BILL ANALYSIS                                                                                                                                                                                                    

                        SENATE FOOD and AGRICULTURE COMMITTEE
                            Senator Dean Florez, Chairman

          BILL NO:    AB 1709                   HEARING:  6/15/10
          AUTHOR:   Conway                      FISCAL:  Yes
          VERSION:  5/5/10                      CONSULTANT:  John Chandler  

          Biologics: animal blood and blood component products: commercial  
                              blood banks for animals.


          California Department of Food and Agriculture (CDFA) Veterinary  
          Biologics Program (biologics program) was established in 1974 as  
          a result of the 1971-72 Exotic Newcastle Disease outbreak in  
          Southern California.  The program was modeled after the United  
          States Department of Agriculture's (USDA) Center for Veterinary  
          Biologics Program.  The program licensed biologics products used  
          in California and ensured that all available veterinary  
          biologics were safe, pure, potent, and efficacious.  CDFA has  
          one veterinarian and $120,000 of General Fund dedicated  
          primarily to the biologics program.  Biologic products are  
          medications that activate an animal's immune system response to  
          fight off a disease.

          Current law defines biologics as: "the following products which  
          are used for the diagnosis and detection of and for the  
          prevention or treatment of, disease in animals other than man:   
          serum, blood, vaccines, live vaccines, killed vaccine, tissue  
          vaccine, autogenous vaccine, live virus, killed virus, live  
          bacterial culture, killed bacterial culture, bacterin, hormone,  
          tissue extract, gland extract, gland preparation, insulin, and  
          similar products made from human or animal tissues or  

          In 1985, the federal government amended the Virus-Serum-Toxin  
          Act authorizing USDA to regulate intrastate, as well as  
          interstate, movement of biological products and broadened their  
          authority to issue regulations.  Regulations were implemented  
          for an exemption from the federal licensure for products  
          produced under an approved state program for exclusive use in  
          the state.  California obtained USDA approval for this exemption  
          and is the only state currently holding this exemption for a  
          state biologics program.  

          Currently, there are three licensed biologic companies in  
          California that are also licensed under USDA's Center for  
          Veterinary Biologics Program.  There are 10 biologic products  


          AB 1709 - Page 2

          that are licensed for use in California and could be approved  
          for use by USDA under conditional restricted use in order for  
          their continued use within California.  

          SB 1342 (Kuehl), Chapter 822, Statutes of 2002, established  
          additional protocols for commercial blood banks for animals that  
          are licensed by the CDFA.

          PROPOSED LAW

          AB 1709 deletes the current veterinary biologics licensing law  
          and replaces it with licensing requirements for animal blood  
          banks. Specifically, this bill:

                 Replaces the existing state veterinary biologics  
               licensing program with licensing requirements for  
               businesses handling animal blood and blood products.

                 Prohibits a person from engaging in the production of  
               biologics unless they have a valid permit or license from  
               the United States Department of Agriculture (USDA). 

                 Requires the CDFA to submit to the Legislature by June  
               1, 2011, a report on the status of the transition of  
               biologics licenses to the federal government.  In addition,  
               requires CDFA to report annually on the transition until  
               all state licensed biologics businesses have transitioned  
               to the federal license. 

                 States that this act will not become operative until all  
               California registered biologics businesses as of December  
               31, 2010, obtain a conditional United States Veterinary  
               Biological Product License from USDA. 


          1.CDFA is sponsoring AB 1709 to eliminate the current state  
            biologics program without impacting the program for commercial  
            blood banks for animals and transition California to the  
            federal biologics program to address funding shortfalls in the  
            current state program.  Based on a recent USDA audit of the  
            California biologics program, it is estimated that the cost to  
            maintain a federally compliant program would be approximately  
            $428,000 and three personnel years, further training or  


          AB 1709 - Page 3

            special recruitment at higher salaries than are currently  
            allowable, and contracting with a private laboratory for  
            regulatory testing of products.  Without sufficient funding or  
            AB 1709 CDFA would not be able to maintain sufficient  
            oversight which could result in a potentially disruptive  
            action by USDA to disallow the California exemption to the  
            federal biologics program.

          2.AB 1709 would maintain the requirements for licensing  
            commercial blood banks for animals under the state program.   
            One of the requirements for a licensed establishment is to  
            produce animal blood and blood component products  under the  
            direct supervision of a qualified person in the field.  There  
            does not seen to be any clear definition of a qualified person  
            or how a person would be deemed qualified in the field.  The  
            committee may wish to consider further explanation of a  
            "person qualified in the field".

          3.AB 1709 would maintain the state required registration for  
            blood or blood component products that meet specified  
            requirements.  The first requirement is that the blood or  
            blood component products are produced under "acceptable  
            procedures."  The committee may wish to consider if the bill  
            should further define "acceptable procedures."  


          Assembly Floor 72-0
          Assembly Appropriations16-0
          Assembly Agriculture  8-0

          Animal Blood Bank
          California Department of Food and Agriculture
          California Veterinary Medical Association

          None received


          AB 1709 - Page 4