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House | June 7, 2016 | Chamber | House Agriculture

Full MP3 Audio File

Members of the committee and members in the audience, I'd like to call the meeting of the House Agriculture Committee to order and welcome everybody here this morning. I'd like to first welcome our pages. Wyatt Cline, Matheus Melanonis, Freeman Polson, Anna Bishop and Casey Jackson and all these young folks are Rollie. Welcome this morning to our house committee. Also our sergeant at arms is with us today, Young Bay, Jim Moron, Martha Gatson and Rex Foster. Thank you very much for being here. Members of the committee and members of the audience, I have just a little bit bit of a housekeeping item to take you have to begin our meeting this morning occasionally we get to do things in the general assembly that are nice, that brings a fresh tone to our meeting and that's what I'm gonna do first. Among the real gentlemen that I have met in the general assembly, J.H Langdon, his representative, representative Langdon. He is truly what we could refer to as a gentle man. I've learned much from him and I've been grateful for the association that I've had with him. As many of you know he is serving in his final term in the the general assembly and just as a token of this committee's appreciation we have taken the liberty, and I'm sure with the full endorsement of everybody here, to provide J.H with a little momento recognizing our appreciation for his service on the agriculture committee. And so Mr. Langdon if you would stand up [BLANK_AUDIO] We're gonna present Chairman Langdon with this gavel that says representative J.H Langdon, Chairman NC House Agriculture Committee 2010-2016. Thank you, Representative Langdon for your noble and faithful service to the agriculture community of North Carolina. >> [APPLAUSE] [APPLAUSE] >> Thank you my [UNKNOWN]. Agriculture's probably one of the most important things in my life and has been all my life. Cuz I grew up on a farm and I farmed for years and taught ag all my career. So having the opportunity to be chair of ag was just really special treat. And the people I've had the opportunity to associate with in this operation of running the House Ag has been great. And I appreciate the service that they provide and I appreciate the individuals that serve on my committee, and I think we have done some really good things since I've been chair. That's helped agriculture in North Carolina in a big way. So I appreciate having that opportunity and I appreciate support of the committee and doing those kinds of things. I've got a lot of close friends in this group, and I would miss you, but not much [LAUGH] I'm going home. >> [LAUGH] [APPLAUSE] >> Thank you. Chairman Mark Brody moves that a PCS for 992B be Properly before the committee, is there a second? >> Second >> All in favor, aye? >> Aye. >> Any opposed? Representative Brody's recognized to present the PCS for house bill 992. [BLANK_AUDIO] >> Thank you Mr. Chairman. This This subject has come up before and being that the district that

I represent is predominantly agriculture, it was brought to my attention again by folks in our area. This is a unique product, a unique plant And I guess some may call it an irony of God's creation. Because it has so many uses and sometimes some forms of it are not, I guess what a good portion of us would say, are not intended to be used for but we'll leave that for For another discussion. But I wanted to say that I passed out this here. It's just a group of articles that were written about industrial hemp and the uses, and some of the background so I won't have to go through all that. I wanted to, Mr. Chairman If you wouldn't mind, let's get right into it and ask if you would allow the staff to explain the bill. >> Thank you, Chairman Brody. Members of the committee, what we will do to facilitate discussion, Chris Sanders, who Has done just an absolute phenomenal job with himself and other staff members. And so we're gonna go through this section by section. And I think it would be productive, Mr. Sanders, when you get through with the session then we'll ask for questions or Comments from the committee on that particular session. At the end of our presentation, if there're others in the audience who would like to speak or make a comment upon this, we will have that opportunity for you at the end of this meeting. Mr. Sanders you're recognized to explain the bill. >> Thank you Chairman Dickson and Chairman Brody. I'll start with Section one. This is a fairly simple section. It adds two definitions to the definition section of the Industrial Hemp Act. And I guess just by way of background before I go into Section one, just to get everybody up to speed, the Industrial Hemp Commission was formed Formed as a five member commission by Senate Bill 313 in the long session to implement an industrial hemp program as authorized by the Federal Farm Act of 2014, which allowed states to an agricultural pilot program to study growth, cultivation or marketing of industrial hemp, provided That's authorized best by state law. And the pilot program was conducted either an institution of higher education or the State Department of Agriculture. So with that being said, section one adds two definitions. It defines industrial hemp research programs as the research program established pursuant to Another section of this act, and then state land grant university is North Carolina University and North Carolina A&T University. And that's all in section one. Would you like me to go straight to section two? >> Any questions or comments relative to section one of the bill? Seeing none, you're recognized to move >> Thank you, Mr. Chairman. Section two expands the membership of the industrial hemp