Amended in Assembly August 27, 2013

Amended in Assembly August 7, 2013

Amended in Assembly June 19, 2013

Amended in Senate May 24, 2013

Amended in Senate April 11, 2013

Amended in Senate April 1, 2013

Senate Bill No. 566

Introduced by Senator Leno

(Principal coauthor: Assembly Member Mansoor)

February 22, 2013

An act to begin insert amend Section 221 of, to end insert add Division 24 (commencing with Section 81000) to, and to repeal Section begin delete 81009 end delete begin insert 81008 end insert of, the Food and Agricultural Code, and to amend Section 11018 of, and to add Section 11018.5 to, the Health and Safety Code, relating to industrial hemp begin insert , and making an appropriation therefor end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 566, as amended, Leno. Industrial hemp.

Existing law makes it a crime to engage in any of various transactions relating to marijuana, as defined, except as otherwise authorized by law, such as pursuant to the Medical Marijuana Program. For purposes of the provisions defining criminal conduct, marijuana is defined as not including the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted therefrom, and fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination.

This bill would revise the definition of “marijuana” so that the term would exclude industrial hemp, as defined, except where the plant is cultivated or processed for purposes not expressly allowed. The bill would define industrial hemp as a fiber or oilseed crop, or both, that is limited to the nonpsychoactive types of the plant Cannabis sativa L. and the seed produced therefrom, having no more than 3⁄10 of 1% tetrahydrocannabinol (THC) contained in the dried flowering tops, and that is cultivated and processed exclusively for the purpose of producing the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin or flowering tops extracted therefrom, fiber, oil, or cake, or the sterilized seed of the plant that is incapable of germination.

The bill would enact provisions relating to growing industrial hemp that would impose specified procedures and requirements on a person who grows industrial hemp, except as specified, that would become operative when authorized under federal law. The bill would require a grower of industrial hemp, as specified, and a seed breeder, as defined, to register, and to renew that registration every 2 years, with the county agricultural commissioner and to pay a begin insert registration or renewal end insert fee, begin insert as end insert determined by the begin delete commissioner, as specified, to cover the reasonable costs of the registration and renewal process. The bill would also require the Department of Food and Agriculture to establish an assessment rate, to be paid by growers of industrial hemp and seed breeders, to defray the reasonable costs of the county agricultural commissioner in implementing and enforcing these provisions. The end delete begin insert Department of Food and Agriculture. The bill would require the fees collected pursuant to these provisions to be deposited into the Department of Food and Agriculture Fund, to be continuously appropriated to cover the costs of implementing, administering, and enforcing these provisions. By establishing a new source of revenue for a continuously appropriated fund, this bill would make an appropriation. end insert

begin insert The end insert bill would require a registrant growing industrial hemp to obtain, before the harvest of each crop, a laboratory test of a random sample of the crop to determine the amount of THC in the crop. The bill would require the laboratory test report to be issued by a laboratory registered by the federal Drug Enforcement Administration and would require the registrant growing industrial hemp to make the report available to law enforcement officials and specified other persons. The bill would require all industrial hemp seed sold for planting in California to be from a crop having no more than 3⁄10 of 1% THC contained in a random sampling of the dried flowering tops and tested under these provisions, and would require the destruction of crops exceeding that content, as specified.

The bill would provide that authorization to grow industrial hemp shall not be construed to begin delete authorize, end delete begin insert authorize end insert certain other conduct, including, among other things, the possession, outside of a field of lawful cultivation, of resin, flowering tops, or leaves that have been removed from the hemp plant, except as necessary to perform the required laboratory testing. The bill would require the Attorney General and the Industrial Hemp Advisory Board to submit reports to the Legislature by January 1, 2019, or 5 years after the provisions of the measure are authorized under federal law, whichever is later, regarding the economic and law enforcement impacts of industrial hemp cultivation.

The bill would establish the Industrial Hemp Advisory Board, with a prescribed membership, and would authorize the board to advise the Secretary of Food and Agriculture on matters pertaining to these provisions.

