Perry Hemp Bill Adds ‘Any Other Fee The Department Determines Necessary’

The text as introduced · 5,752 words

By: Perry
S.B. No. 2952

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of hemp and nonconsumable hemp products;

increasing a criminal penalty; increasing a civil penalty and

providing other penalties; requiring an occupational license;

imposing and authorizing certain fees.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 12.020(c), Agriculture Code, is amended

to read as follows:

(c) The provisions of law subject to this section and the

applicable penalty amounts are as follows:

Provision

Amount of Penalty

Chapters 13, 14A, 18, 19, 41, 46, 61, 72, 73,

not more than $5,000

74, 76, 94, 95, 101, 102, 103, 122, 123, 125,

132, and 134

Subchapters A, B, and C, Chapter 71

not more than $5,000

Chapter 14

not more than $10,000

Chapter 1951, Occupations Code

not more than $5,000

Chapter 153, Natural Resources

Code

not more than $5,000

Section 91.009

not more than $5,000.

SECTION 2. Section 121.002, Agriculture Code, is amended to

read as follows:

Sec. 121.002. LEGISLATIVE FINDINGS; INTENT. (a) The

legislature finds that nothing in 7 U.S.C. Section 1639p:

(1) preempts or limits any law of this state that:

(A) regulates the production of hemp; or

(B) is more stringent than 7 U.S.C. Section 1639o

et. seq.; or

(2) prohibits the production of hemp in this state, if

the production of hemp is not otherwise prohibited by this state.

(b) It is the intent of the legislature that this state have

primary regulatory authority over the production of hemp in this

state.

(c) It is the intent of the legislature that the statutory

definition of hemp shall not include any material that is not itself

naturally created in the plant Cannabis sativa L.

(d) It is the intent of the legislature that the word

"derivatives" in the definition of hemp shall refer only to first

order derivatives of the plant Cannabis sativa L.

SECTION 3. Section 121.003(a), Agriculture Code, is amended

to read as follows:

(a) The department, after consulting with the governor and

attorney general, shall develop a state plan to monitor and

regulate the production of hemp in this state. The plan must comply

with:

(1) 7 U.S.C. Section 1639p;

(2) Chapters [ Chapter ] 122 and 123 ; and

(3) Chapter 443, Health and Safety Code.

SECTION 4. Section 122.001, Agriculture Code, is amended to

read as follows:

Sec. 122.001. DEFINITIONS. In this chapter:

(1) "Cultivate" means to plant, irrigate, cultivate,

or harvest a hemp plant.

(2) "Delta-9 tetrahydrocannabinol concentration"

shall be established by:

(A) a procedure for testing a sample using post

decarboxylation, such that all delta-9 tetrahydrocannabinolic acid

in the sample, where applicable, has been converted to delta-9

tetrahydrocannabinol, thereby identifying the total percentage by

weight of delta-9 tetrahydrocannabinol, on a dry weight basis; or

(B) a procedure for testing a sample using a

conversion factor, by identifying the sum of the percentage by

weight, on a dry weight basis where applicable, of delta-9

tetrahydrocannabinolic acid multiplied by 0.877 plus the

percentage by weight, on a dry weight basis where applicable, of

delta-9 tetrahydrocannabinol, to calculate the total percentage by

weight of delta-9 tetrahydrocannabinol, on a dry weight basis.

(3) "Disposal" means an activity that irreversibly

transitions a non-compliant substance into a non-retrievable and

non-ingestible form that is unfit to enter the stream of commerce.

(4) "Dry weight basis" means a basis for expressing

the percentage of a chemical in a substance after removing the

moisture from the substance.

(5) "Governing person" has the meaning assigned by

Section 1.002, Business Organizations Code.

(6) [ (3) ] "Handle" means to possess , manipulate, or

store a hemp plant:

(A) at a licensed location [ on premises owned,

operated, or controlled by a license holder ] for any period of time;

or

(B) in a vehicle for any period of time other than

during the actual transport of the plant from a licensed location

[ premises owned, operated, or controlled by a license holder ] to:

(i) a licensed location of [ premises owned,

operated, or controlled by ] another license holder; [ or ]

(ii) a person licensed under Chapter 123;

or

(iii) a person licensed under Chapter 443,

Health and Safety Code.

