BILL ANALYSIS Ó
SB 566
Page 1
Date of Hearing: August 21, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 566 (Leno) - As Amended: August 7, 2013
Policy Committee: Public
SafetyVote:7-0
Agriculture
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill provides for regulated cultivation and processing of
industrial hemp upon federal approval, as specified.
Specifically, this bill:
1)Defines industrial hemp as a crop limited to nonpsychoactive
types of the plant Cannabis sativa L., having no more than
three-tenths of 1% tetrahydrocannabinol (THC) contained in the
dried flowering tops, that is cultivated and processed
exclusively for 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 derivative of the plant -
except the resin or flowering tops - that is incapable of
germination.
2)Revises the definition of marijuana to clarify it does not
include industrial hemp as defined by this bill.
3)Creates an 11-member Industrial Hemp Advisory Board within the
CA Department of Food and Agriculture (CDFA) to advise the
secretary.
4)Allows industrial hemp to be grown only if it is on a list of
approved seed cultivars, as approved by specified entities.
5)Requires industrial hemp growers and seed breeders to register
with the agricultural commissioner of the county in which the
grower intends to grow industrial hemp. (Established
agricultural research institutions are exempted.)
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6)Requires CDFA to establish, and each county agricultural
commissioner to collect, an assessment rate to be paid by
commercial industrial hemp growers and seed breeders
sufficient to cover county administrative and enforcement
costs.
7)Requires county commissioners to establish registration and
renewal fees to cover registration costs.
8)Specifies that industrial hemp must be grown in acreages of
not less than five acres, with no plots of less than one
contiguous acre.
9)Requires a registrant who grows industrial hemp to obtain a
laboratory test report to determine the THC levels of a random
sampling of the dried flowering tops of the hemp before the
harvest of each crop, as specified, with the goal of no more
than three-tenths of 1% THC contained in the flowering tops.
If the test report indicates a percentage content of THC equal
to or less than three-tenths of 1%, the hemp qualifies as
California Industrial hemp. If the laboratory test report
indicates a THC content between three-tenths of 1% and 1%, the
registrant must submit additional samples for testing.
A registrant must destroy the hemp upon receipt of an initial
test report indicating more than 1% THC, or a second report
indicating THC content between three-tenths of 1% and 1%.
A registrant who intends to grow industrial hemp and who
complies with this section shall not be prosecuted for
cultivation or possession of marijuana as a result of a test
report.
10)Requires, by January 1, 2019, or five years after the
provisions of this bill are authorized under federal law,
whichever is later, the Attorney General to report to the
Legislature any reported incidents of using an industrial hemp
field to disguise marijuana cultivation, and/or any claims in
a court hearing that marijuana is industrial hemp.
11)Requires, by January 1, 2019, or five years after the
provisions of this bill are authorized under federal law,
whichever is later, the board, in consultation with the Hemp
Industries Association, to report to the Legislature regarding
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the economic impacts of industrial hemp in California and the
economic impacts of industrial hemp in other states that may
have permitted industrial hemp cultivation.
12)Specifies this act shall not become operative unless
authorized under federal law. If these provisions become
operative, the Attorney General is required to issue an
opinion on the extent of authorization under federal law and
California law, the operative date of those provisions, and
whether federal law imposes any limitations inconsistent with
these provisions.
FISCAL EFFECT
1)Minor, likely absorbable, costs to CDFA to support the
Industrial Hemp Advisory Board.
2)Minor, likely absorbable, costs to CDFA to establish and
maintain a list of approved seed varietals.
3)Unknown administrative costs, fully covered by fee revenue, to
county agricultural commissions to operate a registration
program and to implement and enforce the act.
4)Costs of laboratory reports would be borne by registrants.
5)Minor absorbable reporting costs to the Department of Justice.
COMMENTS
1)Rationale. According to the author, "This bill creates jobs.
California companies account for over 50% of the revenues of
the U.S. retail market for hemp products, which is
approximately $500 million and growing. California hemp
cultivation will create the need for hemp seed and fiber
processing facilities. With so many California-based hemp
industry companies, investors will take the opportunity to
support the development of hemp processing operations that
would employ numerous Californians.
"Hemp is an extremely beneficial crop for farmers. Because it
grows in dense groves, hemp is a smother crop that requires
little or no pesticides or herbicides. Hemp is also a great
rotation crop as it leaves nutrients in the soil for the next
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crop?.