The bill would state the findings and declarations of the Legislature relating to industrial hemp begin insert , and would make nonsubstantive changes end insert .

By revising the scope of application of existing crimes relating to marijuana, this bill would impose a state-mandated local program.

By specifying the conditions of cultivation, the violation of which would be a misdemeanor pursuant to other provisions of existing law, this bill would impose a state-mandated local program.

By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would provide that the provisions of this act would not become operative unless authorized under federal law and, if the provisions become operative, would require the Attorney General to issue an opinion, as specified, and to post the opinion on the office of the Attorney General’s Internet Web site.

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

This act shall be known, and may be cited, as the
California Industrial Hemp Farming Act.

SEC. 2.  

The Legislature finds and declares all of the following:

(a) Industrial hemp is an agricultural crop produced in at least
30 nations, including Canada, Great Britain, France, Germany,
Romania, Australia, and China, and is used by industry to produce
thousands of products, including paper, textiles, food, oils,
automotive parts, and personal care products.

(b) The United States Court of Appeals for the Ninth Circuit
has ruled in Hemp Industries Association v. Drug Enforcement
Administration, (9th Cir. 2004) 357 F.3d 1012, that the federal
Controlled Substances Act of 1970 (21 U.S.C. Sec. 812(b))
explicitly excludes nonpsychoactive hemp from the definition of
marijuana, and the federal government has declined to appeal that
decision.

(c) The federal Controlled Substances Act of 1970 specifies the
findings to which the government must attest in order to classify
a substance as a schedule I drug and those findings include that
the substance has a high potential for abuse, has no accepted
medical use, and has a lack of accepted safety for use, none of
which apply to industrial hemp.

(d) According to estimates by the Hemp Industries Association,
sales of industrial hemp products in the United States have grown
steadily since 1990 to more than $500 million annually in 2012.

(e) California manufacturers of hemp products currently import
from around the world tens of thousands of acres’ worth of hemp
seed, oil, and fiber products that could be produced by California
farmers at a more competitive price, and the intermediate
processing of hemp seed, oil, and fiber could create jobs in close
proximity to the fields of cultivation.

(f) In 1999, the Assembly passed House Resolution 32, which
resolved that “the domestic production of industrial hemp can help
protect California’s environment, contribute to the growth of the
state economy, and be regulated in a manner that will not interfere
with the enforcement of marijuana laws.”

(g) Assessment of the economic benefits of industrial hemp
cultivation and determination of possible impacts on the
enforcement of laws prohibiting illicit marijuana cultivation are
important concerns.

(h) It is the intent of the Legislature that law enforcement not
be burdened with tetrahydrocannabinol (THC) testing of industrial
hemp crops when cultivation is in compliance with Section 11018.5
of the Health and Safety Code; therefore, the cultivation of
industrial hemp shall be tightly controlled pursuant to Division 24
(commencing with Section 81000) of the Food and Agricultural
Code, as added by Section 3 of this bill, which includes provisions
consistent with all of the following:

(1) Farmers shall not cultivate industrial hemp in acreages
smaller than five acres at the same time, and no acreage of
industrial hemp shall be comprised of plots smaller than one acre.
The tending of individual plants, as well as ornamental and
clandestine cultivation, is expressly prohibited.

(2) Farmers are required, before harvest, to obtain a laboratory
test report from a federally registered laboratory documenting that
the THC content of their crop is within the legal limit and farmers
shall destroy crops that fail the THC test.

(3) Farmers shall retain an original copy of the THC test report
for the planting seed and the harvested crop for two years, make
original copies available to law enforcement officials upon request,
and are required to provide an original copy to each person
purchasing, transporting, or otherwise obtaining the fiber, oil, cake,
or seed of the plant from the farmer.

