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 seed. 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. -1- 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."