January 13, 2020

From Headquarters

Governor Newsom Unveils Preliminary 2020-21 Budget
On Friday, Governor Gavin Newsom unveiled his 2020-21 budget, which will set the tone for much of the fiscal debate before the legislature this session. As part of the $222 billion California state budget overview, the Governor highlighted a $5.6 billion surplus as well as the $21 billion in reserves for the possibility of an economic downturn.

Of particular interest to ranchers are funds designated for wildfire impacts. Included in the budget were funds to hire over 500 additional firefighters over the next 5 years and $100 million to make homes in low-income areas more fire-resistant through measures like upgrading wooden roofs and closing gaps where sparks could enter. These funds come as part of a total $2 billion emergency services budget, also including funds earmarked for high-tech mapping of areas prone to wildfires and other natural disasters to better predict these events and give firefights better strategies to combat them.

While not technically part of the budget, Governor Newsom also expressed his support for a $4.75 billion “climate resilience bond” targeted for the November ballot to mitigate climate change risks. Newsom says that he envisions a large majority of the bond revenue—about $2.9 billion—would be spent on water, flood and drought measures.

Wildfire measures, including reforestation and the hardening of critical infrastructure, would receive $750 million from the bond. This forest health investment comes as a complement to the forest health and fuel reduction activities supported by the Greenhouse Gas Reduction Fund and to investments that utilities have been required to make in high-risk areas across the state.

Both houses of the legislature are also working on their own bond measures that would pay to safeguard property, water supplies, wildlife habitat and forests from the risks of climate change. The Senate plans to pass their bond, Senator Ben Allen’s SB 45, off the floor by February.

Pacific Gas & Electric was a priority in the budget as well, with the proposed $30 million funding of a Wildfire Safety Division within the Public Utilities Commission to ensure the safe operation of the utility and the suggested possibility of a state takeover of PG&E if the utility does not emerge from bankruptcy by this summer to the satisfaction of state lawmakers.

“The budget reflects necessary support for the administration’s efforts to achieve the required transformation of PG&E within the bankruptcy process,” the budget states. “However, if protecting Californians’ interests and ensuring the necessary transformation requires further intervention, including a state takeover of the utility, the administration will work with the Legislature.”

Other highlights of the Governor’s budget include:

  • $59.4 million to support community resiliency and state response during power shutoffs
  • $10 million for healthier and more nutritious school meals and $1.5 million to the California Department of Food and Agriculture to establish a farm to school grant program
  • $33 million for a Fresno-Merced Food Innovation Corridor to support sustainable agriculture and high-quality jobs
  • $20 million for methane reduction through the Dairy Digester Research Program and the Alternative Manure Management Program
  • $18 million annually for five years for healthy soils programs

The Governor’s budget introduction is the first step in California’s spending plan. In May, once state officials have a clearer estimate of the state’s expected tax revenue, the Governor will issue the “May Revise.” The legislature will have until June 15 to vote on the revise and send it back to Newsom for his final approval.

Council on Environmental Quality Proposes New NEPA Rules
Last Thursday, the Trump Administration’s Council on Environmental Quality (CEQ) issued proposed regulations revising the implementation of the National Environmental Policy Act (NEPA). The proposed amendments are intended to “facilitate more efficient, effective, and timely NEPA reviews,” according to a CEQ fact sheet. The current average timeframe for NEPA reviews—which impact authorization of range improvements and renewal of term grazing permits for ranchers grazing on federal land—is four and a half years.

Regulations implementing NEPA—signed into law in 1970—were last substantively revised more than thirty years ago, in 1986.

The proposed regulations suggest streamlining NEPA analysis in part by limiting the “effects” of proposed federal actions that agencies like the BLM and US Forest Service must consider; currently, federal agencies consider direct, indirect and cumulative effects of proposed actions, but the proposed amendments would direct agencies to consider only those effects which are “reasonably foreseeable and have a reasonably close causal relationship to the proposed action,” reducing agencies’ workload and limiting the analysis that potential environmental litigants can scrutinize.

