SECTIONS 55601-55613 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 55601-55613

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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