1946
  (7 U.S.C. Section 1639p(e)).
         (b)  A penalty collected under this chapter must be deposited
  in the state hemp program account under Section 113.003.
         Sec. 113.152.  ADMINISTRATIVE PENALTY. The department may
  impose an administrative penalty or other administrative sanction
  for a violation of this chapter or a rule or order adopted under
  this chapter, including a penalty or sanction under Section 12.020
  or 12.0201.
         SECTION 6.  Sections 481.002(5) and (26), Health and Safety
  Code, are amended to read as follows:
               (5)  "Controlled substance" means a substance,
  including a drug, an adulterant, and a dilutant, listed in
  Schedules I through V or Penalty Group 1, 1-A, 2, 2-A, 3, or 4.  The
  term includes the aggregate weight of any mixture, solution, or
  other substance containing a controlled substance. The term does
  not include hemp, as defined by Section 112.001, Agriculture Code,
  or any tetrahydrocannabinols or other substances in hemp.
               (26)  "Marihuana" means the plant Cannabis sativa L.,
  whether growing or not, the seeds of that plant, and every compound,
  manufacture, salt, derivative, mixture, or preparation of that
  plant or its seeds. The term does not include:
                     (A)  the resin extracted from a part of the plant
  or a compound, manufacture, salt, derivative, mixture, or
  preparation of the resin;
                     (B)  the mature stalks of the plant or fiber
  produced from the stalks;
                     (C)  oil or cake made from the seeds of the plant;
                     (D)  a compound, manufacture, salt, derivative,
  mixture, or preparation of the mature stalks, fiber, oil, or cake;
  [or]
                     (E)  the sterilized seeds of the plant that are
  incapable of beginning germination; or
                     (F)  hemp or a hemp product, as those terms are
  defined by Sections 112.001 and 113.001, Agriculture Code.
         SECTION 7.  (a) Not later than the 90th day after the
  effective date of this Act, the Department of Agriculture shall
  adopt rules under Section 112.003, Agriculture Code, as added by
  this Act, and submit for approval a state plan to the secretary of
  the United States Department of Agriculture as provided by Section
  112.004, Agriculture Code, as added by this Act.
         (b)  The Department of Agriculture shall submit amended
  state plans as provided by Section 112.004(c), Agriculture Code, as
  added by this Act, as necessary until the plan is approved.
         SECTION 8.  (a) Not later than January 1, 2020, the
  Department of Agriculture shall adopt rules and procedures
  necessary to implement Chapter 113, Agriculture Code, as added by
  this Act.
         (b)  Not later than the 30th day after the date on which rules
  and procedures are adopted under Subsection (a) of this section,
  the Department of Agriculture shall begin authorizing
  participation in the state hemp program established under Chapter
  113, Agriculture Code, as added by this Act.
         SECTION 9.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2019.