BILL ANALYSIS
SENATE FOOD and AGRICULTURE COMMITTEE
Senator Dean Florez, Chairman
BILL NO: AB 856 HEARING: 7/7/09
AUTHOR: Caballero FISCAL: Yes
VERSION: 7/1/09 CONSULTANT: John Chandler
Fertilizing material: organic input material.
BACKGROUND AND EXISTING LAW
Current law establishes the formation of the Fertilizer
Inspection Advisory Board that advises or makes recommendations
to the Secretary of Agriculture on matters relating to
inspection and enforcement, research and education, annual
budget, necessary fees, and regulations required to accomplish
the purposes of the law. The Fertilizer Inspection Advisory
Board is comprised of eight members who possess a commercial
feed license and one public member; all are appointed by the
secretary for three-year terms. The board is required to meet at
least once a year.
Specialty fertilizers, packaged agricultural minerals, auxiliary
soil and plant substances, and packaged soil amendments require
registration prior to being offered for sale or distribution in
California. Registrations are for two years, beginning January
1st of an even numbered year and expiring on December 31st of
the following odd numbered year. The registration fee cannot
exceed $200, with the current initial registration fee of $100
per label, and renewal of $50 per label.
Every person who manufactures or distributes fertilizing
materials shall obtain a license from the secretary for each
plant or business location. Licensing is for two years,
beginning January 1st of each odd numbered year and expiring on
December 31st of the following even numbered year. The license
fee cannot exceed $200, and the current license fee is set at
$100.
Any licensee whose name appears as the guarantor on the label
who sells or distributes bulk fertilizing materials to the end
user or whose name appears on the label of a packaged
fertilizing material shall pay an assessment not to exceed two
mills ($0.002) per dollar of sales. In addition, an additional
assessment not to exceed one mill ($0.001) per dollar sale of
fertilizing material is assessed to provide funding for research
and education regarding the use and handling of commercial and
organic fertilizer, including environmental effects. Inspection
fees are due on a quarterly basis.
AB 856 - Page 2
The California Organic Program is responsible for enforcement of
the federal Organic Foods Production Act of 1990 and the
California Organic Products Act of 2003. These statutes protect
consumers, producers, handlers, processors, and retailers by
establishment of standards under which fresh agricultural
products/foods may be labeled and/or sold as "organic".
Enforcement activities are coordinated with the California
Organic Products Advisory Committee, the USDA, and California
county agricultural commissioners. Activities include program
administration, county biologist training, initiation of
complaint investigation, registration of private certification
organizations, and acting as an information resource on the
California Organic Products Act and California's organic
industry.
The National Organic Program (NOP) develops, implements, and
administers national production, handling, and labeling
standards for organic agricultural products. The NOP also
accredits the certifying agents (foreign and domestic) who
inspect organic production and handling operations to certify
that they meet USDA standards.
In 2008, CDFA concluded a multiyear investigation of
adulteration of organic fertilizer with non-organic chemicals by
an organic fertilizer manufacturer in California. This
non-organic fertilizer was sold to unknowing organic farmers
across the state. As a result of the investigation, CDFA found
the use of ammonium sulfate, a synthetic fertilizer banned from
organic farming by the NOP. The product no longer exists due to
the investigation and a signed agreement between CDFA and the
manufacturer. The Senate Food and Agriculture Committee held a
hearing on February 3, 2009, on this issue.
PROPOSED LAW
AB 856 will do the following:
Define "organic input material" as a bulk or packaged
commercial fertilizer, agricultural mineral, auxiliary soil
and plant substance specialty fertilizer, or soil
amendment, excluding pesticides used on organic crops in
compliance with the NOP. This definition excludes compost
materials that make no nutrient claim or guarantee.
Change the make up of the Fertilizer Inspection Advisory
Board (board) to nine members, of which seven are licensed
AB 856 - Page 3
fertilizer manufacturers or distributors, one is an organic
input material producer, one is an organic grower, and one
public member.
Require CDFA and the board to review the definition of
organic input materials by 2012 for oversight and
implementation issues and examination of materials not
currently regulated that may warrant oversight by CDFA.
CDFA must post the completed review on its website.
Require CDFA to verify that applicants for a fertilizer
manufacturer or distributor license are manufacturers or
distributors prior to issuing a license.
Increase the two-year license fee limit from $200 to
$300.
Establish the Organic Input Materials Fund in CDFA.
Specify that license fees collected from organic input
materials manufacturers or distributors be deposited in the
Organic Input Materials Fund.
