BILL ANALYSIS �
SENATE AGRICULTURE COMMITTEE
Senator Anthony Cannella, Chairman
BILL NO: AB 2682 HEARING: 07/03/12
AUTHOR: Assembly Agriculture CommitteeFISCAL: Yes
VERSION: 06/07/12 CONSULTANT: Anne Megaro
Agriculture.
SUMMARY:
Existing law:
1. Permits the California Science Center to establish a
space-age museum in its building at Exposition Park in the
City of Los Angeles.
2. Provides for a 1% assessment on gross sales of varieties
and species of fruit trees, nut trees, and grapevines, with
exceptions. Funds are used for research programs,
specifically the University of California Foundation Plant
Services program (FPS), which produces, tests, maintains
and distributes premium foundation-level virus and
disease-tested plant materials for use by California
nurseries.
3. Provides definitions for "milk products plant" and
"handler" of milk products.
4. Provides classifications for milk products for the
purpose of milk marketing.
5. Establishes the Dairy Council of California which shall
consist of 24-25 members, nominated by dairy producers,
producer-handlers, and handlers, and appointed by the
secretary of CDFA. Existing law also provides for
nomination procedures and assessment fees.
6. Establishes the California Walnut Commission for the
efficient development and management of a national and
international advertising and promotion program that will
enhance the reputation and competitiveness of the
California walnut industry. In addition to an assessment
fee, the commission receives export assistance funds from
the federal government. If federal export assistance funds
are not provided for two consecutive budget years, the
funds are deemed permanently terminated and the commission
becomes inoperative, unless a referendum vote by producers
is conducted.
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This bill:
1. Permits the California Science Center to establish an
air and space center in its building at Exposition Park in
the City of Los Angeles.
2. Exempts certain species or varieties of olive trees
(table olives), or varieties of other named agricultural
produce, from a 1% annual assessment if it can be
demonstrated that no benefit is derived by these species or
varieties for programs relating to plant inspection,
quarantine and pest control.
3. Redefines "milk products plant" to not include a
properly licensed retail food facility that does either of
the following:
a. Packages dairy products in the presence of the
consumer.
b. Cuts, wraps, and packages cheese, excluding
cottage cheese, that is purchased from a licensed
manufacturer of milk products, labels the products
pursuant to all applicable state and federal laws, and
sells the product only to consumers on the premises of
the retail food facility.
4. Classifies kefir from a class 1 to a class 2 milk
product for the purposes of milk marketing, and to conform
to federal standards.
5. Redefines "handler" of milk products to include any
person who secures custom processing services on an ongoing
basis.
6. Amends language relating to the Dairy Council of
California:
a. Authorizes the secretary of the California
Department of Food and Agriculture (CDFA) to appoint
all members of the Dairy Council of California.
Members may hold office at the pleasure of the
secretary, and members who represent producers are no
longer eligible to hold office.
AB 2682 - Page 3
b. Repeals language relating to Dairy Council of
California member nominations to allow for alternative
procedures to select new members, including but not
limited to, nominations, preference voting, and
district representation. Such procedures shall be
recommended by the council and approved by the
secretary.
c. Authorizes the secretary to assess a 1%
interest rate on unpaid assessment fees for each 30
days the fee is unpaid.
7. Increases from two to three consecutive budget years the
time frame for which federal targeted export assistance
funds are deemed permanently terminated when the federal
government fails to provide these funds to the California
Walnut Commission. Also provides clarification that the
full process to avoid discontinuation of the commission be
followed if said federal funds are permanently terminated.
COMMENTS:
1.Purpose of Bill: Assembly Agriculture Committee's 2012
Omnibus bill changes designation of the California Science
Center's space-age museum to an air and space center; makes a
technical change to exempt certain varieties of olive trees
from fee assessments; classifies kefir (comparable to a
yogurt-based drink) as a class 2 milk market product; makes
technical changes to exclude grocery stores who cut and wrap
cheese from the definition of milk processors; makes technical
changes to the appointment of members to the Dairy Council of
California; makes technical changes to the rules for the
California Walnut Commission to become nonoperational. No
language in this bill is considered controversial.
