BILL NUMBER: AB 1394 CHAPTERED BILL TEXT CHAPTER 103 FILED WITH SECRETARY OF STATE JULY 25, 2001 APPROVED BY GOVERNOR JULY 25, 2001 PASSED THE ASSEMBLY JULY 19, 2001 PASSED THE SENATE JULY 18, 2001 AMENDED IN SENATE JULY 16, 2001 AMENDED IN SENATE JULY 3, 2001 AMENDED IN SENATE MAY 29, 2001 AMENDED IN SENATE MAY 21, 2001 AMENDED IN ASSEMBLY MAY 9, 2001 AMENDED IN ASSEMBLY APRIL 16, 2001 INTRODUCED BY Assembly Member Wiggins (Coauthors: Assembly Members Aroner, Ashburn, Bates, Canciamilla, Cardoza, Cogdill, Corbett, Correa, Florez, Frommer, Jackson, Kelley, Leslie, Maldonado, Migden, Nation, Robert Pacheco, Papan, Pavley, Pescetti, Salinas, Strom-Martin, Thomson, Wright, and Zettel) (Coauthors: Senators Alpert, Chesbro, Costa, Johannessen, Machado, McPherson, Monteith, and Perata) FEBRUARY 23, 2001 An act to amend Sections 221 and 277 of, and to add and repeal Article 8.5 (commencing with Section 6047.1) to Chapter 9 of Part 1 of Division 4 of, the Food and Agricultural Code, relating to pests, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1394, Wiggins. Pests: Pierce's disease and the Glassy-winged Sharpshooter. Existing law generally provides for the eradication of pests that threaten this state's agriculture. Existing law also creates the Pierce's Disease Management Account within the Food and Agriculture Fund for the purpose of research and other efforts to combat Pierce's disease and its vectors. This bill would create in the Department of Food and Agriculture the Pierce's Disease and Glassy-winged Sharpshooter Board, which would consist of at least 14 and no more than 15 members with specified numbers of representatives of producers and processors, as defined, in the grape industry to be appointed by the Secretary of Food and Agriculture, as specified. This bill would set out the powers of the board and would provide for a specified annual assessment to be paid by processors into the Department of Food and Agriculture Fund for the purposes of, among other things, research of integrated pest management and other sustainable industry practices. This bill would provide that the assessment required to be deposited in the Department of Food and Agriculture Fund may be deposited with an entity that is a bank or other depository approved by the Department of Finance, if specified conditions are met. This bill would repeal these provisions as of March 1, 2006. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 221 of the Food and Agricultural Code is amended to read: 221. The "Department of Food and Agriculture Fund," which is a special fund, is continued in existence. Any money that is directed by law to be paid into the fund shall be paid into it and, unless otherwise specifically provided, shall be expended solely for the enforcement of the law under which the money was derived. The expenditure from the fund for the enforcement of any law shall not, unless otherwise specifically provided, exceed the amount of money that is credited to the fund pursuant to the law. Notwithstanding Section 13340 of the Government Code, all money deposited in the fund under the provisions enumerated below is hereby continuously appropriated to the department without regard to fiscal years for expenditure in carrying out the purposes for which the money was deposited and for making the refunds authorized by Section 302. All money deposited in the fund under the provisions enumerated below is hereby exempted from Sections 13320 to 13324, inclusive, of the Government Code: (a) Article 7 (commencing with Section 5821) and Article 7.5 (commencing with Section 5850) of Chapter 8 of Part 1 of Division 4, Chapter 1 (commencing with Section 6701) of Part 3 of Division 4, and Chapter 5 (commencing with Section 53301) of Division 18. (b) Article 5 (commencing with Section 6001) of Chapter 9 of Part 1 of Division 4. (c) Article 8.5 (commencing with Section 6047.1) of Chapter 9 of Part 1 of Division 4. (d) Article 4.5 (commencing with Section 6971) and Article 5 (commencing with Section 6981) of Chapter 2 of Part 3 of Division 4. (e) Chapter 4 (commencing with Section 14200), Chapter 5 (commencing with Section 14501), and Chapter 6 (commencing with Section 14901) of Division 7. (f) Part 1 (commencing with Section 16301) and Part 2 (commencing with Section 17401) of Division 9. (g) Sections 19225, 19227, 19312, and 19315. (h) Division 10 (commencing with Section 20001). (i) Division 11 (commencing with Section 23001). (j) Part 4 (commencing with Section 27501) of Division 12. (k) Division 16 (commencing with Section 40501). (l) Chapter 9 (commencing with Section 44971) of Division 17. (m) Chapter 1 (commencing with Section 52001) of Division 18. (n) Chapter 2 (commencing with Section 52251) of Division 18. (o) Chapter 3 (commencing with Section 52651) of Division 18. (p) Chapter 4 (commencing with Section 52851) of Division 18. (q) Chapter 6 (commencing with Section 55401), Chapter 7 (commencing with Section 56101), and Chapter 7.5 (commencing with Section 56701) of Division 20. (r) Section 58582. (s) Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), and Chapter 3 (commencing with