Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF AGRICULTURE

OF THE STATE OF MONTANA

In the matter of the adoption of New Rules I through IV pertaining to the Montana Hemp Research and Market Development Program

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION

TO: All Concerned Persons

1. On August 13, 2020, at 1:00 p.m., the Department of Agriculture will hold a public hearing in Room 225 of the Scott Hart Building, at Helena, Montana, as well as virtually through the meeting platform Zoom to consider the proposed adoption of the above-stated rules. For the virtual meeting details, please contact Virginia Corbett by email at [email protected] or by phone at (406) 444-3156.

2. The Department of Agriculture will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Agriculture no later than 5:00 p.m. on August 6, 2020, to advise us of the nature of the accommodation that you need. Please contact Cort Jensen, Department of Agriculture, 302 N. Roberts, Helena, Montana, 59601; telephone (406) 444-5402; fax (406) 444-5409; or e-mail [email protected].

3. The rules proposed to be adopted provide as follows:

NEW RULE I MONTANA HEMP ADVISORY COMMITTEE (1) The committee shall be an eight member committee consisting of six voting members actively involved in the production of hemp, one non-voting processing industry representative, and one non-voting representative from the Montana State University System.

(2) A majority of the committee members must be hemp "producers" per 80-11-510(3), MCA. Producer is defined in 80-11-503(5), MCA.

(3) Appointment terms shall be made at the director's discretion and reviewed annually.

AUTH: 80-11-504, MCA

IMP: 80-11-510, MCA

NEW RULE II DEFINITIONS (1) "Department" means the Montana Department of Agriculture.

(2) "Hemp" means all parts and varieties of the plant Cannabis sativa L. containing no greater than 0.3% tetrahydrocannabinol.

(3) "Net receipts" are defined as net weight multiplied by the price paid to the producer.

AUTH: 80-11-504, MCA

IMP: 80-11-503, 80-11-515, MCA

NEW RULE III ANNUAL HEMP ASSESSMENT - COLLECTION (1) Section 80-11-516, MCA charges the Montana Department of Agriculture with collecting the commodity assessment.

(2) The assessment shall be 1% of the net receipts of all hemp crops produced in Montana.

(3) The assessment per 80-11-515, MCA, will occur at the time of first sale by a seller and must be collected by the first purchaser of the commodity from the seller. It shall occur at the time of each settlement for the commodity purchased or by invoice form provided by the Montana Department of Agriculture.

(4) If the first purchaser is not a licensed Montana commodity dealer, producers must make a good faith effort to ensure that the assessment is collected and paid to the department.

AUTH: 8-11-504, MCA

IMP: 80-11-515, MCA

NEW RULE IV APPLICATIONS FOR HEMP RESEARCH AND MARKETING PROJECT FUNDS (1) Applications for project funding shall be filed with the department on or before December 1 of each year. Filing requirements will be made available publicly online no later than 30 days prior to application deadline.

(2) The advisory committee will review all research and marketing project applications at the first regular meeting each year and make a recommendation to the department as to which projects to fund and the amount of funding.

(3) Applicants shall be notified within 30 days after the committee's meeting concerning the disposition of their application(s).

(4) The department shall periodically evaluate all outstanding project agreements for adequate and satisfactory financial control, accounting, and performance by project participants.

(5) The department may modify or terminate the funding of any project if a determination is made that the grantee has not complied or cannot comply with a provision of the project agreement. The department shall notify the grantee in writing within 30 days of such determination, of the reasons for the determination, and the effective date of the modification or termination.

AUTH: 80-11-504, MCA

IMP: 80-11-511, MCA

4. The reason for these proposed rules is that upon advice of the Montana Hemp Advisory Committee, Montana hemp growers petitioned and successfully passed a referendum to create a hemp assessment.

5. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Cort Jensen, Department of Agriculture, 302 N. Roberts, Helena, Montana, 59601; telephone (406) 444-5402; fax (406) 444-5409; or e-mail [email protected], and must be received no later than 5:00 p.m., August 21, 2020.

6. Zach Coccoli, Department of Agriculture, has been designated to preside over and conduct this hearing.

7. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in paragraph 5 or may be made by completing a request form at any rules hearing held by the department.

8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

9. With regard to the requirements of 2-4-111, MCA, the department has determined that the adoption of the above-referenced rules will not significantly and directly impact small businesses.

/s/ Cort Jensen /s/ Ben Thomas

Cort Jensen Ben Thomas

Rule Reviewer Director

Department of Agriculture

Certified to the Secretary of State July 14, 2020.