BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 655
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          |Author:    |Quirk                                                |
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          |-----------+-----------------------+-------------+----------------|
          |Version:   |6/15/2016              |Hearing      | June 29, 2016  |
          |           |                       |Date:        |                |
          |-----------+-----------------------+-------------+----------------|
          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Joanne Roy                                           |
          |           |                                                     |
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          SUBJECT:  Rendering:  inedible kitchen grease:  registration  
          fee:  additional fees.


            ANALYSIS:
          
          Existing law:  
          
          1) Pursuant to the Integrated Waste Management Act (Public  
             Resources Code (PRC) §40000):

             a)    Establishes a state recycling goal of 75% of solid  
                waste generated be diverted from landfill disposal by 2020  
                through source reduction, recycling, and composting.

             b)    Requires each local jurisdiction to divert 50% of solid  
                waste from landfill disposal through source reduction,  
                recycling, and composting.

             c)    Requires CalRecycle and local agencies to promote waste  
                management practices in order of the following priority  
                (PRC §40051):  

                i)          Source reduction.
                ii)         Recycling and composting.
                iii)        Environmentally safe transformation and  
                     environmentally safe land  
                      disposal.

             d)    Defines "source reduction" as any action which causes a  







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                net reduction of solid waste.  "Source reduction"  
                includes, but is not limited to, reducing the use of  
                nonrecyclable materials, replacing disposable materials  
                and products with reusable materials and products,  
                reducing packaging, reducing the amount of yard waste  
                generated, establishing garbage rate structures with  
                incentives to reduce the amount of wastes that generators  
                produce, and increasing the efficiency of the use of  
                paper, cardboard, glass, metal, plastic, and other  
                materials.  "Source reduction" does not include steps  
                taken after the material becomes solid waste or actions  
                which would impair air or water resources in lieu of land,  
                including, but not limited to, transformation.  (PRC  
                §40051).

             e)    Requires a commercial waste generator to arrange for  
                recycling services and requires local governments to  
                implement commercial solid waste recycling programs  
                designed to divert solid waste from businesses.

             f)    Requires generators of specified amounts of organic  
                waste (i.e. food waste and yard waste) to arrange for  
                recycling services for that material.

             g)    Requires the California Environmental Protection Agency  
                (CalEPA), in coordination with the California Department  
                of Resources Recycling and Recovery (CalRecycle), and  
                California Department of Food and Agriculture (CDFA), to  
                develop and implement policies to aid in diverting organic  
                waste from landfills. (PRC §42649.87).

                i)         Requires CalEPA, through CalRecycle, to promote  
                     the goal of reducing at least five million metric  
                     tons of GHG emissions reductions per year through the  
                     development and application of compost on working  
                     lands; and requires CalEPA and CDFA to ensure proper  
                     coordination of agency regulations and goals.

                ii)        Requires CalEPA and CDFA to assess the state's  
                     progress towards developing organic waste processing  
                     and recycling infrastructure necessary to meet the  
                     goals specified in AB 341 (Chesbro), Chapter 476,  
                     Statutes of 2011), AB 1826 (Chesbro), Chapter 727,  
                     Statutes of 2014, the State Air Resources Board's May  








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                     2015 Short-Lived Climate Pollutant Reduction strategy  
                     concept paper, and CDFA's Healthy Soils Initiative. 

          2) Requires the State Air Resources Board (ARB), under the  
             California Global Warming Solutions Act of 2006 (commonly  
             referred to as AB 32), to determine the 1990 statewide  
             greenhouse gas (GHG) emissions level and approve statewide  
             GHG emissions limit that is equivalent to that level, to be  
             achieved by 2020, and to adopt GHG emissions reductions  
             measures by regulation.  (Health and Safety Code §38500 et  
             seq.)

          3) Provides for the regulation of holding, segregation, and  
             disposal of animals unfit for human food purposes such as  
             requiring licensing of renderers and collection centers and  
             registration of inedible kitchen grease (IKG) transporters.   
             (Food and Agriculture Code (FAC) §19051 et seq.)

          4) Defines "rendering" as recycling, processing, and conversion  
             of animal and fish materials and carcasses and IKG into fats,  
             oils, proteins, and other products that are used in the  
             animal, poultry, and pet food industries and other  
             industries.  (FAC §19213).

          5) Requires every person engaged in the business of rendering to  
             obtain a license from CDFA for each rendering plant.  (FAC  
             §19300).