commission from five members to nine members. The members that were already on the commission from Senate Bill 313, were the Commissioner of Agriculture, or the commissioners designee as vice chair. One appointed by the President Pro Tem of the Senate who's the municipal chief of police. One appointed by the Speaker of the House who's an elected sheriff or the sheriff's designee. One appointed by the Governor who's a full time faculty member who regularly teaches in agricultural science. And one appointed by the commissioner of agriculture who's a full time farmer with at least 10 years of experience in agricultural production. The four new members would be another member appointed by the governor, who's a full time faculty member of the State Landgren University who regularly works in agricultural science research. Another member appointed by the commissioner who's a full time farmer with 10 years of experience. One appointed by the commissioner who's a professional agricultural consultant, and one appointed by the commissioner who is an agribusiness professional. Five members of the commission will constitute a quorum and the commission under existing laws authorize to employ two staff members to staff the commission. >> Any questions or comments relative to the creation of the commission or the membership therein. I I might say here that we're recognized from the very beginning that the Commission of Agriculture has an integral part in the implementation and the establishment of this commission and the ongoing efforts.

Speaking for myself, that would be a key element as to how this bill moves and how we proceed. The commission of agriculture is gonna have to be completely satisfied, and in total agreement with the terms and conditions of this bill, which I think it is. And there's been quite a bit of discussion there. But for me, when the commission of agriculture is satisfied, then Chairman Dickson's gonna be satisfied. But not until then. Representative [UNKNOWN] >> Thank you Mr. Chairman. Just briefly also you notice the span of the commission is not only the industry itself but for probably obvious reasons we are including law enforcement in this, and they'll play an integral part in this bill as you'll see as we go forward. Thank you. >> Thank you. Section three. I'm sorry. Representative Ager. >> Just real quick, what's the rationale for expanding the number on the commission? >> Representative Brody. >> It's really limited in the beginning because we actually wanted to get more people on the ground like farmers to get involved. Because this is a business and it is more specialized in agribusiness that we want somebody with more expertise on it, because that's kind of the direction that we're moving on this. This product hasn't really been available in this country for about 70 years. And it's a whole new field now, you could see by the handout that it's a lot of products that are there. We need somebody to also try to coordinate that, and in North Carolina if we do get involved, if the federal laws will change to completely open it up, then we have an opportunity to be Be a leader in not only the production but in the processing. That's a very important part in for North Carolina. We can lead the nation in the processing field of some of these products. >> And just to expand on that, Representative Ager, if you look at the number six and Seven and combine that with my earlier statement we see that as we move forward the viability of this of course is gonna be determined but we're putting very, very heavy emphasis on the agriculture aspect of it and so a professional agricultural consultant and agribusiness professional as expertise to this commission which would be an enhancement to help us determine the viability of this situation. Other questions or comments? Section three. >> Thank you Mr. Chairman, so this is where a little bit more of the meet of the powers and duties of the commission comes into play. If you look at the top of page three section one, makes clear that the industrial hemp research program It's to be directly managed and coordinated by Stateline Grant universities and the research program shall consist primarily of demonstration plots planted and cultivated in North Carolina by selected growers who are licensed pursuing to this section, and the reason for this is because the federal law, federal format makes clear Clear that this has to be a pilot program for research purposes rather than direct commercial enterprise. So there has to be some kind of nexus to legitimate research. A little bit lower in sub section II, it changes, issues license To grow Hemp for commercial purposes, to grow hemp for research purposes and growers have to comply with 106-568.53A which is included in section IV of this act and we'll get to that in a few minutes. A little bit Further down the page at line 33 of page 3 the new language there is basically administrative change that lets the department collect and manage all fees and then renet those funds collected to the commission at least monthly, that's actually a pass three provision kinda like what the department does. And does for check off programs. There are on lines 44 through 48. Those sections are deleted because they're covered under the authorized research purposes that are also included in section IV so those

