Existing law, the California Organic Food and Farming Act, requires the Secretary of Food and Agriculture, county agricultural commissioners, and the Director of Public Health to enforce state and federal laws governing the production, labeling, and marketing of organic products, as specified. Existing law requires every person engaged in the state in the processing or handling of specified products for human consumption that are sold as organic to register with the director, as specified. Existing law requires the director to provide a registration form for those purposes and requires specified information on the registration form.

The bill would require the director to create an online registration and payment option on or before January 1, 2025. 2026.

Existing law, the California Organic Food and Farming Act, requires the Secretary of Food and Agriculture, county agricultural commissioners, and the Director of Public Health to enforce state and federal laws governing the production, labeling, and marketing of organic products, as specified. Existing law requires every person engaged in the state in the processing or handling of specified products for human consumption that are sold as organic to register with the director, as specified. Existing law requires the director to provide a registration form for those purposes and requires specified information on the registration form.

The bill would require the director to create an online registration and payment option on or before January 1, 2025.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 405 (Connolly) - Organic products

Bill Summary:

AB 405 would require the California Department of Public Health (CDPH) to create an online registration and payment option for registered organic food processors by January 1, 2026.

Fiscal Impact:

The CDPH estimates a one-time cost of $2.5 million to develop and implement the online system and ongoing costs of $700,000 annually for system maintenance and operations (General Fund). 

Background:

The United States Department of Agriculture regulates organic farms and business under the National Organic Program (NOP). Only food products containing 95% or more organic content, as specified, can use the USDA organic logo on their product labels and advertising.

The NOP permits State Organic Programs, that can assume regulatory enforcement responsibility for the NOP, and which can add more restrictive requirements due to specific environmental conditions or a need for specialized production and handling practices in that state. California is currently authorized to operate a State Organic Program, and oversees and enforces the federal regulations and guidelines in the NOP, as well as the California Organic Food and Farming Act. This oversight in California is divided between California Department of Food and Agriculture (CDFA) and CDPH. CDFA oversees agricultural production (including fresh fruit and vegetables), milk and dairy food processing, meat and poultry processing, and retail organic production activities, while CDPH oversees processors and handlers of organic food, pet food, and cosmetics.

Under CDPH’s enforcement, each person engaged in selling a product labeled as organic must first be registered as a food processor under CDPH’s licensing/registration requirements but must also be registered as an organic food processor if engaged in the manufacture, processing or handling of a product labeled as organic.

Proposed Law:

AB 405 would require the CDPH to create an online registration and payment option for registered organic food processors by January 1, 2026.

Related Legislation:

AB 1870 (Stone, 2022), as amended May 19, 2022, would have required the CDPH to create an online registration and payment option for registered organic food processors by January 1, 2024. This provision was subsequently amended out of the bill.

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SENATE COMMITTEE ON HEALTH

Senator Dr. Susan Talamantes Eggman, Chair

BILL NO: AB 405

SUBJECT: Organic products

SUMMARY:

Requires the California Department of Public Health to create an online registration and payment option for registered organic food processors by January 1, 2026.

Existing law:

1. Requires persons engaged in the manufacturing, packing, or holding of any processed food in California to obtain a valid registration from the California Department of Public Health (CDPH), and requires a separate registration for each place of manufacturing, packing, or holding. [HSC §110460, §110465]
2. Establishes various other categories of licensure or registration relating to specific types of food processing, including a license to manufacture olive oil, low-acid canned foods, pet foods, or processing or handling fresh or frozen seafood. [HSC §112875, §112650, §113025, §112150]
3. Establishes the California Organic Food and Farming Act, which includes provisions of law in both the Food and Agricultural Code and the Health and Safety Code, which are required to be interpreted in conjunction with each other, and are required to be enforced by the Secretary of the California Department of Food and Agriculture (CDFA) and CDPH. [HSC §110810, et seq., FAC §46000, et seq.]
4. Requires CDPH to enforce the Organic Food and Farming Act as it is applicable to all processors and handlers of processed products sold as organic, including handlers and processors of fish and seafood, cosmetics, and animal food products sold as organic, except for processors and handlers of processed meat, fowl, and dairy products. Requires each person engaged in one of these activities that is selling a product labeled as organic, to first be registered as either a food processor as described in 1) above, or as another category of food processor as described in 2) above, and to also be registered as an organic food processor if engaged in the manufacturing, processing or handling of a product labeled as organic. [HSC§ 110875]
5. Requires CDPH, to the extent feasible, to coordinate the registration and fee collection procedures related to the registration of organic food processors with similar licensing or registration procedures applicable to registrants. When coordinating the organic registration with other required registrations or licenses, requires the expiration date to be the same expiration date as the valid license or registration. [HSC §110875(c)]
6. Establishes the California Organic Products Advisory Committee, comprised of 15 members, as specified. [FAC §46003]
7. Requires CDPH to annually compile and publish and submit to the California Organic Products Advisory Committee a summary of specified information, including the total number of registrations, the total number and quantity of each type of product sold as organic by all registrants combined, and the total annual organic gross sales volume or revenue of all registrants combined. [HSC §110958]

