Kansas 2023-2024 Regular Session

Kansas House Bill HB2168 Compare Versions

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1	1	Session of 2023
2	2	HOUSE BILL No. 2168
3	3	By Representatives Blew and K. Williams
4	4	1-25
5	5	AN ACT concerning agriculture; relating to industrial hemp; allowing the
6	6	fiber, grain and seeds thereof to be used as food for livestock, poultry
7	7	and pets; adding hemp grain to the definition of grain; authorizing the
8	8	secretary to utilize performance-based sampling when inspecting
9	9	industrial hemp; lowering license and registration fees; extending
10	10	license and registration periods to two years; exempting certain hemp
11	11	processors from fingerprinting and background check requirements;
12	12	amending K.S.A. 2-3901, 2-3906, 2-3907, 2-3908 and 34-223 and
13	13	repealing the existing sections.
14	14	Be it enacted by the Legislature of the State of Kansas:
15	15	New Section 1. (a) The secretary shall approve and allow the
16	16	manufacture, transportation, importation, sale or storage of any
17	17	commercial feeding stuffs that include hemp fiber, grain or seed as defined
18	18	in K.S.A. 2-3901, and amendments thereto, except when any such
19	19	commercial feeding stuffs is otherwise determined by the secretary to:
20	20	(1) Be misbranded or adulterated;
21	21	(2) contain or possibly contain any substance injurious to public
22	22	health or the health of livestock, poultry or pets; or
23	23	(3) be sold, offered or exposed for sale in violation of any of the
24	24	statutes contained in article 10 of chapter 2 of the Kansas Statutes
25	25	Annotated, and amendments thereto, or any rules and regulations adopted
26	26	thereunder.
27	27	(b) This section shall be a part of and supplemental to article 10 of
28	28	chapter 2 of the Kansas Statutes Annotated, and amendments thereto.
29	29	Sec. 2. K.S.A. 2-3901 is hereby amended to read as follows: 2-3901.
30	30	(a) K.S.A. 2-3901 et seq., and amendments thereto, shall be known and
31	31	may be cited as the commercial industrial hemp act.
32	32	(b) As used in the commercial industrial hemp act:
33	33	(1) "Commercial" means the cultivation or production of industrial
34	34	hemp for any purpose authorized under K.S.A 2-3906, and amendments
35	35	thereto.
36	36	(2) "Delta-9 tetrahydrocannabinol concentration" means the
37	37	combined percentage of delta-9 tetrahydrocannabinol and its optical
38	38	isomers, their salts and acids, and salts of their acids, reported as free
39	39	THC:
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76	76	(A) On a dry weight basis, of any part of the plant cannabis sativa L.;
77	77	or
78	78	(B) on a percentage by weight basis in hemp products, waste or
79	79	substances resulting from the production or processing of industrial hemp.
80	80	(3) "Effective disposal" includes, but is not limited to:
81	81	(A) Destruction; or
82	82	(B) any other method of disposing of industrial hemp or hemp
83	83	products found to be in violation of this act that is permitted under the
84	84	provisions of 7 U.S.C. § 1621 et seq. and any rules and regulations
85	85	adopted thereunder.
86	86	(4) "Hemp fiber, grain or seeds" means the mature stalks of industrial
87	87	hemp, fiber produced from the stalks, oil or cake made from the seeds of
88	88	the plant, any other compound, manufacture, salt, derivative, mixture or
89	89	preparation of the mature stalks, except the resin extracted therefrom,
90	90	fiber, oil or cake or the sterilized seed of the plant that is incapable of
91	91	germination.
92	92	(5) "Hemp products" means all products made from industrial hemp,
93	93	including, but not limited to, cloth, cordage, fiber, food, fuel, paint, paper,
94	94	particleboard, plastics, seed, seed meal and seed oil for consumption and
95	95	any extract from industrial hemp intended for further processing. Final
96	96	"hemp products" may contain a tetrahydrocannabinol concentration of not
97	97	more than 0.3%. As used in this paragraph, "tetrahydrocannabinol
98	98	concentration" means the same as in K.S.A. 65-6235(b)(3), and
99	99	amendments thereto.
