Amended in Senate July 16, 2015

Amended in Senate June 8, 2015

Amended in Assembly April 21, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 264

Introduced by Assembly Member Dahle

February 10, 2015

An act to amend Sections 52332, 55631, and 56109 of the Food and Agricultural Code, relating to farm products.

LEGISLATIVE COUNSEL’S DIGEST

AB 264, as amended, Dahle. Farm products: processors: produce dealers: seeds.

(1) Existing law, the California Seed Law, requires the Secretary of Food and Agriculture, by regulation, to adopt, among other things, specified lists of plants and crops that the secretary finds are or may be grown in the state or that the secretary finds are detrimental to agriculture if they occur incidentally in other crops, as prescribed, a list of noxious weed seed that the secretary finds are prohibitive noxious weed seed, and methods and procedures, upon recommendation of the Seed Advisory Board, for the conciliation, mediation, or arbitration of disputes between labelers and any persons concerning conformance with label statements, advertisements, or other disputes regarding the quality or performance of seed.

This bill would expand this regulation authority to also make those methods and procedures for the conciliation, mediation, or arbitration of those disputes applicable to disputes concerning conformance with financial terms or the lack of payment by a dealer to a grower, as provided. By expanding the scope of that regulation authority, a violation of which is a crime, the bill would impose a state-mandated local program.

(2) Existing law specifies that every producer of any farm product that sells any farm product that is grown by him or her to any processor under contract, express or implied, in addition to all other rights and remedies that are provided by law, has a lien upon that product and upon all processed or manufactured forms of that farm product for his or her labor, care, and expense in growing and harvesting that product.

This bill would also specify that every producer of a flower, agricultural, or vegetable seed that sells seed that is grown by him or her, when the seed was purchased or supplied by the grower and not supplied by the dealer or an independent 3rd party who paid for the seed, to any seed dealer under contract, express or implied, in addition to all rights and remedies that are provided for by law, has a lien upon that product and upon all processed or manufactured forms of that product for his or her labor, care, and expense in growing and harvesting that product.

(3) Existing law requires that any person engaged in the business of buying, receiving on consignment, soliciting for sale on commission, or negotiating the sale of farm products from a licensee or producer for resale, to be licensed. Existing law, for purposes of those provisions, defines “farm product” to include every agricultural, horticultural, viticultural, and vegetable product of the soil, poultry and poultry products, livestock products and livestock not for immediate slaughter, bees and apiary products, hay, dried beans, honey, and cut flowers, but excludes from that definition any timber or timber product, flower or agricultural or vegetable seed not purchased from a producer, any milk product that is subject to specified licensing requirements, any aquacultural product, or cattle sold to any person who is bonded under a specified federal law.

This bill would revise that definition to exclude flower, agricultural, or vegetable seeds from the definition of farm products, rather than only those that have not been purchased from a producer.

(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 52332 of the Food and Agricultural Code
is amended to read:

52332.  

The secretary, by regulation, may adopt all of the
following:

(a) A list of the plants and crops that the secretary finds are or
may be grown in this state.

(b) A list of the plants and crops that the secretary finds are
detrimental to agriculture if they occur incidentally in other crops,
and which, therefore, are classed as weed seed except if sold alone
or as a specific constituent of a definite seed mixture.

(c) A list of noxious weed seed that the secretary finds are
prohibited noxious weed seed, as defined in this chapter.

(d) A list of those noxious weed seed that are not classified as
prohibited noxious weed seed and are classified by this chapter as
restricted noxious weed seed.

(e) A list of substances that are likely to be used for treating
grain or other crop seed that the secretary finds and determines
are toxic to human beings or animals if used, and an appropriate
warning or caution statement for each substance.

(f) (1) (A) Establish methods and procedures, upon the
recommendation of the board, for the conciliation, mediation, or
arbitration of disputes between labelers and any persons concerning
conformance with label statements, advertisements, financial terms
or the lack of payment by a dealer to a grower, or other disputes
regarding the quality or performance of seed. The methods and
procedures shall be a mandatory prerequisite to pursuing other
dispute resolution mechanisms, including, but not limited to,
litigation. However, if conciliation, mediation, or arbitration
proceedings are commenced under this section to resolve a
controversy, the statute of limitations that applies to a civil action
concerning that controversy is tolled upon commencement of
conciliation, mediation, or arbitration proceedings, and until 30
days after the completion of those proceedings. As used in this
subdivision, “completion of those proceedings” means the filing
of a statement of agreement or nonagreement by the conciliator
or mediator, or the rendering of a decision by an arbitrator or
arbitration committee.

