CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
594AVAILABILITY OF PROPOSED  
CONFLICT–OF–INTEREST CODES
Copies of the proposed conflict–of–interest codes 
may be obtained from the Commission offices or 
the respective agency. Requests for copies from 
the Commission should be made to Daniel Vo, Fair 
Political Practices Commission, 1102 Q Street, Suite 
3000, Sacramento, California 95811, telephone (916) 
322–5660.
TITLE 3.  DEPARTMENT OF FOOD 
AND AGRICULTURE
ANIMAL CONFINEMENT
NOTICE IS HEREBY GIVEN  t h at t he D e pa r t me nt 
of Food and Agriculture (Department) is proposing to 
take the action described in the Informative Digest. 
A public hearing is not scheduled for this proposal. A 
public hearing will be held if any interested person, 
or his or her duly authorized representative, submits a 
written request for a public hearing to the Department 
no later than 15 days prior to the close of the written 
comment period. Any person interested may present 
statements or arguments in writing relevant to the 
action proposed to the person designated in this 
Notice as the contact person beginning May 28, 2021 
and ending on July 12, 2021 . Following the public 
hearing, if one is requested, or following the written 
comment period if no public hearing is requested, the 
Department, upon its own motion or at the instance of 
any interested party, may thereafter adopt the proposals 
substantially as described below or may modify such 
proposals if such modifications are sufficiently related 
to the original text. With the exception of technical 
or grammatical changes, the full text of any modified 
proposal will be available for 15 days prior to its 
adoption from the person designated in this Notice 
as contact person and will be mailed to those persons 
who submit written or oral testimony related to this 
proposal or who have requested notification of any 
changes to the proposal.
Authority and Reference : Pursuant to the authority 
vested by section 25993 of the Health and Safety Code 
(HSC), the Department is proposing to implement, 
interpret, or make specific the requirements relating 
to the confinement of egg–laying hens, veal calves, 
and breeding pigs, and/or selling specified whole veal 
meat, whole pork meat, shell eggs, and liquid eggs in 
California in accordance with sections 25990, 25991, 
25992, 25993.1, and 25994 of the HSC, as described in 
the Informative Digest.INFORMATIVE DIGEST/POLICY 
STATEMENT OVERVIEW
In 2018, California voters passed Proposition 12, 
Farm Animal Confinement Initiative, self–titled as 
the Prevention of Cruelty to Farm Animals Act, and 
as defined in the proposed regulatory text, the Farm 
Animal Cruelty statute (Act), which amended the 
requirements of HSC sections 25990 through 25993 
and added section 25993.1; section 25994 remained 
unchanged. The purpose of the Act is to prevent 
animal cruelty by phasing out certain methods of 
farm animal confinement for covered animals raised 
in the State and the products harvested from those 
animals, or immediate offspring of those animals in 
the case of breeding pigs, if sold within the State for 
human consumption. The Act mandates farm animal 
confinement standards and compliance timeframes, 
establishes definitions affecting the production and sale 
of shell eggs, liquid eggs, whole veal meat, and whole 
pork meat in the State, and directs the Department 
and the Department of Public Health (DPH) to jointly 
promulgate regulations to implement the provisions of 
the HSC relating to the confinement of specified farm 
animals and the sale of specified products derived 
from them.
In this rulemaking, the Department proposes to 
adopt new Chapter 10 (commencing with section 
1320) of Division 2 of Title 3 of the California Code of 
Regulations (CCR) to implement, interpret, and make 
specific the laws established by the Act. Specifically, 
this proposal would establish a program of registration, 
certification, conveyance inspection, and labeling and 
marking requirements for the sale of shell eggs, liquid 
eggs, whole veal meat, and whole pork meat in the 
State which is necessary to fully effectuate the intent 
of the Act.
Existing law, section 25990(a) of the HSC specifies 
that a farm owner or operator within the State of 
California shall not knowingly cause any covered 
animal to be confined in a cruel manner.
Existing law, section 25990(b) of the HSC 
specifies that a business owner or operator shall not 
knowingly engage in the sale within the State of any 
of the following: (1) Whole veal meat that the business 
owner or operator knows or should know is the meat 
of a covered animal who was confined in a cruel 
manner; (2) Whole pork meat that the business owner 
or operator knows or should know is the meat of a 
covered animal who was confined in a cruel manner, 
or is the meat of immediate offspring of a covered 
animal who was confined in a cruel manner; (3) Shell 
eggs that the business owner or operator knows or 
should know is the product of a covered animal who 
was confined in a cruel manner; (4) Liquid eggs that 
the business owner or operator knows or should know CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
595
are the product of a covered animal who was confined 
in a cruel manner.
Existing law, section 25991(a) of the HSC defines 
“breeding pig” as meaning any female pig of the 
porcine species kept for the purpose of commercial 
breeding who is six (6) months or older or pregnant.
Existing law, section 25991(b) of the HSC defines a 
“business owner or operator” to mean any person who 
owns or controls the operations of a business.
Existing law, section 25991(c) of the HSC defines 
a “cage–free housing system” for egg–laying hens 
including types of qualifying platforms and flooring 
systems and describes different acceptable hen housing 
systems that must include the minimum requirements 
for enrichments such as scratch areas, perches, nest 
boxes, and dust bathing areas as well as the ability 
of an employee to fully stand and provide care while 
working in the hens’ usable floorspace.
Existing law, section 25991(d) of the HSC defines a 
“calf raised for veal” to mean any calf of the bovine 
species kept for the purpose of producing the food 
product described as veal.
Existing law, section 25991(e) of the HSC defines 
acts that mean an animal was “confined in a cruel 
manner” including, but not limited to, confining a calf 
raised for veal with less than 43 square feet of usable 
floorspace per calf after December 31, 2019; confining 
a breeding pig with less than 24 square feet of usable 
floorspace per pig after December 31, 2021; confining 
an egg–laying hen with less than 144 square inches 
of usable floorspace per hen after December 31, 2019; 
and confining an egg–laying hen with less than the 
amount of usable floorspace per hen required by the 
2017 edition of the United Egg Producers’ Animal 
Husbandry Guidelines for U.S. Egg–Laying Flocks: 
Guidelines for Cage–Free Housing or in an enclosure 
other than a cage–free system after December 31, 
2021.
Existing law, section 25991(f) of the HSC defines a 
“covered animal” as meaning any calf raised for veal, 
breeding pig, or egg–laying hen who is kept on a farm.
Existing law, section 25991(g) of the HSC defines an 
“egg–laying hen” as meaning any female domesticated 
chicken, turkey, duck, goose, or guineafowl kept for 
the purpose of egg production.
Existing law, section 25991(h) of the HSC defines 
“enclosure” as meaning a structure used to confine a 
covered animal or animals.
Existing law, section 25991(i) of the HSC defines 
“farm” as meaning the land, building, support 
facilities, and other equipment that are wholly or 
partially used for the commercial production of 
animals or animal products used for food or fiber; and 
does not include live animal markets, establishments 
at which mandatory inspection is provided under the 
Federal Meat Inspection Act (21 U.S.C. Sec. 601 et seq.), or official plants at which mandatory inspection is 
maintained under the federal Egg Products Inspection 
Act (21 U.S.C. Sec. 1031 et seq.).
Existing law, section 25991(j) of the HSC defines 
“farm owner or operator” as meaning any person who 
owns or controls the operations of a farm.
Existing law, section 25991(k) of the HSC defines 
“fully extending the animal’s limbs” as meaning fully 
extending all limbs without touching the side of an 
enclosure, or another animal.
Existing law, section 25991(l) of the HSC defines 
“liquid eggs” as meaning eggs of an egg–laying hen 
broken from the shells, intended for human food, with 
the yolks and whites in their natural proportions, or 
with the yolks and whites separated, mixed, or mixed 
and strained. Liquid eggs do not include combination 
food products, including pancake mixes, cake 
mixes, cookies, pizzas, cookie dough, ice cream, or 
similar processed or prepared food products, that 
are comprised of more than liquid eggs, sugar, salt, 
water, seasoning, coloring, flavoring, preservatives, 
stabilizers, and similar food additives.
Existing law, section 25991(m) of the HSC defines a 
“person” as meaning any individual, firm, partnership, 
joint venture, association, limited liability company, 
corporation, estate, trust, receiver, or syndicate.
Existing law, section 25991(n) of the HSC defines 
“pork meat” as meaning meat, as defined in 3 CCR 
900 as of August 2017, of a pig of the porcine species, 
intended for use as human food.
Existing law, section 25991(o) of the HSC defines 
“sale” as meaning a commercial sale by a business 
that sells any item covered by this chapter, but does 
not include any sale undertaken at an establishment 
at which mandatory inspection is provided under 
the Federal Meat Inspection Act (21 U.S.C. Sec. 601 
et seq.), or any sale undertaken at an official plant at 
which mandatory inspection is maintained under the 
federal Egg Products Inspection Act (21 U.S.C. Sec. 
1031 et seq.). For purposes of this section, a sale shall 
be deemed to occur at the location where the buyer 
takes physical possession of an item covered by HSC 
section 25990.
Existing law, section 25991(p) of the HSC defines 
“shell egg” as meaning a whole egg of an egg–laying 
hen in its shell form, intended for use as human food.
Existing law, section 25991(q) of the HSC defines 
“turning around freely” as meaning turning in a 
complete circle without any impediment, including a 
tether, and without touching the side of an enclosure 
or another animal.
Existing law, section 25991(r) of the HSC defines 
“uncooked” as meaning requiring cooking prior to 
human consumption.
Existing law, section 25991(s) of the HSC defines 
“usable floorspace” as meaning the total square CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
596footage of floorspace provided to each covered animal, 
as calculated by dividing the total square footage of 
floorspace provided to the animals in an enclosure by 
the number of animals in that enclosure. In the case of 
egg–laying hens, usable floorspace shall include both 
ground space and elevated level flat platforms upon 
which hens can roost but shall not include perches or 
ramps.
Existing law, section 25991(t) of the HSC defines 
“veal meat” as meaning meat, as defined in 3 CCR 900 
as of August 2017, of a calf raised for veal intended for 
use as human food.
