BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
604 (Fuller)
Hearing Date: 8/17/2009 Amended: 5/5/2009
Consultant: Bob Franzoia Policy Vote: F&A 4-1
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BILL SUMMARY: AB 606 would suspend the San Joaquin Valley
Quality Cotton District by January 1, 2010 with the exception of
specified provisions of the Food and Agriculture Code (FAC)
including those establishing the San Joaquin Valley Cotton
Board. This bill would authorize the board, with the
concurrence of the Secretary of Food and Agriculture, to
periodically determine that provisions made inoperative become
operative for a specified period of time. The board would be
required to report annually and to notify eligible growers and
industry members of any actions proposed to be taken, which
could only be taken only at a public hearing of the board. This
bill would authorize the board to make refunds or transfers of
money deposited in the Food and Agriculture Fund. Because this
bill would authorize the use of these funds for a new purpose,
this bill would make an appropriation.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Periodic Secretary of Food Unknown, likely minor costs
ongoing; Special
and Agriculture review potentially not reimbursed
* Food and Agriculture Fund
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STAFF COMMENTS: The board was created to encourage the
uniformity, quality, and marketability of valley cotton in order
to bring the best monetary returns to growers. The board's
programs are fully funded by an annual industry assessment not
to exceed one half of one percent of each grower's gross dollar
value from the previous year's cotton crop. Persons who have
cotton delinted for planting purposes shall pay an assessment
not to exceed $6.00 per hundred weight on the unlinted weight of
the cottonseed. In 2007, cotton was farmed on 460,000 acres.
In 2008, acreage dropped to approximately 300,000 acres.
Effective January 1, 2010, all provisions of Chapter 4 and
related regulations, except the following sections, shall be
inoperative:
- Protection of the board from liability against monopolies or
combinations in restraint of trade (FAC 52855).
- Establishment of the board (FAC 52871).
- Payment of claims and board member liability (FAC 52887).
- Cotton testing and related administrative expenses (FAC
52942).
- Deposit and expenditure of district funds (FAC 52945).
This bill would authorize the board, with the concurrence of the
secretary, to periodically determine that provisions made
inoperative by this bill would become operative for a specified
period of time. Staff notes this provision raises two concerns:
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AB 604 (Fuller)
(1) It is unclear how the board would reimburse the secretary
for what are recognized to be minor costs if it no longer has
moneys from an assessment.
(2) This bill gives the board, with the approval of the
secretary, the authority to administratively implement actions
set forth in statutes that are no longer operative.
Staff recommends this bill be amended to sunset all provisions
when the Secretary determines the board no longer has sufficient
funds to continue operating or to reimburse the Secretary.