BILL ANALYSIS Ó SENATE COMMITTEE on AGRICULTURE Senator Cathleen Galgiani, Chair BILL NO: SB 1018 HEARING: 04/01/14 AUTHOR: De León FISCAL: Yes VERSION: 03/26/14 CONSULTANT: Anne Megaro Pest control: citrus disease prevention. SUMMARY : This bill would specify that only reasonable, rather than all, expenditures incurred by the California Department of Food and Agriculture be reimbursed from the Citrus Disease Management Account for responsibilities related to the Citrus Pest and Disease Prevention Program. This bill would require the secretary to obtain approval from the California Citrus Pest and Disease Prevention Committee for any changes to program activities or increases in expenditures. BACKGROUND AND EXISTING LAW : California is the top-producing agricultural state in the nation with $44.7 billion in agricultural commodity value in 2012. California is also a top producer of citrus fruits and is ranked second only to Florida in citrus production and first in citrus product sold fresh to market. The $2.1 billion California citrus industry grew nearly 4 million tons of citrus on 270,000 acres in 2012 and provided more than 14,000 jobs. Existing law establishes the California Citrus Pest and Disease Prevention Committee (CCPDPC) within the California Department of Food and Agriculture (CDFA) to advise the secretary of CDFA on efforts to prevent and manage citrus pests and diseases. An assessment is levied on citrus producers and deposited into the Citrus Disease Management Account for the sole purpose of combating citrus-specific pests and diseases. This account may also contain funds from federal and other non-General Fund sources. The current assessment rate is 8 cents per 40 pound carton, which amounts to $16 million annually and represents 64% of the total budget for this program (Food and Agricultural Code §5911 et seq.). Existing law authorizes CCPDPC to develop, under the approval of the secretary, a statewide citrus-specific pest and disease work plan and recommend an annual assessment rate and budget. The CCPDPC shall reimburse the secretary for all expenditures SB 1018 - Page 2 incurred in carrying out, implementing, and administering the statewide work plan. Asian citrus psyllid (ACP) is an invasive pest that feeds on citrus plants' leaves and stems and causes shoot deformation and plant stunting. More importantly, ACP may transmit Huanglongbing (HLB), a bacterial plant disease that causes citrus trees to produce unpalatable/inedible fruit before ultimately killing the tree. According to the University of California Division of Agriculture and Natural Resources (UCANR), the citrus industry, the University of California, and both the state and federal governments are working to eliminate and prevent the establishment of ACP and HLB in California. Much of the research is conducted with funding from the citrus industry through the Citrus Research Board; UCANR; CDFA Specialty Crops Block Grants; and the United States Department of Agriculture, National Institute of Food and Agriculture (USDA-NIFA). The Agricultural Act of 2014 (H.R. 2642) was signed into law on February 7, 2014, and directs $125 million of the USDA Specialty Crop Research Initiative funding toward citrus disease research over the next 5 years. The federal 2014 budget includes an additional $20 million to combat the spread of citrus pests and diseases. PROPOSED LAW : This bill: 1. Specifies that only reasonable, rather than all, expenditures incurred by CDFA in carrying out responsibilities pursuant to the Citrus Pest and Disease Prevention Program be reimbursed by the California Citrus Pest and Disease Prevention Committee. 2. Requires the secretary of CDFA to obtain approval from the CCPDPC before making any changes to program activities. 3. Requires the secretary of CDFA to obtain approval from the CCPDPC before seeking reimbursement for additional expenditures not previously developed by CCPDPC. COMMENTS : SB 1018 - Page 3 Need for this bill: According to those in support, this bill would "strengthen the Program by setting clear guidelines for the Committee and the Department. Currently, no such guidelines exist and as such the efficacy of the program has suffered as a result. Establishing a clear directive for the Program will streamline work by the Committee and the Department, now and in the future." Furthermore, although previous issues have been resolved, this bill would prevent similar issues in the future. Committee Authority: Current law states that the CCPDPC makes recommendations to the secretary of CDFA and has the authority to develop work plans under the approval of the secretary. CCPDPC does not have the authority to require CDFA to obtain committee approval for any action. This is concerning to the sponsors of this bill, given recent incidences when the CCPDPC was not consulted before programmatic changes were made, when budgetary spending authority was increased, or when additional funds were requested by CDFA to cover costs related to citrus pest control and prevention. The committee may wish to consider whether or not it is appropriate public policy to give committees budgetary authority over state programs. Budgetary authority is held by the secretary of CDFA for most, if not all, similar agricultural committees and commissions in California. The committee may wish to consider whether or not the bill should be amended so that CDFA must consult with CCPDPC rather than obtain approval from CCPDPC for the actions specified in the bill. This amendment would address the sponsor's concerns while retaining authority with CDFA. RELATED LEGISLATION : AB 571 (Gatto). Vetoed, 2013. This bill would have appropriated $5 million from the General Fund to the Citrus Disease Management Account within the California Department of Food and Agriculture Fund for the purposes of combating citrus disease or its vectors. AB 604 (De Leon and Fuller) Chapter 17, Statutes of 2010. Authorizes CDFA to spend any monies it had collected in the Citrus Disease Management Account on citrus specific pest and disease programs through June 30, 2010. SB 1018 - Page 4 AB 281 (De Leon) Chapter 426, Statutes of 2009. Establishes the California Citrus Pest and Disease Prevention Committee and the Citrus Disease Management Account within CDFA to prevent and manage citrus pests and diseases, and allows the committee to levy fees on citrus producers to pay for citrus disease detection and control programs. SUPPORT : California Citrus Mutual (Sponsor) OPPOSITION : None received