CA Food & Agric Code Section 58887

A marketing order may contain provisions for the establishment of surplus, stabilization, or byproduct pools for any commodity, or of any grade, size, quality, or condition of it, and providing for the sale of the commodity in any such pool and for the equitable distribution among the persons that are participating in the pool of the net returns which are derived from the sale of such commodity. The marketing of green ripe olives is not, however, subject to any provisions of a marketing order which relate to the establishment and operation of surplus pools. If the marketing order authorizes the establishment of any such pool, the advisory board may receive such commodity from each producer or handler and handle it according to the grade, size, quality, or condition of the commodity and account to each producer or handler that is participating in the pool upon a pro rata basis for the net proceeds derived from the sale of the commodity. The contents of any surplus pool shall not be marketed by the advisory board in any form which would compete directly with that portion of the commodity which is marketed in regular channels of trade. However, any portion of any surplus pool may be transferred by the advisory board upon any gratuitous basis to charitable organizations and other similar agencies under proper safeguards to insure that none of such commodity shall compete directly with the unrestricted portion of such commodity. The advisory board may dispose of the contents of a stabilization pool in the regular marketing channels in such manner and at such times as it deems advisable, consistent with the maintenance of stabilized marketing conditions for such commodity. The advisory board may dispose of the contents of any byproduct pool only for byproducts or for other similar purposes under proper safeguards to prevent such portion of the commodity so disposed of from directly competing with that part of the commodity which is marketed in the usual form or in the regular channels of trade. If the marketing order authorizes the establishment of a surplus, stabilization, or byproduct pool, the advisory board may do any of the following:

(a)

Arrange for and operate any necessary facilities for the storing, financing, grading, packing, servicing, processing, preparing for market, selling, and disposing of the contents of any pools which are provided for in this chapter. The board shall not, however, engage in commercial warehousing.

(b)

Pledge all of the commodity in any such pools with banks or other lending agencies for the purpose of obtaining loans upon it. The board shall have title, for the purpose of financing and handling, to all of the commodity in any such pools.

(c)

Create, by a uniform assessment upon producers, or upon some other uniform and equitable basis, maintain, and disburse an equalization fund to be used for the removal of any inequalities between producers or handlers that are participating in any pool which result from errors in estimating production or surplus or for indemnifying producers whose production, in whole or in part, is diverted in green form or otherwise from normal marketing outlets or diverted to byproducts, relief, or other noncompetitive purposes pursuant to the provisions of the marketing order.