BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 250
                                                                  Page  1

          Date of Hearing:   August 21, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     SB 250 (Wolk) - As Amended:  August 5, 2013 

          Policy Committee:                             AgricultureVote:7  
          - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           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.  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  
            California Department of Food and Agriculture (CDFA).  

          2)Creates a board of directors composed of six producers, three  
            handlers and one public member appointed by the Secretary.  

          3)Requires that 40% of the total number of producers cast a  
            referendum vote to begin operation of the commission.

          4)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.

          5)Authorizes the commission to serve as the advisory body to the  
            Secretary on all matters pertaining to olive oil quality  
            standards.

           FISCAL EFFECT  

          1)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.








                                                                  SB 250
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          2)Start up costs for CDFA would be approximately $40,000 with  
            ongoing costs between $15,000 and $20,000 per year.  All costs  
            would be reimbursed by the commission.

           COMMENTS  

           1)Purpose  . The intent of this legislation is to create the OOCC  
            in order to support the California olive oil industry and  
            combat what the author has found to be fraudulent practices in  
            the labeling of olive oil. California's olive oil industry has  
            been growing rapidly over the past five years.  The author  
            asserts that 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  
            agricultural product.

           2)California's Olive Oil Industry  . Currently, California  
            accounts for 99% of national olive production, and has roughly  
            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.

            According to supporters of the bill, 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 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 nationally-reported study concluded that many  
            of these products were falsely labeled as extra-virgin grade.   


           3)Agricultural Commissions  . 16 different commissions for various  
            commodities ranging from avocados to walnuts have been  
            established under Division 22 of the Food and Agriculture  
            Code.  Typically, these state-established commissions and  
            councils are authorized by statute to engage in various  
            activities covering promotion, education, production or  
            post-harvest research, and quality standards and inspections,  
            with some variation in authorization between different  
            commissions.  









                                                                  SB 250
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            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 a determination of need, the Secretary  
            may conduct a fiscal and administrative audit of OOCC.



           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081