BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON AGRICULTURE
                          Senator Cathleen Galgiani, Chair
                                2015 - 2016  Regular 

          Bill No:           AB 1826         Hearing Date: 6/21/16
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          |Author:    |Mark Stone                                           |
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          |Version:   |6/15/16   Amended                                    |
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          |Urgency:   |No                    |Fiscal:    |Yes              |
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          |Consultant:|Anne Megaro                                          |
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                             Subject:  Organic products


           SUMMARY  :
          This bill would recast and revise the California Organic  
          Products Act of 2003; revise the composition of the California  
          Organic Products Advisory Committee; revise registration fee  
          payment tiers based on gross product sales; revise required  
          information provided during registration and for recordkeeping;  
          and make technical and conforming changes.


           BACKGROUND AND EXISTING  
          LAW  :

          California is the leading agricultural state in the nation.   
          California accounts for more than 40% of the nation's organic  
          production, valued at more than $2.2 billion in sales of raw  
          agricultural products.  Organic registration has steadily  
          increased, and in 2015 there were 4,043 organic agricultural  
          operations registered with the California Department of Food and  
          Agriculture (CDFA) and an additional 2,694 organic products  
          operations registered with the California Department of Public  
          Health.

          The California Organic Foods Act of 1990 created the State  
          Organic Program (SOP) under CDFA to protect consumers from false  








          AB 1826 (Mark Stone)                               Page 2 of ?
          
          or misleading organic labeling claims.  The federal Organic  
          Foods Production Act of 1990 authorized the United States  
          Department of Agriculture (USDA) to establish the National  
          Organic Program (NOP).  Once the NOP was fully implemented in  
          2002, California renamed and revised the act to the California  
          Organic Products Act of 2003 to incorporate NOP standards and  
          regulations in conjunction with the SOP.

          California is the only state with its own organic program.  The  
          SOP requires organic producers, processors, handlers, retailers,  
          wholesalers, and brokers to register with CDFA to verify SOP  
          compliance throughout the production and supply chain.   
          Registration fees range from $25 to $3,000 annually depending on  
          the scale of production; however, producers whose annual organic  
          gross sales are $5,000 or less are exempt from registration.   
          Fees are used by CDFA to fulfill responsibilities under the SOP.  
           On the local level, county agricultural commissioners (CAC)  
          contract with CDFA to provide SOP enforcement and compliance.

          On the federal level, the NOP provides national regulatory  
          oversight and enforcement of USDA organic standards.  The NOP  
          determines which materials may be used in organic production and  
          periodically reviews and updates these standards, investigates  
          complaints and violations, and provides accreditation for  
          third-party organic certifiers. 

          Only products that have been certified as meeting USDA  
          production and handling requirements may use the USDA organic  
          seal/stamp on their labels.

          Existing state law:

             1.   Establishes the State Organic Program to provide organic  
               certification and registration, conduct inspections,  
               collect fees and penalties, investigate violations, provide  
               enforcement, and otherwise regulate products sold or  
               labeled as organic.

             2.   Establishes the California Organic Products Advisory  
               Committee (Advisory Committee) to advise the secretary of  
               CDFA on organic matters.  The committee consists of 15  
               members: six producers, two processors, one wholesale  
               distributor, two consumer representatives, one  
               environmental representative, two technical  
               representatives, and one retail representative.  








          AB 1826 (Mark Stone)                               Page 3 of ?
          
          Existing federal law: 

             1.   Requires USDA to develop national standards and  
               regulations for organically produced agricultural products  
               to assure consumers that products labeled as "organic" meet  
               consistent, uniform standards and originate from farms with  
               organic certification, as authorized by the Organic Foods  
               Production Act of 1990.

             2.   Provides for definitions, regulations, organic  
               certification process, compliance requirements, production  
               and handling practices, accreditation program for  
               certifying agents, violations, penalties, and  
               appropriations.

             3.   Establishes a National Organic Standards Board and a  
               National Organic Certification Cost Share Program.  The  
               program provides reimbursement to farms up to 75% (maximum  
               $750) of the organic certification cost.


           PROPOSED  
          LAW  :

          This bill:

             1)   States findings and declarations in regards to the state  
               organic program history and purpose of current amendments.

             2)   Renames the California Organic Products Act of 2003 as  
               the California Organic Food and Farming Act (Act).

             3)   States the purpose of the Act is to promote coordination  
               of federal, state and local agencies and to support organic  
               agriculture through education, outreach, and other  
               programmatic activities.