Existing law, section 25991(u) of the HSC defines 
“whole pork meat” as meaning any uncooked cut of 
pork, including bacon, ham, chop, ribs, riblet, loin, 
shank, leg, roast, brisket, steak, sirloin, or cutlet, that is 
comprised entirely of pork meat, except for seasoning, 
curing agents, coloring, flavoring, preservatives, and 
similar meat additives. Whole pork meat does not 
include combination food products, including soups, 
sandwiches, pizzas, hotdogs, or similar processed or 
prepared food products, that are comprised of more 
than pork meat, seasoning, curing agents, coloring, 
flavoring, preservatives, and similar meat additives.
Existing law, section 25991(v) of the HSC defines 
“whole veal meat” as meaning any uncooked cut 
of veal, including chop, ribs, riblet, loin, shank, 
leg, roast, brisket, steak, sirloin, or cutlet, that is 
comprised entirely of veal meat, except for seasoning, 
curing agents, coloring, flavoring, preservatives, and 
similar meat additives. Whole veal meat does not 
include combination food products, including soups, 
sandwiches, pizzas, hotdogs, or similar processed or 
prepared food products, that are comprised of more 
than veal meat, seasoning, curing agents, coloring, 
flavoring, preservatives, and similar meat additives.
Existing law, section 25992 of the HSC specifies 
the exceptions to the provisions of Chapter 13.8 of 
Division 20 of the HSC, including during medical 
research; during examination, testing, individual 
treatment, or operation for veterinary purposes; 
during transportation; during rodeo exhibitions, state 
or county fair exhibitions, 4–H programs, and similar 
exhibitions; during slaughter; for a breeding pig during 
the five (5) day period prior to her farrowing date and 
while she is nursing piglets; and during temporary 
periods of no more than six (6) hours in an 24–hour 
period and no more than 24 hours total in any 30–day 
period.
Existing law, section 25993(a) of the HSC specifies 
that the Department and DPH shall jointly promulgate 
rules and regulations for the implementation of these 
provisions by September 1, 2019.
Existing law, sections 25993(b) and (c) specify that 
a violation of any of the provisions of Chapter 13.8 of 
Division 20 of the HSC is a misdemeanor and punishable by a fine not to exceed $1,000 or by imprisonment in 
the county jail for a period not to exceed 180 days or 
by both, and that provisions of the chapter supersede 
any conflicting regulations, including those in Chapter 
6 (commencing with section 40601) of Subdivision 6 
of Division 2 of Title 22 of the CCR.
Existing law, section 25993.1 of the HSC specifies 
that it shall be a defense to any action to enforce 
section 25990(b) that a business owner or operator 
relied in good faith upon a written certification by a 
supplier that the whole veal meat, whole pork meat, 
shell eggs, or liquid eggs at issue was not derived from 
a covered animal confined in a cruel manner, or from 
the immediate offspring of a breeding pig who was 
confined in a cruel manner.
Existing law, section 25994 of the HSC specifies 
that the provisions of the chapter are in addition to, 
and not in lieu of, any other laws protecting animal 
welfare, including the California Penal Code, and shall 
not be construed to limit any state law or regulations 
protecting the welfare of animals, nor prevent a local 
governing body from adopting and enforcing its own 
animal welfare laws and regulations.
Existing regulations in 3 CCR section 1350 (Shell 
Egg Food Safety) specify the minimum cage size 
requirements for egg producers and egg handlers, as 
defined by Food and Agricultural Code (FAC) section 
27510, for marketing unpasteurized shell eggs in 
California. The Egg Safety and Quality Management 
(ESQM) program ensures eggs have been properly 
handled, labeled, transported, and refrigerated by 
inspecting eggs at production, packing, distribution, 
and retail facilities; and are wholesome and safe to eat. 
However, ESQM program regulations do not exist to 
implement the scope of animal confinement provisions 
mandated by the Act for egg–laying hens. The intent 
of the ESQM program’s section 1350 regulations 
is to prevent the occurrence of Salmonella enterica 
serotype Enteritidis (SE) contamination of shell eggs 
at production and to prevent SE contaminated shell 
eggs from being marketed to California consumers.
Regulations do not exist for the confinement of veal 
calves and breeding pigs, or the covered products of 
whole veal meat and whole pork meat as mandated by 
the Act.
Therefore, the Department is proposing to adopt 
new Chapter 10 (commencing with section 1320), 
of Division 2, of Title 3 of the CCR to specify the 
requirements for persons housing egg–laying hens, 
veal calves, and breeding pigs, and/or selling specified 
whole veal meat, whole pork meat, shell eggs, and 
liquid eggs in the State in accordance with sections 
25990, 25991, and 25993 of the HSC.
Anticipated Benefits of the Proposal : This proposal 
would establish a regulatory framework for purposes 
of implementation of the provisions of the Act as CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
597
mandated by section 25993 of the HSC. Effective 
implementation of the provisions specified in HSC 
sections 25990 through 25994 by adopting these 
regulations would benefit the objectives of the citizens 
of California that voted to approve the Proposition 12 
initiative and the standards for animal confinement 
and prohibition of animal cruelty that it described. 
Egg, pork, and veal producers and distributors would 
benefit from this proposal because the Department 
is establishing compliance requirements for 
producing and selling covered products in the State 
in accordance with current law as specified in HSC 
sections 25990 through 25994 to ensure the orderly 
sale of covered products from covered animals not 
confined in a cruel manner regardless of their state 
or country of origin within California. This proposal 
does not directly impact human health and welfare 
of California residents, worker safety, or the State’s 
environment, however the Department can infer that 
benefits accrue to Californians knowing that breeding 
pigs, veal calves, and egg–laying hens are raised with 
a minimum space requirement, which may be more 
space than covered animals previously were allotted. 
There are no quantitative studies that document or 
measure the effect of confinement covered animals 
according the standards outlined in the Act for people 
in California. The proposed regulations are necessary 
to implement animal confinement requirements and 
sale of the covered products pursuant to HSC sections 
25990, 25991 and 25993.
Comparable Federal Regulations/Mandated by 
Federal Law or Regulations:  This proposal is not 
mandated by federal law or regulations and does 
not duplicate or conflict with any federal regulations 
because there are no federal regulations governing 
farm animal confinement requirements if the products 
from specified animals are marketed to California 
consumers.
Consistency and Compatibility with Existing State 
Regulations:  The Department has evaluated this 
proposal and believes that it is not inconsistent or 
incompatible with existing State regulations. The 
intent is to conform the Department’s regulations 
relating to marketing shell eggs, liquid eggs, whole 
veal meat, and whole pork meat in California to 
HSC sections 25990 and 25991. Existing regulations 
in 3 CCR section 1350 (Shell Egg Food Safety) 
specify the minimum cage size requirements for egg 
producers and egg handlers, as defined as defined 
by FAC section 27510, for marketing unpasteurized 
shell eggs in California. The Egg Safety and Quality 
Management (ESQM) program ensures shell eggs 
have been properly handled, labeled, transported, 
and refrigerated by inspecting eggs at production, 
packing, distribution, and retail facilities; and are 
wholesome and safe to eat. The intent of the ESQM program’s section 1350 regulations is based on food 
safety to prevent the occurrence of Salmonella enterica 
serotype Enteritidis (SE) contamination of shell eggs 
at production and to prevent SE contaminated shell 
eggs from being marketed to California consumers. 
Regulations do not exist for the confinement of veal 
calves and breeding pigs, or the covered products of 
whole veal meat and whole pork meat as mandated by 
the Act.
Forms Incorporated by Reference:  None.
Technical, Theoretical, and Empirical Study, Report, 
or Similar Documents (Materials Relied Upon):
● California Proposition 12, Farm Animal 
Confinement Initiative (2018)
● United Egg Producers, Animal Husbandry 
Guidelines for U.S. Egg–Laying Flocks, 
Guideline for Cage–Free Housing, 2017 Edition
● Federal Meat Inspection Act (21 U.S.C. 601 et 
seq.)
● Egg Products Inspection Act (21 U.S.C. 1031 et 
seq.)
● California Code of Regulations, Title 3 section 
900
● California Code of Regulations, Title 3 section 
1350
● Food and Agricultural Code section 27510
● CDFA Workshop to Discuss CA Proposition 
12: Farm Animal Confinement Initiative (2018), 
February 22, 2019, Sacramento, CA
● Sumner, D.A., Goldstein, R., Hart, J.D., Lee, H., 
Matthews, W.A., & Medellin–Asuara, J. (2020). 
Standardized regulatory impact assessment of 
proposed regulations to implement proposition 
12. University of California, Davis, UC 
Agricultural Issues, and California Department 
of Food and Agriculture
● California Department of Public Health, Food 
and Drug Branch, Memo dated November 13, 
2020
● CDFA State Organic Program (FAC sections 
46000–46029 and 3 CCR sections 1391–1391.7)
● USDA, Agricultural Marketing Service, National 
Organic Program (7 CFR Part 205)
● Internal Revenue Code (26 U.S.C. 501(c)(3))
● Health and Safety Code section 113758
● USDA, Food Safety Inspection Service, Meat, 
Poultry and Egg Product Inspection Directory, 
Legend for Establishment Numbers
● Code of Federal Regulations, Title 21, Part 172 
sections 172.510 and 172.515(b), Part 182 sections 
182.10, 182.20, 182.40, and 182.50, and Part 184
● Health and Safety Code section 113789
● Health and Safety Code section 109947CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
598● Code of Federal Regulations, Title 21, Part 160
● Code of Federal Regulations, Title 21, Part 101 
section 101.3
● United States Constitution, Title 21, Part 343 
section 403, Code of Federal Regulations, Title 
9 section 590.5, Health and Safety Code section 
109992, and Food and Agricultural Code section 
27519.6
● Health and Safety Code section 110460
● Code of Federal Regulations, Title 9, Part 424 
section 424.21(c)
● USDA, Institutional Meat Purchase Specifications: 
Fresh Veal Series 300 (November 2014)
● 2014 Uniform Retail Meat Industry Standards
● Code of Federal Regulations Title 9, Part 317 
section 317.2(1) and Part 381 section 381.125(b)
● USDA, Institutional Meat Purchase Specifications: 
Fresh Pork Series 400 (November 2014)
● Code of Federal Regulations, Title 21, Part 530 
section 530.3(i)
● Code of Federal Regulations, Title 3, Part 2 
section 2.31
● Economic and Fiscal Impact Statement STD 399 
with Attachment
LOCAL MANDATE
There will be no local mandate.
