Law:Division 20. Processors, Storers, Dealers, And Distributors Of Agricultural Products (California)

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Contents

Chapter 1. Nonprofit Cooperative Associations

Article 1. Definitions

Ca Codes (fac:54001-54004) Food And Agricultural Code Section 54001-54004



54001. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


54002. "Association" means any corporation which is organized pursuant to this chapter. An association shall be deemed incorporated pursuant to this chapter, or organized pursuant to this chapter and shall be deemed a producer of a product within the meaning of this chapter, if it is functioning under, or is subject to, the provisions of this chapter, irrespective of whether it was originally incorporated pursuant to such provisions or was incorporated under other provisions.


54003. "Member" includes members of associations without capital stock and holders of common stock in associations which are organized with shares of stock.

54004. "Product" includes any horticultural, viticultural, aquacultural, forestry, dairy, livestock, poultry, bee, or farm product.


Article 2. General Provisions

Ca Codes (fac:54031-54042) Food And Agricultural Code Section 54031-54042



54031. The purpose of this chapter is to do all of the following: (a) Promote, foster, and encourage the intelligent and orderly marketing of agricultural products through cooperation. (b) Eliminate speculation and waste. (c) Make the distribution of agricultural products between producer and consumer as direct as can be efficiently done. (d) Stabilize the marketing of agricultural products.


54032. The following are all here recognized: (a) Agriculture is characterized by individual production in contrast to the group or factory system that characterizes other forms of individual production. (b) The ordinary form of corporate organization permits industrial groups to combine for the purpose of group production and the ensuing group marketing, and the public has an interest in permitting farmers to bring their industry to the high degree of efficiency and merchandising skill evidenced in the manufacturing industries. (c) The public interest urgently needs to prevent the migration from the farm to the city in order to keep up farm production and to preserve the agricultural supply of the nation. (d) The public interest demands that the farmer be encouraged to attain a superior and more direct system of marketing in the substitution of merchandising for the blind, unscientific, and speculative selling of crops.

54033. Associations which are organized pursuant to this chapter are "nonprofit," since they are not organized to make profit for themselves, as such, or for their members, as such, but only for their members as producers.

54034. Any provisions of law which are in conflict with this chapter do not apply to any association which is provided for in this chapter.

54035. Any exemption under any existing law which applies to any agricultural product in the possession, or under the control, of the individual producer, shall apply similarly and completely to such product which is delivered by its farmer members that are in the possession, or under the control, of the association.


54036. A person, firm, corporation, or association, that is hereafter organized or doing business in this state, may not use the word "cooperative" as part of its corporate name or other business name or title for producers' cooperative marketing activities, unless it has complied with this chapter.


54037. Any corporation or association which is organized pursuant to previously existing statutes for the purpose of cooperatively marketing products as defined in this chapter or under Title 23 (commencing with Section 653aa), Part 4, Division 1 of the Civil Code shall be deemed to be organized and existing pursuant to, and by virtue of, this chapter, and all of the provisions of this chapter, and any of the restrictions and benefits of such provisions, shall apply to such corporation.


54038. Any association which is organized pursuant to this chapter is not any of the following: (a) A conspiracy, a combination in restraint of trade, or an illegal monopoly. (b) An attempt to lessen competition, to fix prices arbitrarily, or to create a combination or pool in violation of any law of this state.


54039. The marketing contracts and agreements between an association which is organized pursuant to this chapter and its members and any agreements authorized in this chapter are not illegal, in restraint of trade, or contrary to any statute which is enacted against pooling or combinations.


54040. The General Corporation Law (Division 1 (commencing with Section 100) of Title 1 of the Corporations Code) as added by Chapter 682 of the Statutes of 1975 and as heretofore or hereinafter amended and all powers and rights under such law applies to each association which is organized pursuant to this chapter, except where such provisions are in conflict with or inconsistent with the express provisions of this chapter. For the purpose of associations organized without shares of stock, the members shall be deemed to be "shareholders" as the term is used in the General Corporation Law.


54041. (a) Subject to subdivision (c), Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure does not apply to any proprietary interest in an association organized in accordance with this chapter. Any proprietary interest that would otherwise escheat to the state pursuant to Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure shall instead become the property of the association. (b) This section shall apply to all proprietary interests which as of January 1, 1988, have not yet been paid or delivered to the Controller pursuant to the provisions of Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure. (c) Notwithstanding subdivision (a), no proprietary interest shall become the property of the association under this section unless all of the following requirements are satisfied: (1) At least 60 days prior notice of the proposed transfer of the proprietary interest to the association is given to the affected member by first-class or certified mail to the last address of the member shown on the association's records, and by publication in a newspaper of general circulation in the county in which the member last resided as shown on the association's records. Notice given in that manner constitutes actual notice. (2) No written notice objecting to the transfer is received by the association from the affected member or, if the member is deceased, from the member's heirs or the executor or executrix of the estate, prior to the date of the proposed transfer. (d) "Proprietary interest" means and includes any membership, membership certificate, membership share, share certificate, or equity or dividend certificate of any class representing a proprietary interest in, and issued by, the association together with all accrued and unpaid earnings, dividends, and patronage distributions relating thereto.


54042. (a) An association organized pursuant to this chapter may request the board of supervisors of the county in which the association's principal place of business is located to issue a certificate stating that the association meets the requirements of subdivision (b). When the certificate is provided by the board of supervisors to the association, the Franchise Tax Board shall exempt the association from the minimum franchise tax as provided in paragraph (2) of subdivision (c) of Section 23153 of the Revenue and Taxation Code. (b) The board of supervisors shall issue a certificate if all of the following conditions are met: (1) The association is located in an economically distressed area. (2) At least 90 percent of the association's members are, or have been, within the previous 12 months unemployed or dependent on public social services for their income. (3) The request is made during the association's first income year. (c) The certificate issued by the board of supervisors shall be retained by the association. The association shall forward a copy of the certificate to the Franchise Tax Board upon request. (d) As used in this section, "economically distressed area" means a county in which the unemployment rate is either 9 percent, or 2 percent above the statewide average, whichever is greater; or in which 8 percent of the residents are dependent on public social services for their income, or 2 percent more of the residents than the statewide average are dependent on public social services for their income, whichever is greater.


Article 3. Purposes

Ca Codes (fac:54061) Food And Agricultural Code Section 54061



54061. Three or more natural persons, a majority of whom are residents of this state, who are engaged in the production of any product, may form an association pursuant to this chapter for the purpose of engaging in any activity in connection with any of the following: (a) The production, marketing, or selling of the products of its members. (b) The harvesting, preserving, drying, processing, canning, packing, grading, storing, handling, shipping, or utilization of any product of its members, or the manufacturing or making of the byproducts of any product of its members. (c) The manufacturing, selling, or supplying to its members of machinery, equipment or supplies. (d) The financing of the activities which are specified by this section. (e) Any one or more of the activities which are specified in this section.


Article 4. Articles Of Incorporation

Ca Codes (fac:54081-54083) Food And Agricultural Code Section 54081-54083



54081. The articles of incorporation of the association shall show that the signers of the articles of incorporation are engaged in the production of products, and that they propose to incorporate an association pursuant to this chapter, and shall state all of the following: (a) The name of the association. (b) The purposes for which it is formed. (c) The county where the principal office for the transaction of business of the association is to be located. (d) The number of directors of the association, which shall not be less than three, and the names and addresses of the persons who are to serve as first directors. If it is desired that the first directors shall serve for terms of different length, the term for which each person so named shall serve shall also be stated. (e) If organized without shares of stock, whether the voting power and the property rights and interest of each member are equal or unequal. If voting power and property rights and interest of each member are unequal, the general rule or rules which are applicable to all members by which the voting power and the property rights and interests, respectively, of each member may be and are determined and fixed shall also be stated. (f) If organized with shares of stock, the number of shares which may be issued and if the shares are to have a par value, the par value of each share, and the aggregate par value of all shares. If the shares are to be without par value it shall be so stated. If the shares of stock are to be classified, a description of the classes of shares and a statement of the number of shares of each kind or class and the nature and extent of the preferences, rights, privileges, and restrictions which are granted to or imposed upon the holders of the respective classes of stock. Except as to the matters and things so stated, no distinction shall exist between the classes of stock or the holders of them. One class of stock shall always be known as common stock and voting power may be restricted to holders of common stock.


54082. Articles of incorporation shall be signed, acknowledged, and filed in the manner which is prescribed by the general laws of this state for domestic corporations.


54083. The articles of incorporation of any association may be amended in the manner and for the purposes which are authorized by the General Corporation Law, Division 1 (commencing with Section 100), Title 1 of the Corporations Code.


Article 5. Bylaws

Ca Codes (fac:54111-54122) Food And Agricultural Code Section 54111-54122



54111. Each association shall, within 30 days after its incorporation, adopt for its government and management, a code of bylaws, not inconsistent with this chapter. The vote or written assent of shareholders or members that hold at least a majority of the voting power is necessary to adopt such bylaws and is effectual to repeal or amend any bylaws, or to adopt additional bylaws. The power to repeal and amend the bylaws, and adopt new bylaws, may, by a similar vote, or similar written assent, be delegated to the board of directors, which authority may, by a similar vote, or similar written assent, be revoked.


54112. The bylaws may prescribe the time, place, and manner of calling and conducting its meetings. Meetings of members or stockholders shall be held at the place as provided in the bylaws; and if no provision be made, then in the city where the principal place of business is located at a place designated by the board of directors. Meetings of the board of directors may be held at any place within or without the state which is fixed by a quorum of the board of directors unless otherwise provided in the articles of incorporation or bylaws.

54113. The bylaws may prescribe the number of stockholders or members which constitutes a quorum.


54114. The bylaws may prescribe the right of members or stockholders to vote by proxy or by mail or both, and the conditions, manner, form, and effects of such votes; the right of members or stockholders to cumulate their votes and the prohibition, if desired, of cumulative voting.


54115. The bylaws may prescribe the number of directors which constitutes a quorum.


54116. (a) The bylaws may prescribe the qualifications, compensation, duties, and term of office of directors and officers and the time of their election. (b) The number of directors set forth in the articles of incorporation shall be either a fixed number or a variable number. If a fixed number, it shall not be less than three, and if a variable number, the stated minimum shall not be less than three and the stated maximum shall not be greater than two times the stated minimum minus one. (c) The number of directors may also be set forth in the bylaws either as a fixed number or as a variable number subject to the same limitations as in subdivision (b). After shares have been issued or members have been admitted, any adoption or amendment of such bylaw provision shall be approved by the outstanding shares as provided in Section 152 of the Corporations Code. (d) In the event of an inconsistency between an article provision referred to in subdivision (b) and a bylaw provision referred to in subdivision (c), the provision more recently adopted or amended shall prevail. (e) If a variable number of directors is set forth in the articles of incorporation or the bylaws, the exact number of directors shall be fixed, within the limits specified, by approval of the board of directors or the shareholders as provided in Section 153 of the Corporations Code in the manner designated in the bylaws.


54117. The bylaws may prescribe penalties for violations of the bylaws.

54118. The bylaws may prescribe the amount of entrance, organization, and membership fees, if any; the manner and method of collection of such fees; and the purposes for which they may be used.


54119. The bylaws may prescribe the amount which each member or stockholder shall be required to pay annually, or from time to time, if at all, to carry on the business of the association; the charge, if any, to be paid by each member or stockholder for services which are rendered by the association to him and the time of payment and the manner of collection; and the marketing contract between the association and its members or stockholders which every member or stockholder may be required to sign.


54120. The bylaws may prescribe the amount of any dividends that may be declared on the stock or membership capital. To the extent that dividends are payable out of the excess of association income over association expenses attributable to business transacted with or for members, dividends shall not exceed 8 percent per annum. Dividends are in the nature of interest, and do not affect the nonprofit character of any association that is organized pursuant to this chapter.

54121. The bylaws may prescribe the number and qualification of members or stockholders of the association and the conditions precedent to membership or ownership of common stock; the method, time, and manner of permitting members to withdraw or the holders of common stock to transfer their stock; the manner of assignment and transfer of the interest of members, and of the shares of common stock; the conditions upon which, and time when, membership of any member shall cease; the automatic supsension of the rights of a member when he ceases to be eligible to membership in the association; and the mode, manner, and effect of the expulsion of a member.


54122. The bylaws may prescribe the manner of determining the value of a member's interest and provision for its purchase by the association upon the death or withdrawal of a member or upon the expulsion of a member or forfeiture of his membership, or at the option of the association, the purchase at a price fixed by conclusive appraisal by the board of directors; and the conditions and terms for the repurchase by the association from its stockholders of their stock upon their disqualification as stockholders. In case of the expulsion of a member, and where the bylaws do not provide any procedure or penalty, the board of directors shall equitably and conclusively appraise his property interest in the association and shall fix the amount of his property interest in money, which shall be paid to him within one year after such expulsion.


Article 6. Directors And Management

Ca Codes (fac:54141-54150) Food And Agricultural Code Section 54141-54150



54141. The affairs of the association shall be managed by a board of not less than three directors who are elected by the members or stockholders.

54142. The bylaws may provide that the territory in which the association has members shall be divided into districts and that directors shall be elected from the several districts. In any such case, the bylaws shall specify the number of directors to be elected by each district, the manner and method of reapportioning the directors and of redistricting the territory covered by the association.

54143. The bylaws may provide that primary elections shall be held to nominate directors. If the bylaws provide that the territory in which the association has members shall be divided into districts, the bylaws may also provide that the results of the primary elections in the various districts shall be final and shall be ratified at the annual meeting of the association.


54144. The bylaws may provide that the territory in which the association has members shall be divided into districts, and that the directors shall be elected by representatives or advisers, who themselves have been elected by the members or stockholders from the several territorial districts. In any such case, the bylaws shall specify the number of representatives or advisers to be elected by each district, the manner and method of reapportioning the representatives or advisers and of redistricting the territory which is covered by the association.

54145. The bylaws may provide that one or more directors may be chosen by any public official or commission or by the other directors selected by the members. Such director shall represent primarily the interest of the general public in such associations. The directors so chosen shall have the same powers and rights as other directors. Such directors shall not number more than one-fifth of the entire number of directors.


54146. The bylaws may provide for an executive committee and may allot to such committee all the functions and powers of the board of directors, subject to the general direction and control of the board.


54147. An association may provide a fair remuneration for the time which is actually spent by its officers and directors in its service and for the service of the members of its executive committee.


54148. If a vacancy on the board of directors occurs except by expiration of term, the remaining members of the board, by a majority vote, shall fill the vacancy unless the bylaws provide for an election of directors by districts. If the bylaws provide for an election of directors by districts, the vacancy shall be filled by the election of a director from the district in which the vacancy occurs or the board of directors may call a special meeting of the members or stockholders in that district to fill the vacancy.


54149. The directors shall elect a president, one or more vice presidents, a secretary, a treasurer, and such other officers as may be prescribed by the bylaws. Any two or more offices, except those of president and secretary, may be held by the same person. The treasurer may be a bank or any depository and as such, shall not be considered as an officer, but as a function of the board of directors. In such case, the secretary shall perform the usual accounting duties of the treasurer, except that the funds shall be deposited only as and where authorized by the board of directors.


54150. Any member may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition which is signed by five percent of the members, which requests the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the association and, by a vote of a majority of the members, the association may remove the officer or director and fill the vacancy. The director or officer, against whom such charges have been brought, shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses. The person bringing the charges against him shall have the same opportunity. If the bylaws provide for election of directors by districts with primary elections in each district, the petition for removal of a director shall be signed by 20 percent of the members that reside in the district from which such director was elected. The board of directors shall call a special meeting of the members that reside in that district to consider the removal of the director; and by a vote of the majority of the members of that district, the director in question shall be removed from office.


Article 7. Powers

Ca Codes (fac:54171-54182) Food And Agricultural Code Section 54171-54182



54171. An association may engage in any activity in connection with the marketing, selling, preserving, harvesting, drying, processing, manufacturing, canning, packing, grading, storing, handling, or utilization of any product which is produced or delivered to it by its members; or the manufacturing or marketing of the byproducts of any such product; or any activity in connection with the purchase, hiring, or use by its members of supplies, machinery, or equipment, or in the financing of any such activities; or in any one or more of the activities which are specified in this section.


54172. An association may borrow without limitation as to amount of corporate indebtedness or liability and may make advances to members.

54173. An association may act as the agent or representative of any member or members in any of the activites which are mentioned in Section 54171 or 54172.

54174. An association may purchase or otherwise acquire, hold, own, and exercise all rights of ownership in, sell, transfer, pledge, or guarantee the payment of dividends or interest on, or the retirement or redemption of, shares of the capital stock or bonds of any corporation or association which is engaged in any related activity or in the warehousing, handling, marketing, packing, manufacturing, processing, or preparing for market of any product which is handled by the association.


54175. An association may establish reserves and invest the funds of the reserves in bonds or in such other property as may be provided in the bylaws.

54176. An association may buy, hold, and exercise all privileges of ownership, over such real or personal property as may be necessary or convenient for the conduct and operation of, or incidental to, any of the business of the association.


54177. An association may levy assessments in the manner and in the amount as may be provided in its bylaws.


54178. An association may do each and every thing which is necessary, suitable, or proper for the accomplishment of any one of the purposes, or the attainment of any one or more of the objects, which are enumerated in this article; or conducive to or expedient for the interest or benefit of the association; and contract accordingly; exercise and possess all powers, rights, and privileges which are necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged; and, in addition, any other rights, powers, and privileges which are granted by the laws of this state to ordinary corporations, except such as are inconsistent with the express provisions of this chapter; and do any such thing anywhere.


54179. An association may use or employ any of its facilities for any purpose, provided the proceeds which arise from such use and employment shall go to reduce the cost of operation for its members. The products which are handled for, or the services, machinery, equipment, or supplies or facilities which are furnished to, nonmembers shall not, however, exceed in value the products which are handled for, or the services, merchandise, or facilities which are supplied to, members during the same period.


54180. An association may organize, form, operate, own, control, have an interest in, own stock of, or be a member of any other corporation, with or without capital stock, which is engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, utilizing, manufacturing, marketing, or selling of any product which is handled by the association, or the byproducts of any such product. If such corporations are warehousing corporations, they may issue legal warehouse receipts to the association against the commodities which are delivered by it, or to any other person and such legal warehouse receipts shall be considered as adequate collateral to the extent of the usual and current value of the commodity which they represent. If such warehouse is licensed or licensed and bonded pursuant to the laws of this state or the United States, its warehouse receipt which is delivered to the association on any commodity of the association or its members, or delivered by the association or its members, shall not be challenged or discriminated against because of ownership or control, wholly or in part, by the association. Any two or more corporations which are organized pursuant to this section may be merged into one such constituent corporation or consolidated into a new corporation, such merger or consolidation to be made in the manner that is prescribed by the general laws of the state which cover domestic corporations.


54181. Any association may, upon resolution adopted by its board of directors, enter into all necessary and proper contracts and agreements and make all necessary and proper stipulations, agreements and contracts and arrangements with any other cooperative or other corporation, or association, which is formed in this or in any other state, for the cooperative and more economical carrying on of its business or any part of its business. Any two or more associations may, by agreement between them, unite in employing and using, or may separately employ and use, the same personnel, methods, means, and agencies for carrying on and conducting their respective business.


54182. (a) Any association organized and operating pursuant to this chapter or pursuant to similar laws of any other state, the District of Columbia, or the United States, which acts for its members as a producer marketing or bargaining association in its dealings with a person licensed pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) in connection with any product produced by its members, may, either in its own name or in the name of its members, assert all the rights of a producer under either of these chapters with respect to any of those products. (b) Subdivision (a) does not apply to any late charges claimed under Section 55881 on any agricultural products delivered or scheduled to be delivered prior to January 1, 1986.


Article 8. Financial Provisions

Ca Codes (fac:54201-54204) Food And Agricultural Code Section 54201-54204



54201. An association is not subject in any manner to the terms of the Corporate Securities Law, Division 1 (commencing with Section 25000), Title 4 of the Corporations Code, and any association may issue its membership certificates or stock or other securities as provided in this chapter without the necessity of any qualification under that law.


54202. If an association issues nonpar value stock, the issuance of such stock shall be governed by the terms of all general laws which cover the issuance of nonpar value stock in domestic corporations.


54203. If an association with preferred shares of stock purchases the stock or any property, or any interest in any property of any person, it may discharge the obligations which are so incurred, wholly or in part, by exchanging for the acquired interest, shares of its preferred stock to an amount which at par value would equal the fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest which is purchased is equivalent to payment in cash for the shares of stock which are issued.


54204. The board of directors of every association shall cause to be sent to the members of the association not later than 120 days after the close of the fiscal or calendar year an annual report of the operations of the association, unless such report is expressly dispensed with in the bylaws. If required by the bylaws, interim reports of the operations of the association for the three month, six month, or nine month periods of the current fiscal year of the association shall be furnished to the members of the association. Such annual report and any such interim reports shall include a balance sheet as of such closing date. Such financial statement shall be prepared from, and be in accordance with, the books. It shall be prepared in a form which is sanctioned by sound accounting practice for the association or approved by a duly certified public accountant or a public accountant.


Article 9. Members

Ca Codes (fac:54231-54239) Food And Agricultural Code Section 54231-54239



54231. Under the terms and conditions which are prescribed in the bylaws adopted by it, an association may admit as members or issue common stock to only such persons as are engaged in the production of any product which is to be handled by or through the association, or that use or employ any service or facility offered by the association on, or in connection with, land which is used for the production of any product, including the lessees and tenants of land which is used for the production of such product and any lessors and landlords that receive as rent all or part of the crop which is raised on the leased premises.

54232. If a member of a nonstock association is other than a natural person, such member may be represented by any individual, associate, officer, or manager or member of it, who is duly authorized in writing.


54233. Any association may become a member or stockholder of any other association.


54234. If a member of an association which is established without shares of stock has paid his membership fee in full, he shall receive a certificate of membership.


54235. An association shall not issue a certificate for stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but such retention as security does not affect the member's right to vote.


54236. An association, in its bylaws, may limit the amount of common stock which any member may own.


54237. The bylaws shall prohibit the transfer of the common stock or membership certificates of the associations to any person that is not qualified to be a shareholder or member as specified in this chapter. Such restrictions shall be printed upon every certificate of stock or membership which is subject to them.


54238. The association may, at any time, as specified in the bylaws, except when the debts of the association exceed 50 percent of its assets, buy in or purchase its common stock at the book value of the common stock, as conclusively determined by the board of directors, and pay for it in cash within one year thereafter.


54239. A member or stockholder is not liable for the debts of the association to an amount which exceeds the sum which remains unpaid on his membership fee or his subscription to the capital stock, including any unpaid balance on any promissory note which is given in payment of the membership fee or the subscription to the capital stock.


Article 10. Marketing Contracts

Ca Codes (fac:54261-54266) Food And Agricultural Code Section 54261-54266



54261. The association and its members may make and execute marketing contracts which require the members to sell, for any period of time, but not over 15 years, all or any specified part of any product or specified commodity exclusively to or through the association, or any facilities which are created by the association. If they contract a sale to the association, title to the product passes absolutely and unreservedly, except for recorded liens, to the association upon delivery or at any other specified time which is expressly and definitely agreed in the contract.


54262. The contract may provide that the association may sell or resell any product that is delivered by its members, with or without taking title to that product, and pay over to its members, the resale price, after deducting all of the following: (a) Necessary selling, overhead, and other costs and expenses. (b) Proper reserves for retiring stock, if any. (c) Dividends not exceeding 8 percent per annum upon stock or membership capital.

54263. Notwithstanding any provisions of the Civil Code, a contract which is entered into by a member or stockholder of an association which provides for the delivery to such association of any product which is produced or acquired by the member or stockholder, may be specifically enforced by the association to secure the delivery to it of such product.


54264. The bylaws or the marketing contract may fix, as liquidated damages, specific sums to be paid by the member or stockholder to the association upon the breach by him of any provision of the marketing contract regarding the sale or delivery or withholding of any product and may provide that the member will pay all costs, premiums for bonds, expenses, and fees, if any action is brought upon the contract by the association. Such provisions are valid and enforceable in the courts of this state. The clauses which provide for liquidated damages are enforceable as such and shall not be regarded as penalties.

54265. If there is a breach or threatened breach of such marketing contract by a member, the association shall be entitled to an injunction to prevent the further breach of the contract and to a decree of specific performance of the contract. Pending the adjudication of such an action and upon filing a verified complaint which shows the breach or threatened breach, and upon filing a sufficient bond, the association shall be entitled to a temporary restraining order and preliminary injunction against the member.


54266. In any action upon such marketing agreements, it shall be conclusively presumed that a landowner or landlord or lessor is able to control the delivery of any product which is produced on his land by tenants or others, whose tenancy or possession or work on such land, or the terms of whose tenancy or possession or labor on such land, were created or changed after execution by the landowner, landlord, or lessor of such a marketing agreement. In such actions, the remedies for nondelivery or breach which are provided by this article shall lie and be enforceable against such landowner, landlord, or lessor.


Article 11. Reorganization Of Corporations Organized Pursuant To Other Laws

Ca Codes (fac:54291-54294) Food And Agricultural Code Section 54291-54294



54291. Any corporation which is organized or existing pursuant to any law, except Title 23 (commencing with Section 653aa), Part 4, Division 1 of the Civil Code, may be brought under the provisions of this chapter by amending its articles of incorporation, in the manner which is prescribed by the general corporation laws, to conform to this chapter. If any corporation amends its articles of incorporation to conform to this chapter, it shall be deemed to be organized and existing pursuant to, and entitled to the benefit of, and subject to this chapter for all purposes and as fully as though it had been originally organized pursuant to this chapter.


54292. Articles of incorporation shall be deemed to conform to this chapter within the meaning of Section 54291 in both of the following cases: (a) It is provided or declared in the articles of incorporation, in substance, regardless of form, that the corporation is organized and exists as a nonprofit cooperative corporation for the purposes which are provided for in, or permitted by, this chapter, or one or more of such purposes. (b) It clearly appears from the articles of incorporation that the corporation desires to be subject to, and to be organized, exist, and function pursuant to this chapter.


54293. If the amended articles conform, as provided in Section 54292, provisions in the articles of incorporation that appeared in the original articles or some previous amended articles, are ineffective if, and to the extent that, they are inapplicable to, or inconsistent with, this chapter.


54294. This article applies retrospectively as well as prospectively, and may be availed of by a corporation regardless of the time of incorporation, whether prior or subsequent to the adoption of this article, and shall apply to amendments to articles of incorporation whether made prior or subsequent to the adoption of this article, and all amendments made prior to the adoption of this article shall be effective and valid to the same extent as though made subsequent to the adoption of this article.


Chapter 2. Cooperative Bargaining Associations

Article 1. Definitions And General Provisions

Ca Codes (fac:54401-54405) Food And Agricultural Code Section 54401-54405



54401. As used in this chapter, "cooperative bargaining association" means a farmer association which is organized and functioning pursuant to Chapter 1 (commencing with Section 54001) of this division, for the purpose of group bargaining between its producer members and the first handler or processor, with respect to the sale of any agricultural commodity except milk, cotton, or cottonseed.


54402. It is the public policy of the state to establish and support the right of any farmer to join voluntarily, belong to and freely participate in cooperative bargaining associations. Interference with producer rights set forth in this chapter, including the obligation of processors to negotiate and bargain with cooperative bargaining associations, is an unfair trade practice.


54404. For the purpose of enforcing this chapter, the director may receive complaints from producers against any processor, handler, distributor, or any agent of these persons, or from processors, handlers, distributors, or any agent of these persons against a cooperative bargaining association or any agent of an association, with respect to violations of the unfair trade practices which are specified in Section 54431. Upon verification of the complaint, the director shall, or upon the director's own motion may, make any and all necessary investigations, examinations, or inspections of any transaction which involves a suspected violation of any provision of this chapter. The director may thereafter take action against the processor, handler, distributor, or any agent of these persons, or the cooperative bargaining association or any agent of an association, in accordance with applicable provisions of this chapter.


54404.1. If, upon the investigation conducted under Section 54404, the director has reasonable cause to believe that the person charged has violated Section 54431, the director shall issue and cause to be served upon the person so charged a complaint stating the charges. The complaint shall summon the named person to a hearing before the director, which he or she shall call at a specific time and place.


54404.2. At the hearing called pursuant to Section 54404.1, the director may do all the following: (a) Administer oaths and take testimony. (b) Issue subpoenas requiring the attendance of witnesses before him or her, together with any books, memoranda, papers, and other documents, articles, or instruments that may be pertinent to the controversy as set forth in the complaint. (c) Compel the disclosure by the witnesses of all facts known to them that relate to the controversy.


54404.3. The procedure for holding the hearing pursuant to Section 54404.2 is identical to hearings held pursuant to Article 13 (commencing with Section 55781) of Chapter 6.


54404.4. At the conclusion of the hearing called pursuant to Section 54404.1, the director shall enter in his or her office in Sacramento an order which dismisses the complaint, unless the director is satisfied that the person against whom the complaint was filed has violated Section 54431.


54404.5. (a) Notwithstanding Section 54404.1, if the director receives a verified complaint that a processor, handler, distributor, or any agent of any such person or a cooperative bargaining association or any agent of an association has violated subdivision (e) of Section 54431, the director shall conduct a hearing within 14 days of receiving the complaint. The director shall issue a notice of the hearing not less than five days prior to the commencement of the hearing. The director may, but is not required to, make any investigation in addition to the hearing. The director shall announce his or her decision on the complaint within five days after the conclusion of the hearing and may take any action that is authorized by this section. (b) If the director determines that the person against whom the complaint was filed has violated subdivision (e) of Section 54431, the director may issue an order fashioned in a manner so as to expeditiously require that person to comply with the requirements of this chapter. If the person thereafter disobeys the order, the director, represented by the Attorney General, shall apply to the Superior Court of the County of Sacramento in order to obtain a court order requiring the person to obey the order of the director. The action shall be handled in an expeditious manner by the court and given calendar preference. (c) The costs of the hearing held pursuant to subdivision (a) shall be assessed by the director and paid for by the party filing the complaint if the hearing results in a finding that no violation occurred. The costs of the hearing shall be paid for by the party against whom the complaint was filed if the hearing results in a finding that a violation had occurred. (d) The hearing held pursuant to subdivision (a) shall be held in as expeditious a manner as possible under Sections 54404.2 and 54404.3. The hearing officer shall use his or her best efforts to ensure that the hearing will be conducted as quickly as possible consistent with the requirements of due process and this chapter. (e) The record from the hearing held pursuant to subdivision (a) may be introduced by either party to that hearing at a hearing held pursuant to Section 54404. 1.

54405. The director may bring an action to enjoin the violation or threatened violation of any provision of this chapter in the superior court of the county in which such violation occurred or is about to occur. Actions against different defendants may be consolidated, in the discretion of the court, if the alleged violations are of the same provision, have occurred in the same or an adjoining county, relate to the same agricultural commodity, occurred in the same production season, and such consolidation can be done without prejudice to a substantial right of any defendant. Any proceedings which are brought pursuant to this section shall be governed in all other respects by Chapter 3 (commencing with Section 525), Title 7, Part 2 of the Code of Civil Procedure.


Article 2. Unfair Trade Practices

Ca Codes (fac:54431-54435) Food And Agricultural Code Section 54431-54435



54431. It is an unfair trade practice, and unlawful, for any processor, handler, distributor, or agent of any such person, or, with regard to subdivisions (d), (e), and (f), for any cooperative bargaining association or any agent of an association, or for any other person to do any of the following: (a) Interfere with, restrain, coerce, or boycott producers in the exercise of the rights which are guaranteed pursuant to Section 54402. (b) Discriminate against any producer with respect to price or other terms of purchase of any raw agricultural commodity, by reason of the producer's membership in, or contract with, any cooperative bargaining association. (c) Pay or loan money, or give any other thing of value, to a producer as an inducement or reward for refusing or ceasing to belong to, or for breaching one's membership agreement in, a cooperative bargaining association. (d) Maliciously or knowingly give false reports about the finances, management, or activities of any person subject to this chapter. (e) Refuse to negotiate or bargain, including refusing to comply with the procedure prescribed in Article 3.5 (commencing with Section 54451), at reasonable times and for reasonable periods of time with a genuine desire to reach agreement and a serious attempt to resolve differences with a cooperative bargaining association for price, terms of sale, compensation for commodities produced under contract, and other contract provisions relative to any commodity which a cooperative bargaining association represents, or refuse to negotiate or bargain, including refusing to comply with the procedure prescribed in Article 3.5 (commencing with Section 54451), at reasonable times and for reasonable periods of time with a genuine desire to reach agreement and a serious attempt to resolve differences with a processor for price, terms of sale, compensation for commodities produced under contract, and other contract provisions relative to any commodity which the cooperative bargaining association represents. This subdivision does not apply to fresh grapes purchased for wine. Also, this subdivision is limited to processors, handlers, or agents of any of those persons who deal in fruits, nuts, or vegetables for processing and a cooperative bargaining association which meets all of the following: (1) That, under the articles of incorporation or bylaws of the cooperative bargaining association, the association is producer owned and controlled exclusively by producers. (2) The cooperative bargaining association has enforceable contracts with its members. (3) The cooperative bargaining association has financial resources and management reasonably sufficient to accomplish the purpose for which it was organized. (4) The cooperative bargaining association represents, through its own members, a sufficient number of producers or a sufficient quantity of any particular commodity, or both, to make it an effective agent for producers in bargaining with handlers. (5) One of the functions of the cooperative bargaining association is acting as principal or agent for its producer members to negotiate or bargain with handlers for prices, terms of sale, compensation for commodities produced under contract and other terms of contracts with respect to the production, sale, and marketing of their commodities. (f) Refuse to negotiate or bargain for price, terms of sale, compensation for commodities produced under contract, and other contract provisions relative to any commodity which a cooperative bargaining association represents. This subdivision only applies to a cooperative association whose members produce either fresh grapes purchased for wine or whose members produce any other commodity not specified in subdivision (e) and which meets all of the following: (1) Under the articles of incorporation or bylaws of the cooperative bargaining association, the association is producer owned and controlled exclusively by producers. (2) The cooperative bargaining association has enforceable contracts with its members. (3) The cooperative bargaining association has financial resources and management reasonably sufficient to accomplish the purpose for which it was organized. (4) The cooperative bargaining association represents, through its own members, a sufficient number of producers or a sufficient quantity of any particular commodity, or both, to make it an effective agent for producers in bargaining with handlers. (5) One of the functions of the cooperative bargaining association is acting as principal or agent for its producer members to negotiate or bargain with handlers for prices, terms of sale, compensation for commodities produced under contract, and other terms of contracts with respect to the production, sale, and marketing of their commodity.


54432. The provisions of subdivision (e) of Section 54431 only apply to any processor, handler, distributor, or agent of any such person, who refuses to negotiate or bargain, as specified by such provisions, with a cooperative bargaining association which represents producers with whom such a processor, handler, distributor, or agent of any such person, has had a prior course of dealing. For purposes of this section, "prior course of dealing" means that the processor, handler, distributor, or agent of any such person has purchased in any two of the immediate preceding five years a commodity from a producer which a cooperative bargaining association represents. However, a processor, handler, distributor, or agent of any such person is subject to subdivision (e) of Section 54431 if that person has newly gone into business in California by locating in this state from another state or country, by being created from other business entities which had a prior course of dealing with a bargaining association, or by being newly created and utilizing substantially the same processing facilities as a prior processor which itself was subject to subdivision (e) of Section 54431.


54434. The provisions of subdivision (e) of Section 54431 shall not apply to cooperative associations in respect to business done with its own membership.

54435. Nothing in subdivision (e) or (f) of Section 54431 requires any processor, handler, distributor, or agent of any such person, to negotiate over any specific period of time, or to agree upon price, terms of sale, compensation for commodities produced under contract, and other contract provisions relative to any commodity which any cooperative bargaining association represents. However, nothing in this section relieves the parties from the requirement to negotiate and bargain pursuant to subdivision (e) or (f) of Section 54431 or to comply with the procedures prescribed in Article 3.5 (commencing with Section 54451) if applicable.


