GENERAL GOVERNMENT

Department of Agriculture

Office of Agricultural Marketing

(New Administrative Regulation)

 

††††† 302 KAR 50:040. Affiliated universities and colleges.

 

††††† RELATES TO: KRS 260.850-260.869, 7 U.S.C. 5940

††††† STATUTORY AUTHORITY: KRS 260.862(1)(d)

††††† NECESSITY, FUNCTION, AND CONFORMITY: KRS 260.862(1)(d) authorizes the department to promulgate administrative regulations to prescribe rules for a universityís participation in, or affiliation with, any industrial hemp research pilot program in the Commonwealth of Kentucky. This administrative regulation establishes procedures and requirements for eligible universities and colleges with faculty or staff members who wish to affiliate with the departmentís industrial hemp research pilot program for the purpose of conducting academic research projects.

 

††††† Section 1. Definitions. (1) "Cannabis" means all parts of the cannabis plant, whether growing or not, including its seeds, resin, compounds, salts, derivatives, and extracts. Cannabis does not include publicly marketable hemp products, as defined in this administrative regulation.

††††† (2) "Commonwealth" means the Commonwealth of Kentucky.

††††† (3) "DEA" means the United States Drug Enforcement Administration.

††††† (4) "Decarboxylated" means the completion of the chemical reaction that converts THC-acid into delta-9-THC, the intoxicating component of cannabis. The decarboxylated value may also be calculated using a conversion formula that sums delta-9-THC and THC-acid.

††††† (5) "Department" means the Kentucky Department of Agriculture.

††††† (6) "GPS" means Global Positioning System.

††††† (7) "Handling" is defined in KRS 260.850(4).

††††† (8) "Hemp" or "industrial hemp" is defined in KRS 260.850(5).

††††† (9) "Law enforcement agency" means the Kentucky State Police, DEA, or other federal, state, or local law enforcement agency or drug suppression unit.

††††† (10) "Location ID" means the unique identifier established for each unique set of GPS coordinates where hemp will be grown, handled, stored, or processed, which may include a field name or building name.

††††† (11) "Plot" means a contiguous area in a field, greenhouse, or indoor growing structure containing the same variety or strain of hemp throughout the area.

††††† (12) "Processing" is defined in KRS 260.850(9).

††††† (13) "Program" means the departmentís Industrial Hemp Research Pilot Program.

††††† (14) "Propagule" means a plant or plant part that can be utilized to grow a new plant.

††††† (15) "Seed source" means the origin of the seed or propagules as determined by the department.

 

††††† Section 2. Eligible Institutions of Higher Education. (1) To be eligible to affiliate with the departmentís program, an institution of higher education shall:

††††† (a) Be accredited by, and in good standing with, a regional or national higher education accreditation agency;

††††† (b) Confer academic degrees at the associate, bachelor, master, or doctoral level; and

††††† (c) Have a principal campus or office that is located at a site within the Commonwealth of Kentucky.

††††† (2) An institution of higher education shall not conduct hemp research under the authority of the departmentís program at a campus or other site that is located outside the Commonwealth of Kentucky.

 

††††† Section 3. Affiliation with Department Required. (1) An authorized representative of an eligible institution of higher education with faculty, administration, or staff members who wish to conduct academic research projects involving hemp under the auspices of the departmentís program shall complete and submit a University/College Affiliation Application, incorporated by reference in 302 KAR 50:080, annually.

††††† (2) No institution of higher education shall authorize its faculty, administration, or staff members, or any sponsored student, to conduct academic research involving hemp without first completing and submitting a University/College Affiliation Application.

††††† (3) The department shall accept annual University/College Affiliation Applications at any time during a program year.

††††† (4) Upon request from the department, a letter from a faculty department chair or other appropriate academic authority shall be provided in support of a University/College Affiliation Application.

††††† (5) Following receipt of a University/College Affiliation Application form from an authorized representative of an eligible institution of higher education, the department shall issue a University/College Affiliation Confirmation Letter authorizing that person to grow, cultivate, and process hemp:

††††† (a) In accordance with the institutionís research plan;

††††† (b) In accordance with state and federal law; and

††††† (c) In accordance with this administrative regulation.

 

††††† Section 4. Affiliation Application Form - Required Components. A University/College Affiliation Application form shall contain, at a minimum, the following information:

††††† (1) The full name of each person authorized by the institute of higher education who will be responsible for overseeing the academic research project;

††††† (2) The full name of each person who will be involved in growing, processing, or handling hemp;

††††† (3) An academic research plan summary;

††††† (4) The full name of the landowner, street address and GPS coordinates for each field, greenhouse, building, or site where hemp will be grown, handled, processed, or stored; and

††††† (5) Maps depicting each site where hemp will be grown, handled, processed, or stored, with appropriate designations for entrances, field boundaries, and specific locations corresponding to GPS coordinates.

