87R14833 TYPED     By: Perry S.B. No. 1778       A BILL TO BE ENTITLED   AN ACT   relating to the production and regulation of hemp and consumable   hemp products; providing administrative penalties; imposing and   authorizing fees; creating a criminal offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 121.003, Agriculture Code, is amended by   adding Subsection (e) to read as follows:          (e)  Not later than the 90th day after the date a change to a   state statute, federal statute, or federal regulation takes effect,   the department shall submit to the secretary of the United States   Department of Agriculture any amendments to the state plan   necessary to incorporate and implement the change.          SECTION 2.  Subchapter A, Chapter 122, Agriculture Code, is   amended by adding Section 122.005 to read as follows:          Sec. 122.005.  HEMP RESEARCH BY INSTITUTIONS OF HIGHER   EDUCATION. (a) The department shall issue a license to an   institution of higher education in this state that requests the   license.          (b)  Notwithstanding any provision of this chapter or   department rule other than Subsection (c), an institution of higher   education conducting research involving hemp:                (1)  is not required to pay a fee collected by the   department under this chapter;                (2)  is not required to obtain from the department a lot   crop permit or other permit for each location where hemp is grown;                (3)  is not required to obtain preharvest testing under   Section 122.153 before harvesting plants, except as provided by   Subsection (c);                (4)  may use hemp seed and cultivate and handle plants   grown from seed that is not certified or approved under Section   122.252; and                (5)  is not subject to Section 122.403(c) or (d).          (c)  An institution of higher education may not sell or   transfer hemp to another person unless the institution complies   with the requirements of Sections 122.153 and 122.356.          SECTION 3.  Section 122.051, Agriculture Code, is amended by   adding Subsection (c) to read as follows:          (c)  Not later than the 90th day after the date a change to   this chapter, a federal statute, or a federal regulation takes   effect, the department shall propose any rules necessary to   incorporate and implement the change.          SECTION 4.  Section 122.151, Agriculture Code, is amended by   adding Subsection (g) to read as follows:          (g)  A laboratory that performs testing required by this   chapter shall report the delta-9 tetrahydrocannabinol   concentration, the total tetrahydrocannabinol concentration, and   any other federally regulated cannabinoid of the sample on a dry   weight basis and the measurement of uncertainty in the test result.   The measurement of uncertainty must comply with International   Organization for Standardization ISO/IEC 17025 or a comparable or   successor standard. For purposes of this chapter, the delta-9   tetrahydrocannabinol concentration of the sample is the lowest   possible value given that measurement of uncertainty.          SECTION 5.  Section 122.201(a), Agriculture Code, is amended   to read as follows:          (a)  A license holder shall harvest the plants from a plot   not later than the 30th [20th] day after the date a preharvest   sample is collected under Section 122.154 unless field conditions   delay harvesting or the department authorizes the license holder to   delay harvesting. This subsection does not prohibit the license   holder from harvesting the plants immediately after the preharvest   sample is collected.          SECTION 6.  Subchapter E, Chapter 122, Agriculture Code, is   amended by adding Section 122.203 to read as follows:          Sec. 122.203.  HARVEST WHILE LICENSE SUSPENDED OR REVOKED.   (a) A person whose license is suspended or revoked after planting   hemp plants may obtain preharvest or postharvest testing under   Subchapter D and may harvest the plants under Section 122.201 in the   same manner as a license holder.          (b)  While a person's license is suspended or revoked, the   department may:                (1)  prohibit the person from selling or using plants   harvested under Subsection (a); or                (2)  if the delta-9 tetrahydrocannabinol concentration   of the plants is not more than 0.3 percent on a dry weight basis,   allow the person to sell or use plants harvested under Subsection   (a) in the same manner as a license holder under Section 122.202.          (c)  A person whose license is reinstated may sell or use   plants harvested under Subsection (a) as provided by Section   122.202.          SECTION 7.  The heading to Subchapter F, Chapter 122,   Agriculture Code, is amended to read as follows:   SUBCHAPTER F. HEMP SEED AND PLANTS          SECTION 8.  