Law:Division 21. Marketing (California)

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Contents

Part 1. General Provisions

Chapter 1. State Marketing Services

Article 1. Definitions And General Provisions

Ca Codes (fac:58001-58005) Food And Agricultural Code Section 58001-58005



58001. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


58002. "Organization of producers and distributors" includes all corporations, societies, associations, and organizations of producers, producers and distributors, or distributors, cooperative or otherwise, which are formed for the purpose of facilitating the marketing of any product.


58003. "Product" means any agricultural, aquacultural, dairy, or farm product which is produced, grown, raised, manufactured, or processed within the state.

58004. Except as provided in Section 58005, fees, charges, and costs that are collected under this chapter shall be paid into the State Treasury to the credit of the General Fund.


58005. All fees, charges, and costs that are received under this chapter for the collection, analysis, and dissemination of market news shall be paid into the State Treasury monthly to the credit of the Department of Food and Agriculture Fund. Funds received for these purposes, upon appropriation, shall be expended by the department for market news services. The secretary may adopt regulations implementing procedures for receiving fees, charges, and reimbursement for costs from users of market news.


Article 2. Powers Of The Director

Ca Codes (fac:58031-58042) Food And Agricultural Code Section 58031-58042



58031. The director may act as adviser for producers and distributors, if requested, and assist them in economical and efficient distribution of any product at fair prices.


58032. The director may gather and disseminate impartial information which concerns supply, demand, prevailing prices, and commercial movements, including common and cold storage of any product.


58033. The director may promote, assist, and encourage the organization and operation of cooperative and other associations and organizations for improving the relations and services among producers, distributors, and consumers of any product, and protect and conserve the interests of the producers and consignors of products.


58034. The director may foster and encourage cooperation between producers and distributors of any product, in the interest of the general public.

58035. The director may foster and encourage the standardizing, grading, inspection, labeling, handling, storage, and sale of any product.

58036. The director may act as a mediator or arbitrator, if invited by both parties, in any controversy or issue that may arise between producers and distributors of any product.


58037. The director may certify, for the protection of owners, buyers, or creditors, if so requested, warehouse receipts for any product, verifying quantities and qualities of the product, and charge for such service, fees which are sufficient to make the service self-supporting.


58038. The director may issue labels on request of the producer, packer, canner, or distributor, for any product for which labels have not otherwise been authorized by law, pursuant to such regulations as he deems necessary and charge for such labels such fees as in his judgment are proper.

58039. The director may act on behalf of the consumers of any product in conserving and protecting their interests in every practicable way.

58040. The director may improve, broaden, and extend in every practicable way, the distribution and sale of any product of this state throughout the markets of the world. This section shall become operative January 1, 1990.


58041. The director may promote in the interest of the producer, the distributor, and consumer, economical and efficient distribution and marketing of any product which is produced or processed within the state and to better effectuate the purposes of this article may attend necessary meetings and conferences in relation to any such product and may enter into cooperative agreements with the United States Department of Agriculture.


58042. The director may enter into any cooperative agreement with any department or agency of the federal government, or with any other state or agency of it, in order to effectuate the purposes of this division, Division 20 (commecing with Section 54001), or of any marketing law, including any marketing order, marketing program, regulation, or rule and regulation, which is issued under it, the responsibility for the administration and enforcement of which is with the director.


Article 3. Investigations

Ca Codes (fac:58061-58062) Food And Agricultural Code Section 58061-58062



58061. The director may conduct investigations, make surveys, and assemble facts which are pertinent to marketing and to the formulation, administration, or amendment of any marketing order, agreement, or program which is authorized by any law now in effect or which may hereafter be enacted.


58062. The director may make pertinent investigations which concern the aggregate amount of any product which is held in common or cold storage. In connection with any such investigation, the director may inspect only the pertinent books and records of common or cold storage warehouses for the purpose of determining and publishing aggregate amounts of any product which is held in storage, and may issue subpoenas for the attendance of witnesses and the production of pertinent books, papers, accounts, documents, and testimony in any such investigation.


Article 4. Collection And Dissemination Of Information

Ca Codes (fac:58091-58093) Food And Agricultural Code Section 58091-58093



58091. The director shall provide for the collection, analysis, and dissemination of statistics and other information which relates to the production and marketing of farm products, including processed farm products, which are produced in this state, such as, but not limited to, crop and livestock estimating and market news services.


58092. The director may establish such facilities and publish such bulletins and reports as are necessary and proper in keeping producers and handlers informed with regard to the supply, demand, and other economic conditions which affect the sale of any farm product which is produced in this state.


58093. The director shall cooperate with the Secretary of Agriculture, and with the appropriate office of the State of Oregon, to establish a market news service in the Klamath Basin.


Chapter 2. Cooperative Agreements

Article 1. General Provisions

Ca Codes (fac:58201-58203) Food And Agricultural Code Section 58201-58203



58201. It is the policy of this state to gain maximum benefits in behalf of agriculture from the results of research and service work performed by local, state, and federal governments through coordination and correlation of such activities.


58202. Since the Congress of the United States has recognized the value of marketing research, developmental, and service work through the enactment of agricultural marketing laws, including Public Law 733 (60 Stat. 966), and since Title II thereof embodies features of a nature akin to agricultural and regulatory service functions performed by the department, and inasmuch as financial cooperation in those phases of the marketing field is provided in Title II, it is hereby declared to be the purpose of this chapter to make possible a furtherance of intergovernmental cooperation in such marketing activities as will accrue advantageously to the agricultural industry of the state.

58203. The department is the proper state agency for such intergovernmental cooperation in those regulatory and service features contemplated by Public Law 733 (60 Stat. 966) and in relation to such other federal laws as may relate to the same and comparable activities.


Article 2. Powers Of The Director

Ca Codes (fac:58231-58233) Food And Agricultural Code Section 58231-58233



58231. The director may enter into cooperative agreements with the Secretary of Agriculture or the Administrator, Agricultural Marketing Act of 1946 (7 U.S.C. , Sec. 1621 et seq.), or both, to develop projects or programs which are designed to improve, expand, and correlate the work of both agencies in any of the following: (a) Federal-state cooperative crop reporting. (b) Federal-state cooperative market news services. (c) Seed and crop improvement. (d) Agricultural products certification. (e) Marketing orders and programs. (f) Milk and milk products stabilization. (g) Market enforcement. (h) Agricultural trade. (i) Agricultural commodities, grades, and standards. (j) Prepackaging of, and special containers for, shipment of any farm product.

58232. The director may also enter into agreements with federal administrative committees established by the Secretary of Agriculture of the United States pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937 (50 Stat. 246), with advisory boards and program committees which are established by the director pursuant to Chapters 1 (commencing with Section 58601) and 2 (commencing with Section 59501), Part 2 of this division, with producers' cooperative marketing associations and other producer or handler organizations to assist financially or otherwise in the development of such projects or programs and in putting the results of such projects or programs into operation within this state.


58233. The director may receive and pay out money for the purposes which are mentioned in this article.


Chapter 3. Void Contracts And Restraint Of Trade

Article 1. Void Contracts

Ca Codes (fac:58351-58353) Food And Agricultural Code Section 58351-58353



58351. Any contract which is made for the purpose of injuring competitors and destroying competition under which the seller of any agricultural product agrees to pay or allow any brokerage charge, rebate, discount, or other credit, except an allowance for variation in quality, condition, or quantity, or any other form of compensation or credit by a seller to a buyer, or to an agent, employee, subsidiary, or affiliate of a buyer that buys to sell at retail and which is not paid, given, or allowed in like circumstances to all other buyers or to the agents, employees, subsidiaries or affiliates of other buyers, whether the same is paid or allowed directly or indirectly, is hereby declared to be against public policy and void.


58352. Advertising allotments or discounts by a seller to a buyer for bona fide advertising expenditures, however, are not included within such transactions which are against public policy and void.


58353. It is a misdemeanor for any person to take any part in any transaction which is declared by this article to be against public policy and void whether as seller, buyer, buyer's agent, employee, or subsidiary.


Article 2. Destruction Of Foodstuffs In Restraint Of Trade 58381-58383

Ca Codes (fac:58381-58383) Food And Agricultural Code Section 58381-58383



58381. It is unlawful for any person to destroy, in restraint of trade, any fowl, animal, vegetable, aquacultural product, or other stuff, product, or article which is customary food, or which is proper for food, for human beings, and is in fit sanitary condition to be used as such.


58382. A person that receives any agricultural product, for sale on commission or for sale or exchange for the benefit of any other person, shall not destroy, abandon, discard as refuse, or dump, such product, without a permit in writing from the commissioner, county health officer, director, State Director of Health Services, or from some other official now or hereafter authorized by law to issue permits for the destruction of such product. Such permits, together with a detailed statement of every product which is destroyed pursuant to the permit, shall be kept on file by the person to whom they are issued.

58383. A copy of each such permit together with a copy of each such detailed statement shall, on the day such permit is issued, be served personally by the consignee, upon the consignor of the destroyed product, or in lieu of such personal service, shall on such day be served by the consignee on the consignor by depositing it in the post office, inclosed in a sealed envelope, postage fully prepaid, addressed to the consignor of the destroyed product at the consignor's address, if known, or if not known, then to the place where the shipment or consignment of such product originated.


Chapter 4. Assignment Of Dues

Ca Codes (fac:58451-58454) Food And Agricultural Code Section 58451-58454



58451. If any grower or producer of any farm product within this state voluntarily executes and causes to be delivered to a dealer or processor of farm products, either as a clause in a sales contract or other instrument in writing, a notice of assignment of dues to a nonprofit agricultural commodity organization directly representing the specific product involved, by which the processor or dealer is directed to deduct a sum from the price to be paid for such product and to pay the same over to such association as dues for the grower or producer, the processor or dealer shall deduct from the price to be paid for any farm product being sold by any such grower or producer to any such processor or dealer, the amount authorized and pay it over to the organization as assignee.


58452. No provision which is inserted in any contract that is prepared by a dealer or processor which makes an assignment of the dues described in Section 58451 ineffective is valid.


58453. An assignment of dues may not exceed 2 percent of the total value of the product which is delivered by the grower or producer to the dealer or processor.


58454. Payment need not be made under any assignment of dues pursuant to Section 58451 until the dealer or processor has available and under his control funds owing to the grower or producer that are sufficient in amount for making the payment of the dues involved. In the case of an annual product, such payment need not be made until the end of the product year.


Chapter 5. Donation Of Food

Ca Codes (fac:58501-58509) Food And Agricultural Code Section 58501-58509



58501. For purposes of this chapter: (a) "Agricultural product" means any fowl, animal, vegetable, or other stuff, product, or article which is customary food, or which is proper for food for human beings. (b) "Food bank" means a surplus food collection and distribution system operated and established to assist in bringing donated agricultural products to nonprofit charitable organizations and individuals for the purpose of reducing hunger and nutritional needs. (c) "Nonprofit charitable organization" means any organization which was organized and is operating for charitable purposes and meets the requirements set forth in Section 214 of the Revenue and Taxation Code.

58502. (a) Any person engaged in the business of processing, distributing, or selling any agricultural product may donate, free of charge, any product which is in a condition that it may be used as food for human beings, to a nonprofit charitable organization within the state. (b) To assist in accomplishing the purposes of this section, the director may divert agricultural products to organizations operating pursuant to this chapter.


58503. To assist in accomplishing the purposes of Section 58502, the board of supervisors of any county may establish, and publicize the availability of, a surplus food collection and distribution system, consisting of an inventory of storage facilities and refrigeration equipment that are available in the county for such purposes and a 24-hour information and food collection center for receiving and transmitting information as to where agricultural products are available or what organization desires or needs donated agricultural products, and for collecting, receiving, handling, storing, and distributing donated agricultural products. Any nonprofit charitable organization regularly needing agricultural products in its operations may be listed with such center for the purpose of being notified whenever such products are available.


58503.1. In order to qualify as a food bank, an organization shall meet all of the following minimum standards: (a) It shall have access to storage facilities and refrigeration equipment for the purpose of collecting, receiving, handling, storing, and distributing donated agricultural products. (b) It shall be incorporated as a nonprofit tax exempt organization and be eligible as a charitable organization under paragraph (3) of subsection (c) of Section 501 of Title 26 of the United States Code or shall be affiliated with such an organization. (c) It shall maintain records for the proper control of inventory. (d) It shall demonstrate the availability of adequate liability insurance to cover the activities conducted pursuant to this chapter. (e) It shall show local support through funding sources, letters of endorsement, and a board of directors reflective of the community and population to be served.


58503.2. To assist in accomplishing the purposes of this chapter and to maximize use of state surplus equipment, the Director of General Services may assist a food bank by locating and providing available state surplus buildings or equipment necessary for the operation of a food bank.


58503.3. Nothing in this chapter restricts or limits the operation of any other nonprofit organizations which are engaged in the distribution of agricultural products to nonprofit charitable organizations.

58503.4. Programs operated in accordance with this chapter shall complement, and not in any way lessen, assistance to families and individuals pursuant to the Food Stamp Act of 1977 (Chapter 51 (commencing with Section 2011) of Title 7 of the United States Code).


58504. The board of supervisors may provide for the inspection of such products by the county health officer, upon request of the donee, prior to delivery by the donor to determine whether such products may be used as food for human beings.


58505. Except for any injury resulting from gross negligence or willful act, no county or agency of a county established pursuant to this chapter and no person who donates any agricultural product shall be liable for any injury, including, but not limited to, injury resulting from the ingesting of such agricultural product, as a result of any act, or the omission of any act, in connection with donating any product pursuant to this chapter.


58506. Nothing in this chapter shall relieve any nonprofit charitable organization from any liability for any injury, including, but not limited to, injury resulting from the ingesting of such agricultural product, as a result of receiving, accepting, gathering, or removing any agricultural product donated under this chapter.


58507. (a) Any nonprofit charitable organization, that receives any agricultural product pursuant to this chapter, shall not sell or offer to sell any such agricultural product nor move or transfer such product out of the state, provided that any product that does not comply with the requirements of Division 17 (commencing with Section 42501) which is received by a charitable organization situated in this state may be shipped out of the state by such organization in accordance with regulations of the director to assure compliance with the purposes of this chapter. This subdivision does not apply to agricultural products which comply with all maturity, quality, size, standard pack, container and labeling requirements of Division 17 (commencing with Section 42501). (b) No person and no employee of a public agency shall sell, offer for sale, use, or consume any agricultural product donated or distributed pursuant to this chapter, except the recipient of an agricultural product provided as charitable assistance by a nonprofit charitable organization who shall use or consume the agricultural product provided. (c) Any violation of this section is punishable by a fine not exceeding one thousand dollars ($1,000).


58508. In operating an information and food collection center pursuant to this chapter, the board of supervisors shall provide for the screening of donees to assure that agricultural products which are distributed at public expense are not donated to organizations that are capable of purchasing them.


58509. (a) The Secretary of the State and Consumer Services Agency shall consult with four food bank representatives, two from the northern portion of the state, all of whom have been active members of a nationwide network of food banks for a minimum of two years immediately prior to appointment, and two from the southern portion of the state, all of whom have been active members of a nationwide network of food banks for a minimum of two years immediately prior to appointment, and two food industry representatives, one wholesaler and one manufacturer, all of whom shall be selected by the Governor and referred to as the Food Bank Advisory Committee. (b) Members of the committee who are not state employees shall be paid per diem for their actual expenses in attending committee meetings. (c) The committee shall do all of the following: (1) Advise the State and Consumer Services Agency in the establishment of new food banks. (2) Advise in the adequate and efficient distribution of surplus food commodities to all areas of the state.


Chapter 6. Foreign Marketing

Article 1. General Provisions

Ca Codes (fac:58551-58565) Food And Agricultural Code Section 58551-58565



58551. This act shall be known and may be cited as the N. Waters-Nielsen-Vuich-Berryhill Foreign Market Development Export Incentive Program for California Agriculture Act.


58552. (a) The Legislature finds and declares that it is the policy of this state to actively encourage and promote the sale of agricultural products of California in foreign markets and to assist farmers, processors, distributors, and exporters in meeting world market needs. (b) The Legislature further finds and declares, as being consistent with the Thurman Agricultural Policy Act (Chapter 6 (commencing with Section 801) of Part 1 of Division 1), both of the following: (1) The harvest from approximately one out of every four acres of California cropland is now sold in foreign markets, thus the state's agricultural economy is dependent upon international trade. (2) It is in the public's best interest to assist California agriculture in market development for agricultural products, and to expand world trade in these products to maximize growth in the state' s economy.


58553. The definitions in this article apply to this chapter.


58553.5. "Advisory committee" means the State Board of Food and Agriculture.

58554. "Agricultural commodities" means the products of California farms and ranches and items processed from these products, and includes forest products, aquacultural products, and fish and fish products produced in California and livestock fed in feedlots located in California.


58555. "Constraint" means a condition in a particular country or region which needs to be addressed in order to develop, expand, or maintain agricultural commodity exports.


58556. "Cooperator" means a private or nonprofit agricultural marketing organization; a nonprofit trade association, whose members market agricultural commodities, which has demonstrated expertise in the promotion of agricultural commodities that will coordinate a foreign market development program for its members; a federal marketing order board for California produced agricultural commodities; or a state marketing order board or commission organized pursuant to this code operating in California which is actively engaged in the marketing of agricultural commodities and has entered into a project agreement with the department to contribute cash, goods, or services to a foreign market development program.


58557. "Marketing" means the advertising, sale, and distribution of agricultural commodities, including private brands and trade names, in foreign markets.

58558. "Marketing plan" means the primary annual document prepared by cooperators and approved by the director which defines activities and budgets addressing constraints and the marketing of agricultural commodities.

58559. "Project agreement" means a contract between the department and a cooperator under which the cooperator agrees to conduct activities that both address constraints and encourage the development or maintenance of agricultural commodity export sales.


58560. "State funds" means the funds made available by the department under a project agreement.


58561. "Third party cooperator" means a foreign government or private organization which has entered into an agreement with a cooperator to join in the marketing of agricultural commodities.


58562. "Cooperator contributions" means contributions of money, personnel, materials, facilities, services, or supplies, expressed in terms of United States dollar value, that are furnished by the cooperator and any third party cooperator to help carry out the terms of a project agreement. Funds, services, or personnel provided by any state or federal agency, except funds from a state marketing order board, including those funds allocated to carry out commodity transportation offset programs, agricultural commission organized pursuant to this code, or a federal marketing order board for California-produc ed commodities, cannot be counted as a contribution.


58563. The department shall adopt regulations, including criteria to establish what constitutes cooperator contributions, necessary to effectuate this chapter. Whenever applicable, the regulations shall be consistent with similar regulations adopted by the Foreign Agriculture Service of the United States Department of Agriculture.


58564. The department shall, as one of its functions, provide assistance to persons from foreign countries who desire to purchase agricultural products produced in this state. That assistance shall include advice on establishing business contacts that will meet the needs of the prospective purchaser.


58565. The department shall direct a portion of any additional funding, in excess of the original appropriation for purposes of this act, to be used for all of the following purposes: (a) To conduct agricultural market research, including trends in California agricultural industry and trends in foreign agricultural markets. The agricultural market research shall be utilized to determine viable opportunities to export California agricultural products successfully to foreign markets. (b) To conduct personnel training, including the training of California foreign trade office personnel. (c) To perform existing duties of the department under this chapter.


Article 2. Project Agreements

Ca Codes (fac:58571-58580) Food And Agricultural Code Section 58571-58580



58571. (a) Project agreements may be entered into between the department and cooperators in order to address constraints and encourage the marketing of agricultural commodities in foreign countries. A project agreement may be limited to activities in one country, or may include activities in several countries. Project agreements shall include, but are not limited to, all of the following: (1) A description of the commodity, or commodities, for which a project agreement is being requested and a statement that California export availabilities are expected to be adequate during the life of the project. (2) A description of the applicant organization or firm. (3) A justification for participation in the foreign market development program. (4) A statement of proposed activities, including specific information on the activities to be conducted, the countries in which they will be undertaken, who will conduct or supervise them, and the expected results. (5) An estimate of the level of project funds required and an indication of the availability of industry resources to match project funds and personnel needed to carry out the proposed program. (b) Cooperator activities shall be described and budgeted in a marketing plan which becomes part of the project agreement. The marketing plan shall be separately submitted to the director who may approve or disapprove it. The marketing plan shall be reviewed annually at which time it may be revised by the cooperator or the department, or by both. (c) The marketing plan shall include all of the following: (1) The proposed expenditure of state funds and cooperator contributions. (2) Information on how much funding has been received from the Foreign Agriculture Service in the last five years and if those funds have been requested for the current year. (3) An identification of the constraints to expanding or maintaining California exports to each market area addressed by the plan. (4) A description of the proposed activities and the amount of funds, both state and cooperator, to be spent to overcome or mitigate the constraints for the commodity, or commodities, and the country, or countries, covered by the plan. (5) A report, if available, from local attach´┐Żs or the counselors regarding potential marketing activities in their countries. (d) A project agreement may not go into effect pursuant to this chapter without the director's approval of both the marketing plan and the agreement itself. (e) The cooperator shall administer and carry out the project agreement and shall permit the director or other state agencies to oversee and periodically inspect and investigate the administration of the project agreement.


58572. (a) The director may only approve a project agreement that appears to effectively contribute to the creation, expansion, or maintenance of markets abroad. Primary emphasis shall be on commercial markets. The director shall give preference to project agreements that demonstrate potential for establishing long-term benefits. Special consideration may also be given for any of the following: (1) Cooperators who are new to the market. (2) New product promotion. (3) Cooperators who are unable to obtain federal cooperator status. (4) Cooperators whose project proposals involve foreign markets not currently authorized pursuant to regulations adopted by the Foreign Agricultural Service. (b) Approvals and priorities shall be based on the following criteria: (1) Potential for creating, maintaining, or increasing consumption and exports of California agricultural commodities to other countries. (2) Long-range contribution to California agricultural exports. (3) Ability of the cooperator to provide a competent staff and other resources to ensure adequate development, supervision, and execution of project activities. (4) Willingness and ability of private organizations to back up promotional activities with aggressive selling and adequate supplies of commodities of the quality desired by foreign buyers. (5) Competition in the market. (6) Cultural, political, and economic obstacles which restrict imports of California agricultural commodities into the markets. (7) An assessment of the project costs compared to the benefits of expanding California agricultural exports.


58573. Project agreements may promote either a single commodity or a group of related commodities. Activities shall be aimed at increasing both consumer and commercial uses for agricultural commodities. Activities carried out by cooperators fall under the following three categories: (a) Technical assistance, which includes activities to address technical problems related to trade impediments and to the sale, movement, processing, marketing, or utilization of agricultural commodities. (b) Market development activities, which include activities involving foreign traders, importers, wholesalers, retailers, and foreign government officials who import, distribute, and market agricultural commodities. (c) Consumer promotion activities, which include activities to influence consumers by changing attitudes toward, or making them aware of the advantages of utilizing, California agricultural products.


58574. (a) State funds may be used to pay costs which are essential to, and clearly identifiable with, the carrying out of the activities specified in the marketing plan approved by the director. (b) The director shall adopt regulations similar to those developed by the Foreign Agriculture Service of the United States Department of Agriculture to proscribe the unauthorized use of state funds pursuant to this chapter. (c) Not more than five hundred thousand dollars ($500,000) shall be annually appropriated for this program's state administrative costs, as specified in the annual Budget Act. The funds appropriated for administrative costs pursuant to this subdivision shall be derived from the redistribution of the total amount of funds that are appropriated in the annual Budget Act by the Legislature to carry out this chapter. (d) Not more than 15 percent of the funds annually appropriated for this program shall be used for any one project agreement in any one year unless the director approves a higher level upon concurrence of a majority vote of the advisory committee authorized pursuant to Section 58576. (e) Cooperators shall provide an annual contribution which is equal to or greater than the amount of state funds utilized for each project agreement.


58575. Activities undertaken pursuant to this chapter shall be supplemental to, and not a substitute for, any market development activities undertaken by the federal government.


58577. (a) The director, the Director of General Services, and the advisory committee shall take necessary precautions to assure the confidentiality of the information which is contained in proposals for project agreements, market development plans, progress reports, documents in support of claims for funding under a project agreement, and other pertinent information submitted by individual marketing organizations. This information is exempt from the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). (b) Notwithstanding Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code, the advisory committee may hold a closed meeting if an applicant requests that the submitted information not be discussed in an open meeting and the committee determines that it is in the best interest of the program to conduct a closed meeting for that purpose.


58578. All project agreements entered into pursuant to this chapter, unless exempted in accordance with Section 10351 of the Public Contract Code, shall be submitted to the Director of General Services for approval. The director shall have 15 working days from the date of submittal to review and approve or disapprove.


58580. Nothing in this chapter precludes the director from separately funding project proposals coming from private or nonprofit agricultural marketing organizations, state marketing order boards, or commissions which are actively engaged in the marketing of the same commodities.


Article 3. Funding

Ca Codes (fac:58582) Food And Agricultural Code Section 58582



58582. (a) The California Agricultural Export Promotion Account is hereby created in the Department of Food and Agriculture Fund. Notwithstanding Section 13340 of the Government Code, the money in the account is continuously appropriated to the director to support export promotional and public relations activities conducted generally and pursuant to this chapter. (b) The account shall consist exclusively of funds received for the purpose of subdivision (a) from private industry sources, marketing order advisory boards established pursuant to Chapter 1 (commencing with Section 58601) of Part 2, and agricultural councils and agricultural commissions established pursuant to Division 22 (commencing with Section 64001). (c) Funds expended from the account shall be used exclusively for activities which directly benefit the industry sources from which the funds are derived.


Article 4. Reporting

Ca Codes (fac:58591) Food And Agricultural Code Section 58591



58591. On or before December 31 of every odd-numbered year, the director shall report to the chairpersons of the policy committees which have the appropriate subject matter jurisdiction in the Assembly and the Senate, as determined by the respective rules committees, on the status of this chapter. The report shall include an assessment of the act's ability to create, maintain, or increase exports of California agricultural commodities.


Part 2. General Marketing Laws

Chapter 1. California Marketing Act Of 1937

Article 1. Short Title And Definitions

Ca Codes (fac:58601-58624) Food And Agricultural Code Section 58601-58624



58601. This chapter shall be known as "The California Marketing Act of 1937."

58602. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


58603. "Administrative rules and regulations" means rules and regulations that are applicable to a particular marketing order or agreement which are issued and made effective by the director pursuant to Article 18 (commencing with Section 59161) of this chapter.


58604. "Advertising and sales promotion" means, in addition to its ordinarily accepted meaning, trade promotion and activities for the prevention, modification, or removal of trade barriers which restrict the free flow of any commodity to market and may include the presentation of facts to, and negotiations with, state, federal, or foreign governmental agencies on matters which affect the marketing of any commodity that is included in any marketing order or marketing agreement which is made effective pursuant to the provisions of this chapter.

58604.5. "Advertising and sales promotion" also means, in addition to its ordinary accepted meaning, activities for the modification or removal of trade barriers that restrict the free flow of a commodity to market, including negotiation with federal and foreign governments, and the allowance of reimbursement payments to offset commodity transportation or other costs to selected domestic and foreign markets. Domestic f.o.b. selling price shall not be used as a factor in determining qualifications for reimbursement payments unless the director determines that there is no feasible alternative for establishing these qualifications.


58605. "Commodity," except as otherwise provided in Section 58747, means any agricultural, aquacultural, horticultural (including floricultural), vermicultural, viticultural (including wine) or vegetable product which is produced in this state, any fish or seafood, or any class, variety, or utilization of that product, either in its natural state or as processed by a processor or as processed by a producer for the purpose of marketing that product. It includes bees, honey, and milk as defined in Section 32511. It does not, however, include timber or any timber product. The Legislature hereby declares that the addition of the phrase " (including wine)" in this section is made for the purpose of clarification only and shall not be construed or interpreted as an indication that wine is not a commodity as originally defined by Chapter 404, Statutes of 1937, and as heretofore amended. The Legislature further declares that at the time of the original enactment of the definition of the term "commodity" and at all times since, it intended that wine be, and wine was, included within the definition of the term. Every marketing order issued, signed, or declared effective prior to July 15, 1941, and every act of the director prior to such date which was performed pursuant to the provisions of this chapter and consistent with the declarations which are contained in this paragraph are hereby confirmed, ratified, and validated.


58606. "Directly affecting" or "directly affected" is synonymous with "directly regulating" and "directly regulated," and means the direct application of regulations upon any person, including the requirement to pay assessments which are levied pursuant to any marketing order or marketing agreement which is issued by the director pursuant to this chapter. A requirement upon handlers to deduct and remit to the director assessments that are owed by producers under a marketing order or marketing agreement which is applicable upon producers only, does not, however, directly regulate such handlers.


58607. "Distributing" means engaging in the business of a distributor as defined in Section 58608.


58608. "Distributor" means any person that engages in the operation of selling, marketing, or distributing, in intrastate commerce any commodity which he has produced or purchased or acquired from a producer or which he is marketing on behalf of a producer, whether as owner, agent, employee, broker, or otherwise. It does not, however, include a retailer, except a retailer that purchases or acquires from, or handles on behalf of any producer, any commodity which was not previously subjected to regulation by the marketing order which covers such commodity.


58608.1. "Educational program," unless otherwise defined in this chapter, means a program established by the director pursuant to this chapter that provides for the planning and implementation of activities designed to inform the general public of the processes of producing agricultural commodities and designed to foster cooperation and understanding between urban and rural sectors of society.


58609. "Fish" means every form of fish, either salt water or fresh water fish, which is used for human consumption, except fish for canning, retorting, reduction, or use in an extraction process.


58610. "General rules and regulations" means rules and regulations, which are applicable to all marketing orders and marketing agreements and are issued and made effective by the director without prior notice and public hearing, to provide uniform methods and procedures to facilitate the administration and enforcement of all such marketing orders and marketing agreements. Such uniform methods and procedures may include but shall not be limited to any of the following: (a) Methods and procedures which pertain to the receiving, depositing, and expenditure of moneys which are received from assessments collected pursuant to this chapter. (b) The preparation, handling, and payment of claim schedules for the payment of bills, salaries, and other obligations. (c) Establishing the maximum rates to be allowed for travel expenses of board members and board employees. (d) The preparation, verification, and filing of evidence which relates to violations of marketing orders, agreements, and marketing regulations which are authorized pursuant to this chapter and other fiscal and administrative activities which the director finds are necessary to obtain reasonable uniformity, efficiency, and economy in the administration and enforcement of such marketing orders and agreements of this chapter.


58611. "Handler," except with respect to fish and seafood, means any person that is engaged within this state as a distributor in the business of distributing any commodity in intrastate commerce, or any person that is engaged as a processor in the business of processing any commodity. With respect to fish and seafood, it means any person that is engaged in the business of the distribution or sale of fish or seafood to restaurants, or to retailers for resale to consumers, or to any other persons or concerns for resale or for sale direct to consumers.

58612. "Handling" means engaging in the business of a handler as defined in Section 58611.


58613. "Major amendments" mean amendments to any marketing order or agreement which are made pursuant to Article 13 (commencing with Section 59021) of this chapter. It does not include a seasonal marketing regulation.

58614. "Marketed by producers" means producer marketing, as defined by Section 58621.


58615. "Marketing order" means an order which is issued by the director, pursuant to this chapter, which prescribes rules and regulations that govern the processing, distributing, or handling in any manner of any commodity within this state during any specified period.


58616. "Minor amendments" are amendments to any marketing order or agreement which are made effective by the director upon recommendation of the advisory board which is concerned, as specified in Article 14 (commencing with Section 59051) of this chapter, with or without prior notice and public hearing, which change or modify the language or the provisions of any such marketing order or agreement for the purpose of clarification, or the removal of conflicts of meaning without involving changes or modifications of language, or provisions which are classed as major amendments.


58617. "Person" means an individual, firm, corporation, association, or any other business unit, and, for the purposes of this chapter, includes any state agency which engages in any of the commercial activities which are regulated pursuant to the provisions of this chapter.


58618. "Processing" means engaging in the business of a processor as defined in Section 58619.


58619. "Processor" means any person that is engaged within this state in the operation of receiving, grading, packing, canning, fermenting, distilling, extracting, preserving, grinding, crushing, or changing the form of any commodity for the purpose of preparing it for market or of marketing such commodity, or any other activities which are performed for the purpose of preparing it for market or of marketing such commodity. It does not, however, include a person that is engaged in manufacturing from any commodity, so changed in form, another and different product.


58620. "Producer" means any person that is engaged within this state in the business of producing, or causing to be produced for market, any commodity.

58621. "Producer marketing" means any or all operations which are performed by any producer in preparing for market. It includes selling, delivering, or disposing of for commercial purposes, to any handler any commodity which the producer has produced.


58622. "Retailer" means any person that purchases or acquires any commodity for resale at retail to the general public for consumption off the premises. Such person is also included within the definition of distributor, to the extent that such person engages in the business of a distributor as defined in Section 58607.


58623. "Seafood" means shellfish and every other form of animal or plant life which is taken from fresh or salt water and used for human consumption, except seafood which is used for canning, retorting, reduction, or used in an extraction process.


58624. "Seasonal marketing regulations" mean marketing regulations that are applicable to a particular marketing order or agreement which are made effective by the director pursuant to Article 19 (commencing with Section 59171) of this chapter.


Article 2. General Provisions

Ca Codes (fac:58651-58661) Food And Agricultural Code Section 58651-58661



58651. It is hereby declared that the marketing of commodities in this state in excess of reasonable and normal market demands therefor; disorderly marketing of such commodities; improper preparation for market and lack of uniform grading and classification of commodities; unfair methods of competition in the marketing of commodities; and the inability of individual producers to maintain present markets or to develop new or larger markets for California-grown commodities, results in an unreasonable and unnecessary economic waste of the agricultural wealth of this state. Such conditions and the accompanying waste jeopardize the future continued production of adequate supplies of food, fiber, and other products of the farm and of the soil for the people of this and other states, and prevent producers from obtaining a fair return from their labor, their farms, and the commodities which they produce. As a consequence, the purchasing power of such producers has been in the past, and may continue to be in the future, unless such conditions are remedied, low in relation to that of persons engaged in other gainful occupations within the state. Producers are thereby prevented from maintaining a proper standard of living and from contributing their fair share to the support of the necessary governmental and educational functions, thus tending to increase unfairly the tax burdens of other citizens of this state.


58652. These conditions vitally concern the health, peace, safety, and general welfare of the people of this state. It is hereby declared to be the policy of this state to aid producers in preventing economic waste in the marketing of their commodities, to develop more efficient and equitable methods in the marketing of commodities and to aid producers in restoring and maintaining their purchasing power at a more adequate, equitable and reasonable level.


58653. The marketing of 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.


58654. The purposes of this chapter are to do the following: (a) Enable producers of this state, with the aid of the state, to correlate more effectively the marketing of their commodities with market demands for those commodities. (b) Establish orderly marketing of commodities. (c) Provide for uniform grading and proper preparation of commodities for market. (d) Provide methods and means for the maintenance of present markets, or for the development of new or larger markets, for commodities that are grown within this state or for the prevention, modification, or elimination of trade barriers that obstruct the free flow of those commodities to market. (e) Eliminate or reduce economic waste in the marketing of commodities. (f) Restore and maintain adequate purchasing power for the producers of this state. (g) Inform the general public of the processes of producing agricultural commodities. (h) Foster cooperation and understanding between urban and rural sectors of society.

58655. In any civil or criminal action or proceeding for violation of any of the following, proof that the act which is complained of was done in compliance with the provisions of this chapter or a marketing order which is issued pursuant to, and in furtherance of the purposes and provisions of this chapter, is a complete defense to such action or proceeding: (a) The Cartwright Act, Chapter 2 (commencing with Section 16700), Part 2, Division 7 of the Business and Professions Code. (b) The Unfair Practices Act, Chapter 4 (commencing with Section 17000), Part 2, Division 7 of the Business and Professions Code. (c) The Fair Trade Act, Chapter 3 (commencing with Section 16900), Part 2, Division 7 of the Business and Professions Code. (d) Any rule of statutory or common law against monopolies or combinations in restraint of trade.


58657. The provisions of this chapter regarding the marketing of commodities are applicable to fish and seafood and persons that handle, process, or distribute fish and seafood. Any marketing order or agreement relating to fish and seafood shall affect handlers only. It may include only those provisions which are authorized by Sections 58889 and 58892, and any other provisions of this chapter necessary to carry out the purposes of Sections 58889 and 58892. Such provisions shall apply to all fish and seafood whether or not they are a product of this state.


58658. If any section, sentence, clause, or part of this chapter is for any reason held to be unconstitutional, such decision shall not affect the remaining portions of this chapter. The Legislature hereby declares that it would have passed this chapter and each section, sentence, clause, and part of this chapter despite the fact that one or more sections, sentences, clauses, or parts of this chapter is declared unconstitutional.


58659. The suspension, amendment, or termination of any marketing order or marketing agreement does not suspend or terminate any cause of action which has accrued under it, but such cause of action shall survive and exist the same as if such marketing order or agreement had not been suspended, amended, or terminated.


58660. It is hereby declared, as a matter of legislative determination, that the amendments of the statutory predecessor of Sections 58651 to 58653, inclusive, (former Section 1300.10) which were made at the 1959 General Session are enacted in the exercise of the power of this state for the purpose of protecting and furthering the public health and welfare.


58661. The term volume, or quantity, as used in this chapter, except Article 9 (commencing with Section 58881), may be in terms of gross dollar value if the director finds that such volume or quantity cannot be readily ascertained otherwise, or that gross dollar value is a more equitable measure of the commodity involved.



Article 3. Exceptions

Ca Codes (fac:58681-58682) Food And Agricultural Code Section 58681-58682



58681. This chapter does not apply to any order, rule, or regulation which is issued, or is issuable, by the Public Utilities Commission or the Interstate Commerce Commission with respect to the operation of common carriers.

58682. This chapter is not applicable to any retailer of any commodity except to the extent that such retailer also engages in the production, processing or distribution of any commodity.


Article 4. Administration

Ca Codes (fac:58711-58714) Food And Agricultural Code Section 58711-58714



58711. The director shall administer and enforce this chapter and may exercise any or all of the administrative powers which are conferred by Sections 11180 to 11191, inclusive, of the Government Code upon the head of a department of the state.


58712. In order to effectuate the declared purposes of this chapter, the director may issue, administer, and enforce the provisions of any marketing order issued pursuant to this chapter which regulates producer marketing or the handling of any commodity within this state.


58713. The director may do all of the following: (a) Confer and cooperate with the legally constituted authorities of other states and of the United States, for the purpose of obtaining uniformity in the administration of federal and state marketing regulations, licenses, or orders. (b) Conduct joint hearings and issue joint or concurrent marketing orders for the purposes and within the standards which are set forth in this chapter. (c) Exercise any administrative authority which is prescribed by this chapter to effect such uniformity of administration and regulation.


58714. The director may purchase general liability insurance for all marketing orders subject to the provisions of this chapter in an amount he or she determines as necessary. The cost of the insurance shall be paid by the affected marketing orders on a pro rata basis. The insurance policy shall name the director, in his or her official capacity, and all persons, collectively, that are subject to the marketing order as insured parties for claims made against the marketing order in its advisory capacity to the director or against the director regarding the activities of a marketing order. The director, after consultation with the Attorney General, may refer claims to the insurance carrier for appropriate action. In the alternative, the director may require that claims be handled in the manner otherwise specified in this chapter.


Article 5. Marketing Orders And Agreements

Ca Codes (fac:58741-58750) Food And Agricultural Code Section 58741-58750



58741. Subject to the provisions, restrictions, and limitations which are imposed in this chapter, the director may issue marketing orders which regulate producer marketing, the processing, distributing, or handling in any manner of any commodity by any and all persons that are engaged in such producer marketing, processing, distributing, or handling of such commodity within this state.


58741.1. Subject to Section 58993.1, the director may establish an educational program, as defined in Section 58608.1, directly affecting producers of all commodities produced in this state. If established, the educational program shall be created with all the powers, rights, and duties set forth in this chapter, except that it shall not be subject to Section 58749 or 58993.


58742. The director may also, subject to the restriction and limitations which are contained in Article 7 (commencing with Section 58811) of this chapter, issue marketing orders which regulate the handling, processing, preparation for marketing, or marketing of any or all portions of any commodity which is produced in this state for which marketing regulatory powers are not being exercised by the federal government pursuant to the Marketing Agreement Act of 1937 (50 Stat. 249).


58743. If the director finds that it tends to effectuate the declared purposes of this chapter within the standards which are prescribed in this chapter, the director may issue a marketing order, applicable to the marketing, within this state, of any commodity, which contains like terms, provisions, methods, and procedures as any license or order that regulates the marketing of such commodity in interstate or foreign commerce which is issued by the Secretary of Agriculture of the United States pursuant to the provisions of any law or laws of the United States. In selecting the members of any board or other advisory agency under such marketing order, the director shall, insofar as practicable, utilize the same persons as those serving in a similar capacity under such federal license or order, so as to avoid duplicating or conflicting personnel. Any board, agency, or committee so appointed by the director shall be responsible to the director for the performance of such of their duties as relate to the administration of any such marketing order which is issued by the director pursuant to this section.


58744. Any marketing order which is issued by the director pursuant to this chapter may be limited in its application by prescribing the marketing area or portion of the state in which it shall be effective. A marketing order shall not, however, be issued by the director unless it embraces all persons of a like class that are engaged in a specific and distinctive agricultural industry or trade within this state.


58745. In order to effectuate the declared policy of this chapter, the director may also, after due notice and opportunity for hearing, enter into marketing agreements with processors, distributors, producers, and others that are engaged in the handling of any commodity, which regulate the preparation for market and handling of such commodity. Such marketing agreements are binding upon the signatories to the agreements exclusively.


58746. The purposes and provisions of the chapter which relate to marketing orders are applicable to marketing agreements except as follows: (a) Section 58779, which requires the preparation of an official list of the names and addresses of all producers and the volume of the commodity which was produced or marketed by all the producers in the preceding marketing season and a list of the names and addresses of all handlers and the volume of the commodity which was handled by all the handlers, during the preceding marketing season, is not applicable to marketing agreements. (b) Sections 58991 to 58998, inclusive, and Sections 59082 to 59086, inclusive, are not applicable to marketing agreements. Prior to the issuance of any marketing agreement, or amendment to it, the director shall, however, find, in addition to the findings which are set forth in Section 58813, that the marketing agreement, or any amendment to it, has been assented to by a sufficient number of signatories that handle a sufficient volume of the commodity which is affected to accomplish the objectives of the agreement or amendment and provide sufficient moneys from assessments levied to defray the necessary expenses of formulation, issuance, administration, and enforcement. (c) Section 59233 is not applicable to marketing agreements.


58747. Notwithstanding the provisions of Section 58605, the director may issue and make effective marketing orders or marketing agreements that affect handlers only which include only the provisions which are authorized in Sections 58889, 58890, 58892, 58893, and 58894, or any of such provisions, but no others, as may be applicable to the commodity that is regulated which is handled within this state, without regard to whether or not such commodity is produced within this state.


58748. If producers or handlers of any commodity which is regulated by a marketing order or marketing agreement that is issued by the director pursuant to the provisions of this chapter are required to comply with minimum quality, condition, size, or maturity regulations, no person may, except as otherwise provided in such order or agreement, process, distribute, or otherwise handle any of such commodity from any source, whether produced within or without this state, which commodity does not meet such minimum requirements applicable upon producers or handlers of such commodity in this state. Such regulations do not, however, apply to any commodity which has been produced outside of this state and is in transit on the effective date of the regulations.


58749. The director may issue and make effective a marketing order or marketing agreement which applies to two or more commodities. The producers or handlers of each commodity encompassed by such marketing order or agreement shall have all rights and privileges contained in this chapter as though such producers or handlers were directly affected by a marketing order or agreement regulating only a single commodity. If the producers or handlers of one commodity who are directly affected by a marketing order or agreement which applies to two or more commodities act to enjoin, amend, suspend or terminate the provisions thereof to such commodity, the order or agreement shall not be enjoined, amended, suspended or terminated with respect to any other commodity regulated by such order or agreement unless the director finds such injunction, amendment, suspension, or termination respecting one commodity makes continuance of the order or agreement no longer feasible or it fails to attain the objectives of this chapter. Unless the director makes findings to the contrary, a marketing order or agreement applicable to more than one commodity is deemed to be severable with respect to each commodity encompassed by it and also severable as to each sentence, clause, or part as it applies to each commodity. There shall be a clear and concise definition or identification of each commodity regulated by such multiple commodity marketing order or agreement.


58750. (a) There is within the Department of Food and Agriculture a public and private collaboration known as the "Buy California Program." The purposes of the program are to encourage consumer nutritional and food awareness and to foster purchases of high-quality California agricultural products. (b) Pursuant to Section 58749, and in accordance with the provisions of this chapter, the secretary may issue and make effective a marketing agreement and be advised by those elements of the production agriculture and food processing industry willing to participate in the program via co-funding or in-kind contributions in a manner defined under the agreement. (c) The department shall report to the Legislature on January 1, 2002, and each successive January 1 while this section is operative, regarding its expenditures, progress, and ongoing priorities with this program. (d) The Buy California Account is created in the Food and Agriculture Fund and, notwithstanding Section 13340 of the Government Code, is continuously appropriated for purposes of this section.


Article 6. Notice, Reports, And Hearings

Ca Codes (fac:58771-58788) Food And Agricultural Code Section 58771-58788



58771. If the director has reason to believe that the issuance of a marketing order, or amendments to an existing marketing order, will tend to effectuate the declared policy of this chapter with respect to any commodity, he shall, either upon his own motion or upon application of any producer or handler of such commodity, or any organization of such persons, give notice of not less than 30 days for a public hearing upon a proposed marketing order or such amendments to such existing marketing order. In an emergency situation requiring urgent action, the director may, upon citing the nature of the emergency in the notice, give less than 30 days' notice.


58773. The director shall also mail a copy of such notice of hearing and a copy of such proposed marketing order, or proposed amendments, to every producer or handler of such commodity whose name and address appears upon lists of such persons, on file in the department that may be directly affected by the provisions of such proposed marketing order or such proposed amendments.


58774. The notice of hearing shall set forth all of the following: (a) The date and place of the hearing. (b) The commodity and the area which are covered by the proposed marketing order or the proposed amendments. (c) A statement that the director will receive, at the hearing, testimony and evidence as to other necessary and relevant matters which are set forth in Article 7 (commencing with Section 58811).


58775. To provide the director with accurate and reliable information, if that information is not then on file in the department, regarding the persons that may be directly affected by the provisions of any proposed marketing order for any commodity, the director shall, if he or she has reason to believe that the issuance of a marketing order will tend to effectuate the declared policy of this chapter, or upon receipt of a written application for a hearing pursuant to Section 58771, notify all handlers of the commodity to file with the director, within 30 days from the last date of the notice, a report, properly certified, which shows all of the following: (a) The correct name and address of such handler. (b) The quantities of the commodity that are affected by the proposed marketing order which were handled by the handler in the marketing season next preceding the filing of the report or the current marketing season if the harvest and delivery of the commodity to handlers is complete. (c) The correct name and address of every producer of the commodity, that may be directly affected by the proposed marketing order, from whom the handler received the commodity in the marketing season next preceding the filing of the report or the current marketing season if the harvest and delivery of the commodity to handlers is complete. (d) The director may also require all handlers to report quantities of the commodity which were received by the handler from each producer in the marketing season next preceding the filing of the report or the current marketing season if the harvest and delivery of the commodity to handlers is complete.


58777. The director shall mail a copy of such notice to file such report to every handler of such commodity whose name and address appears upon the lists on file in the department, of handlers that may be directly affected by the provisions of such proposed marketing order.


58778. Each handler of such commodity that may be directly affected by the provisions of such proposed marketing order shall file such verified report with the director within the time which is specified in Section 58775. Failure or refusal of any handler to file such report within the time which is specified does not invalidate any proceeding which is taken or marketing order which is issued pursuant to this chapter. The director shall proceed upon the basis of such information and reports as may otherwise be available.


58779. From the reports which are filed and the information which is received or available to the director, including any proper corrections, the director shall prepare a list of the names and addresses of the producers and the volume of such commodity which was produced or marketed by all such producers and a list of the names and addresses of such handlers and the volume of such commodity which was handled by all such handlers, that are directly affected by the provisions of such proposed marketing order, or amendments to it, in the preceding marketing season. Such lists shall constitute complete and conclusive lists for use in any finding made by the director pursuant to the provisions of Article 12 (commencing with Section 58991) of this chapter and such findings are conclusive.


58780. In the preparation of the list of producers or handlers to be used in the formulation or amendment of any marketing order or marketing agreement, the director may omit from such list the name of any person that makes only casual sales of the product which is involved, or whose sales or marketings of such product are incidental to urban home ownership, or the result of activity other than a commercial farm or business venture. Any person that is excluded from such lists is not subject to the provisions, including the payment of any assessments, which are applicable upon producers, or handlers, as prescribed in any such marketing order or marketing agreement.


58781. The information which is contained in the individual reports of handlers which are filed with the director pursuant to this article shall not be made public by the director in such form but the information which is contained in such reports may be prepared in combined form for use by the director, his agents, or other interested persons, in the formulation, administration, and enforcement of a marketing order, or may be made available pursuant to court order. Such information shall not be made available to anyone for private purposes.

58782. The hearing on a proposed marketing order or proposed amendments shall be public and all testimony shall be received under oath. A full and complete record of all proceedings at such hearing shall be made and maintained on file in the office of the director.


58783. At the hearing, the director shall receive, in addition to other necessary or relevant matters, evidence upon the matters which are set forth in Article 7 (commencing with Section 58811).


58784. At any public hearing which is held in connection with the formulation or amendment of a marketing order or marketing agreement, the director shall present testimony with respect to the procedure used to develop the official producer or handler list, as the case may be.

58785. At each public hearing upon a marketing order or a major amendment to it, the director shall receive evidence relative to the period of time which may be necessarily required for the filing, checking, and tabulating of written assents which are prescribed in Article 12 (commencing with Section 58991) of this chapter. He shall also, at the conclusion of each such hearing, make a finding, based upon the evidence, with respect to the period of time which may be reasonably and necessarily required for such filing, checking, and tabulating. On the basis of such finding, the director shall fix and limit the period during which such assents may be received by him and shall be the period at the time of mailing of assent forms to producers and handlers that are affected. If, however, the director finds that an extension of such period is reasonably warranted, he may extend such period for receiving assents.


58786. At a public hearing which is held to consider a proposed marketing order or major amendments to an existing marketing order, the director shall also receive evidence from which the director can determine whether the assent, approval, or favor of the producers, handlers, or processors affected shall be determined by written assents or by referendum as prescribed in Article 12 (commencing with Section 58991).


58787. Upon the conclusion of the hearing, the director shall make a finding which is based upon the evidence received, whether assent, approval, or favor shall be determined by written assents or by referendum.

58788. If the director finds that a referendum shall be had, the director shall direct that a referendum be held in accordance with Sections 58991 to 58998, inclusive. If a referendum is conducted, the director is not required, with respect to the assent, approval, or favor, to make a finding pursuant to Section 58785 concerning, or to fix and limit, the period during which assents may be received by the director.


Article 7. Findings

Ca Codes (fac:58811-58814) Food And Agricultural Code Section 58811-58814



58811. After the notice and hearing which are required by Article 6 (commencing with Section 58771) of this chapter, and before issuing a marketing order or amendments to it for the written assent of producers or handlers which contain provisions for correlating the supply of the commodity which is affected with market demands for it by means of restrictions upon the total quantity of such commodity, or restrictions upon the total quantity of any grade, size, quality, or condition of it, which restrictions have the effect of limiting the total quantity of such commodity which may be marketed during any marketing season, if the restricted portion of such commodity might otherwise be marketed by producers in compliance with other laws of this state or of the United States or in compliance with established commercial practice during such marketing season, the director shall make all of the following findings with respect to such marketing order or amendments to it: (a) Such provisions are necessary in order to effect a reasonable correlation of the supply of the commodity which is affected with market demands for the commodity and that such marketing order or amendments to it will tend to reestablish or maintain such level of prices for such commodity as will provide a purchasing power for such commodity which is adequate to maintain in the business of producing such commodity such number of producers as is required to provide such supply of the quantities and qualities of such commodity as is necessary to fulfill the normal requirements of consumers of the commodity. (b) Such marketing order or amendments to it will tend to approach such equality of purchasing power at as rapid a rate as is feasible in view of the market demand for such commodity. (c) Such marketing order or amendments to it are in conformity with the provisions of this chapter and within the applicable limitations and restrictions which are set forth in this chapter and will tend to effectuate the declared purposes and policies of this chapter. (d) Such marketing order or amendments to it will protect the interests of consumers of such commodity, by exercising the powers of this chapter only to such extent as is necessary to establish the equality of purchasing power which is described in subdivision (a) of this section.


58812. In making the findings with respect to any of the objectives which are set forth in Section 58811, the director shall, if any or all of the following economic factors are relevant, take into consideration any and all facts which are available to him with respect to all of the following: (a) The quantity of such commodity which is available for distribution. (b) The quantity of such commodity which is normally required by consumers. (c) The cost of producing such commodity as determined by available statistics and surveys. (d) The purchasing power of consumers as indicated by reports and indices. (e) The level of prices of other commodities which compete with, or are utilized as substitutes for, such commodity. (f) The level of prices of other commodities, services, and articles which farmers commonly buy.


58813. If the marketing order or amendments to it contain provisions only for the purpose of regulating the flow of the commodity, or any grade, size, or condition of the commodity, to market without directly restricting the total quantity which may be marketed during the marketing season, or if the marketing order or amendments to it contain provisions only for the establishment of grade, size, quality, or condition specifications, or for uniform grading and inspection, or the elimination of unfair trade practices, or provisions for advertising or sales promotion, or for research, the director may issue such marketing order or amendments to it if he makes all of the following findings: (a) That such marketing order or amendments to it are reasonably calculated to attain the objectives which are sought in such marketing order. (b) That such marketing order or amendments to it are in conformity with the provisions of this chapter and within the applicable limitations and restrictions which are set forth in this chapter and will tend to effectuate the declared purposes and policies of this chapter. (c) That the interests of consumers of such commodity are protected in that the powers of this chapter are being exercised only to the extent which is necessary to attain such objectives. In making any findings pursuant to this section, the director shall base his findings upon the facts, testimony, and evidence which is received at the public hearing together with any other relevant facts which are available to him from official publications or institutions of recognized standing.


58814. Any marketing order in effect on August 27, 1945, which was duly issued by the director pursuant to this chapter prior to May 28, 1945, and in effect on such date, shall continue in full force and effect and shall be conclusively presumed to be in conformity with the provisions of this article as amended.


Article 8. Advisory Boards And Committees

Ca Codes (fac:58841-58852) Food And Agricultural Code Section 58841-58852



58841. Any marketing order which is issued pursuant to this chapter shall provide for the establishment of an advisory board to assist the director in the administration of any marketing order. The members of the advisory board shall be appointed by the director and may hold office at the pleasure of the director. A marketing order may, however, provide for the appointment of members from nominations made by the producers and handlers and may also provide for the method of selecting such nominees.


58842. If the marketing order affects directly only producers of a particular commodity, the members of the advisory board shall be producers. If the marketing order affects directly only handlers of a particular commodity, the members of the advisory board shall be handlers. If the marketing order affects directly both producers and handlers of a particular commodity the advisory board shall be composed of both producers and handlers. The number of producers or handlers upon any such advisory board shall be of such number of producers or handlers as the director finds is necessary to assist properly in the administration of such order.


58842.5. Any raisin marketing order or agreement involving producers operating under this chapter shall provide for, and the director shall appoint, a person to represent cooperative bargaining associations organized pursuant to Chapter 2 (commencing with Section 54401) of Division 20 from nominations made by the associations to the advisory board. The person so appointed shall be a voting member of the advisory board.


58843. Upon the recommendation of the advisory board, the director may appoint one person who is neither a producer nor a handler to represent the department or the public generally.


58844. A member of an advisory board is entitled to actual expenses which are incurred while engaged in performing duties that are authorized by this chapter and, with the approval of the advisory board concerned, may receive compensation not to exceed fifty dollars ($50) per day for each day spent in actual attendance at, or traveling to and from, meetings of the board or on special assignment for the board.


58845. The director may authorize an advisory board to do all of the following: (a) Enter into contracts or agreements. (b) Employ necessary personnel, including attorneys engaged in the private practice of the law, and fix their compensation and terms of employment. (c) Incur such expenses, to be paid from moneys which are collected as provided in Article 10 (commencing with Section 58921), as the director may deem necessary and proper to enable the advisory board properly to perform its duties as authorized by this chapter. (d) Receive, invest, and disburse funds pursuant to the provisions of Article 10 (commencing with Section 58921).


58846. The duties of an advisory board are administrative only and any such board may do only the following: (a) Subject to the approval of the director, administer the marketing order. (b) Recommend to the director administrative rules and regulations which relate to the marketing order. (c) Receive and report to the director complaints of violations of the marketing order. (d) Recommend to the director amendments to the marketing order. (e) Assist the director in the assessment of members of the industry and in the collection of funds to cover expenses incurred by the director in the administration of the marketing order. (f) Assist the director in the collection of such necessary information and data as the director may deem necessary to the proper administration of this chapter.


58846.5. Each advisory board shall, annually, report to the members of the industry who are subject to its marketing order on the activities and program, including, but not limited to, the income and expenses, the fund balance, and a report of progress in achieving program goals, of such a marketing order, as prescribed by the director.


58847. The members or alternate members of any advisory board, including employees of the advisory board, are not responsible individually in any way whatsoever to any person for liability on any contract or agreement of the advisory board.


58848. In addition to the advisory board, one or more special committees or subcommittees may be established to assist the advisory board in carrying out its duties and functions. Upon approval of the director, each advisory board may establish committees or subcommittees to carry out assigned duties and functions and designate the members or alternate members of the advisory board to serve upon such committees.


58849. If the marketing order so authorizes, or upon the recommendation of the advisory board, the director may authorize the establishment of special committees or subcommittees of persons who are not members or alternate members of the board to perform specific duties and functions. The members and alternate members of any such special committee or subcommittee shall be appointed by the director.


58850. An advisory board may at any time invite any persons to their meetings to serve in an advisory capacity and the director may, if requested by the advisory board, pay necessary expenses to such persons at rates not to exceed those granted to advisory board members.


58851. Any action of any committee, special committee, or subcommittee of the board is subject to final approval by the advisory board. Members and alternate members of any committee, special committee, or subcommittee, whether by appointment or approval of the director, are entitled to reimbursement for actual expenses which are incurred while acting in their authorized capacities.

58852. It is hereby declared, as a matter of legislative determination, that the producers, or handlers, or both producers and handlers, appointed to any advisory board pursuant to this article are intended to represent and further the interest of a particular agricultural industry concerned, and that such representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are appointed to such advisory boards, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.


Article 9. Terms Of Marketing Orders

Ca Codes (fac:58881-58897) Food And Agricultural Code Section 58881-58897



58881. Except as otherwise provided in Sections 58657 and 58747, any marketing order which is issued by the director pursuant to this chapter may contain any or all of the provisions which are prescribed by this article for regulating, or providing methods for regulating producer marketing, or the handling, or any of the operations of processing or distributing by handlers, of any commodity within the state, but no others.


58882. A marketing order may contain provisions for determining the existence and extent of the surplus of any commodity, or of any grade, size, or quality of it, and providing for the control and disposition of such surplus, and for equalizing the burden of such surplus elimination or control among the producers, processors, distributors, or other handlers that are affected. Notwithstanding any other appropriate means of equalizing the burden of surplus control and its elimination as provided in this chapter, provision may be made for the creation of a stabilization fund to be used for purchasing or otherwise acquiring any portion of the surplus of any commodity either in fresh or processed form, except when processed in hermetically sealed containers, and for the diversion of such surplus quantity of such commodity which is so acquired into noncompetitive or byproducts uses or for disposing of such surplus in noncommercial channels. Money for such stabilization fund shall be provided by means of the establishment of an assessment rate for such purpose levied upon producers or handlers, or upon both producers and handlers. Such assessment rate shall be based upon the units in which such commodity is handled or marketed or upon any other uniform basis which the director determines to be reasonable and equitable. For convenience of collection, the director may collect any producer assessments from handlers of such commodity. Handlers paying such assessments for, and on behalf of, any producers may deduct such producer assessments from any money which is owed by such handlers to such producers.


58883. A marketing order may contain provisions for limiting the total quantity of any commodity, or of any grade, size, or quality of it, which may be marketed by producers, or processed, distributed, or otherwise handled within this state during any specified period by any and all persons that are engaged in such producer marketing, processing, distributing, or handling. Any such limitation shall be applied under a uniform rule which is applicable to all such persons so regulated. The total quantity of any such commodity which is so regulated and permitted to be marketed by producers, processed, distributed, or otherwise handled, shall not be less than the quantity which the director finds is reasonably necessary to supply the market demands of consumers of such commodity. The marketing of green ripe olives is not, however, subject to any provisions of a marketing order which limits the total quantity of such commodity which may be marketed.


58884. A marketing order may contain provisions for allotting the quantity of any commodity, or of any grade, size, or quality of it, which each handler may purchase or acquire from, or handle on behalf of, any and all producers of the commodity, within this state during any specified period under a uniform rule, which is applicable to all handlers that are so regulated based upon the amounts produced or sold by such producers in a prior period which the director finds to be representative, or upon the current season's production or sales of such producers, or both, to the end that the total quantity of such commodity, or of any grade, size, or quality of it, which is so purchased or handled within this state is apportioned equitably among the producers of the commodity.


58885. A marketing order may contain provisions for allotting the quantity of any commodity, or of any grade, size, or quality of it, which each handler may process, distribute, or handle within this state under a uniform rule, which is applicable to all handlers that are so regulated, which is based upon the quantities of such commodity, or of any grade, size, or quality of it, of the current season's crop which each such handler has available for such processing, distribution, or handling, or upon the quantities of such commodity, or of any grade, size, or quality of it, which is so processed, distributed, or handled by each such handler in a prior period which the director finds to be representative, or based upon both, to the end that the total quantity of such commodity, or any grade, size, or quality of it, processed, distributed, or handled within this state during any specified period is equitably apportioned among all such handlers of the commodity.


58886. A marketing order may contain provisions which regulate the period during which any commodity, or any grade, size, or quality of such commodity, may be processed, distributed, or otherwise marketed within this state by any and all persons that are engaged in such processing, distributing, or marketing within this state. The total quantity of such commodity which is so regulated and permitted to be processed, distributed, or otherwise marketed during such period, shall not, however, be less than the quantity which the director finds is necessary to reasonably supply the needs of consumers of such commodity.

58887. A marketing order may contain provisions for the establishment of surplus, stabilization, or byproduct pools for any commodity, or of any grade, size, quality, or condition of it, and providing for the sale of the commodity in any such pool and for the equitable distribution among the persons that are participating in the pool of the net returns which are derived from the sale of such commodity. The marketing of green ripe olives is not, however, subject to any provisions of a marketing order which relate to the establishment and operation of surplus pools. If the marketing order authorizes the establishment of any such pool, the advisory board may receive such commodity from each producer or handler and handle it according to the grade, size, quality, or condition of the commodity and account to each producer or handler that is participating in the pool upon a pro rata basis for the net proceeds derived from the sale of the commodity. The contents of any surplus pool shall not be marketed by the advisory board in any form which would compete directly with that portion of the commodity which is marketed in regular channels of trade. However, any portion of any surplus pool may be transferred by the advisory board upon any gratuitous basis to charitable organizations and other similar agencies under proper safeguards to insure that none of such commodity shall compete directly with the unrestricted portion of such commodity. The advisory board may dispose of the contents of a stabilization pool in the regular marketing channels in such manner and at such times as it deems advisable, consistent with the maintenance of stabilized marketing conditions for such commodity. The advisory board may dispose of the contents of any byproduct pool only for byproducts or for other similar purposes under proper safeguards to prevent such portion of the commodity so disposed of from directly competing with that part of the commodity which is marketed in the usual form or in the regular channels of trade. If the marketing order authorizes the establishment of a surplus, stabilization, or byproduct pool, the advisory board may do any of the following: (a) Arrange for and operate any necessary facilities for the storing, financing, grading, packing, servicing, processing, preparing for market, selling, and disposing of the contents of any pools which are provided for in this chapter. The board shall not, however, engage in commercial warehousing. (b) Pledge all of the commodity in any such pools with banks or other lending agencies for the purpose of obtaining loans upon it. The board shall have title, for the purpose of financing and handling, to all of the commodity in any such pools. (c) Create, by a uniform assessment upon producers, or upon some other uniform and equitable basis, maintain, and disburse an equalization fund to be used for the removal of any inequalities between producers or handlers that are participating in any pool which result from errors in estimating production or surplus or for indemnifying producers whose production, in whole or in part, is diverted in green form or otherwise from normal marketing outlets or diverted to byproducts, relief, or other noncompetitive purposes pursuant to the provisions of the marketing order.


58888. A marketing order may contain provisions which establish, or provide for the establishment, with respect to any commodity, either as delivered by producers to handlers or processors, or as handled, processed, or otherwise prepared for market, or as marketed by producers, handlers, or processors, both of the following: (a) Grading standards of quality, condition, size, maturity, or pack, which standards may include minimum standards. The standards so established shall not, however, be established below any minimum standards which are prescribed by law for such commodity. (b) Uniform inspection and grading of such commodity in accordance with the standards which are so established.


58889. (a) A marketing order may contain provisions for the establishment of plans for advertising and sales promotion to maintain present markets or to create new or larger markets for any commodity that is grown in this state, or for the prevention, modification, or removal of trade barriers that obstruct the free flow of any commodity to market. The secretary may prepare, issue, administer, and enforce plans for promoting the sale of any commodity. (b) Any plan shall be directed toward increasing the sale of the commodity without reference to any private brand or trade name that is used by any handler with respect to the commodity regulated by the marketing order, except the use of wine if other than private brands or private trade names are unavailable, and except that marketing orders that provide for the advertising and sales promotion of raisins, prunes, and walnuts may allow those plans to credit the pro rata assessment obligations of a handler with all or any portion of that handler's direct expenditures for the marketing promotion that may include private brand or trade name advertising performance allowances, sales promotions, couponing, and in-store promotion programs and materials. (c) (1) Notwithstanding any provision of this section, any marketing order for fluid milk may contain in its advertising and sales promotion plan provisions to allocate funds for promotions of cheese, ice cream, or butter products made with California milk, including promotions in which brand or trade names are used, but only if the use is incidental to the promotion of the California milk product and not in direct promotion of the brand or trade name, and if the allocation of funds is made available on a nondiscriminatory basis to all retailers and manufacturers of butter, ice cream, or cheese utilizing milk produced in California. Permissible private brand or trade name marketing promotions may include advertising, performance allowances, sales promotions, couponing subject to Section 61375 and in-store promotion programs and materials, and other marketing communication tools. (2) For purposes of this subdivision, "butter" means the product made by gathering the fat of fresh or ripened milk or cream into a mass, which also contains a small portion of other milk constituents. (3) This subdivision shall not become operative unless approved as set forth in subdivision (c) of Section 58993. (d) No advertising or sales promotion program shall be issued by the secretary that makes use of false or unwarranted claims in behalf of any product, or disparages the quality, value, sale, or use of any other commodity.


58889.1. Notwithstanding Section 58889, any marketing order for processed fruits, nuts, or vegetables may contain in its advertising and sales promotion plan provisions to allocate funds to promote private brands or trade names.

58889.3. Notwithstanding subdivision (b) of Section 58889, effective immediately, a marketing order may contain provisions for the establishment of plans for advertising and sales promotion, including any private brand or trade name, to maintain present international foreign markets or to create new or larger international foreign markets for any commodity which is grown in this state, provided that effective January 1, 1978, such advertising and sales promotion plans require that each individual commodity package label indicate the commodity is of California origin in English or other appropriate language.


58890. A marketing order may contain provisions which relate to the prohibition of unfair trade practices. In addition to the unfair trade practices now prohibited by law, applicable to the processing, distribution, or handling of any commodity within this state, the director may include in any marketing order which is issued provisions that are designed to correct any trade practice which affects the processing, distributing, or handling of any commodity within this state which the director finds, after a hearing upon the marketing order in which all interested persons are given an opportunity to be heard, is unfair and detrimental to the effectuation of the declared purposes of this chapter.


58891. A marketing order may contain provisions for the application for, review, certification, and equitable payment of, production adjustment benefits to growers from funds which are collected for such purpose on a uniform basis from all commercial growers of any commodity in the state, for which production adjustment payments are made. Such funds may be supplemented by funds, if any, which are received from federal, state, or other agencies for such purpose.


58892. (a) A marketing order may contain provisions for carrying on research studies in the production, processing, or distribution of any commodity and for the expenditure of moneys for these purposes. Prior to the implementation of a research program authorized by this section that will extend beyond the next reapproval date of the marketing order pursuant to Section 59086, the director shall call a public hearing pursuant to Article 6 (commencing with Section 58771) to receive testimony regarding support for the research program by persons directly affected by the marketing order. After the hearing, the director shall find and determine, based upon the evidence received, whether or not to conduct a referendum pursuant to subdivision (c) of Section 58993 prior to approval of the proposed research program in order to evaluate with greater certainty the support for the program by the persons directly affected by the marketing order. (b) In carrying out this section, an advisory board may, subject to the approval of the director, establish a trust account to fund research programs on an ongoing basis. These programs may extend beyond the termination date of the marketing order. For any program designed to last more than one year, funding shall be provided for from the trust account during the initial year. (c) In any research in production or processing which is carried on pursuant to this section, the Vice President for Agricultural Sciences of the University of California and the advisory board which is provided for in Article 8 (commencing with Section 58841) shall cooperate in selecting the research program which is to be carried on from time to time. Insofar as practicable, the programs shall be carried out by the University of California, but if the vice president and the advisory board determine that the university has no facilities for a particular program, or that some other research agency has better facilities for it, the program may be carried out by any other research agency which is selected by the vice president and the advisory board. (d) In carrying out this section, an advisory board may carry out research programs for the purpose of developing and testing new products in selected markets. The proposed programs shall be submitted to the director for his or her approval prior to the expenditure of funds for the program. The proposal submitted shall include, among other things, a description of the new products, the test market to be utilized, and the duration of the program.


58892.1. A marketing order may contain provisions for research studies concerning the health, food, nutritional, therapeutic, dietetic or such qualities of other food products, for the development of new food products, or for the development of new uses for agricultural products.


58892.2. No marketing order for milk shall be issued by the director unless he finds that such marketing order does not conflict with the provisions of Chapter 2 (commencing with Section 61801) or Chapter 3 (commencing with Section 62700) of Part 3 of Division 21.


58893. A marketing order may contain provisions which establish, or provide authority for establishing, for any commodity, either as such commodity is produced or is delivered by producers to handlers, or as handled or otherwise prepared for market, or as marketed by producers or handlers, an educational program which is designed to acquaint producers, handlers, consumers or other interested persons with quality improvement and nutritional values, including sanitation practices, procedures, or methods as applied to such commodity.


58894. A marketing order may contain provisions which establish, or provide authority for establishing, and for regulating the permissive use of an official board brand, trade name, or label, or other distinctive designation of grade, quality, or condition, except the grade or quality designations in effect pursuant to state or federal grade standards, for any commodity, other than wine, either as such commodity is produced or is delivered by producers to handlers, or as handled or otherwise prepared for market, or marketed by producers or handlers. As provided in Section 59236, the permissive use of any such official board brand, trade name, or label or other distinctive designation of quality shall be limited to producers and handlers of the commodity that are participating in the marketing agreement or order, and that are in compliance with its provisions and with any regulation, or rule and regulation, which is adopted under it. Any official brand or trade name which is established pursuant to this section shall not be construed as a private brand or trade name with respect to Section 58889.


58895. A marketing order may contain provisions to detect, control, prevent damage by or to eradicate insects, predators, diseases, or parasites with respect to any commodity or group of commodities. The advisory board may recommend and the director may approve measures to assist in the prevention or reduction of losses to crops or livestock caused by predators, insects, disease or parasite infestations, including the establishment and operation of detection, inspection, spraying, dusting, fumigating or other control measures. For the purposes of this section, (1) assessments established pursuant to Article 10 (commencing with Section 58921) of this chapter may include an assessment for nonbearing acreage as well as bearing acreage of the commodity affected by such predators, insects, disease, or parasite, and (2) the director may use both the bearing and nonbearing acreage of such commodity as a measure of production for assent or referendum purposes in relation to such assessments. As used in this section, "nonbearing acreage" means acreage planted to produce the particular commodity covered by the marketing order during the marketing season on which no quantity of the product is produced for marketing or is anticipated will be produced for market during such marketing season.


58896. A marketing order may contain provisions for the gathering and dissemination of weather data to producers of any commodity, and to any persons providing services relating to production of a commodity, when the data is necessary to aid in any manner in the production or harvesting of that commodity.


58897. To address catastrophic events, a marketing order may contain provisions for the establishment and operation of an indemnity trust fund to cover livestock and livestock product losses due to disease, natural disaster, or accidents.


Article 10. Assessments And Funds

Ca Codes (fac:58921-58941) Food And Agricultural Code Section 58921-58941



58921. Except as otherwise provided in Section 58926, each marketing order which is issued pursuant to this chapter shall provide for the levying and collection of assessments in sufficient amounts to defray the necessary expenses which are incurred by the director in the formulation, issuance, administration, and enforcement of the marketing order. If the marketing order authorizes the carrying out of advertising and sales promotion plans, it shall also provide for the levying and collection of assessments in sufficient amounts to defray the expenses of such activities. No assessment for advertising or sales promotion activities shall, however, be levied under any marketing order with respect to the marketing and handling of green ripe olives except that green ripe olives may be assessed for their proportionate share of administrative costs.

58922. Each marketing order shall indicate the maximum rate of any assessment which may be collected and the proportion, if any, of each assessment which is payable by each producer and handler that is directly regulated or affected by such marketing order.


58923. The advisory board which is appointed by the director to assist him in administering each marketing order shall recommend to the director, from time to time, budgets to cover necessary expenses, and budgets to cover the expenses of carrying out sales promotion plans if such plans are authorized in the marketing order, and the assessment rates which are necessary to provide sufficient funds. If the director finds that each such budget and assessment rate are proper and equitable and will provide sufficient moneys to defray the expenses which may be incurred, he may approve such budget and rate of assessment and order that each producer and handler so assessed shall pay to the director, at such times and in such installments as the director may prescribe, an assessment which is based upon the units in which such commodity is marketed, or upon any other uniform basis which the director determines to be reasonable and equitable.


58924. The amount of the assessment for necessary expenses shall not, however, exceed the following: (a) In the case of producers, 2 1/2 percent of the gross dollar volume of sales of the commodity which is affected by all such producers regulated by such marketing order. (b) In the case of processors, distributors, or other handlers, 2 1/2 percent of the gross dollar volume of purchases of the commodity which is affected by the marketing order from producers or of the gross dollar volume of sales of the commodity which is affected by the marketing order and handled by all such processors, distributors, or other handlers that are regulated by such marketing order during the marketing season during which such marketing order is effective.


58925. Any assessment rate which is established for assessments to defray the expenses of advertising and sales promotion plans shall be in an amount which does not exceed 4 percent of the gross dollar volume of sales by all producers or by all processors, distributors, or other handlers of such commodity which is regulated by such marketing order during the marketing season during which such marketing order is effective.


58926. In lieu of the assessments to defray the costs of formulation, issuance, administration, and enforcement and advertising or sales promotion provided for in Section 58921, if the marketing order contains provisions for advertising or sales promotion as authorized in this chapter, the director may approve and fix an assessment for producers and an assessment for handlers as the case may be, not exceeding 6 1/2 percent of the gross dollar volume of sales of such commodity by all producers, or by all processors, distributors, or other handlers of such commodity regulated by such marketing order during the marketing season during which such marketing order is effective. The method and manner of assessment and collection of such assessment, and the limitations and restrictions applicable thereupon, shall conform in all respects with the provisions of this article regarding assessments for advertising and sales promotion, except as to the maximum amount of such assessment.


58927. If the director approves and fixes a single assessment, the advisory board shall recommend and the director may approve the proportions of such assessment which may be expended to defray the costs of formulation, issuance, administration, and enforcement of the marketing order and that which may be expended for such advertising or sales promotion program. The proportion of such assessment which may be allocated in such manner to defray the cost of such administrative activities for such marketing order shall not, however, exceed the maximum amount which is authorized in Section 58924.

58928. If any advisory board of any marketing order has reason to believe that the administration of a marketing order will be facilitated or the attainment of the purposes and objectives of the marketing order will be promoted thereby, the advisory board may borrow money with or without interest to carry out any provision of any marketing order which is authorized by this chapter, and may hypothecate anticipated assessment collections that are applicable to such respective provisions.


58929. Any assessment which is levied as provided in this article, in such specified amount as may be determined by the director pursuant to this chapter, is a personal debt of every person so assessed and shall be due and payable to the director if payment is called for by the director. If any such person fails to pay any such assessment upon the date which is determined by the director, the director may file a complaint against such person in a state court of competent jurisdiction for the collection of the assessment.


58930. If any producer or handler that is duly assessed pursuant to the provisions of this chapter fails to pay to the director the amount so assessed on or before the date which is specified by the director, the director may add to such unpaid assessment an amount not exceeding 10 percent of such unpaid assessment to defray the cost of enforcing the collection of such unpaid assessment. In addition to such payment for the cost of enforcing such collection, any such producer or handler shall pay to the director a penalty of 5 percent for each 30 days of the unpaid balance for each 30 days the assessment is unpaid, prorated over the days unpaid, commencing 30 days after notice has been given to such producer or handler of his failure to pay the assessment on the date required, unless the director determines, to his satisfaction, that such failure to pay is due to resonable cause beyond the producer's or handler's control. Such penalty shall not exceed 50 percent of the total amount of the assessment due.

58931. The director may require the persons that are assessed to deposit with him in advance the following amounts: (a) An amount for necessary expenses. (b) An amount which shall not exceed 25 percent of the assessment to cover the costs of advertising or sales promotion plans which are incurred prior to the receipt of sufficient funds from the assessment for such purpose.

58932. The amount of any deposit which is required by the director pursuant to Section 58931 shall be based upon the estimated number of units to be marketed or handled by the person that is assessed, or upon any other uniform basis which the director determines is reasonable and equitable. Such basis shall be applicable during the marketing season during which such marketing order is effective.


58933. At any time after the funds which are credited to the administrative account, or the advertising or sales promotion account, of the marketing order are sufficient to so warrant, or at the close of the marketing season, the sums deposited by any person shall be adjusted to the amount which is properly chargeable against such person pursuant to the assessment which was authorized.


58934. In lieu of requiring advance deposits, or in order generally to provide funds for defraying administrative or advertising and sales promotion expenses until such time as sufficient moneys are collected for such purpose from the payment of the assessments which are established pursuant to this article, the director may receive and disburse for such expense purposes contributions which are made by producers, processors, distributors, or other handlers. Neither the advisory board nor the director is responsible for the repayment of such contributions. If, however, collections from the payment of established assessments credited to the respective marketing order accounts are sufficient to so warrant, the board shall recommend and the director shall authorize, the repayment of contributions, or authorize the application of such contributions to the assessment obligations of persons that made such contributions.


58934.5. In order to provide funds for defraying expenditures authorized by the marketing order, the director or any advisory board may also receive and disburse contributions that are made by persons other than those directly affected by the marketing order.


58935. For the convenience of making collections of any producer assessments which are established pursuant to this article, the director may collect such assessments from the handlers of the commodity which is being regulated. Any handler that pays any such assessments for and on behalf of any producer may deduct such producer assessments from any money which is owed by such handler to such producer. Any marketing order may require a handler to deduct producer assessments from any money which is owed by such handler to such producer. Such producer assessment deductions are hereby declared to be trust funds held by the handler for the purposes of the marketing order concerned and shall be remitted timely, with assessment reports, to the director.


58936. The director may adopt rules and regulations with respect to the assessment and collection of funds pursuant to this article.


58937. (a) Any money that is collected by the director pursuant to this chapter shall be deposited in a bank or other depository that is approved by the Director of Finance, allocated to each marketing order under which it is collected. Except as provided in Section 58941, these funds shall be disbursed by the director or the advisory board only for the necessary expenses that are incurred by the advisory board and that are approved by the director with respect to each marketing order. Allowable expenses include expenses generated by the auditing requirement imposed by subdivision (b). Funds so collected shall be deposited and disbursed in conformity with appropriate rules and regulations that are prescribed by the director. The expenditure of these funds is exempt from the provisions of Section 925.6 of the Government Code. (b) All such expenditures by the director shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. A copy of the audit shall be delivered within 30 days after the completion of the audit to the Governor, the director, and the Controller.


58938. The director may, at the close of each fiscal period which is used by the advisory board for budgetary purposes, refund any money which remains in such fund that is allocable to any particular commodity which is affected by a marketing order or, upon recommendation of the advisory board and with the approval of the director, all or a portion of such money may be carried over into the next succeeding fiscal period if the director finds that such money is required to defray subsequent expenses under the marketing order. Any refund made pursuant to this section shall be on a pro rata basis made to persons from whom, or on whose behalf, the assessments being refunded were collected. Upon termination by the director of any marketing order, any remaining balances which are not required by the director to defray the expenses of such marketing order, shall be returned by the director upon a pro rata basis, to all persons from whom, or on whose behalf, such assessments were collected unless the director finds that the amounts so returnable are so small as to make impractical the computation and remitting of such pro rata refund to such persons. If the director makes such a finding, he may use the moneys in such fund to defray the expenses which are incurred by him in the formulation, issuance, administration, or enforcement of any subsequent marketing order.


58938.5. (a) Assessments paid on milk pursuant to the requirements of a market milk marketing order or a manufacturing milk marketing order established under this chapter shall be refunded to producers who meet the following criteria: (1) The producer shipped milk to a processor during the months of June or July 1986. (2) The producer was not paid, or received only partial payment, for the milk shipped. (3) The producer has agreed to repay the refunded assessments to the affected programs if, at a subsequent date, the producer is paid for the milk. (b) The producer shall receive a full refund of the amount assessed for milk shipped and for which no payment was received. If partial payment was received, the producer shall receive a refund of assessments paid on milk for which payment was not received. (c) In lieu of payment to the producer, the refund shall be paid to an entity which markets milk or otherwise acts on behalf of a producer who would otherwise qualify for the refund under subdivision (a), if that entity demonstrates to the satisfaction of the director that it paid the assessments for the producer. (d) If a producer, or an entity referred to in subdivision (c), subsequently receives full or partial payment for milk for which assessments have been refunded, the producer or entity, as the case may be, shall repay the assessments in an amount proportionate to the portion of milk for which payment has been received. (e) Refunds shall not be made pursuant to this section if the refund would cause a producer to incur an additional assessment obligation to the National Milk Promotion Program. (f) The director shall adopt procedures for refunding assessments in accordance with this section. The procedures shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.


58939. Any money which is deposited pursuant to this article, which the director determines is available for investment, may be invested or reinvested by the Treasurer or an advisory board in any of the securities which are described in Article 1 (commencing with Section 16430) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code, or placed in a depository as provided in Chapter 4 (commencing with Section 16500) of Part 2 of Division 4 of Title 2 of the Government Code, and handled in the same manner as money in the State Treasury. Any increment which is received from the investment or reinvestment or deposit, if made by the Treasurer, shall be remitted to the advisory board whose funds were invested, reinvested, or deposited, and shall be deposited and disbursed as provided in Sections 58937 and 58938. The Treasurer may deduct from the remittance an amount equal to the reasonable costs incurred in carrying out this section or may bill the advisory board for the costs, and the advisory board shall pay the costs from money which is collected for it pursuant to this chapter.


58940. Any check or warrant which is drawn against the funds of any marketing order which remains unclaimed or uncashed for a period of six months from the date of issuance shall be canceled and the money retained for disbursement to the original payee or claimant upon satisfactory identification for a period of one year from the time the check or warrant is canceled. The money so retained, if not claimed within the period of one year, shall be credited to the then currently operating marketing order for the commodity under which the funds so retained were collected. If there is no marketing order then in effective operation for the commodity, the funds shall be credited to the unexpended balance, if any, of the last previous marketing order for the commodity. If there is no marketing order then in current operation, or no balance exists from any previous marketing order to which the funds may be credited, the funds so retained may be expended by the director for the benefit of any marketing order established under the provision of this chapter.


58941. Notwithstanding the provisions of Article 3 (commencing with Section 241), Chapter 2, Division 1 of this code, each marketing order or agreement shall be charged the amounts which are computed by the director as required to reasonably provide for services to be rendered to such marketing orders by the department. Such amounts are subject to approval by the advisory board which is concerned, shall be included in each budget which is recommended to and approved by the director pursuant to Sections 58923 and 58924, and shall be withdrawn as required by the director and expended only for the necessary expenses which are incurred by the director in the administration of this chapter.


Article 11. Deposits By Applicants For Marketing Order

Ca Codes (fac:58961-58962) Food And Agricultural Code Section 58961-58962



58961. Prior to the issuance of any marketing order by the director pursuant to this chapter, the director may require the applicants for the issuance of the marketing order to deposit with him such amount as he may deem necessary to defray the expenses of preparing and making effective such marketing order. Such funds shall be received, deposited, and disbursed by the director in accordance with the provisions which are set forth in Article 10 (commencing with Section 58921) of this chapter.


58962. The director may reimburse the applicant, from any funds for necessary expenses which he has received pursuant to Article 10 (commencing with Section 58921) of this chapter, for any of the following: (a) Any amount deposited with the director by applicant pursuant to Section 58961. (b) For any necessary expenses which are incurred by the applicant in preparing and in obtaining approval of the marketing order, upon receipt of a verified statement of such expenses which is approved by the director.