Article 3. Annual Report

Ca Codes (fac:54442-54447) Food And Agricultural Code Section 54442-54447



54442. (a) To aid in preparation of the report required under this chapter, the secretary shall establish an advisory committee consisting of the following persons: (1) Six representatives of cooperative bargaining associations from names submitted by cooperative bargaining associations, two of whom shall be appointed by the Governor, two of whom shall be appointed by the Speaker of the Assembly, and two of whom shall be appointed by the Senate Committee on Rules. (2) Six representatives of processors from names submitted by processors, two of whom shall be appointed by the Governor, two of whom shall be appointed by the Speaker of the Assembly, and two of whom shall be appointed by the Senate Committee on Rules. (b) The members of the advisory committee shall be reimbursed for travel expenses pursuant to the rules and regulations adopted by the Director of the Department of Personnel Administration pursuant to Section 19820 of the Government Code for attendance at a meeting approved by the Secretary of Food and Agriculture.


54443. The advisory committee shall study and report on all of the following issues: (a) Unfair trade practices. (b) Licensing. (c) Funding. (d) Investigation and hearing procedures. (e) The need for a mechanism to resolve bargaining disputes. (f) Any other issues relating to this chapter. (g) Any recommended changes to this chapter.


54444. The advisory committee shall meet not less than once annually.

54445. The advisory committee shall prepare and transmit a report to the secretary at a time fixed by the secretary so as to meet his or her obligation under this article.


54446. (a) The advisory committee shall prepare and submit a report to the secretary who, in turn, shall report to the Legislature on the effectiveness of subdivisions (a) and (e) of Section 54431 in successfully aiding the bargaining process between processors and cooperative bargaining associations. The secretary shall include any recommended changes to subdivisions (a) and (e) of Section 54431 as part of the report. (b) After receiving the report, the Assembly Committee on Agriculture and the Senate Committee on Agriculture may hold hearings on the report. (c) The report shall, among other things, focus on any specific abuses of subdivisions (a) and (e) of Section 54431. (d) Annual progress reports on the report shall be submitted by the advisory committee to the secretary.

54447. This article shall be construed as a continuation of former Article 3 of Chapter 2 of Division 20.


Article 3.5. Conciliation

Ca Codes (fac:54451-54458) Food And Agricultural Code Section 54451-54458



54451. The department shall order conciliation between any cooperative bargaining association and any processor subject to this chapter if it determines, after receiving a request under the procedure specified in Section 54452, that conciliation will materially assist the parties in negotiating an agreement. Either party may request at any time that conciliation be ordered.


54451.5. A conciliation service shall be appointed by the department if the parties cannot agree on a conciliator.


54452. The following procedure shall be used upon receipt by the department of a request for conciliation: (a) The request from one of the parties to the negotiation, referred to as the requesting party, shall be presented on a form prescribed by the department. (b) The requesting party shall submit, along with the request, the last offer made to the other party, referred to as the responding party, reasons for rejection of the responding party's last offer, and an indication as to what the requesting party believes would be required to reach an agreement. A copy of the request, as well as any information required pursuant to this subdivision, shall be express mailed to the responding party on the same day that the request is submitted to the department. (c) On the next business day after receiving the request for conciliation, the department shall notify the responding party that a request for conciliation has been received. The responding party shall be required to respond to the department within three business days after receipt of notification that conciliation has been requested. The response from the responding party shall include the last offer made to the requesting party, reasons for rejection of the requesting party's last offer, and an indication as to what the responding party believes would be required to reach an agreement. The responding party's response shall be made on a form prescribed by the department. A copy of the response, as well as any information required pursuant to this subdivision, shall be express mailed to the requesting party on the same day that the response is submitted to the department. (d) On the same day that the responding party is notified by the department that a request for conciliation has been made, the department shall notify the conciliation service designated by the department pursuant to Section 54451.5 that conciliation may be ordered. (e) On the date that the department notifies the responding party that a conciliation has been requested, the department may also request additional information from either party and the department shall notify both parties of their right to use a conciliator agreed upon by the parties if the parties notify the department of their agreement before conciliation is ordered. (f) Both parties have three business days after the date of the request made pursuant to subdivision (e) in which to respond to the request for additional information. (g) Within three business days after final receipt from the parties of all information requested by the department, the department shall determine whether conciliation shall be conducted.


54453. (a) If conciliation is ordered, the department shall, on the day the department determines that conciliation shall be conducted, notify both parties that the conciliation will take place and direct the conciliator agreed to by the parties to commence the conciliation process in accordance with its commercial mediation rules. If the parties have not agreed upon a conciliator, the department shall appoint the conciliation service designated by the department pursuant to Section 54451.5, and direct that conciliation service to commence the conciliation process in accordance with its commercial mediation rules. However, this article prevails if there is any conflict between those rules and this article. (b) Confidential information disclosed to a conciliator by the parties or by any other person in the course of the conciliation shall not be divulged by the conciliator. All statements, oral or written, records, reports, or other documents received or made by a conciliator while serving in that capacity, or by any other person, shall be confidential. The conciliator shall not be compelled to divulge the information or to testify in regard to the conciliation in any proceeding or judicial forum. The parties shall maintain the confidentiality of the conciliation, and shall not rely on, or introduce as evidence in any proceeding or forum, any of the following: (1) Views expressed or suggestions made by any party in the course of conciliation proceedings with respect to a possible settlement of the dispute. (2) Admissions by any party in the course of conciliation proceedings. (3) Proposals made or views expressed by the conciliator. (4) The fact that any party in the course of conciliation proceedings had or had not indicated willingness to accept a proposal for settlement made by the conciliator or other party.


54454. The conciliator shall perform the following duties: (a) Meet with the parties involved in the bargaining process in an attempt to resolve the dispute. (b) Participate in negotiations and have authority to offer suggestions and recommendations to resolve the dispute. (c) The total time allotted for conciliation shall not exceed 10 calendar days unless the conciliator feels that an additional period of five calendar days is likely to resolve the dispute. The determination of the conciliator on whether to extend the period of conciliation shall be based on the progress of negotiations during the conciliation process, the impact of a time delay on the parties, and other relevant factors. (d) If a settlement has not been arrived at through the conciliation process, upon the conclusion of the process and within the time requirements of subdivision (c), the conciliator shall make a final recommendation to the parties as to what he or she believes will equitably resolve the dispute and result in a negotiated settlement. Each party shall be required to respond to the other party, and to the conciliator with their position and response to the conciliator's final recommendations.


54455. If the dispute has not been resolved by the completion of the conciliation process, the conciliator shall file a final report with the department within three business days after the close of conciliation. The report shall include only the following: (a) A factual summary of the events that occurred during conciliation, including all of the following: (1) The dates on which conciliation occurred. (2) The amount of time expended in conciliation on each of those dates. (3) The location of the conciliation on each of those dates. (4) The names of the individuals present during conciliation on each of those dates. (b) The final proposals of each of the parties. (c) The response, as expressed by each party, to the other party's final proposal. (d) A description of the remaining unresolved issues, as expressed by each party. (e) A copy of the original request and response specified in Section 54452.

54456. All reasonable costs incurred in carrying out the conciliation prescribed in this article shall be shared equally by each party to the negotiations.

54457. (a) In the report submitted to the Legislature pursuant to Section 54441, the department shall include a section on this article, which shall consist of the following items: (1) The number of requests for conciliation. (2) The number of conciliation cases handled. (3) The number of conciliation cases reaching settlement through the process prescribed by this article. (4) The parties involved in conciliation. (5) Recommended changes to this article that would improve its effectiveness. (b) The report shall not include any information otherwise confidential pursuant to subdivision (b) of Section 54453.


54458. Any person who violates any provision of this article is liable civilly for a penalty in an amount not to exceed the sum of ten thousand dollars ($10,000) for each and every violation.


Article 4. Penalties

Ca Codes (fac:54461-54463) Food And Agricultural Code Section 54461-54463



54461. The willful violation of any provision of this chapter is a misdemeanor punishable by a fine of not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000) for each and every violation. This section does not apply to Article 3.5 (commencing with Section 54451).


54462. In addition to the penalty which is provided by Section 54461, any person who violates any provision of this chapter is liable civilly for a penalty in an amount not to exceed the sum of five thousand dollars ($5,000) for each and every violation. This section does not apply to Article 3.5 (commencing with Section 54451).


54463. In addition to any other remedies provided under this article, the director may seek to obtain injunctive relief in the proper court to require any person subject to this chapter to comply with any applicable requirement in this chapter.


Chapter 4. California Rice Certification Act Of 2000

Article 1. Declarations And Legislative Intent

Ca Codes (fac:55000-55003) Food And Agricultural Code Section 55000-55003



55000. The production and processing of rice constitutes an important industry of this state that provides substantial and necessary revenues for the state and employment for its citizens. The California rice industry has the potential to be one of the leading segments of the state's agricultural industry. To realize this potential, there is a need to make domestic and foreign consumers aware of the nutritional value of rice, the high quality of the rice produced and processed in the state, the many varieties of rice produced and processed in the state, the intricacies of rice culture, and the versatility of rice as a part of a well balanced diet.


55001. The program established pursuant to this chapter is essential to ensuring the consistently high quality of the rice produced, processed, or handled in the state by informing consumers, maintaining consumer confidence, and enhancing and protecting the reputation of California's rice industry throughout the nation and around the world.


55002. This chapter is intended to allow the rice industry to work cooperatively to maintain consumer confidence and the acceptance of rice produced, processed, and handled in the state.


55003. There is a growing need to maintain the identity of various types of rice to satisfy increasing consumer demand for specialty rices. This demand requires providing the industry with the ability to establish the terms and conditions for the production, processing, and handling of rice in order to achieve the goal of preventing the potential for the commingling of various types of rice, and in order to prevent commingling where reconditioning is infeasible or impossible.


Article 2. Definitions

Ca Codes (fac:55006-55015) Food And Agricultural Code Section 55006-55015



55006. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


55007. "Records" means books, records, contracts, documents, memoranda, papers, correspondence, or other data, whether in written, magnetic, or electronic form, that pertain to matters relating to this chapter.

55008. "Certification" means certification pursuant to Article 7 (commencing with Section 55070).


55008.5. "Chapter" means any provision of the California Rice Certification Act of 2000, and includes any amendments to and regulations adopted pursuant to that act.


55009. "Characteristics of commercial impact" means characteristics that may adversely affect the marketability of rice in the event of commingling with other rice and may include, but are not limited to, those characteristics that cannot be visually identified without the aid of specialized equipment or testing, those characteristics that create a significant economic impact in their removal from commingled rice, and those characteristics whose removal from commingled rice is infeasible.


55010. "Commission" means the California Rice Commission created pursuant to Chapter 9.5 (commencing with Section 71000) of Part 2 of Division 22.

55010.5. "Committee" refers to the committee established under Section 55020.

55010.6. "Department" means the Department of Food and Agriculture.


55010.7. "Handle" means to engage in the business of being a handler.

55011. "Handler" means any person engaged in this state in the business of offering for sale or selling rice.


55012. "Person" includes any individual, partnership, limited liability company, limited liability partnership, corporation, firm, company, or any other entity doing business in California.


55012.5. "Process" means to harvest, dry, mill, transport, or store rice.

55013. "Producer" includes any person who produces rice, or causes rice to be produced.


55014. "Rice" means all rough or "paddy" rice or milled rice (Oryza species) produced in or shipped into California, including mochi rice (sweet rice) and rice produced for seed. It does not include wild rice (Zinzania aquatica; Zinzania palustris).


55015. "Secretary" means the Secretary of Food and Agriculture.


Article 3. Administration

Ca Codes (fac:55020-55022) Food And Agricultural Code Section 55020-55022



55020. The secretary shall appoint a committee, from nominations received from the commission, to administer Article 4 (commencing with Section 55040) and Article 5 (commencing with Section 55050), except as otherwise specified. The committee shall consist of four producers, four handlers, and one representative each of the California Crop Improvement Association, the California Warehouse Association, and the California Cooperative Rice Research Foundation. The secretary shall also appoint one member from the University of California who shall not be affiliated with the California Crop Improvement Association. If the secretary finds any of those nominated to be unacceptable, he or she shall notify the commission and request that another person be nominated. The commission shall appoint one ex officio member who shall be involved in the handling or breeding of seed, and may appoint any other ex officio members deemed reasonably necessary to implement this chapter.


55020.5. (a) The committee shall meet periodically for the purposes specified in Article 4 (commencing with Section 55040) and Article 5 (commencing with Section 55050). (b) A majority of the membership of the committee shall constitute a quorum of the committee. The vote of a majority of the members present at which there is a quorum shall constitute an act of the committee. The committee may continue to transact business at a meeting at which a quorum is initially present, notwithstanding the withdrawal of members, provided any action is approved by the requisite majority of the required quorum. (c) As a committee of the commission, the committee established pursuant to Section 55020 shall conduct itself according to the bylaws and rules of the commission. (d) Sections 71051, 71053, 71063, and 71066 shall apply to the committee.

55021. All funds received from the assessments levied pursuant to this chapter shall be deposited in banks that the commission may designate and be accounted for in a manner prescribed by the commission, and shall be disbursed by order of the commission through an agent or agents as it may designate for that purpose.


55022. (a) Upon receipt of a recommendation from the committee for the promulgation, amendment, or repeal of regulations, the secretary shall within 30 working days do one of the following: (1) Initiate the rulemaking process with the regulation as recommended by the committee. (2) Decline to initiate the rulemaking process and provide the committee with a written statement of reasons for the decision. (3) Request that the committee provide additional information regarding the recommended regulations. (b) All regulations adopted pursuant to this chapter shall be adopted in compliance with the Administrative Procedure Act, Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code and may be subsequently repealed or amended as provided for in that chapter.


Article 4. Duties And Powers

Ca Codes (fac:55040-55047) Food And Agricultural Code Section 55040-55047



55040. The powers and duties of the committee shall include, but not be limited to, all of the following: (a) Identifying rices that have characteristics of commercial impact. (b) Recommending to the secretary proposed regulations establishing terms and conditions for planting, producing, processing, or handling rice identified pursuant to subdivision (a), including, but not limited to, seed application requirements, field buffer zones, handling requirements, seed testing, and identity preservation requirements. All rice identified pursuant to subdivision (a) shall be subject to an identity preservation program. (c) Reviewing the efficacy of terms, conditions, and identity preservation programs imposed on the planting, producing, processing, or handling of rice identified pursuant to subdivision (a) using the most current industry standards and generally accepted scientific principles. (d) Recommending to the secretary on all matters pertaining to this chapter, including, but not limited to, the amendment or repeal of regulations adopted pursuant to this chapter, enforcement of this chapter, and setting the assessment rates. (e) The committee shall review each rice identified as having characteristics of commercial impact not less often than every two years, or upon receipt of a petition from a handler of rice. A handler of rice identified as having characteristics of commercial impact may not file more than one petition on a particular variety of rice in any two-year period. (f) Neither the recommendations of the committee nor any regulation adopted pursuant to this chapter shall be construed as establishing any production, processing, or market tolerance.


55047. The committee shall recommend to the secretary that regulations be adopted, amended, or repealed by the secretary to accomplish all of the following purposes: (a) Maintain the integrity and prevent the contamination of rice which has not been identified pursuant to subdivision (a) of Section 55040. (b) Prevent the introduction of diseases, weeds, or other pests. (c) Ensure that persons handling seed for the production of rice identified pursuant to subdivision (a) of Section 55040, or that persons bringing rice identified pursuant to subdivision (a) of Section 55040 into the state for processing, notify the commission of the location of planting sites and of the dates and procedures for planting, producing, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (d) Ensure that persons receiving rice having been identified pursuant to subdivision (a) of Section 55040 produced outside the state for processing notify the commission of the location of the receipt and of the procedures for processing or handling the rice to prevent commercial impact to other rice and the spread of weeds, diseases, or other pests. (e) Ensure enforcement of terms and conditions imposed on the planting, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (f) Encourage research and development of new types of rice.


Article 5. Commercial Impact Rice

Ca Codes (fac:55050-55052) Food And Agricultural Code Section 55050-55052



55050. Except as provided for in Section 55052, no person may plant, produce, process, or handle rice identified pursuant to subdivision (a) of Section 55040, except in compliance with this chapter. Regulations shall be adopted by the secretary, in accordance with Section 55022, to accomplish all of the following purposes: (a) Maintain the integrity and prevent contamination of rice which has not been identified pursuant to subdivision (a) of Section 55040. (b) Prevent the introduction of disease, weeds, or other pests. (c) Ensure that persons handling seed for the production of rice identified pursuant to subdivision (a) of Section 55040 or bringing rice identified pursuant to subdivision (a) of Section 55040 into the state for processing notify the commission of the location of planting sites and of the dates and procedures for planting, producing, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (d) Ensure that persons receiving rice having been identified pursuant to subdivision (a) of Section 55040 produced outside the state for processing notify the commission of the location of the receipt and of the procedures for processing or handling the rice to prevent commercial impact to other rice and the spread of weeds, diseases, or other pests. (e) Enforce the restrictions and conditions imposed on the planting, producing, processing, or handling of rice identified pursuant to subdivision (a) of Section 55040. (f) Encourage research and development of new types of rice.


55051. Except as specified in Section 55052, rice shall not be planted, produced, processed, or handled unless it has been reviewed by the committee for the purposes of making the findings set forth in Section 55040, and if necessary, the establishment of regulations pursuant to Section 55047.


55052. (a) Except as set forth in this section, this chapter shall not apply to 50 acres or less of rice of any type planted for research purposes. No one type may be planted on more than 50 acres in the state and be considered research within the meaning of this section. Any person conducting research on 50 acres or less shall notify the committee of the location of the acreage involved, and the proposed procedures for planting, producing, processing, or handling the rice. The committee shall review and approve, modify, or reject the proposed procedures to ensure that the research will not result in commercial impacts to other rice. The committee shall accept any procedures that have been previously approved or accepted by an agency of state or federal government unless the committee provides written justification for modifying or rejecting the procedures. (b) In addition to the information required pursuant to subdivision (a), the committee may require any person proposing to conduct research using rice brought into the state from another state or country to provide the committee with proposed procedures to ensure that the introduced rice is free of diseases, weeds, or other pests. The committee shall review and approve, modify, or reject the proposed procedures. The committee shall accept any procedures that have been previously approved or accepted by an agency of state or federal government unless the committee provides written justification for modifying or rejecting the procedures. (c) The notice required pursuant to this section shall not require specific information regarding the attributes of the rice that is the subject of the research. (d) The notice required by this section shall be provided in the time and manner specified by the committee. (e) This chapter shall not apply to research conducted by the University of California except for rice produced directly from the research that enters the channels of trade.


Article 6. Assessments

Ca Codes (fac:55060-55063) Food And Agricultural Code Section 55060-55063



55060. (a) Handlers of seed for the production of rice identified pursuant to subdivision (a) of Section 55040, shall annually pay to the commission an assessment in an amount not to exceed five dollars ($5) per hundredweight (cwt.). (b) The first in-state handler of paddy or brown rice identified pursuant to subdivision (a) of Section 55040, or of seed for the production of rice identified pursuant to subdivision (a) of Section 55040, brought into the state from outside California, shall report to the commission prior to the receipt of the rice or seed and pay an assessment to the commission in an amount not to exceed ten cents ($0.10) per hundredweight (cwt.). The report and payment shall be made in the time and manner specified by the commission.


55061. The assessment shall be paid in the time and manner specified by the commission. No assessment shall be paid by any person for any rice seed for which the assessment has been previously paid. Assessments not paid when due shall be subject to a penalty of 10 percent of the assessment and interest at the rate of 1 percent per month.


55062. The commission shall use all funds received pursuant to this chapter for the purposes of this chapter.


55063. The commission shall publish an annual report of its activities including an accounting of the use of assessments collected pursuant to this chapter. The report, in aggregate form, shall be made available to any person upon request.



Article 7. Certification Of Rice

Ca Codes (fac:55070-55076) Food And Agricultural Code Section 55070-55076



55070. The commission may establish a program allowing for the certification of any verifiable attribute of rice. The commission may operate the program or contract with qualified entities to implement all or any aspect of the program. No organization shall be considered qualified for the purposes of this article unless it can provide accurate, verifiable certification of identified attributes of seed, rough or paddy rice, or milled rice, as determined by the commission. This article does not authorize the certification of any rice as organic. Certification pursuant to this article shall not be construed as establishing any production, processing, or market tolerance.


55071. (a) The commission shall require any organization seeking to certify rice pursuant to this article to file the procedures and standards of an internationally recognized identity preservation program or a certification plan, including, but not limited to, the following: (1) Minimum information to be required from seed producers, producers and handlers regarding production, growing, conditioning, or processing practices, and methods for verifying the information received. (2) Qualifications of, and training requirements for, all inspectors. (3) Procedures for inspection and testing methods, including a complete description of the sampling methodologies. (4) Criteria for certification and attributes to be certified. (5) Processes for decisionmaking relative to certification procedures, criteria, and methods. (b) The certification plan shall be kept by the commission and made available for public inspection upon request.


55072. Organizations certifying rice shall keep accurate books, accounts, and records of all activities relating to certification. The records shall be preserved for a period of three years and shall be submitted for inspection at any reasonable time upon written demand of the commission.


55074. At the end of each rice producing season, as established by the commission, each organization certifying rice for the commission shall prepare a list of all persons whose rice has been certified or is pending certification. This list shall be filed with the commission and shall be available for public inspection.


55075. (a) Notwithstanding any other provision of law, any producer or handler of rice sold as a certified rice and any organization certifying rice for the commission shall immediately make available for inspection by, and shall within 72 hours of a request provide to, the commission a copy of any record required to be kept under this chapter. Records acquired pursuant to this section and any information marked trade secret or confidential acquired by the commission in carrying out its duties under this chapter shall not be public records as that term is defined in Section 6252 of the Government Code and shall not be subject to Chapter 3.5 (commencing with Section 6250) of the Government Code. (b) The commission shall not be required to obtain records not in its possession in response to a subpoena. Prior to releasing records required to be kept pursuant to this chapter in response to a subpoena, the commission shall delete any financial information about any operation or transaction, information regarding the identity of suppliers or customers, the quantity or price of supplies purchased or products sold and any information marked trade secret or confidential. (c) Except for those records subject to public inspection pursuant to Sections 55071 and 55074, this section shall be the exclusive means of public access to records required to be kept or obtained by the commission pursuant to this chapter.


55076. Upon receipt of a petition from any person providing adequate evidence of good cause to do so, the commission may declare all rice produced within a specified area to be certified as to any attribute. If the commission makes this declaration, all rice produced within the area shall be deemed certified, and may be labeled as provided in Section 55082 if the rice is handled to preserve its identity.


Article 8. Sale Of Certified Rice

Ca Codes (fac:55080-55083) Food And Agricultural Code Section 55080-55083



55080. Every person engaged in this state in the production or handling of rice to be identified as certified pursuant to this chapter, shall register with the commission or its designate prior to the first sale of rice so identified, and shall thereafter annually renew the registration unless the person is no longer engaged in the activities requiring registration.


55081. Registration shall be on a form developed by the commission, or developed by its designate and approved by the commission, and shall be valid for one rice producing season.


55082. Rice certified pursuant to this chapter shall be labeled as follows or with substantially similar language: "THIS LOT OF RICE CERTIFIED (accurate identification of specified attribute) IN ACCORDANCE WITH THE CALIFORNIA RICE CERTIFICATION ACT OF 2000." The label shall also include the name of any organization that provided the certification as the commission's designate. The commission may revise the label language with the concurrence of the secretary.

55083. This chapter shall apply to all rice sold as certified pursuant to this chapter within the state, wherever produced or handled, and to all rice produced or handled in the state, wherever sold as certified, pursuant to this chapter; except that in lieu of registration under this chapter, the commission may recognize a certification program operating outside the state that certifies rice sold as certified, provided that program meets minimum standards substantially similar to those contained in this chapter. The commission may establish a procedure whereby certification organizations operating outside the state may apply for and receive recognition.


Article 9. Violations

Ca Codes (fac:55100-55108) Food And Agricultural Code Section 55100-55108



55100. (a) It is unlawful for any person to handle, advertise, or label rice in violation of this chapter. (b) Notwithstanding subdivision (a), a person engaged in business as a retailer of rice who in good faith handles, labels, or advertises any rice in reliance on the representations of a producer or handler that the rice may be sold as certified, shall not be found to violate this chapter, except under any of the following circumstances: (1) The retailer knew or should have known that the rice could not be sold as certified. (2) The retailer was engaged in producing or handling the rice. (3) The retailer prescribed or specified the manner in which the rice was produced or handled.

55101. (a) It is unlawful for any person to certify rice in violation of this chapter. (b) It is unlawful for any person to certify rice unless designated by the commission. (c) It is unlawful for any person to willfully make a false statement or representation, or knowingly fail to disclose a fact required to be disclosed pursuant to Article 7 (commencing with Section 55070).

55102. (a) It is unlawful for any person to produce or handle rice sold as certified unless duly registered pursuant to Section 55080. (b) It is unlawful for any person to willfully make a false statement or representation, or knowingly fail to disclose a fact required to be disclosed, during registration pursuant to Section 55080.


55103. It is unlawful for any person to forge, falsify, fail to retain, fail to obtain, or fail to disclose records as required by this chapter.

55104. It is unlawful for any person to fail or refuse to pay any assessments levied pursuant to this chapter.


55105. It is unlawful for any person to plant, produce, process, or handle rice, except in compliance with this chapter.


55106. All remedies provided by this chapter are cumulative and not exclusive of any other remedy, whether initiated by the commission or the department.

55108. Penalties received pursuant to this article shall be handled as specified in Section 55062.


Article 10. Investigations And Actions By The Commission

Ca Codes (fac:55110-55113) Food And Agricultural Code Section 55110-55113



55110. The commission may receive and investigate complaints regarding alleged violations of this chapter. The commission may refer cases to the department for action.


55111. (a) The commission shall provide notice to the person or persons, and to the secretary, alleged to have violated the provisions of this chapter informing him or her of the commission's decision to take further action pursuant to this article. The person may seek a review of the commission's decision by the secretary and thereafter may seek judicial relief. (b) Notwithstanding subdivision (a) and Section 55111.5, the commission may immediately seek injunctive relief, as specified in Section 55112. Any injunction obtained by the commission shall remain in full force and effect pending any review by the secretary.


55111.5. The commission may enter into a written agreement with any person alleged to have violated this chapter that will cause the cessation of any alleged violation and avoidance of future violations.

55112. (a) The commission may commence civil actions and utilize all remedies provided in law or equity for the collection of assessments and for obtaining a writ of attachment, specific performance, or injunctive relief regarding this chapter. The commission may seek a writ of attachment or injunctive relief, including, but not limited to, a temporary restraining order, preliminary injunction, or a permanent injunction, in order to prevent any violation or threatened violation of this chapter. (b) The commission shall provide notice to the person alleged to have violated this chapter prior to commencing a civil action. (c) A court shall issue to the commission any requested writ of attachment or injunctive relief upon a prima facie showing by verified complaint that a named defendant has violated, or has threatened to violate, this chapter. No bond shall be required to be posted by the commission as a condition for the issuance of the requested writ of attachment or injunctive relief. (d) A writ of attachment shall be issued pursuant to Chapter 5 (commencing with Section 485.010) of Title 6.5 of Part 2 of the Code of Civil Procedure, except that the showing specified in Section 485.010 of the Code of Civil Procedure shall not be required. Injunctive relief shall be issued pursuant to Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, except that the showing of irreparable harm or inadequate remedy at law specified in Sections 526 and 527 of the Code of Civil Procedure shall not be required. (e) Upon entry of any final judgment on behalf of the commission against any defendant, the court shall enjoin the defendant from conducting any type of business regarding rice until there is full compliance and satisfaction of the judgment. Venue for these actions may be established at the domicile or place of business of the defendant or in the county of the principal place of business of the commission. The commission may be sued only in the county of its principal office. (f) Prior to bringing an action for injunctive relief pursuant to this section, the commission shall review all available information, recommend specific enforcement action to the secretary, and allow the secretary the opportunity to respond. Notwithstanding the secretary' s response, nothing in this section shall be construed as preventing the commission from bringing the action.


55113. The commission shall be entitled to receive reimbursement for any reasonable attorney's fees and other related costs, including, but not limited to, investigative costs, involved in enforcement of this chapter.


Article 11. Investigations And Actions By The Department

Ca Codes (fac:55120-55123) Food And Agricultural Code Section 55120-55123



55120. The department may investigate complaints referred to it by the commission regarding alleged violations of this chapter. The department may enter and inspect the premises of any person subject to this chapter for the purpose of inspecting rice, rice processing, or handling activities governed by this chapter. If the department determines that violations have occurred, the department may take action authorized by this chapter, including, but not limited to, seizing and destroying rice. Rice may not be destroyed by the department without due notice to the person whose rice was seized and an informal hearing before the secretary pursuant to procedures adopted by the department.


55121. The department may commence civil actions and utilize all remedies provided in law or equity for obtaining a writ of attachment, specific performance, or injunctive relief for violations of this chapter.

55122. (a) The department may levy a civil penalty against any person who is grossly negligent or willfully violates this chapter in an amount of not more than fifteen thousand dollars ($15,000) for each violation. Each day a grossly negligent or willful violation of this chapter continues, for a period that shall not exceed 10 days, may be a separate violation. The amount of the penalty assessed for each violation shall be based upon the nature of the violation, the seriousness of the effect of the violation upon the effectuation of the purposes and provisions of this chapter, and the impact of the penalty on the violator, including the deterrent effect on future violations. If the secretary determines, based on evidence submitted, that the grossly negligent or willful violation has the potential to seriously impact the ability of California rice producers to produce or market rice without characteristics of commercial impact, each day shall be considered a separate violation and the period of time shall not exceed a total of 20 days. (b) Upon a finding that a violation was negligent or unintentional, the secretary may levy a civil penalty of not more than two thousand five hundred dollars ($2,500) for each violation. (c) For a first offense, and upon a finding that the violation is minor and negligent or unintentional, in lieu of a civil penalty as prescribed in subdivision (b), the secretary may issue a notice of violation. (d) A person against whom a civil penalty is levied shall be afforded an opportunity for a hearing before the secretary, upon a request made within 30 days after the date of issuance of the notice of penalty. At the hearing, the person shall be given the right to present evidence on his or her own behalf. If no hearing is requested, the civil penalty shall constitute a final and nonreviewable order. (e) If a hearing is held, review of the decision of the secretary may be sought by the person against whom the civil penalty is levied within 30 days of the date of the final order of the secretary pursuant to Section 1094.5 of the Code of Civil Procedure. (f) A civil penalty levied by the department pursuant to this section may be recovered in a civil action brought in the name of the state.


55123. (a) The department shall be entitled to receive reimbursement for any reasonable attorney's fees and other related costs, including, but not limited to, investigative costs, involved in enforcement of this chapter. (b) The department shall use all funds received pursuant to this chapter for the purposes of this chapter.


Chapter 5. Grain And Seed Cleaners

Ca Codes (fac:55251-55255) Food And Agricultural Code Section 55251-55255



55251. As used in this chapter: (a) "Grain and seed" includes any grain, seeds, rice, beans, and any other agricultural product which is customarily cleaned by grain and seed cleaners. (b) "Grain and seed cleaner" means a person that is lawfully engaged in the business of cleaning grain and seeds for others.


55252. If the owner delivers any grain and seed to a grain and seed cleaner for cleaning, and desires to have the cleanings from the grain and seed kept for him, he shall make written request to the grain and seed cleaner to segregate and hold all cleanings which result from the cleaning of the grain and seed.


55253. If a request is made by the owner, the cleaner shall sack or otherwise segregate the cleanings and give written notice to the owner when the cleaning is completed.


55254. If the cleanings are not removed from the cleaning plant within five days after the mailing of the written notification to the owner, as provided in Section 55253, or five days from the date of receiving authorization to move the cleanings if such authorization is required by Section 7571, the grain and seed cleaner may dispose of the cleanings in such manner as is provided by law.


55255. If no disposition of the cleanings is provided for by law and authorization to move the cleanings if required by Section 7571 is received as provided in Section 55254, the grain and seed cleaner may dispose of the cleanings by sale or otherwise and shall pay the grower the net receipts received from such sale after deducting reasonable expenses of the sale and satisfying any claims which he may have against such cleanings.


Chapter 6. Processors Of Farm Products

Article 1. Definitions

Ca Codes (fac:55401-55409) Food And Agricultural Code Section 55401-55409



55401. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


55402. "Agent" means any person that on behalf of any processor contracts for or solicits any farm product from a producer of the farm product, or that negotiates the purchase of any farm product on behalf of any processor.

55402.3. "Cash" means coin or currency of the United States, and does not include a check or money order.


55402.5. "Cash buying processor" means any person who is engaged in the business of processing or manufacturing any farm product; who obtains from the producer of any farm product, title to, or possession or control of the farm product; and who buys or agrees to buy any farm product, by cash payment of the full agreed price of such product to the producer at the time of obtaining possession or control or at the time of contracting for title to, or possession or control of any farm product.


55403. "Farm product" includes every agricultural, horticultural, viticultural, or vegetable product of the soil, honey and beeswax, oilseeds, poultry, poultry product, livestock product, and livestock for immediate slaughter. It does not include timber or any timber product, milk or any milk product, any aquacultural product, or cattle sold to any person who is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.).


55404. "Lender" includes any person that advances new value to a processor.

55404.5. "Licensee" means any person licensed under the provisions of this chapter as a processor or cash buying processor.


55405. "New value" includes any new advance or loan, whether in money or other property, which is made by a lender to a processor. It does not, however, include any extension or renewal of any existing obligation of the processor, nor any obligation which is substituted for such existing obligation.

55406. "Packout basis" means that payment for the farm product is based on the grade or quality of the finished product, as determined at the completion of the processing.


55407. "Processor" means any person that is engaged in the business of processing or manufacturing any farm product, that solicits, buys, contracts to buy, or otherwise takes title to, or possession or control of, any farm product from the producer of the farm product for the purpose of processing or manufacturing it and selling, reselling, or redelivering it in any dried, canned, extracted, fermented, distilled, frozen, eviscerated, or other preserved or processed form. It does not, however, include any retail merchant that has a fixed or established place of business in this state and does not sell at wholesale any farm product which is processed or manufactured by him.


55408. "Producer" means any person that is engaged in the business of growing or producing any farm product.


55409. Juice or must used for wine which, as a condition of sale, is required to be pressed or crushed from grapes in the field or at a facility not owned by the purchasing vintner, is a farm product for purposes of this chapter. Juice or must which was not required to be pressed or crushed from grapes as a condition of a sale, and which is stored for the account of the producer who grew the grapes, is not a farm product when it is sold.


Article 2. General Provisions

Ca Codes (fac:55431-55439) Food And Agricultural Code Section 55431-55439



55431. The marketing of agricultural commodities within this state is hereby declared to be affected with the public interest. The provisions of this chapter are enacted in the exercise of the police powers of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.


55432. The director may publish in pamphlet form as often as he thinks necessary a list of processors that are licensed pursuant to this chapter, together with all necessary regulations which concern the enforcement of this chapter.

55433. Any money in the Department of Food and Agriculture Fund which was derived pursuant to this chapter, or Chapter 7 (commencing with Section 56101), may be expended for the administration and enforcement of these chapters and Chapter 7.5 (commencing with Section 56701), notwithstanding any other provision of law which limits the expenditure of any such money to the specific purposes or to the administration or enforcement of each of the chapters separately.

55435. No provisions in any bond which is given pursuant to any provision of this chapter which attempts by contract to shorten the period which is prescribed for the commencement of an action on the bond by Section 337 of the Code of Civil Procedure, is valid if such provision attempts to limit the time for commencement of action on the bond to a shorter period than six months from the termination of the 35-day period which is covered by such bond.