(7) [ (4) ] "Hemp" has the meaning assigned by Section

121.001.

(8) [ (5) ] "Institution of higher education" has the

meaning assigned by Section 61.003, Education Code.

(9) [ (6) ] "License" means a hemp grower's license

issued under Subchapter C.

(10) [ (7) ] "License holder" means an individual or

business entity holding a license.

(11) "Licensed location" means a premises at which a

license holder operates a license issued under this chapter.

(12) [ (8) ] "Nonconsumable hemp product" means a

product that contains hemp, other than a consumable hemp product as

defined by Section 443.001, Health and Safety Code. The term

includes cloth, cordage, fiber, fuel, paint, paper, particleboard,

and plastics containing [ derived from ] hemp.

(13) [ (9) ] "Plot" means a contiguous area in a field,

greenhouse, or indoor growing structure containing the same variety

or cultivar of hemp throughout the area.

(14) "Tetrahydrocannabinol" means any

tetrahydrocannabinol, including its salts, isomers, and salts of

isomers whenever the existence of such salts, isomers, or salts of

isomers is possible within the specific chemical designation.

(15) "Total tetrahydrocannabinol concentration" shall

be established by:

(A) a procedure for testing a sample using post

decarboxylation, such that all tetrahydrocannabinolic acids in the

sample, where applicable, have been converted to

tetrahydrocannabinols, thereby identifying the total percentage by

weight of tetrahydrocannabinols, on a dry weight basis; or

(B) a procedure for testing a sample using a

conversion factor, by identifying the sum of the percentage by

weight, on a dry weight basis where applicable, of

tetrahydrocannabinolic acids multiplied by 0.877 plus the

percentage by weight, on a dry weight basis where applicable, of

tetrahydrocannabinols, to calculate the total percentage by weight

of tetrahydrocannabinols, on a dry weight basis.

SECTION 5. Subchapter A, Chapter 122, Agriculture Code, is

amended by adding Section 122.005 to read as follows:

Sec. 122.005. APPLICABILITY OF CHAPTER. This chapter does

not apply to a patient, organization, person, product, or activity

regulated under Chapter 487, Health and Safety Code.

SECTION 6. Sections 122.052(a) and (b), Agriculture Code,

are amended to read as follows:

(a) The department shall set and collect:

(1) an application fee for an initial license in an

amount not to exceed $100;

(2) a license renewal fee in an amount not to exceed

$ 100;

(3) a participation fee for each location described by

Section 122.103 [ 122.103(a)(1) and each location added after the

application is submitted ] in an amount not to exceed $100;

(4) a site modification fee for each change to a

location described by Section 122.103 [ 122.103(a)(1) ] in an amount

not to exceed $500; [ and ]

(5) a collection and testing fee for each preharvest

test or postharvest test if performed by the department in an amount

not to exceed $300 ; and

(6) any other fee the department determines necessary .

(b) [ A fee set by the department under this section may not

exceed the amount necessary to administer this chapter. ] The

comptroller may authorize the department to collect a fee described

by Subsection (a) in an amount greater than the maximum amount

provided by that subsection if necessary to cover the department's

costs of administering this chapter.

SECTION 7. Sections 122.053(b), (c), and (d), Agriculture

Code, are amended to read as follows:

(b) The department may enter onto land described by Section

122.103 [ 122.103(a)(1) ], conduct inspections, and collect and test

plant samples.

(c) Using [ participation ] fees set and collected under

Section 122.052 [ 122.052(a)(3) ], the department shall pay the cost

of inspections under this section.

(d) The Department of Public Safety or a state or local law

enforcement agency may inspect, collect samples from, or test

plants from any portion of a plot to ensure compliance with this

chapter. A license holder shall allow the Department of Public

Safety or a state or local law enforcement agency access to the plot

and the property on which the plot is located for purposes of this

subsection.

