By: Perry	S.B. No. 2952

	A BILL TO BE ENTITLED
	AN ACT
	relating to the regulation of hemp and nonconsumable hemp products;
	increasing a criminal penalty; increasing a civil penalty and
	providing other penalties; requiring an occupational license;
	imposing and authorizing certain fees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  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, 18, 19, 41, 46, 61, 72, 73, not more than $5,000
	74, 76, 94, 95, 101, 102, 103, 122, 123, 125,
	132, and 134
	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 2.  Section 121.002, Agriculture Code, is amended to
	read as follows:
	Sec. 121.002.  LEGISLATIVE FINDINGS; INTENT. (a) The
	legislature finds that nothing in 7 U.S.C. Section 1639p:
	(1)  preempts or limits any law of this state that:
	(A)  regulates the production of hemp; or
	(B)  is more stringent than 7 U.S.C. Section 1639o
	et. seq.; or
	(2)  prohibits the production of hemp in this state, if
	the production of hemp is not otherwise prohibited by this state.
	(b)  It is the intent of the legislature that this state have
	primary regulatory authority over the production of hemp in this
	state.
	(c)  It is the intent of the legislature that the statutory
	definition of hemp shall not include any material that is not itself
	naturally created in the plant Cannabis sativa L.
	(d)  It is the intent of the legislature that the word
	"derivatives" in the definition of hemp shall refer only to first
	order derivatives of the plant Cannabis sativa L.
	SECTION 3.  Section 121.003(a), Agriculture Code, is amended
	to read as follows:
	(a)  The department, after consulting with the governor and
	attorney general, shall develop a state plan to monitor and
	regulate the production of hemp in this state. The plan must comply
	with:
	(1)  7 U.S.C. Section 1639p;
	(2)  Chapters [Chapter] 122 and 123; and
	(3)  Chapter 443, Health and Safety Code.
	SECTION 4.  Section 122.001, Agriculture Code, is amended to
	read as follows:
	Sec. 122.001.  DEFINITIONS.  In this chapter:
	(1)  "Cultivate" means to plant, irrigate, cultivate,
	or harvest a hemp plant.
	(2)  "Delta-9 tetrahydrocannabinol concentration"
	shall be established by:
	(A)  a procedure for testing a sample using post
	decarboxylation, such that all delta-9 tetrahydrocannabinolic acid
	in the sample, where applicable, has been converted to delta-9
	tetrahydrocannabinol, thereby identifying the total percentage by
	weight of delta-9 tetrahydrocannabinol, on a dry weight basis; or
	(B)  a procedure for testing a sample using a
	conversion factor, by identifying the sum of the percentage by
	weight, on a dry weight basis where applicable, of delta-9
	tetrahydrocannabinolic acid multiplied by 0.877 plus the
	percentage by weight, on a dry weight basis where applicable, of
	delta-9 tetrahydrocannabinol, to calculate the total percentage by
	weight of delta-9 tetrahydrocannabinol, on a dry weight basis.
	(3)  "Disposal" means an activity that irreversibly
	transitions a non-compliant substance into a non-retrievable and
	non-ingestible form that is unfit to enter the stream of commerce.
	(4)  "Dry weight basis" means a basis for expressing
	the percentage of a chemical in a substance after removing the
	moisture from the substance.
	(5)  "Governing person" has the meaning assigned by
	Section 1.002, Business Organizations Code.
	(6) [(3)]  "Handle" means to possess, manipulate, or
	store a hemp plant:
	(A)  at a licensed location [on premises owned,
	operated, or controlled by a license holder] 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 licensed location
	[premises owned, operated, or controlled by a license holder] to:
	(i)  a licensed location of [premises owned,
	operated, or controlled by] another license holder; [or]
	(ii)  a person licensed under Chapter 123;
	or
	(iii)  a person licensed under Chapter 443,
	Health and Safety Code.
	(7) [(4)]  "Hemp" has the meaning assigned by Section
	121.001.
	(8) [(5)]  "Institution of higher education" has the
	meaning assigned by Section 61.003, Education Code.
	(9) [(6)]  "License" means a hemp grower's license
	issued under Subchapter C.