(B) If a proceeding for the conciliation, mediation, or arbitration
of a dispute between a dealer and a grower is commenced under
this subdivision for conformance with the financial terms by a
dealer to a grower, and the decision in the proceeding is in favor
of the grower, the decision may include a provision requiring
compensation to the grower for the estimated value of the seed
production services a grower provides to a begin delete dealer. end delete begin insert dealer, including,
but not limited to, labor, care, and expense in growing and
harvesting that product. end insert

(C) If a dealer fails to comply with the financial obligations of
a judgment rendered in a conciliation, mediation, or arbitration
proceeding between a dealer and a grower commenced pursuant
to this subdivision following the conclusion of all appeals in the
proceeding, the secretary may revoke the dealer’s begin delete license end delete
begin insert registration end insert and prevent the dealer from renewing his or her begin delete license end delete
begin insert registration end insert until the time the financial obligation is fulfilled.

(2) Conciliation, mediation, or arbitration shall not affect any
enforcement action by the secretary pursuant to this chapter.
Regulations adopted by the secretary for the mandatory
conciliation, mediation, or arbitration of disputes shall require that
adequate notice be provided on the seed label notifying any buyer
of the requirement to submit a dispute to mandatory conciliation,
mediation, or arbitration as a prerequisite to other dispute resolution
mechanisms, including litigation.

(g) Establish additional labeling requirements for coated,
pelleted, encapsulated, mat, tape, or any other germination medium
or device used on seed in order that the purchaser or consumer
will be informed as to the actual amount of seed purchased.

SEC. 2.  

Section 55631 of the Food and Agricultural Code is
amended to read:

55631.  

(a) Every producer of any farm product that sells any
product that is grown by him or her to any processor under contract,
express or implied, in addition to all other rights and remedies that
are provided for by law, has a lien upon that product and upon all
processed or manufactured forms of that farm product for his or
her labor, care, and expense in growing and harvesting that product.
The lien shall be to the extent of the agreed price, if any, for that
product so sold. If there is no agreed price or a method for
determining it that is agreed upon, the extent of the lien is the value
of the farm product as of the date of the delivery. Any portion of
that product or the processed or manufactured forms of that
product, in excess of the amount necessary to satisfy the total
amount owed to producers under contract, shall be free and clear
of that lien.

(b) Every producer of a flower, agricultural, or vegetable seed
that sells seed that is grown by him or her, when the seed was
purchased or supplied by the grower and not supplied by the dealer
or an independent third party who paid for the seed, to any seed
dealer under contract, express or implied, in addition to all other
rights and remedies that are provided for by law, has a lien upon
that product and upon all processed or manufactured forms of that
product for his or her labor, care, and expense in growing and
harvesting that product. The lien shall be to the extent of the agreed
price, if any, for that product so sold. If there is no agreed price or
a method for determining it that is agreed upon, the extent of the
lien is the value of that product as of the date of the delivery. Any
portion of that product or the processed or manufactured forms of
that product, in excess of the amount necessary to satisfy the total
amount owed to producers under contract, shall be free and clear
of that lien.

SEC. 3.  

Section 56109 of the Food and Agricultural Code is
amended to read:

56109.  

“Farm product” includes every agricultural,
horticultural, viticultural, and vegetable product of the soil, poultry
and poultry products, livestock products and livestock not for
immediate slaughter, bees and apiary products, hay, dried beans,
honey, and cut flowers. It does not, however, include any timber
or timber product, flower or agricultural or vegetable seed, any
milk product that is subject to the licensing and bonding provisions
of Chapter 2 (commencing with Section 61801) of Part 3 of
Division 21, any aquacultural product, or cattle sold to any person
who is bonded under the federal Packers and Stockyards Act, 1921
(7 U.S.C. Sec. 181, et seq.).

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.