1. (a) A producer seeking an exemption pursuant to paragraph (5) of subdivision (a) of section 42060 of the Public Resources Code shall, if not already registered with the Department pursuant to subdivision (a) of section 18980.5, register with the Department pursuant to subdivision (a) of section 18980.10 and submit an application to the Department electronically via email. If the Department has given notice via its website that an online portal is available for application submittal, the application shall instead be submitted electronically via that portal. The application shall include the following:

   1. (1) Records showing the producer's gross sales in the state in the most recent calendar year were less than one million dollars ($1,000,000).
   2. (2) The nature of business, including: what business activities it conducts, such as retail or wholesale activity; whether it conducts business online, at physical locations, or both; the nature of the products it sells, offers for sale, or distributes, including the degree to which it acquires the products from out-of-state suppliers and the degree to which it owns the brands or trademarks associated with the products.
2. (b) The Department shall approve an application if the application meets the requirements of this section, unless the Department determines that the exemption would hinder a type of covered material or covered material category from satisfying the requirements of section 42050 of the Public Resources Code. If the Department lacks sufficient information and evidence to assess whether such a determination is justified, the producer shall supplement the application with information and evidence requested by the Department as the Department deems necessary to further assess the potential effect of granting the exemption. If the application is approved, the exemption shall become effective on the date the application is approved and is valid for two years.
3. (c) To renew an exemption, the small producer shall, between 120 days and 90 days before the expiration date, provide updated information satisfying the requirements of subdivision (a). The Department shall evaluate the application in the same manner as it reviews initial applications under this section. If approved, the exemption shall be renewed for two additional years from the original expiration date.
4. (d) A producer no longer exempt pursuant to this section shall be subject to the requirements of the Act pursuant to section 18980.5.
5. (e) Any producer who is exempt pursuant to this section shall maintain their registration pursuant to subdivision (a) of section 18980.10.

Note: Authority cited: Sections 40401, 40502 and 42060, Public Resources Code. Reference: Sections 42050, 42052 and 42060, Public Resources Code.

History

1. New section filed 5-1-2026; operative 5-1-2026 pursuant to Government Code section 11343.4(b)(3) (Register 2026, No. 19).