 

††††† Section 5. Restrictions on Affiliated Projects. (1) An institution of higher education with a project affiliated with the departmentís program shall not involve any person who is ineligible or was terminated, or denied admission to the program for one (1) or both of the following reasons:

††††† (a) Failure to obtain an acceptable criminal background check; or

††††† (b) Failure to comply with an order from a representative of the department.

††††† (2) An institution of higher education with a project affiliated with the departmentís program shall not grow, handle, process, or store hemp on property owned by or leased from any person who is ineligible or was terminated, or denied admission to the program for one (1) or both of the following reasons:

††††† (a) Failure to obtain an acceptable criminal background check; or

††††† (b) Failure to comply with an order from a representative of the department.

 

††††† Section 6. No Fees -- Sampling and THC Testing Services Available at Cost. (1) The department shall not assess fees on affiliated institutions of higher education except as provided in subsection (2) of this section.

††††† (2) If a representative of an affiliated institution of higher education requests assistance from the department in collecting samples from hemp plants or testing the THC concentration, then the department shall collect a nonrefundable service charge in an amount sufficient to pay for staff time and other expenses incurred in visiting the site, collecting the samples, and testing the samples.

 

††††† Section 7. Seed Acquisition. (1) An institution of higher education shall not acquire hemp seeds or propagules from a source outside the Commonwealth of Kentucky except as provided in subsection (2) of this section.

††††† (2) A representative of an affiliated institution of higher education shall obtain hemp seeds or propagules from a source outside the Commonwealth by submitting a Seed/Propagule Request form and obtaining written approval from a representative of the department.

††††† (3) A person submitting a Seed/Propagule Request form shall submit to the department documentation showing that the mature plants grown from that seed or propagule variety have a floral material decarboxylated delta-9 THC content of not more than three-tenths (0.3) percent on a dry weight basis.

††††† (4) A person acquiring seeds or propagules from a source outside the Commonwealth shall arrange for the seeds or propagules to arrive at the departmentís facility at 105 Corporate Drive, Frankfort, Kentucky 40601, for inventory and distribution.

††††† (5) Upon request from a representative of the department, a representative of an affiliated institution of higher education shall provide a distribution list showing the locations where and to whom the hemp seeds were distributed following inventory at the departmentís facility.

††††† (6) A Seed/Propagule Request shall not be required for the acquisition of seeds or propagules from a source inside the Commonwealth of Kentucky.

 

††††† Section 8. Site Access for Representatives of the Department and Law Enforcement Agencies. (1) The department shall provide information about approved growing, handling processing, and storage site locations to representatives of the Kentucky State Police, DEA, and other law enforcement agencies whose representatives request registered site information, including GPS coordinates.

††††† (2) Representatives of affiliated institutions of higher education who are participating in hemp research shall have no reasonable expectation of privacy with respect to premises where hemp or other cannabis seeds, plants, or materials are located and any premises listed in the University/College Affiliation Confirmation Letter.

††††† (3) A representative of an affiliated institution of higher education shall permit a representative of the department or a law enforcement agency to enter into premises where hemp or other cannabis seeds, plants, or materials are located and any premises listed in the University/College Affiliation Confirmation Letter with or without cause and with or without advanced notice.

 

††††† Section 9. Academic Research Project Summary to be Submitted to the Department. Following the completion of an academic research project conducted under the auspices of the departmentís program, the person responsible for overseeing the research project shall submit to the department a summary of the researchís objectives and findings. The results of research that is proprietary in nature need not be reported to the department.

 

RYAN F. QUARLES, Commissioner

††††† APPROVED BY AGENCY: December 15, 2017

††††† FILED WITH LRC: December 15, 2017 at noon

††††† PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on January 22, 2018, at 2:00 p.m., at the Kentucky Department of Agriculture, 111 Corporate Drive, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing was received by that date, the hearing may be cancelled. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through January 31, 2018. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.

††††† CONTACT PERSON: Clint Quarles, Staff Attorney, Kentucky Department of Agriculture, 107 Corporate Drive, Frankfort Kentucky 40601, phone (502) 330-6360, fax (502) 564-2133, email clint.quarles@ky.gov.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Clint Quarles

††††† (1) Provide a brief summary of:

††††† (a) What this administrative regulation does: This regulation established the guidelines for participation in the Industrial Hemp Pilot Project administered by the Kentucky Department of Agriculture.