2.Space Museum: The California Science Center (CSC) was
authorized to establish a space-age museum in 1996. On April
12, 2011, the National Aeronautics and Space Administration
(NASA) announced that CSC was competitively selected to
receive the Endeavor, one of the three flown Space Shuttle
Orbiters. By updating the name of the museum to conform to
standard language used in the science and space center field,
the supporters believe the new "air and space center" language
will assist the CSC Foundation in its fundraising for the
project.
AB 2682 - Page 4
3.Olives: SB 707 (Cannella/Wolk) from 2011 included olive trees
in the existing 1% gross sales fee assessment, with the intent
to only include olive trees used for producing olive oil.
This bill clarifies that the secretary may exempt trees that
produce table olives from the assessment fee.
4.Cut and wrap cheese: CDFA requires licensing of all milk
products plants which engage in the business of handling,
receiving, processing, or manufacturing milk products.
Therefore, any grocery store that cuts and wraps cheese
in-house is considered a "milk products plant" and would need
to obtain a license. Since the enactment of this provision in
1983, grocery stores are now required to obtain permits that
safeguard public health and ensure consumers that food was
handled safely. This bill provides technical changes to
exclude retail food facilities that cut and package cheese
from the definition of "milk products plant" and thus from the
requirement to obtain the corresponding license.
5.Kefir: Dairy food processors pay for milk based upon the
products in which is it used, such as fluid milk, butter,
cheese, ice cream, etc. Existing law provides for milk
product classification to categorize such products for milk
marketing purposes. Most of California's milk use
classifications are identical to those in the federal system;
however, in 2002 federal law classified kefir, similar to
drinkable yogurt, as a Class 2 product. In order for
California to remain competitive in the national market, this
bill aligns state law with federal law and reclassifies kefir
as a Class 2 product.
6.Dairy Council of California: Established in 1919, the Dairy
Council of California (DCC) serves California communities
through nutrition education programs that focus on healthy
eating and provides free nutrition lesson plans and programs
to school children and their families. DCC is a state
government entity that is solely funded by, and works on
behalf of, California dairy farmers and milk processors, and
is governed by industry-elected members. Upon review by DCC
staff and industry members, and in working with CDFA, it was
determined that definitions, election processes, and
enforcement of fees would require updates and clarifications.
7.California Walnut Commission: Established in 1987, the
California Walnut Commission (CWC) is an agency of the state
that works in concurrence with CDFA and is funded by mandatory
assessments of growers. CWC is mainly involved in health
AB 2682 - Page 5
research and export market development activities. Existing
law requires the secretary of CDFA to hold a hearing every six
years to determine whether CWC should be continued. If, after
the hearing, a substantial question exists among producers as
to whether the commission should continue, the secretary shall
schedule a referendum vote. A 1998 amendment to this section
failed to appropriately include the hearing process as
precluding the referendum vote. This bill would make the
technical change to clarify that the full hearing and vote
process is to be followed if the targeted export assistance
funds from the federal government are permanently terminated,
and increases from two years to three consecutive budget years
the time allowed for federal funding to lapse before these
funds are determined permanently terminated.
RELATED LEGISLATION:
SB 707 (Cannella/Wolk), Chapter 343, Statutes of 2011. Includes
olive trees in the existing 1% gross sales fee assessment.
AB 2218 (Woods), Chapter 289, Statutes of 1998. Changes the
conditions under which the California Walnut Commission may
exist and how a referendum vote is to be approved.
PRIOR ACTIONS:
Assembly Floor 72-0
Assembly Appropriations16-0
Assembly Agriculture 9-0
SUPPORT:
California Grocers Association
California Science Center Foundation
Dairy Institute of California
OPPOSITION:
None received
AB 2682 - Page 6