BILL ANALYSIS
AB 2240
Page 1
Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2240 (Ma) - As Amended: April 8, 2010
Policy Committee: AgricultureVote:8
- 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes the California Department of Food and
Agriculture (CDFA) to reevaluate the fee structure of the
Marketing Enforcement Branch (MEB) based on actual operating
costs. In addition, this bill raises certain fees and deletes
the outdated fee structure and reporting provisions.
FISCAL EFFECT
This legislation could generate between $250,000 and $300,000 in
additional revenue for the declining MEB fund.
COMMENTS
1)Rationale . The operating revenue of MEB has been declining as
expenditures have increased over the past several years.
Their current year proposed budget estimates a year-end
deficit causing their advisory board to recommend a draw of
roughly 26%, or $200,000, from their reserves (known as the
trust fund) in order to balance their budget. Without an
increase in license fee revenues, this pattern will continue.
The advisory board recommended these fee increases during
their December 3, 2009, meeting. This legislation reflects
those recommendations.
2)The Marketing Enforcement Branch . The mission of the MEB is to
enforce laws enacted to ensure confidence and stability in the
agricultural marketplace and to protect against unfair
business practices between producers, handlers, and processors
of California farm products.
AB 2240
Page 2
MEB duties include:
a) Licensing dealers, brokers, commission merchants, cash
buyers, and processors that handle California farm products
for the purpose of resale or processing.
b) Processing complaints filed by producers or licensees.
The most common complaints filed are for failure to pay in
full, failure to render a true and complete account of
sales, and failure to comply with the provisions of a
written agreement.
c) Investigating alleged violations by licensed or
unlicensed entities to ensure that each is in compliance
with the Food and Agricultural Code.
d) Taking disciplinary action when appropriate against
licensees, principals, or agents. Actions may range from
notices of violation, probation, suspension, or revocation
of a license, to the denial of an application for license.
e) Referring certain violators to local law enforcement
agencies for civil and/or criminal prosecutions.
3)Opposition . In opposition to the bill, the Family Winemakers
of California (FWC) note that in their opinion the fee
increases are inequitable because processors that only buy up
to $20,000 worth of produce will face a $50 increase in fees
and a $20 increase in agent fees. According to the FWC, the
proposal is inequitable since over 3,000 other processors will
not incur an increase even though the branch's enforcement
activity is driven more by complaints against licensees in
other fee tiers.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081