55435.5. (a) Except pursuant to an exemption granted by the department, no person licensed under this chapter shall employ as an agent any person who meets any of the following criteria: (1) Whose license has been revoked, or is currently suspended. (2) Who has committed any one flagrant or repeated violations of this chapter or Chapter 7 (commencing with Section 56101). (3) Who failed to pay a producer's claims for which the person, or, where the person controlled the decision to pay, the person's employer, was liable, and which arose out of the conduct of a business licensed, or required to be licensed, under this chapter or Chapter 7 (commencing with Section 56101). (4) Who has been convicted of a crime that includes as one of its elements the financial victimization of another person. (b) The department may approve the employment of any person covered under subdivision (a), if the licensee furnishes and maintains a surety bond in the form and amount satisfactory to the department, but which shall not be less than ten thousand dollars ($10,000), as assurance that the licensee's business will be conducted in accordance with this chapter and that the licensee will pay all amounts due California producers. The department may approve employment without a surety bond after the expiration of four years from the effective date of the applicable disciplinary order. The department, based on changes in the nature and volume of business conducted by the licensee, may require an increase or authorize a reduction in the amount of the bond, but in no case shall the bond be reduced below ten thousand dollars ($10,000). A licensee who is notified by the department to provide a bond in an increased amount shall do so within a reasonable time to be specified by the department, and if the licensee fails to do so, the approval of employment shall automatically terminate. The department may suspend or revoke the license of any licensee who, after the date given in the notice, continues to employ any person in violation of this section. (c) The department may obtain access to a licensee's or agent's criminal record during the course of a licensing investigation opened for other reasons or if the department is presented with a reasonable basis to believe an agent or licensee satisfies any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a). The Department of Justice shall furnish criminal record information to the department at the department's request. If the information thereby obtained reveals a conviction for a crime that includes as one of its elements the financial victimization of another person, the department shall bring this to the attention of the licensee and the agent by a written notice. This written notice shall set out the charges against the licensee or agent, prohibit employment or revoke or deny the license effective if and when any rights to an administrative hearing have been exhausted, and set out the licensee's or agent's rights under this section. (d) The department may grant an exemption on presentation of substantial, clear, and convincing evidence to support a reasonable belief as to any of the following: (1) There has been a mistake of fact or identity. (2) The present role as an agent provides no opportunity for a repeat of the prior behavior. (3) The person has been rehabilitated. All submissions shall be authenticated and verified under penalty of perjury. Unless the licensee or agent can prove one of these three elements by substantial, clear, and convincing evidence, the department shall deny the request for exemption. (e) (1) A licensee or agent who has been identified by the department as satisfying any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a) and who has not been granted an exemption by the department shall be afforded a hearing upon the licensee's or agent's request under this chapter. The licensee or agent shall not have a right of hearing if the department did not notify the employer or deny an exemption. (2) At the hearing, the department shall have the burden to prove that any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a) are satisfied by a preponderance of the evidence. It shall be the licensee's or agent's burden to prove rehabilitation by substantial, clear, and convincing evidence. (3) In the case of a criminal conviction, "convicted of a crime" includes a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action that the department is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, notwithstanding a subsequent order pursuant to Sections 1203.4 and 1203.4a of the Penal Code permitting the person to withdraw his or her plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the accusation, information, or indictment. For purposes of this section or any other provision of this chapter, the record of a conviction, or a copy thereof certified by the clerk of the court or by a judge of the court in which the conviction occurred, shall be conclusive evidence of the conviction. (4) For purposes of this section or any other provision of this chapter, a certified copy of a decision and order or minutes of the court in which a finding is made concerning any of the criteria set forth in paragraphs (1) to (3), inclusive, of subdivision (a), is prima facie evidence of the truth of the charge and collateral estoppel applies. (f) The documents and information procured pursuant to this section shall be considered the records of a consumer and shall not be construed to be a public record. The documents and information shall remain confidential, except in actions brought by the department to enforce this division, or as a result of the issuance of a subpoena in accordance with Section 1985.4 of the Code of Civil Procedure. The unauthorized release of the documents received from the Department of Justice or the information contained in those documents is a misdemeanor.


55436. Civil suits and criminal prosecutions which arise by virtue of any provision of this chapter may be commenced and tried in any of the following: (a) The county where the products were received by the processor. (b) The county in which the principal place of business of such processor is located. (c) The county in which the violation of this chapter occurred.


55437. The rights, remedies, and penalties which are provided for in this chapter are in addition to any other rights, remedies, or penalties which are provided for by law, and any acts or parts of acts in conflict therewith are hereby repealed.


55438. Except as otherwise provided in this chapter, the provisions of Part 2 (commencing with Section 307) of the Code of Civil Procedure are applicable to, and constitute the rules of practice in, the proceedings which are mentioned in this chapter, and the provisions of Part 2 of the Code of Civil Procedure relative to new trials and appeals, except insofar as they are inconsistent with the provisions of this chapter, apply to the proceedings which are mentioned in this chapter.


55439. If any clause, sentence, paragraph, or part of this chapter is for any reason adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this chapter, but shall be confined in its operation to the clause, sentence, paragraph, or part of this chapter which is directly involved in the controversy in which such judgment is rendered.


Article 3. Exceptions

Ca Codes (fac:55461-55462) Food And Agricultural Code Section 55461-55462



55461. This chapter does not apply to or include any nonprofit cooperative association which is organized and operating pursuant to Chapter 1 (commencing with Section 54001) or pursuant to similiar laws of any other states, the District of Columbia, or the United States. This chapter also does not apply to the agents of these organizations in the performance of their duties. This chapter does apply to the activities of the organization, or agent, which involve the handling or dealing in any farm product of nonmembers of the organization, and activities of such an organization, or agent, which involve acting as a producer bargaining association asserting the lien rights of its members.


55462. For the purposes of trading in cattle, this chapter does not apply to or include any person who is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.) who is engaged in the business of buying or selling cattle.


55462. For the purposes of trading in cattle, this chapter does not apply to or include any person who is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.) who is engaged in the business of buying or selling cattle.


Article 4. Agent's License

Ca Codes (fac:55481-55493) Food And Agricultural Code Section 55481-55493



55481. A person shall not act as an agent unless such person has first obtained a license as provided in this chapter.


55482. Every person, before acting as an agent, shall file an application with the director for a license to so act. The application shall be accompanied by the application fee which is prescribed by Article 16 (commencing with Section 55861) of this chapter.


55483. (a) Each application shall include all of the following: (1) Such information as the department may consider proper or necessary. (2) The name and address of the applicant. (3) The name and address of the processor that is represented or sought to be represented by the agent. (4) The written endorsement or nomination of the processor. (5) A release authorizing the department, during consideration of the application and for the duration of licensure, to have access to and obtain financial information from both of the following: (A) The applicant's files with credit reporting agencies. (B) The applicant's files with banks, savings and loan associations, or any other financial institutions with whom the applicant has done business in the past or with whom the applicant intends to do business during the year of licensure. (6) A notice signed by the applicant that the department may obtain criminal record information during the course of a licensing investigation or upon presentation with a reasonable basis to believe the licensee has been convicted of a crime. An applicant whose application is incomplete shall be given written notice that a failure to complete it within 30 calendar days shall result in denial of the application. (b) The documents and information procured pursuant to this section shall be considered the records of a consumer and shall not be construed to be a public record. The documents and information shall remain confidential, except in actions brought by the department to enforce this division, or as a result of the issuance of a subpoena in accordance with Section 1985.4 of the Code of Civil Procedure. The unauthorized release of the documents received from the Department of Justice or the information contained in those documents is a misdemeanor. (c) The department shall adopt regulations that specify the proper and necessary information and supporting documentation the department requires for an application to be considered complete.


55484. The department shall accept or deny an application within 90 calendar days of receipt of a completed application. The department may deny, condition, suspend, or revoke a license issued pursuant to this chapter upon any of the following grounds and in the manner provided in this chapter: (a) Upon one flagrant violation, as determined by the department, or upon repeated violations, by the holder or applicant, of any one or combination of the sections of this division or under any one or combination of the regulations promulgated by the department under the authority of this division. (b) Upon one flagrant violation, as determined by the department, or upon repeated violations, by a holder's or applicant's agent, employee, or contractor, or of an organization or entity in which the holder or applicant holds a significant financial interest, of any one or combination of the sections of this division or any one or combination of the regulations promulgated under this division under circumstances where the holder or applicant knew or should have known and failed to take reasonable measures to prevent the violation or failed to report the violation to the department upon learning of the violation. (c) On the conviction of the holder or applicant of a crime that includes as one of its elements the financial victimization of another person. However, if the licensee was licensed prior to January 1, 1998, and the department knew of, or was on notice of, the conviction, that conviction may not form the basis of a discipline under this subdivision. (d) On the grounds of a false or misleading statement by a holder or applicant that the holder or applicant knew or should have known to be false or misleading, directed to any official of any government concerning the scope of any indicia of authority, including, but not limited to, the holder's or applicant's license associated with the holder's or applicant's business, the standards under which the indicia was authorized, the contents of the application for licensure, or the holder's or applicant's relationship to the indicia. (e) On the grounds that a holder or applicant, or a holder's or applicant's agency, employee, or contractor, or an organization or entity in which a holder or applicant holds a significant financial interest, deceived a grower in any material matter. Deception, for purposes of this subdivision, does not require scienter, but requires active misrepresentation where the actor knew the representation to be false or where the actor should have known, with due consideration, that he or she did not know whether or not the representation was true or false.


55484.5. (a) The Legislature finds there to be a substantial nexus between the conduct specified in Section 55484 and an applicant's or holder's fitness for licensure. (b) The department shall not dismiss an action where a violation, however minor, has been established. The department shall not dismiss an action because the applicant or holder establishes factors in mitigation. (c) However, the department may impose discipline other than denial or revocation of the license. As an alternative to revocation of a license, the department may stay a revocation subject to terms for a period of probation. As an alternative to denial the department may issue a license subject to conditions. Terms of probation or terms of conditional licensure may include, but are not limited to, a requirement of restitution, payment for extra audits, immediate revocation on a new violation, or any other terms that respond to the particular violations or circumstances found. (d) Once a finding of a violation has been made, the department may consider the following factors in assessing the appropriate level of discipline: (1) The relative isolation or infrequency of the conduct. (2) Whether the conduct was a part of a pattern or practice. (3) Whether the actor had been warned before. (4) Whether the actor considered the consequences of the conduct. (5) Whether the actor reasonably relied on others. (6) The severity of the consequences. (7) The mens rea of the actor. (8) In the case of a criminal conviction, evidence of rehabilitation. (9) The total licensing history. (e) The following factors shall not be considered in assessing the appropriate level of discipline: (1) The social or economic contributions of the applicant or holder. (2) General testimonials as to good character and worthiness to be licensed. (3) Economic hardship on the licensee. (4) "Mercy of the court" pleas in connection with criminal convictions, pattern or practice violations, or deception. (5) In the case of a felony criminal conviction, the department shall not consider rehabilitation unless the convicted person has a valid certificate of rehabilitation.


55484.75. (a) If an application for a license indicates, or the department determines during the application review process, that the applicant was issued a license that was revoked within the preceding two years, the department shall cease any further review of the application until two years have elapsed from the date of the revocation. The cessation of review shall not constitute a denial of the application for the purposes of this chapter, or any other provision of law. (b) If an application for a license indicates, or the department determines during the application review process, that the applicant had previously applied for a license and the application was denied within the last year, the department shall cease further review of the application until 30 days have elapsed from the date of the notification of the denial or from the effective date of the decision and order of the department upholding a denial. The cessation of review shall not constitute a denial of the new applicant for purposes of this chapter, or any other provision of law. (c) Nothing in subdivision (a) or (b) prohibits the department from taking into account the basis for denial or revocation in considering any new application subsequent to the elapse of the applicable period of prohibition.


55485. The applicant shall satisfy the department of the applicant' s character, responsibility, and good faith in seeking to carry on the business that is stated in the application.


55485.5. A license is forfeited by operation of law prior to its expiration date when one of the following occurs: (a) The holder surrenders the license to the department. (b) The holder dies. (c) The partnership holder dissolves. (d) The holder of a significant financial interest in a corporation transfers his or her interest to another person or entity, regardless of relationship. (e) The holder files for bankruptcy under provisions other than those permitting and governing reorganization under bankruptcy.


55485.75. (a) The withdrawal of an application for a license after it has been filed with the department does not deprive the department of its authority to institute or continue a proceeding against the applicant or to enter an order denying the license, unless the department consents in writing to such a withdrawal. (b) The expiration or forfeiture by operation of law of a license, or its forfeiture or cancellation by order of the department or by order of a court of law, or its surrender without the written consent of the department, does not deprive the department of its authority to institute or continue a disciplinary proceeding against the holder upon any ground provided by law or to enter an order revoking the license or otherwise taking disciplinary action against the holder. (c) Any action brought by the department against an applicant or holder does not abate by reason of the sale or other transfer of ownership of the business that is a party to the action, except with the written consent of the department. (d) Nothing in this division or in any other provision of this code deprives the department of the authority to settle or adjudicate a disposition of a case other than by revocation or denial. The department or the department's designee may compromise with the applicant or holder in a written stipulation and order. The department may, following a hearing, order probation on terms and conditions as determined by the department. The authority conferred by this subdivision shall include, but not be limited to, the authority to order payment of amounts determined owing, the authority to dismiss an action on the department's own initiative, the authority to order administrative penalties, the authority to order a respondent to pay for heightened audit scrutiny, the authority to suspend a license for a period of years, or any combination of remedies other than final revocation or denial of a license.


55488. (a) The department shall notify the applicant or holder in writing of the department's decision to bring charges to deny or revoke a license. (1) The notice shall inform the applicant or holder of the charges against him or her, of the department's proposed disciplinary action, and of his or her rights under this chapter. (2) The notice shall be served by certified mail to the applicant' s or holder's last known address. (3) The notice shall be mailed to the applicant or holder at least 30 calendar days in advance of the impending action. (b) The department's proposed action shall become final unless the applicant or holder appeals prior to the end of the notice period by submitting a notice of defense to the department in a form specified by the department. The notice shall be transmitted to the department in a form that is written, including, but not limited to, by facsimile. (c) If the department receives a timely notice of defense, the department shall schedule a hearing within 90 calendar days of receipt of the notice of defense. Pending the final decision at the conclusion of the hearing, a revocation shall be stayed. (d) Proceedings for the revocation or denial of a license issued under this chapter shall be conducted by hearing officers appointed for that purpose by the department. The department may elect to use hearing officers employed by the Office of Administrative Hearings. The hearing officers shall be independent of the Market Enforcement Bureau, but may be employees of the department. The hearing officers shall be qualified administrative law judges. (e) Proceedings shall be conducted generally in accordance with the provisions of Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. However, proceedings need not conform strictly to any "rules of court" adopted as regulations by the Office of Administrative Hearings to guide the conduct of hearings conducted by the Office of Administrative Hearings. The department has all power granted by Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (1) The sole parties to the proceedings shall be the department and the applicant or holder. Third party intervention shall not be permitted. The disputes, claims, and interests of third parties shall not be within the jurisdiction of the proceedings. However, nothing in this paragraph prohibits any interested party from submitting an amicus brief if the hearing officer requests written briefs. (2) The validity of a department regulation or order shall not be within jurisdiction of the proceedings. (3) Law and motion matters shall be handled by the assigned hearing officer. (4) The hearing officer may not enter into settlement discussions. (5) The hearing officer may not issue sanctions. (f) In all proceedings conducted in accordance with this section, the standard of proof to be applied is the preponderance of the evidence. When the department seeks to revoke an existing license, the department shall have the burden of proof and the burden of producing evidence. (g) Decisions following a hearing shall be adopted by the department or the department's designee and become final unless remanded for reconsideration or alternated in accordance with Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (h) The department shall maintain a library of decisions that shall be made available to any person, including the parties to administrative actions during discovery.


55491. The director may issue to each agent a separate license card for each processor represented by the agent.


55492. Any agent that displays a void or expired license card is guilty of a misdemeanor.


55493. Each agent shall show his license upon the request of any interested person.


Article 5. Processor's License

Ca Codes (fac:55521-55530) Food And Agricultural Code Section 55521-55530



55521. A person shall not act as a processor or a cash buying processor unless he has first obtained a license as provided in this chapter or in Section 56574.


55522. Every person, before acting as a processor or a cash buying processor, shall file an application with the director for a license to so act. The application, unless it is an application for a conjunctive processor's license pursuant to Section 56574, shall be accompanied by the application fee which is prescribed by Article 16 (commencing with Section 55861) of this chapter.


55522.5. (a) It is unlawful for a licensee that has changed its legal entity to do any of the following: (1) Continue to operate after the change. (2) Purchase or handle any farm product from a person who had a farm product contract with the former licensee at the time of the change in entity without notifying that person, in writing, of the change in entity. (3) Use any invoice, contract, or other document associated with the purchase, consignment, or brokerage of any farm product that identifies the former licensee unless the new entity is conspicuously identified on the same invoice, contract, or other document as the entity responsible for the transaction. (b) The new entity shall notify the director in writing of the change in legal entity within 15 days of the change. The new legal entity shall, before it conducts business that requires a license, obtain a new license for the business. (c) Notwithstanding subdivision (b), if a licensee conducts business without a new license as a result of a change of legal entity, it may, within 120 days of the change, upon a showing of no substantial change in financial resources and liabilities, petition the director to grant a new license retroactive to the first day of the month during which the change occurred, and the director may grant the license with retroactive effect upon a finding that doing so would be consistent with the purposes of this chapter. Upon granting the petition, the director shall (1) require the licensee to pay an additional fee in an amount that will cover the expenses of the department in the matter, but not to exceed the fee for a new license, (2) place conditions on the license that are consistent with the purposes of this chapter as the director deems appropriate, and (3) require the licensee to pay an amount, for deposit in the Farm Products Trust Fund, equal to the amount that would have been required had the license been obtained in accordance with subdivision (b).

55522.6. (a) If the Secretary of State suspends the corporate status of any licensee or if the corporate status is forfeited, the license is revoked by operation of law. The former licensee shall provide written notice of the suspension or forfeiture to the director, and to each person with whom it has a farm product contract, within 15 days of the date the Secretary of State mails the notice of suspension or forfeiture. (b) The former licensee, may, upon a showing of no substantial change in financial resources and liabilities, and within 90 days of the suspension or forfeiture of corporate status, petition the director for an order to reissue its license formerly held under this chapter. If the corporate status has been reinstated by the Secretary of State, the director may reissue the license if the director finds that doing so would be consistent with the purposes of this chapter. As a condition to reissuing the license, the director may (1) require the former licensee to undertake such financial guarantees, including the filing and maintaining bonds, as the director deems necessary to protect the interests of contracting parties, and (2) impose conditions on the license that are consistent with the purposes of this chapter as the director deems appropriate.


55523. (a) Each application shall state all of the following: (1) The full name of the applicant. (2) If the applicant is a firm, exchange, association, or corporation, the full name of each member of the firm or the names of the officers of the exchange, association, or corporation. (3) The principal business address of the applicant in this state. (4) The name of every person who is authorized to receive and accept service of summons for the applicant. (5) A release authorizing the department, during consideration of the application and for the duration of licensure, to have access to and obtain financial information from both of the following: (A) The applicant's files with credit reporting agencies. (B) The applicant's files with banks, savings and loan associations, or any other financial institutions with whom the applicant has done business in the past or with whom the applicant intends to do business during the year of licensure. (6) A notice signed by the applicant or the applicant's representative that the department may obtain criminal record information during the course of a licensing investigation or upon presentation with a reasonable basis to believe the licensee has been convicted of a crime. An applicant whose application is incomplete shall be given written notice that a failure to complete the application within 60 calendar days shall result in denial of the application. (b) The documents and information procured pursuant to this section shall be considered the records of a consumer and shall not be construed to be a public record. The documents and information shall remain confidential, except in actions brought by the department to enforce this division, or as a result of the issuance of a subpoena in accordance with Section 1985.4 of the Code of Civil Procedure. The unauthorized release of the documents received from the Department of Justice or the information contained in those documents, is a misdemeanor.

55523.1. In addition to the other requirements of this chapter, each application for a license, except for an application for a cash buying processor license, shall include an affidavit in which the applicant affirms that he or she is current in making all payments required under undisputed contract agreements, and that he or she will do all of the following: (a) Abide by all provisions of this chapter and Chapter 7 (commencing with Section 56101). (b) Prepare and retain financial records adequate to document all transactions with suppliers. (c) Prepare and retain current financial information, including, but not limited to, profit and loss statements and a balance sheet that presents fairly the financial condition as of the end of the applicant's most recent fiscal year. The affidavit shall be on a form prescribed by the secretary and shall be submitted under penalty of perjury.


55523.2. Any balance sheet or financial information prepared, retained, or submitted as required by this chapter that shows the applicant to be in an unsound financial condition that impairs the ability to pay farm products creditors in full for farm products received or handled is sufficient grounds to deny the application for license or the renewal of a license. The denial of the application for a license or renewal of a license relating to an unsound financial condition shall include a notice and an opportunity for a hearing.

55523.3. (a) If the director is not satisfied that an applicant or licensee is financially responsible, the director may, in lieu of denying, suspending, or revoking the license, accept an irrevocable guarantee of the obligations of the licensee to all California farm product creditors. The guarantee shall be for any periods and in any amounts that the director may, from time to time, require. The director may, as a condition of accepting and maintaining the guarantee, require the guarantor to supply financial information to the director at times and to the extent the director deems advisable. (b) A guarantee placed with the director pursuant to subdivision (a) shall support an action in a court of competent jurisdiction by a farm products creditor for obligations of the licensee to the creditor and by a state officer for the obligations of the licensee to the state related to transactions subject to the guarantee.


55523.4. If at any time the secretary has cause or reason to believe that any applicant or licensee is in an unsound financial condition so as to impair his or her ability to pay farm products creditors in full for farm products received or handled, or for any reason the secretary deems advisable, the secretary may require an applicant or licensee to file with him or her a balance sheet or statement of financial position that presents fairly the financial condition of the licensee. The financial statement, if not prepared by a public accountant or certified public accountant, shall be on a form prescribed by the secretary and shall be submitted under penalty of perjury. Any balance sheet submitted that does not provide the information required by the secretary may be rejected until the information is provided.


55523.5. Failure to file a financial statement as required by this chapter or to comply with the affidavit requirements of Section 55523.1 is a violation of this chapter.


55523.6. Any financial statement submitted to the secretary pursuant to this chapter is confidential and shall not be divulged except at a hearing before the secretary or under subpoena, if necessary, for the proper determination of any court proceedings.


55524. The department shall accept or deny an application within 90 calendar days of receipt of a completed application. The department may deny, condition, suspend, or revoke a license issued pursuant to this chapter upon any of the following grounds and in the manner provided in this chapter: (a) Upon one flagrant violation, as determined by the department, or repeated violations, by the holder or applicant, of any one or combination of the sections of this division or under any one or combination of the regulations promulgated by the department under the authority of this division. (b) Upon one flagrant violation, as determined by the department, or repeated violations, by a holder's or applicant's agent, employee, or contractor, or of an organization or entity in which the holder or applicant holds a significant financial interest, of any one or combination of the sections of this division or any one or combination of the regulations promulgated under this division under circumstances where the holder or applicant knew or should have known and failed to take reasonable measures to prevent the violation or failed to report the violation to the department on learning of the violation. (c) On the conviction of the holder or applicant of a crime that includes as one of its elements the financial victimization of another person. However, if the licensee was licensed prior to January 1, 1998, and the department knew of, or was on notice of, the conviction, that conviction may not form the basis of a discipline under this subdivision. (d) On the grounds of a false or misleading statement by a holder or applicant that the holder or applicant knew or should have known to be false or misleading, directed to any official of any government concerning the scope of any indicia of authority, including, but not limited to, the holder's or applicant's license associated with the holder's or applicant's business, the standards under which the indicia was authorized, the contents of the application for licensure, or the holder's or applicant's relationship to the indicia. (e) On the grounds that a holder or applicant, or a holder's or applicant's agency, employee, or contractor, or an organization or entity in which a holder or applicant holds a significant financial interest, deceived a grower in any material matter. Deception, for purposes of this subdivision, does not require scienter, but requires active misrepresentation where the actor knew the representation to be false or where the actor should have known, with due consideration, that he or she did not know whether or not the representation was true or false.


55524.5. (a) The Legislature finds there to be a substantial nexus between the conduct specified in Section 55524 and an applicant's or holder's fitness for licensure. (b) The department shall not dismiss an action where a violation, however minor, has been established. The department shall not dismiss an action because the applicant or holder establishes factors in mitigation. (c) However, the department may impose discipline other than denial or revocation of the license. As an alternative to revocation of a license, the department may stay a revocation subject to terms for a period of probation. As an alternative to denial the department may issue a license subject to conditions. Terms of probation or terms of conditional licensure may include, but are not limited to, a requirement of restitution, payment for extra audits, immediate revocation on a new violation, or any other terms that respond to the particular violations or circumstances found. (d) Once a finding of a violation has been made, the department may consider the following factors in assessing the appropriate level of discipline: (1) The relative isolation or infrequency of the conduct. (2) Whether the conduct was a part of a pattern or practice. (3) Whether the actor had been warned before. (4) Whether the actor considered the consequences of the conduct. (5) Whether the actor reasonably relied on others. (6) The severity of the consequences. (7) The mens rea of the actor. (8) In the case of a criminal conviction, evidence of rehabilitation. (9) The total licensing history. (e) The following factors shall not be considered in assessing the appropriate level of discipline: (1) The social or economic contributions of the applicant or holder. (2) General testimonials as to good character and worthiness to be licensed. (3) Economic hardship on the licensee. (4) "Mercy of the court" pleas in connection with criminal convictions, pattern or practice violations, or deception. (5) In the case of a felony criminal conviction, the department shall not consider rehabilitation unless the convicted person has a valid certificate of rehabilitation.


55524.75. (a) If an application for a license indicates, or the department determines during the application review process, that the applicant was issued a license that was revoked within the preceding two years, the department shall cease any further review of the application until two years have elapsed from the date of the revocation. The cessation of review shall not constitute a denial of the application for the purposes of this chapter, or any other provision of law. (b) If an application for a license indicates, or the department determines during the application review process, that the applicant had previously applied for a license and the application was denied within the last year, the department shall cease further review of the application until one year has elapsed from the date of the notification of the denial or from the effective date of the decision and order of the department upholding a denial. The cessation of review shall not constitute a denial of the new applicant for purposes of this chapter, or any other provision of law. (c) Nothing in subdivision (a) or (b) prohibits the department from taking into account the basis for denial or revocation in considering any new application subsequent to the elapse of the applicable period of prohibition.


55525. The applicant shall satisfy the department of the applicant' s character, responsibility, and good faith in seeking to carry on the business that is stated in the application.


55525.75. (a) The withdrawal of an application for a license after it has been filed with the department does not deprive the department of its authority to institute or continue a proceeding against the applicant or to enter an order denying the license, unless the department consents in writing to such a withdrawal. (b) The expiration or forfeiture by operation of law of a license, or its forfeiture or cancellation by order of the department or by order of a court of law, or its surrender without the written consent of the department, does not deprive the department of its authority to institute or continue a disciplinary proceeding against the holder upon any ground provided by law or to enter an order revoking the license or otherwise taking disciplinary action against the holder. (c) Any action brought by the department against an applicant or holder does not abate by reason of the sale or other transfer of ownership of the business that is a party to the action, except with the written consent of the department. (d) Nothing in this division or in any other provision of this code deprives the department of the authority to settle or adjudicate a disposition of a case other than by revocation or denial. The department or the department's designee may compromise with the applicant or holder in a written stipulation and order. The department may, following a hearing, order probation on terms and conditions as determined by the department. The authority conferred by this subdivision shall include, but not be limited to, the authority to order payment of amounts determined owing, the authority to dismiss an action on the department's own initiative, the authority to order administrative penalties, the authority to order a respondent to pay for heightened audit scrutiny, the authority to suspend a license for a period of years, or any combination of remedies other than final revocation or denial of a license.


55527.5. Any person who is adjudicated liable for payment of a claim for farm products which arose out of the conduct of a business licensed or required to be licensed under this chapter or Chapter 7 (commencing with Section 56101), and who has not made full settlement with all producer-creditors, shall not be licensed by the director as a principal for four years from the date of the adjudication.


55527.6. (a) Licensees or applicants for a license shall be required to furnish and maintain a surety bond in a form and amount satisfactory to the director, if within the preceding four years the director determines that they have done any of the following: (1) Engaged in conduct which demonstrates a lack of financial responsibility including, but not limited to, delinquent accounts payable, judgments of liability, insolvency, or bankruptcy. (2) Failed to assure future financial responsibility unless a surety bond is posted. (3) Otherwise violated this chapter which resulted in license revocation. (b) The bond shall not be less than ten thousand dollars ($10,000) or 20 percent of the annual dollar volume of business based on farm product value returned to the grower, whichever is greater, as assurance that the licensee's or applicant's business will be conducted in accordance with this chapter and that the licensee or applicant will pay all amounts due farm products creditors. (c) The director, based on changes in the nature and volume of business conducted by the licensee, may require an increase or authorize a reduction in the amount of the bond, but in no case shall the bond be reduced below ten thousand dollars ($10,000). A licensee who is notified by the director to provide a bond in an increased amount shall do so within a reasonable time as specified by the director. If the licensee fails to do so, the director may, after a notice and opportunity for a hearing, suspend or revoke the license of the licensee.


55528. (a) The department shall notify the applicant or holder in writing of the department's decision to bring charges to deny or revoke a license. (1) The notice shall inform the applicant or holder of the charges against him or her, of the department's proposed disciplinary action, and of his or her rights under this chapter. (2) The notice shall be served by certified mail to the applicant' s or holder's last known address. (3) The notice shall be mailed to the applicant or holder at least 30 calendar days in advance of the impending action. (b) The department's proposed action shall become final unless the applicant or holder appeals prior to the end of the notice period by submitting a notice of defense to the department in a form specified by the department. The notice shall be transmitted to the department in a form that is written, including, but not limited to, by facsimile. (c) If the department receives a timely notice of defense, the department shall schedule a hearing within 90 calendar days of receipt of the notice of defense. Pending the final decision at the conclusion of the hearing, a revocation shall be stayed. (d) Proceedings for the revocation or denial of a license issued under this chapter shall be conducted by hearing officers appointed for that purpose by the department. The department may elect to use hearing officers employed by the Office of Administrative Hearings. The hearing officers shall be independent of the Market Enforcement Bureau, but may be employees of the department. The hearing officers shall be qualified administrative law judges. (e) Proceedings shall be conducted generally in accordance with the provisions of Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. However, proceedings need not conform strictly to any "rules of court" adopted as regulations by the Office of Administrative Hearings to guide the conduct of hearings conducted by the Office of Administrative Hearings. The department has all power granted by Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (1) The sole parties to the proceedings shall be the department and the applicant or holder. Third party intervention shall not be permitted. The disputes, claims, and interests of third parties shall not be within the jurisdiction of the proceedings. However, nothing in this paragraph prohibits any interested party from submitting an amicus brief if the hearing officer requests written briefs. (2) The validity of a department regulation or order shall not be within jurisdiction of the proceedings. (3) Law and motion matters shall be handled by the assigned hearing officer. (4) The hearing officer may not enter into settlement discussions. (5) The hearing officer may not issue sanctions. (f) In all proceedings conducted in accordance with this section, the standard of proof to be applied is the preponderance of the evidence. When the department seeks to revoke an existing license, the department shall have the burden of proof and the burden of producing evidence. (g) Decisions following a hearing shall be adopted by the department or the department's designee and become final unless remanded for reconsideration or alternated in accordance with Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (h) The department shall maintain a library of decisions that shall be made available to any person, including the parties to administrative actions during discovery.


55530. Each licensed processor shall post his license, or a copy of it, in his office or salesroom in plain view of the public.


Article 7. Sale Of Farm Products By Weight

Ca Codes (fac:55581) Food And Agricultural Code Section 55581



55581. If any farm product is sold to and purchased by any processor on the basis of weight, such product shall be weighed by a weighmaster licensed under the laws of this state, and a certificate as to such weight issued by him shall be delivered to the seller by the processor or by the weighmaster as agent for the processor. Settlement for such product shall be made on the basis of the weight which is shown on the certificate.


Article 8. Processors

Ca Codes (fac:55601-55613) Food And Agricultural Code Section 55601-55613



55601. Every processor shall pay for any farm product which is delivered to the processor at the time and in the manner which is specified in the contract with the producer. If no time is set by such contract, or at the time of delivery, then the processor shall pay for the farm product within 30 days of the delivery or taking possession of such farm product.


55601.1. Section 55601.5 shall be known, and may be cited as, the "Clare Berryhill Grape Crush Report Act of 1976."


55601.3. Upon the following, the processor shall notify the seller, on a form to be prescribed by the department, as to the requirements set forth in Sections 55601 and 55881: (a) Upon delinquency of a contract. (b) If payment is not made within 30 days when the contract does not specify time of payment or if there is no contract. (c) If payment is not made within 30 days when the contract is oral, irrespective of the agreed time of payment. The processor shall have the burden of proof as to the timely delivery of such a notice. Such a notice shall only be required as to the first contract between any particular seller and processor during any one calendar year.

55601.4. Notwithstanding the provisions of Section 55601, every processor who purchases livestock for slaughter shall make full payment of such livestock, by the transfer of collected funds to the seller's account, within two business days from the delivery of such livestock to the processor. For purposes of this section, "business day" means any day which is a business day under the provisions of Section 9 of the Civil Code.


