BILL ANALYSIS Ó
SENATE COMMITTEE on AGRICULTURE
Senator Cathleen Galgiani, Chair
BILL NO: AB 1132 HEARING: 07/02/13
AUTHOR: Eggman FISCAL: Yes
VERSION: 06/13/13 CONSULTANT: Anne Megaro
Agriculture: livestock drugs and commercial feed.
SUMMARY :
This bill increases both the livestock drug license application
fee and late payment fee to $50, authorizes the secretary of the
California Department of Food and Agriculture to establish
hazard analysis and preventive control measures for all
commercial feed, and extends the sunset date for commercial feed
license fees, inspection tonnage tax, and provisions regarding
the inspection tonnage tax to January 1, 2020.
BACKGROUND AND EXISTING LAW :
The Feed Inspection Program within the California Department of
Food and Agriculture (CDFA) was established in 1972 and is
responsible for enforcing laws and regulations pertinent to the
manufacturing, distributing, and labeling of commercial
livestock feed in California, while preventing adulterated feed
from being consumed by livestock and poultry. Specifically,
this program ensures food and feed safety and assures the
consumer that the product is properly identified and is of the
quality and quantity as stated by the manufacturer. The Feed
Inspection Advisory Board, composed of eight members appointed
by the secretary, meets at least once a year to make
recommendations to the secretary on matters relating to
inspection and enforcement, annual budget, inspection fees, and
regulations. This program is funded by license fees and an
inspection tonnage tax, as detailed below.
The Safe Animal Feed Education (SAFE) Program , as part of the
Feed Inspection Program, was developed in collaboration with the
feed industry and uses outreach, education, and a voluntary
quality assurance program to ensure a safe and wholesome supply
of commercial feed. On-farm education and organized workshops
provide information on the proper use of medicated feeds, and
voluntary audits review manufacturing practices, quality
assurance protocols, process controls, ingredient storage,
record keeping, product labeling, and compliance with all laws
and regulations.
AB 1132 - Page 2
Existing law requires that a license be obtained for each
location where commercial feed is manufactured, distributed,
sold, or stored. The license fee may range from a minimum of
$100 to a maximum of $600, and revenues are used to fund the
feed inspection program. As of July 1, 2013, the license fee is
$400 per year, as determined by the secretary of CDFA upon
recommendation of the Feed Inspection Advisory Board. CDFA's
authority to adjust this fee above $100 will be repealed January
1, 2015, unless a further statute extends this date.
Existing law provides for the collection of an inspection
tonnage tax on commercial feed sold in California. Revenues
shall be used to carry out provisions regulating commercial
feed, and 15% or $200,000, whichever is greater, may also be
used to provide funding for research and education regarding the
safe manufacture, distribution, and use of commercial feed. The
inspection tonnage tax cannot be greater than $0.15 per ton of
commercial feed sold. Currently, the rate is set at $0.08 per
ton, as determined by the secretary of CDFA upon recommendation
of the Feed Inspection Advisory Board. Provisions authorizing
CDFA to use these funds for research and education are repealed
January 1, 2015, unless a further statute extends this date.
The Livestock Drug Program within CDFA ensures the proper use,
handling, and storage of over-the-counter livestock drugs.
Retail sales of restricted livestock drugs require a license.
Each licensee shall keep a record of each sale of a restricted
drug, including the kind and quantity of the drug, sale date,
purchaser's name, address and signature, and any other
information deemed necessary by the secretary. The license and
annual renewal are accompanied by a $25 fee, with a $10 late
penalty fee. These fees, among others, are used to fund the
Livestock Drug Program.
The federal Food Safety Modernization Act (FSMA) , signed into
law on January 4, 2011, enables the Food and Drug Administration
(FDA) to strengthen the food safety system by primarily focusing
on preventative, rather than response, methods. According to
the Centers for Disease Control and Prevention, 48 million
people become sick, 128,000 are hospitalized, and 3,000 die each
year from foodborne diseases. The FSMA authorizes FDA to
enforce compliance with prevention- and risk-based food safety
standards, hold imported foods to the same standards as domestic
products, authorizes FDA to hold mandatory food product recalls,
and directs FDA to partner with state and local authorities to
build an integrated national food safety system.