          This bill:  

          1) Makes findings and declarations regarding rendering as an  
             effective tool to eliminate pathogens, protect air and  
             groundwater resources, and reduce GHG emissions compared to  
             other alternative disposal options; and describes rendering.

          2) To the extent feasible, requires CDFA to consider the  
             regional "highest and best use" of unprocessed waste animal  
             material and inedible kitchen grease (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.

          3) Increases the maximum annual fee charged to licensed  








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             renderers and collection centers and the registration fee for  
             transporters of IKG.

            Background
          
          1) Statewide waste diversion goals.  CalRecycle is tasked with  
             diverting at least 75% of solid waste statewide by 2020.   
             Currently, an estimated 35 million tons of waste are disposed  
             of in California's landfills annually, of which 32% is  
             compostable organic materials, 29% is construction and  
             demolition debris, and 17% is paper. 

          In addition, CalRecycle is charged with implementing Strategic  
             Directive 6.1, which calls for reducing organic waste  
             disposal by 50% by 2020.  According to CalRecycle,  
             significant gains in organic waste diversion (through  
             recycling technologies of organic waste, including composting  
             and anaerobic digestion) are necessary to meet the 75% goal  
             and to implement Strategic Directive 6.1.

          2) Mandatory commercial organics recycling.  According to  
             CalRecycle, AB 1826 (Chesbro, Chapter 727, Statutes of 2014)  
             requires businesses to recycle their organic waste on and  
             after April 1, 2016, depending on the amount of waste they  
             generate per week.  AB 1826 also requires that on and after  
             January 1, 2016, local jurisdictions across the state  
             implement an organic waste recycling program to divert  
             organic waste generated by businesses.  Mandatory recycling  
             of organic waste is a component in achieving the state's  
             recycling and GHG emission goals.  

          3) Food scraps management.  According to CalRecycle,  
             Californians throw away nearly 6 million tons of food scraps  
             or food waste each year.  This represents about 18% of all  
             the material that goes to landfills.  In order for California  
             to reach its goal of 75% source reduction, recycling, and  
             composting, food waste must be addressed.  Options for  
             recycling food waste include:

             a)    Rendering.  According to CalRecycle, rendering refers  
                to the processing of grease, fat, meat, or bone into  
                usable products.  Rendering companies process animal  
                by-products into saleable commodities.  Collection service  
                areas, costs, and types of materials accepted vary.   








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                Grease from restaurants is a common by-product collected  
                and processed by rendering or tallow companies, but many  
                companies will also collect or accept meat, fat, bone, and  
                dead animal carcasses.

             b)    Anaerobic digestion.  According to the United States  
                Environmental Protection Agency (US EPA), anaerobic  
                digestion is a process where microorganisims break down  
                organic materials, such as food scraps, manure, and sewage  
                sludge.  This is done in the absence of oxygen. Recycled  
                food waste through anaerobic digestion produces biogas and  
                a soil amendment - biogas is made primarily of methane and  
                carbon dioxide and the solids remaining from the anaerobic  
                digestion process can be land applied or composted and  
                used as a soil amendment.  

             Food waste can be processed at facilities specifically  
                designed to digest the organic portion of municipal solid  
                waste.  It can also be co-digested at wastewater treatment  
                facilities and manure digesters.  Co-digestion is a  
                process whereby additional, energy-rich organic materials  
                (e.g. food scraps or fats, oils, and grease) are added to  
                dairy or wastewater digesters.  Co-digestion uses existing  
                infrastructure to divert food scraps and fats, oil, and  
                grease from landfills. 

             c)    Composting.  According to CalRecycle, compost is the  
                controlled decomposition of organic material such as  
                leaves, twigs, grass clippings, and food scraps.  A wide  
                range of materials may be composted, but they must consist  
                of principally organic components (i.e. carbon-containing  
                remnants of residues of life processes).  Compost products  
                may vary since the properties of any given compost depend  
                on the nature of the original feedstock and the conditions  
                under which it was decomposed. 

             Composting is a means of controlling and accelerating the  
                decomposition process.  An overabundance of soil organisms  
                is responsible for transforming the organic matter in  
                compost into carbon dioxide, water, humic substances  
                (components of soil that affect physical and chemical  
                properties and improve soil fertility) and energy in the  
                form of heat.  Most composting facilities use a  
                thermophilic process, which breaks down the waste with  








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                heat-loving bacteria, and relies on high temperatures to  
                meet pathogen reduction standards.

