BILL ANALYSIS
C.S.H.B. 2505
By: Swinford
04-11-95
Committee Report (Substituted)
BACKGROUND
The animal feed industry is subject to the Texas Commercial Feed
Control Act which is administered by the Texas Feed and
Fertilizer Control Service (the Service). The Service is a part
of the Texas Agricultural Experiment Station which is a Texas A&M
University System agency. Current law requires each feed and
fertilizer product to be registered with the Service. The
Service checks the product's label to see that it meets set
guidelines before the product is distributed and later, a field
inspector tests the product. C.S.H.B. 2505 proposes that the
review of feed labels before distribution of a product be
replaced with the licensing of a feed facility. This type of
facility licensing has been adopted in twenty states and a survey
by the American Feed Industry Association shows that Kansas,
Nebraska, Indiana, and Iowa reported no loss of regulatory
control.
Current law requires a feed label to have the name and percentage
of any roughage. Texas is the only state that requires this.
C.S.H.B. 2505 proposes that this roughage provision be deleted
since the maximum amount of crude fiber in the feed is still
required on all labels.
The feed industry pays inspection fees into the Feed Control Fund
which is used by the Service to administer its duties. There is
about $1.5 million in the fund now. C.S.H.B. 2505 proposes that
fees be lowered if need be to keep the balance of this fund at
one-half of the operating expenses per year of the Service.
PURPOSE
As proposed, C.S.H.B. 2505 replaces individual product
registration with facility licensing for commercial feed. It
also changes feed labeling requirements and caps the balance of
the Feed Control Fund.
RULEMAKING AUTHORITY
It is the committee's opinion that additional rulemaking
authority is granted to the Texas Feed and Fertilizer Control
Service in SECTION 4 [Section 141.021], SECTION 7 [Section
141.051], SECTION 8 [Section 141.055], and SECTION 18 [Section
141.149].
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 141.001, Agriculture Code, by adding
the following definitions: "Broker," "Feed facility,"
"Licensee," and "Product." Deletes the definitions "Brand," and
"Registrant." Amends the definition of "Label."
SECTION 2. Amends Section 141.002(c), Agriculture Code. Adds
exceptions for commercial feeds not subject to this chapter. The
exceptions are unground hay not containing toxins or chemical
adulterants, any unadulterated hulls, a feed mixed and used by a
person who has owner-contracted to feed and care for animals, or
a feed handled by a broker.
SECTION 3. Amends Chapter 141, Agriculture Code by renaming
Subchapter B, "LICENSE."
SECTION 4. Amends Section 141.021, Agriculture Code. (a) Sets
forth that a person may not manufacture or distribute commercial
feed without a license issued by the Texas Feed and Fertilizer
Control Service (the service) for each feed facility unless the
person is making only retail sales of commercial feed. Deletes
the requirement that a person register each feed before
distributing it.
(b) Sets forth that a license fee shall not exceed $75 for each
facility.
(c) Sets forth that the applicant shall provide the service
copies of label and other information required by rule. Deletes
the requirement that each manufactured or distributed feed be
registered.
(d) Sets forth a $75 late fee for a license application or
renewal.
SECTION 5. Amends Section 141.023, Agriculture Code. Replaces
the words "permit or registration" with "license". Sets forth
that a license is permanent unless the licensee's report to the
service shows no activity within one year.
SECTION 6. Amends Section 141.025, Agriculture Code. Replaces
the word "permit" with the word "license".
SECTION 7. Amends Section 141.051(a), Agriculture Code.
Requires a label to include the quantity of the feed in the
container, in either net weight, net volume contents, or net
fluid content according to rules adopted by the service. Deletes
the requirement that a label include the name and percentage of
any hulls, shells, screenings, straw, stalks, corncobs, or other
low grade feeding materials or fillers in the feed.
SECTION 8. Amends Subchapter C, Chapter 141, Agriculture Code,
by adding Section 141.055, as follows:
Section 141.055. REQUEST FOR LABEL REVIEW. Requires the
service to review product labels upon request to ensure that
they are in compliance with the rules. Sets forth that the
service shall report its findings to the licensee at no charge.
SECTION 9. Amends Section 141.071(b) and (d), Agriculture Code.
(b) Sets forth that with the approval of the board of regents of
the Texas A&M University System, the director of the Texas
Agricultural Experiment Station may reduce or increase the
inspection in increments of 1 cent up to a maximum of 2 cents per
fiscal year, except that the board and director shall reduce the
inspection fee by 1 cent increments when the balance of the Texas
feed control fund exceeds one-half the projected operating
expenses of the service for the next fiscal year.
(d) Replaces the word "registrant" with "licensee".
SECTION 10. Amends Section 141.072, Agriculture Code. Requires
a feed facility generating $100 or more during a license year in
tonnage fees to file a quarterly report. Requires a feed
facility generating less than $100 a license year in tonnage fees
to file an annual report. Sets forth the dates for quarterly
tonnage reports and inspection fee payments.
