BILL NUMBER: SB 1623 CHAPTERED 09/27/08 CHAPTER 414 FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2008 APPROVED BY GOVERNOR SEPTEMBER 27, 2008 PASSED THE SENATE AUGUST 21, 2008 PASSED THE ASSEMBLY AUGUST 13, 2008 AMENDED IN ASSEMBLY AUGUST 12, 2008 AMENDED IN ASSEMBLY JULY 2, 2008 AMENDED IN ASSEMBLY JUNE 11, 2008 AMENDED IN SENATE APRIL 22, 2008 AMENDED IN SENATE MARCH 25, 2008 INTRODUCED BY Senator Yee (Coauthor: Assembly Member La Malfa) FEBRUARY 22, 2008 An act to amend Sections 55000, 55001, 55002, 55003, 55007, 55011, 55013, 55020, 55020.5, 55021, 55022, 55040, 55047, 55050, 55051, 55052, 55060, 55100, 55105, and 71010 of, to add Sections 55008.5, 55010.6, 55010.7, and 55012.5 to, to add Article 10 (commencing with Section 55110) and Article 11 (commencing with Section 55120) to Chapter 4 of Division 20 of, to repeal Sections 55045, 55046, and 55107 of, and to repeal and add Section 55106 of, the Food and Agricultural Code, relating to the rice industry. LEGISLATIVE COUNSEL'S DIGEST SB 1623, Yee. Rice industry. Existing law generally provides that the Department of Food and Agriculture regulates the rice industry and provides for the certification of rice, as specified. Existing law provides for the California Rice Commission, which, among other tasks, is authorized to receive and investigate complaints alleging violations of the California Rice Certification Act of 2000 (the act). This bill would define the term "process" for purposes of rice production and distribution, and would make conforming and definitional changes in connection with the processing and handling of rice. Existing law requires the Secretary of Food and Agriculture to appoint a committee to administer certain provisions of the act. Existing law also specifies the powers, duties, and responsibilities of the committee. This bill would clarify the committee's administration of the act and certain of its powers and duties. Existing law requires all funds received from the assessments levied under the act to be deposited in banks that the commission may designate and requires agents designated by the commission to handle assessment funds to be bonded by a fidelity bond in favor of the commission in an amount of not less than $25,000. This bill would additionally require those assessment funds received under the act to be accounted for in a manner prescribed by the commission. The bill would delete the requirement that those agents be bonded by a fidelity bond. Existing law requires the secretary to do one of certain things within 30 working days upon the receipt of a recommendation from the committee for the promulgation of regulations. This bill would also require the secretary to do the same with respect to recommendations from the committee for the amendment or repeal of regulations. Existing law makes certain conduct in violation of the act unlawful. This bill would revise the conduct that would be unlawful under the act. Existing law provides that a violation of any provision of the Food and Agricultural Code is a misdemeanor, unless a different penalty is expressly provided. Because this bill would change the terms of a crime, the bill would impose a state-mandated local program. Existing law authorizes the commission to receive and investigate complaints regarding alleged violations of the act and its regulations and to refer cases to the department for action. Existing law also provides certain related notice and review requirements. This bill would recast those provisions and revise certain of those notice and review procedures. Existing law authorizes the commission to investigate and commence civil actions and utilize all remedies for the collection of assessments and for the obtaining of injunctive relief or specific performance regarding the act and its regulations. This bill would recast those provisions and include certain notice requirements. The bill would also authorize the commission to enter into a written agreement with any person alleged to have violated the act that will cause the cessation of any alleged violation and avoidance of future violations. This bill would provide that the commission shall be entitled to receive reimbursement for any reasonable attorney's fees and other related costs involved in enforcement of the act. Existing law requires first in-state handlers of certain rice brought into the state from outside California to report the receipt of the rice or seed and pay a certain assessment to the commission. This bill would instead require that report to be made to the commission prior to the receipt of the rice or seed. Existing law authorizes the secretary to levy a civil penalty against any person who violates the act or its regulations in an amount of not more than $5,000 for each violation and provides various related requirements, including authorizing a maximum civil penalty of $2,500, upon a finding by the secretary that the violation was unintentional. This bill would recast those provisions, and would instead authorize