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 ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 1, 2016 |Policy Vote: AGRI. 4 - 0, E.Q. | | | 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 8, 2016 |Consultant: Robert Ingenito | | | | ----------------------------------------------------------------- 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. AB 655 (Quirk) Page 1 of ? 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. AB 655 (Quirk) Page 2 of ? 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. -- END -- AB 655 (Quirk) Page 3 of ?