in the KNOW

July 6, 2012

High Speed Rail Funding Approved by Legislature

The Legislature this week approved a measure, SB 1029, funding construction, planning and design of California’s controversial high-speed rail system.

Specifically, the measure appropriates $5.8 billion to begin the first leg of the system in the Central Valley–$3.2 billion of which would derive from federal funds and $2.6 billion from state bond funds. Close to another $2 billion would be allocated to improve regional rail in San Francisco and Los Angeles and connect those local systems to high-speed rail.

The high-speed rail system is estimated to cost a total of $68 billion. The remaining sources of funding to complete the system are indefinite. A September 2017 federal deadline must be met to complete the first segment in the Central Valley.

As many Ag Council members know, the proposed high-speed rail route splits some farms in half and significantly impacts operations in one of the most agriculturally productive regions in the country. Several county Farm Bureaus are extremely concerned about the project, while some have stated outright opposition, as have numerous Ag Council members.


Water Bond

This week, the Legislature approved a measure delaying the water bond until the November 2014 ballot.  The measure, AB 1422, is authored by Assemblyman Henry T. Perea (D-Fresno).

The water bond was set to be placed on the November 2012 ballot, but Governor Jerry Brown and others are concerned about having the Governor’s approximately $6 billion tax hike plan on the same ballot as the $11 billion water bond, fearing voters would reject both measures.

If AB 1422 is signed by Governor Brown, this would be the second time the water bond has been delayed.  Governor Arnold Schwarzenegger first postponed the water bond from its original November 2010 vote due to the lack of voter support.

AB 1422 now moves to Governor’s desk for his consideration


Proposition 65

On an issue of importance to many Ag Council members, the state Office of Environmental Health Hazard Assessment (OEHHA) recently issued a proposed regulation to establish a Proposition 65 Maximum Allowable Dose Level (MADL) for sulfur dioxide (SO2).

In its proposed rule, OEHHA concluded that “consumption by the average consumer of dried fruit treated with SO2 will not result in exposure to SO2 exceeding the proposed MADL.  Therefore, a warning is not required under Proposition 65 at this time for exposure to SO2 from consumption of dried fruit.”

Proposition 65 was enacted as a ballot initiative in November 1986 and was intended to protect Californians and the state’s drinking water sources from chemicals known to cause harm and to inform citizens via labeling or signage about exposure to such chemicals.

However, Proposition 65 has led to unintended consequences towards California agriculture.  The recently announced proposed rule has been a high priority regulatory matter for Ag Council and many of our members because healthy California-grown foods can be negatively impacted by Proposition 65 listings and labels.

Please contact our office at ph 916.443.4887 if you would like further details about the proposed rule.  Click HERE to read the regulatory notice and for information about submitting comments to OEHHA.  Comments are due by 5 p.m. on August 20, 2012.


Perea Holds Cap and Trade Forum

Assemblyman Henry T. Perea (D-Fresno) held a Cap and Trade Forum last week in Fresno to discuss how the state cap and trade regulation is being implemented.  The Forum gave stakeholders, including Ag Council and its members, an opportunity to raise concerns about the regulation and encourage support of actions that will help the ag community.  Ag Council was a sponsor of the Forum.

Dino Giacomazzi and Karri Hammerstrom speaking at the Forum

Two Ag Council members spoke at Perea’s Forum last week to provide stakeholder input.  Dino Giacomazzi, a dairyman with Land O’Lakes, and Karri Hammerstrom, a peach grower, who is a member-owner with the California Canning Peach Association.

Giacomazzi spoke about the significant investments Land O’Lakes has made in order to meet current regulations, which exemplifies efforts being undertaken in the Central Valley.

He said, “Land O’Lakes has invested heavily in the latest technologies making our manufacturing plants more efficient.  We invested over $4 million dollars on a new boiler and steam system since 2009.  It includes ultra-low emissions burners, predictive emissions modeling and complex condensate return systems.  Land O’Lakes converted two of our drying plants from natural gas fired to steam heated since 2009 in an effort to reduce emissions and make a higher quality, more marketable product.  Even though these technologies are some of the most advanced available, they are now not adequate when measuring our emissions versus AB 32.”

