TITLE 4. AGRICULTURE

PART 1. TEXAS DEPARTMENT OF AGRICULTURE

CHAPTER 24. HEMP PROGRAM

The Texas Department of Agriculture (TDA or the Department) proposes new Title 4, Part 1, Chapter 24, Hemp Program, Subchapter A, General Provisions, §§24.1 - 24.4, relating to General Provisions; Subchapter B, Fees, §§24.5 - 24.7; Subchapter C, Licensing, §§24.8 - 24.19; Subchapter D, Inspections, Sampling and Collection, §§24.20 - 24.23; Subchapter E, Testing, §§24.24 - 24.29; Subchapter F, Disposal, §24.30 and §24.31; Subchapter G, Enforcement, §§24.32 - 24.38; Subchapter H, Transportation, §§24.39 - 24.43; Subchapter I, Hemp Seed, §§24.44 - 24.48; and Subchapter J, Agricultural or Academic Hemp Related Research, §24.49 and §24.50. The proposed new rules are for TDA's administration of hemp production to comply with the Agricultural Improvement Act of 2018 (2018 Farm Bill) enacted by the 115th United States Congress, and House Bill 1325 (HB 1325) enacted by the 86th Texas Legislature. The proposed rules will regulate and license the growth and distribution of hemp and nonconsumable hemp products in Texas.

Phillip Wright, Administrator for Agriculture and Consumer Protection, Texas Department of Agriculture, has determined that there will be significant fiscal impact to state government as a result of implementing the proposed rules. The program and all associated direct and indirect costs will be absorbed by TDA during the first year at a minimum. TDA does not expect any cost to local governments at this time. As hemp production has not been legal in Texas, TDA lacks sufficient information to estimate revenues or engage in cost recovery calculations for this program at this time. However, TDA anticipates that it will be able to recover the costs of the program based on the number of licenses issued and sampling conducted. As a reference, Kentucky Department of Agriculture issued 1030 applications and 1000 permits, and the Tennessee Department of Agriculture received 2600 applications for the 2019 growing season under their Hemp Research Pilot Programs, which limited hemp production to research purposes only, in accordance with the Agriculture Act of 2014. Since the proposed rules allow for hemp production outside and beyond research purposes, in accordance with the 2018 Farm Bill and HB 1325, TDA anticipates a higher number of applications received and permits issued for Texas' 2020 growing season compared to Kentucky's and Tennessee's 2019 growing season.

Mr. Wright has also determined that for each year of the first five years the proposed rules are in effect, the anticipated public benefit as a result of administering the proposed rules will be to provide Texas farmers with new agricultural opportunities to produce and handle hemp. As with many state regulations, affected producers and industry will absorb costs associated with the compliance of these rules. However, TDA lacks sufficient data to quantify the effect on small and micro-businesses at this time. The cost of compliance with the rules related to hemp production will depend on various factors, including the size of the operation. TDA does not anticipate that there will be an adverse fiscal impact on rural communities related to the implementation of this proposal. Any potential increases in the cost of doing business will be offset by the increased marketing and sales opportunities for Texas producers.

Mr. Wright has also provided the following information related to the government growth impact statement, as required pursuant to Texas Government Code, §2001.0221. As a result of implementing the proposal, for the first five years the proposed rules are in effect:

(1) the TDA Hemp Program will be created;

(2) an additional 7.1 full time employee positions may be created over the course of 5 years, and no existing Department staff positions will be eliminated; and

(3) there may be an increase in future legislative appropriations to the Department of at least $3,127,336 to cover costs to include the creation of new employee positions, and the regulation and administration of the hemp program, over the course of 5 years.

Additionally, Mr. Wright has determined that for the first five years the proposed rules are in effect:

(1) there will be an increase in fees paid to the Department, as this program is entirely new and TDA is required to assess license and/or inspection fees in order to implement or finance this program;

(2) new regulations will be created by the proposal;

(3) the number of individuals subject to the proposal will increase, as this is a new program; and

(4) the proposal will positively affect the Texas economy by allowing producers to grow hemp in the State.

The Texas Department of Agriculture invites comments on the proposed new rules from any member of the public. Comments may be submitted to Philip Wright, Administrator for Agriculture and Consumer Protection, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711, or by email to RuleComments@TexasAgriculture.gov. Comments must be received by TDA no later than Monday, Febuary 10, 2020.

SUBCHAPTER A. GENERAL PROVISIONS

4 TAC §§24.1 - 24.4

New Title 4, Part 1, Chapter 24, Hemp Program, Subchapters A through J, is proposed in compliance with the 2018 Farm Bill and HB 1325, which authorize the Department to establish rules concerning the production of hemp in the State of Texas.

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designate the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.1.Definitions.

Words used in this chapter in the singular form shall be deemed to impart the plural, and vice versa, as the case may demand. For the purposes of provisions and regulations of this chapter, unless the context otherwise requires, the following terms shall mean:

(1) "Act" means Texas House Bill 1325, relating to the production and regulation of hemp in Texas, as codified in Chapters 121 and 122 of the Code.

(2) "Acceptable hemp THC level" means a delta-9 tetrahydrocannabinol content concentration level on a dry weight basis, that, when reported with the laboratory's measurement of uncertainty, produces a distribution or range that includes a result of 0.3% or less. For example, if the reported delta-9 tetrahydrocannabinol content concentration level on a dry weight basis is 0.35% and the measurement of uncertainty is +/- 0.06%, the measured delta-9 tetrahydrocannabinol content concentration level on a dry weight basis for this sample ranges from 0.29% to 0.41%. Because 0.3% is within the distribution or range, the sample is within the acceptable hemp THC level for the purpose of plan compliance. This definition of "acceptable hemp THC level" affects neither the statutory definition of hemp, in 7 U.S.C. §1639o(1) and Texas Agriculture Code §121.001, nor the definition of "marihuana," in 21 U.S.C. §802(16) and in Texas Health and Safety Code §481.002(26).

(3) "Administrative action" includes a denial, revocation or suspension of a license, or an assessed penalty.

(4) "Applicant" means a person, or a person who is authorized to sign for a business entity, who submits an application to participate in the Department's hemp program.

(5) "Cannabis" means a genus of flowering plants in the family Cannabaceae of which Cannabis sativa is a species, and Cannabis indica and Cannabis ruderalis are subspecies thereof. Cannabis refers to any form of the plant in which the delta-9 tetrahydrocannabinol concentration on a dry weight basis has not yet been determined.

(6) "Certified or Approved hemp seed" means seed that meets the legal standards for seed quality and labeling required by Texas and federal law, the legal standards of the jurisdictions from where the seed is originally sold and produced, and the additional hemp seed quality and labeling requirements required by the Department.

(7) "Commissioner" means the Commissioner of the Texas Department of Agriculture.

(8) "Contiguous" means all of the lots in or on a location owned or controlled by one owner or tenant, or the same owner and tenant, and no lot is separated from the other lots on the location by different ownership or control, or a public right of way, a navigable waterway, or an area greater than sixty feet.

