BILL ANALYSIS
SB 362
Page 1
Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON AGRICULTURE
Cathleen Galgiani, Chair
SB 362 (Florez) - As Amended: June 28, 2010
SENATE VOTE : vote not relevant.
SUBJECT : Agriculture: victory gardens: taxes: exclusion.
SUMMARY : Defines a victory garden grower (VGG) as a person who
produces fruits, nuts or vegetables on an acre or less for sale
directly to the public within a 15 mile radius of the VGG's
garden; and excludes a VGG's gross incomes from the sale of VGG
products for the purpose of personal and corporate income taxes.
Specifically, this bill :
1.Allows a VGG to sell fruits, nuts and vegetables within a 15
mile radius of the VGG's garden, directly to the public.
2.Defines a VGG as a person who grows fruits, nuts and
vegetables or any combination of fruits, nuts and vegetables
on a reasonable sized garden of up to one acre. Allows county
agricultural commissioners (CAC) to determine what a
reasonable size is for a VGG, but a VGG does not need a CAC's
permission as a condition to obtain a VGG license.
3.Requires a VGG to file a notice, not exceeding one page, in a
form prescribed by the local CAC, along with a $50 filing fee.
Requires the VGG license to be effective upon filing the
notice and paying the fee. Allows annual renewal by filing
another notice and paying another $50 fee.
4.Requires a photocopy of the filed notice and proof of payment
the file fee be accepted as proof of a VGG license. Allows
CAC to issue receipts or certificates to be used as proof of a
VGG license.
5.Exempts VGGs from all state and local licensing ordinances
relating to VGG activities, including, but not limited to,
local zoning and business licensing. Requires VGGs to follow
applicable state and local laws, including, but not limited
to, health and safety, noise and prohibited poisons.
6.States that it is the intent of the Legislature that state
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laws pertaining to VGGs shall supersede all conflicting local
law and shall apply to charter cities
7.Exempts a VGG's products from size, standard pack, container,
and labeling requirements. Allows CAC to issues guidelines
for point of sales identification of the product as a county
VGG, as long as the guidelines do not have unreasonable costs.
Allows a VGG to add geographical statement of origins on a
label.
8. Exempts a VGG's sales from gross income for the purposes of
personal income and corporate tax.
EXISTING LAW allows for the direct marketing of agricultural
produce through certified farmer's markets (CFM), field retail
stands or farm stands. Allows California farmers to transport
for sale and sell California-grown fresh fruits, nuts, and
vegetables that they produce, directly to the public, at CFMs.
Allows agricultural produce sold at CFMs, field retail stands or
farm stands to be exempt from size, standard pack, container,
and labeling requirements. (Food and Agriculture Code (FAC)
Section 47000-47003)
Imposes a sales and use tax on retailers, based on gross
receipts of the sale of tangible property, or the storage and
use of tangible property. Requires every person intending to
conduct business, as a seller in California, to obtain a
seller's permit from the State Board of Equalization. Allows
for exemptions to sales and use taxes. (Revenue and Taxation
Code (RTC) Section 6051-6249)
Allows for various exclusions to personal income and corporate
tax. (RTC Sections 17131 - 17157, 24301 - 24315)
FISCAL EFFECT : This bill is keyed fiscal by Legislative
Counsel.
COMMENTS : According to the author, victory gardens benefit a
community by making more locally grown food available to the
public. This in turn helps the local VGG economically and will
reduce carbon emission, aiding in better air quality.
The author points to several cities that have granted tax
exemptions to community gardens, one in the City of Regina,
Saskatchewan, Canada, and in the California City of Calistoga.
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The City of Regina granted a property tax exemption for a
community garden, but with no lost revenues to the city, due to
the property already being owned by an exempt organization. The
Calistoga Community Garden is a cooperative venture between the
City of Calistoga and Calistoga Community Garden, Inc., a public
benefit tax-exempt organization. Neither of these locations has
granted a tax exemption on personal or corporate tax exclusion
to persons who sell produce from the community gardens.
Under this bill, VGGs are allowed to make direct sales to the
public, including farmer's markets. Currently farmers must go
through a certification process to sell their produce at a CFM.
The certification involves the local CAC performing at least one
annual onsite inspection of the property to verify production of
the commodities listed on the certificate or the existence in
storage of the harvested production, or both. With a VGG being
exempt from state and local licensing and permitting laws, would
either need to be certified to sell at a certified farmer's
market? The committee may wish to consider clarifying if VGGs
are allowed to sell their products at a CFM without
certification or do VGGs need certification to sell at a CFM.
Under this bill to obtain a VGG license, a person needs to file
a one page notice, prescribed by the local CAC, and pay a $50
annual fee. The CAC does not have the authority to withhold a
VGG license, unless the fee has not been paid. CACs do not have
the authority to inspect a VGG garden, as they are required to
do for any farmer who applies for certification to sell
agricultural products at a CFM. The committee may wish to
consider if CACs should have the authority to inspect VGG
gardens as CACs do with other agricultural entities within their
jurisdiction.
This bill would exempt VGGs from local zoning and local business
licensing ordinances. The committee may wish to consider if
removing VGGs from local zoning controls is appropriate public
policy.
Historically, victory gardens, also called war gardens or food
gardens for defense, were vegetable, fruit and herb gardens
planted at private residences and public parks in the United
States during World War I and World War II, in order to reduce
the pressure on the public food supply brought on by the war
effort.
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Since the turn of the century, there has been a growing interest
in community gardens. The City of Sacramento, for example, has
10 community gardens on public land where residents may rent
plots to grow vegetables, flowers and other plants for their
personal use. The Sacramento Area Community Garden Coalition is
a grassroots group whose goal is to bring more community and
school gardens to the Sacramento area.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
California Department of Alcohol Beverage Control
The Wine Institute
Analysis Prepared by : Victor Francovich / AGRI. / (916)
319-2084