Hammerstrom spoke about the substantial trade pressures on California crops.  She said, “Agricultural products are very sensitive to low-cost competitors in domestic and international markets. The California Department of Food and Agriculture reveals that, of the top 10 commodities in our state, over half are exposed to international trade issues.”

She gave an example of cling peaches, where imports of canned peaches from China to the U.S. tripled from 2006 to 2011 resulting in nearly 70 percent of canned peach imports coming from China.

Hammerstrom continued, “Under the cap and trade regulation, the Air Resources Board (ARB) designated food manufacturers in the medium leakage category.  The determination of the leakage category is partly based on the ability to pass on costs along with domestic and international trade pressures.  In this medium leakage category, ARB is essentially saying there are some issues in food manufacturing relating to cap and trade, but those issues are not meaningful enough to cause substantial damage to the industry.”

Food manufacturers are a key downstream partner for farmers–who would not have a ready market for their crops without the food manufacturers.  As a result, both Giacomazzi and Hammerstrom expressed support at the Forum for Ag Council’s ongoing effort to move food manufacturers from the medium emissions leakage to high emissions leakage category under the cap and trade regulation.  Such action would help minimize the cost impacts on California’s food manufacturers, thereby alleviating some of the negative effects of the regulation on our agricultural community. 

Ag Council President, Emily Rooney, also spoke at the Cap and Trade Forum.  With the first official auction of cap and trade allowances starting in November, the Legislature will need to appropriate auction revenues soon.  Given this, Rooney focused her comments on encouraging Perea’s support for investing a portion of cap and trade auction revenues in agricultural practices that reduce greenhouse gas emissions in the first years of the program.  Examples include partnerships through cost-share grants or rebates on next generation technologies to incentivize further emissions reductions.

Ag Council remains actively involved in the cap and trade regulatory process on behalf of our members.  Click HERE for a video of Ag Council President, Emily Rooney, recently speaking before the Air Resources Board.


Legislature Hits Policy Deadline

This week was the final week of 2012 that state legislators could hear and report bills out of policy committees, per the legislative calendar.  The Assembly formally adjourned yesterday for its summer recess, and the Senate is expected to adjourn later today.  The Legislature reconvenes for business on August 6, 2012, and the last day for fiscal committees to meet and report bills is August 17, 2012.


Labor Bills

Heat Illness
As discussed in a previous newsletter, one of the most troubling measures moving through the Legislature is AB 2346 authored by Assemblywoman Betsy Butler (D-Torrance).  AB 2346 is an onerous state measure relating to heat illness on farms.

AB 2346 singles out agriculture and would implement civil and criminal liability provisions relating to heat illness on farms that are not necessary given that the state already has a well-structured regulation in place to protect farmworkers from heat illness.

AB 2346 is supported by the United Farm Workers.  The bill is currently pending consideration in the Senate Appropriations Committee.  Ag Council continues to oppose the measure along with a coalition of agricultural organizations.

Overtime Wages
AB 1313, authored by Assemblyman Michael Allen (D-Santa Rosa), would repeal current state law where agricultural workers are paid overtime wages after 10 hours of work and replace it with a requirement that overtime be paid after an eight hour workday/40 hour work week.

No other state requires overtime pay for agricultural workers once they have exceeded 40 hours of work in a workweek, and California is the only state currently requiring overtime pay after a 10 hour workday for agricultural workers.

AB 1313 will next be considered in the Senate Appropriations Committee.  Ag Council continues to oppose this bill because, among other concerns, it would make the California ag community less competitive against other states and foreign countries by increasing production and labor costs.


Next Newsletter will be August 10

Due to the legislative recess, Ag Council’s In the Know newsletter will return on August 10.  In the meantime, if there is any pertinent news, we will be sure to communicate it to our members.