SESSION OF 2019
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2173
As Further Amended by House Committee on
Agriculture

Brief*
HB 2173, as further amended, would require the Kansas
Department of Agriculture (KDA), in consultation with the
Governor and Attorney General, to submit a plan to the U.S.
Department of Agriculture (USDA) regarding how the KDA will
monitor and regulate the commercial production of industrial
hemp within the state, in accordance with federal law. In
addition, the bill would establish the Commercial Industrial
Hemp Program, make changes to the Industrial Hemp
Research Program, create the Industrial Hemp Regulatory
Commission, create the Hemp Processor License, establish
prohibitions on specific products, establish sentencing
guidelines, and establish waste disposal requirements.

Creation of the Commercial Industrial Hemp Program
Legislative Intent (New Sec. 1)
The bill would declare it is the intent of the Legislature
that KDA’s implementation of the Commercial Industrial
Hemp Act (Act) will be conducted in the least restrictive
manner allowed under federal law.
Commercial Plan Requirements (New Sec. 2(a)-(b))
The bill would require the KDA, in consultation with the
Attorney General and the Governor, to submit a plan to the
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
USDA under which the KDA would monitor and regulate the
commercial production of industrial hemp within Kansas in
accordance with federal law and any adopted rules and
regulations. The plan would be required to include the
following:
● A procedure to maintain relevant information
regarding land on which industrial hemp is
produced, including a legal description of the land,
for a period of no less than three calendar years;
● A procedure for testing the delta-9
tetrahydrocannabinol (THC) concentration levels of
industrial hemp produced by using post-
decarboxylation or other similarly reliable methods;
● A procedure for the effective disposal of industrial
hemp and hemp products found to be in violation of
the Act;
● Any licensing requirements or other rules and
regulations the KDA deems necessary for the
proper monitoring and regulation of industrial hemp
cultivation and production for commercial
purposes, including, but not limited to, license fees,
license renewals, and other necessary expenses to
defray the cost of implementing and operating the
plan on an ongoing basis;
● A procedure for creating documentation that all
persons in possession of industrial hemp before
being processed may use to prove to law
enforcement officers the industrial hemp was
lawfully grown under this section of the bill;
● A procedure for conducting annual inspections of,
at a minimum, a random sample of hemp
producers to verify hemp is not produced in
violation of the Act; and

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 ● Any other necessary procedures to meet federal
requirements.
Violations (New Sec. 2(c))
The bill would state a hemp producer who negligently
violates the provisions of the bill or any adopted rules and
regulations relating to the production of hemp for commercial
purposes under an approved commercial plan would not be
subject to any state or local criminal enforcement action, but
would be required to comply with the following corrective
actions, as applicable:
● Establish a reasonable date by which the hemp
producer must correct the negligent violation; and
● Require the hemp producer to periodically report to
the KDA on compliance with the production laws
and rules and regulations for a period of not less
than the next two calendar years.
A hemp producer who negligently violates the provisions
of the bill or any adopted rules and regulations three times in
a five-year period would be ineligible to produce industrial
hemp for a period of five years from the date of the third
violation.
The bill would require the KDA to immediately report any
violation by a hemp producer with a greater culpable mental
state than negligence to the Attorney General; the producer
could be subject to criminal enforcement.
Ineligibility (New Sec. 2(d))
Under the bill, an individual would not be eligible to
produce industrial hemp if the individual has submitted any
materially false information in any application to become a
licensed hemp producer.

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Fingerprinting Requirements and Background Checks (New
Sec. 2(e))
The bill would mandate the KDA to require, as a
qualification for initial or continuing licensing, all individuals
seeking a license or renewal as a hemp producer be
fingerprinted and submit to a state and national criminal
history background check. The KDA would be authorized to
submit the fingerprints to the Kansas Bureau of Investigation
(KBI) and Federal Bureau of Investigation (FBI) for the
background checks.
The KDA would be allowed to use the information
obtained from fingerprinting and background checks for
verifying the identification of the individual and for making a
determination of the qualifications for initial or continuing
licensing as a hemp producer. Disclosure or use of any
information received by the KDA for any purpose other than
provided for in the Act would be a class A misdemeanor and
would constitute grounds for removal from office or
termination of employment.
The bill would disqualify an individual who has been
convicted of a controlled substances felony violation or a
substantially similar offense in another jurisdiction within the
preceding ten years from initial or continuing licensure as a
hemp producer.
The KBI would be authorized to charge a reasonable fee
for the background check, and the individual seeking a
license or license renewal as a hemp producer would be
required to pay the costs of fingerprinting and the state and
national background checks.


