THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII
A BILL FOR AN ACT
RELATING to industrial hemp.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Act 228, Session Laws of Hawaii 2016, established an industrial hemp pilot program to allow the cultivation of industrial hemp and distribution of its seed in Hawaii through limited activities by licensee-agents of the board of agriculture for purposes of agricultural or academic research. On December 20, 2018, the 2018 Farm Bill was signed into law, which included removal of industrial hemp from the schedule I controlled substance list, thus legalizing it and paving the way for a successful hemp industry in Hawaii.
The purpose of this Act is to repeal the industrial hemp pilot program as of December 31, 2019, and authorize the department of agriculture to establish an industrial hemp program to license individuals to cultivate industrial hemp in the State.
SECTION 2. Chapter 141, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . industrial hemp program
§141-A Definitions. As used in this part:
"Chairperson" means the chairperson of the board of agriculture;
"Cultivar" means a variety of industrial hemp;
"Department" means the department of agriculture;
"Industrial hemp" means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof 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, or a tetrahydrocannabinol concentration that is allowed by Federal law, whatever is greater; and
"Variety" means a group of individual plants that exhibit the same observable physical characteristics or have the same genetic composition.
§141-B Industrial hemp program; established. The department shall establish an industrial hemp program to allow licensed individuals to cultivate industrial hemp in the State.
§141-C Licensing. (a) An individual desiring to grow industrial hemp in the State shall apply to the department for a license on a form prescribed by the department. The application shall include:
(1) The applicant's name, mailing address, and phone number in Hawaii;
(2) The legal description of the land on which the industrial hemp is to be grown; and
(3) Any other information required by the department.
(b) An applicant, including any partner, director, or member of an applicant, convicted of any felony related to the possession, production, sale, or distribution of a controlled substance in any form in the United States or any other country shall be ineligible for a license.
(c) The cultivation of industrial hemp in accordance with this part shall be limited to lands situated within the state agricultural land district.
(d) An applicant must either be the fee simple owner of the property to be used to grow hemp, or have a written statement from the fee simple owner indicating the applicant is a lessee or legal occupant and that the owner has consented to the growing of hemp on the property.
(e) Any incomplete application for a license shall be denied.
(f) In addition to the application form, each applicant shall submit an application fee. If the fee does not accompany the application, the application for a license shall be deemed incomplete.
(g) All licenses shall be valid for one year from the date of issuance, after which the licensee shall renew the license and pay the renewal fee.
(h) If the chairperson determines that the requirements for a license pursuant to this part, and such other requirements as established by rule, are satisfied, the chairperson may issue a license to the applicant.
(i) The chairperson may limit the number of licenses issued annually, implement standards for selecting licensees, and set maximum acreage per license as prescribed by rules adopted pursuant to chapter 91.
(j) The department may prescribe sampling, inspection, and reporting requirements for licensees.
(k) Any license issued under the industrial hemp pilot program shall have continued validity under the original terms and conditions of that license.
(l) For the effective period of the license, any agricultural land used for the cultivation of industrial hemp in accordance with this part shall:
(1) Qualify for the minimum dedication period; and
(2) Be assessed at the lowest percentage of fair market value or other calculation provided for by ordinance.
(m) The cultivation of industrial hemp in accordance with this part shall qualify as an agricultural product, use, and activity by each relevant county for the effective period of the license.
§141-D Approved cultivars. Licensees shall only grow varieties of industrial hemp that are on the list of approved cultivars created by the chairperson. The chairperson may from time to time add or remove any cultivar from the list if the cultivar is found to be noncompliant with this part.
§141-E Inspections; fees. (a) All licensees shall allow federal, state, or local authorities to inspect and sample the industrial hemp growing area, plants, plant materials, seeds, equipment, or facilities incident to the growth or production of industrial hemp.
(b) Any member of the department, or any agent or third party authorized by the department, may enter at reasonable times upon any private property in order to inspect and sample the industrial hemp growing area, plants, plant materials, seeds, equipment, or facilities incident to the growth or production of industrial hemp.
(c) The department may set inspection and sampling fees.
(d) Licensees shall reimburse the department or the third party laboratory authorized by the department to perform testing for the program for all, if any, laboratory analysis and sample collection costs incurred.
§141-F Violations. (a) In addition to any other violations of this part, the following acts and omissions by any licensee or authorized representative thereof constitute violations:
(1) Refusal or failure by a licensee or authorized representative to fully cooperate and assist the department with the inspection or sampling process;
(2) Failure to provide any information required or requested by the department for purposes pursuant to this part;
(3) Providing false, misleading, or incorrect information pertaining to the licensee's cultivation of industrial hemp to the department by any means, including but not limited to information provided in any application form, report, record, or inspection required or maintained pursuant to this part;
(4) Growing industrial hemp that when tested is shown to have a delta-9 tetrahydrocannabinol concentration greater than 0.3 per cent on a dry weight basis or a tetrahydrocannabinol concentration greater than allowed by federal law, whichever is greater;
(5) Failure to pay fees assessed by the department for inspection or laboratory analysis cost; or
(6) Any violation of any other state or federal law or regulation regarding industrial hemp.
