Commissioner Lara and FAIR Plan reach agreement to increase commercial coverage limit to $20 million

As part of his comprehensive effort to give more insurance options to California residents and businesses, Insurance Commissioner Ricardo Lara announced last week the California FAIR Plan Association has agreed to more than double its existing commercial coverage limits to $20 million for businesses unable to find coverage in the normal insurance marketplace. The FAIR Plan is an association comprised of all insurers authorized to transact basic property insurance in California and designed to be the state’s property “insurer of last resort,” writing coverage for businesses and residences when other insurance options are not available.  Commissioner Lara and the FAIR Plan have been working on this issue since the Commissioner’s investigatory hearing into the FAIR Plan last July where homeowners associations, youth recreational camps, agricultural groups, and other businesses spoke about the growing need for greater commercial coverage limits.   Association President/CEO Roger A. Isom testified at that hearing specifically asking for an increase to at least $20 million in coverage.  “Giving businesses greater options for insurance coverage is a top priority of mine. I am pleased the FAIR Plan is stepping up when insurance companies fall short in providing businesses and homeowners access to the coverage they need,” said Commissioner Lara. Today's agreement signed by Commissioner Lara and FAIR Plan President Victoria Roach will increase the combined coverage limits for the FAIR Plan, under its Division I Commercial Property Program, from $8.4 million to $20 million per location and, under its Division II Businessowners Program, from $7.2 million to $20 million per location.  State legislators, including Senator Toni Atkins and Senator Susan Rubio joined Commissioner Lara’s call for an increased commercial coverage limit at the FAIR Plan in letters sent earlier this year.  The new coverage limits will take effect after the FAIR Plan submits a new rule filing for approval by the Department of Insurance. The FAIR Plan has 60 days to submit a rule filing to the Department, with the goal of the Department approving these coverage limit increases, meaning coverage could be available in the fourth quarter.

CalOSHA Formally Proposes “Indoor Heat Illness Regulation”

The CalOSHA Standards Board has released notice the plan to hear the new Section 3396 – Heat Illness Prevention in Indoor Places of Employment.  This new regulation would affect all indoor work areas where the temperature equals or exceeds 82 °F when employees are present.  In these areas the employer must provide a mandatory “cool down area” that is less than 82 °F.  in addition the employer must monitor the temperature and heat index at all times.  Further, the employer must provide engineering controls to bring temperatures down to 87 °F.  Employers will also have to develop and implement emergency response procedures, employee training, supervisor training and have a written Heat Illness Prevention Plan (HIPP).  The proposed standard is set to be heard by the Standards Board in May.  The Association is opposing the proposed standard as currently written.

Feds Increase Water Deliveries to 80%!

Today, the Bureau of Reclamation announced an increase in Central Valley Project 2023 water supply allocations. After below average precipitation in February, Reclamation announced a conservative initial water supply allocation for the CVP on Feb. 22. Additional atmospheric river systems have since boosted hydrological conditions and storage volumes, allowing for a more robust water supply allocation.  Since making initial allocations last month, Shasta Reservoir, the cornerstone of the Central Valley Project, has increased from 59% to 81%, and San Luis Reservoir, the largest reservoir south-of-Delta, from 64% to 97%. Record-breaking snowpack conditions currently exist in the Southern Sierra coupled with significant snowpack in the Central Sierra and Northern Sierra/Trinity.  Based on current hydrology and forecasting, Reclamation is announcing the following increases to CVP water supply allocations: 

North-of-Delta Contractors

  • Irrigation water service and repayment contractors north-of-Delta are increased to 80% from 35% of their contract total.
  • Municipal and industrial water service and repayment contractors north-of-Delta are increased to 100% from 75% of their historic use.  

South-of-Delta Contractors

  • Irrigation water service and repayment contractors south-of-Delta are increased to 80% from 35% of their contract total.
  • M&I water service and repayment contractors south-of-Delta are increased to 100% from 75% of their historical use.  

Friant Division Contractors

  • Friant Division contractors’ water supply is delivered from Millerton Reservoir on the upper San Joaquin River and categorized by Class 1 and Class 2. The first 800,000 acre-feet of available water supply is considered Class 1; Class 2 is considered the next amount of available water supply up to 1.4 million acre-feet. Class 1 remains at 100% and Class 2 was previously increased from 20% to 70% on March 7.  

State Increases Water Allocation For State Water Project

The Department of Water Resources (DWR) today announced a significant boost in the forecasted State Water Project (SWP) deliveries this year due to continued winter storms in March and a massive Sierra snowpack.  DWR now expects to deliver 75 percent of requested water supplies, up from 35 percent announced in February.  The increase translates to an additional 1.7 million acre-feet of water for the 29 public water agencies that serve 27 million Californians.  Consistent storms in late February and March have built up the Sierra snowpack to more than double the amount that California typically sees this time of year. Rainfall has also allowed for robust flows through the system, providing adequate water supply for the environment and endangered fish species while allowing the SWP to pump the maximum amount of water allowed under state and federal permits into reservoir storage south of the Sacramento-San Joaquin Delta.  Further adjustments to the forecasted allocation are likely following the milestone April snow survey measurements.  April 1 is traditionally when California’s snowpack peaks and starts to melt.  DWR is planning to host its April snow survey on Monday, April 3, at Phillips Station, weather conditions permitting.

