BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 707|
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                                 THIRD READING


          Bill No:  SB 707
          Author:   Cannella (R) and Wolk (D)
          Amended:  5/4/11
          Vote:     21

           
           SENATE AGRICULTURE COMMITTEE  :  7-0, 5/3/11
          AYES:  Cannella, Rubio, Berryhill, Evans, La Malfa, Vargas, 
            Wolk

           SENATE APPROPRIATIONS COMMITTEE  :  9-0, 5/16/11
          AYES:  Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley, 
            Price, Runner, Steinberg


           SUBJECT  :    Agricultural special assessments

           SOURCE  :     Author


           DIGEST  :    This bill includes olive trees in the existing 
          one percent gross sales fee assessment and extends the 
          membership of the Fruit Tree, Nut Tree and Grapevine 
          Improvement Advisory Board to representatives from the 
          olive industry.

           ANALYSIS  :    Existing law assesses a one percent fee 
          annually on gross sales of all deciduous pome and stone 
          fruit trees, nut trees, and grapevines, with certain 
          exceptions.  Existing law allows the Secretary of the 
          California Department of Food and Agriculture (CDFA) to 
          exempt certain species of pome and stone fruit trees, nut 
          trees, grapevines, or ornamental varieties, as specified, 
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          from the assessment.

          This bill includes olive trees within the plants subject to 
          the assessment and provides that ornamental varieties of 
          olive trees would be eligible for the exemption.  
          Additionally, this bill extends the membership of the Fruit 
          Tree, Nut Tree and Grapevine Improvement Advisory Board 
          (IAB) to representatives from the olive industry.

           Background  

          In 1988, the Legislature created the IAB with the primary 
          purpose of conducting research to further the interests of 
          the industry.  The IAB is funded by an industry assessment 
          of one percent of gross sales on all deciduous pome and 
          stone fruit trees, nut trees, and grapevines including 
          seeds, seedlings, rootstocks and topstock.  

          The CDFA Secretary, upon consultation with the industry, 
          appoints an IAB board to provide assistance concerning the 
          implementation of this program.  The board consists of 11 
          members serving two-year terms, with a maximum of three 
          consecutive terms. 

          The University of California, Davis is the home of the 
          Foundation Plant Services (FPS) program.  The FPS produces, 
          tests, maintains, and distributes to California nurseries 
          foundation-level plant materials that are disease-free, 
          virus-tested and certified as true-to-type.  CDFA 
          participates in the cooperative oversight of the FPS 
          program with the United States Department of Agriculture 
          and the industry.  Certain funds from the IAB are used in 
          support of the FPS program.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes   
          Local:  No

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)

             Major Provisions                2011-12     2012-13    
             2013-14               Fund  


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            Agricultural special          no new costs; estimated 
            revenue of          Special*
            assessment          ($20) annually

            * Department of Food and Agriculture Fund

          The one percent assessment on fruit and nut trees in 2009 
          was $663,040.  Preliminary information indicates there were 
          approximately 31,000 acres of olive trees in 2009, or 
          slightly less than three percent of the total acreage 
          dedicated to fruit and nut trees.

           SUPPORT  :   (Verified  5/17/11)

          California Olive Oil Council
          Duarte Nursery
          Santa Cruz Olive Tree Nursery
          Sunridge Nurseries
          The Burchell Nursery, Inc.
          Vintage Nurseries


           ARGUMENTS IN SUPPORT  :    Supporters of this bill state that 
          adding olives to the Foundation Plant Services program 
          provides California nurseries with plant materials that are 
          disease-free and certified as true-to-type.  Over the past 
          five years, olive oil plantings have grown toward the 
          largest in state history.  Further, the addition of olives 
          to the IAB allows the study of diseases such as 
          verticillium wilt, which has prevented olives from being 
          planted in large areas of the Central Valley.  The 
          inclusion of olive trees in the IAB will help ensure that 
          nurseries and olive farmers have certified disease-free 
          trees and that California will have a healthy olive 
          industry.


          MEL:mw  5/17/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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