Section 62700) of Part 3 of Division 21. (t) Chapter 5.5 (commencing with Section 12531) of Division 5 of the Business and Professions Code. (u) Chapter 7 (commencing with Section 12700) of Division 5 of the Business and Professions Code. (v) Chapter 14 (commencing with Section 13400) and Chapter 15 (commencing with Section 13700) of Division 5 of the Business and Professions Code. SEC. 2. Section 227 of the Food and Agricultural Code is amended to read: 227. (a) Notwithstanding any other provision of law, in order to avoid unnecessary charges and to provide for efficient program implementation, the fees and assessments required by law to be paid to the director or the Department of Food and Agriculture Fund to support the agricultural programs specified in subdivision (b) of Section 230, except those specified in Article 5 (commencing with Section 6001) of Chapter 9 of Part 1 of Division 4, Article 8.5 (commencing with Section 6047.1) of Chapter 9 of Part 1 of Division 4, and Chapter 9 (commencing with Section 44971) of Division 17, may be deposited in the Department of Food and Agriculture Fund, or with an entity that is (1) a bank or other depository approved by the Department of Finance, (2) a marketing order board or commission created pursuant to this code, or (3) another state agency, designated by the agricultural program's advisory body, if any. The fees and assessments required by law to be paid to the Department of Food and Agriculture Fund in Article 8.5 (commencing with Section 6047.1) of Chapter 9 of Part 1 of Division 4 may be deposited in the Department of Food and Agriculture Fund, or with an entity that is a bank or other depository approved by the Department of Finance. The director may designate that entity if an advisory body has not been created by statute for an agricultural program. All unencumbered funds in the Department of Food and Agriculture Fund and the Agriculture Trust Fund, including income therefrom, that have been collected pursuant to the agricultural program may also be deposited with the designated entity. (b) The funds deposited with the designated entity shall be expended exclusively for the purpose of implementing and continuing the agricultural program for which they were collected. (c) Prior to the deposit of any funds with an entity designated pursuant to subdivision (a), the entity shall enter into an agreement with the department that shall include, but not be limited to, all of the following requirements: (1) The entity shall serve as custodian for the safekeeping of the funds. (2) Funds deposited with the entity shall be encumbered for the exclusive purpose of implementing and continuing the agricultural program for which they were collected. (3) Funds deposited with the entity shall be subject to an audit at least once every two years by an auditor selected by the director. A copy of the audit shall be provided to the director within 30 days of completion of the audit. (4) The department shall be reimbursed for all expenses it incurs that are reasonably related to implementing and continuing the agricultural program for which the funds were collected in accordance with the agreement. With respect to the agricultural program created in Article 8.5 (commencing with Section 6047.1) of Chapter 9 of Part 1 of Division 4, the department shall be limited to those expenditures permitted under Section 6047.12. When practicable, as determined by the department, the designated entity shall deposit advance payments for these expenses with the department. (5) The entity shall maintain a reserve in an amount sufficient to pay for costs arising from unanticipated occurrences associated with the administration of the program. Provided that, with respect to the agricultural program created in Article 8.5 (commencing with Section 6047.1) of Chapter 9 of Part 1 of Division 4, the reserve shall include only an amount sufficient to pay for costs associated with the administrative expenditures described in Section 6047.12, and may be expended annually for those purposes. (d) In transferring funds from the department to any entity pursuant to subdivision (a), the director shall not be personally liable in any way for errors in judgment, mistakes, or other acts, either by commission or omission, except for his or her own individual acts of dishonesty or crime. SEC. 3. Article 8.5 (commencing with Section 6047.1) is added to Chapter 9 of Part 1 of Division 4 of the Food and Agricultural Code, to read: Article 8.5. Pierce's Disease and the Glassy-winged Sharpshooter 6047.1. The Legislature finds and declares the following: (a) The state's agricultural business economy could be seriously damaged if measures are not taken to prevent the transmittal of plant killing bacteria that cause Pierce's disease, and its vectors, particularly the Glassy-winged Sharpshooter. Furthermore, progress made by winegrape growers and others in the adoption of integrated pest management and sustainable farming practices are threatened if this pest becomes established. (b) The funding to accomplish the purposes of this article shall be derived from an assessment