Section 122.252, Agriculture Code, is amended to   read as follows:          Sec. 122.252.  CERTIFICATION OR APPROVAL OF SEED AND PLANT   VARIETIES. (a) The department or an entity authorized to certify   seed and plants under Chapter 62 shall identify and certify or   approve varieties of seed and plants confirmed to produce hemp.          (b)  The department or entity may not certify or approve a   variety of hemp seed or plant if the variety [seed] is tested and   confirmed to produce a plant that has delta-9 tetrahydrocannabinol   concentration of more than 0.3 percent on a dry weight basis. For   purposes of this subsection, the department may partner with a   private entity or an institution of higher education to test seed   and plant varieties for the purpose of certification or approval   under this section.          (c)  The department may authorize the importation of hemp   seed and plant varieties certified in accordance with the law of   another state or jurisdiction that requires as a condition of   certification that hemp be produced in compliance with:                (1)  that state or jurisdiction's plan approved by the   United States Department of Agriculture under 7 U.S.C. Section   1639p; or                (2)  a plan established under 7 U.S.C. Section 1639q if   that plan applies in the state or jurisdiction.          (d)  The department shall maintain and make available to   license holders a list of hemp seed and plant varieties [seeds]   certified or approved under this section.          SECTION 9.  Subchapter F, Chapter 122, Agriculture Code, is   amended by adding Section 122.254 to read as follows:          Sec. 122.254.  SEEDLINGS AND OTHER IMMATURE PLANTS. (a) In   this section, "immature plant" means a hemp seedling, clone, or   cutting that requires substantial cultivation and further growth   before the beginning of the period under Section 122.201(a) when   the plant may be harvested.          (b)  A person may transport into this state, and a license   holder may obtain and cultivate, immature plants propagated outside   this state if the plants are accompanied by shipping documentation   that:                (1)  complies with any requirements of the state of   origin;                (2)  indicates the grower of the immature plants is   licensed by the state of origin;                (3)  lists the recipient license holder in this state   and the recipient's license number; and                (4)  shows that the variety of the immature plants is   certified or approved under Section 122.252.          (c)  A license holder may obtain and cultivate immature   plants propagated in this state by another license holder if the   plants are accompanied by the shipping certificate or cargo   manifest required by Section 122.055 that shows that the variety of   the immature plants is certified or approved under Section 122.252.   The immature plants are not subject to preharvest testing under   Section 122.153.          (d)  A license holder may transplant immature plants   propagated by the license holder from one plot to another plot   controlled by the license holder. The department by rule shall   waive the requirement that a license holder obtain a lot crop permit   and not require any fee for a greenhouse or other location used to   propagate immature plants if the plants are transplanted to another   plot controlled by the license holder and are not sold or   transferred to another person. The department by rule shall waive   the requirement that a person obtain a shipping certificate or   cargo manifest to transplant immature plants from one plot to   another plot operated by the license holder.          SECTION 10.  Section 122.403, Agriculture Code, is amended   by amending Subsection (a) and adding Subsection (e) to read as   follows:          (a)  If the department determines that a license holder   negligently violated this chapter or a rule adopted under this   chapter, the department shall enforce the violation in the manner   provided by 7 U.S.C. Section 1639p(e) and 7 C.F.R. Section 990.6.          (e)  A license holder may not receive more than one negligent   violation of the same kind per growing season.          SECTION 11.  Subchapter I, Chapter 122, Agriculture Code, is   amended by adding Section 122.4035 to read as follows:          Sec. 122.4035.  