BILL ANALYSIS Ó SENATE COMMITTEE ON AGRICULTURE Senator Cathleen Galgiani, Chair 2015 - 2016 Regular Bill No: AB 958 Hearing Date: 7/7/15 ----------------------------------------------------------------- |Author: |Committee on Agriculture | |-----------+-----------------------------------------------------| |Version: |6/29/15 Amended | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Anne Megaro | | | | ----------------------------------------------------------------- Subject: Agriculture: California Avocado Commission: California Salmon Council. SUMMARY : This bill would change the membership and district reapportionment of the California Avocado Commission; would require the secretary of the California Department of Food and Agriculture to hold a referendum vote to include salmon handlers on the California Salmon Council (CSC), as specified; and would provide for CSC implementation procedures, membership, and other conforming changes should the referendum affirm handler participation. BACKGROUND AND EXISTING LAW : The legislature finds that the agricultural and seafood industries are vitally important elements of the state's economy and state-supported councils and commissions enhance and preserve the economic interests of the state of California. There are approximately 16 active commissions/councils, all of which are governed by boards of directors and overseen by the California Department of Food and Agriculture (CDFA). These commissions/councils were created to enhance their industries by investing in promotion, advertising, education, marketing research, scientific research, and/or the creation and regulation of quality standards. Generally, commissions and councils are initiated by the industry and go into effect following an affirmative industry referendum vote and, at times, AB 958 (Committee on Agriculture) Page 2 of ? a periodic vote to reaffirm their existence. Once in effect, every member of the industry, as specified, is required to follow all laws and regulations including, but not limited to, the payment of assessment fees. California Salmon Council. The California Salmon Council was created in 1988 with the purpose to develop, maintain, and expand local and international markets for salmon harvested, processed, manufactured, sold or distributed in California. California Avocado Commission. The California Avocado Commission (CAC) was created in 1977 to benefit California and the industry by addressing advertising, promotion, research, quality and maturity standards, crop statistics, and public education (Food and Agricultural Code § 67001 et seq.). Existing law: 1) Defines "handler" to mean a processor, receiver, wholesaler, exporter, or individual licensed to working for a licensed partnership, corporation, or other business engaged in the California commercial salmon fishery. 2) Establishes the CSC, composed of nine voting and five non-voting members appointed by CDFA representing commercial salmon vessel operators, handlers, and one public member. 3) Prescribes CSC powers and duties; education, research, and public information programs; purchase of salmon harvesting allocation rights; assessment fees; referendum voting procedures; and council termination. 4) Requires salmon fishermen, as specified, to pay an assessment fee in an amount determined by the CSC, currently set at $0.05 per pound of salmon, in addition to a $0.05 per pound of salmon landing fee charged by the Department of Fish and Wildlife. 5) Establishes the CAC, composed of 10 producers and four handlers elected by the industry and one public member appointed by CDFA. 6) Divides California into five districts representing AB 958 (Committee on Agriculture) Page 3 of ? approximately 20% of the avocado production. 7) Provides for CAC membership, voting procedures, duties and powers, assessment rates, recordkeeping, quality standards, penalties, and referendum procedures including continuance and termination. PROPOSED LAW : This bill: 1) Reduces the number of districts established by the CAC to a minimum of three districts and a maximum of five districts. 2) Removes prescribed procedures for district reapportionment and instead grants the commission the authority to adopt procedures with a 2/3 vote and concurrence by the secretary. 3) Specifies committee membership according to the number of districts established under the CAC. 4) Provides for alternate members for producers, handlers, and the public member. 5) Removes references to the CAC as a corporation. 6) Requires CDFA to post CSC regulations on its website. 7) Requires the secretary of CDFA to hold a referendum vote to include salmon handlers within the CSC, as specified. 8) Adds two salmon handlers as voting members on the CSC should handlers be included within the CSC. 9) Divides equally the officers and other members of the executive committee between salmon vessel operators and handlers should handlers be included within the CSC. 10) Requires salmon handlers, in addition to fishermen, to AB 958 (Committee on Agriculture) Page 4 of ? pay an assessment fee per pound of salmon, as specified. 11) Requires a vote rather than ballot poll to increase the assessment fee above $0.07 per pound of salmon. 12) Prescribes implementation and referendum voting procedures for fishermen and handlers, as specified. 13) Prescribes CSC continuation and termination procedures, as specified. 14) Makes conforming changes should salmon handlers be included on the CSC. 15) Makes numerous technical, clarifying, and conforming changes. ARGUMENTS IN SUPPORT: According to the author, "As part of CAC recent strategic planning process, a series of meetings were conducted with Board and industry members in late 2014/early 2015. One of the clear outcomes from these meetings was strong interest in having CAC review its organizational structure with an eye towards modernization. One recommendation was to modify CAC Board size and establishing more flexible redistricting language to allow CAC structure to evolve as changes in the industry take place, while still equitably representing its constituents." According to the California Salmon Council Board of Directors, "Currently, only salmon fishermen are required to remit assessments even though salmon receivers/buyers have voting representative seats on the Board, but are not legally required to withhold assessments. AB 958 does not mandatorily require receivers/buyers to pay the Council's assessments, it merely authorizes the California Department of Food & Agriculture to schedule an industry wide referendum. The industry receivers/buyers will have the opportunity to decide if they wish to assess themselves and match the funds collected from fishermen." COMMENTS : AB 958 (Committee on Agriculture) Page 5 of ? Avocados. This bill would modernize the CAC by providing flexibility to the commission to adjust the number of districts and board members to more accurately represent the avocado industry. These changes would only occur upon a 2/3 vote of the board. Salmon Council Funding. This bill would allow salmon handlers within the CSC to join CSC fishermen and pay assessment fees. Handlers would choose, through a referendum vote, whether they would agree to pay these fees. According to handlers in support, "The referendum, if successful, would essentially double the budget of the Salmon council that is now funded with an assessment paid by salmon fishermen only. The increased revenues could be used for promotional efforts, trade and consumer education, as well as market development and research, which may be particularly important due to the fourth year of drought conditions and the effect on salmon populations." RELATED LEGISLATION : AB 914 (Atkins), Chapter 322, Statutes of 2011. Among other provisions, authorizes the CAC to require producers to provide specified avocado production data and increases the number of crop years used to determine the reapportionment of avocado districts. AB 1795 (Agriculture), Chapter 365, Statutes of 2010. Among other provisions, authorizes the CSC to share factual information and negotiate with state, federal, and foreign agencies on issues related to the CSC. AB 2390 (Cedillo), Chapter 946, Statutes of 2002. Among other provisions, makes various technical and substantive changes to the CAC and expands and clarifies the purpose of the CAC. PRIOR ACTIONS : ------------------------------------------------------------------ |Assembly Floor: |74 - 0 | |--------------------------------------+---------------------------| |Assembly Appropriations Committee: |17 - 0 | AB 958 (Committee on Agriculture) Page 6 of ? |--------------------------------------+---------------------------| |Assembly Agriculture Committee: |9 - 0 | | | | ------------------------------------------------------------------ SUPPORT : California Fisheries and Seafood Institute California Salmon Council Board of Directors Pacific Coast Federation of Fishermen's Associations OPPOSITION : None received -- END --