BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           140 (Corbett)
          
          Hearing Date:  5/11/2009        Amended: 4/28/2009
          Consultant:  Bob Franzoia       Policy Vote: Ag 4-1
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          ____
          BILL SUMMARY:  SB 140, an urgency measure, would require the  
          Department of Food and Agriculture (department) to establish the  
          Citrus Nursery Stock Pest Cleanliness Program.  This bill  
          specifies the contents of the program, including the requirement  
          that a person who produces citrus stock shall comply with all  
          agricultural practices, application specifications, and  
          deadlines, eligibility, inspection, isolation, notification,  
          pest control, records maintenance and availability,  
          registration, sanitation, testing, and compliance with orders  
          issued by the department.  This bill would authorize the  
          department to adopt regulations and to issue orders establishing  
          rates or prices to cover the department's costs for its  
          administration, testing and inspection services.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           Citrus Nursery Stock Pest         Up to $125      Up to $250Up  
          to $250                Special*
          Cleanliness Program                                     

          * Department of Food and Agriculture Fund
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          ____

          STAFF COMMENTS:  Food and Agriculture Code 6971 provided for an  
          annual assessment not to exceed one percent on the gross sales  
          of all citrus fruit trees, except seedlings and rootstock, for  
          the previous citrus inspection program.  However, pursuant to  
          Chapter 154/2000 (AB 2006, Dutra) this section was repealed on  
          January 1, 2006.  (It is unclear how, or if, the department is  
          funding citrus tree inspection activities.)  This bill requires  
          the department to establish a citrus nursery stock inspection  
          program and permits, but does not require, the department to  
          establish rates or prices to cover its cost.  Staff recomends  
          the bill be amended to require the department to establish rates  










          or prices to cover its costs.
           
          The farm gate value of a cultivated product in agriculture is  
          the net value of the product after marketing costs have been  
          subtracted.  Since many farms do not have significant marketing  
          costs, it is often understood as the price of the product at  
          which it is sold by the farm (the farm gate price).  The farm  
          gate value is typically lower than the retail price as it does  
          not include costs for shipping, handling, storage, marketing,  
          and profit margins.  According to this bill, the farm gate value  
          of citrus trees produced by California's nurseries is $25  
          million.  Using the previous assessment of up to one percent of  
          gross sales, if the department estabishes a similar assessment  
          (minus seedlings, rootstock, and nursery stock license fees), up  
          to $250,000 would be available annually to fund this program.  

          This bill is similar to SB 1466 (Corbett) 2008 which was held on  
          the Assembly Appropriations Committee's Suspense File.