55601.5. (a) (1) Notwithstanding Section 55461, on or before January 10 of every year, every processor who crushes grapes in this state shall furnish to the secretary, on forms provided by the secretary, a report that includes all of the following: (A) The total number of tons of grapes purchased by the processor in this state during the preceding crush within each grape-pricing district, broken down by total tons purchased, variety, and price, including any bonuses or allowances, and sugar calculations. (B) The total number of tons of grapes purchased by the processor in this state in nonrelated purchases during the preceding crush within each grape-pricing district, broken down by total tons purchased, variety, and price, including any bonuses or allowances, and sugar calculations. (C) The total number of tons of each variety of grape crushed within each grape-pricing district and the average sugar content of each variety within each grape-pricing district. (D) The total number of tons of grapes purchased and crushed that are expected, as of the date of reporting by the processor, to be marketed as grape concentrate. In reporting tons purchased and crushed that are expected to be marketed as grape concentrate, processors may estimate equivalent tonnage. In estimating the equivalent tonnage, the processor shall include all equivalent tons crushed for the production of grape concentrate for wine and all other purposes marketed outside the state and the equivalent tons crushed for the production of grape concentrate for all purposes other than wine marketed within the state. In determining the estimated equivalent tons, processors shall make their best estimate of the gallons of concentrate per ton of grapes crushed based upon the Brix level of the grapes used in concentrate production. (2) (A) When reporting price within the category of all tonnage purchased, processors shall include grapes purchased from (i) growers for wine, wine vinegar, juice, concentrate, and beverage brandy, (ii) another processor only if that processor was also the grower of the grapes, (iii) growers that are considered separate entities from the processor operation, or (iv) growers or other processors, but not by the reporting processor; and shall exclude (i) material other than grapes, and defects, or other weight adjustments deducted from the gross-weight ticket, (ii) any raisin-distilling material, (iii) grapes grown by the processor from vineyards that are not considered separate entities, (iv) grapes purchased from other processors that were previously purchased from growers, or (v) grapes crushed to grower accounts or crushed for other wineries. If several varieties were packaged together and purchased for one price, the processor shall report the average price per ton as one mixed lot, and when reporting crush information, shall report individual variety and tonnage information. (B) When reporting price within the category of nonrelated purchases, processors shall exclude tonnage of grapes purchased from a grower if, during the reporting year (i) the grower or an affiliate of the grower, or both the grower and the affiliate of the grower, owned, directly or indirectly, at least 5 percent of the indicia of ownership or voting authority of the processor, (ii) the processor or an affiliate of the processor, or both the processor and the affiliate of the processor, owned, directly or indirectly, at least 5 percent of the indicia of ownership or voting authority of the grower, or (iii) the processor or an affiliate of the processor, or both the processor and the affiliate of the processor, provided long-term financing to the grower in exchange for rights or options to purchase a significant portion of the grower's harvest. (b) On or before February 25 of every year, each processor who crushes grapes in this state shall furnish to the secretary information concerning the final prices, including any bonuses or allowances, paid by variety and grape-pricing district to all growers holding reference price contracts in effect prior to January 1, 1977, which payments have not been reported on January 10. (c) (1) The secretary may not release or otherwise make available any information furnished by an individual processor under this section, except in proceedings brought against the processor by the secretary for the purpose of enforcing this section, or except in the case of a producer who holds any reference price-grape purchase contract, to whom the secretary may furnish, upon request and at a reasonable cost, the information needed to verify the reference price, including any bonuses or allowances, set forth in the contract. (2) The secretary shall not release or otherwise make available any information furnished by an individual processor under this section to any other division of the department except in accordance with a subpoena issued in accordance with Section 1985.3 of the Code of Civil Procedure. (3) The secretary shall release only aggregate figures for grapes crushed that are expected to be marketed as grape concentrate and shall not include information by district, types, or variety. (d) The secretary shall enforce the collection of the information and, on or before February 10 of each year, shall publish a preliminary summary report on the preceding crush. The report shall include all of the following information: (1) The weighted average price paid on the basis of the prices, including any bonuses or allowances, reported and average sugar content for each grape variety purchased within each grape-pricing district. (2) The total number of tons of grapes crushed and the average sugar content for each grape variety within each grape-pricing district. (3) Each price category paid, separated by sugar calculations, if any, and the percentage each represents of the total for each variety within each grape-pricing district. (4) Commencing with the report for the 1997 crush, in a separate and independent table without affecting or modifying existing tables, by weighted average price only, nonrelated purchases, by variety within each grape-pricing district excluding any bonuses, allowances, sugar calculations, and tonnage. (e) On or before March 10 of each year, the secretary shall publish a final summary report, which shall contain all of the data furnished by the processors on or before January 10 and on or before February 25 of each year covering purchases under reference price contracts. The secretary may publish an addendum or supplemental report when reasonably necessary to correct any erroneous or misleading information contained in the annual report required by this section. (f) The forms provided to processors by the secretary pursuant to this section shall provide for the separate reporting of grapes used by a processor (1) as distilling material and (2) for both beverage brandy and other than beverage brandy. A processor shall report all grapes used as distilling material by variety. The secretary, in determining the weighted average price paid for each grape variety purchased within each grape-pricing district, shall not include the prices paid for grapes of any variety used as distilling material for other than beverage brandy in determining the weighted average price. The secretary's report shall include a separate summary regarding grapes used by processors as distilling material. (g) All grape purchase contracts entered into on or after January 1, 1977, shall provide for a final price, including any bonuses or allowances, to be set on or before the January 10 following delivery of the grapes purchased. Any grape purchase contract entered into in violation of this subdivision is illegal and unenforceable. For the purpose of this section, a grape purchase contract shall not include any existing supply contract between a nonprofit cooperative association and a commercial processor. (h) (1) If the department reasonably believes that a processor has failed, refused, or neglected to provide the information required by this section, or if the department finds apparent discrepancies in the information reported, the department may audit or investigate in accordance with Article 11 (commencing with Section 55721) or proceed in accordance with Article 5 (commencing with Section 55522.5), except as specified in paragraph (6). Injunctive relief under Section 55921 shall issue only upon a finding by a court of competent jurisdiction that a processor has done any of the following: (A) Refused to submit required information after the department provides reasonable notice to the processor of the processor's obligations and rights under this chapter. (B) Misreported a fact, knowing that fact to be false, or in reckless disregard for whether the fact was true. (2) Both the refusal to submit after the provision of reasonable notice and the misreporting of a fact under the circumstances set forth in this subdivision shall constitute violations of this chapter. Neither a refusal to submit nor a misreporting of a fact under this subdivision shall be prosecuted pursuant to Article 18 (commencing with Section 55901) or subject to civil penalties under Article 19 (commencing with Section 55921). (3) In the case of misreporting in any action authorized by this section, it shall be a defense for a processor to rely on information provided to the processor by a producer with respect to whether a purchase is a related purchase. (4) In the case of a refusal to report or misreporting, the department shall not commence an audit or investigation, other than a routine audit based on scientifically proven random sampling methods, without first disclosing to the processor being audited or investigated any and all information that constitutes the department' s belief that the processor has not complied, including the identities of all persons providing information on potential violations to the department. (5) Anonymous complaints, unattributable information, or undocumented information shall not constitute reasonable belief and shall not be the basis for any investigation or audit action brought under this section. The department shall inform the processor of its reasons for auditing. (6) No action shall be taken pursuant to Article 5 (commencing with Section 55522.5), Article 18 (commencing with Section 55901), or Article 19 (commencing with Section 55921) based on the reporting of grape concentrate pursuant to subparagraph (D) of paragraph (1) of subdivision (a). (i) For purposes of this section, the following definitions shall apply: (1) "Affiliate" or "affiliated with" means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control of another person. For the purposes of this paragraph, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of any person. (2) "Estimated equivalent tons," when used in the context of reporting tons purchased and crushed that will be marketed as grape concentrate, shall be determined by use of the following formulas: (A) Gallons of concentrate (approximately 20 Brix) produced divided by 40 equals equivalent tons. (B) Gallons of concentrate (approximately 68 Brix) divided by 170 equals equivalent tons. (3) "Grape-pricing district" means a district used by the federal-state cooperative market news services, as provided in Section 58231. (4) "Long-term financing" means financing that by its terms is due over a period of more than one year, or more than 180 days if there is a purchase agreement between a grower and a processor, or if there is a farming agreement where the purchase price is on a per-acre basis. (5) "Person" includes an individual, partnership, corporation, limited liability company, firm, company, or other entity. (6) "Purchase" means the taking by sale, discount, negotiation, mortgage, pledge, lien, issue or reissue, gift, or any other voluntary transaction creating an interest in property. For purposes of this paragraph, "sale" shall consist of the passing of title from the seller to the buyer for a price.


55601.6. (a) To provide funds to carry out Section 55601.5, each processor who crushes more than 100 tons of grapes in California shall pay to the secretary the amount determined by the secretary to be necessary to cover these costs, but not to exceed ten cents ($0.10) per ton of grapes received for crushing, fresh weight equivalent, during each marketing season beginning July 1 and ending the following June 30. However, five cents ($0.05) per ton of grapes received for crushing, or one-half of the fee if the fee is less than ten cents ($0.10), shall be paid by the processor who crushes grapes and five cents ($0.05) per ton of grapes received for crushing, including any grapes produced by the processor, or one-half of the fee if the fee is less than ten cents ($0.10), shall be paid by the processor who crushes grapes and may be deducted from moneys owed to the producer. (b) The amount of the fee shall be paid to the secretary on or before January 10 of each year on all grapes received for crushing through December 15. The amount of the fee on any grapes received for crushing after December 15 shall be paid to the secretary on or before June 30 of that marketing season. (c) The secretary may fix the fee at a lesser amount and may adjust the fee from marketing season to marketing season. (d) Any processor who crushes grapes who fails, neglects, or refuses to pay the required fee shall be in violation of this chapter. Any processor who crushes grapes shall not be entitled to pass the penalty on to the producer of the grapes. (e) If the secretary conducts an acreage survey pursuant to Section 55613, the secretary may increase the fee charged pursuant to subdivision (a) by not more than four cents ($0.04) per ton of grapes received for crushing, fresh weight equivalent, to cover costs of the survey. The same ratio of payment between processor and producer shall be maintained if the fee is increased pursuant to this subdivision. (f) The fee authorized by subdivision (a) for the reports required to be prepared by the secretary pursuant to Section 55601.5 and the increase in that fee authorized by subdivision (e) for the survey authorized by Section 55613 shall be established by the secretary so as to generate only the amount of revenue that the secretary reasonably anticipates will be needed to cover the cost incurred by the secretary in gathering and producing the reports required by Section 55601.5, in conducting the survey authorized by Section 55613, and in conducting related enforcement activities. The funds generated by the fees authorized by this section shall be used only for the purpose of gathering the information and producing the reports required to be prepared by the secretary pursuant to Section 55601.5 and conducting the survey authorized by Section 55613. (g) All moneys received under this section shall be deposited in the State Treasury to the credit of the Department of Food and Agriculture Fund.


55601.7. Notwithstanding Section 55461, every processor who handles freestone peaches for freezing and drying in California shall furnish to the director, on or before December 10 of each year, and every processor who handles walnuts, raisins, or prunes in California annually shall furnish to the director, on or before August 31 of each year, on forms provided by the director, the reporting information specified below showing the number of tons purchased by the processor in that marketing season. In the report, the tonnage shall be broken down by at least major varieties and weighted average price paid for the tonnage acquired (including any bonuses or allowances) and may contain other information required by the director, including, but not limited to, the following: (a) For walnuts, including inshell acquisitions and shelling stock acquisitions, the color, size, percentage of edible yield, and percentage of offgrade. (b) For raisins, the percentage of mold, moisture content, sand, offgrade, or micro-organisms on offgrade acquisitions. (c) For prunes, by size and percentage offgrade. (d) For freestone peaches, by type of utilization on a fresh weight basis and percentage of offgrade. The above reporting shall be on a statewide basis.


55601.8. (a) The secretary shall not release, or otherwise make available, any information furnished by a cooperative or an individual processor under Section 55601.7 or this section, including information relating to the weighted average prices paid, except in proceedings brought against the processor by the secretary for the purpose of enforcing this section. (b) The secretary shall (1) enforce the collection of the information required in Section 55601.7, (2) on or before January 15, publish a summary report for freestone peaches used for freezing and drying and, (3) on or before October 20, publish a summary report for walnuts, raisins, and prunes, reflecting the statistics derived from the processor reports. The summary reports shall include summaries of all information required to be furnished to the secretary. (c) The secretary may dispense with the reporting requirements and his or her duties to enforce the collection of this information and the publishing of summary reports if the secretary determines that the same or similar information is made public information within the same time periods of subdivision (b) by any federal or state committee or organization responsible for regulating the handling of any of the commodities subject to this section. (d) (1) To provide funds to carry out Section 55601.7 and this section, each processor, including agricultural cooperatives, subject to these reporting requirements shall pay to the secretary the amount determined by the secretary to be necessary to cover these costs, but not to exceed twelve cents ($0.12) per fresh ton for freestone peaches, twelve cents ($0.12) per dry ton for raisins and prunes, and twelve cents ($0.12) per inshell dry ton for walnuts handled by the processor during each marketing season. (2) (A) The amount of the fee for freestone peaches used for freezing and drying shall be paid to the secretary on or before December 10 for all freestone peaches used for freezing and drying received from April 1 through November 30. (B) The amount of the fee for any freestone peaches used for freezing and drying received from December 1 to March 31, inclusive, shall be paid to the secretary on or before May 1 of the next marketing season. (C) The amount of the fee shall be paid to the secretary on or before May 1 of each year for all other commodities received from September 1 to March 31, inclusive. (D) The amount of the fee for any other commodity received from April 1 to August 31, inclusive, shall be paid to the secretary on or before September 1 of the next marketing season. (3) The secretary may fix the fee at a lesser amount and may adjust the fee from marketing season to marketing season. Any processor who fails, neglects, or refuses to pay the required fee is in violation of this chapter. Any such processor shall not pass the penalty on to the producer of the commodity. (4) All funds received under this subdivision shall be deposited in the State Treasury to the credit of the Department of Food and Agriculture Fund. (e) If the secretary finds that any processor has failed, refused, or neglected to provide the information required by this section, the secretary may proceed in accordance with Article 11 (commencing with Section 55721). (f) Any cooperative subject to the reporting provisions of this section shall, in lieu of reporting prices, report all advances and other payments made as of the reporting date and its good faith estimate of the market value of the commodity for the crop year. (g) The willful failure of any processor to report to the secretary, as required by this section, is a violation of this chapter and is a separate and distinct violation of this chapter for each day the processor fails to meet the reporting requirements. (h) For the purpose of Section 55601.7 and this section, "marketing season" means the crop year that runs from September 1 to August 31, inclusive, for walnuts, raisins, and prunes, and the crop year that runs from April 1 to March 31, inclusive, for freestone peaches.


55602. Every processor except a licensed winegrower, that purchases for freezing any farm product from the producer of the farm product on a packout basis shall promptly upon completion of the processing of each lot or day's delivery inform the producer of the results obtained.


55603. If a specific grade or quality is a condition of a packout basis contract between the producer and the processor, such grade or quality shall be determined at the completion of the processing.


55604. Every contract between a processor and a producer which covers the purchase of any farm product on a packout basis shall designate the price to be paid for each grade purchased.


55604.1. Where the processor is operating under continuous United States Department of Agriculture inspection, the United States Department of Agriculture grade determination shall be accepted as final in accounting to the producer. Where the processor is not operating under continuous United States Department of Agriculture inspection, any dispute as to grade shall be settled by lot inspection to be made by the United States Department of Agriculture. In the event any lot is shipped within 30 days of processing, the processor shall draw representative samples in accordance with United States Department of Agriculture sampling procedures, and the samples shall be held for a period of not less than 30 days from the date of processing for the inspection if necessary.

55604.2. The provisions of Section 55581 of the Agricultural Code and Section 12713 of the Business and Professions Code do not apply to farm products purchased and accounted for on a packout basis, pursuant to this section.

55605. Every processor, except a licensed winegrower, that receives any farm product from the producer of the farm product for processing on a consigned basis shall promptly make and keep a correct record which shows in detail all of the following with reference to the processing, handling, storage, and sale of such farm product: (a) The name and address of the consignor. (b) The date received. (c) The quantity received. (d) The size of the containers into which the finished product is packed. (e) The grade and quality of the finished product. (f) The price which is obtained from the sale of the finished product. (g) An itemized statement of costs and charges which the processor paid in connection with the processing, handling, storage, and sale of the farm product. Any services rendered for which charges are made, if not filed with the director, shall be charged at cost, if not covered by a written contract. Cost-supporting data shall be available for verification.


55606. If the processor has entered into a contract with two or more producers or consignors, which provides that the returns for any farm product which is handled and sold for the account of such producers or consignors shall be pooled on a definite basis as to grade or quality, or both, during a specific period of time, then the processor shall render a true account of sale which shows the net average pool return on each grade and quality from the sales that are made, which shows in detail all charges in connection with the handling, processing, and selling of such farm product. The processor shall keep a correct record of such sales and charges.


55607. Every processor shall keep accurate books and records which show the name and address of any producer that is selling and making delivery of any farm product to him, including the dates of deliveries, the quantities of the farm product which is delivered, and the agreed price to be paid for such farm product. If no agreed price has been arrived at, or a method for determining it agreed upon, such agreed price shall be considered the value of such product as of date of delivery. For the purpose of ascertaining such value and in addition to other evidence, reference may be had to price quotations from the federal-state market news service.


55608. Accurate grading and weight receipts shall be given by all processors to each producer, or his agent, upon each and every delivery. Each receipt shall state all of the following: (a) The date of the receipt. (b) The name and address of the producer. (c) The name of the processor.


55609. Not later than five days after demand, the processor shall give to every such producer so requesting a full and complete statement of such producer's account, which shows all of the following: (a) The entire quantities of the product which has been delivered by the producer. (b) The grades of the product which has been delivered by the producer. (c) The amount which is owing for every lot and for the total amount of the product which has been delivered by the producer.


55609.1. Remittance in full of the amount which is realized from such sales, including all collections, overcharges, and damages, less the agreed commission and other charges, together with a complete account of sales, shall be made to the consignor within 10 days after receipt of the moneys by the consignee, unless otherwise agreed in writing. The burden of proof is upon the consignee to prove the correctness of his accounting as to any transaction which may be questioned.


55610. A processor, in order to prevent loss or economic waste, may resell or redeliver any raw product purchased and received from the producer of the raw product to another processor for the purpose of processing and such act is not an act which requires licensing pursuant to Chapter 7 (commencing with Section 56101) of this division. The processor who resells or redelivers any raw product remains liable to the producer for the full value of the raw product.


55611. All records required to be kept under this chapter shall be kept for a period of four years.


55613. (a) If the secretary determines by February 1 of any year, commencing in 1992, that an acreage survey of the grape crop is desired by the processors and producers of grapes for wine, and if the producers and processors of grapes for raisins and the producers and packers of grapes for fresh market use agree to pay their proportionate share of the cost of the survey, as determined by the secretary, the secretary shall conduct the survey. The secretary shall implement subdivision (e) of Section 55601.6 to fund the wine industry's proportionate costs of the survey. If an acreage survey is conducted, the results of the survey shall be printed and made available on or before May 30 of the year in which it is conducted. (b) The department shall reimburse any processor or producer of grapes for wine to cover the costs incurred by any of those persons to fund the wine industry's proportionate share of an acreage survey in 1991, from funds collected pursuant to subdivision (e) of Section 55601.6. (c) For purposes of this section, "acreage survey" means an accumulation of plant removals, new plantings, and graftings to provide reliable information on the changing character of the state's grape industry. This information shall be tabulated for each county and on a statewide basis and for each variety of grapes.


Article 9. Producer's Lien

Ca Codes (fac:55631-55653) Food And Agricultural Code Section 55631-55653



55631. Every producer of any farm product that sells any product which is grown by him to any processor under contract, express or implied, in addition to all other rights and remedies which are provided for by law, has a lien upon such product and upon all processed or manufactured forms of such farm product for his labor, care, and expense in growing and harvesting such product. The lien shall be to the extent of the agreed price, if any, for such product so sold. If there is no agreed price or a method for determining it which is agreed upon, the extent of the lien is the value of the farm product as of the date of the delivery. Any portion of such product or the processed or manufactured forms of such product, in excess of the amount necessary to satisfy the total amount owed to producers under contract, shall be free and clear of such lien.


55631.5. Notwithstanding Section 55461, a nonprofit cooperative association acting as a producer bargaining association may assert producer's lien rights for, or on behalf of, its members.


55632. This producer's lien attaches on all of such delivered product from the date of delivery of such farm product or any portion of it by a producer to any processor.


55633. The producer's lien is a preferred lien prior in dignity to all other liens, claims, or encumbrances except the following: (a) Labor claims for wages and salaries for personal services which are rendered by any person to any processor in connection with such processing business after the delivery of any such product for processing. (b) The lien of a warehouseman as provided by Division 7 (commencing with Section 7101) of the Uniform Commercial Code.


55634. Every lien which is provided for in this article is on every farm product and any processed form of the farm product which is in the possession of the processor without segregation of the product. For purposes of this chapter, any and all farm products or processed form of farm products deposited by a processor with a warehouse, whether or not warehouse receipts are given as security to a lender, shall be considered as being in the possession of the processor and subject to the lien.


55635. The lien of a producer, unless sooner released by payment or by security which is given for the payment as provided in this article, attaches from the date of delivery of the product, or if there is a series of deliveries, it attaches from the date of the last delivery.


55636. If suit is commenced by any such producer to enforce any lien, such lien shall remain in effect until one of the following occurs: (a) The payment of the agreed price or the value of such product. (b) Deposit of the amount of the lien or claims with the clerk of the court in which any such action is pending. (c) The final determination of such court proceeding.


55637. Any lien on any product or processed product may, however, be released, to the extent the value of the claim upon such product is secured, by a surety bond or a cash deposit or other security given as provided in this article. Any producer may also release any lien which is possessed by him upon payment being made to him for the agreed or reasonable value of the product which is so sold and delivered, or upon arrangements being made for such payment which are satisfactory to the producer.


55638. It is unlawful for any processor to remove, from this state or beyond his ownership or control, any farm product which is delivered to him, or any processed form of the farm product, to which any of the liens provided for in this chapter has attached, except for any of such product or processed product as may be in excess of a quantity on hand which is of a value that is sufficient to satisfy all existing liens. Furthermore, this section shall not prohibit the sale of any farm product or processed form of the product to which such a lien has attached, so long as the total proceeds of the sale are used to satisfy obligations to producers which are secured by a lien established pursuant to this chapter.

55638.5. The director, within 15 days of the filing of a verified complaint by a producer, shall investigate any charge that a purchaser of a farm product to which a lien has attached has removed any farm product, or any processed form of a farm product, in violation of Section 55638.


55639. Any processor that desires to secure a release of any or all of such liens on any product or processed product may do so in any of the following ways: (a) By paying the agreed or actual value of any farm product which is purchased by such processor within 20 days from the date of delivery of the farm product unless the date of payment is otherwise agreed upon in writing or such payment is secured other than by lien. (b) By depositing with the director a surety bond which is executed by such processor as principal and by a surety company which is qualified and authorized to do business in this state as surety in an amount which equals the current market value of the product or processed product which is intended by such processor to be sold or otherwise disposed of, as such value may appear by the sworn statement of such processor in accordance with quotations from the federal-state market news service or other evidence which is satisfactory to the director. The bond shall be conditioned that if the processor fails to pay up to the amount of such bond the lawful claims of all producers whose liens have been released by the bond, within 35 days after date of the bond, the surety shall be liable to and shall pay to the state on behalf of such claimants all such lawful claims as may be covered by the amount of the bond, together with costs of suit if an action is filed on the bond. (c) By depositing with the director a cash sum in lawful money of the United States which is expressly set apart by an instrument in writing that is signed by the processor for the purpose of guaranteeing to the extent of such sum, payment of all existing claims of producers whose liens are released by the deposit, within 35 days from the date of such deposit. The director shall be named in such instrument as trustee to carry out the purpose and intent of the instrument. (d) By designating, setting apart, and depositing in a public warehouse a quantity of any processed farm products and indorsing over to the director and delivering to him the warehouse receipt for such products for the purpose of guaranteeing to the extent of the value of such deposit, payment within 35 days from the date of such deposit, all existing claims of producers and labor claimants whose liens are released by it. (e) By securing a release from the director after payment in full for such farm product.


55640. If all lawful claims of the producers have been paid in accordance with this article by any processor, any product which is released by such action may be sold, transported, or otherwise disposed of.

55641. If a bond, cash deposit, or security is given to the director by any processor as provided in this article, such processor may sell, transport, or otherwise dispose of the product or processed product to the value which is represented by such security as such value may appear by the sworn statement of such processor in accordance with quotations from the federal-state market news service or other evidence satisfactory to the director.


55642. The director may accept such bond, if approved by him, and such other security. If the claims or any of them are not paid in accordance with the condition of such security, the director may, on proof being made to his satisfaction of the amounts which are due such claimants, pay all such unpaid claims insofar as possible out of the deposit money, or proceeds from any sale made by him of any securities or processed products which are given as security.


55643. If a bond has been given as security, the director shall notify the principal and surety of any default on the part of the principal under the bond, and make demand for payment on behalf of such unpaid claimants. If payment is not made, the director may take any legal action he may deem necessary to enforce payment under such bond.


55644. If the director has received warehouse receipts for any processed product as security, and the processor giving them has failed to pay the claims in accordance with the terms of such security, the director may sell such security with or without notice, and in such manner as he shall determine.


55645. All claims in relation to payment shall have equal standing and payment shall be prorated if necessary among the claimants.


55646. This article does not prevent the director if in his opinion the rights of all of the claimants are fully protected, as provided for in this article, from issuing a certificate in the name of the department and signed by him which releases any specific lot or quantity of any product or processed product from all liens of the claimants. No security which is held by the director shall, however, be released by him to any processor unless and until it is made to appear to his satisfaction that all claims have been fully paid, or that the rights of all of the claimants are fully protected. A fee of five dollars ($5) shall be paid to the director for issuing any certificate or release which is provided for in this section.


55647. This article does not impair or affect the right of any claimant that possesses a lien to maintain a personal action to recover such debt against a processor, either in an action to foreclose his lien or in a separate action. He is not required to state in his affidavit to procure an attachment that his demand is not secured by a lien.


55648. The judgment, if any, which is obtained by the plaintiff in such personal action, or personal judgment which is obtained in such lien action, does not impair or merge any lien right or claim which is held by such plaintiff. Any money, however, which is collected on the judgment shall be credited on the amount of such lien or claims in any action which is brought to enforce the lien or in any action which is filed pursuant to this article by the director.


55649. In an action that is filed by any such lien claimant, the defendant processor may file with the court in which the action is pending a surety bond in an amount that is sufficient to cover the demand of plaintiff's complaint, including the costs, whereupon the court may order the release of a portion or the whole of any product or processed product upon which the lien of plaintiff has attached.


55650. Such processor may also, on motion duly noticed, introduce evidence to the court before whom any such action is pending to the effect that he has sufficient security or money on deposit with the director to protect the lien or other rights of plaintiff. If he does so, the court may order the release of a portion or the whole of such product upon which the lien of plaintiff is attached, and deny to plaintiff any recovery in such action. Such action by the court does not, however, prejudice any other rights or remedies which are possessed by the plaintiff.


55651. The plaintiff in an action which is brought to foreclose any of the liens which are provided for in this article may, in a proper case, and upon proper allegations, secure an injunction against the processor in accordance with the provisions of Chapter 3 (commencing with Section 525), Title 7, Part 2 of the Code of Civil Procedure to restrain the doing of any acts on the part of such processor which are designed to or which would, in effect, remove any processed product in his possession or under his control and upon which valid liens exist, beyond the process of the court, to plaintiff's injury.


55652. If in a court proceeding to foreclose such lien, it is found and determined by the court that there is no cash, bond, or other deposit placed with the director as security for the payment of any of the lien claims as set out in the complaint, the judgment of foreclosure shall be against a sufficient quantity in value of such farm product or processed product in the possession or under the control of the defendant processor, as may be necessary to satisfy such claim or render judgment and declare forfeited any bond which is deposited in the court by such processor to secure the lawful claims of the plaintiff as determined by the court.


55653. All actions filed by the director or producers against any processor for the foreclosure of the liens or other security which are provided for in this article may be consolidated by the court and all persons that are necessary to a determination of such action may be made parties to such actions. Any judgment which is rendered shall determine the lawfulness of the amount of each claim as represented by the pleadings.


Article 10.5. Liens On Livestock Sold Or Delivered To Meatpackers

Ca Codes (fac:55701-55704) Food And Agricultural Code Section 55701-55704



55701. As used in this article, the following definitions shall apply: (a) "Livestock" means any cattle, sheep, swine, goat, or any horse, mule, or other equine, whether living or dead. (b) "Meatpacker" means an establishment where livestock are either slaughtered, the carcasses thereof are prepared, or meat is processed and where state or federal inspection is maintained.


55702. (a) Except as otherwise provided in this section, any person who sells or furnishes livestock to a meatpacker, shall have a lien, not dependent upon possession, on the livestock and upon the identifiable proceeds and products thereof, for the unpaid part of the purchase price, or for the unpaid value of the livestock at the time of the transfer of possession if no purchase price has been agreed upon. The lien shall commence on the date of the transfer of possession of the livestock to the meatpacker and shall have priority over all other liens upon, and security interests in, the livestock and the identifiable proceeds and products thereof, without regard to the time of attachment or perfection of such other liens or security interests and shall remain a lien upon the livestock and the identifiable proceeds and products thereof notwithstanding sale, exchange, or other disposition thereof. (b) Notwithstanding the provisions of subdivision (a), a buyer in the ordinary course of business, as that term is defined in paragraph (9) of subdivision (b) of Section 1201 of the Commercial Code, shall take free of such lien even though the buyer knows of the existence of the lien. (c) Notwithstanding the provisions of subdivision (a), the lien shall cease to be of any force or effect after the expiration of 21 days from the date of delivery of the livestock unless a notice of lien is filed pursuant to subdivision (e), in which case the lien shall remain effective as long as such notice shall remain effective. (d) No person shall have a lien pursuant to subdivision (a) to the extent that the person shall have made the livestock available to the meatpacker on credit terms. (e) Any person selling or delivering livestock who claims a lien under this article shall file a statement with the Secretary of State and a copy thereof with the director, both within 21 days after delivery of the livestock to the meatpacker. The statement shall be in writing, verified by the oath of the person filing, and shall contain all of the following: (1) The name and address of the person filing. (2) A statement of the amount demanded by the person filing the statement after deducting all credits and offsets. (3) The name and address of the meatpacker who received the livestock. (4) A description of the livestock delivered to the meatpacker and the date of delivery. (5) A statement that the amount claimed is a true and bona fide existing debt as of the date of the statement. (6) A statement that the amount claimed is a true and bona fide existing debt as of the date on which payment was due for the livestock. (f) Every statement that is filed shall be accompanied by the fees required by Chapter 5 (commencing with Section 9501) of Division 9 of the Commercial Code in the case of a financing statement not on the standard form and shall remain effective for a period of five years from the date of filing.

55703. Except as provided in this section, any lien created under Section 55702 shall continue in force for a period of five years from the date of filing of the notice of lien. The lien shall cease at the expiration of five years unless the claimant thereof, or his assignee, or successor in interest, brings suit to foreclose the lien, in which case the lien continues in force until such lien foreclosure suit is finally determined and closed. If such foreclosure proceeding is not prosecuted to trial within two years after the commencement thereof, the court may in its discretion dismiss the foreclosure suit. The plaintiff in any such lien foreclosure suit may have the property upon which such lien subsists attached, as provided in the Code of Civil Procedure. Any number of persons claiming liens under this article may join in the same action and when separate actions are commenced, the court may consolidate them. Whenever the sale of the property subject to any lien or liens provided for in this article, under the judgment or decree of foreclosure of such lien or liens, results in a deficiency of proceeds, the proceeds shall be divided pro rata among the lien claimants whose liens are established, regardless of the order in which the liens were created or the order in which the suits to foreclose same were commenced, and the judgment or decree for the deficiency may be docketed against the party personally liable therefor and his sureties, in the same manner and with the same effect as in actions for the foreclosure of security interests. Nothing contained in this article shall be construed to impair or affect the right of any person to whom any debt may be due for livestock sold or delivered to maintain a personal action to recover such debt against the person liable therefor, or his sureties, either in connection with a suit to foreclose the lien or in a separate action. Any person bringing such personal action may take out a separate attachment therefor, notwithstanding his lien or the amount of his debt. In the affidavit to procure an attachment pursuant to such personal action, such person shall state that the attachment is made pursuant to this section, and the judgment, if any, obtained by the plaintiff in such personal action shall not be construed to impair or merge any lien held by such person under this article. Any money collected on such personal judgment shall be credited on the amount of such lien in any action brought to enforce the lien.


55704. Any rights or remedies granted to a person who sells livestock pursuant to this article, are in addition to any other rights or remedies provided by law for such seller.


Article 11. Examinations And Audits Of The Books And Records Of Licensees

Ca Codes (fac:55721-55725) Food And Agricultural Code Section 55721-55725



55721. (a) If, in the opinion of the department, there appears to be reasonable grounds for investigating a complaint or notification made under the provisions of this chapter, the department shall investigate the complaint or notification. In the course of the investigation, if the department determines that violations of this chapter are indicated other than alleged violations specified in the complaint or notification that served as the basis for the investigation, the department may expand the investigation to include the additional violations. (b) In the opinion of the department, if an investigation substantiates the existence of violations of this chapter, the department may cause a complaint to be issued. (c) The investigation may include, but shall not be construed to require, examinations and audits of the books and records of any processor that pertain to the solvency of the processor of, or to the purchase of, or to the handling and accounting for, any farm product that is purchased or received on a pack-out or other basis from the producer of the farm product. The department may examine and audit all pertinent books, records, weight certificates, receipts, ledgers, journals, papers, contracts, bank statements, canceled checks and other documents of the processor that show or tend to show facts regarding the financial condition and the number and status of accounts of growers and others that are doing business with the processor.


55722. If the examination discloses evidence of any violation of this chapter, the department may issue a complaint detailing the charges and the discipline sought in accordance with this chapter.


55722.5. (a) An aggrieved grower or licensee with a complaint that is not subject to the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181 et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.) may seek resolution of that complaint by filing a complaint with the department within nine months from the date a complete account of sales was due. The complaint shall be accompanied by two copies of all documents in the complainant's possession that are relevant to establishing the complaint, a filing fee of one hundred dollars ($100), and a written denial of jurisdiction from the appropriate federal agency unless the commodity involved clearly does not fall under either the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181 et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.). Within five business days of receipt of a signed and verified complaint, the filing fee, and the denials of federal jurisdiction, the department shall serve the verified complaint on the respondent. Service shall be by certified mail. The department, the secretary, the department's employees, the department's agents, the boards and commissions associated with the department, their employees or agents, and the State of California are not parties to the dispute in a proceeding brought under this section. (b) The respondent served shall answer within 30 calendar days of service. The respondent's response shall include two copies of all relevant documentation of the transactions referred to in the verified complaint. (c) Within 30 calendar days of receipt of the answer, the department shall issue to both parties a written factual summary on the basis of the documents that have been filed with the department. (d) If a settlement is not reached within 30 calendar days after the department's summary is issued, the department, on request of the claimant or respondent and upon payment of a filing fee of three hundred dollars ($300), shall schedule alternate dispute resolution, to commence within 90 calendar days. The department shall serve both parties with a notice of hearing, which sets out the time, date, street address, room number, telephone number, and name of the hearing officer. Service of the notice of hearing shall be by certified mail. (e) The alternate dispute resolution shall proceed as follows: (1) The hearing shall be conducted by hearing officers in accordance with standard procedures promulgated by the American Arbitration Association or other acceptable alternative dispute resolution entities. (2) The hearing officers shall be familiar with the type of issues presented by those claims, but need not be attorneys. (3) The sole parties to the proceedings shall be the complainant and the respondent. (4) The disputes, claims, and interests of the department or the State of California are not within the jurisdiction of the proceedings. (5) The validity of a regulation of the department or order promulgated pursuant to this code is not within the jurisdiction of the proceedings. (6) Law and motion matters shall be handled by the assigned hearing officer. (7) The hearing officer has no authority to enter into settlement discussions except upon stipulation of the parties involved. (8) The parties may represent themselves in propria persona or may be represented by a licensed attorney at law. A party may not be represented by a representative who is not licensed to practice law. (9) To the extent of any conflict between any provision of Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title 2 of the Government Code and this article, this article shall prevail. (10) The hearing officer may order a review of records or an audit of records by a certified public accountant. The review or audit shall be conducted under generally accepted auditing standards of the American Institute of Certified Public Accountants, and upon completion of the review or audit the nature and extent of the review or audit shall be disclosed to the parties by the auditor in the audit report. The audit report shall disclose the number of transactions reviewed and the rationale for selecting those transactions. The department shall advance the costs of the audit or review of records, but the hearing officer shall apportion the costs at the conclusion of the hearing. The department shall pursue repayment in accordance with the hearing officer's apportionment and may bring an action in a court of competent jurisdiction to recover funds advanced. Nothing in this subdivision shall be construed to require the department to pursue any specific remedy or to prohibit the department from accepting a reasonable repayment plan. (f) The hearing officer shall render a written decision within 60 days of submission of the case for decision. In addition to rendering a written finding as to what is owed by whom on the substantive allegations of the complaint, the hearing officer shall decide whether or not to order the full cost of the alternative dispute resolution proceeding, and in what ratio or order the losing party is to pay the costs of the proceeding. For these purposes, the cost of the alternative dispute resolution proceeding does not include the filing fee, the parties' attorney fees, or expert witness fees. The hearing officer may also award a sanction against a complainant for filing a frivolous complaint or against a respondent for unreasonable delay tactics, bad faith bargaining, or resistance to the claim, of either 10 percent of the amount of the award or a specific amount, up to a maximum of one thousand dollars ($1,000). Any sanction award shall not be deemed to be res judicata or collateral estoppel in any subsequent case in which either the complainant or respondent are charged with filing a frivolous complaint, unreasonable delay tactics, bad faith bargaining, or resistance to the claim. The department may consider the written decision of the hearing officer in determining any related licensing action. The written decision of the hearing officer may be introduced as evidence at a court proceeding. (g) Nothing in this section prohibits the parties to the dispute from settling their dispute prior to, during, or after the hearing. (h) Nothing in this section alters, precludes, or conditions the exercise, during any stage of the proceedings provided by this chapter, of any other rights to relief a party may have through petition to a court of competent jurisdiction, including, but not limited to, small claims court.


55724. (a) Every licensee shall prepare and preserve the accounts, records, and memoranda required by this chapter which shall fully and correctly disclose all transactions involved in his business. Licensees shall keep records which are adapted to the particular business that the licensee is conducting and in each case such record shall fully disclose all transactions in the business in sufficient detail as to be readily understood and audited. Minimum records required under this chapter are: 1. A record of cash received. 2. A record of cash disbursed. 3. A general ledger or its equivalent. 4. A record of amounts due California producers. 5. A record of amounts due others. (b) Every licensee shall prepare and preserve records and memoranda required by this chapter which shall fully and correctly disclose the true ownership and management of such business.


55725. The failure or refusal of any licensee to produce and make available to the director any books or records requested pursuant to this article, or otherwise to obstruct the examination or audit, is sufficient ground to suspend or revoke the license issued pursuant to this chapter.