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Rules and Regulations (New Sec. 2(f))
The bill would require the Secretary of Agriculture to
promulgate rules and regulations to implement the plan
submitted to the USDA and to otherwise effectuate the
production of commercial industrial hemp.
Fees (New Sec. 2(h)-(i))
The bill would require any modification fee established
by the KDA for any requested change to a license that was
previously issued by the KDA to not exceed $50.
The bill also would change the name of the Alternative
Crop Research Act Licensing Fee Fund to the Commercial
Industrial Hemp Fund (Hemp Fund). Any licensing or other
fees collected pursuant to the bill or any adopted rules and
regulations would be deposited in the Hemp Fund for all
administration costs of the commercial production of industrial
hemp.

Changes to the Industrial Hemp Research Program
Accepting Applications (New Sec. 3)
The bill would require the Secretary of Agriculture to
continue accepting any applications for licensure submitted
under the Industrial Hemp Research Program for the 2019
growing season from March 1, 2019, to June 1, 2019.
Modification Fee (Sec. 8(c))
The bill would require any modification fee established
by the KDA for any requested change to a license previously
issued by the KDA to not exceed $50.


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Fingerprinting and Background Checks (Sec. 8(d)-(e))
The bill would mandate the KDA to require, as a
qualification for initial or continuing licensing, all individuals
seeking a license or renewal as a hemp producer be
fingerprinted and submit to a state and national criminal
history background check. The KDA would be authorized to
submit the fingerprints to the KBI and FBI for the background
checks.
The KDA would be allowed to use the information
obtained from fingerprinting and the background checks for
verifying the identification of the individual and for making a
determination of the qualifications for initial or continuing
licensing as a hemp producer. Disclosure or use of any
information received by the KDA for any purpose other than
provided for in the Act would be a class A misdemeanor and
would constitute grounds for removal from office or
termination of employment.
The bill would disqualify an individual who has been
convicted of a controlled substance felony violation or a
substantially similar offense in another jurisdiction within the
preceding ten years from initial or continuing licensure as a
hemp producer.
The KBI would be authorized to charge a reasonable fee
for the background check, and the individual seeking a
license or license renewal as a hemp producer would be
required to pay the costs of fingerprinting and the state and
national background checks.
Rules and Regulations (Sec. 8(e))
The bill would require rules and regulations promulgated
by the KDA to include, but not be limited to, a requirement
that all license holders always have a current license in their
possession if they are engaged in activities allowed under the
provisions relating to the Industrial Hemp Research Program.

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 The bill would also prohibit the KDA from promulgating
rules and regulations concerning the recording of license
plates.
Discontinuing the Program (New Sec. 2(g))
The bill would allow the KDA to discontinue the existing
Industrial Hemp Research Program if one or more of the
following occurs:
● The federal law authorizing states to operate an
industrial hemp research program is repealed;
● The adoption of a federal plan by the USDA
allowing for the cultivation and production of
commercial industrial hemp is adopted; or
● Rules and regulations by the KDA establishing
commercial industrial hemp production in the state
are adopted.
Effective Date
These changes to the Industrial Hemp Research
Program would not go into effect until on or after July 1, 2019.

Definitions Applicable to Both the Commercial and
Research Programs (Sec. 7)
The bill would make the following changes to definitions
in the Act:
● Add the definitions of “commercial,” “effective
disposal,” “hemp producer,” “hemp processor,”
“person,” and “authorized seed or clone plants”;
● Delete the definitions of “certified seed” and
“department”; and

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 ● Amend the existing definitions of “hemp products”
and “industrial hemp.”
Crimes and Controlled Substances Exceptions (Sec.
12(aa), Sec. 13(h)(1))
The bill would include “industrial hemp” as an exception
to the definition of “marijuana” in the current definition
sections of crimes involving controlled substances.
The bill would also exclude from the schedule I
controlled substances list any THC in:
● Industrial hemp, as defined by the Act;
● Solid waste and hazardous waste, as defined in
continuing law, that is the result of the cultivation,
production, or processing of industrial hemp, as
defined in the Act, and the waste contains a THC
concentration of not more than 0.3 percent on a dry
weight basis; or
● Hemp products as defined in the Act, unless
otherwise considered unlawful.
Industrial Hemp Regulatory Commission
The bill would create the Industrial Hemp Regulatory
Commission (Commission) within the Kansas Department of
Revenue (KDOR).
Administration (New Sec. 4(a))
The Commission would be administered by the Director
of the Commission (Director), who would be appointed by and
serve at the pleasure of the Secretary of Revenue. The
Director would be in the unclassified service and would
receive an annual salary fixed by the Secretary of Revenue