on all grapes grown in California and crushed for wine, wine vinegar, juice concentrate, or beverage brandy. (c) This article is not intended to establish a precedent, or to supersede, or to reduce or in any way alter government funding of the effort to combat Pierce's disease and other pests in this state. (d) The purposes of this article are enhanced by the many and varied efforts of other agricultural commodities' industries to combat this bacteria and its vectors. (e) This article is enacted for the protection of the winegrape industry and is also declared to be enacted in the public interest and in the exercise of the police power of the state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state. (f) The assessments shall be collected and expended for purposes consistent with Section 6046. 6047.2. For the purposes of this article, the following definitions shall govern its construction: (a) "Board" means the Pierce's Disease and Glassy-winged Sharpshooter Board. (b) "Department" means the Department of Food and Agriculture. (c) "Marketing season" begins July 1 of each year and ends June 30 of the next year. (d) "Producer" means a grower, including a cooperative, of grapes in California for wine, wine vinegar, juice, concentrate, or beverage brandy. (e) "Processor" means a processor who crushes grapes in California for wine, wine vinegar, juice, concentrate, or beverage brandy. (f) "Person" means a producer, processor, or any other entity that holds title to grapes subject to assessment. (g) "Purchase" means the taking by sale, discount, negotiation, mortgage, pledge, lien, issue or reissue, gift, or any other voluntary transaction creating an interest in property. For purposes of this paragraph, "sale" shall consist of the passing of title from the seller to the buyer for a price. (h) "Purchased grapes" means grapes grown in California, crushed by a processor for wine, wine vinegar, juice, concentrate, or beverage brandy, and purchased from a person considered a separate entity from the purchaser. (i) "Grapes not purchased" means all other grapes grown in California and crushed by a processor for wine, wine vinegar, juice, concentrate, or beverage brandy, including, but not limited to, the following: (1) Grapes grown by a person who is not considered a separate entity from the processor or who is a member of the processor cooperative. (2) Grapes not purchased and crushed to the account of a person who retains ownership of the grapes. (j) "Secretary" means the Secretary of Food and Agriculture. 6047.3. (a) Within 90 days after the effective date of this section, the secretary shall create in the department the Pierce's Disease and Glassy-winged Sharpshooter Board, which shall consist of at least 14, but not more than 15 members, of which eight shall be representatives of producers who are not also processors and six shall be representatives of processors who are also producers. (b) The secretary shall appoint the members of the board from recommendations received from the industry. In making the appointments, the secretary shall select no more than one person from a producer or processor entity and shall ensure that there is representation on the board from each of the major grape production areas in the state. (c) The secretary may appoint one additional member to the board, from nominees received from the board, who shall serve as the public member. The public member shall represent the interests of the public in all matters coming before the board and shall have the same voting and other rights and immunities as other members of the board. (d) The secretary and other appropriate individuals, as determined by the board, shall be nonvoting ex officio members of the board. (e) It is hereby declared, as a matter of legislative determination, that persons appointed to the board are intended to represent and further the interests of the industry concerned, and that this representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are appointed to the board, the industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code. 6047.4. (a) The powers of the board shall be the following: (1) Submit recommendations to the secretary on, but not limited to, the following: (A) Selection of officers. (B) Terms of office for board members. (C) Annual assessment rate. (D) Annual budget. (E) Expenditures authorized under Section 6047.5. (2) Receive money from the assessment and other sources. (3) Adopt, amend, and rescind all proper and necessary bylaws and procedures. (b) A majority of the members of the board shall constitute a quorum of the board. The vote of a majority of the members present at a meeting at which there is a quorum constitutes an act of the board, except for actions taken pursuant to subdivision (a) of Section 6047.7, which shall require a majority of the vote of the board. The board may continue to transact business at a meeting where a quorum is initially present, notwithstanding the withdrawal of members, provided any action is approved by the requisite majority of the required quorum. (c) As authorized by the board, members of the board may receive per diem and mileage in accordance with the rules of the Department of Personnel Administration for attendance at meetings and other approved board activities. 