(9) "Controlled Substance" is defined in Tex. Health & Safety Code §481.002(5). The term does not include hemp, as defined by Tex. Agric. Code §121.001, or the tetrahydrocannabinols in hemp.

(10) "Conviction" means any plea of guilty or nolo contendere, or any finding of guilt, except when the finding of guilt is subsequently overturned on appeal, pardoned, or expunged. For purposes of this chapter, a conviction is expunged when the conviction is removed from the individual's criminal history record and there are no legal disabilities or restrictions associated with the expunged conviction, other than the fact that the conviction may be used for sentencing purposes for subsequent convictions. In addition, where an individual is allowed to withdraw an original plea of guilty or nolo contendere and enter a plea of not guilty and the case is subsequently dismissed, the individual is no longer considered to have a conviction for purposes of this chapter.

(11) "Corrective action plan" means a plan established by the Department for a licensed hemp producer to correct a negligent violation or non-compliance with the hemp program, this chapter, or other state or federal statute.

(12) "Criminal History Report" means the results of a criminal background investigation conducted by the Department.

(13) "Culpable mental state greater than negligence" means to act intentionally, knowingly, willfully, or recklessly.

(14) "Cultivate" as defined by Tex. Agric. Code §122.001(1) means to plant, irrigate, cultivate or harvest a hemp plant.

(15) "Days" means business days unless otherwise specified.

(16) "Decarboxylation" means the removal or elimination of carboxyl group from a molecule or organic compound.

(17) "Decarboxylated" means the completion of the chemical reaction that converts THC-acid into delta-9-THC, the intoxicating component of cannabis. The decarboxylated value is also calculated using a conversion formula that sums delta-9-THC and eighty-seven and seven tenths (87.7) percent of THC-acid.

(18) "Delta-9 tetrahydrocannabinol or THC or Delta-9-THC" means the primary psychoactive component of cannabis. For the purposes of this chapter, the terms delta-9-THC and THC are interchangeable.

(19) "Department or TDA" means the Texas Department of Agriculture.

(20) "Drug Enforcement Administration or DEA" means the United States Drug Enforcement Administration.

(21) "DPS" means the Texas Department of Public Safety.

(22) "Dry weight basis" means the ratio of the amount of moisture in a sample to the amount of dry solid in a sample. Dry weight is a basis for expressing the percentage of a chemical in a substance after removing the moisture from the substance. The percentage of THC on a dry weight basis means the percentage of THC, by weight, in a cannabis item (plant, extract, or other derivative), after excluding moisture from the item.

(23) "Entity" means a corporation, general partnership, joint stock company, association, limited partnership, limited liability partnership, limited liability company, series limited liability company, irrevocable trust, estate, charitable organization, or other similar organization, including any such organization participating in hemp production as a partner in a general partnership, a participant in a joint venture, or a participant in a similar organization. The term entity includes a domestic or foreign entity defined in Texas Business Organizations Code §1.002 that will be, or proposes to be, in hemp production within the State of Texas.

(24) "Facility" means a location with a legal description and is within the legal control of a person or entity. A facility may consist of multiple fields, greenhouses, storage, and/or lots.

(25) "Farm Service Agency or FSA" means an agency of the United States Department of Agriculture.

(26) "Field" means an outdoor area of land consisting of one or more lots on which the producer will produce or store hemp.

(27) "Final test" means the last Department-authorized laboratory test conducted from a final sample collected.

(28) "Final sample" means the last Department-authorized sample collected from a lot.

(29) "Gas chromatography or GC" means a type of chromatography in analytical chemistry used to separate, identify, and quantify each component in a mixture. GC relies on heat for separating and analyzing compounds that can be vaporized without decomposition.

(30) "Geospatial location" means a location designated through a global system of navigational satellites used to determine the precise ground position of a place or object. This includes GPS coordinates.

(31) "Greenhouse" means any indoor structure consisting of one or more lots on which the producer will produce or store hemp.

(32) "Governing person" has the meaning assigned by Tex. Bus. Orgs. Code §1.002.

(33) "GPS" means Global Positioning System.

(34) "Handle" as defined by Tex. Agric. Code §122.001(3) means to possess or store a hemp plant on premises owned, operated, or controlled by a license holder for any period of time, or in a vehicle for any period of time other than during the actual transport of the plant from a premises owned, operated or controlled by a license holder to a premises owned, operated or controlled by another license holder, or a person licensed under Tex. Health & Safety Code, Chapter 443. "Handle" also means to harvest or store hemp plants or hemp plant parts prior to the delivery of such plants or plant parts for further processing. "Handle" also includes the disposal of cannabis plants that are not hemp for purposes of chemical analysis and disposal of such plants.

(35) "Harvest" means to cut, gather, take, or remove all or part of the cannabis plants growing in a lot or lots, for the purpose of disposal, cloning, distribution, processing, storage, sale, or any other use. "Harvest" does not include transplants from one lot to another lot if both lots are within the same license holder's control, and the plants are transplanted according to the hemp program rules and procedures.

(36) "Hemp" or "industrial hemp" as defined Tex. Agric. Code §121.001 means the plant species Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

(37) "Hemp research license" means a license issued to an institution of higher education to produce or handle hemp for research purposes.

(38) "High-performance liquid chromatography or HPLC" means a type of chromatography technique in analytical chemistry used to separate, identify, and quantify each component in a mixture. HPLC relies on pumps to pass a pressurized liquid solvent containing the sample mixture through a column filled with a solid adsorbent material to separate and analyze compounds.

(39) "Information sharing system" means the database which allows the Department to share Texas hemp program information with federal and state agencies.

(40) "Institution of higher education" has the meaning assigned by Texas Education Code §61.003.

(41) "Key participants" means a sole proprietor, a partner in a general partnership, a general partner in a limited partnership, or a person with executive managerial control in an entity. A person with executive managerial control includes persons such as a trustee, independent or dependent executor or administrator of an estate, chief executive officer, managing member, manager, president, vice president, general partner, chief operating officer and chief financial officer, or their equivalents. This definition does not include non-executive employees such as farm, field, or shift managers that do not make financial planning decisions and that do not vote or exercise control of an entity.

(42) "Law enforcement agency" means any federal or Texas law enforcement agency.

(43) "License" as defined by Tex. Agric. Code §122.001(6) means a hemp producer or handler license issued by the Department.

(44) "License holder" as defined by Tex. Agric. Code §122.001(7) means an individual or business entity holding a license.

(45) "License holder who transplants" means a license holder who cultivates cannabis plants for the purpose of transplanting all living parts of those same cannabis plants according to Department rules and procedures.

(46) "Lot" means a contiguous area in a facility, field, greenhouse, or indoor growing structure containing the same variety or strain of cannabis throughout the area.

(47) "Marijuana or marihuana" means all parts of the plant Cannabis sativa L., whether growing or not, the seeds thereof, the resin extracted from any part of such plant, and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. The term "marihuana" does not include hemp and does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination. "Marihuana" means all cannabis that tests as having a concentration level of THC on a dry weight basis of higher than 0.3 percent.

