BILL ANALYSIS Ó SB 707 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 707 (Cannella and Wolk) - As Amended: June 21, 2011 Policy Committee: AgricultureVote:9 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill adds olive trees to the existing annual assessment of one percent on gross sales on specified stock. In addition, this bill includes olive tree growers on the advisory board that advises the director of the California Department of Food and Agriculture on the assessment and the on-going research to improve the health of the trees. FISCAL EFFECT 1)The existing one percent assessment on fruit tree, nut trees, and grapevines in 2010 generated $1.2 million in funding for the Fruit Tree, Nut Tree and Grapevine Improvement Advisory Board (IAB). Olives are a modest but growing sector of California agriculture. In 2009 there were approximately 31,000 acres of olive trees, or slightly less than three percent of the total acreage dedicated to fruit and nut trees. Including olive trees in the assessment will likely generate an additional $20,000 in revenue for the program. 2)The fees paid for this program is deposited in the Department of Food and Agriculture Fund, a continuously appropriated fund. By increasing moneys in a continuously appropriated fund, this bill would make an appropriation. COMMENTS 1)Background and Purpose . Under current law an annual assessment of one percent of gross sales is applied to all deciduous pome SB 707 Page 2 and stone fruit trees, nut trees, and grapevines sold within the state, produced within the state, or shipped from the state. This assessment is used to fund research designed to reduce and eliminate diseases affecting the trees. This bill adds olive trees to the list of trees affected by the assessment. Supporters, such as the California Olive Council, note that adding olives to the 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 increased significantly. 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 that are true-to-type. Further, with the increasing number of varietal specific oils being produced and marketed, the true-to-type validation has an increasing importance to farmers and consumers. 2)Related Legislation . SB 818 (Wolk), also pending before this committee, redefines California's olive oil labeling requirements to conform to US labeling standards as outlined in the U.S. Standards for Grades of Olive Oil and Olive-Pomace oil published in the Federal Register that took effect on October 25, 2010 (federal regulations). Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081