in the KNOW

October 12, 2012

Ballot Recommendations

No on Prop 37

Proposition 37 mandates labeling of raw or processed food as genetically engineered if the food is for sale to consumers and produced from plants or animals with genetic material changed in certain ways.

Ag Council opposes Prop 37 because it creates a private right of action against family farmers and food processors, increases the cost of food, and prohibits marketing as “natural” any products that are processed in any way, even if a crop is not genetically modified.  Prop 37 exempts alcohol, food sold for immediate consumption, meat, dairy products, certified organic food and other products.

Right to Sue Family Farmers
Prop 37 establishes private cause of action against family farmers by creating a new category of lawsuits where a private citizen can sue a farmer without any proof of harm.  Prop 37 states, “…the consumer bringing the action need not establish any specific damage from, or prove any reliance on, the alleged violation.”  The nonpartisan California Legislative Analyst Office (LAO) said in an analysis, “In order to bring such action forward, the consumer would not be required to demonstrate any specific damage from the alleged violation.”  Given this, Prop 37 places family farmers and food processors, who have done nothing wrong, at enormous risk for lawsuits.

According to an October 2012 advisory by Alston & Bird LLP, Prop 37 advocates “are the same plaintiffs’ attorneys that have been litigating Prop 65 since it was enacted by California voters in 1986.”  Prop 65 requires warnings in California for about 800 chemicals known to cause cancer, birth defects or reproductive harm.  Some trial lawyers have misused the law leading to around 16,000 lawsuits and nearly $500 million in settlement costs mostly going into the pockets of lawyers for fees and costs.

Higher Food Prices
Prop 37 will increase food costs for Californians.  According to a July 2012 economic study by Northbridge Environmental Management Consultants, “total annual consumer cost to pay for the changes made to the food supply in the initiative range from $4.5 to $5.2 billion.”  Also, the study shows families would pay an average of $350 to $400 per year more for groceries, which will hurt struggling California families at a time when they can least-afford it.

In addition, a September 2012 study by University of California (UC), Davis agricultural economics professors reveals Prop 37 will lead to $1.2 billion in higher costs for farmers and food processors alone, as well as higher consumer costs and more regulations.  UC Davis, Agricultural and Resource Economics professors Julian Alston and Daniel Sumner, said, The proposed regulations have no basis in science and impose rules that would have significant costs for food producers, processors and marketers, and ultimately for consumers, while providing misinformation and no demonstrable benefits.”

Bans “Natural”
Prop 37 prohibits marketing as “natural” any products that are processed in any way – even crops that are not genetically modified. Processing is defined in Prop 37 as anything that has been subject to “canning, smoking, pressing, cooking, freezing, dehydration, fermentation or milling.” For example, raw nuts could be marketed as natural, but if they are roasted, salted or canned, the nuts cannot be marketed as natural.

Unsupported by Science
Finally, Prop 37 is not supported by scientific evidence.  Recently, the American Medical Association (AMA) adopted a formal statement opposed to the mandatory labeling of genetically engineered, or bioengineered, foods.  The AMA said, “Our AMA believes that as of June 2012, there is no scientific justification for special labeling of bioengineered foods, as a class, and that voluntary labeling is without value unless it is accompanied by focused consumer education.”

Armed with these facts, Ag Council encourages you to vote no on Prop 37.

Yes on Prop 32

Proposition 32 would ban corporations and public and private sector unions from using payroll-deducted funds for political purposes and prohibit unions and corporations from directly contributing to political candidates.

Prop 32 would prevent one of the most troubling misuses of taxpayer funds, which has garnered national attention.  Currently in our state, public sector unions use taxpayer dollars—in the form of payroll-deducted funds—from about one million public employees to influence legislation and elect candidates.  A March 2012 analysis by the California Public Policy Center shows California’s public sector unions alone are spending about $250 million a year to affect the outcome of local, state and federal elections.  Taxpayer funds have most recently been used by public sector unions to support state tax increases and obstruct pension reform in California.

Voluntary employee contributions for political purposes are allowed under Prop 32 through mechanisms such as a political action committee.  Contribution activity will require written consent.    If passed by voters in November, Prop 32 will primarily impact unions since corporations typically do not use automatic deductions to fund political campaigns.

Government contractors are also barred under the ballot measure from contributing money to government officials who award them contracts.

Ag Council supports Prop 32 because there is a compelling need to improve California’s political process, and Prop 32 is a step in the right direction.

Ag Council’s Board of Directors did not take formal positions on the remaining November ballot measures.  If you are a member and you would like further information, please contact our office at ph. (916) 443-4887.

Legislative Wrap-Up

The Legislature completed its session in the early morning hours of September 1.  Governor Jerry Brown was then tasked with considering over 700 bills on his desk before the September 30 deadline, as required under our state Constitution.  In the end, the Governor vetoed close to 13 percent of those bills during the month of September.  Non-urgency bills approved by the Governor become effective on January 1, 2013 (most bills fall into the non-urgency category).

Below is an overview of some of the state measures affecting agriculture in 2012 and the status of those bills.

Vetoed by the Governor

Heat Illnesss
Ag Council thanks Governor Jerry Brown for his veto of both heat illness measures pending on his desk, AB 2346 by Assemblywoman Betsy Butler (D-Torrance) and AB 2676 by Assemblyman Charles Calderon (D-Whittier).

To read the Governor’s veto statement regarding AB 2346 (Butler), click HERE. The veto statement for AB 2676 (Calderon) is available HERE.

The bills were unnecessary given that our state has a heat illness regulation already in place that is saving lives, and the existing regulation is supported by agriculture.

Ag Council and many other ag and business organizations worked to advocate for the vetoes.  Ag Council was heavily engaged with the Governor’s staff and his administration officials in the hours preceding the veto.  Thank you to all of our members who reached out to the Governor to assist in this effort.

Failed to Move out of the Legislature

Overtime Wage
AB 1313, authored by Assemblyman Michael Allen (D-Santa Rosa), would have repealed current state law where agricultural workers are paid overtime wages after 10 hours of work and replaced it with a requirement that overtime be paid in agriculture after an eight hour workday/40 hour work week.  During the final hours of the legislative session, the overtime wage measure failed to garner sufficient votes and the bill is dead for the year.

Ag Council believes this bill, or a similar measure, is likely to return in the next legislative session.  Ag Council will continue to oppose it 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.

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

Bills Signed Into Law

(not a comprehensive list)
State Water Resources Control Board
SB 965, authored by Senator Rod Wright (D-Los Angeles), makes due process improvements at the State Water Resources Control Board (Board) by addressing ex parte communications.  Ag Council was a vocal advocate of SB 965 because it eliminates existing communications hurdles by allowing Board members to directly learn about issues pending before the Board from stakeholders themselves.

SB 965 gives Board members increased access to information in order to help them make the most educated decisions without weakening environmental protections.

Passage of SB 965 was hard-fought in the Legislature.  Ag Council thanks Governor Brown for signing the bill into law.

Renewable Energy
A renewable energy bill authored by Senator Michael Rubio (D-Shafter), SB 1122, was signed into law by Governor Jerry Brown.  Ag Council supports SB 1122, which facilitates methane capture before it enters the atmosphere allowing the methane to be used to generate renewable power. Sources of methane include food and agricultural facilities, animal waste facilities, farms and waste water treatment plants.

SB 1122 requires the California Public Utilities Commission, within the feed-in-tariff program, to include an additional 250 megawatts of bioenergy projects that begin operation on or after June 1, 2013.

Senator Rubio said, “I thank Governor Brown for signing SB 1122 and allowing our state to harness the huge untapped potential from renewable biomass and biogas projects.”

Read Senator Rubio’s full statement HERE.

Climate Change
The Legislature approved and the Governor recently signed a bill, AB 1532, regarding cap and trade revenue investments.  The bill, by Assembly Speaker John Perez (D-Los Angeles), establishes a public process and criteria to determine how cap and trade revenue will be spent.   AB 1532 includes sustainable ag activities that lower greenhouse gas emissions as one of the eligible areas of cap and trade revenue investment.