(48) "Measurement of Uncertainty (MU)" means the parameter, associated with the result of a measurement, that characterizes the dispersion of the values that could reasonably be attributed to the particular quantity subject to measurement.

(49) "Negligence" means failure to exercise the level of care that a reasonably prudent person would exercise in complying with the regulations set forth under this chapter.

(50) "Nonconsumable hemp product" as defined by Tex. Agric. Code §122.001(8) means a product that contains hemp, other than a consumable hemp product as defined by Tex. Health & Safety Code §443.001. The term includes cloth, cordage, fiber, fuel, paint, paper, particleboard, construction materials, and plastics derived from hemp.

(51) "Permit or lot permit" means a document issued by the Department authorizing a license holder to produce or handle a hemp crop within a lot.

(52) "Person" means an individual or entity, unless otherwise indicated.

(53) "Phytocannabinoid" means the Cannabinoid chemical compounds found in the cannabis plant, two of which are Delta-9 tetrahydrocannabinol (delta-9 THC) and cannabidiol (CBD).

(54) "Postdecarboxylation" means a value determined after the process of decarboxylation that determines the total potential delta-9 tetrahydrocannabinol content derived from the sum of the THC and THC-A content and reported on a dry weight basis. The postdecarboxylation value of THC can be calculated by using a chromatograph technique using heat, and gas chromatography, through which THC-A is converted from its acid form to its neutral form, THC. Thus, this test calculates the total potential THC in a given sample. The postdecarboxylation value of THC can also be calculated by using a high-performance liquid chromatograph technique, which keeps the THC-A intact, and requires a conversion calculation of that THC-A to calculate total potential THC in a given sample. See the definition for decarboxylation.

(55) "Processing" means converting an agricultural commodity into a marketable form.

(56) "Produce" means to cultivate hemp plants in Texas.

(57) "Producer" means a person who produces hemp. A producer also means a person who stores the hemp plants they produced within Department-registered locations.

(58) "Program or hemp program" means the process created by the state of Texas and federal statutes and regulations to facilitate the regulation and cultivation of hemp as a crop.

(59) "Reverse distributor" means a person who is registered with the DEA in accordance with 21 C.F.R. §1317.15 to dispose of marijuana.

(60) "Sample" means a composite, representative portion from one variety of hemp plants in a hemp lot, collected prior to harvest in accordance with Department guidelines and procedures.

(61) "Sample collection date" means the date a hemp sample is collected by the Department or an authorized entity. To determine the sample collection date, the Department may take into consideration events of force majeure or unusual circumstances, including situations beyond a reasonable person's control.

(62) "Sampler" means a person or entity authorized by the Department to conduct the sampling and collection of hemp plants.

(63) "Seed source" means the origin of the seed or propagules as determined by the Department.

(64) "Signing authority" means an individual of a sole proprietorship, or an officer or agent of an entity with written authorization to commit the entity to a binding agreement or verify the contents of a governmental document.

(65) "Specimen" means a cutting taken from a hemp plant.

(66) "Storage" means any structure or container, whether temporary or permanent in nature, in which the producer or handler will store hemp. "Storage" does not include containers used to deliver samples.

(67) "The Code" means the Texas Agriculture Code.

(68) "Transplant" means to move a fully germinated seedling, mature plant, cutting, or clone from one lot and to replant it in another permanent lot under the control of the same license holder, for later harvest by the same license holder. "Transplant" also means a plant, cutting, or clone that has been moved from its initial lot of germination or cultivation for the purpose being transplanted.

(69) "Transport manifest" includes a shipping certificate, cargo manifest or transport document developed by the Department or a U.S authority, authorizing transport of a hemp product within the State of Texas, any other state, the United States of America, or its territories.

(70) "TPIA" means the Texas Public Information Act, Texas Government Code, Chapter 52.

(71) "Unique ID" means the unique identifier established by the Department's hemp program.

(72) "USDA" means the United States Department of Agriculture.

(73) "U.S. authority" means the United States of America, USDA or a sub-agency thereof, a state, a US territory, or an Indian Nation, or federal, state or local law enforcement agency.

§24.2.Information Submitted to the United States Secretary of Agriculture.

(a) Not more than thirty (30) days after receiving and compiling the following information, the Department shall provide to the United States Secretary of Agriculture, or the Secretary's designee, the following information related to Department-licensed producers, in accordance with the Department's Information Gathering and Sharing Procedure:

(1) Full name of individual or entity, residential or principal business address, telephone number, email address, name and title of each key participant of the entity, and employer identification number, if applicable;

(2) Street address, and to the extent practicable, geospatial location for each production location where hemp will be produced in Texas;

(3) Acreage dedicated to the production of hemp, or greenhouse or indoor square footage dedicated to the production of hemp;

(4) The total acreage of hemp planted, or square footage for greenhouses, harvested and if applicable, disposed; and

(5) The status and license number of the license holder.

(b) The Department shall provide real-time updates to USDA for all information that it reports to USDA under this rule, 7 C.F.R. §990.3, or 7 C.F.R.§990.70.

§24.3.Record Retention.

The Department shall collect and retain, for a period of at least three (3) calendar years information for every license holder, and location where the Department has approved hemp to be produced, handled, or sampled and collected.

§24.4.Information Submitted to the Department Subject to Open Records Act.

(a) Except as established in subsection (b) of this section, information and documents generated or obtained by the Department in connection with the program shall be subject to disclosure pursuant to the TPIA.

(b) With the exception of information that must or may be reported or provided to USDA, the DEA, DPS, or local law enforcement, the Department shall withhold all personally identifiable information from disclosure as required or permitted by the TPIA, including physical address, mailing address, driver's license numbers, background checks, geospatial location, telephone, and email addresses.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201904998

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER B. FEES

4 TAC §§24.5 - 24.7

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designate the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.5.Schedule of Licensing and Registration Fees.

(a) The initial application fee shall be at least $100 for each license application.

(b) The renewal fee shall be at least $100 for each annual license renewal application.

(c) The participation fee shall be at least $100. A participation fee shall be assessed for the following, at a minimum for:

(1) each facility;

(2) each lot; and

(3) a processor registration.

(d) The facility modification fee shall be at least $500 for each modified facility.

§24.6.Schedule of Sampling, Collection, and Testing Fees.

(a) The laboratory registration fee shall be in an amount established by the Department.

(b) The fee for sampling and collection conducted by the Department shall be $300.

(c) The license holder shall be responsible for all fees payable to a licensed sampler contracted with the Department to conduct sampling and collection under the Department's hemp program.

(d) The license holder shall be responsible for all fees related to the actual shipment or transport of a hemp sample to the laboratory.

(e) The license holder shall be responsible for all testing fees payable to the laboratory.

§24.7.Other Fees.

(a) The fee for each Department-issued transport manifest shall be in an amount established by the Department.

(b) The fee for the organic certification of hemp shall be in an amount established by the Department.

(c) The fee to participate in an optional marketing program shall be in an amount established by the Department.