SECTION 11. Amends Section 141.073(b), Agriculture Code. Sets
forth that the penalty for delinquent inspection fees is due
before the 61st day following the last day of the quarter.
Replaces the words "registration of a registrant" with "license
of a licensee".
SECTION 12. Amends Section 141.074(a), (c) and (d) Agriculture
Code. Replaces the word "registrant" with "licensee" regarding
record maintenance.
SECTION 13. Amends Section 141.075(b), Agriculture Code.
Replaces the word "registration" with "licensing" regarding the
uses of the Texas feed control fund.
SECTION 14. Amends Section 141.121(c), Agriculture Code.
Extends the stop-sale order from 10 to 30 days.
SECTION 15. Amends Section 141.122(c) and (d), Agriculture Code.
Replaces the word "registrant" with "licensee" regarding the
delivery of feed that has a labeling violation.
SECTION 16. Amends Section 141.143, Agriculture Code. Replaces
"REGISTRATION" with " LICENSE." Sets forth that a person commits
an offense by distributing commercial feed that is in violation
of Subchapter B (License) of this chapter.
SECTION 17. Amends Section 141.148(a), Agriculture Code. Adds a
provision that establishes an offense for distribution of feed
that has been intentionally radiated, unless the radiation was in
conformity with federal law.
SECTION 18. Amends Subchapter G, Chapter 141, Agriculture Code.
Requires the service to adopt rules that conform to but are not
stricter than current good manufacturing practices as established
under federal law. Sets forth the penalties for violating the
rules adopted under this section.
SECTION 19. Repeals Agriculture Code Sections 141.022 regarding
application for registration, 141.024 regarding changes in
guaranteed composition, and 141.026 regarding refusal or
revocation of registration.
SECTION 20. Effective date: January 1, 1996.
SECTION 21. Sets forth that this legislation applies only to
stop-sale orders affixed on or after the effective date of this
bill.
SECTION 22. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute makes several substantial changes to the original
legislation. It requires the service to review licensees' labels
upon request to ensure that they are in compliance with the
rules. While the original legislation increased the inspection
fee to 17 cents and deleted Section 141.071(c) relating to a flat
rate inspection fee for five pound bags of feed, the substitute
maintains the 15 cent inspection fee and five pound bag flat-rate
inspection fee. H.B. 2505 based inspection fee adjustments on
the service operating expenses at the end of a fiscal year, but
the substitute uses the projected operating expenses for the next
fiscal year.
The substitute also makes changes that are technical rather than
substantial. C.S.H.B. 2505 sets forth that a violation of
Subchapter B of the chapter is an offense and that the service
shall not adopt rules that are stricter than federal guidelines.
It also sets forth that the legislation will not affect stop-sale
orders affixed prior to the passage of this Act, and changes the
effective date of the act from September 1, 1995 to January 1,
1996.
The original legislation included a definition for "contract
feeder" that has been excluded from the substitute, and added a
definition for "feed facility," but the substitute expanded the
definition of "feed facility" to include sites where feed
components are salvaged. The substitute also changes the name of
Subchapter B from "PERMIT AND REGISTRATION" to "LICENSE."
SUMMARY OF COMMITTEE ACTION
H.B. 2505 was considered by the committee in a public hearing on
Tuesday, March 28, 1995.
The following persons testified in favor of the bill:
Mr. Ben Boerner representing the Texas Grain and Feed
Association (TGFA);
Dr. Darrell W. Huck, District General Manager of Acco Feeds,
representing the TGFA and himself;
Mr. Robert D. Ross representing himself and TGFA;
Mr. Jack Hamil, General Manager of Hi-Pro Feeds,
representing himself, Hi-Pro Feeds and TGFA;
Mr. Jerry Clark, representing the Associated Milk Producers,
Inc.;
Mr. Ross Wilson representing the Texas Cattle Feeders
Association; and
Mr. Richard S. Sellers representing the American Feed
Industry Association.
The following persons testified neutrally on the bill:
Mr. Durwood Tucker representing the Texas Farm Bureau; and
Dr. George W. Latimer, Jr., State Chemist, representing the
Office of the Texas State Chemist and the Texas Agricultural
Experiment Station.
The bill was left pending.
H.B. 2505 was considered by the committee in a public hearing on
Tuesday, April 4, 1995.
The committee considered a complete substitute for the bill.
One amendment was offered to the substitute.
The amendment was adopted without objection.
The substitute as amended was adopted without objection.
The Chair directed the staff to incorporate the amendment into
the substitute.
The following person testified neutrally on the bill:
Dr. Zerle L. Carpenter, Associate Vice Chancellor for
Agriculture, The Texas A&M System, representing the Texas
Agricultural Extension Service.
The bill was reported favorably as substituted, with the
recommendation that it do pass and be printed by a record vote of
7 ayes, 0 nays, 0 pnv, 2 absent.