	(10) [(7)]  "License holder" means an individual or
	business entity holding a license.
	(11)  "Licensed location" means a premises at which a
	license holder operates a license issued under this chapter.
	(12) [(8)]  "Nonconsumable hemp product" means a
	product that contains hemp, other than a consumable hemp product as
	defined by Section 443.001, Health and Safety Code. The term
	includes cloth, cordage, fiber, fuel, paint, paper, particleboard,
	and plastics containing [derived from] hemp.
	(13) [(9)]  "Plot" means a contiguous area in a field,
	greenhouse, or indoor growing structure containing the same variety
	or cultivar of hemp throughout the area.
	(14)  "Tetrahydrocannabinol" means any
	tetrahydrocannabinol, including its salts, isomers, and salts of
	isomers whenever the existence of such salts, isomers, or salts of
	isomers is possible within the specific chemical designation.
	(15)  "Total tetrahydrocannabinol concentration" shall
	be established by:
	(A)  a procedure for testing a sample using post
	decarboxylation, such that all tetrahydrocannabinolic acids in the
	sample, where applicable, have been converted to
	tetrahydrocannabinols, thereby identifying the total percentage by
	weight of tetrahydrocannabinols, on a dry weight basis; or
	(B)  a procedure for testing a sample using a
	conversion factor, by identifying the sum of the percentage by
	weight, on a dry weight basis where applicable, of
	tetrahydrocannabinolic acids multiplied by 0.877 plus the
	percentage by weight, on a dry weight basis where applicable, of
	tetrahydrocannabinols, to calculate the total percentage by weight
	of tetrahydrocannabinols, on a dry weight basis.
	SECTION 5.  Subchapter A, Chapter 122, Agriculture Code, is
	amended by adding Section 122.005 to read as follows:
	Sec. 122.005.  APPLICABILITY OF CHAPTER. This chapter does
	not apply to a patient, organization, person, product, or activity
	regulated under Chapter 487, Health and Safety Code.
	SECTION 6.  Sections 122.052(a) and (b), Agriculture Code,
	are amended to read as follows:
	(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 [122.103(a)(1) 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 [122.103(a)(1)] in an amount
	not to exceed $500; [and]
	(5)  a collection and testing fee for each preharvest
	test or postharvest test if performed by the department in an amount
	not to exceed $300; and
	(6)  any other fee the department determines necessary.
	(b)  [A fee set by the department under this section may not
	exceed the amount necessary to administer this chapter.] The
	comptroller may authorize the department to collect a fee described
	by Subsection (a) in an amount greater than the maximum amount
	provided by that subsection if necessary to cover the department's
	costs of administering this chapter.
	SECTION 7.  Sections 122.053(b), (c), and (d), Agriculture
	Code, are amended to read as follows:
	(b)  The department may enter onto land described by Section
	122.103 [122.103(a)(1)], conduct inspections, and collect and test
	plant samples.
	(c)  Using [participation] fees set and collected under
	Section 122.052 [122.052(a)(3)], the department shall pay the cost
	of inspections under this section.
	(d)  The Department of Public Safety or a state or local law
	enforcement agency may inspect, collect samples from, or test
	plants from any portion of a plot to ensure compliance with this
	chapter. A license holder shall allow the Department of Public
	Safety or a state or local law enforcement agency access to the plot
	and the property on which the plot is located for purposes of this
	subsection.
	SECTION 8.  Section 122.054, Agriculture Code, is amended to
	read as follows:
	Sec. 122.054.  SAMPLE COLLECTION AND TESTING. (a) 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.
	(b)  Testing for delta-9 tetrahydrocannabinol concentration
	performed under this section must consider the conversion of any
	quantifiable tetrahydrocannabinolic acid into
	tetrahydrocannabinol.
	(c)  A test result showing a delta-9 tetrahydrocannabinol
	concentration of more than 0.3 percent is conclusive evidence that
	the substance represented by the sample is not compliant and is
	therefore not hemp.
	SECTION 9.  Sections 122.055(a) and (b), Agriculture Code,
	are amended to read as follows:
	(a)  The department shall develop a shipping certificate or
	cargo manifest which the department shall issue to a license holder
	in connection with the transportation of a shipment of hemp [plant
	material] originating in this state, other than sterilized seeds
	that are incapable of beginning germination.
	(b)  A certificate or manifest developed under Subsection
	(a) must include a unique identifying number for the shipment and
	the department's contact information to allow law enforcement
	during a roadside inspection of a motor vehicle transporting the
	shipment to verify that the shipment consists of hemp [cultivated]
	in compliance with this chapter.
	SECTION 10.  Section 122.101(a), Agriculture Code, is
	amended to read as follows:
	(a)  Except as provided by Subsection (b), a person [or the
	person's agent] may not cultivate or handle hemp in this state [or
	transport hemp outside of this state] unless the person holds a
	license under this subchapter.
	SECTION 11.  Section 122.102, Agriculture Code, is amended
	by adding Subsection (c) to read as follows:
	(c)  An individual who is not a legal citizen of the United
	States of America may not:
	(1)  hold a license under this subchapter; or
	(2)  be a governing person or owner of a business entity
	that holds a license under this subchapter.
	SECTION 12.  Section 122.103, Agriculture Code, is amended
	by amending Subsection (a) and adding Subsections (d) and (e) to
	read as follows:
	(a)  A person may apply for a license under this subchapter
	by submitting an application to the department on a form and in the
	manner prescribed by the department. The application must be
	accompanied by:
	(1)  a legal description of each location where the
	applicant intends to cultivate or handle hemp and the global
	positioning system coordinates for the perimeter of each location;
	(2)  written consent from the applicant or the property
	owner if the applicant is not the property owner 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 or handled to conduct a physical inspection or to
	ensure compliance with this chapter and rules adopted under this
	chapter;
	(3)  the application fee; [and]
	(4)  a description of the intended use and crop type of
	the hemp plant the applicant intends to cultivate, which must be
	described as:
	(A)  an industrial use, which must be further
	described as one of the following crop types:
	(i)  "grain hemp crop";
	(ii)  "fiber hemp crop";
	(iii)  "seed hemp crop"; or
	(iv)  a hybrid of the crop types described by
	Subparagraphs (i)-(iii); or
	(B)  a cannabinoid use, which must be further
	described as one of the following crop types:
	(i)  "floral hemp crop"; or
	(ii)  "other hemp crop";
	(5)  a description of the growing conditions of the
	location where the applicant intends to cultivate or handle hemp,
	which must be described as:
	(A)  "under protection"; or
	(B)  "in the open"; and
	(6)  any other information required by department rule.
	(d)  The department may only issue a license to an applicant
	for a location that is at least one-half acre and with a requirement
	to plant not less than:
	(A)  for a location that is in the open, 300
	plants; or
	(B)  for a location that is under protection, 100
	plants.
	(e)  The department may not:
	(1)  consider an incomplete application; or
	(2)  issue a license to a person with a history of
	willful noncompliance of any laws related to hemp in any
	jurisdiction.
	SECTION 13.  Section 122.152, Agriculture Code, is amended
	by amending Subsection (b) and adding Subsection (e) to read as
	follows:
	(b)  A laboratory is eligible for registration if the
	laboratory:
	(1)  is registered with the Federal Drug Enforcement
	Agency; and
	(2)  submits to the department proof of accreditation
	by an independent accreditation body in accordance with
	International Organization for Standardization ISO/IEC 17025 or a
	comparable or successor standard and any required fee.
	(e)  The department shall revoke a laboratory's registration
	if the department identifies a pattern of inconsistent results in
	the laboratory's testing.
	SECTION 14.  Section 122.202, Agriculture Code, is amended
	by amending Subsection (b) and adding Subsections (c), (d), and (e)
	to read as follows:
	(b)  Except as provided by this section, if [If] the results
	of a preharvest and, if applicable, postharvest test 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 or destroy
	all plants represented by the sample:
	(1) [(A)]  in the manner prescribed by federal law;
	[or]
	(2)  using a reverse distributor registered with the
	Federal Drug Enforcement Agency [(B) in a manner approved by the
	department that does not conflict with federal law]; or
	(3)  at the licensed location, if:
	(A)  the license holder notifies the department of
	the license holder's intent to dispose of or destroy the plants;
	(B)  the department approves of the disposal or
	destruction; and
	(C)  the license holder submits documentation to
	the department of the disposal or destruction in the manner
	prescribed by the department, including by submitting videos or
	photographs of the disposal or destruction or by allowing a
	department representative to witness the disposal or destruction.