Article 12. Investigations And Hearings

Ca Codes (fac:55741-55745) Food And Agricultural Code Section 55741-55745



55741. The department, upon its own motion, may, or upon the verified complaint of any interested party and within 30 days of the filing of that complaint, shall, commence to investigate, examine, or inspect any of the following: (a) A transaction that involves the failure of the processor to make payment for any farm product within the time that is specified for payment in the contract of sale and purchase between the producer and the processor, in accordance with the terms of the contract or in accordance with this chapter. (b) A transaction that involves the failure of a processor who contracts to harvest a producer's crop to fulfill the terms of the contract. (c) A charge that a processor may be insolvent or in an unsound financial condition.


55742. Except as otherwise provided in Section 55743 or 55744, if the complaint is a bona fide dispute that involves any of the following, the department has no jurisdiction to act upon the complaint if the processor or complainant within 10 days after receiving notice of the filing of the verified complaint has notified the department of his or her election to submit the dispute to alternative dispute resolution procedures in accordance with the provisions of a written contract: (a) The rejection of any farm product. (b) The failure or refusal to accept and pay for any farm product that is bought or contracted to be bought from a producer by a processor. (c) The failure or refusal by the processor to furnish or provide boxes or other containers, or hauling, harvesting, or any other service that is contracted to be done by the processor in connection with the acceptance, harvesting, or other handling of the farm product. (d) The terms and conditions of the written contract.


55743. The jurisdiction that is otherwise reserved to the department in this chapter, however, is restored for the purposes of this chapter if the authorities responsible for the alternative dispute resolution procedures, without reasonable cause, fail, refuse, or neglect to adjudicate the matter of dispute within 90 days from the date of the notification to the department.


55744. The department also has jurisdiction over any such complaint or dispute if the processor has failed to perform in accordance with any alternative dispute resolution procedure award that is made in accordance with the terms of the written contract.


55745. Any verified complaint filed with the department pursuant to this chapter shall be filed not later than nine months from the date a complete account of sales was due. This period, however, does not include the length of time it takes to secure a written letter of denial from the federal agencies responsible for administering the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.).


Article 14. Contempt

Ca Codes (fac:55811-55813) Food And Agricultural Code Section 55811-55813



55811. If any person in any proceedings before the director disobeys or resists any lawful order or refuses to respond to a subpoena, or refuses to take the oath or affirmation as a witness or thereafter refuses to be examined, or is guilty of misconduct during a hearing or so near the place of a hearing as to obstruct the proceeding, the director shall certify the facts to the superior court in and for the county where the proceedings are held.


55812. The court shall thereupon issue an order which directs the person to appear before the court and show cause why he should not be punished as for contempt. The order and a copy of the certified statement shall be served on the person. Thereafter the court shall have jurisdiction of the matter.


55813. The same proceedings shall be had, the same penalties may be imposed, and the person charged may purge himself of the contempt in the same way, as in the case of a person who has committed a contempt in the trial of a civil action before a superior court.


Article 16. Fees

Ca Codes (fac:55861-55864) Food And Agricultural Code Section 55861-55864



55861. (a) Except as otherwise provided in this article or in Section 56574, each applicant for a license shall pay to the department a fee in accordance with the schedule in subdivision (b), except that an agent shall pay fifty-five dollars ($55) for each license period of the principal. (b) The amount of the fee due each year from the applicant shall be determined by the annual dollar volume of business based on the value of the farm products that is returned to the grower, as follows: (1) For a dollar volume of less than twenty thousand dollars ($20,000), the fee shall be one hundred thirty-six dollars ($136). (2) For a dollar volume of twenty thousand dollars ($20,000) and over, but less than fifty thousand dollars ($50,000), the fee shall be two hundred dollars ($200). (3) For a dollar volume of fifty thousand dollars ($50,000) and over, but less than two million dollars ($2,000,000), the fee shall be three hundred dollars ($300). (4) For a dollar volume of two million dollars ($2,000,000) and over, the fee shall be four hundred dollars ($400). (c) The department may reevaluate the fee structure based on operating costs. The fees shall adequately cover the costs to fully administer and operate the program in an effective and efficient manner.


55861.5. The fees provided by Section 55861 are maximum fees. The secretary may fix those fees at a lesser amount, and may adjust those fees from time to time, whenever the secretary finds that the cost of administering this chapter can be defrayed with those below-maximum fees. The secretary may appoint an advisory committee of producers and licensees to provide guidance in establishing those fees or may rely on input from any similar advisory committee already assembled by the secretary.


55862. (a) (1) If any processor does not apply for the renewal of a preexisting license on or before the date of expiration of the license, a penalty of twenty-five dollars ($25) shall be added to the fee provided for under Section 55861 or 55861.5. That penalty shall be paid within 30 days immediately following the license expiration date . Payment of the penalty shall entitle the applicant to 60 days from the date of the penalty payment to complete the application. If the application is not completed within that time, the application shall be denied and all fees retained by the department. (2) If the penalty described in paragraph (1) is not paid within the 30-day period, any application for renewal of a preexisting license shall be treated as a new application. (b) A new applicant shall have 60 days from the date of filing the application form and payment of the fee to complete the application. After the 60-day period has elapsed, if the application remains incomplete, the application may be denied and the application fee may be retained by the department.


55862.7. (a) If any person is found to be operating a business without the license required by Section 55521, or failed to pay a fee in accordance with the schedule in subdivision (b) of Section 55861, that person shall pay to the secretary double the amount of the license fee due pursuant to this chapter. (b) In addition to subdivision (a), if any person is found to be operating a business within the past five years without a license required by Section 55521, or failed to pay the fees in accordance with the schedule in subdivision (b) of Section 55861, that person shall pay to the secretary an amount equal to that portion of the fees that were not paid for the last five years the business has operated.

55863. Any person that has applied for and obtained a license pursuant to this chapter may apply for and secure a license under Chapter 7 (commencing with Section 56101) by filing an application which is accompanied by a fee determined by the dollar volume of business based on the value of the farm products that is returned to the grower or licensee, as follows: (a) For a dollar volume of less than fifty thousand dollars ($50,000), the fee shall be fifty dollars ($50). (b) For a dollar volume of fifty thousand dollars ($50,000) and over, but less than two million dollars ($2,000,000), the fee shall be one hundred forty-five dollars ($145). (c) For a dollar volume of two million dollars ($2,000,000) and over, the fee shall be two hundred dollars ($200). This license shall be known as a "conjunctive license."


55863.5. Any person who has applied for and obtained a license as agent, in the manner and upon the payment of the fee which is set forth in Section 55861, whose principal has applied for and obtained a conjunctive dealer's, commission merchant's, broker's, or cash buyer's license, as the case may be, shall be deemed to be licensed to represent his principal under Chapter 7 (commencing with Section 56101) of this division, and no other fee shall be required of such agent.

55864. All fees which are collected pursuant to this chapter shall be paid into the State Treasury monthly and shall be credited to the Department of Agriculture Fund and, except as otherwise provided in Section 55433, shall be expended in carrying out this chapter.


Article 17. Violations

Ca Codes (fac:55872-55882) Food And Agricultural Code Section 55872-55882



55872. It is a violation of this chapter if the applicant, or licensee, has failed or refused to pay for any farm product at the time and in the manner which is specified in the contract with the producer, or as is otherwise provided in this chapter.


55873. It is a violation of this chapter if the applicant, or licensee, has rejected, without reasonable cause, or has refused to accept, without reasonable cause, any farm product which is bought or contracted to be bought from a producer by such applicant or licensee, or failed or refused, without reasonable cause, to furnish or provide boxes or other containers, or hauling, harvesting, or any other service which is contracted to be done by the licensee in connection with the acceptance, harvesting, or other handling of such farm product which is bought or handled or contracted to be bought or handled.

55874. It is a violation of this chapter if the licensee has knowingly employed an agent without causing the agent to comply with the licensing requirements of this chapter which are applicable to agents.

55875. It is a violation of this chapter if the licensee has failed or refused, upon demand, to permit the director or his agents to make the investigations, examinations, or audits as provided in this chapter, or that the licensee has removed or sequestered any books, records, or papers necessary to any such investigations, examinations, or audits, or has otherwise obstructed them.


55876. It is a violation of this chapter if the applicant, or licensee, has otherwise violated any provision of this chapter or Chapter 7 (commencing with Section 56101) of this division.


55877. It is a violation of this chapter if the licensee licensed as a cash buying processor has bought or otherwise taken title to, or possession of, any farm product from the producer of the farm product, except by cash payment to the producer, at the time of obtaining such possession or control, of the full agreed price.


55878. The failure or refusal of a processor to make payment for any farm product within the time which is specified for such payment in the contract of sale and purchase between the producer and the processor, and in accordance with the terms of the contract, is a violation of this chapter.


55879. It is a violation of this chapter if the applicant or licensee has failed or refused to render a true and correct account of sales or make settlement thereon or to pay for farm products received on consignment within the time and in the manner required by this chapter.


55880. It is a violation of this chapter if the licensee or applicant has failed or refused to file with the director a schedule of his charges for services in connection with any farm product which is handled on account of, or as agent for another. Any services rendered for which charges are made, if not filed with the director, shall be charged at cost, if not covered by a written contract. Cost-supporting data shall be available for verification.


55881. Under a contract for the purchase or handling of any farm product, any delinquent payment of money under this chapter shall also include a late charge of 5 percent per month of the unpaid balance calculated on a daily basis for the period of the delinquency for the first month and an additional 1 percent per month of the unpaid balance calculated on a daily basis for the remaining period of the delinquency. Any such late charge shall be payable to the person from whom the farm product was purchased, unless the person waives, in writing, his right to such payment. Such waiver shall be valid and effective only when given after a delinquency has occurred. This section does not affect the time of payment provided for in this chapter or in any contract for the purchase or handling of any farm product.


55882. It is a violation of this chapter if a licensee fails, neglects, or refuses to collect or remit any assessments that have been levied in accordance with the assessment provisions of Article 10 (commencing with Section 58921) of Chapter 1 or Article 12 (commencing with Section 59941) of Chapter 2 of Part 2 of Division 21, or Article 8 (commencing with Section 64691) of Chapter 2, Chapter 3, (commencing with Section 65500), Article 5 (commencing with Section 66621) of Chapter 4, Article 6 (commencing with Section 67101) of Chapter 5, Article 6 (commencing with Section 68101) of Chapter 6, Article 6 (commencing with Section 69081) of Chapter 7, Chapter 9.5 (commencing with Section 71000), Article 6 (commencing with Section 72101) of Chapter 10, Chapter 12.6 (commencing with Section 74701), Chapter 12.7 (commencing with Section 74801), Article 6 (commencing with Section 75131) of Chapter 13, Article 8 (commencing with Section 75631) of Chapter 13.5, Article 6 (commencing with Section 76141) of Chapter 14, Chapter 15 (commencing with Section 76201), Chapter 16.5 (commencing with Section 77001), Chapter 17 (commencing with Section 77201), Chapter 17.5 (commencing with Section 77401), Chapter 19 (commencing with Section 77701), Chapter 20 (commencing with Section 77901), Article 6 (commencing with Section 78285) of Chapter 21, or Article 6 (commencing with Section 78700) of Chapter 24, of Part 2 of Division 22.


Article 18. Criminal Penalties

Ca Codes (fac:55901-55906) Food And Agricultural Code Section 55901-55906



55901. (a) Except as specified in Section 55902, any misdemeanor which is prescribed by this article is punishable by a fine of not less than five hundred dollars ($500) or more than five thousand dollars ($5,000), by imprisonment in the county jail for not more than one year, or by both that fine and imprisonment. (b) For a violation of the offense described in subdivision (a), the department may recover investigative costs, excluding attorneys' fees and administrative overhead, for those charges where there has been a conviction in a court of law, or a court-supervised settlement has been reached. Nothing in this section allows the department to recover investigative costs for an administrative licensing action or any action that has not been filed in a court of law. (c) Any person or entity responsible for investigative costs under this section shall be allowed to audit the department's investigative costs. The audit must be performed by a third-party certified public accountant and paid for by the person or entity requesting the audit. The department shall promulgate regulations to implement this subdivision by June 1, 2002.


55902. It is a misdemeanor for any person subject to this chapter to act as a processor or agent without a license, and is punishable by a fine of not less than ten thousand dollars ($10,000), by imprisonment in the county jail for not more than one year, or by both the fine and imprisonment.


55902.2. It is a misdemeanor for any person subject to this chapter to pay license fees in an amount less than that amount established under subdivision (b) of Section 55861. Any person who pays less than the amount established under subdivision (b) of Section 55861 for two or more consecutive years shall pay to the director treble the amount of the license fees due pursuant to this chapter.


55902.5. It is a misdemeanor for any person licensed as a cash buying processor to buy or otherwise take title to, or possession of, any farm product from a producer of the product, except by cash payment of the full agreed price to the producer at the time of obtaining possession or control.


55903. It is a misdemeanor for any person that is subject to this chapter to willfully refuse to pay for any farm product which such person purchases within 20 days after the date of the delivery of such product by the producer if he has the ability to pay and demand for payment is made, except in the case of a bona fide dispute, unless the time of payment is otherwise agreed upon in writing, or the payment of the purchase price is secured other than by a lien.


55904. It is a misdemeanor for any person that is subject to this chapter to falsely deny the amount, or the validity, of any producer' s claim, or that it is due, with the intent to secure for himself, his employer or other person, any discount upon such indebtedness, or with the intent to annoy, harass, oppress, hinder, delay, or defraud the person to whom such indebtedness is due.


55905. It is a misdemeanor for any person that is subject to this chapter to sell, hypothecate, sequester with intent to defraud any producer, or in any manner place or attempt to place any product upon which liens in favor of any producer have attached, beyond the control, reach, or recovery of any such claimant.


55906. It is a misdemeanor for any person that is subject to this chapter to fail to comply with this chapter.


Article 19. Civil Remedies And Penalties

Ca Codes (fac:55921-55922) Food And Agricultural Code Section 55921-55922



55921. The director may bring an action to enjoin the violation or the threatened violation of any provision of this chapter or of any order which is made pursuant to this chapter in the superior court in the county in which such violation occurs or is about to occur. There may be enjoined in one proceeding any number of defendants alleged to be violating the same provisions or orders, although their properties, interests, residences, or places of business may be in several counties and the violations separate and distinct. Any proceeding which is brought pursuant to this section shall be governed in all other respects by the provisions of Chapter 3 (commencing with Section 525), Title 7, Part 2 of the Code of Civil Procedure.


55922. (a) Any person that violates any provision of this chapter is liable civilly in the sum of not less than five hundred dollars ($500) or more than one thousand dollars ($1,000) for each and every violation, this sum to be recovered in an action by the secretary in any court of competent jurisdiction. All sums which are recovered under this section shall be deposited in the State Treasury to the credit of the Department of Food and Agriculture Fund. (b) For a violation of the offense described in subdivision (a), the department may recover investigative costs, excluding attorneys' fees and administrative overhead, for those charges where there has been a conviction in a court of law, or a court-supervised settlement has been reached. Nothing in this section allows the department to recover investigative costs for an administrative licensing action or any action that has not been filed in a court of law. (c) Any person or entity responsible for investigative costs under this section shall be allowed to audit the department's investigative costs. The audit must be performed by a third-party certified public accountant and paid for by the person or entity requesting the audit. The department shall promulgate regulations to implement this subdivision by June 1, 2002.


Chapter 7. Produce Dealers

Article 1. Definitions

Ca Codes (fac:56101-56110) Food And Agricultural Code Section 56101-56110



56101. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


56102. "Agent" means any person who on behalf of any licensee receives on consignment, contracts for, or solicits for sale on commission, any farm product from a licensee or producer of such product, or who negotiates the consignment or purchase of any farm product on behalf of any licensee.


56103. "Broker" means any person that negotiates the purchase or sale of any farm product. A broker may not, however, handle either the farm product which is involved or the proceeds of a sale.


56103.5. "Cash" means coin or currency of the United States, and does not include a check or money order.


56104. "Cash buyer" means any person who obtains title to, possession or control of, or buys or agrees to buy any farm product from a licensee or a producer by paying to the seller the full agreed price in cash at the time of obtaining possession or control, or at the time of contracting for title to, or possession or control of any farm product.


56105. "Commission merchant" means any person, as follows: (a) Who receives on consignment or solicits any farm product from a licensee or producer of the product. (b) Who accepts any farm product in trust from a licensee or the producer of the product for purposes of sale. (c) Who sells any farm product on commission. (d) Who handles any farm product in any way for the account of or as an agent of the consignor of the product. Any person who accepts a farm product from a licensee or the producer of such product for the purpose of sale or resale is a commission merchant, unless the person has bought, or agreed to buy, the farm product by a contract which designates the price to be paid to the seller.


56106. "Consignor" includes any person that ships or delivers to any commission merchant or dealer any farm product for handling, sale, or resale.

56107. "Dealer" means any person who obtains title to, or possession, control, or delivery of, any farm product from a licensee or producer at a designated price for the purpose of resale, or who buys or agrees to buy any farm product from a licensee or the producer of the farm product at a designated price.


56108. "Established place of business" means any permanent warehouse, building, or structure which is owned in fee or leased, at which the owner or lessee carries on a legitimate permanent business in good faith, and at which a stock of any farm product is stored or kept in quantities which are usually carried and reasonably adequate to meet the requirements of the business. It does not mean any tent, temporary stand, or other temporary structure, or permanent structure which is occupied pursuant to a temporary arrangement.


56109. "Farm product" includes every agricultural, horticultural, viticultural, and vegetable product of the soil, poultry and poultry products, livestock products and livestock not for immediate slaughter, bees and apiary products, hay, dried beans, honey, and cut flowers. It does not, however, include any timber or timber product, flower or agricultural or vegetable seed not purchased from a producer, any milk product which is subject to the licensing and bonding provisions of Chapter 2 (commencing with Section 61801) of Part 3 of Division 21, any aquacultural product, or cattle sold to any person who is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.).


56109.5. "Licensee" means any person licensed under this chapter as a broker, cash buyer, commission merchant, or dealer.


56110. "Producer" means any person that is engaged in the business of growing or producing any farm product.


Article 2. General Provisions

Ca Codes (fac:56131-56136) Food And Agricultural Code Section 56131-56136



56131. The marketing of agricultural commodities within this state is hereby declared to be affected with a public interest. The provisions of this chapter are enacted in the exercise of the police powers of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.


56132. The director may publish in pamphlet form as often as he thinks necessary a list of all licensees and agents that are licensed pursuant to this chapter together with all necessary regulations which concern the enforcement of this chapter.


56133. Any money in the Department of Food and Agriculture Fund which was derived pursuant to this chapter or Chapter 6 (commencing with Section 55401) may be expended for the administration and enforcement of these chapters and Chapter 7.5 (commencing with Section 56701), notwithstanding any other provision of law which limits the expenditure of any such money to the specific purposes or to the administration or enforcement of each of the chapters separately.

56133.5. (a) Except pursuant to an exemption granted by the department, no person licensed under this chapter shall employ any person as an agent, or who previously was an agent, who meets any of the following criteria: (1) Whose license has been revoked or is currently suspended. (2) Who has committed any one flagrant or repeated violations of this chapter or Chapter 6 (commencing with Section 55401). (3) Who failed to pay a producer's claims for which the person, or, where the person controlled the decision to pay, the person's employer, was liable, and which arose out of the conduct of a business licensed or required to be licensed under this chapter or Chapter 6 (commencing with Section 55401). (4) Who has been convicted of a crime that includes as one of its elements the financial victimization of another person. (b) The department may approve employment of any person covered by subdivision (a) if the licensee furnishes and maintains a surety bond in form and amount satisfactory to the department, but that shall not be less than ten thousand dollars ($10,000), as assurance that the licensee's business will be conducted in accordance with this chapter and that the licensee will pay all amounts due farm products creditors. The department may approve employment without a surety bond after the expiration of four years from the effective date of the applicable disciplinary order. The department, based on changes in the nature and volume of business conducted by the licensee, may require an increase or authorize a reduction in the amount of the bond, but in no case shall the bond be reduced below ten thousand dollars ($10,000). A licensee who is notified by the department to provide a bond in an increased amount shall do so within a reasonable time to be specified by the department. If the licensee fails to do so, the approval of employment shall automatically terminate. The department may suspend or revoke the license of any licensee who, after the date given in the notice, continues to employ any person in violation of this section. (c) The department may obtain access to a licensee's or person's criminal record during the course of a licensing investigation opened for other reasons or if the department is presented with a reasonable basis to believe a person or licensee satisfies any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a). The Department of Justice shall furnish criminal record information to the department at the department's request. If the information thereby obtained reveals a conviction for a crime that includes as one of its elements the financial victimization of another person, the department shall bring this to the attention of the licensee and the person by a written notice. This written notice shall set out the charges against the licensee or person, prohibit employment or revoke or deny the license effective if and when any rights to an administrative hearing have been exhausted, and set out the licensee's or person's rights under this section. (d) The department may grant an exemption on presentation of substantial, clear, and convincing evidence to support a reasonable belief as to any of the following: (1) There has been a mistake of fact or identity. (2) The present role of the person provides no opportunity for a repeat of the prior behavior. (3) The person has been rehabilitated. All submissions shall be authenticated and verified under penalty of perjury. Unless the licensee or person can prove one of these three elements by substantial, clear, and convincing evidence, the department shall deny the request for exemption. (e) (1) A licensee or person who has been identified by the department as satisfying any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a) and who has not been granted an exemption by the department shall be afforded a hearing upon the licensee's or person's request under this chapter. The licensee or person shall not have a right of hearing if the department did not notify the employer or deny an exemption. (2) At the hearing, the department shall have the burden to prove that any of the criteria set forth in paragraphs (1) to (4), inclusive, of subdivision (a) are satisfied by a preponderance of the evidence. It shall be the licensee's or person's burden to prove rehabilitation by substantial, clear, and convincing evidence. (3) In the case of a criminal conviction, "convicted of a crime" includes a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action that the department is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, notwithstanding a subsequent order pursuant to Sections 1203.4 and 1203.4a of the Penal Code permitting the person to withdraw his or her plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the accusation, information, or indictment. For purposes of this section or any other provision of this chapter, the record of a conviction, or a copy thereof certified by the clerk of the court or by a judge of the court in which the conviction occurred, shall be conclusive evidence of the conviction. (4) For purposes of this section or any other provision of this chapter, a certified copy of a decision and order or minutes of court in which a finding is made concerning any of the criteria set forth in paragraphs (1) to (3), inclusive, of subdivision (a), is prima facie evidence of the truth of the charge and collateral estoppel applies. (f) The documents and information procured pursuant to this section shall be considered the records of a consumer and shall not be construed to be a public record. The documents and information shall remain confidential, except in actions brought by the department to enforce this division, or as a result of the issuance of a subpoena in accordance with Section 1985.4 of the Code of Civil Procedure. The unauthorized release of the documents received from the Department of Justice or the information contained in those documents, is a misdemeanor.


56134. Civil suits and criminal prosecutions which arise by virtue of any provision of this chapter may be commenced and tried in any of the following: (a) The county where the product was received by the licensee or agent. (b) The county in which the principal place of business of such licensee or agent is located. (c) The county in which the violation of this chapter occurred.


56134.5. The rights, remedies, and penalties that are provided for in this chapter are in addition to any other rights, remedies, or penalties that are provided for by law, and supercede provisions of law in conflict therewith.

56134.75. Except as otherwise provided in this chapter, Part 2 (commencing with Section 307) of the Code of Civil Procedure is applicable to, and constitutes the rules of practice in, the proceedings that are mentioned in this chapter except as insofar as they are inconsistent with the provisions of this chapter.


56135. If any clause, sentence, paragraph, or part of this chapter is for any reason, adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this chapter, but shall be confined in its operation to the clause, sentence, paragraph, or part of this chapter which is directly involved in the controversy in which such judgment is rendered.


56136. (a) No person, other than a corporate officer, licensed and employed as an agent, shall control the business of the licensee, as determined by the director. (b) For purposes of this section, "control" includes, but is not limited to, possession, either direct or indirect, of the power to direct or cause the direction of the management and policies of the licensee. (c) Violation of this section shall, after notice and opportunity for hearing, constitute grounds for license revocation of either, or both, the licensee or agent by the director.


Article 3. Exceptions

Ca Codes (fac:56161-56162) Food And Agricultural Code Section 56161-56162



56161. This chapter does not apply to or include any of the following: (a) Any nonprofit cooperative association organized and operating pursuant to Chapter 1 (commencing with Section 54001), any nonprofit cooperative association organized and operating pursuant to any similar law of any other state, the District of Columbia, or the United States, or the agents of these organizations, except as to the activities of these organizations or agents which involve the handling of, or dealing in, any farm product of a nonmember of the organization. (b) Any person or exchange that buys, receives, or otherwise handles any farm product as a processor, as defined in Section 55407. (c) Any retail merchant who has a fixed or established place of business in this state. This exemption does not, however, apply to retail merchants who are also engaged in the business of selling, at wholesale, any farm product purchased from a licensee or producer. This exemption also does not apply to any transaction wherein possession of any farm product is obtained from a licensee or producer, and the farm product is sold to another person without being handled in the regular course of a retail business which is conducted at a fixed and established place. (d) Any person who buys any farm product for his or her own use or consumption. (e) Any person licensed as a distributor or handler under Chapter 2 (commencing with Section 61801) of Part 3 of Division 21 who purchases farm products from a dealer, broker, or commission merchant. However, this chapter applies to any such licensed person who purchases farm products from a producer. (f) Any person licensed as a landscape contractor pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code. (g) Any person, not otherwise required to be licensed pursuant to this chapter, that buys or otherwise acquires possession of any farm product from, and processed by, a nonprofit cooperative association to which subdivision (a) is applicable. (h) For the purposes of trading in cattle, any person engaged in the business of buying or selling cattle who is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.).


56162. This chapter does not apply to any person that buys, receives, or otherwise handles any farm product for human consumption whose business is the distribution or sale of the farm product to persons who regularly operate mobile vehicles, mobile food preparation units, or vending machines on routes and who sell the farm product directly to the consumer. However, this chapter applies to any such person who purchases farm products from a producer.


Article 4. Licenses

Ca Codes (fac:56181-56196) Food And Agricultural Code Section 56181-56196



56181. Except as otherwise provided in Section 55610, any person engaged in the business of buying, receiving on consignment, soliciting for sale on commission, or negotiating the sale of farm products from a licensee or producer for resale shall be licensed as provided in this chapter.


56182. Any person required by Section 56181 to be licensed shall file an application with the director for a license to transact business before engaging in such business. The application shall be accompanied by the application fee which is provided in Article 17 (commencing with Section 56571) of this chapter.


56182.5. (a) It is unlawful for a licensee that has changed its legal entity to do any of the following: (1) Continue to operate after the change. (2) Purchase or handle any farm product from a person who had a farm product contract with the former licensee at the time of the change in entity without notifying that person, in writing, of the change in entity. (3) Use any invoice, contract, or other document associated with the purchase, consignment, or brokerage of any farm product that identifies the former licensee unless the new entity is conspicuously identified on the same invoice, contract, or other document as the entity responsible for the transaction. (b) The new entity shall notify the director in writing of the change in legal entity within 15 days of the change. The new legal entity shall, before it conducts business that requires a license, obtain a new license for the business. (c) Notwithstanding subdivision (b), if a licensee conducts business without a new license as a result of a change of legal entity, it may, within 120 days of the change, upon a showing of no substantial change in financial resources and liabilities, petition the director to grant a new license retroactive to the first day of the month during which the change occurred, and the director may grant the license with retroactive effect upon a finding that doing so would be consistent with the purposes of this chapter. Upon granting the petition, the director shall (1) require the licensee to pay an additional fee in an amount that will cover the expenses of the department in the matter, but not to exceed the fee for a new license, (2) place conditions on the license that are consistent with the purposes of this chapter as the director deems appropriate, and (3) require the licensee to pay an amount, for deposit in the Farm Products Trust Fund, equal to the amount that would have been required had the license been obtained in accordance with subdivision (b).

56182.6. (a) If the Secretary of State suspends the corporate status of any licensee or if the corporate status is forfeited, the license is revoked by operation of law. The former licensee shall provide written notice of the suspension or forfeiture to the director, and to each person with whom it has a farm product contract, within 15 days of the date the Secretary of State mails the notice of suspension or forfeiture. (b) The former licensee, may, upon a showing of no substantial change in financial resources and liabilities, and within 90 days of the suspension or forfeiture of corporate status, petition the director for an order to reissue its license formerly held under this chapter. If the corporate status has been reinstated by the Secretary of State, the director may reissue the license if the director finds that doing so would be consistent with the purposes of this chapter. As a condition to reissuing the license, the director may (1) require the former licensee to undertake such financial guarantees, including the filing and maintaining of bonds, as the director deems necessary to protect the interests of contracting parties and (2) impose other conditions on the license that are consistent with the purposes of this chapter as the director deems appropriate.


56183. The application shall in each case state all of the following: (a) Every class of farm products which the applicant proposes to handle. (b) The full name of the person that is applying for such license. If the applicant is a firm, exchange, association, or corporation, the full name of each member of the firm, or the names of the officers of the exchange, association, or corporation shall be given in the application. (c) The principal business address of the applicant in this state and elsewhere. (d) The name of each person authorized to receive and accept service of summons and legal notices of all kinds for the applicant.


56183.5. (a) An initial application, at a minimum, shall include the following: (1) A release authorizing the department, during consideration of the application and for the duration of licensure, to have access to and obtain financial information from both of the following: (A) The applicant's files with credit reporting agencies. (B) The applicant's files with banks, savings and loan associations, or any other financial institutions with whom the applicant has done business in the past or with whom the applicant intends to do business during the year of licensure. (2) A notice signed by the applicant that the department may obtain criminal record information during the course of a licensing investigation or upon presentation with a reasonable basis to believe the licensee has been convicted of a crime. An applicant whose application is incomplete shall be given written notice that a failure to complete it within 60 calendar days shall result in denial of the application. (b) The documents and information procured pursuant to this section shall be considered the records of a consumer and shall not be construed to be a public record. The documents and information shall remain confidential, except in actions brought by the department to enforce this division, or as a result of the issuance of a subpoena in accordance with Section 1985.4 of the Code of Civil Procedure. The unauthorized release of the documents received from the Department of Justice or the information contained in those documents is a misdemeanor. (c) The department shall adopt regulations that specify the proper and necessary information and supporting documentation the department requires for an application to be considered complete.


56184. In addition to the general requirements which are applicable to all applications as set forth in this article, the following requirements shall apply to each applicant who engages in the designated activity: (a) Each applicant who intends to engage in business as a commission merchant shall include a complete schedule of commissions, together with an itemized listing of all charges for all services. Such designated commissions and charges shall not be changed or varied except by written contract between the parties. If changed by a written contract, such charges shall be clearly set forth in detail in such written contract. Any services which are rendered for which charges are made, if not listed in the schedule on the application, shall be rendered on a strictly cost basis. (b) Each application for an agent's license shall include such information as the director may consider proper or necessary, and shall include the name and address of applicant, and the name and address of the licensee that is represented or sought to be represented by the agent, and the written endorsement or nomination of such licensee.


56185. The department shall accept or deny an application within 90 calendar days of receipt of a completed application. The department may deny, condition, suspend, or revoke a license issued pursuant to this chapter upon any of the following grounds and in the manner provided in this chapter: (a) Upon one flagrant violation, as determined by the department, or upon repeated violations, by the holder or applicant, of any one or combination of the sections of this division or under any one or combination of the regulations promulgated by the department under the authority of this division. (b) Upon one flagrant violation, as determined by the department, or upon repeated violations, by a holder's or applicant's agent, employee, or contractor, or of an organization or entity in which the holder or applicant holds a significant financial interest, of any one or combination of the sections of this division or any one or combination of the regulations promulgated under this division under circumstances where the holder or applicant knew or should have known and failed to take reasonable measures to prevent the violation or failed to report the violation to the department upon learning of the violation. (c) Upon the conviction of the holder or applicant of a crime that includes as one of its elements the financial victimization of another person. However, if the licensee was licensed prior to January 1, 1998, and the department knew of, or was on notice of, the conviction, that conviction may not form the basis of a disciplinary action under this subdivision. (d) On the grounds of a false or misleading statement by a holder or applicant that the holder or applicant knew or should have known to be false or misleading, directed to any official of any government concerning the scope of any indicia of authority, including, but not limited to, the holder's or applicant's license associated with the holder's or applicant's business, the standards under which the indicia was authorized, the contents of the application for licensure, or the holder's or applicant's relationship to the indicia. (e) On the grounds that a holder or applicant, or a holder's or applicant's agency, employee, or contractor, or an organization or entity in which a holder or applicant holds a significant financial interest, deceived a grower in any material matter. Deception, for purposes of this subdivision, does not require scienter, but requires active misrepresentation where the actor knew the representation to be false or where the actor should have known, with due consideration, that he or she did not know whether or not the representation was true or false.


56185.5. (a) The Legislature finds there to be a substantial nexus between the conduct specified in Section 56185 and an applicant's or holder's fitness for licensure. (b) The department shall not dismiss an action where a violation, however minor, has been established. The department shall not dismiss an action because the applicant or holder establishes factors in mitigation. (c) However, the department may impose discipline other than denial or revocation of the license. As an alternative to revocation of a license, the department may stay a revocation subject to terms for a period of probation. As an alternative to denial the department may issue a license subject to conditions. Terms of probation or terms of conditional licensure may include, but are not limited to, a requirement of restitution, payment for extra audits, immediate revocation on a new violation, or any other terms that respond to the particular violations or circumstances found. (d) Once a finding of a violation has been made, the department may consider the following factors in assessing the appropriate level of discipline: (1) The relative isolation or infrequency of the conduct. (2) Whether the conduct was a part of a pattern or practice. (3) Whether the actor had been warned before. (4) Whether the actor considered the consequences of the conduct. (5) Whether the actor reasonably relied on others. (6) The severity of the consequences. (7) The mens rea of the actor. (8) In the case of a criminal conviction, evidence of rehabilitation. (9) The total licensing history. (e) The following factors shall not be considered in assessing the appropriate level of discipline: (1) The social or economic contributions of the applicant or holder. (2) General testimonials as to good character and worthiness to be licensed. (3) Economic hardship on the licensee. (4) "Mercy of the court" pleas in connection with criminal convictions, pattern or practice violations, or deception. (5) In the case of a felony criminal conviction, the department shall not consider rehabilitation unless the convicted person has a valid certificate of rehabilitation.


56185.75. (a) If an application for a license indicates, or the department determines during the application review process, that the applicant was issued a license that was revoked within the preceding two years, the department shall cease any further review of the application until two years have elapsed from the date of the revocation. The cessation of review shall not constitute a denial of the application for the purposes of this chapter, or any other provision of law. (b) If an application for a license indicates, or the department determines during the application review process, that the applicant had previously applied for a license and the application was denied within the last year, the department shall cease further review of the application until 30 days have elapsed from the date of the notification of the denial or from the effective date of the decision and order of the department upholding a denial. The cessation of review shall not constitute a denial of the new applicant for purposes of this chapter, or any other provision of law. (c) Nothing in subdivision (a) or (b) prohibits the department from taking into account the basis for denial or revocation in considering any new application subsequent to the elapse of the applicable period of prohibition.


56186. The department shall require the applicant to make a showing of character, responsibility, and good faith in seeking to carry on the business that is stated in the application, and may make investigations, hold hearings, and make determinations respecting such matters.


56186.5. A license is forfeited by operation of law prior to its expiration date when one of the following occurs: (a) The holder surrenders the license to the department. (b) The holder dies. (c) The partnership holder dissolves. (d) The holder of a significant financial interest in a corporation transfers his or her interest to another person or entity, regardless of relationship. (e) The holder files for bankruptcy under provisions other than those permitting and governing reorganization under bankruptcy.


56186.75. (a) The withdrawal of an application for a license after it has been filed with the department does not deprive the department of its authority to institute or continue a proceeding against the applicant or to enter an order denying the license, unless the department consents in writing to such a withdrawal. (b) The expiration or forfeiture by operation of law of a license, or its forfeiture or cancellation by order of the department or by order of a court of law, or its surrender without the written consent of the department, does not deprive the department of its authority to institute or continue a disciplinary proceeding against the holder upon any ground provided by law or to enter an order revoking the license or otherwise taking disciplinary action against the holder. (c) Any action brought by the department against an applicant or holder does not abate by reason of the sale or other transfer of ownership of the business that is a party to the action, except with the written consent of the department. (d) Nothing in this division or in any other provision of this code deprives the department of the authority to settle or adjudicate a disposition of a case other than by revocation or denial. The department or the department's designee may compromise with the applicant or holder in a written stipulation and order. The department may, following a hearing, order probation on terms and conditions as determined by the department. The authority conferred by this subdivision shall include, but not be limited to, the authority to order payment of amounts determined owing, the authority to dismiss an action on the department's own initiative, the authority to order administrative penalties, the authority to order a respondent to pay for heightened audit scrutiny, the authority to suspend a license for a period of years, or any combination of remedies other than final revocation or denial of a license.