This bill: Requires CDPH to create an online registration and payment option for registered organic food processors by January 1, 2026.

FISCAL EFFECT:

According to the Assembly Committee on Appropriations, on a prior version of this bill that required implementation by January 1, 2025 instead of January 1, 2026, CDPH estimated a one-time cost of approximately $2.5 million over an 18-month period to plan, design, develop, and implement the online system, and an ongoing cost of approximately $659,000 for system maintenance and operations (General Fund).

COMMENTS:

1. Author’s statement. According to the author, outdated state registration procedures negatively affect organic food manufacturing and processing businesses’ bottom lines, limiting California’s ability to keep up with consumer demand. In addition to obtaining organic certification under the United States Department of Agriculture, organic food manufacturers are required to register through a paper-based system with CDPH. Every year, these businesses must mail forms and checks to CDPH, a process that is time-consuming, inaccessible, and susceptible to lost documents. CDPH’s outdated registration procedures negatively impact organic food manufacturer’s bottom line, limiting California’s ability to keep up with consumer demand for organic products. This bill establishes a deadline by which CDPH will create an online registration and payment system. This will make it easier for small organic businesses to complete the registration process and make their payments as opposed to relying solely on a paper-based system.
2. Background. The United States Department of Agriculture regulates organic farms and business under the National Organic Program (NOP). However, the NOP permits State Organic Programs, that can assume regulatory enforcement responsibility for the NOP, and which can add more restrictive requirements due to specific environmental conditions or a need for specialized production and handling practices in that state. California is currently the only authorized State Organic Program, and oversees and enforces the federal regulations and guidelines in the NOP, as well as the California Organic Food and Farming Act. This oversight in California is divided between CDFA and CDPH. CDFA oversees agricultural production (including fresh fruit and vegetables), milk and dairy food processing, meat and poultry processing, and retail organic production activities, while CDPH oversees processors and handlers of organic food, pet food, and cosmetics.
   
   Under the NOP, food products labeled as “100% organic” must consist of entirely organic ingredients, products labeled as “organic” must consist of 95% certified organic ingredients, while “made with organic” means it contains at least 70% certified organic ingredients. Only food products containing 95% or more organic content can use the USDA organic logo on their product labels and advertising.
   
3. CDPH Organic Processed Product Registration Program Report for 2022. According to CDPH’s 2022 report on the organic processor program, there are a total of 2,234 registered organic processors regulated by CDPH, which include food processors, pet food processors, and manufacturers of cosmetics. These processors handle a range of products from soft drinks and other beverages, breakfast cereals, bulk whole grains and beans, canned or frozen fruits and vegetables, nuts and nut products, prepared mixes, and many more. The median annual gross sales revenue for registrants was $350,000 in 2022, however, 736 registrants reported gross annual sales between $0 and $50,000, and 786 were above $2.5 million. Total gross annual sales revenue for 2022 was over $30 billion.
4. Prior legislation. AB 1870 (Stone) of 2022 would have required CDPH to establish a process for resolving complaints concerning the Organic Food and Farming Act to meet a 90-day timeline, and to require information regarding fees and costs related to the organic food processor registration program to be added to the information that CDPH is required to submit to the California Organic Products Advisory Committee. An earlier version of AB 1870 included a similar provision to this bill requiring CDPH to create an online registration and payment option, but it required it by January 1, 2024, rather than January 1, 2026 as in this bill. However, this provision was amended out of the bill in Senate Appropriations Committee, along with another provision requiring CDPH to develop a single application for applicants to apply for all similar licensing or registration procedures applicable to the registrant in addition to organic registration. AB 1870 was vetoed by the Governor, who stated that the bill was duplicative of existing law and would have resulted in ongoing General Fund costs not included in the budget.
   
