By: Perry, et al. S.B. No. 1240
 
 
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the production and regulation of hemp; requiring an
  occupational license; authorizing fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 5, Agriculture Code, is amended by adding
  Subtitle F to read as follows:
  SUBTITLE F. HEMP
  CHAPTER 121. STATE HEMP PRODUCTION PLAN
         Sec. 121.001.  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. 121.002.  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. 121.003.  DEPARTMENT RULES. (a) The department, after
  consulting with the governor and attorney general, shall adopt
  rules consistent with Chapter 122 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, high-performance liquid chromatography, 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 minimum
  requirements for approval as a state plan under Section 297B,
  Agricultural Marketing Act of 1946 (7 U.S.C. Section 1639p).
         Sec. 121.004.  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
  121.003 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 121.003 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 121.003 and otherwise
  developing the plan.
  CHAPTER 122. PRODUCTION OF HEMP
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 122.001.  DEFINITIONS. In this chapter:
               (1)  "Hemp" has the meaning assigned by Section
  121.001.
               (2)  "Institution of higher education" has the meaning
  assigned by Section 61.003, Education Code.
               (3)  "License" means a hemp producer's license issued
  under Subchapter C.
               (4)  "License holder" means an individual or business
  entity holding a license.
               (5)  "Plot" means a contiguous area in a field,
  greenhouse, or indoor growing structure containing the same variety
  or strain of hemp throughout the area.
         Sec. 122.002.  LOCAL REGULATION PROHIBITED. A municipality,
  county, or other political subdivision of this state may not enact,
  adopt, or enforce a rule, ordinance, order, resolution, or other
  regulation that prohibits the production of hemp as authorized by
  this chapter.
  SUBCHAPTER B. POWERS AND DUTIES OF DEPARTMENT
         Sec. 122.051.  RULES. (a) The department may adopt rules
  necessary to implement, administer, and enforce this chapter.
         (b)  Rules under Subsection (a) must be consistent with any
  similar rules governing the production of a comparable crop.
         Sec. 122.052.  FEES. (a) The department shall set and
  collect:
               (1)  an application fee for an initial license in an
  amount not to exceed $100;
               (2)  a license renewal fee in an amount not to exceed
  $100;
               (3)  a participation fee for each location described by
  Section 122.103(b)(3) and each location added after the application
  is submitted in an amount not to exceed $100;
               (4)  a site modification fee for each change to a
  location described by Section 122.103(b)(3) in an amount not to
  exceed $500; and
               (5)  a collection and testing fee for each preharvest
  test or secondary test if performed by the department in an amount
  not to exceed $300.
         (b)  A fee set by the department under this section may not
  exceed the least of:
               (1)  the amount necessary to administer this chapter;
  or
               (2)  the maximum amount provided by Subsection (a).
         (c)  The department may not set or collect a fee associated
  with the production of hemp that is not listed in Subsection (a).
         (d)  Fees collected by the department under this chapter are
  not refundable and may be appropriated only to the department for
  the purpose of administering this chapter.
         Sec. 122.053.  INSPECTIONS. (a) The department shall
  randomly inspect land where hemp is grown to determine whether hemp
  is being produced in compliance with this chapter.
         (b)  The department may enter onto land described by Section
  122.103(b)(3), conduct inspections, and collect and test plant
  samples.
         Sec. 122.054.  SAMPLE COLLECTION AND TESTING. The
  department may collect samples and perform testing or contract with
  a laboratory for the performance of that collection and testing on
  behalf of the department. A test performed by a laboratory on
  behalf of the department is considered to be performed by the
  department for purposes of this chapter.
  SUBCHAPTER C. HEMP PRODUCER'S LICENSE
         Sec. 122.101.  LICENSE REQUIRED; EXCEPTIONS. (a) Except as
  provided by Subsection (b), a person may not produce hemp in this
  state unless the person holds a license under this subchapter.
         (b)  A person is not required to hold a license under this
  subchapter to:
               (1)  produce hemp if the person holds a license under
  Chapter 487, Health and Safety Code;
               (2)  manufacture commercial feed containing hemp in
  accordance with Chapter 141; or
               (3)  manufacture an article or other item containing
  hemp in accordance with Subtitle A, Title 6, Health and Safety Code.
