MAY 16, 2008 California Farm Bureau Federation Friday Review

Governor Schwarzenegger released his revised budget proposal on May 14 and, as expected, the state’s budget dilemma has worsened since January. The newly estimated $17.2 billion shortfall would be closed with the following proposed solutions:

• $5.1 billion in borrowing by securitizing state lottery payments.
• $4.3 billion in cuts to education, similar to what was proposed in the January budget but the governor’s original proposal to suspend the constitutionally required spending levels for K-14 education have been dropped.
• $3.7 billion (approximately) in other cuts contained in the January proposed budget. The Governor has, however withdrawn his proposals to close state parks and to release 22,000 prisoners early.
• $2 billion in accounting changes.
• $1 billion (approximately) in various other one-time revenues, including special funds loans and transfers and the acceleration of the fees charged to Limited Liability Companies.
• $828 million diversion of sales tax on gasoline and other public transit funds to General Fund purposes.
• $627 million in major new cuts to health and human services.

The governor’s plan to securitize the lottery is connected to his budget reform proposal and would require voter approval. The governor believes that the $15 billion can be achieved while maintaining the lottery's current $1.2 billion support for schools. In the event the voters reject the lottery proposal, the governor is proposing a one-cent sales tax increase to replace the funds that otherwise would come from the lottery securitization.

Many of the program cuts that were proposed in January that are special interest to farmers and ranchers were maintained in the new proposed budget:

• Retains proposal to reduce Williamson Act subventions by 10 percent for a cut to county governments of $3.9 million in 2008-09.
• Retains proposal to reduce $9.5 million (General Fund) from the Department of Food and Agriculture’s budget, eliminating Diaprepes Root Weevil detection and Eradications, reduce Pierce Disease and Fire Ant controls, reduce livestock health inspections, and reduce funding for county agricultural commissioners' measurement standards programs.
• Retains proposal to increase $7.5 million (Motor Vehicle Account/General Fund) and 117.5 positions to operate all statewide border inspection stations full time to inspect all commercial and private vehicles.
• Retains proposal to cut $1.9 million from the Small/Rural Sheriffs Grant program that provide resources for discretionary law enforcement purposes.
• Modifies the proposed surcharge on those who hold insurance on all residential and commercial property statewide, by creating a two-tiered charge based on differing risk: 1.40 percent on those structures in areas designated as high-hazard zones in terms of earthquake, fire, or flood, as determined by Office of Emergency Services and Department of Forestry and Fire Protection risk maps, and 0.75 percent on those structures in low-hazard zones. Funds generated from this proposal will be used to offset an otherwise $49.1 million reduction in General Fund support for fire protection programs and fund $28.9 million for 4 member crews on all state fire engines during peak and transition fire seasons.
• Retains proposal to appropriate $126.5 million (Proposition 1E) to continue statewide evaluation and repair of system levees.
• Retains proposal to augment $61.7 million (Proposition 84) over five years and 25.4 new positions for the following activities: climate change evaluation and adaptation; urban/agricultural water conservation; surface storage studies; flood management and water supply integration; CA water plan implementation; development of the delta vision and plan.

·        Retains proposal to reduce $7.1 million (General Fund) from various programs and will have impacts on flood protection, water management, and may increase fees for watermaster services.

• Retains proposal to augment $3 million (reimbursement authority) to implement the Salton Sea Restoration and Management Program.

A bill that would allow counties to defer the December 2008 property tax payment for farmers in various counties who suffered losses resulting from the January 2007 freeze, October 2007 wildfires and the October 2007 windstorm was approved by the Senate Revenue and Taxation Committee. SB 1562 (Dennis Hollingsworth, R-Murrieta) would authorize the following counties, those affected by these governor-declared disasters, to adopt an ordinance allowing the deferral:

Freeze:             El Dorado, Fresno, Imperial, Kern, Kings, Madera, Merced, Monterey, Riverside, San Luis Obispo, San Bernardino, San Diego, Santa Barbara, Santa Clara, Stanislaus, Tulare, Ventura, and Yuba.

