BILL ANALYSIS Ó SB 65 Page 1 Date of Hearing: ASSEMBLY COMMITTEE ON AGRICULTURE Henry Perea, Chair SB 65 (Wolk) - As Amended March 9, 2015 SENATE VOTE: 36-0 SUBJECT: Food labeling: olive oil. SUMMARY: Recasts, changes, and adds to requirements for labeling California olive oils. Specifically, this bill: 1)Recasts wording for California Olive Oil from "shall be made of oil derived solely" to "100 % of that oil shall be derived" from olives grown in California. 2)Deletes American Viticultural Areas (AVA) for labeling, replacing the AVAs with specific California regions; raises the required percentage of oil from 75% to at least 85% from the specified region; and, adds that the percentage is by weight. 3)Requires, for the use of the term estate in labeling olive oil, the oil is made from at least 95%, by weight, of oil derived from olives grown on the specified estate. SB 65 Page 2 EXISTING LAW requires the California Department of Public Health (CDPH) to enforce various laws regarding the manufacture, blending, production, labeling and sale of olive oil. Existing law requires any olive oil produced, processed, sold, offered for sale, given away, or possessed in this state, that indicates on its label that it is from an area that is one of the approved AVAs under federal law, to be made of oil 75% of which is derived solely from olives grown in that approved AVA. A violation of these provisions is a misdemeanor, punishable by a fine of not less than $500, nor more than $1,000, or by imprisonment in the county jail for not exceeding one year, or by both fine and imprisonment. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: The California Olive Oil Industry is going through a maturing process and trying to better define its products. Two years ago the industry created the Olive Oil Commission of California (OOCC) for the purpose of establishing quality grading, labeling standards, research, and enforcement requirements. The OOCC adopted "Grade and Labeling Standards" in September 2014 and made one amendment to them in February 2015. The OOCC membership is for bottlers of 5,000 gallons or more per year, upon which an assessment is paid. 2014 was the first year for the assessment and reporting; they received the gallons bottled reports from 65 bottlers of olive oil in California, for the olive oil bottled from August 2014 to March 2015. The reports showed 10 producers bottled above the OOCC threshold and accounted for 98% of all olive oil bottled in California. The language of SB 65 includes some of the adopted labeling requirements OOCC has established for their membership but does not include all of the OOCC's adopted labeling requirements. SB 65 Page 3 OOCC requirements include prohibited labeling terminology, and requirements for the use of varietal names, among many other requirements. SB 65 will require the 55 non-OOCC bottlers in the state to meet a limited labeling requirement that would be consistent with the OOCC bottlers, thereby providing some uniformity for olive oil consumers. Using specified regions as a labeling identifier may be an improvement over using wine label references of AVA, although neither the bill nor the OOCC standards provide any definition for how a region is determined. This could create an enforcement problem for CDPH and disputes among the bottlers attempting to gain a marketing edge. The Committee may wish to consider if "regions" need to be further defined. When bottling fluids, such as in the wine industry, the Alcohol and Tobacco Tax and Trade Bureau uses the volume of fluids rather than their weight to measure the percentages. SB 65 is comparing the weight of the fluid rather than their volume, according to the author, due to the fact that the temperature of olive oil affects its volume. Previous Legislation: SB 250 (Wolk), Chapter 344, Statutes of 2013, established the OOCC to engage in olive oil quality and nutritional research and to recommend grades and labeling standards; prescribed membership, board of directors, powers and duties, implementing and voting procedures, assessments and recordkeeping, penalties, and continuation or termination of OOCC; authorized OOCC to levy annual assessments on producers, as defined, and authorized OOCC to expand those funds for purposes of implementing the bill; and, becomes operative upon a favorable producer referendum vote. SB 818 (Wolk), Chapter 567, Statures of 2011, redefined California's olive oil labeling requirements, making technical SB 65 Page 4 yet substantive changes, to conform to United States labeling standards as outlined in the U.S. Standards for Grades of Olive Oil and Olive-Pomace oil, published in the Federal Register that took effect on October 25, 2010. AB 1164 (Tran), Chapter 140, Statutes of 2009, made numerous technical changes in the California codes that were recommended by the Legislative Counsel's Office. AB 1585 (Accountability and Administrative Review), Chapter 7, Statutes of 2009, revised the procedure for mandatory and voluntary reporting requirements and deleted obsolete reports. SB 634 (Wiggins), Chapter 694, Statutes of 2008, clarified the definition of olive oil, repealed current licensure provisions, conformed olive oil definitions, grades and labeling requirements to international standards, authorized the addition of vitamin E to specified olive oil, permitted a consumer to re-use a clean olive oil container, can, or drum; and, made legislative findings and declarations. AB 2824 (Agriculture), Chapter 695, Statutes of 2008, clarified the definition of olive oil; conformed olive oil definitions, grades and labeling requirements to international standards; and, provided contingent enactment language with SB 634 (Wiggins). AB 2079 (Emmerson), Chapter 73, Statutes of 2008, deemed food to be misbranded if the labeling does not conform to federal food allergen labeling requirements, and eliminated a licensing requirement for persons engaged in the manufacturing, packaging, and distribution of olive oil. SB 65 Page 5 REGISTERED SUPPORT / OPPOSITION: Support Yocha Dehe Wintun Nation Opposition None on file Analysis Prepared by:Jim Collin / AGRI. / (916) 319-2084