(b) For any violation of this part, the department may impose civil penalties up to $500 and disciplinary sanctions, including denial or revocation of a license, provided that:
(1) If the department determines that a licensee has negligently violated this part, the licensee shall comply with a corrective action plan established by the department to correct the violation, which may include disposal of any industrial hemp crop, plant, plant material, or seed, whether growing or not, and products derived from those plants;
(2) A licensee that negligently violates this part three times in a five-year period shall be ineligible for the industrial hemp program for a period of five years beginning on the date of the third violation; and
(3) Any applicant that materially falsifies any information contained in an application shall be ineligible to participate in the industrial hemp program.
§141-G Rulemaking. (a) The department shall adopt rules pursuant to chapter 91 that include but are not limited to:
(1) Inspection and sampling requirements of any industrial hemp during growth or after harvest to determine tetrahydrocannabinol levels;
(2) Licensure requirements;
(3) Reporting requirements;
(4) A process to set a limit for the number of licenses issued annually and create standards for selecting licensees;
(5) A process to set maximum acreage per license;
(6) Assessment of fees for application, licensing, inspecting, and sampling industrial hemp cultivation;
(7) A procedure for the disposal of industrial hemp crop, plant, plant material, or seed, whether growing or not, found to be in violation of this part, and products derived from those plants;
(8) Penalties for any violation; and
(9) Any other rules and procedures necessary to carry out this part.
(b) The department may repeal any rules currently in place pursuant to the industrial hemp pilot program, and any repeal shall be exempt from chapters 91 and 201M.
(c) The department may adopt interim rules, which shall be exempt from chapter 91 and chapter 201M, to effectuate the purposes of this part; provided that any interim rules shall only remain in effect until July 1, 2025, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.
(d) The department may amend the interim rules, and the amendments shall be exempt from chapters 91 and 201M, to effectuate the purposes of this chapter; provided that any amended interim rules shall remain in effect until July 1, 2025, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.
§141-H Authority to cease operations. Notwithstanding the foregoing, the chairperson shall have the authority to cease operations and issuance or renewal of any license, and terminate any industrial hemp program, in order to effectuate any other federal or state industrial hemp regulatory program; provided that any license that has been issued at that time will remain in effect until its expiration.
§141-I Industrial hemp special fund; established. (a) There is created in the state treasury a special fund to be designated as the industrial hemp special fund to be administered by the department of agriculture. Moneys deposited in the special fund shall be used to fulfill the purposes of this part and shall include:
(1) Any moneys appropriated by the legislature to the special fund;
(2) Any fees collected by the department in relation to the industrial hemp pilot program or industrial hemp program; and
(3) The interest or return on investments earned from moneys in the special fund.
(b) The department of agriculture may use the moneys in the special fund to carry out the purposes of this part, including hiring employees, specialists, and consultants necessary to complete projects related to the purposes of this part."
SECTION 3. Section 712-1260, Hawaii Revised Statutes, is amended to read as follows:
§712-1260[ ]] Industrial hemp. The possession, cultivation, sale,
receipt, or transfer of industrial hemp as authorized under part [ II]
of chapter 141 shall not constitute an offense under this part."
SECTION 4. Act 228, Session Laws of Hawaii 2016, is amended by amending section 8 to read as follows:
8. This Act shall take effect on July 1,
, and]; provided that section 2 of this Act shall be
repealed on [ June 30, 2021.] December 31, 2019."
SECTION 5. All funds remaining in the industrial hemp special fund established pursuant to 141-41, Hawaii Revised Statutes, shall be deposited into the industrial hemp special fund established pursuant to 141-I, Hawaii Revised Statutes.
SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $255,000 or so much thereof as may be necessary for fiscal year 2019-2020 to be deposited into the industrial hemp special fund established pursuant to 141-I, Hawaii Revised Statutes.
SECTION 7. There is appropriated out of the industrial hemp special fund established pursuant to 141-I, Hawaii Revised Statutes, the sum of $255,000 or so much thereof as may be necessary for fiscal year 2019-2020 to be allocated as follows:
(1) $85,000 for the establishment of one full-time equivalent (1.0 FTE) program coordinator position;
(2) $120,000 for the establishment of two full-time equivalent (2.0 FTE) specialist positions; and
(2) $50,000 for administrative costs of the industrial hemp program.
The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.
SECTION 8. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on July 1, 2019.
Industrial Hemp Program; Department of Agriculture; Appropriation
Authorizes the department of agriculture to establish the industrial hemp program. Repeals the industrial hemp pilot program as of 12/31/2019. Appropriates funds.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.