sections are just basically being moved else where in the statue And then on line 49 subsection eight , that's a grands rule making authority directly to the commission so under previous law or current law rather and senate bill 313, the commission has the authority to propose to the board of agriculture rules to carry out This program this actually gives the commission it's own rule making authority. Lets see. On page four line 20 is the conforming change to recognize that the commission would have rule making authority and then the other A new duty of the commission is to notify the state bureau of investigation and local law enforcement of the duration size and location authorized industrial hemp demonstration plots, and I conclude section three. >> Any questions Representative Brody. >> Chairman chairman [INAUDIBLE] any questions or comments from members of the committee? >> Representative Ager. >> Can the industrial hemp while it's grown under this program actually be processed now? When it's grown can it be processed Processed in that plant they have around here. >> Mr. Sanders. >> Thank you Mr. Chairman. Representative Edgar yes they would be allowed to engage in commercial activities as long as it's subject to a research program and that's gonna be covered in Be covered in Section Four under Authorized Research Purposes. It does make clear that commercial marketing and sale of industrial hemp are authorized as long as there's an agreement between the grower and the university. >> Representative Willingham. >> I'm just curious about the fees that will be collected What are these fees for that the university will be charging those persons who'll be going in? >> Mr. Sanders. >> Representative Willingham, the fees are to support the activities of the commission, to finance the staff Staff I would assume and any other administrative activities of the commission, beyond that I'm not entirely sure with the specifics. The language providers only to support the commission's activities and to reimburse the department for expenses associated with issuance of cultivation licences. >> Follow up? >> Yes I guess I'm confused, the fees charge. These fees to be charged to whom and why would someone be paying if there's nothing they can do with whatever I guess they're growing is This for research purposes will be going back, or the university of course will be doing this. I'm just confused.- >> Representative Brody. >> Thank you. Right now for research purposes, once we're researching how we grow it, what's the efficient way Efficient way of growing it different generating tread, certain strains that are gonna be more productive in North Carolina. Now that we're resorting through the hemp that seventy years ago we used to do that kinda went to weed, now when we're bringing it back so the research is designed to study that, the product though Though actually can be sold to commercial users. It can be sold. So there is a market for the product. At the same time they're making a marketable product, we're also doing the research on it. That's why we're gonna have a number of different plots in different areas of the state. So we can figure out what's best grows in North Carolina, and the ones that we want to produce. The other thing I wanted to point out was in the handout that I gave you, the very last in the bottom here, that industrial hemp is being produced in the world. It's just not being produced here. And a good portion of product that's being produced in the world is actually coming here to be processed. We're just not doing it ourselves and that's where the viability of the product itself is, what we're trying to do is create a market for particular products. I hope you understand that the research is gonna be going on to beside a lot of things about which is best for North Carolina in our particular market, and we do have a phenomenal research facility at NC State that we're proud of. They will be playing a key role in leading that research as well

as the other universities. >> Representative Willingham, also in the next section, section four, we will find out that a part of the research in this legislation does account for marketing and sale. And so there will be as this thing moves forward there will be income derived from these research projects that would help generate the fees. And basically the short answer to your question is the fee schedule and stuff it's to do to support the commission itself and its activities. Okey doke. Other questions? Thank you, section four. >> Thank you Mr. Chairman. The first part of section four lists out the responsibilities of licencees. And basically the responsibilities of licencees are to maintain records demonstrating compliance with the Industrial Health Act and all other state laws. And to retain those records and industrial hemp production records for a minimum of three years. To allow industrial hemp crops to be inspected by and at the discretion of the Industrial Hemp Commission, the SBI or local law enforcement and to maintain a current written agreement with a state land-grant university saying that the grower is a participant in the industrial hemp research program managed by that university. So those are the responsibilities of licensees in that section. And then this creates a new section as well for authorized research purposes which incorporate some of the authorized research purposes that were in senate bill 313, and so I'll just walk through a few there. You can see on page four and five there's several. So the kinda things that a research project can include or starting investigation market place opportunities for hemp products to increase the job base in the state by means of employment related to production of industrial hemp. Starting investigation methods of industrial hemp cultivation bast suited to soil conservation restoration. Overseeing a analyzing group of industrial hemp by licensed for agronomy research, analysis of soil, growing condition, harvest method etc. Conducting seed research and then if you look at E on page five line 12. I think that's maybe the key one for this discussion. Studying the economic feasibility of developing an