   AB 1826 (Stone, Chapter 403, Statues of 2016) recast and revised the California Organic Products Act of 2003 and renamed it the California Organic Food and Farming Act, revised the composition of the California Organic Products Advisory Committee, revised registration fee payment tiers based on gross product sales, revised required information provided during registration and for recordkeeping, and made technical and conforming changes.
5. Support. A number of organizations submitted a joint letter of support, including the California Certified Organic Farms (sponsor of this bill), the Agricultural Institute of Marin, California League of Food Processors, Pesticide Action Network, Center for Food Safety, and a number of individual farming companies. Supporters state that certified organic is a unique food label backed by federal law, which requires the use of organic ingredients and prohibits the use of artificial flavors, colors, or preservatives. Supports state that demand for organic processed foods is rapidly growing, with sales more than doubling between 2020 and 2021, from $14.8 billion to more than $30 billion. As sales increase, organic food manufacturers need more streamlined oversight to ensure California businesses can keep up with consumer demand for organic products. Currently, organic food manufacturers are required to register through a paper-based system, and this bill supports the growing organic sector by establishing a deadline by which CDPH will create an online registration and payment system.

SUPPORT AND OPPOSITION:

Support: California Certified Organic Farmers (sponsor)

Agricultural Institute of Marin
All STAR Organics
Blue Beautifly
Cafe Altura
California Citrus Mutual
California Climate & Agriculture Network
California Cotton Ginners and Growers Association
California Food Producers
Center for Food Safety; the
Ceres Community Project

Community Alliance With Family Farmers
Eckert Frozen Foods
Health Care Without Harm
Kinetic Koffee
La Rocca Vineyards
Lucero Organic Farms
Mandela Partners
Oro De Sonora Pure Jojoba Family Farms
Pesticide Action Network North America
Setton Farms Organic
Sunblaze Ranch
Taylor Farms Organic
Traditional Medicinals
Western Agricultural Processors Association

Oppose: None received

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ASSEMBLY THIRD READING

ATR Bill Id:AB 405

Author:(Connolly and Mathis)

As Amended Ver:May 18, 2023

Majority vote

SUMMARY

The bill requires the director of the California Department of Public Health (CDPH) to create an online registration and payment option on or before January 1, 2026.

Major Provisions

Requires CDPH to create an online registration and payment option on or before January 1, 2026.

COMMENTS

California follows the United States Department of Agriculture's National Organic Program (NOP) guidelines and enforces the Organic Food Production Act of 1990 and the California Organic Food and Farming Act, formerly the California Organic Products Act of 2003. The California Department of Food and Agriculture’s State Organic Program (SOP) assumes the NOP's oversight and enforcement authority in the state, and California is the only state in the U.S. with an NOP authorized state organic program. The laws and regulations in place protect consumers, producers, handlers, processors, and retailers by establishing standards for agricultural products and foods that are labeled and/or sold as organic.

Every person engaged in this state in the production or handling of raw agricultural products sold as organic must register with CDFA. Processors and handlers of processed meat, fowl, dairy products, and retailers engaged in processing or handling of products sold as organic register with CDFA. Processors and handlers of processed products for human consumption, including dietary supplements, alcoholic beverages, fish or seafood, and processors or handlers of animal (non-livestock) food, and cosmetics sold as organic, register with CDPH.

According to the Author

Outdated state registration procedures negatively affect organic food manufacturing and processing businesses’ bottom lines, limiting California’s ability to keep up with consumer demand.