the secretary to levy a civil penalty against any person who is grossly negligent or willfully violates the act in an amount of not more than $15,000 for each violation, as provided. The bill would authorize the secretary to levy that lower civil penalty amount for negligent or unintentional violations. Existing law authorizes the secretary and the commission to bring an action for injunctive relief for any violation of the act or its regulations, as provided. This bill would recast those provisions. This bill would authorize the department to investigate complaints referred to it by the commission regarding violations of the act and would authorize the department to enter and inspect the premises of any person subject to the act and to seize and destroy rice, as provided. This bill would provide that the department shall be entitled to receive reimbursement for any reasonable attorney's fees and other related costs involved in enforcement of the act. This bill would provide that all remedies provided by the act are cumulative and not exclusive of any other remedy, whether initiated by the commission or the department. This bill would make other conforming and clarifying changes. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 55000 of the Food and Agricultural Code is amended to read: 55000. The production and processing of rice constitutes an important industry of this state that provides substantial and necessary revenues for the state and employment for its citizens. The California rice industry has the potential to be one of the leading segments of the state's agricultural industry. To realize this potential, there is a need to make domestic and foreign consumers aware of the nutritional value of rice, the high quality of the rice produced and processed in the state, the many varieties of rice produced and processed in the state, the intricacies of rice culture, and the versatility of rice as a part of a well balanced diet. SEC. 2. Section 55001 of the Food and Agricultural Code is amended to read: 55001. The program established pursuant to this chapter is essential to ensuring the consistently high quality of the rice produced, processed, or handled in the state by informing consumers, maintaining consumer confidence, and enhancing and protecting the reputation of California's rice industry throughout the nation and around the world. SEC. 3. Section 55002 of the Food and Agricultural Code is amended to read: 55002. This chapter is intended to allow the rice industry to work cooperatively to maintain consumer confidence and the acceptance of rice produced, processed, and handled in the state. SEC. 4. Section 55003 of the Food and Agricultural Code is amended to read: 55003. There is a growing need to maintain the identity of various types of rice to satisfy increasing consumer demand for specialty rices. This demand requires providing the industry with the ability to establish the terms and conditions for the production, processing, and handling of rice in order to achieve the goal of preventing the potential for the commingling of various types of rice, and in order to prevent commingling where reconditioning is infeasible or impossible. SEC. 5. Section 55007 of the Food and Agricultural Code is amended to read: 55007. "Records" means books, records, contracts, documents, memoranda, papers, correspondence, or other data, whether in written, magnetic, or electronic form, that pertain to matters relating to this chapter. SEC. 6. Section 55008.5 is added to the Food and Agricultural Code, to read: 55008.5. "Chapter" means any provision of the California Rice Certification Act of 2000, and includes any amendments to and regulations adopted pursuant to that act. SEC. 7. Section 55010.6 is added to the Food and Agricultural Code, to read: 55010.6. "Department" means the Department of Food and Agriculture. SEC. 8. Section 55010.7 is added to the Food and Agricultural Code, to read: 55010.7. "Handle" means to engage in the business of being a handler. SEC. 9. Section 55011 of the Food and Agricultural Code is amended to read: 55011. "Handler" means any person engaged in this state in the business of offering for sale or selling rice. SEC. 10. Section 55012.5 is added to the Food and Agricultural Code, to read: 55012.5. "Process" means to harvest, dry, mill, transport, or store rice. SEC. 11. Section 55013 of the Food and Agricultural Code is amended to read: 55013. "Producer" includes any person who produces rice, or causes rice to be produced. SEC. 12. Section 55020 of the Food and Agricultural Code is amended to read: 55020. The secretary shall appoint a committee, from nominations received from the commission, to administer Article 4 (commencing with Section 55040) and Article 5 (commencing with Section 55050), except as otherwise specified. The committee shall consist of four producers, four handlers, and one representative each of the California Crop Improvement Association, the California Warehouse Association, and the California