Amended in Senate August 13, 2013

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

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

LEGISLATIVE COUNSEL’S DIGEST

AB 1038, as amended, Pan. Milk products: California Dairy Future Task Force.

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.

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 begin delete 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 delete begin insert the California Dairy Future Task Force, previously established by the secretary, to be continued in existence in order to evaluate and make recommendations on various issues relating to the specific purpose of developing a stable economic environment for all California dairy producers and processors. The bill would require that funding for the task force, not to exceed an unspecified amount, 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 end insert .

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

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

SECTION 1.  

(a) The Legislature finds and declares begin delete both end delete begin insert all end insert
of the following:

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

begin delete

(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:

(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.

(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 delete begin insert

(3) 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.

end insert begin delete

(c)

end delete

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

begin insert

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

end insert

begin delete

SEC. 2.  

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

61901.5.  

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 delete

begin insert

begin insert SEC. 2. end insert   

end insert

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

begin insert

 

Article begin insert 10. end insert   California Dairy Future Task Force

 

begin insert 590. end insert   

(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 dairy producers and processors, promote competition,
and encourage innovation.

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

(D) Adequacy of relevant statutes and regulations.

(2) 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 ____ dollars ($____), shall be made
available from the funds deposited into the Department of Food
and Agriculture 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 insert