(d) The fee for certification of seed or plants shall be in an amount established by the Department.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201904999

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER C. LICENSING

4 TAC §§24.8 - 24.19

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designate the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.8.License Application.

(a) Any person who wishes to produce, handle, or sample and collect hemp at any location in the State of Texas shall submit to the Department annually a completed license application in a form prescribed by the Department.

(b) A person who does not hold a valid license from the Department shall not produce, handle, or sample and collect hemp within the State of Texas.

(c) An applicant shall pay the required annual fee for each application, renewal or modification of a license.

(d) A license shall not be issued unless:

(1) the application is submitted online to the Department;

(2) the application is complete and accurate;

(3) the applicant has completed a Department mandatory orientation course;

(4) the applicant for a sampler license has completed an additional Department sampling and collection training course;

(5) the applicant has paid all required fees, in the amounts established by the Department or statute;

(6) the applicant's criminal history confirms that all key participants covered by the license have not been convicted of a felony, under state or federal law, relating to a controlled substance within the past ten (10) years, unless the person was lawfully growing hemp under the 2014 Farm Bill before December 20, 2018, and whose conviction also occurred before December 20, 2018;

(7) the application contains no false statements or misrepresentations and the applicant has not previously submitted an application with any false statements or misrepresentations; and

(8) the applicant's hemp license has not been terminated or suspended.

(e) Each applicant shall provide the following information for each license application:

(1) full name, Texas address, telephone number, and email address;

(2) if the applicant is submitting an application on behalf of an entity, the full name of the entity, the principal Texas business location address, the full names, titles, addresses, and emails of key participants, the full name, title, and email of the applicant who will have signing authority, and the Texas taxpayer ID number;

(3) for a producer or handler license;

(A) street address and geospatial location including GPS for each facility where hemp will be cultivated or stored; and

(B) proof of ownership or control over the location where hemp will be cultivated or stored.

(4) for a sampler license, proof of a contract with the Department to conduct sampling and collection under the Department's hemp program; and

(5) all other information required by the Department.

(f) Licenses will not be automatically renewed, and must be renewed annually prior to license expiration. Renewal applications are subject to the same terms, information collection requirements, and approval criteria as required for initial applications.

(g) A license holder must submit a license modification if there is any change to the information submitted in the application including, but not limited to, sale of a business, a change in or new location of the facility for the production, handling, or storage of hemp in Texas, or a change in the key participants.

(h) The Department shall notify each applicant by letter or email of the denial or approval of the person's application.

§24.9.Ineligibility for a License.

(a) A person under the age of eighteen (18) years of age at the time the application is submitted to the Department is ineligible for a license.

(b) A person who has had a hemp license revoked by the Department, USDA, another state, Indian nation, or U.S. territory is ineligible to apply for participation in the Department hemp program for a period of five (5) years from the date of revocation. Upon application following the five-year exclusionary period, the Department may deny an application for any lawful reason, including previous conduct that occurred while licensed by the Department, USDA, another state, Indian nation, or U.S. territory.

(c) A person 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, hold a license or be a governing person of a business entity that holds a license unless the person was lawfully growing hemp under the 2014 Farm Bill before December 20, 2018, and whose conviction also occurred before December 20, 2018.

(d) A person who falsifies any information contained in a license application to the Department, or has previously submitted an application to the Department, USDA, another state, Indian nation, or U.S. territory with any materially false statements or misrepresentations is ineligible for a license.

(e) A person is ineligible for a sampler license unless they have a valid contract with the Department to conduct sampling and collection under the Department's hemp program. A sampler license is invalid upon the termination or expiration of a contract with the Department to conduct sampling and collection under the Department's hemp program.

§24.10.Criteria for Evaluation of License Application.

(a) The applicant shall submit a complete application with all required components and attachments.

(b) The applicant's history with other TDA programs, if any, shall demonstrate a willingness to comply with the Department's rules and instructions from Department staff.

(c) The applicant shall be in good standing with TDA.

(d) The applicant must not have a criminal conviction described in this subchapter.

§24.11.Criminal Background Check.

(a) Each applicant, including each key participant of an entity, shall undergo and pay for an annual criminal background check.

(b) Each license holder must undergo and pay for an additional criminal background check if it changes or adds, prior to the anniversary date of its license, a key participant not previously identified on an application or renewal application.

(c) Each license holder or applicant is required to pay, as a condition to initial or continued licensure under the program, all required criminal background check fees assessed by the Department.

§24.12.Administrative Appeal from Denial of License Application.

(a) A license applicant may appeal the denial of a license application.

(b) If the Department sustains an applicant's appeal of a licensing denial, the applicant will be issued a license.

(c) If the Department denies an appeal, the applicant's license application will be denied. The applicant may request a formal adjudicatory proceeding within 30 days in writing to review the decision. Such proceeding shall be conducted pursuant to Chapter 12 of the Code.

§24.13.Terms and Conditions for License Holders.

(a) As an initial and continuing condition of licensure under the Department's hemp program, a license holder consents to entry on and inspection of all locations identified in an initial or renewal application, and all land and premises where hemp or other cannabis plants or materials are located. Such consent includes representatives of the Department or U.S. authority, who may enter such location(s), land, and premise(s) with or without cause, and with or without advance notice.

(b) As an initial and continuing condition of licensure under the Department's hemp program, a license holder has a legal duty and obligation to destroy, at the license holder's expense, in accordance with DEA reverse distributor regulations found at 21 C.F.R. §1317.15, and without compensation from the State of Texas, USDA or the federal government, any:

(1) material found in excess of an acceptable hemp THC level;

(2) plants located in an area that is not licensed by the Department; and

(3) plants not accounted for in required reporting to the Department;

(c) A license holder shall not sell, assign, loan, transfer, pledge or otherwise dispose of, alienate or encumber a license. A license is not transferrable upon the death of a license holder, except upon the death of a license holder the independent or dependent executor of the deceased license holder may contract with another license holder to cultivate, harvest, handle, test, and convey the hemp crop existing at the time of the license holder's death.

(d) A license holder shall not produce or handle hemp in any location other than the location listed in an initial or renewal application or facility addition or modification request.

(e) A license holder, other than a Hemp Research License Holder, shall not interplant hemp with any other crop without express written permission from the Department.

(f) A license holder shall comply with restrictions established by the Department limiting the movement of hemp plants and plant parts.

(g) A license holder shall ensure that at any time hemp is in transit, whether in intrastate or interstate commerce, a Department issued transport manifest shall be available for inspection upon the request of a representative of the Department, or U.S. authority.

(h) Upon request from a representative of the Department, or U.S. authority, a license holder shall immediately produce a copy of his or her license for inspection.

(i) A license holder shall notify the Department of any interaction with any U.S. authority, within twenty-four (24) hours following such interaction, by telephone call to the Department and follow-up in writing to the Department within three (3) calendar days of the occurrence.

(j) A license holder shall notify the Department of any theft of cannabis materials, whether growing or not.