Cooperative Rice Research Foundation. The secretary shall also appoint one member from the University of California who shall not be affiliated with the California Crop Improvement Association. If the secretary finds any of those nominated to be unacceptable, he or she shall notify the commission and request that another person be nominated. The commission shall appoint one ex officio member who shall be involved in the handling or breeding of seed, and may appoint any other ex officio members deemed reasonably necessary to implement this chapter. SEC. 13. Section 55020.5 of the Food and Agricultural Code is amended to read: 55020.5. (a) The committee shall meet periodically for the purposes specified in Article 4 (commencing with Section 55040) and Article 5 (commencing with Section 55050). (b) A majority of the membership of the committee shall constitute a quorum of the committee. The vote of a majority of the members present at which there is a quorum shall constitute an act of the committee. The committee may continue to transact business at a meeting at which 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 a committee of the commission, the committee established pursuant to Section 55020 shall conduct itself according to the bylaws and rules of the commission. (d) Sections 71051, 71053, 71063, and 71066 shall apply to the committee. SEC. 14. Section 55021 of the Food and Agricultural Code is amended to read: 55021. All funds received from the assessments levied pursuant to this chapter shall be deposited in banks that the commission may designate and be accounted for in a manner prescribed by the commission, and shall be disbursed by order of the commission through an agent or agents as it may designate for that purpose. SEC. 15. Section 55022 of the Food and Agricultural Code is amended to read: 55022. (a) Upon receipt of a recommendation from the committee for the promulgation, amendment, or repeal of regulations, the secretary shall within 30 working days do one of the following: (1) Initiate the rulemaking process with the regulation as recommended by the committee. (2) Decline to initiate the rulemaking process and provide the committee with a written statement of reasons for the decision. (3) Request that the committee provide additional information regarding the recommended regulations. (b) All regulations adopted pursuant to this chapter shall be adopted in compliance with the Administrative Procedure Act, Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code and may be subsequently repealed or amended as provided for in that chapter. SEC. 16. Section 55040 of the Food and Agricultural Code is amended to read: 55040. The powers and duties of the committee shall include, but not be limited to, all of the following: (a) Identifying rices that have characteristics of commercial impact. (b) Recommending to the secretary proposed regulations establishing terms and conditions for planting, producing, processing, or handling rice identified pursuant to subdivision (a), including, but not limited to, seed application requirements, field buffer zones, handling requirements, seed testing, and identity preservation requirements. All rice identified pursuant to subdivision (a) shall be subject to an identity preservation program. (c) Reviewing the efficacy of terms, conditions, and identity preservation programs imposed on the planting, producing, processing, or handling of rice identified pursuant to subdivision (a) using the most current industry standards and generally accepted scientific principles. (d) Recommending to the secretary on all matters pertaining to this chapter, including, but not limited to, the amendment or repeal of regulations adopted pursuant to this chapter, enforcement of this chapter, and setting the assessment rates. (e) The committee shall review each rice identified as having characteristics of commercial impact not less often than every two years, or upon receipt of a petition from a handler of rice. A handler of rice identified as having characteristics of commercial impact may not file more than one petition on a particular variety of rice in any two-year period. (f) Neither the recommendations of the committee nor any regulation adopted pursuant to this chapter shall be construed as establishing any production, processing, or market tolerance. SEC. 17. Section 55045 of the Food and Agricultural Code is repealed. SEC. 18. Section 55046 of the Food and Agricultural Code is repealed. SEC. 19. Section 55047 of the Food and Agricultural Code is amended to read: 55047. The committee shall recommend to the secretary that regulations be adopted, amended, or repealed by the secretary to accomplish all of the following purposes: (a) Maintain the integrity and prevent the contamination of rice which has not been identified pursuant to subdivision (a) of Section 55040. (b) Prevent the introduction of diseases, weeds, or other pests. (c) Ensure that persons handling seed for the production of rice identified pursuant