SECTION 8. Section 122.054, Agriculture Code, is amended to

read as follows:

Sec. 122.054. SAMPLE COLLECTION AND TESTING. (a) The

department may collect samples and perform testing or contract with

a laboratory for the performance of that collection and testing on

behalf of the department. A test performed by a laboratory on

behalf of the department is considered to be performed by the

department for purposes of this chapter.

(b) Testing for delta-9 tetrahydrocannabinol concentration

performed under this section must consider the conversion of any

quantifiable tetrahydrocannabinolic acid into

tetrahydrocannabinol.

(c) A test result showing a delta-9 tetrahydrocannabinol

concentration of more than 0.3 percent is conclusive evidence that

the substance represented by the sample is not compliant and is

therefore not hemp.

SECTION 9. Sections 122.055(a) and (b), Agriculture Code,

are amended to read as follows:

(a) The department shall develop a shipping certificate or

cargo manifest which the department shall issue to a license holder

in connection with the transportation of a shipment of hemp [ plant

material ] originating in this state, other than sterilized seeds

that are incapable of beginning germination.

(b) A certificate or manifest developed under Subsection

(a) must include a unique identifying number for the shipment and

the department's contact information to allow law enforcement

during a roadside inspection of a motor vehicle transporting the

shipment to verify that the shipment consists of hemp [ cultivated ]

in compliance with this chapter.

SECTION 10. Section 122.101(a), Agriculture Code, is

amended to read as follows:

(a) Except as provided by Subsection (b), a person [ or the

person's agent ] may not cultivate or handle hemp in this state [ or

transport hemp outside of this state ] unless the person holds a

license under this subchapter.

SECTION 11. Section 122.102, Agriculture Code, is amended

by adding Subsection (c) to read as follows:

(c) An individual who is not a legal citizen of the United

States of America may not:

(1) hold a license under this subchapter; or

(2) be a governing person or owner of a business entity

that holds a license under this subchapter.

SECTION 12. Section 122.103, Agriculture Code, is amended

by amending Subsection (a) and adding Subsections (d) and (e) to

read as follows:

(a) A person 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) a legal description of each location where the

applicant intends to cultivate or handle hemp 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 cultivated or handled to conduct a physical inspection or to

ensure compliance with this chapter and rules adopted under this

chapter;

(3) the application fee; [ and ]

(4) a description of the intended use and crop type of

the hemp plant the applicant intends to cultivate, which must be

described as:

(A) an industrial use, which must be further

described as one of the following crop types:

(i) "grain hemp crop";

(ii) "fiber hemp crop";

(iii) "seed hemp crop"; or

(iv) a hybrid of the crop types described by

Subparagraphs (i)-(iii); or

(B) a cannabinoid use, which must be further

described as one of the following crop types:

(i) "floral hemp crop"; or

(ii) "other hemp crop";

(5) a description of the growing conditions of the

location where the applicant intends to cultivate or handle hemp,

which must be described as:

(A) "under protection"; or

(B) "in the open"; and

(6) any other information required by department rule.

(d) The department may only issue a license to an applicant

for a location that is at least one-half acre and with a requirement

to plant not less than:

(A) for a location that is in the open, 300

plants; or

(B) for a location that is under protection, 100

plants.

(e) The department may not:

(1) consider an incomplete application; or

(2) issue a license to a person with a history of

willful noncompliance of any laws related to hemp in any

jurisdiction.

SECTION 13. Section 122.152, Agriculture Code, is amended

by amending Subsection (b) and adding Subsection (e) to read as

follows:

(b) A laboratory is eligible for registration if the

laboratory :

(1) is registered with the Federal Drug Enforcement

Agency; and

(2) submits to the department proof of accreditation

by an independent accreditation body in accordance with

International Organization for Standardization ISO/IEC 17025 or a

comparable or successor standard and any required fee.

(e) The department shall revoke a laboratory's registration

if the department identifies a pattern of inconsistent results in

the laboratory's testing.

