BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 224
          Author:   Gordon (D)
          Amended:  9/3/13 in Senate
          Vote:     21


           SENATE AGRICULTURE COMMITTEE  :  4-0, 7/2/13
          AYES:  Galgiani, Cannella, Berryhill, Wolk
          NO VOTE RECORDED:  Lieu
           
          SENATE APPROPRIATIONS COMMITTEE  :  5-0, 8/12/13
          AYES:  De León, Gaines, Hill, Lara, Steinberg
          NO VOTE RECORDED:  Walters, Padilla
           
          ASSEMBLY FLOOR  :  76-0, 5/29/13 - See last page for vote


            SUBJECT  :    Agricultural products:  direct marketing:   
                      community-supported agriculture

           SOURCE  :     Community Alliance with Family Farmers


           DIGEST  :    This bill defines community-supported agriculture  
          (CSA) within the direct marketing program regulated by the  
          Department of Food and Agriculture (DFA).  This bill establishes  
          regulatory parameters and requires CSA registration fees to fund  
          administration and related programmatic costs, as specified.   
          Requires the secretary of DFA to file an order to adopt, amend,  
          or repeal regulations relating to the fee, as specified.

           Senate Floor Amendments  of 9/3/13 clarify fees related to  
          amended registrations, require a single-farm CSA program to  
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          source all products from only one farm with no more than a de  
          minimus amount originating from other registered CSAs, and  
          prohibit the adoption, amendment, or repeal of fees pursuant to  
          CSAs from being subject to certain rulemaking provisions.

           ANALYSIS  :    Existing law establishes the federal  
          Farmer-to-Consumer Direct Marketing Act of 1976 which was  
          enacted to promote "the development and expansion of direct  
          marketing of agricultural commodities from farmers to consumers"  
          in order to "lower the cost and increase the quality of food to  
          such consumers while providing increased financial returns to  
          the farmers."  Shortly following, the DFA enacted regulations  
          exempting certified farmers' markets from certain packing,  
          sizing, and labeling requirements under the Fruit, Nut, and  
          Vegetable Standards Law in order to sell agricultural products  
          directly to consumers.  These exceptions were expanded by AB  
          2168 (Jones, Chapter 447, Statutes of 2008) to include farm  
          stands, field retail stands, and other forms of direct  
          marketing.  

          Existing law makes legislative findings and declarations  
          regarding the direct marketing of agricultural products as being  
          a benefit to the agriculture community and consumers by  
          supplying quality produce at reasonable prices.  Existing law  
          encourages DFA to assist producers in organizing direct  
          marketing activities by providing technical advice on marketing  
          methods and in complying with the regulations that affect direct  
          marketing programs.

          This bill:

           1. Encourages DFA to assist in organizing CSA by including CSAs  
             as a form of direct marketing under the Food and Agriculture  
             Code.

           2. Defines "community-supported agriculture program," or CSA  
             program, to mean a program under which a registered  
             California direct marketing producer, or a group of  
             registered California direct marketing producers, grow food  
             for consumer shareholders or subscribers who pledge to  
             contract to buy a portion of the future crop, animal  
             production, or both, of the registered California direct  
             marketing producer(s).


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           3. Defines "single-farm" CSA programs to mean a program where  
             all farm products originate from and are produced at the farm  
             of a single registered California direct marketing producer,  
             with no more than a de minimus amount of products originating  
             from other registered California direct marketers.

           4. Defines "multi-farm" CSA programs to mean a program where  
             all farm products originate from and are produced at one or  
             more farms of a group of registered California direct  
             marketing producers who declare their association as a group  
             by certification.

           5. Requires that a registered California direct marketing  
             producer or group comply with the following:

              A.    Register annually with DFA as either a single- or  
                multi-farm CSA and declare that produce will be grown in  
                accordance with good agricultural practices, as outlined  
                in the small farm food safety guidelines published by the  
                department.

              B.    Label the farm delivery box with the name and address  
                of the farm.

              C.    Maintain the consumer boxes in a condition that  
                prevents contamination.

              D.    Inform consumers of the origin of each item included  
                in the box.

              E.    Maintain records that document the contents and origin  
                of all items included in each consumer box.

              F.    Comply with all labeling and identification  
                requirements for shell eggs and processed foods.

           1. Adds registered California direct marketing producers in  
             good standing and in compliance with these provisions as an  
             "approved source" of food that conforms with applicable laws,  
             current public health principles and practices, and generally  
             recognized industry standards that protect public health.

           2. Adds any whole uncut fruit, vegetable or unrefrigerated  
             shell egg grown or produced in compliance with all applicable  

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             federal, state or local laws, regulations and food safety  
             guidelines issued by a regulatory agency, as an "approved  
             source" of food.

           3. Requires all potentially hazardous food contained within a  
             consumer box to be produced, processed and handled according  
             to all applicable federal, state and local food safety  
             requirements.

           4. Requires poultry, rabbit, and other meat to comply with  
             handling requirements established in the small farm food  
             safety guidelines published by DFA per provisions in this  
             bill. 

           5. Authorizes the Department of Public Health (DPH) or a local  
             regulatory agency responsible for retail food safety to enter  
             and inspect a CSA operation in response to a public food  
             safety complaint.  The CSA shall cover reasonable costs  
             associated with such an inspection.

