‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) ELIGIBLE HEMP FARMER.—The term ‘eli-
gible hemp farmer’ means any person who— 
‘‘(A) engaged in the trade or business of 
hemp farming, and 
‘‘(B) has gross receipts for the preceding 
taxable year of not more than $25,000,000. 
‘‘(2) CASH RENT.—The term ‘cash rent’ means 
any rent paid for the use of land in cash or as a 
crop share that is guaranteed as to the dollar 
amount of the commodity paid in rent. 
‘‘(3) CROP SHARE RENT.—The term ‘crop share 
rent’ means any rent paid for the use of land as a 
crop share and that is not described in paragraph 
(2). 
‘‘(4) YEARS OF ELECTION.—The taxpayer may 
elect the application of this section only for 3 taxable 
years of the first 5 taxable years for which ordinary 
and necessary expenses paid or incurred in carrying 
on such trade or business are allowable as a deduc-
tion by the taxpayer under section 162. 
‘‘(5) CONTROLLED GROUPS AND COMMON CON-
TROL.—All persons treated as a single employer 
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under subsections (a) and (b) of section 52 shall be 
treated as 1 person.’’. 
(b) PART OF GENERAL BUSINESS CREDIT.—Section 
38(b) of such Code is amended by striking ‘‘plus’’ at the 
end of paragraph (32), by striking the period at the end 
of paragraph (33) and inserting ‘‘, plus’’, and by adding 
at the end the following new paragraph: 
‘‘(34) the hemp farmer start-up credit deter-
mined under section 45U(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 45U. Hemp farmer start-up credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 5. SMALL HEMP FARMER INVESTMENT CREDIT. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 48C the fol-
lowing new section: 
‘‘SEC. 48D. SMALL HEMP FARMER CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, in 
the case of an eligible hemp farmer, the small hemp farm-
er credit for any taxable year is an amount equal to 30 
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percent of the basis of hemp farming property placed in 
service during the taxable year. 
‘‘(b) ELIGIBLE HEMP FARMER.—For purposes of 
this section, the term ‘eligible hemp farmer’ means any 
person who— 
‘‘(1) engaged in the trade or business of hemp 
farming, and 
‘‘(2) has gross receipts for the preceding tax-
able year of not more than $250,000. 
‘‘(c) HEMP FARMING PROPERTY.—For purposes of 
this section, the term ‘hemp farming property’ means any 
property (of a character subject to the allowance for de-
preciation) which placed in service by the taxpayer for use 
in the trade or business of hemp farming. 
‘‘(d) CONTROLLED GROUPS
AND COMMON CON-
TROL.—All persons treated as a single employer under 
subsections (a) and (b) of section 52 shall be treated as 
1 person for purposes of subsection (b)(2).’’. 
(b) PART OF INVESTMENT CREDIT.—Section 46 of 
such Code is amended by striking ‘‘and’’ at the end of 
paragraph (5), by striking the period at the end of para-
graph (6) and inserting ‘‘, and’’, and by adding at the 
end the following new paragraph: 
‘‘(7) the small hemp farmer credit.’’. 
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(c) 
50-PERCENT
BASIS
REDUCTION.—Section 
50(c)(3) of such Code is amended by inserting ‘‘or small 
hemp farmer credit’’ after ‘‘energy credit’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart E of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 48C the following new item: 
‘‘Sec. 48D. Small hemp farmer credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service in 
taxable years beginning after December 31, 2020. 
SEC. 6. MARKETABILITY STUDY AND REPORT. 
(a) IN GENERAL.—The Secretary of the Treasury, in 
consultation with the Secretary of Agriculture, shall study 
the issues described in subsection (b) with respect to the 
production of hemp and, not later than 1 year after the 
date of the enactment of this Act, submit to Congress a 
report of the findings of such study. 
(b) ISSUES.—The issues described in this subsection, 
with respect to the production of hemp, are as follows: 
(1) The potential opportunities for hemp seed 
to be used as an animal feed and any obstacles to 
approval for such use. 
(2) The potential opportunities for hemp to be 
used to create personal protective equipment for 
healthcare workers and first responders. 
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(3) The feasibility and financial impact of hemp 
producer compliance with applicable Department of 
Agriculture sampling timetables. 
(4) The feasibility of hemp producer compliance 
with Department of Agriculture reporting require-
ments. 
(5) The feasibility of hemp producer compliance 
with a legal maximum 0.3 percent tetrahydrocannab-
inol limitation, including compliance and losses due 
to non-compliance, and a comparison to the feasi-
bility of a legal maximum 1.0 percent tetrahydrocan-
nabinol limitation. 
(6) The maximum tetrahydrocannabinol level 
for the crop to have no psychotropic effect or intoxi-
cating potential. 
(7) The ability for United States hemp pro-
ducers to compete globally with other countries that 
have a maximum 1.0 percent tetrahydrocannabinol 
limitation. 
(8) Identifying market challenges and opportu-
nities for a craft and small hemp producers to re-
main competitive in the United States and global 
hemp marketplace. 
(9) The nutritional value and benefits of foods, 
drinks, and supplements produced from hemp-based 
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products, and the potential benefits of including 
hemp-based food, drink, supplements, and protein to 
certain public school meal programs. 
(10) Which items procured by the Federal Gov-
ernment, or items used by contractors or subcontrac-
tors of the Federal Government at any tier, can be 
substituted by a hemp-based product. 
(11) Identify potential opportunities for hemp 
to be used as a renewable energy source. 
Æ 
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