GENERAL GOVERNMENT

Department of Agriculture

Office of Agricultural Marketing

(New Administrative Regulation)

 

††††† 302 KAR 50:060. Fees and forms.

 

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

††††† STATUTORY AUTHORITY: KRS 260.862

††††† NECESSITY, FUNCTION, AND CONFORMITY: KRS 260.862(1)(a) authorizes the department to promulgate administrative regulations to prescribe rules for any industrial hemp research pilot program in the Commonwealth of Kentucky. KRS 260.862(1)(g) authorizes the department authority to establish a schedule of nonrefundable fees. This administrative regulation establishes a schedule of fees for the departmentís industrial hemp research pilot program.

 

††††† Section 1. Schedule of Fees for Growers. (1) The definitions for this subsection shall be the same definitions that appear in 302 KAR 50:020.

††††† (2) The fees set forth in this subsection shall be nonrefundable.

††††† (3) The Grower License Application fee shall be $100 for each application.

††††† (4) The annual grower participation fee shall be $400 for each growing address.

††††† (5) the secondary pre-harvest sample fee shall be $250 for each sample.

††††† (6) The post-harvest retest fee shall be $250 for each sample.

††††† (7) The site modification surcharge fee shall be $750 for each GPS coordinate location change for each growing site after the grower licensing agreement has been executed.

 

††††† Section 2. Schedule of Fees for Processors/Handlers. (1) The definitions for this subsection shall be the same definitions that appear in 302 KAR 50:030 (Policies and Procedures for Processors and Handlers).

††††† (2) The fees established in this subsection shall be nonrefundable.

††††† (3) The Processor/Handler License Application fee shall be $100 per application.

††††† (4) The annual participation fee for processing the grain component of hemp shall be $500.

††††† (5) The annual participation fee for processing the fiber component of hemp shall be $500.

††††† (6) The annual participation fee for processing the floral material component of hemp (such as CBD) shall be $3,000.

††††† (7) The annual participation fee for a handler (such as a seed cleaner or laboratory) shall be $500.

††††† (8) A processor for more than one (1) component (grain, fiber, or floral material) shall pay the annual participation fee for each component. (For example, a person who processes hemp for fiber, grain, and CBD shall pay a participation fee of $4,000.)

††††† (9) the site modification surcharge fee shall be $750 for each GPS coordinate location change for each processing site after the Processor/Handler Licensing Agreement has been executed.

 

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 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: