BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                  SB 250
                                                                  Page  1

          Date of Hearing:  June 25, 2013

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                Bob Wieckowski, Chair
                      SB 250 (Wolk) - As Amended:  June 3, 2013

           SENATE VOTE  :  35-2
           
          SUBJECT  :  Olive oil commission of california

           KEY ISSUE  :  should the state establish the olive oil commission  
          of california to engage in quality and nutritional research and  
          recommend grades and labeling standards In a rapidly expanding  
          industry?  

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

                                      SYNOPSIS

          This non-controversial bill seeks to establish the Olive Oil  
          Commission of California, with a prescribed membership and  
          specified powers, duties and responsibilities vested in a  
          commission board of directors, but only if the olive oil  
          industry votes in sufficient number to approve this  
          self-assessment process modeled after other similar agriculture  
          commissions in California.  Among other things, the board of  
          directors would be authorized to conduct quality and nutritional  
          research and to recommend to the Secretary of the California  
          Department of Food and Agriculture olive oil grades and labeling  
          standards.  In addition, the bill would authorize the commission  
          to levy an annual assessment on producers, as defined, not to  
          exceed the reasonable costs of implementing the chapter's  
          provisions, and would authorize the commission to expend those  
          funds for the purpose of implementing the bill.  There is no  
          known opposition and the bill received strong bi-partisan  
          support in the Senate.

           SUMMARY  :  Establishes the Olive Oil Commission of California to  
          engage in olive oil quality and nutritional research and to  
          recommend grades and labeling standards.  Specifically,  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  








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            California Department of Food and Agriculture (Secretary).  

          2)States declarations and general provisions.    

          3)Defines the terms "olive oil," "district boundaries,"  
            "handler," "marketing season," "producer," and "advisory  
            committee."

          4)Creates a board of directors composed of six producers, three  
            handlers and one public member appointed by the Secretary from  
            nominees recommended by the board.  Provides for alternate  
            members.

          5)Authorizes the board to modify the number of producers and  
            handlers who serve on the board.  Changes must be adopted by a  
            two-thirds vote in concurrence with the Secretary, and prior  
            notice must be given to all commission members.  

          6)Creates an advisory committee to advise the board on issues  
            affecting the commission.  Provides for seven members serving  
            three-year terms and a chair selected by the members.

          7)Provides that the Secretary and the chair of the advisory  
            committee be ex-officio members of the board, in addition to  
            other appropriate persons as determined by the board.

          8)Authorizes the Secretary to require the commission 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 commission refusal or failure to comply, the Secretary  
            may, upon written notice, suspend commission activities or  
            functions.  Allows either party to seek judicial relief in  
            court.

          9)Requires the commission to reimburse the California Department  
            of Food and Agriculture for all expenditures incurred in  
            carrying out this chapter.

          10)Allows the commission to bring suit, be subject to suit, and  
            enter into contracts.

          11)Authorizes the Secretary or his or her representative to be  
            notified and attend meetings of the board, except for  
            executive sessions called for the purpose of discussing  
            litigation against the department.








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          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 the  
            commission or its contracts.  No member, employee or agent of  
            the commission shall be personally liable for contracts or  
            responsible individually for any error except for their own  
            acts of dishonesty or crime.  

          15)Authorizes the board to:

             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, 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 subject to  
               an annual audit submitted to the Legislature and the  
               department;
             h)   Present facts and negotiate with state, federal and  
               foreign agencies;
             i)   Conduct and contract for research to study olive oil  
               quality and nutrition and to 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;








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             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 be funded by proponents of this chapter.

          17)Requires that 40 percent of the total number of producers to  
            cast a referendum vote to begin operation of the commission  
            and that either of the following also occur:

             a)   Of those votes, 65 percent must vote in favor of the  
               commission.  That same 65 percent must also represent  
               producers who, when total production volume is combined,  
               produce the majority of olive oil of all those  
               participating in the referendum; or

             b)   Of those votes, a majority of producers must vote in  
               favor of the commission, and those producers must represent  
               65 percent or more of the total quantity of olive oil  
               produced by those participating in the referendum vote.

          18)Authorizes the Secretary to declare this chapter inoperative  
            upon a failed referendum vote.  The Secretary must wait at  
            least one year before conducting another vote.

          19)Establishes an assessment rate to be paid by producers of not  
            more than $0.25 per calling 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 be available for inspection.

          21)Provides that all proprietary information be confidential.

          22)Authorizes the commission 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)Authorizes the board to establish procedures for individuals  
            aggrieved by its actions, including appeals and judicial  








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            review.

          24)Authorizes the commission to commence civil actions and  
            utilize all remedies provided in law for collection of  
            assessment and civil penalties.

          25)Provides for continuation, suspension, or termination of this  
            chapter through commission referendum.

          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 the  
            commission shall be continued.

          27)Authorizes the board, upon two-thirds vote, to recommend to  
            the Secretary that the commission be suspended for failure to  
            effectuate its declared purposes.  The Secretary shall then  
            hold a referendum.

          28)Authorizes the commission 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 to promote the production and marketing of  
          California agricultural commodities.  Commissions have a variety  
          of powers covering the advertising, promotion, education,  
          production or post-harvest research, and quality standards and  
          inspections, and similar commissions already cover a variety of  
          other commodities. 

           COMMENTS  :  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  
          standards to promote the sustainability and success of this  
          important agricultural product."

           Fraudulent Practices  :  Supporters state that California produces  
          some of the highest quality extra-virgin olive oil in the world.  
           However, the California olive oil industry faces fierce global  
          competition from producers who reportedly do not adhere to the  
          same high quality standards as California producers.  The UC  
          Davis Olive Center released a study based on laboratory and  








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          sensory testing that found that 69 percent of imported  
          extra-virgin olive oils bought off the shelves of California  
          supermarkets failed to meet international standards.  The  
          nationally-reported study concluded that many of these products  
          were falsely labeled as extra-virgin grade.  

           Organizational benefits  :  According to the California Department  
          of Food and Agriculture, 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  
          structure for solving problems and also provide a vehicle for  
          collecting funds to support activities.

           Effectiveness of commissions  :  Several existing commissions  
          reportedly have been successful in achieving goals of improving  
          product quality, expanding markets, funding research, and  
          establishing product grades and standards.  The current bill is  
          focused on creating the Olive Oil Commission of California to  
          conduct research and establish product grades and standards and  
          does not specifically authorize the use of assessment fees for  
          advertising purposes.  This bill includes language requiring  
          annual audits, and upon determination of need, the Secretary may  
          conduct a fiscal and administrative audit of the commission.

           RELATED LEGISLATION  :  AB 2695 (HernŠndez), Chapter 605, Stat.  
          2010.  Created the California Nursery Producers Commission with  
          prescribed membership, powers, duties, and responsibilities of  
          the commission.  Authorized the commission to engage in  
          outreach, education, promotion, marketing, and research relating  
          to nursery products.  

          AB 1912 (Evans), Chapter 585, Stat. 2010.  Created by the  
          California Apiary Research Commission with prescribed  
          membership, powers, duties and responsibilities of the  
          commission.  Authorized the commission to engage in research and  
          education programs relating to honeybees.

          AB 606 (Ma), Chapter 366, Stat. 2009.  Created the California  
          Blueberry Commission with prescribed membership, powers, duties  
          and responsibility of the commission.  Authorized the commission  
          to engage in education, promotion, marketing, and research  








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          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
          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 Landy Company
          Tocha Dehe Wintun Nation

           Opposition  

          None on file

           Analysis Prepared by  : Drew Liebert and Alex Nowinski / JUD. /  
          (916) 319-2334