BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON AGRICULTURE
                          Senator Cathleen Galgiani, Chair
                                2015 - 2016  Regular 

          Bill No:           AB 689                    Hearing Date:  
          6/30/15
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          |Author:    |Dodd                                                 |
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          |Version:   |6/23/15   Amended                                    |
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          |Urgency:   |No                    |  Fiscal:  |Yes              |
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          |Consultant:|Anne Megaro                                          |
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             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  :
                         
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          |Assembly Floor:                       |77 - 0                     |
          |--------------------------------------+---------------------------|
          |Assembly Appropriations Committee:    |17 - 0                     |
          |--------------------------------------+---------------------------|
          |Assembly Agriculture Committee:       |10 - 0                     |
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          AB 689 (Dodd)                                       Page 5 of ?
          
          
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           SUPPORT  :
          
          Association of California Egg Farmers (Co-sponsor)
          Pacific Egg & Poultry Association (Co-sponsor)

           OPPOSITION  :
          
          None received

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