There was a full slate of 15 voting members participating at the Tuesday, December 17, 2024, Producer Review Board (PRB) meeting in Modesto. Eleven of them were in-person and four participated by telephone. Two of the 15 voting members were alternates serving on behalf of absent board members.
The Department announced that it is about 30 votes short of obtaining a quorum of producers voting on the current referendum. The ballots must be postmarked by January 9, 2025, to be counted, and 51% of the producers must vote for the referendum to be valid. If you want to confirm that your ballot has been received by the Department, you can contact David Ko at David.Ko@cdfa.ca.gov or 916-900-5011. For producers planning to vote in the referendum, I encourage you to get your ballot submitted today so that it’s not lost in the holiday shuffle.
The main reason the meeting had to be held in this holiday season is due to the requirement in the Referendum Petition Procedure rules that the PRB must meet within 60 days to consider a petition that has received valid signatures from at least 25% of eligible producers. On November 4, 2024, CDFA verified that a petition by STOP QIP for a referendum to terminate the QIP program had obtained sufficient signatures. This started the 60-day clock. The PRB had a robust discussion about the petition and a motion to recommend to the Secretary that a referendum be called to vote on terminating the QIP program passed by a vote of 8 yes to 7 no. A subsequent motion to ask the Secretary to delay her consideration of the recommendation until the results of the current referendum are known passed 14 yes to 1 no.
Another action by the PRB was to recommend lowering the QIP assessment from the current 4 cents per pound of SNF to 3.85 cents per pound of SNF. This is a regular fine tuning of the assessment rate to make sure the cash balances in the fund do not over accumulate while still maintaining a sufficient reserve to pay quota premiums on time.
The Department gave an update on processor audits it conducted this past year. Those audits found a collective underpayment to producers of about $570,000, which it is in the process of obtaining.
The final topic in the meeting was dealing with five hardship requests. One producer requested relief from paying the assessment citing losses his operation incurred due to flooding. The four other requests all made the argument that they were not getting any benefit from the QIP and that paying the assessment was creating an economic hardship, therefore they should be excused from paying. There was a robust discussion, but in the end all of the requests were denied by overwhelming majorities.
Geoff Vanden Heuvel
Director of Regulatory and Economic Affairs
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