BILL NUMBER: SB 566	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  SEPTEMBER 6, 2013
	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

INTRODUCED BY   Senator Leno
   (Principal coauthor: Assembly Member Mansoor)

                        FEBRUARY 22, 2013

   An act to amend Section 221 of, to add Division 24 (commencing
with Section 81000) to, and to repeal Section 81008 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,
and making an appropriation therefor.



	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  , the California Industrial Hemp Farming Act, 
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   seed, or any component of the   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, except as specified, that industrial hemp be grown
only if it is on the list of approved seed cultivars and would
require the Department of Food and Agriculture to determine the
methodology and procedure by which the list of approved seed
cultivars may be amended, as specified.  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 registration
or renewal fee, as determined by the 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 
actual 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.
   The 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 authorize  
prohibit  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,
 and the pruning and tending of individual industrial  
hemp plants,  except as  necessary to perform the
required laboratory testing   specified  . 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, and would make
nonsubstantive changes.
   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 regarding that authorization  , as
specified, and to post the opinion on the office of the Attorney
General's Internet Web site.
   Vote: majority. Appropriation: yes. 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,  food ingredients,  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   4  of this bill, which
includes provisions consistent with all of the following:
   (1)  Farmers   Farmers, not including
established agricultural research institutions or registered seed
breeders,  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
  Ornamental  and clandestine  cultivation,
  cultivation  is expressly  prohibited
  prohibited, and the pruning and tending of individual
industrial hemp plants are prohibited except when those plants are
grown by an established agricultural research institution or when
necessary to perform THC testing  .
   (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.
  SEC. 3.  Section 221 of the Food and Agricultural Code is amended
to read:
   221.  (a) The "Department of Food and Agriculture Fund," which is
a special fund, is continued in existence. Any  money
  moneys  that  is   are 
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
  moneys were  derived. The expenditure from the
fund for the enforcement of any law shall not, unless otherwise
specifically provided, exceed the amount of  money 
 moneys  that is credited to the fund pursuant to the law.
    (b) Notwithstanding Section 13340 of the Government Code, all
 money   moneys  deposited in the fund
under the provisions enumerated in subdivision (c)  is
  are  hereby continuously appropriated to the
department without regard to fiscal years for expenditure in carrying
out the purposes for which the  money was  
moneys were  deposited and for making the refunds authorized by
Section 302.
    (c) All moneys deposited in the fund under the provisions
enumerated below  is   are  hereby exempted
from Sections 13320 to 13324, inclusive, of the Government Code:
   (1) 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.
   (2) Article 5 (commencing with Section 6001) of Chapter 9 of Part
1 of Division 4.
   (3) Article 8.5 (commencing with Section 6047.1) of Chapter 9 of
Part 1 of Division 4.
   (4) Article 5 (commencing with Section 6981) of Chapter 2 of Part
3 of Division 4.
   (5) Chapter 4 (commencing with Section 14200), Chapter 5
(commencing with Section 14501), and Chapter 6 (commencing with
Section 14901) of Division 7.
   (6) Part 1 (commencing with Section 16301) and Part 2 (commencing
with Section 17401) of Division 9.
   (7) Sections 19225, 19227, 19312, and 19315.
   (8) Division 10 (commencing with Section 20001).
   (9) Division 11 (commencing with Section 23001).
   (10) Part 4 (commencing with Section 27501) of Division 12.
   (11) Division 16 (commencing with Section 40501).
   (12) Chapter 9 (commencing with Section 44971) of Division 17.
   (13) Chapter 1 (commencing with Section 52001) of Division 18.
   (14) Chapter 2 (commencing with Section 52251) of Division 18.
   (15) Chapter 3 (commencing with Section 52651) of Division 18.
   (16) Chapter 4 (commencing with Section 52851) of Division 18.
   (17) Chapter 6 (commencing with Section 55401), Chapter 7
(commencing with Section 56101), and Chapter 7.5 (commencing with
Section 56701) of Division 20.
   (18) Section 58582.
   (19) 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.
   (20) Division 24 (commencing with Section 81000).
   (21) Chapter 5.5 (commencing with Section 12531) of Division 5 of
the Business and Professions Code.
   (22) Chapter 7 (commencing with Section 12700) of Division 5 of
the Business and Professions Code.
   (23) Chapter 14 (commencing with Section 13400) and Chapter 15
(commencing with Section 13700) of Division 5 of the Business and
Professions Code.
  SEC. 4.  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. 
   (h) "Seed development plan" means a strategy devised by a seed
breeder, or applicant seed breeder, detailing his or her planned
approach to growing and developing a new seed cultivar for 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.
 In the case of forming the initial board, and if the
registration program established pursuant to this division has not
yet been implemented, these board members shall be those who intend
to register as growers of industrial hemp.  A member of the
board who is a grower of industrial  hemp  
hemp, or who intends to register as 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
  as provided by  the California State Sheriffs'
Association  or other law enforcement association who has
experience or a background in agricultural issues.   and
approved by the secretary. 
   (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  processors or  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   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   adding, amending,  or removing seed
cultivars. 
   (1) The adoption, amendment, or repeal of the list of approved
seed cultivars, and the adoption of a methodology and procedure to
add, amend, or remove a seed cultivar from the list of approved seed
cultivars, pursuant to this section shall not be subject to the
requirements of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).  
   (2) The department, in consultation with the board, shall hold at
least one public hearing with public comment to determine the
methodology and procedure by which a seed cultivar is added, amended,
or removed from the list of approved seed cultivars.  
   (3) The department shall finalize the methodology and procedure to
add, amend, or remove a seed cultivar from the list of approved seed
cultivars and send the methodology and procedure to the Office of
Administrative Law. The Office of Administrative Law shall file the
methodology and procedure promptly with the Secretary of State
without further review pursuant to Article 6 (commencing with Section
11349) of Chapter 3.5 of Part 1 of Division 3 of Title 2 of the
Government Code. The methodology and procedure shall do all of the
following: 
   (A) Indicate that the methodology and procedure are adopted
pursuant to this division.  
   (B) State that the methodology and procedure are being transmitted
for filing.  
   (C) Request that the Office of Administrative Law publish a notice
of the filing of the methodology and procedure and print an
appropriate reference in Title 3 of the California Code of
Regulations.  
   (d) The department, in consultation with the board, may determine
the manner in which the public is given notice of the list of
approved seed cultivars, and any addition, amendment, or removal from
that list. 
   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   name, physical address,
and mailing  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   cultivation,
storage, or both  .
   (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 81005.
   (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 81005.
   (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  , storage, or
both,  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. 
   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   name, physical address,
and mailing  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   cultivation,
storage, or both  .
   (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 seed
cultivar.   all of the following:  
   (i) The name of the seed-certifying agency that will be conducting
the certification.  
   (ii) The industrial hemp varieties that will be used in the
development of the new California seed cultivar.  
   (iii) A seed development plan specifying how the listed industrial
hemp varieties will be used in the development of the new seed
cultivar, measures that will be taken to prevent the unlawful use of
industrial hemp or seed cultivars under this division, and a
procedure for the maintenance of records documenting the development
of the new seed cultivar. 
   (2) (A) The application shall be accompanied by a registration
fee, as determined pursuant to Section 81005.
   (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 81005.
   (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 
 cultivation, storage, or both,  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) A registrant developing a new California seed cultivar who
wishes to change any provision of the seed development plan shall
submit to the commissioner the revised seed development plan. Once
the commissioner has received the change to the registration, the
commissioner shall notify the registrant that he or she may cultivate
under the revised seed development plan.  
   (f) All records pertaining to the seed development plan shall be
kept and maintained by the seed breeder and be available upon request
by the commissioner, a law enforcement agency, or a seed certifying
agent.  
   (e) 
    (g)  The commissioner shall transmit information
collected under this section to the department.
   81005.  (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  actual 
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.
   81006.  (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. 
   (3) Registered seed breeders, for purposes of developing a new
California seed cultivar, shall grow industrial hemp as densely as
possible in dedicated acreage of not less than one acre and in
accordance with the seed development plan. The entire area of the
dedicated acreage is not required to be used for the cultivation of
the particular seed cultivar. 
   (b) Ornamental and clandestine  cultivation, as well as
the pruning, culling, and tending of individual plants, 
 cultivation  of industrial hemp is prohibited. All plots
shall have adequate signage indicating they are industrial hemp. 

