LegiStorm

Summary:
Highlights

GAO reviewed the United States Department of Agriculture's (USDA) new rule on the establishment of a domestic hemp production program. GAO found that the final rule establishes new regulations governing the production of hemp. It also establishes a federal plan for producers in states or territories of Indian tribes that do not have their own USDA-approved plan. The program includes provisions for maintaining information on the land where hemp is produced, testing the levels of delta-9 tetrahydrocannabinol, disposing of plants not meeting necessary requirements, licensing requirements, and ensuring compliance with the new compliance.

Enclosed is our assessment of USDA's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Janet Temko-Blinder, Assistant General Counsel, at (202) 512-7104.





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B-331557
November 12, 2019
The Honorable Pat Roberts
Chairman
The Honorable Debbie Stabenow
Ranking Member
Committee on Agriculture, Nutrition, and Forestry
United States Senate
The Honorable Collin C. Peterson
Chairman
The Honorable K. Michael Conaway
Ranking Member
Committee on Agriculture
House of Representatives
Subject: Department of Agriculture,
Agricultural Marketing Service: Establishment of a Domestic Hemp Production Program
Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a
major rule promulgated by the Department of Agriculture (USDA), Agricultural Marketing
Service entitled ?Establishment of a Domestic Hemp Production Program? (AMS-SC-19-0042;
SC19-990-2 IR).  We received the rule on October 31, 2019.  It was published in
the Federal Register as an interim final rule with request for comments on October
31, 2019.  84 Fed. Reg. 58522.  The effective date of the rule is October 31,
2019, and is effective through November 1, 2021.
The interim final rule establishes new regulations governing the production of hemp.
 According to USDA, this action is mandated by the Agriculture Improvement Act of
2018, which amended the Agricultural Marketing Act of 1946.  Aug. 14, 1946, ch. 966,
title II, 60 Stat. 1087.  This rule outlines provisions for USDA to approve plans
submitted by states and Indian tribes for the domestic production of hemp.  It also
establishes a federal plan for producers in states or territories of Indian tribes that do
not have their own USDA-approved plan.  The program includes provisions for
maintaining information on the land where hemp is produced, testing the levels of delta-9
tetrahydrocannabinol, disposing of plants not meeting necessary requirements, licensing
requirements, and ensuring compliance with the new compliance.
The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a
major rule from the date of publication in the Federal Register or receipt of the
rule by Congress, whichever is later.  5 U.S.C. § 801(a)(3)(A).  The 60-day delay
in effective date can be waived, however, if the agency finds for good cause that delay is
impracticable, unnecessary, or contrary to the public interest, and the agency incorporates
a statement of the findings and its reasons in the rule issued.  5 U.S.C.  §§
553(b)(3)B), 808(2).  Here, although USDA did not specifically mention the CRA?s
60-day delay in effective date requirement, the agency found good cause to waive
notice-and-comment procedures and incorporated a brief statement of reasons.
 Specifically, USDA identified four factors justifying the waiver.  First,
Congress instructed USDA to promulgate regulations and guidelines as expeditiously as
practicable in the authorizing legislation.  7 U.S.C. § 1639r(a)(1)(A).  Second,
the final rule provides critical guidance to numerous stakeholders that await the
publication of the final rule.  Third, USDA already solicited comments through
listening sessions and a webinar that solicited the public participation consultations with
state and tribal officials.  Finally, there is public interest in expediting the
ability of the nation?s farmers to enter the new agricultural market presented by hemp.
Enclosed is our assessment of USDA?s compliance with the procedural steps required by
section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.  If you have
any questions about this report or wish to contact GAO officials responsible for the
evaluation work relating to the subject matter of the rule, please contact Janet
Temko-Blinder, Assistant General Counsel, at (202) 512-7104.
  signed
Shirley A. Jones
Managing Associate General Counsel
Enclosure
cc: Bruce Summers
Administrator
Agricultural Marketing Service
Department of AgricultureENCLOSURE
REPORT UNDER 5 U.S.C. § 801(a)(2)(A) ON A
MAJOR RULE
ISSUED BY THE
Department of AGRICULTURE,
AGRICULTURAL MARKETING SERVICE
ENTITLED
?Establishment of a Domestic Hemp Production Program? (AMS-SC-19-0042;
SC19-990-2 IR)
(i) Cost-benefit analysis
The Department of Agriculture, Agricultural Marketing Service (USDA) estimated the final
rule would have an annualized benefit of $65,810,000 and cost of $19,016,000, leaving a net
benefit of $46,794,000 at a 3 percent discount rate.  USDA further estimated an
annualized benefit of $62,440,000 and cost of $18,053,000, leaving a net benefit of
$44,386,000 at a 7 percent discount rate.
(ii) Agency actions relevant to the Regulatory Flexibility Act (RFA), 5 U.S.C. §§
603-605, 607, and 609
USDA prepared a Regulatory Flexibility Analysis.  The analysis included (1) a
statement of the reasons action is being considered, (2) a description of potentially
affected small entities, and (3) alternatives to minimize impacts of the rule.
(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act
of 1995, 2 U.S.C. §§ 1532-1535
USDA did not address the Act in the final rule.
(iv) Other relevant information or requirements under acts and executive
orders
Administrative Procedure Act, 5 U.S.C. §§ 551et seq.
USDA waived the notice-and-comment process under 5 U.S.C. § 553(b)(3)(B). 
Specifically, USDA found four factors justifying the waiver.  First, Congress
instructed USDA to promulgate regulations and guidelines as expeditiously as practicable in
the authorizing legislation.  7 U.S.C. § 1639r(a)(1)(A).  Second, the final
rule provides critical guidance to numerous stakeholders that await the publication of the
final rule.  Third, USDA already solicited comments through listening sessions and a
webinar that solicited the public participation consultations with state and tribal
officials.  Finally, there is public interest in expediting the ability of the
nation?s farmers to enter the new agricultural market presented by hemp.  The agency
stated there would be a 60-day comment period ending December 30, 2019.
Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501-3520
USDA determined the final rule contains information collection requirements (ICRs) under
the Act.  USDA indicated the ICRs would be submitted to the Office of Management and
Budget for approval under control number 0581-NEW.  USDA estimated the total burden
hours of all ICRs in the final rule will be 17,363.4 with a total cost of $989,714.94.
Statutory authorization for the rule
USDA promulgated the final rule pursuant to sections 1639o note, 1639p, 1639q, and 1639r
of title 7, United States Code.
Executive Order No. 12,866 (Regulatory Planning and Review)
USDA determined this final rule is economically significant under the Order.
Executive Order No. 13,132 (Federalism)
USDA concluded the final rule does have federalism implications because the rule has
substantial direct effects on states, on the relationship between the national government
and states, and on the distribution of power and responsibilities among the various levels
of government.  USDA stated the federalism implications of the rule flow from and are
consistent with the underlying statute.  The agency further concluded the final rule
is not inconsistent with the Order, will not impose significant additional costs and
burdens on the states, and will not affect the ability of the states to discharge
traditional state governmental functions.  To reach these conclusions, USDA stated it
consulted with state officials and held listening sessions.




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