Bill Summary for S 315 (2019-2020)

Summary date: 

Mar 20 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 315 (Public) Filed Wednesday, March 20, 2019
AN ACT TO MAKE VARIOUS CHANGES TO THE AGRICULTURAL LAWS OF THE STATE.
Intro. by B. Jackson, Sanderson, Johnson.

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Bill summary

Enacts new Article 50F, North Carolina Hemp Commission, in GS Chapter 106, providing as follows. Includes the NCGA’s findings related to hemp. Defines hemp as the plant 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, within the federally defined THC level for hemp. Defines hemp extract as an extract from hemp, or a mixture or preparation containing hemp plant material or compounds. Defines hemp product as any product within the federally defined THC level for hemp derived from, or made by, processing hemp plants or plant parts, that are prepared in a form available for commercial sale, including, but not limited to, cosmetics, personal care products, food intended for animal or human consumption, cloth, cordage, fiber, fuel, paint, paper, particleboard, plastics, and any product containing one or more hemp-derived cannabinoids, such as cannabidiol.

Establishes the nine-member North Carolina Hemp Commission (Commission). Provides that members, appointed by the Commissioner of Agriculture (Commissioner), NCGA, and Governor, serve four-year terms with initial terms effective July 1, 2019, with staggered membership terminating on specified dates. Establishes the Commission’s duties, including issuing licenses allowing a person, firm, or corporation to cultivate or handle hemp. Allows the Commission to adopt temporary rules to implement the act for 180 days after effective date.

Prohibits a person from cultivating or handling hemp in this state without a hemp license issued by the Commission. Limits individuals who are able to obtain a license to cultivate hemp to those who are qualifying farmers or a conditional qualifying farmer.  Makes any person convicted of a felony related to a controlled substance ineligible to obtain any hemp license for 10 years following conviction. Any person who materially falsifies license application information is ineligible to obtain a license.

Requires licensees to furnish the Commissioner with a bond in the amount of no less than $25,000. Allows a new bond or increased bond amount if the Commissioner finds it necessary for the cultivator’s protection.

Requires any person who is required to obtain a hemp license issued to comply with a corrective action plan if the Commission determines that the person has negligently violated any provision of this Article or any rule adopted by the Commission. Requires the corrective action plan to include at least the date by which the violation will be corrected and a requirement that the person will periodically report on the person's compliance for at least the next two calendar years. Sets the penalty for a negligent violation of any provision of this Article or any rule adopted by the Commission as compliance with a corrective action plan; negligent violations of this Article or any rule adopted by the Commission three times in a five-year period makes the individual ineligible to obtain a hemp license for five years beginning on the date of the third violation and the individual is subject to criminal and civil penalties for additional violations during that period.

Allows civil penalties of no more than $2,500 per violation against any person who: (1) violates any provision of this Article or a rule adopted by the Commission, or conditions of any license, permit, or order issued by the Commission; (2) manufactures, distributes, dispenses, delivers, purchases, aids, abets, attempts, or conspires to manufacture, distribute, dispense, deliver, purchase, or possesses with the intent to manufacture, distribute, dispense, deliver, or purchase marijuana on property used for hemp production, or in a manner intended to disguise the marijuana due to its proximity to hemp; (3) provides the Commission with false or misleading information in relation to a license application or renewal, inspection, or investigation authorized by this Article; or (4) tampers with or adulterates a hemp crop lawfully planted.

Makes it a Class I felony to willfully, knowingly, or intentionally manufacture, distribute, dispense, deliver, purchase, aid, abet, attempt, or conspire to manufacture, distribute, dispense, deliver, purchase, or possess with the intent to manufacture, distribute, dispense, deliver, or purchase marijuana on property used for hemp production, or in a manner intended to disguise the marijuana due to its proximity to hemp. Makes it a Class 1 misdemeanor to (1) willfully, knowingly, or intentionally provide the Commission with false or misleading information or (2) willfully, knowingly, or intentionally tamper with or adulterate a hemp crop lawfully planted.

Exempts from licensing possessing, handling, transport, or selling hemp products or hemp extracts. Allows hemp products to be transported to other states and exported to foreign nations.

Establishes the North Carolina Hemp Program Fund (Fund) in the Department of Agriculture and Consumer Services (DACS), consisting of amounts received from appropriations and any other proceeds from gifts, grants, federal funds, application fees, license fees, and any other funds made available for purposes of this Article. Limits the Fund’s use to the costs of personnel, program administration, testing, and any other costs incurred in administering this Article, including promotion, marketing, and branding of North Carolina grown and processed hemp.