(k) A license holder shall report to the USDA, Agricultural Marketing Service (AMS), or Farm Service Agency (FSA), consistent with USDA requirements:

(1) their license or authorization number, street address, and facility and lot geospatial location, including all transplantation areas, where hemp is and will be produced;

(2) the acreage dedicated to the production of hemp, or greenhouse indoor square footage dedicated to the production of hemp, and the total acreage or square footage of hemp planted, harvested and if applicable, disposed; and

(3) any change in the facility or lot geospatial location or amount of acreage dedicated to the production of hemp, and any change in the facility or lot geospatial location or amount of greenhouse indoor square footage dedicated to the production of hemp, including the total acreage or square footage of hemp planted, harvested and if applicable, disposed due to said changes.

(l) Failure to comply with this chapter, or any procedure or process established by the Department related to the cultivation, handling, sampling and collection, processing, testing, storage or transport of hemp, or any request by the Department related to the cultivation, handling, sampling and collection, processing, testing, storage or transport of hemp, shall constitute grounds for appropriate enforcement action including, without limitation, the assessment of administrative penalties, the requirement to undertake corrective action, the denial of an initial or renewal application, the revocation of a license, the referral to other state and federal agencies for civil or criminal action, or any combination of such remedies by the Department.

§24.14.Restrictions for License Holders.

(a) A license holder shall not produce or handle any cannabis that is not hemp.

(b) A license holder shall not produce or handle hemp or other cannabis on a facility unless the facility is identified on an application, renewal application or facility addition or modification request approved by the Department.

(c) Hemp shall be physically segregated from other crops unless prior approval is obtained in writing from the Department.

(d) An applicant or license holder shall not include any real property on an application or facility addition or modification request that is not owned or completely controlled by the applicant or license holder, to produce or handle hemp.

(e) A license holder shall not produce or handle hemp or other cannabis on real property owned by or leased from:

(1) a person who is ineligible for licensure under the Department's hemp program; or

(2) a person whose application or renewal application for participation in the Department's hemp program was denied, or whose license was terminated or revoked.

(f) The legal cultivation of cannabis in another state pursuant to the authorization granted by said state shall not prevent a person from holding a license in Texas.

(g) A person who holds a producer and sampler license with the Department shall not conduct the sampling and collection of their own hemp product.

§24.15.License Holders Who Transplant.

(a) In order to be eligible to transplant cannabis plants:

(1) a license holder must acquire a lot permit for the initial area of cultivation, and a lot permit for each final transplantation area.

(2) a license holder who transplants must indicate in the lot permit application for the initial area of cultivation, all final transplantation areas, and anticipated dates of transplants; and

(3) a license holder who transplants shall maintain all recordkeeping required for each lot permit, including submission of all lot reports.

(b) The area where a license holder who transplants initially cultivates cannabis plants and the final transplantation areas shall constitute separate lots. The license holder who transplants shall pay the associated fee for each lot permit.

(c) In the event the initial area of cultivation is not within the same facility as the final transplantation area, the license holder who transplants must request a transport manifest from the Department before transporting a lot of cannabis plants to a separate facility for transplanting purposes. A transport manifest shall be valid for five (5) days from the date of issuance.

(d) A sale or transfer of a lot of cannabis plants from a license holder to another license holder for transplant is considered a harvest.

§24.16.Facility Addition or Modification.

(a) A license holder who elects to produce or handle hemp in a facility other than the facility specified by the geospatial location in the applicant's original licensing application shall register the new facility by submitting a facility addition or modification request form and obtain written approval from the Department for the new facility.

(b) In the event the geospatial location of a facility previously registered with the Department changes, the license holder must submit a facility addition or modification request form and obtain written approval from the Department for the modified facility.

(c) Once a license holder obtains approval from the Department, the license holder may cultivate, handle or produce hemp at the newly added or modified facility.

(d) The Department shall not process or approve a facility addition or modification request until the Department has received the required forms and fees.

§24.17.Lot Permit.

(a) A license holder must acquire a lot permit from the Department for each lot where the license holder intends to produce or handle hemp prior to producing or handling hemp. The applicant shall submit, at a minimum the license number, geospatial location of the lot where the hemp variety will be planted, the facility where the lot is located, and anticipated dates of cultivation.

(b) An application that is missing required information shall be subject to denial.

(c) A change in the geospatial location of a lot where the hemp variety will be planted will be considered by the Department as a new lot.

§24.18.Reporting and Recordkeeping.

(a) License holders shall maintain records and reports of all hemp plants acquired, produced, handled, sampled and collected, or disposed for at least three years, using a Department form.

(b) All records shall be maintained and made available for inspection by Department inspectors, US authorities, or their representatives, during reasonable business hours. The following records must be made available:

(1) records regarding acquisition of hemp seed or cultivars;

(2) records regarding production of hemp;

(3) records regarding handling of hemp;

(4) records regarding sampling and collection of hemp;

(5) records regarding disposal of all cannabis plants that, upon testing by the Department, the license holder, or US authority, exceeds the acceptable hemp THC level; and

(6) records regarding the transport or proposed transport of hemp, including transport manifests.

(c) All reports and records required to be submitted to the Department as part of participation in this program which include confidential data or business information, including but not limited to information constituting a trade secret or disclosing a trade position, financial condition, or business operations of the particular license holder or their customers, shall be received by, and at all times kept in the custody and control of, the Department and its employees in accordance with the requirements of Texas law and the Department's information security procedures and policies. Confidential data or business information may be shared with US authorities, or their designees. License holders are responsible for identifying all of the license holder's confidential data or business information, including but not limited to information constituting a trade secret or trade positions, financial conditions, or business operations of the particular license holder or its customers which the license holder deems to be protected from disclosure by the Department. Such identification must be made by separate written communication to the Department specifically identifying the information sought to be protected by the license holder.

§24.19.Registration of Nonconsumable Hemp Processors.

(a) All persons who intend to process nonconsumable hemp products shall register with the Department.

(b) Only a processor registered with the Department shall process nonconsumable hemp products in the State of Texas.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905000

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER D. INSPECTIONS, SAMPLING AND COLLECTION

4 TAC §§24.20 - 24.23

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.20.Site Access for Representatives of the Department and Law Enforcement Agencies.

(a) The Department, the DEA, DPS, and local law enforcement agencies, along with their representatives and employees, shall be provided with complete and unrestricted access to all hemp plants, whether growing or harvested, and all facilities used for the production and storage of all hemp in all locations where hemp is produced or handled.

(b) The Department or its representative shall conduct random inspections of license holders to verify the production and handling of hemp complies with applicable state and federal law.

(c) During a scheduled sample collection, the producer or an authorized representative of the producer shall be present at each lot undergoing sampling and testing.

§24.21. Sampling and Collection.

(a) Sampling and Collection Notification.

(1) A completed sample request form from a license holder shall be submitted to the Department at least fifteen (15) days prior to the expected harvest date.

(2) The Department's receipt of a sample request form triggers a site inspection and sample collection by the Department or its representative.

(b) Sampling and Collection.

(1) The material selected for sampling will be determined by the Department's Sampling and Collection Procedure.

