BILL ANALYSIS Ó
AB 907
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 907 (Ma)
As Amended June 21, 2012
2/3 vote
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|ASSEMBLY: | |(May 26, 2012) |SENATE: |36-0 |(August 13, 2012) |
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(vote not relevant)
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|COMMITTEE VOTE: |9-0 |(August 22, 2012) |RECOMMENDATION: |concur |
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Original Committee Reference: TRANS.
SUMMARY : Authorizes the California Department of Food and
Agriculture (CDFA) to impose sanctions three times the amount of
unpaid or underpaid license fees and requires any bond or
irrevocable guarantee, placed in lieu of proof of financial
responsibility, to include both past and future debts owed, as a
requirement of obtaining a processor's license.
The Senate amendments delete the Assembly version of this bill, and
instead:
1)Include all debts, past and future, to be considered in the value
of the surety bond or irrevocable guarantee that ensures
financial responsibility and ability to pay for the licensee's
obligations at the time the guarantee is issued as a requirement
of processor license approval.
2)Provide definition for "irrevocable guarantee" to include a
personal or corporate guarantee, a certificate of deposit, a bank
letter of credit, or a surety bond, as determined to be
appropriate by the secretary of CDFA.
3)Increase by three times the amount of fees due to the Secretary
(Secretary) of CDFA, if any person is found to be operating as a
processor without a license within the last five years that
person has operated.
AB 907
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EXISTING LAW :
1)Defines processor to mean any person that is engaged in the
business of processing or manufacturing any farm product, that
buys, or contracts to buy, any farm product for the purpose of
processing or manufacturing it and selling, reselling, or
redelivering it in any processed form. It does not include any
retail merchant, as specified.
2)Requires that all processors of farm products apply and obtain
processor licenses with CDFA.
3)Requires up to four years' financial documentation as part of the
license application. If the secretary determines that an
applicant or licensee is unable to pay in full for future farm
product purchases, the applicant or licensee is denied a license,
with the following exception:
a) A surety bond may be posted in lieu of financial
responsibility for a minimum of $10,000 or 20% of the total
annual value of the products the applicant/licensee intends to
purchase.
4)Authorizes the Secretary, through the Market Enforcement Branch
(MEB), to enforce processor marketing laws through licensing,
fees, bonds, liens, audits, investigations, violations, and
penalties.
AS PASSED BY THE ASSEMBLY , this bill established new procedures for
the reporting of ladder or hoist equipment safety issues by
authorizing a port agent to review the initial report of a
suspected ladder or hoist safety standard violation, and any
information gathered as part of the preliminary investigation.
FISCAL EFFECT : According to the Senate Appropriations Committee,
likely minor increase in revenue from additional penalties
deposited in the Department of Food and Agriculture Fund for unpaid
licensing fees.
COMMENTS: The Senate amendments that replaced the previous version
of this bill work to resolve the following issue:
Most wineries pay farmers for delivered grapes in a timely manner;
however, each year a few wineries neglect to pay growers, causing
economic hardship to those farming operations. Within the last
AB 907
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three years, the CDFA's MEB received formal complaints from 214
winegrape growers against 81 wineries, alleging $10.4 million in
nonpayment for delivered grapes. This bill authorizes CDFA to
impose sanctions three times the amount of unpaid or underpaid
license fees, as well as requires any bond or irrevocable
guarantee, placed in lieu of proof of financial responsibility, to
include both past and future debts owed as a requirement of
obtaining a processor's license. This bill has been amended as a
result of negotiations between winegrape growers and wineries, and
is noncontroversial in its current form.
This bill was substantially amended in the Senate and the
Assembly-approved provisions of this bill were deleted. Senate
amendments have not been heard in an Assembly policy committee.
The Assembly version of this bill dealt with safety measures to
protect boat pilots. The Senate version relates to processors of
farm products and processor's licenses.
Analysis Prepared by : Victor Francovich / AGRI. / (916) 319-2084
FN: 0005394