(4) Although they have no psychoactive effect, any resin,
flowering tops, or leaves of the industrial hemp plant that are
removed from the lawful field of cultivation shall be, by definition,
marijuana and subject to prosecution. Farmers should take care to
ensure that all flowering tops and leaves remain in the lawful field
of cultivation after the harvest of seed or fiber, and the possession
of those tops and leaves outside of the field of cultivation is
prohibited. There is no lawful reason to harvest, collect, or process
the flowering tops of industrial hemp.

(5) In addition to plant structure, height, and method of planting,
the horticultural tending of cannabis plants indicates to law
enforcement that it is marijuana and not industrial hemp. Signs of
horticultural tending include, but are not limited to, pathways or
rows within the field that provide access to each plant, the pruning
of individual plants, or the culling of male plants from the field.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 221 of the end insert begin insert Food and Agricultural Code end insert begin insert is
amended to read: end insert

221.  

begin insert (a) end insert begin insert   end insert The “Department of Food and Agriculture Fund,”
which is a special fund, is continued in existence. Any money that
is directed by law to be paid into the fund shall be paid into it and,
unless otherwise specifically provided, shall be expended solely
for the enforcement of the law under which the money was derived.
The expenditure from the fund for the enforcement of any law
shall not, unless otherwise specifically provided, exceed the amount
of money that is credited to the fund pursuant to the law.

begin delete

Notwithstanding

end delete

begin insert (b) end insert begin insert   end insert begin insert Notwithstanding end insert Section 13340 of the Government Code,
all money deposited in the fund under the provisions enumerated
begin delete below end delete begin insert in subdivision (c) end insert is hereby continuously appropriated to
the department without regard to fiscal years for expenditure in
carrying out the purposes for which the money was deposited and
for making the refunds authorized by Section 302.

begin delete

All money

end delete

begin insert (c) end insert begin insert   end insert begin insert All moneys end insert deposited in the fund under the provisions
enumerated below is hereby exempted from Sections 13320 to
13324, inclusive, of the Government Code:

begin delete

(a)

end delete

begin insert (1) end insert  Article 7 (commencing with Section 5821) and Article 7.5
(commencing with Section 5850) of Chapter 8 of Part 1 of Division
4, Chapter 1 (commencing with Section 6701) of Part 3 of Division
4, and Chapter 5 (commencing with Section 53301) of Division
18.

begin delete

(b)

end delete

begin insert (2) end insert  Article 5 (commencing with Section 6001) of Chapter 9 of
Part 1 of Division 4.

begin delete

(c)

end delete

begin insert (3) end insert  Article 8.5 (commencing with Section 6047.1) of Chapter
9 of Part 1 of Division 4.

begin delete

(d)

end delete

begin insert (4) end insert  Article begin delete 4.5 (commencing with Section 6971) and Article end delete 5
(commencing with Section 6981) of Chapter 2 of Part 3 of Division
4.

begin delete

(e)

end delete

begin insert (5) end insert  Chapter 4 (commencing with Section 14200), Chapter 5
(commencing with Section 14501), and Chapter 6 (commencing
with Section 14901) of Division 7.

begin delete

(f)

end delete

begin insert (6) end insert  Part 1 (commencing with Section 16301) and Part 2
(commencing with Section 17401) of Division 9.

begin delete

(g)

end delete

begin insert (7) end insert  Sections 19225, 19227, 19312, and 19315.

begin delete

(h)

end delete

begin insert (8) end insert  Division 10 (commencing with Section 20001).

begin delete

(i)

end delete

begin insert (9) end insert  Division 11 (commencing with Section 23001).

begin delete

(j)

end delete

begin insert (10) end insert  Part 4 (commencing with Section 27501) of Division 12.

begin delete

(k)

end delete

begin insert (11) end insert  Division 16 (commencing with Section 40501).

begin delete

(l)

end delete

begin insert (12) end insert  Chapter 9 (commencing with Section 44971) of Division
17.

begin delete

(m)

end delete

begin insert (13) end insert  Chapter 1 (commencing with Section 52001) of Division
18.