industrial hemp market in various types of industrial hemp that can be grown in the state, including by the commercial marketing and sale of industrial hemp. So that does explicitly provide for the commercial marketing and sale of hemp. So the raw hemp could be sold, it could be processed etc. And then there is several others reporting on estimated value added benefits, studying agronomy research are being conducted world wide relating to the industrial hemp varieties Varieties, research and promoting industrial hemp and hemp seed that could be grown, say on the world market. Promoting research into development of industrial hemp and commercial market for North Carolina industrial hemp and hemp products. Studying feasibility of attracting federal or private funding for the North Carolina industrial hemp research program and then studying the use of industrial hemp and new energies. Energy technologies. So those will be the authorized research purposes for a grower who has an agreement with a Stateline university. >> Questions or comments, representative Edgar? >> Thank you Mr speaker. Will these licences be issued this summer or this fall for the next growing season? >> Representative Aggert/g, as the commission is appointed, and as you say the commission of agriculture has five appointments, the speaker and the president have one each and the governor has two. We believe that the commission will be appointed expeditiously and then they will take this legislation as we develop it and hopefully vote it out of here next week. And then they will conduct themselves as a commission to issue the licence to the people who apply. >> Thank you. >> Representative Personnel/g. >> Thank you Mr. Chairman. Is there an easy way for law enforcement other than being they would maybe maybe know that their licence has been given but is there an easy test or something that can be made by law enforcement to go buy and pluck some of them off and see if it's industrial hemp rather than marijuana? >> Some of the technical details you'll see a little bit later on as far as content, certification of seed and the levels of various

elements within this can not exceed certain levels. And it will be supervised by the Delain Grant university under very strict controls. So the answer to your question is yes there will be abundant opportunity. [BLANK_AUDIO] Section five. >>Thank you Mr. Chairman, Section Five addresses civil penalties and criminal penalties for violations of the act. Subsection A gives the commissioner the authority to assess a civil penalty of up to $2500 for violation against any person who violates any provision of this article or a rule abided by the commission or conditions of any license, permit or order issued by the commission. Manufacturing, distributing dispensing, etc. Marijuana on property used for industrial hemp production or in a way that's intended to disguise marijuana due to its proximity to industrial hemp. And this is an addition to any other penalties provided by law. There will be a penalty for any person who provides the commission with false or misleading information, and a license application and renewal and inspection or an investigation or any person who tampers with or adulterates a lawfully planted industrial hemp product. So that wouldn't apply only to licensees in that subdivision eight four. And then as far as criminal penalties, it's basically the same ones. There'll be a class two misdemeanor for any person who manufactures, distributes, etc, marijuana on property issued on hemp production or in a way intended to disguise marijuana. For providing falsely misleading information on application, inspection or investigation or for tampering or adulterating with an industrial hemp crop lawfully planted pursuant to the industrial hemp program. >> Questions or comments, I think this is pretty exhaustive and well intended relative to the civil penalties and it's very important that we get this right to begin with because cross pollination, can be and could be a serious problem and that's the reason that this has to be very closely monitored. And that's the reason that we have included in this legislation these kinds of penalties and safeguards. So that people understand from the very beginning that we are serious about the agriculture intent and we realize that there are sensitivities to this issue around the state and around the nation. And as much housekeeping and house cleaning that we can do upfront, we're trying to do that. Questions or comments from the committee. >> Representative Bob. >> Thank you. I just, I know they grow this elsewhere across the country and I've never heard any dilemmas or public outcries. So is there some history you can share of other states that have hemp programs that are going along just fine? Representative Berger. >> Just a little bit of research of the front pages from the state of Kentucky. They're probably the leaders in this right now. They're a little bit of step ahead of us. They've basically done the same thing. They've run in it with their eyes wide open and addressed the issues. North Dakota is another one that's a little bit ahead of us in the same thing. Of course Colorado has theirs and they're wrestling with a whole different strain of the cannabis plant. There hasn't been any reported major problems with the other two states, North Dakota and Kentucky although we are We're making it a point that once again we're going with our eyes wide open and we know someone will try it, attempt to do it and we wanna be ready for it. The other thing is as you read more into the research of industrial hemp that a trained eye and I think law enforcement is gonna be trained Trained and others will be able to instantly tell the difference between the two.