100	100	(5)(6) "Hemp producer" means any individual, licensed or otherwise,
101	101	engaging in the cultivation or production of industrial hemp for
102	102	commercial purposes pursuant to K.S.A. 2-3906, and amendments thereto.
103	103	(6)(7) "Hemp processor" means a person registered under K.S.A. 2-
104	104	3907, and amendments thereto, to process and manufacture industrial
105	105	hemp and hemp products.
106	106	(7)(8) "Industrial hemp" means all parts and varieties of the plant
107	107	cannabis sativa L., whether growing or not, that contain a delta-9
108	108	tetrahydrocannabinol concentration of not more than 0.3% on a dry weight
109	109	basis.
110	110	(8)(9) "Person" means an individual, corporation, partnership,
111	111	association, joint stock company, trust, unincorporated organization or any
112	112	similar entity or any combination of the foregoing acting in concert.
113	113	(9)(10) "State educational institution" means the university of
114	114	Kansas, Kansas state university, Wichita state university, Emporia state
115	115	university, Pittsburg state university, Fort Hays state university, or any
116	116	other accredited college, university, technical college or community
117	117	college within Kansas.
118	118	(10)(11) "Authorized seed or clone plants" means a source of
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162	162	industrial hemp seeds or clone plants that:
163	163	(A) Has been certified by a certifying agency, as defined by K.S.A. 2-
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165	165	(B) has been produced from plants that were tested during the active
166	166	growing season and were found to produce industrial hemp having a
167	167	tetrahydrocannabinol concentration that does not exceed 0.3% on a dry
168	168	weight basis and has been certified in writing by the grower or distributor
169	169	of such seeds or clone plants to possess such qualities; or
170	170	(C) meets any other authorized standards approved by the Kansas
171	171	department of agriculture through rules and regulations, except that no
172	172	seed or clone plants shall be considered authorized seed or clone plants if
173	173	they do not meet any standard adopted by the United States department of
174	174	agriculture pursuant to 7 U.S.C. § 1621 et seq., and amendments thereto.
175	175	Sec. 3. K.S.A. 2-3906 is hereby amended to read as follows: 2-3906.
176	176	(a) The Kansas department of agriculture, in consultation with the
177	177	governor and attorney general, shall submit a plan to the United States
178	178	department of agriculture under which the Kansas department of
179	179	agriculture will monitor and regulate the commercial production of
180	180	industrial hemp within the state in accordance with 7 U.S.C. § 1621 et seq.
181	181	and any rules and regulations adopted thereunder.
182	182	(b) Such plan shall include the following:
183	183	(1) A procedure to maintain relevant information regarding land on
184	184	which industrial hemp is produced, including a legal description of the
185	185	land, for a period of not less than three calendar years;
186	186	(2) a procedure for testing, using post-decarboxylation or other
187	187	similarly reliable methods, the delta-9 tetrahydrocannabinol concentration
188	188	levels of industrial hemp produced;
189	189	(3) a procedure for the effective disposal of industrial hemp and hemp
190	190	products that are found to be in violation of this act;
191	191	(4) any licensing requirements or other rules and regulations deemed
192	192	necessary by the Kansas department of agriculture for the proper
193	193	monitoring and regulation of industrial hemp cultivation and production
194	194	for commercial purposes, including, but not limited to:
195	195	(A) Fees for licenses, license renewals and other necessary expenses
196	196	to defray the cost of implementing and operating the plan on an ongoing
197	197	basis; and
198	198	(B) standards for authorized seed or clone plants;
199	199	(5) a procedure for the creation of documentation that any person in
200	200	possession of unprocessed industrial hemp may use to prove to any law
201	201	enforcement officer that such industrial hemp was lawfully grown under
202	202	this section;
203	203	(6) a procedure for conducting annual inspections of, at a minimum, a
204	204	random sample of hemp producers to verify, including the use of
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248	248	performance-based sampling, that industrial hemp is not produced in
249	249	violation of this act; and
250	250	(7) any other procedures necessary to meet the requirements set forth
251	251	in 7 U.S.C. § 1621 et seq. and any rules and regulations adopted
252	252	thereunder.
