SB2791

SECTION 1. The legislature finds it necessary that a task force be established to identify development strategies and actions that will best support Hawaii's emergent hemp industry. This task force will assist the agricultural sector by providing data to the State to increase revenue streams; further diversify the State's agricultural portfolio; and allow the identification of key sectors for regulated growth. This task force will provide for the sharing and exchanging of pertinent information amongst principal industry and government actors, which will aim to optimize hemp policy and programming to support Hawaii agriculture, hemp consumers, and the public generally. This task force shall include hemp industry stakeholders and representatives from the department of agriculture and department of health.

The legislature also finds that, although hemp is a high-value crop that has the potential to bring significant and diverse revenues to Hawaii, the industry has been significantly stymied in Hawaii due to several factors, including limitations to Hawaii farmer's access to markets and overregulation of farming, production, and processing, which has often driven Hawaii hemp farmers out of business, made farmers non-competitive, and has also created challenges for hemp building and housing and biofuel projects. Moreover, Hawaii is the only state in the union where hemp production and farming is heavily regulated at both the state and federal levels.

The legislature further finds that the department of agriculture and department of health have worked to be responsive to changing federal and state hemp regulations and that a forum that provides an opportunity for regular interface with a cross-section of the Hawaii hemp industry and experts can help identify data that will make department of agriculture and department of health administrative rule implementation easier, potentially saving agency time and resources.

Accordingly, the purpose of this Act is to require the department of agriculture and department of health to jointly convene a Hawaii hemp task force to inform public policy and identify methods and actions to best support agriculture and build a hemp industry to support rural economic development in the State.

SECTION 2. Section 141-42, Hawaii Revised Statutes, is amended to read as follows:

"§141-42 Commercial hemp production. (a) It shall be legal for an individual or entity to produce hemp, as defined in title 7 United States Code section 1639o, if that individual or entity has a license to produce hemp, issued by the Secretary of the United States Department of Agriculture pursuant to title 7 United States Code section 1639q; provided that:

(1) Hemp shall not be grown within three hundred feet of pre-existing real property comprising a playground, childcare facility, or school; provided that this restriction shall not apply to an individual or entity licensed to grow hemp in those areas under the state industrial hemp pilot program before August 27, 2020;

(2) Hemp shall not be grown within one hundred feet of any pre-existing house, dwelling unit, residential apartment, or other residential structure that is not owned or controlled by the license holder; provided that this restriction shall not apply to an individual or entity licensed to grow hemp in those areas under the state industrial hemp pilot program before August 27, 2020; and

(3) Hemp shall not be grown in any house, dwelling unit, residential apartment, or other residential structure, unless that structure is part of a United States Department of Agriculture area.

(b) An individual or entity licensed to produce hemp pursuant to subsection (a) may transport hemp within the State to a facility authorized by law to process hemp or to another licensed producer's grow area; provided that the transportation has been reported to the department of agriculture. The department of agriculture may require movement reports that include copies of the United States Department of Agriculture test results for the hemp to be transported and may deny authorization if the hemp is found to not comply with any law or regulation.

(c) Any individual or entity who grows hemp without a United States Department of Agriculture license shall be fined not more than $10,000 for each separate offense. Any notice of violation of this section may be accompanied by a cease and desist order, the violation of which constitutes a further violation of this section. Any action taken to collect the penalty provided for in this subsection shall be considered a civil action.

(d) For any judicial proceeding to recover an administrative penalty imposed by order or to enforce a cease and desist order against an unlicensed hemp producer, the department may petition any court of appropriate jurisdiction and need only show that:

(1) Notice was given;

(2) A hearing was held or the time granted for requesting a hearing has expired without such a request;

(3) The administrative penalty was imposed on the individual or entity producing hemp; and

(4) The penalty remains unpaid or the individual or entity continues to produce hemp.

(e) An individual or entity licensed by the United States Department of Agriculture to produce hemp in Hawaii may sell hemp biomass.

(f) In addition to all other labeling requirements, the identity statement used for labeling or advertising hemp products shall identify the percentage of Hawaii-grown hemp in hemp products; provided that any hemp product containing hemp not grown or processed in Hawaii shall identify the origin and percentage of the hemp from outside Hawaii in the hemp product; provided further that if the hemp product contains hemp from multiple origins, the hemp product shall identify the percentage of hemp origin as "United States" or "Foreign" if the hemp product includes hemp from a source outside of the United States.

(g) A hemp producer licensed by the United States Department of Agriculture to grow hemp shall follow all inspection and sampling rules and protocols established by the United States Department of Agriculture. The State shall not require other inspections or sampling. The State shall not issue notices of violations or impose penalties upon any hemp producer licensed by the United States Department of Agriculture; provided that the licensee complies with all of the requirements imposed by the United States Department of Agriculture. The State shall impose no penalty with respect to the production of hemp, except penalties for growing hemp without a license issued by the United States Department of Agriculture.

(h) A Hawaii hemp task force shall be jointly convened by the department of agriculture and the department of health to gather data and information to understand industry needs and inform strategies and actions that support agriculture and a robust hemp industry in the State. The task force:

(1) Shall include hemp producers from each island proportionate to the total number of United States Department of Agriculture hemp licenses in the State and a representative from each of the fuel, building, general fiber, cannabinoid, and grain food sectors;

(2) May ask for data and information from additional sources, including but not limited to hemp economists, regulators in other states, retailers, farmers, and hemp industry groups outside of the State;

(3) Shall jointly develop an outline of farmer and industry needs and the strategies and actions that can help inform public policy concerning the development of a hemp industry in the State that also supports rural agricultural development in the State;

(4) Shall work to ameliorate inconsistencies in the Hawaii Revised Statutes that impede economic growth in the emerging sector of commercial hemp production;

(5) Shall identify legal and feasible pathways for start-up hemp farming and processing;

(6) Shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2025; and

(7) Shall cease to exist on July 1, 2025.

The initial meeting of the task force shall occur no later than sixty days after the effective date of Act , Regular Session 2024, during which the members shall elect a chairperson and any other necessary officers from among its appointed members. The task force shall be exempt from chapter 92.

Members of the task force shall receive no compensation for their duties and shall not be subject to section 84-17 solely based on their participation on the task force.

[~~(h)~~] (i) As used in this section, "hemp biomass" means the stalks of hemp plants.

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval, and shall be repealed on July 1, 2025.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2791
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII