BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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  :    
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          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  

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            either of the following must also occur:

             A.   Of those votes, 65% must vote in favor of the  
               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,  

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          education, promotion, marketing, and research relating to  
          nursery products.

          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
          Yocha Dehe Wintun Nation
           
          ARGUMENTS IN SUPPORT  :    According to the author, "California's  

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          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  
          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

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