Amended in Senate July 10, 2013

Amended in Senate July 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1038

Introduced by Assembly Member Pan

February 22, 2013

begin delete An act to add Article 10 (commencing with Section 590) to Chapter 3 of Part 1 of Division 1 of the Food and Agricultural Code, relating to milk products. end delete begin insert An act to add Section 61901.5 to the Food and Agricultural Code, relating to milk products, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1038, as amended, Pan. begin delete California Dairy Future Task Force. end delete begin insert Milk products: California Dairy Future Task Force. end insert

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Existing law authorizes the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk and requires a handler subject to a stabilization and marketing plan to pay an assessment to the secretary, as specified. Existing law requires that all moneys received by the secretary pursuant to these provisions be deposited into the Department of Food and Agriculture Fund, a continuously appropriated fund, and be used to defray expenses in connection with the administration of these provisions.

end insert begin insert

This bill would make specified legislative findings and declarations regarding challenges faced by the dairy industry and would state specified intents of the Legislature. The bill would require that the administration and activities of the California Dairy Future Task Force, which has been previously established by the secretary, be funded by the assessments collected by the secretary. By authorizing the expenditure of moneys in a continuously appropriated fund for a new purpose, the bill would make an appropriation.

end insert begin delete

Existing law empowers the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk. Existing law requires every handler subject to the provisions of a stabilization and marketing plan that purchases market milk from producers to pay a specified assessment to the secretary for deposit into the Department of Food and Agricultural Fund, with revenues to be used for certain purposes.

end delete begin delete

This bill would require the California Dairy Future Task Force previously established by the secretary be continued in existence in order to evaluate, hold workshops, and make recommendations on various issues relating to the specific purpose of establishing a stable economic environment for California dairy producers and processors. The bill would provide that funding for the task force, not to exceed $500,000, shall be made available from assessment revenues paid to the secretary by handlers subject to a stabilization and marketing plan, subject to appropriation by the Legislature. The bill would also make legislative findings and declarations.

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Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert begin insert

(a) The Legislature finds and declares both of
the following:

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(1) The California dairy industry has been confronted with
numerous challenges in the past several years that have forced
the dairy producers to exit the industry and dairy processors to
face heightened competition.

end insert begin insert

(2) The challenges include dramatic increases in the cost of
corn and other produce used to feed livestock, increasing
environmental and regulatory costs, and decreasing water
availability.

end insert begin insert

(b) It is the intent of the Legislature to encourage the
Department of Food and Agriculture, to the extent that economic
conditions warrant, to hold the following hearings regarding milk
pricing:

end insert begin insert

(1) A hearing to amend the recent emergency price relief
decision, issued by the Secretary of Food and Agriculture on June
24, 2013, to allow for additional emergency price relief.

end insert begin insert

(2) A hearing to address changes to the whey scale factor that
is used to determine the amount paid into the milk pool in
California.

end insert begin insert

(c) It is the intent of the Legislature that the Secretary of Food
and Agriculture actively engage the California Dairy Future Task
Force to assist in developing proposals intended to best position
both dairy producers and processors to achieve the goals of
long-term success and sustainability.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 61901.5 is added to the end insert begin insert Food and Agricultural
Code end insert begin insert , to read: end insert

begin insert

begin insert 61901.5. end insert   

Administration and activities of the California Dairy
Future Task Force, previously established by the secretary, shall
be funded by assessments collected pursuant to Section 62211.

end insert

begin delete

SECTION 1.  

(a) The Legislature finds and declares both of
the following:

(1) The California dairy industry has been confronted with
numerous significant challenges in the past several years that have
resulted in dairy producers losing revenue and equity, with many
forced to exit the industry, while processors have faced heightened
competition and transportation costs, and other economic
challenges.

(2) A concentrated focus on these challenges is essential so that
the California dairy industry may participate successfully in
domestic and international markets to the benefit of dairy producers
and processors alike.

(b) It is the intent of the Legislature that the Secretary of Food
and Agriculture actively engage a California Dairy Future Task
Force to develop recommendations intended to best position both
dairy producers and processors, as well as consumers, to achieve
the goals of long-term success and sustainability in a market that
continues to evolve beyond the scope of the current regulatory
system with the addition of new products and markets.

(c) It is the further intent of the Legislature that these
recommendations address current statutory and regulatory
impediments to achieve these goals.

SEC. 2.  

Article 10 (commencing with Section 590) is added to
Chapter 3 of Part 1 of Division 1 of the Food and Agricultural
Code, to read:

 

Article 10.  California Dairy Future Task Force

 

590.  

(a) The California Dairy Future Task Force previously
established by the secretary and consisting of dairy producers,
processors, and cooperatives shall be continued in existence for
the specific purpose of developing a stable economic environment
for California dairy producers and processors.

(b) The California Dairy Future Task Force shall do all of the
following:

(1) Evaluate all of the following issues and any other issues it
determines to be relevant:

(A) Market-based and other alternative pricing models.

(B) Pricing mechanisms that appropriately share risk and value
between producers and processors, promote competition, and
encourage innovation.

(C) Impacts of milk pricing decisions on small cheese
manufacturers and other manufacturers that do not participate in
the whey markets, and whether revenues from their products should
be included in the milk pool, because whey products are derived
from the milk delivered by producers.

(D) Whether California’s regulated milk pricing system has
kept pace with the rapidly changing global marketplace.

(E) Whether milk is directed to the highest and best use.

(F) Adequacy of relevant statutes and regulations.

(2) Hold workshops and solicit input from the dairy industry
and related businesses.

(3) Make recommendations to the secretary and the Legislature
no later than July 1, 2014, regarding the addition, modification,
or repeal of existing statutes and regulations for all classes of milk.

(c) Funding for the California Dairy Future Task Force, in an
amount not to exceed five hundred thousand dollars ($500,000),
shall be made available from the funds deposited into the
Department of Food and Agricultural Fund pursuant to Article 14
(commencing with Section 62211) of Chapter 2 of Part 3 of
Division 21, subject to appropriation by the Legislature.

end delete