Article 12. Assent To Marketing Orders

Ca Codes (fac:58991-59000) Food And Agricultural Code Section 58991-59000



58991. A marketing order or major amendment to it, which directly affects handlers, that is issued pursuant to this chapter, shall not become effective unless and until the director finds one of the following has occurred: (a) It has been assented to in writing by not less than 65 percent of the handlers that are engaged, within the area specified in the marketing order or amendment to it, in the handling of the commodity which is regulated by the marketing order. (b) It has been assented to in writing by handlers that handle not less than 65 percent of the volume of the commodity which is regulated by the marketing order. (c) It has been approved by handlers in a referendum among handlers that are directly affected. The director may make the finding pursuant to this subdivision if the valid votes cast in the referendum represent not less than 40 percent of the total number of handlers of the commodity of record with the department, and if the handlers that cast ballots in the referendum in favor of the marketing order or amendment to it represent not less than 65 percent of the total number of handlers that cast ballots in the referendum and handled not less than 51 percent of the total quantity of the commodity which was marketed in the next preceding marketing season, or the current marketing season if the harvest and delivery of the commodity to handlers is complete, by all of the handlers that cast ballots in the referendum, or if the handlers that cast ballots in the referendum in favor of the marketing order or amendment represent not less than 51 percent of the total number of handlers that cast ballots in the referendum and handled not less than 65 percent of the total quantity of the commodity which was handled in the next preceding marketing season, or the current marketing season if the harvest and delivery of the commodity to handlers is complete, by all of the handlers who cast ballots in the referendum. The quantity of the commodity handled by the handler may be stated on the referendum ballot returned by each handler or may be obtained by requiring handlers to report that volume pursuant to Section 58775.


58992. Any marketing order or major amendment to it which directly affects processors that are engaged in the operation of canning of fresh fruits or vegetables or canning or packing of dried fruits shall not be made effective by the director unless and until the director finds one of the following has occurred: (a) The marketing order or amendment to it has been assented to in writing by the processors that are engaged in the marketing activity which is regulated by the marketing order or amendment to it that processed not less than 65 percent of the volume of the commodity which is processed within the area defined in the marketing order or amendment to it and by 65 percent of the number of the processors that are engaged in the marketing activity which is regulated by the marketing order or amendment to it. (b) It has been approved by processors in a referendum among processors that are directly affected. The director may make the finding pursuant to this subdivision if the valid votes cast in the referendum represent not less that 40 percent of the total number of processors of the commodity of record with the department, and if the processors that cast ballots in the referendum in favor of the marketing order or amendment to it represent not less than 65 percent of the total number of processors that cast ballots in the referendum and processed not less than 51 percent of the total quantity of the commodity which was marketed in the next preceding marketing season, or the current marketing season if the harvest and delivery of the commodity to processors is complete, by all of the processors that cast ballots in the referendum, or if the processors that cast ballots in the referendum in favor of the marketing order or amendment represent not less than 51 percent of the total number of processors that cast ballots in the referendum and processed not less than 65 percent of the total quantity of the commodity which was marketed in the next preceding marketing season or the current marketing season if the harvest and delivery of the commodity to processors is complete, by all of the processors who cast ballots in the referendum. The quantity of the commodity processed by the processor may be stated on the referendum ballot returned by each processor or may be obtained by requiring processors to report that volume pursuant to Section 58775.

58993. No marketing order or major amendment to it, which directly affects producers or producer marketing, that is issued pursuant to this chapter, shall be made effective by the director unless and until the director finds one or more of the following has occurred: (a) It has been assented to in writing by not less than 65 percent of the producers that are engaged, within the area specified in the marketing order or amendment to it, in the production for market, or engaged in the producer marketing, of not less than 51 percent of the commodity which is specified in the marketing order or the amendment to the marketing order in commercial quantities. (b) It has been assented to in writing by producers that produce not less than 65 percent of the volume of the commodity and by 51 percent of the total number of producers that are so engaged. (c) It has been approved by producers in a referendum among producers that are directly affected. The director may make the finding if the valid votes cast in the referendum represent not less than 40 percent of the total number of producers of the commodity of record with the department, and if the producers that cast ballots in the referendum in favor of the marketing order or amendment to it represent not less than 65 percent of the total number of producers that cast ballots in the referendum and marketed not less than 51 percent of the total quantity of the commodity which was marketed in the next preceding marketing season, or the current marketing season if the harvest and delivery of the commodity to handlers is complete, by all of the producers that cast ballots in the referendum or if the producers that cast ballots in the referendum in favor of the marketing order or amendment represent not less than 51 percent of the total number of producers that cast ballots in the referendum and marketed not less than 65 percent of the total quantity of the commodity which was marketed in the next preceding marketing season, or the current marketing season if the harvest and delivery of the commodity to handlers is complete, by all of the producers who cast ballots in the referendum. The quantity of the commodity delivered by the producer may be stated on the referendum ballot returned by each producer or may be obtained by requiring handlers to report that volume pursuant to Section 58775.


58994. If any marketing order or any major amendment to any marketing order is issued by the director for the approval of producers, handlers, or processors, the director shall determine whether the approval shall be by written assents or by referendum.


58995. If the director determines that it should be by referendum, the director shall establish a referendum period not to exceed 30 days. If the director determines that the referendum period so established does not provide sufficient time for the balloting, the director may extend the referendum period not more than 15 additional days. At the close of the referendum period, the director shall count and tabulate the ballots filed during the referendum period.


58996. If from the tabulation the director finds that the number of producers that voted in the referendum and that the number of producers that voted in favor of the marketing order or amendment to the marketing order are sufficient for him to make the finding that producers that are directly affected have approved the marketing order or amendment, the director may make the marketing order or amendment to the marketing order effective.


58997. If the director finds from the tabulation of such referendum that the number of producers that voted in favor of such marketing order or amendment to the marketing order is not sufficient for him to make the finding that producers that are directly affected have approved the marketing order or amendment to it, he shall not make the marketing order or amendment effective.


58998. The director may prescribe such additional procedures as may be necessary to conduct the referendum.


58999. In finding whether the marketing order or major amendment to it is assented to in writing or approved or favored by producers pursuant to the provisions of this chapter, the director shall consider the approval of any nonprofit agricultural cooperative marketing association, which is authorized by its members so to assent, as being the assent, approval, or favor of the producers that are members of, or stockholders in, that nonprofit agricultural cooperative marketing association.


59000. Any producer that sells a growing crop to be harvested and marketed by another person is entitled to assent to, or vote in a referendum, if both of the following requirements are complied with: (a) At the time of sale of such growing crop the producer retains the exclusive right so to assent or to so vote. (b) The quantity of such growing crop can be determined to the satisfaction of the director.


Article 13. Major Amendments

Ca Codes (fac:59021-59037) Food And Agricultural Code Section 59021-59037



59021. In making effective major amendments to a marketing order, the director shall follow the same procedures which are prescribed in this chapter for the institution of a marketing order.


59022. For the purposes of this chapter, a major amendment to a marketing order shall include, but not be limited to, any amendment which is specified in Sections 59023 to 59035, inclusive.


59023. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for any of the following: (a) Determining the existence and extent of the surplus of any commodity, or of any grade, size, or quality of it. (b) Providing for the control and disposition of such surplus and for equalizing the burden of such surplus elimination. (c) The establishment of a stabilization fund for equalizing surplus obligations.

59024. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for limiting the total quantity of any commodity, or of any grade, size, or quality of it, which may be prepared for market or marketed within this state.


59025. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for allotting the quantity of any commodity, or of any grade, size, or quality of it, which any handler may purchase or acquire from or handle on behalf of any and all producers of such commodity within this state.


59026. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for allotting the quantity of any commodity, or of any grade, size, or quality of it, which any handler may process, distribute, or handle within this state.


59027. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for regulating the period during which any commodity, or any grade, size, or quality of such commodity, may be processed, distributed, or otherwise marketed within this state.


59028. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for the establishment of surplus, stabilization, or byproduct pools for any commodity, or of any grade, size, quality, or condition of it.


59029. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for the establishment of uniform grading and inspection of any commodity and the establishment of grading standards of quality, condition, size, or pack of such commodity.


59030. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for the establishment of plans for advertising and sales promotion of any commodity.


59031. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority to prohibit unfair trade practices.


59032. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for the establishment of production adjustment requirements and benefit payments which relate to them.


59033. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority for carrying out research studies in the production, processing, or distribution of any commodity.


59034. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority to increase an assessment rate beyond the maximum rate which is authorized by the marketing order then in effect.

59035. An amendment is a major amendment if it adds to, or deletes from, a marketing order authority to extend the application of the provisions of any marketing order to portions or uses of a commodity not previously subject to such provisions or to restrict or extend the application of such provisions upon the producers or handlers of such portions or uses of any such commodity.


59036. Modification of any provision of any marketing order in effect for the purpose of clarifying the meaning or application of such provision or modifying administrative procedures for carrying out such provision is not a major amendment of such marketing order.


59037. The exercise by the director of any regulatory authority which is authorized in a marketing order or marketing agreement is not a major amendment, but is a seasonal marketing regulation.


Article 14. Minor Amendments

Ca Codes (fac:59051-59052) Food And Agricultural Code Section 59051-59052



59051. The director may make minor amendments to any marketing order upon the recommendation of not less than 75 percent of the producer members or handler members of the advisory board, or not less than 75 percent of each group if both are represented upon the advisory board.


59052. The director may require a public hearing upon minor amendments if in his opinion the substance of such minor amendments so warrant. The director is not, however, required to submit minor amendments for written assents or referendum approval.


Article 15. Termination Or Suspension

Ca Codes (fac:59081-59088) Food And Agricultural Code Section 59081-59088



59081. The director shall suspend or terminate any marketing order, if he finds, after a public hearing duly noticed and held in accordance with the provisions of Article 6 (commencing with Section 58771) of this chapter, that such marketing order is contrary to, or does not tend to effectuate, the declared purposes or provisions of this chapter within the standards and subject to the limitations and restrictions which are imposed in this chapter.


59082. The director shall terminate any marketing order if he finds that the termination of the marketing order is requested in writing, within a 90-day period, by at least 51 percent of the producers that are directly affected that produce at least 51 percent of the volume of the product, or by at least 51 percent of the handlers that are directly affected that handle at least 51 percent of the volume of the product. The person or persons originating such a written request shall file a written notice with the director in such a manner that the date such a request is initiated can be readily ascertained. Any such person may withdraw his name from such a written request until the time the request is presented to the director. A request to terminate a marketing order shall be submitted to the director by a petition signed by not less than the number of producers or handlers which produce or handle the volume of products specified in this section. The signatures to the petition need not all be appended to one sheet of paper. Each person signing the petition shall add to his signature his place of business, giving street and number. If no street and number exist, then a designation of the place of business shall be given which will enable the location to be readily ascertained. Before circulating a petition to terminate a marketing order, its proponents shall notify the director of their intent to do so in order to ascertain the beginning date of the 90-day period. After such notification to the director, the petition may be circulated among the producers or handlers affected. The petition shall bear a copy of the notice of intention. Signatures shall be secured within the time limit specified in this section. Any person may withdraw his name from a petition to terminate any marketing order until the time the petition is presented to the director.


59083. If at least 25 percent of the producers that are directly affected that produce at least 25 percent of the product and at least 25 percent of the handlers that are directly affected that handle at least 25 percent of the product request, within a 90-day period, that such marketing order be submitted to reapproval, the director shall hold a hearing on the question of the reapproval of such marketing order, and whether such reapproval shall be by assent or referendum. If the director finds after the hearing that a substantial question exists as to whether such marketing order is contrary to, or does not effectuate the declared purposes or provisions of, this chapter within the standards and subject to the limitations and restrictions which are imposed in this chapter, such marketing order shall be submitted for the reapproval of those producers and handlers that are directly affected, as provided in this article, within 120 days of the receipt of the original request. The person or persons originating such a request shall file a written notice with the director in such a manner that the date such a request is initiated can be readily ascertained. Persons may withdraw their names from such a request until the time the request is presented to the director. A request to hold a public hearing on a marketing order shall be submitted to the director by a petition signed by not less than the number of producers or handlers which produce or handle the volume of products specified in this section. The signatures to the petition need not all be appended to one sheet of paper. Each person signing the petition shall add to his signature his place of business, giving street and number. If no street and number exist, then a designation of the place of business shall be given which will enable the location to be readily ascertained. Before circulating a petition to hold a public hearing on a marketing order, its proponents shall notify the director of their intent to do so in order to ascertain the beginning date of the 90-day period. After such notification to the director, the petition may be circulated among the producers or handlers affected. The petition shall bear a copy of the notice of intention. Signatures shall be secured within the time limit specified in this section. Any person may withdraw his name from a petition to hold a public hearing on any marketing order until the time the petition is presented to the director.


59084. If the director finds that the marketing order is not reapproved, he shall declare such order terminated. An order shall be considered reapproved if it has been assented to or favored at a referendum in the same manner as is required for a new marketing order.


59085. At any time the director finds that a substantial number of persons that are directly affected by an order are in opposition to it, he shall hold a hearing on the question of the termination, suspension, amendment, or reapproval of such order, and shall, not more than 60 days after such hearing, terminate, suspend, or submit for amendment or reapproval such order, or make a finding that there is not sufficient opposition to the order to warrant any action.


59086. A marketing order shall not be submitted for reapproval until one year after the original enactment, or within one year of any prior approval. However, if no provision is made in any marketing order for reapproval or for termination in less than five years, the director shall at least once each five years hold a hearing, duly noticed and held in accordance with the provisions of this chapter. If the director finds after the hearing that a substantial question exists as to whether such marketing order is contrary to, or does not effectuate the declared purposes or provisions of this chapter within the standards and subject to the limitations and restrictions which are imposed in this chapter, such marketing order shall be submitted for reapproval. The vote for reapproval shall be the same as used for original approval of a marketing order. The director shall determine whether such approval shall be by assent or referendum. An amendment to a marketing order which extends the term thereof shall be deemed a reapproval of the marketing order. A marketing order which within five years prior to the effective date of this act has been amended to fix or extend its term shall be deemed to have been duly reapproved.


59087. (a) The director may terminate, without a public hearing, any marketing order or marketing agreement which has been inoperative for three consecutive marketing seasons after giving notice of intent to terminate such marketing order or marketing agreement pursuant to subdivision (b) of this section. (b) The notice shall be posted on a public bulletin board which the director shall maintain in his office. Termination shall not become effective until five days after the date of such posting. The director shall also issue at the time of such posting, a public notice to newspapers of general and statewide circulation concerning his intention to terminate such marketing order or marketing agreement.

59088. No suspension or termination of any marketing order or marketing agreement pursuant to this article shall become effective until the expiration of the marketing season then current.


Article 16. Publication Of Notice

Ca Codes (fac:59111) Food And Agricultural Code Section 59111



59111. Upon the issuance of any order which makes effective a marketing order or marketing agreement, or any suspension, amendment, or termination of a marketing order or marketing agreement, a notice of the issuance shall be posted on a public bulletin board which the director shall maintain in his office. A marketing order or marketing agreement, or any suspension, amendment, or termination of it, shall not become effective until five days after the date of such posting. The director shall also mail a copy of the notice to every person that is directly affected by the terms of such marketing order or marketing agreement, suspension, amendment, or termination, whose name and address is on file in the office of the director, and to every person that files in the office of the director a written request for such notice. This section does not apply to the termination of any marketing order or marketing agreement under Section 59087.


Article 17. General Rules And Regulations

Ca Codes (fac:59141-59142) Food And Agricultural Code Section 59141-59142



59141. The director may establish such general rules and regulations for uniform application to all marketing orders and marketing agreements which are issued pursuant to this chapter as may be necessary to facilitate the administration and enforcement of such marketing orders and agreements.


59142. The provisions of Article 16 (commencing with Section 59111) of this chapter relative to posting and time of taking effect are applicable to any general rule and regulation which is established pursuant to this article and applicable to marketing orders generally. Such notice shall be mailed to the advisory board for each marketing order or marketing agreement which is in active operation.



Article 18. Administrative Rules And Regulations

Ca Codes (fac:59161-59163) Food And Agricultural Code Section 59161-59163



59161. Upon recommendation of the advisory board which is concerned, the director may, without prior notice and hearing, establish administrative rules and regulations for each marketing order or marketing agreement which is issued and made effective as may be necessary to facilitate the administration and enforcement of each such order or agreement.


59162. Such rules and regulations may include, but shall not be limited to, any of the following: (a) Methods and procedures for the purpose of explaining or clarifying the provisions of such marketing order or agreement. (b) Prescribing reporting forms and procedures to be followed by producers and handlers that are directly affected by such marketing order or agreement. (c) Providing information to producers and handlers that are subject to such marketing order or agreement. (d) Other similar procedural and explanatory provisions to enable such producers and handlers better to understand the program and their respective obligations under it and thereby assist in obtaining cooperation and compliance.


59163. The provisions of Article 16 (commencing with Section 59111) of this chapter relative to posting, mailing of notice, and time of taking effect are applicable to any such administrative rules and regulations.


Article 19. Seasonal Marketing Regulations

Ca Codes (fac:59171-59176) Food And Agricultural Code Section 59171-59176



59171. Upon recommendation of the advisory board which is concerned, the director may, without prior notice to, and public hearing for, the producers or handlers of the commodity which is directly affected, issue and make effective seasonal marketing regulations or modifications of such regulations if all of the following requirements are complied with: (a) The marketing order, or agreement concerned provides for the issuance or modification of such seasonal marketing regulations without requiring such prior notice and public hearing and sets forth the limits within which such seasonal marketing regulations may be made effective or subsequently modified by the director. (b) The director finds that such seasonal marketing regulations or modifications of them are reasonable and proper and a practical means of carrying out the marketing provisions which are authorized in such marketing order or agreement and will tend to effectuate the declared purposes and policies of the chapter with respect to such commodity.

59172. Seasonal marketing regulations shall be applicable to a particular marketing order or agreement for the purpose of carrying into effect by administrative order, the marketing regulatory authorizations and provisions of such marketing order or agreement as such authorizations or provisions may be applicable to, or required by, changing economic or marketing conditions and requirements, from time to time, during each marketing season in which such marketing order or agreement may operate.


59173. Seasonal marketing regulations shall not extend beyond the marketing regulatory authorizations which are specified in the marketing order or agreement concerned, or modify or change the language of such marketing order or marketing agreement by adding to, or subtracting from, such marketing order or agreement any of the marketing regulatory authorizations which are classed in Article 13 (commencing with Section 59021) of this chapter as major amendments, or modify the language of any marketing order or agreement for the purpose of clarification as provided in Article 14 (commencing with Section 59051) of this chapter for minor amendments.


59174. Notice of the issuance and the effective date of any such seasonal marketing regulations, or modifications of them, shall be given by the director to all producers and handlers that are directly affected by any such regulations in the manner and within the time which is specified in the applicable marketing order or agreement, or as specified in the administrative rules and regulations which are made effective for such marketing order or agreement pursuant to Article 18 (commencing with Section 59161) of this article.


59175. It is recognized that, with respect to some commodities, marketing, weather, and other conditions may change so rapidly as to require changes in seasonal marketing regulations from week to week or oftener.

59176. It is intended that the provisions of this article be interpreted liberally so that the director may carry out the marketing regulations and procedures authorized in this article in a practical and effective manner.


Article 20. Records

Ca Codes (fac:59201-59204) Food And Agricultural Code Section 59201-59204



59201. The director may require any and all processors or distributors, that are subject to the provisions of any marketing order which is issued pursuant to this chapter, to maintain books and records which reflect their operations under such marketing order, and to furnish him with such information as may be from time to time requested by him which relates to operations under such marketing order, and to permit the inspection by the director of such portions of such books and records as relate to operations under such marketing order.

59202. Information which is obtained by any person pursuant to this article is confidential and shall not be disclosed to any other person except to a person with like right to obtain the information, or any attorney who is employed to give legal advice upon it, or by court order.


59203. For the purpose of carrying out the purposes of this article, the director may hold hearings, take testimony, administer oaths, subpoena witnesses, and issue subpoenas for the production of books, records, or documents of any kind.


59204. A person shall not be excused from attending and testifying, or from producing documentary evidence, before the director in obedience to the subpoena of the director on the ground, or for the reason, that the testimony or evidence, documentary, or otherwise, which is required of him may tend to incriminate him or subject him to a penalty or forfeiture. A natural person shall not, however, be prosecuted or subjected to any penalty or forfeiture for, or on account of, any transaction, matter, or thing concerning which he may be so required to testify, or produce evidence, documentary or otherwise, before the director in obedience to a subpoena which is issued by him. A natural person so testifying is not, however, exempt from prosecution and punishment for perjury committed in so testifying.



Article 21. Actions And Penalties

Ca Codes (fac:59231-59252) Food And Agricultural Code Section 59231-59252



59231. Any action for any penalty or other remedy which is prescribed under any provision of this chapter shall be commenced within three years from the date of the alleged violation.


59232. The penalties, remedies, procedures, and actions which are prescribed by this article apply in instances of any violation or complaint of any violation of any provision of this chapter, any marketing order, or any regulation, or rule and regulation, which is issued by the director pursuant to this chapter or pursuant to any marketing order which is issued under this chapter.


59233. Every person that violates any provision of this chapter or any provision of any marketing order which is duly issued by the director pursuant to this chapter, is guilty of a misdemeanor, and upon conviction, shall be punished by a fine of not less than one hundred dollars ($100), nor more than one thousand dollars ($1,000), or by imprisonment of not less than 10 days nor more than six months, or by both such fine and imprisonment. Each violation during any day constitutes a separate offense.


59234. Any person that violates this chapter or any marketing order which is duly issued by the director and in effect pursuant to this chapter, or violates any rule or regulation which is issued by the director pursuant to this chapter or the marketing order, is liable civilly in an amount of not more than two thousand five hundred dollars ($2,500) for each and every violation. Each violation during any day is a separate offense.


59234.5. (a) When the director makes a determination that a marketing program assessment payment due pursuant to this chapter is deficient as to the payment due, the director may determine the amount of the deficiency, including any applicable penalty, as provided in this section. After giving notice that a deficiency determination is proposed and an opportunity to file a report or provide supplemental information is provided, the director may make one or more deficiency determinations of the amount due for any reporting period based on information in the director's possession. When a business is discontinued, a deficiency determination may be made at any time thereafter as to liability arising out of the operation of that business. The director shall give notice of the proposed deficiency determination and the notice of deficiency determination by placing the notice thereof in a sealed envelope with postage paid addressed to the person affected as it appears in the records of the marketing order or as otherwise available to the director. The giving of notice is complete at the time of deposit in the United States mail. In lieu of mailing, a notice may be served personally by delivering it to the person to be served. Except in the case of fraud or failure to file a required return, a notice of a deficiency determination shall be given within four years of the accrual of the deficiency. (b) The person against whom a deficiency determination is made may petition the director for redetermination within 30 days after the serving of the notice of deficiency determination. If a petition is not filed within 30 days, the deficiency determination shall become final. A petition for redetermination shall be in writing, state the specific grounds upon which it is based, and be supported by applicable records and declarations under penalty of perjury that the information supporting the petition is accurate and complete. If a petition for redetermination is duly filed, the director shall reconsider the deficiency determination and may grant a hearing thereon. The director shall, as soon as practicable, make an order on redetermination, which shall become final 30 days after service of notice of the order of redetermination upon the petitioner. The notice of the order shall be served in the same manner as the notice of the original deficiency determination. (c) If any amount required to be paid pursuant to a deficiency determination or redetermination is not paid within the time specified in the notice thereof, the director may, within four years thereafter, file in the Superior Court for the County of Sacramento, or the superior court of any other county, a certificate specifying the amount required to be paid, the name and address of the person liable as it appears on the records of the director, and a request that judgment be entered against the person in that amount 30 days after the filing. Notice of the filing shall be given in the same manner as for the notice of deficiency determination. The court shall enter a judgment in conformance with the director's certificate 30 days after its filing, unless a petition for judicial review has been filed within the 30-day period. An abstract of the judgment, or a copy thereof, may be filed with the county recorder of any county. From the time of filing of the judgment, the amount of the judgment constitutes a lien upon all of the property in the county owned by the judgment debtor. The lien has the force, effect, and priority of a judgment lien and shall continue for 10 years from the date of the judgment, unless sooner released or otherwise discharged. The lien imposed by this section is not valid insofar as personal property is concerned against a purchaser for value without actual knowledge of the lien. Execution shall issue upon the judgment upon request of the director in the same manner as execution may issue upon other judgments, and sales shall be held under execution as prescribed in the Code of Civil Procedure. (d) The person named in a notice of deficiency determination or redetermination may, within 30 days of the notice of filing with the superior court, file an action for judicial review thereof, as provided in subdivision (c), in the Superior Court for the County of Sacramento or, with the director's consent, the superior court of any other county where the Attorney General maintains an office. As a condition of staying entry of judgment or granting other relief, the court shall require the filing of a corporate surety bond with the director in the amount of the deficiency stated in the certificate. In any court proceeding, the certificate of the director determining the deficiency shall be prima facie evidence of the fee and the amount due and unpaid. (e) The provisions of this section are supplemental to any other procedures for collection and imposition of fees and penalties provided by this chapter. In lieu of proceeding pursuant to this section, the director may file a complaint for collection of unpaid assessments as provided by law.

59235. In addition to such civil penalty, any person that knowingly exceeds any quota or allotment or marketable percentage fixed for him under any marketing order, regulation, or rule and regulation, issued by the director pursuant to such marketing order, shall forfeit to this state a sum equal to the current market value of such excess (or three times such amount, in the discretion of the court) which forfeiture may be recoverable in a civil suit which is brought in the name of this state. Any money which is recovered pursuant to this section shall be deposited in accordance with Section 58937.


59236. If the use by a producer or handler of a particular emblem, label, certificate, or other distinctive designation of grade, quality, or condition, except the grade or other quality designations then in effect pursuant to state or federal grade standards, is made contingent upon compliance with certain production or handling regulations which are authorized by the provisions of a marketing order or agreement which is issued and made effective pursuant to this chapter, it is unlawful and a violation of this chapter for any person, that is not participating in, and complying with, such order, agreement, or regulations to use such designation of grade, quality, or condition.

59237. It is a violation of this chapter for any person to willfully render or furnish a false or fraudulent report, statement, or record which is required by the director pursuant to any provision of this chapter, or any marketing order which is effective pursuant to this chapter.


59238. It is a violation of this chapter for any person that is engaged in the handling or processing of any commodity, or in the wholesale or retail trade of the commodity, to fail or refuse to furnish to the director or his duly authorized agents, upon request, information concerning the name and address of the persons from whom he has received any commodity which is regulated by a marketing order that is issued and in effect pursuant to this chapter, and the quantity of such commodity which is so received.


59239. It is a violation of this chapter for any handler to receive, handle, or have in his possession any commodity which is regulated by a marketing order or marketing agreement which is issued pursuant to this chapter, that the handler knows is being marketed by the producer of the commodity without complying with, or in violation of any provision of such marketing order or agreement.


59240. The director on his own motion may, or shall upon complaint of any interested party which charges any violation of any provision of this chapter or any provision of any marketing order, regulation, or rule and regulation, which is issued by the director and effective pursuant to this chapter, do one of the following: (a) Refer the matter directly to the Attorney General or any district attorney for the institution of legal proceedings upon the matter. (b) If he deems it necessary or advisable, immediately call an administrative hearing to consider the charges which are set forth in such verified complaint.

59241. If the matter is referred directly by the director to the Attorney General or any district attorney, such officer shall thereupon bring an appropriate action in a court of competent jurisdiction in this state, if, after examination of the complaint and evidence he believes that a violation has occurred.


59242. If an administrative hearing is called by the director, the director shall cause a copy of such complaint, together with a notice of the time and place of hearing of such complaint, to be served personally or by mail upon every person that is named as a respondent in such verified complaint. Such service shall be made at least 10 days before the hearing.


59243. The hearing shall be held at one of the following places which is selected by the director: (a) The city or place in which the principal place of business of the respondent is situated. (b) The city or place in which the violation complained of is alleged to have occurred. (c) In the nearest office of the department.


59244. At the time and place which is designated for such administrative hearing, the director shall hear the parties to the complaint and shall enter in his office at Sacramento, his findings which are based upon the facts that are established at such hearing. If from the testimony and evidence which is adduced at the administrative hearing the director finds that no violation has occurred, he shall forthwith dismiss such complaint and notify the parties to such complaint.


59245. If the director finds from the administrative hearing that a violation has occurred, he shall so enter his findings and notify the parties to such complaint. The director may refer the matter to the Attorney General for the institution of legal proceedings or he may notify such parties to cease and desist from further violation. Upon their refusal or failure to comply, or if he finds that the facts or circumstances warrant immediate prosecution, he shall file a complaint with the Attorney General or any district attorney which requests that such officer commence any action which is authorized in this chapter against such respondent in a court of competent jurisdiction as set forth in this article.

59246. The Attorney General, or any district attorney, shall upon complaint by the director or any other person, or may, upon his own initiative, if, after examination of the complaint and evidence he believes a violation has occurred, bring an action for criminal penalties in the name of the people of this state in any court of competent jurisdiction in this state against any person violating any provision of this chapter or any marketing order which is duly issued by the director and effective pursuant to this chapter.


59247. The Attorney General shall upon complaint by the director or may, upon his own initiative, if, after examination of the complaint and evidence he believes a violation to have occurred, bring an action in the name of the people of this state in the superior court of this state for civil penalties or for injunctive relief, including specific performance of any obligation which is imposed by any marketing order, regulation, or rule and regulation, which is issued pursuant to this chapter, against any person violating any provision of this chapter or of any marketing order, regulation, or rule and regulation, which is duly issued by the director pursuant to this chapter.

59248. If it appears to the court upon any application for a temporary restraining order, or upon the hearing of any order to show cause why a preliminary injunction should not be issued, or upon the hearing of any motion for a preliminary injunction, or if the court shall find, in any such action, that any defendant is violating, or has violated, any provision of this chapter, any marketing order, or any regulation, or rule and regulation, duly issued by the director pursuant to this chapter, the court shall enjoin the defendant from committing further violations, and may compel specific performance of any obligation imposed by a marketing order, or any regulation which is issued by the director pursuant to this chapter.


59249. In any suit brought by the Attorney General to enforce any provision of this chapter, any marketing order which is issued by the director and effective pursuant to this chapter, or any regulation, or rule and regulation, which is issued by the director pursuant to the provisions of any marketing order, the judgment, if in favor of the state, shall provide that the defendant pay to the director the costs which were incurred by the director and by the advisory board concerned with the administration of such marketing order in the prosecution of such action. Any money which is recovered shall be deposited in accordance with Section 58937.


59250. Any such action may be commenced either in the county where defendant resides, or where any act or omission, or part of the act or omission, which is complained of occurred.


59251. The penalties and remedies which are prescribed in this article with respect to any violation mentioned in this article are concurrent and alternative, and neither singly nor combined are exclusive, and either singly or combined are cumulative with any and all other civil, criminal, or administrative rights, remedies, forfeitures, or penalties which are provided or allowed by law with respect to any such violation.


59252. In lieu of other procedures which are provided in this article, the director may, if he finds that any person has exceeded any quota, allotment, or marketable percentage which is fixed for him pursuant to any marketing order issued by the director pursuant to this chapter, and if the director further finds that such person did not intend to violate such quota, allotment, or marketable percentage, make demand on such person to pay to the director an amount equal to the market value of the quantity marketed in excess of such quota, allotment, or percentage. Such market value shall be only the cost of acquisition to the person that is concerned and does not include the value of services or commodities which are added subsequent to acquisition. Payment of such amount shall preclude any further enforcement action in connection with such transaction. If such person refuses to pay, or fails to pay, the amount which is demanded, the director shall thereupon proceed in accordance with the other provisions of this article. Any money which is recovered pursuant to this section shall be deposited in accordance with Section 58937.


Article 22. Inspection And Abatement

Ca Codes (fac:59281-59293) Food And Agricultural Code Section 59281-59293



59281. This article applies to any lot of any commodity which is regulated by a marketing order or marketing agreement wherever, or in whose possession, such lot may be in the marketing channels within this state.

59282. Any authorized inspector, or other authorized person, who is discharging his duties in the checking of compliance with the provisions of any marketing order which is made effective pursuant to this chapter may enter and inspect any premises, enclosure, building, or conveyance where he has reason to believe any commodity which is subject to a marketing order is produced, stored, being prepared for market, or marketed, and inspect, or cause to be inspected, such representative samples of the commodity as may be necessary to determine whether or not any lot of such commodity is in compliance with applicable regulations, or rules and regulations, of any marketing order which is made effective pursuant to any provision of this chapter.


59283. Except as otherwise provided in this article, any authorized inspector, or other authorized person, in the discharge of his duties, if he has reason to believe that a lot of any commodity subject to a marketing order or marketing agreement which is issued pursuant to this chapter is not in compliance with the requirements of such marketing order or agreement, or of marketing regulations, or rules and regulations, which are issued pursuant to it, as to quality, condition, size, maturity, pack, labeling, or markings, may hold such lot for a reasonable period of time sufficient to enable such officer to ascertain by an authorized inspection whether such lot complies with such marketing requirements, but in any event not to exceed 24 hours in the case of perishables, or 72 hours in the case of nonperishables.


59284. Following inspection, such inspector or other authorized person may affix to any lot which is determined to be in noncompliance, an official notice, warning tag, or other appropriate marking which warns that the lot is held and states the reasons why it is held. It is unlawful for any person, except an authorized inspector or enforcing officer, to detach, alter, deface, or destroy any such official notice, warning tag, or marking so affixed to any such lot, or to remove or dispose of such lot in any manner or under conditions other than as prescribed in such notice of noncompliance except upon written permission of an authorized enforcing officer or by order of a court of competent jurisdiction.


59285. The director, or the authorized person by whom such lot is being held, shall serve the person in possession of the lot with a notice of noncompliance. Such notice shall be served in person or by mail to the last known address of such person that is in possession. The person in possession shall notify the owner of the lot, or every other person that has an interest in it, of the serving of such notice of noncompliance.


59286. The notice of noncompliance shall include all of the following: (a) A description of the lot. (b) The place where, and the reasons for which, the lot is held. (c) A citation of the applicable marketing order or agreement or marketing regulation, or rule and regulation, and any section of it upon which the notice of noncompliance is based.


59287. The owner of the lot shall have, in the case of a perishable commodity not to exceed 48 hours, and in the case of a nonperishable commodity not to exceed 72 hours, from the time of serving such notice of noncompliance for reconditioning or for the correction of the deficiencies which are noted in the notice of noncompliance. If such lot is reconditioned or the deficiencies are corrected the enforcing officer shall remove the warning tags or markings and release the lot for marketing or may, with the consent of the owner of such lot, divert the lot to other lawful uses or destroy it.


59288. If the owner of the lot fails or refuses to give such consent, or if the lot has not been reconditioned or the deficiencies otherwise corrected so as to bring it into compliance within the time which is specified in the notice, the enforcing officer shall proceed as provided in Section 59289.


59289. (a) The enforcing officer may file a verified petition in superior court requesting permission to divert the lot to any other available lawful use or to destroy the lot. The verified petition shall show all of the following: (1) The condition of the lot. (2) That the lot is situated within the territorial jurisdiction of the court in which the petition is being filed. (3) That the lot is held, and that the notice of noncompliance has been served as provided in Section 59285. (4) That the lot has not been reconditioned as required. (5) The name and address of the owner and the person in possession of the lot. (6) That the owner has refused permission to divert or to destroy the lot. (b) A proceeding under this section is a limited civil case if the value of the property in controversy is less than or equal to the maximum amount in controversy for a limited civil case under Section 85 of the Code of Civil Procedure.

59290. Upon the filing of the verified petition, the court may issue an order to show cause returnable in five days after service upon the owner why the lot shall not be reconditioned or the deficiencies corrected, or why the lot shall not be diverted to other lawful uses or destroyed. The owner of the lot may, prior to the date when the order to show cause is returnable, either recondition or correct the deficiencies in the lot so as to bring it into compliance, or may file at or before the hearing on the order an answer with the court stating why the lot should not be reconditioned or the deficiencies corrected so as to bring it into compliance, or showing why it should not be diverted to other lawful uses or destroyed.


59291. If at the expiration of the five-day period the owner of the lot has failed or refused to recondition or to correct the deficiencies so as to bring the lot into compliance, the court may enter judgment ordering that the lot be reconditioned, diverted to any other lawful use, destroyed in the manner which is directed by the court, relabeled, denatured or otherwise processed, sold, or released upon such conditions as the court in its discretion may impose. The lot may not, however, be sold or released into the regular channels of trade.

59292. In the event of sale of any lot by order of court, the costs of storage, handling, and reconditioning or disposal shall be deducted from the proceeds of sale and the balance, if any, paid into court for the account of the owner of any such lot.


59293. Disposal of any lot or portion of any lot pursuant to the provisions of this article, whether such disposal be by arrangement with an enforcement officer or by court order, does not waive any of the penalty provisions of this chapter.


Chapter 2. The Agricultural Producers Marketing Law

Article 1. Short Title And Definitions

Ca Codes (fac:59501-59514) Food And Agricultural Code Section 59501-59514



59501. This chapter shall be known as the Agricultural Producers Marketing Law.


59502. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


59504. "Commodity" means any horticultural, viticultural, or vegetable product of the soil, aquacultural, livestock and livestock products, and poultry and poultry products. It does not, however, include milk or milk products.

59505. "Dealer" means any distributor or retailer.


59506. "Distributor" means any person, except a retailer, that acquires and distributes any commodity at wholesale or retail.


59507. "Handler" means any person that receives any commodity from the producer for the purpose of marketing it.


59508. "Marketing program" means any program which contains provisions which are authorized by Article 8 (commencing with Section 59801) of this chapter.

59509. "Primary channel of trade" means that transaction in which the producer or a cooperative marketing association of producers transfers physical possession of the commodity to another person in the current of commercial trade.

59510. "Producer" means any person that is engaged in the business of growing or producing any commodity for commercial use.


59511. "Processor" means any person that buys, or otherwise takes title to or possession of, any commodity for the purpose of processing or manufacturing it or selling, reselling, or redelivering it in dried, canned, extracted, fermented, distilled, or other preserved form. It also includes all of the following: (a) Any person or exchange that conducts such business. (b) Any person or exchange that buys any commodity from the producer of the commodity for the purpose of reselling it to any person or exchange that conducts such business.


59512. "Proration" means the application of allocated quantities or percentages under a uniform rule to the production, or merchantable production, of all producers that are affected, for the purpose of regulating the quantity of any commodity which may be harvested, prepared for market, or marketed in primary channels of trade during any specified period.


59513. "Proration zone" means any district for which a marketing program is proposed or has been instituted.


59514. "Retailer" means any person that is engaged in the business of making retail sales direct to the general public.


Article 2. General Provisions

Ca Codes (fac:59541-59546) Food And Agricultural Code Section 59541-59546



59541. The Legislature declares that: The disorderly marketing of commodities in this state; the improper preparation for market; the lack of uniform grade specifications or uniform inspection of commodities; the marketing of commodities in excess of reasonable or normal market demands therefor; or the inability of individual producers to expand existing markets or to develop new or larger markets for California grown commodities tends to prevent agricultural producers from maintaining a proper standard of living or from contributing their fair share to the support of necessary governmental and educational functions and thereby tends to increase unfairly the tax burden of other citizens of this state.


59542. The conditions set forth in Section 59541 vitally concern the health, peace, safety and general welfare of the people of this state. It is declared to be the policy of this state to aid agricultural producers in preventing or correcting adverse marketing conditions, improving existing marketing conditions, expanding existing markets, promoting new or broader markets, developing more orderly or efficient or equitable methods in the marketing of commodities and thereby to aid agricultural producers to achieve and maintain a purchasing power at an equitable and reasonable level.


59543. The production and marketing of commodities by producers within this state is 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.


59545. Any order of the director which makes effective a marketing program, and any other order of the director which substantially affects the rights of any interested party, may be reviewed by any court of competent jurisdiction. Any such action shall be commenced withn 30 days after the effective date of the order which is complained of.


59546. If producers of any commodity which is regulated by a marketing program that is issued by the director pursuant to the provisions of this chapter are required to comply with minimum quality, condition, size, or maturity regulations, no person may, except as otherwise provided in such program, process, distribute, or otherwise handle any of such commodity from any source, whether produced within or without this state, which commodity does not meet such minimum requirements which are applicable to producers of the commodity in this state. Such regulations do not, however, apply to any commodity which has been produced outside of this state and is in transit on the effective date of the regulations.


Article 3. Exceptions

Ca Codes (fac:59571-59572) Food And Agricultural Code Section 59571-59572



59571. By reason of the climatic and other conditions which relate to the production and marketing of figs for canning purposes, no marketing program pursuant to this chapter shall be established for figs for canning purposes.

59572. By reason of the climatic conditions and other factors which relate to the production of grapes in such counties, no marketing program shall be applicable to grapes in Sonoma, Napa, Mendocino, Lake, Santa Clara, Santa Cruz, Alameda, San Benito, Solano, San Luis Obispo, Contra Costa, Monterey, and Marin Counties, or any of them.



Article 4. Administration

Ca Codes (fac:59607-59619) Food And Agricultural Code Section 59607-59619



59607. The director may appoint an attorney and shall provide for such other personnel as may be necessary and shall prescribe their duties.

59611. The director may conduct hearings and investigations to carry out the intent and purposes of this chapter.


59612. In the conduct of any hearing, inquiry, or investigation, the director may administer oaths, and issue subpoenas for the attendance of witnesses and the production of papers, books, maps, accounts, documents, and testimony in any inquiry, investigation, or hearing which is ordered or undertaken in any part of the state.


59614. The superior court of the county in which any inquiry, investigation, or hearing is held may compel the attendance of witnesses and require the disclosure by the witnesses of all facts known to them, relative to the matters under investigation, and the production of papers, maps, books, accounts, documents, and testimony as required by any subpoenas issued by the director.


59615. Any party that disobeys any order or subpoena which is issued pursuant to the authority of the director is guilty of contempt and shall be certified to the superior court of the county in which the contempt occurs, which court shall punish the contempt.


59616. The director through his duly authorized representatives and agents, including any proration zone agent who is in charge of a marketing program, shall have access, solely for the purposes of investigating possible violations of any marketing program, to the records of every producer, dealer, distributor, public or private property transporatation agency, and handler of a commodity as to which a marketing program has been instituted. He shall have at all times free and unimpeded access to any building, yard, warehouse, store, or transportation facility or other place in which any commodity under a marketing program is kept, stored, handled, or transported. All information which is obtained is confidential and shall not be disclosed unless required in a judicial proceeding.


59617. In carrying out his duties under this chapter, the director may utilize the facilities and personnel of the state and county departments of agriculture.


59618. A full and accurate record of business or acts which are performed, or of testimony which is taken pursuant to the provisions of this chapter, shall be kept and be placed on file in the office of the director.

59619. The director may purchase general liability insurance for all marketing programs subject to the provisions of this chapter in an amount he or she determines as necessary. The cost of the insurance shall be paid by the affected marketing programs on a pro rata basis. The insurance policy shall name the director, in his or her official capacity, and all persons, collectively, that are subject to the marketing program as insured parties for claims made against the marketing program in its advisory capacity to the director or against the director regarding the activities of the marketing program. The director, after consultation with the Attorney General, may refer claims to the insurance carrier for appropriate action. In the alternative, the director may require that claims be handled in the manner otherwise specified in this chapter.


