BILL ANALYSIS Ó
AB 264
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
264 (Dahle)
As Amended July 16, 2015
Majority vote
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|ASSEMBLY: | 80-0 | (May 14, |SENATE: |40-0 | (August 31, |
| | |2015) | | |2015) |
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Original Committee Reference: AGRI.
SUMMARY: Removes seed from the definition of "farm product"
under market enforcement provisions regarding produce dealers,
thereby removing seed dealers from these provisions; retains one
market enforcement provision pertaining to the use of product
liens for seed owned and grown by a seed producer and sold to a
seed dealer under contract; and, adds to the California Seed Law
(CSL) the authority for the California Department of Food and
Agriculture (CDFA) to establish methods and procedures to settle
disputes regarding financial terms and lack of payment by a seed
dealer to a seed grower.
The Senate amendments:
1)Allow, that if a dispute is resolved in favor of a grower, the
compensation to the grower may reflect the cost of production
services, as specified.
AB 264
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2)Allow the Secretary of CDFA to revoke a dealer's licenses if
the dealer does not comply with a financial judgment as a
result of a dispute.
3) Provide for a process for liens in the dispute process.
EXISTING LAW:
1)Requires that any person engaged in the business of buying or
reselling, as specified, farm products from a licensee or
producer for resale, to be licensed by the Market Enforcement
Branch (MEB).
2)Defines farm products to include every agricultural,
horticultural, viticultural, and vegetable product, as
specified.
3)Provides exemption from licensing several classes of products,
including flower or agricultural or vegetable seed not
purchased from a producer.
4)Establishes CSL which requires every labeler of specified
seeds for sale or that is sold in this state, or persons
receiving or possessing seeds for sale or that sells in this
state, to annually register with CDFA, as specified, and to
pay an annual assessment that funds the activities of this
law.
5)Requires labeling requirements for seed sold and that
regulations be adopted for germination standards, enforcement
tolerances and examination procedures, sampling methods,
schedule of fees, and other such regulations, as specified.
These regulations are required to be as near as practicable to
the Federal Seed Act (FSA).
AB 264
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FISCAL EFFECT: According the Senate Appropriations Committee,
CDFA estimates that the bill would result in a revenue loss of
$68,000 (special funds). The department's administrative costs
would be minor and absorbable.
COMMENTS: MEB has regulatory and fee authority over all farm
products, which includes a broad definition of agricultural
products. There are several exemptions to MEB authority,
including flower or agricultural or vegetable seed not purchased
from a producer. MEB enforces laws to protect against unfair
business practices between those who grow, package, and process
California farm products.
CSL was enacted in 1967 to ensure that agricultural and
vegetable seed is properly and accurately identified on the
product label and that it meets quality standards, including
germination, variety and species. Seed labeling and standards
are also regulated under FSA. According to the author, over the
past few years there has been increasing confusion over which
seed transactions are subject to MEB oversight, which dealers
need to obtain licenses, and which seeds are regulated by CSL.
Furthermore, MEB staff have been citing seed dealers and
threatening them with fines unless they register as produce
dealers under MEB.
The sponsor of this bill states it will simplify all seed
transactions and consolidate them under the governance of CSL
and FSA. Funding for the CSL program is through industry seed
assessments and registration fees and is administered by CDFA.
Furthermore, the sponsor stresses that there have not been any
complaints from seed farmers to MEB in more than five years. In
conversations, the sponsors pointed out that the seed industry
is a highly regulated industry with both state and federal laws,
and that only a small number of transactions in California fall
under MEB rules. This bill will help streamline seed
transactions, while still protecting buyers, sellers and the
public.
AB 264
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The senate amendments strengthen protection to growers and
establish a lien process under CLS, similar to what currently
exist in MEB. This bill is substantially similar to the version
that was passed by the Assembly.
Analysis Prepared by:
Victor Francovich / AGRI. / (916) 319-2084 FN:
0001336