AB 1132 - Page 3
PROPOSED LAW :
This bill:
Increases the renewal application fee for a retail
license to sell restricted livestock drugs from $25 to $50
per year, with an increased penalty of $50 for late
payments.
Authorizes the secretary of CDFA to establish hazard
analysis and preventive control measures necessary to carry
out provisions regulating commercial feed.
Extends to January 1, 2020, the annual license fee
required for those manufacturing, distributing, selling or
storing commercial feed.
Extends to January 1, 2020, the minimum inspection
tonnage tax of $0.15 per ton of commercial feed sold, as
specified, and the secretary of CDFA's authority to adjust
this rate as necessary.
Extends to January 1, 2020, the authority of the
secretary of CDFA to designate 15% of tonnage taxes
collected or $200,000, whichever is greater, to provide
funding for research and education regarding the safe
manufacture, distribution, and use of commercial feed.
COMMENTS :
Stated need for this bill: According to the author, "If the
sunset is not extended, the Commercial Feed Inspection Program
would likely end due to lack of funding, which would increase
the risk to animal feed safety. Further, under the federal Food
Safety Modernization Act, additional requirements will be placed
on commercial feed operators to ensure clean and healthy feed
products. The extension of the research funding will allow
continued research and assistance to commercial feed operators
and users of commercial feed."
Furthermore, according to those in support, "This bill extends
the authority to collect the assessment on each ton of feed sold
for another five years. The assessment and SAFE program have
wide industry support and have been successfully implemented for
many years. This will accelerate compliance with the Food
Safety Modernization Act."
Livestock drugs: Since enactment in 1976, the fees for livestock
drug registration and retail licensing have not increased. The
AB 1132 - Page 4
Feed Inspection Advisory Board recommended an increase in
restricted livestock drug license and late payment fees to
better support the workload of the Livestock Drug Program.
Fee revenues: According to CDFA, in FY 2012/13, the Commercial
Feed License Fee generated $528,900 in revenue, and the
restricted livestock drug licenses generated $6,925.
Food Safety Modernization Act: CDFA is actively involved in
ensuring compliance with FSMA laws and regulations. By
authorizing the secretary of CDFA to establish hazard analysis
and preventive control methods for all commercial feed,
California will be better prepared to align current laws and
regulations with the FSMA as it becomes fully implemented.
Tax measure: This is the first time the sunset on the inspection
tonnage tax has been considered a "tax", requiring a 2/3 vote
for passage in both houses. Prior to Proposition 26 of 2010,
this legislation required a simple majority vote in both houses
for passage.
RELATED LEGISLATION :
AB 547 (Mendoza), Chapter 245, Statutes of 2009. Extends the
sunset date for provisions regarding the commercial feed license
fee and tonnage tax to January 1, 2015.
AB 2958 (Agriculture), Chapter 285, Statutes of 2006. Authorizes
CDFA to increase the commercial feed license fee to an amount
not to exceed $600, increases late penalty fees, includes a
sunset date for license fees to revert back to $100, and
specifies use of revenues generated from license fees.
AB 1071 (Matthews), Chapter 929, Statutes of 2004. Expands the
use of commercial feed inspection funds to include research and
education until 2010, among other provisions.
SB 1935 (Costa), Chapter 1000, Statues of 2000. Increases the
commercial feed license application, renewal and late payment
fees, and authorizes the secretary of CDFA to increase the
tonnage tax to a maximum $0.15 per ton of commercial feed sold,
among other provisions.
PRIOR ACTIONS :
AB 1132 - Page 5
Assembly Floor 77-0
Assembly Appropriations 16-0
Assembly Agriculture 7-0
SUPPORT :
California Grain and Feed Association
OPPOSITION :
None received