         Sec. 122.102.  INELIGIBILITY BASED ON CRIMINAL CONVICTION.
  (a) An individual who is convicted of a felony relating to a
  controlled substance under state or federal law may not, before the
  10th anniversary of the date of the conviction:
               (1)  hold a license under this subchapter; or
               (2)  be a governing person of a business entity that
  holds a license under this subchapter.
         (b)  In connection with each application for the issuance or
  renewal of a license, the department shall obtain criminal history
  record information for each individual described by Section
  122.103(b)(1) or (2)(C) for the purpose of determining whether the
  applicant is disqualified under Subsection (a).
         (c)  The department by rule may require an individual to
  submit a complete and legible set of fingerprints to the department
  for purposes of obtaining criminal history record information under
  Subsection (b).
         (d)  Notwithstanding Subsections (b) and (c), the department
  is not required to obtain criminal history record information for
  an individual if the department receives a copy of the individual's
  license to carry a handgun under Subchapter H, Chapter 411,
  Government Code, that was issued or renewed not more than one year
  before the application date.
         Sec. 122.103.  APPLICATION; ISSUANCE. (a) A person may
  apply for a license under this subchapter by submitting to the
  department an application form prescribed by the department along
  with the required application fee.
         (b)  The application must include:
               (1)  if the applicant is an individual, the
  individual's full legal name and contact information; or
               (2)  if the applicant is a business entity:
                     (A)  the name under which the entity is authorized
  to transact business in this state;
                     (B)  the entity's principal business location
  address in this state; and
                     (C)  the full legal name, title, and contact
  information of each governing person, including an e-mail address
  if available;
               (3)  the legal description of the land on which the
  applicant will cultivate or harvest hemp and the global positioning
  system coordinates of that location; and
               (4)  other information required by department rule.
         (c)  The department shall issue a license to a qualified
  applicant not later than the 60th day after the date the department
  receives the completed application and the required application
  fee.
         Sec. 122.104.  TERM; RENEWAL. (a) A license is valid for
  one year and may be renewed as provided by this section.
         (b)  A license holder may apply for the renewal of a license
  under this subchapter by submitting an application in the manner
  prescribed by the department and paying the required renewal fee.
         (c)  The department shall renew a license if the department
  determines the applicant's license is eligible for renewal.
         Sec. 122.105.  REVOCATION. (a) The department may revoke a
  license if the license holder intentionally violates this chapter
  or a rule adopted under this chapter.
         (b)  The department shall revoke a license if the license
  holder is convicted of a felony relating to a controlled substance
  under Chapter 481, Health and Safety Code.
  SUBCHAPTER D. PREHARVEST TESTING
         Sec. 122.151.  TESTING REQUIRED. A license holder may not
  harvest a hemp plant unless the delta-9 tetrahydrocannabinol
  concentration of a representative sample of hemp plants from the
  plot where the plant is grown is tested using post-decarboxylation,
  high-performance liquid chromatography, or another similarly
  reliable method in the manner required by this subchapter.
         Sec. 122.152.  REPRESENTATIVE SAMPLE. (a) For purposes of
  Section 122.151, a representative sample of hemp plants from a plot
  consists of cuttings taken from at least five plants throughout the
  plot.
         (b)  A laboratory performing testing under this subchapter
  shall homogenize all the cuttings in the sample and test the delta-9
  tetrahydrocannabinol concentration of a random sample of the
  homogenized material.
         Sec. 122.153.  SAMPLE COLLECTION. (a) A license holder
  shall notify the department at least 20 days before the date the
  license holder expects to harvest hemp plants.
         (b)  A sample must be collected by the department or another
  entity described by Section 122.154(a).
         (c)  The department by rule may prescribe reasonable
  procedures for a person who collects a sample to submit the sample
  to the testing laboratory selected by the license holder.
         Sec. 122.154.  TESTING LABORATORY. (a) Testing required by
  this subchapter must be performed by:
               (1)  the department;
               (2)  an institution of higher education; or
               (3)  a private testing laboratory accredited by an
  accreditation body in accordance with International Organization
  for Standardization ISO/IEC 17025 or a successor standard.