Article 5. Establishment Of Proration Zone

Ca Codes (fac:59641-59662) Food And Agricultural Code Section 59641-59662



59641. Ten or more producers of the variety or kind of commodity which is to be affected may file with the director a petition for the establishment of a proration zone and the institution of a marketing program.

59642. The petition shall, among other things, contain or be accompanied by all of the following: (a) A description of the district which comprises the proration zone upon which the proposed marketing program is to be based. (b) A general statement of facts which sets forth the necessity for instituting a marketing program. (c) A draft of a proposed marketing program, or a statement of the principal features which are to be included in the proposed marketing program.


59643. Except as otherwise provided in Section 59654, if, after receiving a petition for the establishment of a proration zone and a proposed marketing program for it, the director determines that such proposed proration zone and proposed marketing program are consistent with the provisions of this chapter, the director shall hold a public hearing at some central point which is located within the area described in the petition and proposed to be established as a proration zone. If the director determines that the proposed proration zone or proposed marketing program is not consistent with the provisions of this chapter, no hearing need be held.


59645. Prior to holding a public hearing upon a proposed proration zone and a proposed marketing program, the director: (a) May require the petitioners to file with the department a good and sufficient undertaking to cover the probable cost of conducting the hearing and instituting a marketing program. (b) Shall establish a list of producers of the commodity which is affected within the area which comprises the proposed proration zone.


59646. In establishing the list of producers, the director may issue a notice to handlers which requires them to file with the director a certified report that shows all of the following: (a) The name and mailing address of the handler. (b) The quantities of the commodity that is to be affected, which were handled by the handler in the marketing season next preceding the filing of the report, together with a reasonable determination of the quantity so handled which was produced within the proposed boundaries of the proration zone. (c) The correct name and mailing address of each producer, whose producing operations are located within the proposed proration zone, from whom the handler received the commodity which is to be affected, during the next preceding season. (d) The quantities of the commodity which were received by the handler from each such producer in the marketing season next preceding the filing of the report.

59647. The notice to handlers which requires them to file the lists shall be published by the director pursuant to Section 6062 of the Government Code in the capital of the state and in such other localities as the director may require, and shall be mailed to all handlers of the commodity that are directly affected, of record with the department. The lists of producers shall be filed by handlers within 10 days from the last date of publication of the notice.


59648. In addition, the director may obtain lists of producers that are affected, whenever and in such manner as he may deem necessary or advisable for the purpose of checking, comparing, or correcting such lists. The director shall maintain a current list of producers which is based upon the records of operations under each marketing program. Such producer list shall, subject to any proper corrections, be final and conclusive in making determinations relative to the assent by producers upon a marketing program.


59649. Any producer that produces the commodity which is affected by any proposed or existing marketing program, whose name does not appear upon the director's list of producers affected, may have his name established upon such list by filing with the director a signed statement which states that he produced such commodity in the next preceding season and gives the quantity which was produced and the quantity which was delivered into primary channels of trade in such season.


59650. Notice of the public hearing shall be mailed to a list of producers within the proposed zone at least 10 days prior to such hearing. The list of producers shall be established in accordance with the provisions of Sections 59646, 59647, 59648, and 59649. A notice of such public hearing shall also be given at least 10 days prior to such hearing by publication pursuant to Section 6061 of the Government Code in the area proposed as the proration zone. If the proposed proration zone includes areas that are noncontiguous, the director shall hold a hearing in each.


59651. At the public hearing, the director shall receive evidence offered by the petitioners in support of the proposed proration zone and the proposed marketing program and evidence from any interested person in support of, or in opposition to, them. All testimony at the hearings shall be under oath.

59652. The hearings may be adjourned from time to time and from place to place as the circumstances may require. For the purpose of procuring additional evidence, facts, and data, petitioners or opponents shall, upon proper motion, be granted a continuation of any hearing by the director for a period not exceeding five days. A transcript of the proceedings at all such hearings shall be made by the director and shall be open to inspection by any interested party.


59653. All evidence and exhibits and all facts and data which are used directly or indirectly by the director, or introduced at a hearing shall, within a reasonable time after being used or introduced, be available at the office of the director to all interested parties.


59654. The director may decline to hold a public hearing upon a proposed proration zone and a proposed marketing program if he determines and is satisfied that a public hearing cannot be held within a reasonable time in advance of the harvesting of, or the beginning of the marketing season for, the commodity, so as to permit the formulation and establishment of an equitable and effective marketing program for the marketing season.


59655. Before issuing a marketing program for the written assent of producers, which contains provisions for correlating the supply of the commodity which is affected with market demands for it by means of restrictions upon the total quantity of the commodity, or restrictions upon the total quantity of any grade, size, quality, or condition of it, which restrictions have the effect of limiting the total quantity of the commodity which may be marketed during any marketing season and which restricted portion of the commodity might otherwise be marketed by producers in compliance with other laws of this state or of the United States, or in compliance with established commercial practice during the marketing season, the director shall make all of the following findings with respect to the marketing program: (a) The marketing program will tend to reestablish or maintain such level of prices for the commodity as will provide a purchasing power for the commodity which is adequate to maintain in the business of producing the commodity such number of producers as is required to provide such supply of the quantities and qualities of the commodity as is necessary to fulfill the normal requirements of consumers. (b) The marketing program will tend to approach such equality of purchasing power at as rapid a rate as is feasible in view of the market demand for the commodity. (c) The marketing program conforms with the provisions of this chapter and will tend to effectuate the declared purposes and policies of this chapter. (d) The marketing program will protect the interest of consumers of the commodity through the exercise of the powers of this chapter only to such an extent as is necessary to establish the level of purchasing power which is described in subdivision (a) of this section.

59656. In making the findings which are required by Section 59655, the director shall take into consideration all facts which are available to him with respect to all of the following economic factors. (a) The quantity of the commodity which is available for distribution. (b) The quantity of the commodity which is normally entered into primary channels of trade. (c) The necessary costs of producing the commodity as determined by available surveys or other facts. (d) The purchasing power of consumers as indicated by available reports and indices. (e) The level of prices of other commodities which compete with, or are utilized as substitutes for, the commodity. (f) The level of prices of other commodities, services, and articles which producers commonly purchase.


59657. Before issuing a marketing program for the written assent of producers, which contains provisions for the purpose of regulating the flow of the commodity, or any grade or size of it, to market without restricting the total quantity which may be marketed during the season, or which marketing program provides for the establishment of grade, size, quality, or condition specifications, for uniform grading and inspection, or for advertising and trade promotion, the director shall make all of the following findings with respect to the marketing program: (a) The marketing program will tend to attain the objectives which are sought by the program. (b) The marketing program conforms with the provisions of this chapter and will tend to effectuate the declared purposes and policies of this chapter. (c) The marketing program will protect the interests of consumers in that the powers of this chapter are being exercised only to the extent which is necessary to attain the objectives of the program.


59658. In making any findings pursuant to Section 59657, the director shall base his findings upon the facts, testimony, and evidence which is received at the public hearing together with any other relevant facts which are available to him from official publications or institutions of recognized standing.


59659. In addition to either of the applicable findings prescribed by Section 59655 or 59657, the director shall find that the proposed proration zone includes all of the area within this state which is reasonably necessary to carry out and attain the objectives of this chapter.

59660. If, at a public hearing which includes a consideration of the establishment of the boundaries of a proration zone, it appears that the inclusion of territory additional to that which is described in the petition that is being heard is necessary to the proper administration or enforcement of the proposed marketing program, the director shall postpone further proceedings until notice has been given by the director to the producers within the additional territory in the manner which is provided for in Sections 59643, 59644, 59650, 59652, 59653, and 59654. Thereafter, the director may conclude the hearing, and prepare his findings.


59662. Each proration zone is a separate public corporate entity.


Article 6. Change Of Proration Zone Boundaries

Ca Codes (fac:59691-59694) Food And Agricultural Code Section 59691-59694



59691. Any area within the state which is not already included in a proration zone that produces the same kind or variety of a commodity as is produced in a proration zone which is already established pursuant to this chapter, and regulated by a marketing program, may be added or annexed to the established proration zone pursuant to this article.


59692. A petition to change the boundaries of any proration zone may be filed with the director by producers that produce not less than 10 percent of the production of the commodity which is affected that is produced within the boundaries of the proration zone which is established, or within the boundaries of the area which is proposed to be added. The petition may request that the existing marketing program or a proposed marketing program, as amended, be made applicable to the entire area which is included within the proposed changed boundaries of the proration zone. Upon the receipt of such a petition, the director shall hold a public hearing, as provided in Article 5 (commencing with Section 59641) of this chapter, and receive evidence as to whether or not the boundaries of the proration zone as established shall be changed as recommended. The director shall also, at the hearing, receive evidence with respect to the marketing program which is to be applicable to all of the area within the proposed changed boundaries of the proration zone.


59693. After the hearing, findings shall be made and procedures followed which are in accordance with the applicable provisions of Article 5 (commencing with Section 59641) of this chapter. If the findings are positive, a marketing program is issued, and a proration zone with new boundaries is established, the marketing program shall be submitted to producers within the zone for their written assent as prescribed by the applicable provisions and procedures of Article 9 (commencing with Section 59851) of this chapter.


59694. If the marketing program which is submitted is not assented to by producers in sufficient number and by sufficient volume to meet the requirements of Article 9 (commencing with Section 59851) of this chapter, the director shall dismiss the proceedings which were instituted to change or annex the boundaries of the proration zone, and the marketing program in operation at the time the proceedings were instituted shall continue to be effective within the boundaries of the proration zone as constituted prior to the proceedings. The marketing program has the same force and effect as though no proceedings had been instituted pursuant to this article.


Article 7. Marketing Program And Grading Committees

Ca Codes (fac:59721-59738) Food And Agricultural Code Section 59721-59738



59721. The affairs of each proration zone shall be managed by a marketing program committee which is appointed in accordance with this chapter. The director shall appoint the initial marketing program committee from nominations which are received at the public hearing upon the proposed program. The term of office of the initial marketing program committee shall be for one marketing season. The term of office of subsequent marketing program committees for each marketing program shall be two years or until their successors have been appointed and have qualified. The beginning date of the term of office shall be set forth in the marketing program.


59722. For terms subsequent to the term of the initial committee, members and their respective alternates shall be selected and appointed in accordance with the following procedure: The director shall divide the proration zone into as many districts as may be necessary for the proper administration of the program, and allot to each district the proper number of producers to be appointed to serve as members and alternate members upon a marketing program committee so as to give as nearly as possible adequate representation to all producers in all such districts. Members and their respective alternate members shall be appointed by the director from lists of producers that are eligible to serve on the marketing program committee. In addition, the director may appoint one public member on each such marketing program committee. Upon the director's request, the committee shall submit to the director the names of three or more natural persons, each of whom shall be a citizen and resident of this state and not a producer, shipper, or processor nor financially interested in any producer, shipper, or processor, for appointment by the director as a public member of the committee. The director may appoint one of the nominees as the public member on the committee. If all nominees are unsatisfactory to the director, the committee shall continue to submit lists of nominees until the director has made a selection. Any vacancy in the office of the public member of the committee shall be filled by appointment by the director from the nominee or nominees similarly qualified submitted by the committee. The public member of the committee shall represent the interests of the general public in all matters coming before the committee and shall have the same voting and other rights and immunities as other members of the committee.


59723. Eligible lists shall be established by the director either by means of a meeting of producers in each district, or by means of mail ballot, or by a combination of meetings and mail ballot. The method to be used shall be determined by the director, except that a mail ballot shall be granted upon a written request of 10 percent of the producers. Each producer is entitled to one vote and voting by proxy is not permitted. From nominations which are made, not less than three eligible persons shall be selected for each member of the committee. Any person that is nominated shall be a producer with producing property which is located within the district for which he is nominated.

59724. If a corporation or a partnership is a producer, it may designate a representative who may be a nominee.


59725. Each respective alternate shall be appointed from the same eligible list from which the member is appointed. Each district in the proration zone is entitled to at least one member and one alternate member of the committee.

59726. The marketing program committee may at any time invite any handler or other person to its meetings to serve in an advisory capacity and may authorize, subject to the approval of the director, the payment of compensation and necessary expenses to any person that is serving in such advisory capacity at rates not to exceed those which are granted to marketing program committee members.


59727. The director may, if requested by the producer members of the marketing program committee, appoint on the committee, in addition to the producer members, not more than three handler members and their respective alternates who are handlers of the commodity which is affected by the marketing program of the proration zone.


59728. If grade, quality, or size regulations are authorized under any marketing program for any commodity which is used for canning, freezing, fermenting, or distilling, and the regulations are not an integral part of a proration plan for the purpose of controlling a surplus condition in the commodity, such grade, quality, or size regulations or interpretations, or modifications of them, shall be approved by a grading committee which is appointed by the director. A grading committee shall consist of the marketing program committee, or a subcommittee, of at least seven members and an equal number of processor representatives that are nominated by the industry which is engaged in the processing of the commodity that is involved. Any action of the grading committee shall be concurred in by a majority of the processor members, a majority of the producer members, and by the director.


59729. The members and alternate members of any marketing program committee or grading committee which are duly appointed by the director, including employees of the marketing program committee, are not responsible individually in any way whatsoever to any person for liability on any contract or agreement of the committee.


59730. Marketing program committee members are entitled to compensation at a rate not exceeding ten dollars ($10) each for each day while engaged on official business. Such compensation shall not, however, be paid for more than five days in any month unless approved by the director. The members shall be reimbursed for their necessary traveling expenses.


59731. An alternate member of a marketing program committee shall sit as a regular member of the committee if the member for whom he is an alternate fails for any reason to attend any meeting of the committee. He shall be compensated and reimbursed for his necessary traveling expenses in the same manner and to the same extent as a regular member while so serving.


59732. Any vacancy on the marketing program committee which is occasioned by the expiration of term of office shall be filled from eligible lists of producers selected in each district obtained as provided in Sections 59721 to 59729, inclusive. Any vacancy which is occasioned by the death or resignation of any member, or by removal for incompetence, inattention, or neglect of duties as a member of the marketing program committee, by the director, or by a member who ceases to qualify as a producer or handler of the commodity which is concerned, shall be filled from persons who remain on the eligible lists of producers from which the appointments for the current term were made, or from new lists which are obtained as provided in Sections 59721 to 59729, inclusive.


59733. The marketing program committee shall appoint an agent, subject to the approval of the director, who shall administer the marketing program under the direction of the marketing program committee and who may be removed from office in the same manner as he was appointed. The salary or compensation of the agent shall be fixed by the marketing program committee, subject to the approval of the director.


59734. The agent shall appoint such deputy agents and other assistants as may be necessary to direct the marketing program. Such appointments are subject to the approval of the program committee. The agents, deputy agents, and other assistants are employees of the proration zone and not of the state. An officer or employee shall not receive compensation which is based on a percentage of volume which is involved in a marketing program, or in any manner that would lend encouragement to the promotion of a marketing program for the purpose of increasing salaries and income.


59735. The marketing program committee, with the approval of the director, may do all of the following: (a) Appoint subcommittees in any producing areas within the proration zone to facilitate the carrying out of the purposes of this chapter. (b) Collaborate and cooperate with any agency or organization with similar purposes, whether of this state, any other state, or of the United States, in the formulation and execution of any marketing program or marketing order which has common objectives. In any proper case, the director may require such collaboration and cooperation. (c) Cooperate with any duly constituted authority in the enforcement of other laws of this state, or of the United States, which are enacted to protect producers or the consuming public from fraud or deception. (d) Make contracts and agreements in the furtherance of any of the powers of the marketing program committee. (e) Receive, invest, and disburse funds, pursuant to the provisions of Article 12 (commencing with Section 59941).


59736. The exercise of the powers which are granted to a marketing program committee in its administration of a marketing program which is made effective pursuant to this chapter is subject to the approval of the director.

59737. Upon recommendation of the marketing program committee which is concerned, the director may, consistent with this chapter, establish such administrative regulations as may be necessary to facilitate the administration and enforcement of each marketing program which is promulgated pursuant to this chapter. Upon the issuance and making effective of such regulations, notice of the issuance of the regulations shall be made in the same manner as provided in Article 16 (commencing with Section 59111), Chapter 1, Part 2 of this division for marketing orders.


59738. It is hereby declared, as a matter of legislative determination, that producers, or handlers, and processors appointed to any committees pursuant to this article are intended to represent and further the interest of a particular agricultural industry concerned, and that such representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are appointed to such committees, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.


Article 8. Marketing Programs

Ca Codes (fac:59801-59824) Food And Agricultural Code Section 59801-59824



59801. The powers which are granted to a marketing program committee by a marketing program pursuant to this article may be exercised for the purpose of minimizing the effect of any surplus or other adverse market condition.

59802. A marketing program may authorize the marketing program committee to establish and maintain stabilization and surplus pools. The marketing of green ripe olives is not, however, subject to the provisions of any marketing program which relates to the esablishment and operation of stabilization and surplus pools.


59803. The program committee may receive from each producer for delivery into a stabilization or surplus pool the uncertificated portions of the commodity which is regulated by the marketing program and market it by any variety, grade, or size for the account of the producers if the uncertificated portion can be disposed of advantageously either in its original or a converted state. The marketing program committee shall designate the quantity or the percentage of the marketable supply of the commodity that shall be placed in the stabilization pool and the quantity or the percentage of the marketable supply of the commodity that shall be placed in the surplus pool. Any quantity or percentage which is so established is applicable to each producer.


59804. In operating any stabilization or surplus pool, the marketing program committee may receive and account for the commodity on the basis of variety, grade, or size classifications, and may fix servicing charges to be assessed against the total quantity of any commodity which is received into the pools.


59805. The marketing program committee has title to all of the commodity in each of the pools and shall handle all of the commodity received into each of the pools and account for it to each producer that is beneficially interested in such commodity upon a pooled basis.


59806. The contents of a stabilization pool may be disposed of or may be marketed, from time to time, as the marketing program committee deems advisable, consistent with the maintenance of stabilized marketing conditions.


59807. The contents of a surplus pool shall not be marketed in any form which would directly compete with that portion of the commodity which is regularly certificated or which is in a stabilization pool. Any part of any surplus pool may, however, be transferred by a marketing program committee on a gratuitous basis to any charitable organization, self-held cooperative, or similar agency under proper safeguards to prevent any part of the commodity so disposed of from directly competing with the part of the commodity which is marketed through the usual channels of trade.


59808. A marketing program may authorize the marketing program committee to establish and maintain diversion or substandard pools. The program committee may receive from each producer for delivery into a diversion or a substandard pool such quantity of each producer' s production or deliveries as fails to qualify for marketing or sale in regular marketing channels, under grade, quality, or size regulations which are established in the marketing program or under standardization laws or other laws of this state or of the United States.

59809. In operating any such diversion or substandard pool, the marketing program committee may fix servicing charges to be assessed against the commodity which is received into the pool and may receive and account for the commodity on a basis of variety, grade, and size classifications. The program committee has title to all of the commodity in either of the pools and shall handle all of the commodity which is received into either of the pools and account for it to each producer that is beneficially interested in such upon a pooled basis.

59810. The contents of any diversion or substandard pool shall be disposed of for byproducts or for other purposes under proper safeguards to prevent that part of the commodity which is so disposed of from directly competing with the part of the commodity which is marketed in its usual form through the usual channels of trade.


59811. A marketing program may authorize the marketing program committee to create, establish, or otherwise obtain and operate any facility for the storing, financing, grading, packing, servicing, processing, preparing for market, selling, or disposal of the contents of any pools which are provided for in this article. A marketing program committee shall not, however, engage in public warehousing.


59812. The marketing program committee may pledge all of the commodity that is in any pool which is established pursuant to any provision of this article with a bank or other lending agency for the purpose of obtaining loans upon such commodity. The marketing program committee has title to all of the commodity which is in any such pools for the purpose of financing and handling.


59813. A marketing program may authorize the marketing program committee to create, by a uniform assessment upon producers based upon the volume of the commodity which is marketed by each, or upon some other uniform and equitable basis, maintain, and disburse an equalization fund to be used for the removal of any inequalities between producers as to the total volume which is marketed through prorated channels that result from errors in estimating production or surplus, or for indemnifying producers whose production, in whole or in part, is diverted in green form or otherwise from normal marketing outlets, or diverted to relief, byproducts, or other noncompetitive purposes pursuant to a marketing program.


59814. No part of any funds which are raised for equalization fund purposes, as specified in Section 59813, shall be applied to the cost of maintenance of the department.


59815. A marketing program may authorize the marketing program committee to establish, adopt, and apply methods for correlating the marketable supply of any commodity to the reasonable market demands by means of volume limitation, time limitation, diversion, or by grade, quality, or size regulations which are applicable to the total production of any commodity, or to that portion of any commodity which qualified for marketing pursuant to standards which are authorized in the marketing program, standardization laws, or other laws of this state, or of the United States. The marketing of green ripe olives is not, however, subject to the provisions of any marketing program which limits the total quantity of such commodity which may be marketed.


59816. A marketing program may authorize the marketing program committee to broaden distribution and increase consuming outlets by appropriate educational and trade stimulation efforts of a general industry nature and not unfairly depreciative of the quality of any other food product.


59817. Educational and trade stimulation efforts may include all of the following: (a) Efforts to prevent, modify, or remove trade barriers which directly affect the commodity to which the marketing program applies. (b) The presentation of facts to, and negotiations with, any state, federal, or foreign governmental agency on any matter which affects the marketing of the commodity.

59818. For the purpose of providing funds to defray the cost of formulating, administering, and enforcing educational and trade stimulation efforts, a fee or assessment shall be established and collected upon the volume of the commodity which is marketed or upon some other uniform and equitable basis. The fee may be collected separately by the marketing program committee or may be combined with any fee which is collected for general administrative purposes, in which case the marketing program committee may recommend to the director, and the director may approve, the proportions of the combined fee which may be expended for each of such purposes.


59819. Any portion of the funds which are collected during any marketing season to accomplish the purposes of Sections 59816, 59817, and 59818 may, subject to the approval of the director, be carried forward for expenditure during any season subsequent to the season during which the funds are collected.


59820. Any educational and trade stimulation efforts which are authorized by any marketing program if approved by growers, either by written assent or by referendum ballots, for a specified period of time, but not exceeding four years, may be carried out for such period without the necessity of a biennial referendum as required in Section 59981.


59821. A marketing program may authorize the marketing program committee to provide for the adjustment of production of any commodity by means of tree or vine pulling. The marketing program committee may receive applications from producers for acreage adjustment payments. The marketing program committee shall, upon proper review and certification, make such acreage adjustment payments on an equitable basis from funds which are collected for that purpose under the marketing program on a uniform basis from all commercial producers of the commodity within the proration zone, or from funds which are received from any federal, state, or other agency for that purpose.


59822. A marketing program of production adjustment adopted under Section 59821 shall not authorize any payment for the removal of acreages of trees or vines of any species or variety specified in the marketing program which have, during the three years immediately preceding the date of application, produced an annual yield per acre in excess of the comparably computed average yield from bearing trees or vines of the same species or variety for the state as a whole. Such yields and averages shall be determined by the director from statistical data which is compiled by any state or federal agency or such other data as the director deems to be representative and reliable.


59823. If the marketing program committee finds that the results of research would be advantageous in the administration of a marketing program, it may, subject to the approval of the director, authorize and arrange for research to be conducted. The cost of the research shall be considered a part of the cost of the administration of that portion of the marketing program for which the research is authorized.


59824. In any such research, the Dean of the College of Agriculture of the University of California and the program committee shall cooperate in selecting the research projects to be carried on from time to time. Insofar as practicable, the projects shall be carried out by the College of Agriculture, but if the dean of the college and the marketing program committee determine that the college has no facilities for a particular project or that some other research agency has better facilities for it, the project may be carried out by any other research agency which is selected by the dean and the marketing program committee.


Article 9. Assents To Marketing Programs

Ca Codes (fac:59851-59857) Food And Agricultural Code Section 59851-59857



59851. Upon the issuance of a marketing program for the written assent of producers, the director shall submit a copy of the marketing program in full to each of the producers of the commodity which is to be affected, or their duly authorized agent, within the proposed proration zone as shown by the lists of producers which are compiled in accordance with this chapter, accompanied by a printed, typewritten, or mimeographed form upon which the producer can record his assent to the marketing program.


59852. A nonprofit cooperative association may assent on behalf of any of its members only if it is authorized so to do by an instrument in writing which is signed by the member. Such authority may be revoked as to him by any such member by an instrument in writing which is filed with the director and with such association. The revocation shall become effective three days after its receipt by the director. A copy of any written authorization, or any revocation of such authority, of a producer to the nonprofit cooperative association of which he is a member shall be forwarded to the director by the association.


59853. The director may at the time of mailing to producers a marketing program or amendments to it for written assent, establish a closing date after which assents will not be counted. If he does so, the closing date upon which assents are required to be postmarked in order to be counted shall be shown on the assent form and be announced by a press release for general dissemination which is issued by the director.


59854. If the closing date is not established at the time assent forms are mailed to producers, and the director subsequently finds that because of the oncoming harvesting season or because of any other relevant reason it is desirable to fix a closing date for filing assents, he may do so by publishing a notice pursuant to Section 6061 of the Government Code in the capital of the state and in such other localities as the director may prescribe not less than 10 days prior to the closing date. The closing date shall also be announced by a press release for general dissemination which is issued by the director at least 10 days prior to the closing date.


59855. If the director finds that the marketing program has been assented to in writing by one of the following, he shall make the marketing program effective: (a) Not less than 65 percent of the producers in the proration zone that produced for market not less than 51 percent of the quantity of the commodity which was produced in the proration zone in the next preceding season. (b) Not less than 51 percent of the producers that produced for market not less than 65 percent of the quantity of such commodity which was produced in the proration zone in the next preceding season.


59856. If the director makes a marketing program effective, he shall publish a notice of the effective date pursuant to Section 6061 of the Government Code in the capital of the state and in such other localities as the director may prescribe, not less than five days prior to the effective date.


59857. A member of the marketing program committee, or the proration zone agent, shall not unduly influence producers in their choice either for or against the institution of a marketing program, or for or against the termination of such a marketing program.


Article 10. Proration Certificates

Ca Codes (fac:59881-59886) Food And Agricultural Code Section 59881-59886



59881. After any marketing program has been formulated and has been approved as provided in this chapter, the agent for the proration zone shall assume the administration of the marketing program and any subsequent modification of it and the issuance of proration certificates pursuant to it. Such certificates shall be divided into primary and secondary certificates.


59882. Each producer is entitled to one primary certificate which may indicate the quantities of the commodity for which the marketing program has been instituted which the producer that is named in the certificate is entitled to harvest or otherwise prepare for market and delivery into the primary channels of trade. The primary certificate may also indicate from time to time the number of secondary certificates which are issued under it.


59883. Secondary certificates shall be numbered consecutively and shall be used to control the time and volume of harvesting or other preparation for disposal. Secondary certificates shall accompany all deliveries of the prorated commodity by producers into a primary trade channel.


59884. In the case of any commodity which is normally concentrated for preparation for market, the marketing program committee may authorize the harvesting of the entire commodity for the purpose of delivery to a concentration point and subsequent marketing control.


59885. Primary or secondary certificates are not negotiable between producers, except with the approval of the marketing program committee and the director.

59886. In the operation of any marketing program, any cooperative or other market agency which is entitled to the possession of any commodity for marketing purposes may be authorized in writing by the marketing program committee to receive certificates for producers that are represented by it and to represent its respective producers if proration is applied to the commodity while it is in the possession of such agency.


Article 11. Amendments To Marketing Programs

Ca Codes (fac:59911-59927) Food And Agricultural Code Section 59911-59927



59911. Any amendment to a marketing program which is specified in Sections 59912 to 59921, inclusive, is a major amendment.


59912. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to correlate the marketable supply of any commodity with reasonable market demands by means of volume, grade, size, variety, or time regulations.


59913. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to fix salable and surplus percentages.

59914. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to establish, maintain, and operate stabilization, surplus, or diversion--substandard pools.


59915. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to create, establish, or otherwise obtain and operate any facility for the storing, financing, grading, packing, servicing, processing, preparing for market, selling, or disposing of the contents of any pools which are established.


59916. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to create and disburse an equalization fund as provided for in Sections 59813 and 59814.


59917. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to broaden distribution and increase consuming outlets by educational and trade stimulation efforts.

59918. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to provide for the adjustment of production of any commodity by means of tree or vine pulling.


59919. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority for carrying on research which is related to production, processing, or distribution of any commodity, that is in addition to research that is directly necessary to the administration of the marketing program.

59920. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to increase an assessment rate or fee beyond the maximum authorized by the marketing program which is in effect.

59921. An amendment is a major amendment if it adds to, or deletes from, a marketing program authority to extend the application of the provisions of the marketing program to portions or uses of any commodity which is not subject to such provisions or to extend the application of such provisions upon the producers of such portions or uses of any such commodity.


59922. A major amendment shall not be made effective unless a public hearing has been held upon it in accordance with Article 5 (commencing with Section 59641) of this chapter for the establishment or institution of a marketing program, and the director makes both of the following findings: (a) The amendment is in conformity with the applicable provisions and procedures of Article 5 of this chapter. (b) The amendment is assented to in writing in the required percentages prescribed in Article 9 (commencing with Section 59851) of this chapter.

59923. Minor amendments may be made to an effective marketing program upon the recommendation of not less than 75 percent of the producer members of the marketing program committee, with the approval of the director, if the director finds that such amendments are in conformity with the applicable provisions and procedures of Article 5 (commencing with Section 59641) of this chapter.


59924. If the director deems it advisable, he may hold a public hearing upon minor amendments prior to such approval. Any public hearing held for this purpose shall be held within the boundaries of the proration zone.

59925. The amendment of any marketing program to provide for a referendum is a minor amendment.


59926. Any modification of the provisions of any marketing program in effect for the purpose of clarifying the meaning or application of the provisions or modifying administrative procedures for carrying out the provisions is a minor amendment.


59927. If the director makes any amendment to a marketing program effective, he shall publish a notice of the effective date pursuant to Section 6061 of the Government Code in the capital of the state and in such other localities as the director may prescribe, not less than five days prior to the effective date.


Article 12. Funds

Ca Codes (fac:59941-59958) Food And Agricultural Code Section 59941-59958



59941. The proration zone agent for each marketing program shall collect, either for each primary certificate or for each secondary certificate, or for both, a reasonable and proportional fee to be fixed by the program committee, subject to the approval of the director, so calculated as to provide an amount which is adequate to defray the necessary expenses of instituting and carrying out the marketing program and a proper proportion of the cost of the maintenance of the department in the performance of duties which are required by this chapter.

59942. Any fee for primary certificates or secondary certificates which is fixed by the program committee with the approval of the director, pursuant to this article, is due and payable by each producer upon all units of the commodity of the producer which are subject to the certificates and constitutes a personal debt of the producer.


59943. If any producer has authorized a handler to obtain secondary certificates and pay secondary certificate fees on behalf of the producer, or the handler has been a party to noncompliance with respect to payment for certificates or corresponding fees, the amounts unpaid constitute a personal debt of the handler.


59943.5. For the convenience of collecting any producer fees which are established pursuant to this article, the director may collect such fees from the handlers of the commodity which is being regulated. Any handler that pays a fee for and on behalf of any producer may deduct the producer fee from any money which is owed by the handler to the producer. Any marketing program may require a handler to deduct producer fees from any money which is owed by the handler to the producer. Such producer fee deductions are hereby declared to be trust funds held by the handler for the purposes of the marketing program concerned and shall be timely remitted, with fee reports, to the director.


59944. The proportion of the fees which is payable to the department may vary upon a seasonal basis for each program according to the estimated expense to be incurred by the director in administering the marketing program. The amount so required shall not exceed 15 percent of the certificate fees which are collected by the proration zone agent specifically for administrative purposes, however, such 15 percent limit may be exceeded when it is approved by the program committee, and, in addition, such proportion of fees which are collected for any educational and trade stimulation marketing program as may be required by the director to administer the marketing program, which shall in no event exceed 5 percent of the fees which are collected for such purpose, unless the payment of a larger proportion of such funds is approved by the marketing program committee for the marketing program.


59945. Upon the request of any marketing program committee, the director shall confer with the committee or its representatives prior to fixing the amount or proportion of any fees of the marketing program which are payable to the department for maintenance of the department in the performance of the duties which are required by this chapter.


59946. All fees shall be deposited promptly by the proration zone agent in a bank which is approved by the Director of Finance, and shall be accounted for immediately to the Director of Food and Agriculture. Each deposit shall be made in the name of the proration zone under which the funds are collected. Any money which is so deposited may be invested and reinvested by the Treasurer or marketing program committee in any of the securities which are described in Article 1 (commencing with Section 16430) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code, or placed in a depository as provided in Chapter 4 (commencing with Section 16500) of Part 2 of Division 4 of Title 2 of the Government Code, and handled in the same manner as money in the State Treasury. For these purposes, these moneys may also be combined with funds which are determined by the director to be available for investment pursuant to Section 58939. Any increment which is received from investment, reinvestment, or deposit made by the Treasurer shall be remitted to the marketing program committee. The Treasurer may deduct from the remittance an amount equal to the reasonable cost incurred in carrying out this section or may bill the marketing program committee for the costs, and the marketing program committee shall pay the costs from any money which is collected for it pursuant to this chapter.


59947. (a) The funds that are deposited pursuant to Section 59946 shall be disbursed by the director or the marketing program committee, pursuant to regulations prescribed by him or her, only for the expenditures that are incurred by the marketing program committee in carrying out the specific purposes and provisions of the marketing program, including all necessary expenses that are incurred in the formulation, administration, and enforcement of the marketing program, and expenses generated by the auditing requirement imposed by subdivision (b). (b) All expenditures shall be audited at least once every two years by one of the following means: (1) By contract with a certified public accountant. (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy. (3) By contract with a public accounting firm. (4) By agreement with the Department of Finance. A copy of the audit shall be delivered, within 30 days after the completion of the audit, to the Governor, the director, and the Controller.


59948. The proportionate amount of fees which are payable to the department shall be withdrawn from the funds monthly by the director and shall be used only for the department in carrying out its duties as required by this chapter.

59949. At the end of any marketing season as designated in each marketing program, after proper provision has been made for the payment of all necessary expense which is incurred in connection with the marketing season, any money which remains to the credit of the marketing program committee may be refunded upon a pro rata basis to all persons from whom certificate fees were collected. During any marketing season, however, the marketing program committee may, with the approval of the director, carry forward any unexpended balances for expenditure during seasons subsequent to the season during which such fees were collected. Alternatively, the refund may, upon the resolution of the marketing program committee and with the approval of the director, be deferred so as to permit the marketing program committee to use the residual funds to meet operating expenses in the succeeding season or until sufficient funds have been collected, or the collection of sufficient funds is assured, to enable the committee to make the refund and to defray the expenses of the then current marketing season, including an allowance for preliminary expenses of the next succeeding season.


59950. At the time a refund is made, the marketing program committee shall file with the director a claim for the refund to growers that are entitled to such refund. If the director finds that as of the end of any marketing season the amount which remains to the credit of the marketing program committee is so small as to make impractical the computation and remitting of the pro rata refund, he may authorize the transfer of the funds to the then current marketing season for expenditure in carrying out the marketing program.


59951. Unexpended balances of any money which is collected to carry out the educational and trade stimulation efforts which are provided for in Sections 59816, 59817, and 59818 which are sufficient in amount to warrant incurring the expense of making a refund shall be refunded following the termination of any marketing program which contains provisions which are authorized by those sections or following the suspension or termination of educational and trade stimulation provisions of any marketing program. The refund shall be made upon such pro rata basis as the program committee and the director determine is equitable.

59952. If the unexpended balance is so small as to make impractical the computation and remitting of a pro rata refund, the director may authorize the transfer of the funds to the administrative account of the marketing program or to the Department of Agriculture Fund for the support of the department in carrying out its duties in the administration of this chapter.


59953. Unless otherwise requested by the marketing program committee, the director is not required to issue refunds to any producer in an amount less than five dollars ($5).


59954. Any check or warrant which is drawn against the fund of any marketing program which remains unclaimed or uncashed for a period of six months from the date of issuance shall be canceled and the money retained for disbursement to the original payee or claimant upon satisfactory identification for a period of one year from the time the check or warrant is canceled. The money so retained, if not claimed within the period of one year, shall be credited to the then currently operating marketing program for the commodity pursuant to which the funds so retained were collected.


59955. If there is no marketing program then in effective operation for the commodity, the funds shall be credited to the unexpended balance, if any, of the last previous marketing program for the commodity. If there is no marketing program then in current operation or no balance exists from any previous marketing program to which the funds may be credited, the funds so retained may be expended by the director for the benefit of any marketing program established under the provision of this chapter.


59956. An agent or employee of the marketing program committee shall not have or receive any funds which are collected pursuant to this chapter until such agent or employee has filed with the director a bond in such form and in such penal sum as the director may prescribe.


59957. Upon the recommendation of the marketing program committee, the director may relieve the proration zone agent of the responsibility of collecting any amount which is due and unpaid not exceeding five dollars ($5) if the director determines that the collection is improbable or the cost of collecting would exceed the amount which is involved.


59958. The director, in addition to other remedies which are provided by law, may direct suit in the name of the people of this state as plaintiff, to be brought for the recovery of fees as provided in this chapter. In such case, the director may make the necessary affidavit for and a writ of attachment may issue. All fees collected in this manner shall be handled as provided in this article.


Article 13. Termination Of Marketing Programs

Ca Codes (fac:59981-59988) Food And Agricultural Code Section 59981-59988



59981. Except as otherwise provided in Section 59820, if any marketing program which is in active operation does not provide for a periodic referendum of producers of record with the department, directly affected by the program, for the purpose of determining whether or not the program shall be continued or modified, the director shall, prior to the beginning of a marketing season, conduct a referendum on the program at least biennially for the purpose of making the determination.


59982. An expression by a majority of the producers that participate in the referendum shall govern the action of the director in declaring a program modified, continued, or suspended.


59983. In conducting the referendum, the director may require the majority expression to be that of producers in terms of volume of production in addition to numbers of producers voting.


59984. After the institution of any marketing program, the program shall be terminated if there is filed with the director a petition for its termination which is signed by not less than 40 percent of the producers of the commodity in the proration zone that produced not less than 40 percent of the commodity affected that was produced within the proration zone during the last preceding season. The signatures of the producers upon the petition shall be those of the producers whose names appear on the list which was used at the institution of the program or on any corrected list which the director has had prepared during the existence of the marketing program, or their successors in interest.


59985. Each petitioner shall, upon affixing his signature to the petition for termination, write in the date of signing. No signature to the petition shall be valid for any purpose if affixed more than six months prior to the filing of the petition with the director. The petition shall be accompanied by a good and sufficient undertaking in an amount which is equal to the probable costs incident to conducting the hearing and making of findings. A hearing shall be held by the director upon the petition to determine the sufficiency of the signatures within 60 days after the presentation of the petition.

59986. If from a check of the petition together with the facts and evidence which are adduced at the hearing, it is established that the petition to terminate is signed by the required 40 percent of the producers of the commodity in the zone that produced at least 40 percent of the proration commodity affected which was produced within the zone during the last preceding season, the director shall terminate the marketing program. Any marketing program on a seasonal commodity shall not, however, be terminated except at the end of its marketing season.

59987. The costs incident to conducting the hearing and making of findings shall initially be paid from the funds of the program to the extent that they are available and thereafter from the undertaking. If the petition is found to be insufficiently signed, the entire cost of conducting the hearing shall be paid from the undertaking. If a program is terminated, any funds which remain for the use of the program committee that are not otherwise disposed of by this chapter shall be deposited in the State Treasury to the credit of the Department of Agriculture Fund.


59988. The director may at any time initiate an investigation to determine whether or not the facts which are specified in Sections 59655 to 59662, inclusive, continue to exist. Upon a finding that any one or more of the prerequisite facts no longer exist, the director shall terminate or suspend the marketing program and may dissolve the proration zone. A program on a seasonal commodity shall not, however, be terminated or suspended except at the end of its marketing season.


Article 14. Actions And Penalties

Ca Codes (fac:60011-60016) Food And Agricultural Code Section 60011-60016



60011. Any action for penalties or other remedies which is prescribed in this chapter shall be commenced within two years from the date of the alleged violation.


60012. Any person that possesses, markets, handles, or transports any commodity in violation of any provision of an original or modified marketing program which is approved and made effective or in violation of any regulation which is adopted by any marketing program committee and approved by the director may be enjoined by the director, or, with the approval of the director, by the proration zone which is affected, in an action which is brought in the superior court for any county in which the violation is alleged to be occurring. There may be enjoined in the same proceeding any number of defendants that are alleged to be violating the same program although their actual violations of the marketing program may be separate and distinct and occur in different counties. In any action for injunction which is brought pursuant to this section, the procedure shall be governed by Chapter 3 (commencing with Section 525), Title 7, Part 2 of the Code of Civil Procedure.


60013. Any person that violates a marketing program which is approved and made effective, or violates any regulation which is adopted by any program committee and approved by the director, is liable civilly in an amount of not more than two thousand five hundred dollars ($2,500) for each and every violation. That sum shall be recovered by the director or, with the approval of the director, by the proration zone which is affected, in an action brought in any court of competent jurisdiction. All sums recovered pursuant to this section shall be expended only for the necessary expenses which are incurred by the director in the administration of this chapter. Each violation during any day is a separate offense.


60014. Except as otherwise provided in Section 60015, it is a misdemeanor for: (a) Any person to willfully render or furnish a false or fraudulent report, statement, or record required under this chapter. (b) Any person to deliver into a primary trade channel without proper authority any commodity upon which a marketing program has been instituted. (c) Any handler, dealer, or carrier to receive or have in its possession, within this state, without proper authority, any commodity upon which a marketing program has been instituted. (d) Any person to deliver or to attempt to deliver any commodity that has been diverted under the provisions of any marketing program into any channel of trade except that into which diversion has been ordered. (e) Any person to aid or abet in the commission of any of the acts which are specified in this section. Each violation of this section constitutes a separate and distinct offense.

60015. Section 60014 does not apply to a common carrier which is operating over a regular route or between fixed termini if the shipment is made by the carrier in good faith and in accordance with its duties as a common carrier and a record of every such shipment within or from this state is kept by the carrier which shows the date of shipment, character and quality of shipment, origin and destination of the shipment, and the names of the consignor and the consignee. The record shall be open to inspection at all reasonable hours by or on the written order of the official or administrative authority that is charged with the enforcement of this chapter or any marketing program pusuant to this chapter.


