Article 10. Assessments And Funds of California Food And Agricultural Code >> Division 21. >> Part 2. >> Chapter 1. >> Article 10.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

(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.

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.

(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.

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.

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.

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.