BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 65| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- CONSENT Bill No: SB 65 Author: Wolk (D) Amended: 3/9/15 Vote: 21 SENATE AGRICULTURE COMMITTEE: 5-0, 4/7/15 AYES: Galgiani, Cannella, Berryhill, Pan, Wolk SENATE HEALTH COMMITTEE: 8-0, 4/22/15 AYES: Hernandez, Nguyen, Mitchell, Monning, Nielsen, Pan, Roth, Wolk NO VOTE RECORDED: Hall SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: Food labeling: olive oil SOURCE: Author DIGEST: This bill removes the use of American Viticultural Areas from olive oil labels and instead uses specific regions or estates within California to indicate oil source. This bill requires that olive oil labeled as originating from a specific region of California contain at least 85% oil made from olives grown in that specified region, and if labeled from a specific estate, 95% from olives grown on the specified estate. ANALYSIS: American Viticultural Areas (AVAs) were established in 1980 by the federal Alcohol and Tobacco Tax and Trade Bureau to delineate grape-growing regions in the United States based on differences in climate, geology, soil characteristics, and physical features such as topography or watersheds. In addition, wines may use an AVA label only if 75% of the wine is derived from grapes grown in that region. The first AVA SB 65 Page 2 established in California was Napa Valley in 1981, and today there are approximately 130 approved AVAs in California. (29 CFR Part 9). Existing state law: 1)Requires the California Department of Public Health to regulate and enforce food labeling laws and regulations and may also determine that a food is misbranded if its label is false or misleading (Health and Safety Code §110660 et seq.). 2)Requires any olive oil produced, processed, sold, given away, or possessed in California to be derived solely from olives grown in California if the label indicates that it contains California olive oil. Similarly, olive oil with a label claim indicating a specific region of California (AVA, see below) must contain 75% olive oil made from olives grown in that specified region. 3)Creates the Olive Oil Commission of California (OOCC) to engage in olive oil quality and nutritional research and to recommend grading and labeling standards to the California Department of Food and Agriculture (CDFA). After a successful producer referendum, the OOCC developed California olive oil grading and labeling standards that would apply only to Californians processing over 5,000 gallons of olive oil, refined-olive oil, or olive-pomace oil, per year. CDFA approved these recommendations, and they became effective on September 26, 2014. This bill: 1)Specifies that olive oil labeled "California Olive Oil" must be 100% derived from California-grown olives. 2)Deletes the use of AVAs for olive oil labeling. 3)Requires that olive oil labeled as originating from a specific region of California contain at least 85% of oil made from olives grown in that specified region. 4)Requires that olive oil labeled as originating from a specific SB 65 Page 3 estate in California contain at least 95% of oil made from olives grown on that specified estate. Background California Olive Oil. California produces 99% of the olives grown within the United States. According to the California Olive Oil Council, there are over 400 growers on approximately 30,000 acres dedicated to the production of olive oil. With over 75 olive varieties grown in California, it is estimated that the 2013-14 harvest will produce over 3.5 million gallons of extra virgin olive oil. Comments Conform state law. The OOCC recommendations approved by CDFA in 2014 included Section 11.3.4, which developed labeling requirements in regards to "provenance," or origination of the olive oil. This bill conforms state law to these new regulations by removing the reference to AVAs and strengthens the standard of olive oil origination, requiring 100% of the olives to be grown in California, 85% within the stated region or 95% from the specific estate, if such provenance label claims are made. By amending existing law, these labeling requirements will apply to all California producers, not just those affected by OOCC standards. Regions vs AVA. AVAs were created for the wine industry to group wines within a specific region (i.e. Napa Valley). Given the abundance of microclimates in California, which have an effect on product quality and taste, it is understandable that a different commodity, olive oil, would benefit from the creation of its own provenance areas based on variables affecting olive groves, not vineyards. However, the specific regions established in this bill are neither described nor detailed, and, therefore, require no delineation from one region to another. The OOCC may wish to address this issue in future recommendations. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes SB 65 Page 4 SUPPORT: (Verified5/4/15) None received OPPOSITION: (Verified5/4/15) None received ARGUMENTS IN SUPPORT: According to the author, "The California Health and Safety Code contains outdated language relating to utilizing California and its regions in the labeling of olive oil by referencing American Viticultural Areas (AVA's) established by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) which regulates wine. SB 65 will replace the outdated language with language that incorporates the OOCC standards for 'California' labeling and applies it to all California olive oil producers." Prepared by:Anne Megaro / AGRI. / (916) 651-1508 5/6/15 16:16:13 **** END ****