AAM-17-15-00011-RP Growth and Cultivation of Industrial Hemp

9/30/15 N.Y. St. Reg. AAM-17-15-00011-RP

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 39

September 30, 2015

RULE MAKING ACTIVITIES

DEPARTMENT OF AGRICULTURE AND MARKETS

REVISED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. AAM-17-15-00011-RP

Growth and Cultivation of Industrial Hemp

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following revised rule:

Proposed Action:

Addition of Part 159 to Title 1 NYCRR.

Statutory authority:

Agriculture and Markets Law, sections 16, 18 and 508

Subject:

Growth and cultivation of industrial hemp.

Purpose:

To set forth procedures for authorizing and regulating the growth and cultivation of industrial hemp.

Text of revised rule:

Chapter III of 1 NYCRR is amended by adding thereto a new Subchapter F, to read as follows:

Subchapter F Industrial Hemp

Part 159 Industrial Hemp Agricultural Pilot Programs

(Statutory Authority: Agriculture and Markets Law sections 16 and 18 and article 29)

§ 159.1 Definitions

For the purpose of this Part, the following terms shall have the following meanings:

(a) “Authorization holder” means an institution of higher education that has been granted authority by the Commissioner to acquire and possess industrial hemp to study its growth and cultivation.

(b) “Commissioner” means the Commissioner of Agriculture and Markets of the State of New York.

(c) “Department” means the Department of Agriculture and Markets of the State of New York.

(d) “Dispose”, and any variant thereof, means to render unusable for any purpose.

(e) “Industrial hemp” means the same as that term is defined in subdivision (1) of Agriculture and Markets Law section 505.

(f) “Institution of higher education” means the same as that term is defined in subdivision (2) of Agriculture and Markets Law section 505.

(g) “Person” means an individual, partnership, corporation, limited liability company, association, or any business entity by whatever name designated and whether or not incorporated, unless the context clearly indicates otherwise.

(h) “Registered premises” means any facility, location, or property owned, leased, or licensed, which is under the control of the authorization holder and certified by the Commissioner as a site where industrial hemp may be grown or cultivated, harvested, stored, studied, or disposed of.

(i) “Secured facility” means a building or structure where access is restricted only to authorized persons.

(j) “State” means the State of New York.

§ 159.2 Authorization to grow and cultivate industrial hemp

(a) Industrial hemp and industrial hemp seeds may not be possessed, grown, or cultivated unless an application therefor has been submitted to and authority has been granted by the Commissioner.

(b) Only an institution of higher education may submit an application to the Commissioner for authorization to grow or cultivate industrial hemp.

(c) Industrial hemp may only be grown or cultivated upon registered premises.

(d) An application to grow and cultivate industrial hemp shall be made upon a form prescribed by the Commissioner and shall include an application fee of $500.00. Each application and renewal application shall provide the information deemed necessary by the Commissioner for the administration of this Part, including but not limited to:

(1) a description of each premises where industrial hemp will be grown or cultivated, harvested, stored, studied or disposed of, by physical address and by GPS co-ordinates;

(2) a diagram for each premises that visually depicts the buildings, structures and improvements on the premises and identifies their use, and that sets forth the relevant activities conducted at the premises; and

(3) a detailed summary of the issues and matters that the applicant intends to study in conjunction with growing or cultivating industrial hemp which may include:

i. the soils, growing conditions, and harvest methods suitable for the growth or cultivation of various types of industrial hemp in the State;

ii. the cultivars suitable for the growth or cultivation of various types of industrial hemp, including the cost of each cultivar; the yield of industrial hemp attributable to each such cultivar; and the inputs required to assure that each such cultivar, when planted, results in a satisfactory yield of industrial hemp;

iii. the markets that the applicant has identified, in consultation with appropriate commercial interests, that exist or that could feasibly be developed for various types of industrial hemp, including but not limited to markets for apparel, energy, food, paper, and tools;

iv. the means and methods that could feasibly be used to advertise, expose, or publicize products that contain, in whole or in predominate part, industrial hemp, to facilitate the wholesale and/or retail sale thereof.

(4) a transportation plan, if industrial hemp will be moved from one location on the registered premises to another or from one registered premises to another registered premises, that sets forth information relevant to the security requirements set forth in section 159.6 of this Part.

(5) a security plan that sets forth the measures that the applicant intends to take to ensure that the security requirements set forth in section 159.6 of this Part are complied with.

(e) Applications to grow and cultivate industrial hemp shall be evaluated in the order in which they are received. In the event that two or more applications are received at the same time, the Department will determine the order of receipt at random.