   (c) Pruning and tending of individual industrial hemp plants is
prohibited, except when grown by an established agricultural research
institution or when the action is necessary to perform the THC
testing described in this section.  
   (d) Culling of industrial hemp is prohibited, except when grown by
an established agricultural research institution, when the action is
necessary to perform the THC testing described in this section, or
for purposes of seed production and development by a registered seed
breeder.  
   (c) 
    (e)  Industrial hemp shall include products imported
under the Harmonized Tariff Schedule of the United States (2013) of
the United States International Trade Commission,  including
  including, but not limited to,  hemp seed, per
subheading 1207.99.03, hemp oil, per subheading 1515.90.80, 
oilcake, per subheading 2306.90.01,  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) 
    (f)  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 sample collected for THC testing shall be accompanied by
the following documentation:  
                                                (A) The registrant's
proof of registration.  
   (B) Seed certification documentation for the seed cultivar's used.
 
   (C) The THC testing report for each certified seed cultivar used.
 
   (3) 
    (4) 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) 
    (5)  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) 
    (6)  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) 
    (7)  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)   (6)  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   division  .
   (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
  seed, or any component of the seed,  of the
plant. 
   (g) If, in the Attorney General's opinion issued pursuant to
Section 8 of the act that added this division, it is determined that
the provisions of this section are not sufficient to comply with
federal law, the department, in consultation with the board, shall
establish procedures for this section that meet the requirements of
federal law.  
   81007.  This division shall not be construed to authorize any of
the following, and all of the following are prohibited:
   (a) The 
    81007.    (a)     Except as
provided in subdivision (b) or as necessary to perform testing
pursuant to subdivision (f) of Section 81006, 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 81006   plant is prohibited  . 
   (b) The presence of a de minimis amount, or insignificant number,
of hemp leaves or flowering tops in hemp bales that result from the
normal and appropriate processing of industrial hemp shall not
constitute possession of marijuana.  
   (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 81006. 

   (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 in
accordance with Section 81006. 
   81008.  (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)   (f)  of Section
81006 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.
   81009.  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,  or its successor industry 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.
   81010.  This division shall not become operative unless authorized
under federal law.
  SEC. 5.  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.
  SEC. 6.  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   seed, or any component of
the seed,  of the plant that is incapable of germination.
  SEC. 7.  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.
  SEC. 8.  (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.  The Attorney General should
complete the opinion as soon as possible or within four months of
authorization under federal law. 
   (c) The Attorney General shall post the opinion described in
subdivision (b) on the office of the Attorney General's Internet Web
site.