BILL ANALYSIS Ó
AB 1894
Page 1
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
AB 1894
Page 2
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:
AB 1894
Page 3
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
AB 1894
Page 4
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:
AB 1894
Page 5
Support
None on file.
Opposition
None on file.
Analysis Prepared by:Victor Francovich / AGRI. / (916) 319-2084