BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 655 (Quirk) - Rendering:  inedible kitchen grease:   
          registration fee:  additional fees
          
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          |Version: August 1, 2016         |Policy Vote: AGRI. 4 - 0, E.Q.  |
          |                                |          7 - 0                 |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 8, 2016    |Consultant: Robert Ingenito     |
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          This bill does not meet the criteria for referral to the  
          Suspense File.


          


          Bill  
          Summary: AB 655 would (1) 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  
          (2) authorize CDFA to raise specified fees only upon  
          recommendation of the Rendering Industry Advisory Board.


          Fiscal  
          Impact: This bill would result in annual revenue gains, likely  
          in the hundreds of thousands of dollars (Food and Agriculture  
          Fund), offset by anticipated increased costs for enforcement  
          activities.








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          Background: 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.   
          Inedible (used) kitchen grease has become a valuable commodity  
          in the last decade (rising up to six times in price), especially  
          in light of rising gasoline prices and corresponding growth in  
          the biodiesel fuel industry.  Thus, recycling a waste product  
          into a valuable feed or biofuel resource has become attractive.  
          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.
          The CDFA Inedible Kitchen Grease Program was established in 1995  
          in response to increasing theft of IKG.  This program is  
          responsible for regulating and enforcing IKG laws and works  
          closely with local law enforcement to conduct investigations and  
          prevent IKG theft.  To assist in these efforts, CDFA requires  
          all renderers and collection centers to apply for and obtain a  
          license and requires all IKG transporters to be registered.   
          Existing law 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 


          Current law (1) requires licensed renderers, collection center  
          operators, and registered transporters to retain specified  
          records reflecting sales and transportation of IKG for two  
          years, (2) prohibits anyone from accepting IKG from any  
          unregistered transporter and from possessing any IKG that is  
          knowingly stolen, and (3) provides for fines and/or imprisonment  
          for violations of these provisions.




          Proposed Law:  
          This bill would, among other things, do the following:
           Increase from $3,000 to $10,000 the maximum annual fee charged  
            to each licensed renderer and collection center.










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           Increase from $100 to $250 the maximum registration fee for  
            transporters of IKG.


           Increase 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.


           Authorize CDFA, 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.







          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.


          Staff  
          Comments: Current-year revenues are approximately $540,000.  
          Under the bill, the maximum increase in revenues would be about  
          $660,000. This amount would only be realized if CDFA set the  
          fees at the maximum allowable amount.


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