BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1132 (Eggman) - Agricultural: Livestock Drugs and Commercial
Feed
Amended: August 12, 2013 Policy Vote: Agriculture 4-0
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Robert Ingenito
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1132 would (1) increase both the livestock drug
license application fee and late payment fee to $50, (2)
authorize the Secretary of the California Department of Food and
Agriculture (CDFA) to establish hazard analysis and preventive
control measures for all commercial feed, and (3) extend the
sunset date for commercial feed license fees, inspection tonnage
tax, and provisions regarding the inspection tonnage tax to
January 1, 2020.
Fiscal Impact:
The increase in the livestock drug license application
fee is projected to increase revenues by about $10,000
(special funds), sufficient to fund current workload.
In 2012-13, the Commercial Feed License Fee is projected
to generate $528,900 in revenue (special funds). Without a
sunset extension for the enhanced fee authority, the
revenue would fall to approximately $176,300, a loss of
$352,600.
The commercial feed tonnage tax has generates about $1.9
million (special funds) annually for the operation of the
feed inspection program. Currently, this tax is not at the
maximum allowed by statute ($0.15 per ton). The current
rate is $0.08 per ton.
Background: 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
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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. Under
current law, 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 Feed Inspection Program within 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..
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.
Current 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.
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Current 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
percent 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 federal Food Safety Modernization Act (FSMA) 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.
Proposed Law: This bill would, among other things, do the
following:
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. The fee ranges from $100 to $600
for each location where commercial feed is stored,
manufactured or distributed. Absent an extension, the fee
will be reduced to $100 per location.
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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 percent of tonnage taxes
collected or $200,000, whichever is greater, to be used for
education and research regarding the safe manufacture,
distribution, and use of commercial feed.
Related Legislation: AB 547 (Mendoza), Chapter 245, Statutes of
2009. Extended 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. Authorized
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.
Staff Comments: AB 1132 would extend from January 1, 2015 to
January 1, 2020, the authority of the Department of Food and
Agriculture (CDFA) to impose a license fee of $100 to $600 for
each location where commercial feed is manufactured,
distributed, sold, or stored for later sale. The funds
collected are deposited into the Food and Agriculture Fund.
This bill would require the license fee to be $100 for each
location beginning January 1, 2020. In addition, this bill
would extend for the same period the authority of CDFA to
establish an inspection tonnage tax for commercial fee with a
maximum rate of $0.15 per ton and to designate a specified
amount of the tonnage taxes to provide funding for research and
education regarding the safe manufacture, distribution, and use
of commercial feed. The funds collected from the license fee
and from the tonnage tax are deposited into the Food and
Agriculture Fund. By extending the time during which a higher
license fee may be applied and the authority to designate a
specified amount of the tonnage taxes collected, this bill would
(1) increase the fees that are deposited into a continuously
appropriated fund, and (2) extend the purposes for which funds
in a continuously appropriated fund may be spent, thereby making
an appropriation.
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