BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 654 (Hall) - Certified Farmers Markets: Operator Fees
Amended: June 26, 2013 Policy Vote: Ag 4-0
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Robert Ingenito
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 654 would extend, from January 1, 2014 to
January 1, 2018, provisions governing Certified Farmers' Markets
(CFMs).
Fiscal Impact: By extending the current sunset, this measure
would generate about $240,000 annually (special funds), paid to
the Department of Food and Agriculture (CDFA). The funding
supports approximately one position at CDFA that provides
coordination and oversight with county agricultural
commissioners. County Agricultural Commissioners (commissioners)
certify markets and producers pursuant to local ordinances.
Background: The CFM program enables farmers to sell their
produce directly to consumers under the Direct Marketing Law.
Sellers are permitted to market only produce that they grow.
This alternate method of marketing for farmers without the
required labeling, packing, or size requirements has grown
tremendously throughout California. Today there are
approximately 700 farmers' markets and 2,200 certified producers
participating in California farmers' markets, roughly half of
which are year-round. The majority of the seasonal markets
operate from April to October of each year.
Originally, the CFM program was funded from the General Fund at
about $120,000 annually for state oversight, dispute
resolutions, and enforcement. However, in the early 1990's,
General Fund support was eliminated. Following a period of
insufficient funding through a certification charge for
participating farmers, the Legislature authorized an operator's
fee in 1999. CDFA collects the fee from the CFM operator based
on a $.60 per stall times the number of market events a producer
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participates. If an operator fails to pay the fee, an interest
charge on the unpaid balance is assessed.
CDFA provides much of the oversight and direction to
commissioners, who issue the certificates to both the producer
and the market operator; commissioners also conduct inspection
and enforcement activities at the markets.
The Secretary of CDFA and commissioner are authorized to levy
civil penalties against certified farmers' markets who violate
the direct marketing law. Civil penalties levied are measured
as either (1) "serious," which are repeat or intentional
violations punishable by a penalty between $401-$1,000 per
violation; (2) "moderate," which are repeat or unintentional
violations punishable by a penalty between $151-$400 per
violation; (3) or "minor," which are procedural in nature and
punishable by a penalty between $50-$150 per violation. Alleged
violators have the ability to appeal the action.
Although data is not readily available in regard to the average
sales per certified producer at a CFM, CDFA estimates that the
average producer earns approximately $350 to $700 per market
instance, which translates to approximately $40,250 to $80,500
in annual gross sales. Certified producers currently remit the
equivalent of approximately .09 percent to .17 percent of their
annual gross sales to CDFA.
Related Legislation: SB 599 (Evans) of 2013. This bill extends
the sunset date to 2018 for the collection of farmers' market
operator fees and enforcement provisions of direct marketing.
This bill was amended in the Assembly and these provisions were
removed.
SB 513 (Cannella), Chapter 337, Statutes of 2011. Extended from
January 1, 2012 to January 1, 2014 the collection of certified
farmers' market fees and related penalty and enforcement
provisions.
AB 2676 (Agriculture), Chapter 440, Statutes of 2006. Extended
from January 1, 2007 to January 1, 2012 the collection of
certified farmers' market fees and related penalty and
enforcement provisions.
AB 1726 (Agriculture), Chapter 444, Statutes of 2004. Extended
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from January 1, 2005 to January 1, 2007 the collection of
certified farmers' market fees and related penalty and
enforcement provisions. Imposed a late penalty charge on
operators who failed to pay the required fee.