BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                        AB 1894


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     Date of Hearing:  March 30, 2016


                         ASSEMBLY COMMITTEE ON AGRICULTURE


                                  Bill Dodd, Chair


     AB 1894  
     (Committee on Agriculture) - As Amended March 1, 2016


     SUBJECT:  Food and agriculture:  omnibus bill.


     SUMMARY:  Authorizes the Department of Food and Agriculture (CDFA) to  
     collect assessments for the Standardization Program (SP) and Citrus  
     Program (CP) together and specify an adequate time frame for remittance  
     and clarify the authority of CDFA's Dairy Marketing Branch (DMB) to  
     finance environmental research projects of interest to the dairy  
     industry.  Specifically, this bill:  



        1)   Changes CP late payment date from the 10 days after assessment is  
          due to 10 day after the following month when a CP assessment is due,  
          which conforms the CP to the SP.



        2)   Clarifies that citrus handlers are responsible for the payment of  
          assessments and inspection fee associated with CP. 



        3)   Defines, as it relates to milk and dairy products marketing,  
          educational and research activities to mean any effort to develop  
          and improve the management practices of dairy producers and  








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          processors, including, but not limited to, practices associated with  
          the environmental sustainability of land, air quality, and water  
          quality.



        4)   Allows CDFA to fund educational and research activities.



        5)   Makes conforming and technical changes.


     EXISTING LAW:  


     1)Establishes the California Citrus Advisory Committee to develop and  
       make recommendations to CDFA regarding procedures for implementing an  
       inspection program; requires producers of citrus varieties grown in  
       this state, as specified, to pay an assessment; requires the assessment  
       to be collected at the end of each month; and, requires any payment not  
       made by the 10th day of the month following the month for which the  
       assessment is payable, incur a penalty of 10% of the assessment owed.



     2)Regulates milk and dairy products, as specified, and requires every  
       milk handler subject to that regulation to pay specified assessments  
       and fees to CDFA to cover the costs of regulating milk.  Establishes  
       the CDFA Fund as a special fund, to be used, among other things, for  
       laws regulating the marketing of milk and other dairy products, and the  
       stabilization and marketing of market milk.


     FISCAL EFFECT:  Unknown.


     COMMENTS:  









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     Citrus


     In the current Food and Agricultural Code (FAC), the SP and CP have  
     distinct language specifying the due dates of assessments and the date  
     penalty payments begin accruing.  For the SP, statutes specify payments  
     are late 30 days after the date produce is shipped.  For the CP, language  
     governing the late payment schedule is ambiguous.  Since the inception of  
     the CP, FAC has been interpreted and applied 10 days and one month  
     following the date assessments was due (approximately 40 days).  





     After confusion arose over late payments between the two programs, a  
     legal review was conducted by CDFA. Late payment dates for the two  
     programs were clarified, and it was determined that the citrus industry's  
     assessments are actually payable on the tenth day of the following month  
     from which the citrus was received, meaning the citrus industry has only  
     10 days rather than 40 days to remit payment to CDFA.  Requiring the  
     industry to remit payment within a 10 day time period prior to issuing  
     penalties for late payment is unreasonable and could interrupt business  
     practices. While legal determination has been established, ambiguity in  
     state statute still exists and requires rectification. This bill  
     clarifies this issue by conforming the two programs late assessment  
     payments.   





     Dairy










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     In the late 1990's, environmental regulations were in the process of  
     being considered for California's dairy industry.  Following an initial  
     review, it was determined that regulations were extremely costly and that  
     additional scientific research/review was needed to understand what  
     regulations would be beneficial to the industry and the environment. The  
     industry concluded that funding for environmental activities was to be  
     provided via DMB's budget.  DMB's budget funding is paid two thirds by  
     dairy producers and one third by dairy processors.  In the interest of  
     performing this work, CDFA has cited existing authority per FAC to fund  
     an environmental staff position and coordinate activities. 





     The funds for these activities are collected from market milk and  
     manufacturing milk producers, as well as milk processors in California,  
     using pre-existing assessment authority and are for the benefit of  
     producers and processors.  Using the current assessment collection  
     authority ensures that all parties benefiting from these projects help  
     finance them. 





     Current FAC authorizes DMB to develop and maintain positive marketing  
     conditions; bring about and maintain stability; and, provide education  
     activities for the dairy industry. The broad interpretation of this  
     statutory mandate is that CDFA may use this authority to fund  
     environmental research projects.  The ambiguous nature of the language  
     does, however, bring into question the legality of the continued use of  
     DMB funds. This bill clarifies DMB's authority to fund environmental  
     research projects using existing funds.


     REGISTERED SUPPORT / OPPOSITION:










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     Support


     None on file.




     Opposition


     None on file.




     Analysis Prepared by:Victor Francovich / AGRI. / (916) 319-2084