	(c)  A license holder may remediate plants represented by a
	preharvest sample described by Subsection (b) if:
	(1)  [(2)  if] the department determines the plants
	represented by the sample reached that concentration solely as a
	result of negligence;
	(2)  the type of hemp seed planted by the license holder
	was:
	(A)  certified or approved under Section 122.252
	as "grain hemp crop", "fiber hemp crop", "seed hemp crop" or a
	hybrid of such crop types; and
	(B)  reported as "grain hemp crop", "fiber hemp
	crop", "seed hemp crop" or a hybrid of such crop types on the
	license holder's application for a license under Section 122.103;
	(3)  the license holder is contracted to sell the
	plants to a nonconsumable hemp product manufacturer in this state;
	and
	(4)  the license holder fulfills any other department
	requirements [, the license holder is subject to Section 122.403(c)
	and may:
	[(A) trim the plants until the delta-9
	tetrahydrocannabinol concentration of the plants is not more than
	0.3 percent on a dry weight basis and dispose of the noncompliant
	parts of the plants in a manner approved by the department;
	[(B) 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
	[(C) take any other corrective action consistent
	with federal regulations adopted under 7 U.S.C. Chapter 38,
	Subchapter VII].
	(d)  A license holder described by Subsection (c) may
	remediate the plants by:
	(1)  separating and disposing of or destroying flower
	or floral material, including buds and trichomes, and retaining the
	stalks, fibers, grain, or seed of the plants;
	(2)  properly raking and retting the plants for a
	minimum of 30 days to dispose of or destroy flower or floral
	material; or
	(3)  remediating in another similar method that
	disposes of or destroys any flower or floral material containing
	tetrahydrocannabinol and that is approved by the department.
	(e)  Plants remediated under this section must undergo
	postharvest testing to ensure the plants have a delta-9
	tetrahydrocannabinol concentration of not more than 0.3 percent
	before the hemp enters the stream of commerce.
	SECTION 15.  Subchapter E, Chapter 122, Agriculture Code, is
	amended by adding Section 122.203 to read as follows:
	Sec. 122.203.  PLANTING AND HARVESTING VERIFICATION. (a)
	Not later than the 30th day after a license holder plants hemp
	authorized under the license, the license holder shall submit to
	the department, in the manner prescribed by the department:
	(1)  the amount, type, and variety of each hemp seed
	planted; and
	(2)  a description of the plot where the seeds were
	planted.
	(b)  Not later than the 30th day after a license holder
	harvests hemp plants, the license holder shall submit to the
	department, in the manner prescribed by the department:
	(1)  the amount, type, and variety of each hemp plant
	harvested; and
	(2)  a description of the plot where the plants were
	harvested.
	(c)  The department may conduct an inspection of a location
	indicated on any document submitted under this section.
	SECTION 16.  Section 122.252, Agriculture Code, is amended
	by amending Subsection (d) and adding Subsection (e) to read as
	follows:
	(d)  The department shall maintain and make available to the
	general public [license holders] a list of hemp seeds certified or
	approved under this section. The list must be published on the
	department's Internet website, updated regularly, and include for
	each approved seed:
	(1)  an identification number for each seed;
	(2)  the sex, source, and photoperiod of each seed;
	(3)  the intended use and crop type produced by the
	seed, described as:
	(A)  an industrial use, which must be further
	described as one of the following crop types:
	(i)  "grain hemp crop";
	(ii)  "fiber hemp crop";
	(iii)  "seed hemp crop"; or
	(iv)  a hybrid of the crop types described by
	Subparagraphs (i)-(iii); or
	(B)  a cannabinoid use, which must be further
	described as one of the following crop types:
	(i)  "floral hemp crop"; or
	(ii)  "other hemp crop";
	(4)  any other information the department determines
	relevant to differentiate between seed types; and
	(5)  to the extent possible, information and best
	practices to ensure hemp grown and harvested from the seed complies
	with this chapter.