             Composting diverts organic materials out of landfills and  
                turns it into a product that is useful for soil  
                restoration.  In addition to improving the quality of  
                soil, compost prevents soil erosion, reduces the need for  
                chemical fertilizers, herbicides, and pesticides, and  
                enables better soil water retention.  

             However, composting of animal tissue may raise concern due to  
                potential public health and safety risks related to  
                composting's effectiveness in destroying disease  
                pathogens.  Also, federal regulations prohibit feeding  
                "ruminants to ruminants" and possible grazing of cattle on  
                land that has had compost containing animal tissue applied  
                to it may increase the risk of diseases such as mad cow.

            Comments
          
          1) Purpose of Bill.  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 [GHG] emissions compared to  
             other alternative disposal options?More funds are needed to  
             maintain an effective enforcement system for [the IKG]  
             program."

          2) Rendering and GHG emissions reductions compared to other  
             options.  AB 655 provides that "rendering is an effective  
             tool to?greatly reduce greenhouse gas emissions compared to  
             other alternative disposal options."  A question arises as to  
             what alternative disposal options that rendering is being  
             compared to, and under what circumstances.  Compared to  
             composting, anaerobic digestion, or landfilling?  

          Such a conclusion should be based on life cycle analyses.    
             Factors may include: how and where the material is sourced,  
             how it is processed and transported, and the end use.   
             Because there are a variety of end uses of rendering as noted  
             in the bill, such as "soaps, paints, varnishes, cosmetics,  
             explosives, toothpaste, pharmaceuticals, leather, textiles,  
             and lubricants used daily in most households," saying  








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             definitively that rendering is better in terms of GHG  
             emissions reductions requires life cycle analyses of those  
             uses.  

             The Committee may wish to consider whether it may be  
             inappropriate to unequivocally say that rendering reduces GHG  
             emissions significantly when life cycle analyses for all of  
             these options have not been conducted.
             
          3) §19300.1(b).  §19300.1(b) of AB 655 states, "Therefore, to  
             the extent feasible, the department shall consider the  
             regional "highest and best use" of unprocessed mammalian,  
             poultry, fish material, and inedible kitchen grease 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."

             a)    What does "regional 'highest and best use'" mean?

                i)         Regional.  The term "regional" is unclear and  
                     not defined.  What is considered a region?  How many  
                     regions are in the state?  Can regions overlap one  
                     another?  What factors go into determining the  
                     borders of a region?  Is it based on city or county  
                     limits?  Or distance from a generator to a rendering,  
                     anaerobic digester, or composting facility?  If so,  
                     what is an appropriate number of miles to consider  
                     feasible for transportation?  Should economic or GHG  
                     emissions from transporting the material be factored  
                     in?  Does the number of generators in an area help  
                     determine a region? Should a minimum number of  
                     options for disposal be considered to help determine  
                     the size of a region?  This bill does not provide any  
                     parameters on how to determine what "regional" means.

                ii)        "Highest and best use."  The term "highest and  
                     best use" is not defined in the bill.  However, it is  
                     referenced in quotation marks - What does this refer  
                     to?  Does this refer to a provision in statute?  From  
                     whose perspective is the use considered highest and  
                     best?  What factors should be considered when  
                     determining highest and best use - public health  
                     issues, GHG emissions reductions, economic impacts,  








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                     or environmental benefits and protections such as air  
                     or water quality?

                Is "highest and best use" referring to the following food  
                     recovery hierarchy recommended by the US EPA? 

                          (1)                  Source reduction - Reduce  
                               the volume of surplus food generated.
                          (2)                  Feed people - Donate excess  
                               to food banks, soup kitchens and shelters.
                          (3)                  Feed animals - Divert food  
                               scraps to animal feed.
                          (4)                  Industrial uses - Provide  
                               waste oils for rendering and fuel  
                               conversion and food scraps for digestion to  
                               recover energy.
                          (5)                  Composting - Create a  
                               nutrient-rich soil amendment.
                          (6)                  Landfill/incineration -  
                               Last resort to disposal.

                     If so, then it may be noted that for "industrial  
                     uses," the US EPA specifies, "waste oils for  
                     rendering and fuel conversion and food scraps for  
                     digestion to recover energy."  It appears that the US  
                     EPA may recommend anaerobic digestion over rendering  
                     for food scraps, which would likely include meat  
                     scraps - it may be noted that anaerobic digestion is  
                     under the purview of CalRecycle, not CDFA.  This  
                     seems somewhat incongruous with the findings and  
                     declarations about rendering in this bill.  

                     If the bill is requiring CDFA to consider "highest  
                     and best use" when developing regulations and  
                     policies governing the handling and recycling of meat  
                     scraps, and is referencing the food recovery  
                     hierarchy recommendations by the US EPA, a question  
                     arises as to why the bill requires CDFA to consider  
                     options outside of its jurisdiction.  

             b)    CDFA as sole determiner.  This bill requires CDFA to  
                consider regional "highest and best use" when developing  
                regulations and policies governing the handling and  
                recycling of meat scraps.  The handling and recycling of  








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                meat scraps is not solely a CDFA issue.  CDFA regulates  
                renderers and the rendering process.  CalRecycle regulates  
                waste haulers, anaerobic digestion, composting, and  
                landfill facilities.  The State Water Resources Control  
                Board (SWRCB) regulates advanced wastewater treatment  
                facilities that may recycle food wastes.  

             The wording of the bill emphasizes the importance and value  
                of rendering compared to other alternative disposal  
                options (that are not within the purview of CDFA) and  
                concludes with "therefore" CDFA, to the extent feasible,  
                must consider "regional 'highest and best use'" when  
                developing regulations and policies governing the handling  
                and recycling of specified materials.  Handling and  
                recycling are broad terms. Concern has been raised that  
                the wording implies a possible overreach of CDFA in areas  
                of handling and recycling meat scraps that may go beyond  
                its jurisdiction, such as anaerobic digestion and  
                composting.  Also, the bill contains no requirements for  
                CDFA to work or consult with its sister agencies in making  
                such considerations.

             c)    "Unprocessed."  AB 655 pertains to "unprocessed  
                mammalian, poultry, fish material."  The term  
                "unprocessed" is not defined.  At what point does animal  
                material transform from being unprocessed to processed?   
                It is unclear what "unprocessed" animal material means.

             d)    Technical error.  The findings and declarations should  
                not contain §19300.1(b) because mandating CDFA to act in a  
                specified manner is a directive, which is not a finding  
                nor a declaration.

          4) What's the beef about?  Some clear lines exist as to who may  
             transport and receive waste meat, poultry, and fish materials  
             based on the type of generator.  For example, US Department  
             of Agriculture or CDFA Meat Inspection Program (MIP)  
             facilities, such as slaughterhouses and meat/poultry  
             processors, use registered transporters to take the materials  
             to rendering facilities - these are governed by CDFA in the  
             Food and Agriculture Code.  On the other hand, the materials  
             from restaurants and residences are transported by solid  
             waste haulers and can end up at anaerobic digestion,  
             composting, or landfill facilities - these are governed by  








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             CalRecycle in the Public Resources Code.  

          However, there seems to be a long-standing dispute regarding  
             authority/jurisdiction (and market share) over transporting  
             and end use of waste meat, poultry, and fish material from  
             retail establishments such as delicatessens, grocery stores,  
             super markets, butcher shops, and other retail stores that  
             sell fresh or frozen meat.  In addition, in recent years, as  
             the state has looked more at increasing renewable energy,  
             decreasing fossil fuel consumption, and reducing GHG  
             emissions, there seems to be more of an interest in looking  
             at meat scraps from retail stores as organic waste materials  
             for anaerobic digestion or composting.  Are retail stores and  
             their meat scraps more like restaurants, which are governed  
             by CalRecycle, or more akin to meat/poultry processors, which  
             are governed by CDFA?  Or is this
             material a combination of both?

          5) Conclusion.  Meat scraps are generally thought of as waste to  
             the general public, but they are a valuable commodity.   
             Although some waste meat, poultry, and fish materials from  
             specified generators are clearly governed by either CDFA or  
             CalRecycle, a bone of contention is present over meat scraps  
             from retail establishments.  The various methods for dealing  
                                                                                   with waste meat, poultry, and fish materials all have merit  
             and serve a variety of purposes - statutorily choosing one as  
             the king of all other options would be imprudent.  

          Because of the issues raised above, the Committee may wish to  
             consider amending AB 655 to remove and replace §19300.1 with  
             an uncodified section to do the following: 
          
             a)    Require CalRecycle and CDFA, in consultation with the  
                State Water Resources Control Board, the Air Resources  
                Board, and Department of Public Health, to work together  
                to address issues related to the regulations and policies  
                governing the handling and recycling of waste meat,  
                poultry, and fish materials from retail establishments,  
                including, but not limited to, grocery stores,  
                supermarkets, and delicatessens, butcher shops, and other  
                retail stores that sell fresh or frozen meat.

             b)    Among the factors that shall be considered are:









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               i)        Environmental protection and benefits, e.g., air  
                    and water quality;
               ii)       Public health considerations, e.g., prevention of  
                    human and animal disease pathogens;
               iii)      Reduction of GHG emissions; and,
               iv)       Economic considerations and impacts.

             c)    Hold a minimum of three public workshops with at least  
                one held in northern, central, and southern California.

             d)    Report findings and make recommendations to the  
                Legislature no later than July 1, 2018.
             