(f) The Commissioner may decline to grant authority to grow and cultivate industrial hemp, and may revoke or decline to renew an authorization to grow and cultivate industrial hemp, if he or she finds, after investigation and opportunity to be heard, that:

(1) the application does not set forth the information required pursuant to subdivision (d) of this section and fails to set forth such information within twenty days after the applicant has received notice that the required information was not set forth on the application; or

(2) ten authorizations to grow and cultivate industrial hemp have been issued and are in effect; or

(3) the applicant or authorization holder is not capable for whatever reason of complying, or has failed to comply, with the provisions of this Part or with state or federal law relating to the possession, sale, or cultivation of industrial hemp; or

(4) the Department determines, in its sole discretion, that it is or will be impracticable to regulate the applicant’s or authorization holder’s adherence to the requirements set forth in this Part; or

(5) the authorization holder has not complied with the requirements set forth in subdivision (e) of section 159.3 of this Part.

(g) Authorization to grow and cultivate industrial hemp shall be for a period of three years from the date application therefor was approved by the Commissioner. Notwithstanding the preceding, the Commissioner may grant or renew an authorization to grow and cultivate industrial hemp for a period of more than three years if he or she determines that the issues and matters that the applicant or authorization holder intends to study or is studying cannot be adequately and fully studied within three years from the date that authorization is granted or renewed.

An application for renewal shall be submitted to the Commissioner no later than thirty days prior to the date that the authorization expires and shall include an application fee of $500.00.

(h) The Commissioner may grant or renew an authorization to grow and cultivate industrial hemp with conditions, including but not limited to one or more of the following:

(1) industrial hemp is grown and cultivated on a limited number of acres; or

(2) industrial hemp is grown and cultivated in a limited volume.

(i) An authorization holder may surrender its authorization at any time; however, the requirements set forth in section 159.6 of this Part shall remain applicable and binding upon such authorization holder until its authorization period would otherwise have expired.

§ 159.3 Requirements

(a) Studies and reports.

(1) An authorization holder shall, no later than three months after the date of application to grow or cultivate industrial hemp was approved by the Commissioner, furnish to the Commissioner a report that provides, in detail, its findings and conclusions regarding the issues and matters set forth in its application to grow or cultivate industrial hemp.

(2) An authorization holder shall every three months after furnishing a report of the type referred to in paragraph (1) of this subdivision, furnish a report that supplements, in detail, the findings and conclusions set forth in earlier report(s).

(3) An authorization holder may study issues and matters different from those set forth in its application to grow or cultivate industrial hemp, with the prior written approval of the Commissioner, and all reports required pursuant to this section, furnished after the date of the Commissioner’s approval, shall set forth findings and conclusions regarding such different issues and matters.

(b) Except as provided in subdivision (a) of section 159.6 of this Part and in this subdivision, industrial hemp may be grown or cultivated, harvested, stored, and disposed of only on the registered premises. Industrial hemp that has been harvested shall be stored in a secured facility except when it is being transported within the registered premises, to a laboratory for testing, or to another registered premises or facility approved by the Commissioner.

(c) Industrial hemp may be transported off registered premises only if it is being transported to a laboratory for testing or to another registered premises or facility approved by the Commissioner. Industrial hemp may be transported only in an enclosed, locked compartment of a truck or van where it cannot be seen from the outside of the vehicle, the contents of the vehicle are not disclosed, and the operator of the vehicle has been approved by the authorization holder to transport industrial hemp, as indicated in the record required to be maintained pursuant to paragraph (1) of subdivision (a) of section 159.4 of this Part.

(d) Testing and disposition.

(1) An authorization holder shall prepare, maintain, and make available to the Commissioner, upon request, a record that sets forth an accurate inventory of industrial hemp plants and seeds and shall reasonably ensure that no plant is possessed or grown or cultivated that would not meet the definition of industrial hemp because it contains a concentration of more than 0.3 percent of delta-9 tetrahydrocannabinol, on a dry basis.

(2) An authorization holder shall ensure that a representative sample of plants grown or cultivated from each variety of seed used for the purpose of growing or cultivating industrial hemp is analyzed at a laboratory approved by the Commissioner, to determine the concentration of delta-9 tetrahydrocannabinol therein. The authorization holder shall furnish a report that sets forth the results of analysis(es) to the Commissioner promptly after such analysis(es) is made, in a form approved by the Commissioner.

(3) An authorization holder shall dispose of all plants determined, after laboratory analysis, to have a concentration of more than 0.3 percent of delta-9 tetrahydrocannabinol on a dry basis, and shall prepare and maintain on the registered premises for a period of two years, a record that sets forth the information required in section 159.4(a)(4)(iii) of this Part. The authorization holder shall make available to the Department such records upon request, in a form and at a location satisfactory to the Commissioner.