60016. (a) When the director makes a determination that a marketing program fee payment due pursuant to this chapter is deficient as to the payment due, the director may determine the amount of the deficiency, including any applicable penalty, as provided in this section. After giving notice that a deficiency determination is proposed and an opportunity to file a report or provide supplemental information is provided, the director may make one or more deficiency determinations of the amount due for any reporting period based on information in the director's possession. When a business is discontinued, a deficiency determination may be made at any time thereafter as to liability arising out of the operation of that business. The director shall give notice of the proposed deficiency determination and the notice of deficiency determination by placing the notice thereof in a sealed envelope with postage paid addressed to the person affected as it appears in the records of the marketing order or as otherwise available to the director. The giving of notice is complete at the time of deposit in the United States mail. In lieu of mailing, a notice may be served personally by delivering it to the person to be served. Except in the case of fraud or failure to file a required return, a notice of a deficiency determination shall be given within four years of the accrual of the deficiency. (b) The person against whom a deficiency determination is made may petition the director for redetermination within 30 days after the serving of the notice of deficiency determination. If a petition is not filed within 30 days, the deficiency determination shall become final. A petition for redetermination shall be in writing, state the specific grounds upon which it is based, and be supported by applicable records and declarations under penalty of perjury that the information supporting the petition is accurate and complete. If a petition for redetermination is duly filed, the director shall reconsider the deficiency determination and may grant a hearing thereon. The director shall, as soon as practicable, make an order on redetermination, which shall become final 30 days after service of notice of the order of redetermination upon the petitioner. The notice of the order shall be served in the same manner as the notice of the original deficiency determination. (c) If any amount required to be paid pursuant to a deficiency determination or redetermination is not paid within the time specified in the notice thereof, the director may, within four years thereafter, file in the Superior Court for the County of Sacramento, or the superior court of any other county, a certificate specifying the amount required to be paid, the name and address of the person liable as it appears on the records of the director, and a request that judgment be entered against the person in that amount 30 days after the filing. Notice of the filing shall be given in the same manner as for the notice of deficiency determination. The court shall enter a judgment in conformance with the director's certificate 30 days after its filing, unless a petition for judicial review has been filed within the 30-day period. An abstract of the judgment, or a copy thereof, may be filed with the county recorder of any county. From the time of filing of the judgment, the amount of the judgment constitutes a lien upon all of the property in the county owned by the judgment debtor. The lien has the force, effect, and priority of a judgment lien and shall continue for 10 years from the date of the judgment, unless sooner released or otherwise discharged. The lien imposed by this section is not valid insofar as personal property is concerned against a purchaser for value without actual knowledge of the lien. Execution shall issue upon the judgment upon request of the director in the same manner as execution may issue upon other judgments, and sales shall be held under execution as prescribed in the Code of Civil Procedure. (d) The person named in a notice of deficiency determination or redetermination may, within 30 days of the notice of filing with the superior court, file an action for judicial review thereof, as provided in subdivision (c), in the Superior Court for the County of Sacramento or, with the director's consent, the superior court of any other county where the Attorney General maintains an office. As a condition of staying entry of judgment or granting other relief, the court shall require the filing of a corporate surety bond with the director in the amount of the deficiency stated in the certificate. In any court proceeding, the certificate of the director determining the deficiency shall be prima facie evidence of the fee and the amount due and unpaid. (e) The provisions of this section are supplemental to any other procedures for collection and imposition of fees and penalties provided by this chapter. In lieu of proceeding pursuant to this section, the director may file a complaint for collection of unpaid fees as provided by law.


Part 3. Marketing Laws Regarding Particular Products

Chapter 1. Marketing Of Milk And Other Dairy Products

Article 1. Definitions

Ca Codes (fac:61301-61317) Food And Agricultural Code Section 61301-61317



61301. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


61302. "Bulk milk" or "bulk cream" means milk or cream, respectively, which has not been pasteurized or packaged in bottles, cartons, dispenser cans, or other consumer packages, and which is handled or delivered, in bulk, in tanks, cans, or other bulk containers. For this purpose, skim milk or cream which has been preheated or pasteurized not more than once, as provided in Section 34004 or 34005 of this code, and is handled or delivered in bulk is not pasteurized.

61303. "Consumer" means any person that buys milk, cream, or any dairy product for consumption and not for resale.


61304. "Cream" has the meaning of that term as defined in Section 32504.

61305. "Dairy product" means any product classified as Class 1 or Class 2 under Section 61932, 61933, or 61936; any frozen product or frozen product mix classified as Class 3 under Section 61934; any product classified as Class 4b under subdivision (b) of Section 61935; butter; pasteurized process cheese; and any filled product or any imitation milk product in which the use of market milk or any component of market milk is required by Section 38925. This definition applies to the designated products whether processed or manufactured in the state or outside of the state and irrespective of the classification of those products at a point of origin outside the state.


61306. (a) "Distributor" means any handler, as defined in Section 61826, and includes brokers and agents and the nonprofit cooperative associations described in Article 2 (commencing with Section 61331) of this chapter in the transactions in which such article provides that the associations are distributors. It also includes both of the following: (1) Any person who regularly operates mobile vehicles on routes predominantly for sales of market milk, market cream, or dairy products on such routes to wholesale customers. (2) A wholesale customer only as to milk, cream, or any dairy product that is actively and directly processed, manufactured, or packaged by such wholesale customer. (b) Distributor does not, however, include any of the following: (1) Any wholesale customer which is not actively and directly engaged in manufacturing, processing, or packaging milk, cream, or any dairy product. (2) Any producer that delivers milk or cream only to a distributor or manufacturer.


61307. "Manufacturing milk" has the meaning of that term as defined in Section 32509.


61307.2. "Manufacturing milk handler" means any person who, as owner, agent, broker, or intermediary, either directly or indirectly, receives, purchases, or otherwise acquires ownership, possession, or control of manufacturing milk in unprocessed or bulk form from a producer, a producer-handler, or another manufacturing milk handler for the purpose of manufacture, processing, sale, or other handling, regardless of whether the manufacturing milk is produced within or outside this state.


61307.4. "Manufacturing milk plant" means any place, structure, or building where a handler receives manufacturing milk.


61308. "Manufacturer" means any person that is engaged in the business of manufacturing any dairy product.


61309. "Market milk" has the meaning of that term as defined in Section 32510.


61310. "Market cream" has the meaning of that term as defined in Section 35811.


61311. "Milk" has the meaning of that term as defined in Section 32511.

61312. "Packaged milk," "packaged cream," or "packaged dairy product" means market milk, market cream, or any dairy product, respectively, which is packaged in cartons, bottles, dispenser cans, or other consumer packages for sale to wholesale customers or consumers.


61313. "Person" means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, nonprofit cooperative association, nonprofit corporation, or any other business unit or organization.


61314. "Producer" means any person that operates a dairy herd which produces milk or cream commercially and whose bulk milk or bulk cream is received or handled by any distributor, manufacturer, or any nonprofit cooperative association of producers. It includes the nonprofit cooperative associations described in Article 2 (commencing with Section 61331) of this chapter in the transactions in which such article provides the associations are producers.


61315. "Producer-distributor" means any person that is both a producer of milk or cream and a distributor of milk, cream, or any dairy product. For the purpose of this chapter, a "producer-distributor" is a producer in any transaction which involves the delivering of bulk milk or bulk cream produced by him to a distributor, manufacturer, or any nonprofit cooperative association of producers, and is a distributor in any transaction which involves the pasteurization of bulk market milk or bulk market cream, or the packaging of such milk or cream in bottles, cartons, dispenser cans, or other consumer packages, or the sale or delivery of packaged milk, packaged cream, or packaged diary products.


61316. "Restricted use market milk" has the meaning of that term as defined in Section 32516.5.


61317. "Wholesale customer" means any person other than a distributor that buys packaged milk, cream, or any dairy product for resale to consumers or to other wholesale customers.


Article 2. Nonprofit Cooperative Associations

Ca Codes (fac:61331-61333) Food And Agricultural Code Section 61331-61333



61331. For the purposes of this chapter, a nonprofit cooperative association which is organized and existing under Chapter 1 (commencing with Section 54001) of Division 20 of this code, that acts for producers, including members and any nonmembers of the association, to whom it accounts on a patronage basis, is a producer in any of the following transactions: (a) Any transaction which involves its receipt or handling of bulk market milk, bulk market cream, or any bulk dairy product which was produced or delivered by such producers. (b) Any transaction which involves the sale or delivery of bulk market milk, bulk market cream, or any bulk dairy product to any producer, distributor, manufacturer, or other nonprofit cooperative association of producers. (c) The receipt by it of payment for bulk market milk, bulk market cream, or any bulk dairy product which was produced or delivered by such producers. (d) Any transaction in connection with accounting to such producers for the proceeds derived from the sale or marketing of market milk, market cream, or any dairy product whether packaged or in bulk.


61332. For the purposes of this chapter, a nonprofit cooperative association which is organized and existing under Chapter 1 (commencing with Section 54001) of Division 20 of this code, that acts for producers, including members and any nonmembers of the association, to whom it accounts on a patronage basis, is a distributor in any transaction which involves the receipt by it of market milk, market cream, or any dairy product from any person other than a producer to whom it accounts on a patronage basis and in any transaction which involves the pasteurization of bulk milk or bulk cream, or the packaging of it in bottles, cartons, dispenser cans, or other consumer packages, or the sale or delivery of packaged milk, packaged cream, or any packaged dairy product.


61333. A nonprofit cooperative association accounts to producers on a patronage basis when it accounts to each producer for his share of the net proceeds derived from the marketing operations of the association, according to quantity and quality of fluid milk and fluid cream furnished to the association for marketing and according to any marketing pools and quotas established by the association.



Article 3. General Provisions

Ca Codes (fac:61341-61345) Food And Agricultural Code Section 61341-61345



61341. The director may adopt regulations for the proper administration and enforcement of the provisions of this chapter. Any violation of any such regulation is subject to the remedies, procedures, and penalties which are provided in Article 10 (commencing with Section 61571) of this chapter.


61342. The provisions of this chapter shall be liberally construed as being complementary of, and supplemental to, the provisions of Chapter 2 (commencing with Section 61801) of this part. If a provision of this chapter and a similar provision of Chapter 2 is applicable to the same person and subject matter the provisions of Chapter 2 shall control. If a provision of this chapter is applicable to any person and subject matter as to which Chapter 2 makes no express provision, the provision of this chapter shall control.


61343. Any person and subject matter to which this chapter is applicable is not subject to the provisions of the Unfair Practices Act, Chapter 4 (commencing with Section 17000), Part 2, Division 7 of the Business and Professions Code.

61344. This chapter shall be liberally construed. If any article, section, subdivision, sentence, clause, or phrase of this chapter is for any reason held to be unconstitutional or invalid as applied to any person or as applied under certain circumstances, that decision shall not affect the validity of the remaining provisions of this chapter or the application of this chapter to any other person or under any other circumstances. The Legislature hereby declares that it would have enacted each article, section, subdivision, sentence, clause, or phrase of this chapter regardless of the fact that one or more other articles, sections, subdivisions, sentences, clauses, or phrases are declared unconstitutional or invalid.


61345. Chapter 2 (commencing with Section 61801), Chapter 2.5 (commencing with Section 62500), and Chapter 3 (commencing with Section 62700) shall be liberally construed as being complementary of, and supplemental to, this chapter, and these chapters shall constitute a single comprehensive scheme for the regulation of the production and handling of milk. However, each of the chapters, and each article, section, subdivision, sentence, clause, and phrase of each chapter is severable. If one of the chapters or any article, section, subdivision, sentence, clause, or phrase of any one of the chapters is for any reason held void, invalid, or unconstitutional, the decision shall not affect the validity of any other chapter or any of its articles, sections, subdivisions, sentences, clauses, or phrases.


Article 4. Unlawful Practices

Ca Codes (fac:61381-61391) Food And Agricultural Code Section 61381-61391



61381. Any false or misleading advertising, as defined in Sections 32914 and 36062 of this code, and Sections 17500, 17501, and 17502 of the Business and Professions Code, of milk, cream, or any dairy product is an unlawful practice.

61382. Discrimination in price between distributors or between wholesale customers, or between consumers, that purchase milk, cream, or any dairy product of like grade and quality under like conditions of service if the effect of that discrimination may be substantially to lessen competition or to injure or destroy or prevent competition with the person that either grants or knowingly receives the benefit of the discrimination is an unlawful practice. This section does not, however, prevent differentials which make only due allowance for differences in the cost of the raw product which is used in the milk, cream, or dairy product, or the cost of manufacture, processing, sale, or delivery which results from the different methods or quantities in which the commodities are manufactured, processed, sold, or delivered.


61383. The sale or offer to sell or giving of any article in any transaction which involves the sale or disposal of milk, cream, or any dairy product, for less than the cost of the article, as "cost" is defined in Section 61384, to secure or retain the milk, cream, or dairy products business of any wholesale customer or any person that buys as a consumer is an unlawful practice.


61384. (a) The sale by any retailer, wholesale customer, manufacturer, or distributor, including any producer-distributor or nonprofit cooperative association acting as a distributor, of milk, cream, or any dairy product at less than cost is an unlawful practice. This subdivision applies to finished products, and does not apply to sales of bulk milk between handlers. (b) For the purposes of this section, the following terms have the following meanings: (1) "Cost," as applied to manufacturers and distributors, means the total consideration paid or exchanged for raw product, plus the total expense incurred for manufacturing, processing, handling, sale, and delivery. (2) "Cost," as applied to wholesale customers, means the invoice price charged to the wholesale customer, or the expense of replacement, whichever is lower, plus the wholesale customer's cost of doing business. (3) "Cost of doing business," as applied to wholesale customers, means a wholesale customer's total operating expense divided by the customer's total sales income. (4) (A) Except as provided in subparagraph (B), "total consideration paid or exchanged for raw product," in the case of market milk or market cream used in the manufacture of class 1, 2, and 3 products, means the department's current announced regulated minimum price of the market milk or market cream, payable by handlers to producers, except as provided in Section 62708.5. (B) Notwithstanding subparagraph (A), in situations involving sales on a bid basis to public agencies or institutions, the definition in subparagraph (A) shall only apply to market milk or market cream that is utilized for class 1 purposes, as those purposes are defined in Chapter 2 (commencing with Section 61801). (c) Proof of cost, based on audits or surveys conducted in accordance with generally accepted accounting principles as defined by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board, and modified, if necessary, to satisfy the requirements of this section, shall establish a rebuttable presumption of that cost at the time of the transaction of any sale. This presumption is a presumption affecting the burden of proof, but it does not apply in a criminal action. (d) Nothing in this section shall be deemed to prohibit any of the following activities: (1) The meeting, in good faith, of a lawful competitive price or a lawful competitive condition. (2) A distributor's action in making conditional sales of equipment or other property, extending credit for merchandise purchased, or paying a customer's obligations not otherwise prohibited by this chapter to another distributor in connection with the transfer of the customer's business from the latter to the former. (e) The secretary shall establish, by regulation pursuant to Section 61341, the procedures which shall be used to make the determinations required by this section, including the following: (1) Any modifications to the generally accepted accounting principles described in subdivision (c) necessary to satisfy the requirements of this section. (2) Procedures for evaluating efforts to meet lawful competitive prices or conditions. (3) Other procedures necessary or appropriate to facilitate the application or enforcement of this section.


61385. Any false statement or representation which is knowingly made, by any wholesale customer or consumer, or anyone that is acting on the behalf of either, to any distributor or manufacturer, or any representative of a distributor or manufacturer, that a competitor of the distributor or manufacturer has offered or is offering to sell, or is selling milk, cream, or any dairy product to the wholesale customer or consumer at a lower price than the manufacturer or distributor has offered or is offering to sell, or is selling it is an unlawful practice.

61391. Solicitation by, or collusion or joint participation between or among, any manufacturer, distributor, producer, wholesale customer, consumer, or any representative of any of them, to commit any of the unlawful practices which are prescribed in this article, or the use of any misrepresentation, threat, intimidation, or boycott to effectuate the commission of those unlawful practices, makes any person that participates in those unlawful practices subject to the penalties of this chapter.


Article 5. Bonding And Payment For Manufacturing Milk

Ca Codes (fac:61400-61419) Food And Agricultural Code Section 61400-61419



61400. It is recognized by the Legislature that unfair and disruptive practices have developed concerning the purchasing of manufacturing milk, as defined in Section 32509, including the failure to pay, or the making of late payments, to producers of manufacturing milk. Such practices tend to disrupt and interfere with the purposes of this chapter by, among other things, creating an unfair advantage to purchasers of manufacturing milk used for manufacturing purposes over purchasers of market milk used for manufacturing purposes. It is necessary, in order to more fully achieve the purposes of this chapter, to provide for the requirement of a payment bond and a schedule for payment concerning purchases of manufacturing milk in certain circumstances.


61404. The bond provided for in this article is required for each manufacturing milk handler.


61405. (a) Every manufacturing milk handler that operates only one plant within the state, before purchasing any manufacturing milk from a producer, shall execute and deliver to the secretary a surety bond, executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety. The amount of the bond shall be based upon the average daily quantity of manufacturing milk purchased by the handler during any calendar month during a calendar year. The minimum amount of the bond shall be as follows: (1) Five thousand dollars ($5,000) for any handler that purchases an average daily quantity of less than 1,000 gallons. (2) Ten thousand dollars ($10,000) for any handler that purchases an average daily quantity of at least 1,000 gallons but less than 4,000 gallons. (3) Fifteen thousand dollars ($15,000) for any handler that purchases an average daily quantity of at least 4,000 gallons but less than 8,000 gallons. (4) Twenty thousand dollars ($20,000) for any handler that purchases an average daily quantity of 8,000 gallons or more. (b) Every manufacturing milk handler that operates more than one plant within the state, before purchasing any manufacturing milk from a producer, shall execute and deliver to the secretary a surety bond, executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety. The bond shall be a single bond covering all plants within the state and shall be in an amount determined by multiplying twenty thousand dollars ($20,000) by the number of plants operated by the handler in the state. (c) Any milk purchase agreement between a handler and a producer may provide for surety bonds, guarantees, or other forms of security in addition to the bonding requirements in this article.


61405.1. If any handler increases his or her purchases of manufacturing milk during the license year so that the purchases exceed the amount for which the handler is bonded, the handler shall immediately post an additional bond as may be required to comply with this article.


61406. The bond required by Section 61405 shall be in a form approved by the director, and shall be conditioned upon the payment in the manner that is required by the terms of purchase between the manufacturing milk handler and the producer of all amounts due to producers for manufacturing milk purchased by the licensee or applicant during the license year. The bond shall be to the state in favor of every producer of manufacturing milk.


61407. If a handler fails to pay any producer or producers in the manner that is required by this chapter, the director shall proceed forthwith to ascertain the names and addresses of all the producers that the handler has failed to pay, together with the amounts due and owing to them and each of them by the handler, and shall request all of those producers to file a verified statement of their respective claims with the director. The producer need only verify that he or she is owed an amount by the handler. The actual amount in that case may be ascertained by the director.


61407.1. (a) After determining the claims of the producers pursuant to Section 61407, the director shall bring an action on the bond on behalf of the producers. (b) Any producer not satisfied with the amount of the producer's claim as determined by the director, or with the ratio the producer's claim bears to all claims against the bond as determined by the director, may intervene in an action commenced upon the bond so that the correct amount of his or her claim and the ratio it bears to all the claims may be adjudicated.


61407.2. If the recovery upon the bond is not sufficient to pay all of the claims as finally determined and adjudged by the court, the amount recovered shall be divided pro rata among the producer-creditors.


61407.3. Payments by a handler to a producer, for the purposes of any action on a handler's bond for any year, shall be credited first to interest and then to principal due, owed, and unpaid. Amounts to be applied to the principal shall be applied first to the amount owed for the most recent deliveries and then successively, in descending order, to the amounts owed to the next most recent deliveries.


61407.4. (a) The director may bring an action against a surety bond company if the company fails to do any of the following: (1) Acknowledge promptly and act reasonably upon receiving a bond demand from the director. (2) Promptly investigate and process claims. (3) Make fair and equitable settlement of claims. (4) Pay the bond amount to the director. (b) The authority provided in subdivision (a) is in addition to the authority provided for in subdivision (h) of Section 790.03 of the Insurance Code. (c) In addition to the bond proceeds, the surety bond company may be ordered to pay interest at the prevailing prime rate on the amounts owed from the date the claim was filed, all of the department' s court costs, and reasonable attorney's fees.


61408. If a manufacturing milk handler fails to pay any producer in the manner that is required by this chapter, the director may require the filing of a new or additional bond in the amount determined by the director to be sufficient to satisfy claims for the payment of producers thereafter supplying manufacturing milk to the manufacturing milk handler. The failure of a manufacturing milk handler to have filed a new bond within 10 days after notice from the director constitutes grounds for the revocation or suspension of the manufacturing milk handler's license of the manufacturing milk handler.

61409. The failure of any manufacturing milk handler that purchases manufacturing milk from producers to execute and deliver the bond as provided and required in this article is a violation of this chapter. The failure of any handler to post any additional bond as may be required is also a violation of this chapter.


61410. The failure of any manufacturing milk handler that purchases manufacturing milk from producers to execute and deliver the bond as provided and required in this article shall constitute grounds for suspension, revocation, or refusal of the manufacturing milk handler' s license. The failure of any handler to post any additional bond as may be required to comply with this article shall also be grounds for suspension, revocation, or refusal of the license pursuant to these procedures.


61411. Except as otherwise provided in Section 61411.2 or 61411.3, the purchase of any manufacturing milk in excess of 1,000 gallons monthly from any manufacturing milk producer without a written contract that has been executed and complies with all the requirements of this article is an unlawful practice. The contract shall include all of the following: (a) The amount of manufacturing milk which is to be purchased for any period. (b) The price to be paid for all manufacturing milk received. (c) The date and method of payment for the manufacturing milk. Payment shall be made for the amount of the manufacturing milk delivered during the first 15 days of any calendar month not later than the first day of the next following month and for the amount delivered during the remainder of the month not later than the 15th day of the next following month. (d) The charges for transportation, if hauled by the handler, which shall be the lower of either of the following: (1) A rate not in excess of the rate charged for actual or reasonably similar services by highway carriers, as the term "highway carrier" is defined in Section 3511 of the Public Utilities Code. (2) The actual amount paid by a handler for that transportation. The contract may contain any other provisions that are not in conflict with this chapter. A signed copy of the contract shall be filed by the producer with the director within five days of the date of its execution. This section does not apply to the purchase of milk which does not meet market milk standards in Chapter 2 (commencing with Section 35751) of Part 2 of Division 15, when the milk has been processed on a dairy farm that held a valid market milk permit during the 30-day period preceding the purchase.


61411.1. The production of manufacturing milk in excess of amounts to be purchased under contracts executed pursuant to Section 61411 shall be voluntary on the part of the producer and shall not be a condition, oral or written, of the execution or renewal of any contract.


61411.2. Section 61411 does not apply to the purchase of manufacturing milk which is necessary to meet an unanticipated increase in demand or an unanticipated shortage in the supply of a handler if the quantity purchased from any one producer does not exceed 5,000 gallons in any one month. However, if the producer is a cooperative association acting as a producer, the total quantity purchased shall not exceed 30,000 gallons per month. For a single transaction between a producer and handler, payment shall be made for the amount of milk delivered during the first 15 days of any calendar month not later than the first day of the next following month and payment shall be made for the amount of milk delivered during the remainder of the month not later than the 15th day of the next following month, unless the milk is subject to a pooling plan as authorized in Chapter 3 (commencing with Section 62700) and the pooling plan provides for different dates and methods of payment, in which case the date and method of payment for the milk shall be as provided for in the pooling plan.


61411.3. Section 61411 does not apply to manufacturing milk purchased under cash-on-delivery terms.


61411.4. Any contract between a producer and a handler shall be voidable by the producer for a 45-day period following the occurrence of either of the following: (a) The handler has failed to pay the producer the full price specified in the contract or has failed to comply with the terms specified in subdivision (c) of Section 61411, and the failure has not been corrected by the handler within one business day after notification by the producer or director. The 45-day period shall commence on the day after the payment was due. (b) The handler has failed on three separate occasions within a 12-month period to pay the producer the full price specified in the contract or has failed to comply with the terms specified in subdivision (c) of Section 61411. The 45-day period shall commence on the day after the third occurrence.


61411.5. If a notice has been issued by the director that the future deliveries to the handler shall not be covered under the Milk Producers Security Trust Fund created pursuant to Chapter 2.5 (commencing with Section 62500), all contracts between producers and the handler are voidable by the producers. Producers shall have the option to void their contracts for a 45-day period from the date the notice is issued or until the date the director establishes for reinstatement of the handler's eligibility under the trust fund, whichever is later.

61412. Every milk handler who receives manufacturing milk subject to the provisions of this article shall deduct as an assessment from payments made to producers for manufacturing milk the sum of one and two-tenths cents ($0.012) per hundredweight of manufacturing milk. The amount of the assessments so deducted shall be paid to the director on or before the 45th day following the last day of the month during which the manufacturing milk was received. Every milk handler who receives manufacturing milk subject to the provisions of this article that purchases or handles manufacturing milk from producers shall pay a fee of six-tenths of one cent ($0.006) per hundredweight of manufacturing milk. The amount of the fee shall be paid to the director on or before the 45th day following the last day of the month in which the manufacturing milk was received.

61413. The director may fix the rates of assessments or fees required by Section 61412 at lesser amounts, and may adjust the rates of assessments or fees from time to time, whenever he or she finds that the cost of administering this article can be defrayed from revenues derived from the lower rates, provided that the rate of assessments deducted from payments to producers for manufacturing milk and the rate of fees paid by manufacturing milk handlers shall at all times be in the ratio of two to one.


61414. (a) Any assessment or fee or either of them payable pursuant to any provision of this article is a debt of the person by whom the assessment or fee or either of them is payable and shall be due and payable to the director upon the date set forth in Section 61412. If the person does not pay the assessment or fee or either of them upon the required date, the director may file a complaint against that person in a state court of competent jurisdiction for the collection of the assessment or fee or either of them. (b) If any such person does not pay to the director the assessments or fees or either of them provided for in this article, on or before the date specified in Section 61412, the director may add to the unpaid assessments or fees or either of them an amount not exceeding 10 percent of the unpaid assessment or fees or either of them to defray the cost of enforcing the collection of the unpaid assessments or fees or either of them.

61415. The failure of any handler to pay for manufacturing milk delivered to the handler at the time and in the manner specified in the contract with the producer is an unlawful trade practice.


61415.1. (a) Handlers shall pay producers either by check or cash. Handlers electing to pay producers in cash shall, in all cases, obtain a dated, signed receipt from each producer. These receipts shall be made a part of the permanent records of the handler. Handlers paying by check shall issue checks which are reduceable to cash by the producer in no more than one business day. (b) The giving of a promissory note is not payment within the meaning of this chapter.

61415.2. (a) If a handler does not pay for manufacturing milk delivered to him or her at the time and in the manner specified in the contract, the handler shall pay the producer interest on the unpaid amount from the time the payment was due until paid at the rate of 12 percent per annum. The interest is in addition to any other penalties provided in this chapter. (b) If there is no contract for the delivery of milk to the handler or the delivery was made as a single transaction between the producer or handler, the handler shall pay the department interest on the unpaid amount from the time the payment was due until paid at the interest rate specified in subdivision (a). The interest is in addition to any other penalties provided in this chapter.


61415.3. If a handler fails to pay for manufacturing milk delivered to him or her at the time and in the manner specified in this chapter, the director may assess a penalty for each payment date that the producers were not fully paid. Any penalty assessed shall be a minimum of one hundred dollars ($100) for each payment date. If the amount not properly paid is more than forty thousand dollars ($40,000), the penalty assessed shall be five thousand dollars ($5,000) or one-fourth of 1 percent of the amount not properly paid, whichever is less.

61416. The director may revoke or suspend any license of a handler if the director finds as a result of a noticed hearing that the handler has not paid for any manufacturing milk delivered to him or her at the time and in the manner specified in the contract with the producer.


61416.1. The director, pursuant to the procedure in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, may also refuse to grant or renew any license to a handler if the director is satisfied that the handler has failed to pay for any manufacturing milk delivered to him or her at the time and in the manner specified in the contract with the producer.


61417. In lieu of revoking or suspending a handler's license under Section 61416, the director may impose any other conditional and probationary orders, pursuant to a noticed hearing, that may be proper for the enforcement of this chapter or to enforce any provision of any regulation adopted by the director pursuant to Section 61341.


61418. If the respondent does not comply with any conditional or probationary orders, the director may suspend or revoke the license in accordance with the procedure provided in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.


61419. (a) Whenever the director is satisfied, either by investigation or after a hearing, that a handler is unable to pay for any manufacturing milk purchased from any producer, and is further satisfied that to permit the handler to continue to purchase and receive any manufacturing milk from producers would be likely to cause serious and irreparable loss to producer-creditors and other producers, the director may thereupon and forthwith shorten the time for hearing that is provided for in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and thereupon may issue an order to show cause why the license of the handler should not be forthwith suspended or revoked. The time of notice of the hearing shall not, however, be less than five days. At the hearing the handler that is proceeded against shall be ordered to show cause why the license should not be suspended or revoked, or continued under conditions and provisions, if any, that the director may consider just and proper and for the protection of the best interests of the producer-creditors and producers from whom the handler has been and is receiving any manufacturing milk. Following the hearing, the decision of the director shall become effective at the director's discretion. (b) The hearing, in the case of an emergency, may be called upon written notice which is served personally or by mail on the handler that is involved. If the notice is sent by mail, the hearing date shall be no sooner than 10 days after the notice is sent. It may be held at the nearest office of the director or at any place that may be most convenient in the discretion of the director for the attendance of all of the parties that are involved.


Article 6. Records

Ca Codes (fac:61441-61443) Food And Agricultural Code Section 61441-61443



61441. Every distributor, person who sells at wholesale, or manufacturer of milk, cream, or any dairy product shall maintain and keep, for a period of three years from their initial recordation, or for a period of three years from their expiration date, whichever period is longer, all of the following records: (a) A record of all milk, cream, or dairy products received, detailed as to location, names and addresses of suppliers, prices paid, and deductions or charges made, and the use to which the milk or cream was put. (b) A record of all milk, cream, or dairy products sold, classified as to kind and grade of milk, cream, or dairy product, showing where the milk, cream, and dairy products were sold, the quantities sold, the amounts received for the sales, and the written price schedules maintained by the distributor, person who sells at wholesale, or manufacturer for all milk, cream, and dairy products sold. (c) A record of the wastage or loss of milk or any dairy product. (d) A record of all costs of manufacturing, processing, handling, sale, and delivery, including overhead costs. (e) A record of all property or financial transactions, other than those for which records are maintained under subdivision (b), between the distributor, person who sells at wholesale, or manufacturer and wholesale customers. (f) Other records that the director may deem necessary for the proper enforcement of this chapter.


61442. The director shall have access to, and may enter at all reasonable hours, any place where any dairy product is being processed, bottled, stored, kept, or sold, or where the books, papers, records, or documents pertaining to any transaction which relates to any dairy product is kept. He may inspect and copy such books, papers, records, or documents in any place within the state.


61442.1. Within 60 days of the effective date of this section, each manufacturing milk handler shall provide the director with a list of the name, address, and date of every current contract between the handler and manufacturing milk producers. Monthly thereafter, the handler shall report to the director the same information on all terminated, new, and amended contracts which has not been previously reported. The director may assess a one hundred dollar ($100) penalty against any manufacturing milk handler who fails to file the required report for each report not filed.


61443. Any record or report which is made to the director pursuant to this article, or any contract required to be filed pursuant to this chapter, is confidential and shall not be divulged, except if necessary for the proper determination of any court proceeding or hearing before the director.


Article 7. Investigations And Hearings

Ca Codes (fac:61471-61478) Food And Agricultural Code Section 61471-61478



61471. The director may, upon his or her own motion or upon the receipt of any verified complaint, investigate any transaction that involves the violation of any provision of this chapter by any person. The director may call and conduct a hearing in furtherance of that investigation.


61472. If a hearing is called by the director, the director shall cause a copy of the complaint, together with a notice of time and place of hearing of the complaint, to be served personally or by mail upon that person. Service shall be made at least 10 days before the hearing.

61473. The hearing shall be held in the city or place in which is situated the business location of the person that is complained of, or in which the transaction complained of is said to have occurred.


61474. The person complained of shall, at least three days prior to the date fixed for the hearing, serve upon the complaining party and file with the director a verified answer to all the allegations which are contained in the complaint.


61475. At the time and place which is appointed for such hearing the director shall hear the parties to such complaint, and shall enter in the office of the director at Sacramento a decision dismissing such complaint or specifying the facts which are established on such hearing. A copy of such decision shall be furnished to each of the respective parties to it.


61476. The director may do any of the following: (a) Administer oaths and take testimony thereunder. (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.


61477. Any party that disobeys any order or subpoena of the director is guilty of contempt and shall be certified to the superior court of the state, in and for the county wherein such contempt occurs, for punishment for such contempt in accordance with Sections 11180 to 11191, inclusive, of the Government Code.


61478. Any act of the director pursuant to any provision of this chapter may be reviewed by any court of competent jurisdiction.


Article 8. Manufacturing Milk Handler Licenses

Ca Codes (fac:61490-61494) Food And Agricultural Code Section 61490-61494



61490. For the purposes of this article, each subsidiary manufacturing milk plant, or branch manufacturing milk plant, whether under one ownership or not, shall be considered as an individual manufacturing milk handler.

61491. "Manufacturing milk handler" means any person defined as a manufacturing milk handler pursuant to Section 61402.


61492. It is unlawful for a manufacturing milk handler who is not licensed under Article 12 (commencing with Section 62141) of Chapter 2 to handle manufacturing milk without first obtaining a manufacturing milk handler's license pursuant to this article. In addition, pursuant to Section 61490, any handler shall obtain a separate license for each milk plant owned or operated. The license provided for in this article is in addition to any license which is required by Division 15 (commencing with Section 32501), or by any law or ordinance of any county or municipality of this state.


61493. Application for the license provided by this article shall be made on forms prescribed by the director, accompanied by an application fee as prescribed in Section 61494, and state the name and address of the applicant and any details specifically related to the nature of the applicant's business that the director may require. The applicant shall further satisfy the director of his or her character, responsibility, and good faith in seeking to carry on the business stated in the application.


61494. One-half of the valid license renewals shall be issued for a period of 24 months beginning January 1, 1988. The application fee for the renewal of the 24-month license shall be twenty-five dollars ($25). The remaining valid license renewals shall be issued for a period of 12 months beginning January 1, 1988. The application fee for the renewal of the 12-month license shall be twelve dollars and fifty cents ($12.50). Beginning January 1, 1989, all renewals of licenses shall be issued for a 24-month period, and shall be twenty-five dollars ($25). Except as otherwise provided, beginning January 1, 1988, every new license issued shall expire on the 31st day of December of the following year. Application for a new license or a renewal license, together with the appropriate application fee, shall be made prior to the handling of manufacturing milk or the expiration date of the license held. If it is not so made, the applicant shall pay an additional twenty-five dollars ($25) before the license shall be issued.



Article 9. Disposition And Use Of Funds

Ca Codes (fac:61531) Food And Agricultural Code Section 61531



61531. All money received by the director pursuant to this chapter shall be paid monthly into the State Treasury to the credit of the Department of Food and Agriculture Fund. Funds which are so collected may only be used to defray the expenses in connection with the administration of this chapter, Chapter 2 (commencing with Section 61801), and Chapter 2.5 (commencing with Section 62500).


Article 10. Actions And Penalties

Ca Codes (fac:61571-61573) Food And Agricultural Code Section 61571-61573



61571. The violation of any provisions of this chapter is a misdemeanor which is punishable by a fine not less than one hundred dollars ($100) and not exceeding one thousand dollars ($1,000) or by imprisonment in a county jail not exceeding six months, or by both such fine and imprisonment. The amount of penalty which is assessed pursuant to this section on each count of violation shall be based upon the nature of the violation and the seriousness of the effect of such violation upon effectuation of the purposes and provisions of this chapter.

61572. Any person who violates this chapter, or any regulations adopted under this chapter, is liable civilly in an amount not less than one hundred dollars ($100) and not exceeding one thousand dollars ($1,000) for each and every violation, that sum to be recovered by the director in any court of competent jurisdiction. The amount of penalty which is assessed pursuant to this section on each count of violation shall be based upon the nature of the violation and the seriousness of the effect of the violation upon effectuation of the purposes and provisions of this chapter. The court may, in addition to the civil penalty, award reasonably incurred investigative and enforcement costs, and attorney's fees, to the director. The court may also award attorney's fees to any person successfully defending a civil action under this section. In any civil action initiated by the director under this section, the director shall join in the action, and assert civil penalties against, all parties participating in the commission of the unlawful practice. Any sum which is recovered under this section shall be deposited in the State Treasury to the credit of the Department of Food and Agriculture Fund.


61573. 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.


Chapter 2. Stabilization And Marketing Of Market Milk

Article 1. Legislative Declarations

Ca Codes (fac:61801-61812) Food And Agricultural Code Section 61801-61812



61801. The production of market milk is hereby declared to be a business 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 and welfare of the people of this state.


61802. The Legislature hereby declares all of the following: (a) Market milk is a necessary article of food for human consumption. (b) The production and maintenance of an adequate supply of healthful market milk of proper chemical and physical content, free from contamination, is vital to the public health and welfare, and the production, transportation, processing, and storage of market milk in this state is an industry affecting the public health. (c) Because of the perishable quality of milk, the nature of milk production, the varying seasonal production and demand factors, and other economic factors affecting the milk industry, the potential exists for economic disruption, in the absence of regulation, in the production, marketing, and sale of market milk which may constitute a menace to the health and welfare of the inhabitants of this state and may tend to undermine sanitary regulations and standards of content and purity, however effectually the sanitary regulations may be enforced. (d) Health regulations alone are insufficient to prevent economic disturbances in the production of milk which may disrupt the future supply of market milk and to safeguard the consuming public from future inadequacy of a supply of this necessary commodity. (e) It is the policy of this state to promote, foster, and encourage the intelligent production and orderly marketing of commodities necessary to its citizens, including market milk, and to eliminate economic waste, destructive trade practices, and improper accounting for market milk purchased from producers. (f) It is recognized by the Legislature that the economic factors concerning the production, marketing, and sale of market milk in California may be affected by the national market for milk for manufacturing purposes. (g) It is recognized by the Legislature that in recent years the supply of manufacturing milk in California, as defined in Section 32509, has consistently declined and continues to decline, and that market milk has virtually supplanted manufacturing milk for manufacturing purposes in this state, and that it is therefore necessary to conform the pricing standards governing minimum producer prices for market milk established under this chapter to current economic conditions. (h) It is recognized by the Legislature that the levels of retail prices of milk and milk products paid by consumers are affected by a large number of economic and other factors apart from minimum producer prices for market milk established under this chapter, many of which factors are not within the power of the director to regulate or control, particularly since the Legislature repealed provisions concerning establishment of minimum wholesale and retail prices. It is further recognized by the Legislature that, in order to accomplish the purposes of this chapter and to promote the public health and welfare, it is essential to establish minimum producer prices at fair and reasonable levels so as to generate reasonable producer incomes that will promote the intelligent and orderly marketing of market milk in the various classes, and that minimum producer prices established under this chapter should not be unreasonably depressed because other factors have affected the levels of retail prices paid by consumers.


61803. It is recognized by the Legislature that conditions within the milk industry of this state are such that it is necessary to establish marketing areas wherein different prices and regulations are necessary, and for that purpose the director shall have the administrative authority, with such additional duties as are herein prescribed, after investigation and public hearing, to prescribe such marketing areas and modify the same when advisable or necessary.


61804. The foregoing statements in this article of facts, policy, and application of this chapter are hereby declared a matter of legislative determination.

61805. The purposes of this chapter are to do all of the following: (a) Provide funds for administration and enforcement of this chapter, by assessments to be paid by producers and handlers of market milk in the manner prescribed in this chapter. (b) Authorize and enable the director to prescribe marketing areas and to determine minimum prices to be paid to producers by handlers for market milk which are necessary due to varying factors of costs of production, health regulations, transportation, and other factors in the marketing areas of this state. In determining minimum prices to be paid producers by handlers, the director shall endeavor under like conditions to achieve uniformity of cost to handlers for market milk within any marketing area. However, no minimum prices established or determined under this chapter shall be invalid because uniformity of cost to handlers for market milk in any marketing area is not achieved as a result of the minimum producer prices so established or determined. (c) Authorize and enable the director to formulate stabilization and marketing plans, subject to the limitations prescribed in this chapter with respect to the contents of the stabilization and marketing plans, and to declare the plans in effect for any marketing area. (d) Enable the dairy industry, with the aid of the state, to develop and maintain satisfactory marketing conditions, bring about and maintain a reasonable amount of stability and prosperity in the production of market milk, and provide means for carrying on essential educational activities.

61806. It is the intent of the Legislature that the powers conferred in this chapter shall be liberally construed.


61807. Nothing in this chapter permits or authorizes the development of conditions of monopoly in the production of market milk. In the establishment of the terms and conditions under which market milk shall be purchased from producers, the terms and conditions are those which will, in the several localities and markets of the state, and under the varying conditions of production, insure an adequate and continuous supply of pure, fresh, wholesome market milk to consumers of the market milk.


61808. The Legislature hereby declares that this chapter is intended to formulate a comprehensive scheme for the regulation of marketing milk. If, however, any provision of, or addition or amendment to, this chapter, either as originally enacted in 1935 at the 51st Regular Session of the California Legislature, or as amended, added to, recodified, or reenacted at any subsequent session of the California Legislature, should be held to be unconstitutional, the unconstitutionality of such provision does not affect any other provision of this chapter.

61809. If any article, section, subdivision, sentence, clause, or phrase of any provision of this chapter is for any reason held to be unconstitutional, such decision does not affect the validity of the remaining provisions of this chapter. The Legislature hereby declares that it would have enacted each article, section, subdivision, sentence, clause, or phrase of this chapter irrespective of the fact that one or more other articles, sections, subdivisions, sentences, clauses, or phrases is declared unconstitutional.


61810. Chapter 1 (commencing with Section 61301), Chapter 2.5 (commencing with Section 62500), and Chapter 3 (commencing with Section 62700) shall be liberally construed as being complementary of, and supplemental to, this chapter, and these chapters shall constitute a single comprehensive scheme for the regulation of the production and handling of market milk. However, each of the chapters, and each article, section, subdivision, sentence, clause, and phrase of each chapter is severable. If one of the chapters or any article, section, subdivision, sentence, clause, or phrase of any one of the chapters is for any reason held void, invalid, or unconstitutional, the decision shall not affect the validity of the other chapter or any of its articles, sections, subdivisions, sentences, clauses, or phrases.


61811. No provision of this chapter, or of any stabilization and marketing plan formulated by the director pursuant to this chapter, is any limitation upon the right of any handler or producer-handler including any nonprofit cooperative association of producers which association is also a handler, by reason of the form or nature of the legal entity under which such handler conducts business, to sell or handle market milk, or any dairy product at prices or upon terms and conditions according to, and within, the several methods of handling, at or subject to which the market milk or dairy product lawfully may be sold or handled by any other handler. This section does not make lawful or permit the payment by any such handler to a producer for market milk of prices less than the minimum prices prescribed in the applicable stabilization and marketing plan.

61812. Neither the repeal of former Chapter 2 of this part, the reenactment of this chapter nor the amendment of any provision of this chapter shall have the effect of terminating or invalidating any stabilization and marketing plan, including provisions thereunder regarding minimum prices to be paid producers for market milk, established by the director pursuant to this chapter or former Chapter 2 prior to the effective date of the repeal, enactment, or amendment. The director shall, however, establish minimum prices pursuant to the provisions of the enactment, or amendment at the earliest practicable date after the effective date of the amendment.



Article 2. Definitions

Ca Codes (fac:61821-61839) Food And Agricultural Code Section 61821-61839



61821. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.


61822. "Board" means any advisory board created as authorized in this chapter.


61823. "Bulk market milk" means market milk which has not been pasteurized or packaged in bottles, cartons, dispenser cans, or other consumer packages, and is handled or delivered, in bulk, in tanks, cans, or other bulk containers.

61824. "Consumer" means any person that purchases market milk, or any dairy product for consumption.


61825. "Dairy product" or "milk product" includes any product manufactured from milk or any derivative or product of milk.


61826. "Handler" means any person who, as owner, agent, broker, or intermediary, either directly or indirectly, receives, purchases, or otherwise acquires ownership, possession, or control of market milk in unprocessed or bulk form from a producer, a producer-handler, or another handler for the purpose of manufacture, processing, sale, or other handling, regardless of whether such market milk is produced within or outside this state.


61827. "Market cream" means cream, as defined in this code, and any combination of cream and milk, or any fluid product of milk or cream sold under any trade name whatsoever, which complies with all of the following requirements: (a) Is not packaged in hermetically sealed containers. (b) Conforms to the health and sanitary regulations of the place where it is sold or disposed of for human consumption.


61828. "Market milk" has the meaning of that term as defined in Section 32510 and has the same meaning as "restricted use market milk" as defined in Section 32516.5. Unless the context otherwise indicates, "market milk" includes market cream, the components and derivatives of market milk, and dairy products manufactured from market milk or its components and derivatives.


61829. "Market skim milk" means skim milk, as defined in this code, that is derived from market milk and conforms to the health and sanitary regulations of the place where sold or disposed of for human consumption.

61830. "Marketing area" is any area within this state declared to be such in the manner that is prescribed in this chapter.


61831. "Milk" has the meaning of that term as defined in Section 32511.

61831.5. "Milk used for manufacturing purposes" means all milk used for those products defined in Part 3 (commencing with Section 36601) of Division 15.

61832. "Milk plant" means any place, structure, or building where a handler receives market milk.


61833. "Packaged market milk" or "packaged market cream" means market milk or market cream respectively, which is packaged in cartons, bottles, dispenser cans, or other consumer packages, for sale to wholesale customers, or consumers.

61834. "Person" means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, nonprofit cooperative association, nonprofit corporation, or any other business unit or organization.


61835. "Processing" means receiving, pasteurizing, and packaging market milk. It includes the manufacturing of milk products from market milk.

61836. "Producer" means any person that produces market milk from five or more cows in conformity with the applicable health regulations of the place in which it is sold, and whose bulk market milk is received, acquired, or handled by any handler or any nonprofit association of producers. It includes the nonprofit cooperative associations described in Article 3 (commencing with Section 61871) of this chapter in the transactions in which such article provides that the associations are producers.


61837. "Producer-handler" means any person that is both a producer and a handler of market milk. For the purposes of this chapter a producer-handler is a producer in any transaction which involves the sale or delivery of bulk market milk which was produced by him to a handler or to any nonprofit cooperative association of producers, and is a handler in any transaction which involves the purchase, acquisition or receipt by him of market milk, the pasteurization or packaging of market milk, or the sale or delivery of packaged market milk to any person.

61838. "Stabilization and marketing plan" means any plan formulated and made effective by the director within the legislative standards provided by this chapter. It includes, among other things, the establishing of prices to be paid by handlers for any or all of the various classes of market milk.


61839. "Wholesale customer" means any person except a distributor that buys packaged milk, cream, or any dairy product for resale to consumers or to other wholesale customers.


Article 3. Nonprofit Cooperative Associations

Ca Codes (fac:61871-61873) Food And Agricultural Code Section 61871-61873



61871. For the purposes of this chapter, a nonprofit cooperative association organized and existing under Chapter 1 (commencing with Section 54001) of Division 20, that acts for producers, including members and any nonmembers of the association, to whom it accounts on a patronage basis, is a producer in any of the following transactions: (a) Any transaction which involves its receipt or handling of bulk market milk produced or delivered by such producers. (b) Any transaction which involves the sale or delivery of bulk market milk to any producer, handler, or manufacturer, or other nonprofit cooperative association of producers. (c) The receipt by it of payment for bulk market milk, packaged market milk, or any other product of market milk produced or delivered by such producers. (d) Any transaction in connection with accounting to such producers for the proceeds derived from the sale or marketing of bulk market milk, packaged market milk, or any other product of market milk produced or delivered by such producers.


61872. For the purposes of this chapter, a nonprofit cooperative association organized and existing under Chapter 1 (commencing with Section 54001) of Division 20, that acts for producers, including members and any nonmembers of the association, to whom it accounts on a patronage basis, is a handler in any transaction which involves the receipt by it of market milk from any person other than a producer to whom it accounts on a patronage basis and in any transaction which involves the pasteurization of bulk market milk or the packaging of it in bottles, cartons, dispenser cans, or other consumer packages, or the sale or delivery of packaged market milk.


61873. A nonprofit cooperative association accounts to producers on a patronage basis when it accounts to each producer for his share of the net proceeds derived from the marketing operations of the association, according to quantity and quality of market milk furnished to the association for marketing and according to any marketing pools and quotas established by the association.


Article 4. Administration

Ca Codes (fac:61891-61904) Food And Agricultural Code Section 61891-61904



61891. The director shall enforce the provisions of this chapter and of any stabilization and marketing plan initiated pursuant to the provisions of this chapter. The director shall adopt those regulations necessary for the proper administration and enforcement of the provisions of this chapter.


61892. The director shall have and may exercise any or all the powers conferred by the Government Code upon the head of a department of the state with respect to hearings and investigations under this chapter.

61893. The director is the instrumentality of this state for the purpose of administering and enforcing the provisions of this chapter and to execute the legislative intent expressed in this chapter, and is hereby vested with the administrative authority described in this chapter. Notwithstanding other laws to the contrary, in the event a milk marketing order under the jurisdiction of the United States Department of Agriculture or other appropriate federal agency, is created by referendum or under the applicable laws and procedures relating thereto, in this state or in any geographical area within this state, the provisions of this chapter or any part thereof which is in conflict with such federal order, or which is unnecessary or is a duplication thereof, shall be suspended in the geographical area covered by and during the existence of such federal order. The director shall take such steps and procedures as are necessary to wind up and conclude the administration and enforcement of the provisions of this chapter, or any part thereof, for the period prior to the suspension date.

61894. For the purposes of enforcing this chapter, the director may investigate any and all transactions, between producers and handlers, between nonprofit cooperative associations and producers, among handlers, or between handlers and wholesale customers, among wholesale customers, between handlers and consumers, or between wholesale customers and consumers. For that purpose, the director shall have access to, and may enter at all reasonable hours, any place where market milk is being stored, bottled, or manufactured, where market milk or any market milk product is being bought, sold, or handled, or where the books, papers, records, or documents which relate to those transactions are kept. He may inspect and copy those books, papers, records, or documents in any place within the state.


61895. The director may require the registration of producers.


61896. The director may formulate any stabilization and marketing plan as prescribed in this chapter and declare it effective after public hearing and reasonable notice by mail or otherwise to all producers, handlers, and consumer organizations who have filed requests with the director or the Director of Consumer Affairs.


61897. A full and accurate record of business or acts performed, or of testimony taken, by the director pursuant to this chapter shall be kept and placed on file in the office of the director.


61898. In addition to the compilation of information which pertains to market milk from the reports required by this chapter, the director shall collect, assemble, compile, and distribute statistical data relative to market milk, other milk and milk products, and such other information as may relate to the dairy industry and the provisions of this chapter.


61899. Any order of the director made pursuant to this chapter which substantially affects the rights of any interested party may be reviewed by any court of competent jurisdiction. Any such action shall be commenced within 30 days after the effective date of the order complained of, or within 30 days after the injurious effect complained of becomes reasonably apparent.


61900. The director may confer, enter into agreements, or otherwise arrange with the constituted authorities of this state, other states, or agencies of the United States with respect to plans which relate to the stabilization and distribution of market milk within this state or as between this state and other states or the United States, and may exercise his powers pursuant to this chapter to effectuate and enforce such plans.


61901. All money received by the director pursuant to this chapter shall be paid monthly into the State Treasury to the credit of the Department of Food and Agriculture Fund. Funds which are so collected may only be used to defray expenses in connection with the administration of this chapter, Chapter 1 (commencing with Section 61301), and Chapter 2.5 (commencing with Section 62500).


61902. If the director determines that it is probable that one or more factors or conditions which affect prices of market milk have changed on a relatively uniform basis throughout two or more marketing areas, he may consolidate the hearings on the matter of price changes for such areas. No price change shall be made as a result of such a consolidated hearing unless the amount of the change or the resulting prices are uniform throughout the areas which are affected.

61903. Any person who has testified under oath at a public hearing held by the director pursuant to this chapter may be granted, upon request prior to the close of the hearing, a period of time not to exceed 10 calendar days following the closing date of the public hearing, in which to file with the director a written posthearing brief in amplification, explanation, or withdrawal of that person's testimony. Any such posthearing brief shall be made available by the director to any interested person for inspection. Except as herein provided, the director, in formulating any stabilization and marketing plan, pursuant to this chapter, following a public hearing, shall not accept or consider any posthearing brief. Nothing in this section shall require the director to prepare, or to make available, any verbatim transcript or other record or summary of the hearing within the 10-calendar-day period referred to in this section. However, any verbatim transcript or other record or summary of the hearing prepared for or by the director shall be made available to any interested party for inspection at the office of the director in Sacramento and, upon reasonable request, at the regional office of the director nearest the location at which the public hearing was held.

61904. Any provisions of a stabilization and marketing plan formulated, established, or rejected by the director pursuant to this chapter, shall be accompanied by written statements, which shall be made available by the director to any interested person upon request, stating in substance the considerations upon which such plan provisions and minimum prices are based, or upon which such provisions and prices were rejected.


Article 5. Classes Of Market Milk

Ca Codes (fac:61931-61937) Food And Agricultural Code Section 61931-61937



61931. Market milk may be classified for the purposes of this chapter as provided in this article.


61932. Class 1 comprises: (a) Any market milk, market skim milk, half-and-half, or concentrated milk that is supplied to consumers in the fluid state, with the exception of the following: (1) (A) Any UHT market milk product, as defined in Chapter 9 (commencing with Section 39701) of Part 3 of Division 15, that is sold for use outside the state. (B) Any market milk products that are ultrapasteurized and sold for use outside the 48 contiguous states in the United States. (2) Any market half-and-half that is ultrapasteurized and packaged in hermetically sealed containers. (3) Any market half-and-half that is packaged in presterilized containers under aseptic conditions to meet the marketing requirements for these products in states other than this state. However, this paragraph does not authorize the sale within this state of any milk product as a UHT product unless the product meets the standards and requirements for UHT products specified in Chapter 9 (commencing with Section 39701) of Part 3 of Division 15. (b) Any market milk, market skim milk, or market cream that is used in any other milk product, or products resembling milk products, in which the use of market milk, or any components or derivatives of market milk, is required by, or pursuant to, this code, except any product defined in Section 61933 as class 2. (c) Any market milk, market skim milk, market cream, market milk fat, or market milk solids-not-fat that is used in the standardizing or fortifying of any milk product that is defined in this section as class 1. (d) Any market milk, market skim milk, or market cream that is used in any product not otherwise classified, which is required by any regulations adopted by the director pursuant to Article 2 (commencing with Section 36631) of Chapter 1 of Part 3 of Division 15 to be made from market milk or any components or derivatives of market milk. (e) Any market milk, market skim milk, market cream, market milk fat, or market milk solids-not-fat used in any filled product or imitation milk product, when the product imitated or resembled, is defined in this section as class 1.

61933. Class 2 comprises any market milk, market skim milk, or market cream used in the manufacture of market cream, homogenized market cream, sour cream, sour cream dressing, sour half-and-half or light sour cream, uncreamed, creamed, or partially creamed cottage cheese, soft fresh cheese (fromage frais), buttermilk, and yogurt. Class 2 also comprises any market milk, market skim milk, or market cream used in the manufacture of any product for which a definition and standard is prescribed in Division 15 (commencing with Section 32501), except any product that is included in class 1, class 3, class 4a, or class 4b.

61934. Class 3 comprises all market milk, market skim milk, or market cream used in the manufacture of frozen dairy products.


61935. (a) Class 4a comprises all market milk, market skim milk, or market cream used in the manufacture of butter, dried milk, dried skim milk, nonfat dry milk solids, defatted milk solids, dried buttermilk, and all market milk, market skim milk, or market cream which is supplied to consumers as condensed milk, condensed skim milk, evaporated skim milk, evaporated cream or clotted cream, or evaporated milk, and any milk products which are UHT products, as defined in Chapter 9 (commencing with Section 39701) of Part 3 of Division 15, or ultrapasteurized, and sold for use outside of the 48 contiguous states in the United States, or yogurt, soft fresh cheese (fromage frais), uncreamed, creamed, or partially creamed cottage cheese, sour cream, sour half-and-half, or light sour cream which is sold for use outside the boundaries of the United States, or any product for which no definition and standards are prescribed in Division 15 (commencing with Section 32501), except the products defined in paragraph (2) of subdivision (a) of Section 61932. (b) Class 4b comprises all market milk, market skim milk, or market cream used in the manufacture of cheese other than cottage cheese.

61936. If the director establishes a temporary definition and standards for any new milk product pursuant to Article 2 (commencing with Section 36631), Chapter 1, Part 3 of Division 15, he shall assign such new product to that class under this article which includes the most nearly comparable product as determined by the director.


61937. Market milk, market skim milk, or market cream, utilized in bulk by handlers as condensed milk, condensed skim milk, evaporated skim milk, evaporated cream or clotted cream, or evaporated milk, shall be assigned by the director to the classification of ultimate usage of such market milk, market skim milk, or market cream.



Article 6. Marketing Areas

Ca Codes (fac:61961-61963) Food And Agricultural Code Section 61961-61963



61961. The director shall designate marketing areas which he deems necessary or advisable to effectuate the purposes of this chapter, and in which he finds the conditions affecting the production, handling, and sale of market milk, are reasonably uniform.


61962. The director may establish additional areas, or modify areas previously established, if he deems the establishment or modification of such areas necessary or advisble to effectuate the purposes of this chapter.

61963. If the director finds, after a public hearing in and for each particular marketing area under consideration for consolidation, that conditions of production and handling are reasonably uniform in two or more such marketing areas in which stabilization and marketing plans are in effect, he may consolidate the areas.



Article 7. Formation And Adoption Of Stabilization And Marketing Plans

Ca Codes (fac:61991-61998) Food And Agricultural Code Section 61991-61998



61991. Except as otherwise provided in Section 61992, the director shall, prior to the formulation of a stabilization and marketing plan for market milk for any marketing area, conduct a public hearing in the area for the purpose of determining whether or not the formulation of a stabilization and marketing plan for market milk for such area is desired by producers whose major interest in the market milk business is in the production of market milk for the marketing area and that both: (a) Represent not less than 65 percent of the total number of producers whose major interest in the market milk business is in the production of market milk for the marketing area. (b) Produce not less than 65 percent of the total volume of the market milk produced for the marketing area by all such producers.


61992. A hearing need not, however, be held if a petition requesting a stabilization and marketing plan is presented to the director by the producers whose major interest in the market milk business is in the production of market milk for the marketing area, and that both: (a) Represent not less than 65 percent of the total number of producers whose major interest in the market milk business is in the production of market milk for the marketing area. (b) Produce not less than 65 percent of the total volume of the market milk produced for the marketing area by all such producers.


61993. If the director finds that a stablization and marketing plan is necessary to accomplish the purposes of this chapter, he shall formulate a stabilization and marketing plan for market milk for such area and issue a notice of public hearing upon the plan which is formulated to all producers and handlers of record with the department that may be subject to the provisions of such plan.


61994. The notice of the hearing may be effected by mail, or by publication pursuant to Section 6062 of the Government Code in the area which is designated. It shall specify the time and place of such hearing, which shall not be prior to 15 days from the mailing, or from the final publication of such notice. If no daily newspaper of general circulation is published in the area which is designated, publication pursuant to Section 6066 of the Government Code shall be considered proper publication of notice.


61995. At the hearing, interested parties shall be heard and records kept of the proceedings of such hearing for determination by the director whether the plan proposed will accomplish the purposes of this chapter.

61996. If, after the public hearing, the director determines that the proposed plan will tend to accomplish the purposes of this chapter within the standards which are prescribed in it, he or she shall issue an order to all producers and handlers of record with the department and subject to the provisions of the plan, declaring the plan in effect within 62 days from the date of the hearing. The director shall announce any order under this section at least 10 calendar days prior to the effective date of the plan.


61997. A handler that is subject to the provisions of any stabilization and marketing plan shall not purchase milk from any producer that does not comply with this chapter and such plan.


61998. No stabilization or marketing plan shall contain provisions the purposes of which are to establish limitations upon the production of market milk.


Article 8. Amendment And Termination Of Stabilization And Marketing Plans

Ca Codes (fac:62031-62032) Food And Agricultural Code Section 62031-62032



62031. The director may amend or terminate any stabilization and marketing plan, after notice and public hearing as prescribed in Article 7 (commencing with Section 61991), if he or she finds that the plan is no longer in conformity with the standards which are prescribed in, or will not tend to effectuate the purposes of, this chapter. Any order under this article amending or terminating any stabilization and marketing plan shall be subject to Section 61996.


62032. A hearing on the amendment or termination of a stabilization and marketing plan may be held upon the motion of the director and shall be held upon receipt of a petition which is signed by producers, or by the board of directors of any nonprofit agricultural cooperative marketing association which is authorized by its members to so petition. Such petition shall represent not less than 55 percent of the total number of all producers and not less than 55 percent of the total production of all producers that are eligible to petition the director for the formulation of such a plan.


Article 9. Establishment Of Minimum Prices And Provisions Of Stabilization And Marketing Plans

Ca Codes (fac:62061-62079) Food And Agricultural Code Section 62061-62079



62061. Each stabilization and marketing plan shall contain provisions for prohibiting producers and handlers from engaging in the unlawful trade practices applicable to them that are set forth in Article 10 (commencing with Section 62091) of this chapter.


62062. Each stabilization and marketing plan shall contain provisions whereby the director establishes minimum prices to be paid by handlers to producers for market milk in the various classes. The director shall establish the prices by designating them in the plan, or by adopting methods or formulas in the plan whereby the prices can be determined, or any combination of the foregoing. If the director directly designates prices in the plan, the prices shall be in reasonable and sound economic relationship with the national value of manufactured milk products. If the director adopts methods or formulas in the plan for designation of prices, the methods or formulas shall be reasonably calculated to result in prices that are in a reasonable and sound economic relationship with the national value of manufactured milk products. In establishing the prices, the director shall take into consideration any relevant economic factors, including, but not limited to, the following: (a) The reasonableness and economic soundness of market milk prices for all classes, giving consideration to the combined income from those class prices, in relation to the cost of producing and marketing market milk for all purposes, including manufacturing purposes. In determining the costs, the director shall consider the cost of management and a reasonable return on necessary capital investment. (b) That prices established pursuant to this section shall insure an adequate and continuous supply, in relation to demand, of pure, fresh, wholesome market milk for all purposes, including manufacturing purposes, at prices to consumers which, when considered with relevant economic criteria, are fair and reasonable. (c) That prices, including the prices of components of milk, established by the director for the various classes of market milk bear a reasonable and sound economic relationship to each other. In establishing the prices, the director shall also take into consideration all the purposes, policies, and standards contained in Sections 61801, 61802, 61805, 61806, 61807, 62076, and 62077.


62062.1. Any designation of a class 1 price by any method or formula that is used to develop class 1 prices paid to producers in the various marketing areas, shall provide, on a calendar year basis, a statewide weighted average minimum price level for a hundred weight of milk testing 3.5 fat and 8.7 solids not fat that is in reasonable relationship with minimum class 1 milk prices paid to producers in contiguous states. If the statewide weighted average class 1 prices paid to producers are not in a reasonable relationship with the class 1 prices paid to producers in contiguous states, the secretary shall immediately hold a hearing to consider adjustments to the class 1 prices.


62062.5. The minimum prices otherwise established pursuant to this chapter shall be increased by any security charges that are imposed pursuant to Chapter 2.5 (commencing with Section 62500).


62063. Subject to the provisions of Sections 62074 and 62075, each stabilization and marketing plan shall contain provisions whereby the director shall provide methods for the establishment of minimum prices for market milk received within a marketing area regardless of whether the milk is subsequently sold or distributed within or without the marketing area within the jurisdiction of this state, and may contain the provisions whether or not the market milk is subsequently sold or distributed outside the jurisdiction of this state.

62064. Each stabilization and marketing plan shall provide all of the following: (a) For the establishment of prices for market milk, whether or not such market milk is subsequently sold or distributed in another marketing area within this state where a stabilization and marketing plan is in effect. (b) That, if area of usage pricing is in effect, producers shall be paid not less than the minimum prices established for the marketing area wherein such market milk is ultimately sold or distributed. (c) That, if area of usage pricing is in effect and such market milk is subsequently sold or distributed in any place within the jurisdiction of this state where no stabilization and marketing plan is in effect, such market milk shall be paid by the handler to the producer at not less than the average of prices which are paid by handlers, whose plants are located within such area, to producers for market milk. If, however, no plants are located within such area, the price which shall be paid by the handler to the producer shall not be less than the average of prices which are paid by handlers to producers for market milk, at the plants in the nearest marketing areas adjacent to the area where such market milk is sold or distributed, as established by the stabilization and marketing plans in effect in such adjacent marketing areas.

62065. No amendment of this article terminates or invalidates any provision of any stabilization and marketing plan which has been established by the director prior to the effective date of such amendment. Each such plan shall, however, be brought into conformity with such amendment at the earliest practicable date after the effective date of such amendment.


62066. Notwithstanding any other provision of this code to the contrary, the director, in establishing minimum prices to be paid by handlers to producers, for market milk in any marketing area, may establish, as the applicable minimum prices, those prices applicable within the marketing area of ultimate usage of such market milk, those prices applicable within the marketing area where the plant of first receipt of such market milk is located, those prices applicable in the marketing area where the producers place of production is located, or any of the above or any combination of the above.


62067. Each stabilization and marketing plan may contain provisions which require handlers to report to each producer from whom market milk is secured all of the following: (a) The volume of market milk received from such producer in pounds of milk. (b) The milk fat, solids-not-fat, or other component tests of such milk. (c) The amount of market milk in pounds of milk fat, solids-not-fat or other components paid for in the several classes or pools. (d) The prices paid for the various classes for each month.


62068. Each stabilization and marketing plan may contain provisions which authorize any handler that purchases market milk under contract from any producer to pool such market milk for producer payment purposes in accordance with such contracts, irrespective of whether such market milk is actually and physically received at the same milk products plant or diverted, in accordance with such plan. Such provisions may do any of the following: (a) Provide that market milk that is received from producers by milk products plants under the same ownership, may be pooled for purposes of payment to producers. (b) Provide that if a handler pools market milk, as provided in subdivision (a), the handler shall allocate, among all producers that participate in the class 1 usage, transportation savings which are applicable to market milk, not actually transported between the plant of first receipt and one or more other plants subject to the pool, and used for class 1, and may pay to producers shipping market milk directly to a plant subject to the pool a price for usage of such market milk for class 1, which price represents the average of minimum producer prices payable by that particular plant for such class 1 usage.


62069. The director may establish minimum prices to be paid by handlers to producer-handlers for milk not used by the purchasing handler as class 1 milk. These provisions may provide that the milk, if used in classes other than class 1 by the purchasing handler, may be paid for at the minimum prices established by the director for this other usage but which shall not be less than the prices as found by the director to be paid by manufacturing milk plants in, or adjacent to, the area that use milk for similar purposes. The prices shall remain in effect only for the period during which, as determined by the director, there is a surplus of producer-handler milk.


62070. Each stabilization and marketing plan may further provide for maximum charges for plant processing and transportation service on the market milk or market milk components which are transported to the area where sold. The stabilization and marketing plan may enumerate the applicable maximum charges, and may establish individual charges for each function enumerated. In establishing any such maximum charges for such transportation services, the director shall base such maximum charges upon the rates which are charged for actual or reasonably similar services by highway carriers, as the term "highway carriers" is defined in Secton 3511 of the Public Utilities Code.


62071. Each stabilization and marketing plan may provide for minimum charges for the various services performed or rendered by a nonprofit cooperative association in respect to class 1 market milk sold or delivered to another handler. Handler services include component testing for payment purposes, quality control, producer payroll, weighing and sampling of bulk market milk. Each stablization and marketing plan may also include, but not be limited to, minimum charges for the handling of intermittent or irregular deliveries of market milk and plant standby services. The stabilization and marketing plan may enumerate applicable minimum charges and establish individual charges for each service enumerated or, in the alternative, the director may establish one or more minimum charges covering one or more of the separate handler services.


62072. In establishing minimum handler service charges under Section 62071, the director shall take into consideration all relevant factors, including, but not limited to, the following: (a) The reasonably necessary costs of providing such services, including overhead, as determined by impartial cost surveys, examination of books and records, or both, of such portions of those handlers within the marketing area as are reasonably determined by the director to be sufficiently representative to indicate such costs of all reasonably efficient handlers within such marketing area. (b) The relationship of the establishment of such minimum charges to the achievement and maintenance of the orderly marketing of market milk and to the effectuation of the purposes of this chapter.


62073. If any contract between a handler and a producer for the purchase of any market milk provides that the charges for the hauling of it shall be paid, in whole or in part, by the producer, and such hauling is done by the handler either directly or through an agent or by any person that contracts with, or is designated by, such handler for such hauling, the director may, and upon the written request of the producer or the written request of any association representing the producer shall, investigate the rates, terms, and conditions which are involved in such hauling in order to determine whether such rates, terms and conditions are in compliance with Section 62070. If the director determines that such rates, terms, and conditions are not in compliance with Section 62070, he shall determine, within the standards which are prescribed in Section 62070, the maximum charges on account of such hauling that will comply with Section 62070 with respect to such purchase of market milk.


62074. If the director establishes a stabilization and marketing plan for market milk, the director shall establish minimum prices to be paid by handlers for market cream, market skim milk, or milk fat, or market skim milk components of such market milk.


62074.5. A stabilization and marketing plan may contain provisions necessary to encourage the availability of market milk for those usages for which class 1 and class 2 milk is mandatory.


62075. The director shall establish the minimum prices to be paid by handlers to producers for class I usage of market milk upon a milk fat, solids-not-fat or the subcomponents thereof, and fluid carrier basis. In establishing the minimum prices for classes of market milk other than class I, separate prices may be established for any one or more of the following: (a) The milk fat contained in such milk. (b) The solids-not-fat or subcomponents thereof contained in such milk. (c) The fluid contained in such milk. (d) Any combination of the milk fat, the solids-not-fat or subcomponents thereof, or the fluid contained in such milk.


62076. In establishing prices to be paid by handlers to producers for class 2, class 3, class 4a, or class 4b market milk, the director shall take into consideration any relevant economic factors, including, but not limited to, the following: (a) The relative market value of the various products yielded from such market milk. (b) The market price of other milk which may be used for the same purposes that are set forth in such respective classes. (c) The value of milk used for manufacturing purposes giving consideration to any relevant factors including, but not limited to, product prices, product yields, and manufacturing costs of class 4a or class 4b.


62077. A handler shall not pay any producer less than the applicable price established for the usage to which the market milk, purchased from him is applied pursuant to accounting procedures established by the director. If the market milk is not applied to any purpose set forth in Article 5 (commencing with Section 61931), then a handler shall not pay any producer less than the lower of the prices established under the applicable stabilization and marketing plan for class 4a and class 4b usage.


62078. All handlers who receive market milk within this state shall be obligated to pay minimum producer prices established under this chapter regardless of the area of origin of such milk, whether inside or outside the jurisdiction of the State of California.


62079. Whenever a pooling plan is in effect as provided in Chapter 3 (commencing with Section 62700) and Chapter 3.5 (commencing with Section 62750) of this part, all market milk received by pool handlers shall be obligated to the pool at the applicable minimum price established in the Stabilization and Marketing Plans based on the classified usage of that milk. Handlers may pay producers for restricted use market milk at prices that are less than the amount credited to those handlers for restricted use market milk by the pooling plan.


Article 10. Unlawful Trade Practices

Ca Codes (fac:62091-62095.1) Food And Agricultural Code Section 62091-62095.1



62091. The unlawful trade practices described in this article apply to every handler whether or not a stabilization and marketing plan is in effect in the area in which the handler is licensed or carries on his business. This article applies to transactions conducted, either directly or indirectly, between producers and handlers.


62092. The payment, allowance, or acceptance of any secret rebate, secret refund, or unearned discount by any person, whether in the form of money or otherwise, is an unlawful trade practice.


62093. The giving of any milk, cream, dairy product, service, or article of any kind, except to a bona fide charity, for the purpose of securing or retaining the market milk business of any customer is an unlawful trade practice.

62094. The payment, gift, or the offer or promise of any payment or gift, of money or other thing of value, directly or indirectly, or through any agent or other intermediary, to any person with the purpose or design of inducing such person to become or remain the wholesale customer of any handler is an unlawful trade practice.


62095. The payment, gift, or the offer or promise of any payment or gift, of money or other thing of value by any person, directly or indirectly or through any agent or other intermediary, to any handler or producer, or the acceptance by any handler or producer of the payment or gift or thing of value is an unlawful trade practice if it is for any of the following: (a) For the purpose of inducing a handler or producer to enter into a new contract, or to renew, extend, or modify an existing contract, for the purchase of market milk by a handler from a producer. (b) As a condition upon which a handler will enter into a new contract, or renew, extend, or modify an existing contract, for the purchase of market milk from a producer. (c) For the purpose of enabling a handler to pay to a producer, or a producer to receive from a handler, less than the minimum class usage prices established by the director to be paid by handlers to producers for market milk. (d) Nothing in this section prevents a handler from paying to a producer, or a producer from receiving from a handler, prices in excess of the minimum prices established by the director if these prices are paid to all producers supplying the handler under the same terms and conditions.

62095.1. The payment by a handler, either directly or indirectly, of less than the minimum producer price established under the applicable stabilization and marketing plan adopted pursuant to this chapter, is an unlawful trade practice. This section does not apply to sales of bulk milk between handlers.


Article 11. Sales To The United States

Ca Codes (fac:62121) Food And Agricultural Code Section 62121



62121. The director may require that each person that submits a bid for the sale to an agency of the United States government of market milk or any milk product which utilizes class 1 market milk shall file with the director, at the same time such bid is submitted, a complete copy of such bid and the following certification: "The undersigned certifies that in sales by the undersigned to agencies of the United States Government, pursuant to the attached bid, for market milk or milk products utilizing class 1 market milk, as such class 1 market milk is defined in Chapter 2 (commencing with Section 61801), Part 3, Division 21 of the Food and Agricultural Code, the undersigned is complying with all California statutes and regulations pertaining to the establishment and enforcement by the Director of Food and Agriculture of minimum prices to be paid producers for such class 1 market milk." All bids and certifications filed pursuant to this section shall be confidential and shall not be divulged except when necessary for the proper determination of any court proceeding or hearing before the director.


Article 12. Handlers' Licenses

Ca Codes (fac:62141-62155) Food And Agricultural Code Section 62141-62155



62141. The licenses provided for in this article are required for each handler. For the purposes of this article, each subsidiary milk plant or branch milk plant, whether under one ownership or not, shall be considered as an individual handler.


62142. For the purposes of this article, "handler" shall include any person defined as a handler under Section 61826 or any person defined as a distributor under Section 61306 that purchases or handles market milk or market cream for processing, manufacture, or sale.


62143. No person who qualifies as a handler under Section 62142 shall deal in market milk without first obtaining a license from the director. In addition, any person qualifying as a handler who purchases or handles market milk or market cream for processing or manufacture shall obtain a license for each milk plant owned or operated. The license provided for in this article is in addition to any license which is required by Division 15 (commencing with Section 32501), or by any law or ordinance of any county or municipality of this state. Notwithstanding the provisions of Section 61832, "milk plant" as used in this article, means any place, structure, or building where a handler receives market milk and weighs, tests, standardizes, pasteurizes, homogenizes, separates, bottles or packages such milk. "Milk plant" does not include a place, structure, or building which is used for the purpose of receiving, weighing, or testing milk to be diverted or delivered to a licensed milk plant of the handler.


62144. Applications for the license provided by this article shall be made on forms prescribed by the director, accompanied by a fee as prescribed in Section 62145, and state the name and address of the applicant and any details specifically related to the nature of the applicant's business that the director may require. The applicant shall further satisfy the director of his or her character, responsibility, and good faith in seeking to carry on the business stated in the application.


62145. One-half of the valid license renewals shall be issued for a period of 24 months beginning January 1, 1988. The application fee for renewal of the 24-month license shall be twenty-five dollars ($25). The remaining valid license renewals shall be issued for a period of 12 months beginning January 1, 1988. The application fee for the renewal of the 12-month license shall be twelve dollars and fifty cents ($12.50). Beginning January 1, 1989, all renewals of licenses shall be issued for a 24-month period and shall be twenty-five dollars ($25). Except as otherwise provided, beginning January 1, 1988, every new license issued shall expire on the 31st day of December of the following year. Application for a new license or a renewal license, together with the appropriate application fee, shall be made prior to the handling of market milk or the expiration date of the license held. If it is not so made, the applicant shall pay an additional twenty-five dollars ($25) before the license shall be issued.


62146. The director may refuse to grant or renew any license if he or she is satisfied that any applicant, or any person connected with the applicant, either directly or indirectly, has violated any of the following: (a) This chapter or any stabilization and marketing plan or other regulation adopted under this chapter. (b) Chapter 1 (commencing with Section 61301). (c) Chapter 3 (commencing with Section 62700) or any pooling plan established thereunder.

62147. The director may also refuse to grant or renew any license to a handler if he is satisfied that the handler has failed to pay for any market milk delivered to him at the time and in the manner specified in the contract with the producer.


62148. The proceedings to determine whether or not the director shall refuse to grant or renew a license 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 of the powers granted in such chapter.


62149. The decision may include an order refusing to grant or renew the license applied for, or affixing other conditional and probationary orders that may be proper for the enforcement of any of the following: (a) This chapter or any stabilization and marketing plan formulated pursuant to this chapter. (b) Chapter 1 (commencing with Section 61301). (c) Any regulation duly adopted by the director pursuant to Section 61891. (d) Chapter 3 (commencing with Section 62700) or any pooling plan established thereunder.


62150. After any decision in favor of the issuance or renewal of a license which includes any conditional or probationary orders, if the person to whom the license is issued does not comply with any such orders, the director may suspend or revoke the license in accordance with the procedure provided in Sections 62151, 62152, 62153, 62154, and 62155.


62151. The director may revoke or suspend, as the case may require, any license which is issued pursuant to this chapter, if he or she is satisfied that any licensee or any person who is connected with the licensee has violated any of the following: (a) This chapter or any stabilization and marketing plan which is formulated pursuant to this chapter. (b) Any regulation which is adopted by the director pursuant to Section 61891. (c) Chapter 1 (commencing with Section 61301). (d) Chapter 3 (commencing with Section 62700) or any pooling plan adopted thereunder. 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 director shall have all the powers which are granted in that chapter.


62152. The director may also revoke or suspend any license of a handler if he is satisfied that the handler has not paid for any market milk delivered to him at the time and in the manner specified in the contract with the producer.

62153. The decision may include an order revoking or suspending the license held by the licensee, or affixing such other conditional and probationary orders as may be proper for the enforcement of this chapter or any provision of any stabilization and marketing plan formulated pursuant to the provisions of this chapter or of any regulation adopted by the director pursuant to Section 61891.


62154. After any decision, which includes any conditional or probationary orders, if the respondent does not comply with any such orders, the director may suspend or revoke the license in accordance with the procedure which is provided in this article.


62155. Whenever the director is satisfied, either by investigation or after a hearing, that a handler is unable to pay for any market milk purchased from any producer, and is further satisfied that to permit the handler to continue to purchase and receive any market milk from producers would be likely to cause serious and irreparable loss to producer-creditors and other producers, the director may thereupon and forthwith shorten the time for hearing that is provided for in Chapter 5 (commencing with Section 11500), Part 1, Division 3, Title 2 of the Government Code, and thereupon may issue an order to show cause why the license of such handler should not be forthwith suspended or revoked. The time of notice of the hearing shall not, however, be less than five days. At such hearing the handler that is proceeded against shall be ordered to show cause why the license should not be suspended or revoked, or continued under such conditions and provisions, if any, as the director may consider just and proper and for the protection of the best interests of the producer-creditors and producers from whom the handler has been and is receiving any market milk. Following such hearing, the decision of the director shall become effective at his discretion. The hearing, in the case of such emergency, may be called upon written notice which is served personally or by mail on the handler that is involved. It may be held at the nearest office of the director or at such place as may be most convenient in the discretion of the director for the attendance of all of the parties that are involved.


Article 13. Bonding And Payment For Market Milk

Ca Codes (fac:62181-62202) Food And Agricultural Code Section 62181-62202



62181. The bonds provided for in this article are required for each handler and apply to all purchases of milk by that handler. A handler bonded under this article is not required to be separately bonded under Section 61405.

62182. (a) Every handler that operates only one plant within the state, before purchasing any market milk from a producer, shall execute and deliver to the secretary a surety bond, executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety. The minimum amount of the bond shall be based upon the average daily quantity of market milk purchased by the handler during any calendar month during a calendar year. The minimum amount of the bond shall be as follows: (1) Five thousand dollars ($5,000) for any handler that purchases an average daily quantity of less than 1,000 gallons. (2) Ten thousand dollars ($10,000) for any handler that purchases an average daily quantity of at least 1,000 gallons but less than 4,000 gallons. (3) Fifteen thousand dollars ($15,000) for any handler that purchases an average daily quantity of at least 4,000 gallons but less than 8,000 gallons. (4) Twenty thousand dollars ($20,000) for any handler that purchases an average daily quantity of 8,000 gallons or more. (b) Every handler that operates more than one plant within the state, before purchasing any market milk from a producer, shall execute and deliver to the secretary a surety bond, executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety. The bond shall be a single bond covering all plants within the state and shall be in an amount determined by multiplying twenty thousand dollars ($20,000) by the number of plants operated by the handler in the state. (c) Any milk purchase agreement between a handler and a producer may provide for additional surety bonds, guarantees, or other forms of security in addition to the bonding requirements in this article.


62183. If any handler so increases his purchases of market milk during the license year that such purchases exceed the amount for which the handler is bonded, such handler shall forthwith post such additional bond as may be required to comply with this article.


62184. The bonds required by Sections 62182 and 62183 shall be upon a form approved by the director, and shall be conditioned upon the payment in the manner that is required by this chapter, of all amounts due to producers for market milk purchased by such licensee or applicant during the license year. It shall be to the state in favor of every producer of market milk.


62185. If a handler fails to pay any producer or producers for market milk in the manner that is required by this chapter, the director shall proceed forthwith to ascertain the names and addresses of all the producers that the handler has failed to pay, together with the amounts due and owing to them and each of them by such handler, and shall request all such producers to file a verified statement of their respective claims with the director. The producer need only verify that he is owed an amount by the handler. The actual amount in such case may be ascertained by the director.


62186. After determining the claims of such producers, the director shall bring an action on the bond on behalf of such producers. Any producer not satisfied with the amount of such producer's claim as determined by the director, or with the ratio such producer' s claim bears to all claims against the bond as determined by the director, may intervene in such an action so that the correct amount of his claim and the ratio it bears to all the claims may be adjudicated.

62186.1. (a) The director may bring an action against a surety bond company if the company fails to do any of the following: (1) Acknowledge promptly and act reasonably upon receiving a bond demand from the director. (2) Promptly investigate and process claims. (3) Make fair and equitable settlement of claims. (4) Pay the bond amount to the director. (b) The authority provided in subdivision (a) is in addition to the authority provided for in subdivision (h) of Section 790.03 of the Insurance Code. (c) In addition to the bond proceeds, the surety bond company may be ordered to pay interest at the prevailing prime rate on the amounts owed from the date the claim was filed, all the department's court costs, and reasonable attorney's fees.


62187. If a handler fails to pay any producer in the manner that is required by this chapter, the director may require the filing of a new or additional bond in an amount determined by the director that will be sufficient to satisfy claims for the payment of producers thereafter supplying market milk to the handler. The failure of a handler to have filed a new bond within 10 days after notice from the director constitutes grounds for the revocation or suspension of the license of the handler.


62188. If recovery upon the bond is not sufficient to pay all of the claims as finally determined and adjudged by the court, any such amount recovered shall be divided pro rata among the producer-creditors.


62189. The failure of any handler that purchases market milk from producers to execute and deliver the bond as provided and required in this article is a violation of this chapter. The failure of any such handler to post any additional bond as may be required to comply with any provision of this chapter is also a violation of this chapter.


62190. Payments by a handler to a producer, for the purposes of any action on a handler's bond or bonds for any year or years, shall be credited first to interest and then to principal due, owing, and unpaid. Amounts to be applied to principal shall be applied first to the amount due for the most recent deliveries and then successively, in descending order, to the amounts due to the next most recent deliveries.


62191. (a) Except as otherwise provided in Section 62193 or 62194, the purchase of any market milk in excess of 1,000 gallons monthly from any producer is an unlawful trade practice unless a written contract, which complies with all of the requirements which are prescribed by this section, has been entered into with the producer. (b) The contract shall include all of the following: (1) The amount of market milk which is to be purchased for any period. (2) The minimum quantity of the market milk which is to be paid for as class 1, if any is to be purchased for this purpose. The quantity shall be stated in pounds of market milk, pounds of market milk fat, or gallons of market milk, unless the price which is to be paid for the class 1 market milk is established separately for the market milk fat and market skim milk, in which case the quantity may, in the alternative, be stated in both pounds of market milk fat and pounds of market skim milk separately. The minimum quantity of market milk to be paid for as class 1 shall not be less than 70 percent of the total quantity provided in the contract to be purchased at a milk products plant, and not less than 60 percent of the total quantity of market milk fat, or the total quantity of market skim milk components, but not necessarily both, provided in the contract to be purchased at a country plant, as defined by the director in stabilization and marketing plans. (3) The price to be paid for all market milk received. (4) The date and method of payment for the market milk. Payment shall be made for the amount of the market milk delivered during the first 15 days of any calendar month not later than the first day of the next following month and for the amount delivered during the remainder of the month not later than the 15th day of the next following month unless the milk is subject to a pooling plan as authorized in Chapter 3 (commencing with Section 62700) and the pooling plan provides for different dates and methods of payment, in which case the date and method of payment for the milk shall be as provided for in the pooling plan. (5) The charges for transportation if hauled by the handler. (6) A provision that market milk received within the total quantity provided by the contract to be purchased for any period shall not be paid for at less than the minimum price for market milk used for class 2. (c) The contract may contain other provisions that are not in conflict with this chapter. A signed copy of the contract shall be filed by the producer with the director within five days from the date of its execution. (d) Paragraphs (2) and (6) of subdivision (b) shall not be applicable if an equalization pool, as provided pursuant to Chapter 3 (commencing with Section 62700), is in effect for the area in which the purchase of the market milk occurs.


62192. The production of market milk in excess of amounts provided to be purchased under contracts executed pursuant to Section 62191 shall be voluntary on the part of the producer and shall not be a condition, oral or written, of execution or renewal of any of those contracts.


62193. Section 62191 does not apply to the purchase of market milk which is necessary to meet an unanticipated increase in demand or an unanticipated shortage in the supply of a handler if both of the following occur: (a) The quantity of market milk purchased from any one producer does not exceed 5,000 gallons in any one month. However, if the producer is a cooperative association acting as a producer, the total quantity purchased shall not exceed 30,000 gallons per month. (b) A complete record of all of these purchases is kept by the handler, and the price paid for the milk by the handler is not less than the price which is established in the applicable stabilization and marketing plan for the usage to which the milk is applied. For a single transaction between a producer and handler, payment shall be made for the amount of milk delivered during the first 15 days of any calendar month not later than the first day of the next following month and payment shall be made for the amount of milk delivered during the remainder of the month not later than the 15th day of the next following month, unless the milk is subject to a pooling plan as authorized in Chapter 3 (commencing with Section 62700) and the pooling plan provides for different dates and methods of payment, in which case the date and method of payment for the milk shall be as provided for in the pooling plan.


62194. Section 62191 does not apply to market milk purchased under cash-on-delivery terms.


62195. The payment by a handler to any producer, including any nonprofit cooperative association acting as a producer, or the receipt from a handler by a producer, including any nonprofit cooperative association acting as a producer, of a lesser price for any market milk distributed to any person, including any agency of federal, state, or local government, for less than the minimum prices established by the director to be paid by handlers to producers for market milk for the marketing area is an unlawful trade practice.


62196. The failure of any handler to pay for market milk delivered to him or her at the time and in the manner specified in the contract with the producer is an unlawful trade practice, except as provided for in Section 62079.

62197. This article applies regardless of the form in which market milk is received by the handler and regardless of the area of origin of the market milk.

62198. Any contract between a producer and handler is voidable by the producer for a 45-day period following the occurrence of either of the following events: (a) The handler has failed to pay the producer the full price specified in the contract or has failed to comply with the terms specified in paragraph (4) of subdivision (b) of Section 62191, and the failure has not been corrected by the handler within one business day after notification by the producer or director. The 45-day period shall commence on the day after the payment was due. (b) The handler has failed on three separate occasions within a 12-month period to pay the producer the full price specified in the contract or has failed to comply with the terms specified in paragraph (4) of subdivision (b) of Section 62191. The 45-day period shall commence on the day after the third occurrence.


62199. If a notice has been issued by the director that the future deliveries to the handler will not be covered under the Milk Producers Security Trust Fund created pursuant to Chapter 2.5 (commencing with Section 62500), all contracts between producers and the handler are voidable by the producers. Producers shall have the option to void their contracts for a 45-day period from the date the notice is issued or until the date the director establishes for reinstatement of the handler's eligibility under the trust fund, whichever is later.

62200. (a) Handlers shall pay producers either by check or cash. Handlers electing to pay producers by cash shall, in all cases, obtain a dated, signed receipt from each producer. The receipts shall be made a part of the permanent records of the handler. Handlers paying by check shall issue checks which are reduceable to cash by the producer in no more than one business day. (b) The giving of a promissory note is not payment within the meaning of this chapter.

62201. (a) If a handler does not pay for market milk delivered to him or her at the time and in the manner specified in the contract, the handler shall pay the producer interest on the unpaid amount from the time the payment was due until paid at the rate of 12 percent per annum. This interest is in addition to any other penalties provided in this chapter. (b) If there is no contract for the delivery of milk to the handler or the delivery was made as a single transaction between the producer or handler, the handler shall pay the department interest on the unpaid amount from the time the payment was due until paid at the interest rate specified in subdivision (a). The interest is in addition to any other penalties provided in this chapter.


62202. If a handler fails to pay for market milk delivered to him or her at the time and in the manner specified in this chapter, the director may assess a penalty for each payment date that producers were not fully paid. Any penalty assessed shall be a minimum of one hundred dollars ($100) for each payment date. If the amount not properly paid is in excess of forty thousand dollars ($40,000), the penalty assessed will be five thousand dollars ($5,000) or one-fourth of 1 percent of the amount not properly paid for, whichever is less.


Article 14. Administrative Fees

Ca Codes (fac:62211-62213) Food And Agricultural Code Section 62211-62213



62211. Every handler subject to the provisions of any stabilization and marketing plan, including a producer-handler, shall deduct as an assessment from payments made to producers for market milk, including the handler's own production, the sum of one and six-tenths cents ($0.016) per hundredweight of market milk. The amount of the assessments so deducted shall be paid to the director on or before the 45th day following the last day of the month during which such market milk was received. Every handler subject to the provisions of any stabilization and marketing plan that purchases or handles market milk from producers, including the handler's own production, if any, shall pay a fee of eight-tenths of one cent ($0.008) per hundredweight of market milk. The amount of such fee shall be paid to the director on or before the 45th day following the last day of the month in which such market milk was received.


62212. The director may fix the rates of assessments or fees required by Section 62211 at lesser amounts, and may adjust the rates of assessments or fees from time to time, whenever he or she finds that the cost of administering the provisions of this chapter, including any allocation of funds made pursuant to Section 38986, can be defrayed from revenues derived from the lower rates. However, the rate of assessments deducted from payments to producers for market milk, including the handler's own production, and the rate of fees paid by handlers shall, at all times, be in the ratio of 2 to 1, except that this ratio need not be achieved during a six-month period following the transfer of any fund surplus pursuant to Section 62574.


62213. Any assessment or fee or either of them payable pursuant to any provision of this article is a debt of the person by whom such assessment or fee or either of them is payable and shall be due and payable to the director upon the date set forth in Section 62211. If such person does not pay such assessment or fee or either of them upon the required date, the director may file a complaint against such person in a state court of competent jurisdiction for the collection of such assessment or fee or either of them. If any such person does not pay to the director the assessments or fees or either of them provided for in this article, on or before the date specified in Section 62211, the director may add to such unpaid assessments or fees or either of them an amount not exceeding 10 percent of such unpaid assessment or fees or either of them to defray the cost of enforcing the collection of such unpaid assessments or fees or either of them.


Article 15. Reports And Statistics

Ca Codes (fac:62241-62243) Food And Agricultural Code Section 62241-62243



62241. All handlers shall make and file with the director at least once each month such reports as the director may require to enable him to enforce the provisions of this chapter.


62241.5. Within 60 days of the effective date of this section, each market milk handler shall provide the director with a list of the name, address, and date of every current contract between the handler and market milk producer. Monthly thereafter, the handler shall report to the director the same information on all terminated, new, and amended contracts which has not been previously reported. The director may assess a one hundred dollar ($100) penalty against any market milk handler who fails to file the required report for each report not filed.

62242. Every handler that purchases market milk shall make and keep for three years a correct record which shows in detail all of the following with reference to the handling, sale, or storage of the market milk: (a) The name and address of the seller. (b) The date the market milk was received. (c) The amount of market milk received. (d) The official tests of the market milk purchased. (e) The usage of the market milk. (f) Evidence of payment for the market milk purchased. (g) Other records that the director may require.


62243. Any record or report made to the director pursuant to this article, or any contract required to be filed under this chapter, is confidential and shall not be divulged, except if necessary for the proper determination of any court proceedings or hearing before the director.


Article 17. Local And Regional Producer Advisory Boards

Ca Codes (fac:62301-62313) Food And Agricultural Code Section 62301-62313



62301. Except as otherwise provided in Section 62303, the director may, if he deems such board necessary or advisable, appoint: (a) A local advisory board for any marketing area established as prescribed in this chapter to assist and advise him in matters which pertain to the production and marketing of market milk or to the operation of a stabilization and marketing plan. (b) A regional advisory board, if he deems such board necessary or advisable to represent several marketing areas adjacent to each other and wherein production conditions and costs are reasonably uniform.


62302. Except as otherwise provided in Section 62303, the director shall appoint: (a) A local advisory board, if a majority of the producers individually, or through any nonprofit agricultural cooperative marketing association which is authorized by its members to so petition, request the establishment of such board. (b) A regional advisory board, if in each marketing area which is involved a majority of producers that supply such marketing areas individually, or through any nonprofit agricultural cooperative marketing association which is authorized by its members to so petition, requests that such a board be established.


62303. The director shall not establish any local or regional advisory board pursuant to this article if he finds that the assessments or fees which are collected pursuant to Article 14 (commencing with Section 62211) of this chapter from the marketing area are insufficient to cover the costs of such local or regional advisory board. No regional advisory board shall be set up to include any marketing area which on September 7, 1955, was operating under a local advisory board, unless by petition as provided for in this article or through public hearing, producers of such marketing area request that they be represented by a regional advisory board.


62304. If the director receives a qualified petition for a local advisory board, he may investigate the possibility of establishing a regional advisory board covering the marketing area from which the petition was received and the adjacent marketing areas, by holding one or more public hearings for the purpose of establishing whether or not a majority of producers supplying the marketing areas proposed to be included in such region desire such regional advisory board.


62305. A local advisory board established pursuant to this article shall consist of seven members who shall be producers that supply market milk to the particular marketing area. A regional advisory board may consist of any number of members who are producers that supply market milk to any of the marketing areas in the region, but shall consist of not less than one member from each such marketing area in the region. The director may appoint one additional member on each such board who shall be a public member. Upon the director's request, each board shall submit to the director the names of three or more natural persons, each of whom shall be a citizen and resident of this state and not a producer, shipper, or processor nor financially interested in any producer, shipper, or processor, for appointment by the director as a public member of the board. The director may appoint one of the nominees as the public member on the board. If all nominees are unsatisfactory to the director, the board shall continue to submit lists of nominees until the director has made a selection. Any vacancy in the office of the public member of the board shall be filled by appointment by the director from the nominee or nominees similarly qualified submitted by the board. The public member of each board shall represent the interests of the general public in all matters coming before the board and shall have the same voting and other rights and immunities as other members of the board.


62306. The term of office of each member of a regional advisory board or a local advisory board shall be two years.


62307. The director may remove any member from a local or a regional advisory board if he finds, after a hearing, that such member is guilty of nonfeasance or malfeasance in office.


62308. The director may appoint a member to fill any vacancy on a local or a regional advisory board.


62309. Each regional advisory board and each local advisory board may meet in regular session each month, and each member shall be allowed twenty dollars ($20) per diem and mileage at the rate of fifteen cents ($0.15) per mile for attending such regular meetings, and any other meeting or conference which is called or authorized by the director within or outside of the boundaries of this state.


62310. Any regional or local advisory board may, with the previous approval of the director, employ such personnel as may be necessary in the performance of its duties and shall adopt regulations for its conduct. Each such board shall submit a budget of its expenses to the director for his approval. The funds to be used for the maintenance of each such board shall be paid from the proceeds of assessments and licenses which are paid to the director under the plan of any area which is represented upon verified claims that are presented by the board to the director. A regional or local advisory board shall not incur any expenses except those for per diem and mileage, unless the expenses are approved by the director.


62311. Regional and local advisory boards shall review with the director the methods which are to be used in determining producer costs, and aid the director in the selection of the level of production which is necessary to meet the requirements of Section 62062 with respect to producer price minimums.


62312. For purposes of developing uniformity of administration as between marketing areas in which producer advisory boards have been appointed, the director shall call together representatives of regional and local advisory boards from time to time to advise him as to the relationships in producer costs among the marketing areas, and may designate such representatives as the statewide committee of producer advisory boards.


62313. It is hereby declared, as a matter of legislative determination, that producers of market milk appointed to the regional advisory boards pursuant to this article are intended to represent and further the interest of a particular agricultural industry concerned, and that such representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are appointed to such advisory boards, the particular industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.


Article 18. Actions And Penalties

Ca Codes (fac:62401-62403) Food And Agricultural Code Section 62401-62403



62401. The violation of any provision of this chapter, or of any provision of any stabilization and marketing plan, or of any regulation adopted under this chapter, is a misdemeanor which is punishable by a fine of not less than one hundred dollars ($100) and not exceeding one thousand dollars ($1,000), or by imprisonment in a county jail not exceeding six months, or by both such fine and imprisonment. The amount of penalty which is assessed pursuant to this section on each count of violation shall be based upon the nature of the violation and the seriousness of the effect of such violation upon effectuation of the purposes and provisions of this chapter.


62402. Any person who violates this chapter, any provision of any stabilization and marketing plan, or any regulation adopted under this chapter, is liable civilly in an amount not less than one hundred dollars ($100) and not to exceed one thousand dollars ($1,000) for each and every violation. That penalty is to be recovered by the director in any court of competent jurisdiction. The amount of penalty which is assessed pursuant to this section on each count of violation shall be based upon the nature of the violation and the seriousness of the effect of the violation upon effectuation of the purposes and provisions of this chapter. The court may, in addition to the civil penalty, award reasonably incurred investigative and enforcement costs, and attorney's fees, to the director. The court may also award attorney's fees to any person successfully defending a civil action under this section. In any civil action initiated by the director under this section, the director shall join in the action, and assert civil penalties against, all parties participating in the commission of the unlawful practice. Any sum which is recovered under this section shall be deposited in the State Treasury to the credit of the Department of Food and Agriculture Fund.

62403. The director may bring an action to enjoin the violation, or the threatened violation, of any provision of this chapter, any provision of any stabilization and marketing plan, or any regulation adopted under 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, orders, or regulations, 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.


Chapter 2.5. Milk Producers Security Trust Fund

Article 1. Legislative Declaration

Ca Codes (fac:62500-62508) Food And Agricultural Code Section 62500-62508



62500. The production and distribution of milk, and the components thereof, is hereby declared to be a business affected with a public interest. This chapter is enacted in the exercise of the police powers of this state for the purpose of protecting the health and welfare of the people of this state.


62501. It is hereby declared that the dairy industry is a paramount agricultural industry of the state, and the normal processes of producing and marketing milk are enterprises of vast economic importance to the state and of vital importance to the consuming public which should be safeguarded and protected in the public interest. The Legislature finds that the marketing of milk requires producers to receive prompt payment. It is the policy of this state to protect producers against loss of payment for bulk milk. The public interest requires the establishment of a system to provide payment security for producers.


62502. It is recognized by the Legislature that the powers conferred upon the director by Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), and Chapter 3 (commencing with Section 62700) are inadequate to enable the dairy industry to maintain satisfactory producer payment protection. Therefore, those powers must be supplemented by the powers conferred by this chapter upon the director to establish and administer a milk producers security trust fund.


62503. This chapter shall be liberally construed. If any article, section, subdivision, sentence, clause, or phrase of this chapter is for any reason held to be unconstitutional or invalid as applied to any person or as applied under certain circumstances, that decision shall not affect the validity of the remaining provisions of this chapter or the application of this chapter to any other person or under any other circumstances. The Legislature hereby declares that it would have enacted each article, section, subdivision, sentence, clause, or phrase of this chapter regardless of the fact that one or more other articles, sections, subdivisions, sentences, clauses, or phrases are declared unconstitutional or invalid.


62504. Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), and Chapter 3 (commencing with Section 62700) shall be liberally construed as being complementary of, and supplemental to, this chapter, and these chapters shall constitute a single comprehensive scheme for the regulation of the production and handling of milk. However, each of the chapters, and each article, section, subdivision, sentence, clause, and phrase of each chapter is severable. If one of the chapters or any article, section, subdivision, sentence, clause, or phrase of any one of the chapters is for any reason held void, invalid, or unconstitutional, the decision shall not affect the validity of any other chapter or any of its articles, sections, subdivisions, sentences, clauses, or phrases.


62505. This chapter does not preclude any producer from bringing any action against any handler in any court of competent jurisdiction.

62506. In order to effectuate the purposes of this chapter, the Milk Producers Security Trust Fund is hereby created.


62507. It is hereby declared, as a matter of legislative determination, that producers and handlers appointed to the Milk Producers Security Trust Fund Board are intended to represent and further the interest of a particular agricultural industry concerned, and that this representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are appointed to the board, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.


62508. This chapter shall be known and may be cited as the Norman S. Waters-Ruben S. Ayala Milk Producers' Security Act of 1987.


Article 2. Definitions

Ca Codes (fac:62520-62521) Food And Agricultural Code Section 62520-62521



62520. Unless otherwise defined in this chapter, or the context otherwise requires, the definitions contained in Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), or Chapter 3 (commencing with Section 62700) govern the construction of this chapter.


62521. For purposes of this chapter, the following terms mean: (a) (1) "Acceptable security" means a surety bond from an admitted insurer, deposits of government securities, a letter of credit, or other form of performance guarantee acceptable to the secretary and meeting the requirements as acceptable security pursuant to law. Any instrument used as acceptable security shall contain provisions the secretary may prescribe, shall have an effective life of no less than two years, shall name the secretary as the beneficiary of the instrument, shall be clean and irrevocable if the security is a letter of credit, shall provide that the secretary may draw upon it up to the total amount in the event of the handler's payment default, and, except as otherwise provided in paragraph (3), shall be verified to the secretary as being in effect and complying with the provisions of this chapter at the end of every six-month interval following the date on which a handler originally posts the instrument. Except as provided in paragraphs (2) and (3), acceptable securities provided to the secretary shall not be released by the secretary unless the handler's average monthly purchases, as determined annually by the secretary, fall below thirty million dollars ($30,000,000), or the fund cash, whichever is higher. Any interest accrued by the instrument shall be the property, and for the benefit, of the handler posting the instrument. (2) Subject to the provisions of this chapter, a handler who has posted an acceptable security shall have the right to replace that instrument with a new acceptable security meeting the requirements of this chapter at the end of every six-month interval following the date on which the handler originally posted the instrument. The secretary shall release the issuer of any acceptable security from all past, present, or future obligations secured by the acceptable security upon the secretary's acceptance of replacement security meeting the requirements of this chapter and the secretary shall then provide written confirmation to the issuer of the original acceptable security that an acceptable replacement security had been provided. (3) Upon receipt of an affidavit confirming that the amount paid under an acceptable security posted pursuant to this chapter was equal to the total amount of that instrument, the secretary shall release the issuer of that acceptable security from all past, present, and future liability. Upon receipt of an affidavit confirming any other amount paid by an issuer under an acceptable security posted pursuant to this chapter, the secretary shall release the issuer of that security to the extent of the issuer's payment. (b) "Board" means the Milk Producers Security Trust Fund Board. (c) "Covered milk" means milk that would, in the event of a default in payment by the purchasing handler, qualify for coverage under Article 5 (commencing with Section 62580) of Chapter 2.5 of Part 3. (d) "Fund" means the Milk Producers Security Trust Fund created pursuant to Section 62506. (e) "Fund cash" means the combined value of the security charges collected pursuant to Section 62561 and any increments received pursuant to Section 62573. (f) (1) Except as provided in paragraph (2), "fund surplus" means the portion of fund cash at any particular time that consists of increments received by the fund pursuant to Section 62573. (2) If payment of producer claims pursuant to Article 7 (commencing with Section 62620) reduces the fund cash to thirty million dollars ($30,000,000), "fund surplus" shall thereafter mean the amount by which the fund cash exceeds thirty million dollars ($30,000,000). (g) "Handler" means any person who as owner, agent, broker, or intermediary, either directly or indirectly, receives, purchases, or otherwise acquires ownership, possession, or control of milk in unprocessed or bulk form from a producer or a producer-handler for the purpose of manufacturing, processing, selling, or other handling. It includes cooperative associations that, either directly or indirectly, receive, purchase, or otherwise acquire ownership, possession, or control of milk from other handlers or producers who are nonmembers of the cooperative. (h) "Milk" means bulk whole milk, bulk reduced-fat milk, bulk lowfat milk, bulk skim milk, bulk condensed skim, and bulk cream, and any other combination of these products which have not had nondairy ingredients added. It does not include milk which has been packaged in bottles, cartons, dispenser cans, or other consumer packages. (i) "Producer" means any person that produces milk from five or more cows whose bulk milk is received, acquired, or handled by a handler. It includes the nonprofit cooperative associations described in Article 3 (commencing with Section 61871) of Chapter 2 in the sale of milk of its member producers to other handlers.


Article 3. Milk Producers Security Trust Fund Board

Ca Codes (fac:62540-62543) Food And Agricultural Code Section 62540-62543



62540. The director shall appoint a Milk Producers Security Trust Fund Board consisting of seven members. The director shall appoint two members of the first board for a term of one year, two members for a term of two years, and three members for a term of three years. Thereafter, all appointments shall be for a term of three years, and no member shall be appointed to more than three consecutive three-year terms. Members of the board shall include three milk producers, two representatives of handlers licensed under Chapter 2 (commencing with Section 61801), and two nonproducer members representing cooperative associations of milk producers.


62541. Each member of the board shall be paid one hundred dollars ($100) per day plus travel expenses, including expenses for lodging and meals, which are incurred in the attendance at board meetings or in conducting the business of the board. All per diem and expense claims are subject to approval by the director.


62542. The board shall advise the director on the administration of the fund, including, but not limited to, the amount of the fund defaults under this chapter and the implementation of the security charge necessary to accomplish its functions.


62543. The board may, by contract, with the approval of the director, engage the services of an accounting firm or other consultants or agencies which the board determines to be necessary.


Article 4. Financing Plan

Ca Codes (fac:62560-62574) Food And Agricultural Code Section 62560-62574



62560. (a) The security charges provided for in Section 62561 shall be collected until January 1, 2007. Unless otherwise permitted by this section, the secretary shall thereafter discontinue collection of the security charges. The fund shall consist of the security charges collected, the value of any alternative financial instrument, and acceptable securities provided by handlers pursuant to subdivision (c). (b) If, after January 1, 2007, payment of producer claims reduces the fund cash below thirty million dollars ($30,000,000), the secretary may resume collecting security charges in order that the fund cash is thereafter maintained at thirty million dollars ($30,000,000). Security charges necessary to return the fund cash to thirty million dollars ($30,000,000) shall, subject to subdivision (c), be collected from all handlers making purchases of milk, including handlers who have posted acceptable securities pursuant to subdivision (c). (c) If, in any month, 110 percent of any handler's average monthly milk purchases, computed over the preceding 12 months, unless the increase in value of milk purchases is the result of substantial business expansion or the result of a merger or acquisition, in which case the 12-month computation requirement does not apply, exceeds the fund cash as of the end of that month, or thirty million dollars ($30,000,000) whichever is higher, the secretary shall require that handler to provide acceptable securities within 10 working days in an amount equal to the difference between the fund cash or thirty million dollars ($30,000,000) whichever is higher, and 110 percent of that handler's average monthly milk purchases. When handlers have provided acceptable securities covering the difference, the secretary shall not collect security charges from those handlers for the portion of their average monthly milk purchases covered by acceptable securities. Shipments to handlers failing to provide acceptable securities within 10 working days of notice by the secretary of the obligation to post acceptable securities, as required by this subdivision, shall be listed by the secretary as ineligible for coverage under the fund pursuant to Section 62586. (d) The secretary shall calculate the value of milk handlers' average monthly milk purchases at least once each year for those handlers whose previous average monthly milk purchases exceed twenty million dollars ($20,000,000). If, as a result of any such calculation, the secretary determines that a handler must provide additional acceptable securities to satisfy the requirements of subdivision (c), that handler shall provide additional acceptable securities within 10 working days of notice by the secretary. (e) In the event a handler fails to comply with subdivision (d): (1) In addition to paying all other amounts required by this chapter, including any security charges then in effect under subdivision (a) of Section 62561, that handler shall pay an enhanced security charge on all purchased milk to be computed as follows: (A) (i) One and seven-tenths mills per pound ($0.0017) for class 1 fat. (ii) Nine-tenths mills per pound ($0.0009) for class 1 solids-not-fat. (iii) One-tenth mill per pound ($0.0001) for class 1 fluid. (B) (i) Three and two-tenths mills per pound ($0.0032) for classes 2, 3, 4a, and 4b fat. (ii) One and three-tenths mills per pound ($0.0013) for classes 2, 3, 4a, and 4b solids-not-fat. (2) A handler shall be liable for the enhanced security charges required by this section until the handler provides the required additional acceptable securities to the secretary. Notwithstanding Section 62521 and subdivision (b) of this section, enhanced security charges paid pursuant to this paragraph shall be deposited into the trust fund and become part of the fund cash. (f) If a handler fails to timely provide acceptable securities, or additional acceptable securities, as required by this section, the secretary shall promptly give notice of that fact to all producers who have a contract on file with the secretary, all cooperative associations, and other interested parties. A handler failing to post acceptable securities may also be subject to revocation, suspension, or nonrenewal or placement of conditions upon the milk handler's license pursuant to Sections 62146, 62149, and 62151. (g) In consultation with the Milk Producers Security Trust Fund Advisory Board, the secretary may consider and use alternative financial instruments, in addition to, or in lieu of, using security charges to meet the financial security requirements of this section.


62561. (a) The following security charges shall be in effect for any period for which the secretary has implemented collections under this chapter: (1) (A) One and seven-tenths mills per pound ($0.0017) for class 1 fat. (B) Nine-tenths mills per pound ($0.0009) for class 1 solids-not-fat. (C) One-tenth mill per pound ($0.0001) for class 1 fluid. (2) (A) Three and two-tenths mills per pound ($0.0032) for classes 2, 3, 4a, and 4b fat. (B) One and three-tenths mills per pound ($0.0013) for classes 2, 3, 4a, and 4b solids-not-fat. (b) The secretary shall add the security charges to the prices established for all classes of milk in accordance with Chapter 2 (commencing with Section 61801). The secretary is only authorized by this article to collect security charges on covered milk.


62562. Any increase in classified prices due to Section 62561 shall be considered as part of the minimum prices required to be paid to producers under other provisions of this code. No other provisions of this chapter modify the minimum payment requirements contained in Chapter 1 (commencing with Section 61301) and Chapter 2 (commencing with Section 61801).


62563. Any handler subject to any pooling plan in effect under Chapter 3 (commencing with Section 62700) shall continue to be obligated for the minimum prices provided for in the stabilization and marketing plans on the pooled usage of the handler. However, any part of the minimum prices that is attributable to the security charges established pursuant to Section 62561 shall be deducted before producer prices are determined under the pooling plan. Any handler subject to the pooling plan that receives milk that is not included in the calculation of producer prices determined under the pooling plan shall be obligated to pay the security charges established pursuant to Section 62561 for any portion of that milk that is assigned to class 1, class 2, class 3, class 4a, and class 4b usage. The amount of any handler's obligation attributable to the security charges established pursuant to Section 62561 shall be remitted by the secretary to the fund by the end of the month following the month the pool calculations were completed.


62564. Any handler receiving milk not subject to any pooling plan in effect pursuant to Chapter 3 (commencing with Section 62700) shall be obligated to remit to the secretary any security charges in effect pursuant to Section 62561 for class 1, class 2, class 3, class 4a, and class 4b products produced from the milk and may deduct the security charges from the minimum prices required to be paid to producers.


62564.5. Any producer-handler who has milk production that is exempt pursuant to Section 62708, 62708.1, 62708.5, or 62722 from the pooling plan in effect pursuant to Chapter 3 (commencing with Section 62700) shall be exempt from any security charges established pursuant to this article for that exempt production.


62565. Security charges may be collected by the director through direct payment or through pool accounting procedures established by the director pursuant to Chapter 3 (commencing with Section 62700).


62566. The director may add a penalty of 10 percent to amounts which are not paid when due.


62567. If any handler or producer-handler does not provide the information necessary to determine the amount due, when required, the director shall estimate the amount due from the records of the department or from any other source of information which is available.


62568. The director may take all appropriate action against any person to recover any unpaid amounts. In any action, a declaration by the director which states the amount required to be paid, including penalty, is prima facie evidence of the delinquency. The presumption established by this section is a presumption affecting the burden of proof.


62569. Any money which is collected by the director pursuant to this chapter shall be deposited in a bank or other depository which is approved by the director. Funds which are so collected are exempt from Sections 11270 and 11272 of the Government Code and shall be deposited and disbursed only to pay for milk produced and delivered within this state, which has not been otherwise paid for, including pool equalization fund obligations, attorney's fees and other costs incurred in litigation involving the fund, expenses generated by the auditing requirement imposed by Section 62570, expenses generated by the use of alternative financial instruments pursuant to Section 62560, and for the costs set forth in Section 62573. The expenditure of those funds is exempt from Section 925.6 of the Government Code. Nothing in this section prevents the director from using the increment received from investment, reinvestment, or deposit of money specified in Section 62573, in the manner provided by Section 62574.


62570. All fund activities shall be subject to an audit at least once every two years by an auditing firm recommended by the board and selected by the director. A copy of the audit shall be delivered to the director within 30 days after completion.


62571. Notwithstanding Section 13340 of the Government Code, any money which is collected by the director pursuant to this chapter is hereby continuously appropriated to the director to carry out only those purposes provided for in Section 62569. The appropriation which is made in this section is exempt from Section 16304 of the Government Code.


62572. Any money which is deposited pursuant to Section 62569, which the director determines is available for investment, may be invested or reinvested by the Treasurer in any of the securities described in Article 1 (commencing with Section 16430) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code, or placed in a depository as provided in Chapter 4 (commencing with Section 16500) of that part, and handled in the same manner as money in the State Treasury. For these purposes, the money may also be combined with funds determined by the director to be available for investment pursuant to Section 58939.

62573. Any increment which is received from investment, reinvestment, or deposit of money pursuant to Section 62572 shall be deposited to the credit of the fund. The Treasurer may deduct from this remittance an amount equal to the reasonable costs incurred in carrying out Section 62572 and this section or may bill the director for the costs, and the director shall pay the costs from money collected pursuant to this chapter. Nothing in this section prevents the director from using the increment in a manner provided by Section 62574.


62574. Immediately following the payment to the fund of the increment provided in Section 62573, if the secretary determines that there is a fund surplus, the secretary may, after consultation with the Trust Fund Board, transfer an amount equal to the increment referenced in the section to an account administered by the Dairy Marketing Branch of the department to be used to reduce the producer and handler assessments that would otherwise be imposed pursuant to Article 14 (commencing with Section 62211) of Chapter 2. One-half of the increment so transferred shall be used to reduce the obligation of producers and one-half shall be used to reduce the obligation of handlers pursuant to that article.


Article 5. Milk Producers Security Trust Fund Coverage

Ca Codes (fac:62580-62587) Food And Agricultural Code Section 62580-62587



62580. Except as otherwise provided in this chapter, milk shipped by a producer to a handler which meets the following criteria shall be considered for coverage pursuant to this chapter: (a) Milk shipment was made after December 31, 1986. (b) A valid contract between the producer and handler pursuant to Chapter 1 (commencing with Section 61310) or Chapter 2 (commencing with Section 61801) has been filed with the director prior to the date the milk was shipped, unless the shipment was made in the first five days after the contract was executed. This requirement shall not apply to all shipments made prior to the effective date of this chapter. (c) The handler was licensed and bonded as required by Chapter 1 (commencing with Section 61301) or Chapter 2 (commencing with Section 61801) when the contract was filed with the director. (d) The milk was produced within the state and delivered to a plant within the state. (e) The director has not issued a prior notice that the shipments would not be covered by the fund. (f) The shipment was not made under a custom processing arrangement with the producer retaining title. (g) The producer or cooperative shipping the milk had a direct contract with the handler. In the case of a cooperative, only the milk of its members shipped under the contract is covered. Milk shipped to a handler under a contract held by intermediaries, brokers, or agents is not covered. (h) The producer does not have a beneficial ownership interest in the handler to whom shipments were made. (i) The producer is in compliance with this chapter, Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), and Chapter 3 (commencing with Section 62700).


62580.5. Any producer entity, including a nonprofit cooperative that severs a disqualifying beneficial-ownership interest in a handler to which it supplies bulk milk, shall not have trust fund coverage for future milk shipments to that handler for a period of 12 months after notice is given to the secretary of termination of the beneficial ownership interest unless a waiver is granted subject to Section 62587.


62581. Only shipments which occur during the first 35 days from the date of the earliest shipment for which a producer has not been paid are eligible.

62582. If future shipments to a handler are not eligible for coverage under this chapter in the event of a default, the secretary shall notify all producers who have a contract on file with the secretary, all cooperative associations, and other interested parties. Future shipments will not be eligible when any of the following events occur: (a) The handler fails to maintain a valid license or bond as required under Chapter 1 (commencing with Section 61301) or Chapter 2 (commencing with Section 61801). (b) The handler has failed to pay producers as required under Chapter 1 (commencing with Section 61301) or Chapter 2 (commencing with Section 61801). (c) The handler has failed to pay the amount due the pool equalization fund provided for in Chapter 3 (commencing with Section 62700). (d) The handler fails to submit, when requested by the secretary, executed contracts that establish the relationship between affected parties.

62583. If, on the date of the notice issued pursuant to Section 62582, a producer has a contract with the handler which is on file with the secretary, and that producer has received payment from a handler whose milk purchases have been declared ineligible, shipments by that producer which occur more than five days from the date of the notice of ineligibility issued by the secretary will not be considered in determining any claim the producer may make against the fund, unless the secretary reestablishes eligibility for future shipments to be covered by the fund.


62584. If, on the date of the notice issued pursuant to Section 62582, a producer does not have a contract with the handler which is on file with the secretary, shipments by that producer which occur more than five days from the date of the notice of ineligibility issued by the secretary will not be considered in determining any claim the producer may make against the fund, unless the secretary reestablishes eligibility for future shipments to be covered by the fund.

62585. If the director issues a notice pursuant to Section 62582, the director may again qualify shipments to the handler if any of the following occur: (a) The handler has corrected the deficiency upon which the notice was originally issued and has done all of the following: (1) Paid all amounts owed to producers, including interest, provided for in Chapter 1 (commencing with Section 61301) or Chapter 2 (commencing with Section 61801). Producers are not entitled to receive interest on amounts for which they have been paid by the fund after the date of payment by the fund. (2) Reimbursed the fund for any payments made by the fund due to a default by the handler plus interest at the rate of 12 percent per annum from the date of payment by the fund. (3) Paid any amount owed to the pool equalization fund. (4) Paid any assessments, penalties, or other amounts owed under federal, state, or local laws. (b) Four years have elapsed since the date of the default in payment.


62586. The director shall periodically publish a list of all handlers to whom shipments are not eligible for coverage under the fund.

62587. The director may waive any of the provisions of this article if, after consultation with the board, the director finds that a hardship would be imposed on persons subject to this chapter which is not consistent with the intent of this chapter.


Article 6. Discovery And Notification Of Default In Payments 62600-62604

Ca Codes (fac:62600-62604) Food And Agricultural Code Section 62600-62604



62600. Any producer who does not receive payment for milk sold or delivered to a handler in the manner required by Chapter 1 (commencing with Section 61301) or Chapter 2 (commencing with Section 61801) shall promptly notify the director.

62601. The director shall, upon his or her own motion or upon information from a producer, producer representative, or any other person, promptly take whatever action is necessary to determine whether a payment default has occurred.

62602. The director may, but is not required to, investigate a payment default which occurred more than one year prior to the date the director received the information.


62603. If the director determines that a payment default has occurred, the director shall notify the handler that it has one business day from receipt of the notification to correct the payment deficiency. If the director determines that a payment default has not occurred, the director shall so notify the handler and complaining party.


62604. When a payment default has occurred, which was not corrected within one business day after notification, the director shall issue a notice pursuant to Section 62582 which identifies the defaulting handler and informs producers of the provisions of Sections 62583 and 62584. The notice shall also inform producers of their rights to file claims pursuant to Article 7 (commencing with Section 62620).



Article 7. Producer Claims

Ca Codes (fac:62620-62625) Food And Agricultural Code Section 62620-62625



62620. If the director determines that the fund is liable for any nonpayments to producers, the director shall provide to the producers, who have a contract with the defaulting handler on file with the director, a claim form. The claim form, which shall be verified, shall be returned to the director within 60 days from the date the claim forms are mailed by the director. The producer need only verify that a nonpayment has occurred. The amount of the nonpayment shall be determined by the director.


62621. If a verified claim form is not filed as required by Section 62620, the director and the fund are relieved of any further duty or liability pursuant to this chapter.


62622. Upon receipt of all verified claim forms from producers or the expiration of the time allowed to file claims, whichever occurs first, the director shall calculate the amount due each producer and shall notify each producer of their calculated amount and the relationship that amount bears to the total of all claims. Any producer not satisfied with the determination of the director may, within 30 days of receiving the notice pursuant to this section, request the director to review his or her calculated amount.


62623. For purposes of this chapter, the amounts owed to the producers shall be calculated as follows: (a) Only shipments which occur during the first 35 days from the date of the earliest shipment for which a producer has not been paid shall be used. (b) The minimum prices established in the stabilization and marketing plans applied to the usage assigned under the pooling plan shall be used for cooperative marketing associations. (c) The price specified in the contract with the handler shall be used for manufacturing milk producers unless a lower price is contained in the stabilization and marketing plans, in which case the lower price shall be used. (d) The minimum prices established in the stabilization and marketing plans shall be used for direct market milk producers who are not shipping their milk under the pooling plan. (e) The quota, base, and overbase prices, as provided for in the pooling plan, shall be used for producers, other than cooperative marketing associations, who ship their milk directly to a handler. (f) Deductions shall be made for those items which the handler customarily deducts from the payments, unless the deductions are in violation of Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), or Chapter 3 (commencing with Section 62700), or the deductions are for voluntary assignments made by the producer. (g) The producer's share of any bond recovery under Chapter 1 (commencing with Section 61301) or Chapter 2 (commencing with Section 61801) shall be deducted.


62624. Two hundred thousand dollars ($200,000) shall be deducted from the total of the amount owed to all producers, as calculated in Section 62623, and the balance shall be paid from the fund on a pro rata basis. The amount calculated pursuant to Section 62623 shall be the basis for prorating.

62625. A prorated payment shall be made to all affected producers based on the amount payable pursuant to Section 62624 when there is not sufficient money in the fund. Additional payments shall be made on a quarterly basis until the total amount due is paid. Each payment shall take into consideration all claims that have been partially satisfied and new claims approved since the previous payment.



Article 9. Trust Fund Coverage Of The Pool Equalization Fund 62640-62641

Ca Codes (fac:62640-62641) Food And Agricultural Code Section 62640-62641



62640. If a handler defaults in payments to the pool equalization fund provided for in Chapter 3 (commencing with Section 62700) and the secretary determines that additional efforts will not result in collection of the amount due, the secretary, after consultation with the board, may pay money from the Milk Producers Security Trust Fund to the pool equalization fund to cover the amount of the default. However, the secretary shall first exhaust all administrative and legal remedies within his or her authority against the defaulting handler, and execute all judgments resulting from those remedies, prior to recommending to the board this payment from the Milk Producers Security Trust Fund.


62641. No payment shall be made from the Milk Producers Security Trust Fund to the pool equalization fund for unpaid amounts which were owed for milk handled prior to January 1, 1987.


Article 10. Administration

Ca Codes (fac:62660-62667) Food And Agricultural Code Section 62660-62667



62660. The director may use money in the Department of Food and Agriculture Fund derived from assessments and fees collected pursuant to Chapter 1 (commencing with Section 61301), Chapter 2 (commencing with Section 61801), and Chapter 3 (commencing with Section 62700) to the extent necessary to defray the costs of administering this chapter, except costs for which the fund is liable, as provided for in Section 62569.


62661. The director is the instrumentality of this state for the purpose of administering and enforcing this chapter and to execute the legislative intent expressed in this chapter, and is hereby vested with the administrative authority specified in this chapter.


62662. The director may exercise any or all of the powers conferred by Chapter 2 (commencing with Section 11150) of Division 3 of Title 2 of the Government Code upon the head of a department with respect to hearings and investigations under this chapter.


62663. For purposes of enforcing this chapter, the director may investigate any and all transactions between producers and handlers, between nonprofit cooperative associations and producers, and among handlers. For that purpose, the director shall have access to, and may enter at all reasonable hours, any place where milk is being stored, bottled, or manufactured and where milk is being bought, sold, or handled, or where the books, papers, records, or documents which relate to those transactions are kept. The director may inspect and copy those books, papers, records, or documents at any place within the state.

62665. Any order of the director made pursuant to this chapter which substantially affects the rights of any directly affected party shall be subject to judicial review upon petition to the appropriate court. The petition shall be filed within 30 days after the effective date of the order.


62666. Any producer who recovers from the fund shall subrogate to the director all rights of recovery against any person or organization, and the producer shall execute and deliver to the director instruments and papers and perform any other acts necessary to carry out this section.


62667. Any payments made to producers from the fund due to a handler's default shall accrue interest at the rate of 12 percent per annum from the date of payment. The payments and accrued interest is a judgment against the defaulting handler. The judgment shall be considered a lien on all real and personal property of the defaulting handler. The director may file the lien for record with any county recorder where a defaulting handler's property is located and shall specify the amount owed, the name of the handler, the federal social security number or the federal employer tax number if known, and the last known address of the handler. The lien shall remain in full force and effect until the handler has repaid to the fund an amount equal to the default.


Chapter 3. Equalization Pools

Ca Codes (fac:62700-62731) Food And Agricultural Code Section 62700-62731



62700. The production and distribution of fluid milk and fluid cream is hereby declared to be a business 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 and welfare of the people of this state.


62701. It is hereby declared that fluid milk and fluid cream are necessary articles of food for human consumption; that the production and maintenance of an adequate supply of healthful milk of proper chemical and physical content, free from contamination, is vital to public health and welfare, and that the production, transportation, processing, storage, distribution and sale of fluid milk and fluid cream in the State of California is an industry, in whole and in part, affecting public health and welfare; that unfair, unjust, destructive and demoralizing trade practices have appeared within this industry and these practices constitute a menace to the health and welfare of the inhabitants of this state by threatening the stability of this industry and by thereby endangering the assurance to the people of the State of California of the maintenance of an adequate supply of this necessary commodity; that it is a policy of this state to promote, foster and encourage the intelligent production and orderly marketing of commodities necessary to its citizens, including fluid milk and fluid cream, and to eliminate speculation, waste, improper marketing, unfair and destructive trade practices, and improper accounting for milk purchased from producers.


62702. It is recognized by the Legislature that currently the powers conferred upon the director by Chapter 2 (commencing with Section 61801) are inadequate to enable the dairy industry to develop and maintain satisfactory marketing conditions and bring about and maintain a reasonable amount of stability and prosperity in the production of fluid milk and fluid cream; and that to accomplish these purposes, and particularly to insure to consumers within California an adequate and continuous supply of pure, fresh, and wholesome milk at fair and reasonable prices, including a reasonable estimate of the additional supply which is needed to provide for normal fluctuations in production and in consumer demand for those products, those powers must be supplemented by the powers conferred in this chapter upon the director to equalize gradually the distribution of class 1 usage among the producers of this state.


62702.1. It is recognized by the Legislature that the provisions for equalization of usages among producers and entry of new producers contained in the Gonsalves Milk Pooling Act, as originally enacted, and the pooling plan adopted thereunder, tended to achieve the purposes of that act; however, the provisions for more rapid equalization and additional new entry would more rapidly and effectively achieve the purposes of this chapter. It is also recognized that some holders of pool quota and production base initially issued under the Gonsalves Milk Pooling Act have waited for several years for equalization, and that equalized producers have for a number of years not shared in any of the benefits of new quota created by new usage. It is further recognized that it is necessary to promote and to attempt to assure more rapid equalization of the holders of pool quota issued subsequent to the initial allocation of production bases and pool quota pursuant to this chapter, and to provide for a program for entry and for equalization of new producers. It is the purpose of the amendments to this chapter to provide a reasonable and equitable mechanism to permit more accelerated equalization, to equalize the holders of pool quota and production base initially issued under the Gonsalves Milk Pooling Act and who are not yet equalized, and to legislatively allocate in a fair and reasonable manner a share of new pool quota created by new usage to existing pool quota holders who are not equalized, to new producers, and to equalized pool quota holders who have not shared in the benefits of the growth of new usage since the original enactment of the Gonsalves Milk Pooling Act and the pooling plan thereunder.


62703. In effectuating the purposes of this chapter, a production base and a pool quota shall be established for each producer pursuant to Section 62707. The establishing of these bases and their functions shall be as provided in the pooling plan formulated by the director pursuant to the provisions of this chapter.


62704. The director is authorized to develop a proposed pooling plan and to designate the proposed areas in which the plan will be made effective. He shall appoint fluid milk producers, and representatives of producers, to be the members and alternate members of a formulation committee, reasonably representative of all producers and areas to be included in the proposed pooling plan, which committee shall advise and assist the director in the establishment of the proposed pooling plan area and in the formulation of the proposed pooling plan. The pooling plan shall include all areas covered by stabilization and marketing plans under Chapter 2 (commencing with Section 61801), except any relatively isolated region of the state may be excluded therefrom, if the director, after a public hearing, finds that the inclusion of the region is not practical or in conformity with the purposes of the pooling plan, or if he finds that the producers in the relatively isolated region do not desire to be a part of either their own or one of the pools.


62705. After the director, with the advice and assistance of the formulation committee, has formulated the proposed plan, he shall hold one or more public hearings in each proposed pooling area to be affected by the proposed plan for the purposes of considering modification of the proposed boundaries and formulating the pooling plan which will best accomplish the purposes of this chapter. Notice of the public hearings shall be given to each producer, including each member of cooperative marketing associations, who ships fluid milk to a distributor and to each distributor who receives fluid milk from producers. The procedures for the giving of notice and the conducting of the hearings shall be the same as those provided in Chapter 2 (commencing with Section 61801) for public hearings on stabilization and marketing plans.


62706. The pooling plan shall prescribe the pooling area to be covered by each pool. Any such pooling area shall mean and include a large sales and consuming center together with all intermediate and secondary cities, towns and rural areas, which depend upon and receive their fluid milk supplies from a common producing and supply area, and including the fluid milk producers who produce fluid milk for such sales and consuming area, and including the fluid milk processing plants which receive, process or distribute the fluid milk supplies for such an area. In establishing pool areas the director shall take into consideration the fact that some producers and processors may produce, or process and distribute, respectively, fluid milk for more than one pool area and therefore may qualify for inclusion and participation in more than one pool. Producers who so qualify for participation in more than one pool shall be permitted to do so on the basis of the proportions of their shipments of fluid milk to each pool area.

62707. The formulation committee shall make recommendations to the secretary for inclusion in the pooling plan, and the secretary shall include in the pooling plan, all of the following: (a) The establishment of one or more pools throughout the state. (b) (1) The base period to be used in determining the production and class 1 usage bases of each producer directly affected by the pooling plan. The base period shall, at the producer's option, be his or her fluid milk production and usage in the pool area during the calendar year 1967 on an average daily basis or his or her production and usage in the pool area during the last six months of 1966 on an average daily basis. (2) As to a producer south and east of San Gorgonio Pass, his or her production base may, at his or her option, be four times his or her production in the months of December 1966, and January and February 1967. (3) If a producer, during any base period, had a valid contract with a distributor, or as a member of a cooperative association had an allocation, that provided that the distributor or cooperative association was required to accept a larger amount of fluid milk from the producer than the producer actually produced during the period, on proof satisfactory to the secretary of the contract or allocation, the producer may, at his or her option, have the amount specified in the contract or allocation established as his or her production base. (c) The establishment of a class 1 usage for each producer, which shall be the amount of his or her production of fluid milk accounted for as class 1, and any fluid milk sold for use as class 1 to a United States military installation but that was not accounted for as class 1. (d) The allocation to each producer within any pool of a pool quota, which, initially, shall be 110 percent of that producer's class 1 usage, as determined in subdivision (c). (e) (1) The determination of new class 1 usage and the allocation of pool quota based thereon in a manner consistent with effectuating the purposes of this chapter. (2) All producers who have not reached the equalization point shall share in the allocation of pool quota on the basis of a formula that gives substantial weight to each producer's production base, but that, at the same time, allocates a larger percentage to hardship cases and low class 1 usage producers. (3) The allocations shall be made on the basis of each individual producer, with each cooperative association considered as a single producer. The cooperative associations of producers shall reassign any new quota to their own members subject to Section 62710. (4) Annually, within no more than four months after August 31 of each year, the pool quota shall be adjusted by each component to reflect any additional pool quota. Any increase in pool quota shall be determined from the amount of new class 1 and class 2 solids not fat usage that developed during the preceding annual period which exceeded the previous highest identical annual period since the 1988-89 fiscal year. There shall be no downward adjustment of pool quota below the quota initially established pursuant to this chapter. (f) The establishment of production bases and pool quotas for new fluid milk producers who wish to enter the pooling plan after the effective date of the plan. The recommendations of the committee shall be reasonably equitable to both the new producers and to participating producers and consistent with effectuating the purposes of this chapter. (g) The transfer of production bases and pool quotas from one fluid milk producer to another under conditions so designed as to prevent abuses in the transfers and to avoid the development of excessive values for the bases and quotas. (h) Notwithstanding Section 62711, any provision which may be necessary to encourage the availability of market milk for those usages for that class 1 and class 2 milk is mandatory. (i) Any governmental agency that produces, processes, and consumes in its own facilities only its own production shall not be a pool plant. The plant shall operate outside the pool for accounting and settlement purposes unless the plant notifies the secretary of its election to participate in the pool. Any production of such a governmental agency that is transferred or diverted to a pool plant shall be classified for the purpose of settlement at the class 4a or class 4b price, whichever is lower. (j) Any and all other matters necessary and desirable to effectuate the provisions of this chapter. The recommendations of the formulation committee and the pooling plan may provide exceptions from the plan's general application for individual cases of hardship.


62707.1. (a) The director, on July 1, 1978, shall issue new pool quota sufficient to bring all holders of production base and pool quota as of that date (excluding any production base and pool quota issued pursuant to subdivision (f) of Section 62707), to the equalization point both on the fat and the solids-not-fat components. (b) Subsequent to July 1, 1978, all allocations of new class 1 usage determined under subdivision (e) of Section 62707, shall be made as follows: (1) Forty percent to producers whose total production base and pool quota are below the equalization point, to be allocated according to provisions adopted by the director in the applicable pooling plan. (2) Forty percent to producers whose total production base and pool quota are equal to or above the equalization point, this allocation to each such producer to be in the same ratio to the total allocation under this subdivision as that producer's total holdings of quota bears to the total quota holdings of all equalized producers. (3) The remaining 20 percent shall be utilized for new producer allocations under subdivision (f) of Section 62707, according to the provisions in the then applicable pooling plan. The terms "total production and pool quota" and "total quota" shall for the purposes of this subdivision, include allocations of production base and pool quota issued pursuant to subdivision (f) of Section 62707.

62707.2. A person eligible for, but not yet assigned, a production base or pool quota, or both, pursuant to Section 62707 shall not be eligible for such a production base or pool quota, or both, unless he applies for such a production base or pool quota, or both, prior to January 1, 1971.

62707.5. If a portion of the pool quota of any producer is transferred, it shall carry with it the same quantity of production base, except that if the pool quota exceeds the production base, the pool quota shall carry with it a percentage of production base equal to the percentage of pool quota which is so transferred. In either case, the producer making a partial transfer of his pool quota shall lose a percentage of his production base equal to the percentage of his pool quota which is so transferred. If a producer transfers his entire production base to one person, his entire pool quota shall also be transferred to the recipient of the production base. If a producer transfers his entire pool quota, his entire production base shall also be transferred to the recipients of the pool quota in a percentage equal to the percentage of pool quota received by each. All transfers of production base and pool quota shall be recorded by the director in a manner consistent with the purposes of this chapter. Permanent records shall be maintained by the director of all transactions in either production base or pool quota. Any person who purchases or otherwise acquires a producer's business or a portion of a producer's business prior to the operative date of the pooling plan shall succeed to that same proportion of the producer's production base and pool quota.


62707.6. In addition to the quota provided for under paragraph (3) of subdivision (b) of Section 62707.1, any quota returned to the director after April 30, 1981, shall be utilized for new producer allocations under subdivision (f) of Section 62707, according to the provisions in the then applicable pooling plan.


62708. "Producer-handler" for purposes of this chapter is any person that is both a producer and a handler of fluid milk or fluid cream. For the purposes of this chapter, a producer-handler is a producer in any transaction which involves the delivery of bulk fluid milk or bulk fluid cream which was produced by him to a handler, or any nonprofit cooperative association of producers and is a handler in any transaction which involves the purchase by him of fluid milk or fluid cream, the pasteurization or packaging of fluid milk or fluid cream, or the sale or delivery of packaged fluid milk or packaged fluid cream to any person. A producer-handler, including partnerships or corporations with common ownership, where the ownership of the producing entity is substantially proportionate to the ownership of the handling entity, shall have the option, at the time of the adoption of the initial pooling plan under this chapter, to have a production base and pool quota established as a part of the pooling plan provided for in this chapter, or to elect to operate entirely outside of the pool for producer payment purposes. This option is available only in such cases where the producer-handler on January 1, 1968, exercised complete and exclusive control over the operation and management of a plant at which he processes milk received from his own milk production facilities, except for purchases in bulk or packaged fluid milk, fluid skim milk or fluid cream which do not exceed an annual average of 50 gallons per day or 5 percent of his total fluid milk sales, whichever is greater, and only in such case as the producer-handler had retail sales for its own account of not less than 66 2/3 percent of its total class 1 sales. Any producer-handler electing to be excluded from the pool may at any later time be admitted to the pool, but with only the production base and pool quota to which he would have originally been entitled or his average daily production and class 1 usage during the 12 months preceding his entry into the pool, whichever is less.


62708.1. Any producer-handler who qualified and elected an exemption under Section 62708 and continued eligibility for such exemption by complying with the requirements of that section shall be entitled after January 1, 1978, to continue such exemption provided that such producer-handler maintains retail sales for his own account of not less than 50 percent of his total class 1 sales and his purchases do not exceed 25 percent of his total fluid milk sales, except that any purchases exceeding 5 percent of such sales shall be from pool sources. Any producer-handler qualifying for and electing an exemption under Section 62708, and maintaining such exemption under Section 62708 and this section, may, after January 1, 1978, elect during the 61-day period of August 1 through September 30 of any year to obtain a production base and pool quota under Section 62708 and enter the pool subject to the option provision of Section 62708.5.


62708.5. (a) A producer-handler, for purposes of this chapter, shall also include, as a separate and distinct category of producer-handlers, any producer and any handler who purchases or handles fluid milk or fluid cream produced by this producer if all of the ownership of the handler and all of the ownership of the producer is owned by the same person or persons and their ownership in the producer or handler is at least 95 percent identical for each person with their ownership in the handler or producer. This ownership shall not exceed 10 individual persons or owners of equitable interest in a partnership, corporation, or other legally constituted business association. (b) The ownership required by this section may be through a partnership, corporation, or other legally constituted business association if the entities are owned by the same person or persons, and there is at least 95 percent identity of ownership for each person with their ownership in the handler or producer. For purposes of this section, a "person" or "persons" includes the spouse, or other persons of lineal consanguinity of the first or second degree or collateral consanguinity to the fourth degree, and their spouses, and includes an adopted child the same as a natural child and kindred of the half blood equally with those of the whole blood of the owner and ownerships by persons so related shall be considered single ownership by one person. For purposes of this section, property pledged or hypothecated in any manner to others shall be considered "owned" if equitable ownership with management and control remain with the producer-handler. (c) Ownership as provided in this section shall have existed at the time of the base period selected by the producer under Section 62707 and at all other times thereafter. (d) Any such producer-distributor may, until August 6, 1969, do either of the following: (1) Join and operate wholly within the pool. (2) Have its entire original production base and pool quota determined during the base period it selected as a producer pursuant to Section 62707, established as a part of the pooling plan, and, nevertheless elect to operate entirely outside of the pool to the extent authorized by this section. (e) Any producer-handler who qualifies under this section and elects to operate outside the pool, to the extent of the authority granted, shall have the right to make deductions, as follows, from its own class 1 sales, excluding sales to a handler, whether in bulk or packaged, before being required to account to the pool: (1) If it has not sold production base and pool quota subsequent to February 9, 1977, it may deduct its original quota, and quota purchased prior to March 1, 1995, plus a daily deduction of 150 pounds of milk fat and 375 pounds of solids not fat. (2) If it has sold production base and pool quota subsequent to February 9, 1977, it may only deduct its original pool quota, and quota purchased prior to March 1, 1995. (f) The deductions from class 1 sales authorized pursuant to this section may be made irrespective of the fact that the average class 1 usage in the pool for that month may be less than 100 percent of the pool quota in that pool. (g) Any production subject to this section from the producer-handler selecting this option shall not have the right to participate in the quota pool, irrespective of the fact that the producer-handler did not sell all of the quota as class 1, and will participate in either the base pool or the overbase pool depending upon whether the total production base of the producer is sufficient to cover the milk delivered in excess of the class 1 usage exempted hereunder, otherwise the production in excess of the exempt producer-handler's own class 1 sales, as defined in this section, shall be accounted for as overbase milk. (h) The fact that a producer-handler qualifies as to one of its milk production operations under this section does not prevent it from operating on an entirely separate nonqualifying basis (and, therefore, subject to pooling) at other milk production facilities, and with other nonqualifying persons at these other milk production facilities. A producer-handler can neither buy nor sell pool quota and transfer therewith the option granted under this section, but this shall not prevent him or her from purchasing or selling pool quota or production base as otherwise provided in this chapter. (i) If at any time ownership, as defined in this section, ceases, the producer-handler shall no longer be eligible for the options in this section, shall account to the pool as a separate handler, and shall be entitled to reentry into producer participation in the pool on the same basis as a producer-handler may under the last paragraph of Section 62708.


62710. The production base and the pool quota for milk shipped through a cooperative association shall belong to the individual producer but shall be assigned to the custody and control of the cooperative association and the production base and pool quota may be transferred only in accordance with the articles of incorporation, bylaws, or marketing agreements of such association. The cooperative association shall continue to be treated as a single producer, both for producer payment purposes and for pool settlement purposes.


62711. (a) Except as provided in subdivision (h) of Section 62707, each producer shall be paid the highest usage for that amount of his or her fluid milk production that is equal to his or her pool quota and shall be paid the next highest usage for the difference between his or her pool quota and his or her production base under the production pool designated pursuant to this chapter and the lowest usage for all milk produced in excess of his or her production base under the overproduction pool designated pursuant to this chapter. (b) In calculating the pool value, the volume of milk that has been classified as restricted use market milk shall be credited to the handler at the class 4a or class 4b price, whichever is lower.


62712. (a) The secretary may require handlers, including cooperative associations acting as handlers, to make reports at any intervals and in any detail that he or she finds necessary for the operation of the pool. The secretary may impose and collect a civil penalty of one hundred dollars ($100) from any handler or cooperative association acting as a handler that does not file a report on the date specified by the secretary pursuant to this subdivision. Any funds collected pursuant to this subdivision shall be deposited in the Department of Food and Agriculture Fund and, upon appropriation by the Legislature, the funds may be expended for the purposes of this chapter. (b) For the purposes of enforcing this chapter, the secretary, through his or her duly authorized representatives and agents, shall have access to the records of every producer and handler. The secretary shall have at all times, free and unimpeded access to any building, yard, warehouse, store, manufacturing facility, or transportation facility in which any market milk or market milk product is produced, bought, sold, stored, bottled, handled, or manufactured. Any books, papers, records, documents, or reports made to, acquired by, prepared by, or maintained by the secretary pursuant to this chapter, which would disclose any information about finances, financial status, or worth, composition, market share, or business operations of any producer or handler, excluding information that solely reflects transfers of production base and pool quota among producers, is confidential and shall not be disclosed to any person other than the person from whom the information was received, except pursuant to the final order of a court with jurisdiction, or as necessary for the proper determination of any proceeding before the secretary. (c) In conjunction with the pools authorized by this chapter, the secretary may require handlers to make payments into a settlement fund for fluid milk received and the secretary may provide for the disbursement of moneys from the settlement fund in the course of administering the pools. Handlers who have a financial obligation to the pool resulting from the operation of the pooling plan shall pay the obligations to the pool manager each month as requested. All of these moneys shall be deposited in a bank or banks approved by the secretary, and shall be paid out by the pool manager to handlers who have pool credits resulting from the operation of the pooling plan. All financial operations of each pool shall be audited by the department at least once annually. The secretary may require handlers to make such deductions from amounts due to producers as he or she finds are necessary to establish a reserve fund to insure prompt payment to producers. (d) The secretary may employ a pool manager to operate each pool and may permit the pool manager to employ such other necessary personnel and incur such expenses incidental to the operation of the pool as the secretary finds are necessary. The pool manager shall effectuate the purposes of Section 62711 by designating the percentage of each price class (i.e., classes 1, 2, 3, 4a, and 4b) to be paid within each pool settlement classification (i.e., quota pool, production pool, and overproduction pool), and in so doing he or she shall allocate the highest usage available, first to the quota pool, next to the production pool, and last to the overproduction pool. (e) All pool quotas initially determined pursuant to Section 62707 shall be recognized and shall not in any way be diminished.


62714. After the director has established pools, each distributor shall report to the director the total receipts from the producers that are shipping to the distributor and the class 1, class 2, class 3, class 4a, and class 4b usage of the distributor and any other information determined by the director as necessary to carry out the operation of the pool. The director shall have access to, and may enter during business hours, the premises of any distributor, handler, or producer, or any place where the books, papers, records, or documents pertaining to any transaction which relates to the acquisition or disposition of milk are kept. The director may inspect and copy these books, papers, records, or documents in any place within the state.


62715. Any individual distributor purchasing milk from a producer shall continue to have the right to specify quality requirements that are more stringent than standards set by public regulatory or health authorities, and to specify these standards in a contract with the producer, provided that all contract quality requirements by the distributor are identical as to all producers under contract with that distributor. The distributor may reject milk for class 1 purposes if it fails to meet these specified standards, and may continue to reject such milk continuously until it again meets these standards. Any such rejected milk must be picked up separately from all other milk, and the contract shall give the producers the unqualified right to sell this rejected milk to others. In the event the rejected milk is not sold or used for class 1 purposes, the producer's pool quota shall be reduced by an amount equal to the amount of pool quota milk rejected during the period in which it is rejected. The producer's pool quota shall be restored to its full amount when all his production meets the specified standards. The quality standards specified shall be subject to review by the director, and the purported failure of a producer to meet these standards shall be subject to impartial laboratory tests or such other procedures as the director may find necessary to prevent abuse.


62716. Following the required hearing, the director shall submit the pooling plan to producers concerned for their approval or disapproval in a statewide referendum. The approval or disapproval of individual producers voting in this referendum shall be kept confidential. Each producer shall have one vote and such vote shall be individually cast so that there will be no block voting. The director shall prepare a ballot. The ballot form shall be substantially as follows: Ballot Shall the proposed pooling plan be made effective Yes ____ No ____ In addition, the ballot shall include a statement of the voter's total production during the calendar month next preceding the month of the commencement of the referendum period, where and to whom such production was sold or otherwise disposed, and the producer's name and address. The director may reveal the names of producers whose votes have been received to both proponents and opponents of the plan. The referendum shall be set for a period of 60 days. The director may at his own discretion or upon a proper showing, extend the referendum for a period not to exceed 30 days.


62717. If the director finds that producers on a statewide basis have assented in writing to the proposed pooling plan submitted to them for assent, the director shall place the proposed pooling plan into effect. The director shall find that producers have assented to the plan if he finds on a statewide basis that not less than 51 percent of the total number of eligible producers in the state shall have voted in the referendum and finds one of the following: (a) Sixty-five percent or more of the total number of eligible producers who voted in the referendum who produced 51 percent or more of the total amount of fluid milk produced in the state during the calendar month next preceding the month of the commencement of the referendum period by all producers who voted in the referendum approve the plan. (b) Fifty-one percent or more of the total number of eligible producers who voted in the referendum who produced 65 percent or more of the total amount of fluid milk produced in the state during the calendar month next preceding the month of the commencement of the referendum period by all producers who voted in the referendum, approve the plan. If the plan is not approved, the director may resubmit the plan, or submit a new plan, at any time after six months from the date the director announces the plan was not approved. The director may amend the plan, after notice and public hearing has been given in the same manner as is provided in Chapter 2 (commencing with Section 61801) for stabilization and marketing plans, if he finds that the amendment is necessary to effectuate the purposes of this chapter. After the hearing, the director, upon his own motion, may make nonsubstantive amendments to the plan. The director may make substantive amendments to the plan only if producers assent to the proposed amendments at a referendum conducted in the same manner and in the same number as provided for the referendum approving the pooling plan. The director may terminate the plan on a statewide basis after notice and public hearing has been given in the same manner as is provided in Chapter 2 (commencing with Section 61801) for stabilization and marketing plans, if he finds that the plan is no longer in conformity with the standards described in, or will not tend to effectuate the purposes of, this chapter. The hearing may be held upon the motion of the director, and shall be held upon receipt of a petition signed by producers representing not less than 25 percent of the total number of all producers and not less than 25 percent of the total production of all producers. The director shall submit the termination of the plan on a statewide basis in a referendum conducted in the same manner as provided for initial approval of the plan if, after notice and public hearing has been given in the same manner as is provided in Chapter 2 (commencing with Section 61801) for stabilization and marketing plans, he finds that a substantial question exists as to whether or not producers desire the plan to continue and shall submit the plan for termination upon receipt of a petition requesting termination signed by producers representing not less than 25 percent of the total number of all producers and not less than 25 percent of the total production of all producers. The plan shall be terminated if termination is favored by the same percentage of producers producing the same amount of fluid milk as required to initiate the plan.


62718. The pools established shall be administered by the director. Each distributor shall deduct from moneys owed producers and pay to the director the amount necessary to cover the cost of administering the pool plan, but not to exceed two cents ($0.02) per hundredweight of fluid milk. The amount of such fee shall be paid to the director on or before the 30th day following the last day of the month in which such fluid milk or fluid cream was received. The director may fix such fee at a lesser amount and may adjust such fee from time to time. In the event any distributor fails to pay to the director the fee provided for in this section on or before the date specified in this section, the director may add to such unpaid fee an amount not exceeding 10 percent of such unpaid fee to defray the cost of enforcing the collection of such unpaid fee. The distributor shall not be entitled to pass this penalty on to the producer. All moneys received under the provisions of this section shall be deposited in the State Treasury to the credit of the Department of Agriculture Fund.

62719. The director shall, from nominations submitted by producers, appoint a review board composed of no less than 12 members to advise him in the administration of the pool plan. The director shall appoint three members of the first board for a one-year term, three members for two-year terms, three members for three-year terms, and three members for four-year terms. Thereafter all appointments shall be for a term of four years and no member may be appointed to more than two four-year terms. The board members shall be producers and not more than three may be producer-managers of associations and not more than two shall be producer-handlers. The board members shall give proportionate representation to all areas of the state, with due regard to the relative production and usage of fluid milk in the various areas of the state. The director may appoint one additional member on the board, who shall be a public member. Each member of the review board shall be paid not less than twenty-five dollars ($25) or more than thirty-five dollars ($35) per day plus travel expenses, including expenses for lodging and meals, which are incurred in the attendance at board meetings or in conducting the business of the board; all per diem and expenses being subject to approval by the director. Upon the director's request, the board shall submit to the director the names of three or more natural persons, each of whom shall be a citizen and resident of this state and not a producer, shipper, or processor nor financially interested in any producer, shipper, or processor, for appointment by the director as a public member of the board. The director may appoint one of the nominees as the public member on the board. If all nominees are unsatisfactory to the director, the board shall continue to submit lists of nominees until the director has made a selection. Any vacancy in the office of the public member of the board shall be filled by appointment by the director from the nominee or nominees similarly qualified submitted by the board. The public member of the board shall represent the interests of the general public in all matters coming before the board and shall have the same voting and other rights and immunities as other members of the board.


62719.1. It is hereby declared, as a matter of legislative determination, that producers appointed to the review board pursuant to Section 62719 are intended to represent and further the interest of a particular agricultural industry concerned, and that such representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are appointed to such board, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.


62720. No pooling plan formulated pursuant to this chapter shall restrict the free movement of fluid milk and no pooling plan shall result in an unequal raw product cost between distributors in the same marketing areas.

62721. No pooling plan shall control the production of fluid milk except insofar as may otherwise be specifically authorized in this chapter.

62722. Pooling plans shall not apply to the production of goats milk or producer-handlers who produce and sell less than 500 gallons of fluid milk used for class 1 purposes per day unless they specifically request entry into the pool at the time of the adoption of the initial pooling plan for that area. Producers of certified milk or guaranteed raw milk shall have the option, at the time of the adoption of the initial pooling plan under this chapter, to be subject to the plan, and accordingly to have a production base and pool quota established for the producer, or to be excluded from the plan. (a) Any such producer of less than 500 gallons of fluid milk per day, or any such producer of certified milk, or any such producer of guaranteed raw milk, electing to be excluded from the plan, may at any later time be admitted to the pool, but with only the production base and pool quota to which he or she would have originally been entitled or his or her existing production and average daily class 1 usage during the 12 months preceding his or her entry into the pool, whichever is less. (b) Any producer claiming exemptions from the provision of any pooling plan by reason of the provisions of Section 62708, 62708.1, or this section, who loses his or her exemption by failure to meet the requirements for exemptions set forth in those sections shall automatically be deemed to have applied for and become a part of a producer pool on September 1st following any year ended August 31st during which the director determines he or she is no longer entitled to exemption, and his or her admittance into such a pool shall be on the basis of the production base and pool quota calculations as set forth in those sections.


62723. Unless otherwise defined in this chapter, the definitions contained in Chapter 2 (commencing with Section 61801) govern the construction of this chapter. For the purposes of this chapter, the following definitions shall apply: (a) The terms "distributor" and "processor" shall have the same definition as the term "handler" contained in Section 61826. (b) "Equalization point" shall mean that point at which pool quota held is equal to 95 percent of production base held. (c) "Fluid cream" shall have the same definition as the term "market cream" contained in Section 61827. (d) "Fluid milk" shall have the same definition as the term "market milk" contained in Section 61828. (e) "Fluid skim milk" shall have the same definition as the term "market skim milk" contained in Section 61829.


62724. This chapter does not modify the provisions of Chapter 1 (commencing with Section 61301) nor Chapter 2 (commencing with Section 61801) of this part, except as may be necessary to effect the purposes of this chapter. If necessary to effect the purposes of this chapter, the director, in establishing the minimum prices which shall be paid for fluid milk to producers, may establish minimum producer prices applicable at the producer's place of production.


62725. The director is authorized to use money in the Department of Food and Agriculture Fund derived from assessments and fees collected pursuant to Chapter 2 (commencing with Section 61801), to the extent necessary to defray the expenses incident to the formulation and making effective the pooling plan pursuant to this chapter, if, as soon as sufficient money is available from fees collected pursuant to this chapter, the amount shall be repaid.


62726. The director is the instrumentality of this state for the purpose of administering and enforcing the provisions of this chapter and to execute the legislative intent which is expressed in this chapter, and is hereby vested with the administrative authority which is described in this chapter. Notwithstanding other laws to the contrary, in the event a milk marketing order under the jurisdiction of the United States Department of Agriculture or other appropriate federal agency, is created by referendum or under the applicable laws and procedures relating thereto, in this state or in any geographical area within this state, the provisions of this chapter or any part thereof which is in conflict with such federal order, or which is unnecessary or is a duplication thereof, shall be suspended in the geographical area covered by and during the existence of such federal order. The director shall take such steps and procedures as are necessary to wind up and conclude the administration and enforcement of the provisions of this chapter, or any part thereof, prior to the suspension date.

62727. It is the intent of the Legislature that the power conferred in this chapter shall be liberally construed. The provisions of this chapter or subsequent amendment are severable. If any section, subdivision, paragraph, sentence, clause, or phrase of this chapter should be declared or held unconstitutional or invalid for any reason, such unconstitutionality or invalidity shall not affect the validity of any other provision of this chapter. The Legislature hereby declares that it would have enacted each other such section, subdivision, paragraph, sentence, clause, or phrase of this chapter irrespective of the fact that one or more sections, subdivisions, paragraphs, sentences, clauses, or phrases has been declared unconstitutional or invalid. Provided further that any such finding of invalidity or unconstitutionality shall not invalidate, affect or impair pool quotas and production bases heretofore issued under the Gonsalves Milk Pooling Act or pooling plan promulgated thereunder.


62728. The director shall terminate any pooling plan in effect in any marketing area without notice or hearing at any time that there ceases to be a stabilization and marketing plan in force and effect in such marketing area, establishing minimum prices to be paid to producers, unless minimum prices payable by distributors to producers for fluid milk in such marketing area are subject to a federal milk marketing agreement or order which is not in conflict with, or in duplication of, the pooling plan.


62729. The director or his assistants, deputies, agents, or other employees, are authorized to travel out-of-state in order to carry out the purposes of this chapter.


62730. Any violation of any provision of this chapter, or any regulations adopted pursuant to this chapter, shall be punishable, and shall have the same effect, as a violation of Chapter 2 (commencing with Section 61801).


62731. This chapter shall be known as the Gonsalves Milk Pooling Act.


Chapter 3.5. Milk Pooling

Ca Codes (fac:62750-62756) Food And Agricultural Code Section 62750-62756



62750. Notwithstanding any provision of Chapter 3 (commencing with Section 62700) in conflict with this section or any pooling plan for market milk in effect under that chapter, effective January 1, 1994, each producer shall be paid the amounts determined in accordance with this section for his or her pool quota production and for all production in excess of his or her pool quota. (a) For all milk fat, whether or not equal to his or her pool quota, an amount determined by dividing the value of all milk fat in the pool by the amount of milk fat produced. (b) Transportation allowances that are provided for in the pooling plan shall not be deducted from the quota milk of any region, but shall be deducted from the total solids not fat pool revenue before any price is determined for quota and nonquota solids not fat. (c) Regional quota adjusters shall continue to be subtracted from the quota price in the established areas as specified in the pooling plan for market milk. However, the hundredweight price specified shall be converted to a solids not fat equivalent value, and the adjustments for the effect of those regional quota adjusters shall be applied to the solids not fat revenue. (d) After taking into consideration the effect of the regional quota adjusters, the solids not fat announced quota price for those areas in which there is no regional quota adjuster shall be nineteen and one-half cents ($0.195) per pound greater than the announced solids not fat price for all milk produced in excess of pool quota.


62750.1. In calculating the pool value, the volume of milk that has been classified as restricted use market milk shall be credited to the handler at the class 4a or class 4b price, whichever is lower.


62751. Except as provided in Section 62756, this chapter shall remain operative until the secretary certifies to the Secretary of State that producers have voted in a referendum to suspend the operation of this chapter.

62752. The secretary may hold a public hearing at any time to consider whether this chapter shall be suspended, and shall hold a public hearing to review a petition requesting the suspension of this chapter signed by not less than 25 percent of the producers who produced not less than 25 percent of the total amount of fluid milk produced in this state during the preceding calendar month.


62753. The secretary shall establish a period of 60 days in which to conduct the referendum. The secretary may extend the referendum period an additional 30 days if he or she determines that the additional time is needed to adequately conduct the referendum, and may prescribe additional procedures necessary to conduct the referendum.


62754. (a) Each producer shall have one vote and the vote shall be individually cast in order to prevent block voting. The secretary shall prepare a ballot. The ballot form shall be substantially as follows: Ballot Shall Chapter 3.5 (commencing with Section 62750) of Part 3 of Division 21 of the Food and Agricultural Code be continued in effect Yes No (b) In addition, the ballot shall include a statement of the voter' s total production during the calendar month next preceding the month of the commencement of the referendum period, where and to whom that production was sold or otherwise disposed, and the producer's name and address and pooling numbers.


62755. (a) The secretary shall find that producers have assented to the continued operation of this chapter if the secretary finds on a statewide basis that not less than 51 percent of the total number of eligible producers in the state have voted in the referendum and that 51 percent or more of the total number of eligible producers who voted in the referendum and who produced 51 percent or more of the total amount of fluid milk produced in the state during the calendar month next preceding the month of the commencement of the referendum period by all producers who voted in the referendum, approve the continued operation of this chapter. (b) If the secretary finds that a vote favorable to the continued operation of this chapter has not been given, the secretary shall so certify to the Secretary of State and shall declare this chapter inoperative. (c) The secretary may reveal the names of producers whose votes have been received to both proponents and opponents of the continued operation of this chapter. However, whether individual producers voted for or against the continued operation of this chapter shall be kept confidential.


62756. (a) If the continued operation of this chapter is not approved, the secretary shall continue in operation the pooling plan in effect on December 31, 1993. (b) Notwithstanding Section 62751, this section shall remain operative notwithstanding a vote by producers to suspend the operation of this chapter.


Chapter 3.6. Dairy Marketing Study

Ca Codes (fac:62765) Food And Agricultural Code Section 62765



62765. The Department of Food and Agriculture, after consulting with its dairy advisory committee, shall complete a study of various proposals affecting regulated milk pricing and pooling programs by April 15, 2002. In particular, it shall study the following: (a) The impact of the current federal forward price contract program on the regulated pricing and pooling programs operating in federal milk marketing orders and review other risk management tools available to dairy farmers and dairy processors. (b) The impact of current forward price contract programs administered by California dairy farmer cooperatives on participating producers, on proprietary processors in procuring milk, and on affected products in the marketplace and the comparability of those programs with those operating within federal milk marketing orders. (c) The impact of the various forward contract programs in use or proposed on pool revenue and price when those contracts are performed within the California milk pooling program. (d) The impact of the various forward contract programs in use or proposed on pool revenue and price when those contracts are performed outside the California milk pooling program. (e) The study may also include a review of the impact of requiring class 2 and 3 milk to be reported to the pool. (f) A review of the advantages and disadvantages of a protein pricing payment system that is similar to the system used in federal milk marketing orders. (g) This study shall be submitted to the respective chairpersons of the Senate Committee on Agriculture and Water Resources and the Assembly Committee on Agriculture.


Chapter 4. Marketing Of Edible Nuts

Article 1. Contract Requirements

Ca Codes (fac:62801-62803) Food And Agricultural Code Section 62801-62803



62801. Except as otherwise provided in Section 62803, or unless the parties agree otherwise, every contract for the sale of edible nuts shall be in writing and shall state the full purchase price in a definite sum which is to be paid in accordance with the terms of the contract and, if the price is to be paid upon the basis of units or measures, the contract shall specify or describe the unit and state the full unit price. Written contracts under this section shall state the method by which the price is to be determined.


62802. Any purchaser of edible nuts which are delivered pursuant to a contract entered into on or after the effective date of the act amending this section in the 1983-84 Regular Session of the Legislature and which is in violation of this article is liable to the seller for the reasonable value of the nuts as of the time of delivery and, in addition, is liable to the seller for a penalty of twice the difference between any amounts paid to the seller and the reasonable value of the nuts at the time of delivery. Any purchaser of edible nuts which are delivered pursuant to a contract that was entered into prior to the effective date of the act amending this section in the 1983-84 session which is in violation of this article is liable to the seller for the reasonable value of the nuts as of the time of delivery and, in addition, is liable to the seller for a penalty of twice the reasonable value of the nuts.


62803. This article is not applicable to any contract between any member of any cooperative agricultural marketing association, which is operating under, and by virtue of, the laws of this state, any other state, the District of Columbia, or the United States, and the cooperative agricultural marketing association.


Article 2. Records

Ca Codes (fac:62831-62834) Food And Agricultural Code Section 62831-62834



62831. The commissioner of each county, under the supervision of the director, shall enforce this article insofar as it relates to the keeping of the records which are required to be kept by this article.

62832. Every person that purchases English walnuts or almonds for purposes of processing or resale from any person, except a licensed dealer, broker, commission merchant, agricultural cooperative, or wholesaler, shall keep a record of the name and address of the person from whom each lot of such walnuts or almonds was purchased. If such walnuts or almonds are delivered to the purchaser by motor vehicle, the purchaser shall record either the license number of the vehicle or the driver's license number of the person who makes delivery of each lot of such nuts.


62833. The record and statement required to be made by this article shall be kept for one year from the date of purchase or delivery, whichever is later, and shall be made available for inspection upon request by any peace officer.

62834. Any violation of this article is a misdemeanor.


Chapter 5. Marketing Of Avocados

Ca Codes (fac:63001-63004) Food And Agricultural Code Section 63001-63004



63001. The commissioner of each county, under the supervision of the director, shall enforce this chapter insofar as it relates to the keeping of the records which are required to be kept by this chapter.

63002. Every person who purchases or receives on consignment avocados for purposes of processing or sale from any person, except a grower, licensed dealer, broker, commission merchant, agricultural cooperative, or wholesaler, shall keep a record of the name and address of the person from whom each lot of such avocados was purchased or received on consignment. The purchaser or consignee shall also record the driver's license number or other reasonable identification of the person who makes delivery of each lot of such avocados.

63003. The record and statement required to be made by this chapter shall be kept for one year from the date of purchase or delivery, whichever is later, and shall be made available for inspection upon request by the commissioner.

63004. Any violation of this chapter is a misdemeanor.


Chapter 6. Marketing Of Processing Strawberries

Article 1. General Provisions

Ca Codes (fac:63101-63105) Food And Agricultural Code Section 63101-63105



63101. It is the declared policy of the state to eliminate fraud, misinformation, deception, and other unfair trade practices that have existed in the processing strawberry industry and are detrimental to producers, processors, and consumers of processing strawberries due to the unavailability of accurate and reliable market price information. In order to prevent fraud, misinformation, deception, and other unfair trade practices, it is hereby declared as the policy of the state that the purchase of processing strawberries be subject to this chapter. The necessity for the enactment of this chapter, including the exemptions contained within it, is declared to be for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.


63102. "Processing strawberries" means strawberries produced, in whole or in part, for the purpose of being ultimately processed into a use other than fresh consumption.


63103. "Purchase price" means all price and price terms for processing strawberries, including any and all forms of compensation from processors to producers.


63104. "Integrated producer-processor" means any producer who processes strawberries of his or her own production either as an individual, a business entity, or as a separate business entity operating as parent and subsidiary, or otherwise, which are under the same ownership and control, and who retains title to the processed strawberries, including, but not limited to, all rights to hypothecate the processed strawberries.


63105. This chapter covers any marketing order issued pursuant to Chapter 1 (commencing with Section 58601) of Part 2 which exclusively affects processing strawberries.


Article 2. Marketing Orders

Ca Codes (fac:63121-63129) Food And Agricultural Code Section 63121-63129



63121. Any marketing order affecting processing strawberries shall require that each time during a marketing season that a processor establishes or changes purchase prices for processing strawberries, the processor shall, on or before the effective date of the purchase prices, post a schedule of the purchase prices at each receiving station for which each schedule applies, and file each schedule with the marketing order advisory board established under the marketing order. The advisory board shall, within five days of the effective date of each purchase price schedule, mail or deliver a copy of the schedule to every other processor. Except as otherwise provided in this chapter, a processor shall acquire processing strawberries at the filed purchase price.


63122. The director shall adopt a seasonal marketing regulation pursuant to Section 59171 for price filing and posting. The regulation shall not become effective prior to April 1 of any year.


63123. The director, with the assistance of the advisory board, shall establish administrative rules and regulations that provide for, but are not limited to, the specific manner of filing, posting, and revising purchase prices and any additional action necessary to assure adequate public disclosure of purchase prices.


63123.5. Any contract which is not exempt pursuant to Section 63124, including, but not limited to, any contract which makes a reference to a posted price for the purchase of strawberries by a processor from a producer and which also provides an additional purchase price, as defined by the director by regulation pursuant to Section 63123, shall be filed with the advisory board and posted in the manner prescribed by the director.


63124. (a) The following are exempt from this chapter: (1) An integrated producer-processor. This exemption does not apply to the acquisition of strawberries for processing from any person who is not involved in a proprietary manner in the integrated producer-processor operation and who is not compensated for strawberries delivered through a proportionate share of the profits of the business entity. (2) A processor registered in the state as a bona fide nonprofit cooperative when it acquires strawberries from members of the cooperative. This exemption does not apply to the acquisition of strawberries for processing from any person who is not a member of the cooperative. (3) A contract with a fixed purchase price for the purchase of processing strawberries by a processor from a producer which is entered into and filed with the advisory board on or before the effective date of any seasonal marketing regulation for price filing and posting adopted pursuant to this chapter. (4) Any contract for the purchase of strawberries for processing by a processor from a producer entered into prior to January 1, 1985, and filed prior to the effective date of any seasonal marketing regulation for price filing and posting adopted pursuant to this chapter. (5) A contract that makes a reference to a processor's posted price for the purchase of processing strawberries by the processor from a producer which does not contain an additional purchase price, as defined by the director by regulation pursuant to Section 63123. (b) Notwithstanding any other provision of this chapter, any contract which is exempt from this chapter pursuant to subdivision (a) shall be filed with the advisory board in the manner prescribed by the director pursuant to Section 63123. (c) Information obtained by the advisory board pursuant to this chapter shall be maintained in confidence. However, the advisory board may disclose, upon request, whether a particular producer's processing strawberries are covered by an exempt contract or other arrangement.

63125. The director shall actively supervise the requirements of this chapter and conduct an annual review of its provisions. The review may include an analysis of written reports from processors which the director is authorized to require, an investigation of industry conditions, an audit of processor records required to be maintained pursuant to this chapter, and any other actions relating to this chapter that are deemed necessary by the director.


63126. On or before the last day of each year in which a marketing order exclusively affecting processing strawberries is in effect, the director shall prepare and file with the Legislature a written report of the operations of this chapter and shall make recommendations regarding its various provisions. Each report and recommendation shall be based on determinations made by the director as a result of the annual review specified in Section 63125.


63127. The director shall suspend the requirements of this chapter if he or she determines as a result of the annual review and states in the annual report required in Section 63126 that price filing and posting is not required to prevent unfair trade practices. The suspension shall apply to the year following the determination unless legislation requiring the adoption of a seasonal marketing regulation for price posting is enacted prior to April 1 of that year.

63128. This chapter does not apply to the acquisition of strawberries for processing by a processor from another processor.


63129. The director shall amend any existing marketing order exclusively affecting processing strawberries in a manner necessary to conform to this chapter without the necessity of complying with any provisions of Chapter 1 (commencing with Section 58601) of Part 2 including those sections relating to the amendment of a marketing order.


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