Arguments in Support

Demand for organic processed foods is rapidly growing. Sales more than doubled between 2020 and 2021, from $14.8 billion to $34.5 billion. As sales increase, organic food manufacturers need more streamlined oversight to ensure California businesses can keep up with consumer demand for organic products. Currently, organic food manufacturers are required to register through a paper-based system with CDPH. Every year, these businesses must mail forms and checks to CDPH, a process that is time-consuming, inaccessible, and susceptible to lost documents.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, on a prior version of this bill, CDPH estimated a one-time cost of approximately $2.5 million over an 18-month period to plan, design, develop, and implement the online system, and an ongoing cost of approximately $659,000 for system maintenance and operations (General Fund). However, the bill as amended postpones the deadline by one year, presumably lowering costs for the department. In addition, the fiscal year (FY) 2022-23 budget approved 33 positions, $20.1 million General Fund in fiscal year 2022-23, and $18.1 million General Fund ongoing for CDPH to, among other things, implement and support the framework for modernization of public health information technology infrastructure and systems. Creating an online registration and payment option for = organic food processing operations, as required by this bill, would presumably be included in this IT modernization effort.

VOTES

ASM AGRICULTURE: 8-0-3

YES: Mathis, Aguiar-Curry, Alanis, Connolly, Irwin, Soria, Villapudua, Wood

ABS, ABST OR NV: Flora, Jones-Sawyer, Robert Rivas

ASM APPROPRIATIONS: 11-0-5

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

ABS, ABST OR NV: Megan Dahle, Dixon, Mathis, Robert Rivas, Sanchez

UPDATED

VERSION: May 18, 2023

CONSULTANT: Victor Francovich / AGRI. / (916) 319-2084 FN: 0000570

Date of Hearing: March 29, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 405

Author:(Connolly) – As Introduced Ver:February 2, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires, on or before January 1, 2025, the director of the California Department of Public Health (CDPH) to create an online registration and payment option for specified organic food processing operations.

FISCAL EFFECT:

CDPH estimates a one-time cost of approximately $2.5 million over an 18-month period to plan, design, develop, and implement the online system, and an ongoing cost of approximately $659,000 for system maintenance and operations (General Fund).

COMMENTS:

1) Purpose. According to the author:

The CA Dept. of (Public) Health needs to have an online registration and payment system for farmers and farming operations. Relying solely on a paper-based system is inefficient, and can negatively impact organic food manufacturers’ bottom line.

2) State Organic Program (SOP). The SOP follows the United States Department of Agriculture (USDA) National Organic Program (NOP) guidelines and enforces the Organic Food Production Act of 1990 and the California Organic Food and Farming Act. The SOP assumes the NOP’s oversight and enforcement authority in the state. California is the only state in the nation with a NOP-authorized SOP. According to the California Department of Food and Agriculture (CDFA), the SOP protects the integrity of the organic label through enforcement, education, and outreach, and is responsible for enforcing and administering the provisions of state and federal organic laws that govern the standards under which fresh agricultural products and foods may be labeled and sold as organic.

3) Organic Industry in California. According to CDFA’s 2021-2022 California Agricultural Organics Report, California leads the nation in the number of organic farms, land in organic production, and organic sales. California organic sales, which accounts for 36% of organic sales in the U.S., increased 16.4% from $12 billion in 2020 to $14 billion in 2021.

4) Organic Registration Requirements. Every person engaged in the production or handling of raw agricultural products sold as organic must register with CDFA before the first sale of the products. Organic food processing operations must register with CDFA or CDPH prior to the first sale of their organic agricultural products. Processors and handlers of processed meat, fowl, or dairy products, and retailers engaged in the processing or handling of products sold as organic, must register with CDFA. Processors and handlers of processed products for human consumption that are not part of the CDFA categories listed above, including dietary supplements, alcoholic beverages, fish, or seafood, as well as processors or handlers of animal food and cosmetics sold as organic, must register with CDPH. According to CDPH, there are currently 2,975 valid organic registrations with CDPH.

According to a coalition of organizations writing in support of the bill:

As sales increase, organic food manufacturers need more streamlined oversight to ensure California businesses can keep up with consumer demand for organic products. Currently, organic food manufacturers are required to register through a paper-based system with the California Department of Public Health (CDPH). Every year, these businesses must mail forms and checks to CDPH, a process that is time-consuming, inaccessible, and susceptible to lost documents. AB 405 supports the growing organic sector by establishing a deadline by which CDPH will create an online registration and payment system.

5) Current Efforts. According to CDPH, while registrations and payments are currently paper-based, the department’s Information Technology Services Division is reviewing options for online enterprise solutions. Additionally, in August 2022, CDPH began piloting a DocuSign process, which allows a customer to fill out the application online, and once all the required fields are inputted, the customer can print, sign, and submit the application. According to the department, this interim approach has reduced the time it takes to process applications, addressed most of the previous delays due to incomplete or incorrect applications, and allowed timelier issuance of licenses.

CDPH asserts it would not be able to meet the deadlines in the bill due to the time-intensive procurement and implementation process for establishing new state IT systems.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: March 15, 2023

ASSEMBLY COMMITTEE ON AGRICULTURE

Robert Rivas, Chair

ABPCA Bill Id:AB 405

Author:(Connolly) – As Introduced Ver:February 2, 2023

SUBJECT: Organic products

SUMMARY: The bill requires the director of the California Department of Public Health (CDPH) to create an online registration and payment option on or before January 1, 2025.

EXISTING LAW:

1. Existing law, the California Organic Food and Farming Act, requires the Secretary of Food and Agriculture, county agricultural commissioners, and the Director of CDPH to enforce state and federal laws governing organic products. Health and Safety Code (HSC) 110810 - 110959/Food and Agriculture code (FAC) 46000 - 46029
2. Existing law requires every person engaged in the state in the processing or handling of specified products for human consumption that are sold as organic to register with CDPH or CDFA, as specified. HSC 110875/FAC 46013.1
3. Existing law requires CDPH to provide a registration form for those purposes and requires specified information on the registration form. HSC 110875.

FISCAL EFFECT: Unknown

COMMENTS: California follows the United States Department of Agriculture’s National Organic Program (NOP) guidelines and enforces the Organic Food Production Act of 1990 and the California Organic Food and Farming Act, formerly the California Organic Products Act of 2003. The California Department of Food and Agriculture’s State Organic Program (SOP) assumes the NOP’s oversight and enforcement authority in the state, and California is the only state in the U.S. with an NOP authorized state organic program. The laws and regulations in place protect consumers, producers, handlers, processors, and retailers by establishing standards for agricultural products and foods that are labeled and/or sold as organic.

Every person engaged in this state in the production or handling of raw agricultural products sold as organic must register with CDFA. Processors and handlers of processed meat, fowl, dairy products, and retailers engaged in processing or handling of products sold as organic register with CDFA. Processors and handlers of processed products for human consumption, including dietary supplements, alcoholic beverages, fish or seafood, and processors or handlers of animal (non-livestock) food, and cosmetics sold as organic, register with CDPH.

According to the author, outdated state registration procedures negatively affect organic food manufacturing and processing businesses’ bottom lines, limiting California’s ability to keep up with consumer demand. The California Organic Products Advisory Committee (COPAC) and organic food processors have consistently flagged the following issues:

1. The paper-based registration and payment system is time-consuming, inefficient, and susceptible to lost documents.

1. Decentralized forms make the registration process unnecessarily difficult to navigate; processors must obtain a Processed Food Registration and the Organic Processed Products Registration or any of 7 separate registrations (depending on the type of business) in order to obtain a valid organic registration and must register each physical facility separately; this is in addition to the federal certification paperwork.

AB 1826 (Stone), Chapter 403, Statues of 2016, overhauled the SOP, by changing the SOP fee structure, granting a larger administrative role to accredited certifying agencies, revising the composition of the California Organic Products Advisory Committee, and, revising required information provided for registration and recordkeeping. This bill will streamline registration and payment issues related to CDPH

REGISTERED SUPPORT / OPPOSITION:

Support

Agricultural Institute of Marin
All STAR Organics
Blue Beautifly
Cafe Altura
California Alliance With Family Farmers
California Certified Organic Farmers (CCOF)
California Climate & Agriculture Network
California Cotton Ginners and Growers Association
California Food Producers
Center for Food Safety; the
Ceres Community Project
Eckert Frozen Foods
Health Care Without Harm
Kinetic Koffee
Larocca Vineyards
Lucero Organic Farms
Mandela Partners
Oro De Sonora Pure Jojoba Family Farms
Pesticide Action Network North America
Setton Farms Organic
Sunblaze Ranch
Taylor Farms
Traditional Medicinals
Western Agricultural Processors Association

Opposition

None on file

Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084