86(R) HB 1325 - Introduced version

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	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:

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, 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.

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.

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.

(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.

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.

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;

(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.