BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON AGRICULTURE
                          Senator Cathleen Galgiani, Chair
                                2015 - 2016  Regular 

          Bill No:           AB 655          Hearing Date: 6/21/16
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          |Author:    |Quirk                                                |
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          |Version:   |6/15/16   Amended                                    |
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          |Urgency:   |No                    |Fiscal:    |Yes              |
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          |Consultant:|Anne Megaro                                          |
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           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 and inedible kitchen  
          grease.  This bill would increase the registration fee and other  
          fees charged by the California Department of Food and  
          Agriculture (CDFA) to cover administrative costs associated with  
          rendering and the transportation of inedible kitchen grease and  
          would authorize CDFA to raise specified fees only upon  
          recommendation of the Rendering Industry Advisory Board.


           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 pickup and transportation to rendering facilities.  Due  
          to the increasing value of biofuels, IKG theft has proven to be  
          a relatively easy and profitable target for thieves, and has  
          risen over the past several years.

          Existing law:

             1)   Creates the CDFA Inedible Kitchen Grease Program,  
               established in 1995, to regulate and enforce IKG laws and  







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               work closely with local law enforcement to conduct  
               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 provides for 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:









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             1)   Adds findings and declarations to the Food and  
               Agricultural Code regarding the rendering industry and the  
               consideration of the "highest and best use" of waste animal  
               tissue and inedible kitchen grease when handling and  
               recycling these materials.

             2)   Increases from $3,000 to $10,000 the maximum annual fee  
               charged to each licensed renderer and collection center.

             3)   Increases from $100 to $250 the maximum registration fee  
               for transporters of IKG.

             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 the rendering,  
               collecting, and transporting 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."


           ARGUMENTS IN OPPOSITION:
           Republic Services Inc. and others stated below are in opposition  
          "because the 'highest and best use' standard for organic food  
          waste stated in this bill extends beyond the animal byproducts  
          that pose a significant threat to public health and safety.  As  
          such, the bill purports to establish that standard over the  
          'handling and recycling' of all types of organic food waste.   
          Such a hierarchy already exists in the Public Resources Code.   
          We, therefore, believe that inserting a new standard in the Food  








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          and Agricultural Code will be duplicative and most likely result  
          in further conflict and confusion."


           COMMENTS :

          Need for this bill. The Rendering Industry Advisory Board  
          discussed at their 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 of the Rendering  
          Industry Advisory Board.  In current law, the secretary's  
          authority to raise fees is not restricted.


          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.








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          Highest and best use. The Public Resources Code § 40051  
          prioritizes waste management practices as follows: 1) source  
          reduction; 2) recycling and composting; and 3) environmentally  
          safe transformation and environmentally safe land disposal.   
          CalRecycle further suggests that food waste management should be  
          prioritized as follows: 1) prevent food waste; 2) feed people;  
          3) convert to animal feed and/or rendering; and 4) compost.   
          (  http://www.calrecycle.ca.gov/SWFacilities/Compostables/WasteMeat 
          .pdf  ). 

          The US EPA further divides these categories specifically for  
          food waste into a "food recovery hierarchy" as follows: 1)  
          source reduction, 2) feed hungry people, 3) feed animals, 4)  
          industrial uses (waste oils for rendering and fuel conversion  
          and food scraps for digestion to recover energy), 5) composting,  
          and 6) landfill.  This bill would require CDFA to consider the  
          regional "highest and best" use of unprocessed mammalian,  
          poultry, fish material, and IKG from inspected establishments,  
          retail stores, custom slaughterers, and custom processors when  
          developing regulations and policies governing the handling and  
          recycling of these regulated materials and establishments. 



           RELATED  
          LEGISLATION  :

          AB 1826 (Chesbro), Chapter 727, Statutes of 2014.  Among other  
          provisions, requires businesses to recycle their organic waste  
          and requires local jurisdictions to implement organic waste  
          recycling programs. 

          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.








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          SB 513 (Cannella), Chapter 393, Statutes of 2011.  Creates the  
          Rendering Industry Advisory Board, including membership and  
          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 and extends the sunset date to  
          January 1, 2016, for the CDFA administration fee for the  
          Inedible Kitchen Grease Program.  


           PRIOR  
          ACTIONS  :
                         
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          |Assembly Floor:                       |75 - 1                     |
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          |Assembly Appropriations Committee:    |17 - 0                     |
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          |Assembly Agriculture Committee:       |10 - 0                     |
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           SUPPORT  :
          
          California Grain and Feed Association (Co-sponsor)
          Pacific Coast Rendering Association (Co-sponsor)
          California Department of Food and Agriculture


           OPPOSITION  :
          
          California Refuse Recycling Council








          AB 655 (Quirk)                                      Page 7 of ?
          
          
          Republic Services, Inc. (Oppose unless amended)
          Waste Connections, Inc. (Oppose unless amended)


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