(a) For purposes of this section, “industrial source” means any of the following:

1. (1) An entity required to be registered pursuant to Section 110460 of the Health and Safety Code.
2. (2) An entity exempted from registration pursuant to Section 110480 of the Health and Safety Code.
3. (3) A beer manufacturer, as defined in Section 23012 of the Business and Professions Code.
4. (4) A distilled spirits manufacturer, as defined in Section 23015 of the Business and Professions Code.

(b) A county, city, district, or local governmental agency shall not subject the hauling of byproducts from the processing of food or beverages to an exclusive franchise, contract, license, or permit, if those byproducts meet all of the following conditions:

1. (1) The byproducts originate from agricultural or industrial sources.
2. (2) The byproducts do not include animal, including fish, processing byproducts.
3. (3) The byproducts are source separated by the generator of the byproducts.
4. (4) The byproducts are not discarded.
5. (5) The byproducts are used as animal feed.