BILL ANALYSIS �
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THIRD READING
Bill No: AB 1132
Author: Eggman (D)
Amended: 8/12/13 in Senate
Vote: 27
SENATE AGRICULTURE COMMITTEE : 4-0, 7/2/13
AYES: Galgiani, Cannella, Berryhill, Wolk
NO VOTE RECORDED: Lieu
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/19/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 77-0, 5/29/13 - See last page for vote
SUBJECT : Agriculture: livestock drugs and commercial feed
SOURCE : Author
DIGEST : This bill increases the livestock drug license
application fee, the renewal fee, and the penalty fee to $50,
authorizes the Secretary of the California Department of Food
and Agriculture (CDFA) 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.
ANALYSIS : The Feed Inspection Program within CDFA was
established in 1972 and is responsible for enforcing laws and
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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 CDFA 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.
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. Requires
revenues to 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.
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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 a risk-based food safety
standard, 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.
This bill:
1.Increases the application and 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 of a renewal application fee.
2.Authorizes the Secretary of CDFA to establish hazard analysis
and preventive control measures necessary to carry out
provisions regulating commercial feed.
3.Extends to January 1, 2020, the annual license fee required
for those manufacturing, distributing, selling or storing
commercial feed.
4.Extends to January 1, 2020, the minimum inspection tonnage tax
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of $0.15 per ton of commercial feed sold, as specified, and
the Secretary of CDFA's authority to adjust this rate as
necessary.
5.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.
Background
Livestock drugs . Since enactment in 1976, the fees for
livestock drug registration and retail licensing have not
increased. The 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 existing 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.
Prior 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 (Assembly Agriculture Committee, Chapter 285, Statutes
of 2006) authorizes CDFA to increase the commercial feed license
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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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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.
SUPPORT : (Verified 8/20/13)
California Grain and Feed Association
ARGUMENTS IN SUPPORT : 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
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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."
ASSEMBLY FLOOR : 77-0, 5/29/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Donnelly, Holden, Vacancy
JL:ej 8/21/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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