COST OR SAVINGS TO STATE AGENCIES 
(FISCAL IMPACTS)
The Act mandates farm animal confinement 
standards and compliance timeframes, establishes 
definitions affecting the production and sale of shell 
eggs, liquid eggs, whole veal meat, and whole pork 
meat in the State, and directs the Department and the 
DPH to jointly promulgate regulations to implement 
the provisions of the HSC relating to the confinement 
of specified farm animals and the sale of specified 
products derived from them. Details of the estimated 
fiscal impacts discussed below can be found in the 
Department’s Standardized Regulatory Impact 
Assessment (SRIA) and appendix.
Department.  The total annual agency budget for 
Fiscal Year (2020–21) equals approximately $3.53 
million. The Department estimates the total annual 
fiscal costs for Fiscal Years (2021–22) and (2022–23) 
to each equal approximately $4.94 million.
Pursuant to the Act, the Department’s proposed 
regulations describe a program to implement 
prohibitions on the sale of shell eggs, liquid eggs, 
whole veal meat, and whole pork meat derived 
from cruelly confined animals so Californians can have confidence that the products they purchase 
come only from sources that meet specified animal 
housing standards, as described. Specifically, this 
proposal would establish a program of registration, 
certification, conveyance inspection, and labeling and 
marking requirements for the sale of shell eggs, liquid 
eggs, whole veal meat, and whole pork meat in the 
State which is necessary to fully effectuate the intent 
of the Act.
Schools.  Schools in California serve free or 
reduced–price meals to needy children with funding 
from the State Meal Program that includes state and 
federal dollars. In the 2018–2019 school year a total 
of 288 million breakfasts and 536 million lunches 
were provided to school children. Eggs and pork are 
components in these meals and the costs of these 
covered products will increase after January 1, 2022 
when the full standards go into effect. In total, it is 
expected State costs for school meals to increase by 
$1.84 million in the first full school year after egg–
laying hen and breeding pig confinement standards 
move to cage–free and twenty–four square feet, 
respectively.
Colleges and universities.  The economic impact 
on the operating costs of California state colleges 
and universities is accounted for in meal plan fees to 
participating students living on campus. The costs 
to the State of California from the increase in meal 
plan fees is the State expenditure to fund meal plans 
for students on state–subsidized scholarships which 
include coverage of room and board fees. The State 
costs for student meal plan subsidy is $1.32 million for 
the first full academic year after January 1, 2022 when 
animal confinement minimum standards go into full 
effect due to an increase in food costs.
State prisons.  California’s state prison population 
is projected to remain at about 117 thousand people 
for the next several years when animal confinement 
minimum standards go into full effect after January 
1, 2022. (California Department of Corrections and 
Rehabilitation 2020). An increase in the price of shell 
eggs, liquid eggs, and whole pork meat would increase 
the total costs of meals for the state prisons by about 
$4.68 million per year.
COST TO ANY LOCAL AGENCY OR SCHOOL 
DISTRICT WHICH MUST BE REIMBURSED 
IN ACCORDANCE WITH GOVERNMENT 
CODE SECTIONS 17500 THROUGH 17630
Cost to local governments will not be reimbursed 
by the State.CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
599
OTHER NON–DISCRETIONARY COST OR 
SAVINGS IMPOSED ON LOCAL AGENCIES
The Department’s regulations do not require 
additional expenditures by local governments; 
however, local agencies may incur costs. Fiscal impact 
on local governments will begin when the second 
deadline of animal confinement minimum standards 
go into effect January 1, 2022 for whole pork meat, 
shell eggs, and liquid eggs due to the increase in the 
cost of these foods sold in California. Whole veal meat 
is not included in this impact to local agencies because 
it is not purchased by the impacted local governments. 
This cost to local governments will not be reimbursed 
by the State.
County jails.  California county jail population 
totaled around 73,000 inmates in 2018 and 2019. 
(California Board of State and Community Corrections 
August 25, 2020 report). Beginning in 2022, an annual 
total cost for county jails of about $2.92 million due 
to increase in costs of shell egg, liquid egg, and whole 
pork meat due to full implementation of animal 
confinement standards as outlined in statutes.
COST OR SAVINGS IN  
FEDERAL FUNDING TO STATE
None.
DETERMINATION OF ANTICIPATED 
BUSINESS IMPACT
The Department has made an initial determination 
that this regulatory proposal will impact egg, veal, and 
pork producers; food processing facilities (referred to 
as “food manufacturing” in SRIA); distribution; food 
retailers (supermarkets/grocery/convenience stores); 
and restaurants (and drinking establishments) that 
purchase or sell shell eggs, liquid eggs, whole veal 
meat, or whole pork meat in California, as specified. 
Details of the estimated business impacts as discussed 
below can be found in the Department’s SRIA and 
appendix.
Businesses (and individuals) affected by this proposal:
California egg producers: approximately 6,546 
farms
California veal producers: approximately 0 farms
California pork producers: approximately 1,236 
farms
California restaurant/drinking establishments: ap -
proximately 76,200
California supermarkets/grocery/convenience 
stores: approximately 20,000
California food processing facilities: approximately 
450Total number of businesses affected: approximately 
104,432
Compete with businesses in other states.  In–state 
farms will find it more costly to compete with farms 
outside of the State when selling shell eggs, liquid 
eggs, whole veal meat, and whole pork meat to an out–
of–state buyer compared to farms located in states that 
do not have the same animal confinement standards 
as described in the Act. Food processing facilities 
based in the State will have to use more expensive 
ingredients, shell eggs, liquid eggs, whole veal meat, 
and whole pork meat, that are compliant with the Act 
compared to food processing facilities located outside 
the State.
Creation/elimination of existing businesses/
expansion of businesses : The proposed regulations 
will impact whole veal meat, whole pork meat, shell 
eggs, and liquid eggs produced and marketed in 
California. The current businesses from farm to end–
user will be affected. Some farms may choose to exit 
during implementation rather than make the necessary 
adjustments, others may find the implementation of 
the regulations attractive for entry into the market. 
Private third–party certifying businesses providing 
certification services to farms and “handlers” according 
the NOP standards within the State will be able to 
expand services to additional farms and distributors 
for compliance with the Act and this proposal. This 
flux is expected to be small relative to the numbers 
already in the production, distribution, processing, 
and retailing businesses. It is expected entries and 
exits in the range of less than 100 businesses.
Creation/elimination of jobs:  Impacts on jobs in 
California is minimal compared to the impact on 
consumer expenditures for the covered food items. 
Overall, there is a projected a loss of 31 jobs statewide 
in the calendar year 2022, when final deadlines for the 
Act go into effect, and then a loss of 332 jobs in 2023, 
after adjustments for the a reduction in cage–free shell 
egg production are fully incorporated. A large portion 
of the jobs effect from the proposed regulations are 
in California’s shell egg production and associated 
industries due to requirement to a cage–free production 
system.
Anticipated compliance requirements as a result of 
this proposal:  Producers and distributors who sell their 
shell eggs, liquid eggs, whole pork meat, and whole 
veal meat in California would need to comply with the 
certification, registration, and labeling requirements as 
proposed. Private third–party certifiers would need to 
be accredited by the Department to certify operations 
in as compliance with the Act and these regulations.
 Certification.  The proposed regulations require 
producers and distributors to be certified as 
compliant with the Act. This may be done by 
a private third–party that is accredited by the CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
600Department, a government entity outside of the 
State, or directly by the Department. Certification 
compliance consists of credible regulatory 
documentation (audit trail) of a production or 
distribution operation’s good standing with 
certification requirements in these regulations 
and conformance with the specific minimum 
confinement standards in accordance with HSC 
section 25991.
 Registration.  The proposed regulations require 
annual distributor registration application and 
renewal used by the Department to identify and 
ensure compliance of businesses selling shell 
eggs, liquid eggs, whole pork meat, and whole 
veal meat within or into California.
 Labeling.  The proposed regulations require 
product container labeling for shell egg cartons, 
which is already a requirement under the 
Department’s ESQM program (3 CCR section 
1354), although this proposal would require some 
modifications to the existing required labeling 
on printed cartons. Consumer facing packaging 
labeling of other products such as liquid eggs, 
whole pork meat, and whole veal meat is not a 
requirement of the proposed regulations, however, 
could be implemented voluntarily by associated 
industries. Required labeling of shipping 
manifests and bills of lading is proposed for all 
covered product sales transactions within or into 
the State, however these types of documents are 
easily generated and modified.
Paperwork/Reporting:  There are new paperwork 
and reporting requirements under this proposal. The 
requirements include annual distributor registration 
application and renewal forms, certifying agent 
accreditation application and renewal (every five 
years) forms that may be retained and otherwise 
required by statute or regulation, and submitted to the 
Department as part of routine business transactions in 
order for the sale of covered products in California. 
Accredited third–party certifying agents are also 
required to submit an annual report to the Department 
of the operations that have been granted, renewed, or 
denied certification. Each producer and distributor 
operation must be certified as compliant to raise 
covered animals producing covered products sold in 
California, and/or businesses selling covered products 
within and into the State. This certification requires 
necessary records to be maintained for review or audit 
by a certifying agent or the Department, as specified.
Recordkeeping:  There are new recordkeeping 
requirements under this proposal that may impact 
egg, pork, and veal distributors and producers. The 
proposed regulations require that records must be 
sufficient for an audit trail and documented in a traceable manner that covered product originated from 
certified compliant operations with the Act and these 
regulations. For example, records of their business 
operations, such as, production and shipment records, 
invoices, receipts, and related paperwork. The records 
are not required to be sent to the Department, however 
certified producers and certified distributors must 
keep the records on–site or available electronically 
for two years. Accredited third–party certifiers are to 
submit annual reports to the Department as a part of 
their recordkeeping requirements as specified in this 
proposal. The Department conducts routine and risk–
based audits and inspections of farms, distributors, 
end–users, and certifying agents to ensure compliance 
with statutes and regulations.