253	253	(c) (1) A hemp producer who negligently violates this section or any
254	254	rules and regulations adopted hereunder shall not be subject to any state or
255	255	local criminal enforcement action, but shall comply with the following
256	256	corrective actions as applicable:
257	257	(A) A reasonable date by which the hemp producer shall correct the
258	258	negligent violation; and
259	259	(B) a requirement that the hemp producer shall periodically report to
260	260	the Kansas department of agriculture on the hemp producer's compliance
261	261	with this section and rules and regulations adopted hereunder, for a period
262	262	of not less than the next two calendar years.
263	263	(2) A hemp producer who negligently violates this section or any
264	264	rules and regulations adopted hereunder three times in a five-year period
265	265	shall be ineligible to produce industrial hemp for a period of five years
266	266	beginning on the date of the third violation.
267	267	(3) The Kansas department of agriculture shall immediately report
268	268	any violation by a hemp producer with a greater culpable mental state than
269	269	negligence to the attorney general and such hemp producer shall not be
270	270	subject to the exemption in subsection (c)(1).
271	271	(d) Any individual otherwise eligible to become a licensed hemp
272	272	producer shall not be eligible to produce industrial hemp if such individual
273	273	has submitted any materially false information in any application to
274	274	become a licensed hemp producer.
275	275	(e) (1) The department shall require, as a qualification for initial or
276	276	continuing licensure, all individuals seeking a license or license renewal as
277	277	a hemp producer under this section to be fingerprinted and to submit to a
278	278	state and national criminal history record check. The fingerprints shall be
279	279	used to identify the individual and to determine whether the individual has
280	280	a record of criminal history in this state or any other jurisdiction. The
281	281	department is authorized to submit the fingerprints to the Kansas bureau of
282	282	investigation and the federal bureau of investigation for a state and
283	283	national criminal history record check. The department may use the
284	284	information obtained from fingerprinting and the criminal history record
285	285	check for purposes of verifying the identification of the individual and for
286	286	making an official determination of the qualifications for initial or
287	287	continuing licensure as a hemp producer pursuant to this section and rules
288	288	and regulations promulgated hereunder. Disclosure or use of any
289	289	information received by the department for any purpose other than the
290	290	purposes provided for in the commercial industrial hemp act shall be a
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334	334	class A misdemeanor and shall constitute grounds for removal from office
335	335	or termination of employment.
336	336	(2) An individual who has been convicted of a felony violation of
337	337	article 57 of chapter 21 of the Kansas Statutes Annotated, and amendments
338	338	thereto, or a substantially similar offense in another jurisdiction, within the
339	339	immediately preceding 10 years, shall be disqualified from initial or
340	340	continuing licensure as a hemp producer under this section.
341	341	(3) The Kansas bureau of investigation may charge a reasonable fee
342	342	for conducting a criminal history record check.
343	343	(4) The individual seeking a license or license renewal as a hemp
344	344	producer under this section shall pay the costs of fingerprinting and the
345	345	state and national criminal history record checks.
346	346	(f) The secretary of agriculture shall promulgate rules and regulations
347	347	to implement the plan submitted to the United States department of
348	348	agriculture and to otherwise effectuate the provisions of this section.
349	349	(g) Upon the repeal of 7 U.S.C. § 5940 or either the adoption of a
350	350	federal plan by the United States department of agriculture that allows for
351	351	the cultivation and production of industrial hemp for commercial purposes
352	352	within the state or upon the adoption of rules and regulations by the
353	353	Kansas secretary of agriculture that establish the cultivation and
354	354	production of industrial hemp for commercial purposes within the state,
355	355	the Kansas department of agriculture may discontinue the industrial hemp
356	356	research program established pursuant to K.S.A. 2-3902, and amendments
357	357	thereto.
358	358	(h) Any modification fee established by the department for any
359	359	requested change to a license that was previously issued by the department
360	360	under this section shall not exceed $50.
361	361	(i) (1) The licensing period for any license issued by the secretary
362	362	pursuant to this act shall be at least two years.
363	363	(2) The fee for any license issued by the secretary pursuant to this act
364	364	shall not exceed $500 and shall be allowed to be paid in a single lump
365	365	sum or in annual increments not larger than $250.