to subdivision (a) of Section 55040, or that persons bringing rice identified pursuant to subdivision (a) of Section 55040 into the state for processing, notify the commission of the location of planting sites and of the dates and procedures for planting, producing, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (d) Ensure that persons receiving rice having been identified pursuant to subdivision (a) of Section 55040 produced outside the state for processing notify the commission of the location of the receipt and of the procedures for processing or handling the rice to prevent commercial impact to other rice and the spread of weeds, diseases, or other pests. (e) Ensure enforcement of terms and conditions imposed on the planting, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (f) Encourage research and development of new types of rice. SEC. 20. Section 55050 of the Food and Agricultural Code is amended to read: 55050. Except as provided for in Section 55052, no person may plant, produce, process, or handle rice identified pursuant to subdivision (a) of Section 55040, except in compliance with this chapter. Regulations shall be adopted by the secretary, in accordance with Section 55022, to accomplish all of the following purposes: (a) Maintain the integrity and prevent contamination of rice which has not been identified pursuant to subdivision (a) of Section 55040. (b) Prevent the introduction of disease, weeds, or other pests. (c) Ensure that persons handling seed for the production of rice identified pursuant to subdivision (a) of Section 55040 or bringing rice identified pursuant to subdivision (a) of Section 55040 into the state for processing notify the commission of the location of planting sites and of the dates and procedures for planting, producing, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (d) Ensure that persons receiving rice having been identified pursuant to subdivision (a) of Section 55040 produced outside the state for processing notify the commission of the location of the receipt and of the procedures for processing or handling the rice to prevent commercial impact to other rice and the spread of weeds, diseases, or other pests. (e) Enforce the restrictions and conditions imposed on the planting, producing, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (f) Encourage research and development of new types of rice. SEC. 21. Section 55051 of the Food and Agricultural Code is amended to read: 55051. Except as specified in Section 55052, rice shall not be planted, produced, processed, or handled unless it has been reviewed by the committee for the purposes of making the findings set forth in Section 55040, and if necessary, the establishment of regulations pursuant to Section 55047. SEC. 22. Section 55052 of the Food and Agricultural Code is amended to read: 55052. (a) Except as set forth in this section, this chapter shall not apply to 50 acres or less of rice of any type planted for research purposes. No one type may be planted on more than 50 acres in the state and be considered research within the meaning of this section. Any person conducting research on 50 acres or less shall notify the committee of the location of the acreage involved, and the proposed procedures for planting, producing, processing, or handling the rice. The committee shall review and approve, modify, or reject the proposed procedures to ensure that the research will not result in commercial impacts to other rice. The committee shall accept any procedures that have been previously approved or accepted by an agency of state or federal government unless the committee provides written justification for modifying or rejecting the procedures. (b) In addition to the information required pursuant to subdivision (a), the committee may require any person proposing to conduct research using rice brought into the state from another state or country to provide the committee with proposed procedures to ensure that the introduced rice is free of diseases, weeds, or other pests. The committee shall review and approve, modify, or reject the proposed procedures. The committee shall accept any procedures that have been previously approved or accepted by an agency of state or federal government unless the committee provides written justification for modifying or rejecting the procedures. (c) The notice required pursuant to this section shall not require specific information regarding the attributes of the rice that is the subject of the research. (d) The notice required by this section shall be provided in the time and manner specified by the committee. (e) This chapter shall not apply to research conducted by the University of California except for rice produced directly from the research that enters the channels of trade. SEC. 23. Section 55060 of the Food and Agricultural Code is amended to read: 55060. (a) Handlers of seed for the production of rice identified pursuant to subdivision (a) of Section 55040, shall annually pay to the commission an assessment