SB884.DOC

SECTION 1. The legislature finds that the department of agriculture hemp pilot program has been progressing and going through the rule making development stages. In order to prepare the hemp pilot program for implementation, a few amendments must be made to address the program's commencement.

The purpose of this Act is to clarify wording to ensure that the county real property program will treat the cultivation of industrial hemp as an agricultural product, use, and activity and not assess the planted area at full market and to create a special fund to allow for fees to be deposited into.

SECTION 2. Chapter 141, Hawaii Revised Statutes, is amended by adding to Part II a new section to be appropriately designated and to read as follows:

"§141- Industrial hemp special fund; established. (a) There is created in the state treasury a special fund to be designated as the industrial hemp special fund to be administered by the department of agriculture. Moneys deposited in this special fund shall be used to fulfill the purposes of this part and shall include:

(1) Any moneys appropriated by the legislature to the special fund;

(2) Any fees collected by the department of agriculture in relation to the industrial hemp pilot program;

(3) The interest or return on investments earned from moneys in the special fund.

(b) The department of agriculture may use the moneys in the special fund to carry out the purposes of this part, including hiring employees, specialists, and consultants necessary to complete projects related to the purposes of this chapter.

(c) Moneys deposited into or appropriated to the special fund shall remain available until they are obligated or until the special fund is terminated.

(d) If the special fund is terminated, all funds shall be transferred to the general fund; provided that all unexpended or unencumbered balances shall be disbursed in accordance with any requirements set by funding sources and for purposes consistent with this chapter."

SECTION 3. Section 141-33, Hawaii Revised Statutes, is amended to read as follows:

"§141-33 Licensing. (a) Each applicant for an industrial hemp license shall submit a signed, complete, accurate, and legible application form provided by the board between January 1 and April 1 of the year in which the applicant plans to grow industrial hemp, which shall include the following:

(1) The applicant's name, mailing address, and phone number in Hawaii and, if applicable, electronic mail address;

(2) If the applicant is an individual or partnership, the date of birth of the individual or partners;

(3) If the applicant is any business entity other than an individual, partnership, or institution of higher education, documentation that the entity is authorized to do business in Hawaii;

(4) The cultivated variety that will be sown;

(5) The source and amount of certified seed to be used;

(6) The number of acres to be cultivated for seed, viable grain, industrial products, or any combination thereof;

(7) The global positioning system coordinates in decimal degrees from the central most point of the growing area to be cultivated and a map showing the location of the growing area in terms of its address or legal description;

(8) A statement that the applicant is the owner of the growing area to be used for the cultivation or a statement, signed by the owner of the growing area, indicating that the owner has consented to that use;

(9) The address of the place in Hawaii where the applicant will keep the records, books, electronic data, or other documents that are required by the part;

(10) The name and address of each place where the industrial hemp is to be stored, sold, or provided, indicating for each place the form of the industrial hemp; and

(11) The applicant's acknowledgment and agreement to the following terms and conditions:

(A) Any information obtained by the board may be publicly disclosed and provided to law enforcement agencies without further notice to the applicant or licensee;

(B) The applicant agrees to allow any inspection and sampling that the board deems necessary;

(D) The applicant agrees to submit all required reports by the applicable due dates specified by the board; and

(E) The applicant and any partner, directors, or members have not been convicted of any felony related to the possession, production, sale, or distribution of a controlled substance in any form in this or any other country.

(b) An application may be received beginning on January 1 of each year and shall be signed by the applicant or, in the case of a business entity, one of its officers, directors, or partners, as the case may be, and indicate that all information and documents submitted in the support of the application are correct and complete to the best of the applicant's knowledge.

(d) In addition to the application form, each applicant for a license shall submit a fee set by the chairperson. If the fee does not accompany the application, the application for a license will be deemed incomplete.

(e) The annual license fee for production of industrial hemp shall be $250 plus $2 per acre. Moneys collected from license fees shall be used to cover the costs of implementing, administering, and enforcing this part.

(f) All licenses shall be valid for two years from the date of issuance, after which the licensee shall renew the license and pay the renewal fee, to be established by rules of the board.

(g) Any licensee who wished to alter the growing areas on which the licensee will conduct industrial hemp cultivation shall, before altering the area, submit to the board an updated address, global positioning system location, and map specifying the proposed alteration. If the chairperson receives and approves the updated information, the chairperson shall notify the licensee in writing that the licensee may cultivate industrial hemp on the altered land area.

(h) A license that wishes to change the seed cultivar grown shall submit to the chairperson the name of the new, approved seed cultivar to be grown. If the chairperson receives and approves the change to the seed cultivar, the chairperson shall notify the licensee that the licensee may cultivate the new, approved seed cultivar.

(i) If the chairperson determines that the requirements for a license pursuant to this part are satisfied, the chairperson shall issue a license to the applicant.

(j) Industrial hemp cultivated in accordance with the Hawaii industrial hemp pilot program shall qualify as an agricultural product, use, and activity by each relevant county for the effective period of the license.

(k) Any agricultural land used for cultivation of industrial hemp in accordance with the Hawaii industrial hemp pilot program shall qualify for the minimum dedication period and the agricultural land shall be assessed at the lowest percentage of fair market value or other calculation provided for by ordinance for the effective period of the license.

(l) The cultivation of industrial hemp shall be limited to licensed owners, lessees, or occupiers of lands situated within the state agricultural land district."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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BY REQUEST

THE SENATE	S.B. NO.	884
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII