By: King of Uvalde, Guillen, H.B. No. 3948       Morales of Maverick, Israel, et al.     A BILL TO BE ENTITLED   AN ACT   relating to the production and regulation of hemp and consumable   hemp products; authorizing a fee.          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   the concentration of 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   for and may not require a license holder to pay 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 may 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 122.301, Agriculture Code, is amended   by adding Subsection (c) to read as follows:          (c)  Notwithstanding Subsection (b), a person may   manufacture products described by that subsection in this state if:                (1)  the products are sold only to persons located   outside this state; and                (2)  the person was manufacturing or processing   consumable hemp products, as those terms are defined by Section   443.001, Health and Safety Code, in this state on May 22, 2019.          SECTION 11.  Subchapter A, Chapter 443, Health and Safety   Code, is amended by adding Section 443.005 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.          SECTION 12.  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 13.  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   modify a license held by an establishment in the event of a change   in ownership of the establishment if:                (1)  the current owner and the new owner apply to the   department for the modification;                (2)  the new owner is not ineligible to hold the license   under Section 443.102; and                (3)  one party to the transaction submits any license   modification fee to the department.          SECTION 14.  Section 443.152, Health and Safety Code, is   amended by adding Subsection (d) 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 15.  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 16.  Section 443.204, Health and Safety Code, is   amended to read as follows:          Sec. 443.204.  RULES RELATED TO SALE OF CONSUMABLE HEMP   PRODUCTS. (a) Rules adopted by the executive commissioner   regulating the sale of consumable hemp products must to the extent   allowable by federal law reflect the following principles:                (1)  hemp-derived cannabinoids, including cannabidiol,   are not considered controlled substances or adulterants;                (2)  products containing one or more hemp-derived   cannabinoids, such as cannabidiol, intended for ingestion are   considered foods, not controlled substances or adulterated   products;                (3)  consumable hemp products must be packaged and   labeled in the manner provided by Section 443.205; and                (4)  the processing or manufacturing of a consumable   hemp product for smoking is prohibited.          (b)  Notwithstanding Subsection (a)(4), a person may   manufacture products described by that subsection in this state if:                (1)  the products are sold only to persons located   outside this state; and                (2)  the person was manufacturing or processing   consumable hemp products in this state on May 22, 2019.          SECTION 17.  This Act takes effect September 1, 2021.