begin delete

(n)

end delete

begin insert (14) end insert  Chapter 2 (commencing with Section 52251) of Division
18.

begin delete

(o)

end delete

begin insert (15) end insert  Chapter 3 (commencing with Section 52651) of Division
18.

begin delete

(p)

end delete

begin insert (16) end insert  Chapter 4 (commencing with Section 52851) of Division
18.

begin delete

(q)

end delete

begin insert (17) end insert  Chapter 6 (commencing with Section 55401), Chapter 7
(commencing with Section 56101), and Chapter 7.5 (commencing
with Section 56701) of Division 20.

begin delete

(r)

end delete

begin insert (18) end insert  Section 58582.

begin delete

(s)

end delete

begin insert (19) end insert  Chapter 1 (commencing with Section 61301), Chapter 2
(commencing with Section 61801), and Chapter 3 (commencing
with Section 62700) of Part 3 of Division 21.

begin insert

(20) Division 24 (commencing with Section 81000).

end insert begin delete

(t)

end delete

begin insert (21) end insert  Chapter 5.5 (commencing with Section 12531) of Division
5 of the Business and Professions Code.

begin delete

(u)

end delete

begin insert (22) end insert  Chapter 7 (commencing with Section 12700) of Division
5 of the Business and Professions Code.

begin delete

(v)

end delete

begin insert (23) end insert  Chapter 14 (commencing with Section 13400) and Chapter
15 (commencing with Section 13700) of Division 5 of the Business
and Professions Code.

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

Division 24 (commencing with Section 81000) is added
to the Food and Agricultural Code, to read:

 

Division 24.  Industrial Hemp

 

81000.  

For purposes of this division, the following terms have
the following meanings:

(a) “Board” means the Industrial Hemp Advisory Board.

(b) “Commissioner” means the county agricultural
commissioner.

(c) “Established agricultural research institution” means a public
or private institution or organization that maintains land for
agricultural research, including colleges, universities, agricultural
research centers, and conservation research centers.

(d) “Industrial hemp” has the same meaning as that term is
defined in Section 11018.5 of the Health and Safety Code.

(e) “Secretary” means the Secretary of Food and Agriculture.

(f) “Seed breeder” means an individual or public or private
institution or organization that is registered with the commissioner
to develop seed cultivars intended for sale or research.

(g) “Seed cultivar” means a variety of industrial hemp.

81001.  

(a) There is in the department an Industrial Hemp
Advisory Board. The board shall consist of 11 members, appointed
by the secretary as follows:

(1) Three of the board members shall be growers of industrial
hemp that are registered pursuant to the provisions of this division.
A member of the board who is a grower of industrial hemp shall
be a representative of at least one of the following functions:

(A) Seed production.

(B) Seed condition.

(C) Marketing.

(D) Seed utilization.

(2) Two of the board members shall be members of an
established agricultural research institution.

(3) One member of the board shall be a representative of the
California State Sheriffs’ Association or other law enforcement
association who has experience or a background in agricultural
issues.

(4) One member of the board shall be a county agricultural
commissioner.

(5) One member of the board shall be a representative of the
Hemp Industries Association or its successor industry association.

(6) One member of the board shall be a representative of
industrial hemp product manufacturers.

(7) One member of the board shall be a representative of
businesses that sell industrial hemp products.

(8) One member of the board shall be a member of the public.

(b) It is hereby declared, as a matter of legislative determination,
that growers and representatives of industrial hemp product
manufacturers and businesses appointed to the board pursuant to
this division are intended to represent and further the interest of a
particular agricultural industry, and that the representation and
furtherance is intended to serve the public interest. Accordingly,
the Legislature finds that persons who are appointed to the board
shall be subject to the conflict-of-interest provisions described in
Section 87103 of the Government Code.

(c) The term of office for a member of the board is three years.
If a vacancy exists, the secretary shall, consistent with the
membership requirements described in subdivision (a), appoint a
replacement member to the board for the duration of the term.