SECTION 14. Section 122.202, Agriculture Code, is amended

by amending Subsection (b) and adding Subsections (c), (d), and (e)

to read as follows:

(b) Except as provided by this section, if [ If ] the results

of a preharvest and, if applicable, postharvest test performed on a

sample show a delta-9 tetrahydrocannabinol concentration of more

than 0.3 percent on a dry weight basis , [ :

[ (1) ] the license holder shall dispose of or destroy

all plants represented by the sample:

(1) [ (A) ] in the manner prescribed by federal law;

[ or ]

(2) using a reverse distributor registered with the

Federal Drug Enforcement Agency [ (B) in a manner approved by the

department that does not conflict with federal law ]; or

(3) at the licensed location, if:

(A) the license holder notifies the department of

the license holder's intent to dispose of or destroy the plants;

(B) the department approves of the disposal or

destruction; and

(C) the license holder submits documentation to

the department of the disposal or destruction in the manner

prescribed by the department, including by submitting videos or

photographs of the disposal or destruction or by allowing a

department representative to witness the disposal or destruction.

(c) A license holder may remediate plants represented by a

preharvest sample described by Subsection (b) if:

(1) [ (2) if ] the department determines the plants

represented by the sample reached that concentration solely as a

result of negligence ;

(2) the type of hemp seed planted by the license holder

was:

(A) certified or approved under Section 122.252

as "grain hemp crop", "fiber hemp crop", "seed hemp crop" or a

hybrid of such crop types; and

(B) reported as "grain hemp crop", "fiber hemp

crop", "seed hemp crop" or a hybrid of such crop types on the

license holder's application for a license under Section 122.103;

(3) the license holder is contracted to sell the

plants to a nonconsumable hemp product manufacturer in this state;

and

(4) the license holder fulfills any other department

requirements [ , the license holder is subject to Section 122.403(c)

and may:

[ (A) trim the plants until the delta-9

tetrahydrocannabinol concentration of the plants is not more than

0.3 percent on a dry weight basis and dispose of the noncompliant

parts of the plants in a manner approved by the department;

[ (B) process the plants into fiber with a delta-9

tetrahydrocannabinol concentration of not more than 0.3 percent on

a dry weight basis and dispose of any remaining parts of the plants

in a manner approved by the department; or

[ (C) take any other corrective action consistent

with federal regulations adopted under 7 U.S.C. Chapter 38,

Subchapter VII ].

(d) A license holder described by Subsection (c) may

remediate the plants by:

(1) separating and disposing of or destroying flower

or floral material, including buds and trichomes, and retaining the

stalks, fibers, grain, or seed of the plants;

(2) properly raking and retting the plants for a

minimum of 30 days to dispose of or destroy flower or floral

material; or

(3) remediating in another similar method that

disposes of or destroys any flower or floral material containing

tetrahydrocannabinol and that is approved by the department.

(e) Plants remediated under this section must undergo

postharvest testing to ensure the plants have a delta-9

tetrahydrocannabinol concentration of not more than 0.3 percent

before the hemp enters the stream of commerce.

SECTION 15. Subchapter E, Chapter 122, Agriculture Code, is

amended by adding Section 122.203 to read as follows:

Sec. 122.203. PLANTING AND HARVESTING VERIFICATION. (a)

Not later than the 30th day after a license holder plants hemp

authorized under the license, the license holder shall submit to

the department, in the manner prescribed by the department:

(1) the amount, type, and variety of each hemp seed

planted; and

(2) a description of the plot where the seeds were

planted.

(b) Not later than the 30th day after a license holder

harvests hemp plants, the license holder shall submit to the

department, in the manner prescribed by the department:

(1) the amount, type, and variety of each hemp plant

harvested; and

(2) a description of the plot where the plants were

harvested.

(c) The department may conduct an inspection of a location

indicated on any document submitted under this section.

