BILL ANALYSIS �
SB 250
Page 1
Date of Hearing: June 19, 2013
ASSEMBLY COMMITTEE ON AGRICULTURE
Susan Talamantes Eggman, Chair
SB 250 (Wolk) - As Amended: June 3, 2013
SENATE VOTE : 35-2
SUBJECT : Olive Oil Commission of California.
SUMMARY : This bill establishes the Olive Oil Commission of
California (OOCC) to engage in olive oil quality and nutritional
research and to recommend grades and labeling standards. This
bill authorizes OOCC to levy an annual assessment, as specified,
on producers, as defined. This bill becomes operative upon a
favorable producer referendum vote. Specifically, this bill :
1. Creates OOCC, as specified, to engage in olive oil
quality and nutritional research, and to recommend grades
and labeling standards to the Secretary (Secretary) of the
California Department of Food and Agriculture (CDFA).
2. States declarations and general provisions.
3. Defines olive oil, district boundaries, handler,
marketing season, producer, and advisory committee for
OOCC.
4. Creates a board of directors (board) composed of six
producers, three handlers and one public member appointed
by the Secretary of CDFA from nominees recommended by the
board. Provides for alternate members.
5. Allows the board to modify the number of producers and
handlers who serve on the board. These changes must be
adopted by a two-thirds vote in concurrence with the
Secretary, and prior notice must be given to all OOCC
members.
6. Creates an advisory committee to advise the board on
issues affecting the OOCC. There shall be seven members
serving three-year terms. The chair shall be selected by
the members.
7. Provides that the Secretary and the chair of the
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advisory committee be ex-officio members of the board, in
addition to other appropriate persons as determined by the
board.
8. Allows the Secretary to require the OOCC to correct or
cease any activity or function that is determined not to be
in the public interest or is in violation of this chapter.
Upon OOCC refusal or failure to comply, the Secretary may,
upon written notice, suspend OOCC activities or functions.
Allows either party to seek judicial relief in court.
9. Requires OOCC to reimburse CDFA for all expenditures
incurred in carrying out this chapter.
10. Allows OOCC to sue and be sued and enter into contracts.
11. Requires the Secretary, or his or her representative, to
be notified and allows them to attend meetings of the
board, except for executive sessions called for the purpose
of discussing litigation against CDFA.
12. Provides that no member of the board or any committee
shall receive a salary. Except for ex-officio members,
members may receive reasonable and necessary traveling
expenses and meal allowances for attendance at meetings or
special assignment.
13. Requires that all monies received by any person from
assessments levied under this chapter be deposited in banks
of the board's choosing.
14. Relieves the state of any liability for actions of OOCC
or its contracts. No member, employee or agent of OOCC
shall be personally liable for contracts or responsible
individually for any error except for their own acts of
dishonesty or crime.
15. Allows, but does not limit, the board to perform the
following powers and duties:
a. Adopt and amend bylaws, rules, regulations,
and orders;
b. Administer and enforce this chapter;
c. Appoint officers and employ persons to serve
as president, chief executive officer, legal counsel,
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or other personnel;
d. Fix compensation for employees;
e. Appoint committees;
f. Establish offices and incur expenses, invest
funds, enter into contracts and agreements, and create
liabilities and borrow funds;
g. Record and keep accurate books and accounts
which are subject to an annual audit that shall be
submitted to the Legislature and CDFA;
h. Present facts and negotiate with state,
federal and foreign agencies;
i. Conduct and contract for research to study
olive oil quality and nutrition; collect contributions
and funds for research purposes;
j. Collect information, such as crop statistics,
and distribute periodic communications to producers;
aa. Establish an assessment rate;
bb. Establish an annual budget which shall be
concurred in by the Secretary;
cc. Submit an annual statement of activities for
concurrence by the Secretary;
dd. Investigate and prosecute civil violations of
this chapter and file complaints with law enforcement
agencies; and,
ee. Engage in activities creating, amending and
enforcing olive oil quality standards.
16. Establishes implementation and voting procedures to be
administered by the Secretary and provides that the initial
referendum vote be funded by proponents of this chapter.
17. Requires 40% of the total number of producers to cast a
referendum vote to begin operation of OOCC and that either
of the following must also occur:
a. Of those votes, 65% must vote in favor of
OOCC. 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; and,
b. Of those votes, a majority of producers must
vote in favor of OOCC, and those producers must
represent 65% or more of the total quantity of olive
oil produced by those participating in the referendum
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vote.
18. Requires the Secretary to declare this chapter
inoperative upon a failed referendum vote. Allows the
Secretary to conduct another referendum vote no sooner
than one year after the previous referendum.
19. 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.
20. Requires every handler and producer to keep complete and
accurate records of all olive oil handled. Records must be
kept for two years and available for inspection.
21. Provides that all proprietary information be
confidential.
22. Allows OOCC to levy civil penalties not exceeding $1,000
for persons who furnish false documents to avoid paying
assessment fees and for persons who destroy, alter, refuse,
or fail to furnish reports or records required to be kept
by this chapter.
23. Requires the board to establish procedures for
individuals aggrieved by its actions, including appeals and
judicial review.
24. Allows OOCC to commence civil actions and utilize all
remedies provided in law for collection of assessments and
civil penalties.
25. Provides for continuation, suspension, or termination of
this chapter through OOCC member referendum vote.
26. Requires the Secretary to hold a public hearing once
every five years to determine whether this chapter should
be continued. Should a substantial question be raised, the
Secretary shall hold a referendum vote to determine if OOCC
shall be continued.
27. Authorizes the board, upon two-thirds vote, to recommend
to the Secretary that OOCC be suspended for failure to
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effectuate its declared purposes. The Secretary shall then
hold a referendum vote.
28. Authorizes OOCC to serve as the advisory body to the
Secretary on all matters pertaining to olive oil quality
standards.
EXISTING LAW authorizes various marketing and promotion
commissions (commissions) to promote the production and
marketing of California agricultural commodities. Commissions
have a variety of powers covering promotion, advertising,
education, production or post-harvest research, and quality
standards and inspections. Commissions cover a variety of
commodities
FISCAL EFFECT : Unknown. This bill has been keyed fiscal by
Legislative Counsel.
COMMENTS : According to the author, "California's olive oil
industry has been growing rapidly 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."
Supporters state 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 always adhere to the same
high quality standards as California producers. The University
of California, Davis Olive Center, released a 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.
According to CDFA, the purpose of marketing programs is to
provide agricultural producers and handlers an organizational
structure, operating under government sanction, which allows
them to solve production and marketing problems collectively
that they could not address individually. Current marketing
programs' activities include commodity promotion, research, and
maintenance of quality standards. Commissions provide a
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structure for solving problems and also provide a vehicle for
collecting funds to support activities.
For accomplishing the purposes stated by the author for this
industry, a commission may be an appropriate entity. Current
commissions and marketing orders have been successful in
expanding markets, improving product quality, and providing more
research for pests and disease prevention. In recent years, one
commission was terminated by the industry and another had an
audit by the Secretary, which revealed potential misuse of
funds. This bill has language requiring annual audits, and upon
determination of the need, the Secretary may conduct a fiscal
and administrative audit of OOCC.
PREVIOUS LEGISLATION :
AB 2695 (Hernandez), Chapter 605, Statutes of 2010, created the
California Nursery Producers Commission with prescribed
membership, powers, duties, and responsibilities of the
commission. This bill also authorized the commission to engage
in outreach, education, promotion, marketing, and research
relating to nursery products.
AB 1912 (Evans), Chapter 585, Statutes of 2010, created the
California Apiary Research Commission with prescribed
membership, powers, duties and responsibilities of the
commission. This bill authorized the commission to engage in
research and education programs relating to honeybees.
AB 606 (Ma), Chapter 366, Statutes of 2009, created the
California Blueberry Commission with prescribed membership,
powers, duties, and responsibility of the commission. This bill
authorized the commission to engage in education, promotion,
marketing, and research relating to blueberries.
REGISTERED SUPPORT / OPPOSITION :
Support
Anchordoguy and Company
Bari Olive Oil Company
Blossom Vineyards
California Harvesting
California League of Food Processors
California Olive Oil Council
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California Olive Ranch
Corto Olive Company
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
Opposition
None on file.
Analysis Prepared by : Victor Francovich / AGRI. / (916)
319-2084