            Related/Prior Legislation

          AB 1045 (Irwin, Chapter 596, Statutes of 2015) required CalEPA  
          to establish policies and goals to encourage recycling of  
          organic waste and coordinate oversight and regulation of organic  
          waste recycling facilities.

          AB 1826 (Chesbro, Chapter 727, Statutes of 2014) required  
          generators of specified amounts of organic waste, including  
          green material, to arrange recycling services for that material.

          AB 1566 (Holden, Chapter 595, Statutes of 2014) increased the  
          authority of CDFA and the California Highway Patrol (CHP) to  
          oversee and enforce laws related to the collection,  
          transportation, storage, and rendering of inedible kitchen  
          grease.  Among other things, extended the sunset for the  
          collection of annual fees charged by CDFA by five years, from  
          July 1, 2015 to July 1, 2020.

          SB 25 (Padilla, 2010) would have specified that "renderer" and  
          "rendering" do not include facilities or activities that are  
          already licensed by CalRecycle.
          
          DOUBLE REFERRAL:  

          This measure was heard in Senate Agriculture Committee on June  
          21, 2016, and passed out of committee with a vote of 4-0.
           
           SOURCE:                    California Grain and Feed Association
          Pacific Coast Rendering Association
           








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          SUPPORT:               

          None received  

           OPPOSITION:    
           
           California Compost Coalition
          California Refuse Recycling Council
          Californians Against Waste
          Inland Empire Disposal Association
          League of California Cities
          Los Angeles County Waste Management Association
          Recology
          Republic Services, Inc.
          Rural County Representatives of California
          Solid Waste Association of Orange County
          Waste Connections, Inc.
           
           ARGUMENTS IN  
          SUPPORT:    

          According to support, "Rendering is the process of turning  
          animal tissue from the livestock, food processing, and food  
          service industries into valuable by-products?The rendering  
          industry provides critical health and safety infrastructure in  
          California.  The process of recycling animal tissue into stable,  
          value-added by-products is important for the state's economy.   
          The rendering industry also provides necessary disposal  
          alternatives which include a sterilization step, eliminating  
          dangerous pathogens and bacteria, as a safe management  
          alternative.  Every year, the industry recycles over 60 billion  
          pounds of organic material and turns it into useful ingredients  
          such as biofuels, industrial lubricants, various soaps, paints  
          and varnishes, cosmetics, pharmaceuticals, leather, and textiles  
          used daily in most households?[T]his measure will direct  
          administrative agencies to consider, to the maximum extent  
          feasible, the 'highest and best use' of materials regulated by  
          the department within the rendering program which includes  
          livestock carcasses, offal, animal tissue, expired meat, [IKG],  
          and interceptor trap grease."
           
           ARGUMENTS IN  
          OPPOSITION:    
           








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           According to opposition, "Our concerns are focused on a  
          longstanding dispute over the regulatory jurisdiction of fully  
          inspected animal byproducts from retail establishments.  This is  
          an important feed stock for composting and anaerobic digestion.   
          These materials are currently fully and effectively regulated by  
          CalRecycle and the California Public Resources Code.  [AB 655]  
          establishes a 'highest and best use' standard.  Such a hierarchy  
          already exists in §40051 and §40196 of the California Public  
          Resources Code.  We, therefore, believe that inserting a new  
          standard in the Food and Agriculture Code will not only be  
          duplicative, it will result in further conflict and confusion.   
          The sponsor, in testifying in favor of this measure before the  
          Senate Agriculture Committee, stated that this language was  
          taken directly from CalRecycle regulations.  We are unaware of  
          any such language in CalRecycle regulations.  Further, when  
          asked the author's office for that language in CalRecycle's  
          regulations, they did not provide us any regulations, rather  
          they provided us with a document titled, 'Safely Disposing of  
          Waste Meat, Poultry and Fish Material Guidance and FAQs.'   
          Nowhere in that document is there language regarding 'highest  
          and best use.'"
           
           
                                          
                                      -- END --