(2) If the license holder fails to complete harvest within fifteen (15) days of sample collection, a secondary sample of each lot to be harvested shall be collected and submitted for testing. The license holder must notify the Department of a delay in harvesting by submitting another, or second, complete, sample request form to initiate a second or subsequent sample collection from each lot to be harvested.

(3) The Department will grant or conduct no more than two (2) sample requests per lot. The Department may grant or conduct additional sample requests under unusual circumstances, including an event unforeseeable by a reasonable person.

(4) A separate sample must be taken for each lot.

(5) Samples shall be labeled and prepared for transport to the laboratory for testing in accordance with the Department's Sampling and Collection Procedure.

§24.22.Lot Report.

(a) A license holder shall provide a lot report to the Department no later than the 30th day after a final sample is collected from a lot, or no later than 180 days from the lot permit issue date, whichever is earlier.

(b) A lot report shall be provided using a Department form and must contain the following information at a minimum, regarding the particular lot:

(1) license holder account number;

(2) facility ID and lot ID;

(3) sample(s) ID(s) and test ID(s);

(4) disposition of cannabis plant materials produced or handled within the lot (e.g. harvest, disposal, transplanting, cloning, distribution, processing, sale, or other use) and any Department-issued transport manifest;

(5) total acres or square footage of cannabis plant material produced or handled; and

(6) a certified statement indicating whether or not any living cannabis plants remain in any lot identified in the lot report. In the event any living cannabis plants remain in any lot identified in the lot report, the license holder shall further provide a certified statement indicating whether the license holder intends to dispose of or cultivate the remaining, living cannabis plants.

(c) The license holder shall report and certify disposal of cannabis plants to the Department in the lot report and include a description of the date and method of disposal.

(d) In the event the license holder cultivates the remaining, living cannabis plants, the license holder shall register the location(s) of the remaining, living cannabis plants as new lots and pay the applicable participation fee.

§24.23.Other Activities.

(a) A license holder shall not harvest a cannabis crop prior to samples being collected.

(b) The license holder shall harvest the crop not more than 15 days following the date of sample collection by the Department, unless specifically authorized in writing by the Department.

(c) Prior to processing, cannabis from harvested lots shall not be commingled with cannabis from other harvested lots or other material without prior permission from the Department.

(d) A license holder may not sell or use harvested plants unless a test of the sample(s) for the lot associated with the harvested plants is at or below the acceptable hemp THC level.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905001

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER E. TESTING

4 TAC §§24.24 - 24.29

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorizes the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.24.Testing Laboratory.

(a) Registration.

(1) An independent testing laboratory, or a laboratory in an institution of higher education, must be registered with the Department before performing any test related to the Department hemp program.

(2) An independent testing laboratory or a laboratory in an institution of higher education shall submit a complete application for registration in a form prescribed by the Department.

(3) An independent testing laboratory or a laboratory in an institution of higher education must be accredited by an independent accreditation body in accordance with International Organization for Standardization ISO/IEC 17025 and must be registered with DEA.

(b) Registered Laboratories

(1) A list of Department-registered laboratories shall be available to license holders on the Department website.

(2) A license holder may test a hemp sample using a registered laboratory in accordance with Tex. Agric. Code §122.151(c).

(3) A license holder who uses a registered laboratory shall pay that laboratory's fees.

(c) State of Texas Laboratory.

(1) A license holder may test a hemp sample using a State of Texas Laboratory operated by the Department or its representative (State Laboratory).

(2) The State Laboratory shall be used if the license holder fails to use a registered laboratory.

(3) A license holder shall pay the State laboratory fees.

(4) The State Laboratory shall be registered with DEA.

§24.25.Standards for Testing.

Analytical testing for purposes of detecting the concentration levels of delta-9 tetrahydrocannabinol (THC) in the flower material of the cannabis plant shall meet the following standards:

(1) laboratory quality assurance must ensure the validity and reliability of test results;

(2) analytical method selection, validation, and verification must ensure that the testing method used is appropriate (fit for purpose) and that the laboratory can successfully perform the testing;

(3) the demonstration of testing validity must ensure consistent, accurate analytical performance; and

(4) method performance specifications must ensure analytical tests are sufficiently sensitive for the purposes of the detectability requirements of this subchapter.

§24.26.Methods for Testing.

(a) Laboratories shall use appropriate, validated methods and procedures for all testing activities and evaluate the measurement of uncertainty.

(b) At a minimum, analytical testing of samples for delta-9 tetrahydrocannabinol concentration levels must use post-decarboxylation or other similarly reliable methods approved by the Department.

(c) The testing methodology must consider the potential conversion of delta-9 tetrahydrocannabinolic acid (THCA) in hemp into delta-9 tetrahydrocannabinol (THC) and the test result reflect the total available THC derived from the sum of the THC and THC-A content. Testing methodologies meeting these requirements include, but are not limited to, gas or liquid chromatography with detection.

(d) Alternative testing protocols will be considered by the Department if they are comparable and similarly reliable to the baseline established under the Department program. Alternative testing protocols must be requested of the Department in writing and approved in writing by the Department, provided they meet the requirements of this subchapter.

§24.27.Testing Procedure.

(a) The laboratory shall test samples in accordance with the Department "Testing Procedure".

(b) The laboratory shall maintain the chain of custody of each sample using a form prescribed by the Department.

(c) The laboratory shall retain the sample for a minimum of thirty (30) business days from the sample collection date.

§24.28.Reporting Test Results.

(a) The laboratory shall send the test results electronically to the Department and license holder no later than the fourteenth (14th) business day from the sample collection date.

(b) The total delta-9 tetrahydrocannabinol concentration level shall be determined and reported on a dry weight basis. Additionally, measurement of uncertainty (MU) must be estimated and reported with the test results.

(c) Any sample test result showing with at least 95% confidence that the THC content of the sample exceeds the acceptable hemp THC level shall be conclusive evidence that one or more cannabis plants or plant products from the lot represented by the sample contain a THC concentration in excess of that allowed. If the results of a test conclude that the THC levels of a sample conclusively exceeds the acceptable hemp THC level, the laboratory will promptly notify the producer and the Department or its authorized agent.

§24.29.Retest.

(a) A license holder may request a retest of the original sample within five (5) days from the date the license holder receives the results of the first test.

(b) A license holder requesting a retest must use the laboratory that conducted the initial test.

(c) The laboratory shall use the original sample, used in the first test, for the retest.

(d) The results of the retest are final.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905002

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER F. DISPOSAL

4 TAC §24.30, §24.31

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.30.Notice Procedures.

(a) The license holder shall submit a completed disposal report to the Department no later than seven (7) days after the license holder receives a final test result exceeding the acceptable hemp THC level.

(b) The Department's receipt of a disposal report triggers a potential field inspection by the Department or its representative.

(c) The Department will inform the license holder no later than seven (7) days after receiving the disposal report of the approved method of disposal.

§24.31.Non-compliant Cannabis Plants.

