BILL ANALYSIS Ó SB 250 Page 1 SENATE THIRD READING SB 250 (Wolk) As Amended August 5, 2013 Majority vote SENATE VOTE :35-2 AGRICULTURE 7-0 JUDICIARY 9-1 ----------------------------------------------------------------- |Ayes:|Eggman, Olsen, Atkins, |Ayes:|Wieckowski, Wagner, | | |Dahle, Pan, Quirk, Yamada | |Alejo, Chau, Dickinson, | | | | |Garcia, Maienschein, | | | | |Muratsuchi, Stone | | | | | | |-----+--------------------------+-----+--------------------------| | | |Nays:|Gorell | | | | | | ----------------------------------------------------------------- APPROPRIATIONS 16-1 -------------------------------- |Ayes:|Gatto, Harkey, Bigelow, | | |Bocanegra, Bradford, Ian | | |Calderon, Campos, Eggman, | | |Gomez, Hall, Holden, | | |Linder, Pan, Quirk, | | |Wagner, Weber | | | | |-----+--------------------------| |Nays:|Donnelly | | | | -------------------------------- 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 the OOCC 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). SB 250 Page 2 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 OOCC. 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 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 oil olives processed into 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 oil olives processed into olive oil by those participating in the referendum vote. 7)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. 8)Authorizes OOCC to levy civil penalties not exceeding $1,000, as specified. 9)Authorizes OOCC to commence civil actions and utilize all remedies provided in law for collection of assessments and civil penalties. 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. SB 250 Page 3 FISCAL EFFECT : According to the Assembly Appropriations Committee, this bill has startup costs to CDFA of $40,000 and annual costs of up to $20,000, but these costs will be borne by OOCC. 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. 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 of CDFA, which revealed potential misuse of funds. This bill has language requiring annual audits, and upon determination of the need, the Secretary of CDFA may conduct a fiscal and administrative audit of OOCC. Analysis Prepared by : Victor Francovich / AGRI. / (916) 319-2084 FN: 0002120 SB 250 Page 4