SECTION 16. Section 122.252, Agriculture Code, is amended

by amending Subsection (d) and adding Subsection (e) to read as

follows:

(d) The department shall maintain and make available to the

general public [ license holders ] a list of hemp seeds certified or

approved under this section. The list must be published on the

department's Internet website, updated regularly, and include for

each approved seed:

(1) an identification number for each seed;

(2) the sex, source, and photoperiod of each seed;

(3) the intended use and crop type produced by the

seed, described as:

(A) an industrial use, which must be further

described as one of the following crop types:

(i) "grain hemp crop";

(ii) "fiber hemp crop";

(iii) "seed hemp crop"; or

(iv) a hybrid of the crop types described by

Subparagraphs (i)-(iii); or

(B) a cannabinoid use, which must be further

described as one of the following crop types:

(i) "floral hemp crop"; or

(ii) "other hemp crop";

(4) any other information the department determines

relevant to differentiate between seed types; and

(5) to the extent possible, information and best

practices to ensure hemp grown and harvested from the seed complies

with this chapter.

(e) If a variety of hemp seed approved or certified by the

department under this section produces multiple harvest batches

that yield a delta-9 tetrahydrocannabinol concentration of more

than 0.3 percent, the department shall:

(1) for a variety of hemp seed that produces plants

that have a delta-9 tetrahydrocannabinol concentration of more than

0.3 percent but not more than 1.0 percent when harvested, suspend

the approval or certification of the seed and conduct a review to

evaluate if the seed should be removed from the list of approved or

certified hemp seeds; or

(2) for a variety of hemp seed that produces plants

that have a delta-9 tetrahydrocannabinol concentration of more than

1.0 percent when harvested, remove the seed from the list of

approved or certified hemp seeds.

SECTION 17. Chapter 122, Agriculture Code, is amended by

adding Subchapter G-1 to read as follows:

SUBCHAPTER G-1. DISTRIBUTION AND SALE

Sec. 122.3011. HEMP RESTRICTIONS. A person may not

distribute, deliver, sell, purchase, or otherwise introduce into

the stream of commerce in this state hemp:

(1) that has not been tested in accordance with the

requirements of Subchapter D; and

(2) that is not accompanied by documentation that

includes:

(A) the company name and physical address for the

location where the hemp was produced;

(B) the delta-9 tetrahydrocannabinol

concentration of the hemp; and

(C) the total tetrahydrocannabinol concentration

of the hemp.

SECTION 18. Section 122.354, Agriculture Code, is amended

to read as follows:

Sec. 122.354. DEPARTMENT RULES. The department, in

consultation with the Department of Public Safety, shall adopt

rules regulating the transportation of hemp in this state to ensure

that illegal marihuana and illegal marihuana extract are [ is ] not

transported into , [ or ] through , or out of this state disguised as

legal hemp.

SECTION 19. Section 122.356, Agriculture Code, is amended

to read as follows:

Sec. 122.356. DOCUMENTATION AND OTHER SHIPPING

REQUIREMENTS. (a) A person may not transport or receive hemp

[ plant material ] in this state unless the hemp:

(1) is produced in compliance with:

(A) a state or tribal plan approved by the United

States Department of Agriculture under 7 U.S.C. Section 1639p; or

(B) a plan established under 7 U.S.C. Section

1639q if the hemp was produced [ cultivated ] in an area where that

plan applies; and

(2) is accompanied by a label clearly identifying the

hemp as hemp and :

(A) a shipping certificate or cargo manifest

issued under Section 122.055 if the hemp originated in this state;

or

(B) documentation containing the name and

address of the place where the hemp was produced, the delta-9

tetrahydrocannabinol concentration of the hemp, the total

tetrahydrocannabinol concentration of the hemp, [ cultivated ] and a

statement that the hemp was produced in compliance with 7 U.S.C.

Section 1639p or 7 U.S.C. Section 1639q [ 7 U.S.C. Chapter 38,

Subchapter VII ], if the hemp originated outside this state.

(b) A person transporting hemp [ plant material ] in this

state:

(1) may not concurrently transport any cargo that is

not hemp [ plant material ]; and

(2) shall furnish the documentation required by this

section to the department or any peace officer on request.

(c) A person may not transport or receive hemp in this state

if the hemp is not accompanied by a label that includes:

(1) contact information of the department;

(2) the date and time of the departure of the hemp

shipment from the place of origin for the hemp;

(3) the quantity and form of hemp being transported;

(4) the delta-9 tetrahydrocannabinol concentration of

the hemp;

(5) the total tetrahydrocannabinol concentration of

the hemp; and

(6) any other information required by the department

or the Department of Public Safety.

