Existing law generally regulates fertilizing materials, as defined, and provides for the licensure of individuals who manufacture or distribute fertilizing materials. For purposes of these provisions, existing law defines fertilizing materials to mean any commercial fertilizer, agricultural mineral, auxiliary soil and plant substance, organic input material, or packaged soil amendment.

This bill would revise the definition of fertilizing materials to instead mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material. The bill would also define the term beneficial substance for these purposes.

Existing law requires that each differing label, other than weight or package size, as described, for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered. Existing law requires that registrations be valid for 2 years and requires the registration fee to not exceed $200 per product, except for the registration fee for organic input material, which may not exceed $500.

This bill would eliminate the label registration requirement for auxiliary soil and plant substances and packaged soil amendments and would apply that requirement to beneficial substances. The bill would require registrations to be valid for up to 4 years and would increase the general registration fee to a maximum of $400 and the organic input registration fee to a maximum of $1,000. The bill would also exclude certain substances from the registration requirement if distributed in bulk quantities.

The bill would require the Department of Food and Agriculture to refuse to issue a license or label registration, or both, if the person has a fine, fee, assessment, or penalty levied by the department for a violation of the provisions regulating fertilizing materials that remains unpaid after a specified time period, and until that fine, fee, assessment, or penalty is paid in full. The bill would require the department to adopt regulations that establish procedures for a written appeals process for a person who wishes to contest the departments refusal to issue a license or registration, or both, as specified.

Existing law requires a licensee whose name appears on the label who sells or distributes bulk fertilizing materials to unlicensed purchasers to pay to the Secretary of Food and Agriculture an assessment not to exceed $0.002 per dollar of sales and authorizes the secretary to reduce the assessment to a lower rate that provides sufficient revenue to carry out these provisions.

This bill would authorize the secretary to set the mill assessment rate, subject to a specified limit, and exempt the setting of the mill assessment rate from specified laws relating to administrative regulations and rulemaking.

Existing law requires a tonnage report to be submitted to the secretary semiannually no later than January 31 and July 31 of each year, and requires the secretary to impose a penalty of $200 on any person who fails to submit a report on or before the due dates.

This bill would instead require the tonnage report to be submitted semiannually as specified by regulation and would instead require the secretary to impose a late fee of $200. The bill would require, if a person has obtained multiple fertilizing materials licenses and the reports are submitted after the required dates, the late fee to be limited to one $200 late fee per person.

This bill would also make conforming, clarifying, and technical changes.

Existing law generally regulates fertilizing materials, as defined, and provides for the licensure of individuals who manufacture or distribute fertilizing materials. For purposes of these provisions, existing law defines fertilizing materials to mean any commercial fertilizer, agricultural mineral, auxiliary soil and plant substance, organic input material, or packaged soil amendment.

This bill would revise the definition of fertilizing materials to instead mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material. The bill would also define the term beneficial substance for these purposes.

Existing law requires that each differing label, other than weight or package size, as described, for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered. Existing law requires that registrations be valid for 2 years and requires the registration fee to not exceed $200 per product, except for the registration fee for organic input material, which may not exceed $500.

This bill would eliminate the label registration requirement for auxiliary soil and plant substances and packaged soil amendments and would apply that requirement to beneficial substances. The bill would require registrations to be valid for up to 4 years and would increase the general registration fee to a maximum of $400 and the organic input registration fee to a maximum of $1,000. The bill would also exclude certain substances from the registration requirement if distributed in bulk quantities.

The bill would require the Department of Food and Agriculture to refuse to issue a license or label registration, or both, if the person has a fine, fee, assessment, or penalty levied by the department for a violation of the provisions regulating fertilizing materials that remains unpaid after a specified time period, and until that fine, fee, assessment, or penalty is paid in full. The bill would require the department to adopt regulations that establish procedures for a written appeals process for a person who wishes to contest the departments refusal to issue a license or registration, or both, as specified.

Existing law requires a licensee whose name appears on the label who sells or distributes bulk fertilizing materials to unlicensed purchasers to pay to the Secretary of Food and Agriculture an assessment not to exceed $0.002 per dollar of sales and authorizes the secretary to reduce the assessment to a lower rate that provides sufficient revenue to carry out these provisions.

This bill would authorize the secretary to set the mill assessment rate, subject to a specified limit, and exempt the setting of the mill assessment rate from specified laws relating to administrative regulations and rulemaking.

Existing law requires a tonnage report to be submitted to the secretary semiannually no later than January 31 and July 31 of each year, and requires the secretary to impose a penalty of $200 on any person who fails to submit a report on or before the due dates.

This bill would instead require the tonnage report to be submitted semiannually as specified by regulation and would instead require the secretary to impose a late fee of $200. The bill would require, if a person has obtained multiple fertilizing materials licenses and the reports are submitted after the required dates, the late fee to be limited to one $200 late fee per person.

This bill would also make conforming, clarifying, and technical changes.

Existing law generally regulates fertilizing materials, as defined, and provides for the licensure of individuals who manufacture or distribute fertilizing materials. For purposes of these provisions, existing law defines fertilizing materials to mean any commercial fertilizer, agricultural mineral, auxiliary soil and plant substance, organic input material, or packaged soil amendment.

This bill would revise the definition of fertilizing materials to instead mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material. The bill would also define the term beneficial substance for these purposes.

Existing law requires that each differing label, other than weight or package size, as described, for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered. Existing law requires that registrations be valid for 2 years and requires the registration fee to not exceed $200 per product, except for the registration fee for organic input material, which may not exceed $500.

This bill would eliminate the label registration requirement for auxiliary soil and plant substances and packaged soil amendments and would apply that requirement to beneficial substances. The bill would require registrations to be valid for up to 4 years and would increase the general registration fee to a maximum of $400 and the organic input registration fee to a maximum of $1,000. The bill would also exclude certain substances from the registration requirement if distributed in bulk quantities.

The bill would require the department to refuse to issue a license or label registration, or both, if the person has a fine, fee, assessment, or penalty levied by the department for a violation of the provisions regulating fertilizing materials that remains unpaid after a specified time period, and until that fine, fee, assessment, or penalty is paid in full. The bill would require the department to adopt regulations that establish procedures for a written appeals process for a person who wishes to contest the departments refusal to issue a license or registration, or both, as specified.

Existing law requires a licensee whose name appears on the label who sells or distributes bulk fertilizing materials to unlicensed purchasers to pay to the secretary an assessment not to exceed $0.002 per dollar of sales and authorizes the secretary to reduce the assessment to a lower rate that provides sufficient revenue to carry out these provisions.

This bill would authorize the secretary to set the mill assessment rate, subject to a specified limit, and exempt the setting of the mill assessment rate from specified laws relating to administrative regulations and rulemaking.

Existing law requires a tonnage report to be submitted to the secretary semiannually no later than January 31 and July 31 of each year, and requires the secretary to impose a penalty of $200 on any person who fails to submit a report on or before the due dates.

This bill would instead require the tonnage report to be submitted semiannually as specified by regulation and would instead require the secretary to impose a late fee of $200. The bill would require, if a person has obtained multiple fertilizing materials licenses and the reports are submitted after the required dates, the late fee to be limited to one $200 late fee per person.

This bill would also make conforming, clarifying, and technical changes.

SENATE THIRD READING

STR Bill Id:SB 1522

Author:(Committee on Agriculture)

As Introduced Ver:March 11, 2024

Majority vote

SUMMARY

This bill authorizes the California Department of Food and Agriculture (CDFA) to adjust the mill assessment rate on fertilizing materials registered for sale in California without using a formal rulemaking process provided the Fertilizing Industry Advisory Board (FIAB) determines the adjustment is necessary, and makes other changes to registration and fee provisions.

Major Provisions

1. Increases the registration period from two to four years and the maximum registration fee from $200 to $400 per product and from $500 to $1,000 for organic products.
2. Allows the CDFA secretary to adjust the mill assessment rate based upon recommendation of FIAB, not to exceed two mills ($0.002) and deletes the requirement to make this adjustment through a rulemaking under the Administrative Procedure Act (APA).
3. Requires CDFA to specify semi-annual tonnage report due dates by regulation and authorizes late fees for reports submitted after due dates, limited to one $200 late fee per person.
4. Requires CDFA to refuse to issue fertilizing material licenses or registrations to a person with unpaid fine, fee, assessment, or penalty from a violation if it is unpaid after 30 days and until it is paid in full, and requires CDFA to adopt regulations establishing an appeal process.

COMMENTS

Existing law establishes the Fertilizing Materials Inspection Program, an industry-funded program administered by CDFA to ensure consumers receive fertilizing materials that are safe and effective and meet the quality and quantity guaranteed by the manufacturer. Each differing label for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment must be registered and pay a fee of no more than $200 per product and $500 per product for organic material for each two-year registration period. Each person who manufacturers or distributes bulk fertilizing materials must obtain a license, pay a $300 license fee, and pay an assessment not to exceed 2 mills ($0.002) per dollar of sales for all fertilizing materials. Existing law authorizes the CDFA secretary to adjust the mill rate, which is subject to APA rulemaking requirements.

According to the Author

The current rulemaking process to adjust the mill assessment…is cumbersome and does not allow CDFA to react quickly enough to the economic trends of the fertilizer industry. CDFA has amended the regulation twice in the past 8 years, but FIAB is hesitant to recommend adjustments to the assessment rate because it cannot be done in a timely manner to react to economic market conditions due to the lengthy regulatory process, which can take up to a year and a half from the time FIAB recommends a rate adjustment to the rate actually being adjusted….Further, in an effort to streamline the process and utilize resources in the most efficient way possible, SB 1522 extends the validity of the registration from two years to four years and adjusts the fees for registration accordingly. This bill does not increase the registration fee.

Arguments in Support

This bill will enhance CDFA's ability to improve and expedite the fertilizer registration process, particularly for organic fertilizers. They claim the fertilizer industry has suffered due to the lack of more timely and nimble mill rate adjustments. Furthermore changes made by this bill have been extensively discussed via the FIAB's public process.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, this bill has costs that are minor and absorbable within existing resources (special fund).

VOTES

SENATE FLOOR: 37-0-3

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Newman, Nguyen, Niello, Ochoa Bogh, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Grove, Min, Padilla

ASM AGRICULTURE: 8-0-2

YES: Soria, Alanis, Aguiar-Curry, Connolly, Irwin, Sanchez, Ta, Villapudua

ABS, ABST OR NV: Jones-Sawyer, Wood

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta

ABS, ABST OR NV: Villapudua

UPDATED

VERSION: March 11, 2024

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0003774

Date of Hearing: August 7, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1522

Author:(Committee on Agriculture) – As Introduced Ver:March 11, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes the California Department of Food and Agriculture (CDFA) to adjust the mill assessment rate on fertilizing materials registered for sale in California without using a formal rulemaking process provided the Fertilizing Industry Advisory Board (FIAB) determines the adjustment is necessary, and makes other changes to registration and fee provisions.

Specifically, this bill:

1. Eliminates the registration requirement for auxiliary soil and plant substances and packaged soil amendments and applies it to beneficial substances, with conforming definitions.
2. Excludes from the registration requirement substances such as hay, straw, sand, wood products, manures, and certain compost if distributed in bulk quantities.
3. Increases the registration period from two to four years and the maximum registration fee from $200 to $400 per product and from $500 to $1,000 for organic products.
4. Allows the CDFA secretary to adjust the mill assessment rate based upon recommendation of FIAB, not to exceed 2 mills ($0.002) and deletes the requirement to make this adjustment through a rulemaking under the Administrative Procedure Act (APA).
5. Requires CDFA to specify semi-annual tonnage report due dates by regulation and authorizes late fees for reports submitted after due dates, limited to one $200 late fee per person.
6. Requires CDFA to refuse to issue fertilizing material licenses or registrations to a person with unpaid fine, fee, assessment, or penalty from a violation if it is unpaid after 30 days and until it is paid in full, and requires CDFA to adopt regulations establishing an appeal process.

FISCAL EFFECT:

CDFA reports that costs are minor and absorbable within existing resources (special fund).

COMMENTS:

1. Purpose. According to the author:

The current rulemaking process to adjust the mill assessment…is cumbersome and does not allow CDFA to react quickly enough to the economic trends of the fertilizer industry. CDFA has amended the regulation twice in the past 8 years, but FIAB is hesitant to recommend adjustments to the assessment rate because it cannot be done in a timely manner to react to economic market conditions due to the lengthy regulatory process, which can take up to a year and a half from the time FIAB recommends a rate adjustment to the rate actually being adjusted….Further, in an effort to streamline the process and utilize resources in the most efficient way possible, SB 1522 extends the validity of the registration from 2 years to 4 years and adjusts the fees for registration accordingly. This bill does not increase the registration fee.

1. Background. Existing law establishes the Fertilizing Materials Inspection Program, an industry-funded program administered by CDFA to ensure consumers receive fertilizing materials that are safe and effective and meet the quality and quantity guaranteed by the manufacturer. Each differing label for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment must be registered and pay a fee of no more than $200 per product and $500 per product for organic material for each two-year registration period. Each person who manufacturers or distributes bulk fertilizing materials must obtain a license, pay a $300 license fee, and pay an assessment not to exceed 2 mills ($0.002) per dollar of sales for all fertilizing materials. Existing law authorizes the CDFA secretary to adjust the mill rate, which is subject to APA rulemaking requirements.

Supporters of this bill from the fertilizer industry and the FIAB state this bill will enhance CDFA’s ability to improve and expedite the fertilizer registration process, particularly for organic fertilizers. They claim the fertilizer industry has suffered due to the lack of more timely and nimble mill rate adjustments. They further state that changes made by this bill have been extensively discussed via the FIAB’s public process.

CDFA reports that the tonnage report due dates this bill requires be specified in regulation are already in current regulations. CDFA further reports that costs to adopt regulations through an APA rulemaking to establish an appeal process for license denials are minor and absorbable because only minor changes to an existing appeals process are required.

Analysis Prepared by: Jacqueline Kinney / APPR. / (916) 319-2081

Date of Hearing: June 26, 2024

ASSEMBLY COMMITTEE ON AGRICULTURE

Esmeralda Soria, Chair

SBPCA Bill Id:SB 1522

Author:(Committee on Agriculture) – As Introduced Ver:March 11, 2024

SENATE VOTE: 37-0

SUBJECT: Fertilizing material

SUMMARY: This bill would extend the label registration of someone who manufactures or distributes fertilizing material from 2 years to 4 years and adjusts registration fees accordingly. This bill would allow the Secretary of the California Department of Food and Agriculture (CDFA) to adjust the mill assessment rate on fertilizing materials registered for sale in California without using administrative regulations and/or the rulemaking process provided the Fertilizing Industry Advisory Board (FIAB) determines the change is necessary. Finally, this bill updates definitions and makes technical changes. Specifically, this bill:

1. Defines “fertilizing material” to mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material.
2. Defines “beneficial substance” to mean any substance or compound, other than primary plant nutrients, secondary plant nutrients, and micronutrients, and excluding pesticides, that can be demonstrated by scientific research to be beneficial to one or more species of plants, soil, or media. A beneficial substance includes, but is not limited to, plant biostimulants.
3. Defines “labeling” to mean all written, printed, or graphic matter on, accompanying, or used in promoting the sale of any fertilizing material, including advertisements, brochures, posters, internet websites, and television and radio announcements.
4. Allows CDFA to establish a schedule for all registrations to be submitted to the department for approval and be valid for up to four years.
5. Allows the department to adjust the registration fee from $200 to $400 per product, and from $500 to $1,000 per organic product to accommodate the doubling of the registration time.
6. Exempts any substance distributed for the purpose of promoting plant growth or improving the quality of crops by conditioning soils from registration as long as the substance is sold in bulk. These would include, but would not be limited to, hay, straw, sand, wood products, manures, and compost sold without guarantees for plant nutrients.
7. Allows the Secretary of CDFA to adjust the mill assessment rate based upon a finding and recommendation of FIAB, not to exceed 2 mills ($0.002).
8. Clarifies if a person has obtained multiple fertilizing materials licenses and their tonnage reports are submitted after the required dates specified, a late fee may be imposed and is limited to one $200 late fee per person.
9. Includes technical fixes such as recognizing standardized definitions for plant biostimulants and beneficial substances.
10. Establishes authority for CDFA to refuse to issue fertilizing material licenses or registrations in circumstances when a person has an unpaid fine, fee, assessment, or penalty levied for a violation if it remains unpaid after 30 days of the issuance of a hearing officer’s decision, a superior court judgment, a stipulated settlement payment deadline, or any combination thereof, until that fine, fee, assessment, or penalty is paid in full.

EXISTING LAW:

1. Establishes the Fertilizing Materials Inspection Program, which is an industry-funded program that ensures consumers receive fertilizing materials that are safe and effective and meet the quality and quantity guaranteed by the manufacturer. The program's three arms include registration, inspection and research.
2. Requires each differing label for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered (Food and Agricultural Code (FAC) 14601).
   1. The registrations are valid for a period of 2 years and requires the fee to be no more than $200 per product, except for the fee for organic material, which would be no more than $500 per product.
3. Allows the Secretary of CDFA to reduce the mill assessment to a lower rate that provides sufficient revenue to carry out the registration program (FAC 14601(d)).
4. States that a licensee who sells or distributes bulk fertilizing materials in California must pay an assessment not to exceed 2 mills ($0.002) per dollar of sales for all fertilizing materials; and, also states that a licensee whose name appears on the label of packaged fertilizing materials shall pay an assessment not to exceed 2 mills per dollar of sales (FAC 14611).

FISCAL EFFECT: Unknown.

COMMENTS: The rulemaking process that is currently required to change the mill assessment rate utilizes significant staff resources and presents a lengthy and time-consuming process for program personnel and CDFA legal staff.

FIAB believes the current process is prohibitive and one that does not let the department react quickly enough to the economic trends of the fertilizer industry. While CDFA has amended this regulation twice in the past eight years, FIAB has indicated that they have elected to not adjust the mill assessment rate at times due to the inability to react quickly enough to current economic market conditions. As such, the fertilizer industry has suffered due to the lack of more timely and nimble rate adjustments. Due to the lengthy regulatory process, when FIAB recommends a rate adjustment, the change will not be enacted until over a year after they were originally intended by FIAB and the Secretary.

Supporters state, this bill will also improve CDFA’s ability to improve and expedite the fertilizer registration process, particularly for organic fertilizers. This bill extends the registration period for these products, and assure needed resources are available for product assessments. Additionally, it will allow CDFA to respond more efficiently to recommendations of the Fertilizer Inspection Advisory Board (FIAB) regarding fertilizer mill tax. Currently, the regulatory process can result in extensive delays to CDFA’s approval process. The changes identified in this bill and supported by WPH will allow CDFA to more efficiently respond to research and education needs related to the environmentally safe and agronomically sound use of fertilizers. The proposals within this bill have been extensively discussed via the FIAB’s public process. WPH strongly believes this bill will enhance the operations of CDFA’s Fertilizer Division and help encourage the further development and use of new technologies that will strengthen California’s Healthy Soils Program and California agriculture’s sustainability.

REGISTERED SUPPORT / OPPOSITION:

Support

Biotechnology Innovation Organization

Western Plant Health Association

Opposition

None on file.

Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084

 CONSENT  

Bill No: SB 1522

Author: Committee on Agriculture

Introduced: 3/11/24

Vote: 21

SENATE AGRICULTURE COMMITTEE: 3-0, 4/16/24

AYES: Hurtado, Cortese, Padilla

NO VOTE RECORDED: Grove, Alvarado-Gil

SENATE GOVERNMENTAL ORG. COMMITTEE: 16-0, 4/23/24

AYES: Dodd, Wilk, Alvarado-Gil, Archuleta, Ashby, Bradford, Glazer, Jones, Nguyen, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Smallwood-Cuevas

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Fertilizing material

SOURCE: Author

DIGEST:

This bill would extend the label registration of someone who manufactures or distributes fertilizing material from 2 years to 4 years and adjusts registration fees accordingly. This bill would allow the Secretary of the California Department of Food and Agriculture (CDFA) to adjust the mill assessment rate on fertilizing materials registered for sale in California without using administrative regulations and/or the rulemaking process provided the Fertilizing Industry Advisory Board (FIAB) determines the change is necessary. Finally, this bill updates definitions and makes technical changes.

ANALYSIS:

Existing law:

1. Establishes the Fertilizing Materials Inspection Program which is an industry-funded program that ensures consumers receive fertilizing materials that are safe and effective and meet the quality and quantity guaranteed by the manufacturer. The program's three arms include registration, inspection and research (https://www.cdfa.ca.gov/is/ffldrs/fertilizer.html).
2. Requires each differing label for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered (Food and Agricultural Code Section 14601). The registrations are valid for a period of 2 years and requires the fee to be no more than $200 per product, except for the fee for organic material which would be no more than $500 per product.
3. Allows the Secretary of CDFA to reduce the mill assessment to a lower rate that provides sufficient revenue to carry out the registration program (Food and Agricultural Code Section 14601(d)).
4. States that a licensee who sells or distributes bulk fertilizing materials in California must pay an assessment not to exceed 2 mills ($0.002) per dollar of sales for all fertilizing materials and also states that a licensee whose name appears on the label of packaged fertilizing materials shall pay an assessment not to exceed 2 mills per dollar of sales (Food and Agricultural Code Section 14611).

This bill:

1. Defines “fertilizing material” to mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material.
2. Defines “beneficial substance” to mean any substance or compound, other than primary plant nutrients, secondary plant nutrients, and micronutrients, and excluding pesticides, that can be demonstrated by scientific research to be beneficial to one or more species of plants, soil, or media. A beneficial substance includes, but is not limited to, plant biostimulants.
3. Defines “labeling” to mean all written, printed, or graphic matter on, accompanying, or used in promoting the sale of any fertilizing material including advertisements, brochures, posters, internet websites, and television and radio announcements.
4. Allows CDFA to establish a schedule for all registrations to be submitted to the department for approval and be valid for up to four years.
5. Allows the department to adjust the registration fee from $200 to $400 per product, and from $500 to $1,000 per organic product to accommodate the doubling of the registration time.
6. Exempts any substance distributed for the purpose of promoting plant growth or improving the quality of crops by conditioning soils from registration as long as the substance is sold in bulk. These would include, but would not be limited to, hay, straw, sand, wood products, manures, and compost sold without guarantees for plant nutrients.
7. Allows the Secretary of CDFA to adjust the mill assessment rate based upon a finding and recommendation of FIAB, not to exceed 2 mills ($0.002).
8. Clarifies if a person has obtained multiple fertilizing materials licenses and their tonnage reports are submitted after the required dates specified, a late fee may be imposed and is limited to one $200 late fee per person.
9. Includes technical fixes such as recognizing standardized definitions for plant biostimulants and beneficial substances.
10. Establishes authority for CDFA to refuse to issue fertilizing material licenses or registrations in circumstances when a person has an unpaid fine, fee, assessment, or penalty levied for a violation if it remains unpaid after 30 days of the issuance of a hearing officer’s decision, a superior court judgment, a stipulated settlement payment deadline, or any combination thereof, until that fine, fee, assessment, or penalty is paid in full.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 5/6/24)

Biotechnology Innovation Organization

Western Plant Health Association

OPPOSITION: (Verified 5/6/24)

None received

ARGUMENTS IN SUPPORT: According to the author:

“Current law allows for the Secretary of CDFA to reduce the mill assessment to a lower rate that provides sufficient revenue to carry out the registration program but does not allow the secretary to adjust the assessment to address economic trends. The current rulemaking process to adjust the mill assessment to address these concerns is cumbersome and does not allow CDFA to react quickly enough to the economic trends of the fertilizer industry. CDFA has amended the regulation twice in the past 8 years, but FIAB is hesitant to recommend adjustments to the assessment rate because it cannot be done in a timely manner to react to economic market conditions due to the lengthy regulatory process, which can take up to a year and a half from the time FIAB recommends a rate adjustment to the rate actually being adjusted.

“Further, in an effort to streamline the process and utilize resources in the most efficient way possible, SB 1522 extends the validity of the registration from 2 years to 4 years and adjusts the fees for registration accordingly. This bill does not increase the registration fee.”

Western Plant Health Association (WPH) writes in support of SB 1522, stating:

“SB 1522 will also improve CDFA’s ability to improve and expedite the fertilizer registration process, particularly for organic fertilizers. SB 1522 will extend the registration period for these products, and assure needed resources are available for product assessments. Additionally, it will allow CDFA to respond more efficiently to recommendations of the Fertilizer Inspection Advisory Board (FIAB) regarding fertilizer mill tax. Currently, the regulatory process can result in extensive delays to CDFA’s approval process. The changes identified in SB 1522 and supported by WPH will allow CDFA to more efficiently respond to research and education needs related to the environmentally safe and agronomically sound use of fertilizers. The proposals within SB 1522 have been extensively discussed via the FIAB’s public process. WPH strongly believes this bill will enhance the operations of CDFA’s Fertilizer Division and help encourage the further development and use of new technologies that will strengthen California’s Healthy Soils Program and California agriculture’s sustainability.”

Prepared by: Reichel Everhart / AGRI. / (916) 651-1508

5/8/24 11:36:39

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2023 - 2024 Regular

Bill No: SB Hearing Date: 4/23/2024

SUBJECT:

DIGEST: This bill revises the definition of “fertilizing materials,” and defines the term “beneficial substance” for those purposes; eliminates label registration requirements for auxiliary soil and plant substances and packaged soil amendments and instead applies that requirement to beneficial substances; extends the validity of registrations from two to four years and adjust the fees for registration accordingly; excludes certain substances from the registration requirement; requires the California Department of Food and Agriculture (CDFA) to deny a license or registration to those individuals with fines, fees, assessments, and penalties, as specified; authorizes the Secretary of CDFA (Secretary) to set the mill assessment rate and exempts the setting of the rate from the Administrative Procedures Act (APA); and makes other conforming and non-substantive changes.

ANALYSIS:

Existing law:

1. Generally regulates fertilizing materials and provides for the licensure of individuals who manufacture or distribute fertilizing materials, as specified.
2. Requires that each differing label, other than weight or package size, as described, for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered.
3. Requires registrations be valid for two years and requires the registration fee to not exceed $200 per product, except for the registration fee for organic input material, which may not exceed $500.
4. Requires a licensee whose name appears on the label who sells or distributes bulk fertilizing materials to unlicensed purchasers to pay to the Secretary an assessment not to exceed $0.002 per dollar of sales and authorizes the Secretary to reduce the assessment to a lower rate that provides sufficient revenue to carry out these provisions.
5. Requires a tonnage report to be submitted to the Secretary semiannually no later than January 31 and July 31 of each year, and requires the Secretary to impose a penalty of $200 on any person who fails to submit a report on or before the due dates.
6. Defines “fertilizing materials” to mean any commercial fertilizer, agricultural mineral, auxiliary soil and plant substance, organic input material, or packaged soil amendment.
7. The APA governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law (OAL).

This bill:

1. Eliminates the label registration requirement for “auxiliary soil and plant substances” and “packaged soil amendments” and instead applies that requirement to beneficial substances, as defined.
2. Increases the amount of time that registrations are valid for from two to four years and increases the general registration fee to a maximum of $400 and the organic input registration fee to a maximum of $1,000.
3. Excludes certain substances (except for organic input material and biochar) from the registration requirement if distributed in bulk quantities including, but not limited to, hay, straw, sand, wood products, manures, and compost sold without guarantees for plant nutrients.
4. Revises the tonnage report requirements to instead require the Secretary to impose a late fee of $200 on any person who does not submit the report on or before the required dates, as specified and provides that if a person has obtained multiple fertilizing materials licenses and the reports are submitted after the required dates, the late fee is limited to one $200 late fee per person, as specified.
5. Requires CDFA to refuse issuing a license, registration, or both to a person that has a fine, fee, assessment, or penalty levied by CDFA for specified violations if it remains unpaid after 30 days of the issuance until that fine, fee, assessment, or penalty is paid in full.
6. Authorizes an individual to appeal the decision of CDFA to refuse to issue a license, registration, or both.
7. Requires CDFA to adopt regulations that establish procedures for a written appeals process for a person who wishes to contest the department’s refusal to issue a license or registration, or both, and limits the appeal to the issue of whether the person has unpaid fines, fees, assessments, or penalties, as specified.
8. Authorizes the Secretary to adjust the mill assessment rate based upon a finding and recommendation of the Fertilizer Inspection Advisory Board (Board) of a proposed rate and prohibits that rate from exceeding the maximum rate set by this bill and existing law.
9. Provides that setting the mill assessment rate is not subject to the APA, as specified.
10. Revises the definition of “fertilizing material” to mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material.
11. Defines “beneficial substance” to mean any substance or compound, other than primary plant nutrients, secondary plant nutrients, and micronutrients, and excluding pesticides, that can be demonstrated by scientific research to be beneficial to one or more species of plants, soil, or media. A beneficial substance includes, but is not limited to, plant biostimulants.
12. Defines “plant biostimulant” to mean a substance or microorganism, or mixtures thereof, that, when applied to seeds, plants, the rhizosphere, soil, or other growth media, act to support a plant’s natural nutrition process independently of the biostimulant’s nutrient content. The plant biostimulant thereby may improve nutrient availability, uptake, or use efficiency, tolerance to abiotic stress, and consequent growth, development, quality, or yield.

Background

Author Statement. According to the author’s office, “current law allows for the Secretary of CDFA to reduce the assessment to a lower rate that provides sufficient revenue to carry out the registration program but does not allow the secretary to adjust the assessment to reflect economic market trends. The current rulemaking process to adjust the mill assessment to address these concerns is cumbersome and does not allow the department to react quickly enough to the economic trends of the fertilizer industry. CDFA has amended the regulation twice in the past eight years, but the [Fertilizer Industry Advisory Board] FIAB is hesitant to recommend adjustments to the assessment rate because it cannot be done in a timely manner to react to economic market conditions due to the lengthy regulatory process, which can take up to a year and a half from the time the FIAB recommends a rate adjustment to the rate actually being adjusted.”

Further, “in an effort to streamline the process and utilize resources in the most efficient way possible, SB 1522 adjusts the registration validity from two years to four years and adjusts the fees for registration accordingly. This bill does not increase the registration fee. Finally, SB 1522 establishes authority for CDFA to refuse to issue a fertilizing material license or registration to someone who has an unpaid fine, fee, assessment, or penalty levied for a violation if it remains unpaid after 30 days of the issuance.”

Fertilizing Materials. The California Food and Agricultural Code, specifically its sections on fertilizing materials, sets forth a comprehensive legal structure designed to regulate the production, distribution, and sale of fertilizing materials within the state. It was the intent of the Legislature, in adopting the comprehensive regulatory scheme, to “promote the distribution of effective and safe fertilizing materials essential for the production of food and fiber,” to “provide assurance to the consumer of commercial fertilizers, agricultural minerals, packaged soil amendments, and auxiliary soil and plant substances that the product purchased is properly identified;” and to “provide funds for the administration and enforcement of the law.” Existing law grants CDFA the authority to enforce these standards and defines a broad range of terms related to fertilizing materials, covering everything from commercial fertilizers to more specialized substances.

A significant aspect of this legal framework is its focus on licensing and registration. By requiring manufacturers and distributors to obtain licenses and register their products, the law aims to maintain high standards of quality and safety. The establishment of the Fertilizer Inspection Advisory Board, which includes stakeholders from within the industry, creates a collaborative approach to regulation.

Enforcement mechanisms such as penalties for non-compliance, requirements for detailed labeling, and comprehensive record-keeping and reporting protocols underscore the law's commitment to accountability. These provisions seek to maintain transparency in the market and ensure that products meet the stated quality and safety standards. Existing law details potential violations, including misbranding and adulteration, and penalties.

Plant Biostimulants. Plant biostimulants are substances or microorganisms that, when applied to plants, seeds, or growing mediums, enhance the plant’s growth, development, and stress response by improving nutrient use efficiency, increasing tolerance to abiotic stress, and facilitating plant recovery from such stress. Unlike fertilizers that provide direct nutrient input to improve plant growth, biostimulants work by stimulating natural processes in the plant to enhance nutrient uptake, nutrient efficiency, tolerance to abiotic stress, and quality traits.

Biostimulants can be derived from various natural materials, including, but not limited to: humic and fulvic acids, seaweed extracts, microbial inoculants, amino acids and peptides, chitosan and other biopolymers, and mineral-based products.

The use of biostimulants is part of an integrated approach to plant health and agricultural sustainability, aiming to reduce the resilience on chemical fertilizers and pesticides, improve crop resilience to environmental stresses, and increase crop quality and yield. The mode of action of biostimulants can vary widely depending on their composition and the specific needs of the plant or soil they are applied to.

This bill revises the definition of fertilizing materials to instead mean; any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material. Further, this bill defines “beneficial substance” for these purposes, to include, but not be limited to, biostimulants.

This bill eliminates the label registration requirement for auxiliary soil and plant substances and packaged soil amendments and instead applies that requirement to beneficial substances and extends the term that registrations are valid for from two to four years. Additionally, this adjusts the general registration fee for these purposes accordingly, to a maximum of $400 and the organic input registration fee to a maximum of $1,000.

This bill requires CDFA to refuse to issue a license or label registration, or both, if the person has a fine, fee, assessment, or penalty leveled by the department for a violation the provisions regulating fertilizing materials that remains unpaid after a specified time period, and until that fine, fee, assessment, or penalty is paid in full. This bill requires CDFA to adopt regulations that establish procedures for a written appeals process for a person who wishes to contest the department’s refusal to issue a license or registration, or both. That regulatory process is governed by the APA.

The California Administrative Procedures Act. The APA, originally established by SB 705 (DeLap, Chapter 867, Statutes of 1945), predates the federal version and is a set of laws and regulations that governs how state agencies in California must conduct administrative rulemaking and adjudicative proceedings. The APA was established in response to concerns that the number of administrative regulations had grown significantly, and that many regulations were written in an unclear and unnecessarily complex manner. The APA aims to ensure that regulations are written in a comprehensible manner, are authorized by statute, and are consistent with other law.

To achieve these goals, the APA established the OAL as a central office within state government charged with the orderly review of adopted regulations. The OAL is responsible for reviewing regulations to ensure that they are written in a comprehensible manner, are authorized by statute, and are consistent with other law. The OAL is also tasked with reducing the number of administrative regulations and improving the quality of those regulations that are adopted.

State agencies must actively seek to reduce the unnecessary regulatory burden on private individuals and entities by substituting performance standards for prescriptive standards wherever performance standards can be reasonably expected to be as effective and less burdensome, and that this substitution shall be considered during the course of the agency rulemaking process.

The APA requires that state agencies must give the OAL ready access to their records and full information and reasonable assistance in any matter of research requiring recourse to them or to data within their knowledge or control.

Furthermore, any interested person may petition a state agency requesting the adoption, amendment, or repeal of a regulation as provided in Article 5 of the APA. The state agency must notify the petitioner in writing of the receipt and must within 30 days deny the petition indicating why the agency has reached its decision on the merits of the petition in writing or schedule the matter for public hearing in accordance with the notice and hearing requirements of that article.

The APA was designed to promote transparency, fairness, and public participation in the administrative process. Its main objectives are to ensure that regulations are written in a comprehensible manner, are authorized by statute, and are consistent with other law. The APA established the OAL to review and improve the quality of adopted regulations, and state agencies must actively seek to reduce the unnecessary regulatory burden on private individuals and entities.

When considering exemptions to the APA, it is important to consider what else that may lead to such as reduced transparency and accountability, risk of arbitrary decisions, and potential legal challenges. Limiting the public’s opportunity for input and oversight may result in a higher risk of arbitrary or inconsistent decision-making in the development and implementation of the program’s guidelines.

California Regulatory Notice Register. The California Regulatory Notice Register contains notices of proposed regulatory actions by state regulatory agencies to adopt, amend, or repeal regulations contained in the California Code of Regulations. A state agency must complete its rulemaking and submit the rulemaking file to OAL within one year of the date of publication of a Notice of Proposed Action (“Notice”) in the Notice Register. (Government Code Section 11346.4(b)). OAL provides online access to current and past issues of the California Regulatory Notice Register online.

The Notice of Proposed Action contains a variety of information about the nature of the proposed regulatory changes including various findings, determinations, statutory authority and the law(s) being implemented. The Notice of Proposed Action also contains procedural information, such as deadlines for submitting comments, scheduling of hearings (if any), and where copies of the Express Terms, Initial Statement of Reasons, and any other supporting information can be obtained. For non-major regulations, the results of the Economic Impact Assessment will be included in the Notice of Proposed Action. If the rulemaking is a major regulation, any comments provided by the Department of Finance (DOF), along with the agency’s responses, will be included in the Notice of Proposed Action.

The Notice Register Publication Schedule identifies the required deadline date for OAL to receive the Notice for publication in order to meet the desired date for the close of the public comment period and for the public hearing, if a hearing is scheduled.

This bill authorizes the Secretary to adjust the mill assessment rate based upon a finding and recommendation of the Board of a proposed rate. This bill specifies that the mill assessment rate shall not exceed the maximum rate established by this bill and existing law, and exempts the setting of the mill assessment rate from the APA.

Additionally, this bill requires CDFA to adopt regulations that establish procedures for a written appeals process for an individual denied a license, registration, or both who wishes to contest the department’s refusal to issue a license or registration, or both. This bill specifies that the appeal shall be limited to the issue of whether the person has unpaid fines, fees, assessments, or penalties pursuant to the requirements of this bill. This bill does not exempt that regulatory process from the APA.

Prior/Related Legislation

SB 1204 (Wieckowski, 2022) would have made non-substantive changes to the definition of biochar. (Never referred out of Senate Rules Committee)

SB 1289 (Committee on Judiciary, Chapter 92, Statutes of 2018) made non-substantive maintenance changes to various California codes by recommendation of the Legislative Counsel’s office, including to the statute governing fertilizing materials.

AB 1713 (Committee on Agriculture, 2017) would have made assorted changes related to the regulation of fertilizing materials and organic input materials manufacturers, as specified. (Held on the Assembly Appropriations Committee Suspense File)

AB 1811 (Dodd, Chapter 448, Statutes of 2016) authorized CDFA to develop a new schedule for organic input material registration; authorized provisional label registration, as specified; prioritized inspections for high-risk products and manufacturers; and, authorized CDFA to determine whether a fertilizer material is mislabeled, as specified.

AB 2511 (Levine, Chapter 331, Statutes of 2016) clarifies that “biochar” is a soil amendment that is included in the definition of “auxiliary soil and plant substance” and, therefore, subject to licensing and labeling laws, and defined “biochar” to mean materials derived from thermochemical conversion of biomass in an oxygen-limited environment.

AB 856 (Caballero, Chapter 257, Statutes of 2009) established the organic input material manufacturer’s licensure program, increased fees and penalties, and made various other changes regarding fertilizer materials, inspections, and labeling.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

Biotechnology Innovation Organization

Western Plant Health Association

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: In support of the bill, the Biotechnology Innovation Organization writes that, “[p]lant biostimulants are a relatively new category of agricultural input technology that can potentially play a crucial role in sustainable agriculture by promoting nutrient uptake, stress tolerance, and overall plant vigor. Moreover, they enhance plant growth and development by improving the efficiency of plant nutrients, as measured by either increased nutrient uptake or reduced nutrient losses to the environment, with demonstrated ability to help improve soil structure, health, function, or performance and thus augment plant response. Such products, which reduce nutrient runoff and improve water quality, can be derived from natural or biological sources such as bacterial or microbial inoculants, biochemical materials, amino acids, humic acids, fulvic acid, seaweed extract and similar materials. These naturally derived products can be used for conventional and organic crop production, as well as non-agricultural, turf and ornamental uses.”

DUAL REFERRAL: Senate Agriculture Committee (3-0) & Senate Governmental Organization Committee

SENATE COMMITTEE ON AGRICULTURE

Senator Melissa Hurtado, Chair

2023 - 2024 Regular

Bill No: SB 1522 Hearing Date: 4/16/24

Subject: Fertilizing material

SUMMARY

:

This bill would extend the label registration of someone who manufactures or distributes fertilizing material from 2 years to 4 years and adjusts registration fees accordingly. This bill would allow the Secretary of the California Department of Food and Agriculture (CDFA) to adjust the mill assessment rate on fertilizing materials registered for sale in California without using administrative regulations and/or the rulemaking process provided the Fertilizing Industry Advisory Board (FIAB) determines the change is necessary. Finally, this bill updates definitions and makes technical changes.

BACKGROUND AND EXISTING LAW

:

1. Establishes the Fertilizing Materials Inspection Program which is an industry-funded program that ensures consumers receive fertilizing materials that are safe and effective and meet the quality and quantity guaranteed by the manufacturer. The program's three arms include registration, inspection and research (https://www.cdfa.ca.gov/is/ffldrs/fertilizer.html).
2. Requires each differing label for specialty fertilizer, packaged agricultural mineral, auxiliary soil and plant substance, organic input material, and packaged soil amendment be registered (Food and Agricultural Code Section 14601).
   1. The registrations are valid for a period of 2 years and requires the fee to be no more than $200 per product, except for the fee for organic material which would be no more than $500 per product.
3. Allows the Secretary of CDFA to reduce the mill assessment to a lower rate that provides sufficient revenue to carry out the registration program (Food and Agricultural Code Section 14601(d)).
4. States that a licensee who sells or distributes bulk fertilizing materials in California must pay an assessment not to exceed 2 mills ($0.002) per dollar of sales for all fertilizing materials and also states that a licensee whose name appears on the label of packaged fertilizing materials shall pay an assessment not to exceed 2 mills per dollar of sales (Food and Agricultural Code Section 14611).

PROPOSED LAW

:

This bill:

1. Defines “fertilizing material” to mean any commercial fertilizer, agricultural mineral, beneficial substance, or organic input material.
2. Defines “beneficial substance” to mean any substance or compound, other than primary plant nutrients, secondary plant nutrients, and micronutrients, and excluding pesticides, that can be demonstrated by scientific research to be beneficial to one or more species of plants, soil, or media. A beneficial substance includes, but is not limited to, plant biostimulants.
3. Defines “labeling” to mean all written, printed, or graphic matter on, accompanying, or used in promoting the sale of any fertilizing material, including advertisements, brochures, posters, internet websites, and television and radio announcements.
4. Allows CDFA to establish a schedule for all registrations to be submitted to the department for approval and be valid for up to four years.
5. Allows the department to adjust the registration fee from $200 to $400 per product, and from $500 to $1,000 per organic product to accommodate the doubling of the registration time.
6. Exempts any substance distributed for the purpose of promoting plant growth or improving the quality of crops by conditioning soils from registration as long as the substance is sold in bulk. These would include, but would not be limited to, hay, straw, sand, wood products, manures, and compost sold without guarantees for plant nutrients.
7. Allows the Secretary of CDFA to adjust the mill assessment rate based upon a finding and recommendation of FIAB, not to exceed 2 mills ($0.002).
8. Clarifies if a person has obtained multiple fertilizing materials licenses and their tonnage reports are submitted after the required dates specified, a late fee may be imposed and is limited to one $200 late fee per person.
9. Includes technical fixes such as recognizing standardized definitions for plant biostimulants and beneficial substances.
10. Establishes authority for CDFA to refuse to issue fertilizing material licenses or registrations in circumstances when a person has an unpaid fine, fee, assessment, or penalty levied for a violation if it remains unpaid after 30 days of the issuance of a hearing officer’s decision, a superior court judgment, a stipulated settlement payment deadline, or any combination thereof, until that fine, fee, assessment, or penalty is paid in full.

ARGUMENTS IN SUPPORT: According to the author:

“Current law allows for the Secretary of CDFA to reduce the mill assessment to a lower rate that provides sufficient revenue to carry out the registration program but does not allow the secretary to adjust the assessment to address economic trends. The current rulemaking process to adjust the mill assessment to address these concerns is cumbersome and does not allow CDFA to react quickly enough to the economic trends of the fertilizer industry. CDFA has amended the regulation twice in the past 8 years, but FIAB is hesitant to recommend adjustments to the assessment rate because it cannot be done in a timely manner to react to economic market conditions due to the lengthy regulatory process, which can take up to a year and a half from the time FIAB recommends a rate adjustment to the rate actually being adjusted.

Further, in an effort to streamline the process and utilize resources in the most efficient way possible, SB 1522 extends the validity of the registration from 2 years to 4 years and adjusts the fees for registration accordingly. This bill does not increase the registration fee.”

Western Plant Health Association (WPH) writes in support of SB 1522, stating:

“SB 1522 will also improve CDFA’s ability to improve and expedite the fertilizer registration process, particularly for organic fertilizers. SB 1522 will extend the registration period for these products, and assure needed resources are available for product assessments. Additionally, it will allow CDFA to respond more efficiently to recommendations of the Fertilizer Inspection Advisory Board (FIAB) regarding fertilizer mill tax. Currently, the regulatory process can result in extensive delays to CDFA’s approval process. The changes identified in SB 1522 and supported by WPH will allow CDFA to more efficiently respond to research and education needs related to the environmentally safe and agronomically sound use of fertilizers. The proposals within SB 1522 have been extensively discussed via the FIAB’s public process. WPH strongly believes this bill will enhance the operations of CDFA’s Fertilizer Division and help encourage the further development and use of new technologies that will strengthen California’s Healthy Soils Program and California agriculture’s sustainability.”

ARGUMENTS IN OPPOSITION:

None received.

COMMENTS

:

The rulemaking process that is currently required to change the mill assessment rate utilizes significant staff resources and presents a lengthy and time-consuming process for program personnel and CDFA legal staff.

FIAB believes the current process is prohibitive and one that does not let the department react quickly enough to the economic trends of the fertilizer industry. While CDFA has amended this regulation twice in the past eight years, FIAB has indicated that they have elected to not adjust the mill assessment rate at times due to the inability to react quickly enough to current economic market conditions. As such, the fertilizer industry has suffered due to the lack of more timely and nimble rate adjustments. Due to the lengthy regulatory process, when FIAB recommends a rate adjustment, the change will not be enacted until over a year after they were originally intended by FIAB and the Secretary.

SUPPORT

:

Western Plant Health Association

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