BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 549|
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THIRD READING
Bill No: SB 549
Author: Rubio (D)
Amended: As introduced
Vote: 21
SENATE AGRICULTURE COMMITTEE : 7-0, 5/3/11
AYES: Cannella, Rubio, Berryhill, Evans, La Malfa, Vargas,
Wolk
SENATE APPROPRIATIONS COMMITTEE : 8-0, 5/16/11
AYES: Kehoe, Alquist, Emmerson, Lieu, Pavley, Price,
Runner, Steinberg
NO VOTE RECORDED: Walters
SUBJECT : Eggs: assessment fees
SOURCE : Author
DIGEST : This bill increases the assessment on in-state
and out-of-state eggs from $0.05 per 30 dozen to $0.15 per
30 dozen and includes egg products from out-of -state to
the assessment. This bill specifies that the Secretary of
the Department of Food and Agriculture (CDFA) must collect
a lower fee assessment rate if the funds exceed the
program's enforcement and administrative costs.
ANALYSIS : Existing law establishes requirements
governing the regulation of eggs and egg products and
provides that the purpose is to assure that healthful and
wholesome eggs with identifiable quality standards are sold
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and marketed in the state and to prevent the deceptive or
mislabeled marketing of eggs. The CDFA is authorized to
adopt regulations on the market and marketing of shell eggs
including packaging, sampling procedures, branding,
advertising, registration, grade standards, inspection,
size and appearance, and other matters related to shell egg
production and marketing.
Existing law requires that egg handlers and producers pay a
maximum assessment of $0.05 per 30 dozen eggs sold in the
state. Out-of-state egg handlers and producers must report
and pay the assessment on egg sales into California sold to
a producer, retailer, handler, or breaking point. The CDFA
Secretary may establish a lower assessment rate that
reasonably covers the cost of administration and
enforcement of the shell egg program. The current
assessment rate is at the maximum allowable of $0.05 per 30
dozen eggs.
This bill raises the maximum fee to $0.15 per 30 dozen eggs
sold in the state, the revenue of which is used by CDFA to
ensure that eggs sold and marketed in the state meet
quality standards and to prevent the deceptive or
mislabeled marketing of eggs. The fees paid are deposited
in the Department of Food and Agriculture Fund. The
Secretary is authorized to establish a lower rate for those
fees if the funds derived from the assessment are more than
reasonably necessary to cover the cost of administration
and enforcement of the preparation for market and marketing
of eggs.
Comments
According to the Senate Agriculture Committee, the increase
in the maximum assessment from $0.05 to $0.15 per 30 dozen
is 300% more than the current shell egg assessment cap.
Since the original implementation of the egg assessment, it
has taken many years to reach the current maximum.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Market enforcement up to ($210) initially,
annually; up Special*
assessment to ($2,100) maximum annually at $0.15
* Department of Food and Agriculture Fund
The current assessment is the near maximum $0.045 per 30
dozen eggs which generates approximately $1,050,000 or
$210,000 per $0.01 per 30 dozen eggs. Total revenue would
be $3,150,000 for program operations.
SUPPORT : (Verified 5/17/11)
California Grain and Feed Association
Pacific Egg and Poultry Association
ARGUMENTS IN SUPPORT : Supporters of this bill state that
the increase in the assessment cap on the shell egg program
would provide funds for increased enforcement and a more
vibrant inspection program. In 2010, hundreds of
Californians were sickened by an outbreak of Salmonella
associated with shell eggs produced in several mid-western
states which resulted in an egg recall. Such
health-related outbreaks highlight the importance of a
fully-funded food safety program for eggs sold in
California. This bill ensures that the shell egg program
will be adequately funded for the future.
MEL:mw 5/17/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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