in an amount not to exceed five dollars ($5) per hundredweight (cwt.). (b) The first in-state handler of paddy or brown rice identified pursuant to subdivision (a) of Section 55040, or of seed for the production of rice identified pursuant to subdivision (a) of Section 55040, brought into the state from outside California, shall report to the commission prior to the receipt of the rice or seed and pay an assessment to the commission in an amount not to exceed ten cents ($0.10) per hundredweight (cwt.). The report and payment shall be made in the time and manner specified by the commission. SEC. 24. Section 55100 of the Food and Agricultural Code is amended to read: 55100. (a) It is unlawful for any person to handle, advertise, or label rice in violation of this chapter. (b) Notwithstanding subdivision (a), a person engaged in business as a retailer of rice who in good faith handles, labels, or advertises any rice in reliance on the representations of a producer or handler that the rice may be sold as certified, shall not be found to violate this chapter, except under any of the following circumstances: (1) The retailer knew or should have known that the rice could not be sold as certified. (2) The retailer was engaged in producing or handling the rice. (3) The retailer prescribed or specified the manner in which the rice was produced or handled. SEC. 25. Section 55105 of the Food and Agricultural Code is amended to read: 55105. It is unlawful for any person to plant, produce, process, or handle rice, except in compliance with this chapter. SEC. 26. Section 55106 of the Food and Agricultural Code is repealed. SEC. 27. Section 55106 is added to the Food and Agricultural Code, to read: 55106. All remedies provided by this chapter are cumulative and not exclusive of any other remedy, whether initiated by the commission or the department. SEC. 28. Section 55107 of the Food and Agricultural Code is repealed. SEC. 29. Article 10 (commencing with Section 55110) is added to Chapter 4 of Division 20 of the Food and Agricultural Code, to read: Article 10. Investigations and Actions by the Commission 55110. The commission may receive and investigate complaints regarding alleged violations of this chapter. The commission may refer cases to the department for action. 55111. (a) The commission shall provide notice to the person or persons, and to the secretary, alleged to have violated the provisions of this chapter informing him or her of the commission's decision to take further action pursuant to this article. The person may seek a review of the commission's decision by the secretary and thereafter may seek judicial relief. (b) Notwithstanding subdivision (a) and Section 55111.5, the commission may immediately seek injunctive relief, as specified in Section 55112. Any injunction obtained by the commission shall remain in full force and effect pending any review by the secretary. 55111.5. The commission may enter into a written agreement with any person alleged to have violated this chapter that will cause the cessation of any alleged violation and avoidance of future violations. 55112. (a) The commission may commence civil actions and utilize all remedies provided in law or equity for the collection of assessments and for obtaining a writ of attachment, specific performance, or injunctive relief regarding this chapter. The commission may seek a writ of attachment or injunctive relief, including, but not limited to, a temporary restraining order, preliminary injunction, or a permanent injunction, in order to prevent any violation or threatened violation of this chapter. (b) The commission shall provide notice to the person alleged to have violated this chapter prior to commencing a civil action. (c) A court shall issue to the commission any requested writ of attachment or injunctive relief upon a prima facie showing by verified complaint that a named defendant has violated, or has threatened to violate, this chapter. No bond shall be required to be posted by the commission as a condition for the issuance of the requested writ of attachment or injunctive relief. (d) A writ of attachment shall be issued pursuant to Chapter 5 (commencing with Section 485.010) of Title 6.5 of Part 2 of the Code of Civil Procedure, except that the showing specified in Section 485.010 of the Code of Civil Procedure shall not be required. Injunctive relief shall be issued pursuant to Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, except that the showing of irreparable harm or inadequate remedy at law specified in Sections 526 and 527 of the Code of Civil Procedure shall not be required. (e) Upon entry of any final judgment on behalf of the commission against any defendant, the court shall enjoin the defendant from conducting any type of business regarding rice until there is full compliance and satisfaction of the judgment. Venue for these actions may be established at the domicile or place of business of the defendant or in the county of the principal place of business of the commission. The commission may be sued only in the county of its principal office. (f) Prior to bringing an action for injunctive relief pursuant to this section, the commission shall review all available information, recommend specific enforcement action to the secretary, and allow the secretary the opportunity to respond. Notwithstanding the secretary' s response, nothing in this section shall be construed as preventing the commission from bringing the action. 