Not only in how it looks but how it's grown, how it's planted. Generally a marijuana plant, it expands and you want that expansion Industrial hemp is grown in narrow rows because what we're looking for is the fiber and it allows the leaves to grow up in a strong fiber. Law enforcement will be able to tell if you're gonna What your use is for the plant. >> Representative [INAUDIBLE] >> Thank you [INAUDIBLE] This indicates that we would have an opportunity to be one of the top five states in growing rope from what you determine Representative Brody. >> Right. As one who used rope in the Navy, rope is no longer made out of hemp for the most part but yeah it would be that. But there are also a lot of other things. One significant fact down here, the very last page and On top is really significant because we can grow four times as much fiber used in paper and other products than a forest can. So if we want to eventually save our Start preserving our forest and we can substitute the hemp product for a lot of those products that are used in our forest products. >> Representative Graham. >> Thank you, Mr. Chair. I think I've supported this in the past. I just have a couple of questions about the legal aspects of this. I'm not No expert on marijuana or industrial hemp or any of that type of material. My big concern is what we just talked about in section five and that is the misuse or the misconception that we're Legalizing marijuana here in North Carolina. How can we, in my situation, relieve any anxiety the from the religious community that they would have as it relates to this? I just want to Be able to give my public a reasonable answer to that. I do understand the technology and I do understand the industrial use but there's still a perception that this is still marijuana. Maybe I can have a sidebar with you to help me With this personally. My second concern is what is a Class 2 misdemeanor? What is the penalty for a Class 2 misdemeanor? >> I'm gonna refer that to- >> Staff. >> To staff yes. >> It's not a whipping No. [CROSSTALK] >> Put a lot of people in prison. But I'm really serious about what is a Class 2 misdemeanor? What is the penalty for that? This is a serious thing that we're talking about. I want to make sure we send a strong message. You just should not be Misusing the technology. >> Chris Sanders/g. >> Thank you Mr. Chairman. President Gramm/g I'm not a criminal expert but I believe this is right. For a Class 2 misdemeanor if you have no prior convictions the punishment is one to three days community punishment. If you have 1 to 4 prior convictions it's 1 to 45 days community or intermediate punishment, and if you have 5 or more it's 1 to 60 days community, intermediate or active punishment, which would be I believe jail time. And I think the fine is $1000 maximum for a class D misdemeanor. >> Representative Gram/g I share your concerns and if you remember back to last session, the manner in which this bill passed out of the house It never came before the house agriculture committee. That's the reason that it is here now and to address your concerns and the concerns of other people is the reason that this bill is before the house agriculture committee now, to give it the hearing that it deserves.

This bill will not move out of this committee until there's a majority of the members of the committee who want to see the bill moved forward. That's the reason that we felt prompted to schedule this meeting at a time when we could get it out and we put this out yesterday and we want each member of the committee to be very comfortable with the provisions of this bill because it is It is serious business that we're talking about and rather than to have the commission appointed and go forward in the manner that it would have under the legislation that passed. We felt like that it was worthy of the time and effort both on staff as well as the Department of Agriculture, and other people to make sure that we've got this right if we were going to do something. So, I hope that that explanation helps. It would be the decision of this committee, Representative Gram/g >> Yes, thank you I appreciate that response. I want to support this and I did support it. But I do have some concerns about the PR. Especially with the clergy and the other folks that concern about the misuse. It only takes one bad apple to cause a lot of harm. With this line of thought here I have, why would you not consider maybe putting someone from the clergy on this committee? I just think it's very, very, if something is very sensitive and I'm really concerned about the public perception, how this will be perceived. But I do thank you for this meeting, I think it's a productive meeting. I like the new language I like the special provisions, and I think that's to be commended but there's still that air of anxiety that I have and then some other folks out in the clergy may have that this could be something that may not be good. But I see the goodness in it. >> Representative Graham, when we convene The next meeting could consider this bill we will