366	366	(j) Any licensing or other fees collected pursuant to this section and
367	367	any rules and regulations adopted hereunder shall be deposited in the
368	368	commercial industrial hemp act licensing fee fund established by K.S.A. 2-
369	369	3903, and amendments thereto, for all costs of the administration of the
370	370	commercial production of industrial hemp.
371	371	(j)(k) This section shall be a part of and supplemental to the
372	372	commercial industrial hemp act, K.S.A. 2-3901 et seq., and amendments
373	373	thereto.
374	374	Sec. 4. K.S.A. 2-3907 is hereby amended to read as follows: 2-3907.
375	375	(a) The state fire marshal shall create and maintain a registry of all hemp
376	376	processors operating within the state of Kansas.
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420	420	(b) Any person engaging in the processing of industrial hemp shall
421	421	register annually biennially with the state fire marshal prior to processing
422	422	industrial hemp.
423	423	(c) Registration shall expire annually biennially on June 30.
424	424	Registration fees, not to exceed $1,000, shall be established pursuant to
425	425	rules and regulations adopted by the state fire marshal. Such registration
426	426	fees shall not exceed $500 and shall be allowed to be paid in a single lump
427	427	sum or in annual increments not larger than $250.
428	428	(d) Any person required to register as a hemp processor pursuant to
429	429	this section shall submit an annual a biennial registration application on a
430	430	form provided by the state fire marshal that shall include, at a minimum:
431	431	(1) The full legal name, date of birth, address and telephone number
432	432	of the applicant. If the applicant is not an individual, the same information
433	433	shall also be provided for all owners and the individual responsible for all
434	434	industrial hemp processing and related activities performed by the
435	435	applicant;
436	436	(2) the physical location of any premises that will serve as a part of
437	437	the applicant's industrial hemp processing operations;
438	438	(3) a brief description of the industrial hemp processing methods,
439	439	activities and products planned for production; and
440	440	(4) certification that such applicant has fully complied with the
441	441	fingerprinting and criminal history record check requirements contained in
442	442	this section, if applicable. Any such applicant who provides a false
443	443	statement of compliance with such requirements shall be guilty of a class
444	444	C nonperson misdemeanor.
445	445	(e) The state fire marshal shall provide an updated list of all hemp
446	446	processors to the Kansas bureau of investigation and to the county sheriff
447	447	in each county where a hemp processor is located as often as is reasonably
448	448	required or requested.
449	449	(f) Fees collected pursuant to this section shall be remitted to the state
450	450	treasurer in accordance with the provisions of K.S.A. 75-4215, and
451	451	amendments thereto. Upon receipt of each such remittance, the state
452	452	treasurer shall deposit the entire amount in the state treasury to the credit
453	453	of the fire marshal fee fund.
454	454	(g) It shall be unlawful for any person to operate as a hemp processor
455	455	without valid registration. Upon a first conviction for a violation of this
456	456	subsection, a person shall be guilty of a class A nonperson misdemeanor.
457	457	On a second or subsequent conviction for a violation of this subsection, a
458	458	person shall be guilty of a severity level 9, nonperson felony.
459	459	(h) (1) Except as otherwise provided by subsection (k), the state fire
460	460	marshal shall require all individuals applying for a hemp processor
461	461	registration who seek to engage in the extraction of cannabinoids from
462	462	industrial hemp, including the disposal of such cannabinoids, pursuant to
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506	506	the commercial industrial hemp act to be fingerprinted and submit to a
507	507	state and national criminal history record check. The state fire marshal
508	508	may require individuals who are current employees or applying to be
509	509	employees of a hemp processor to be fingerprinted and submit to a state
510	510	and national criminal history record check. The fingerprints shall be used
511	511	to identify the individual and to determine whether the individual has a
512	512	record of criminal history in Kansas or any other jurisdiction. The state fire
513	513	marshal is authorized to submit the fingerprints to the Kansas bureau of
514	514	investigation and the federal bureau of investigation for a state and
515	515	national criminal history record check. The state fire marshal may use the
516	516	information obtained from fingerprinting and the criminal history record
517	517	check for purposes of verifying the identification of the individual and for
518	518	making an official determination of the qualification and fitness of the
519	519	individual to process industrial hemp pursuant to this act and rules and
520	520	regulations promulgated hereunder. Disclosure or use of any criminal
521	521	history information for any purpose other than the purposes provided for in
522	522	the commercial industrial hemp act shall be a class A nonperson
523	523	misdemeanor and shall constitute grounds for removal from office or
524	524	termination of employment.
