BILL ANALYSIS �
AB 1132
Page 1
Date of Hearing: April 17, 2013
ASSEMBLY COMMITTEE ON AGRICULTURE
Susan Talamantes Eggman, Chair
AB 1132 (Eggman) - As Introduced: February 22, 2013
SUBJECT : Commercial feed: license fee: inspection tonnage tax.
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 fifteen
cents ($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. 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 : Unknown. Legislative Counsel has keyed this
bill fiscal and 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 2/3 vote (Proposition 26).
AB 1132
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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 the FIP, the Safe Animal Feed Education Program,
promotes feed safety and security through outreach and
education, and performs Voluntary Feed Quality Assurance Audits.
The 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 1st and
expiring June 30th of the following year. The current annual
licensing fee is $300. The inspection tonnage tax is currently
at eight cents ($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
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 2/3 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. This bill extended the sunset date from January 1,
2010 to January 15, 2015 for the Secretary of the Department of
Food and Agriculture to (1) set a specific fee for feed
licenses, and (2) 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 1132
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AB 2958 (Agriculture), Statutes of 2006, Chapter 285. This
bill 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. This bill
expanded the use of commercial feed inspection funds to include
research and education until January 1, 2010; extended the
sunsets to 2011 for the licensing of renderers, collection
centers and the registration of transporters of inedible kitchen
grease and collection centers; permitted the use of rendered
products in accordance with the United States Food and Drug
Administration rules and regulations; and, required a registrant
to notify a county health officer when a contract is terminated
or expires.
REGISTERED SUPPORT / OPPOSITION :
Support
California Grain and Feed Association
Opposition
None on file.
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084