(a) Cannabis plants exceeding the acceptable hemp THC level constitute marijuana, a Schedule I controlled substance, which must be disposed of in accordance with the federal Controlled Substances Act (CSA) in 21 C.F.R. §13 and DEA regulations in 21 C.F.R. §1317.15.

(b) A final test result exceeding the acceptable hemp THC level shall be conclusive evidence that the lot represented by the sample is non-compliant with state and federal law. The cannabis on that lot may not be further handled, processed, or enter the stream of commerce, other than for disposal purposes in strict compliance with the CSA and DEA regulations.

(c) Disposal of Non-compliant Cannabis Plants.

(1) Within five (5) days of receiving a notice of disposal from the Department, the license holder shall contact an appropriate DEA-registered reverse distributor or other authorized person or entity to request disposal of the non-compliant cannabis plants in strict compliance with the CSA and DEA regulations.

(2) The license holder shall pay all costs and fees required for the destruction of non-compliant cannabis plants and shall surrender such plants to the DEA-registered reverse distributor or other authorized person or entity for disposal in accordance with DEA regulations, without compensation from TDA, the State of Texas, or U.S. authorities.

(d) License holders must notify USDA and the Department of intent to dispose of non-compliant cannabis plants and verify disposal by maintaining and submitting records of the disposal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905003

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER G. ENFORCEMENT

4 TAC §§24.32 - 24.38

The proposal is made under §§121.003, 121.004, and §122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

§24.32.Complaints.

(a) Any person with cause to believe that any provision of the Code or this chapter, related to the Department hemp program, has been violated or not complied with by a license holder, may file a complaint with the Department. The Department will accept either a written or oral complaint, but may require the completion and signing of a complaint form before conducting an investigation into the circumstances or situation giving rise to the complaint.

(b) Upon receipt of an acceptable complaint, the Department will investigate the complaint and make a written report.

(c) The Department's written report will be made available to the public to the extent authorized by the TPIA.

(d) The Department shall, as soon as possible, notify the person(s) believed to be responsible for the acts, omissions, circumstance(s) and situation(s) described in the complaint, and the owner or lessee of the land where the incident(s) allegedly occurred of the existence of the complaint.

(e) The Department will not find a violation based solely on the uncorroborated statements of an anonymous or unidentified complainant. However, the Department routinely investigates all such complaints. The Department will determine the extent of the investigation and resources which are necessary to address any particular complaint.

§24.33.Negligent Violations.

(a) A hemp producer shall be subject to enforcement for negligently producing hemp or for negligently producing cannabis (marijuana) which exceeds the acceptable hemp THC level.

(b) Negligent violations shall include, but not be limited to:

(1) failure to provide a legal description or geospatial location of the facility on which the license holder produces or stores hemp;

(2) failure to obtain a license or other required authorization from the Department; or

(3) production of cannabis with a delta-9 tetrahydrocannabinol concentration exceeding the acceptable hemp THC level.

(c) Hemp producers do not commit a negligent violation under this chapter if they make reasonable efforts to grow hemp, and after sampling and testing, the cannabis (marijuana) does not produce a test result showing a delta-9 tetrahydrocannabinol concentration for the lot's sample of more than 0.5 percent on a dry weight basis.

(d) For each negligent violation, the Department will issue a Notice of Violation and require the license holder to submit a corrective action plan. The Department shall review the corrective action plan and determine if the corrective action plan meets the requirements of 7 C.F.R. §990, the Code, this chapter, and the Department's other requirements. If the Department approves the corrective action plan, the license holder shall comply with the corrective action plan to cure the negligent violation. If the Department denies the corrective action plan, the license holder's license shall be revoked. Corrective action plans will be in place for a minimum of two (2) years from the date of their approval. Corrective action plans will, at a minimum, include:

(1) the date by which the license holder shall correct each negligent violation;

(2) steps to correct each negligent violation; and

(3) a description of the written procedures to demonstrate compliance with applicable law and the Department's policies and procedures, which may include additional reporting requirements to show such compliance.

(e) A license holder that negligently violates this chapter shall not, as a result of that violation, be subject to any criminal enforcement action in Texas.

(f) If a subsequent violation occurs while a corrective action plan is in place, a new corrective action plan must be submitted with a heightened level of quality control, staff training, and quantifiable action measures.

(g) A license holder that negligently violates the terms of a license three (3) times in a five-year period shall have their license revoked and be ineligible to produce hemp for a period of five (5) years, beginning on the date of the third violation.

(h) The Department or any U.S. authority along with their authorized representatives and employees shall conduct inspections to determine if the corrective action plan has been implemented.

§24.34.Violations with a Culpable Mental State Greater than Negligence.

(a) In addition to being subject to license suspension, license revocation, and monetary civil penalty procedures established in this chapter, a person who is found by the Department to have violated any statute or administrative regulation governing that person's participation in the hemp program with a culpable mental state greater than negligence shall be subject to the reporting requirements established in this section.

(b) The Department shall immediately report a person who is found by the Department to have violated any statute or administrative regulation governing that person's participation in the hemp program with a culpable mental state greater than negligence to the following law enforcement agencies:

(1) the Attorney General of the United States;

(2) the Texas Department of Public Safety;

(3) the Office of the Texas Attorney General; and

(4) other law enforcement authorities with jurisdiction over the producer's acts or omissions that are the subject of the report.

§24.35.License Suspension.

(a) The Department may issue a notice of suspension to a license holder if the Department or its representative receives credible evidence establishing that a license holder has:

(1) engaged in conduct, being either an act or omission, violating a provision of this chapter; or

(2) failed to comply with a written order from the Department related to negligence as defined in this chapter.

(b) Any license holder whose license has been suspended shall not cultivate, handle or remove hemp or cannabis from any location where hemp or cannabis was located at the time when the Department issued its notice of suspension, without prior written authorization from the Department.

(c) Any person whose license has been suspended shall not produce or handle hemp during the period of suspension.

(d) A license holder whose license has been suspended may appeal that decision in accordance with this subchapter.

(e) A license holder whose license has been suspended and not restored on appeal may have their license restored after a waiting period of one year from the date of the suspension, subject to the terms of a five-year revocation.

(f) A license holder whose license has been suspended may be required to complete a corrective action plan to fully restore the license.

§24.36.License Revocation.

The Department shall immediately revoke a license if a person:

(1) pleads guilty to, or is convicted of, any felony related to a controlled substance under Texas law, federal law or the law of any other state;

(2) made a false statement or provided false information or documentation to the Department or its representatives, with a culpable mental state greater than negligence; or

(3) is found to be growing cannabis exceeding the acceptable hemp THC level with a culpable mental state greater than negligence, or negligently violated this chapter three (3) times in five (5) years.

§24.37.Penalties.

Section 12.020 of the Code, which provides for the assessment of administrative penalties, applies to a person who violates the Code or this chapter. Failure to pay an administrative penalty assessed by a final order of the Department is a violation of this chapter. Failure to pay a final judgment which assesses a civil penalty in which express findings of a violation are made, and which was entered pursuant to the Code or this chapter, shall also constitute a violation of this chapter.

§24.38.Appeals.

