BILL ANALYSIS Ó SENATE COMMITTEE ON AGRICULTURE Senator Cathleen Galgiani, Chair 2015 - 2016 Regular Bill No: AB 655 Hearing Date: 7/7/15 ----------------------------------------------------------------- |Author: |Quirk | |-----------+-----------------------------------------------------| |Version: |7/1/15 Amended | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Anne Megaro | | | | ----------------------------------------------------------------- Subject: Rendering: inedible kitchen grease: registration fee: additional fees. SUMMARY : This bill would add findings and declarations to the Food and Agricultural Code in regards to the rendering industry and the value of recycling waste animal tissue. This bill would increase the registration fee and other additional fees charged by the California Department of Food and Agriculture (CDFA) to cover administrative costs associated with the transportation of inedible kitchen grease and would authorize CDFA to raise specified fees only upon recommendation of the Rendering Industry Advisory Committee. BACKGROUND AND EXISTING LAW : Inedible kitchen grease (IKG) is a byproduct of commercial cooking that can be rendered into a valuable product and used for biofuel or as an ingredient in animal feed. Typically, restaurants will store IKG behind buildings and in alleyways awaiting pick-up and transportation to rendering facilities. Due to the increasing value of biofuels, IKG theft has risen over the past several years and has proven to be a relatively easy and profitable target for thieves. Existing Law: 1) Creates the CDFA Inedible Kitchen Grease Program, established in 1995, to regulate and enforce IKG laws and work closely with local law enforcement to conduct AB 655 (Quirk) Page 2 of ? investigations and prevent IKG theft (Food and Agricultural Code §19300 et seq.). 2) Requires all renderers and collection centers to apply for and obtain a license from CDFA and requires all IKG transporters to be registered. 3) Authorizes CDFA to charge additional fees necessary to cover the cost of administering this program, not to exceed $300 per year per vehicle and $3,000 per year per registered IKG transporter. 4) Exempts an individual from 75% of the additional administrative fee if the individual is transporting IKG for their own personal, noncommercial use as an alternative fuel, provided specific requirements are met. 5) Authorizes CDFA to revoke, suspend, or refuse to issue a renderer or collection center license or transporter registration under specified circumstances, including previous violations of IKG transportation laws or regulations. 6) Requires licensed renderers, collection center operators, and registered transporters to retain specified records reflecting sales and transportation of IKG for two years. 7) Prohibits anyone from accepting IKG from any unregistered transporter and from possessing any IKG that is knowingly stolen and issues fines and/or imprisonment for violations of these provisions. 8) Creates the Rendering Industry Advisory Board to provide recommendations to the secretary of CDFA regarding rendering and IKG enforcement, fees, annual budget, and regulations (Food and Agricultural Code §19218). PROPOSED LAW : This bill: 1) Adds findings and declarations to the Food and Agricultural Code in regards to the rendering industry and AB 655 (Quirk) Page 3 of ? the value of recycling waste animal tissue. 2) Increases from $100 to $250 the registration fee for transporters of IKG. 3) Increases from $3,000 to $10,000 the maximum annual fee charged to each licensed renderer and collection center. 4) Increases, from $300 to $500 per vehicle, and from $3,000 to $10,000 per registered transporter, the maximum fees charged by CDFA to cover administrative costs associated with transportation of IKG. 5) Authorizes the secretary, upon recommendation of the Rendering Industry Advisory Board, to determine the additional fee amounts necessary to provide the revenue needed to administer provisions regarding renderers and the transportation of IKG. 6) Makes technical and conforming changes. ARGUMENTS IN SUPPORT: According to the author, "The rendering industry is critical to the health and safety of California. Rendering is an effective tool in eliminating many human and animal disease pathogens, protecting our groundwater and air resources, and greatly reducing greenhouse gas emissions compared to other alternative disposal options. [?] More funds are needed to maintain an effective enforcement system for [the IKG] program." COMMENTS : Need for this bill. The Rendering Industry Advisory Committee discussed at their board meeting on December 4, 2014, the need to "select a sustainable mechanism to help support the Rendering Enforcement Program and establish strategic priorities for future program activities." A motion passed unanimously in support of raising fees to support the program. Secretary authority. This bill would authorize the secretary to raise specified fees only upon recommendation from the Rendering Industry Advisory Committee. In current law, the secretary's authority to raise fees is not restricted. AB 655 (Quirk) Page 4 of ? Liquid gold. IKG has become a valuable commodity in the last decade, especially in light of rising gasoline prices and corresponding growth in the biodiesel fuel industry. Recycling an otherwise 'grimy waste product' into a valuable feed or biofuel resource is attractive and profitable. According to a recent article, IKG is traded in commodity markets, and its value has skyrocketed from $0.66 per gallon in April 2001 to $3.68 per gallon in April 2011 ("Grease is gold; thieves get bold." News & Observer, NC. June 1, 2011). A more recent article published in The New Yorker states that a thief driving down a strip-mall alleyway can collect $4,000 worth of IKG in half an hour ("Hot Grease." The New Yorker. November 18, 2013.) IKG theft program. According to the CDFA IKG Theft Program, legitimate companies and restaurants are losing millions of dollars to theft and container damage by IKG thieves. Thieves break into storage containers and pump out the contents into a truck, where a truckload could bring in as much as $600 at a grease recycling center. Environmental impact. In addition to theft concerns, the process of rendering IKG creates harmful waste byproducts that must be handled and disposed of properly so as not to damage or contaminate waterways or the environment. It is unlikely that black-market IKG thieves are equipped to handle these chemicals. RELATED LEGISLATION : AB 1566 (Holden), Chapter 595, Statutes of 2014. Expands the authorization of CDFA and California Highway Patrol employees to enforce inedible kitchen grease laws and regulations. Extends the sunset date for the collection of annual fees charged by CDFA; authorizes CDFA to deny, suspend, or revoke licenses and registrations; increases violation penalties; and makes conforming and technical changes. AB 2378 (Huber), Chapter 303, Statutes of 2012. Increases maximum fines for specified crimes related to IKG theft. Requires transporters, renderers, and collection centers to maintain records on IKG for two years. SB 513 (Cannella), Chapter 393, Statutes of 2011. Creates the Rendering Industry Advisory Board, including membership and AB 655 (Quirk) Page 5 of ? duties; and reauthorizes the licensing of renderers and the collection of fees, to sunset January 1, 2016. AB 2612 (Agriculture), Chapter 393, Statutes of 2010. This omnibus bill, among other provisions, expands rendering definitions of a "collection center," changes collection centers' licensure expiration dates, and exempts collection centers from specified fees. AB 1249 (Galgiani), Chapter 280, Statutes of 2009. Authorizes the transportation of dead animals to alternative facilities during a state of emergency; extends the sunset date to January 1, 2016, for the CDFA administration fee for the Inedible Kitchen Grease Program. PRIOR ACTIONS : ------------------------------------------------------------------ |Assembly Floor: |75 - 1 | |--------------------------------------+---------------------------| |Assembly Appropriations Committee: |17 - 0 | |--------------------------------------+---------------------------| |Assembly Agriculture Committee: |10 - 0 | | | | ------------------------------------------------------------------ SUPPORT : California Grain and Feed Association Pacific Coast Rendering Association OPPOSITION : None received -- END --