BILL NUMBER: SB 870 CHAPTERED 10/13/01 CHAPTER 828 FILED WITH SECRETARY OF STATE OCTOBER 13, 2001 APPROVED BY GOVERNOR OCTOBER 12, 2001 PASSED THE SENATE SEPTEMBER 4, 2001 PASSED THE ASSEMBLY AUGUST 30, 2001 AMENDED IN ASSEMBLY JULY 16, 2001 AMENDED IN ASSEMBLY JULY 5, 2001 AMENDED IN SENATE MAY 7, 2001 INTRODUCED BY Senator Costa FEBRUARY 23, 2001 An act to add Chapter 3.6 (commencing with Section 62765) to Part 3 of Division 21 of the Food and Agricultural Code, relating to dairies, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 870, Costa. Dairies: dairy marketing study. Existing law relating to milk pricing and pooling provides that all milk produced in the state shall be pooled and that minimum prices that handlers must pay individual producers for the share of the raw milk that they have supplied shall be set. Existing law provides that the Secretary of Agriculture, in establishing minimum prices to be paid by handlers to producers for market milk in any market area, may establish, as the applicable minimum prices, those prices applicable within the marketing area of ultimate usage of the market milk, those prices applicable within the marketing area where the plant of first receipt of the market milk is located, those prices applicable in the marketing area where the producers place of production is located, or any of the above or any combination of the above. A violation of any of the provisions relating to the stabilization and marketing of market milk is a misdemeanor. This bill would require the Department of Food and Agriculture to complete by April 15, 2002, a study of various programs affecting the regulated milk pricing and pooling programs and to submit it to the respective chairpersons of the Senate Committee on Agriculture and Water Resources and the Assembly Committee on Agriculture. 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. Chapter 3.6 (commencing with Section 62765) is added to Part 3 of Division 21 of the Food and Agricultural Code, to read: CHAPTER 3.6. DAIRY MARKETING STUDY 62765. The Department of Food and Agriculture, after consulting with its dairy advisory committee, shall complete a study of various proposals affecting regulated milk pricing and pooling programs by April 15, 2002. In particular, it shall study the following: (a) The impact of the current federal forward price contract program on the regulated pricing and pooling programs operating in federal milk marketing orders and review other risk management tools available to dairy farmers and dairy processors. (b) The impact of current forward price contract programs administered by California dairy farmer cooperatives on participating producers, on proprietary processors in procuring milk, and on affected products in the marketplace and the comparability of those programs with those operating within federal milk marketing orders. (c) The impact of the various forward contract programs in use or proposed on pool revenue and price when those contracts are performed within the California milk pooling program. (d) The impact of the various forward contract programs in use or proposed on pool revenue and price when those contracts are performed outside the California milk pooling program. (e) The study may also include a review of the impact of requiring class 2 and 3 milk to be reported to the pool. (f) A review of the advantages and disadvantages of a protein pricing payment system that is similar to the system used in federal milk marketing orders. (g) This study shall be submitted to the respective chairpersons of the Senate Committee on Agriculture and Water Resources and the Assembly Committee on Agriculture. SEC. 2. 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 evaluate the advantages and disadvantages of implementing cash forward contract programs at the earliest possible time, it is necessary for this act to take effect immediately.