SECTION 20. Sections 122.358(c) and (d), Agriculture Code,

are amended to read as follows:

(c) If a peace officer has probable cause to believe that a

person transporting hemp in this state is also transporting

marihuana , marihuana extract, a controlled substance analogue, or a

controlled substance, as defined by Section 481.002, Health and

Safety Code, or any other illegal substance under state or federal

law, the peace officer may seize and impound the hemp along with the

controlled or illegal substance.

(d) This subchapter does not limit or restrict a peace

officer from enforcing to the fullest extent the laws of this state

regulating marihuana , marihuana extract, controlled substance

analogues, and controlled substances, as defined by Section

481.002, Health and Safety Code.

SECTION 21. Section 122.359(a), Agriculture Code, is

amended to read as follows:

(a) A person who violates Section 122.356 is liable to this

state for a civil penalty in an amount not to exceed $5,000 [ $500 ]

for each violation.

SECTION 22. Section 122.360(b), Agriculture Code, is

amended to read as follows:

(b) An offense under this section is a Class B misdemeanor

[ punishable by a fine of not more than $1,000 ].

SECTION 23. Sections 122.403(a) and (c), Agriculture Code,

are amended 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 Section 122.404 and 7 U.S.C. Section 1639p(e).

(c) A license holder who violates this chapter by

cultivating plants with a delta-9 tetrahydrocannabinol

concentration of more than 0.3 percent on a dry weight basis solely

as a result of negligence [ described by Section 122.202(b)(2) ]:

(1) must comply with an enhanced testing protocol

developed by the department;

(2) shall pay a fee in the amount not exceeding $1,000

[ of $500 ] for each violation to cover the department's costs of

administering the enhanced testing protocol; and

(3) shall be included on a list maintained by the

department of license holders with negligent violations, which is

public information for purposes of Chapter 552, Government Code.

SECTION 24. Subchapter I, Chapter 122, Agriculture Code, is

amended by adding Section 122.405 to read as follows:

Sec. 122.405. FORFEITURE. A person who sells or

distributes a substance with a delta-9 tetrahydrocannabinol

concentration of more than 0.3 percent on a dry weight basis is

subject to forfeiture of contraband under Chapter 59, Code of

Criminal Procedure, and Chapter 481, Health and Safety Code.

SECTION 25. Subtitle F, Title 5, Agriculture Code, is

amended by adding Chapter 123 to read as follows:

CHAPTER 123. MANUFACTURE, DISTRIBUTION, AND SALE OF NONCONSUMABLE

HEMP PRODUCTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 123.001. DEFINITIONS. In this chapter:

(1) "Consumable hemp product" has the meaning assigned

by Section 443.001, Health and Safety Code.

(2) "Dry weight basis" has the meaning assigned by

Section 122.001.

(3) "Hemp" has the meaning assigned by Section

121.001.

(4) "Institution of higher education" has the meaning

assigned by Section 61.003, Education Code.

(5) "License" means a nonconsumable hemp product

manufacturer's license issued under this chapter.

(6) "License holder" means an individual or business

entity holding a nonconsumable hemp product manufacturer's license

under this chapter.

(7) "Nonconsumable hemp product" has the meaning

assigned by Section 122.001.

(8) "Smoking" has the meaning assigned by Section

443.001, Health and Safety Code.

(9) "Tetrahydrocannabinol" has the meaning assigned

by Section 122.001.

Sec. 123.002. LEGISLATIVE INTENT. It is the intent of the

legislature to create a robust market for the production of fiber

hemp crops and the manufacturing of nonconsumable hemp products in

this state.

Sec. 123.003. LOCAL REGULATION PROHIBITED. A municipality,

county, or other political subdivision may not enact, adopt, or

enforce a rule, ordinance, order, resolution, or other regulation

that prohibits the processing of hemp for use in the manufacturing

of a nonconsumable hemp product, or the manufacturing or sale of

nonconsumable hemp products as authorized by this chapter.

