BILL ANALYSIS �
AB 1132
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CORRECTED : 05/29/2013 Changes per consultant.
ASSEMBLY THIRD READING
AB 1132 (Eggman)
As Introduced February 22, 2013
2/3 vote
AGRICULTURE 7-0 APPROPRIATIONS 16-0
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|Ayes:|Eggman, Olsen, Atkins, |Ayes:|Gatto, Harkey, Bigelow, |
| |Dahle, Pan, Quirk, Yamada | |Bocanegra, Bradford, Ian |
| | | |Calderon, Campos, Eggman, |
| | | |Gomez, Hall, Ammiano, |
| | | |Linder, Pan, Quirk, |
| | | |Wagner, Weber |
| | | | |
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SUMMARY : Extends the sunset date to January 1, 2020, for
commercial feed operations license fees and the inspection
tonnage taxes.
EXISTING LAW requires an annual licensure of a commercial feed
operation, per site, ranging from a minimum of $100 to a maximum
of $600, as determined by the Secretary of the California
Department of Food and Agriculture (CDFA), based upon the
recommendations of the Feed Inspection Advisory Board (Board).
Requires fees to fund program reserves to a minimum of 25% of
the program costs, then fees shall be used to reduce the feed
tonnage tax, based upon the recommendations of the Board. This
requirement will sunset on January 1, 2015, and the license cost
will revert to $100.
Existing statute authorizes a maximum tonnage tax on commercial
feeds, except for whole grains and hays when unmixed, of $0.15
per ton for any distributor of commercial feed to an in-state
consumer-buyer. This includes feeds provided by a distributor
to his, or her, own animals. This rate is established by CDFA,
based upon recommendations of the Board. Based upon the Board
recommendations, CDFA may designate 15% of tonnage taxes, or
$200,000, whichever is greater, to be used for research and
education regarding the safe manufacture, distribution, and use
of commercial feed. These funds may only be used for activities
approved by the Board, with approval made prior to expenditure.
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This statute will sunset on January 1, 2015. After this date,
the tonnage tax remains in effect but the use of 15% or
$200,000, whichever is greater for research and education
regarding the safe manufacturing, distribution and use of
commercial feed, is deleted.
FISCAL EFFECT : According the Assembly Committee on
Appropriations, this bill has negligible costs to CDFA or the
General Fund. In 2013-14 this license fee is expected to
generate $528,900; without the sunset extension revenues drop to
roughly $173,300. In the last three years the tonnage tax has
provided $1.9 million in revenues; the current tax rate is at
$0.08, which is below the maximum rate permitted.
The Legislative Counsel has determined that it is a "tax", as
determined within the meaning of Section 3, Article XIII A, of
the California Constitution, thus requires, for passage in
either house, a two thirds vote (Proposition 26).
COMMENTS : This program is known as the Feed Inspection Program
(FIP) and was created in 1972. Its purpose is to ensure a clean
and wholesome supply of milk, meat and eggs by providing clean
and wholesome fodder for livestock and poultry, as well as,
providing assurance that the product received by the consumer is
of the quality and quantity purported by the manufacturer.
Inspectors and investigators are located throughout the state to
conduct routine sampling and inspections; conduct quality
assurance inspections of the manufacturing facilities; respond
to consumer complaints; and, enforce the laws and regulations
that govern the manufacturing and distribution of animal feed.
As part of FIP, the Safe Animal Feed Education Program promotes
feed safety and security through outreach and education, and
performs Voluntary Feed Quality Assurance Audits. FIP is funded
through the collection of a licensing fee and an inspection tax
based upon tonnage sold. Commercial feed licensing is for a one
year period, beginning July 1 and expiring June 30 of the
following year. The current annual licensing fee is $300. The
inspection tonnage tax is currently at $0.08 per ton and is due
on a quarterly basis.
The Board advises or makes recommendations to CDFA on matters
relating to inspection and enforcement, annual budget,
inspection fees, and regulations required to accomplish the
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purposes of the law. The Board is comprised of eight members
who possess a commercial feed license and one public member; all
are appointed by CDFA for three-year terms. The Board currently
meets at least once a year.
This is the first time the sunset on the inspection tax has been
considered "a tax", requiring a two thirds vote for passage in
both houses. In the past, previous to Proposition 26 of 2010,
this legislation required a simple majority vote in both houses
for passage.
Previous legislation : AB 547 (Mendoza), Statutes of 2009,
Chapter 245, extended the sunset date from January 1, 2010, to
January 15, 2015, for the Secretary of CDFA to set a specific
fee for feed licenses, and designate a specified amount of
commercial feed tonnage taxes collected be provided for funding
for research and education, regarding the safe manufacture,
distribution, and use of commercial feed.
AB 2958 (Agriculture), Statutes of 2006, Chapter 285, allowed
commercial feed to be sold by volume, in addition to weight;
replaced the $100 biennial commercial feed license fee with an
annual fee of at least $100, but not more than $600, upon
recommendation of the Board, until January 1, 2010; required the
license fee revenue to replenish FIP reserves to 25% of its
expenditures, after which point the license fee revenue must be
used to reduce feed tonnage taxes to a level recommended by the
Board; and, increased, from $40 to $100, the penalty imposed for
late renewal of a commercial feed license.
AB 1071 (Matthews), Statutes of 2004, Chapter 929, expanded the
use of commercial feed inspection funds to include research and
education until January 1, 2010, and provided changes to other
non-related agricultural programs.
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084
FN: 0000800
AB 1132
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