             4)   Changes the membership of the advisory committee by  
               requiring one, instead of two, members to be consumer  
               representatives and adds one member to represent an  
               accredited certifying agency operating in California.

             5)   Authorizes the secretary, in consultation with the  
               advisory committee, to establish procedures and conduct all  
               of the following activities, to the extent that funds are  
               available: receive and investigate complaints; conduct  







          AB 1826 (Mark Stone)                               Page 4 of ?
          
               periodic spot inspections and prohibited substance testing;  
               conduct farmers' market inspections; support organic  
               agriculture through education, outreach and other  
               programmatic activities; reimburse investigation,  
               enforcement and market surveillance expenses; and conduct  
               hearings, appeals, mediation or settlement conferences.

             6)   Requires investigation, inspection, and prohibited  
               material testing reports to be forwarded to the secretary  
               for enforcement.

             7)   Requires the secretary to coordinate SOP activities with  
               other county and state licensing, registration, inspection,  
               and fee collection procedures.

             8)   Defines "accredited certification agency" to mean an  
               entity accredited by the USDA to certify operations as  
               compliant with the federal organic standards.

             9)   Provides several definitions, such as "certified  
               operation," "data," "exempt operation," "prohibited  
               substance," "residue testing," and "retail food  
               establishment," among others.

             10)  Requires any monies collected pursuant to the Food and  
               Agricultural Code sections of the Act to be used solely to  
               fulfill the responsibilities authorized under the same  
               sections of the Act.

             11)  Requires only persons engaged in the production or  
               handling of raw agricultural products sold as organic and  
               processors of organically derived products to be registered  
               with the secretary.

             12)  Categorizes organic product registrants as follows:  
               citrus; fruit and vegetable row crops; livestock and dairy;  
               stone fruit; tree fruit; tree nuts; other, such as herbs,  
               mushrooms, cut flowers, nursery, and apiaries.

             13)  Requires registrants to provide the address or  
               assessor's parcel number of the precise location where  
               products are produced, processed, or handled.

             14)  Deletes the requirement that exempt producers provide  
               additional information regarding the production area, such  
               as a map and documentation of the previous 36-month land  







          AB 1826 (Mark Stone)                               Page 5 of ?
          
               use history.

             15)  Deletes the requirement that, during registration,  
               exempt producers provide a list of all substances applied  
               or used.

             16)  Consolidates fee schedule categories by combining  
               producers with gross sales of $10,000 to $50,000 into one  
               group with a registration fee of $75 and combines producers  
               with gross sales of $50,000 to $250,000 into a group with a  
               registration fee of $100.

             17)  Deletes a variety of fees and registration requirements  
               placed on small producers, brokers, retail stores, and  
               persons hiring custom packing or labeling.

             18)  Exempts the adoption, amendment, or repeal of any fee  
               from California state administrative procedures and only  
               requires the Office of Administrative Law to publish a  
               notice of the fee change.

             19)  Requires CDFA, in consultation with the director of the  
               California Department of Public Health, to coordinate  
               registration and annual fee collection procedures.

             20)  Removes the authority of CACs to deny a registration  
               submission that is incomplete or not in compliance.

             21)  Limits the registration fee for certifying agencies to  
               $500 annually.

             22)  Authorizes certifying agencies to submit annual  
               registration fees and applications on behalf of their  
               clients.

             23)  Requires certifying agencies to provide records, as  
               specified, for inspection.

             24)  Exempts records from being subject to the California  
               Public Records Act.

             25)  Deletes specific, prescribed, record keeping  
               requirements and, instead, requires the secretary, in  
               consultation with the Advisory Board, to determine what  
               data and records should be kept by registrants. 








          AB 1826 (Mark Stone)                               Page 6 of ?
          

           ARGUMENTS IN SUPPORT:
           According to the author, "Organic products are wanted more and  
          more throughout the country and California organic producers  
          have grown to fill that increased demand. As these farmers work  
          to provide these products they are required to comply with both  
          state and national programs, something that producers in other  
          states are not required to do. California's organics program has  
          been critical in developing the state into the global leader in  
          organics, but has also resulted in some duplicative fees and  
          paperwork for producers. AB 1826 will help limit those  
          duplications and ensure California remains as a top producer of  
          organic products, while maintaining the integrity of the  
          California organics market."