The proposal also promotes the use of more efficient analyses, encouraging the use of categorical exclusions (actions which are exempted from detailed review) and environmental assessments (which are less burdensome than environmental impact statements), and CEQ proposes time limits and page limits on environmental analyses to ensure that most NEPA reviews are completed within two years.

CCA welcomes CEQ’s announcement of the proposed rulemaking, as reforming and streamlining NEPA analysis has been a focus of CCA and CCA’s public lands permittees in recent years.

For more information on CEQ’s proposed regulatory amendments, see the January edition of Hot Irons or contact Kirk Wilbur in the CCA office. To provide comments to CEQ in support of the proposed rulemaking, click here and click “Comment Now!” prior to March 10.

State Agencies Release Water Resilience Portfolio
Earlier this month, the California Natural Resources Agency, California Environmental Protection Agency and California Department of Food and Agriculture released their draft 2020 Water Resilience Portfolio as ordered by Governor Newsom’s April 29, 2019 executive order.

The portfolio (available here) contains more than 100 goals and priorities, such as Governor Newsom’s plan for building a single tunnel underneath the Sacramento-San Joaquin Delta.

Many of the goals in the Water Resilience Portfolio could be advantageous to California’s ranching community. For instance, the Portfolio proposes advancing the Sites Reservoir, a water-storage project long-sought by the agricultural community. The Portfolio also includes goals for increased surface storage and groundwater recharge, which could provide opportunities to promote improved regulation regarding livestock stock ponds in the state. Numerous goals and priorities relate to providing incentives for farm and rangeland improvements.

The Portfolio includes several potential threats for the ranching community, however. For instance, multiple goals point to increased water reporting requirements for agricultural users, and one goal proposes requiring water users who divert 500 or more acre-feet of water per year to measure their diversions using telemetry equipment.

The agencies are accepting public comment on the draft portfolio through February 7. For more information on how to provide comment on the draft clickhere.

California Employers Soon Required to Register for Employee Retirement Plan
California employers will soon be required to facilitate retirement plans for their employees if they do not do so already. In 2016, then-Governor Jerry Brown signed into law SB 1234 (DeLeon, 2016) which requires employers with 5 or more employees to provide a retirement plan for their workers or register for the CalSavers program and facilitate employees’ own contribution to individual retirement accounts.

By June 30, companies with 100 employees and no employer-sponsored retirement plan must register with the state-run CalSavers program. This then gives employees the ability to choose their contribution rate to a Roth IRA, automatically deducting that amount from their after-tax paycheck.

While the deadline for larger companies is this June, the rollout for smaller employers will occur over the next two years with the deadline for companies with 50 or more employees occurring June 30, 2021, and businesses with 5 or more employees, June 30, 2022.

To help ranchers understand how this could affect their operations CCA, in conjunction with Western United Dairies, will be hosting a conference call with Jonathan Herrera of the CalSavers Retirement Savings Program and the California State Treasurer’s Office January 21, 1-3pm. Producers are encouraged to call in to find out more. Call-in number: 1-866-365-4406, Group PIN: 4440848#

For more information, check out the January issue of CCA’s Hot Irons.

Save the Date for the FARM Club | Beef Producer Symposium: February 22
Join the UC Davis School of Veterinary Medicine Center for their 2020 Winter Conference: FARM Club | Beef Producer Symposium.  The event, being hosted at Gladys Valley Hall, UC Davis, on February 22 from 8am to 5pm, will focus on learning and networking with other beef producers.

Guest speakers for the day will include the following.

  • Gabriele Maier, DVM, MPVM, Ph.D., DACVPM
  • Bret McNabb, DVM, DACT, DABVP
  • Frank Mitloehner, PhD
  • Jeffrey Stott, MS, PhD
  • Alison Van Eenennaam, PhD

Additionally, the day will include a Beef Quality Assurance (BQA) session this year, led by Dr. Gabriele Maier. To learn more about the event and complete your registration, click here.