(d) A member of the board shall not receive a salary but may
be reimbursed by the department for attendance at meetings and
other board activities authorized by the board and approved by the
secretary.

(e) The board shall advise the secretary and may make
recommendations on all matters pertaining to this division,
including, but not limited to, industrial hemp seed law and
regulations, enforcement, annual budgets required to accomplish
the purposes of this division, and the setting of an appropriate
assessment rate necessary for the administration of this division.

(f) The board shall annually elect a chair from its membership
and, from time to time, other officers as it deems necessary.

(g) The board shall meet at the call of its chair or the secretary,
or at the request of any four members of the board. The board shall
meet at least once a year to review budget proposals and fiscal
matters related to the proposals.

81002.  

(a) Except when grown by an established agricultural
research institution or by a registered seed breeder developing a
new California seed cultivar, industrial hemp shall only be grown
if it is on the list of approved seed cultivars.

(b) The list of approved seed cultivars shall include all of the
following:

(1) Industrial hemp seed cultivars that have been certified on
or before January 1, 2013, by member organizations of the
Association of Official Seed Certifying Agencies, including, but
not limited to, the Canadian Seed Growers Association.

(2) Industrial hemp seed cultivars that have been certified on
or before January 1, 2013, by the Organization of Economic
Cooperation and Development.

(3) California varieties of industrial hemp seed cultivars that
have been certified by a seed-certifying agency pursuant to Article
6.5 (commencing with Section 52401) of Chapter 2 of Division
18.

(c) Upon recommendation by the board or the department, the
secretary may update the list of approved seed cultivars by adding
or removing seed cultivars.

81003.  

(a) Except for an established agricultural research
institution, and before cultivation, a grower of industrial hemp for
commercial purposes shall register with the commissioner of the
county in which the grower intends to engage in industrial hemp
cultivation.

(1) The application shall include all of the following:

(A) The name and address of the applicant.

(B) The legal description, Global Positioning System
coordinates, and map of the land area on which the applicant plans
to engage in industrial hemp cultivation.

(C) The approved seed cultivar to be grown and whether the
seed cultivar will be grown for its grain or fiber, or as a dual
purpose crop.

(2) (A) The application shall be accompanied by a registration
fee, as determined pursuant to Section begin delete 81006 end delete begin insert 81005 end insert .

(B) A registration issued pursuant to this section shall be valid
for two years, after which the registrant shall renew his or her
registration and pay an accompanying renewal fee, as determined
pursuant to Section begin delete 81006 end delete begin insert 81005 end insert .

(b) If the commissioner determines that the requirements for
registration pursuant to this division are met, the commissioner
shall issue a registration to the applicant.

(c) A registrant that wishes to alter the land area on which the
registrant conducts industrial hemp cultivation shall, before altering
the area, submit to the commissioner an updated legal description,
Global Positioning System coordinates, and map specifying the
proposed alteration. Once the commissioner has received the
change to the registration, the commissioner shall notify the
registrant that it may cultivate industrial hemp on the altered land
area.

(d) A registrant that wishes to change the seed cultivar grown
shall submit to the commissioner the name of the new, approved
seed cultivar to be grown. Once the commissioner has received
the change to the registration, the commissioner shall notify the
registrant that it may cultivate the new seed cultivar.

81004.  

(a) Except when grown by an established agricultural
research institution, and before cultivation, a seed breeder shall
register with the commissioner of the county in which the seed
breeder intends to engage in industrial hemp cultivation.

(1) The application shall include all of the following:

(A) The name and address of the applicant.

(B) The legal description, Global Positioning System
coordinates, and map of the land area on which the applicant plans
to engage in industrial hemp cultivation.

(C) The approved seed cultivar to be grown and whether the
seed cultivar will be grown for its grain or fiber, as a dual purpose
crop, or for seed production.

(D) If an applicant intends to develop a new California seed
cultivar to be certified by a seed-certifying agency, the applicant
shall include the name of the seed-certifying agency that will be
conducting the certification and what industrial hemp varieties
will be used in the development of the new California begin insert seed end insert cultivar.