56189. Any person who is adjudicated liable for payment of a claim for farm products that arose out of the conduct of a business licensed or requiring a license under this chapter or Chapter 6 (commencing with Section 55401), and who has not made full settlement with all producer-creditors, shall not be licensed by the director as a principal for four years from the date of the adjudication.


56189.2. In addition to the other requirements of this chapter, each application for a license, except for a cash buyer's license, shall include an affidavit in which the applicant affirms that he or she is current in making all payments required under undisputed contract agreements, and that he or she will do all of the following: (a) Abide by all provisions of this chapter and Chapter 6 (commencing with Section 55401). (b) Will prepare and retain financial records adequate to document all transactions with suppliers. (c) Will prepare and retain current financial information, including, but not limited to, profit-and-loss statements and a balance sheet that presents fairly the financial condition as of the applicant's most recent yearend. The affidavit shall be on a form prescribed by the secretary and shall be submitted under penalty of perjury.


56189.5. (a) Licensees or applicants for a license shall be required to furnish and maintain a surety bond in a form and amount satisfactory to the director, if within the preceding four years the director determines that they have done any of the following: (1) Engaged in conduct which demonstrates a lack of financial responsibility including, but not limited to, delinquent accounts payable, judgments of liability, insolvency, or bankruptcy. (2) Failed to assure future financial responsibility unless a surety bond is posted. (3) Otherwise violated this chapter which resulted in license revocation. (b) The bond shall not be less than ten thousand dollars ($10,000) or 20 percent of the annual dollar volume of business based on farm product value returned to the grower, whichever is greater, as assurance that the licensee's or applicant's business will be conducted in accordance with this chapter and that the licensee or applicant will pay all amounts due farm products creditors. (c) The director, based on changes in the nature and volume of business conducted by the licensee, may require an increase or authorize a reduction in the amount of the bond, but in no case shall the bond be reduced below ten thousand dollars ($10,000). A licensee who is notified by the director to provide a bond in an increased amount shall do so within a reasonable time as specified by the director. If the licensee fails to do so, the director may, after notice and opportunity for hearing, suspend or revoke the license of any licensee.


56190. (a) The department shall notify the applicant or holder in writing of the department's decision to bring charges to deny, suspend, or revoke a license. (1) The notice shall inform the applicant or holder of the charges against him or her, of the department's proposed disciplinary action, and of his or her rights under this chapter. (2) The notice shall be served by certified mail to the applicant or holder's last known address. (3) Except where the license has been temporarily suspended, the notice shall be mailed to the applicant or holder at least 30 calendar days in advance of the impending action. (b) The department's proposed action shall become final unless the applicant or holder appeals prior to the end of the notice period by submitting a notice of defense to the department in a form specified by the department. The notice shall be transmitted to the department in a form that is written, including, but not limited to, by facsimile. (c) If the department receives a timely notice of defense, the department shall schedule a hearing within 90 calendar days of receipt of the notice of defense, except where the license has been temporarily suspended. Pending the final decision at the conclusion of the hearing, a revocation shall be stayed. A temporary suspension shall not be stayed. (d) Proceedings for the revocation or denial of a license issued under this chapter shall be conducted by hearing officers appointed for that purpose by the department. The department may elect to use hearing officers employed by the Office of Administrative Hearings. The hearing officers shall be independent of the Market Enforcement Bureau, but may be employees of the department. The hearing officers shall be qualified administrative law judges. (e) Proceedings shall be conducted generally in accordance with the provisions of Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. However, proceedings need not conform strictly to any "rules of court" adopted as regulations by the Office of Administrative Hearings to guide the conduct of hearings conducted by the Office of Administrative Hearings. The department has all power granted by Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (1) The sole parties to the proceedings shall be the department and the applicant or holder. Third party intervention shall not be permitted. The disputes, claims, and interests of third parties shall not be within the jurisdiction of the proceedings. However, nothing in this paragraph prohibits any interested party from submitting an amicus brief if the hearing officer requests written briefs. (2) The validity of a department regulation or order shall not be within jurisdiction of the proceedings. (3) Law and motion matters shall be handled by the assigned hearing officer. (4) The hearing officer may not enter into settlement discussions. (5) The hearing officer may not issue sanctions. (f) In all proceedings conducted in accordance with this section, the standard of proof to be applied is the preponderance of the evidence. When the department seeks to revoke an existing license, the department shall have the burden of proof and the burden of producing evidence. (g) Decisions following a hearing shall be adopted by the department or the department's designee and become final unless remanded for reconsideration or alternated in accordance with Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (h) The department shall maintain a library of decisions that shall be made available to any person, including the parties to administrative actions during discovery.


56193. Each licensee shall post his license or a copy of it in his office or salesroom in plain view of the public.


56194. The director shall issue to any individual or member of a partnership, a card which specifies that he or his firm is licensed. The licensee shall show such card upon the request of any interested person.

56195. The director may also issue to each agent a separate card for each principal which the agent represents, which shall bear the signature of the agent. Any agent shall show the card upon the request of any interested person. Any agent that displays a void or expired license card is guilty of a misdemeanor, punishable as provided in Section 56631 of this chapter.


56196. All indicia of the possession of a license are at all times the property of this state. Each licensee is entitled to the possession of them only for the duration of the license.


Article 6. Financing Charges And Financial Statements

Ca Codes (fac:56251-56255) Food And Agricultural Code Section 56251-56255



56251. A licensee that finances, lends money, or otherwise makes advances of money or credits to another licensee may not deduct from the proceeds of any farm product which is marketed, sold, or otherwise handled by him on behalf of or for the account of the licensee to whom such money, loans, advances or credits are made, an amount which exceeds a reasonable commission or brokerage, together with the usual and customary selling charges or costs of marketing, or both. He may not otherwise divert to his own use or account or in liquidation of such loans, advances, or credits the moneys, returns, or proceeds accruing from the sale, handling, or marketing of any farm product which is handled by him on behalf of or for the account of the licensee to whom or for whom such loans, advances, or credits are made.


56252.2. (a) If the director is not satisfied that an applicant or licensee is financially responsible, the director may, in lieu of denying, suspending, or revoking the license, accept an irrevocable guarantee of the obligations of the licensee to all California farm products creditors. The guarantee shall be for any periods and in any amounts that the director may from time to time require. The director may, as a condition of accepting and maintaining the guarantee, require the guarantor to supply financial information to the director at times and to the extent the director deems advisable. (b) A guarantee placed with the director pursuant to subdivision (a) shall support an action in a court of competent jurisdiction by a farm products creditor for obligations of the licensee to the creditor and by a state officer for the obligations of the licensee to the state related to transactions subject to the guarantee.


56253. The secretary may require a licensee to file a balance sheet or statement of financial position that presents fairly the financial condition of such licensee. Such financial statement, if not prepared by a public accountant or certified public accountant, shall be on a form prescribed by the secretary and shall be submitted under penalty of perjury. Any balance sheet submitted that does not provide the information required by the secretary shall not meet the requirements of this section. Failure of a licensee to file a financial statement pursuant to this section shall be sufficient grounds for license revocation.

56254. Any financial statement submitted to the director pursuant to the provisions of this article is confidential and shall not be divulged except if necessary for the proper determination of any court proceedings or hearing before the director.


56255. (a) Every licensee shall prepare and preserve the accounts, records, and memoranda required by this chapter which shall fully and correctly disclose all transactions involved in his business. Licensees shall keep records which are adapted to the particular business that the licensee is conducting and in each case such records shall fully disclose all transactions in the business in sufficient detail as to be readily understood and audited. Minimum records required under this chapter are: 1. A record of cash received. 2. A record of cash disbursed. 3. A general ledger or its equivalent. 4. A record of amounts due California producers. 5. A record of amounts due others. (b) Every licensee shall prepare and preserve records and memoranda required by this chapter which shall fully and correctly disclose the true ownership and management of such business. (c) All records required to be kept under this chapter shall be kept for a period of four years.


Article 7. Commission Merchants

Ca Codes (fac:56271-56283) Food And Agricultural Code Section 56271-56283



56271. Every commission merchant, that receives any farm product for sale as a commission merchant, shall promptly make and keep a correct record which shows in detail all of the following with reference to the handling, sale, or storage of such farm product: (a) The name and address of the consignor. (b) The date it was received. (c) The condition and quantity upon arrival. (d) Date of such sale for the account of the consignor. (e) The price for which it was sold. (f) An itemized statement of the charges to be paid by the consignor in connection with the sale. Any services rendered for which charges are made, if not filed with the director, shall be charged at cost if not covered by a written contract. Cost-supporting data shall be available for verification. (g) The names and addresses of all purchasers if the commission merchant has any financial interest in the business of the purchasers, or if the purchasers have any financial interest in the business of the commission merchant, directly or indirectly, as holder of the other's corporate stock, as copartner, as lender or borrower of money to or from the other, or otherwise. Such interest shall be noted in such records following the name of any such purchaser. (h) A lot number or other identifying mark for each consignment, which number or mark shall appear on every sales tag and every other essential record which is needed to identify each consignment from receipt through final sale. When requested by the consignor, as provided by Section 56281, a lot number shall appear on each individual farm product container. When containers are on pallets, then only the exposed containers shall be marked. When stamping or otherwise identifying each container is impractical due to the type of packaging, the container need not be marked. (i) Any claim which has been or may be filed by the commission merchant against any person for overcharges or for damages which result from the injury or deterioration of such farm product by the act, neglect, or failure of such person. Such records shall be open to the inspection of the director and the consignor of the farm product for whom such claim is made.


56272. When requested by his consignors, a commission merchant shall, before the close of the next business day following such request, transmit to the consignor a true written report of the quantity sold and the selling price.

56273. The full amount which is realized from the sales, including all collections, overcharges, and damages, less the agreed commission and other charges, together with a complete account of sales, as provided in Section 56273.1, shall be remitted to the consignor within 10 days after receipt of the moneys by the commission merchant, unless otherwise agreed in writing.


56273.1. (a) For purposes of this chapter, an account of sales shall be deemed complete if it consists of all of the following information: (1) The date of shipment. (2) The terms of the original sale concerning where and when title passes. (3) The commodity, variety, size, and grade. (4) The quantity shipped. (5) The quantity disposed of in a manner other than sale by the buyer, if applicable. (6) The original selling price. (7) The adjusted selling price, if applicable. (8) The reason for adjustment, if applicable. (9) Any inspection certificate required to be obtained as stated in Section 56280. (10) Amounts billed and collected from the buyer for services rendered to the buyer by the commission merchant. (11) The gross and net returns received from the buyer. (12) Any authorized commission merchant charges. (13) Any additional amounts paid to the consignor by the commission merchant to support the original price. (14) The net amount due the consignor. (b) The consignor and the commission merchant may agree on the documentation necessary to support the information required by subdivision (a). The agreements shall be made, in writing, prior to the shipping season of the particular farm product.


56274. In the account, the names and addresses of purchasers need not be given. Where a commission merchant has entered into a contract with two or more producers or consignors which contract provides that the returns for farm products sold for the account of such producers or consignors shall be pooled on a definite basis as to size or grade, or both, during a certain period of time, then a commission merchant shall obtain the written consent of the consignors and shall be required to render an account of sales, showing the net average pool return on each size or grade, or both, from sales made and shall keep a correct record of such sales, showing in detail all information as required in Section 56271.


56275. Every licensee operating as a commission merchant shall retain a copy of all records which cover each transaction, which copy shall at all times be available for, and open to, the confidential inspection of the director, consignor, or the authorized representative of either.


56276. If there is any dispute or disagreement between a consignor and a commission merchant which arises at the time of delivery as to condition, quality, grade, pack, quantity, or weight of any lot, shipment, or consignment of any farm product, the department shall furnish, upon the payment of a reasonable fee for it by the requesting party, a certificate which establishes the condition, quality, grade, pack, quantity, or weight of such lot, shipment, or consignment.

56277. Such certificate is prima facie evidence of the truth of the statements contained therein. The presumption established by this section is a presumption affecting the burden of proof, but it does not apply in a criminal action.

56278. Proof of any sale of any farm product which is made by a commission merchant for less than the current market price to any person with whom he has any financial connection, directly or indirectly as owner of its corporate stock, as copartner, or otherwise, or any sale out of which such commission merchant receives, directly or indirectly, any portion of the purchase price, except the commission which is named in the licensee's application or in a specific contract with the consignor, establishes a rebuttable presumption of fraud within the meaning of this chapter. This presumption is a presumption affecting the burden of proof.


56279. The burden of proof shall be upon the commission merchant to prove the correctness of any accounting required to be performed by the commission merchant pursuant to this chapter as to any transaction which may be questioned.

56280. (a) A commission merchant shall notify each consignor with whom he or she does business of this section. The notice shall be given in writing prior to the shipping season of the particular farm product. (b) No charge shall be made against a consignor's account for a downward price adjustment or a reduction in quantity of farm products delivered due to a breach of contract, unless the commission merchant has, in his or her files, a federal-state inspection certificate, issued pursuant to the United States Agricultural Marketing Act of 1946, (7 U.S.C. 1621, et seq.), indicating the type and the extent of the substandard condition of the lot involved in the breach of contract, thereby supporting the amount charged against the consignor's account. The commission merchant need not obtain a federal-state inspection certificate unless the lot involved is of a substandard condition. (c) Notwithstanding Section 56281, this section does not preclude a consignor from agreeing to a downward price adjustment or a reduction in the quantity of farm products delivered and waiving the right to inspection when the agreement was made prior to the shipping season of the particular farm product and was in writing. (d) The federal-state inspection certificate may be substituted by a private third-party inspection, based on the standards prescribed under the United States Agricultural Marketing Act of 1946, if the director determines, to his or her satisfaction, that a federal-state inspection certificate could not reasonably be obtained. If the director determines, to his or her satisfaction, that neither a federal-state inspection certificate nor private, third-party inspection, can be reasonably obtained, a signed statement of two or more disinterested, or otherwise independent parties, who have sufficient knowledge, acquired through education or experience, to evaluate the farm product involved, may be used as substitute for the federal-state certificate or third-party inspection, in order to make a statement as to the quality and condition of the lot of farm product at the time of inspection. (e) Where the condition of the lot is not substandard but for other reasons, including a decline in market demand, there is a downward price adjustment, the commission merchant shall affirm, in writing, that the lot was at least of standard quality at the time of sale. The affirmation shall be attached to, or made part of, the records of the consignment. (f) As used in this section, "lot" means the farm product identified by the procedure set forth in subdivision (h) of Section 56271.

56280.5. Any agreement waiving any right guaranteed by this chapter shall set forth in exact language the provision of this code being waived. Upon request by the secretary, the commission merchant shall make the agreement available for inspection. Any agreement that does not comply with this section, or that is not made available to the secretary for inspection upon the secretary's request, is void.


56281. A commission merchant shall notify each consignor with whom he or she does business of the provisions affecting the consignor that are contained in Sections 56271, 56272, 56273, 56280, 56282, and 56351, and this section. The notice shall be given in writing prior to the shipping season of the particular farm product. The notice shall include a form whereby the consignor may request notice of any adjustment by the commission merchant. The form shall also include a provision whereby the consignor may request that lot numbers be affixed on each individual farm product container as provided in subdivision (h) of Section 56271. Each commission merchant shall keep the records necessary to prove that the notices were given to each consignor in accordance with this section. A licensee operating as a commission merchant shall notify the consignor of any adjustment on a transaction, and provide reasons for the adjustment, within 48 hours. If the commission merchant is unable to contact the consignor by telephone or in person, the notification shall be immediately provided by mail.

56282. (a) Pursuant to this chapter, upon the verified complaint of the consignor, the secretary may disallow to a commission merchant, all or part of, any adjustment charged back to any consignor similarly situated, if the secretary determines that there is insufficient justification of the condition or circumstances requiring the adjustment. (b) In determining whether there is insufficient justification for an adjustment, the secretary shall first determine if any waivers or agreements have been entered into pursuant to this chapter. If a waiver or agreement has been entered into and the secretary determines that the waiver or agreement complies with Section 56280.5 and does not otherwise violate this chapter, the secretary's inquiry in determining this adjustment shall be governed by the terms and conditions of the waiver or agreement. (c) If there is no waiver or agreement, or if the waiver or agreement violates this chapter, as determined by the secretary, in determining whether there is insufficient justification for an adjustment, the secretary shall consider, among other things, the following: (1) The certificate issued pursuant to Section 56280 or 56351 does not support breach of contract. (2) The perishability of the farm product involved and the timely issuance of the certificate pursuant to Section 56280 or 56352. (3) Market reports or other market evidence does not support a downward price adjustment in accordance with Section 56279.


56283. Every commission merchant who receives any farm product for sale on consignment shall exercise reasonable care and diligence in disposing of the product in a fair and reasonable manner.


Article 8. Dealers

Ca Codes (fac:56301-56302.5) Food And Agricultural Code Section 56301-56302.5



56301. Every licensee operating as a dealer who purchases any farm product from the producer of the farm product or from any licensee for the purpose of resale, shall promptly make and keep a correct record which shows in detail all of the following: (a) The name and address of the producer or licensee. (b) The date received. (c) The price to be paid. (d) An itemized statement of any charges paid by the dealer for the account of the seller.

56302. Every dealer shall pay for any farm product purchased by him at the time and in the manner specified in the contract with the producer or licensee. If no time for payment is set by such contract or made at the time of the delivery, the dealer shall pay for the farm product within 30 days from the delivery or taking possession of such farm product.


56302.5. Upon the following, a licensee operating as a dealer shall notify the seller on a form to be prescribed by the department, as to the requirements set forth in Sections 56302 and 56620: (a) Upon delinquency of a contract. (b) If payment is not made within 30 days when the contract does not specify time of payment or if there is no contract. (c) If payment is not made within 30 days when the contract is oral, irrespective of the agreed time of payment. The dealer shall have the burden of proof as to the timely delivery of such a notice. Such a notice shall only be required as to the first contract between any particular seller and dealer during any one calendar year.


Article 9. Brokers

Ca Codes (fac:56331-56332) Food And Agricultural Code Section 56331-56332



56331. (a) Every licensee operating as a broker, upon negotiating the sale of farm products, shall issue to both buyer and seller a written memorandum of sale, before the close of the next business day, showing price, date of delivery, quality, and all other details concerned in the transaction. (b) The memorandum required by subdivision (a) shall have an individual identifying number printed upon it. The numbers shall be organized and printed on the memoranda so that each memorandum can be identified and accounted for sequentially. Unused or damaged memoranda shall be retained by the broker for accounting purposes.


56332. A licensee operating as a broker shall not alter the terms of the transaction as specified on his original memorandum of sale without the consent of both parties to the transaction. Upon making such change, the broker is required to issue a clearly marked corrected memorandum of sale, which shall clearly indicate the date and time when such adjustment or change was made, and shall transmit such corrected memorandum to both buyer and seller before the close of the next business day.


Article 10. Claims Of Licensees

Ca Codes (fac:56351-56352) Food And Agricultural Code Section 56351-56352



56351. A claim may not be made against the seller of any farm product by a licensee pursuant to this chapter, and no credit may be allowed to such licensee against another licensee or a producer of any farm product by reason of damage to or loss, dumping, or disposal of any farm product which is sold to such licensee, in any payment, accounting, or settlement which is made by the licensee to the producer or other licensee, unless the licensee has secured and is in possession of a certificate issued by a county agricultural commissioner, a county health officer, the director, a duly authorized officer of the State Board of Health, or by some other official now or hereafter authorized by law. The certificate shall state that the farm product which is involved has been damaged, dumped, destroyed, or otherwise disposed of as unfit for human consumption or as in violation of the fruit and vegetable standards which are contained in Division 17 (commencing with Section 42501) of this code. A private third-party inspection based on the standards prescribed in the United States Agricultural Marketing Act of 1946 may be substituted for such certificate if the director determines that an inspection certificate cannot be reasonably obtained. Where the director determines that neither an inspection certificate nor a private third-party inspection can be reasonably obtained, the signed statement of two or more disinterested or otherwise independent parties who have sufficient knowledge acquired through education or experience to evaluate the farm product involved may be used to describe the type and extent of the quality and condition factors present upon inspection.


56352. The certificate is not valid as proof of a proper claim, credit, or offset unless it is issued within 24 hours of the receipt by the licensee of the farm product which is involved.


Article 11. Examinations And Audits

Ca Codes (fac:56381-56383) Food And Agricultural Code Section 56381-56383



56381. (a) If, in the opinion of the department, there appears to be reasonable grounds for investigating a complaint or notification made under the provisions of this chapter, the department shall investigate the complaint or notification. In the course of the investigation, if the department determines that violations of this chapter are indicated other than alleged violations specified in the complaint or notification that served as the basis for the investigation, the department may expand the investigation to include the additional violations. (b) In the opinion of the department, if an investigation substantiates the existence of violations of this chapter, the department may cause a complaint to be issued. (c) The investigation may include, but shall not be construed to require, examinations and audits of the books and records of any licensee pertaining to the solvency of the licensee, or to the purchase or handling of and accounting for any farm product purchased or received on consignment from another licensee or the producer, or handled as a brokerage transaction. The department may examine and audit all pertinent books, records, weight certificates, receipts, ledgers, journals, papers, contracts, bank statements, canceled checks, and other documents of the licensee that show or tend to show facts regarding the financial condition and the number and status of accounts of growers and others who are doing business with the licensee.


56382. If the examination discloses evidence of any violation of this chapter, the department may issue a complaint detailing the charges and the discipline sought in accordance with this chapter.


56382.5. (a) An aggrieved grower or licensee with a complaint that is not subject to the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181 et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.) may seek resolution of that complaint by filing a complaint with the department within nine months from the date a complete account of sales was due. The complaint shall be accompanied by two copies of all documents in the complainant's possession that are relevant to establishing the complaint, a filing fee of one hundred dollars ($100), and a written denial of jurisdiction from the appropriate federal agency unless the commodity involved clearly does not fall under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181 et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.). Within five business days of receipt of a signed and verified complaint, the filing fee, and the denials of federal jurisdiction, the department shall serve the verified complaint on the respondent. Service shall be by certified mail. The department, the secretary, the department's employees, the department's agents, the boards and commissions associated with the department, their employees or agents, and the State of California are not parties to the dispute in a proceeding brought under this section. (b) The respondent served shall answer within 30 calendar days of service. Respondent's response shall include two copies of all relevant documentation of the transactions referred to in the verified complaint. (c) Within 30 calendar days of receipt of the answer, the department shall issue to both parties a written factual summary on the basis of the documents that have been filed with the department. (d) If a settlement is not reached within 30 calendar days after the department's summary is issued, the department, on request of the claimant or respondent and upon payment of a filing fee of three hundred dollars ($300), shall schedule alternate dispute resolution, to commence within 90 calendar days. The department shall serve both parties with a notice of hearing, which sets out the time, date, street address, room number, telephone number, and name of the hearing officer. Service of the notice of hearing shall be by certified mail. (e) The alternate dispute resolution shall proceed as follows: (1) The hearing shall be conducted by hearing officers in accordance with standard procedures promulgated by the American Arbitration Association or other acceptable alternative dispute resolution entities. (2) The hearing officers shall be familiar with the type of issues presented by such claims, but need not be attorneys. (3) The sole parties to the proceedings shall be the complainant and the respondent. (4) The disputes, claims, and interests of the department or the State of California are not within the jurisdiction of the proceedings. (5) The validity of a regulation of the department or order promulgated pursuant to this code is not within the jurisdiction of the proceedings. (6) Law and motion matters shall be handled by the assigned hearing officer. (7) The hearing officer has no authority to enter into settlement discussions except upon stipulation of the parties involved. (8) The parties may represent themselves in propria persona or may be represented by a licensed attorney at law. A party may not be represented by a representative who is not licensed to practice law. (9) To the extent of any conflict between any provision of Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title 2 of the Government Code and this article, this article shall prevail. (10) The hearing officer may order a review of records or an audit of records by a certified public accountant. The review or audit shall be conducted under generally accepted auditing standards of the American Institute of Certified Public Accountants, and upon completion of the review or audit the nature and extent of the review or audit shall be disclosed to the parties by the auditor in the audit report. The audit report shall disclose the number of transactions reviewed and the rationale for selecting those transactions. The department shall advance the costs of the audit or review of records, but the hearing officer shall apportion the costs at the conclusion of the hearing. The department shall pursue repayment in accordance with the hearing officer's apportionment and may bring an action in a court of competent jurisdiction to recover funds advanced. Nothing in this subdivision shall be construed to require the department to pursue any specific remedy or to prohibit the department from accepting a reasonable repayment plan. (f) The hearing officer shall render a written decision within 60 days of submission of the case for decision. In addition to rendering a written finding as to what is owed by whom on the substantive allegations of the complaint, the hearing officer shall decide whether or not to order the full cost of the alternative dispute resolution proceeding, and in what ratio or order the losing party is to pay the costs of the proceeding. For these purposes, the cost of the alternative dispute resolution proceeding does not include the filing fee, the parties' attorney fees, or expert witness fees. The hearing officer may also award a sanction against a complainant for filing a frivolous complaint or against a respondent for unreasonable delay tactics, bad faith bargaining, or resistance to the claim, of either 10 percent of the amount of the award or a specific amount, up to a maximum of one thousand dollars ($1,000). Any sanction award shall not be deemed to be res judicata or collateral estoppel in any subsequent case in which either the complainant or respondent is charged with filing a frivolous complaint, unreasonable delay tactics, bad faith bargaining, or resistance to the claim. The department may consider the written decision of the hearing officer in determining any related licensing action. The written decision of the hearing officer may be introduced as evidence at a court proceeding. (g) Nothing in this section prohibits the parties to the dispute from settling their dispute prior to, during, or after the hearing. (h) Nothing in this section alters, precludes, or conditions the exercise, during any stage of the proceedings provided by this chapter, of any other rights to relief a party may have through petition to a court of competent jurisdiction, including, but not limited to, small claims court.


56382.8. (a) In addition to all other complaint procedures provided for in this chapter, any aggrieved grower or licensee with a complaint that is not subject to the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181 et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.) and for which the claim for damages does not exceed thirty thousand dollars ($30,000), may file a verified complaint with the department, subject to expedited review and settlement. Informal complaints may be made for damages, but not for disciplinary action, although the department may issue a complaint pursuant to Section 56382 as the basis for disciplinary action. Informal complaints must be received by the department within nine months of when the claimant ought to have reasonably known of its existence, as required under Section 56446. (b) Complaints must be submitted to the department in writing and verified, and may be transmitted via United States mail, overnight delivery, or by facsimile transmission, setting forth the essential details of the transactions complained of, including the following: (1) The name and address of each party to the dispute, of the agent representing him or her in the transaction involved, if any, as well as the party's counsel, if any. (2) The quantity and quality or grade of each kind of produce shipped if a grade or quality is the basis of payment. (3) The date of shipment. (4) The carrier identification if a carrier was used. (5) The shipping and destination points. (6) If a sale, the date, sales price, and amount actually received. (7) If a consignment, the date, reported proceeds, gross, and net. (8) A precise estimate of the amount of damages claimed, if known. (9) A brief statement of material facts in dispute, including terms of applicable contracts. (10) The amount of damages being sought. (c) The complaint shall also, so far as practicable, be accompanied by true copies of all available papers relating to the transaction complained about, including shipping documents, letters, telegrams, invoices, manifests, inspection certificates, accountings, accounts of sale, and any special contracts or agreements. (d) The informal complaint shall be accompanied by a nonrefundable filing fee of one hundred dollars ($100) as required under Section 56382.5. (e) Upon confirmation that a complaint has been properly and timely filed, including the securing of a denial letter from the United States Department of Agriculture under the federal Packers and Stockyards Act, 1921, or the federal Perishable Agricultural Commodities Act, 1930, the department shall send a copy of the complaint to the respondent by certified mail and advise the respondent that it shall have 30 days from the department's mailing of the complaint in which to answer the complaint. The answer shall contain a brief response to the complaint, including the respondent's position with respect to the claimant's description of matters in dispute, the relevant facts, and the remedy sought, together with a description of any claims it may have against the complainant, in the same manner as claims are to be set out in the complaint. The respondent shall also include any pertinent documentation relevant to its defense with its answer. (f) After receipt of the answer from the respondent, the department shall informally consult with the parties to clarify the nature of the dispute and to facilitate the exchange of information between the parties in order to assist the parties in reaching an expedited informal resolution of the dispute. The informal consultation process will last no longer than 60 days. The parties shall cooperate fully with the department and shall participate in the informal consultation process. (g) If the informal consultation process provided for in this section does not result in resolution of the dispute, the complainant may then pursue arbitration against the licensee and the complaint and any counterclaim will be fully and finally adjudicated and resolved by a decision of an arbitrator under expedited arbitration procedures as follows: (1) The complainant shall submit a fee of six hundred dollars ($600) to the department made payable to the arbitrator, arbitration service, or payee designated by the department for the arbitration and any counterclaimant shall submit a fee of six hundred dollars ($600) to the department for any counterclaim that is filed also made payable to the arbitrator, arbitration service, or payee designated by the department. (2) An arbitrator from a panel of arbitrators registered with the department shall be selected by the department and confirmed by both the complainant and the respondent or counterclaimant after the prospective arbitrator has certified that he or she has no known conflict of interest in the dispute and after each party has had an opportunity to lodge an objection for cause to the appointment of the named arbitrator within five days of its receipt of the notice of appointment of the arbitrator. The notice of appointment shall be in writing and may be transmitted via overnight delivery or by facsimile transmission. (3) Upon confirmation of the appointment of the arbitrator the department will transmit to the arbitrator the verified complaint, the statement of defense, and the statement of counterclaim, if one is filed. (4) The complainant shall have 30 days after receipt of the notice of appointment of the arbitrator to submit to the department in writing sworn declarations by witnesses and any other documentary evidence not previously submitted, as well as legal authorities and arguments. (5) Within five days of the department's receipt of the complainant's written submission the department shall transmit a copy of the complainant's written submission to the respondent. The respondent shall have 30 days from the receipt of the complainant's written submission to submit to the department in writing responsive declarations by witnesses or other documentary evidence not previously submitted, as well as any legal authorities and arguments. The respondent's written submission in support of its counterclaim, if any, must be sent to the department at the same time as the responsive submission. (6) If there is a counterclaim filed, within five days of the department's receipt of the counterclaimant's written submission the department shall transmit a copy of the counterclaimant's written submission to the complainant. The complainant shall have 10 days from the receipt of the counterclaimant's written submission to submit any witness statements, evidence, or legal authorities and arguments in reply. (7) Once all periods for submission of evidence and arguments have expired and the department has transmitted all written submissions to the arbitrator, the case and all evidence to be considered by the arbitrator shall be deemed to be submitted. (8) The arbitrator may, in the interest of justice, briefly extend the time periods for written submissions by either party. (9) The arbitrator shall issue his or her arbitration decision and award in writing within 30 days after the case has been submitted for a decision. This time period may be extended by the arbitrator if, in his or her judgment, clarification of the evidence submitted is required from either the complainant, the respondent or counterclaimant, or both. (10) No hearings or live testimony shall be conducted under the expedited arbitration procedures. (11) The arbitrator shall award interest at the legal rate to be paid in addition to any damages that are awarded and the arbitrator may award the recovery of costs to one party to the arbitration or apportion costs between the parties as he or she deems appropriate. Costs may include filing fees, mediation fees and expenses, fees or expenses incurred by the department, and fees paid to expert witnesses, auditors, or inspectors, but not attorney's fees, unless there has been an agreement by the parties that the prevailing party in any dispute shall be entitled to recover reasonable attorney's fees as part of any award for damages, and in that case, the arbitrator may award reasonable attorney's fees to the prevailing party. (h) Either party to an expedited arbitration proceeding conducted pursuant to this section may bring an action in any California court of competent jurisdiction to enforce any awards for damages made pursuant to this section. If an enforcement action is necessary to secure payment of awards for damages, the party initiating the enforcement proceeding shall be entitled to recover all additional expenses, costs, and attorney's fees incurred in connection with that proceeding. (i) The department shall retain jurisdiction, as provided for under Section 56445, over any matter in which a licensee refuses to pay or otherwise comply with an arbitrator's decision conducted pursuant to the expedited arbitration procedures as set forth herein, and may immediately commence an action to revoke the license of the licensee. (j) A complainant may enforce his or her rights through the verified complaint and expedited arbitration process as provided herein, or by a civil action brought in any court of competent jurisdiction. This section shall in no way abridge, preclude, or alter other remedies available to the parties now existing under common law or by statute, and the provisions set forth herein are in addition to those other remedies.


56383. The failure or refusal of any licensee to produce and make available to the director any such books or records, or otherwise to obstruct such examination or audit, is a good and sufficient ground for the suspension or revocation of his license.


Article 12. Complaints By Producers

Ca Codes (fac:56411-56415) Food And Agricultural Code Section 56411-56415



56411. For the purpose of enforcing this chapter, the director may receive verified complaints from producers or licensees against any person licensed pursuant to this chapter or Chapter 6 (commencing with Section 55401) or any person who acts or attempts to act as a licensee. Upon receipt of any verified complaint, the director may make any and all necessary investigations relative to the complaint. The director shall, within 30 days, commence to investigate any verified complaint alleging that a licensee may be insolvent or in an unsound financial condition.


56412. The director may administer oaths of verification on the complaints.

56413. He shall have free and unimpeded access at all times to any building, yard, warehouse, or storage or transportation facility in which any farm product is kept, stored, handled, or transported.


56414. He may do all of the following: (a) Administer oaths and take testimony under oath. (b) Issue subpoenas which require the attendance of witnesses before him, together with all books, memoranda, papers, and other documents, articles, or instruments. (c) Compel the disclosure by such witnesses of all facts which are known to them relative to the matters under investigation.


56415. All parties disobeying the orders or subpoenas of the director are guilty of contempt and shall be certified to the superior court of the state for punishment for such contempt.


Article 13. Investigations And Hearings

Ca Codes (fac:56441-56447) Food And Agricultural Code Section 56441-56447



56441. The director on his own motion may, or upon the verified complaint of any interested party shall, investigate, examine, or inspect any of the following: (a) Any transaction which involves solicition, receipt, sale, or attempted sale of any farm product by any person that is acting or assuming to act as a licensee. (b) Failure to make proper and true account of sales and settlement of sales as required by this chapter. (c) The intentional making of false statements as to condition and quantity of any farm product which is received or in storage. (d) The intentional making of false statements as to market conditions. (e) The failure to make payment for any farm product within the time which is required by this chapter. (f) Any and all other injurious transactions.


56442. In furtherance of any such investigation, examination, or inspection, the director may examine the ledgers, books, accounts, memoranda and other documents, farm products, scales, measures, and other articles and things which are used in connection with the business of the person.


56443. Except as otherwise provided in Section 56444 or 56445, if the complaint is a bona fide dispute that involves any of the following, the department has no jurisdiction to act upon the complaint if the licensee or complainant, within 10 calendar days after receiving notice of the filing of the verified complaint, has notified the department of his or her election to submit the dispute to alternative dispute procedures in accordance with the provisions of a written contract: (a) The rejection of any farm product. (b) The failure or refusal to accept and pay for any farm product that is bought or contracted to be bought from a producer or by a licensee. (c) The failure or refusal by the licensee to furnish or provide boxes or other containers, or hauling, harvesting, or any other services that are contracted to be done by the licensee in connection with the acceptance, harvesting, or other handling of the farm product. (d) The terms and conditions of the written contract.


56444. The jurisdiction that is otherwise reserved to the department in this chapter is, however, restored for the purposes of this chapter if the authorities responsible for the alternative dispute procedures, without reasonable cause, fail, refuse, or neglect to adjudicate the matter in dispute within 90 days from the date of notification to the department.


56445. The department also has jurisdiction over any complaint or dispute if the licensee has failed to perform in accordance with any alternative dispute procedure award that is made in accordance with the terms of the written contract.