525	525	(2) An individual who has been convicted of a felony violation of
526	526	article 57 of chapter 21 of the Kansas Statutes Annotated, and amendments
527	527	thereto, or a substantially similar offense in another jurisdiction, within the
528	528	immediately preceding 10 years, shall be disqualified from processing
529	529	industrial hemp under this section.
530	530	(3) The state fire marshal may deny registration to any individual
531	531	who has violated subsection (g) or any other provision of the commercial
532	532	industrial hemp act.
533	533	(4) The Kansas bureau of investigation may charge a reasonable fee
534	534	for conducting a criminal history record check.
535	535	(5) The individual seeking authorization to extract or dispose of
536	536	cannabinoids from industrial hemp pursuant to this section shall pay the
537	537	costs of fingerprinting and the state and national criminal history record
538	538	check.
539	539	(6) Local and state law enforcement officers and agencies shall assist
540	540	in taking and processing an individual's fingerprints as authorized by this
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542	542	(i) (1) The state fire marshal shall promulgate rules and regulations to
543	543	carry out the provisions of this section, including, but not limited to, rules
544	544	and regulations on:
545	545	(A) The denial, conditioning, renewal or revocation of registration;
546	546	(B) the creation of multiple classes of registrations based upon the
547	547	scope of hemp processing activities of an applicant;
548	548	(C) construction and safety standards for processing facilities;
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592	592	(D) security measures;
593	593	(E) inventory control;
594	594	(F) maintenance of records;
595	595	(G) access to and inspection of records and processing facilities by
596	596	the state fire marshal and law enforcement agencies;
597	597	(H) the collection and disposal of any cannabinoids extracted during
598	598	the processing of industrial hemp that cannot be lawfully sold in this state;
599	599	and
600	600	(I) the transportation of industrial hemp or hemp products.
601	601	(2) The state fire marshal may grant an exemption from the
602	602	application of a specific requirement of rules and regulations promulgated
603	603	under paragraph (1), unless the state fire marshal determines that the
604	604	condition, structure or activity that is or would be in noncompliance with
605	605	such requirement would constitute a distinct hazard to life or property. Any
606	606	such exemption shall be granted only upon written request of a registrant
607	607	or applicant for registration that clearly demonstrates that enforcement of a
608	608	specific requirement of a rule and regulation will cause unnecessary
609	609	hardship as determined by the state fire marshal.
610	610	(j) The Kansas department of agriculture and the state fire marshal
611	611	shall coordinate with one another, including providing any requested
612	612	information from the other, regarding industrial hemp licensees, hemp
613	613	processors and hemp processor applicants necessary for the enforcement
614	614	of any laws or rules and regulations relating to industrial hemp.
615	615	(k) The state fire marshal shall grant an exemption from the
616	616	fingerprinting and criminal history record check requirements of
617	617	subsection (h) for processors who only manufacture hemp products that
618	618	are derived from hemp fiber, grain or seeds.
619	619	(l) This section shall be a part of and supplemental to the commercial
620	620	industrial hemp act, K.S.A. 2-3901 et seq., and amendments thereto.
621	621	Sec. 5. K.S.A. 2-3908 is hereby amended to read as follows: 2-3908.
622	622	(a) (1) It shall be unlawful for any of the following hemp products to be
623	623	manufactured, marketed, sold or distributed by any person in the state of
624	624	Kansas:
625	625	(A) Cigarettes containing industrial hemp;
626	626	(B) cigars containing industrial hemp;
627	627	(C) chew, dip or other smokeless material containing industrial hemp;
628	628	(D) teas containing industrial hemp;
629	629	(E) liquids, solids or gases containing industrial hemp for use in
630	630	vaporizing devices; and
631	631	(F) any other hemp product intended for human or animal
632	632	consumption containing any ingredient derived from industrial hemp that
633	633	is prohibited pursuant to the Kansas food, drug and cosmetic act, K.S.A.