	(e)  If a variety of hemp seed approved or certified by the
	department under this section produces multiple harvest batches
	that yield a delta-9 tetrahydrocannabinol concentration of more
	than 0.3 percent, the department shall:
	(1)  for a variety of hemp seed that produces plants
	that have a delta-9 tetrahydrocannabinol concentration of more than
	0.3 percent but not more than 1.0 percent when harvested, suspend
	the approval or certification of the seed and conduct a review to
	evaluate if the seed should be removed from the list of approved or
	certified hemp seeds; or
	(2)  for a variety of hemp seed that produces plants
	that have a delta-9 tetrahydrocannabinol concentration of more than
	1.0 percent when harvested, remove the seed from the list of
	approved or certified hemp seeds.
	SECTION 17.  Chapter 122, Agriculture Code, is amended by
	adding Subchapter G-1 to read as follows:
	SUBCHAPTER G-1. DISTRIBUTION AND SALE
	Sec. 122.3011.  HEMP RESTRICTIONS. A person may not
	distribute, deliver, sell, purchase, or otherwise introduce into
	the stream of commerce in this state hemp:
	(1)  that has not been tested in accordance with the
	requirements of Subchapter D; and
	(2)  that is not accompanied by documentation that
	includes:
	(A)  the company name and physical address for the
	location where the hemp was produced;
	(B)  the delta-9 tetrahydrocannabinol
	concentration of the hemp; and
	(C)  the total tetrahydrocannabinol concentration
	of the hemp.
	SECTION 18.  Section 122.354, Agriculture Code, is amended
	to read as follows:
	Sec. 122.354.  DEPARTMENT RULES. The department, in
	consultation with the Department of Public Safety, shall adopt
	rules regulating the transportation of hemp in this state to ensure
	that illegal marihuana and illegal marihuana extract are [is] not
	transported into, [or] through, or out of this state disguised as
	legal hemp.
	SECTION 19.  Section 122.356, Agriculture Code, is amended
	to read as follows:
	Sec. 122.356.  DOCUMENTATION AND OTHER SHIPPING
	REQUIREMENTS. (a) A person may not transport or receive hemp
	[plant material] in this state unless the hemp:
	(1)  is produced in compliance with:
	(A)  a state or tribal plan approved by the United
	States Department of Agriculture under 7 U.S.C. Section 1639p; or
	(B)  a plan established under 7 U.S.C. Section
	1639q if the hemp was produced [cultivated] in an area where that
	plan applies; and
	(2)  is accompanied by a label clearly identifying the
	hemp as hemp and:
	(A)  a shipping certificate or cargo manifest
	issued under Section 122.055 if the hemp originated in this state;
	or
	(B)  documentation containing the name and
	address of the place where the hemp was produced, the delta-9
	tetrahydrocannabinol concentration of the hemp, the total
	tetrahydrocannabinol concentration of the hemp, [cultivated] and a
	statement that the hemp was produced in compliance with 7 U.S.C.
	Section 1639p or 7 U.S.C. Section 1639q [7 U.S.C. Chapter 38,
	Subchapter VII], if the hemp originated outside this state.
	(b)  A person transporting hemp [plant material] in this
	state:
	(1)  may not concurrently transport any cargo that is
	not hemp [plant material]; and
	(2)  shall furnish the documentation required by this
	section to the department or any peace officer on request.
	(c)  A person may not transport or receive hemp in this state
	if the hemp is not accompanied by a label that includes:
	(1)  contact information of the department;
	(2)  the date and time of the departure of the hemp
	shipment from the place of origin for the hemp;
	(3)  the quantity and form of hemp being transported;
	(4)  the delta-9 tetrahydrocannabinol concentration of
	the hemp;
	(5)  the total tetrahydrocannabinol concentration of
	the hemp; and
	(6)  any other information required by the department
	or the Department of Public Safety.
