BILL ANALYSIS
AB 1401
Page 1
ASSEMBLY THIRD READING
AB 1401 (Ma)
As Amended May 5, 2009
Majority vote
AGRICULTURE 8-0 APPROPRIATIONS 16-1
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|Ayes:|Galgiani, Tom Berryhill, |Ayes:|De Leon, Nielsen, |
| |Conway, Fuller, Ma, | |Ammiano, Charles |
| |Mendoza, Yamada, Bonnie | |Calderon, Davis, Duvall, |
| |Lowenthal | |Krekorian, Hall, Harkey, |
| | | |Miller, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Audra Strickland, |
| | | |Torlakson, |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Creates a fund and program, as specified, to assist
farmers who are transitioning from conventional farming
practices to certified organic practices. Specifically, this
bill :
1)Cites this as the Transition to Organic Act (Act), and
requires it to be interpreted in accordance with the National
Organic Program (NOP) and the California Organic Products Act
of 2003 (COPA).
2)Provides the following definitions for purposes of this Act:
a) "Uncertified farm" means any farm or portion thereof
that is not certified in accordance with NOP or COPA and
has submitted a pesticide use report prior to January 1,
2010; and,
b) "Person" means an individual, group or individuals,
corporation, association, organization, cooperative or
other entity.
3)Creates the Transition to Organics Fund (Fund), defines it as
not a fund of the state treasury, and permits deposits to be
deposited in the state treasury, a bank or other depository
approved by the Department of Finance. Without regard to
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other provisions of law, money deposited cannot be transferred
to another fund, encumbered or expended except for purposes
provided by this Act.
4)Requires the Fund to consist of moneys from federal, industry,
and citizen sources and prohibits deposits from the state
general fund.
5)Requires the Fund to be administered by the Secretary
(Secretary) of the California Department of Food and
Agriculture (CDFA) and permits the adoption of regulations to
carryout this Act. Requires expenditures from the Fund to
only the following:
a) Provide financial assistance to transitioning farmers
pursuant to the following procedures:
i) Once such a farm, is certified to sell organic
products, the Act permits them to apply and receive up to
a 25% reimbursement of the costs to obtain organic
certification, including inspection fees, application
fees and annual fees, for the first year of
certification; and,
ii) Restricts the maximum payment to any such farm to
$250 with payments made on a first come, first serve
basis, contingent upon sufficient funds being available
in the Fund.
b) Restricts administrative and operational expenses not to
exceed 10% of the total moneys deposited into the Fund;
c) Permits the Secretary to administer the Fund in
coordination with the procedures associated with the
federal Organic Certification Cost-Share program;
d) Requires the Secretary to receive, accept and deposit
moneys on behalf of the Fund from any combination of
persons, state or federal agencies; and,
e) Requires the Secretary to keep records of contributions
and disbursements of the Fund; these records are to be
publicly available, and requires them to be available to
the California Organic Products Advisory Committee.
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EXISTING FEDERAL LAW provides for the establishment of
regulations of food for humans, food for pets, livestock feed
and raw agricultural products when using, on a principal display
panel (label), the word "Organic." The enabling NOP regulations
were finalized and adopted in December 2001 under the
authorization of the federal Organic Foods Product Act, which
was created in 1990. Regulations provide definitions,
enforcement procedures, registration fees for certification and
procedures, requirements for becoming a certifier, and listing
of allowed and prohibited substances that are updated annually.
The federal Organic Certification Cost-Share program provides up
to 75% of the certification cost, up to a maximum of $750.
EXISTING LAW :
1)Protects the consumers, producers, handlers, processors and
retailers by the establishment of standards under which fresh
agricultural products and foods may be labeled and sold as
"organic."
2)Provides definitions, enforcement, program procedures, an
advisory board, inspections, penalties, a certification
process, fees, and regulations.
3)Coordinates enforcement activities with the California Organic
Products Advisory Committee, the United States Department of
Agriculture and California County Agricultural Commissioners.
4)Expands the Act to include seed fiber, and horticultural
products sold or labeled as organic.
5)Conforms the Act to the NOP and renames COPA.
FISCAL EFFECT : According to the Assembly Committee on
Appropriations, the Fund would optimally receive $100,000
annually to provide at least 300 transitioning farmers a $250
stipend and provide enough money for administration of the Act.
The bill prohibits the use of the state's General Fund for this
Act.
COMMENTS : Transition from conventional to organic farming
creates many challenges, it take at least three to become
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certified organic. Organic or transitioning farmers cannot use
synthetic fertilizers and can only use approved pesticides, and
such products are often more expensive and less familiar to the
farmer. During this time the farmer must comply with organic
growing requirements but cannot sell products as organic. The
sponsors state that these financial challenges discourage many
farmers from converting to organic practices.
Currently, the California Department of Food and Agriculture has
an agreement with NOP to administer the federal Cost-Share
Program, which can provide to organic farmers, processors and
handlers who are eligible, up to 75% or a maximum of $750 of
their costs to be certified as organic. This is funded by a
limited pool of federal funds which is estimated to be expended
over the next two years. AB 1401 proposes to create a similar
program to the federal cost-share program to encourage farmers
interested in transitioning to organic practices and provide an
economic incentive once they have reached certification status
but unlike the federal program, AB 1401 proposed to cover the
cost of certification for only the first year after the
transition and limit that amount to a maximum of $250.
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084
FN: 0000713