55113. The commission shall be entitled to receive reimbursement for any reasonable attorney's fees and other related costs, including, but not limited to, investigative costs, involved in enforcement of this chapter. SEC. 30. Article 11 (commencing with Section 55120) is added to Chapter 4 of Division 20 of the Food and Agricultural Code, to read: Article 11. Investigations and Actions by the Department 55120. The department may investigate complaints referred to it by the commission regarding alleged violations of this chapter. The department may enter and inspect the premises of any person subject to this chapter for the purpose of inspecting rice, rice processing, or handling activities governed by this chapter. If the department determines that violations have occurred, the department may take action authorized by this chapter, including, but not limited to, seizing and destroying rice. Rice may not be destroyed by the department without due notice to the person whose rice was seized and an informal hearing before the secretary pursuant to procedures adopted by the department. 55121. The department may commence civil actions and utilize all remedies provided in law or equity for obtaining a writ of attachment, specific performance, or injunctive relief for violations of this chapter. 55122. (a) The department may levy a civil penalty against any person who is grossly negligent or willfully violates this chapter in an amount of not more than fifteen thousand dollars ($15,000) for each violation. Each day a grossly negligent or willful violation of this chapter continues, for a period that shall not exceed 10 days, may be a separate violation. The amount of the penalty assessed for each violation shall be based upon the nature of the violation, the seriousness of the effect of the violation upon the effectuation of the purposes and provisions of this chapter, and the impact of the penalty on the violator, including the deterrent effect on future violations. If the secretary determines, based on evidence submitted, that the grossly negligent or willful violation has the potential to seriously impact the ability of California rice producers to produce or market rice without characteristics of commercial impact, each day shall be considered a separate violation and the period of time shall not exceed a total of 20 days. (b) Upon a finding that a violation was negligent or unintentional, the secretary may levy a civil penalty of not more than two thousand five hundred dollars ($2,500) for each violation. (c) For a first offense, and upon a finding that the violation is minor and negligent or unintentional, in lieu of a civil penalty as prescribed in subdivision (b), the secretary may issue a notice of violation. (d) A person against whom a civil penalty is levied shall be afforded an opportunity for a hearing before the secretary, upon a request made within 30 days after the date of issuance of the notice of penalty. At the hearing, the person shall be given the right to present evidence on his or her own behalf. If no hearing is requested, the civil penalty shall constitute a final and nonreviewable order. (e) If a hearing is held, review of the decision of the secretary may be sought by the person against whom the civil penalty is levied within 30 days of the date of the final order of the secretary pursuant to Section 1094.5 of the Code of Civil Procedure. (f) A civil penalty levied by the department pursuant to this section may be recovered in a civil action brought in the name of the state. 55123. (a) The department shall be entitled to receive reimbursement for any reasonable attorney's fees and other related costs, including, but not limited to, investigative costs, involved in enforcement of this chapter. (b) The department shall use all funds received pursuant to this chapter for the purposes of this chapter. SEC. 31. Section 71010 of the Food and Agricultural Code is amended to read: 71010. The commission form of administration created by this chapter is uniquely situated to provide those engaged in the production and milling of rice the opportunity to avail themselves of the benefits of collective action of the broad fields of development, maintenance, and expansion of markets, marketing research, education, advertising and promotion, and production and processing research necessary to achieve the purposes stated herein, and any activity authorized in Chapter 4 (commencing with Section 55000) of Division 20. SEC. 32. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.