(e) An authorization holder shall, no later than fifteen days after having been granted authorization, notify, in writing, the applicable unit or units of law enforcement, including the unit or units of law enforcement in the political subdivision in which the registered premises is located, that it has received such authorization and shall provide such unit or units of law enforcement a copy of the security plan referred to in section 159.2(d)(5) of this Part. The authorization holder shall, no later than fifteen days after having notified such unit or units of law enforcement, provide the Department with a copy of such notification. An authorization holder shall adequately monitor registered premises under its control and shall notify the appropriate unit or units of law enforcement and the Department regarding facts and circumstances that indicate that industrial hemp has been or may be held or possessed in violation of the provisions of this Part.

(f) (1) Notwithstanding any provision of this Part to the contrary, an authorization holder may enter into a contract with a person for that person to be involved in growing or cultivating, harvesting, storing, studying, transporting, and/or disposing of industrial hemp, if:

i. the contract has, prior to execution, been approved by the Commissioner; and

ii. the contract requires such subcontractor to comply with all relevant provisions of this Part.

(2) The Commissioner may decline to renew or may revoke an authorization to grow and cultivate industrial hemp if he or she finds, after investigation, that such subcontractor has failed to comply with all relevant provisions of this Part.

§ 159.4 Recordkeeping

(a) An authorization holder shall create, maintain, and make available accurate records, in a form and at a location satisfactory to the Commissioner, that set forth the following information:

(1) a description of the registered premises at which industrial hemp is grown or cultivated that is in substantially the same form as the description required to be provided pursuant to paragraph (1) of subdivision (d) of section 159.2 of this Part;

(2) the name of the cultivar(s) grown and the volume of each cultivar purchased, acquired and/or used, for the appropriate growing season; and

(3) the volume of industrial hemp grown or cultivated, for the appropriate growing season; and

i. the volume of industrial hemp harvested; and

ii. the volume of industrial hemp studied and the name and address of each person who or that has conducted or been involved in such study; and

iii. the volume of industrial hemp disposed of, the date and location of each disposal, and the method of each disposal.

(b) The records and materials referred to in subdivision (a) of this section shall be maintained on the registered premises and made available to the Commissioner for two years from the date they were made or prepared.

§ 159.5 Inspections

(a) The authorization holder shall inspect the registered premises as often as necessary to ensure compliance with the requirements set forth in this Part.

(b) The registered premises of an authorization holder are subject to inspection by the Commissioner and by his or her authorized agents, employees, or officers, pursuant to Agriculture and Markets Law section 20, as often and to the extent necessary to ensure compliance with the provisions of this Part and state and federal law relating to the possession, sale, or cultivation of industrial hemp. The Commissioner may authorize agents, employees, or officers of the New York State Department of Health and/or local law enforcement to accompany him or her during an inspection of the registered premises of an authorization holder.

§ 159.6 Security measures

(a) An authorization holder shall take all actions necessary to ensure that:

(1) industrial hemp is not removed from registered premises except for transportation to a laboratory for testing pursuant to the provisions of section 159.3(d)(2) of this Part or except as allowed by the Commissioner pursuant to his/her written authorization.

(2) industrial hemp is not acquired, possessed, grown or cultivated, harvested, stored, transported, or disposed of except under conditions that ensure that it will not be removed from registered premises or used in violation of state or federal law.

(b) The authorization holder shall take measures, satisfactory to the Commissioner, to ensure compliance with the requirements set forth in subdivision (a) of this section, including but not limited to:

(1) restricting access to areas of the registered premises where industrial hemp is grown or cultivated; and

(2) posting signs, each of which set forth, in readily observable block letters, the words “NO TRESPASSING. FACILITY CONTAINS INDUSTRIAL HEMP. UNAUTHORIZED POSSESSION OF INDUSTRIAL HEMP IS SUBJECT TO PROSECUTION PURSUANT TO ARTICLE 220 OF THE PENAL LAW”. A sufficient number of signs shall be posted so that a sign and the information required to be set forth on a sign can be read, from a distance of not less than 100 feet, from any location around the perimeter of the registered premises where industrial hemp is grown or cultivated, or held; and

(3) providing for equipment and/or other fixtures such as fences that are reasonably designed to prevent unauthorized persons from entering the registered premises and/or having their presence therein undetected.

(c) Nothing in this section is intended to apply to any finished or marketable product which contains industrial hemp but from which the hemp may not practically be extricated in the form of industrial hemp.

Revised rule compared with proposed rule:

Substantial revisions were made in sections 159.1(h) and (i), 159.2(d)(3), (g), (h), 159.3(d)(1) and 159.6(b).

Text of revised proposed rule and any required statements and analyses may be obtained from

Chris Logue, Director, Division of Plant Industry, NYS Dept. of Agriculture and Markets, 10B Airline Drive, Albany, NY 12235, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

30 days after publication of this notice.

Summary of Revised Regulatory Impact Statement

1. Statutory authority:

Agriculture and Markets Law (“A&ML”) sections 16, 18, and article 29.