	SECTION 20.  Sections 122.358(c) and (d), Agriculture Code,
	are amended to read as follows:
	(c)  If a peace officer has probable cause to believe that a
	person transporting hemp in this state is also transporting
	marihuana, marihuana extract, a controlled substance analogue, or a
	controlled substance, as defined by Section 481.002, Health and
	Safety Code, or any other illegal substance under state or federal
	law, the peace officer may seize and impound the hemp along with the
	controlled or illegal substance.
	(d)  This subchapter does not limit or restrict a peace
	officer from enforcing to the fullest extent the laws of this state
	regulating marihuana, marihuana extract, controlled substance
	analogues, and controlled substances, as defined by Section
	481.002, Health and Safety Code.
	SECTION 21.  Section 122.359(a), Agriculture Code, is
	amended to read as follows:
	(a)  A person who violates Section 122.356 is liable to this
	state for a civil penalty in an amount not to exceed $5,000 [$500]
	for each violation.
	SECTION 22.  Section 122.360(b), Agriculture Code, is
	amended to read as follows:
	(b)  An offense under this section is a Class B misdemeanor
	[punishable by a fine of not more than $1,000].
	SECTION 23.  Sections 122.403(a) and (c), Agriculture Code,
	are amended to read as follows:
	(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 122.404 and 7 U.S.C. Section 1639p(e).
	(c)  A license holder who violates this chapter by
	cultivating plants with a delta-9 tetrahydrocannabinol
	concentration of more than 0.3 percent on a dry weight basis solely
	as a result of negligence [described by Section 122.202(b)(2)]:
	(1)  must comply with an enhanced testing protocol
	developed by the department;
	(2)  shall pay a fee in the amount not exceeding $1,000
	[of $500] for each violation to cover the department's costs of
	administering the enhanced testing protocol; and
	(3)  shall be included on a list maintained by the
	department of license holders with negligent violations, which is
	public information for purposes of Chapter 552, Government Code.
	SECTION 24.  Subchapter I, Chapter 122, Agriculture Code, is
	amended by adding Section 122.405 to read as follows:
	Sec. 122.405.  FORFEITURE. A person who sells or
	distributes a substance with a delta-9 tetrahydrocannabinol
	concentration of more than 0.3 percent on a dry weight basis is
	subject to forfeiture of contraband under Chapter 59, Code of
	Criminal Procedure, and Chapter 481, Health and Safety Code.
	SECTION 25.  Subtitle F, Title 5, Agriculture Code, is
	amended by adding Chapter 123 to read as follows:
	CHAPTER 123. MANUFACTURE, DISTRIBUTION, AND SALE OF NONCONSUMABLE
	HEMP PRODUCTS
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 123.001.  DEFINITIONS. In this chapter:
	(1)  "Consumable hemp product" has the meaning assigned
	by Section 443.001, Health and Safety Code.
	(2)  "Dry weight basis" has the meaning assigned by
	Section 122.001.
	(3)  "Hemp" has the meaning assigned by Section
	121.001.
	(4)  "Institution of higher education" has the meaning
	assigned by Section 61.003, Education Code.
	(5)  "License" means a nonconsumable hemp product
	manufacturer's license issued under this chapter.
	(6)  "License holder" means an individual or business
	entity holding a nonconsumable hemp product manufacturer's license
	under this chapter.
	(7)  "Nonconsumable hemp product" has the meaning
	assigned by Section 122.001.
	(8)  "Smoking" has the meaning assigned by Section
	443.001, Health and Safety Code.
	(9)  "Tetrahydrocannabinol" has the meaning assigned
	by Section 122.001.
	Sec. 123.002.  LEGISLATIVE INTENT. It is the intent of the
	legislature to create a robust market for the production of fiber
	hemp crops and the manufacturing of nonconsumable hemp products in
	this state.
	Sec. 123.003.  LOCAL REGULATION PROHIBITED. A municipality,
	county, or other political subdivision may not enact, adopt, or
	enforce a rule, ordinance, order, resolution, or other regulation
	that prohibits the processing of hemp for use in the manufacturing
	of a nonconsumable hemp product, or the manufacturing or sale of
	nonconsumable hemp products as authorized by this chapter.