(2) (A) The application shall be accompanied by a registration
fee, as determined pursuant to Section begin delete 81006 end delete begin insert 81005 end insert .

(B) A registration issued pursuant to this section shall be valid
for two years, after which the registrant shall renew its registration
and pay an accompanying renewal fee, as determined pursuant to
Section begin delete 81006 end delete begin insert 81005 end insert .

(b) If the commissioner determines that the requirements for
registration pursuant to this division are met, the commissioner
shall issue a seed breeder registration to the applicant.

(c) A registrant that wishes to alter the land area on which the
registrant conducts industrial hemp cultivation shall, before altering
the area, submit to the commissioner an updated legal description,
Global Positioning System coordinates, and map specifying the
proposed alteration. Once the commissioner has received the
change to the registration, the commissioner shall notify the
registrant that it may cultivate industrial hemp on the altered land
area.

(d) A registrant that wishes to change the seed cultivar grown
shall submit to the commissioner the name of the new, approved
seed cultivar to be grown. Once the commissioner has received
the change to the registration, the commissioner shall notify the
registrant that it may cultivate the new seed cultivar.

(e) The commissioner shall transmit information collected under
this section to the department.

begin delete

81005.  

The department shall establish, and each commissioner
shall collect, an assessment rate to be paid by growers of industrial
hemp for commercial purposes and seed breeders, not including
an established agricultural research institution, to defray the
reasonable costs of each commissioner in implementing and
enforcing the provisions of this division.

end delete begin delete

81006.  

The commissioner of each county shall process
registrations and renewals within his or her county as economically
as possible. Each commissioner shall establish a registration fee
and a renewal fee to be imposed on industrial hemp growers and
seed breeders, to cover the reasonable costs of the registration and
renewal process pursuant to Sections 81003 and 81004. A renewal
fee shall not exceed more than one-half of the registration fee.

end delete begin insert

begin insert 81005. end insert   

(a) The department shall establish a registration fee
and appropriate renewal fee to be paid by growers of industrial
hemp for commercial purposes and seed breeders, not including
an established agricultural research institution, to cover the costs
of implementing, administering, and enforcing the provisions of
this division.

(b) Fees collected by the commissioners upon registration or
renewal pursuant to Section 81003 or 81004 shall be forwarded,
according to procedures set by the department, to the department
for deposit into the Department of Food and Agriculture Fund to
be used for the administration and enforcement of this division.

end insert

begin delete 81007. end delete
begin insert 81006. end insert   

(a) (1) Except when grown by an established
agricultural research institution or a registered seed breeder
developing a new California seed cultivar, industrial hemp shall
be grown only as a densely planted fiber or oilseed crop, or both,
in acreages of not less than five acres at the same time, and no
portion of an acreage of industrial hemp shall include plots of less
than one contiguous acre.

(2) Registered seed breeders, for purposes of seed production,
shall only grow industrial hemp as a densely planted crop in
acreages of not less than two acres at the same time, and no portion
of the acreage of industrial hemp shall include plots of less than
one contiguous acre.

(b) Ornamental and clandestine cultivation, as well as the
pruning, culling, and tending of individual plants, of industrial
hemp is prohibited. All plots shall have adequate signage indicating
they are industrial hemp.

(c) Industrial hemp shall include products imported under the
Harmonized Tariff Schedule of the United States (2013) of the
United States International Trade Commission, including hemp
seed, per subheading 1207.99.03, hemp oil, per subheading
1515.90.80, true hemp, per heading 5302, true hemp yarn, per
subheading 5308.20.00, and woven fabrics of true hemp fibers,
per subheading 5311.00.40.

(d) Except when industrial hemp is grown by an established
agricultural research institution, a registrant that grows industrial
hemp under this section shall, before the harvest of each crop and
as provided below, obtain a laboratory test report indicating the
tetrahydrocannabinol (THC) levels of a random sampling of the
dried flowering tops of the industrial hemp grown.

