BILL ANALYSIS Ó
SENATE AGRICULTURE COMMITTEE
Senator Anthony Cannella, Chairman
BILL NO: SB 625 HEARING: 04/05/11
AUTHOR: Hernandez FISCAL: Yes
VERSION: 02/18/11 CONSULTANT: John Chandler
California Nursery Producers Commission.
BACKGROUND AND EXISTING LAW
Existing law allows for the establishment of commissions and
councils to advance the interests of California agriculture and
seafood industries. Commission law declares that California
agriculture and seafood industries are vitally important
elements of the state's economy and are supported by
state-established commissions and councils mandated to enhance
and preserve the economic interests of California. The
legislature finds and declares that commissions and councils
implement public policy through their express conduct and these
programs are among the broad range of state-mandated regulatory
programs that are funded by industry, generally through user
fees assessed in accordance with each person's relationship to a
particular program. The legislature further declares that these
commissions and councils are established to reflect a commitment
to California agriculture and seafood industries, represent a
policy of support for self-help and public-private partnerships,
provide a benefit to the entire industry and all Californians,
and are intended to enhance the image of California agriculture
and seafood products.
The goals and objectives of commissions are accomplished through
the following activities:
Research.
Elimination of tariff and non-tariff trade barriers.
Consumer education relating to health and other benefits of
using and consuming these products.
Demand-side regulation.
Analysis of government regulation.
Cooperative crisis resolution.
Participation in negotiations with other governments relating
to market access issues.
Industry self-regulation to establish and maintain grade,
size, and maturity standards and to stabilize flow of product.
Each commission and council is established and administered
according to its own statutory guidelines. According to
information provided by the California Department of Food and
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Agriculture, California has more than 55 advisory boards,
councils, and commissions.
AB 2695 (Hernandez), Chapter 605, Statutes of 2010, authorized
the creation of 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.
AB 1912 (Evans) Chapter 585, Statutes 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.
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 wine grapes.
SB 1540 (Alpert), Chapter 973, Statutes of 2002, created the
California Sea Urchin Commission (CSUC) with a prescribed
membership, and specified the powers, and duties and
responsibilities of CSUC, which is authorized to carry out
programs of education, promotion, marketing, and research
relating to sea urchins. The bill authorized CSUC to levy an
assessment, as specified, on sea urchin divers and handlers and
authorized the expenditure of those funds for the purposes of
carrying out the provisions of CSUC.
PROPOSED LAW
SB 625 repeals the current authorizing language and
reestablishes 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:
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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 $2,500,000 or more
of nursery products in the preceding marketing season.
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.
Establishes CNPC, composed of 14 producers, one public
member, and ex officio members. The producer members will
be made up of two members at large and four producer
representatives from each of the three geographical
districts of the commission. The public member is to be
appointed by the Secretary of the California Department of
Food and Agriculture (secretary) from nominees recommended
by CNPC.
Provides that 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 portion of the 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.
Provides that the secretary and other appropriate
members, as determined by CNPC, shall be ex officio
members.
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 are in violation of this chapter, by
specified procedures.
Requires the secretary, on decisions needing
concurrence, to respond within 15 working days of
notification.
Requires CNPC to reimburse the secretary for all
expenditures incurred in carrying out this chapter.
Requires that all proceeds from assessments be deposited
in designated banks and that disbursement ordered by CNPC
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be by designated agents of CNPC.
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.
Establishes CNPC's duties and powers to include, but not
be limited to, the following:
o Adopt, alter, rescind, modify and amend
bylaws, rules, regulations and orders to carry out
this chapter, including rules for appeals;
o Administer, enforce, and perform all acts and
exercise all powers incidental to the purpose of this
chapter;
o Appoint officers with powers and duties
delegated to them by CNPC;
o Hire personnel to manage and carry out the
functions of CNPC, including compensation;
o Appoint committees of CNPC members and
non-members to advise CNPC;
o Establish offices; enter into contracts and
agreements; create liabilities; borrow funds; and keep
accurate books, records, and accounts subject to
annual audits, which are to be part of the annual
report and be submitted to the legislature. Further,
permit the secretary to conduct a fiscal and
compliance audit when determined to be necessary;
o Authorize, in regard 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 acceptance of
private, state, and federal funds for such; and,
o Establish an assessment to defray operating
costs and an annual budget, concurred in by the
secretary, plus an annual statement of contemplated
activities.
