BILL ANALYSIS                                                                                                                                                                                                    �



                            SENATE AGRICULTURE COMMITTEE
                         Senator Anthony Cannella, Chairman

          BILL NO:    SB 549                    HEARING:  05/03/11
          AUTHOR:   Rubio                       FISCAL:  Yes
          VERSION:  02/17/11                    CONSULTANT:  John Chandler
          
                               Eggs: assessment fees.


          BACKGROUND AND EXISTING LAW

          Current law establishes requirements governing the regulation of 
          eggs and egg products and provides that the purpose is to assure 
          that healthful and wholesome eggs with identifiable quality 
          standards are sold and marketed in the state and to prevent the 
          deceptive or mislabeled marketing of eggs.  California 
          Department of Food and Agriculture (CDFA) is authorized to adopt 
          regulations on the market and marketing of shell eggs including 
          packaging, sampling procedures, branding, advertising, 
          registration, grade standards, inspection, size and appearance, 
          and other matters related to shell egg production and marketing.

          Current law requires egg handlers and producers pay a maximum 
          assessment of $0.05 per 30 dozen eggs sold in the state.  Out of 
          state egg handlers and producers must report and pay the 
          assessment on egg sales into California sold to a producer, 
          retailer, handler, or breaking point.  The Secretary of CDFA may 
          establish a lower assessment rate that reasonably covers the 
          cost of administration and enforcement of the shell egg program. 
           The current assessment rate is at the maximum allowable of 
          $0.05 per 30 dozen eggs. 

          PROPOSED LAW

          SB 549 would increase the assessment on in-state and out of 
          state eggs from $0 .05 per 30 dozen to $0.15 per 30 dozen and 
          include egg products from out of state to the assessment.  
          Further, the bill specifies that the Secretary of CDFA must 
          collect a lower fee assessment rate if the funds exceed the 
          program's enforcement and administrative costs.

          COMMENTS

          1.Supporters of SB 549 state that the increase in the assessment 
            cap on the shell egg program would provide funds for increased 
            enforcement and a more vibrant inspection program.  In 2010, 
            hundreds of Californians were sickened by an outbreak of 
            Salmonella associated with shell eggs produced in several 




          SB 549 - Page 2


            mid-western states which resulted in an egg recall.  Such 
            health-related outbreaks highlight the importance of a fully 
            funded food safety program for eggs sold in California.  SB 
            549 ensures that the shell egg program will be adequately 
            funded for the future.  

          2.SB 549 increases the maximum assessment from $0.05 to $0.15 
            per 30 dozen.  This is 300% more than the current shell egg 
            assessment cap.  Since the original implementation of the egg 
            assessment, it has taken many years to reach the current 
            maximum.  The committee may wish to consider if we really need 
            such a large single increase in the egg assessment maximum.  


          SUPPORT
          
          California Grain and Feed Association
          Pacific Egg & Poultry Association

          OPPOSITION
          
          None received