Sec. 123.004. SEVERABILITY. (a) A provision of this

chapter or its application to any person or circumstance is invalid

if the secretary of the United States Department of Agriculture

determines that the provision or application conflicts with 7

U.S.C. Chapter 38, Subchapter VII, and prevents the approval of the

state plan submitted under Chapter 121.

(b) The invalidity of a provision or application under

Subsection (a) does not affect the other provisions or applications

of this chapter that can be given effect without the invalid

provision or application, and to this end the provisions of this

chapter are declared to be severable.

SUBCHAPTER B. POWERS AND DUTIES

Sec. 123.051. DEPARTMENT RULES AND PROCEDURES. (a) The

department shall adopt rules and procedures necessary to implement,

administer, and enforce this chapter.

(b) Rules adopted under Subsection (a) must comply with:

(1) a state plan submitted to and approved by the

secretary of the United States Department of Agriculture under

Section 121.003; and

(2) 7 U.S.C. Chapter 38, Subchapter VII, and federal

regulations adopted under that subchapter.

Sec. 123.052. DESIGNATION OF CONSUMABLE HEMP PRODUCT. (a)

The executive commissioner of the Health and Human Services

Commission may designate a substance that contains hemp as a

consumable hemp product if the executive commissioner determines

that the substance qualifies as a consumable hemp product under

Section 443.001, Health and Safety Code.

(b) A designation or modification of a designation made by

the executive commissioner of the Health and Human Services

Commission under this section is final and binding.

(c) A consumable hemp product designated under this section

is governed under Chapter 443, Health and Safety Code.

(d) A designation under this section is not subject to

Chapter 2001, Government Code.

Sec. 123.053. INDUSTRIAL HEMP STANDARDS. (a) The

department shall adopt standards for the production of hemp for

industrial purposes.

(b) The department may work with an institution of higher

education or certified third party to adopt and administer

responsible hemp standards for the production and distribution of

hemp for industrial purposes, as well as the manufacturing of

nonconsumable hemp products.

SUBCHAPTER C. NONCONSUMABLE HEMP PRODUCT MANUFACTURER'S LICENSE

Sec. 123.101. LICENSE REQUIRED; LIMITATIONS. A person may

not process hemp for use in a nonconsumable hemp product or

manufacture a nonconsumable hemp product in this state unless the

person holds a license under this subchapter.

Sec. 123.102. LICENSE INELIGIBILITY. (a) An individual who

is or has been convicted of a felony relating to a controlled

substance under federal law or the law of any state may not, before

the 10th anniversary of the date of the conviction:

(1) hold a license under this subchapter; or

(2) be a governing person or owner of a business entity

that holds a license under this subchapter.

(b) A person licensed under Chapter 443, Health and Safety

Code, may not be issued or hold a license under this subchapter.

(c) An individual who is not a legal citizen of the United

States of America may not:

(1) hold a license under this subchapter; or

(2) be a governing person or owner of a business entity

that holds a license under this subchapter.

Sec. 123.103. APPLICATION; ISSUANCE. A person may apply

for a license by submitting an application in the manner prescribed

by the department. The application must be accompanied by:

(1) the physical address, including the county, of the

location where the applicant intends to process hemp for use in a

nonconsumable product or manufacture nonconsumable hemp products;

and

(2) any other information the department requires by

rule.

Sec. 123.104. TERM; RENEWAL. (a) A license is valid for

one year and may be renewed as provided by this section.

(b) The department shall renew a license if the license

holder:

(1) is eligible to hold the license; and

(2) does not owe any outstanding fee to the

department.

Sec. 123.105. REVOCATION. The department may suspend or

revoke a license if the license holder fails to comply with this

chapter or a department rule.

Sec. 123.106. FEES. The department by rule shall establish

a fee schedule for this chapter, including an application fee and an

annual renewal fee each in the amount not to exceed $10,000.