         (b)  A license holder shall select a laboratory described by
  Subsection (a) to perform testing of a sample taken from the license
  holder's plot. A license holder must pay the costs of sample
  collection and testing. The fee for sample collection and testing
  performed by the department may not exceed the amount provided by
  Section 122.052.
         (c)  The department shall recognize and accept the results of
  a test performed by an institution of higher education or private
  testing laboratory described by Subsection (a). The department may
  require that a copy of the test results be sent directly to the
  department by the institution of higher education or private
  testing laboratory.
         (d)  The department shall notify the license holder of the
  results of a test performed by the department not later than the
  14th day after the date the sample was collected under Section
  122.153.
  SUBCHAPTER E. HARVEST AND USE OR DISPOSAL OF PLANTS
         Sec. 122.201.  HARVEST. (a) A license holder shall harvest
  the plants from a plot not later than the 20th day after the date a
  preharvest sample is collected under Section 122.153 unless field
  conditions delay harvesting or the department authorizes the
  license holder to delay harvesting.
         (b)  A license holder may not sell or use harvested plants
  before the results of a test under Subchapter D performed on a
  sample representing the plants are received. If the test results
  are not received before the plants are harvested, the license
  holder shall dry and store the harvested plants until the results
  are received.
         (c)  A license holder may not commingle harvested plants
  represented by one sample with plants represented by another sample
  until the results of the tests are received.
         Sec. 122.202.  USE OR DESTRUCTION OF HARVESTED PLANTS. (a)
  If the results of a test under Subchapter D performed on a sample
  show a delta-9 tetrahydrocannabinol concentration of not more than
  0.3 percent on a dry weight basis, the license holder may sell or
  use the plants represented by the sample for any purpose allowed by
  law.
         (b)  If the results of a test under Subchapter D performed on
  a sample show a delta-9 tetrahydrocannabinol concentration of more
  than 0.3 percent on a dry weight basis:
               (1)  the license holder shall dispose of all plants
  represented by the sample in a manner approved by the department; or
               (2)  if the department determines the plants
  represented by the sample reached that concentration solely as a
  result of negligence, the license holder may:
                     (A)  process the plants into fiber with a delta-9
  tetrahydrocannabinol concentration of not more than 0.3 percent on
  a dry weight basis and dispose of any remaining parts of the plants
  in a manner approved by the department; or
                     (B)  transfer the plants to an appropriately
  licensed person to process into a product with a delta-9
  tetrahydrocannabinol concentration of not more than 0.3 percent on
  a dry weight basis and dispose of any remaining parts of the plants
  in a manner approved by the department
  SUBCHAPTER F. ENFORCEMENT
         Sec. 122.251.  NEGLIGENT VIOLATIONS. (a) If the department
  determines that a license holder negligently violated this chapter
  or a rule adopted under this chapter, 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)). 
         (b)  A license holder described by Subsection (a) is not
  subject to a civil, criminal, or administrative enforcement action
  other than an enforcement action provided by this chapter.
         (c)  A license holder who negligently violates this chapter
  three times in any five year period may not grow, process, or
  otherwise produce hemp in this state before the fifth anniversary
  of the date of the third violation.
         Sec. 122.252.  OTHER VIOLATIONS. If the department
  determines that a license holder violated this chapter or a rule
  adopted under this chapter with a culpable mental state greater
  than negligence, the department shall immediately report the
  license holder to:
               (1)  the United States attorney general; and
               (2)  the attorney general of this state, who may:
                     (A)  investigate the violation;
                     (B)  institute proceedings for injunctive or
  other appropriate relief on behalf of the department; or
                     (C)  report the matter to an appropriate law
  enforcement agency.
         SECTION 2.  Subchapter A, Chapter 141, Agriculture Code, is
  amended by adding Section 141.008 to read as follows:
         Sec. 141.008.  UNADULTERATED FEED. (a) Commercial feed is
  not considered adulterated solely on the basis that the commercial
  feed contains hemp as defined by Section 121.001 if the hemp was
  produced in accordance with Subtitle G, Agricultural Marketing Act
  of 1946 (7 U.S.C. Chapter 38, Subchapter VII).