As background, the state climate change law (AB 32) requires that greenhouse gas emissions be reduced to 1990 levels by the year 2020. The California Air Resources Board created the cap and trade program as the regulatory mechanism to implement AB 32.  Entities emitting over 25,000 metric tons of greenhouse gas emissions a year, including some Ag Council members, must abide by the cap and trade regulation.

Under Ag Council’s analysis of the regulation, some of our members will be required to purchase allowances during the quarterly cap and trade auctions, and the cost of allowances could potentially be in the millions of dollars per year for regulated entities.  The first auction of emissions allowances is in November.

Given the importance of this issue to our members, Ag Council continues to be actively involved in the regulatory process as it moves forward. Click HERE for a video.

Dairy Cattle Supply Liens
SB 592 modifies procedures in California’s dairy cattle supply lien law to provide more certainty to a dairy creditor obtaining a lien on the proceeds of a dairy’s milk products.  The bill, authored by Senator Tom Harman (R-Huntington Beach), was signed into law by Governor Brown and impacts contracts entered into after January 1, 2013.

Animal Welfare
Governor Jerry Brown signed a controversial measure backed by the Humane Society and other animal welfare groups to ban the use of dogs to hunt bears and bobcats in California.

The bill by Senator Ted Lieu (D-Torrance), SB 1221, includes exceptions, such as when a dog is guarding crops or livestock.

State Pensions
Governor Jerry Brown signed AB 340, a pension reform measure recently approved by the Legislature. The bill is authored by Assemblyman Warren Furutani (D-Long Beach).

Under the new law, all state employees (including current employees) must pay at least 50 percent of their pension benefit costs. Retirement age is raised by two years or more for new employees, and pensionable salaries are capped at the Social Security contribution and wage base of $110,100.

AB 340 was approved on the last day of the legislative session. Republicans said the measure did not go far enough to cut state costs, and Assemblywoman Diane Harkey (R-Laguna Niguel) called it an “insincere ploy to go out before the voters and say we did some pension reform.” Meanwhile, Governor Brown said it is “the biggest rollback to public pension benefits in the history of California pensions.”

Read the Governor’s full statement HERE.

AB 1492, a bipartisan bill addressing rising costs in California’s timber industry, was signed into law by Governor Jerry Brown.

AB 1492 limits liability on landowners when a fire begins on private land. It also enacts a one percent consumer tax on lumber in order to pay for strict state regulations that lead to costs on California companies that are much higher than the costs borne by timber operators in other states. In addition, the new law lengthens timber harvest plans from five to seven years.

Read the Governor’s entire statement HERE.

Fertilizer Research and Education Program
Governor Jerry Brown signed AB 2147 into law making changes to the Fertilizer Research and Education Program (FREP).  Ag Council supports this new law, authored by Assemblyman Luis Alejo (D-Watsonville), given that it allows technical assistance projects as an eligible category of funding under FREP at the California Department of Food and Agriculture.

FREP, created in 1990 under state legislation, provides funding for technical, research and education projects in California regarding the use and handling of fertilizer material.  Funding for FREP comes from a mil assessment on all fertilizer sales.

Workers’ Comp Revision
In a bipartisan deal brokered to prevent skyrocketing workers’ compensation rates, legislation to improve the state workers’ compensation system was signed into law by Governor Jerry Brown.

SB 863, by Senator Kevin De Leon (D-Los Angeles), reduces administrative costs in the appeal process and shortens the medical and legal review of workers’ compensation injuries. By offsetting costs, SB 863 provides benefit increases for injured workers. It also streamlines the permanent disability schedule.

Click HERE to read Governor Brown’s statement.

Next Newsletter – October 26, 2012

The next In the Know newsletter will be emailed to subscribers on October 26, 2012.  In the meantime, if there is any pertinent news, we will be sure to communicate it to our members.