SUBCHAPTER D. TESTING OF NONCONSUMABLE HEMP PRODUCTS

Sec. 123.151. TESTING REQUIRED. (a) Before a

nonconsumable hemp product is sold in this state by a license

holder, one or more samples from a batch of the nonconsumable hemp

product must be tested by a laboratory located in the state that is:

(1) registered with the Federal Drug Enforcement

Agency; and

(2) accredited by an accreditation body in accordance

with International Organization for Standardization ISO/IEC 17025

or a comparable or successor standard.

(b) The department shall adopt rules that require a

laboratory to electronically report any test result conducted under

this section to the department.

(c) This section does not apply to a nonconsumable hemp

product containing only:

(1) the mature stalks of the plant Cannabis sativa L.;

or

(2) fiber produced from the mature stalks of the plant

Cannabis sativa L.

Sec. 123.152. PROVISIONS RELATED TO TESTING. Any method

for detecting tetrahydrocannabinols must consider the conversion

of tetrahydrocannabinolic acid into tetrahydrocannabinol.

SUBCHAPTER E. MANUFACTURE, TRANSPORTATION, AND SALE OF

NONCONSUMABLE HEMP PRODUCT

Sec. 123.201. TRANSPORTATION OF NONCONSUMABLE HEMP

PRODUCTS. A person may transport a nonconsumable hemp product

manufactured in compliance with this subchapter.

Sec. 123.202. INTERSTATE TRANSPORTATION OF PRODUCTS.

Nonconsumable hemp products may only be transported across state

lines in a manner that is consistent with state and federal law.

Sec. 123.203. RESTRICTIONS ON SALE. (a) A person may not

sell a nonconsumable hemp product if the product contains any

detectable tetrahydrocannabinols.

(b) All nonconsumable hemp products must be manufactured in

product batches to allow for accurate sampling, testing, packaging,

and labeling.

(c) A person may not manufacture, distribute, deliver, make

available for sale, purchase, possess, or use a nonconsumable hemp

product in this state that:

(1) contains harmful ingredients;

(2) can be used for smoking; or

(3) contains any detectable tetrahydrocannabinols.

Sec. 123.204. PACKAGING AND LABELING. Each nonconsumable

hemp product must be labeled with:

(1) a logo or insignia designed by the department

identifying the product as a nonconsumable hemp product; and

(2) the name and address of the license holder.

Sec. 123.205. SALE OF OUT-OF-STATE NONCONSUMABLE HEMP

PRODUCTS. A person may sell a nonconsumable hemp product

manufactured outside of this state if:

(1) the hemp in the nonconsumable hemp product was

cultivated or processed in compliance with a plan approved by the

United States Department of Agriculture under 7 U.S.C. Section

1639p or established under 7 U.S.C. Section 1639q;

(2) the nonconsumable hemp product was tested and the

result reported in accordance with the requirements of Section

123.151; and

(3) the sale does not violate federal law.

SECTION 26. The following provisions of the Agriculture

Code are repealed:

(1) Section 122.052(c);

(2) Section 122.053(e);

(3) Subchapter G, Chapter 122; and

(4) Sections 122.358(a) and (b).

SECTION 27. (a) Not later than December 1, 2025, the

Department of Agriculture shall develop and submit for approval a

state plan to the secretary of the United States Department of

Agriculture as required by Section 121.003, Agriculture Code, as

amended by this Act.

(b) If the state plan submitted under Subsection (a) of this

section is not approved, as soon as practicable, the Department of

Agriculture shall submit amended state plans as required by Section

121.003, Agriculture Code, as amended by this Act, until the plan is

approved by the secretary of the United States Department of

Agriculture.

(c) As soon as practicable after a state plan is approved

under Subsection (a) or (b) of this section, the Department of

Agriculture and the Department of State Health Services shall

implement the state plan.

SECTION 28. (a) As soon as practicable after the effective

date of this Act, the executive commissioner of the Health and Human

Services Commission shall adopt rules necessary to implement the

changes in law made by this Act.

(b) As soon as practicable after the effective date of this

Act, the commissioner of the Department of Agriculture shall adopt

rules necessary to implement the changes in law made by this Act.

SECTION 29. This Act takes effect September 1, 2025.