Benefits to human health, worker safety, or the State’s 
environment.  This proposal does not directly impact 
human health and welfare of California residents, 
worker safety, or the State’s environment, however 
the Department can infer that benefits accrue to 
Californians knowing that breeding pigs, veal calves, 
and egg–laying hens are raised with a minimum space 
requirement, which may be more space than covered 
animals previously were allotted. This proposal is 
needed to implement the Proposition 12 initiative 
which was passed by California voters in 2018. A 
benefit is for proper and orderly implementation of a 
law directly decided by voters for them to purchase 
with confidence covered products from covered 
animals not raised in a cruel manner. There are no 
quantitative studies that document or measure the 
effect of purchasing shell eggs, liquid eggs, whole veal 
meat, and whole pork meat from farms animals not 
confined in a cruel manner for people in California.
The Department has made an initial determination 
that the proposed regulatory action will have 
significant, statewide adverse economic impact 
directly affecting California businesses including 
the ability of California businesses to compete with 
businesses in other states. The Department has 
considered proposed alternatives that would lessen 
any adverse economic impacts on business and invites 
you to submit proposals. Submissions may include the 
following considerations:
● The establishment of differing compliance or 
reporting requirements or timetables that take 
into account the resources available to businesses.
● Consolidation or simplification of compliance 
and reporting requirements for businesses.
● The use of performance standards rather than 
prescriptive standards.
● Exemption or partial exemption from the 
regulatory requirements for businesses.CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
601
COST IMPACTS ON REPRESENTATIVE 
PRIVATE PERSONS OR BUSINESSES
The Department is aware of cost impacts that a 
representative private person or businesses would 
necessarily incur in reasonable compliance with 
the proposed action. This determination is based on 
the SRIA included in this filing. The impacts are as 
a result of the implementation of existing law, HSC 
sections 25990 and 25991.
Private persons:  There are no initial costs for an 
individual and ongoing costs for an individual are 
estimated at $50 per year for increase in food costs 
after January 1, 2022. California per individual annual 
covered egg consumption (including in processed 
products made in California) is a little over 20 dozen. 
Per dozen cost increase about $2 per dozen, increasing 
ongoing costs to $40 per individual and it is estimated 
that increase in whole pork meat and whole veal meat 
prices will increase food costs $10 per individual 
giving a total of $50 per year individual ongoing costs.
Businesses:  Producers and distributors selling shell 
eggs, liquid eggs, whole pork meat, and whole veal 
meat would need to comply with the provisions for 
animal confinement or ensure covered product sold in 
the State originate from animals that comply with the 
provisions for animal confinement as specified in HSC 
section 25990 and 25991.
 Whole pork meat.  A typical breeding pig farm 
has about 1,000 breeding pigs and produces 
20,000 hogs per year. Estimated initial cost for 
a typical breeding pig operation is $66,000 per 
farm to convert barns and pens into housing 
compliant with minimum standards outlined in 
the Act. Estimated ongoing cost is greater than 
the initial cost of conversion at $100,000 per year 
for a typical breeding pig farm due to smaller 
inventory of breeding pigs, lower piglet output 
per animal and increased breeding pig mortality.
 Shell eggs and liquid eggs.  A typical egg farm is 
one million egg–laying hens producing a total of 
25 million dozen eggs per year. Estimated initial 
cost is $68 million per typical egg farm to convert 
to cage–free requirements outlined in the Act. 
Estimated annual ongoing cost is $6.8 million per 
typical egg farm.
 Whole veal meat.  There is no veal produced in 
California.
Paperwork/Reporting and Recordkeeping:  The 
recordkeeping/reporting requirement for a typical 
California business is estimated at $5,000/year and a 
conservative estimate of 7,900 businesses will need 
to comply with proposed recording requirements 
for a total of $39.5 million/year. The possible 7,900 
businesses include egg producers, pork producers, and distributors of covered egg, pork, and veal products. 
Each of these operations must be certified as compliant 
to raise covered animals in California and/or sell 
covered products in California. This certification 
requires necessary records to be maintained for 
review or audit by an accredited third–party certifier 
or the Department. This number of California 
businesses, 7,900, is potentially an overestimate based 
on the current number of commercial egg and pork 
producers in California being much smaller than the 
United States Department of Agriculture (USDA) 
2017 Agricultural census reference of 6,500 covered 
farming operations in the State. The Act does not 
have a minimum herd or flock size requirement for 
compliance (ESQM program), or a minimum number 
of dollars sold to register (State Organic Program), so 
any farm raising egg–laying hens or breeding pigs will 
need to comply with recordkeeping requirements. In 
addition, California distributors are responsible for 
documenting traceability of selling shell eggs, liquid 
eggs, whole veal meat, and whole pork meat sourced 
from certified farms, which may originate at locations 
outside of the State or country.
HOUSING COSTS
None.
SMALL BUSINESS IMPACT
The Department’s proposal may affect small 
California businesses, as defined in Government 
Code section 11342.610, such as small retail food 
establishments (supermarkets, grocery stores, 
convenience stores, restaurants, and other food 
retailers) that have veal on their menus due to the 
increase in veal wholesale prices, however, as a whole, 
costs are negligible because total sales change little. 
For small California pork and egg producers, they 
face initial and annual compliance costs that are less 
than a typical operation because they are likely to have 
space that is compliant or almost compliant. There 
are about 210 small pork farms selling more than 25 
hogs annually and 823 small egg farms may need to 
make investments for animal confinement compliance 
in California. Estimated initial costs is $5,000 and 
ongoing annual cost $500 for small pork and egg 
producers.
BUSINESS REPORTING REQUIREMENT
It is necessary for the health, safety, or welfare of 
the people of the State that the regulation apply to 
businesses. There are new paperwork and reporting 
requirements under this proposal. The requirements 
include annual distributor registration application 
and renewal forms, certifying agent accreditation CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
602application and renewal (every five years) forms that 
may be retained and otherwise required by statute or 
regulation, and submitted to the Department as part 
of routine business transactions in order for the sale 
of covered products in California. Accredited third–
party certifying agents are also required to submit an 
annual report to the Department of the operations that 
have been granted, renewed, or denied certification.
RESULTS OF STANDARDIZED 
REGULATORY IMPACT ASSESSMENT
The Department completed a SRIA, which is 
included in this filing. A summary of the results of the 
assessment is as follows:
a. The creation or elimination of jobs within the 
State.
Impacts on jobs in California is minimal compared 
to the impact on consumer expenditures for the 
covered food items. Overall, the Department projects 
a loss of 31 jobs statewide in the calendar year 2022, 
when final deadlines for the Act go into effect and 
proposed regulations are fully implemented, and then 
a loss of 332 jobs in 2023, after adjustments for the 
reduction in cage–free shell egg production are fully 
incorporated. A large portion of the jobs lost are in the 
shell egg production and associated industries because 
the mandates of the Act require these industries to 
move into a cage–free production system.
b. The creation of new businesses or the elimination 
of existing businesses within the State.
Creation and elimination of businesses is natural 
given any significant change to the business conditions. 
The regulations considered here will change the 
nature of veal, pork, and eggs produced and marketed 
in California. The current businesses from farm 
through end–user will be affected. Some farms may 
choose to exit during implementation rather than 
make adjustments others may find the implementation 
of the regulations attractive for entry. The Department 
expects this flux to be small relative to the numbers 
already in the production, distribution, and retailing 
businesses. The Department expects entries and exits 
in the range of less than 100 businesses.
California has a large shell egg industry. Egg 
producers in California face higher costs by $72 
million, and egg output will decline by 51 million 
dozen relative to the baseline in 2022. Shell egg farm 
revenue rises by $7 million in 2022.
c. The competitive advantages or disadvantages for 
businesses currently doing business within the 
State.
The cage–free mandate for egg–laying hens and 24–
square–foot mandate for breeding pigs (the portion of 
the proposed regulations that goes into effect starting January 1, 2022) may cause some egg and pork 
producers to exit because they find it uneconomical to 
adapt their facilities to comply with the new mandates 
required by the Act. The Department expects that 
some preexisting producers whose facilities already 
meet the Act’s standards will enjoy corresponding 
competitive advantages. Preexisting cage–free egg 
producers, whose potential market grows when 
statutes take effect, will have an advantage over those 
who have not engaged in cage–free production in 
that they will not face costs of converting facilities. 
Similar competitive farm issues apply to breeding pig 
operations, but there are very few such businesses in 
California.
d. The increase or decrease of investment in the 
State.
As discussed in Section 6.2 and 6.3 of the SRIA, some 
new businesses and investment may enter the market 
as a result of the proposed regulations, the overall 
effect of the regulations (as summarized in Section 
1.4, reported in Section 4, and detailed in Appendices 
1–4 of the SRIA) is to decrease the total amount of 
shell eggs, liquid eggs, whole pork meat, and whole 
veal meat consumed in California. Although some 
one–time investments in construction, machinery, 
and labor will be made by businesses as they adapt 
their facilities, in the long run the Department expects 
that the regulations promulgated to implement the Act 
will decrease average annual investment in California 
egg and pork producers and distributors, relative to the 
Baseline. Although investment in other businesses in 
California may correspondingly decrease as investors 
move resources elsewhere, the Department expects 
the net effect to be a modest decrease in overall 
investment in the State.
California consumers will be affected by higher food 
prices and respond with lower quantity consumed. In 
the 2022 calendar year, when the Act’s standards go 
into full effect, proposed regulations will increase 
consumer expenditures in California of $1,195 million. 
The largest impacts are on consumers of shell eggs 
and whole pork meat due to increased cost of these 
covered products at wholesale and retail.
e. The incentives for innovation in products, 
materials, or process.
Farms may have some incentives to innovate 
in their business processes as they adapt their 
facilities to be compliant with the Act’s confinement 
standards. However, businesses involved in the design 
and manufacturing of products and materials for 
adaptation, such as animal cages, are not typically 
located in California.
f. The benefits of the regulations, including, but 
not limited to, benefits to the health, safety, and 
welfare of California residents, worker safety, CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
603
and the State’s environment and quality of life, 
among any other benefits identified by the agency.
The SRIA did not quantify any benefits directly 
impacting human health and welfare of California 
residents, worker safety, or the State’s environment. 
