BILL ANALYSIS                                                                                                                                                                                                    





                                                                  AB 388

                                                                  Page  1

          GOVERNOR'S VETO
          AB 388 (Strom-Martin)
          As Amended June 12, 2002
          2/3 vote

           ----------------------------------------------------------------- 
          |ASSEMBLY:  |     |(June 6, 2001)  |SENATE: |23-10|(August 8,     |
          |           |     |                |        |     |2002)          |
           ----------------------------------------------------------------- 
                     (vote not relevant)

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          |ASSEMBLY:  |45-30|(August 15,     |        |     |               |
          |           |     |2002)           |        |     |               |
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          Original Committee Reference:    NAT. RES.  

           SUMMARY:   Requests the University of California (UC) to assess  
          the economic opportunities of specialty or alternative fiber  
          crops, including industrial hemp, kenaf, and flax utilizing  
          information from other states and countries.  The research shall  
          include market demand, identification of potential barriers,  
          production, and processing.  The UC shall complete the report by  
          January 1, 2004, at which time it shall be distributed to the  
          Assembly Committee on Agriculture and the Senate Agriculture and  
          Water Resources Committee.

           The Senate amendments  delete the Assembly version of this bill,  
          and instead:

          1)Request the UC to conduct an assessment on the economic  
            opportunities of growing specialty and alternative fiber crops  
            in California.  The assessment is to include industrial hemp,  
            kenaf, and flax, and to extrapolate from existing data on  
            productivity and costs of other states and countries. 

          2)Require the report to include, but not be limited to, an  
            estimation of the demand and likely crop prices,  
            identification of potential barriers to profitability,  
            identification of production and processing, and marketing  
            issues that need to be addressed for future demonstration  










                                                                  AB 388

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            research or pilot commercial trials.

          3)Request the report to be completed by January 1, 2004 and be  
            given to the Assembly Committee on Agriculture and the Senate  
            Agriculture and Water Resources Committee.

           AS PASSED BY THE ASSEMBLY  , this bill required an annual  
          appropriation of $125,000 for expenditures to the Office of Oil  
          Spill Prevention and Response (OSPR) to develop and conduct  
          training of staff and other personnel to respond to toxic spills  
          requiring the rescue of wildlife.  The bill appropriated  
          $135,000 to OSPR for allocation to the nonprofit Marine Mammal  
          Center for research into the effects of toxic substances on  
          marine mammals.

           FISCAL EFFECT  :  This bill passed out of the Senate  
          Appropriations Committee under Senate Rule 28.8.  Any additional  
          state costs are not significant and do not and will not require  
          the appropriation of additional state funds, and the bill will  
          cause no significant reduction in revenues.

           COMMENTS  :  This bill was substantially amended in the Senate and  
          the Assembly-approved provisions of the bill were deleted.  AB  
          448 (Strom-Martin) dealt with establishing rules and regulations  
          for the licensure and cultivation of industrial hemp; it failed  
          passage in the Assembly Committee on Agriculture (May 21, 2001).


            AB 388 takes a different tack in preparing background and data  
          to discover if such fiber crops as industrial hemp, flax, and  
          kenaf would be a viable commodity if grown in California.  The  
          market for products made from such alternative fiber crops has  
          grown in recent years and other agricultural producing regions  
          of the world have expanded their production.

           
          GOVERNOR'S VETO MESSAGE  :

               This bill would request that the University of  
               California conduct a study of the economic  
               opportunities associated with the production of  
               alternative fiber crops, including industrial hemp,  










                                                                  AB 388

                                                                  Page  3

               flax, and kenaf. 

               There are a number of significant concerns regarding  
               the legality of producing industrial hemp in the  
               United States.  The U.S. Department of Agriculture  
               concluded that 'legal issues currently preclude  
               research into the viability of industrial hemp fiber  
               production in the United States.'  In addition, the  
               Drug Enforcement Administration applies the same  
               strict controls of industrial hemp as it does to  
               marijuana.  That is, it is a Schedule I Controlled  
               Substance under federal law.  For these reasons, I am  
               returning this bill without my signature. 



           Analysis Prepared by:     Dawn Clover / AGRI. / (916) 319-2084 



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