6047.5. (a) Expenditure of the funds pursuant to this article shall be restricted to the following: (1) Reasonable administrative expenses of the board and the department, subject to the limitation in Section 6047.12. (2) The collection, enforcement, deposit, and handling of the assessments. (3) Subject to subdivision (d) of Section 6047.1, research and other activities related to the transmittal of the plant killing Pierce's disease bacteria, and its vectors, particularly the Glassy-winged Sharpshooter, including, but not limited to, research of integrated pest management and other sustainable industry practices. (b) Except as provided in subdivision (c), data and related information and materials produced during the course of research conducted pursuant to this article that are in the possession of the department, the board, or any entity engaged in research funded pursuant to this article, shall be confidential and shall not be released for any purpose, except to the extent that they are included in any final publication of research, or except when required by a court order after a hearing in a judicial proceeding involving this article. (c) The restrictions in this section shall not apply to research conducted by the University of California, except to the extent that they are consistent with the university's policies on sponsored research and publication, which may allow for, among other things, a short period of review by the board in advance of publication. (d) Processors subject to this article and expenditure of the funds collected pursuant to this article are subject to audit by the department. 6047.6. The secretary shall accept the recommendations of the board unless he or she determines that the recommendations are not practicable or in the interest of the industry and the public. The secretary shall provide the board with a written statement of the reasons for his or her decision if the secretary does not accept a recommendation of the board. 6047.7. During the first marketing season, beginning July 1, 2001, and ending June 30, 2002, the annual assessment shall be three dollars ($3) for each one thousand dollars ($1,000) assessed pursuant to Section 6047.9 for all grapes subject to assessment under this article. The department shall notify each processor of the established assessment as soon as practicable. For each marketing season thereafter the following shall apply: (1) An annual assessment shall be recommended by the board and submitted to the department for approval in an amount not to exceed three dollars ($3) for each one thousand dollars ($1,000) assessed pursuant to Section 6047.9 for all grapes subject to assessment under this article. (2) The department shall notify each processor of the established assessment rate by July 15, or as soon thereafter as possible. (b) In no event shall there be an assessment on the following: (1) Material other than grapes, and defects, or other weight adjustments deducted from the gross weight ticket. (2) Any raisin-distilling material. (3) Grapes for which an assessment has been withheld, paid, or is already owed. 6047.8. (a) The assessment is the obligation of the producer. (b) For purchased grapes, the processor who purchases the grapes shall act on behalf of the person from whom the grapes were purchased in collecting and remitting the assessment, shall deduct the assessment from moneys owed by the processor, and shall pay the assessment as provided in this article. (c) For grapes not purchased, the processor who crushes the grapes shall do the following: (1) Charge the person who retains ownership of the grapes the assessment and pay the assessment as provided in this article. (2) Be responsible for the remittance of the assessment for the crushing of grapes from persons not considered a separate entity from the processor. 6047.9. (a) For purposes of calculating the amount to be collected by the processor for purchased grapes, the assessment shall be based on the gross dollar value of the grapes, which is the gross dollar amount payable for the grapes before any deductions for governmental assessments and fees. (b) For purposes of calculating the assessment for grapes not purchased, the assessment shall be based on the following: (1) The tonnage of grapes delivered less material other than grapes and defects or other weight adjustments deducted from gross weight. (2) The weighted average price per ton delivered basis purchased from all nonrelated sources for wine, concentrate, juice, vinegar, and beverage brandy by processors, by type, variety and reporting district where grown for the grapes delivered, sources as reported by the secretary pursuant to Section 55601.5 for the immediately preceding marketing season. 