         (b)  The service may not take an enforcement action under
  this chapter solely on the basis that commercial feed contains hemp
  as defined by Section 121.001 if the hemp was produced in accordance
  with Subtitle G, Agricultural Marketing Act of 1946 (7 U.S.C.
  Chapter 38, Subchapter VII).
         SECTION 3.  Subchapter C, Chapter 431, Health and Safety
  Code, is amended by adding Section 431.062 to read as follows:
         Sec. 431.062.  PROHIBITED ENFORCEMENT ACTIONS RELATED TO
  HEMP PRODUCTS. The department may not take an enforcement action
  under this subchapter solely on the basis that a product contains
  hemp as defined by Section 121.001, Agriculture Code, if the hemp
  was produced in accordance with Subtitle G, Agricultural Marketing
  Act of 1946 (7 U.S.C. Chapter 38, Subchapter VII) and the product is
  in conformance with this chapter and other applicable law.
         SECTION 4.  Subchapter D, Chapter 431, Health and Safety
  Code, is amended by adding Section 431.0815 to read as follows:
         Sec. 431.0815.  UNADULTERATED FOOD. A food is not
  considered adulterated under Section 431.081 solely on the basis
  that the food contains hemp as defined by Section 121.001,
  Agriculture Code, if the hemp was produced in accordance with
  Subtitle G, Agricultural Marketing Act of 1946 (7 U.S.C. Chapter
  38, Subchapter VII) and the food is in conformance with this chapter
  and other applicable law.
         SECTION 5.  Subchapter E, Chapter 431, Health and Safety
  Code, is amended by adding Section 431.1115 to read as follows:
         Sec. 431.1115.  UNADULTERATED DRUG OR DEVICE. A drug or
  device is not considered adulterated under Section 431.111 solely
  on the basis that the drug or device contains hemp as defined by
  Section 121.001, Agriculture Code, if the hemp was produced in
  accordance with Subtitle G, Agricultural Marketing Act of 1946 (7
  U.S.C. Chapter 38, Subchapter VII) and the drug or device is in
  conformance with this chapter and other applicable law.
         SECTION 6.  Subchapter F, Chapter 431, Health and Safety
  Code, is amended by adding Section 431.1415 to read as follows:
         Sec. 431.1415.  UNADULTERATED COSMETIC. A cosmetic is not
  considered adulterated under Section 431.141 solely on the basis
  that the cosmetic contains hemp as defined by Section 121.001,
  Agriculture Code, if the hemp was produced in accordance with
  Subtitle G, Agricultural Marketing Act of 1946 (7 U.S.C. Chapter
  38, Subchapter VII) and the cosmetic is in conformance with this
  chapter and other applicable law.
         SECTION 7.  Section 431.043, Health and Safety Code is
  amended to read as follows:
         (a)  A person who is required to maintain records under this
  chapter or Section 519 or 520(g) of the federal Act or a person who
  is in charge or custody of those records shall, at the request of
  the department or a health authority, permit the department or
  health authority at all reasonable times access to and to copy and
  verify the records. These records include records that verify the
  hemp ingredients were produced in accordance with Chapter 122,
  Texas Agriculture Code.
         SECTION 8.  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 121.001, Agriculture Code,
  or the tetrahydrocannabinols 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, as that term is defined by Section
  121.001, Agriculture Code.
         SECTION 9.  (a) Not later than the 90th day after the
  effective date of this Act, the Department of Agriculture shall
  adopt rules under Section 121.003, 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
  121.004, Agriculture Code, as added by this Act.
         (b)  The Department of Agriculture shall submit amended
  state plans as provided by Section 121.004(c), Agriculture Code, as
  added by this Act, as necessary until the plan is approved.
         (c)  As soon as practicable after the effective date of this
  Act, the executive commissioner of the Health and Human Services
  Commission shall adopt rules necessary to implement the changes in
  law made by this Act.
         SECTION 10.  The Department of Agriculture shall implement
  the state plan approved by the secretary of the United States
  Department of Agriculture not later than the 30th day after the date
  on which the state plan is approved.
         SECTION 11.  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.