Other economic studies have shown that some 
government regulations of meat and egg production 
and processing increase consumer willingness to pay 
more in food markets. About 20% of California’s shell 
egg consumption prior to 2022 already met California 
cage–free egg standards. This means cage–free shell 
egg consumers were already willing to pay more than 
twice as much, on average, for cage–free shell eggs 
than for conventional shell eggs. Other consumers 
who are not willing to pay double for cage–free eggs 
may be willing to pay a smaller increased amount for 
cage–free shell eggs. Both of these types of consumers 
would therefore receive some corresponding benefits 
(even if they are hard–to–quantify benefits such as 
moral satisfaction, peace of mind, social approval, etc.) 
from knowing all eggs raised and sold in California 
are cage–free after January 1, 2022. In addition, non–
consumers of the covered products may benefit from 
assurance that shell eggs, liquid eggs, whole veal 
meat, and whole pork meat sold in California meet the 
specified housing standards even if they do not plan 
to consume these foods. The Department notes that 
a large majority of voters in 2018 approved, 63%, the 
Proposition 12 initiative to eliminate egg–laying hens, 
veal calves, and breeding pigs from being cruelly 
confined in the State or if products from those animals 
are sold in the State.
Animal confinement space allowances prescribed 
in the Act (cage–free for egg–laying hens, 43 square 
feet for veal calves and 24 square feet for breeding 
pigs) are not based in specific peer–reviewed 
published scientific literature or accepted as standards 
within the scientific community to reduce human 
food–borne illness, promote worker safety, the 
environment, or other human or safety concerns. 
Health and Safety Code confinement standards are 
described as a minimum standard for space allowance 
to prevent cruel confinement of covered animals and 
the law was not primarily written with the concern 
or benefit of human food–borne illness, worker 
safety, environment, etc. The standard of cage–free 
in HSC references the United Egg Producers 2017 
guidelines and is the cage–free standard set by the 
egg industry to provide uniform guidance of cage–
free egg operations. Minimum space requirements 
for veal calves and breeding pigs outlined in HSC 
are not drawn from specific industry standards or 
published scientific research prescribing 43 square 
feet for veal calves and 24 square feet for breeding 
pigs. The Department has no regulatory discretion 
over the Act’s animal confinement mandates, so any such effects would stem not from the way regulations 
were written or implemented, but from the mandates 
directly imposed by the Act.
SUMMARY OF DEPARTMENT OF  
FINANCE COMMENTS AND  
DEPARTMENT’S RESPONSE
The Department of Finance (Finance) provided 
comments to the Department’s SRIA. A summary 
of the five comment categories and the Department’s 
responses are below. Reference citations noted in the 
below responses can be found in the Department’s 
SRIA.
Finance comment #1:  The SRIA must estimate the 
costs to producers to comply with the new housing, 
certification, labeling, and reporting requirements 
and for individuals to maintain their consumption or 
to substitute. Furthermore, disparate impacts must be 
discussed. For instance, some small farmers might not 
be able to switch to cage–free eggs right away and 
might reduce or stop production altogether. Larger 
farms, who typically can adapt more quickly, will 
increase their market share to compensate for lower 
production from smaller farms.
a. Cost to producers for certification, labeling, and 
reporting requirements
Certification costs.  Proposed regulations require 
farms to be certified as compliant with the Act. This 
may be done by a private third–party that is accredited 
by the Department or directly by the Department. 
Producers would incur costs for certification services 
from accredited third–party certifiers by payment of 
fees charged by these private entities. For existing 
private businesses that conduct certification services 
similar to those proposed in these regulations (e.g., 
American Certified Humane, Certified Humane, 
Validus, Global Humane Animal Partnership, etc.), 
the fee structures are most commonly based on a 
sliding scale depending on the size of the production 
operation. Small producers may pay $100–$200 per 
year for certification while large producers may pay 
$2,000–4,000 each year for certification (subsection 
b. below for more information on smaller– and larger–
sized operations). If a production operation is already 
inspected by a third–party company for welfare 
standards who is accredited by the Department, then 
the producer may not have to incur additional costs 
for certification. For example, American Certified 
Humane, Certified Humane, and Global Animal 
Partnership all have standards that meet the minimum 
confinement requirements for egg–laying hens. Similar 
costs might be expected for producers receiving 
certification services directly from the Department, 
depending upon the extent of public funds available to 
support this activity.CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
604Labeling costs . Product container labeling is only 
required for shell egg cartons under this proposal. 
Currently, all cartons of unpasteurized eggs still in 
the shell that are sold in California have required 
labeling of “CA SEFS COMPLIANT” as part of the 
Department’s Shell Egg Food Safety program. The 
addition of “CA CAGE FREE” labeling as part of the 
proposed regulations starting in July of 2022 is not 
expected to result in significant additional costs to shell 
egg producers that already must print cartons with 
California specific statements. Additionally, the use of 
“Cage Free” statements on cartons to identify this type 
of production system for consumers purchasing eggs is 
already common in the marketplace, and the proposed 
addition of “CA” to existing statements to designate 
conformance with the Act and this proposal’s specific 
standards is not expected to be a significant added 
cost.
Labeling of other covered products (e.g., liquid eggs, 
whole pork meat, and whole veal meat) on consumer 
facing packaging is not a requirement of the proposed 
regulations, but could be done voluntarily by the 
industry at the discretion of the producer, packer, or 
co–packer to communicate compliance with the Act 
and these regulations for marketing purposes.
Proper labeling of shipping manifests and bills of 
lading is required by the proposed regulations and 
again is estimated to be a nominal cost to the producer 
or distributor because these types of documents are 
already being generated and printed for covered 
products distributed and sold in California. For 
example, beginning in January of 2022 shipments of 
whole pork meat under this proposal will need to have 
“CA 24+” printed on the shipping documents and be 
available for review during the certification process, 
upon entry at a California Border Protection Station, 
or during an inspection or investigation.
Reporting costs . The additional cost of reporting 
requirements as outlined in the proposed regulations is 
estimated to be $5,000 annually for a typical California 
business (producer, distributor or accredited third–
party certifier). This record keeping cost will vary 
depending on the extent of time required to maintain 
documents required to demonstrate compliance 
and traceability with the Act and these regulations. 
Additionally, annual reporting to the Department 
is required of accredited third–party certifiers and 
annual renewal distributor registration under this 
proposal will contribute to overall recordkeeping 
costs for a typical California business.
b. Consideration of disparate impacts
California Veal Operations: small and large farm 
potential differential impacts . There is no data to 
indicate that there are veal producers in California. 
Therefore, there are no differential impacts across veal 
producers.California Pork Operations: small and large farm 
potential differential impacts.  According to the 2017 
United States (US) Census of Agriculture, there were 
1,389 swine farms that had a total of 96,456 hogs and 
pigs in California. The census data does not distinguish 
between breeding pig, weaned pig, finishing, or fully 
integrated operations. Of the total swine operations in 
California, 1,236 of the farms sold hogs and pigs at a 
total of 207,768 animals in 2017. Most of the farms that 
sold hogs and pigs (USDA reported term for number 
of head slaughtered), 1,009 farms, sold fewer than 25 
hogs and pigs each annually. To qualify as a “farm” 
operation under the USDA definition, the business 
only needs to have products that might have sold for 
more than $1,000 in a year. Of these 1,009 very small 
operations, a total of 5,950 animals were sold, giving 
an average of about 6 hogs and pigs from each farm. 
A breeding pig will produce about 25 piglets per year, 
therefore few of these small operations would have 
any breeding pigs that would be affected by the Act’s 
confinement square footage minimums. There were 
six farms in 2017 that sold more than 5,000 hogs and 
pigs each for a total of 161,409 animals, giving an 
average of about 26,900 hogs and pigs sold by each of 
these larger swine operations.
Of the six large farms that sold more than 5,000 
pigs each, three were farrow–to–finish, meaning they 
housed breeding sows and would need to comply with 
minimum confinement standards requirements in 
2022. Calculations assume that these farms sold about 
25,000 hogs and pigs each, that would imply about 
1,000 breeding pigs at each of these three larger swine 
farms. Nationwide, breeding pigs represent about 4% 
of hogs and pig inventory, which of the 96,456 hogs 
and pigs in California indicates there are less than 
4,000 breeding pigs in California. According to the 
2017 Agricultural Census, the total inventory of hogs 
and pigs in the United States (US) was 72 million 
animals. Since breeding pigs represent 4% of the total 
hog and pig population, California has about 0.133% 
of the national breeding pig herd.
California pork producers produce specialty pork, 
such as organic, pasture–raised, and show animals 
for 4–H and FFA projects. Farrowing operations with 
a small number of breeding pigs will likely find it 
easier to meet California–specific housing regulations 
than would commercialsized operations. Generally, 
very small livestock farms have higher measured, 
imputed, or implied accounting costs per animal sold, 
but continue to operate the farm because either their 
actual individual costs are lower than those imputed 
or implied in the studies or for non–pecuniary reasons 
(Whitt, McDonald and Todd).
The economic impact of proposed regulations on 
swine producers in California is likely concentrated 
on the larger operations that are more likely to have CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
605
already made the capital investment in housing that 
based on pens and square footage allowance from 
traditional commercial breeding pig operations. Very 
small pork producers are more likely to already be 
compliant with confinement standards outlined in 
the Act or would have nominal cost adjustments to 
become compliant.
Data and economic analysis indicate no significant 
change in the size distribution of pork producers in 
California from the proposed regulations.
California Egg Operations: small and large farm 
potential differential impacts . Three data sources 
provide useful information on the distribution of 
egg farms in the US; WattAgNet, USDA, and the 
Department. WattAgNet publishes information on 
the largest table egg farms in the US. and the top two 
egg farms are located outside of California and each 
have about 45 million and 26.6 million egg–laying 
hens. According to WattAgNet the top 20 egg farms 
in the US represent 254.6 million egg–laying hens or 
77% of the egg–laying hens producing eggs for shell 
and liquid egg purposes. The first California farm on 
the top 20 list is number 19 with 5 million egg–laying 
hens. Other relatively large egg farms in California 
have egg production operations with millions of egg–
laying hens.
The 2017 USDA Census of Agriculture reports that 
about 94% of the egg–laying hens in California are 
on farms with more than 100,000 hens. This census 
data provides a breakdown of many different sized 
operations ranging from an average of 15 egg–laying 
hens per farm to almost 500,000 egg–laying hens per 
farm. Again, to qualify as a “farm” operation under 
the USDA definition, the operation only needs to have 
products that might have sold for more than $1,000 
in a year. According to the 2017 UDSA Census data 
there are a total of 6,546 egg–laying farms, with a 
total of 14,194,957 egg–laying hens, giving an average 
of 2,168 egg–laying hens per farm. The category of 
farm with the smallest number of egg–laying hens is 
less than 50 hens and the 2017 USDA Census reported 
5,717 of these small farms in California with an 
average of 15 hens per farm. The largest category of 
farms are operations with greater than 100,000 egg–
laying hens and there are 28 farms that fall into that 
category housing a total of 13,344,294 hens with an 
average of 476,562 hens per farm.
The Department reported in 2019, based on its 
inspections of farms selling shell eggs in California, 
there were 728 farms with less than 3,000 egg–laying 
hens each. The total egg–laying hens on these small 
farms was 172,574 animals for an average of 237 hens 
per small egg–laying operation. The Department 
reported that in 2019 there were 95 farms with more 
than 3,000 hens each in the State. These large farms had about 15.35 million hens total for an average of 
about 161,600 hens per operation.
This data indicates that most egg–laying hens raised 
in California are housed on relatively large farms. In 
addition, there are many small boutique farms with 
only a few hens each. A typical hen will lay between 
20 and 25 dozen eggs per year. California compliant 
cage–free shell eggs will wholesale between $1.50 
and $5 per dozen, therefore a hen may produce a 
gross revenue of between $30 and $100 each year. A 
large farm with one million egg–laying hens, which 
would likely be at the low end of the wholesale price 
spectrum, would then have a gross revenue of $30 
million. Margins are very tight for large commercial 
egg farms with most costs devoted to recurring costs 
for labor, feed, and pullets.
At the other end of the size spectrum, a small 
farm with 300 egg–laying hens marketing organic 
or pasture–raised eggs may generate a gross farm 
revenue of about $30,000, and potential to increase 
their net income per hen if the small farm also had a 
distinct business structure to retail shell eggs directly 
to consumers like at a farmer’s market or egg delivery 
service.
Small egg farms are less likely to face the cage–
free facility investment cost because the hens are 
more likely to be already cage–free, free–range, or 
pasture based. Small egg operations are also less 
likely to produce eggs to be sold as liquid eggs or a 
similar processed egg product. Therefore, the average 
compliance cost to covert to California cage–free is 
expected to be progressively lower per hen for the 
smaller sized egg farms.
Data and economic analysis indicate no significant 
change in the size distribution of egg farms in 
California from the proposed regulations.
Finance comment #2:  Small businesses that rely 
on regulated products such as small restaurants, 
who tend to have a thin profit margin, might increase 
prices or close if cost increases cannot be absorbed.
a. Effects on restaurants that are small businesses
The National Restaurant Association estimates 
that there were about 76,200 eating and drinking 
establishments in California in 2018, with $97 
billion in retail sales, and employing 1.83 million 
food service workers. Of course, these statistics are 
pre–pandemic and the long–term effects of COVID 
on restaurant businesses in California is not known. 
The Small Business Association (SBA) has specific 
definitions to include these food services as a small 
business; full–service restaurants, mobile food 
services, “drinking places,” caterers, and Snack and 
Nonalcoholic Beverage Bars if they have less than 
$8 million in annual revenues. Limited–service 
restaurants are small businesses if they have less than 
$12 million in annual revenues. Cafeterias and buffets CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
606are small businesses if they have less than $30 million 
in annual revenues. And food service contractors are 
small businesses if they have less than $41.5 million in 
annual revenues. Under these definitions established 
by the SBA, most restaurants in California are 
considered small businesses.
By National Restaurant Association estimates, 
average annual revenues of an “eating and drinking 
establishment” in California in 2018 were $1.27 
million, less than one–sixth of the maximum revenue 
for an (SBA–defined) “small business.” A restaurant 
in California with average revenue for its industry 
is thus considered a small business as defined by the 
SBA. Thus, most impacts on restaurants identified in 
the SRIA are primarily impacts on small businesses.
Within the restaurant category, sit–down family 
restaurants or “fine dining” restaurants tend to be 
smaller businesses than fast–casual or fast–food 
restaurants. Veal is unusual among most restaurant 
categories in that it is primarily consumed at high–
end restaurants. Popular restaurant veal dishes include 
veal chop, veal parmigiana, and veal marsala and will 
cost more for restaurant patrons to enjoy after full 
implementation of the Act and proposed regulations 
because it is assumed the increase in veal meat 
wholesale prices will be passed along to the customer. 
Californians may not be willing to bear an increase 
in veal meal prices on the menu; alternatively, many 
restaurants may simply stop including veal on their 
menu or serve fewer portions of veal. Thus, the Act and 
this proposal will have a significant impact on those 
small businesses in California that have historically 
had veal dishes on their menus.
Restaurants or other food service places that 
purchase covered pork and egg products that are 
cage–free, crate–free, or otherwise already meet 
or almost meet the confinement standards in the 
Act would face lower costs of adjusting to the new 
standards. The impact for those restaurants serving 
pork is less severe because the price impact is small 
on menu prices, given the high share of whole pork 
meat in food service food prices. The other category 
of restaurants likely to be significantly affected are 
those with menu items that have significant covered 
egg product content. Certain large quick–serve chains, 
like McDonald’s, declared plans to shift to cage–free 
eggs independent of the Proposition 12 initiative, but 
few had completed that adjustment before the Act was 
passed into law. There is no data to indicate that their 
costs of shifting or maintaining confinement standards 
to meet the requirements outlined in the Act would 
be different per unit of sales than other independent 
food service places. There is no data to suggest that 
the Act’s standards have a particular impact by size of 
establishment.
b. Grocery stores and retail that are small businessesA substantial portion of grocery stores and 
convenience stores in California sell covered pork 
and egg products and are also classified as “small 
businesses” under the SBA definition.
IBISWorld (2019) reports that there are about 
8,000 supermarkets and grocery stores in California 
employing about 300,000 people. The California 
Grocers Association (2020) reports having about 
6,000 member–businesses. The National Association 
of Convenience Stores (2020) reports that there are 
about 12,000 convenience stores in California.
Meat markets, fish and seafood markets, fruit and 
vegetable markets, baked goods stores, confectionery 
and nut stores, and other specialty food stores are 
classified by the SBA as small businesses if they have 
less than $8 million in annual revenues. Convenience 
stores are small businesses if they have less than $32 
million in annual revenues. Supermarkets and other 
grocery stores are small businesses if they have 
less than $35 million in annual revenues. Thus, a 
substantial portion of grocery stores and convenience 
stores are small businesses, although large chains have 
a greater presence in the grocery and convenience 
store category than in the restaurant category.
Consumers shopping at small or large grocery stores, 
or convenience stores, are likely to respond to higher 
shell egg, liquid egg, whole veal meat, and whole pork 
meat prices by buying less of the covered pork, veal 
and egg products, and are also likely to substitute some 
or all of their covered product spending for spending 
on other food products, including non–covered pork 
such as ready–to–eat or ground pork products. The 
covered egg, veal and pork products represent a small 
share of total consumer food spending at grocery 
stores and even less at convenience stores. Therefore, 
no disproportionate impact of the Act’s standards on 
small grocery or other retail companies is expected.
Finance comment #3:  Effects on individual SNAP 
and food subsidy program benefits
a. SNAP: Low income Californians pay a higher 
share of their total income on food
Covered pork, and especially covered egg products 
will become more expensive to consumers starting 
in January 2022 because of the animal confinement 
standards mandated in statutes. Eggs are purchased 
by low–income consumers as a higher share of their 
food budgets compared to middle– and high–income 
consumers.
Many low–income consumers in California are 
enrolled in USDA food and nutrition service programs 
such as school meals, the Special Supplemental 
Nutrition Program for Women, Infants, and Children 
(WIC), and Supplemental Nutrition Assistance 
Program (SNAP), which in California is administered 
as the Cal Fresh program. These programs enroll 
millions of Californians, many of whom participate in CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
607
several programs. For example, there were almost 4 
million SNAP recipients (about 10% of the population 
in California in 2019). Supplemental Nutrition 
Assistance Program benefits averaged about $1,700 
annually per household member in 2019. However, not 
all low–income consumers are enrolled in programs 
and many face higher food costs with little assistance. 
It is not yet clear the extent, if any, to which federal 
program benefits will be adjusted to fully cover the 
added food costs of consumers beginning in 2022. For 
example, the typical consumer (across all ages and 
other characteristics) consumes about 21 dozen eggs 
and 40 pounds of pork meat annually, and estimated 
increase in food costs are approximately $2 per dozen 
shell eggs and $0.20 per pound of whole pork meat. 
This means covered egg and pork costs go up by $42 
and $8 per year respectively for a total of $50 per 
person per year starting in 2022. This increase in 
food costs does not include veal because it is assumed 
lower–income households are not purchasing veal. 
These calculations are based on economic results 
which repeatedly find that the quantity purchased by 
low–income households of broad food items like shell 
eggs or whole pork meat do not fall proportionately 
to when the price increase (demand is price inelastic). 
Meaning, when price rises, the expenditure on that item 
also rises. The increased cost of $50 per person will 
need to be included in federal benefits for California 
recipients otherwise their real food purchasing power 
will fall.
Therefore, the Act will disproportionately reduce 
food purchasing power of low–income consumers. 
However, since some of the food budget of low–
income consumers is covered by federal programs, 
they may not be differentially affected, as a group, 
relative to consumers with higher incomes that are 
not eligible for food assistance. Food consumers most 
affected will be those low–income consumers that are 
not enrolled in assistance programs.
Consumers least affected are those who already 
consume cage–free shell and liquid eggs and whole 
pork meat from hogs for whom the mother pig 
experienced additional space during gestation. These 
tend to be higher income consumers.
b. Other food subsidy benefit programs
In addition, as noted above, there are federal meal 
subsidy programs serving other populations such as 
daycare for younger children and eldercare facilities. 
A brief summary of the Federal Child and Adult Care 
Food Program is provided by the USDA Economic 
Research Service (USDA, ERS 2019). The program 
is designed to improve nutrition with meals and 
snacks for infants, children, and adults. Providers 
are reimbursed for meals and snacks. In 2018–19 
Federal reimbursement for the California program 
was $485 million and state reimbursement was about $2.1 million. Almost all the outlays were for childcare 
centers and in–home daycares. (CDE, 2020). In 
addition, the state cost of the Federal Child and Adult 
Care Food Program is $2.1 million. The best estimate 
of added cost of these programs is about 0.5% times 
$2.1 million, equaling an added cost due to the Act’s 
confinement standards of about $11,000 per year.
Finance comment #4:  Fiscal cost calculations 
must be disclosed and include all costs to state and 
local governments. Costs should be broken down by 
category including but not limited to certification, 
registration, enforcement, and other administrative 
costs.
The Department’s proposed program for 
implementation of Proposition 12 initiative is titled the 
Animal Care Program and total fiscal cost for 22/23 
fiscal year for this program is $4,936,485. This is the first 
full fiscal year after the Act’s timelines are all in effect 
for covered animals and costs have been broken down 
into administration, compliance audits, investigations, 
and registration/certification/accreditation. Within 
each of these categories the expenses are further 
divided into personal services and operating expenses 
and equipment. More specifically, total administration 
costs are $1,047,157 ($557,661 for personal services and 
$489,496 for operating expenses and equipment), total 
compliance audits costs are $3,024,377 ($1,858,393 
from personal services and $1,165,984 from operating 
expenses and equipment), total investigations costs 
are $456,058 ($349,186 from personal services and 
$106,872 from operating expenses and equipment), 
and total registration/certification/accreditation costs 
are $408,893 ($350,021 from personal services and 
$58,872 from operating expenses and equipment).
No fiscal costs to local governments.
Finance comment #5:  The SRIA must evaluate 
impacts on other government agencies that are 
consumers of the covered products, such as schools 
and prisons.
a. Fiscal impact on California schools
Schools in California served 288 million breakfasts 
and 536 million lunches in the 2018–2019 academic 
year. Of those meals, 233 million breakfasts and 
405 million lunches were served free of charge to 
needy children. The total funds expended for school 
meal programs were $2.27 billion with the State 
contributing $161 million or about 7% of this budget 
in 2018–2019. Of these state funds, $103 million were 
expended for lunches, and $58 million were expended 
for breakfast meals. In addition, summer meal 
programs in the 2018–2019 school year served 14.8 
million meals, including 3.2 million breakfast meals 
and 9.5 million lunch meals. Total funds expended for 
the summer meal programs were $46.1 million with 
State funds contributing $1.7 million or about 3.7% of 
the total budget. Of these state funds for the summer CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
608meal program, $1.2 million were expended for lunches 
and $495 thousand for breakfast meals (CDEa).
To estimate the increase in covered egg and pork costs 
beginning in 2022, the same average annual increase 
in food costs is used as in the SNAP explanation above 
of $50 per person or $50/ (3X365) = $0.0457 per meal 
increase in food costs. This estimate was then rounded 
down to $0.04 per meal because these meals are 
mostly lunch and breakfast, the average consumption 
of children from 6 to 18 is less than the average person, 
and schools have access to bulk buying and economies 
in covered egg and pork purchases. Applying this 
$0.04/meal to the free school–year meals of 638 
million meals gives an increased cost of about $25.5 
million. The California budget pays about 7% of the 
total or about $1.80 million ($25.5 million X 0.07). For 
summer meals the added total cost is $0.6 million, and 
the California cost is $0.042 million ($0.6 million X 
0.07). In total, California state government costs for 
these school meals are about $1.84 ($1.80 million plus 
$0.042 million) million in the 2022–23 school year.
Besides federal cash contribution to school meals 
programs USDA has provided direct food purchasing 
of egg products to some school districts at a discounted 
rate. Two frozen liquid egg products and an egg 
patty product have been available (USDA Foods) for 
schools to purchase. California egg producer housing 
standards have been distinct from those in the rest of 
the US for retail sales since 2015, but the California 
egg production is mainly for shell eggs which are 
not often used in school meal programs. Under the 
proposed regulations, liquid eggs and egg products 
included in the Egg Products Inspection Act are also 
included as covered product needing to come from 
cage–free hens and therefore California schools may 
not be able to purchase low–cost covered egg products 
from USDA Foods.
It is not known whether USDA will provide USDA 
egg products to California schools that meet California 
cage–free standards. If not provided, this source 
of benefit may be lost to school meal programs in 
California. If USDA is unwilling to use egg products 
that meet California standards this will reduce the 
benefit of school meal programs in California, unless 
menu planners avoid the use of covered egg products. 
Alternatively, USDA may use cage–free eggs to 
produce compliant USDA egg products for use in 
California schools.
b. Fiscal impact on California colleges and 
universities
The impact of the Act and this proposal on food 
costs for California state colleges and universities 
is small and accounted for in meal plan fees to 
students. The University of California system and 
the California State University system together enroll 
about 700 thousand undergraduates (The Regents of the University of California 2020, The California 
State University 2020, USDE/NCES 2020). About 
110 thousand UC and CSU students live on campus 
and most of those are enrolled in campus meal plans. 
The number of students living on campus is calculated 
using the average percentage of undergraduates living 
on campus for each UC and major CSU campus from 
Carnegie Dartlett (2020). On most campuses, basic 
meal plans are included in room and board fees and 
vary from about $100 to over $200 per week. Cost of 
meal plans for each campus was obtained from the 
corresponding campus website. On average, meal 
plans cost about $175 per student, per week, for an 
equivalent of three meals per day, seven days a week. 
A typical school year not including summer school 
consists of about 32 weeks. Using 32 weeks as the 
length of an average school year, the total cost of meals 
per student amounts to $5,600 per year. For the total 
student population living in campus housing on the 
UC and CSU campuses, student meal plans amount to 
$616 million per year ($5,600 X 110,000).
Estimates of increased covered egg and pork costs 
(veal is not served on college campuses) for meals 
served beginning in 2022 take into account the nine–
month academic year and a slight increase in total eggs 
consumed based on the demographic and ability to 
purchase in bulk. The total increase is $40 per person 
annually for purchasing covered eggs and pork. This 
total uses college student consumption of 23 dozen 
eggs per year (shell and liquid), but average 3/4 of the 
year (9 months) on the meal plan so egg cost increase is 
(0.75) X 46 = $34.50 due to the price of cage–free eggs 
and rounded up to $35 per year. Increase in costs due 
to increase in the price of whole pork meat is $5 ($8 
X 0.75=$6, rounded down to $5) because of slightly 
lower prices due to bulk purchases. The increase in 
food costs totals $40 per person or a total of $4.4 
million per year for students living on campus taking 
part in a meal program ($40 X 110,000). The cost to 
the State of California due to this increase in cost of 
covered eggs and pork depends on the expenditure 
to cover meal plans for students on state–subsidized 
scholarships that include coverage of room and board 
fees.
About 30% of California public college and 
university students receive financial benefits that will 
be affected by meal plan costs and 70% of added meal 
plan costs are paid by the students or their families. 
Therefore, the estimated cost of the Act and this 
proposal on State costs for meal plan student subsidy is 
about 30% times $4.4 million or $1.32 million during 
the first academic year after full implementation in 
2022 ($4.4 million X 0.30).
c. California and local jurisdictions operate prisons 
and jails that provide mealsCALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
609
California’s state prison population is projected 
to remain at about 117 thousand people for the next 
several years (California Department of Corrections 
and Rehabilitation 2020). About 117 thousand inmates 
is a five–year rolling average projection for 2021 and 
2022 based on prison population for 2015–2019. This 
gives a total of 42.7 million prison–days per year, or 
just over 128 million meals (assuming three meals per 
person per day).
California county jail population is totaled at about 
73 thousand in 2018 and 2019 (Board of State and 
Community Corrections Jail Profile Survey August 
25, 2020 report). Using the same calculation for county 
jail inmates as state inmates yields about 80 million 
meals served each year.
An increase in the price of covered eggs and pork 
as a result of the mandated statute and proposed 
regulations will increase the annual costs of meals per 
prisoner by about $40 per year starting in 2022, which 
is mostly the higher costs of cage–free shell eggs and 
liquid eggs, but with a small amount for cost of whole 
pork meat and no added cost for whole veal meat. This 
was calculated by estimating that the increase in meal 
costs provided to prisoners will be lower than for the 
average Californian by about 20%, so additional costs 
of covered eggs and pork would be $40 per year ($50 
X 0.8). At the current and projected incarceration 
population numbers, this would increase the total 
costs of meals for the state prisons by about $4.68 
million per year ($40 X 117,000). For county jails, this 
will be an added cost of about $2.92 million per year 
($40 X 73,000) for meals served to its 73,000 inmates.
CONSIDERATION OF ALTERNATIVES
The Department must determine that no reasonable 
alternative it considered or that has otherwise been 
identified and brought to its attention would be more 
effective in carrying out the purpose for which the 
action is proposed, would be as effective and less 
burdensome to affected private persons than the 
proposed action, or would be more cost–effective 
to affected private persons and equally effective in 
implementing the statutory policy or other provision 
of law.
Any interested person may present statements or 
arguments orally or in writing relevant to the above 
determinations at the hearing (if a hearing is requested) 
or during the written public comment period.
The two alternatives considered do not vary the 
basic requirements of the Act itself, for example, 
the alternatives did not consider whether eggs must 
be cage–free, or by when. The two alternatives 
considered the economic impacts of the Department’s 
discretionary choices, namely through definitions 
and procedures, used to implement the Act. The two alternative regulations considered and ultimately 
rejected include (1) lower–cost regulations and (2) 
higher–cost regulations:
Alternative 1:  Under the lower–cost alternative, 
annual farm cost and consumer expenditure increases 
by $982 million; = $19.5 billion in present value at a 
5% discount rate.
