BILL ANALYSIS
SENATE FOOD and AGRICULTURE COMMITTEE
Senator Dean Florez, Chairman
BILL NO: AB 604 HEARING: 7/7/09
AUTHOR: Fuller FISCAL: Yes
VERSION: 5/5/09 CONSULTANT: John Chandler
Cotton: San Joaquin Valley Quality Cotton District
BACKGROUND AND EXISTING LAW
The San Joaquin Valley Quality Cotton District (district) was
formed in 1978, originally as the One Variety Cotton District
which was changed to its current name in 1990 as cotton growers
started growing Pima cotton. All cotton grown in the district
must meet criteria established by San Joaquin Valley Quality
Cotton Law. The district consists of Fresno, Madera, Merced,
Kern, Kings, and Tulare counties. Further, an ongoing variety
testing program conducted by the San Joaquin Valley Cotton Board
evaluates promising cottons developed by private and public
cotton breeders.
The San Joaquin Valley Quality Cotton District 17-member board
(board) is composed of seven cotton growers, three cotton
industry members from the San Joaquin Valley, one public member,
and four nonvoting ex-official members. The board establishes
quality standards for cotton; conducts tests for cotton
production and quality evaluation; conducts referendums; and
sets the appropriate seed assessment necessary for operation of
the board.
PROPOSED LAW
AB 604 will suspend the San Joaquin Valley Quality Cotton
District by January 1, 2010, except for the following
provisions:
The protection of the San Joaquin Valley Cotton Board's
(board) actions from liability as a monopoly or
combinations in the restraint of trade;
The protection of the state from acts of the board or
their contracts;
The creation of the board, its membership and their
election;
The use of proceeds for enforcement, board functions,
cotton testing and related administrative expenses; and,
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The deposit and expenditure of funds.
AB 604 will also:
Permit the board, in concurrence with the Secretary
(secretary) of the California Department of Food and
Agriculture (CDFA), to periodically determine what specific
sections of the district's authorizing chapter and related
regulations shall be operative and for what period of time.
Authorize the board, with CDFA's concurrence, to decide
if funds of the district will be refunded in whole or part
to eligible persons, or transferred to persons or
organizations under the district.
Require the board to annually report to the legislature
the specific actions taken under this new authority and
require the board to notify, prior to taking any actions
concerning activation of chapter regulations or refunds of
funds in a properly noticed public hearing, all eligible
growers and industry members.
COMMENTS
1.According to the author, AB 604 creates greater flexibility
and is a reflection of the evolving nature of the California
cotton industry. During the initial establishment of the
district, there was much more certainty as to the types of
cotton varieties that should be grown, quality standards, and
need for testing. As the industry has declined, due to loss
of cotton acreage, the district board has to reevaluate its
priorities.
2.AB 604 is a drastic approach to address changes in the San
Joaquin Valley cotton industry. Just last year, this
committee passed AB 1913 (Fuller) Chapter 189, Statutes of
2008, downsizing the board to reflect a downsizing cotton
industry. With AB 604 suspending all provisions except the
district board, it appears that the cotton industry is
shrinking exponentially. The committee may wish to consider
eliminating the entire chapter.
3.AB 604 will keep the San Joaquin Valley Quality Cotton
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District Board intact to work with CDFA to activate different
sections of the San Joaquin Valley Quality Cotton District as
needed. As written, there is no specified term of office for
board members. They would have to activate Section 52878
which specifies a four-year term of office for board members.
Theoretically, the board could opt for permanent terms if they
never activate this section. The committee may wish to
consider requiring that terms of office in this law be exempt
from suspension.
4.Further, AB 604 would suspend the quorum requirement for the
board. If the board is going to be responsible for meeting
and activating sections of the district chapter, it would be
important that they have a quorum requirement specified in
Section 52883. The committee may wish to consider exempting a
quorum requirement from suspension.
5.Contained within the code sections being suspended under AB
604 is the requirement to notify CDFA and CDFA attendance at
board meetings. Given the need for a close working
relationship between the board and CDFA to activate suspended
sections in AB 604, it might be a good idea for the
requirement in Section 52884 to be maintained.
6.AB 604 is a unique solution to a problem faced by the cotton
industry as it has downsized over the years. It will grant
greater flexibility by giving to CDFA and the San Joaquin
Valley Quality Cotton District Board the authority to turn on
and off different sections of law at will. This is sweeping
authority and perhaps a little too much. If it was necessary
to go to the legislature to create the board and make any
changes to the law, should the legislature surrender its
authority over this chapter of law? While AB 604 requires
annual reporting to the legislature, the committee may wish to
consider if the legislature is prepared to give up its
oversight completely.
PRIOR ACTIONS
Assembly Floor 78-0
Assembly Appropriations17-0
Assembly Agriculture 8-0
SUPPORT
None received
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OPPOSITION
None received