6047.10. (a) All assessments payable under this article shall be remitted to the department no later than January 10 of each year. The department shall deposit the assessments remitted in the Department of Food and Agriculture Fund. (b) In no event shall any proprietary information specified in Section 6047.13 that is received by the department in collecting assessments be transferred to the board. (c) Processors shall not charge producers an administrative fee for collecting and remitting assessments. 6047.11. Any producer who disputes the amount of the assessment may file a claim with the department. The producer shall prove his or her claim by a preponderance of the evidence. 6047.12. (a) Expenditures charged by the department and the board for administrative purposes shall not exceed a total of 7 percent of the assessments collected pursuant to this article. Administrative purposes shall include, but not be limited to, all auditing expenses and all costs and attorneys fees resulting from, or relating to, litigation involving this article against the department, or the board and its members and agents, and expenses associated with Section 6047.4 and paragraphs (1) and (2) of subdivision (a) of Section 6047.5. (b) Notwithstanding subdivision (a), the Joint Legislative Audit Committee and the State Auditor shall maintain independent authority to audit the expenditure of industry assessments. 6047.13. All proprietary information obtained by the board or the department from producers, processors, or any other source, including, but not limited to, the names and addresses of all producers and processors in the possession of the board or the department are confidential and shall not be disclosed except when required by a court order after a hearing in a judicial proceeding involving this article. 6047.14. (a) The sole remedy against any producer who fails to pay the assessment and against any processor who fails to collect and remit assessments within the time required by the secretary shall be an action to collect the delinquent assessments and payment to the secretary a penalty of 10 percent of the amount of the assessment determined to be due and, in addition, payment to the secretary of 11/2 percent interest per month on the unpaid balance. (b) A producer may not bring any claim against a processor for damages, or otherwise, in connection with the assessment or the required deduction by the processor of the moneys owed to the producer as provided in this article. 6047.15. Upon termination of this article, and based upon a recommendation of the board subject to approval by the secretary, any collected assessments not required to defray financial obligations incurred pursuant to this article shall be returned on a pro rata basis to all persons from whom assessments were collected during the marketing season immediately preceding the date of termination or paid to any existing state or federal program engaged in disease prevention or research activities in the grape industry. The assessments refunded to processors shall be paid to producers if the assessment was previously deducted from moneys owed to the producer by the processor. 6047.16. No action in law or equity may be brought against any members or agent of the board, nor shall any member or agent of the board be personally liable for the actions of the board or the department. No member or agent of the board is responsible individually in any way to any other person for errors in judgment, mistakes, or other acts, either of commission or omission, as a principal, agent, or employee, except for his or her own individual acts of dishonesty or crime. No member or agent of the board, is responsible individually for an act or omission of any other member or agent of the board, or the department. Liability is several and not joint, and no member or agent of the board is liable for the default of any other member or agent of the board, or the department. 6047.17. This article shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. 6047.18. This article shall be liberally construed. If any provision of this article or the application thereof to any person or circumstances is held to be invalid, the invalidity shall not affect other provisions or applications of the article which can be given effect without the invalid provision or application, and, to this end, the provisions of this article are severable. 6047.19. (a) On or before December 31st of every year, the secretary, after consultation with the advisory board, shall report on the status of this chapter to the chairs of the policy and fiscal committees that have the appropriate subject matter jurisdiction in the Assembly and the Senate. (b) The report shall include a financial accounting, including the distribution of industry assessments and any unexpended amount on deposit, of the department's efforts to contain Pierce's disease and its vectors. (c) This article shall remain in effect only until March 1, 2006, and as of that date is repealed, unless a later enacted statute, that is enacted before March 1, 2006, deletes or extends that date. SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to protect the winegrape industry from the plant killing Pierce's disease bacteria, and its vectors, it is necessary for this act to take effect immediately as an urgency statute.