receive amendments and vote on them. >> Representative Broody. >> Just to briefly also this is a research program and you might hear people in your districts saying okay how do you get into it. Well the commissioner made it real clear that the amount of acres that's going to be done through the research is very small in comparison to what the potential might be if we go forward so I think at that point we're not only researching the plant itself or researching everything that's surrounding this particular product. >> Representative Turner. >> Thank you Mr. Chairman. I apologize for being a little late today. You've already addressed the visual appearance of this plant? Is it the same for the hemp as it is for marijuana plant? >> [BLANK_AUDIO] Representative Broody. How can you visually distinguish hemp from regular marijuana? I believe it's her question. >> Well I would say that um if it's grown in the same method you probably can't distinguish one from the other but the difference is they're grown differently. As I've seen before as all agricultural products and those in egg/g districts know that the point of growing something is for its maximum yield of whatever it is you're growing. A marijuana plant if you're gonna grow it, mind you I don't have a lot of experience with marijuana plants so just so you know. >> [LAUGH] >> But it's grown for the leaves and the flower, so it's growing out. An industrial hemp product is grown for the fibers, which are basically in the stem itself, and are planted like corn, where it would be compacted so it doesn't have the chance to grow. So you would be able to probably look down a field and and say there might be some potential of somebody trying to sneak something in there. And as trained eyes are developed through law enforcement etc They'll be able to tell pretty quickly. And as far as the importance of the fines itself,

I would then just say somebody will probably try it. This is a country of ingenious people. They try everything and slip something into a field. But they gotta remember that what you're doing is, if they cross-pollinate they tend to diminish the end product of what's being grown. And so you are altering somebody else's product that they are trying to sell. And it's serious business so be real careful. Remember the research project is a very narrow group of [INAUDIBLE], so we're gonna experiment with everything that goes, research everything that goes into it. >> Follow up. >> Follow up. Thank you. Also this might be for staff, the class two [INAUDIBLE], is that standard for this charges in criminal statutes. And it's just brought over or is it more or less. Can you address that. >> [UNKNOWN] Representative Turner, this are new penalties I'm not quite sure how to address that but I believe these are a bolder line with what you'd have for other violations of agency programs. I can look more into that and get back to you. I do not deal with criminal law a whole lot but I can find out. >> Thank you. >> That would be a good thing, Representative Turner for you to report to us when we come back for our next meeting. >> I would be glad to thank you. >> Representative Bell. >> Thank you Mr. Chairman. I just wanted to know is there going to be a special appropriation for this research at the university's- >> No, sir. >> Excuse/g my second follow up. >> Follow up. >> So they are gonna have to do this research on the present staff and the present funding that they have. >> Yes sir. Representative Reeves. >> Thank you Mr. Chair. I just had a um couple of questions and I actually may be able to help on representative Turner's question if she could repeat it for me, but my first question is as to the participants and I imagine this was addressed in the original legislation, who are the participants and how do we choose the participants in the program? >> The commission that will be setup, Representative Lee, a person who is interested in becoming a part of this research parlor will apply for a licence to this commission, the commission will then either issue them a licence or not. That is the selecting process it goes through. >> Followup? >> Next, I know that u under the penalties that the commissioner has some authority to issue a civil penalty. Does the commissioner also have authority to go ahead and issue a suspension or is there a process for that? The reason I ask is for instance if you found somebody violating protocol of the program I would imagine you would want to get them out at least temporarily, and so I was curious as to that. >> Mr. Sanders. Representative Lee that's not addressed specifically in that civil penalty section. I imagine that might be something the commission would take up in rule making but your point is well taken there. >> Followup? >> Any followup if you will allow for representative Turner to re-ask her question I can try to help out on the misdemeanor/g stuff, that's one of the few things I actually know something about. >> Representative Turner, would you redirect your question to Representative Lee. >> That'd be great- >> At no legal