	Sec. 123.004.  SEVERABILITY. (a) A provision of this
	chapter or its application to any person or circumstance is invalid
	if the secretary of the United States Department of Agriculture
	determines that the provision or application conflicts with 7
	U.S.C. Chapter 38, Subchapter VII, and prevents the approval of the
	state plan submitted under Chapter 121.
	(b)  The invalidity of a provision or application under
	Subsection (a) does not affect the other provisions or applications
	of this chapter that can be given effect without the invalid
	provision or application, and to this end the provisions of this
	chapter are declared to be severable.
	SUBCHAPTER B. POWERS AND DUTIES
	Sec. 123.051.  DEPARTMENT RULES AND PROCEDURES. (a) The
	department shall adopt rules and procedures necessary to implement,
	administer, and enforce this chapter.
	(b)  Rules adopted under Subsection (a) must comply with:
	(1)  a state plan submitted to and approved by the
	secretary of the United States Department of Agriculture under
	Section 121.003; and
	(2)  7 U.S.C. Chapter 38, Subchapter VII, and federal
	regulations adopted under that subchapter.
	Sec. 123.052.  DESIGNATION OF CONSUMABLE HEMP PRODUCT. (a)
	The executive commissioner of the Health and Human Services
	Commission may designate a substance that contains hemp as a
	consumable hemp product if the executive commissioner determines
	that the substance qualifies as a consumable hemp product under
	Section 443.001, Health and Safety Code.
	(b)  A designation or modification of a designation made by
	the executive commissioner of the Health and Human Services
	Commission under this section is final and binding.
	(c)  A consumable hemp product designated under this section
	is governed under Chapter 443, Health and Safety Code.
	(d)  A designation under this section is not subject to
	Chapter 2001, Government Code.
	Sec. 123.053.  INDUSTRIAL HEMP STANDARDS. (a) The
	department shall adopt standards for the production of hemp for
	industrial purposes.
	(b)  The department may work with an institution of higher
	education or certified third party to adopt and administer
	responsible hemp standards for the production and distribution of
	hemp for industrial purposes, as well as the manufacturing of
	nonconsumable hemp products.
	SUBCHAPTER C. NONCONSUMABLE HEMP PRODUCT MANUFACTURER'S LICENSE
	Sec. 123.101.  LICENSE REQUIRED; LIMITATIONS. A person may
	not process hemp for use in a nonconsumable hemp product or
	manufacture a nonconsumable hemp product in this state unless the
	person holds a license under this subchapter.
	Sec. 123.102.  LICENSE INELIGIBILITY. (a) An individual who
	is or has been convicted of a felony relating to a controlled
	substance under federal law or the law of any state 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 or owner of a business entity
	that holds a license under this subchapter.
	(b)  A person licensed under Chapter 443, Health and Safety
	Code, may not be issued or hold a license under this subchapter.
	(c)  An individual who is not a legal citizen of the United
	States of America may not:
	(1)  hold a license under this subchapter; or
	(2)  be a governing person or owner of a business entity
	that holds a license under this subchapter.
	Sec. 123.103.  APPLICATION; ISSUANCE. A person may apply
	for a license by submitting an application in the manner prescribed
	by the department. The application must be accompanied by:
	(1)  the physical address, including the county, of the
	location where the applicant intends to process hemp for use in a
	nonconsumable product or manufacture nonconsumable hemp products;
	and
	(2)  any other information the department requires by
	rule.
	Sec. 123.104.  TERM; RENEWAL. (a) A license is valid for
	one year and may be renewed as provided by this section.
	(b)  The department shall renew a license if the license
	holder:
	(1)  is eligible to hold the license; and
	(2)  does not owe any outstanding fee to the
	department.
	Sec. 123.105.  REVOCATION. The department may suspend or
	revoke a license if the license holder fails to comply with this
	chapter or a department rule.
	Sec. 123.106.  FEES. The department by rule shall establish
	a fee schedule for this chapter, including an application fee and an
	annual renewal fee each in the amount not to exceed $10,000.