"Because this bill is operative only upon federal approval,
there are no conflicts with federal law. Federal approval may
take several different forms including a federal
administrative waiver or a change in federal law. The
Industrial Hemp Farming Act of 2013 (H.R. 525 and S. 359) has
been introduced in both houses of Congress with bipartisan
support including strong support from Senate Majority Leader
Mitch McConnell and Senator Rand Paul. If the current federal
legislation passes, the federal government will defer to
states to regulate hemp cultivation.
"SB 566 provides the necessary framework, provisions and
regulations for California hemp cultivation. Once federal
permission for cultivation is given, the Attorney General will
issue an opinion on the extent of federal approval and will
note whether federal law imposes any limitations that are
inconsistent with the provisions of this bill?.
"SB 566 ensures law enforcement will not be negatively
impacted. Under the terms of this bill, all flowering tops of
the industrial hemp plant, which have no legal commercial
application, are not permitted if removed from the field of
cultivation. Although hemp flowers have no psychoactive
effect, this relieves law enforcement of any need to
distinguish hemp from marijuana. For these reasons, the bill
enjoys the support of the California State Sheriffs'
Association.
2)Support includes the CA State Sheriffs Association, the ACLU,
the Planning and Conservation League, and a list of
hemp-related commercial entities that use hemp. Vote Hemp, a
sponsor of this bill, states, "Markets for hemp products in
the United States are growing rapidly including foods,
bodycare, textiles and composites. According to SPINS [an
information and service provider for the Natural and Specialty
Products Industry] retail sales of hemp food and body care
products in the stores they track grew by more than 16.5% to
$52 million in 2012. Mainstream companies like Ford, Daimler
Chrysler, Calvin Klein and Adidas use hemp in their products.
A Zogby poll conducted in 2007 shows 71% of likely voters in
California support changing state law to allow California
farmers to grow industrial hemp. A number of California
companies like Dr. Bronner's, Nutiva and Alterna use imported
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hemp in their products and want a cheaper domestics source.
The Hemp Industries Association estimates that total U.S.
retail sales of hemp products in 2012 were in excess of $500
million.
"Currently one of the largest markets for hemp is in
bio-composites. Ford, GM, Daimler Chrysler, Saturn, and BMW
are currently using hemp based composites for their door
panels, trunks, head liners and other interior parts. Hemp,
with its superior tensile strength and light weight, is an
outstanding raw material for this potentially huge market.
Replacing fiberglass with bio-composite materials is also
better for the environment because hemp bio-composites are
recyclable."
3)Opposition includes the CA Police Chiefs Association. The
California Narcotic Officers' Association states, "This bill
will undermine law enforcement efforts to curtail marijuana
cultivation and will result in significantly increased costs
in connection with the prosecution of marijuana trafficking
cases.
"Grown in the wild, hemp and marijuana are visually
indistinguishable. The impact of legalizing hemp will be that
marijuana cultivators will be able to camouflage their illegal
grows with a perimeter of same sex hemp plants. Effectively
this will require law enforcement to test plants for THC
content before taking any action - and beguiling hemp
camouflage can enable the cultivator to potentially escape
accountability altogether. Since the state crime labs
currently are not equipped to test for THC content, they will
either have to incur the costs of gearing up for this
function, or local agencies will have to incur the additional
costs of finding a private lab to conduct testing."
4)Pending amendment . The author is continuing discussions with
CDFA on language for one registration fee set and collected by
CDFA to cover the department's costs.
5)Prior Legislation .
a) SB 676 (Leno), 2011, authorized a five-county pilot
project with respect to the cultivation and processing of
industrial hemp. SB 676 was vetoed. In his veto message,
Gov. Brown stated:
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"Federal law clearly establishes that all cannabis plants,
including industrial hemp, are marijuana, which is a
federally regulated controlled substance. Failure to obtain
a permit from the U.S. Drug Enforcement Administration
prior to growing such plants will subject a California
farmer to federal prosecution.
"Although I am not signing this measure, I do support a
change in federal law. Products made from hemp - clothes,
food, and bath products - are legally sold in California
every day. It is absurd that hemp is being imported into
the state, but our farmers cannot grow it."
This bill addresses the governor's concerns by making this
bill contingent on federal authorization.
b) AB 684 (Leno), 2007, was similar to SB 676 and was
vetoed.
c) AB 1147 (Leno), 2006, authorized cultivation of
industrial hemp and was vetoed.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081