BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 250
                                                                  Page  1

          Date of Hearing:   August 14, 2013

                          ASSEMBLY COMMITTEE ON AGRICULTURE
                           Susan Talamantes Eggman, Chair
                     SB 250 (Wolk) - As Amended:  August 5, 2013

           SENATE VOTE  :  35-2

           JUDICIARY           9-1                                           
                              
           
           ----------------------------------------------------------------- 
          |Ayes:|Wieckowski, Wagner,       |     |                          |
          |     |Alejo, Chau, Dickinson,   |     |                          |
          |     |Garcia, Maienschein,      |     |                          |
          |     |Muratsuchi, Stone         |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Gorell                    |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           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.








                                                                  SB 250
                                                                  Page  2


             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  
               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 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  








                                                                  SB 250
                                                                  Page  3

               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,  
                    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  








                                                                  SB 250
                                                                  Page  4

               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  
                    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 be 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  








                                                                  SB 250
                                                                  Page  5

               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  
               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 OOCC 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  








                                                                  SB 250
                                                                  Page  6

          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 could not be addressed 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.

          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  








                                                                  SB 250
                                                                  Page  7

          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
          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