56446. Any verified complaint filed with the department pursuant to this chapter shall be filed not later than nine months from the date a complete account of sales was due. This period, however, does not include the length of time it takes to secure a written letter of denial from the federal agencies responsible for administering the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.) or the federal Perishable Agricultural Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.).


56447. If a licensee fails to pay farm products creditors for any farm product that is received on consignment from the creditors, or fails to pay farm products creditors for any farm product purchased from the creditors, the department shall ascertain the names and addresses of all farm products creditors of that licensee together with the amounts due and owing to them by the licensee, and shall request all those farm products creditors to file a verified statement of their respective claims with the department. The request shall be addressed to each known farm products creditor at his or her last known address.


Article 15. Contempt

Ca Codes (fac:56501-56503) Food And Agricultural Code Section 56501-56503



56501. If any person in any proceedings before the director disobeys or resists any lawful order, refuses to respond to a subpoena, refuses to take the oath or affirmation as a witness or thereafter refuses to be examined, or is guilty of misconduct during a hearing or so near the place of the hearing as to obstruct the proceeding, the director shall certify the facts to the superior court in and for the county where the proceedings are held.


56502. The court shall thereupon issue an order which directs the person to appear before the court and show cause why he should not be punished as for contempt. The order and a copy of the certified statement shall be served on the person. Thereafter the court shall have jurisdiction of the matter.


56503. The same proceedings shall be had, the same penalties may be imposed and the person charged may purge himself of the contempt in the same way, as in the case of a person who has committed a contempt in the trial of a civil action before a superior court.


Article 17. Fees

Ca Codes (fac:56571-56576) Food And Agricultural Code Section 56571-56576



56571. (a) Except as otherwise provided in this article or Section 55863, each applicant for a license shall pay to the department a fee in accordance with the schedule in subdivision (b), except that an agent shall pay fifty-five dollars ($55) for each license period of the principal. (b) The amount of the fee due each year shall be determined by the annual dollar volume of business based on farm product value returned to the grower or licensee, as follows: (1) For a dollar volume of less than twenty thousand dollars ($20,000), the fee shall be one hundred thirty-six dollars ($136). (2) For a dollar volume of twenty thousand dollars ($20,000) and over, but less than fifty thousand dollars ($50,000), the fee shall be two hundred dollars ($200). (3) For a dollar volume of fifty thousand dollars ($50,000) and over, but less than two million dollars ($2,000,000), the fee shall be three hundred dollars ($300). (4) For a dollar volume of two million dollars ($2,000,000) and over, the fee shall be four hundred dollars ($400). (c) The department may reevaluate the fee structure based on operating costs. The fees shall adequately cover the costs to fully administer and operate the program in an effective and efficient manner.

56571.5. The fees provided by Section 56571 are maximum fees. The secretary may fix those fees at a lesser amount, and may adjust those fees from time to time, whenever the secretary finds that the cost of administering this chapter can be defrayed with those below-maximum fees. The secretary may appoint an advisory committee of producers and licensees to provide guidance in establishing those fees or may rely on input from any similar advisory committee already assembled by the secretary.


56572. (a) (1) If any licensee does not apply for the renewal of a preexisting license on or before the date of the expiration of the license, a penalty of twenty-five dollars ($25) shall be added to the fee provided for under Section 56571 or 56571.5. That penalty shall be paid within 30 days immediately following the license expiration date . Payment of the penalty shall entitle the applicant to 60 days from the date of the penalty payment to complete the application. If the application is not completed within such time, the application shall be denied and all fees retained by the department. (2) If the penalty described in paragraph (1) is not paid within the 30-day period, any application for renewal of a preexisting license shall be treated as a new application. (b) A new applicant shall have 60 days from the date of filing the application form and payment of the fee to complete the application. After the 60-day period has elapsed, if the application remains incomplete, the application may be denied and the application fee retained by the department.


56573.5. (a) If any person is found to be operating a business without the license required by Section 56181 or failed to pay the fee in accordance with the schedule in subdivision (b) of Section 56571, that person shall pay to the director double the amount of the license fee due pursuant to this chapter. (b) In addition to subdivision (a), if any person is found to be operating a business within the past five years without a license required by Section 56181, or failed to pay the fees in accordance with the schedule in subdivision (b) of Section 56571, that person shall pay to the director an amount equal to that portion of the fees which were not paid for the last five years the business has operated.

56574. Any person who has obtained a license pursuant to this chapter may secure a license pursuant to Chapter 6 (commencing with Section 55401) by filing an application accompanied by a fee determined by the dollar volume of business based on farm product value returned to the grower, as follows: (a) For a dollar volume of less than fifty thousand dollars ($50,000), the fee shall be fifty dollars ($50). (b) For a dollar volume of fifty thousand dollars ($50,000) and over, but less than two million dollars ($2,000,000), the fee shall be one hundred forty-five dollars ($145). (c) For a dollar volume of two million dollars ($2,000,000) and over, the fee shall be two hundred dollars ($200). This license shall be known as a "conjunctive license."


56574.5. Any person who has applied for and obtained a license as agent, in the manner and upon the payment of the fee which is set forth in Section 56571, whose principal has applied for and obtained a conjunctive processor's license, pursuant to Section 56574, shall be deemed to be licensed to represent his principal under Chapter 6 (commencing with Section 55401) of this division, and no other fee shall be required of such agent.


56576. All license fees which are collected pursuant to this chapter shall be paid into the State Treasury monthly and shall be credited to the Department of Agriculture Fund and, except as otherwise provided in Section 56133, shall be expended in carrying out this chapter.


Article 18. Violations

Ca Codes (fac:56602-56623) Food And Agricultural Code Section 56602-56623



56602. It is a violation of this chapter if the applicant or licensee has made any fraudulent charges or returns for the handling, sale, or storage of, or for rendering any service in connection with the handling, sale, or storage of any farm product.


56603. It is a violation of this chapter if the applicant, or licensee, has failed or refused to render a true account of sales, or to make a settlement on the sales, or to pay for any farm product which is received, within the time and in the manner which are required by this chapter.


56604. It is a violation of this chapter if the applicant, or licensee, has made any false statement as to the condition, quality, or quantity of any farm product which is received, handled, sold, or stored by him.

56605. It is a violation of this chapter if the applicant, or licensee, directly or indirectly, has purchased for his, or its, own account any farm product which is received by him upon consignment without prior authority from consignor together with the price fixed by the consignor or without promptly notifying the consignor of such purchase. This does not prevent any commission merchant from taking to account of sales, in order to close the day's business, miscellaneous lots of parcels of any farm product which remains unsold, if such commission merchant forthwith enters such transaction on his account of sales.

56606. It is a violation of this chapter if the applicant, or licensee, has intentionally made any false or misleading statement as to the conditions of the market for any farm product.


56607. It is a violation of this chapter if the applicant or licensee has made any fictitious sale or has been guilty of collusion to defraud a producer or another licensee.


56608. It is a violation of this chapter if a commission merchant to whom any consignment is made has reconsigned such consignment to another commission merchant or employed a broker to effect the sale for the consignor and has deducted more than one charge for effecting the sale without the written consent of the consignor.


56609. It is a violation of this chapter if the licensee was intentionally guilty of fraud or deception in the procurement of such license.

56610. It is a violation of this chapter if the licensee or applicant has failed or refused to file with the director a schedule of his charges for services in connection with any farm product which is handled on account of, or as an agent of, another.


56611. It is a violation of this chapter if the applicant, or licensee, has indulged in any unfair practice.


56612. It is a violation of this chapter if the licensee: (a) Has rejected without reasonable cause or has failed or refused to accept without reasonable cause, any farm product which the licensee has bought or contracted to buy from another licensee or a producer. (b) Has failed or refused without reasonable cause to provide boxes or other containers, or hauling, harvesting, or any other service which is contracted to be done by the licensee in connection with the acceptance, harvesting, or handling of such farm product. (c) Has used any device to avoid acceptance or unreasonably defer acceptance of such farm product.

56613. It is a violation of this chapter if the licensee has otherwise violated any provision of this chapter.


56614. It is a violation of this chapter if the licensee has knowingly employed an agent, without causing the agent to comply with the licensing requirements of this chapter which are applicable to agents.

56615. It is a violation of this chapter if the applicant or licensee has in the handling of any farm product been guilty of fraud, deceit, or willful negligence.


56616. It is a violation of this chapter if the licensee has failed or refused, upon demand, to permit the director or his agents to make the investigations, examinations, or audits as provided in this chapter, or that the licensee has removed or sequestered any books, records, or papers which are necessary to any such investigations, examinations, or audits, or has otherwise obstructed them.


56617. It is a violation of this chapter if the licensee without reasonable cause has failed or refused to execute or carry out a lawful contract with a producer or another licensee.


56618. It is a violation of this chapter if the licensee has failed or refused to keep and maintain the records as required by this chapter.

56619. It is a violation of this chapter if a dealer has obtained title to or possession, control, or delivery of any farm product from another licensee or a producer of the farm product without having executed a contract of purchase and sale, or a contract agreeing to purchase the farm product at a designated price to be paid by the dealer.


56619.5. It is a violation of this chapter for a person licensed as a cash buyer to buy or otherwise take title to or possession of any farm product from a licensee or a producer of such product, except by cash payment of the full agreed price to the licensee or producer at the time of obtaining such possession or control.


56620. Under a contract for the purchase or handling of any farm products, any delinquent payment of money under this chapter shall also include a late charge of 5 percent per month of the unpaid balance calculated on a daily basis for the period of the delinquency for the first month and an additional 1 percent per month of the unpaid balance calculated on a daily basis for the remaining period of the delinquency. Any such late charge shall be payable to the person from whom the farm product was purchased, unless the person waives, in writing, his right to such payment. Such waiver shall be valid and effective only when given after a delinquency has occurred. This section does not affect the time of payment provided for in this chapter or in any contract for the purchase or handling of any farm product.


56621. It is a violation of this chapter if a licensee fails, neglects, or refuses to collect or remit any assessments that have been levied in accordance with the assessment provisions of Article 10 (commencing with Section 58921) of Chapter 1 or Article 12 (commencing with Section 59941) of Chapter 2 of Part 2 of Division 21, or Article 8 (commencing with Section 64691) of Chapter 2, Chapter 3 (commencing with Section 65500) of Part 2 of Division 22, Article 5 (commencing with Section 66621) of Chapter 4, Article 6 (commencing with Section 67101) of Chapter 5, Article 6 (commencing with Section 68101) of Chapter 6, Article 6 (commencing with Section 69081) of Chapter 7, Chapter 9.5 (commencing with Section 71000), Article 6 (commencing with Section 72101) of Chapter 10, Chapter 12.6 (commencing with Section 74701), Chapter 12.7 (commencing with Section 74801), Article 6 (commencing with Section 75131) of Chapter 13, Article 6 (commencing with Section 76141) of Chapter 14, Chapter 15 (commencing with Section 76201), Chapter 16.5 (commencing with Section 77001), Chapter 17 (commencing with Section 77201), Chapter 17.5 (commencing with Section 77401), Chapter 19 (commencing with Section 77701), Chapter 20 (commencing with Section 77901) of Article 6 (commencing with Section 78285) of Chapter 21, or Article 6 (commencing with Section 78700) of Chapter 24, of Part 2 of Division 22.

56623. It is a violation of this chapter if any commission merchant who collects or receives funds in connection with the sale of consigned farm products has made any use or disposition of these funds in his or her possession or control that endangers or impairs faithful and prompt payment to the consignor of the product or to any other person having a financial interest therein.


Article 19. Criminal Penalties

Ca Codes (fac:56631-56639) Food And Agricultural Code Section 56631-56639



56631. (a) Except as specified in Section 56632, any misdemeanor which is prescribed in this article is punishable by a fine of not less than five hundred dollars ($500) or more than five thousand dollars ($5,000), by imprisonment in the county jail for not more than one year, or by both the fine and imprisonment. (b) For a violation of the offense described in subdivision (a), the department may recover investigative costs, excluding attorneys' fees and administrative overhead, for those charges where there has been a conviction in a court of law, or a court-supervised settlement has been reached. Nothing in this section allows the department to recover investigative costs for an administrative licensing action or any action that has not been filed in a court of law. (c) Any person or entity responsible for investigative costs under this section shall be allowed to audit the department's investigative costs. The audit must be performed by a third-party certified public accountant and paid for by the person or entity requesting the audit. The department shall promulgate regulations to implement this subdivision by June 1, 2002.


56632. It is a misdemeanor for any person to assume or attempt to act, or to act, as a licensee or agent without a license and is punishable by a fine of not less than ten thousand dollars ($10,000), by imprisonment in the county jail for not more than one year, or by both the fine and imprisonment.


56632.2. It is a misdemeanor for any person subject to this chapter to pay license fees in an amount less than that amount established under subdivision (b) of Section 56571. Any person who pays less than the amount established under subdivision (b) of Section 56571 for two or more consecutive years shall pay to the director treble the amount of the license fees due pursuant to this chapter.


56632.5. It is a misdemeanor for any person licensed as a cash buyer to buy or otherwise take title to, or possession of, any farm product from a licensee or a producer of such product, except by cash payment of the full agreed price to the licensee or producer at the time of obtaining possession or control.


56633. It is a misdemeanor for any person to impose any false charge for handling or services in connection with any farm product.


56634. It is a misdemeanor for any person to fail to account promptly, correctly, fully, and properly and to make settlement of accounts as provided in this chapter.


56635. It is a misdemeanor for any person to intentionally make any false or misleading statement as to market conditions.


56636. It is a misdemeanor for any person to make any fictitious sale or be guilty of collusion to defraud a producer or licensee.


56637. It is a misdemeanor for any person to directly or indirectly purchase for his own account, goods which are received by him upon consignment without prior authority from the consignor, or to fail to promptly notify the consignor of such purchases, if any, on his own account. This section does not, however, prevent any commission merchant from taking to account of sales, in order to close the day's business, any miscellaneous lot or parcel of any farm product which remains unsold, if such commission merchant forthwith enters such transaction on his account of sales.


56638. It is a misdemeanor for any person to intentionally make any false statement regarding the grade, conditions, markings, quality, or quantity of any goods which are shipped or packed in any manner.


56639. It is a misdemeanor for any person to fail to comply in every respect with the provisions of this chapter.


Article 20. Civil Remedies And Penalties

Ca Codes (fac:56651-56652) Food And Agricultural Code Section 56651-56652



56651. The director may bring an action to enjoin the violation or the threatened violation of any provision of this chapter or of any order which is made pursuant to this chapter in the superior court in the county in which such violation occurs or is about to occur. There may be enjoined in one proceeding any number of defendants that are alleged to be violating the same provisions or orders, although their properties, interests, residences, or places of business may be in several counties and the violations separate and distinct. Any proceeding which is brought pursuant to this section shall be governed in all other respects by the provisions of Chapter 3 (commencing with Section 525), Title 7, Part 2 of the Code of Civil Procedure.


56652. (a) Any person that violates any provision of this chapter is liable civilly in the sum of not less than five hundred dollars ($500) or more than one thousand dollars ($1,000) for each and every violation. This sum shall be recovered in an action by the secretary in any court of competent jurisdiction. All sums which are recovered pursuant to this section shall be deposited in the State Treasury to the credit of the Department of Food and Agriculture Fund. (b) For a violation of the offense described in subdivision (a), the department may recover investigative costs, excluding attorneys' fees and administrative overhead, for those charges where there has been a conviction in a court of law, or a court-supervised settlement has been reached. Nothing in this section allows the department to recover investigative costs for an administrative licensing action or any action that has not been filed in a court of law. (c) Any person or entity responsible for investigative costs under this section shall be allowed to audit the department's investigative costs. The audit must be performed by a third-party certified public accountant and paid for by the person or entity requesting the audit. The department shall promulgate regulations to implement this subdivision by June 1, 2002.


Chapter 7.5. Farm Products Trust Fund

Article 1. General Provisions

Ca Codes (fac:56701-56717) Food And Agricultural Code Section 56701-56717



56701. There is in the Department of Agriculture Fund the Farm Products Trust Fund, which is hereby created.


56701.5. (a) No further claims shall be made against the products fund subsequent to January 1, 1998, and no further assessment may be collected for deposit in the fund after January 1, 1999. (b) The department shall continue to administer the products fund for the purpose of paying lawful charges accrued but not paid as of December 31, 1997. Upon completion of the last of these claims, the products fund shall cease to exist, and any funds remaining on deposit shall be distributed on a pro rata basis to then existing licensees.

56702. For the purposes of this chapter, "products fund" means the Farm Products Trust Fund.


56702.5. "Farm products creditor" means either of the following: (a) A person who produced and sold a farm product produced in this state to a person licensed pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) who failed to pay for the farm product. (b) A person licensed pursuant to Chapter 7 (commencing with Section 56101) who sold or handled a farm product produced in this state to a person licensed pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) who failed to pay for the farm product.


56703. In addition to the fees required under Article 16 (commencing with Section 55861) of Chapter 6 and Article 17 (commencing with Section 56571) of Chapter 7, each principal applicant for a license, or for the renewal of a license, under Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) shall pay to the director an annual fee of one hundred twenty-five dollars ($125) which shall be paid before the director issues or renews any such license. If any person is found to be operating a business without the license required by Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), that person shall pay to the director double the amount of the annual fee. All the fees collected pursuant to this chapter shall be deposited in the products fund. The director may establish a lower annual fee if he or she finds it to be sufficient to defray the costs in carrying out this chapter. This chapter does not apply to any licensee who pays to the seller, at the time of obtaining title, possession, or control, or at the time of contracting for the title, possession, or control, of any farm product, the full agreed purchase price of the farm product in coin or currency, lawful money of the United States, or to any licensee who purchases livestock and is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.).


56704. The money deposited in the products fund shall only be used to pay for farm products grown or produced within this state which have not been otherwise paid for. However, claims made against the fund may include charges for services which by custom of the trade are incidental to the sale and generally accepted as being included in the purchase price. Any moneys remaining in the products fund after all the claims have been settled, discharged, or paid in any year shall be credited to the funds to be used in any other year, and the director, in view of this, shall adjust the fees provided for under Section 56703 in accordance with the provisions of that section.


56704.5. Claims may only be made against the products fund by a farm products creditor.


56705. If a person licensed under Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) fails to pay a farm products creditor for any farm product which is received by the licensee, the director shall ascertain the names and addresses of all farm products creditors together with the amounts which are due and owing to them and each of them by the licensee and shall request all of those farm products creditors to file a verified statement of their respective claims with the director. The request shall be addressed to each creditor at his or her last known address. If by reason of the absence of records, or other circumstances which make it impossible or unreasonable for the director to ascertain the names and addresses of all of the farm products creditors, the director, after exerting due diligence and making reasonable inquiry to secure the information from all reasonable and available sources, may make demand upon the products fund on the basis of information then in his or her possession, and thereafter is not liable or responsible for claims or the handling of claims which may subsequently appear or be discovered.


56705.5. Only those claims filed pursuant to Section 56705 or as a result of a verified complaint filed pursuant to Section 55751 or 56451 shall be accepted by the director as a proper claim upon the products fund.

56706. If the farm products creditor fails, refuses, or neglects to file in the office of the director his or her verified claim as requested by the director under this chapter, within 60 days from the date of the request, the director is relieved of further duty or liability pursuant to this chapter on behalf of the farm products creditor.


56707. Upon ascertaining all claims and statements against a respondent licensee, the director shall pay, up to the amount specified in Section 56708, from the products fund to claimants, in accordance with the provisions of this chapter and all the following terms and conditions: (a) The claimants shall have filed a verified complaint with the department. (b) The amount due the claimants has been determined by an audit or investigation by the department, and the amount of the indebtedness has been fully substantiated by the claimant and verified by the director. (c) The amount due is not disputed by the licensee and is approved by the department or, if the claim is disputed or not agreed to by the parties, the claim shall be adjudicated by an administrative hearing and a decision rendered pursuant to Section 55749 or 56447 specifying the amount due the creditors.


56708. The director may only pay up to 50 percent of any claim from the products fund. In no case shall the total paid all the claimants under this chapter exceed fifty thousand dollars ($50,000) against any one licensee. However, if a person subsequently obtains a new license under Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), claims may be made pursuant to Section 56705 against the products fund due to acts of the licensee made under his or her new license and those claims may be paid up to fifty thousand dollars ($50,000).


56709. No payment shall be made from the products fund by the director on any claim until he determines, to his satisfaction, that all possible recoveries have been made under the provisions of Article 12 (commencing with Section 55741) of Chapter 6 or Article 13 (commencing with Section 56441) of Chapter 7 of this division.


56710. This chapter does not preclude a claimant from bringing any action against the licensee in any court having jurisdiction.


56711. A creditor's claim shall be paid under this chapter only if the claim is based on a transaction with a processor, dealer, broker, or commission merchant who was licensed pursuant to the provisions of Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) at the time of entering into the contract involved or at the time of delivery of the farm products. In any case where the director has notified the creditor before delivery of the farm product that the license authorizing the contract has been revoked or suspended, or the creditor has independent knowledge thereof, and the creditor thereafter makes delivery of the farm products to the former or suspended licensee, the claim shall be disallowed. In addition, the director may disallow any claim, in whole or in part, upon a finding of lack of good faith in entering into the contract, collusion to violate any provision of Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), or fraud against the products fund. The provisions of this section shall not be construed to authorize any person subject to this chapter to continue to perform any of the functions of a licensee while the license is revoked or suspended or to release the person whose license has been revoked or suspended from any damages which may accrue to the other party to the contract, or to others, as a result of the legal inability to perform because of the license discipline.


56712. If a payment is made to any creditor from the products fund, the director shall be subrogated to all of the creditor's rights of recovery against any person or organization and the creditor shall execute and deliver to the director such instruments and papers and perform any other acts necessary to carry out the provisions of this section.


56713. In the event any moneys are expended from the products fund on behalf of any licensee, such licensee shall not be licensed in this state for a period of four years from the date such payment is made, so long as the licensee remains legally obligated to pay any claim for farm products made pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), or unless the amount of money expended on the licensee's behalf has been repaid to the products fund and the balance, if any, due creditors plus a penalty assessment of 7 percent per annum from the date such moneys were expended from the products fund or due the creditor have been paid. In case the licensee is a corporation, this section shall apply with respect to any officer, member of the board of directors, or any person employed by such corporation in a managerial position, or any person who owns more than 25 percent of the stock of such corporation.


56714. Any money in the products fund, which the director determines is available for investment, may be invested or reinvested by the State Treasurer in any of the securities which are described in Article 1 (commencing with Section 16430), Chapter 3, Part 2, Division 4, Title 2 of the Government Code, or placed in a bank as provided in Chapter 4 (commencing with Section 16500), Part 2, Division 4, Title 2 of the Government Code, and handled in the same manner as money in the State Treasury.


56715. Any transactions with a licensee made after the licensee has filed bankruptcy shall not be covered under this chapter until the bankruptcy is resolved. A transaction includes, but is not limited to, a contract which provides for multiple deliveries.


56716. Any transactions with a licensee made after a verified complaint has been filed by a claimant due to default by the licensee shall not be covered under this chapter on behalf of that claimant until the complaint is resolved. A transaction includes, but is not limited to, a contract which provides for multiple deliveries.


56717. This chapter shall remain in effect only until the date upon which all of the funds remaining in the products fund have been distributed pursuant to Section 56701.5, and as of that date is repealed, unless a later enacted statute, which is enacted before that date, deletes or extends that date.


Chapter 8. Produce Markets

Article 1. Definitions

Ca Codes (fac:56801-56810) Food And Agricultural Code Section 56801-56810



56801. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


56802. "Association" means an association of produce dealers which is organized to carry out the responsibilities of produce dealers which are imposed by this chapter.


56803. "City" includes city and county.


56804. "Commissioner," with respect to any matter which relates to a particular market, means the deputy labor commissioner who is in charge of the office of the Labor Commissioner which is located nearest to that market.

56805. "Director" means the Director of Industrial Relations.


56806. "Farm product" means any fruit, nut, vegetable, berry, or aquacultural product.


56807. "Market" means the places of business, collectively, of produce dealers that operate in a city, or the vicinity of a city, and that deal in any farm product which is intended, in whole or in part, for ultimate sale for consumption in a fresh state within the city and the vicinity of the city. This chapter applies only to markets in which five or more produce dealers operate.


56808. "Produce dealer" includes "commission merchant," as defined in Section 56105, and "dealer," as defined in Section 56107. It does not, however, include a "broker," as defined in Section 56103, nor "processor," as defined in Section 55407.


56809. "Registered unloader" means a person who unloads any farm product in a market. It does not, however, include any of the following: (a) A producer of farm products, or his or her son or daughter, father, mother, or regularly employed employee. (b) The operator of any vehicle which is engaged in the transporation of any farm product to market if the operation of such vehicle is subject to the jurisdiction of the Public Utilities Commission and the rate which is charged for such transporation includes the charge for unloading the farm product which is so transported.


56810. "Union" means the labor union which has been recognized by the National Labor Relations Board, or other governmental agency which has jurisdiction, as the bargaining agency for employees who are employed in a market.


Article 2. General Provisions

Ca Codes (fac:56831-56832) Food And Agricultural Code Section 56831-56832



56831. It is the purpose of this chapter to promote the orderly marketing of farm products and the establishment of reasonable charges for unloading such products at markets in this state. It is declared that in some of the markets of this state the charges for unloading farm products have been found to be exorbitant and unreasonable and that this chapter is enacted to remedy such evils and in the interests of the public welfare.


56832. The director may make such regulations as he may deem necessary to carry out this chapter and to effectuate its purposes.


Article 3. Exceptions

Ca Codes (fac:56861-56863) Food And Agricultural Code Section 56861-56863



56861. This chapter does not apply to any market in which less than five produce dealers operate.


56862. This chapter does not apply to any produce dealer at whose place of business every farm product which is delivered is unloaded without charge by employees of the produce dealer either with or without the assistance of the operator of the vehicle which transports such product or other persons who accompany the operator on such vehicle. This chapter does not prohibit any employee of a produce dealer from assisting in unloading any farm product without charge if registered unloaders are not available.


56863. This chapter does not apply to any market in Los Angeles County.


Article 4. Registered Unloaders

Ca Codes (fac:56891-56893) Food And Agricultural Code Section 56891-56893



56891. Every person who unloads any farm product in a market and who is a registered unloader shall register his name, Federal Social Security number, and address and union affiliation, if any, with the commissioner. The commissioner shall supply each registered unloader with a card of registration. Each registered unloader shall carry such card at all times while employed or seeking employment in unloading any farm product in a market. A person within the definition of the term registered unloader shall not unload any farm product in a market unless he is registered as provided in this chapter.

56892. Every producer who transports any farm product to a market may register himself or herself, his or her parents, and his or her sons or daughters, and regular full-time employees, with the commissioner. Such registration shall show the name of the producer, the registration number and other means of identification of his or her own personally owned vehicles, and the relationship of the registrant to the producer. This chapter does not prohibit a person so registered from unloading any farm product from a vehicle as to which he or she is so registered, and no such person is required to employ any other person to unload or assist in unloading such farm product nor to pay for any services which are not requested to be performed. The commissioner shall supply each such registrant with an appropriate card, which the registrant shall carry at all times while engaged in unloading any farm product at a market.


56893. Every produce dealer that operates in a market is responsible for providing that registered unloaders sufficient in number to do the work which is required are available at all times when any farm product is being delivered to his place of business. He is also responsible for having on hand at his place of business at all such times a responsible person to receipt for any farm product which is unloaded at his place of business.


Article 5. Association Of Produce Dealers

Ca Codes (fac:56921-56923) Food And Agricultural Code Section 56921-56923



56921. In order to facilitate the carrying out of their responsibilities pursuant to this chapter, the produce dealers that operate in a market may organize an association. A produce dealer shall not be required to become or to be a member of such association, but any such association shall admit to membership any produce dealer that operates in the market. If a produce dealer is admitted to membership in the association, he shall not be subject to any assessment or payment except those which are necessary to carry out his responsibilities pursuant to this chapter.


56922. An association may do all of the following: (a) Obtain a dispatching service from which registered unloaders may be sent to the places where their services are required. (b) Act as the bargaining agent to establish with a union the scale of charges for unloading any farm product in the market in accordance with this chapter. (c) Provide for watchman service to protect and give a receipt for any farm product which is delivered to a market at times when the market is not otherwise in operation.


56923. The costs of services of an association to its members for carrying out any of the activities which are provided for or required by this chapter are subject to review by the director. No cost or expenditure for any other purpose shall be payable by any produce dealer except on an entirely voluntary basis. The director shall from time to time on his own motion, or at the request of a produce dealer, review the activities of the association to determine if any charge is made against any produce dealer in violation of this chapter.


Article 6. Charges For Unloading Produce

Ca Codes (fac:56951-56959) Food And Agricultural Code Section 56951-56959



56951. Each produce dealer that operates within a market shall establish a scale of charges for unloading any farm product which is transported to his place of business and shall post and maintain a legible copy of such scale in a conspicuous place at his place of business where it is readily visible at all times during which any farm product is delivered to such place of business.


56952. Any scale of charges which is established pursuant to this article may be modified from time to time in accordance with the method and procedure which is prescribed for establishing such scale.


56953. The scale of charges which is established shall be the standard charge for unloading any farm product in the market.


56954. A person shall not charge or receive any payment for unloading any farm product in excess of the standard charge which is established for the market.

56955. The scale of charges shall be established as follows: (a) If all the produce dealers in a market, or a majority of such produce dealers, either individually or through group representation, have an agreement with a union, the scale of charges shall be that which is prescribed in such agreement and approved as provided in this chapter. If an agreement which covers any employees of produce dealers in a market does not cover persons who unload farm products, the agreement shall be modified, or a new agreement made, to cover such persons. (b) If there is no such union, the scale of charges shall be fixed by the produce dealers that operate within the market. In either event, the scale of charges is subject to the approval of the director.


56956. Upon the determination of a scale of charges for a market, the scale of charges shall be transmitted to the director. The director shall examine such scale and shall compare it with any available information relative to the charges for similar work which is performed under similar conditions in the city in, or for, which the market is operated. The director may take into consideration any and all factors which are relevant to the determination of the reasonableness of such charges, including any rates of the Public Utilities Commission for the performance of work of a similar nature.


56957. If the director determines that the scale of charges is not unreasonable, he shall approve the scale and thereafter the scale of charges shall be the standard charge for unloading any farm product in the market.

56958. If the director finds that the scale of charges is unreasonable, he shall fix a time and place for a hearing on the matter. Notice of such hearing shall be mailed to each produce dealer that operates in the market and to the officials of the union, if a union is involved. The director may also notify any or all producers of any farm product which is delivered to the market.


56959. At the hearing the director shall consider any relevant matters that may be presented and, at or after the conclusion of such hearing, he shall so adjust the scale or any item of the scale so that the scale is not unreasonably higher than the prevailing rate for similar work which is performed under similar conditions in the city or its vicinity.


Article 7. Penalties

Ca Codes (fac:56981-56982) Food And Agricultural Code Section 56981-56982



56981. The violation of any provision of this chapter by any person is a misdemeanor.


56982. The violation of any provision of this chapter by a produce dealer is grounds for the revocation of his license, and the violation of any provision of this chapter by an association is grounds for the revocation of the license of each produce dealer that participates in such violation.


Chapter 8.5. Produce Markets In Alameda, San Francisco, And San Mateo Counties

Article 1. Definitions

Ca Codes (fac:57001-57013) Food And Agricultural Code Section 57001-57013



57001. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


57002. "Association" means an association of produce dealers which is organized to carry out the responsibilities of produce dealers which are imposed by this chapter.


57003. "City" includes city and county.


57004. "Commissioner," with respect to any matter which relates to a particular market, means the deputy labor commissioner who is in charge of the office of the Labor Commissioner which is located nearest to that market.

57005. "Director" means the Director of Industrial Relations.


57007. "Farm product" means any fruit, nut, vegetable, berry, or aquacultural product.


57008. "Hauler" means any trucker or carrier.


57009. "Market" means the places of business, collectively, of produce dealers that operate in a city, or the vicinity of a city, and that deal in any farm product which is intended, in whole or in part, for ultimate sale for consumption in a fresh state within the city and the vicinity of the city. This chapter applies only to any market in which five or more produce dealers operate in the Counties of Alameda, San Francisco, and San Mateo and the provisions of Chapter 8 (commencing with Section 56801) of this division shall not be applicable to any such market.


57010. "Produce dealer" includes "commission merchant," as defined in Section 56105, and "dealer," as defined in Section 56107. It does not, however, include a "broker," as defined in Section 56103, nor "processor," as defined in Section 55407.


57011. "Producer" means any person who commercially grows and markets farm products.


57012. "Registered unloader" means a person who unloads any farm product in a market. It does not, however, include any of the following: (a) A producer of farm products, or his son or daughter, father or mother, or regularly employed employee of such producer. (b) The operator of any vehicle which is engaged in the transportation of any farm product to market if the operation of such vehicle is subject to the jurisdiction of the Public Utilities Commission and the rate which is charged for such transportation includes the charge for unloading the farm product which is so transported.


57013. "Union" means the labor union which has been recognized by the National Labor Relations Board, or other governmental agency which has jurisdiction, as the bargaining agency for employees who are employed in a market.


Article 2. General Provisions And Exceptions

Ca Codes (fac:57015-57018) Food And Agricultural Code Section 57015-57018



57015. It is the purpose of this chapter to promote the orderly marketing of farm products and the establishment of reasonable charges for unloading such products at markets in this state. It is declared that in some of the markets of this state the charges for unloading farm products have been found to be exorbitant and unreasonable and that this chapter is enacted to remedy such evils and in the interests of the public welfare.


57016. The director may make such regulations as he may deem necessary to carry out this chapter and to effectuate its purposes.


57017. This chapter does not apply to any market in which less than five produce dealers operate.


57018. This chapter does not apply to any produce dealer at whose place of business every farm product which is delivered is unloaded without charge by employees of the produce dealer either with or without the assistance of the operator of the vehicle which transports such product or other persons who accompany the operator on such vehicle. This chapter does not prohibit any employee of a produce dealer from assisting in unloading any farm product.


Article 3. Registered Unloaders

Ca Codes (fac:57021-57024) Food And Agricultural Code Section 57021-57024



57021. Every person who unloads any farm product in a market and who is a registered unloader shall register his name, federal social security number, and address and union affiliation, if any, with the commissioner. The commissioner shall supply each registered unloader with a badge of registration. Each registered unloader shall wear such badge at all times while employed or seeking employment in unloading any farm product in a market. A person within the definition of the term registered unloader shall not unload any farm product in a market unless he is registered as provided in this chapter.

57022. Every producer who transports any farm product to a market may register himself, his father or mother, and his sons or daughters, and regular full-time employees, with the commissioner. Such registration shall show the name of the producer and the relationship of the registrant to the producer. The commissioner shall supply each such registrant with an appropriate badge, which the registrant shall wear at all times while engaged in unloading any farm product at a market. This chapter does not prohibit a person from unloading any farm product, and no person is required to employ any other person to unload or assist in unloading such farm product nor to pay for any services which are not requested to be performed.


57023. Every produce dealer that operates in a market is responsible for having on hand at his place of business a responsible person to receipt for any farm product which is unloaded at his place of business during posted receiving hours.


57024. All vehicles shall be unloaded in a timely manner and in the order in which they arrive at the market, when the vehicles are unloaded by registered unloaders.


Article 4. Association Of Produce Dealers

Ca Codes (fac:57025-57028) Food And Agricultural Code Section 57025-57028



57025. In order to facilitate the carrying out of their responsibilities pursuant to this chapter, the produce dealers that operate in a market may organize an association. A produce dealer shall not be required to become or to be a member of such association, but any such association shall admit to membership any produce dealer that operates in the market. If a produce dealer is admitted to membership in the association, he shall not be subject to any assessment or payment except those which are necessary to carry out his responsibilities pursuant to this chapter.


57027. An association may provide for watchman service to protect and give a receipt for any farm product which is delivered to a market at times when the market is not otherwise in operation.


57028. The costs of services of an association to its members for carrying out any of the activities which are provided for or required by this chapter are subject to review by the director. No cost or expenditure for any other purpose shall be payable by any produce dealer except on an entirely voluntary basis. The director shall from time to time on his own motion, or at the request of a produce dealer, review the activities of the association to determine if any charge is made against any produce dealer in violation of this chapter.


