Amended in Senate August 17, 2015

Amended in Senate June 23, 2015

Amended in Senate May 18, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 689

Introduced by Assembly Member Dodd

February 25, 2015

An act to amend Section 27581.4 of, and to add Sections 27561.5, 27581.1, 27583, 27583.2, 27583.4, 27584, and 27585 to, the Food and Agricultural Code, relating to eggs.

LEGISLATIVE COUNSEL’S DIGEST

AB 689, as amended, Dodd. Marketing of eggs: violations: administrative and civil penalties.

Existing law establishes a regulatory scheme for the marketing of shell eggs, and requires egg producers and egg handlers to register with the Secretary of Food and Agriculture. A violation of those provisions or regulations adopted pursuant to those provisions is unlawful, and for certain violations, punishable as a misdemeanor. Existing law also authorizes the secretary, in lieu of seeking prosecution for the violation, to bring a civil action for up to $1,000 for the violation.

This bill would authorize the department to refuse to issue, or to suspend or revoke, an egg handler or egg producer certificate of registration under certain circumstances and would require the department to adopt regulations to establish procedures for an appeals process to contest the refusal to issue a certificate of registration or the department’s suspension or revocation of a certificate of registration. The bill would increase the civil penalty amount to $10,000 and would also authorize a county agricultural commissioner to bring a civil action. The bill would also authorize the secretary or a county agricultural commissioner, in lieu of prosecution, to levy an administrative penalty of up to $10,000 for a violation of those provisions. The bill would require the secretary, on or before January 1, 2017, to adopt regulations classifying violations of these egg provisions as either “minor,” “moderate,” or “serious,” with different penalty ranges applicable to each classification, as specified, and would apply these amounts to both civil penalties and administrative penalties. The bill would set forth notice and other procedural requirements for bringing and resolving an administrative action pursuant to those provisions, and would require the funds recovered by the county agricultural commissioner to be deposited in the county’s general fund, and funds collected by the secretary to be deposited into the Department of Food and Agriculture Fund for use by the department in administering these provisions, when appropriated to the department for that purpose.

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

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

SECTION 1.  

Section 27561.5 is added to the Food and
Agricultural Code, to read:

27561.5.  

(a) The department may refuse to issue, or may
suspend or revoke, a certificate of registration if either of the
following occur:

(1) The applicant fails to pay in full by the due date a fine, fee,
assessment, or penalty levied by the department for a violation of
this chapter, including a violation that occurred before January 1,
2016.

(2) The applicant has violated a provision of this chapter or any
regulation adopted to implement this chapter.

(b) The department may reverse its refusal to issue or its
suspension or revocation of a certificate of registration if the
department finds substantial grounds to do so.

(c) (1) The department shall adopt regulations that do both of
the following:

(A) Establish procedures for an appeals process, including a
noticed hearing, for a person who wishes to contest the
department’s refusal to issue a certificate of registration or the
department’s suspension or revocation of a certificate of
registration.

(B) Specify the maximum time period following the refusal to
issue, suspension, or revocation of a certificate of registration
during which the applicant shall not reapply for another egg handler
or egg producer certificate of registration. The time period shall
be based on the severity or number of violations of this chapter,
and shall not exceed three years from the date of the original refusal
to issue, suspension, or revocation of the certificate of registration.

(2) Regulations adopted pursuant to this section shall not be
subject to Chapter 3.5 (commencing with Section 11340) of Part
1 of Division 3 of Title 2 of the Government Code.

SEC. 2.  

Section 27581.1 is added to the Food and Agricultural
Code, to read:

27581.1.  

(a) On or before January 1, 2017, the secretary shall
adopt regulations classifying violations of this chapter, or any
regulation adopted pursuant to this chapter, as “minor,” subject to
a penalty from fifty dollars ($50) to four hundred dollars ($400),
inclusive, “moderate,” subject to a penalty from four hundred one
dollars ($401) to one thousand dollars ($1,000), inclusive, or
“serious,” subject to a penalty from one thousand one dollars
($1,001) to ten thousand dollars ($10,000), inclusive.

(b) The penalty schedule described in this section shall apply
to civil penalties imposed pursuant to Section 27581.4 and
administrative penalties imposed pursuant to Section 27583.

(c) The department shall post on its Internet Web site when the
penalty schedule described in this section has been adopted.

SEC. 3.  

Section 27581.4 of the Food and Agricultural Code is
amended to read:

27581.4.  

(a) The secretary, or a commissioner for violations
in his or her county, may bring a civil action against any person
who violates this chapter or any regulation adopted pursuant to
this chapter, and any person who commits that violation is liable
civilly in an amount not to exceed ten thousand dollars ($10,000).
The court shall set the civil penalty imposed for a violation of this
chapter, or any regulation adopted pursuant to this chapter, in
accordance with the penalty schedule adopted by the secretary
pursuant to Section 27581.1.