Wildfires:          Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura.

Windstorm:       Riverside.

If a board of supervisors in the affected counties adopts the deferral ordinance, farmers facing a 60 percent or greater revenue loss would be allowed to defer their next property tax payment without penalty or interest until December 2009. Applications for the deferral would have to be made by the qualifying taxpayer by November 1, 2008. Farm Bureau testified in support of the measure that was approved unanimously.

Farm Bureau’s sponsored bill, AB 2168 (Jones, D-Sacramento), passed out of the Assembly Appropriations Committee on consent on Wednesday. This bill will allow farmers to sell processed agricultural products, such as jams, dried fruits, olive oil, etc. at their farm stands without being classified as Retail Food Facilities and therefore, subject to all of the requirements under the California Retail Food Code. The bill now moves to the Assembly floor where it is scheduled to be placed on the consent calendar.  

CFBF testified Monday before the Senate Budget and Fiscal Review Committee’s Subcommittee No. 2 on agricultural water runoff supplemental report language. The background write up from committee staff stated that “agricultural nonpoint source (NPS) pollution is the leading source of water quality impacts on surveyed rivers and lakes, the second largest source of impairments to wetlands, and a major contributor to contamination of surveyed estuaries and groundwater.” Staff went on to say “agricultural activities that cause NPS pollution include poorly located or managed animal feeding operations; overgrazing; plowing too often or at the wrong time; and improper, excessive, or poorly timed application of pesticides, irrigation water, and fertilizer.”

Committee staff recommended that the Subcommittee adopt the following supplemental report language:

“On or before January 30, 2009, the State Water Resources Control Board shall submit a report to the Joint Legislative Budget Committee and to the relevant policy committees that details: 1) the precise actions the SWRCB would have to undertake to obtain a 30 percent reduction to agricultural pollution runoff into the Sacramento-San Joaquin Delta and its tributary watersheds in two scenarios – by 2010 and by 2015; 2) the estimated costs of those actions; and 3) which of those actions can be completed administratively and which would require legislation to implement.”

CFBF, the Northern California Water Association and Western Growers Association will meet with Senators Alan Lowenthal (D-Long Beach) and Darrell Steinberg (D-Sacramento) to explain that the proposed language does not actually make sense within the context of the Porter-Cologne Act because the Act establishes water quality standards to protect designated beneficial uses of the Central Valley waterways. The Porter-Cologne Act enforced by the State Water Resources Control Board (SWRCB) and Central Valley Regional Water Quality Control Board (CVRWQCB) already requires irrigators to meet those water quality standards, in order to ensure that beneficial uses of those waterways are protected. Porter-Cologne does not function through arbitrary percentage reductions of discharges, which may be too little or too much. Rather, the Porter-Cologne Act sets water quality standards, and requires dischargers to meet them, and existing agricultural regulations in the Central Valley do precisely that.

The SWRCB and CVRWQCB are actively engaged in regulating agricultural drain water quality through the Irrigated Lands Regulatory Program (ILRP). The ILRP is a comprehensive regulatory program with significant requirements that protect water quality. The ILRP requires monitoring and reporting for the tributaries of the Sacramento-San Joaquin Delta. When water quality issues are identified, farmers, ranchers and landowners are required to prepare management plans that describe corrective action and submit them to the CVRWQCB.

The ILRP has been the subject of much controversy, but has been generally upheld in multiple challenges to the SWRCB as well as in the courts, and it is important that it continue to be implemented successfully.

The proposed language, while it may appear simple on its face, would result in a rather significant change in direction for the existing program, requiring a complete and expensive re-design of the monitoring program. The monitoring and analysis and response done to date would be worthless. The Board staff would be redirected from continuing to implement a successful program into a new type of program, with different goals, which may not actually accomplish the desired environmental goal, and would certainly sidetrack current water quality improvements.