Article 5. Charges For Unloading Produce

Ca Codes (fac:57031-57039) Food And Agricultural Code Section 57031-57039



57031. (a) Any union representing registered unloaders is authorized and entitled to bargain with the employer of the registered unloaders to establish a scale of charges for unloading produce. (b) If the union or unions representing registered unloaders and the employer of registered unloaders are unable to agree on a scale of charges, the director shall mediate the dispute pursuant to Section 65 of the Labor Code. (c) The scale of charges in effect on December 31, 1978, shall remain in effect until new charges are established pursuant to this section.


57032. The scale of charges which is established shall be the standard charge for unloading any farm product in the market.


57033. A person shall not charge or receive any payment for unloading any farm product in excess of the standard charge which is established for the market.

57034. Each produce dealer shall post and maintain a legible copy of the effective scale of charges established under this article in a conspicuous place at his place of business where it is readily visible at all times during which any farm product is delivered to such place of business.


57035. The commissioner or his representative shall investigate any complaint brought to his attention involving produce dealers or registered unloaders.

57036. If a scale of charges is not established pursuant to bargaining as provided for in Section 57031, the union may propose a scale of charges for approval by the director.


57037. After receipt of the scale of charges proposed by the union pursuant to Section 57036, the director shall fix a time and place for a hearing on the matter. Notice of the hearing shall be published and mailed to each produce dealer in the Counties of Alameda and San Mateo and in the City and County of San Francisco and to the union. The director shall also notify any or all haulers and producers of any farm product which is delivered to the market.


57038. (a) At the hearing the director shall consider any relevant matters that may be presented. (b) At or after the conclusion of the hearing, the director shall determine whether or not the proposed scale is reasonable. If the director determines that the proposed scale is reasonable, the director shall approve it and thereafter that scale of charges shall be the standard charge for unloading any farm product in the market. If the director determines that the scale is unreasonable, the director shall adjust the scale or any item of the scale so that the scale is not unreasonably higher than the prevailing rate for similar work which is performed under similar conditions. After this adjustment, the scale shall be the standard charge for unloading any farm product in the market. (c) In making the determination and, if necessary, the adjustment required in subdivision (b), the director shall compare the scale proposed by the union with any available information relating to the charges for similar work which is performed under similar conditions in the city in, or for, which the market is operated. The director may take into consideration any rates set by the Public Utilities Commission for the performance of work of a similar nature.


57039. The director may by regulation establish a fee in the amount necessary to cover the costs that are incurred by the Department of Industrial Relations in implementing this article. Each party participating in a hearing conducted pursuant to this article shall pay an equal share of the fee.


Article 6. Penalties

Ca Codes (fac:57041-57043) Food And Agricultural Code Section 57041-57043



57041. Violation of any provision of this chapter or laws affecting personal injury or property damage by a produce dealer or registered unloader is grounds for license or registration revocation or suspension. Before suspending or revoking any registration or license under this chapter, the commissioner shall afford the holder of such registration or license an opportunity to be heard in person or by counsel. The proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein.

57042. The director may assess a fee not to exceed four hundred dollars ($400) per year payable by produce dealers for use exclusively in administering the provisions of this chapter.


57043. The violation of any provision of this chapter by any person is a misdemeanor.


Chapter 9. Dairy Produce Exchanges

Article 1. Definitions And General Provisions

Ca Codes (fac:57101-57103) Food And Agricultural Code Section 57101-57103



57101. "Dairy produce exchange" means any association of persons which is organized for the following purposes: (a) Furnishing a medium for trading in butter, cheese, or eggs. (b) Facilitating the marketing of any such product. (c) Establishing the wholesale market value of any such product.


57102. The director may require such monthly or other periodical reports, records of market quotations, and other statistical information as may be necessary to him in administering this chapter. All such reports, statistics, or information which is pertinent to each dairy produce exchange which is licensed pursuant to this chapter shall be kept on file in the office of the director and subject to public inspection.


57103. The director shall have access to all records of every dairy produce exchange which is licensed pursuant to this chapter, and may appoint a representative to sit with the board of directors or other governing body of such exchange.


Article 2. Licenses

Ca Codes (fac:57131-57134) Food And Agricultural Code Section 57131-57134



57131. It is unlawful for any person to establish or operate a dairy produce exchange unless he has first obtained from the director a license to do so.

57132. Every dairy produce exchange, and any person that desires to operate a dairy produce exchange, before engaging in such activity, shall file with the director a written application for a license, accompanied by the license fee which is prescribed by Section 57134. The application shall state all of the following information: (a) The name under which the dairy produce exchange proposes to operate. (b) The location of its place of business. (c) The names of its officers, directors, and the persons, firms, corporations, or associations which constitute its membership. (d) A certified copy of its articles of incorporation, its constitution and bylaws, and the rules and regulations and bases of trade under which it proposes to operate.


57133. The director shall examine the application, and if he finds that the applicant has fully complied with the provisions of this chapter, he shall issue a license which authorizes the applicant to operate a dairy produce exchange. The license shall recite in bold type that the issuance of the license is permissive only and does not constitute a recommendation or endorsement of the rules and regulations or bases of trade under which the applicant proposes to operate.

57134. For each license, the director shall charge the sum of one hundred dollars ($100), which sum shall accompany the application for the license. Except as otherwise provided in this chapter, each license which is issued by the director shall continue in effect so long as the licensee shall continue in business, and shall pay a fee of one hundred dollars ($100) annually to the director. Such fee is payable on the first Monday of each calendar year.


Article 3. Arbitration

Ca Codes (fac:57161-57165) Food And Agricultural Code Section 57161-57165



57161. The director shall act as arbitrator in all cases of dispute or contention which concerns the maintenance or operation of any licensed dairy produce exchange, or the bylaws, rules, or regulations which pertain to it.

57162. Upon receipt of any verified complaint which concerns a licensed dairy produce exchange, the director shall proceed to make a thorough investigation. In this connection, the director: (a) May conduct hearings, of which all interested parties shall receive due notice, and may require written statements which set forth the views of any or all contending parties. (b) Shall invite the cooperation and solicit the opinion of the Federal Trade Commission and the Economic Research Service of the United States Department of Agriculture.


57163. On the basis of the information which is so obtained, the director shall prescribe a tentative rule which shall be effective in the operation of any licensed dairy produce exchange for not to exceed 90 days.

57164. If, after such trial period, it appears that the tentative rule operates in a fair and equitable manner, it shall then, upon order of the director, be made a permanent rule of such licensed dairy produce exchange.

57165. If, in the conduct of any such investigation, it appears that any unlawful act has been committed by any licensed dairy produce exchange, the director may initiate appropriate legal proceedings against such exchange.


Article 4. Investigations, Hearings, And Suspension Or Revocation Of Licenses

Ca Codes (fac:57191-57193) Food And Agricultural Code Section 57191-57193



57191. The director may upon his own motion, and shall upon the verified complaint in writing of any person, investigate the actions of any dairy produce exchange and may temporarily suspend or permanently revoke any license which is issued pursuant to this chapter if the licensee is guilty of any of the following: (a) Failure to supply all the information which is required by subdivisions a, b, c, and d of Section 57132. (b) Making any false statement or misrepresentation of fact to the director. (c) Fraud or deception in the application for or procurement of a license. (d) Any other conduct, whether of the same or a different character than the conduct which is specified in this section, which is unlawful. (e) Violation of any law or ordinance of the state or any city or county or the rules of the Federal Trade Commission which govern unfair trade practices in the handling of butter, cheese, or eggs.


57192. The proceedings shall be conducted in accordance with Chapter 5 (commencing with Section 11500), Part 1, Division 3, Title 2 of the Government Code, and the director shall have all the powers which are granted in that chapter.

57193. If judicial review of the decision of the director is sought, the decision of the director shall remain in effect pending the determination of the review, unless the party that seeks the review files with the court a bond in a sum to be fixed by the court, in favor of the people and conditioned upon the faithful performance of all those things which are ordered to be done, or the faithful observance of such restraint as may be directed by the director. The bond shall be for the benefit of any person that has dealings with the person that seeks the review.


Article 5. Violations And Penalties

Ca Codes (fac:57221-57222) Food And Agricultural Code Section 57221-57222



57221. Any person that operates a dairy produce exchange without a license is guilty of a misdemeanor and shall also pay to the state one hundred dollars ($100) for each and every day of such operation. Any money which is due the state pursuant to this section shall be recovered by an action at law brought by the Attorney General in the name of the people.


57222. Any person that makes any false statement in applying for a license or violates any rule or decision of the director which is authorized by this chapter is guilty of a misdemeanor.


Chapter 10. Private Produce Inspection

Ca Codes (fac:57301-57309) Food And Agricultural Code Section 57301-57309



57301. The commissioner shall require any person, except a county, state, or federal inspection agency, who, for payment by a private party, reports upon the condition of lots of fresh fruits or vegetables offered for sale other than for processing to register with the commissioner. The commissioner shall maintain a registry of these persons which shows the name and business address, market or markets at which inspections are made, the products inspected, and additional matters that the commissioner requires. The commissioner shall forward this information to the director who shall maintain a central registry on a statewide basis. A produce inspector who is registered in one county where he or she does business may do business in any other county without registering in the other county if the commissioner in the other county is provided proof of registration.

57302. The board of supervisors may, pursuant to this chapter, establish a registration fee in an amount necessary to cover the actual costs of the commissioner for that registration.


57303. Each registered inspector shall maintain a copy of each written report of the date, lot description, volume, and condition of the commodity inspected. Condition shall include the grade or other criteria used to evaluate the product. If a report has been made orally, a written confirmation shall be prepared within 24 hours and retained in the same manner as a written report. Reports need not name the person to whom the advice was given, but the names shall be maintained so that they may be matched to the respective reports upon request of the commissioner. Reports shall be maintained for a period of not less than 90 days and shall be made available to the commissioner upon demand.

57304. If the commissioner or the director receives a complaint from an interested party that any report required to be kept by Section 57303 is materially inaccurate, the commissioner may investigate the matter and shall give a report of findings to all interested parties.


57305. The remedies or penalties in this chapter are cumulative to each other and to the remedies or penalties available under all other laws of this state.

57306. If the commissioner finds that a registered inspector has repeatedly given inaccurate information or failed to maintain required records, the commissioner may, after a hearing, cancel or suspend the registration.

57307. (a) Any person who violates this chapter shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General at the request of the director. Any funds recovered pursuant to this subdivision shall be deposited in the Department of Food and Agriculture Fund. (b) An action may also be brought pursuant to this section by the district attorney at the request of the commissioner in the county in which the offense occurred. Any funds recovered pursuant to this subdivision shall be deposited in the general fund of the county.


57308. It is unlawful for any person to act as a registered inspector unless currently registered by the commissioner.


57309. It is unlawful for any person to misrepresent the quality of any commodity inspected or to fail to make and maintain the records required by the commissioner.


Chapter 11. Dairy Cattle Supply Lien

Ca Codes (fac:57401-57414) Food And Agricultural Code Section 57401-57414



57401. (a) The definitions in this section govern the construction of this chapter. (b) "Feed or materials" means commercial feed, grain, forage, feed ingredients, mineral feed, drugs, animal health products, customer-formula feed, any mixture or preparation for feeding animals, any of the constituent nutrients of an animal ration, or any other food which is used for the feeding of dairy cattle. (c) "Proceeds" means funds derived from the sale of milk or milk products which are payable to the lien debtor by the possessor of the funds, except for any of the following: (1) Deductions for taxes, fees, and assessments. (2) Funds due or owing milk processing cooperative associations organized and operating pursuant to Chapter 1 (commencing with Section 54001). (3) Funds retained by the cooperative association. (4) Deductions made pursuant to a court order. (5) Deductions due or owing the buyer of the milk for hauling services provided by the buyer pursuant to subdivision (e) of Section 62096 and deductions due or owing the buyer for the testing of milk for purposes of payment pursuant to Section 34231. (d) "Raising or maintaining of dairy cattle" means feeding, pasturing, caring for, and managing dairy cattle kept or raised for use or profit. (e) "Reasonable or agreed charges" means the agreed price, if any, for the feed and materials sold to the lien debtor, at the lien debtor's request. If there is no agreed price or a method for determining price which is agreed upon, "reasonable or agreed charges" means the reasonable value of the feed or materials as of the date of delivery.


57402. A person who provides feed or materials to aid the raising or maintaining of dairy cattle has a lien upon the proceeds of the milk or milk products produced from the dairy cattle, for the reasonable or agreed charges for the feed or materials provided and for the costs of enforcing the lien. However, the amount of charges secured by the lien cannot exceed an amount equal to the reasonable or agreed charges for feed or material provided within a 45-day period, and only two providers of feed or materials shall have an enforceable lien at any time according to the priority set forth in Section 57406.

57403. (a) The lien created pursuant to this chapter attaches to proceeds. (b) Except as otherwise provided in this chapter, the notice of claim of lien shall remain in effect, and no new notice of claim of lien shall be required in order to maintain the lien, as long as the person who provides feed or materials either (1) remains unpaid for amounts secured by the lien, or (2) continues to provide feed or materials on a regular basis to the lien debtor. For purposes of this section, providing feed or materials shall not be deemed to be made on a regular basis if a period of more than 30 days elapses between deliveries.

57405. The lien created by this chapter shall be perfected and shall be effective upon the filing of a notice of claim of lien with the Secretary of State pursuant to all the provisions of this section. (a) The person who provides feed or materials may, at any time, file in the manner and at the place set forth in this section, the notice of claim of lien. (b) The notice of claim of lien shall, at a minimum, set forth all of the following information: (1) The name and address of the lien claimant. (2) The name and address of the lien debtor. (3) The location of the dairy to which the feed and materials were provided. (4) That the lien claimant has a dairy cattle supply lien pursuant to Section 57402. (c) The notice of claim of lien shall be signed by the lien claimant or by a person authorized to sign documents of a similar kind on behalf of the claimant. (d) The notice of claim of lien shall be filed on a form which is the standard form of original financing statement prescribed by the Secretary of State pursuant to Section 9521 of the Commercial Code. The standard form shall be completed with the following changes: (1) The lien claimant may be identified either as lien claimant or as secured party. (2) The form shall be signed by the lien claimant and need not be signed by the debtor. (3) In the space for the description of the collateral there shall instead be entered the statement substantially as set forth in paragraphs (3) and (4) of subdivision (b). (e) The notice of claim of lien shall be filed, indexed, and marked in the office of the Secretary of State in the same manner as a financing statement is filed, indexed, and marked pursuant to Section 9519 of the Commercial Code. (f) The lien claimant shall provide written notice of the claim of lien to the lien debtor within 10 days of the date of the filing with the office of the Secretary of State. (g) For the purpose of the Secretary of State's index pursuant to Sections 9515, 9516, and 9522 of the Commercial Code and for the purpose of the issuance of a certificate pursuant to Section 9519 or 9528 of the Commercial Code, the Secretary of State shall identify a notice pursuant to this section as a financing statement.


57406. (a) The lien created by this chapter shall have priority in accordance with the time the notice of claim of lien is filed. (b) The lien created by this chapter shall have the same priority as a security interest perfected by the filing of a financing statement as of the date the notice of claim of lien was filed.


57407. Except to the extent specifically set forth in this chapter, the lien created by this chapter shall be subject to Division 9 (commencing with Section 9101) of the Commercial Code.


57408. A member of the public may obtain a certificate identifying whether there is a lien on file and any notice of claim of lien naming a particular debtor, and if so, giving the date and time of filing of each notice, and the names and addresses of each lienholder therein. The fee for the certificate is the same as the fee for a certificate issued pursuant to Section 9525 of the Commercial Code.


57409. A member of the public may obtain a copy of any notice of claim of lien filed pursuant to this chapter, including notices affecting the notices. The fee for these copies shall be the same as that prescribed in Section 9525 of the Commercial Code.


57410. The Secretary of State may adopt any regulations necessary to carry out his or her duties pursuant to this chapter, including prescribing necessary forms.


57411. A lien created pursuant to this chapter is assignable or transferable by the holder of the lien, with full rights of enforcement. A lienholder's statement of assignment or transfer shall be filed with the Secretary of State in the same manner as a secured party's statement of assignment or transfer as prescribed in Section 9514 of the Commercial Code.


57412. The lien claimant shall provide written notice to secured creditors at least 30 days prior to enforcing a claim of lien. For the purposes of this section, "secured creditors" means those creditors having a perfected security interest in dairy cattle, milk, milk products, or the proceeds thereof, as of the date the notice of claim of lien is filed with the Secretary of State.


57413. The lien claimant shall foreclose on a lien created by this chapter only in an action to recover the reasonable or agreed charges for feed and materials delivered. The final judgment shall be enforced pursuant to Title 9 (commencing with Section 680.010) of the Code of Civil Procedure.


57414. (a) When a lien claimant receives payment for amounts secured by the lien and the lien claimant has not been providing feed or materials for a period of 30 consecutive days, the lien claimant shall, on written demand by the debtor, send the debtor a statement that he or she no longer claims a security interest under the statement, which shall be identified by date, names of parties thereto, and file number. If the affected lienholder of record fails to send such a termination statement within 10 days after proper demand therefor, he or she shall be liable to the debtor for all actual damages suffered by the debtor by reason of this failure, and, if the failure is in bad faith, for a penalty of one hundred dollars ($100). (b) The filing officer shall mark each termination statement with the date and time of filing and shall index the statement under the name of the debtor and under the file number of the original lien. If the filing officer has a microfilm or other photographic record of the lien and related filings, he or she may remove the originals from the files at any time after receipt of the termination statement and destroy them, or if he or she does not have the record, he or she may remove them from those files at any time after one year after receipt of the termination statement and destroy them.


Chapter 12. Poultry And Fish Supply Lien

Article 1. Definitions

Ca Codes (fac:57501-57507) Food And Agricultural Code Section 57501-57507



57501. "Eggs or egg" means eggs or egg products as defined in Section 27512, 27513, or 27514.


57502. "Feed or materials" means commercial feed, grain, forage, feed ingredients, mineral feed, drugs, poultry or fish health products, customer-formula feed, any mixture or preparation for feeding poultry or fish, any of the constituent nutrients of a poultry or fish ration, or any other food which is used for the feeding of poultry or fish.


57503. "Fowl" means chickens, turkeys, ducks, geese, and other domesticated birds.


57504. "Poultry" means domesticated fowl and domesticated rabbit which is intended for use for human food.


57505. "Proceeds" means funds derived from the sale of eggs, poultry, fish, or other products derived from eggs, poultry, or fish payable to the lien debtor. "Proceeds" do not include any of the following: (a) Deductions for taxes, fees, and assessments. (b) Funds due or owing egg or poultry processing cooperative associations organized and operating pursuant to Chapter 1 (commencing with Section 54001). (c) Funds retained by the cooperative association. (d) Deductions made pursuant to a court order.


57506. "Raising or maintaining of poultry or fish" means feeding, housing, caring for, and managing poultry or fish kept or raised for use or profit.

57507. "Reasonable or agreed charges" means the agreed price, if any, for the feed and materials sold to the lien debtor, at the lien debtor's request. If there is no agreed price or a method for determining price which is agreed upon, "reasonable or agreed charges" means the reasonable value of the feed or materials as of the date of delivery.


Article 2. Poultry And Fish Supply Lien

Ca Codes (fac:57510-57519) Food And Agricultural Code Section 57510-57519



57510. A person who provides feed or materials to aid the raising or maintaining of poultry or fish or for the production of eggs has a lien upon the proceeds of the sale of the eggs, poultry, fish, or other products derived from eggs, poultry, or fish, for the reasonable or agreed charges for the feed or materials provided, and for the costs of enforcing the lien. However, the amount of charges secured by the lien shall not exceed an amount equal to the reasonable or agreed charges for feed or material provided within a 45-day period, and only two providers of feed or materials shall have an enforceable lien at any time according to the priority set forth in Section 57525.


57511. (a) The lien created pursuant to this chapter attaches to the proceeds. (b) Except as otherwise provided in this chapter, the notice of claim of lien shall remain in effect, and no new notice of claim of lien shall be required in order to maintain the lien, as long as the person who provides feed or materials either (1) remains unpaid for amounts secured by the lien, or (2) continues to provide feed or materials on a regular basis to the lien debtor. For purposes of this section, providing feed or materials shall not be deemed to be made on a regular basis if a period of more than 30 days elapses between deliveries.

57512. The lien created by this chapter shall be perfected and shall be effective upon the filing of a notice of claim of lien with the Secretary of State pursuant to this article.


57513. Any person who provides feed or materials may, at any time, file in the manner and at the place set forth in this article, the notice of claim of lien.


57514. The notice of claim of lien shall contain all of the following information: (a) The name and address of the lien claimant. (b) The name and address of the lien debtor. (c) The location of the property to which the feed and materials were delivered. (d) That the lien claimant has a poultry or fish supply lien pursuant to Section 57510.


57515. The notice of claim of lien shall be signed by the lien claimant or by a person authorized to sign documents of a similar kind on behalf of the claimant.


57516. The notice of claim of lien shall be filed on a form which is the standard form of original financing statement prescribed by the Secretary of State pursuant to Section 9521 of the Commercial Code. The standard form shall be completed with the following changes: (a) The lien claimant may be identified either as a lien claimant or as a secured party. (b) The form shall be signed by the lien claimant and need not be signed by the lien debtor. (c) In the space for the description of the collateral there shall instead be entered the information specified in subdivisions (c) and (d) of Section 57514.

57517. The notice of claim of lien shall be filed, indexed, and marked in the office of the Secretary of State in the same manner as a financing statement is filed, indexed, and marked pursuant to Section 9519 of the Commercial Code.

57518. The lien claimant shall provide written notice of the claim of lien to the lien debtor within 10 days of the date of the filing with the office of the Secretary of State.


57519. For the purpose of the Secretary of State's index pursuant to Section 9519 of the Commercial Code and for the purpose of the issuance of a certificate pursuant to Section 9519 or 9528 of the Commercial Code, the Secretary of State shall identify a notice pursuant to this article as a financing statement.


Article 3. Priority Of Liens

Ca Codes (fac:57525) Food And Agricultural Code Section 57525



57525. (a) The lien created by this chapter shall have the priority in accordance with the time the notice of claim of lien is filed. (b) The lien created by this chapter shall have the same priority as a security interest perfected by the filing of a financing statement as of the date the notice of claim of lien was filed.



Article 4. Information Concerning Lien

Ca Codes (fac:57530-57531) Food And Agricultural Code Section 57530-57531



57530. A member of the public may obtain a certificate identifying whether there is a lien on file and any notice of claim of lien naming a particular debtor, and if so, giving the date and time of filing of each notice, and the names and addresses of each lienholder therein. The fee for the certificate is the same as the fee for a certificate issued pursuant to Section 9525 of the Commercial Code.


57531. A member of the public may obtain a copy of any notice of claim of lien filed pursuant to this chapter, including notices affecting the notices. The fee for these copies shall be the same as that prescribed in Section 9525 of the Commercial Code.


Article 5. Enforcement Of Lien

Ca Codes (fac:57535-57537) Food And Agricultural Code Section 57535-57537



57535. The lien claimant shall provide written notice to secured creditors at least 30 days prior to enforcing a claim of lien. For the purposes of this section, "secured creditors" means those creditors having a perfected security interest in poultry, eggs, poultry products, fish, fish products, or the proceeds thereof, as of the date the notice of claim of lien is filed with the Secretary of State.


57536. The lien claimant shall foreclose on a lien created by this chapter only in an action to recover the reasonable or agreed charges for feed and materials provided. The final judgment shall be enforced pursuant to Title 9 (commencing with Section 680.010) of the Code of Civil Procedure.


57537. (a) When a lien claimant receives payment for the total amounts secured by the lien and the lien claimant has not provided feed for materials for a period of 30 consecutive days, the lien claimant shall, on written demand by the debtor, send the debtor a statement that he or she no longer claims a security interest under the statement, which shall be identified by the date, names of parties thereto, and file number. If the affected lienholder of record fails to send the termination statement within 10 days after proper demand therefor, he or she is liable to the debtor for actual damages suffered by the debtor by reason of this failure, and, if the failure is in bad faith, for a penalty of one hundred dollars ($100). (b) The filing officer shall mark each termination statement with the date and time of filing and shall index the statement under the name of the lien debtor and under the file number of the original lien. If the filing officer has a microfilm or other photographic record of the lien and related filings, he or she may remove and destroy the originals from the files at any time after receipt of the termination statement. If the filing officer does not have the record, he or she may remove and destroy the originals from the files at any time after one year after receipt of the termination statement.


Article 6. Assignment Of Lien

Ca Codes (fac:57540-57541) Food And Agricultural Code Section 57540-57541



57540. A lien created pursuant to this chapter is assignable or transferable by the holder of the lien, with full rights of enforcement. The lienholder shall file a statement of assignment or transfer with the Secretary of State in the same manner as a secured party's statement of assignment or transfer as prescribed in Section 9514 of the Commercial Code.


57541. Except to the extent specifically set forth in this chapter, the lien created by this chapter is subject to Division 9 (commencing with Section 9101) of the Commercial Code.


Article 7. Miscellaneous

Ca Codes (fac:57545) Food And Agricultural Code Section 57545



57545. The Secretary of State may adopt any regulations necessary to carry our his or her duties pursuant to this chapter, including prescribing necessary forms.


Chapter 13. Agricultural Chemical And Seed Lien

Article 1. Definitions

Ca Codes (fac:57551-57555) Food And Agricultural Code Section 57551-57555



57551. "Agricultural chemical" means fertilizers, fertilizer material, lime, chemical compounds, pesticides, pesticide chemicals, plant regulators, plant amendments, plant food, soil amendments, herbicides, fungicides, and agricultural chemicals that are applied to crops or to land that is used for the raising of crops.


57552. "Agricultural seed" means the seed of any domesticated grass or cereal, of any vegetable, flower, or propagated plant, and of any legume or other plant which is grown as turf, cover crop, forage crop, fiber crop, or field crop, and mixtures of the seed.


57553. "Labor" means labor or service performed in the application, delivery, or preparation of an agricultural chemical or agricultural seed provided by the seller of the agricultural chemical or agricultural seed.

57554. "Proceeds" means funds received by the lien debtor from the sale of the crop on which the agricultural chemical was applied or for which the agricultural seed was used. "Proceeds" do not include any of the following: (a) Deductions for taxes, fees, and assessments. (b) Funds due or owing to a cooperative association organized and operating pursuant to Chapter 1 (commencing with Section 54001). (c) Funds retained by the cooperative association. (d) Deductions made pursuant to a court order.


57555. "Reasonable or agreed charges" means the agreed price, if any, for agricultural chemicals or agricultural seeds sold to the lien debtor, at the lien debtor's request, and for labor. If there is no agreed price or a method for determining price which is agreed upon, "reasonable or agreed charges" means the reasonable value of the agricultural chemicals and labor or agricultural seeds and labor as of the date of application, delivery, or preparation.


Article 2. Agricultural Chemical And Seed Lien

Ca Codes (fac:57561-57570) Food And Agricultural Code Section 57561-57570



57561. (a) A person who provides agricultural chemical or agricultural seed is not entitled to establish a lien pursuant to this chapter, unless that person has first sent to the lien debtor a written notice, by certified mail, which states all of the following: (1) The payment of the reasonable or agreed charges is more than 30 days overdue. This requirement does not apply to deliveries of agricultural chemicals and seed and related labor that are made subsequent to deliveries which are overdue. (2) The amount of reasonable or agreed charges that are overdue. (3) The lien debtor has the following three alternatives: (A) Allow the lien to be filed. (B) Enter into a consensual security interest in the proceeds, pursuant to the Commercial Code. (C) Pay the reasonable or agreed charges that are overdue. (4) In 10-point type or bolder, notify the lien debtor that he or she has 10 days from receipt of the notice to select an alternative, notify the lien claimant of the alternative selected, and satisfy all the requirements of the selected alternative, and that the lien claimant may file the notice of claim of lien pursuant to this chapter at any time thereafter if the lien debtor does not comply with the requirements of this section. (b) A person who provides agricultural chemical or agricultural seed, and has complied with subdivision (a), has a lien upon the proceeds of the crop for the reasonable or agreed charges and for the costs of enforcing the lien. (c) The lien established pursuant to this chapter attaches to the proceeds of the following: (1) The crops that existed at the time of application upon the land where the agricultural chemical was applied. (2) If crops are not planted, the next production crop on that land following the last date on which the agricultural chemical was applied. (3) The crops produced from the agricultural seed. (d) The amount of charges secured by the lien shall not exceed an amount equal to the reasonable or agreed charges for agricultural chemicals furnished within a 60-day period and for agricultural seeds furnished within a 45-day period.

57562. Except as otherwise provided in this chapter, the notice of claim of lien shall remain in effect, and no new notice of claim of lien shall be required in order to maintain the lien, as long as the person who provides the agricultural chemicals and labor or agricultural seeds and labor either (1) remains unpaid for the amounts secured by the lien; or (2) continues to provide agricultural chemicals and labor or agricultural seeds and labor on a regular basis to the lien debtor. For purposes of this section, providing agricultural chemicals and labor or agricultural seeds and labor shall not be deemed to be made on a regular basis if a period of more than 45 days elapses between applications, deliveries, or preparations.


57563. The lien created by this chapter shall be perfected and shall be effective upon the filing of a notice of claim of lien with the Secretary of State pursuant to this article.


57564. Any person who provides agricultural chemicals or agricultural seeds may file in the manner and at the place set forth in Section 57568, the notice of claim of lien. The lien claimant may not file a notice of claim of lien upon the proceeds of crops for agricultural seeds and labor furnished by the lien claimant if an investigation of a dispute between the lien claimant and the lien debtor is pending pursuant to subdivision (g) of Section 52332. The lien claimant may not file a notice of claim of lien upon the proceeds of crops for agricultural chemicals and labor furnished by the lien claimant, if the settlement of a dispute between the lien claimant and the lien debtor is pending, or has not been resolved pursuant to Section 57564.5.


57564.5. (a) The director shall, by regulation, establish methods and procedures for the settlement of a dispute between a lien claimant supplying agricultural chemicals and labor and a lien debtor, including, but not limited to, the following: (1) Time requirements for submitting the dispute to the department. (2) Time requirements within which a notice of the dispute shall be submitted to each party. (3) A process for evaluating the dispute. (b) Each party to the dispute is equally liable for the reasonable costs incurred by the department in carrying out this section.


57565. The notice of claim of lien shall contain all of the following information: (a) The name and address of the lien claimant. (b) The name and address of the lien debtor. (c) The location of the property to which the agricultural chemicals and labor or agricultural seeds and labor were provided. (d) A statement that the payment of the reasonable or agreed charges is more than 30 days overdue. (e) The amount of the reasonable or agreed charges that are overdue. (f) A statement, signed under penalty of perjury, that the lien claimant sent to the lien debtor the notice required pursuant to subdivision (a) of Section 57561, that more than 10 days have elapsed since the notice was received by the lien debtor, and that the lien debtor has not complied with the requirements of subdivision (a) of Section 57561. (g) That the lien claimant has an agricultural chemical and agricultural seed lien pursuant to Section 57561.


57566. The notice of claim of lien shall be signed by the lien claimant or by a person authorized to sign documents of a similar kind on behalf of the claimant.


57567. The notice of claim of lien shall be filed on a form which is the standard form of original financing statement prescribed by the Secretary of State pursuant to Sections 9515, 9516, and 9522 of the Commercial Code. The standard form shall be completed with the following changes: (a) The lien claimant may be identified either as a lien claimant or as a secured party. (b) The form shall be signed by the lien claimant and need not be signed by the lien debtor. (c) In the space for the description of the collateral there shall instead be entered the information specified in subdivisions (c) to (g), inclusive, of Section 57565. (d) Attached to the form shall be a separately signed statement containing the information specified in subdivision (f) of Section 57565.

57568. The notice of claim of lien shall be filed, indexed, and marked in the office of the Secretary of State in the same manner as a financing statement is filed, indexed, and marked pursuant to Section 9519 of the Commercial Code.

57569. The lien claimant shall provide written notice of the claim of lien to the lien debtor within 10 days of the date of the filing with the office of the Secretary of State.


57570. For the purpose of the Secretary of State's index pursuant to Section 9519 of the Commercial Code and for the purpose of the issuance of a certificate pursuant to Section 9519 or 9528 of the Commercial Code, the Secretary of State shall identify a notice pursuant to this article as a financing statement.


Article 3. Priority Of Lien

Ca Codes (fac:57575) Food And Agricultural Code Section 57575



57575. (a) The lien created pursuant to this chapter shall have the priority in accordance with the time the notice of claim of lien is filed. (b) The lien created pursuant to this chapter shall have the same priority as a security interest perfected by the filing of a financing statement as of the date the notice of claim of lien was filed. (c) The lien created pursuant to this chapter shall not have priority over labor claims for wages and salaries for personal services which are provided by any employee to any lien debtor in connection with the production of agricultural products, the proceeds of which are subject to the lien.


Article 4. Information Concerning Lien

Ca Codes (fac:57581-57582) Food And Agricultural Code Section 57581-57582



57581. A member of the public may obtain a certificate identifying whether there is a lien on file and any notice of claim of lien naming a particular debtor, and if so, giving the date and time of filing of each notice, and the names and addresses of each lienholder in the certificate. The fee for the certificate is the same as the fee for a certificate issued pursuant to Section 9525 of the Commercial Code.


57582. A member of the public may obtain a copy of any notice of an agricultural chemical or seed lien filed, including notices affecting the notices. The fee for these copies shall be the same as that prescribed in Section 9525 of the Commercial Code.


Article 5. Enforcement Of Lien

Ca Codes (fac:57585-57587) Food And Agricultural Code Section 57585-57587



57585. The lien claimant shall provide written notice to secured creditors at least 30 days prior to enforcing a claim of lien. For purposes of this section, "secured creditors" means any entity named as a secured party in a financing statement filed with regard to the debtor and which covers crops subject to the lien, crops growing or grown on the land, or the next production crops to be grown on the land if the crops are not planted, where the agricultural chemical or agricultural seed was provided or applied, farm products, or accounts.

57586. The lien claimant shall foreclose on a lien created by this chapter only in an action to recover the reasonable or agreed charges. The final judgment shall be enforced pursuant to Title 9 (commencing with Section 680.010) of the Code of Civil Procedure.


57587. (a) When a lien claimant receives payment for the total amounts secured by the lien and the lien claimant has not furnished agricultural chemicals or seeds for a period of 45 consecutive days, the lien claimant shall send the lien debtor a statement that he or she no longer claims a security interest under the notice of claim of lien, which shall be identified by the date, names of parties thereto, and file number. If the affected lienholder of record fails to send the termination statement within 10 days, he or she is liable to the debtor for all actual damages suffered by the debtor by reason of this failure, and if the failure is in bad faith, for a penalty of one hundred dollars ($100). (b) The filing officer shall mark each termination statement with the date and time of filing and shall index the statement under the name of the lien debtor and under the file number of the original lien. If the filing officer has a microfilm or other photographic record of the lien and related filings, he or she may remove and destroy the originals from the files at any time after receipt of the termination statement. If the filing officer does not have the record, he or she may remove and destroy the originals from the files at any time after one year after receipt of the termination statement.


Article 6. Assignment Of Lien

Ca Codes (fac:57590-57591) Food And Agricultural Code Section 57590-57591



57590. (a) A lien created pursuant to this chapter is assignable or transferable by the holder of the lien, with full rights of enforcement. (b) The lienholder shall file a statement of assignment or transfer with the office of the Secretary of State in the same manner that a statement is filed pursuant to Section 9514 of the Commercial Code.


57591. Except to the extent specifically set forth in this chapter, the lien created by this chapter is subject to Division 9 (commencing with Section 9101) of the Commercial Code.


Article 7. Miscellaneous

Ca Codes (fac:57595) Food And Agricultural Code Section 57595



57595. The Secretary of State may adopt any regulations necessary to carry out his or her duties pursuant to this chapter, including prescribing necessary forms.


Chapter 14. Limitation On Nonconsensual Supplier Liens

Ca Codes (fac:57700) Food And Agricultural Code Section 57700



57700. No more than two liens filed pursuant to Chapter 12 (commencing with Section 57501) and Chapter 13 (commencing with Section 57551) shall be enforceable against any one lien debtor, even if filed by different lien claimants.


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