(1) Sampling shall occur as soon as practicable when the THC
content of the leaves surrounding the seeds is at its peak and shall
commence as the seeds begin to mature, when the first seeds of
approximately 50 percent of the plants are resistant to compression.

(2) The entire fruit-bearing part of the plant including the seeds
shall be used as a sample. The sample cut shall be made directly
underneath the inflorescence found in the top one-third of the plant.

(3) The laboratory test report shall be issued by a laboratory
registered with the federal Drug Enforcement Administration, shall
state the percentage content of THC, shall indicate the date and
location of samples taken, and shall state the Global Positioning
System coordinates and total acreage of the crop. If the laboratory
test report indicates a percentage content of THC that is equal to
or less than three-tenths of 1 percent, the words “PASSED AS
CALIFORNIA INDUSTRIAL HEMP” shall appear at or near the
top of the laboratory test report. If the laboratory test report
indicates a percentage content of THC that is greater than
three-tenths of 1 percent, the words “FAILED AS CALIFORNIA
INDUSTRIAL HEMP” shall appear at or near the top of the
laboratory test report.

(4) If the laboratory test report indicates a percentage content
of THC that is equal to or less than three-tenths of 1 percent, the
laboratory shall provide the person who requested the testing not
less than 10 original copies signed by an employee authorized by
the laboratory and shall retain one or more original copies of the
laboratory test report for a minimum of two years from its date of
sampling.

(5) If the laboratory test report indicates a percentage content
of THC that is greater than three-tenths of 1 percent and does not
exceed 1 percent, the registrant that grows industrial hemp shall
submit additional samples for testing of the industrial hemp grown.

(6) A registrant that grows industrial hemp shall destroy the
industrial hemp grown upon receipt of a first laboratory test report
indicating a percentage content of THC that exceeds 1 percent or
a second laboratory test report pursuant to paragraph (5) indicating
a percentage content of THC that exceeds three-tenths of 1 percent
but is less than 1 percent. If the percentage content of THC exceeds
1 percent, the destruction shall take place within 48 hours after
receipt of the laboratory test report. If the percentage content of
THC in the second laboratory test report exceeds three-tenths of
1 percent but is less than 1 percent, the destruction shall take place
as soon as practicable, but no later than 45 days after receipt of
the second test report.

(7) Paragraph (6) does not apply to industrial hemp grown by
an established agricultural research institution if the destruction
of the industrial hemp grown will impede the development of types
of industrial hemp that will comply with the three-tenths of 1
percent THC limit established in this section.

(8) A registrant that intends to grow industrial hemp and who
complies with this section shall not be prosecuted for the cultivation
or possession of marijuana as a result of a laboratory test report
that indicates a percentage content of THC that is greater than
three-tenths of 1 percent but does not exceed 1 percent.

(9) Paragraph (8) does not apply to industrial hemp grown by
an established agricultural research institution. Established
agricultural research institutions shall be permitted to cultivate or
possess industrial hemp with a laboratory test report that indicates
a percentage content of THC that is greater than three-tenths of 1
percent if that cultivation or possession contributes to the
development of types of industrial hemp that will comply with the
three-tenths of 1 percent THC limit established in this section.

(10) Except for an established agricultural research institution,
a registrant that grows industrial hemp shall retain an original
signed copy of the laboratory test report for two years from its date
of sampling, make an original signed copy of the laboratory test
report available to the department, the commissioner, or law
enforcement officials or their designees upon request, and shall
provide an original copy of the laboratory test report to each person
purchasing, transporting, or otherwise obtaining from the registrant
that grows industrial hemp the fiber, oil, cake, or seed of the plant.

begin delete 81008. end delete
begin insert 81007. end insert   

This division shall not be construed to authorize any
of the following, and all of the following are prohibited:

(a) The possession, outside of a field of lawful cultivation, of
resin, flowering tops, or leaves that have been removed from the
hemp plant, except as is necessary to perform testing pursuant to
subdivision (d) of Section begin delete 81007 end delete begin insert 81006 end insert .

