BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 655


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          Date of Hearing:   April 22, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          655 (Quirk) - As Amended April 6, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill codifies certain legislative findings with respect to  
          the importance of rendering and increases the maximum additional  
          per-vehicle registration fee for transporters of inedible  
          kitchen grease (IKG) from $300 to $350 per year while  
          maintaining the overall cap on total registration fees per IKG  
          transporter at $3,000 per year.


          


          FISCAL EFFECT:








                                                                     AB 655


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          Annual GF revenue gains of approximately $30,000 to Department  
          of Food and Agriculture (DFA) from fee increase, offset by  
          anticipated increased cost for enforcement activities.


          COMMENTS:


          1)Purpose.  According to the author, the IKG program needs  
            additional funds for enforcement activities.  Transporting IKG  
            does not require significant capital investment, attracting  
            fly-by-night operators.  High prices can encourage theft of  
            IKG from reputable operators, while low prices can encourage  
            illegal dumping, damaging water systems.  The increase in  
            registration fees is intended to assist DFA to increase  
            enforcement actions to stop theft and illegal dumping.


          2)Greasy Wheels.  Current law imposes a base annual fee of $300  
            on IKG transporters and an additional annual enforcement and  
            administration fee of up to $300 per vehicle used to transport  
            IKG, subject to an overall cap of $3,000 per year per IKG  
            transporter.  This bill increases the annual per vehicle fee  
            to $350 but maintains the $3,000 annual cap.


            Collection centers and renderers are also subject to annual  
            fees of $1,500 and $3,000, respectively, which count toward  
            the annual fee cap.  As a result, this bill only affects IKG  
            transporters without rendering licenses and fewer than 10  
            vehicles, and collection centers with fewer than 5 vehicles.   
            Current law also imposes certain record keeping requirements  
            on IKG transporters, subject to audit and inspection by both  
            DFA and local law enforcement.


            Rendering essentially recycles IKG and other animal tissue  








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            into several stable materials used in a variety of industries,  
            including biofuels, soaps, paints and varnishes, cosmetics,  
            explosives, toothpaste, pharmaceuticals, leather, textiles,  
            and lubricants.  According to Render Magazine, an industry  
            trade publication, market prices for IKG have been volatile  
            over recent years, but can exceed $1,000 per metric ton.





          Analysis Prepared by:Joel Tashjian / APPR. / (916)  
          319-2081