PENALTIES FOR CULTIVATING HEMP WITHOUT A   LICENSE; CRIMINAL OFFENSE. (a) On determining that a person   violated Section 122.101, the department may:                (1)  if the person has not previously received a   penalty under this section:                      (A)  issue a written warning to the person;                      (B)  impose an administrative penalty in the   amount of $500;                      (C)  require the person to obtain a license; and                      (D)  allow the person to continue to cultivate or   handle the hemp plants that are the subject of the violation,   harvest those plants, and, after obtaining the license, sell or use   those plants as provided by Section 122.202;                (2)  if the person has previously received a penalty   under Subdivision (1) for other conduct but has not previously   received a penalty under this subdivision:                      (A)  issue a second written warning to the person;                      (B)  impose an administrative penalty in the   amount of $500;                      (C)  require the person to obtain a license; and                      (D)  seize and dispose of the hemp plants that are   the subject of the violation; and                (3)  if the person has previously received a penalty   under Subdivision (2) or this subdivision for other conduct:                      (A)  refer the matter to the appropriate   prosecuting attorney for criminal prosecution under Subsection   (b); and                      (B)  seize and dispose of the hemp plants that are   the subject of the violation.          (b)  A person commits an offense if the person:                (1)  violates Section 122.101; and                (2)  has previously received a penalty under Subsection   (a)(2) for other conduct.          (c)  An offense under Subsection (b) is a Class B   misdemeanor.          SECTION 12.  Subchapter A, Chapter 443, Health and Safety   Code, is amended by adding Sections 443.005 and 443.006 to read as   follows:          Sec. 443.005.  CONSUMABLE HEMP PRODUCTS ACCOUNT. (a) The   consumable hemp products account is an account in the general   revenue fund administered by the department.          (b)  The account consists of:                (1)  appropriations of money to the account by the   legislature;                (2)  public or private gifts, grants, or donations,   including federal funds, received for the account;                (3)  fees collected under this chapter or under Chapter   431 as it applies to consumable hemp products;                (4)  interest and income earned on the investment of   money in the account;                (5)  penalties for violations of this chapter or   Chapter 431 as it applies to consumable hemp products; and                (6)  funds from any other source deposited in the   account.          (c)  The department may accept appropriations and gifts,   grants, or donations from any source to administer and enforce this   chapter and Chapter 431 as it applies to consumable hemp products.   Money received under this subsection shall be deposited in the   account.          (d)  Money in the account may be appropriated only to the   department for the administration and enforcement of this chapter   and Chapter 431 as it applies to consumable hemp products.          Sec. 443.006.  MAXIMUM TETRAHYDROCANNABINOL CONTENT. (a)   Notwithstanding any other law, a person may not process,   manufacture, possess, transport, sell, or purchase a consumable   hemp product in this state that:                (1)  has a delta-9 tetrahydrocannabinol concentration   of more than 0.3 percent on a dry weight basis;                (2)  has a total tetrahydrocannabinol concentration of   more than one percent on a dry weight basis;                 (3)  exceeds any federal limit; or                (4)  has been adulterated with additional   tetrahydrocannabinol or synthetic tetrahydrocannabinol.          (b)  For purposes of Subsection (a), the total   tetrahydrocannabinol concentration includes all isomers, acids,   compounds, and other forms of tetrahydrocannabinol and shall be   determined without any adjustment for a measurement of uncertainty   in a test result.          SECTION 13.  Section 443.103, Health and Safety Code, is   amended to read as follows:          Sec. 443.103.  APPLICATION; ISSUANCE. An individual or   establishment may apply for a license under this subchapter by   submitting an application to the department on a form and in the   manner prescribed by the department. The application must be   accompanied by:                (1)  the physical address [a legal description] of each   location where the applicant intends to process hemp or manufacture   consumable hemp products [and the global positioning system   coordinates for the perimeter of each location];                (2)  written consent from the applicant or the property   owner if the applicant is not the property owner allowing the   department, the Department of Public Safety, and any other state or   local law enforcement agency to enter onto all premises where hemp   is processed or consumable hemp products are manufactured to   conduct a physical inspection or to ensure compliance with this   chapter and rules adopted under this chapter;                (3)  any fees required by the department to be   submitted with the application; and                (4)  any other information required by department rule.          