BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 250| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 250 Author: Wolk (D) Amended: 4/10/13 Vote: 21 SENATE AGRICULTURE COMMITTEE : 5-0, 4/16/13 AYES: Galgiani, Cannella, Berryhill, Lieu, Wolk SENATE APPROPRIATIONS COMMITTEE : 7-0, 4/29/13 AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg SUBJECT : Olive Oil Commission of California SOURCE : Author DIGEST : This bill establishes the Olive Oil Commission of California (Commission) to engage in olive oil quality and nutritional research and to recommend grades and labeling standards. This bill prescribes membership, board of directors, powers and duties, implementing and voting procedures, assessments and recordkeeping, penalties, continuation or termination of the Commission, and creation of quality standards. This bill authorizes the Commission to levy an annual assessment, not to exceed a specified amount, on producers, as defined, and authorizes the Commission to expand those funds for purposes of implementing the bill, thereby making an appropriation. This bill becomes operative upon a favorable producer referendum vote. ANALYSIS : CONTINUED SB 250 Page 2 Existing law: 1.Provides for the creation of marketing programs within the California Food and Agriculture Code, Division 22. There are currently 16 active commissions in California, all of which are governed by boards of directors and overseen by the California Department of Food and Agriculture (CDFA). These commissions were created to enhance their industries by investing in promotion, advertising, education, marketing research, scientific research, and the creation and regulation of quality standards. 2.Provides that commissions are industry-funded programs and assessed through grower and/or handler fees. The industry pays for all costs of the Commission, including all costs for governmental oversight. The fee rate may be prescribed in statute with the potential to be increased by a referendum vote of the Commission. This bill: 1.Creates the Olive Oil Commission of California to engage in olive oil quality and nutritional research, and to recommend grades and labeling standards to the Secretary of the CDFA. 2.States declarations and general provisions and definitions, as specified. 3.Creates a board of directors (board) with prescribed membership, powers, duties and responsibilities of the Commission. 4.Designates that all monies received by any person from assessments levied be deposited in banks of the board's choosing. 5.Establishes implementation and voting procedures. 6.Requires 40% of the total number of producers to cast a referendum vote to begin operation of the Commission and that either of the following must also occur: A. Of those votes, 65% must vote in favor of the CONTINUED SB 250 Page 3 Commission. That same 65% must also represent producers who, when total production volume is combined, produce the majority of olive oil of all those participating in the referendum vote. B. Of those votes, a majority of producers must vote in favor of the Commission, and those producers must represent 65% or more of the total quantity of olive oil produced by those participating in the referendum vote. 1.Establishes an assessment rate to be paid by producers of not more than $0.25 per gallon of olive oil. An increase in this rate must be approved by a referendum vote, and a penalty shall be paid on any past due assessment. 2.Authorizes the Commission to levy civil penalties not exceeding $1,000 , as specified. 3.Authorizes the board to establish procedures for individuals aggrieved by its actions, including appeals and judicial review. 4.Authorizes the Commission to commence civil actions and utilize all remedies provided in law for collection of assessments and civil penalties. Background California produces 99% of the olives grown in the United States. According to the California Olive Oil Council, there are over 400 growers on approximately 30,000 acres dedicated to the production of olive oil. With over 50 varieties of olives grown in California, it is estimated that the 2013 harvest will produce over 2.4 million gallons of oil. Related Legislation AB 2695 (Hernandez, Chapter 605, Statutes of 2010), creates the California Nursery Producers Commission with prescribed membership, powers, duties, and responsibilities of the Commission. Authorizes the Commission to engage in outreach, education, promotion, marketing, and research relating to nursery products. CONTINUED SB 250 Page 4 AB 1912 (Evans, Chapter 585, Statutes of 2010), creates the California Apiary Research Commission with prescribed membership, powers, duties and responsibilities of the Commission. Authorizes the Commission to engage in research and education programs relating to honeybees. AB 606 (Ma, Chapter 366, Statutes of 2009), creates the California Blueberry Commission with prescribed membership, powers, duties, and responsibility of the commission. Authorizes the Commission to engage in education, promotion, marketing, and research relating to blueberries. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee, because this measure authorizes an industry assessment, it would have no impact on the State's General Fund or CDFA's budget. If the maximum assessment of $0.25 per gallon is leveled on 2.4 million gallons of olive oil, the Commission would receive $600,000 in operating revenue. SUPPORT : (Verified 4/30/13) Anchordoguy & Co. Bari Olive Oil Company Blossom Vineyards California Harvesting California League of Food Processors California Olive Oil Council California Olive Ranch Dickson Napa Ranch ENZO Olive Oil Company/P-R Farms, Inc. Kennedy Ranch Lodi Farming, Inc. Maben Family, LLC McCorkle Land Company ARGUMENTS IN SUPPORT : According to the author, "California's olive oil industry has been growing exponentially over the past five years. The industry believes it is time to support a coordinated effort to provide for olive oil research and CONTINUED SB 250 Page 5 standards to promote the sustainability and success of this important agricultural product." According to supporters of this bill, the Commission will address fraudulent practices in the marketplace. Supporters state that "California produces some of the highest quality extra virgin olive oil. However, the California olive oil industry faces fierce global competition from producers who do not adhere to the same high quality standards as California producers. In fact, the UC Davis Olive Center released a surprising study based on laboratory and sensory testing that found that 69% of imported extra-virgin olive oils bought off the shelves of California supermarkets failed to meet international standards. The study concluded that many of them were falsely labeled as extra virgin grade." > JL:ej 4/30/13 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** CONTINUED