California Cattle Council Strategic Plan — Producer Participation Request
The California Cattle Council (Council) is calling on all interested and willing cattle producers to participate in an online survey to assist the Council in developing a strategic plan. The strategic plan will provide a framework for the Council to fully realize its mission to support California beef and dairy producers and target the most critical issues facing the industry today. In addition, the plan will guide the allocation of funds over the coming years to ensure projects, research, campaigns and advocacy efforts are effective and can be properly measured to determine success. Grassroots input is critical to ensure the Council can accomplish this objective. This is your dollar and the Council takes its obligation to effectively and responsibly serve the California cattle industry very seriously. Survey results are anonymous, and the Council encourages your candid participation.

To learn more and take the survey, click here.

USDA Now Accepting Applications for Value-Added Producer Grants
The United States Department of Agriculture (USDA) Rural Development is accepting applications for the Value-Added Producer Grant (VAPG) program now through the beginning of March.

According to the USDA Rural Development website, “the Value-Added Producer Grant (VAPG) program helps agricultural producers enter into value-added activities related to the processing and marketing of new products. The goals of this program are to generate new products, create and expand marketing opportunities and increase producer income.”

Applications are due March 5, 2020 for electronic applications and March 10, 2020 for paper applications. Approximately $37 million is available in funding.

For more information on the program and eligibility click here.

PLC Now Accepting Applications for the 2020 Nick Theos Scholarship
Applications for the 2020 Nick Theos Scholarship are being accepted by the Public Lands Council now through February 1. The scholarships provide students with a passion for the western livestock industry an opportunity to attend the 2020 PLC Spring Legislative Conference, held March 30-31, in Washington, D.C.

The PLC Legislative Conference brings together top industry leaders, elected officials, and other stakeholders to discuss public policy issues impacting public lands ranchers. Selected participants will engage in an unforgettable hands-on learning experience exploring legislative priorities and navigating the regulatory environment of public lands ranching.

Two Nick Theos scholarships are available for 2020. The scholarships provide a $250 stipend, complimentary hotel accommodations on Capitol Hill and complimentary conference registration. While PLC is unable to pay for travel in full, additional sponsorships to help cover travel costs are encouraged and may be available through individual state public lands council associations.

Nick Theos, a founding member of PLC and lifetime supporter of the livestock industry, passed away on April 11th, 2013, at the age of 92. The scholarship was created by the Theos family to encourage the next generation to engage in the policy issues facing public lands ranching.

For more details on applying for this opportunity click here.

Industry News

Gig law doesn’t apply to independent truck drivers, California judge rules Los Angeles Times “California’s new gig-economy law does not apply to the thousands of independent truck drivers in the state because the controversial measure is preempted by federal law, a Los Angeles County Superior Court judge has ruled.” To continue reading, click here.

Walmart Enters The Beef Business With Packing Facility In Georgia Drovers “Walmart hosted a grand opening of its new meat processing facility in Thomasville, Georgia, on Friday as the world’s largest retailer enters the beef business.” To continue reading, click here.

FEMA says it may bill fire victims if it can’t get $4 billion from PG&E SF Chronicle “Federal officials say Pacific Gas and Electric Co. owes the government nearly $4 billion, and if they can’t get the payment request resolved as part of the utility’s bankruptcy case, they may later have to ask wildfire victims for a portion of the money instead.” To continue reading, click here.

Upcoming Events

Red Bluff Bull and Gelding Sale
Jan. 21-25, Red Bluff, CA
For more information, click here.

Cattle Industry Convention and NCBA Tradeshow
Feb. 5-7, San Antonio, TX
For more information, click here.

CCA Steak & Eggs Legislative Breakfast
March 25, Sacramento, CA
For more information, click here.

CCA Midyear Meeting
June 16-18, Paso Robles, CA
More details to come.

Feedlot cattle in snow on cover of January California Cattleman

California Cattleman

Click here to read the latest issue!

Happy New Year! Our first issue of 2020 has all you need to know about the 103rd CCA & CCW Convention, including policy updates, new officers and 2019 photo contest and scholarship winners.

This issue also features Bruin Ranch, the 2019 CBCIA Seedstock Producer of the Year, and includes insights from beef industry leaders on a new year and decade.

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