BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 732| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 732 Author: Cooper (D), et al. Amended: 7/8/15 in Senate Vote: 21 SENATE AGRICULTURE COMMITTEE: 3-0, 6/30/15 AYES: Galgiani, Cannella, Pan NO VOTE RECORDED: Berryhill, Wolk SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for vote SUBJECT: Cattle protection: brands: inspection: fees SOURCE: California Farm Bureau Federation Milk Producers Council DIGEST: This bill exempts cattle from brand inspection when sold or ownership is transferred when all of the following apply: the entity with a controlling interest does not change, the cattle remain within California or the point-of-origin inspection area, and the cattle are associated with a registered brand or dairy exemption number. This bill also increases specified related fees for brand registration and cattle inspection by approximately 20%. ANALYSIS: Existing law: AB 732 Page 2 1)Authorizes the California Department of Food and Agriculture (CDFA), through the Bureau of Livestock Identification, to administer and enforce laws and regulations that would protect cattle from theft and misappropriation in California. 2)Authorizes CDFA to regulate and record brands that establish or indicate cattle ownership, as specified. 3)Establishes the Livestock Identification Advisory Board to make recommendations to the secretary of CDFA in regards to administration and enforcement of brand laws and regulations and the annual budget for the Bureau of Livestock Identification. Advisory board members are appointed by the secretary and consist of cattle producers, dairymen, persons engaged in livestock marketing, operators of feedlots, and a member of the public. 4)Authorizes CDFA to collect fees and penalties regarding cattle identification, including, but not limited to: a) $60 per brand registration, renewal, or transfer. b) $1.05 per animal inspected, with exceptions. c) $1.44 per carcass or hide inspected, with exceptions. 5)Authorizes CDFA to increase cattle inspection fees up to 20% of the statutory fee upon recommendation of the Livestock Identification Advisory Board (Food and Agricultural Code §20760 and 21291). 6)Requires fees and penalties collected pursuant to cattle protection to be deposited in the Department of Food and Agriculture Fund and used for the administration and enforcement of cattle protection provisions. 7)Provides for civil and criminal penalties for persons in violation of cattle branding laws. Provides penalties for livestock grand theft, punishable by a fee of $5,000 and/or imprisonment for up to one year (Penal Code §489). This bill: 1)Exempts cattle from a brand inspection when sold or ownership transferred under all of the following circumstances: AB 732 Page 3 a) The controlling interest remains unchanged. b) Cattle will remain within California or the point-of-origin inspection area. c) Cattle are associated with a registered brand or dairy exemption number. 2)Requires cattle owners, within 30 days of ownership transfer, to self-certify their ownership on a CDFA-issued form. 3)Authorizes CDFA to charge a fee, not to exceed $50, to cover the reasonable costs of processing the form. 4)Makes violations of the above provisions subject to civil penalties currently in law for violations of cattle inspection provisions. 5)Increases specified related fees for brand registration and cattle inspection by approximately 20%. Background The CDFA Bureau of Livestock Identification is responsible for the administration and enforcement of cattle protection by issuing brand registration certificates and conducting inspections. Generally, inspections are required when cattle are sold, transported, have a transfer of ownership, and before entering a feedlot or slaughterhouse. Funding for this program is entirely supported through registration and inspection fees. (Food and Agricultural Code §20001 et seq.). Comments Need for this bill. Supporters of this bill provided the Senate Agriculture Committee with a recent example of a dairy farm owner who wanted to add his son as a minority partner. This required the dairy to be changed from a sole proprietorship to a general partnership. Under current law, this change is considered a change in ownership and triggers a brand inspection by the Bureau of Livestock Identification, even though the majority owner, business name, location, and herd remain the same. This bill provides an exemption from brand inspection for cattle whose ownership is transferred in such a manner. At AB 732 Page 4 $1.05 per animal, a brand inspection can be unnecessarily costly. Fees. Existing law authorizes CDFA to increase cattle inspection and registration fees up to 20%. On August 28, 2014, the Livestock Identification Advisory Board passed a motion to increase several of these fees, many of which are at or near the maximum 20% increase. In order for the program to remain effective, this bill increases the current fees in code to that which is currently charged by CDFA, while maintaining existing authority for CDFA to increase fees by another 20%. These fees were last increased in statute in 2006 (AB 2332, Committee on Agriculture, Chapter 568; brand inspection fees) and 2007 (AB 472, Committee on Agriculture, Chapter 267; registration and hide inspection fees). Prior to that, the last statutory fee increase was established in 1991. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: Yes SUPPORT: (Verified8/18/15) California Farm Bureau Federation (co-source) Milk Producers Council (co-source) California Cattlemen's Association California Chamber of Commerce OPPOSITION: (Verified8/18/15) None received ARGUMENTS IN SUPPORT: According to the author, "California's farm families that raise dairy and beef cattle face increasing economic pressures to remain competitive. Passing on these family farms and ranches is becoming increasingly difficult. There are many factors contributing to the loss of family farms and ranches and it is important that California works to reduce unnecessary impediments to passing farms and ranches onto the next generation. AB 732 would clarify that no inspection is necessary when the controlling interest of the farm or ranch does not change and the cattle are not being moved out of state AB 732 Page 5 or out of a modified point-of-origin inspection area. This clarification will reduce costs to families working to maintain their farms and bring on the next generation to continue California's successful farming tradition." ASSEMBLY FLOOR: 77-0, 5/7/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Campos, Roger Hernández, Steinorth Prepared by:Anne Megaro / AGRI. / (916) 651-1508 8/18/15 16:54:10 **** END ****