The lower–cost regulations apply a narrower 
interpretation of which food products are covered and 
which businesses are subject to annual registration and 
certification requirements. Intent of the Act is not fully 
applied across sales of covered products and therefore 
California residents would not be able to confidently 
purchase and consume covered products knowing they 
were sourced from covered animals raised according 
to the confinement standards of the Act, regardless of 
origin of product. The lower–cost alternative would 
be confusing for the California consumer because 
there would be a mix of compliant and non–compliant 
covered product for sale in California. The lower–cost 
regulations are defined in detail in SRIA 4.2.1, however 
some key variations in the lower–cost regulations, 
versus the proposed regulations, are as follows:
● “Shell eggs” include only raw or pasteurized eggs 
with the shell still intact, therefore, excluding all 
forms of hard–cooked eggs such as peeled, sliced, 
or chopped.
● “Liquid eggs” include only eggs broken from 
the shell with the yolks and whites in their 
natural proportions, or with the yolks and whites 
separated, mixed or mixed and strained as defined 
by the Code of Federal Regulations, therefore 
excluding other forms of liquid eggs such as 
frozen, dried, cooked, and prepared egg products 
(e.g. egg patties or egg “pucks” consisting of 
mostly eggs except for added seasoning and 
flavoring).
● The Act’s confinement requirements are limited 
to sales of shell eggs, liquid eggs, whole veal 
meat, or whole pork meat at the retail level to a 
consumer.
● Restaurants, prepared food vendors, and food 
processing facilities are not required to source 
shell eggs, liquid eggs, whole veal meat, or 
whole pork meat compliant with the Act for their 
business of further processing those ingredients.
The Department rejected this option because 
the narrow definitions of shell eggs and liquid eggs 
did not coincide with the intent of the Act that was 
overwhelmingly passed by voters to ensure eggs 
purchased and consumed by Californians were not 
from egg–laying hens confined in a cruel manner. 
Whether the shell egg consumed is purchased raw 
or hardboiled, peeled, and included in a snack pack, 
the Department determined that hardboiled eggs need CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
610from be from egg–laying hens confined according 
to the Act’s standards to meet the expectations of 
Californians. Californians that voted to ensure liquid 
eggs purchased in California were from egg–laying 
hens not confined in a cruel manner are most likely 
not aware of all food manufacturing processes or 
the extensive list of egg products defined in the Egg 
Products Inspection Act. Due to the versatile use 
of liquid eggs in food processing, and food service, 
the Department adopted the definitions of liquid egg 
to include all products in the federal Egg Products 
Inspection Act. The Department feels confident this 
was the expectation of voters when they voted for the 
Proposition 12 initiative in 2018. Whether the liquid 
eggs are frozen, dried, or cooked into a patty, if the 
covered egg product is sold in California, then it must 
have originated from egg–laying hens not confined in 
a cruel manner.
The Department also rejected this lower–cost 
alternative option because there would be a mix of 
compliant and noncompliant covered products sold in 
California and it would be difficult for the consumer to 
know if they were purchasing shell eggs, liquid eggs, 
whole veal meat, and whole pork meat from animals 
not confined in a cruel manner. Also, the lower–cost 
alternative would be more difficult to regulate because 
wholesale and retail costs of covered products coming 
from covered animals not confined in a cruel manner 
are significantly higher than the prices of covered 
products from animals housed in a cruel manner. With 
a narrower scope of products included in the lower–
cost alternative option and compliant and noncompliant 
covered products in the California marketplace, 
there would more opportunities for cheating, greater 
challenges for enforcement, and unfair cost burden 
put on California small businesses, mostly restaurants 
who purchase shell eggs, liquid eggs, whole veal meat, 
and whole pork meat from a retailer.
Alternative 2:  Under the higher–cost alternative, 
annual farm and consumer expenditure increases by 
$1.263 billion; = $25.26 billion in present value at a 
5% discount rate.
Higher–cost regulations impose more stringent 
restrictions on some covered products moving through 
California and expand the definition of covered 
products; they imply larger negative economic 
consequences, including reduced California port 
activity. Benefits may be larger under the higher–cost 
alternative if more covered animals are not raised in a 
cruel manner. The higher–cost regulations are defined 
in detail in SRIA section 4.2.2. Specifically, the 
higher–cost regulations include all the requirements of 
the proposed regulations plus the following additional 
requirements:
● Raw ground veal, raw ground pork, and their 
products (meaning foods composed of raw ground veal or pork plus seasonings, coloring, 
curing agents, etc.) are considered cuts of “whole 
veal meat” and cuts of “whole pork meat,” and 
thus subject to the Act’s requirements.
● The Act’s requirements apply to covered food 
products moving through California for sale and 
end–use in another state or country.
● Consumer–facing labeling is required for all 
covered products or prepared foods containing 
a covered product. Labels would allow the buyer 
to scan a QR code at retail or when consuming 
a prepared food made with covered product 
and see record of the Act’s animal confinement 
certification and traceability of product back to 
farm of origin.
The Department rejected this option because in 
the Act definitions of whole veal meat and whole 
pork meat exclude processed or prepared foods such 
as hot dogs. Raw ground and comminuted products 
made from veal or pork are specifically identified in 
these regulations as not needing to be included under 
the definitions of covered products. This decision 
was made based on informal feedback from pork 
stakeholders and due to the definitions in statute. 
Analysis for the SRIA include calculations with and 
without ground pork because there has been mixed 
informal feedback from stakeholders regarding the 
exclusion of ground and comminuted products.
The higher–cost alternative option to apply the 
Act’s confinement standards of covered products only 
moving through California and destined for export, 
use on cruise ships, or sale in other states was rejected 
because the Department did not think including these 
products under the Act’s animal confinement standards 
was the intention of the law. California has busy ports 
for export and import and if all shell eggs, liquid 
eggs, whole veal meat, and whole pork meat moving 
through these ports had to be compliant with the Act 
and these regulations, then import/export business in 
California would be devastated and moved to other 
states. The Department specifically excluded covered 
products moving through the State for a destination 
outside of the State or country in these regulations 
for stakeholders to understand the processes and 
expectations for these types of products.
The final suggestion in the higher–cost alternative 
option was rejected by the Department because the 
requirement for a consumer facing labeling with 
a unique QR code was determined to be overly 
burdensome for stakeholders including restaurants 
which are often independently owned and classified 
as small businesses. Instead of putting the burden of 
proof to defend and communicate that a food is or 
contains covered product from covered animals not 
confined in a cruel manner to the Department on these CALIFORNIA REGULATORY NOTICE REGISTER 2021, VOLUME NUMBER 22-Z
611
small businesses, the Department decided to move 
this compliance one level up in the supply chain to a 
distributor. In addition, many of the final consumer 
facing packaging of liquid eggs, whole veal meat, and 
whole pork meat are under inspection of USDA, FSIS 
and any labeling of those products would need to be 
approved by FSIS.
This proposal is necessary for compliance with 
section 25990, 25991, 25992, and 25993 of the HSC.
CONTACT PERSONS
Inquiries and any written comments concerning 
this proposal are to be addressed to the following:
Dr. Elizabeth Cox, Program Manager  
Department of Food and Agriculture  
Animal Care Program  
1220 N Street, Sacramento, CA 95814  
Telephone (916) 900–5000  
E–mail: animalcare@cdfa.ca.gov
The back–up contact person is as follows:
Thami Rodgers, Associate Analyst  
Department of Food and Agriculture  
Animal Care Program  
1220 N Street, Sacramento, CA 95814  
Telephone (916) 204–9688  
E–mail: thamarah.rodgers@cdfa.ca.gov
AVAILABILITY OF INITIAL STATEMENT OF 
REASONS AND INFORMATION, AND  
TEXT OF REGULATIONS
The Department has prepared and has available 
for public review an Initial Statement of Reasons for 
the proposed action, all the information upon which 
the proposal is based, and the express terms of the 
proposed regulations. A copy of the Initial Statement 
of Reasons and the proposed regulations in underline 
may be obtained upon request. The location of the 
information on which the proposal is based may also 
be obtained upon request. Requests should be directed 
to Dr. Elizabeth Cox at the mailing or email address 
specified above.
AVAILABILITY OF CHANGED OR  
MODIFIED TEXT
After considering all timely and relevant comments 
received, the Department may adopt the proposed 
regulations substantially as described in this notice. 
If the Department makes modifications which are 
sufficiently related to the originally proposed text, it 
will make the modified text (with the changes clearly 
indicated) available to the public for at least 15 days before the Department adopts the revised regulations. 
Any person interested may obtain a copy of any 
modified regulations prior to the date of adoption by 
contacting Dr. Elizabeth Cox at the mailing or email 
address specified above.
AVAILABILITY AND LOCATION OF THE 
FINAL STATEMENT OF REASONS
Upon its completion, copies of the Final Statement of 
Reasons may be obtained by contacting Dr. Elizabeth 
Cox at the mailing or email address specified above.
INTERNET ACCESS
The Department has posted the information 
regarding this proposed regulatory action on its 
Internet website http://www.cdfa.ca.gov/ahfss/
regulations.html .
TITLE 14.  BOARD OF FORESTRY AND 
FIRE PROTECTION
SOUTHERN SUBDISTRICT AND 
BROADCAST BURNING AMENDMENTS
NATURE OF PROCEEDING
Notice is hereby given that the California State Board 
of Forestry and Fire Protection (Board) is proposing to 
take the action described in the Informative Digest.
PUBLIC HEARING
The Board will hold a public hearing on July 14, 
2021, at its regularly scheduled meeting commencing 
at 9:00 a.m., via the virtual meeting platform of 
GoToWebinar. At the hearing, any person may present 
statements or arguments, orally or in writing, relevant 
to the proposed action. The Board requests, but does 
not require, that persons who make oral comments at 
the hearing also submit a written summary of their 
statements. Additionally, pursuant to Government 
Code (GOV) § 11125.1(b), writings that are public 
records pursuant to GOV § 11125.1(a) and that are 
distributed to members of the state body prior to 
or during a meeting, pertaining to any item to be 
considered during the meeting, shall be made available 
for public inspection at the meeting if prepared by the 
state body or a member of the state body, or after the 
meeting if prepared by some other person.
Attendees may participate via GoToWebinar online 
meeting platform or telephone conferencing. To 
participate via GoToWebinar online meeting platform 
please email PublicComments@bof.ca.gov  by 4:30