Amends GS 106-139 by adding the following provisions. Allows the Board of Agriculture to adopt rules to establish current good manufacturing practices in manufacturing, packaging, labeling, or holding operations for cannabinoid-related compounds derived from industrial hemp. Prohibits the manufacture, sale, delivery, holding, or offering for sale of any cannabinoid-related compounds that does not comply with the Board’s rules. Prohibits engaging in manufacturing, packaging, labeling, processing, or holding of cannabinoid-related compounds without a valid license. Exempts retail establishments, wholesalers, and warehousing operations that do not engage in the manufacturing, packaging, or labeling of cannabinoid-related compounds. Specifies information that is to be included on the license application. Makes failure to comply with Article 12 (Food, Drugs and Cosmetics) or related regulations cause for license suspension or revocation.

The above provisions are effective on the date that the Commission adopts and submits to the Governor and to the Revisor of Statutes a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect.

Effective on the date that the Commission adopts and submits the resolution to the Governor and to the Revisor of Statutes, amends GS 106-139 again to allow the Board of Agriculture to adopt rules to establish current good manufacturing practices in manufacturing, packaging, labeling, or holding operations for cannabinoid-related compounds derived from hemp (was, industrial hemp).

Amends GS 90-87 to exclude from the definition of marijuana hemp, hemp products, or hemp extracts (was, excluded industrial hemp only). Amends GS 90-95 to provide that any person who manufactures, sells or delivers, or possesses with intent to manufacture, sell, or deliver a controlled substance classified in Schedule VI is to be punished by being required to comply with a corrective action plan for a first or second offense so long as the person has a valid hemp license and they did not willfully, knowingly, or intentionally cause the controlled substance to exceed the specified concentration. Sets out the same punishment for any person with a valid hemp license who possesses a controlled substance classified in Schedule VI. Effective on the date that the Commission adopts and submits to the Governor and to the Revisor of Statutes a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect.

Requires within six months of the adoption of rules by the US Department of Agriculture pursuant to Section 297D of the Agriculture Marketing Act of 1946, as amended by the Agriculture Improvement Act of 2018, that the Commissioner (in consultation with the Governor and Attorney General) submit to the Secretary of the US Department of Agriculture a State plan for the regulation of hemp production. Sets out four elements that must be included in the plan including a procedure to maintain information regarding land on which hemp is produced in the state, and a procedure for the disposal of products that are produced in violation of new Article 50F or any rule adopted by the Commission. Requires an amended plan be submitted if the initial plan is disapproved. Effective when the act becomes law.

Amends GS 106-550 to declare it in the interests of the public welfare that the state’s farmers who produce hemp (along with producers of other specified crops) be permitted and encouraged to act in cooperation with growers, handlers, dealers, and processors in promoting and stimulating the increased production, use, and sale of such agricultural commodities. Enacts new GS 106-554.1 making the Commission the entity that provides certification and approval for the purpose of conducting a referendum among hemp growers or producers. Requires the Commission to perform the same function as the Board of Agriculture in all other respects for cultivators of hemp.  Effective on the date that the Commission adopts and submits to the Governor and to the Revisor of Statutes a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect.

Amends SL 2015-299, Section 4, to change the expiration of the act (establishing Article 50E, which regulates industrial hemp) until the date that the North Carolina Industrial Hemp Commission adopts and submits to the Governor and Revisor a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect (was, expired on June 30 of the fiscal year in which such a resolution was adopted).

Enacts GS 62-193, allowing the underlying fee owner of land encumbered by any easement acquired by a utility company to file a complaint with the Utilities Commission for an order requiring the utility company to terminate the easement, in exchange for payment of its fair market value, when construction has not been commenced by the utility company for the purpose for which the easement was acquired within 20 years of the date of acquisition (whether acquired by purchase or condemnation). Provides for service and response of the complaint, including disagreement with termination by the utility company, in which case the Commission must determine (1) whether the easement is necessary or advisable for the utility company’s long-range needs for the provisions of services to its service area or (2) whether the termination of the easement would be contrary to the using and consuming public’s interest. Permits a hearing on the matter, and provides an appeals process for an appeal of the Commission’s decision by either party. Places the burden of proof on the utility company. Provides a process for instances when the underlying fee owner and the utility company cannot reach a mutually agreed upon fair market value of the easement. Prohibits the underlying fee owner from filing a second complaint with the Commission regarding the same easement for a period of five years if the Commission decides that the easement should not be terminated. Defines utility company. Effective October 1, 2019.

Amends GS 20-150 to prohibit drivers from overtaking and passing self-propelled farm equipment proceeding in the same direction that is making a left turn or signaling an intent to do so. Applies to offenses committed on or after December 1, 2019.