2. Legislative objectives:

The legislature has authorized the Department of Agriculture and Markets (“Department”) to allow a limited number of educational institutions to study the growth and cultivation of industrial hemp. The proposed rule will set forth requirements that will ensure that industrial hemp is properly grown and cultivated and, thereafter, held, studied, and disposed of in a manner designed to protect the public health, safety and welfare.

3. Needs and benefits:

The proposed rule will add a new Part 159 to 1 NYCRR. The proposed rule is needed to provide procedures and authorization so that those institutions of higher education that want to conduct research on industrial hemp may do so. The proposed rule will require each such institution to submit an application to the Commissioner of Agriculture and Markets (“Commissioner”) for authorization to grow and cultivate industrial hemp, including information about the premises upon which the hemp will be grown or cultivated, stored, studied, and disposed of. The Commissioner may deny authority if he or she determines that the applicant cannot or will not comply with the requirements of Part 159. An institution of higher education that has received authorization must submit periodic reports regarding its research, have samples of industrial hemp analyzed in an approved laboratory, maintain records, and provide proper security. Such requirements are needed to ensure that industrial hemp, which is defined in Public Health Law section 3302(21) to be marijuana but contains only a relatively insignificant amount of delta-9 tetrahydrocannabinol, is not improperly diverted or used. The State’s agricultural industry will benefit if the proposed rule is adopted because relevant policy makers will be in a better position to determine whether the industrial hemp can be grown and cultivated in New York and whether it is a commercially-viable product.

4. Costs:

a. Cost to regulated parties:

An educational institution that applies for authorization to grow and cultivate industrial hemp is required to submit a $500.00 application fee. An educational institution that has been granted authorization (an “authorization holder”) will, thereafter, incur costs in growing and cultivating a field of industrial hemp – the amount of such costs is dependent upon the acreage of the field where it is grown and the costs of seeds, fertilizer, and crop protectants, as well as the cost of harvesting, storage, and processing.

An authorization holder will also be required to study industrial hemp and prepare periodic reports reflecting its findings. The cost associated with this requirement will depend in large part upon whether the institution will need to hire new staff or can utilize staff presently employed.

An authorization holder will, furthermore, need to provide proper security and to post signs, at the premises where industrial hemp is grown or cultivated, and held. The cost associated with this requirement will depend upon a site specific analysis of the risks posed by possible theft or unauthorized use.

b. Costs to state and local government:

None.

5. Local government mandates:

None.

6. Paperwork:

An authorization holder will be required to furnish periodic reports to the Commissioner and to maintain and update such reports as necessary.

7. Duplication:

Section 7606 of the federal Agricultural Reform, Food and Jobs Act of 2013 (Public Law 113-79) amended Title 7 of the United States Code to add section 5940 thereto to authorize states to enact statutes allowing educational institutions to grow and cultivate industrial hemp. Pursuant to such authorization, the New York State legislature passed, and the Governor signed, a bill that enacted Article 29 of the Agriculture and Markets Law, entitled “Growth of Industrial Hemp” (see Chapter 524 of the Laws of 2014). The federal law referred to above does not set forth any duplicative, overlapping or conflicting requirements for educational institutions authorized by the Commissioner to grow and cultivate industrial hemp must comply with.

8. Alternatives:

On February 24, 2015, a meeting of the Industrial Hemp Work Group was held at the Department’s offices. This group consisted of Department representatives; manufacturers of products that contain industrial hemp; representatives of educational institutions involved in the study of industrial hemp; and a state assemblywoman. Prior to the meeting, the participants were furnished with a copy of the proposed express terms of the rule, At the meeting, several participants suggested amendments to the express terms and, after the meeting was concluded, the Department assessed such comments and made substantial revisions to the express terms. The Department amended the proposed express terms so that an educational institution, in its application to grow and cultivate industrial hemp, could indicate that it intended to study the methods that could be used to advertise, expose, or publicize industrial hemp and products containing that substance. Furthermore, the express terms were amended to allow the Commissioner to grant authorization to grow and cultivate industrial hemp for more than one year, to require reports to be submitted quarterly rather than biannually, and to allow an authorized institution to subcontract with another entity to allow that entity to conduct regulated activities, if such entity were required to comply and did comply with applicable regulatory provisions. Although certain participants requested that the proposed express terms be amended to lessen the security requirements, the Department initially chose not to do so. However, at the hearing held to consider whether the proposed rule should be adopted, additional information regarding the impact of the security requirements set forth in the proposed rule was provided. After assessing such information, the Department decided to make such requirements less stringent, and the express terms presently require an authorized educational institution only to restrict access to areas of the registered premises where industrial hemp is grown or cultivated; to post warning signs; and to maintain equipment, facilities, and fixtures reasonably designed to ensure that industrial hemp is not improperly handled, in violation of the provisions of the proposed rule.