(b) Any money recovered by the secretary under this section
shall be deposited in the Department of Food and Agriculture Fund
for use by the department in administering this chapter, when
appropriated to the department for that purpose.

(c) Any money recovered by a commissioner under this section
shall be deposited in the county’s general fund.

SEC. 4.  

Section 27583 is added to the Food and Agricultural
Code, to read:

27583.  

(a) In lieu of prosecution, the secretary or the
commissioner may levy an administrative penalty, in an amount
not to exceed ten thousand dollars ($10,000) and in accordance
with Section 27583.2 or begin delete Section end delete 27583.4, as applicable, against a
person who violates this chapter or any regulation implemented
pursuant to this chapter. Commencing on the date the department
posts notice of the adoption of the penalty schedule described in
Section 27581.1, a penalty levied pursuant to this section shall be
in accordance with that schedule.

(b) “Person,” as used in this section, means anyone engaged in
the business of producing, candling, grading, packing, or otherwise
preparing shell eggs for market or who engages in the operation
of selling or marketing eggs that he or she has produced, purchased,
or acquired from a producer, or which he or she is marketing on
behalf of a producer, whether as owner, agent, employee, or
otherwise pursuant to this chapter.

SEC. 5.  

Section 27583.2 is added to the Food and Agricultural
Code, to read:

27583.2.  

If the secretary levies an administrative penalty
pursuant to Section 27583, the following shall apply:

(a) The person charged with the violation shall be notified of
the proposed action in accordance with subdivision (b). The notice
shall include the nature of the violation, the amount of the proposed
administrative penalty, and the right to request a hearing to appeal
the administrative action.

(b) (1) Notice shall be sent by certified mail to one of the
following:

(A) The address of the person charged, as provided by any
license or registration issued by the department, which is not
limited to a certificate of registration issued pursuant to this
chapter.

(B) The address of an agent for service of process for the person
charged, as filed with the Secretary of State.

(C) If an address described in subparagraph (A) or (B) is not
available, the last known address of the person charged.

(2) Notice that is sent to any of the addresses described in
paragraph (1) shall be considered received, even if delivery is
refused or if the notice is not accepted at that address.

(3) The person charged shall have the right to appeal the
proposed action by requesting a hearing within 20 days of the
issuance of the notice of the proposed action.

(c) If a hearing is requested, the secretary shall schedule a
hearing within 45 days of the request, with notice of the time and
place of the hearing given at least 10 days before the date of the
hearing. At the hearing, the person charged shall be given an
opportunity to review the secretary’s evidence and to present
evidence on his or her own behalf. If a hearing is not timely
requested, the secretary may take the proposed action without a
hearing.

(d) The secretary shall issue a decision within 30 days of the
conclusion of the hearing, which shall become effective
immediately.

(e) The secretary shall send a copy of the notice of the proposed
action to the commissioner of the county in which the violation
took place at the same time notice is sent pursuant to subdivision
(b). Additionally, the secretary shall inform the commissioner of
the county in which the action was initiated of violations for which
a penalty has been assessed.

(f) If the proposed action is not overturned, in addition to the
levy of an administrative penalty, the secretary may recover from
the person charged any other reasonable costs incurred by the
department in connection with administering the hearing to appeal
the proposed action.

(g) Revenues collected by the secretary pursuant to this section
shall be deposited into the Department of Food and Agriculture
Fund for use by the department in administering this chapter, when
appropriated to the department for that purpose.

SEC. 6.  

Section 27583.4 is added to the Food and Agricultural
Code, to read:

27583.4.  

If a commissioner levies an administrative penalty
pursuant to Section 27583, the following shall apply:

(a) (1) Before an administrative penalty is levied, the person
charged with the violation shall receive written notice of the
proposed action in accordance with paragraph (2). The notice shall
include the nature of the violation, the amount of the proposed
penalty, and the right to request a hearing to appeal the
administrative action. begin delete The person shall have the right to request a
hearing within 20 days after receiving notice of the proposed
action. end delete

(2) (A) Notice shall be sent by certified mail to one of the
following:

(i) The address of the person charged, as provided by any license
or registration issued by the department, which is not limited to a
certificate of registration issued pursuant to this chapter.

(ii) The address of an agent for service of process for the person
charged, as filed with the Secretary of State.

(iii) If an address described in clause (i) or (ii) is not available,
the last known address of the person charged.

(B) Notice that is sent to any of the addresses described in
subparagraph (A) shall be considered received, even if delivery is
refused or if the notice is not accepted at that address.

(C) The person charged shall have the right to appeal the
proposed action by requesting a hearing within 20 days of the
issuance of the notice of the proposed action.