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
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referendum to pass, it must meet the following criteria:
o At least 40% of the total number of producers
from the list must participate in the vote and either
of the following must occur:
§ 65% of the producers who voted in
the referendum voted in favor of the referendum,
and those producers so voting represent a
majority of the nursery products marketed in the
preceding marketing year by all producers voting;
or,
§ 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 marketed in the preceding
marketing year by all producers voting.
Provides that, prior to the referendum, the proponents
of the referendum shall deposit with the secretary funds to
cover the cost of the referendum.
Requires CNPC to establish an assessment for the
following marketing season between May 1 to April 30 of
each year. The assessment shall not be more than $0.006
per dollar of sales. Allows the commission to vary the
assessment rate for different classes of trade. Once
established, the assessment may be changed with a 2/3-vote
of CNPC. Establishes procedures for collection, payment,
and tracking and reporting, including penalties of 10% for
failure to pay with an interest rate of 1.5% per month on
unpaid balances.
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.
o 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.
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Establishes a civil penalty not exceeding $1,000 for any
person who does any of the following:
o Willfully renders or furnishes a false report,
statement, or record required by CNPC;
o Fails to render or furnish a report,
statement, or record required by CNPC; or,
o Secretes, destroys, or alters records required
to be kept under this chapter.
Provides methods for continuation or suspension or
termination of CNPC, including requiring the secretary,
after five years of implementation, 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.
Authorizes the new commission to commence civil actions
and utilize all remedies provided in law or equity for the
collection of assessments and civil penalties and for
obtaining injunctive relief or specific performance.
Makes a legislative declaration that information
required to be submitted to CNPC that is personal or
sensitive business information is protected as confidential
information.
COMMENTS
1.According to the sponsor, SB 625 reintroduces the Nursery
Producers Commission. Last year AB 2695 (Hernandez) was
signed into law by the governor but did not receive the needed
2/3 majority required by the passage of Proposition 26 and
will, therefore, be repealed on December 31, 2011, unless
another bill is passed. The California nursery industry faces
numerous regulatory, research, and marketing challenges in
California. The establishment of a commission would address
the need within the nursery industry for a unified voice from
the nursery industry to the public and regulatory agencies on
the importance of California's nursery industry. A commission
would help the industry with improved marketing of California
nursery products. California nurseries are under increasing
pressure from invasive pests, causing increased costs and
challenges transporting nursery products. A commission would
help the industry respond to the pressures of invasive pests,
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help educate the public, and be an industry asset in combating
current and future invasive pest threats.
2.Currently, the Fruit Tree, Nut Tree, and Grapevine Improvement
Advisory Board (IAB) was created by the agriculture industry
in 1987 to fund research. The IAB provides a significant
level of funding for the University of California's Foundation
Plant Material Service (FPMS), which is recognized as the
leader in the production of disease-tested grafting and
budding material for California nurseries. The IAB is funded
by the industry through a 1% assessment on gross sales. There
have been some questions raised as to whether the Nursery
Producers Commission could be duplicating some of the IAB
efforts.
3.The Senate Rules Committee has doubled referred this bill to
the Senate Governance and Finance Committee as the second
committee of referral. Therefore, if this measure is approved
by this committee, the motion should include an action to
re-refer the bill to the Senate Committee on Governance and
Finance.
SUPPORT
Dave Wilson Nursery
Sunlet Nursery, Inc.
OPPOSITION
None received