9. Federal standards:

The proposed rule is authorized by Agriculture and Markets Law section 508 which, in turn, is authorized pursuant to 7 USC section 5940.

10. Compliance schedule:

An educational institution that has been authorized to grow and cultivate industrial hemp will be required to comply with all of the provisions of the proposed rule immediately upon being granted authorization.

Revised Regulatory Flexibility Analysis

1. Effect of rule:

This rule amends 1 NYCRR by adding thereto a Part 159, entitled “Industrial Hemp”.

It is anticipated that the rule may have only an incidental impact on local governments, but only to the extent those governments decide to increase the number of police patrols in areas where industrial hemp is grown or cultivated by the limited number of institutions of higher education authorized to do so (“authorization holders”). The rule will have no impact on small businesses, will not impose any compliance requirements upon them, will not require them to obtain any professional services, and will not cause them to incur any compliance costs.

2. Compliance requirements:

The rule does not regulate local governments. The rule, also, does not directly regulate small businesses. An authorization holder may, pursuant to proposed section 159.3(f), enter into a contract with a small business that would allow that small business to participate in the cultivating and growing, holding, studying, and disposing of industrial hemp. Depending upon the provisions of the contract, a small business may be required to conduct studies and prepare periodic reports relating to such growth or cultivation. A small business may also be required to ensure that cultivars of industrial hemp grown or cultivated by it are tested in a laboratory to determine their chemical composition, and may also be required to ensure that industrial hemp is properly disposed of after having been used or studied. Finally, a small business may be required to ensure that proper security equipment and procedures are installed and instituted to prevent industrial hemp from being improperly diverted.

3. Professional services:

None.

4. Compliance costs:

(a) Initial capital costs that will be incurred by a small business that has contracted with an authorized institution of higher education:

A small business that has entered into a contract with an authorization holder (“contractor”) may, generally, be required to ensure that the premises where industrial hemp is grown or cultivated, and held, are secure; that a breach in security is capable of being detected; and that signs are posted warning against a breach in security and unauthorized possession of industrial hemp. The capital costs associated with complying with these requirements will vary greatly depending upon, inter alia, the location of the premises where industrial hemp is grown or cultivated, or held (for example, whether the premises are located in a populated area and whether they are readily accessible by common modes of transportation) and the size of the premises to be so used.

(b) Annual cost for continuing compliance with the proposed rule:

A contractor may be required to conduct studies and complete reports. It is impossible to determine how much a contractor will need to spend to study industrial hemp and to prepare a report setting forth its possible commercial uses.

5. Economic and technological feasibility:

The rule will require authorization holders to, inter alia, prepare a report(s) regarding its experience in growing or cultivating industrial hemp and the possible commercial uses thereof; to maintain required records, and to ensure that proper security equipment and procedures are installed and instituted to ensure that industrial hemp is not improperly diverted from its premises; a contractor may, depending upon the provisions of its contract, engage in such activities. Every one of the requirements that an authorization holder must comply with, and that a contractor may have to comply with, is technologically and economically feasible.

6. Minimizing adverse impact:

The rule will not have an adverse impact upon local governments. Furthermore, the rule does not regulate small businesses; rather, only those small businesses that choose to enter into a contract with an authorization holder will, indirectly, be regulated by the rule.

7. Small business and local government participation:

On February 24, 2015, a meeting of the Industrial Hemp Work Group was held at the Department’s offices. This group consisted of Department representatives; manufacturers of products that contain industrial hemp; representatives of educational institutions involved in the study of industrial hemp; and a state assemblywoman. Prior to the meeting, the participants were furnished with a copy of the proposed express terms of the rule, At the meeting, several participants suggested amendments to the express terms and, after the meeting was concluded, the Department assessed such comments and made substantial revisions to such express terms.

On May 20, 2015, a hearing to consider whether the express terms of the proposed rule, as revised as referred to above, should be adopted. Numerous interested persons provided oral and written comments prompting additional revisions.

Revised Rural Area Flexibility Analysis

The proposed rule implements the provisions of Article 29 of the Agriculture and Markets Law, entitled “Industrial Hemp”. The proposed rule sets forth procedures for the Commissioner of Agriculture and Markets to authorize institutions of higher education to grow and cultivate industrial hemp and requires authorized institutions to study industrial hemp and issue periodic reports regarding the results of such study, to maintain certain required records, to ensure that samples of industrial hemp are tested in an approved laboratory, and to install and institute proper security equipment and procedures so that industrial hemp is not improperly diverted.

Because this proposal does not impose an adverse impact upon rural areas and because it imposes no reporting, recordkeeping or other compliance requirements on public or private entities in rural areas that have not applied and have not been granted authorization to grow and cultivate industrial hemp, no rural area flexibility has been prepared in connection with the proposed rule, pursuant to SAPA section 202-bb(4)(a).