Association Seeks Tractor Replacement Funding But Budget Looms Large

Association President/CEO Roger Isom spent part of this past week at the State Capitol meeting legislators in an all-out effort to reinstate FARMER funding into the state budget.  The Funding Agricultural Replacement Measures for Emission Reductions (FARMER) is an incentive program designed to help farmers achieve voluntary emission reductions by helping pay for new lean burning tractors and harvesters while having the farmers destroy the older higher emitting equipment.  As of last year, more than 4,200 tractors and harvesters had been replaced as well as 277 ag trucks and 66 ag pump engines with the lowest emission equipment available.  In addition, more than 2,600 fuel burning ATVs had been replaced with fully electric UTVs.  In total, this has generated more than 20,000 tons of NOx reductions, 1,200 tons of PM reductions, and more than 185,000 metric tons of CO2 equivalents.  The hugely successful program has been a win-win for everyone especially air quality in the San Joaquin Valley.  The program is also part of an important State Implementation Plan (SIP) that promotes the use of the incentives as meeting as part of an effort to achieve 11 tons per day of NOx emissions by the end of 2023.  Should the goal not be achieved, it will force the California Air Resources Board (CARB) to develop and implement a mandatory tractor replacement rule that will require the replacement of every Tier 0, 1 and 2 tractor and harvester by 2030!  This would be devastating to farmers throughout the valley that are already battling high energy, labor, fuel and other input costs while dealing with the implementation of the Sustainable Groundwater Management Act (SGMA).  Unfortunately, the growing statewide budget deficit is weighing heavy on legislators as they fight to keep funding in existing programs.  “Every office we visited understood the importance of the FARMER program, but many indicated this is a very tough year from a fiscal perspective”, stated Isom.  “Nonetheless, many indicated their support of the FARMER program, and we remain hopeful some amount of funding will be reinstated.”  The Association is part of a large coalition seeking $160 million in FARMER funding for FY 2023. 

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Governor Signs Ag Overtime Bill

Ignoring the pleas of real farmworkers and the agricultural industry, Governor Edmund G. Brown Jr. today signed AB 1066, the ag overtime legislation. This means that California will have the most stringent trigger of any state in the country for overtime for farmworkers, with 45 states having no overtime protection at all. The Governor signed this bill, supposedly to bring “equality to all workers”, yet taxi cab drivers, commercial fishermen, car salesmen, student nurses, computer programmers, and carnival workers all work without any overtime provisions whatsoever. The Governor signed this ag overtime bill in the same year that minimum wage legislation was also passed that will take California to the highest minimum wage as well as legislation forcing California to adopt additional greenhouse gas regulations for businesses in California. California is the only state in the country subject to such regulations. Today’s signing occurred despite numerous requests by the agricultural industry to meet with the Governor to discuss our concerns. The message is clear. California simply doesn’t care. These provisions will be phased in over the next few years ending with the overtime provisions to be triggered at 8 hours per day and 40 hours per week.

In the Beginning As folks transitioned out of cotton and into tree nuts, the industry recognized the need to have active and effective representation at the local, state and national levels. Having enjoyed such effective representation over the years from the California Cotton Ginners and Growers Associations, these folks yearned for the same representation in the tree nut processing industry. Issues such as air quality, food safety, labor, taxes, employee safety, and environmental concerns are at the forefront, and there is a significant need for an aggressive and dynamic Association to lead the industry into the next decade and beyond. In recognition of this, the Western Agricultural Processors Association was created in 2009. The Western Agricultural Processors Association (WAPA) shares staff and office space with the California Cotton Ginners and Growers Associations taking advantage of a unique and opportunistic situation. WAPA is a voluntary dues organization with four shared staff and one dedicated staff person. Regulatory, legislative and legal issues fall under the purview of this new organization for the tree nut processing industry, which includes almonds, pecans, pistachios and walnuts. From air quality permits to conditional use permits, from regulatory hearings on greenhouse gases to federal legislation on food safety, and from OSHA violations to assisting members on hazardous materials business plans, no issue is too small or too large for WAPA. WAPA has assembled one of the best and most capable staffs in the industry, and the results are already starting to show Membership The Western Agricultural Processors Association represents facilities involved in the processing of almonds, pecans, pistachios and walnuts.Membership in the Association is classified as Regular memberships are limited to almond hullers or processors, pecan and pistachio processors, and walnut dehydrators and processors. Associate memberships are limited to any individual or business entity which is not engaged in agricultural processing, but which provides products or services directly related to the agricultural processing industry. WAPA Associate members include, but are not limited to, commodity brokers, accounting firms, and insurance brokers. Organization The Western Agricultural Processors Association is governed by a Board of Directors, elected by its membership.The Board consists of up to 15 members from throughout the state, and throughout the industry.The Board meets on a quarterly basis and conducts an Annual Meeting in the spring of each year.WAPA, in conjunction with the California Cotton Ginners and Growers Associations, conducts a special training school for its members focused on safety.In combination with the school, the Association holds a Labor Management Seminar for all of the managers. Consulting Services In researching and considering the concept of forming a new organization, the Boards of Directors for the California Cotton Ginners and Growers Associations instructed staff to perform some of the work on a consulting basis first. The point was to determine the workload from consulting and to determine if there was sufficient interest. In November of 2007, the Association began conducting services under consulting contracts for such services as air quality permits and safety plans.The effort has been so successful that demand has progressed outside the tree nut industry into other agricultural processing facilities, including vegetable dehydration facilities, tomato processing facilities, and wheat mills, as well as cotton gins in Arizona.It was determined by the new Board of Directors of WAPA, that WAPA would maintain the consulting services to provide offsetting income to help with the expenses of getting the new organization up and running.Today, WAPA provides for a long list of satisfied clients in the agricultural processing industry, by providing critical services such as air quality, safety, food safety, and environmental issues (Hazardous Materials Business Plan, Spill Prevention Control and Countermeasure Plans, etc.).