	SUBCHAPTER D. TESTING OF NONCONSUMABLE HEMP PRODUCTS
	Sec. 123.151.  TESTING REQUIRED. (a) Before a
	nonconsumable hemp product is sold in this state by a license
	holder, one or more samples from a batch of the nonconsumable hemp
	product must be tested by a laboratory located in the state that is:
	(1)  registered with the Federal Drug Enforcement
	Agency; and
	(2)  accredited by an accreditation body in accordance
	with International Organization for Standardization ISO/IEC 17025
	or a comparable or successor standard.
	(b)  The department shall adopt rules that require a
	laboratory to electronically report any test result conducted under
	this section to the department.
	(c)  This section does not apply to a nonconsumable hemp
	product containing only:
	(1)  the mature stalks of the plant Cannabis sativa L.;
	or
	(2)  fiber produced from the mature stalks of the plant
	Cannabis sativa L.
	Sec. 123.152.  PROVISIONS RELATED TO TESTING. Any method
	for detecting tetrahydrocannabinols must consider the conversion
	of tetrahydrocannabinolic acid into tetrahydrocannabinol.
	SUBCHAPTER E. MANUFACTURE, TRANSPORTATION, AND SALE OF
	NONCONSUMABLE HEMP PRODUCT
	Sec. 123.201.  TRANSPORTATION OF NONCONSUMABLE HEMP
	PRODUCTS. A person may transport a nonconsumable hemp product
	manufactured in compliance with this subchapter.
	Sec. 123.202.  INTERSTATE TRANSPORTATION OF PRODUCTS.
	Nonconsumable hemp products may only be transported across state
	lines in a manner that is consistent with state and federal law.
	Sec. 123.203.  RESTRICTIONS ON SALE. (a) A person may not
	sell a nonconsumable hemp product if the product contains any
	detectable tetrahydrocannabinols.
	(b)  All nonconsumable hemp products must be manufactured in
	product batches to allow for accurate sampling, testing, packaging,
	and labeling.
	(c)  A person may not manufacture, distribute, deliver, make
	available for sale, purchase, possess, or use a nonconsumable hemp
	product in this state that:
	(1)  contains harmful ingredients;
	(2)  can be used for smoking; or
	(3)  contains any detectable tetrahydrocannabinols.
	Sec. 123.204.  PACKAGING AND LABELING. Each nonconsumable
	hemp product must be labeled with:
	(1)  a logo or insignia designed by the department
	identifying the product as a nonconsumable hemp product; and
	(2)  the name and address of the license holder.
	Sec. 123.205.  SALE OF OUT-OF-STATE NONCONSUMABLE HEMP
	PRODUCTS. A person may sell a nonconsumable hemp product
	manufactured outside of this state if:
	(1)  the hemp in the nonconsumable hemp product was
	cultivated or processed in compliance with a plan approved by the
	United States Department of Agriculture under 7 U.S.C. Section
	1639p or established under 7 U.S.C. Section 1639q;
	(2)  the nonconsumable hemp product was tested and the
	result reported in accordance with the requirements of Section
	123.151; and
	(3)  the sale does not violate federal law.
	SECTION 26.  The following provisions of the Agriculture
	Code are repealed:
	(1)  Section 122.052(c);
	(2)  Section 122.053(e);
	(3)  Subchapter G, Chapter 122; and
	(4)  Sections 122.358(a) and (b).
	SECTION 27.  (a) Not later than December 1, 2025, the
	Department of Agriculture shall develop and submit for approval a
	state plan to the secretary of the United States Department of
	Agriculture as required by Section 121.003, Agriculture Code, as
	amended by this Act.
	(b)  If the state plan submitted under Subsection (a) of this
	section is not approved, as soon as practicable, the Department of
	Agriculture shall submit amended state plans as required by Section
	121.003, Agriculture Code, as amended by this Act, until the plan is
	approved by the secretary of the United States Department of
	Agriculture.
	(c)  As soon as practicable after a state plan is approved
	under Subsection (a) or (b) of this section, the Department of
	Agriculture and the Department of State Health Services shall
	implement the state plan.
	SECTION 28.  (a) 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.
	(b)  As soon as practicable after the effective date of this
	Act, the commissioner of the Department of Agriculture shall adopt
	rules necessary to implement the changes in law made by this Act.
	SECTION 29.  This Act takes effect September 1, 2025.