Revised Job Impact Statement

The proposed rule implements the provisions of Article 29 of the Agriculture and Markets Law, entitled “Industrial Hemp”. The proposed rule sets forth procedures for the Commissioner of Agriculture and Markets to authorize institutions of higher education to grow and cultivate industrial hemp and requires authorized institutions to study industrial hemp and issue periodic reports regarding the results of such study, to maintain certain required records, to ensure that samples of industrial hemp are tested in an approved laboratory, and to install and institute proper security equipment and procedures so that industrial hemp is not improperly diverted.

The proposed rule is expected to have no impact, or perhaps a minimally positive impact, on jobs and employment opportunities in authorized institutions and among agricultural workers and security guards.

Assessment of Public Comment

The Department of Agriculture and Markets (“Department”) received public comment from individuals, representatives of trade organizations and commercial interests, and state legislators, regarding various provisions of proposed 1 NYCRR Part 159. Set forth, below, is a list of the provisions of Part 159 which were commented upon, a summary of the comments, and the Department’s response.

1. Proposed subdivision (g) of section 159.1 – definition of the term “person”.

One commentator proposed that the definition of the word “person” should be amended so that it would refer to individuals and juridical entities, regardless of the context in which such word was used (the definition currently provides that that word could mean either an individual or a juridical entity, or both, depending upon the context in which it is used). This suggestion was not incorporated; certain provisions of proposed 1 NYCRR Part 159 use the word “person” to refer to an individual only, and other provisions use that word to refer to individuals as well as to juridical entities.

Another commentator suggested that the word “person” was sexist and that the word “person” should be substituted therefor. This suggestion was not adopted; the word “person” is used throughout the law and regulations and is commonly understood to refer to both genders.

2. Proposed subdivision (h) of section 159.1 – definition of the term “registered premises”.

Several commentators proposed that the definition of the term “registered premises” be amended to broaden its scope so that it would include leased or licensed premises; this suggestion was incorporated.

3. Paragraph (4) of subdivision (d) of section 159.2 – requirement that an application must set forth an employee’s or staff member’s social security number and criminal history.

Several commentators proposed that an applicant to grow and cultivate industrial hemp (“applicant”) should not be required to set forth, in its application, its employer identification number and the social security number, and the criminal history, of each person involved, generally, in the handling of industrial hemp. This suggestion was not incorporated. Regarding the requirement that an application set forth the applicant’s federal employer identification number, Tax Law section (5) requires all applications of the type required to grow and cultivate industrial hemp to set forth such information. Regarding the requirement that an application set forth the social security number and the criminal history of each person employed by the applicant in, generally, handling industrial hemp, the Department believes that, because industrial hemp is marijuana, within the meaning of Public Health Law (“PHL”) section 3302(21), and because marijuana is a controlled substance pursuant to PHL section 3306(d)(13), it is reasonable that the Commissioner of Agriculture and Markets (“Commissioner”) be able to determine if an applicant’s staff members have, in the past, improperly handled or abused controlled substances, or otherwise acted contrary to law, when determining whether to grant such application. Furthermore, most of the applications for permits or licenses, issued by the Commissioner, require the provision of such information.

4. Proposed subparagraph (iv) of paragraph (3) of subdivision (d) of section 159.2 – required topics of study.

A commentator suggested that an institution of higher education that has been authorized to grow and cultivate industrial hemp (“authorized institution”) may not be equipped, and should, therefore, not be required to study and report regarding methods and means to advertise industrial hemp or products that contain such plant; this suggestion was incorporated insofar as the application to grow and cultivate industrial hemp may, but is not required to, provide that that activity will be studied and reported on.

5. Subdivision (i) of section 159.1 – definition of the term “secured facility”.

A commentator proposed that the definition of the term “secured facility” be amended to refer only to a structure the doors of which have hardened locks. The substance of this suggestion was incorporated; in place of the stringent security requirements previously incorporated in the definition of such term, a “secured facility” will be defined as, basically, a structure to which only authorized persons have access. An authorized institution will, therefore, have flexibility to determine and utilize those procedures and equipment that will ensure that unauthorized access to a secured facility is prevented.

6. Paragraph (2) of subdivision (d) of section 159.2 – requirement that an application must set forth a diagram of the registered premises.

A commentator proposed that an applicant should not be required to set forth, in its application, a diagram of the premises where industrial hemp is to be grown or cultivated or held. This suggestion was not incorporated; the Department believes that it will be in a better position to determine whether an applicant will engage in productive activities and research if it can review and assess a diagram of the applicant’s facilities.

7. Subparagraphs (i) and (iii) of paragraph (3) of subdivision (d) of section 159.2 – issues and matters to be studied by an authorized institution.

