BILL ANALYSIS                                                                                                                                                                                                    

                   Senate Appropriations Committee Fiscal Summary
                           Senator Tom Torlakson, Chairman

                                           684 (Leno)
          Hearing Date:  8/20/07          Amended: 8/1/07
                        + RN 07 26254
          Consultant: Nora Lynn           Policy Vote: Ag 3-1; Pub Saf 3-2
          BILL SUMMARY:   
          As proposed to be amended, AB 684 would authorize a five-year,  
          four-county pilot program for the cultivation of industrial  
          hemp, as specified.
                            Fiscal Impact (in thousands)

           Major Provisions         2007-08      2008-09       2009-10     Fund
           Enforcement            See staff comments               GF/LF
          Litigation             See staff comments               General
          Report                 Minor, absorbable costs          General

          STAFF COMMENTS: 
          Under existing California and federal law "marijuana" is defined  
          as the flowering tops, leaves and non-sterile seeds of the plant  
          Cannabis sativa L. Existing law exempts from the definition of  
          "marijuana" the stalks of the cannabis plant, products made from  
          the stalks, oil and oil cake made from the seed, and sterile  

          AB 684 would define "industrial hemp" as Cannabis sativa L that  
          has a THC content in its leaves and flowering tops lower than  
          0.3% (the THC content of marijuana leaves or flowers used for  
          intoxication averages 5-10%). AB 647 requires growers of  
          industrial hemp in Imperial, Kings, Mendocino and Yolo Counties  
          to grow their crops in plots between one and five acres in size  
          and marked with signage, as prescribed in the bill, indicating  
          the crop is hemp. Growers must obtain a laboratory report from a  
          federal Drug Enforcement Agency-registered laboratory prior to  
          harvest indicating THC levels below the required levels. If two  
          pre-harvest THC content tests show levels higher than 0.3%, the  
          crop must be destroyed. Lab results are to be maintained by the  


          grower for two years and made available to law enforcement upon  
          request as well as to anyone purchasing any hemp raw materials.  
          AB 684 also bans the transport of any live hemp plants,  
          flowering tops or seed. AB 684 would sunset January 1, 2013.

          DOJ estimates any enforcement costs related to AB 684 would be  
          minor and absorbable and that its ongoing efforts to combat  
          marijuana propagation (Campaign Against Marijuana Planting)  
          would remain unaltered by the bill. The department further  
          contends that AB 684 as currently drafted does not create a  
          "hemp defense" for marijuana growers and that local law  
          enforcement would be able to prosecute marijuana cultivation  
          cases in the four hemp-producing counties without relying on DOJ  
          for THC testing. To the extent that local law enforcement  
          agencies make such referrals in the future, the agency indicated  
          a reevaluation of such costs might be necessary.


          AB 684 (Leno)
          Page 2

          In terms of litigation expenses, DOJ did not reflect any such  
          costs associated with AB 684. The department indicated that in  
          the event AB 684 is challenged in court, it might incur costs  
          for additional deputy attorneys general, but reporting costs  
          ahead of such litigation was premature. Additionally, staff  
          notes the act of legislating invites litigation. In general, the  
          Senate Appropriations Committee treats the potential for  
          litigation as an indirect cost of any bill and does not consider  
          it as a part of the fiscal analysis.

          DOJ estimates costs to produce a required report of outlining  
          cases of industrial hemp farms used to disguise marijuana  
          plantings will be minor and absorbable.

          Proposed author's amendments would strike the word  
          "horticulture" and "horticultural" from the bill and create a  
          definition for "established agricultural research institution."