SB 1404 (Alan Lowenthal, D-Long Beach) is on Senate third reading and only received one no vote in the Senate Agriculture Committee. This bill was amended to require any wholesale establishment or distributor that sells plants in containers of 5 gallons or less, with the exception of stock that is sold directly to growers, to provide a label indicating the approximate water use of each plant for 6 climate zones. CFBF believes its nursery members have been proactive on the issue of water conservation by providing the watering and other growing needs on labels of the plants they sell, making SB 1404 unnecessary. Additionally, the California Department of Food and Agriculture does not currently have an inspection or enforcement program in place for this purpose and without funding would have to look to our members to pay for this program through increased fees. CFBF understands the need to educate consumers about water efficiency, but SB 1404 targets our nursery members rather than those that hold the watering hose. CFBF is opposed but continues to discuss our concerns with the author.

SB 1527 (Leland Yee, D-San Francisco), which would require the Department of General Services (DGS) and the Department of Food and Agriculture (CDFA) to negotiate with the Daly City to determine the fair market value of the 13-acre overflow parking lot for the Cow Palace, was approved by the Senate Government Organization Committee. The proceeds from any sale would go to the Fair and Exposition Fund for the benefit of the Cow Palace. The “Friends of Cow Palace” continued to push the committee to allow the lease of the land instead of selling in fee, but the recommendation fell on deaf ears. The committee approved the bill unanimously with one recommended amendment to clarify that the property is not being declared surplus. This amendment was deemed necessary to avoid a potential constitutionality question since the proceeds would go into the F&E Fund instead of the Special Fund for Economic Uncertainties as required by Section 9 of Article III. The bill will next be heard in the Senate Appropriations Committee where the clarifying amended will be added.

Former Assembly Speaker Fabian Núñez (D-Los Angeles) has stated he is working on a bill to provide agricultural employees with a new way to select a union as their collective-bargaining agent (CBA). Currently, the only way is by secret-ballot election conducted by the Agricultural Labor Relations Board. Núñez reportedly said he is exploring “having them go absentee like absentee ballots.” Once he develops it, he will amend his new plan into his AB 2386, an unrelated measure.

Last year, Gov. Schwarzenegger vetoed two bills that would have amended the Agricultural Labor Relations Act to let a union become the CBA of a farmer’s ag employees by gathering enough cards signed by them to evidence majority support. Both of these so-called “card-check” bills failed to protect the free association rights of farm employees by stripping them of their right to a secret-ballot election and replacing it with an unprotected process called a “majority sign-up election.” This type of scheme not only undermines the right of employees to cast their ballots in a secure, private election booth free from coercion, but also deprives them of the opportunity to hear and consider other viewpoints on unionization.

AB 2714 Rick Keene (R-Chico) passed out of the Assembly on a 76-0 vote. The bill continues to sail through the legislative process with no opposition and is scheduled for hearing in the Senate Transportation and Housing committee on June 10. The bill will amend the vehicle code to address the “loss of load” issue presented by the incidental loss of hay or straw chaff from trucks hauling hay on the highway. CFBF sponsored the bill.

SB 1663 Jeff Denham (R-Merced) is now in the Assembly waiting for a committee assignment having passed out of the Senate on a 40-0 vote. The bill will make grant money available from existing funds, to provide financial assistance to agricultural businesses for the transportation and disposal of used and waste tires and for the cost of removal and disposal of illegally dumped tires. CFBF is in support.

AB 2402 Doug La Malfa (R-Chico) has been referred to the Senate Transportation and Housing Committee for hearing. The bill will extend the amount of time that a commercial motor carrier can be stopped, parked, or left standing within a roadside rest area or viewpoint. Federal regulation requires a 10-hour rest period for truckers, current California law only allows for parking in a rest area or similar location for 8-hours before towing or citation. CFBF is in support.

AB 2065 Loni Hancock (D-Berkeley) would require any private or public entity that owns or manages a water storage reservoir or waterway to assess the vulnerability for the introduction of invasive aquatic mussel species. The measure would also require a monitoring and control program to prevent the introduction of that species. Farm Bureau has not yet taken a position and is working with the author to amend the bill to exclude reservoirs and waterways on private property that do not have public access.