BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          SB 599 (Evans) - Certified Farmers Markets: Operator Fees
          
          Amended: April 10, 2013         Policy Vote: Agriculture 5-0
          Urgency: No                     Mandate: No
          Hearing Date: April 29, 2013    Consultant: Robert Ingenito
          
          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill Summary: SB 599 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 $221,000 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  
          participates. If an operator fails to pay the fee, an interest  








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          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 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  
          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.

          AB 593 (Strom-Martin), Chapter 833, Statutes of 1999.  Codifies  
          regulations exempting direct marketers from specified packing  








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          and labeling standards, amends fee structures, and authorizes  
          farmers' markets to establish rules and procedures.