(3) If a hearing is requested, the commissioner shall schedule
a hearing within 45 days of the request, with notice of the time
and place of the hearing given at least 10 days before the date of
the hearing. At the hearing, the person charged shall be given an
opportunity to review the commissioner’s evidence and to present
evidence on his or her own behalf. If a hearing is not timely
requested, the commissioner may take the proposed action without
a hearing. If the person charged, or his or her legal representative,
fails to appear, the commissioner shall prevail in the proceedings.

(4) The commissioner shall issue a decision within 30 days of
the conclusion of the hearing, which shall become effective
immediately.

(5) The commissioner shall send a copy of the notice of the
proposed action to the secretary at the same time notice is sent to
the person charged with the violation.

(b) If the person, upon whom the commissioner levied an
administrative penalty, requested and appeared at a hearing, the
person may appeal the commissioner’s decision to the secretary
within 30 days of the date of receiving a copy of the
commissioner’s decision. The following procedures apply to the
appeal:

(1) The appeal shall be in writing and signed by the appellant
or his or her authorized agent, state the grounds for the appeal, and
include a copy of the commissioner’s decision. The appellant shall
file a copy of the appeal with the commissioner at the same time
it is filed with the secretary.

(2) The appellant and the commissioner, at the time of filing
the appeal, within 10 days thereafter, or at a later time prescribed
by the secretary, may present the record of the hearing and a written
argument to the secretary stating the ground for affirming,
modifying, or reversing the commissioner’s decision.

(3) The secretary may grant oral arguments upon application
made at the time written arguments are filed.

(4) If an application to present an oral argument is granted,
written notice of the time and place for the oral argument shall be
given at least 10 days before the date set for oral argument. The
times may be altered by mutual agreement of the appellant, the
commissioner, and the secretary.

(5) The secretary shall decide the appeal on the record of the
hearing, including the written evidence and the written argument
described in paragraph (2), that he or she has received. If the
secretary finds substantial evidence in the record to support the
commissioner’s decision, the secretary shall affirm the decision.

(6) The secretary shall render a written decision within 45 days
of the date of appeal or within 15 days of the date of oral arguments
or as soon thereafter as practical.

(7) On an appeal pursuant to this section, the secretary may
affirm the commissioner’s decision, modify the commissioner’s
decision by reducing or increasing the amount of the penalty levied
so that it is consistent with the penalty schedule described in
Section 27581.1, or reverse the commissioner’s decision. An
administrative penalty increased by the secretary shall not be higher
than that proposed in the commissioner’s notice of proposed action
given pursuant to subdivision (a). A copy of the secretary’s
decision shall be delivered or mailed to the appellant and the
commissioner.

(8) Any person who does not request a hearing with the
commissioner pursuant to an administrative penalty assessed under
subdivision (a) shall not file an appeal to the secretary pursuant to
this subdivision.

(c) If the proposed action is not overturned, in addition to the
levy of an administrative penalty, the commissioner may recover
from the person charged any other reasonable costs incurred by
the commissioner in connection with administering the hearing to
appeal the proposed action.

(d) Revenues from administrative penalties levied by the
commissioner shall be deposited in the general fund of the county
and, upon appropriation by the board of supervisors, shall be used
by the commissioner to carry out his or her responsibilities under
this chapter. The commissioner shall inform the secretary of any
violations for which a penalty has been assessed.

SEC. 7.  

Section 27584 is added to the Food and Agricultural
Code, to read:

27584.  

If a respondent in an administrative action agrees to
stipulate to the notice of proposed action, a signed stipulation with
the payment of the proposed administrative penalty shall be
returned to the commissioner or secretary, as applicable, within
45 days of the postmark of the notice of the proposed action. If
the stipulation and payment of the proposed administrative penalty
are not received within 45 days, the commissioner or the secretary
may file a certified copy of a final decision that directs the payment
of an administrative penalty with the clerk of the superior court of
any county. begin delete Judgement end delete begin insert Judgment end insert shall be entered immediately by
the clerk in conformity with the decision. begin delete No end delete begin insert Pursuant to Section
6103 of the Government Code, no end insert fees shall be charged by the
clerk of the superior court for the performance of any official
service required in connection with the entry of judgment pursuant
to this section.

SEC. 8.  

Section 27585 is added to the Food and Agricultural
Code, to read:

27585.  

After the exhaustion of the appeal and review of
procedures provided in this article, the secretary or commissioner,
or his or her representative, may file a certified copy of a final
decision that directs the payment of an administrative penalty, and,
if applicable, a copy of any decision of the secretary, or his or her
authorized representative, and a copy of any order that denies a
petition for a writ of administrative mandamus, with the clerk of
the superior court of any county. Judgment shall be entered
immediately by the clerk in conformity with the decision or order.
begin delete No end delete begin insert Pursuant to Section 6103 of the Government Code, no end insert fees
shall be charged by the clerk of the superior court for the
performance of any official service required in connection with
the entry of judgment pursuant to this section.