HB5643 - Relating to the production, sale, distribution, delivery, and regulation of hemp; creating a criminal offense; imposing a tax.

      By: Cain H.B. No. 5643       A BILL TO BE ENTITLED   AN ACT   relating to the production, sale, distribution, delivery, and   regulation of hemp; creating a criminal offense; imposing a tax.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 443.001, Health and Safety Code, is   amended by adding Subsections (12) and (13) to read as follows:           (12)     "Hemp plant material" has the meaning assigned by   Section 121.001, Agriculture Code, and any stalks, stems, flowers,   or parts of hemp that does not exceed 0.3 percent delta-9   tetrahydrocannabinol by dry weight at the time of harvest, as   demonstrated by a certificate of analysis issued within the   previous twelve months by an independent testing laboratory.           (13)     "Independent Testing Laboratory" means a laboratory   that:                 (a)     holds an ISO 17025 accreditation or is registered   with the federal Drug Enforcement Administration in accordance with   21 C.F.R. Section 1301.13;                 (b)     does not have a direct or indirect interest in the   entity whose product is being tested; and                 (c)     does not have a direct or indirect interest in a   facility that cultivates, processes, distributes, dispenses, or   sells consumable hemp products in this state or any other   jurisdiction.          SECTION 2.  Subchapter A, Chapter 443, Health and Safety   Code, is amended by adding Sections 443.005 and 443.006 to read as   follows:           Sec.   443.005.     CONSUMABLE HEMP PRODUCTS ACCOUNT. (a) The   consumable hemp products account is an account in the general   revenue fund administered by the department.           (b)  The account consists of:                 (1)     appropriations of money to the account by the   legislature;                 (2)     public or private gifts, grants, or donations,   including federal funds, received for the account;                 (3)     fees collected under this chapter or under Chapter   431 as it applies to consumable hemp products;                 (4)     interest and income earned on the investment of   money in the account;                 (5)     penalties for violations of this chapter as it   applies to consumable hemp products; and                 (6)     funds from any other source deposited in the   account; and                 (7)     funds from the excise tax described in Section   443.006 of this Section at a rate of five percent on hemp consumable   products.           (c)     The department may accept appropriations and gifts,   grants, or donations from any source to administer and enforce this   chapter as it applies to consumable hemp products. Money received   under this subsection shall be deposited in the account.           (d)     Money in the account may be appropriated to the   department for the administration and enforcement of this chapter   as it applies to consumable hemp products and for juvenile mental   health programs, drug abuse prevention education, and for funding   of the Dementia Prevention Research Institute of Texas.           Section.   443.006.     TAX IMPOSED ON CONSUMABLE HEMP PRODUCTS.   An excise tax at the rate of five percent shall be imposed on the   retail sale of a consumable hemp product. The tax is in addition to   any tax imposed under any other provision of federal, state, or   local law.          SECTION 3.  Section 443.103, Health and Safety Code, is   amended to read as follows:          Sec. 443.103.  APPLICATION; ISSUANCE. An individual or   establishment may apply for a license under this subchapter by   submitting an application to the department on a form and in the   manner prescribed by the department. The application [ must be   accompanied by ] shall include :                (1)   the physical address [ a legal description ] of each   location where the applicant intends to process hemp or manufacture   consumable hemp products [ and the global positioning system   coordinates for the perimeter of each location ];                (2)  written consent from the applicant or the property   owner if the applicant is not the property owner allowing the   department, the Department of Public Safety, and any other state or   local law enforcement agency to enter onto the [ all ] premises   during normal business hours [ where hemp is processed or consumable   hemp products are manufactured ] to conduct a physical inspection or   to ensure compliance with this chapter and rules adopted under this   chapter;                (3)  any reasonable fees to cover the cost of the   processing of the application; [ required by the department to be   submitted with the application; ] and                (4)  any other relevant information required by   department rule.          SECTION 4.  Subchapter C, Chapter 443, Health and Safety   Code, is amended by adding Section 443.106 to read as follows:           Sec.   443.106.     EXPEDITED LICENSING PROCESS. The department   by rule may provide an expedited licensing process for the renewal   of a license in good standing or the purchaser of a business by a   qualifying party of a currently licensed business.          SECTION 5.  Section 443.151, Health and Safety Code, is   repealed and replaced in its entirety as follows:           Sec.   443.151.     