Amends GS 136-129 to exempt specified outdoor advertising promoting a bona fide farm from the prohibition on outdoor advertising within 660 feet of the right-of-way of the interstate or primary highway system.  In order to be exempt, the outdoor advertising must promote a bona fide farm that is exempt from specified zoning regulations if the sign is more than three feet long on any side and it is located on the bona fide farm property (this replaces the exemption that applied to advertisements for the sale of any fruit or vegetable crop by the grower at a roadside stand or by having the purchaser pick the crop on the property if the sign met specified requirements). 

Amends GS 120-150 by adding that the cochairs of the Agriculture and Forestry Awareness Study Commission serve two-year terms that begin on the convening of the NCGA in each odd-numbered year. Sets out provisions governing lack of successor, completion of service when not seeking reelection, and resignation.

Requires that the Environmental Management Commission classify facilities storing products that are (1) grown, produced or generated on one or more agricultural operations and (2) that are renewable energy resources, as agricultural operations that are exempt from the requirements of 15A NCAC 02D .1806 (control and prohibition of odorous emissions). Requires adoption rules to amend 15A NCAC 02D .1806 consistent with this provision.

Amends the definition of agritourism activity as it applies to Article 4, Argitourism Activity Liability of GS Chapter 99E, so that it also includes any activity carried out on a farm or ranch that allows members of the general public to view or enjoy hunting, fishing, and shooting sports (but excludes hunting or shooting sports involving semiautomatic centerfire rifles). Amends GS 153A-340(b)(2a) concerning the qualifications for a building or structure that is used for agritourism to meet a bona fide farm purpose by amending the definition of agritourism in the same manner as above.

Enacts new Article 87, North Carolina Sweet Potato Act of 2019, in GS Chapter 87. Specifies that only sweet potatoes grown in the state may be designated for sale inside or outside of the state as North Carolina sweet potatoes. Allows the Commissioner of Agriculture (Commissioner) to create, register, license, promote, and protect a trademark for use on or in connection with the sale or promotion of North Carolina sweet potatoes and products containing North Carolina sweet potatoes. Allows collection of a reasonable royalty or license fee, to be determined by the Commissioner in consultation with representatives of the sweet potato industry and the Marketing Division of the Department of Agriculture and Consumer Services. Requires that funds from the royalties and license fees be used to promote North Carolina sweet potatoes and to pay costs associated with monitoring the use of the trademark, prohibiting the unlawful or unauthorized use of the trademark, and enforcing rights in the trademark. Allows the Board of Agriculture to adopt rules on quality standards, grades, packing, handling, labeling, and marketing practices for the marketing of sweet potatoes in this state, and other rules necessary to administer this Article. Also allows the adoption of rules establishing a registration, inspection, and verification program for the production and marketing of North Carolina sweet potatoes in the state. Requires all North Carolina sweet potatoes sold to conform to the prescribed standards and grades and be labeled. Provides for inspections by the Commissioner and the Commissioner's agents. Adopts as the standards for grades in this state the specified standard for grades adopted by the US Department of Agriculture, Agricultural Marketing Service. Requires the Commissioner to appoint a North Carolina Sweet Potato Advisory Council to render advice regarding the Commissioner's authority to regulate and promote sweet potatoes.

Amends GS 89C-25 by providing that GS Chapter 89C (Engineering and Land Surveying) does not prevent practice by employees of the DACS Division of Soil and Water Conservation who have engineering job approval authority issued by the Natural Resources Conservation Service or the Soil and Water Conservation Commission that involves the planning, designing, or implementation of best management practices on agricultural lands, or for the planning, designing, or implementation of best management practices approved for cost-share funding pursuant to the specified programs. Amends GS 139-3 by defining the term job approval authority. Amends GS 139-4 by adding to the Soil and Water Conservation Commission’s duties developing and implementing a program for granting job approval authority to Soil and Water Conservation District staff and employees of the Division of Soil and Water Conservation to plan, design, and certify the installation of best management practices approved for cost-share funding pursuant to specified programs.

Amends GS 105-277.4 by adding that if an assessor determines that property loses its eligibility for present-use value classification, the assessor must give written notice to the owner, including specified information; requires the notice to be separate from the regular yearly tax notice or bill. Requires that an appeal of the assessor’s determination be made within 60 days after date of the written notice. Adds that while an assessor’s decision of lost eligibility is under appeal, if the assessor determines that the property is no longer eligible because of an additional disqualifying event independent of the one that is the basis of the disqualification under appeal, the assessor must follow the same notice and appeal procedure for the subsequent disqualification. If notice is not given for the subsequent disqualification, reinstatement of the property is deemed effective for any assessments occurring from the date of the assessor’s decision under appeal to the date of the final decision of the county board or Property Tax Commission to reinstate the property. Effective for taxes imposed for taxable years beginning on or after July 1, 2019.

Includes a severability clause.

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