(a) Persons who believe they are adversely affected by the assessment of an administrative action may appeal such decision to the Department.

(b) If the Department sustains the appeal of an administrative action, the person will retain their license and not be subject to the administrative action proposed by the Department in all or part.

(c) If the Department denies the appeal of an administrative action, the license will be revoked or suspended and any administrative action will be imposed. The person may request a formal adjudicatory proceeding in accordance with Chapter 12 of the Code.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905004

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER H. TRANSPORTATION

4 TAC §§24.39 - 24.43

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

§24.39.Transport Manifest Required.

(a) A Department-issued transport manifest shall be required for the transportation of hemp outside a facility where the hemp is produced.

(b) Hemp produced outside of Texas and transported in Texas shall be accompanied by valid documentation authorized by another state, Indian Nation, or U.S. territory.

§24.40.Transport Manifests for Test Samples.

A Department-issued transport manifest shall accompany all samples collected and transported to a laboratory for testing.

§24.41.Transport of Pests Prohibited.

A person may not transport hemp in the State of Texas that contains an agricultural pest or disease listed in Title 4 of the Texas Administrative Code Chapter 19.

§24.42.Transplants Originating Outside the State of Texas Prohibited.

To the extent authorized by the laws and Constitution of the United States, no person shall bring into the State of Texas a cannabis transplant that originated from cannabis plants germinated outside of the State of Texas. A license holder may only cultivate cannabis transplants originating from cannabis plants germinated in Texas.

§24.43.Mixed Cargo Prohibited.

A person transporting hemp plant material in the State of Texas shall not concurrently transport any cargo that is not hemp material.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905005

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER I. HEMP SEED

4 TAC §§24.44 - 24.48

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.44. Certified or Approved Hemp Seed.

(a) The Department shall maintain and make available to license holders a list of businesses that sell hemp seeds certified or approved for production, sale, offered for sale, or distributed within the State of Texas.

(b) A person may not sell, offer for sale, distribute or use hemp seed in the State of Texas unless the seed is certified or approved by the Department.

§24.45. License Required to Sell, Possess, Hold or Purchase Hemp Seed.

After May 1, 2020, A person or entity may not sell, possess, hold or purchase hemp seed unless that person holds a valid and active license issued by the Department for the production and handling of hemp.

§24.46. Hemp Seed Quality and Labeling Requirements.

(a) Hemp seed sold, offered for sale, distributed, or used in the State of Texas must meet the legal standards for seed quality and seed labeling required by Texas and federal law, as well the legal standards of the jurisdictions from where the seed is originally sold and produced.

(b) Hemp seed sold, offered for sale, distributed, or used in the State of Texas must also meet the additional hemp seed quality and labeling requirements as provided for by the Department.

(c) Hemp seed sold, offered for sale, distributed, or used in the State of Texas must contain a clear, legible statement on the label in English in addition to any other language on the label indicating the:

(1) specific variety of the hemp seed;

(2) the seller or distributor; and

(3) the location and jurisdiction of origin of the hemp seed.

§24.47.Hemp Seed Recordkeeping.

A person who sells, offers to sell, distributes, or uses hemp seed in Texas shall maintain records indicating:

(1) the origin of the hemp seed for five (5) years;

(2) the person or entity from whom the person purchased the hemp seed;

(3) any documentation indicating certification or approval of the provenance, quality, and variety of the hemp seed; and

(4) the location and jurisdiction of origin of the hemp seed.

§24.48.Certification or Approval of Hemp Seed.

(a) A person may request the certification or approval of a hemp seed for a particular variety by submitting a completed form prescribed by the Department.

(b) A person requesting for the certification or approval of hemp seed for a particular variety shall provide the following information to the Department:

(1) name of kind and variety;

(2) a statement concerning the variety's origin, and the breeding procedure used, in its development including evidence on stability (evidence on stability must include any field test reports and sample test results demonstrating the hemp seed was used to grow hemp plants which tested within the acceptable hemp THC Level);

(3) a completed objective form for the crop as provided by the Department Seed Quality Program, if such form is available. The completed objective description form as provided by the U.S. Plant Variety Protection Office may be used in lieu of the Texas form;

(4) a statement delineating the geographic area or areas of adaptation of the variety; and

(5) such other information as may be requested by the Department which may include but is not limited to:

(A) special characteristics of the seed and of the plant as it passes through the seedling stage and flowering stage; and

(B) other evidence of performance of the variety (date, graphs, charts, pictures, etc.) supporting the identity of the variety, if known. If statements or claims are made concerning performance characteristics, such as yield, tolerance to insects or diseases, or lodging, there must be evidence to support such statements. Statistical analysis of data is encouraged.

(c) The Department may gather the information described in this section to conduct research and analysis to determine the quality and viability of hemp seed varieties for approval by the Department. The Department may partner with Texas A&M University or a State of Texas institution of higher education to conduct research and analysis pertaining to hemp seed varieties.

(d) The Department may revoke a hemp seed variety certification or approval if it determines that the hemp seed variety does not meet the standards described in this section.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905006

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476


SUBCHAPTER J. AGRICULTURAL OR ACADEMIC HEMP RELATED RESEARCH

4 TAC §24.49, §24.50

The proposal is made under §§121.003, 121.004, and 122.051 of the Texas Agriculture Code (the Code), which designates the Department as the lead agency for the administration, implementation, and enforcement of hemp production, and authorize the Department to adopt rules to coordinate, implement and enforce the hemp program; and, §12.020 of the Code, which authorizes the Department to assess penalties for violations of rules adopted by the Department.

Chapters 12, 121 and 122 of the Code are affected by the proposal.

§24.49.Hemp Research License.

(a) Texas A&M University or a Texas institution of higher education may apply for a license to produce and handle hemp for agricultural or academic research. A license issued to Texas A&M University or a Texas Institution of higher education pursuant to this section is known as a "Hemp Research License."

(b) In order to obtain a hemp research license, Texas A&M University or a Texas institution of higher education must submit an application and required fees to the Department.

(c) A hemp research license holder must comply with and is solely responsible for compliance with all state and federal laws, rules, and guidelines pertaining to the production and handling of hemp in addition to the laws, rules, and guidelines of any other jurisdiction where such hemp research license holder may produce or handle hemp.

§24.50.Hemp Research Plan.

(a) An applicant for a hemp research license must also submit a research plan providing the following information:

(1) a detailed statement specifying the nature and purpose of the hemp related research to be conducted;

(2) all locations where hemp related research will be conducted;

(3) the varieties of hemp to be utilized for the research purposes; and

(4) such other information as may be requested by the Department.

(b) A hemp research license holder must also submit an annual research plan detailing the location, activities, and the results of the hemp related research conducted by the hemp research license holder during the previous twelve (12) month period. Trade secret or patent information developed due to hemp research may be omitted from the annual research plan so long as there is a necessity for the research institution to protect such information.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 27, 2019.

TRD-201905007

Ferjie Ruiz Hontanosas

Assistant General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: February 9, 2020

For further information, please call: (512) 463-7476