BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1826|
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                                   THIRD READING 


          Bill No:  AB 1826
          Author:   Mark Stone (D) 
          Amended:  6/30/16 in Senate
          Vote:     21 

           SENATE AGRICULTURE COMMITTEE:  5-0, 6/21/16
           AYES:  Galgiani, Cannella, Berryhill, Pan, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/11/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           ASSEMBLY FLOOR:  77-0, 5/31/16 - See last page for vote

           SUBJECT:   Organic products


          SOURCE:    California Certified Organic Farmers


          DIGEST:   This bill recasts and revises the California Organic  
          Products Act of 2003; revises the composition of the California  
          Organic Products Advisory Committee; revises registration fee  
          payment tiers based on gross product sales; revises required  
          information provided during registration and for recordkeeping;  
          and makes technical and conforming changes.

          ANALYSIS:  

          Existing federal law: 

           1) Requires the United States Department of Agriculture (USDA)  
             to develop national standards and regulations for organically  
             produced agricultural products to assure consumers that  








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             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.

          Existing state law:

           1) Establishes the State Organic Program (SOP) 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 the  
             California Department of Food and Agriculture (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.  
              

          This bill:

           1) States findings and declarations in regards to California  
             organic agriculture and the state and federal organic  
             programs.

           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  







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             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 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.








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           12)Categorizes organic product registrants as follows: citrus;  
             fruits, excluding citrus; livestock or dairy; nuts;  
             vegetables; other, such as apiculture, fallow ground, herbs,  
             mushrooms, cut flowers, and nursery.

           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 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 county agricultural commissioners  
             (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  







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             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. 

          Background

          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 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 SOP under  
          CDFA to protect consumers from false or misleading organic  
          labeling claims.  The federal Organic Foods Production Act of  
          1990 authorized the 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, CACs contract with CDFA to provide SOP  
          enforcement and compliance.








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          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.


          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  
          organic producer in California.  The third-party accrediting  
          agency, local CACs, CDFA, and certified farmers' markets (if  







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          they participate in these markets) all require similar and very  
          detailed information regarding every plot of land and commodity  
          produced.  This bill changes the fee structure and removes  
          certain reporting requirements.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes

          According to the Senate Appropriations Committee, to implement  
          the requirements of this bill, CDFA estimates a one-time cost of  
          $107,000 for reprogramming the SOP's online registration system  
          and database which can be absorbed within SOP's Department of  
          Food and Agriculture Fund reserve. Specifically, CDFA would have  
          to restructure the application process, data collection and  
          assignments, and the fee schedule. 

          In addition, CDFA anticipates a reduction in annual revenue of  
          approximately $164,000 (Department of Food and Agriculture Fund)  
          resulting from the reduction and consolidation of fee categories  
          and the removal of registration requirements for specified  
          operations.

          SUPPORT:   (Verified8/12/16)


          California Certified Organic Farmers (source)
          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







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          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
          T&D Willey Farms
          Traditional Medicinals, Inc.
          One individual


          OPPOSITION:   (Verified8/12/16)


          None received

          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."

          ASSEMBLY FLOOR:  77-0, 5/31/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  







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            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández,  
            Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine,  
            Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,  
            Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,  
            Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Beth Gaines, Harper, Patterson

          Prepared by:Anne Megaro / AGRI. / (916) 651-1508
          8/15/16 20:17:20


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