fee. >> And then I won't have to report back- >> Oh in that case I'm not gonna answer it. >> [LAUGH] >> Okay, we're having fun. The class two misdemeanor on this charge is that comparable to the criminal statute for the same charge. >> It's not necessarily comparable because the charges that you would get for instance on, to give you an example, if you were to be found to manufacture marijuana or something of that sort, that's your felony. And so if I understood staff correctly, what this will do is this is an additional penalty, so if you're found to be manufacturing marijuana or distributing, you can still be charged with a felony but you'll also get this misdemeanor charge. >> I'm pleased with that answer, thank you. >> And staff agrees with that. Representative Willingham. >> Yes And then representative Ager/g. >> My question is that it's obvious now that there're two or three states that are producing hemp and growing it. Well, can North Carolina, and we have industries that probably could use some of the products that they make, but can the state of North Carolina import hemp now. From those who states who are growing it, who are using it. Can we bring that to North Carolina now and use it? >> Representative Brody >> Absolutely yes. We bring it in to sustain the plant,

I can't remember where the plant is now but we have to because we can't grow it here, so they're bringing it in. They are importing it. The United States imports. Virtually other than these research plots in other states, all the hemp that it produces, the object is to research why is what can we produce here at process here, produce process. And then after that then, how can we match our production ability to manufacture what we can do in North Carolina. But yes we do have a plant for processing right now. >> Follow up. Representative Willngham, representative Graham. >> I'd like to ask representative our legal expert over a question. >> Add no fee. >> [LAUGH] Still no fee. >> No fee. Talking about the different classes of felonies. Do you have lower level? >> Well actually any time we're dealing with numbers, it's misdemeanor. So it's Class three, Class two, Class one and A one going in increasing order. And then if you're dealing with felonies, there'll be classes A through I, with A being the most serious I being the least serious. >> I being the serious. >> Yes. >> Thank you. >> Representative Ager and I apologize for skipping over you. >> Thank you Mr. Chair, my question is do this civil penalties include people that would buy industrial hemp seeds, and plant it on their own outside of the [INAUDIBLE] of the commission? >> I think I can answer that one, yes sir. Any legal participation in this research project pilot must be under the auspices of the commission. And according to these rules that they set out. Representative [UNKNOWN] >> On a little bit lighter note under the scientific facts that Representative Brody handed out he says that if hemp grows outdoors marijuana will not be grown close by to avoid producing little green marijuana It might keep the marijuana patch kinda separate from your hemp patch. >> [LAUGH] Thank you for that insight. >> [LAUGH] >> Mr. Sanders. >> Thank you Mr. Chairman. One note on somebody who would grow industrial hemp outside of the program. if you look at section VI of the bill on page six. Industrial hemp is still classified as marijuana when it's not produced and used complaints with the rules issued by the commission's. So if it's grown outside of the program, it will still be considered marijuana for purposes of criminal law. So it wouldn't so much be that the commissioner would enforce the sale penalty. but they will be subject to all the criminal penalties associated with growing marijuana. [BLANK_AUDIO] >> Further comments and questions. Where are we on section Six? >> We just covered that. [BLANK_AUDIO] Where are we at Mr. Sunders? >> Mr. Chairman we're on section six and seven are the next two and they're basically technical changes to reflect that the Industrial Hemp Commission would have rule making authority and then section eight actually sorta gets back to the question that representative Ager asked earlier about whether or not um this would e done in time for the next grilling season and what section 8 does is amend the effective date of when that definition of marijuana which change to allow industrial hemp grown in compliance with the Industrial Hemp Program to be grown. It would change that definition effective following the adoption of temporary rules by the commission which takes about three months from the time they start the rule-making process under Senate Bill 313, that definition would change following the adoption of permanent rules, which takes about a year or more. And so they would miss the 2017 growing season. With this change to affect the following the adoption of temporary rules by the commission this should expedite the growing or the rule-making schedule which, in theory, would allow for these to be in place by the start of the 2017 growing season. >> Any questions?

