BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 822| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 822 Author: Roth (D) Amended: 5/31/16 Vote: 21 SENATE AGRICULTURE COMMITTEE: 4-0, 3/29/16 AYES: Galgiani, Cannella, Pan, Wolk NO VOTE RECORDED: Berryhill SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen SUBJECT: Agricultural pest control: citrus disease prevention: monthly assessment SOURCE: California Citrus Mutual DIGEST: This bill increases the maximum monthly citrus assessment fee from $0.09 to $0.12 cents per 40 pound carton. ANALYSIS: Existing law requires producers in the citrus fruit industry to pay a monthly assessment not exceeding $0.09 per carton of citrus fruit, to be used for citrus disease management and pest control activities, which are deposited in the Citrus Disease Management Account, except as specified. This bill increases the monthly citrus assessment fee from $0.09 to $0.12 per 40 pound carton. Background California is the top-producing agricultural state in the nation with $54 billion in agricultural commodity value in 2014. SB 822 Page 2 California is also a top producer of citrus fruits and is ranked second only to Florida in citrus production but first in citrus product sold fresh to market. According to the most recent census, in 2012, the $2.1 billion California citrus industry grew nearly 4 million tons of citrus on 270,000 acres and provided more than 14,000 jobs. Existing law establishes the California Citrus Pest and Disease Prevention Committee (CCPDPC) within the California Department of Food and Agriculture (CDFA) to advise the secretary of CDFA on efforts to prevent and manage citrus pests and diseases. An assessment is levied on citrus producers and deposited into the Citrus Disease Management Account for the sole purpose of combating citrus-specific pests and diseases. This account may also contain funds from federal and other non-General Fund sources. The current assessment rate is $0.09 per 40 pound carton, which amounts to $15 million annually and represents more than half of the total budget for this program (AB 281, De León, Chapter 426, Statutes of 2009; Food and Agricultural Code §5911 et seq.). Asian citrus psyllid (ACP) is an invasive pest that feeds on citrus plants' leaves and stems and causes shoot deformation and plant stunting. More importantly, ACP may transmit Huanglongbing (HLB), a bacterial plant disease that causes the plant to produce unpalatable/inedible fruit before ultimately killing the tree. According to CDFA, HLB is the most devastating disease of citrus in the world. There is no cure and infected plants must be destroyed. The first discovery of ACP and HLB in the United States was in Florida in 1998 and early September 2005, respectively. Within 2 years, the disease HLB spread to all citrus-producing counties and infected over half of all citrus trees in the state. Studies have shown that the economic damage due to HLB in Florida alone has resulted in a loss of $7.8 billion and 7,513 jobs since 2007, reducing the industry to nearly a quarter of the size it once was. The disease HLB has also been detected in Georgia, Louisiana, South Carolina, Texas, and most recently, California. In 2008, the pest ACP was first identified in Southern SB 822 Page 3 California. In in the last two years, ACP has rapidly spread north into commercial citrus groves and residential trees, and quarantine boundaries have expanded to encompass one-third of the state. Meanwhile, in March 2012, HLB was detected in a residential, multi-grafted citrus tree in Los Angeles County. The tree was destroyed, however the disease was detected again in 2015 in 17 trees located in the surrounding areas. The new finds and the rapid northern migration is a cause of great concern, raising CDFA's surveillance, trapping, and analytical workloads. According to the University of California, Agriculture and Natural Resources (UCANR), the citrus industry, the University of California, and both the state and federal governments are working to eliminate and prevent the establishment of ACP and HLB in California. Much of the research is conducted with funding from the citrus industry through the Citrus Research Board, UCANR, CDFA Specialty Crops Block Grants, and the United States Department of Agriculture - National Institute of Food and Agriculture (USDA-NIFA). The Agricultural Act of 2014 (H.R. 2642) was signed into law on February 7, 2014, and directs $125 million of the USDA Specialty Crop Research Initiative funding toward citrus disease research over the next 5 years. In FY 2015, the federal government awarded $20 million in grants nationwide to university researchers and extension projects to aid in the fight against HLB. Comments Funding sources. The CCPDPC is funded by the California citrus industry and federal grants. Of the $25 million annual budget, roughly $15 million is funded through the $0.09 per carton assessment fee and $10 million through the United States Department of Agriculture. However, this year, the federal government approved an additional $2 million in funding that will be used to increase psyllid detection and trapping in the San Joaquin Valley. The CCPDPC received a one-time $1 million appropriation from the General Fund in FY 2013-14 (AB 110, Statutes of 2013), however no other monies from California's General Fund have been appropriated. SB 822 Page 4 Budget request. The Senate Budget Subcommittee No. 2 approved a General Fund allocation of $5 million to CDFA for Asian citrus psyllid control, where $4.25 million is dedicated for residential application and $750,000 for an interagency agreement with the Department of Pesticide Regulation to provide a consumer product database for a residential level study of the impacts of neonicotinoid-treated seed and plants sold at the retail level. Residential citrus. Over half of all citrus trees in California are located in residential backyards. Currently, $12 million of the industry-assessed fees are being used to detect and trap ACP and remove HLB-infected citrus trees in the Los Angeles Basin, the area of greatest infestation. None of the assessment fees are currently being used to treat commercial citrus groves. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: The bill would increase citrus industry assessed fee authority by $0.03 per carton, from $0.09 to $0.12. If the fee were raised to the maximum level, revenues would increase by roughly $5 million annually (special fund). SUPPORT: (Verified5/31/16) California Citrus Mutual (source) Southwest California Legislative Council Western Growers Association OPPOSITION: (Verified5/31/16) None received SB 822 Page 5 ARGUMENTS IN SUPPORT: According to the author, "SB 822 will provide much needed funding to continue to combat the spread and devastating effects of Huanglongbing (HLB) on California's citrus industry. Florida has already lost approximately $7.8 billion in revenue, 162,000 citrus acres, and 7,513 jobs to HLB and similar impacts are being seen in Texas. While California's citrus industry has slowed the spread of the disease by raising $15 million per year for trapping and treatments, it is not enough. SB 822 seeks to increase the assessment on citrus growers to raise up to an additional $5 million [?] to help protect California's $3 billion citrus industry, 22,000 jobs and countless residential citrus trees so important to California's rich history." Prepared by: Anne Megaro / AGRI. / (916) 651-1508 5/31/16 20:45:33 **** END ****