TESTING REQUIRED. (a) To ensure consumer   safety, consumable hemp must be tested as provided by this section.           (b)     Before a consumable hemp product may be distributed or   sold as a final product, including hemp plant material, a sample   representing the final product must be tested, as required by the   executive commissioner, to determine:                 (1)     the concentration of various cannabinoids,   including delta-9 tetrahydrocannabinol;                 (2)     the presence or quantity of heavy metals,   pesticides, microbial contaminants, mycotoxins, harmful   microorganisms and pathogens, and residual solvents;                 (3)     the presence of any synthetic cannabinoids meaning   a substance included in Penalty Group 2-A under Section 481.1031 of   the Health and Safety Code; and any other substance prescribed by   the department.           (c)     All cannabinoid testing required under this Chapter   must be performed by a laboratory that is accredited by an   accreditation body in accordance with International Organization   for Standardization ISO/IEC 17025 or a comparable or successor   standard to determine the delta-9 tetrahydrocannabinol   concentration of the product.          SECTION 6.  Section 443.152, Health and Safety Code, is   amended by adding Subsection (d) to read as follows:           (d)     The executive commissioner by rule may exclude a   substance from the testing required under Section 443.151 that is   generally recognized as having no risk of contaminating a finished   consumable hemp product, including a microorganism or other   substance that is inevitably destroyed or removed while processing   or manufacturing the product.          SECTION 7.  Section 443.201, Health and Safety Code, is   amended by adding Subsections (c), (d), and (e) to read as follows:           (c)     A person may transport and deliver a consumable hemp   product in compliance with this chapter to a lawful purchaser of the   product. A person may also transport or deliver raw hemp extract   intended to be remediated into a final form product. The person   transporting the consumable hemp product or raw hemp extract shall   maintain documentation during transport to demonstrate the   transaction complies with this chapter. The person transporting   and the consumable hemp product is not required to:                 (1)     obtain a license under Section 443.101, unless the   person processes or manufactures the product delivered; or                 (2)     register under Section 443.2025, unless the person   sells the product delivered.           (d)     A person may not manufacture or sell a non-compliant   consumable hemp product in this state.           (e)     To the extent this Section conflicts with Chapter 481,   the Texas Controlled Substances Act, Chapter 481 shall prevail.          SECTION 8.  Section 443.2025, Health and Safety Code, is   amended by amending Subsections (b), (d), and (f) and adding   Subsection (d-1) to read as follows:          (b)  A person that sells [ may not sell ] or distributes   consumable hemp products [ containing cannabidiol at retail ] in this   state , other than products generally recognized as safe by the   United States Food and Drug Administration, shall register with the   department [ unless the person registers with the department each   location owned, operated, or controlled by the person at which   those products are sold. A person is not required to register a   location associated with an employee or independent contractor   described by Subsection (d) ].          (d)  A person is not required to register with the department   under Subsection (b) if the person is:                (1)  an employee of a registrant; or                (2)  an independent contractor of a registrant who   sells the registrant's products to consumers [ at retail ].           (d-1)     unless such employee or independent contractor works   for a person located outside of the state who is not a registrant   and sells or distributes products covered by Subsection (b) in this   state.          (f)  The registration shall [ department by rule may adopt a   registration fee schedule that establishes reasonable fee amounts   for the registration of ]:                (1)   identify the responsible party to direct   correspondence [ a single location at which consumable hemp products   [containing cannabidiol are sold ]; and                (2)   be subject to a nominally reasonable fee [ multiple   locations at which consumable hemp products [containing   cannabidiol] are sold under a single registration ].          SECTION 9.  Section 443.204, Health and Safety Code, is   amended by adding Subsection (b) to read as follows:          Sec. 443.204.  RULES RELATED TO SALE OF CONSUMABLE HEMP   PRODUCTS. (a) Rules adopted by the executive commissioner   regulating the sale of consumable hemp products must, to the extent   allowable by law, reflect the following principles:                (1)  hemp-derived cannabinoids, including cannabidiol   and raw hemp extract intended to be remediated into a finished good ,   are not considered controlled substances or adulterants;                (2)  products containing one or more hemp-derived   cannabinoids, such as cannabidiol, intended for ingestion are   considered foods, not contr [Text truncated for display. Full text available on Congress.gov.]