Require that organic input materials also be registered
for each label every two years.
Specify that the organic input materials fee shall be
not more than $500 per product to compensate for additional
resources and review time to ensure that nutrient
guarantees and claims are reasonable and meet the NOP
standards. Registration fees collected from organic input
materials shall be deposited in the Organic Input Material
Fund.
Specify that CDFA may reduce the registration fee if
there are sufficient funds for fertilizer inspections.
Specify that registrations may not be issued without a
current license.
Include organic input materials in the current
requirement for proof of label statements on the product.
Require that all organic input materials manufacturers
be inspected at least once a year to validate label
nutrient guarantees, claims, and compliance with NOP
standards during registration process.
AB 856 - Page 4
Authorize the use of third-party inspections for organic
input materials manufacturers located outside of
California.
Include organic input materials in the current
fertilizer sales assessment and additional fertilizer sales
assessment. All assessment funds from organic input
materials shall be deposited in the Organic Input Materials
Fund.
Specify that any licensee that does not submit the
required semiannual tonnage report to CDFA within 90 days
of January 31 or July 31 may lose their license.
Require CDFA, for purposes of enforcement, at times to
monitor the manufacturing of fertilizer material and sample
different stages of the manufacturing process.
Increase the penalty for violation to $1000 for the
first violation and $1000 for each subsequent violation.
Change the name of the CDFA oversight division from
"Agricultural Commodities and Regulatory Services" to
"Feed, Fertilizer, Livestock Drugs and Egg Regulatory
Services."
Require that a civil penalty be levied of not more than
$5,000 for each violation. If the violation is negligible
or unintentional, a notice of warning is permitted. For
those levied civil penalties, a due process appeal hearing
with CDFA is provided.
Create a penalty for any person that adulterates,
misbrands, or alters a fertilizing material that results in
the material not being consistent with the label claims.
This is a misdemeanor punishable by not more than $15,000
for the first offense and not less than $15,000 for each
subsequent violation. Any violators may be prohibited from
obtaining a license to sell organic input materials for
three years.
Create a civil penalty for the movement, distribution,
or sale of product quarantined by CDFA of a misdemeanor
punishable by a fine of not more than $5,000 for the first
offense, and a fine of not less than $10,000 for second or
subsequent violations.
AB 856 - Page 5
Authorize CDFA to recover costs for any reasonable
attorney's fees and other related costs from any person in
violation.
Prohibit the distribution of a product considered
adulterated, and add that an organic input material is
adulterated if it is not in compliance with the
requirements of NOP standards.
COMMENTS
1.Proponents state that AB 856 will provide greater oversight of
organic inputs by including organic input materials in CDFA's
fertilizer inspection program. Historically, fertilizers used
in production of organic food and crops have gone without
detailed state oversight. AB 856 increases CDFA's role in
active enforcement of NOP standards on organic fertilizer
manufacturers with annual inspections, stiffer penalties, and
greater oversight of the organic fertilizer industry. The
cost of this program would be shouldered by the fertilizer
industry.
2.Some members of the organic fertilizer industry have raised
concerns about recent amendments taken in Senate Environmental
Quality Committee (EQ). They are concerned with the change in
the Fertilizer Inspection Advisory Board that specifies seats
on the board for an organic fertilizer producer and organic
farmer. It is felt that this may be a "nose under the tent"
which begs the question about all the other specialty
fertilizer producers that would not have designated seats on
the board. Further, they raise concerns on segregation of
fees from organic input materials into the Organic Input
Materials Fund and also concerns about making proof of
labeling statements or claims mandatory. Finally, they raise
concerns that an organic producer should only have their
license at risk if they adulterate a product with non-organic
product.
3.Recent amendments by EQ include a requirement that all funds
collected from organic input materials fees or assessments be
placed in a new fund within CDFA called the Organic Input
Materials Fund subject to appropriation by the legislature.
The intent of this amendment by EQ is stated to give greater
oversight by the legislature over the expenditure of organic
input materials inspection dollars. However, this does create
an added step for the department, to have to segregate
AB 856 - Page 6
fertilizer inspection fees and assessments between organic and
non-organic which may increase administrative costs. The
committee may wish to consider the need for a specific fund
just for organic input materials.
PRIOR ACTIONS
Assembly Floor 76-0
Assembly Appropriations17-0
Assembly Agriculture 8-0
SUPPORT
California Certified organic Farmers
Organic Fertilizer Association of California
Western Plant Health Association
OPPOSITION
None received