BILL ANALYSIS Ó SENATE COMMITTEE ON AGRICULTURE Senator Cathleen Galgiani, Chair 2015 - 2016 Regular Bill No: AB 689 Hearing Date: 6/30/15 ----------------------------------------------------------------- |Author: |Dodd | |-----------+-----------------------------------------------------| |Version: |6/23/15 Amended | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No | Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Anne Megaro | | | | ----------------------------------------------------------------- Subject: Marketing of eggs: violations: administrative and civil penalties. SUMMARY : This bill would authorize the California Department of Food and Agriculture (CDFA) to refuse to issue, or suspend or revoke, an egg handler or egg producer certificate of registration, as specified; would authorize CDFA to adopt regulations to classify egg marketing violations and would increase the maximum civil penalty from $1,000 to $10,000; would authorize CDFA and county agricultural commissioners, in lieu of prosecution, to levy an administrative penalty, as specified. BACKGROUND AND EXISTING LAW : Existing state and federal law provides for the regulation of eggs and egg products to assure that healthful, wholesome eggs of known quality are sold in California, to facilitate the orderly marketing of shell eggs in a uniform manner, and to prevent the marketing of deceptive, adulterated, or mislabeled containers of eggs (Food and Agriculture Code §27501 et seq.; Egg Products Inspection Act, 21 USC §1031 et seq.). Existing state law: 1) Authorizes the California Department of Food and Agriculture (CDFA), and county agricultural commissioners under the supervision of the secretary, to enforce laws and AB 689 (Dodd) Page 2 of ? regulations for eggs produced, shipped, or sold in California. The Egg Safety and Quality Management Program ensures that eggs sold in California are properly handled, transported, refrigerated, and labeled for quality, origin, grade and size. (Food and Agriculture Code §27501 et seq.). 2) Requires egg producers and egg handlers selling eggs in California to register with CDFA. 3) Establishes the Shell Egg Advisory Committee to advise the secretary of CDFA on all matters pertaining to standards for shell eggs, including quality, sampling, inspection, fees, budget, and components of the Egg Quality Assurance Plan. 4) Requires the secretary to establish a policy manual describing the procedures for providing notice to a person charged with a violation and for conducting a hearing. 5) Authorizes the district attorney in the county where a violation occurs to prosecute a violator of egg marketing laws or regulations. 6) Authorizes CDFA, in lieu of prosecution, to bring civil action against any person in violation of egg marketing laws and regulations for a maximum penalty of $1,000 per violation. 7) Provides for criminal punishment and procedures for persons engaging in unlawful acts related to egg marketing, punishable as a misdemeanor. PROPOSED LAW : This bill: 1) Requires the secretary of CDFA to adopt regulations that would classify violations of egg marketing laws and regulations as minor, moderate, or serious and, subject to penalties from $50 to $10,000. 2) Authorizes CDFA to refuse to issue, or suspend or revoke, an egg producer's or egg handler's registration if AB 689 (Dodd) Page 3 of ? the applicant fails to pay in full a fine, fee, assessment, or penalty or if the applicant has violated a provision of egg marketing laws or regulations. 3) Requires CDFA to adopt regulations to establish procedures for a hearing and appeals process and establish a maximum time period an applicant must wait before reapplying for registration. 4) Increases the civil penalty for violations up to $10,000. 5) Authorizes a county agricultural commissioner to take an egg marketing violator to county court and deposit any money recovered into the county's general fund. 6) Authorizes the secretary or a commissioner, in lieu of prosecution, to levy an administrative penalty against a violator in an amount according to the penalty schedule to be created by CDFA, not to exceed $10,000. 7) Provides the process for which an administrative penalty is levied by the secretary or a commissioner, including notice of violation, hearing and appeals process, payment, and involvement of the county court in the event of nonpayment. ARGUMENTS IN SUPPORT: According to the author, "Currently, violations of shell egg marketing regulations are under-enforced. District attorneys may hesitate to allocate limited resources to a commercial/agricultural issue that brings little return to the county due to caps on penalties. While the Secretary of Food and Agriculture can pursue civil penalties, using a statewide office to pursue local violations is cumbersome. [This] bill provides enforcement authority to local agricultural commissioners who have expertise in the issue. AB689 will weed out bad actors and ensure California's consumers are protected." COMMENTS : Penalty increase. This bill would increase the maximum penalty for violations of egg marketing provisions from $1,000 to $10,000. Although this is a seemingly large increase, the low penalty of $1,000 has not been changed since 1990. A weak AB 689 (Dodd) Page 4 of ? penalty could be construed as the "cost of doing business" and not serve as a strong incentive for egg producers and handlers to comply with state laws and regulations. Egg safety. CDFA developed regulations to reduce the risk of Salmonella Enteritidis (SE) contamination, and these regulations went into full effect on January 1, 2015. These regulations implement a vaccination program to protect against SE; implement a chick-monitoring program for environmental SE; establish hen enclosure requirements; and require that every container of eggs sold in California include a new label statement indicating "California Shell Egg Food Safety Compliant" or "CA SEFS Compliant" (3 CCR 1350). RELATED LEGISLATION : AB 1414 (Agriculture), Chapter 11, Statutes of 2014. Defines "pasteurized in-shell eggs" and includes these eggs in the definition of "egg handler"; exempts pasteurized in-shell eggs from current labeling requirements for "shell eggs" and, instead, creates new labeling requirements and sell-by date criteria for pasteurized in-shell eggs. AB 1069 (Agriculture) Chapter 283, Statutes of 2003. Creates a new procedure for regulating out-of-state egg shippers. AB 2981 (Agriculture) Chapter 535, Statutes of 2002. Clarifies compliance with federally required labeling for safe-handling instructions for eggs. AB 593 (Cardoza) Chapter 403, Statutes of 1997. Improves the quality controls under which fresh eggs are handled, transported, and marketed. PRIOR ACTIONS : ------------------------------------------------------------------ |Assembly Floor: |77 - 0 | |--------------------------------------+---------------------------| |Assembly Appropriations Committee: |17 - 0 | |--------------------------------------+---------------------------| |Assembly Agriculture Committee: |10 - 0 | | | | AB 689 (Dodd) Page 5 of ? ------------------------------------------------------------------ SUPPORT : Association of California Egg Farmers (Co-sponsor) Pacific Egg & Poultry Association (Co-sponsor) OPPOSITION : None received -- END --