BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 566 (Leno) - Industrial Hemp
Amended: April 11, 2013 Policy Vote: Ag 5-0, Public
Safety 7-0
Urgency: No Mandate: No
Hearing Date: May 13, 2013 Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 566 would permit hemp to be grown in the State,
upon federal approval, by defining "industrial hemp" to be
excluded from the definition of "marijuana." Additionally, the
bill would provide for cultivation practices, laboratory
testing, reporting requirements, and regulation.
Fiscal Impact: The Department of Food and Agriculture (CDFA)
estimates that it would require the following with respect to
new costs related to the regulation of the development, growth,
harvesting, and sale of industrial hemp seeds.
$1.7 million for personal services (20.0 PYs, including
a manager, 18 scientists, and an analyst).
$1.4 million for operating expenses, which includes a
one-time database development cost of $200,000.
Additionally, the Department of Justice (DOJ) would incur a
one-time, potentially significant General Fund cost to meet the
bill's reporting requirements.
Background: Hemp is a commonly used term for varieties of the
Cannabis plant and its products, which include fiber, oil, and
seed. Hemp can be refined into products like hemp seed foods,
hemp oil, wax, resin, rope, cloth, pulp, and fuel. Industrial
hemp is currently legal to grow in over two dozen countries.
Proposed Law: This bill would, among other things, do the
following:
Include in the definition of industrial help that it
shall have no more than 0.3 percent tetrahydrocannabinol
(THC) contained in the dry flowering tops.
SB 566 (Leno)
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Redefine "marijuana" to exclude industrial hemp when
cultivated or processed for defined purposes.
Create a new division for hemp under the Food and
Agriculture Code.
Authorize CDFA to regulate the development, growth,
harvesting, and sale of industrial hemp seeds.
Authorize CDFA to promulgate additional regulations to
ensure compliance with this division or federal law.
Require the Attorney General to report to the
Legislature by January 1 2019, or within five years after
hemp agriculture is approved under federal law, any
incident where marijuana is falsely claimed to be hemp, or
where hemp cultivation is used to disguise marijuana
cultivation.
Related Legislation: In 2011, SB 676 (Leno) would have created a
limited pilot program for the cultivation of help in California.
The measure was vetoed by the Governor.
Staff Comments: CDFA's Seed Services Program is funded by an
assessment on the reported sales of agricultural and vegetable
seeds, which are deposited into the Food and Agriculture Fund.
The Program does not expect a significant financial impact to
regulate the "labeling" of hemp seeds. The current version of SB
566 however, requires CDFA to regulate the development, growth,
harvesting, and sale of industrial hemp seeds. These activities
are outside the scope of activities currently performed by the
Seed Services Program.
The current level of compliance monitoring and enforcements
performed by the Seed Services Program are not adequate to
provide statewide regulation of the potential industrial hemp
industry in California. Consequently, a new program will need to
be developed to cover these activities. However, this bill does
not specify which entity will pay for the services as well as
the fund source needed for the program. If fees are not created
via legislation, then this program will become a general fund
obligation.
SB 566 (Leno)
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