A commentator proposed that an authorized institution should not be required to study the soils, growing conditions and harvest methods suitable for the growth and cultivation of industrial hemp, or to study the possible commercial uses thereof. This suggestion was incorporated to a certain extent in that an applicant may, but is not required, to conduct such studies.

8. Paragraphs (1) and (2) of subdivision (f) of section 159.2 – grounds for denial of an application, or revocation of an authorization, to grown and cultivate industrial hemp.

A commentator proposed that an applicant be allowed fifteen days or twenty days to correct an application that does not set forth the required information instead of fourteen days, the period presently prescribed. This suggestion was incorporated to provide that an applicant will have twenty days from the date of notification that its application was insufficient to make the necessary corrections and/or additions.

This commentator also proposed that the Commissioner not be authorized to deny an application if ten authorizations to grow and cultivate industrial hemp have already been granted. This suggestion was not incorporated; Agriculture and Markets Law (“AML”) section 508 precludes the issuance of more than ten authorizations.

9. Subdivision (f) of section 159.2 – grounds for denial of an application, or revocation of an authorization, to grown and cultivate industrial hemp.

A commentator proposed that a new paragraph (6) be added to subdivision (f) of section 159.2, to allow the Commissioner to revoke an authorization only after the authorization holder has been given an opportunity to remedy a failure to adequately study industrial hemp, consistent with its application. This suggestion was not incorporated; the Department intends to review the quarterly reports that all authorized institutions are required to provide and if a particular authorized institution has been determined to have not made adequate progress, the Department will contact such institution to determine the cause of, and possible remedies for, such failure.

10. Subdivision (g) of section 159.2 – authorization period.

Several commentators suggested that each authorization to grow and cultivate industrial hemp should be for a three-year period while one commentator suggested that a five-year period was appropriate. The first commentator’s suggestion was incorporated. The Department concurs that a one-year authorization period, as initially proposed, would discourage an authorized institution from adequately providing the necessary capital improvements to grow and cultivate industrial hemp and, furthermore, would make it difficult for such an institution to procure monetary grants which are, typically, given for more than a one-year period. The Department believes that a three-year authorization period will provide the necessary assurances that an authorized institution will be legally entitled to grow and cultivate industrial hemp for a reasonable period of time so as to justify providing for capital improvements and applying for monetary grants.

11. Section 159.2 – amendment of application to study new issues and matters.

A commentator suggested that proposed section 159.2 be amended to set forth a new subdivision, allowing an authorized institution to amend its application to allow it to grow and cultivate industrial hemp on different premises, and to study issues and matters different from those set forth in its application. This suggestion was not incorporated since section 159.3(a)(3) currently allows an authorized institution to study issues and matters different from those set forth in its application, with the prior approval of the Commissioner.

12. Subdivision (h) of section 159.2 – conditional authorizations.

A commentator proposed that the Commissioner not be allowed to issue conditional authorizations. This suggestion was not incorporated; the Department believes that its ability to issue conditional authorizations will better enable it to manage and oversee the growing and cultivating of industrial hemp, and its handling, so that such plant is not impermissibly used or diverted. Furthermore, the Commissioner is currently authorized to issue conditional licenses in other contexts (see, for example, AML section 258-c, which allows the Commissioner to issue conditional milk dealer licenses).

13. Paragraph (3) of subdivision (h) of section 159.2 – authorization condition.

A commentator proposed that the Commissioner not be allowed to issue an authorization that prohibits the authorized institution from having any affiliation, association, or contact with a person who has acted in a manner demonstrating his or her inability or unwillingness to properly grow or cultivate industrial hemp, or handle such plant. This suggestion was incorporated.

14. Paragraphs (1) and (2) of subdivision (a) of section 159.3 – periodic reporting.

Several commentators suggested that an authorized institution should be required to submit a report regarding its study of industrial hemp every six months, rather than every three months as presently provided. This suggestion was not incorporated; the Department intends to actively monitor the activities of all authorized holders and can do so only if it receives frequent reports that describe either facts and conclusions ascertained, or obstacles encountered, regarding growing and cultivating industrial hemp, and handling, studying, and disposing of such plant. Furthermore, most institutions that award grants require grantees to submit quarterly reports; as such, this requirement should not impose an additional burden upon most authorized institutions.

15. Subdivision (b) of section 159.3 – permissible areas for holding and transporting industrial hemp.

One commentator suggested that industrial hemp should not be required to be held, once harvested, in a building where it would not be visible from the outside. This suggestion was incorporated.

Another commentator suggested that industrial hemp should be allowed to be transported not only within a registered premises or to a laboratory for testing, but also to another registered premises. This suggestion was incorporated.