634	634	65-636 et seq., and amendments thereto, and the commercial feeding stuffs
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678	678	act, K.S.A. 2-1001 et seq., and amendments thereto. This subparagraph
679	679	shall not otherwise prohibit the use of any such ingredient, including
680	680	cannabidiol oil, in such hemp products.
681	681	(2) As used in this subsection:
682	682	(A) "Human or animal consumption" means:
683	683	(i) Ingested orally; or
684	684	(ii) applied by any means such that an ingredient derived from
685	685	industrial hemp enters the human or animal body.
686	686	(B) "Intended for human or animal consumption" means:
687	687	(i) Designed by the manufacturer for human or animal consumption;
688	688	(ii) marketed for human or animal consumption; or
689	689	(iii) distributed with the intent that it be used for human or animal
690	690	consumption.
691	691	(b) (1) It shall be unlawful for any of the following hemp products to
692	692	be marketed, sold or distributed to any person in Kansas who is not
693	693	registered as a hemp processor pursuant to K.S.A. 2-3907, and
694	694	amendments thereto, or who does not possess a license by the Kansas
695	695	department of agriculture under any commercial plan established pursuant
696	696	to K.S.A. 2-3906, and amendments thereto, or the research program
697	697	established pursuant to K.S.A. 2-3902, and amendments thereto:
698	698	(A) Industrial hemp buds;
699	699	(B) ground industrial hemp floral material;
700	700	(C) ground industrial hemp leaf material; or
701	701	(D) any extract from industrial hemp with a delta-9
702	702	tetrahydrocannabinol concentration greater than 0.3% that will be further
703	703	processed.
704	704	(2) No license or registration shall be required for the transport of
705	705	hemp products described in paragraph (1) if such products are transported
706	706	between hemp producers and hemp processors or between more than one
707	707	hemp processor. Any such transportation of hemp products shall be subject
708	708	to rules and regulations promulgated by the state fire marshal pursuant to
709	709	this act.
710	710	(c) (1) Upon a first conviction for a violation of this section, a person
711	711	shall be guilty of a class A nonperson misdemeanor.
712	712	(2) On a second or subsequent conviction for a violation of this
713	713	section, a person shall be guilty of a severity level 9, nonperson felony.
714	714	(d) Nothing in this section shall prohibit:
715	715	(1) The use of any hemp product for research purposes by a state
716	716	educational institution or affiliated entity; or
717	717	(2) the production, use or sale of any hemp product that is otherwise
718	718	not prohibited by state or federal law.
719	719	(e) This section shall be a part of and supplemental to the commercial
720	720	industrial hemp act, K.S.A. 2-3901 et seq., and amendments thereto.
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764	764	Sec. 6. K.S.A. 34-223 is hereby amended to read as follows: 34-223.
765	765	As used in chapter 34 of Kansas Statutes Annotated, and amendments
766	766	thereto:
767	767	(a) "Action" includes counterclaim, setoff and suit in equity.
768	768	(b) "Delivery" means voluntary transfer of possessions from one
769	769	person to another.
770	770	(c) "Fungible grain" means grain of which any unit is, from its nature
771	771	or by mercantile custom, treated as the equivalent of any other unit.
772	772	(d) "Grain" means wheat, corn, oats, barley, rye, soybeans, grain
773	773	sorghums, hemp grain and any grains upon which federal grain standards
774	774	are established. "Grain" includes seeds generally stored by warehouses, if
775	775	special permission is granted by the secretary.
776	776	(e) "Holder of a receipt" means a person who has both actual
777	777	possession of such receipt and a right of property therein.
778	778	(f) "Order" means an order by endorsement of the receipt.
779	779	(g) "Owner" does not include mortgagee or pledgee.
780	780	(h) "Person" includes individuals, corporations, partnerships and all
781	781	associations of two or more persons having a joint or common interest.