SECTION 14.  Subchapter C, Chapter 443, Health and Safety   Code, is amended by adding Section 443.106 to read as follows:          Sec. 443.106.  CHANGE OF OWNERSHIP. The department may   change ownership to another person if:                (1)  the current license holder and the recipient apply   to the department for the change of ownership;                (2)  the recipient is not ineligible to hold a license   under Section 443.102; and                (3)  one party to the change of ownership submits any   change of ownership fee to the department.          SECTION 15.  Section 443.152, Health and Safety Code, is   amended by adding Subsections (d) and (e) to read as follows:          (d)  The executive commissioner by rule may exclude a   substance that is generally recognized as having no risk of   contaminating a finished consumable hemp product, including a   microorganism or other substance that is inevitably destroyed or   removed while processing or manufacturing the product, from the   testing required under Section 443.151.          SECTION 16.  Section 443.201, Health and Safety Code, is   amended by adding Subsection (c) to read as follows:          (c)  A person may transport and deliver a consumable hemp   product to a consumer who purchased the product in compliance with   this chapter. The person transporting and delivering the consumable   hemp product is not required to:                (1)  obtain a license under Section 443.101, unless the   person processes or manufactures the product delivered; or                (2)  register under Section 443.2025, unless the person   sells the product delivered.          SECTION 17.  The heading to Section 443.2025, Health and   Safety Code, is amended to read as follows:          Sec. 443.2025.  REGISTRATION REQUIRED FOR RETAILERS AND   DISTRIBUTORS OF CERTAIN PRODUCTS.          SECTION 18.  Section 443.2025, Health and Safety Code, is   amended by amending Subsections (b), (d), and (f) and adding   Subsection (d-1) to read as follows:          (b)  A person may not sell or distribute consumable hemp   products containing more than trace amounts of cannabinoids to   consumers [cannabidiol at retail] in this state or distribute those   products intended for sale to consumers in this state unless the   person registers with the department each location owned, operated,   or controlled by the person at which those products are sold. A   person is not required to register a location associated with an   employee or independent contractor described by Subsection (d).          (d)  A person is not required to register with the department   under Subsection (b) if the person is:                (1)  an employee of a registrant; or                (2)  an independent contractor of a registrant who   sells the registrant's products to consumers [at retail].          (d-1)  A person is required to register with the department   under Subsection (b) if the person, as an employee or independent   contractor of a person located outside this state who is not a   registrant, sells or distributes products covered by Subsection (b)   in this state.          (f)  The department by rule may adopt a registration fee   schedule that establishes reasonable fee amounts for the   registration of:                (1)  a single location at which consumable hemp   products containing more than trace amounts of cannabinoids   [cannabidiol] are sold; and                (2)  multiple locations at which consumable hemp   products containing more than trace amounts of cannabinoids   [cannabidiol] are sold under a single registration.          SECTION 19.  Section 443.203, Health and Safety Code, is   amended by adding Subsection (c) to read as follows:          (c)  A person who sells, offers for sale, or distributes a   consumable hemp product that the person claims is made in this state   commits a false, misleading, or deceptive act or practice   actionable under Subchapter E, Chapter 17, Business & Commerce   Code, if the product contains any hemp that was not grown and   processed in this state by license holders under Chapter 122,   Agriculture Code and Chapter 443, Health and Safety Code.          SECTION 20.  Section 122.403, Agriculture Code, as amended   by this Act, and Section 122.4035, Agriculture Code, as added by   this Act, apply only to conduct that occurs on or after the   effective date of this Act. Conduct that occurred before that date   is governed by the law in effect when the conduct occurred, and the   former law is continued in effect for that purpose.          SECTION 21.  This Act takes effect September 1, 2021.