           COMMENTS  :

          NOP and SOP.  California is the only state with its own organic  
          program.  Before the national program existed, California had  
          already begun to regulate organic agricultural production and  
          labeling in California (Organic Food Act, 1979).  Once the NOP  
          was established, California aligned the SOP to accommodate and  
          incorporate the national standards while maintaining state  
          enforcement, surveillance activities, and the authority to  
          impose additional requirements and gather data on organic  
          production in the state.  Currently, the SOP can regulate any  
          organic claim at any point in the supply chain regardless of  
          whether or not an operation is registered or certified organic.   
          For instance, according to CDFA, many of the small producers who  
          are exempt from organic certification sell products at certified  
          farmers' markets.  These exempt producers (who receive $5,000 or  
          less annual gross sales) are required to be registered with CDFA  
          even though they do not have an organic certification.  This  
          allows CDFA and CACs to conduct market inspections and  
          surveillance of all vendors selling at certified farmers'  
          markets.

          Additionally, CDFA also works closely with the Department of  
          Pesticide Regulation for pesticide residue testing, and the  
          California Department of Public Health regulates processed  
          organic products.

          Paperwork and fees.  Although the value of maintaining the SOP  
          is recognized, organic producers are now concerned with the  
          volume of paperwork and multiple fees required to be a certified  







          AB 1826 (Mark Stone)                               Page 7 of ?
          
          organic producer in California.  The third-party accrediting  
          agency, local CACs, CDFA, and certified farmers' markets (if  
          they participate in these markets) all require similar and very  
          detailed information regarding every plot of land and commodity  
          produced.  This bill would change the fee structure and remove  
          certain reporting requirements.

          Further considerations. As currently amended, this bill would  
          categorize organic product registrants into seven categories:  
          citrus; fruit and vegetable row crops; livestock and dairy;  
          stone fruit; tree fruit; tree nuts; other, such as herbs,  
          mushrooms, cut flowers, nursery, and apiaries.  This information  
          would be used for market analysis; however, some organic  
          producers have stated that they would prefer to, instead, have a  
          more detailed market analysis of specific crops rather than  
          categories.


           RELATED  
          LEGISLATION  :

          AB 1625 (Allen) of 2012.  Would have established the Transition  
          to Organics Fund to assist persons transitioning from  
          conventional to organic farming management systems by  
          subsidizing organic certification costs. Vetoed.

          AB 2612 (Agriculture), Chapter 393, Statutes of 2010.  Among  
          other provisions, requires organic producers to include a  
          detailed physical description of the location where organic  
          products are produced and requires exempt producers to include a  
          map, as specified, and exempts producers whose annual organic  
          gross sales are $5,000 or less.

          AB 2823 (Strom-Martin), Chapter 533, Statutes of 2002.  Revises  
          the California Organic Foods Act to conform to the NOP, changes  
          the fee structure for registration, and increases the authority  
          of CDFA and the Department of Public Health to regulate organic  
          products.  


           PRIOR  
          ACTIONS  :
                         
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          |Assembly Floor:                       |77 - 0                     |
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          AB 1826 (Mark Stone)                               Page 8 of ?
          
          |Assembly Appropriations Committee:    |20 - 0                     |
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          |Assembly Agriculture Committee:       |10 - 0                     |
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           SUPPORT  :
          
          California Certified Organic Farmers (Sponsor)
          Archi's Acres, B Corp.
          Be Wise Ranch, Inc.
          Bennett Farms, Inc.
          Café Virtuoso
          California Certified Organic Farmers Pacific Southwest Chapter
          California Climate and Agriculture Network
          California Compost Coalition
          California Farm Bureau Federation
          California Farmlink
          California League of Conservation Voters
          Californians Against Waste
          Capay Organic
          Corigin
          Cornucopia Institute
          Ecological Farming Association
          Environment California
          Environmental Working Group
          The Farmers Guild
          Frey Vineyards
          Harpos Organics
          Harvest Fields Organic Farm
          Heirloom Organic Gardens
          Hunter Orchards
          LaRocca Vineyards
          Orange County Produce LLC
          Organic Trade Association
          Panorama Meats
          Pesticide Action Network
          The Peterson Family
          Phil Foster Ranch
          Quarter Acre Farm
          Roots of Change
          San Diego County Farm Bureau
          Seven Bridges Cooperative Microbrewery, Inc.
          Stoney Point-Pine Hill Orchards
          Straus Family Creamery







          AB 1826 (Mark Stone)                               Page 9 of ?
          
          T&D Willey Farms
          Traditional Medicinals, Inc.
          1 individual


           OPPOSITION  :
          
          None received

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