782	782	(i) "To purchase" includes to take as mortgagee or pledgee.
783	783	(j) "Receipt" means a warehouse receipt or receipts.
784	784	(k) "Value" means any consideration sufficient to support a simple
785	785	contract and includes an antecedent or preexisting obligation, whether for
786	786	money or not, where a receipt is taken either in satisfaction thereof or as
787	787	security therefor.
788	788	(l) "Public warehouseman" means a person lawfully engaged in the
789	789	business of storing grain for the public.
790	790	(m) "Public warehouse" or "public grain warehouse" means every
791	791	elevator or other building in which grain is received for storage or transfer
792	792	for the public.
793	793	(n) "Secretary" means the secretary of the Kansas department of
794	794	agriculture or the secretary's designee.
795	795	(o) "Department" means the Kansas department of agriculture.
796	796	(p) "Grain bank grain" means any grain that has been received into
797	797	any public warehouse to be held for the account of the depositor and
798	798	returned to the depositor at a later date either as whole or processed grain.
799	799	(q) "Storage grain" or "stored grain" means grain that has been
800	800	received in any public warehouse located in this state, and such grain is
801	801	not purchased by the lessee, owner or manager of such warehouse.
802	802	(r) "Functional unit" means a public warehouse that has the capacity
803	803	to store, weigh in and weigh out grain. The storage capacity of any
804	804	outlying storage facility of a public warehouse that is not a functional unit
805	805	itself shall be included as part of the combined capacity of the
806	806	warehouseman's nearest functional unit.
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850	850	(s) "Open storage" means the storage of grain pursuant to the
851	851	issuance of a scale ticket, regardless of whether the grain is retained in the
852	852	warehouse that issued the scale ticket or elsewhere.
853	853	(t) "Owner" means the holder of any warehouse receipt or any ticket
854	854	for grain held in storage by a public warehouseman, regardless of whether
855	855	the grain for which the warehouse receipt or ticket was issued is stored at
856	856	the warehouse that issued the receipt or ticket or is stored elsewhere.
857	857	(u) "Deferred payment" means any payment to be made pursuant to
858	858	the terms of a grain purchase contract after the delivery of grain to a public
859	859	warehouseman.
860	860	(v) "Delayed pricing" means any method of pricing grain pursuant to
861	861	the terms of a grain purchase contract after the delivery of grain to a public
862	862	warehouseman.
863	863	(w) "Financial institution" means any institution whose deposits,
864	864	shares or accounts are insured by a federal agency or any bank for
865	865	cooperative created pursuant to title III of the farm credit act of 1971.
866	866	(x) "Standby letter of credit" means "letter of credit" as that term is
867	867	defined in K.S.A. 84-5-103, and amendments thereto, that by its terms:
868	868	(1) Is irrevocable;
869	869	(2) is nontransferrable;
870	870	(3) names the seller that produced the grain as beneficiary;
871	871	(4) shall not expire earlier than 60 calendar days after the final
872	872	payment is due pursuant to the terms of the underlying grain purchase
873	873	contract; and
874	874	(5) cannot be drawn upon by the beneficiary in the absence of a
875	875	default as defined by the terms of the underlying grain purchase contract.
876	876	(y) "Unpaid balance" means that portion of the purchase price under a
877	877	grain purchase contract, together with an interest thereon, if any, that
878	878	remains due and owing to the seller pursuant to the terms of the grain
879	879	purchase contract at the time the seller makes a demand for payment as
880	880	provided in the contract. If a grain purchase contract provides for delayed
881	881	pricing and the price has not been established at the time the seller makes
882	882	demand for payment, then for the purposes of this section only, the unpaid
883	883	balance shall be determined as though the price had been established at the
884	884	time of the closing of the relevant futures market on the last trading day
885	885	before the seller made a demand for payment.
886	886	(z) "Hemp grain" means the same as defined in K.S.A. 2-3901, and
887	887	amendments thereto.
888	888	Sec. 7. K.S.A. 2-3901, 2-3906, 2-3907, 2-3908 and 34-223 are hereby
889	889	repealed.
890	890	Sec. 8. This act shall take effect and be in force from and after its
891	891	publication in the statute book.
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