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and approved by the Governor. The Director would be
responsible for all powers, duties, and functions assigned to
KDOR under the Act.
In addition, the bill would require the Commission to
adopt rules and regulations as necessary to implement and
administer the provisions of the Act relating to the licensing
and regulation of hemp processor. The bill would allow the
Commission to advise and consult with the Kansas
Department of Health and Environment (KDHE) and KDA on
the rules and regulations.
The bill would apply the provisions of this section and
rules and regulations promulgated by the Commission to any
individual licensed by the KDA to process, manufacture,
produce, or distribute industrial hemp under the Industrial
Hemp Research Program, except the individual would not be
subject to license application or renewal fees established by
the Commission.
Electronic Database (New Sec. 4(b))
The bill would require the Commission to establish an
electronic database to store information regarding each
license issued to a hemp processor; each individual working
as an employee, agent, or unpaid worker of a hemp
processor; and other information deemed necessary or
appropriate by the Director. In addition, information in the
database would be shared with law enforcement in a manner
prescribed by the KBI for the purpose of verifying the validity
of any identification card or license issued or the location of
any operations authorized by the Act.


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Hemp Processor License
Hemp Processor Application Requirements (New Sec. 4(c))
The bill would allow a person to apply to the
Commission for initial or renewed licensure as a hemp
processor in a manner prescribed by the Commission and
accompanied by a fee not to exceed $5,000. An applicant
would be required to submit information and documentation
for the licensure, as specified in the bill. Under the bill, the
hemp processor license would authorize the licensee to
process industrial hemp into hemp products and to perform
other acts deemed necessary and incidental to by the
Commission, as established in rules and regulations adopted
by the Commission. (New Sec. 4(c)(1))
The bill would prohibit a person not in current
compliance with any Kansas tax law administered by the
Director of Taxation, KDOR; tax, fee, or payment
administered by the Department of Labor; or any charge
administered by any other state agency, from having an
ownership interest in a hemp processor. (New Sec. 4(c)(2))
An applicant would be required to provide information
and documentation on an application for licensure as a hemp
processor, as specified in the bill. (New Sec. 4(c)(3))
Within 60 calendar days of receiving any hemp
processor application, the Commission would be required to
issue a decision to grant or deny licensure to the applicant. If
the Commission denies licensure to a hemp processor, the
bill would require the Commission to refund half of the
applicant’s application or renewal fee. (New Sec. 4(c)(5)-(6))
Fingerprinting and Background Checks (New Sec. 4(c)(4))
The bill would mandate the Commission to require all
individuals working as employees, agents, or unpaid workers
of a hemp processor to be fingerprinted and submit to a state
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and national criminal history background check. The
Commission would be authorized to submit the fingerprints to
the KBI and FBI for the background checks.
The Commission would be allowed to use the
information obtained from fingerprinting and the background
checks for verifying the identification of the individual and for
making a determination of the qualifications for initial or
continuing licensing as a hemp processor. Disclosure or use
of any information received by the Commission for any
purpose other than provided for in the Act would be a class A
misdemeanor and would constitute grounds for removal from
office or termination of employment.
The bill would disqualify an individual who has been
convicted of a controlled substances felony violation or a
substantially similar offense in another jurisdiction within the
preceding ten years from initial or continuing licensure as a
hemp processor.
The KBI would be authorized to charge a reasonable fee
for the background check and the individual seeking a license
or license renewal as a hemp processor would be required to
pay the costs of fingerprinting and the state and national
background checks.
Hemp Processor License (New Sec. 4(c))
Under the bill, a hemp processor license would be
effective for a two-year period. If the Commission grants
licensure, the Commission would require the applicant or
licensee to:
● Pay a licensure fee not exceeding $5,000; and
● Provide satisfactory evidence the hemp processor
has obtained a surety bond in an amount required
by the Commission based on the size and actual
and projected yield of the hemp processor

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 operations, the number of facilities operated by the
hemp processor, and other factors established by
the Commission through rules and regulations.
The Commission would be required to remit all moneys
from any fees to the State Treasurer, who would deposit the
amount into the State Treasury to the credit of the
Commercial Industrial Hemp Processor Fund (Proc