BILL ANALYSIS
AB 2695
Page 1
Date of Hearing: April 14, 2010
ASSEMBLY COMMITTEE ON AGRICULTURE
Cathleen Galgiani, Chair
AB 2695 (Hernandez) - As Introduced: February 19, 2010
SUBJECT : California Nursery Producers Commission.
SUMMARY : Creates the California Nursery Producers Commission
(CNPC) with prescribed membership, powers, duties and
responsibilities, and requires positive referendum vote by
nursery product producers, as specified, to activate.
Specifically, this bill :
1)Provides declarations and general provisions for CNPC,
including stating that CNPC is necessary for efficient
management of research, public education, and marketing
programs; and, carrying out a commitment to responsible
stewardship and environmental protection.
2)Provides definitions including defining a producer as a person
who operates under a California state nursery license who
produces or causes to be produced nursery products; who
produces a gross value of five million dollars or more of
nursery products in the preceding marketing season; and, who
allows the dollar amount to be raised by a 2/3 vote of the
commission or lowered by a referendum vote of all producers,
including those who would become producers under the lowering
of the dollar amount.
3)Establishes CNPC, composed of 14 producers, one public member,
and ex officio members. The producers are to be elected by
all state producers. The public member is to be appointed by
the Secretary (Secretary) of the California Department of Food
and Agriculture (CDFA) from nominees recommended by CNPC.
4)Provides each member, except for ex officio members, shall
have an alternate elected in the same fashion as the member.
Vacancies are to be filled by appointment for the unexpired
term of office, by a majority vote of CNPC. Designates a
quorum as a majority of CNPC members, while a majority vote of
members present at a meeting, at which a quorum is present,
constitutes an act of CNPC.
5)Provides that the Secretary and other appropriate members, as
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determined by CNPC, shall be ex officio members.
6)Permits the Secretary to correct or cease the activities or
functions of CNPC when it is determined they are not in the
public interest or in violation of this Chapter, by specified
procedures.
7)Requires the Secretary, on decisions needing concurrence, to
respond within 15 working days of notification.
8)Requires CNPC to reimburse the Secretary for all expenditures
incurred in carrying out this Chapter.
9)Requires all proceeds from assessments be deposited in
designated banks and disbursement ordered by CNPC be by
designated agents of CNPC.
10)Establishes that the state is not liable for acts of CNPC or
its agents, and that no CNPC member, alternate member, or
employees of CNPC shall be personally liable or individually
responsible for errors, omissions, or acts of CNPC, except for
their own individual acts of dishonesty or crime.
11)Establishes CNPC's duties and powers to include, but not be
limited to, the following:
a) Adopt, alter, rescind, modify and amend bylaws rules,
regulations and orders to carryout this Chapter. Includes
rules for appeals;
b) Administer, enforce, perform all acts and exercise all
powers incidental to the purpose of this Chapter;
c) Appoint officers with powers and duties delegated to
them by CNPC;
d) Hire personnel to manage and carry out the functions of
CNPC, including compensation;
e) Appoint committees of CNPC members and non-members to
advise CNPC;
f) Establish offices, enter into contracts and agreements,
create liabilities, borrow funds, keep accurate books,
records and accounts subject to annual audits, which are to
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be part of the annual report and be submitted to the
Legislature. Further, permits the Secretary to conduct a
fiscal and compliance audit when determined to be
necessary;
g) Authorizes, in regards to nursery production,
advertising, market expansion including foreign markets,
education and instruction of wholesale and retail trade,
market surveys, negotiations with state, federal and
foreign agencies for nursery production promotion,
scientific research and to accept private, state and
federal funds for such; and,
h) Establishes an assessment to defray operating costs and
an annual budget, that is concurred in by the Secretary,
plus an annual statement of contemplated activities.
12) Requires the Secretary, within 60 days of a request from any
producer, to establish a list of producers and handlers
eligible for a referendum vote, but the chapter is not
operative except for the referendum vote. For the referendum
to pass, it must meet the following criteria:
a) At least 40% by number of the total producers from the
list must participate in the vote and either of the
following must occur:
i) 65% of the producers who voted in the referendum
voted in favor of the referendum, and the producers so
voting represent a majority of nursery products in the
preceding marketing year by all producers voting; or,
ii) A majority of producers who voted in the referendum
voted in favor of the referendum, and those producers so
voting produced 65% of the nursery products in the
preceding marketing year by all producers voting.
13)Provides that prior to the referendum, the proponents of the
referendum shall deposit funds to cover the cost of the
referendum with the Secretary.
14)Requires CNPC to establish an assessment for the following
marketing season no later than January 1 of each year. Once
established, the assessment may be changed with a 2/3 vote of
CNPC. Establishes procedures for collection, payment,
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tracking and reporting, including penalties of 10% for failure
to pay with an interest rate on unpaid balances of 1.5% per
month.
15)Requires any person who produces nursery products for market,
whether or not they are producers as defined in this Chapter,
to keep records of the nursery products produced and sold and
aggregated data on customers and trading partners in a method
prescribed by CNPC. Requires the records to be kept for three
years and made available to CNPC upon written demand.
