BILL ANALYSIS C.S.H.B. 2744 By: Romo 04-13-95 Committee Report (Substituted) BACKGROUND In 1991 the Texas Legislature passed the Omnibus Recycling Act (S.B. 1340), which set a state goal to recycle 40 percent of the state's municipal solid wastes by January 1, 1994. A major element of achieving the goal was creating incentives to increase composting. In 1993, the Texas Legislature approved S.B. 1051, to decrease solid waste by creating markets for recycled products such as compost. Still, the state has not met its goal. Compost is recycled waste that mainly consists of dead plant materials such as dry leaves and grass, but may contain a variety of elements ranging from chipped tire to sewage sludge. Compost may be used as a fertilizer, but must be applied in large amounts since its nutrient concentration is considerably lower than most commercial fertilizers. The Texas Feed and Fertilizer Control Service (the Service) regulates the production of fertilizer. Current law requires fertilizer manufacturers to pay an inspection fee of $0.32 per ton to cover the cost of registering fertilizers. The inspection fee may be applied to any substance that claims to contain essential plant nutrients or to promote plant growth. Such claims would subject compost to fertilizer law requiring the manufacturer to pay a high fertilizer inspection fee since compost has a high moisture content resulting in a high weight to low nutrient ratio. Proponents of compost contend that the state fertilizer law discourages composting and creates a market disadvantage. PURPOSE This bill would exempt compost that makes no specific grade claim from commercial fertilizer labeling and inspection fee requirements. RULEMAKING AUTHORITY It is the committee's opinion that this bill does expressly grant additional rulemaking authority to the Texas Feed and Fertilizer Control Service in SECTION 3 [Section 63.051(e), Agriculture Code]. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 63.001(8), Agriculture Code. Expands the definition of "fertilizer material" to include organic material for which no specific grade claim is made. SECTION 2. Amends Section 63.051(a), Agriculture Code. Sets forth that Subsection (e), relating to compost, is an exception to the provisions of this section which are related to the labeling of commercial fertilizer. SECTION 3. Amends Section 63.051, Agriculture Code. Exempts compost that is sold without a specific grade content claim from mandatory commercial fertilizer labeling and guaranteed content analysis. Requires the service to adopt rules for labeling such compost. SECTION 4. Amends Section 361.421(1), Health and Safety Code. Expands the definition of compost to include that it may be used or sold as a fertilizer. SECTION 5. Effective Date: September 1, 1995. SECTION 6. Emergency Clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The original legislation did not exempt compost from commercial fertilizer labeling and inspection requirements, but did decrease the inspection fee for compost to 25 percent of the set fee. The substitute exempts compost that claims no specific grade content from the labeling and inspection requirements. It also authorizes the Texas Feed and Fertilizer Control Service to develop and adopt rules for the labeling of compost. SUMMARY OF COMMITTEE ACTION H.B. 2744 was considered by the committee on Tuesday, March 28, 1995. Representative Romo explained the bill. The following persons testified in support of the bill: Mr. Malcolm Beck representing himself; Mr. A. Vance Kemler, President of and representing the Texas Lone Star Chapter of the Solid Waste Association of North America and himself; and Mr. Jody Slagle, City of Austin Compost Manager, representing himself. The following persons testified against the bill: Mr. Durwood Tucker representing the Texas Farm Bureau; Mr. James Terrell representing the Texas Association of Dairymen; The following persons testified neutrally on the bill: Ms. Kitty Coley representing the Texas Natural Resource Conservation Commission (TNRCC); Mr. Allan Kimball representing the Texas General Land Office; Mr. John Foseid, compost specialist, TNRCC, representing himself; and Dr. George W. Latimer, Jr., State Chemist, representing the Office of the Texas State Chemist, Texas Agricultural Experiment Station. The bill was referred to a subcommittee consisting of Representatives Rusling (Chair), Walker and Swinford. After being recalled from subcommittee, the bill was considered by the committee in a public hearing on Tuesday, April 4, 1995. The committee considered a complete substitute for the bill. The substitute was adopted without objection. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed by a record vote of 6 ayes, 0 nays, 0 pnv, 3 absent.