Representative Yarborough I apologize for missing you a while ago. >> [BLANK_AUDIO] >> That's okay. Cuz it kinda got into another section of what I was gonna ask about, and that's the federal regulations regarding hemp. In Section three it talks about the commission has to adopt the federal regulations. And then it also talks here in Section 8 about the United States Congress enacting legislation removing industrial help from the federal control substances act. What federal rules exactly do we have to follow on the existence of control substance. We have to wait for approval to do it. >> Staff or [CROSSTALK] I take a quick shot at it and staff can certainly amplify but the drug enforcement agency is one that enforces this so when Representative Hagar says can you [INAUDIBLE] well if you can get a license from the drug enforcement agency again up and do it but don't count on getting that. The other thing with the research projects itself in congress, there's bills in congress to allow legalizing the industrial hemp industry itself. They're waiting for the research and that's the key to this and we get so far four states that are doing it that we find out that it is viable product and answers a lot of the questions especially like we're [UNKNOWN] and a number folks.We answer those questions and then I think they're gonna be able to act. But right now drug enforcement agency enforces the law that says that we can't grow it without a permit because it's considered marijuana. >> Representative Salmon >> Thank you, Mr. Chair. Just a quick question about Senate Bill 313. The provision says that there's gotta be private funding obtained of at least 200,000. I was just wondering how many folks have contributed towards that and how much money has been raised. >> Ms. Hicks, do you have the answer to that question? We talked about it the other day. Joy Hicks with the Department of Agriculture. Could you please repeat that? >> The question is how many participants was there in raising the $200,000? >> Sir, I don't have that question, but we do have at the department the list of participants that did, and there were quite a number of those reach the required 200,000 that was in last year's legislation. But that has been collected and received by the department. Inside that threshold that would allow the formation of that commission and the appointments to that commission. That threshold has been tipped. >> Miss Hicks, would you be kind enough to distribute to the members of this committee, the actual list of the participants who contributed to the $200,000. >> Sir, i will make sure that we get that list to staff. Of course that is somehow protected information but as long as that is available to the public I'll make sure that that gets to staff. today. >> Thank you. Other comments or questions? [UNKNOWN] >> I know we running too close on time here but i would- >> We've scheduled a two hour meeting but we don't have to stay here two hours. >> Okay sounds good. Question for Mr. Representative Brody. >> Yes sir. >> Um who decided the class 2 misdemeanor, who gave input on that? >> I'm gonna field that question to staff who drew it up. It was discussed initially when we begun this process that we're gonna have to have penalties because it's just kinda the nature of the product, we're gonna have to do that, as far as who decided the level I don't know maybe staff or- >> Mr. Sanders. >> Thank you Mr. Chairman. So this language is partially based on the um Virginia industrial hemp [UNKNOWN] and I believe that's what they use as well and if you look in the um department of agriculture statute, they have several violations of various programs as the department runs that are class two misdemeanors as well. There's at least 27 by the first search so it seems fairly consistent with what um the violations of department programs would generally be in terms of the penalties.

Thank you. >> Other questions or comments? Are there members of the public sergeant-at-arms has there been assigned a list for people? Pardon [BLANK_AUDIO] Now members of the public all right, thank you. I have one Members if you will look on page 3 line 11 under the responsibilities of the commission. As you see there in [UNKNOWN] 2, to issue a licence allowing a person farm or corporation to cultivate industrial hemp for research purposes. And I'm expressing this to the committee to get feedback and input from you before our next meeting, I am under the opinion that we might at that point need to put some acreage limitation. And I'll tell you exactly why I think that. Per lessee/g If someone contributed x amount of money to this $200,000, and if somebody contributed 10x amount of money to the commission. I don't think that the person who contributed 10x to the commission should necessarily think that they should have the opportunity to have 10 times more. And I don't want to take our time here but I think we might we might be wise to consider that at this point in legislation. Representative Brody, final comments? >> In line with that I do think that we need to be mindful that we spread it around the state because we are such a geologically diverse state that we need to make sure that the research is conducted in basically everywhere. The product itself I wish one of the farmers that intends to would like to be a part of the research I wish he was here because the okay, well you decided not to speak then. But the agricultural benefits of growing hemp for industrial hemp and its effect on the rotation of crops, and pesticides, herbicides, it's a phenomenal product that has other benefits besides what the product itself produces. And as I said is one of the ironies of God's creation. That something so extremely versatile as this is currently illegal because of something else that also comes from it. So I encourage all the committee to think about it, if there's amendments please bring them forth or concerns, we wanna make this right as we go forward and the research project is designed to work on a lot of the bugs, but maybe we can try to work on some of those before we learn about them in the research project itself. Thank you Mr. Chairman. >> Thank you Representative Brody, Chairman Laingdon/g any concluding comments? >> Our procedure then, and our plan, members of the committee, is that we'll convene this committee again next week, probably at our normal time hopefully. And I'd also your I'd like to say to members of the public that what I would like to do when we convene the meeting the next time is have public comment up front, if there is anybody that would like to comment. And we will allow public comment on the bill upfront And then we will discuss it as a committee and then we will have a vote on the bill as amended to move forward. Any questions or comments?

[BLANK_AUDIO] Thank you for your attention. Committee's adjourned.