BILL ANALYSIS
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THIRD READING
Bill No: AB 2240
Author: Ma (D)
Amended: 6/21/10 in Senate
Vote: 21
SENATE FOOD AND AGRICULTURE COMMITTEE : 3-1, 6/15/10
AYES: Florez, Emmerson, Wolk
NOES: Hollingsworth
NO VOTE RECORDED: Hancock
SENATE APPROPRIATIONS COMMITTEE : 8-0, 8/2/10
AYES: Kehoe, Alquist, Ashburn, Corbett, Emmerson, Price,
Wolk, Yee
NO VOTE RECORDED: Leno, Walters, Wyland
ASSEMBLY FLOOR : 58-11, 5/6/10 - See last page for vote
SUBJECT : Agriculture: processors of farm products:
fees
SOURCE : California Farm Bureau Federation
DIGEST : This bill raises certain fees and deletes the
outdated fee structure and reporting provisions of the
Department of Food and Agricultures (DFA's) Market
Enforcement Branch. This bill (1) increases from $60 to
$100, the filing fee paid by a grower or licensee, with a
complaint not subject to certain federal laws, seeking
resolution of the complaint, (2) increases from $35 to $55,
the license fee paid by agents of produce dealers and food
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AB 2240
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processors, and (3) increases from $100 to $136, the lowest
tier of four, the fee paid by produce dealers and food
processors. This bill authorizes the Secretary of DFA to
appoint an advisory committee of producers and licensees to
provide guidance in establishing those fees or to rely on
input from any similar advisory committee already assembled
by the Secretary.
ANALYSIS : Current law requires that all persons engaged
in the processing or manufacturing, or purchasing for
processing or manufacturing of any farm product be licensed
by DFA. Similarly, all persons buying, receiving on
consignment, soliciting for sale on commission, or
negotiating the sale for resale must be licensed by DFA.
The current licensing fees are based on annual volume of
sales for each licensee: $20,000 or less, sales fees are
$100; $50,000 to $2 million, fees are $300; and over $2
million, fee is $400. Agents of a licensed principal are
required to pay a $35 fee.
Federal law authorizes similar marketing laws under the
Packers and Stockyards Act of 1921 (7 U.S.C., Sec. 181, et.
seq.).
This bill:
1. Increases the fee for an aggrieved grower or licensee
filing a complaint against a processor or dealer/broker
from $60 to $100.
2. Increases the fee for each agent of a licensed producer
or dealer/broker from $35 to $55.
3. Increases the fee for processors and dealer/broker
buyers of annual volumes of $20,000 or less from $100 to
$136.
4. Authorizes DFA to appoint an advisory committee of
producers and licensees to provide guidance in
establishing processor and dealer/broker fees or rely on
input from any similar advisory committees already
assembled by DFA.
5. Eliminates the outdated fee structure and reporting
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provisions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Revised fee structure Estimated ($270)
annually, ongoing Special*
* Department of Food and Agriculture Fund
SUPPORT : (Verified 8/4/10)
California Farm Bureau Federation (source)
California Bean Shippers Association
California Grain & Feed Association
California Pear Growers
California Seed Association
California State Floral Association
Western Growers
OPPOSITION : (Verified 8/4/10)
Family Winemakers of California
ARGUMENTS IN SUPPORT : Supporters state that the Market
Enforcement Branch (MEB) is facing a proposed $600,000
shortfall of its annual $2.6 million budget in 2010-2011.
The current fee of $100 for the processors and produce
dealers with less than $20,000 purchases per year does not
cover the $136 cost to DFA to process a single application.
It is estimated that the fee increases in this bill
recommended by the Marketing Enforcement Advisory
Committee, made up of appointees by DFA, would bring in
$268,400 annually. With this bill, combined with the
effort by MEB to locate processors and produce dealers
currently operating without a license, DFA expects the
revenue to increase $425,000. This bill's fee increases
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will help prevent the MEB from running out of funds needed
to operate.
ARGUMENTS IN OPPOSITION : Opponents state that this bill
increases the processor licensing fee on the smallest
buyers and producers which is inequitable as over 3,000
processors will not face a fee increase. The fee increase
would, therefore, be borne by processors and produce
dealers that would be most impacted by even a small
increase in costs to their operations. Opponents feel that
the MEB enforcement costs are driven by more complaints
against the licensees that are not facing a fee increase,
and therefore, all processors and produce dealers should
share in the fee increases needed to keep the MEB
operating.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Bill Berryhill, Tom
Berryhill, Blakeslee, Blumenfield, Bradford, Brownley,
Caballero, Charles Calderon, Carter, Conway, Cook, Coto,
Davis, De La Torre, De Leon, Emmerson, Eng, Feuer,
Fletcher, Fong, Fuentes, Fuller, Furutani, Galgiani,
Garrick, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Jones, Lieu, Bonnie Lowenthal, Ma, Niello, Nielsen, V.
Manuel Perez, Portantino, Ruskin, Salas, Saldana,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NOES: Anderson, Chesbro, DeVore, Gaines, Huber, Huffman,
Jeffries, Knight, Logue, Nestande, Norby
NO VOTE RECORDED: Bass, Block, Buchanan, Evans, Gilmore,
Mendoza, Miller, Monning, Nava, Silva, Vacancy
RJG:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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