(b) Any ornamental or clandestine cultivation of the industrial
hemp plant.

(c) Any pruning, culling, or tending of individual industrial
hemp plants, except when the action is necessary to perform the
THC testing pursuant to subdivision (d) of Section begin delete 81007 end delete begin insert 81006 end insert .

(d) Any cultivation of industrial hemp in acreages of less than
five acres, or any acreage comprised of plots of less than one
contiguous acre, except when the industrial hemp is grown by an
established agricultural research institution or seed breeder begin insert in
accordance with Section 81006 end insert .

begin delete 81009. end delete
begin insert 81008. end insert   

(a) Not later than January 1, 2019, or five years after
the provisions of this division are authorized under federal law,
whichever is later, the Attorney General shall report to the
Assembly and Senate Committees on Agriculture and the Assembly
and Senate Committees on Public Safety the reported incidents,
if any, of the following:

(1) A field of industrial hemp being used to disguise marijuana
cultivation.

(2) Claims in a court hearing by persons other than those
exempted in subdivision (d) of Section begin delete 81007 end delete begin insert 81006 end insert that marijuana
is industrial hemp.

(b) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government
Code.

(c) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2023, or four years after the date
that the report is due, whichever is later.

begin delete 81010. end delete
begin insert 81009. end insert   

Not later than January 1, 2019, or five years after the
provisions of this division are authorized under federal law,
whichever is later, the board, in consultation with the Hemp
Industries Association, shall report the following to the Assembly
and Senate Committees on Agriculture and the Assembly and
Senate Committees on Public Safety:

(a) The economic impacts of industrial hemp cultivation,
processing, and product manufacturing in California.

(b) The economic impacts of industrial hemp cultivation,
processing, and product manufacturing in other states that may
have permitted industrial hemp cultivation.

begin delete 81011. end delete
begin insert 81010. end insert   

This division shall not become operative unless
authorized under federal law.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 11018 of the Health and Safety Code is
amended to read:

11018.  

“Marijuana” means all parts of the plant Cannabis sativa
L., whether growing or not; the seeds of that plant; the resin
extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant,
its seeds or resin. It does not include industrial hemp, as defined
in Section 11018.5, except where the plant is cultivated or
processed for purposes not expressly allowed for by Division 24
(commencing with Section 81000) of the Food and Agricultural
Code.

begin delete SEC. 5. end delete
begin insert SEC. 6. end insert   

Section 11018.5 is added to the Health and Safety
Code, to read:

11018.5.  

“Industrial hemp” means a fiber or oilseed crop, or
both, that is limited to nonpsychoactive types of the plant Cannabis
sativa L. and the seed produced therefrom, having no more than
three-tenths of 1 percent tetrahydrocannabinol (THC) contained
in the dried flowering tops, and that is cultivated and processed
exclusively for the purpose of producing the mature stalks of the
plant, fiber produced from the stalks, oil or cake made from the
seeds of the plant, or any other compound, manufacture, salt,
derivative, mixture, or preparation of the mature stalks, except the
resin or flowering tops extracted therefrom, fiber, oil, or cake, or
the sterilized seed of the plant that is incapable of germination.

begin delete SEC. 6. end delete
begin insert SEC. 7. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act or because costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or infraction,
within the meaning of Section 17556 of the Government Code, or
changes the definition of a crime within the meaning of Section 6
of Article XIII B of the California Constitution.

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

(a) This act shall not become operative unless
authorized under federal law.

(b) If this act becomes operative, the Attorney General shall
issue an opinion on the extent of that authorization under federal
law and California law, the operative date of those provisions, and
whether federal law imposes any limitations that are inconsistent
with the provisions of this act.

(c) The Attorney General shall post the opinion described in
subdivision (b) on the office of the Attorney General’s Internet
Web site.