16. Subdivision (d) of section 159.3 – testing requirements.

Two commentators suggested that an authorized institution would incur a cost in having to test industrial hemp plants to determine their concentration of delta-9 tetrahydrocannabinol (“THC”). Neither commentator suggested, however, that this requirement be jettisoned.

17. Subdivision (e) of section 159.3 – notification to law enforcement.

Two commentators suggested that an authorized institution should be allowed to notify law enforcement units that it has been authorized to cultivate and grow industrial hemp, within fifteen days of receiving authorization rather than within five days as presently provided. This suggestion was incorporated.

18. Paragraph (2) of subdivision (f) of section 159.3 – declining or revoking authorizations.

A commentator suggested that an authorized institution should be allowed to “cure” a violation of Part 159, prior to the Commissioner declining to renew or to revoke an authorization. This suggestion was not incorporated. As set forth above, the Department intends to actively monitor the activities of authorized institutions; if it determines that an authorized institution is not complying or has not complied with applicable requirements, it intends to aid and assist such institution to so comply. Furthermore, the Department retains discretion to excuse minor violations of applicable requirements and/or to encourage compliance, before instituting a proceeding to decline to renew, or to revoke, an authorization.

19. Section 159.5 – inspections.

A commentator suggested that inspections of registered premises be made only by Department inspectors who have been designated as peace officers. This commentator suggested that a Department inspector who encountered a plant with a level of THC above the legal maximum for industrial hemp would, in essence, be a witness to and have to deal with a violation of applicable federal and state drug laws, an activity for which the inspector would not be properly trained to deal with.

The suggestion referred to above was not incorporated. Department inspectors typically inspect premises and observe violations of applicable provisions of the AML, each of which is a misdemeanor pursuant to AML section 41. The Department believes that authorized institutions will be careful to grow and cultivate plants that do not have levels of THC above the legal maximum and, in the event that plants are found to contain excessive amounts of such substance, will immediately and properly dispose of such plants in compliance with section 159.3(d)(3). The Department does not believe that an authorized institution’s registered premises is, under any circumstances, a location that is of a type that should be inspected only by a Department inspector who has been designated as a peace officer.

20. Section 159.6 – security requirements.

All commentators, including representatives of educational institutions, prospective growers, commercial interests, and state legislators, objected to the security requirements set forth in this section. The security requirements previously required that an authorized institution had to erect eight foot high fences around the perimeter of the premises, install a security surveillance system, providing for forgery resistant security badges to authorized personnel, and employ security staff. Commentators objected to each of these requirements upon the basis that they would be too expensive to implement and would, therefore, discourage educational institutions from applying to grow and cultivate industrial hemp; or would be unnecessary in light of the fact that industrial hemp contains such a low level of THC (the substance in marijuana that causes an hallucinogenic effect) that areas where it is grown or cultivated, or held, would not be “attractive nuisances”; or would convey the idea that industrial hemp is not an agricultural product but, is, rather, a dangerous or harmful commodity that needs to be subject to the highest level of security. Some commentators suggested that certain security requirements be eliminated entirely while others suggested that certain such requirements be modified or amended to be less burdensome.

The suggestions referred to above were incorporated to the extent that the security requirements previously provided for were substantially amended so that an authorized institution will only be required to restrict access to areas of the registered premises where industrial hemp is grown or cultivated, or held; to post signs that set forth certain information; and to provide security reasonably designed to ensure that industrial hemp is not improperly diverted or held. These amendments should dramatically lessen the costs associated with the requirements that were previously provided for. Authorized institutions will be required to block private roadways and post signs; both of these requirements should impose only a nominal cost. Such institutions will, also, be required to take measures reasonably designed to prevent unauthorized persons from entering the premises; this requirement does not mandate that certain equipment or personnel be provided but, rather, provides for a flexible standard. As such, an authorized institution may, depending upon the location and size of its registered premises, incur only a nominal cost in ensuring that industrial hemp is not improperly held or diverted.

21. Part 159 – proposed new section allowing the Commissioner to waive requirements.

A commentator suggested that a new section be added, allowing the Commissioner to waive any requirement set forth in Part 159 upon being asked to do so, in writing. This suggestion was not incorporated; the rule has been substantially amended and contains requirements that are reasonable and can realistically be complied with. As such, the Department sees no need to amend Part 159 so that such procedure is provided for.

22. Part 159 – proposed new provision allowing farmers to visit registered premises.

A commentator suggested that Part 159 be amended to allow persons interested in growing and cultivating industrial hemp to be able to visit registered premises, to be able to assess the viability of such activity if and when it becomes legal to do so. This suggestion was not incorporated; nothing in Part 159 presently prohibits an authorized institution from allowing visitors to its registered premises nor requires such an institution to ascertain and provide the type of information, for each visitor, that it is required to ascertain and provide for staff members.