BILL ANALYSIS �
SB 676
Page 1
Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 676 (Leno) - As Amended: August 15, 2011
Policy Committee: AgricultureVote:6
- 0
Public Safety 5 - 2
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill authorizes an eight-year, four-county pilot project
with respect to the cultivation and processing of industrial
hemp. Specifically, this bill:
1)Permits a pilot program for industrial hemp research by
established agricultural research institutions as specified,
and for the agricultural production of hemp Imperial, Kings,
Kern, and San Joaquin counties.
2)Defines industrial hemp as an agricultural field crop limited
to the non-psychoactive varieties of the plant Cannabis sativa
L., having no more than three-tenths of 1%
tetrahydrocannabinol (THC).
3)Requires industrial hemp farmers to post signs identifying the
crop.
4)Regulates the plot size of industrial hemp farms, and
specifically prohibits tending of individual plants.
5)Requires industrial hemp growers, except those that are
established agricultural research institutions, to obtain a
laboratory test report indicating TCH levels prior to
harvesting.
6)Requires the Department of Justice (DOJ) to report to
specified legislative committees, on or before January 1,
2018, regarding the economic and law enforcement impacts of
hemp cultivation.
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7)Requires the Hemp Industries Association to submit economic
impact reports to the Legislature by January 1, 2018.
FISCAL EFFECT
1)Minor increase in revenues, likely less than $30,000 per year,
for the Seed Services Program.
2)The cost of the report would be minor and absorbable within
existing DOJ resources.
COMMENTS
1)Purpose . This bill allows California to cultivate industrial
hemp in a limited way by authorizing a four-county, eight-year
pilot project. According to the author," SB 676 is about job
creation and allowing farmers to choose crops that suit their
business needs and prospects. Preventing American farmers
from cultivating industrial hemp has created a growing market
for other countries to supply the state's food and personal
care product manufacturers."
2)Industrial Hemp . Information provided by the author shows that
the U.S. imports millions of pounds of hemp fiber, seed and
oil. The current U.S. market for industrial hemp products is
$400 million and growing at a rate of $26 million per year.
Of the U.S.-based hemp product companies, more than 55% are
based in California, many of which would expand their business
if a local and more economical source of industrial hemp was
available.
Hemp is currently used in a myriad of products. Hemp-seed oil
is used in cooking and baking, and as an ingredient in inks,
paints, soaps, and shampoos. Hemp fibers are used for
clothing, paper, animal bedding and insulation.
The author argues that in addition to the economic
opportunities, hemp is an environmentally-friendly and
sustainable crop that reduces the use of chemicals and saves
farmers money. Hemp requires little or no pesticides and
herbicides, puts nutrients back into the soil and leaves the
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field virtually free of weeds making it an excellent
rotational crop. As a source for paper, hemp produces more
fiber per acre than timber, and hemp matures in 90 days as
opposed to the decades required for timber. Hemp can also be
used for plywood-type building materials. Over time, hemp
cultivation could allow us to meet an ever growing demand for
paper products as well as the demand for building materials
traditionally met by timber.
3)The Seed Services Program is an industry funded program in the
California Department of Food and Agriculture (CDFA). The
primary responsibility of the Seed Services Program is to
administer and enforce the California Seed Law. This
enforcement involves:
a) Issuing authorizations to firms/individuals that wish to
sell agricultural or vegetable seed.
b) Conducting a compliance monitoring program that involves
collecting seed samples and submitting them to the
California Seed Lab for diagnosis.
c) Monitoring seed lots for compliance to the seed law.
d) Administering a mandatory dispute resolution process for
growers and dealers.
e) Conducting investigations regarding the circumstances
involved in disputes or label representations.
The activities of the Seed Services Program at CDFA are
overseen by a Seed Advisory Board that is composed of 11
members (nine from the seed industry and two public members).
The Seed Advisory Board makes recommendations to the Secretary
about various aspects of the Seed Advisory Program.
Funding to run the Seed Services Program comes from a $40
registration fee for growers (which would include industrial
hemp growers) and an assessment on the reported value of seed
sales in the prior fiscal year. The assessment rate for seed
sales in FY2011 is 25 cents per $100 of reported sales. In
2011, the combination of fees and assessments is expected to
generate about $1.7 million in revenue for the program.
4)Related Legislation . AB 684 (Leno), of the 2007-08 Legislative
Session, was substantially similar to this bill and would have
permitted the cultivation of industrial hemp in California
under a pilot program in five counties. AB 684 was vetoed.
In his veto message,
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Gov. Schwarzenegger stated that hemp is still considered a
cannabis plant regardless of its THC content and, therefore,
illegal under federal law.
AB 1147 (Leno), of the 2005-06 Legislative Session, would have
permitted the cultivation of industrial hemp in California.
AB 1147 was vetoed, with a similar message.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081