Information collected shall be confidential and not made
public unless under court order.
a) Information required for reports to governments,
financial reports to CNPC or aggregate sales and inventory
information, if stripped of an individual's information,
may be disclosed by CNPC.
16)Establishes a civil violation for the following:
a) Willfully render or furnish a false report, statement,
or record required by CNPC;
b) Fail to render or furnish a report, statement, or record
required by CNPC; or,
c) Secrete, destroy, or alter records required to be kept
under this Chapter.
17)Provides methods for continuation or suspension or
termination of CNPC, including requiring the Secretary, after
five years of implantation, to hold a hearing to determine
whether it should continue, which may prompt another
referendum, or by a 2/3 vote of CNPC to terminate this
chapter; CNPC may recommend suspension of CNPC to the
Secretary.
18)Makes a legislative declaration that information required to
be submitted to CNPC that is personal or sensitive business
information is protected as confidential information.
EXISTING LAW authorizes various marketing and promotion
commissions (commissions) to promote the production and
marketing of California agricultural commodities. Commissions
have a variety of powers covering promotion, advertising,
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education, production or post-harvest research, and quality
standards and inspections. Commissions cover a variety of
commodities (Food and Agriculture Code Section 64001-79304)
FISCAL EFFECT : This bill is keyed fiscal by Legislative
Counsel.
COMMENTS : According to the author, California nurseries face
numerous regulatory, research and marketing issues in
California. The industry sees a need for a unified voice to
educate the public and regulatory entities about the role
California's nursery industry plays in a variety of areas,
including water use, reuse and conservation, pest exclusion,
economic development, land use and trade. A commission will
bring together this diverse industry under a common entity to
assist in accomplishing its goals. According to the sponsor,
there are roughly 600 producers in California, as defined by
this bill.
According to CDFA, the purpose of marketing programs is to
provide agricultural producers and handlers an organizational
structure, operating under government sanction, which allows
them to solve production and marketing problems collectively
that they could not address individually. Current marketing
programs' activities include commodity promotion, research, and
maintenance of quality standards. Commissions provide a
structure for solving problems and also provide a vehicle for
collecting funds to support activities.
For accomplishing the purposes stated by the author for this
industry, a commission may be an appropriate entity. Current
commissions and marketing orders have been successful in
expanding markets, improving product quality, and providing more
research for pests and disease prevention. In recent years, one
commission was terminated by the industry and another had an
audit by the Secretary, which revealed potential misuse of
funds. This bill has language requiring annual audits, and upon
determination of the need, the Secretary may conduct a fiscal
and administrative audit of CNPC.
There are two issues the Committee may wish to consider, as
follows:
1)On page 16 lines 25-27, this bill requires CNPC to establish
an assessment for the following market season, but does not
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set a maximum amount. All other commissions have a maximum
amount of assessments set in California Code. Assessment have
been based on a specific dollar amount per weight, carton or
acre, or based on a percentage of gross dollar value (GDV) of
sales. Current GDV based assessment rates range from one
percent for the Cut Flower Commission to six and a half
percent for the Avocado Commission. This bill defines
producers in part based on producing at least $5 million GDV
worth of products. The committee may wish to consider placing
a maximum assessment based on GDV for CNPC.
2)On line 19, line 1-2, this bill makes it a civil violation to
render false reports, fail to render reports upon CNPC's
request or to falsify records required by CNPC. This bill
does not state the amount of the civil violation. The most
recent commission law, AB 606 (Ma), chapter 366, statutes of
2009, lists a civil violation up to $1,000. The committee may
wish to consider if this bill should list a civil violation up
to $1,000 to conform to recent law.
PENDING LEGISLATION : AB 1912 (Evans) of 2010 creates the
California Apiary Research Commission (CARC) with prescribed
membership, powers, duties and responsibilities, and requires
positive referendum vote by beekeepers, as specified, to
activate.
PREVIOUS LEGISLATION : AB 606 (Ma), Chapter 366, Statutes of
2009, created the California Blueberry Commission with
prescribed membership, powers, duties and responsibilities, and
required a positive referendum vote by blueberry producers and
handlers, as specified, to activate.
SB 303 (Chesbro), Chapter 597, Statutes of 2005, authorized the
Mendocino County Winegrape and Wine Commission (MCWWC), and
provided that, upon approval of a referendum of producers and
processors, MCWWC may establish and collect an assessment from
Mendocino winegrape producers and processors in order to further
research and facilitate the successful and orderly marketing of
Mendocino County winegrapes.
SB 1540 (Alpert), Chapter 973, Statutes of 2002, created the
California Sea Urchin Commission (CSUC) with a prescribed
membership, and specifies the powers, duties and
responsibilities of CSUC, which is authorized to carry out
programs of education, promotion, marketing, and research
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relating to sea urchins. Authorized CSUC to levy an assessment,
as specified, on sea urchin divers and handlers and authorizes
the expenditure of those funds for the purposes of carrying out
the provisions of CSUC.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Nurseries and Garden Centers
Opposition
None on file.
Analysis Prepared by : Victor Francovich / AGRI. / (916)
319-2084