           6. Authorizes the secretary of DFA to set and collect a fee  
             for, or the fee for amendment to the annual registration, not  
             to exceed $100, from a registered California direct marketing  
             producer.  Requires these funds to be used by DFA for  
             administration of this program, which includes the following:

              A.    Creation and maintenance of a registration system.

              B.    Development and publication of periodic small farm  
                food safety guidelines in consultation with the DPH and  
                local health officers.  The guidelines shall include, but  
                not be limited to, safe production, processing, and  
                handling of both non-potentially hazardous and potentially  
                hazardous foods. 

              C.    Expenses incurred relative to meetings of any ad hoc  
                direct marketing advisory committee established by the  
                secretary.

           1. Waives part or all, of the annual registration fee if the  
             California direct marketing producer pays fees for  
             registration or certification under any other program under  
             the purview of this chapter.  Requires these provisions to be  
             followed regardless of any fee waiver.

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           2. Prohibits the adoption, amendment, or repeal of any fee, as  
             defined, from being subject to specified requirements of the  
             Government Code.

           3. Requires an order to adopt, amend, or repeal regulations  
             concerning the fee, as defined, to be transmitted within 30  
             days by the secretary to the Office of Administrative Law. 

           4. Requires the Office of Administrative Law to file the order  
             promptly with the Secretary of State without further review,  
             as defined, and to contain all of the following:

              A.    Indicate that the regulations are adopted, amended, or  
                repealed pursuant to this chapter.

              B.    State that the order is being transmitted for filing.

              C.    Request that the Office of Administrative Law publish  
                a notice of the filing of the order and print an  
                appropriate reference in Title 3 of the California Code of  
                Regulations.

           Background 
           
           CSA  .  As defined by the United States Department of  
          Agriculture's National Agricultural Library, "Community  
          Supported Agriculture consists of a community of individuals who  
          pledge support to a farm operation so that the farmland becomes,  
          either legally or spiritually, the community's farm, with the  
          growers and consumers providing mutual support and sharing the  
          risks and benefits of food production."

          According to a study conducted at the University of California,  
          Davis, CSAs have gained popularity in the last few decades,  
          first forming in the mid-1980s and growing to over 3,600 CSA  
          operations today.  However, existing law does not specifically  
          define CSAs within direct marketing programs or provide for a  
          cohesive programmatic model or regulatory oversight.

           Ad Hoc Committee  .  DFA convened the Direct Marketing Ad Hoc  
          Committee to assess the role of direct marketing in California  
          and create a transparent and inclusive process to reinvigorate  
          the Direct Marketing Program.  The Ad Hoc Committee published a  

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          report in December 2012 with their findings, which confronted  
          the long-term health of direct marketing, funding and  
          enforcement, and potential regulatory frameworks and program  
          designs.  The CSA Subcommittee of the Ad Hoc Committee agreed  
          that some additional regulatory oversight may be necessary to  
          ensure integrity of commodity marketing, food safety, and a  
          level business playing field.

           Prior Legislation

           AB 1632 (Gordon, 2012) would have encouraged DFA to assist in  
          organizing the marketing of community-assisted agriculture.  The  
          bill was referred to the Assembly Agriculture Committee and not  
          taken up for hearing.

          AB 2168 (Jones, Chapter 447, Statutes of 2008) expands the  
          definition of direct marketing to include farm stands, field  
          retail stands, and other forms of direct marketing, revises  
          related definitions, and authorizes DFA to adopt regulations to  
          regulate direct marketing, as specified.

          AB 593 (Strom-Martin, Chapter 833, Statutes of 1999) codifies  
          regulations exempting direct marketers from specified packing  
          and labeling standards, amends fee structures, and authorizes  
          farmers' markets to establish rules and procedures.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes
          According to the Senate Appropriations Committee, DFA indicates  
          that it would need 0.5 positions and $25,000 (special funds) to  
          implement the provisions of this bill.  DFA identifies about 350  
          CSAs in the state.  The $100 fee will generate $35,000 in annual  
          revenue.  Thus, revenues generated by this bill will be  
          sufficient to fund the additional costs identified above.

           SUPPORT  :   (Verified  9/4/13)

          Community Alliance with Family Farmers (source)
          California Association of Environmental Health Administrators
          California Farm Bureau Federation
          California Federation of Certified Farmers' Markets

           ARGUMENTS IN SUPPORT  :    According to the author, the "rapid  
          expansion of CSAs in recent years along with adaptations to the  

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          original CSA model demonstrates that CSAs are in need of  
          definition and parameters for its regulation."  Furthermore,  
          according to those in support, "It became clear in that task  
          force (CDFA Direct Marketing Ad Hoc Committee) that CSAs were  
          not an "approved source" for health and safety purposes at  
          present, and that either they needed to obtain retail food  
          permits from Environmental Health or they needed to be clearly  
          included in the direct marketing laws and some food safety  
          practices mandated that would satisfy the health authorities."

          According to the Direct Marketing Ad Hoc Committee report, "In  
          practice, there is significant variation within the State of  
          California in regard to definition of a CSA. These models  
          substantially deviate from USDA's definition.  As a result of  
          the ambiguity related to the definition of a CSA, industry and  
          consumers would benefit from a clear definition of CSAs that  
          encompasses California's burgeoning CSA industry."

           ASSEMBLY FLOOR :  76-0, 5/29/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,  
            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,  
            Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,  
            Jones, Jones-Sawyer, Levine, Logue, Lowenthal, Maienschein,  
            Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin,  
            Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,  
            V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,  
            Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,  
            Williams, John A. Pérez
          NO VOTE RECORDED:  Holden, Linder, Yamada, Vacancy


          JL:k  9/5/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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