††††† (b) The necessity of this administrative regulation: This regulation is necessary to establish provisions for growing, movement, processing and possession of industrial hemp.

††††† (c) How this administrative regulation conforms to the content of the authorizing statutes: KRS 260.850-260.869 requires the Kentucky Department of Agriculture to regulate industrial hemp. This administrative regulation satisfies this mandate.

††††† (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This administrative regulation codifies the industrial hemp pilot program that has been administered by the KDA since the 2014 growing season.

††††† (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

††††† (a) How the amendment will change this existing administrative regulation: This is a new administrative regulation.

††††† (b) The necessity of the amendment to this administrative regulation: This is a new administrative regulation.

††††† (c) How the amendment conforms to the content of the authorizing statutes: This is a new administrative regulation.

††††† (d) How the amendment will assist in the effective administration of the statutes: This is a new administrative regulation.

††††† (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: The KDA has 243 grower applications, and 56 processor applications for the 2018 growing season. Additionally, this regulation affects the KDA and the Kentucky State Police, The University of Kentucky Division of Regulatory Services, and possibly local law enforcement agencies.

††††† (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

††††† (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: The 2018 applicants wishing to grow, process, or handle industrial hemp must comply with the administrative requirements listed in this collection of filings, including a criminal background check and testing of the crop produced.

††††† (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): This administrative regulation will add little to no cost to the entities listed for the growing seasons since 2014, other than the fees established and the governmental costs of additional testing and manpower.

††††† (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): Entities will be allowed to grow, process, handle and conduct research on industrial hemp.

††††† (5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:

††††† (a) Initially: The administrative regulation itself adds very little cost to the KDA over previous growing seasons. The KDA employs three (3) full time staff, seasonal contractors, and the partial staff time of several employees to administer the pilot program.

††††† (b) On a continuing basis: The KDA anticipates that the growing market demand for the crop may necessitate additional staff and resources in the future.

††††† (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: The source of funds to administer will come from the fees created by this administrative regulation, as well as the KDA general fund.

††††† (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment: This administrative regulation creates new fees. The KDA will evaluate after a period of time to determine if fee amounts will cover expenses of administration of the program.

††††† (8) State whether or not this administrative regulation established any fees or directly or indirectly increased any fees: Fees are directly established.

††††† (9) TIERING: Is tiering applied? No. All regulated entities have the same requirements.

 

FEDERAL MANDATE ANALYSIS COMPARISON

 

††††† 1. Federal statute or regulation constituting the federal mandate. 7 U.S.C. 5940

††††† 2. State compliance standards. KRS 260.850-260.869

††††† 3. Minimum or uniform standards contained in the federal mandate. 7 U.S.C. 5940. Establish requirements for industrial hemp pilot programs. This administrative regulation establishes the requirements for participation in Kentucky.

††††† 4. Will this administrative regulation impose stricter requirements, or additional or different responsibilities or requirements, than those required by the federal mandate? No, this administrative regulation does not impose stricter, additional, or different requirements or responsibilities than those required by the federal mandate.

††††† 5. Justification for the imposition of the stricter standard, or additional or different responsibilities or requirements. This administrative regulation does not impose stricter, additional, or different requirements or responsibilities than those required by the federal mandate.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

††††† (1) What units, parts, or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Kentucky Department of Agriculture for the administration of the pilot program, plus Kentucky State Police, University of Kentucky Division of Regulatory Services, and local law enforcement.

††††† (2) Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS 260.850-260.869 and 7 U.S.C. 5940.

††††† (3) Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect. The KDA cannot estimate the costs of other agencies, but would reasonably guess that marginal costs increases may be anticipated due to program popularity.

††††† (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? The KDA estimates revenue of $250,000 at this time. Revenue for UK DRS will be approximately 85 dollars per test sample submitted. We estimate no revenue for law enforcement agencies.

††††† (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? The KDA cannot estimate this amount as it is based on number of applicants and growing addresses.

††††† (c) How much will it cost to administer this program for the first year? The KDA fully anticipates the revenue generated to cover only a fraction of the costs to administer the program.

††††† (d) How much will it cost to administer this program for subsequent years? The KDA cannot estimate this amount as it is based on number of applicants and growing addresses.

††††† Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

††††† Revenues (+/-): Perhaps $250,000

††††† Expenditures (+/-): Well in excess of $250,000

††††† Other Explanation: