On Monday, August 5th, the 80 member California State Legislature returned from summer recess.  On August 12th, the 40 Senators will return to Sacramento.  They will begin the month-long mad dash towards interim recess which will begin on September 13th.  There are still many pending bills of concern to farmers, agriculture processors and suppliers.  Below is a short synopsis of the major legislation. 

Labor:

AB 10 (Alejo) Minimum Wage - This bill would increase the minimum wage on January 1, 2014 to not less than $8.25 an hour, on January 1, 2015 to not less than $8.75 an hour and on January 2016, not less than $9.25 an hour and finally $10 a year later.

SB 25 (Steinberg) Agriculture Labor Disputes - This measure would amend the binding arbitration timelines for ag labor disputes. 

AB 442 (Nazarian) Minimum Wage Violations - This measure increases penalties to employers who violate minimum wage laws and authorizes an employee to collect liquidated damages. 

AB 263 (Hernandez) - The bill creates significant employer penalties for supervisors who may improperly threaten an employee concerning their immigration status.  The current penalties include loss of all licenses (except professional licenses) after the 4th penalty, with significant fines from earlier violations. 

Water Quality

AB 69 (Perea) - Nitrate Risk Fund - This bill is intended to serve as a vehicle for a consensus plan to implement a funding source for groundwater mitigation.  The author has circulated potential mill assessments on fertilizer to raise approximately $60 million annually for 10 years.

SB 691 (Hancock) - Increased Penalties for Nuisance Violations of Air Standards - This bill would raise the penalty for the violation of a nuisance air standard from $10,000 to $100,000.  A large coalition of opposition from most manufacturing industries has been getting clarifying language and attempting to limit the scope of the bill to major events.

Other outstanding issues include: fixing the unemployment insurance fund which has an unfunded loan from the federal government for $10 billion, the water bond, which may get attention but will more likely be a 2014 issue, energy rate reform and reforming piece-rate legislation. 

BDCP Releases Economic Report

The California Natural Resources Agency released the draft statewide economic impact report this week of the Bay Delta Conservation Plan, the results of a study led by Dr. David Sunding of UC Berkeley and The Brattle Group. The study focused on an analysis of the overall economic impacts of the BDCP on the state as a whole. The report concluded that the BDCP would create approximately 177,000 new jobs, as well as protect the jobs of more than one million California residents. The study also determined that the BDCP will lead to a net economic benefit to the state, amounting to a net improvement of $4.8 billion to $5.4 billion in economic welfare for California residents. The report not only sheds light on the benefits of the BDCP, it also stresses the critical importance of following through with its implementation to avoid an economic disaster.

The administration hopes to release the final draft of the BDCP documents this fall.  However, recent press reports discuss the challenges the plan is encountering from the federal fish and wildlife agencies.  This may result in a delay of the release of the plan. 

A copy of the economic impact report can be

http://baydeltaconservationplan.com/news/news/13-08-05/BDCP_Draft_Statewide_Economic_Analysis_Released.aspx 

The  Department of Homeland Security (DHS) recently distributed letters to some members informing them of their potential need to complete DHS's Top-Screen online assessment tool, as required under the Chemical Facility Anti-Terrorism Standards (CFATS) interim final rule issued on April 9, 2007.  DHS uses the Top-Screen assessment tool to establish a risk category for facilities that possess (or plan to possess) certain chemicals. The resulting risk category then is a determining factor as to what additional DHS regulations the facility is required to follow. 

Following is the first paragraph of the DHS letter.

Under the Chemical Facility Anti-Terrorism Standards (CFATS), 6 C.F.R. Part 27, the Department of Homeland Security (DHS or the Department) is responsible for regulating the security of high-risk chemical facilities. See Pub. L. No. 109-295 § 550 (2006), as amended. Appendix A to CFATS contains a list of chemicals of interest (COI) that, if possessed by a facility above the screening threshold quantity (STQ), triggers a requirement for the facility to complete and submit an online consequence assessment called a Top­-Screen within 60 calendar days of coming into possession of the COI at quantities that meet or exceed the corresponding STQ. See 6 CFR § 27.210(a)(l)(i). Appendix A lists approximately 322 chemicals of interest and includes common industrial chemicals such as chlorine, propane and anhydrous ammonia as well as specialty chemicals such as arsine and phosphorus trichloride. Based on available information, it appears that [Company Name] may possess one or more COI that meet or exceed the STQ specified in Appendix A to CFATS. To date, the Department has not received a Top-Screen from [Company Name].

The letter further states that the facility is to by a specified date either submit a Top-Screen or advise DHS why it is not required to do so. In accordance with DHS regulations, facilities that received a letter of notice of potential non-compliance are required to respond.

As noted in the DHS letter, chemicals of interest (COI) are listed in CFATS Appendix A (attached). Included among the chemicals are propane, anhydrous ammonia, phosphine, aluminum phosphide and magnesium phosphide, as well as others that may be possessed by grain, feed and processing facilities.  If a facility possesses or plans to possess an Appendix A listed chemical that meets or exceeds the specified minimum concentration and at a quantity that meets or exceeds the chemical's screening threshold quantity (STQ) level, then it is required to submit a Top-Screen.

Following is Appendix A information for some chemicals that may be possessed by grain, feed and processing facilities. 

• Anhydrous Ammonia - STQ of 10,000 pounds, at a minimum concentration of 1 percent.

• Propane - STQ of 60,000 pounds (14,285 gallons) at a minimum concentration of 1 percent.  Under the regulations, facilities are not required to count propane tanks containing 10,000 pounds (2,381 gallons) or less when calculating whether they possess a sufficient quantity of propane to reach the STQ.

• Phosphine - STQ of 15 pounds at a minimum concentration of 0.67 percent.

• Aluminum Phosphide and Magnesium Phosphide -  STQs are established as the quantity sufficient to require placarding during shipping according to DOT regulations found at Subpart F of 49 CFR part 172, which requires "Dangerous When Wet" placarding because they are Hazard Class 4.3 substances.

DOT regulations found in 49 CFR part 173.9 provide requirements for transport vehicles or freight containers containing fumigated grain, feed or food products. This part specifies that a treated transport vehicle or freight container be clearly identified with a proper "fumigant marking."  This part also specifies that "for domestic transportation, a hazard warning label authorized by EPA under 40 CFR 156 may be used as an alternative to the fumigant marking."

EPA warning signs and DOT fumigant markings are different than DOT placards required in subpart F of 49 CFR part 172 for shipping hazardous materials over public roads.  Grain, feed, and food products fumigated in transportation conveyances, such as railcars and barges, are not subject to the placarding provisions of subpart F of 49 CFR part 172.  

A grain, feed or processing facility that possesses aluminum phosphide and/or magnesium phosphide for fumigation purposes does not meet the STQ for aluminum phosphide and magnesium phosphide unless it ships such chemicals and is required to placard the shipment according to DOT regulations found at Subpart F of 49 CFR part 172. 

Importantly, DHS on Dec. 21, 2007 also issued an indefinite time extension for submitting Top-Screens by farmers and agricultural users of chemicals. Under the provisions of the extension that are still in place,

1. Grain, feed, and processing facilities that possess a quantity of a COI that meets or exceeds its STQ solely for the purpose of fumigating grain, feed or food are covered under the extension.  But facilities that sell fumigants are not covered by the extension.   
2. Chemicals of interest that are fuels (such as propane) are not covered by the extension. Therefore, facilities that possess quantities of propane that meet or exceed the propane STQ (60,000 pounds (approximately 14,285 gallons); however facilities do not need to count propane stored in tanks containing less than 10,000 pounds (approximately 2,381 gallons) when determining their STQ level) need to complete and submit a Top Screen.  
3. Agricultural facilities that sell or commercially apply COIs (such as anhydrous ammonia) are not covered by the extension.

For your information, attached is a previously distributed NGFA guidance document that provides additional details about the CFATS regulations.

Presidential Executive Order:  In a related development, President Obama on Aug. 1 issued an Executive Order to improve chemical facility safety and security. Among other things, the order requires DHS within 90 days to identify a list of chemicals, including poisons and reactive substances, that should be considered for addition to the CFATS Chemicals of Interest list.  

DHS CFATS Appendix A

NGFA Guidance on CFATS

Whether the White House is paying attention to increasing calls for a repeal of the Renewable Fuels Standard (RFS) or focusing on warnings from the fuel industry that RFS levels are unrealistic given gasoline sales, EPA this week released its 2013 RFS levels for four fuel groups, at the same time signaling it will ease RFS levels in 2014.  

The 2013 RFS levels require a total of 16.55 billion gallons of renewable fuels - mainly corn-based ethanol - be blended with gasoline to hit a 9.74% blend rate.  The overall mandate adds to ethanol the following levels of other biofuels:

• Biomass-based diesel - 1.28 billion gallons; 1.13% (unchanged)
• Advanced biofuels (biodiesel, etc.) - 2.75 billion gallons; 1.62% (mostly unchanged)
• Cellulosic biofuels (wood-based) - 6 billion gallons; 0.004% (down from 8.6 billion mandate)

EPA said in calculating its congressionally mandated 2013 blend levels, several public comments reflected concern over the "E10 blend wall," the point at which "there is difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10 (10% blend rate)." This means because of lagging gasoline sales, the agency agrees the fuel industry right now can't blend enough ethanol to hit the mandated biofuels use level without going above the 10% limit per gallon of gasoline.  Gasoline refiners contend to go above 10% will lead to engine damage and lower fuel sales because most cars and trucks can't operate on higher ethanol blends.

Because of this concern, the agency said, it will use its authority to reduce both the advanced biofuel and total renewable biofuel volumes in the forthcoming 2014 RFS requirements. It also provided longer lead time and flexibility to fuel producers to comply with the 2013 RFS requirements by extending the deadline for compliance to June 30, 2014.

Some in the ethanol industry said the EPA announcement is a step in the right direction and shows the agency is capable of reacting to "real market signals" and adjusting the RFS.  Critics, however, contend the 2014 announcement is too little, too late, and that Congress must repair or repeal the RFS.  

"While the Administration acknowledged that higher ethanol mandates are unworkable by suggesting a new approach for 2014 standards, EPA missed an opportunity to fix the problem this year," said the American Petroleum Institute (API), a major critic of the RFS. "Now it's up to Congress to exercise leadership to end this dangerous mandate."

The American Soybean Assn. (ASA) released a statement, saying, "As producers of the feedstock that accounts for more than half of all domestic biodiesel production, we are very pleased with today's announcement."  

The National Chicken Council (NCC), while giving a nod to EPA for "recognizing the reality" of RFS problems, called the agency announcement "a band-aid approach...to a problem that needs a long-term, sustainable solution...we need certainty in the market that only Congress can provide by repealing the conventional requirements of the RFS."

Legislation to repeal the mandate has been introduced in the House by Rep. Bob Goodlatte (R, VA), chair of the House Judiciary Committee, and Rep. Jim Costa (D, CA), a member of the House Agriculture Committee. In the Senate, a repeal was introduced in June by Sen. John Barasso (R, WY) and several colleagues.   

The House Energy & Commerce Committee, following two days of hearings on the RFS and its impact on food/agriculture, set up a working group of four committee members led by Rep. John Shimkus (R, IL) to work with gasoline, biofuels, ag and other stakeholders on identifying improvements in the RFS mechanism. Goodlatte and Costa, along with Reps. Steve Womack (R, AR) and Peter Welch (D, VT), sent committee Chair Fred Upton (R, MI) and ranking member Rep. Henry Waxman (D, CA) a letter this week urging them to ensure the Goodlatte/Costa bill is part of the RFS solution.

Aloha CGFA Members!

I know some of you would like to get a jump start on booking your room for the 2014 CGFA Annual Convention at the Sheraton in Maui.  The dates will be April 23-26, 2014. The schedule will follow our traditional format Wednesday through Saturday morning. Rooms can be booked directly with the reservations department at The Sheraton Maui.   Call the Resort Desk (808) 921-4645 (The hours of operation are Mondays through Fridays from 7:00 am to 6:00 pm and Saturday & Sunday from 8:00 am to 4:00 pm, Hawaii Standard Time).    

Cut-off Date:  The "cut-off date" for reserving rooms in the Room Block is 5:00 p.m. local time at Hotel on March 21, 2014.  After the cut-off date, it is at Hotel's discretion whether to accept additional reservations, which will be subject to group rates, based upon availability.  

Rates:  We are pleased to confirm the following group rates:

Therefore, your guests can follow the following process to book their rooms:

Group Code:  VMCGFA

Reservations:

Individual attendees may make reservations by calling our resorts desk at (808) 921-4645 and making reservation on their own. (The hours of operation are Mondays through Fridays from 7:00 am to 6:00 pm and Saturday & Sunday from 8:00 am to 4:00 pm, Hawaii Standard Time). 

Rates are not confidential and a deposit equal to two night's stay is required to hold each individual's reservation.  Such deposit shall serve to confirm the reservation for the date(s) indicated, and, upon check-in, shall be applied to the first and/or final night of the reserved stay.  This deposit is refundable if notice is received at least seventy-two hours (72 hours) prior to arrival and a cancellation number is obtained.  If cancellation is made within seventy-two hours (72 hours) prior to arrival, the two days deposit will be retained as a cancellation.  All deposits shall be charged at the time the reservation is made.

Rates listed are based on single or double occupancy.  There will be an additional charge of eighty dollars ($80.00), plus tax for any adult (eighteen years or older) in a room (for a third person).  Children under eighteen (18) may stay for free in their parent's room when using existing bedding.  The maximum number of persons per room is four (4) adults or two (2) adults and two (2) children. All room rates are quoted exclusive of applicable state and local taxes, currently 13.41%.  Taxes are subject to change.

The rates established for your meeting will be offered 3 days prior and 3 days after the meeting dates as indicated on the first page of this contract, subject to availability of rate and Run of House rooms at the time of reservation.

PLAYMORE Room Discounts:  In the days prior to or following your Hawaii event, the exclusive PLAYMORE program offers discounted rates at each of our Hawaii resorts. So, whether your guests want to explore Kauai, Oahu or Hawaii's "Big Island", Starwood delivers the very best Hawaii has to offer. To take advantage of our discounted PLAYMORE rates, your guests can call 1-800-782-9488 and ask for PLAYMOR4 by name or visit www.playmoreinhawaii.com/LEARNMORENOW to reserve their rooms online.

Mahalo and see you there.....

Donna Boggs, Associate Director

dboggs@cgfa.org 

House Transportation & Infrastructure Committee Chair Bill Schuster (R, PA) told the National Governors Association annual meeting in Milwaukee this week his committee will take up its version of the Water Resources Reform & Development Act (WRRDA) in September and hopes to have it on the floor in October.

The full Senate approved its version of the waterways bill in May.  That package tackles funding to modernize locks and dams, update river projects, and directs the Army Corps of Engineers to increase efficiency.  

While Schuster didn't give the state executives details of his waterways bill, a statement released in Washington, DC, says WRRDA "is a top priority for us."  Reports indicate the full committee has reached agreement on the bill's framework and that the chairman's final draft will be unveiled shortly after Congress returns in September.

One new aspect of the House framework designed to address Schuster's concern over too much power being vested in the Corps of Engineers would require the Corps to select projects for funding and submit that list to Congress for review and approval.  In addition to ensuring the Corps is answerable for its expenditures and project selection, the system would force Congress to revisit WRRDA more frequently than it has over time, Schuster said.

WRRDA has not been reauthorized since 2007; its previous reauthorization was in 2000.  The law is supposed to be revisited every two years.  Schuster says this failure to keep up with waterways challenges has led to a system that is "growing more obsolete every day." 

Mike Taylor, CPCU

Vice President 

InterWest Insurance Services, Inc.

100 Pringle Avenue, North Tower, Suite 550

Walnut Creek, CA 94596

(925) 977-4104 Office

(800) 464-0077 Toll Free

(925) 977-4150 Fax

(510) 206-5505 Mobile

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www.iwins.com

mtaylor@iwins.com

Sen. Max Baucus (D, MT), chair of the Senate Finance Committee, introduced legislation last week to extend the Trade Adjustment Assistance (TAA), a workplace retraining program designed to help workers adversely affected by U.S. trade deals.  As part of that effort, he said, he'll move legislation to give President Obama trade promotion authority (TPA).

The president has requested Congress give him TPA, an authority enjoyed by most presidents which allows them to directly negotiate bilateral trade agreements for submission to Congress for approval on straight up or down votes.

USDA this week said severe drought conditions persist in several areas of the country and this means ranchers may graze cattle or cut hay on some Conservation Reserve Program (CRP) acres under certain conditions and on a temporary basis.  Further, CRP annual rental payments related to emergency haying and grazing will be reduced from 25% to 10%, with the sale of hay allowed under certain conditions.  Details of the emergency assistance can be found by going to www.fsa.usda.gov/crp.