BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
1582 (Simitian)
Hearing Date: 5/22/08 Amended: 4/29/08
Consultant: Nora Lynn Policy Vote: Public Safety 5-0;
EQ 5-2
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BILL SUMMARY: SB 1582 would require large passenger vessels
operating in California to have two "ocean rangers" on board to
monitor their compliance with wastewater discharge laws, review
procedures involving onboard wastewater treatment, review
specified records, assist passengers and crew in reporting and
investigating potential criminal activities taking place while
in the marine waters of the state and serve as liaison with both
the state and the federal Department of Homeland Security. The
Department of Justice would be required to contract for the
rangers' services and training and to negotiate a number of
memoranda of understanding (MOUs) with authorities in other
states and countries pertaining to the ocean rangers' boarding
large passenger vessels at the last port of call before a vessel
enters California waters. SB 1582 authorizes the Department of
Justice (DOJ) to collect, from January 1 to August 31, 2009, a
fee of $1 per day per passenger for each day the vessel is
operating in state waters; thereafter, the authorized fee would
be $1 per day per passenger for each day the vessel is in state
waters and its ocean ranger complement is on board. Fees would
be deposited into the Ocean Ranger Program Fund, a continuously
appropriated fund created in the bill, would be used to offset
costs of the ocean ranger program. SB 1582 requires the fee to
be revised on or before January 1, 2010, and biannually
thereafter to ensure sufficient revenue is generated to cover
program implementation costs.
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Fiscal Impact (in thousands)
Major Provisions 2008-09 2009-10 2010-11 Fund
Estimated fee revenues ($2,000) (unknown revenues)*
Special**
BOE $650 Unknown, likely <$150
Special**
DOF: work plan, fee review Unknown ongoing costs General
Staffing: rangers $3,327 Unknown, significant
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Special**
Training: rangers $456 Unknown, significant
Special**
POST curriculum $100
Special***
Staffing: MOUs $416 Unknown, likely minor
Special**
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* Bill requires fee to be revised on or before January 1, 2010
to ensure it is sufficient to offset implementation costs and
maintain a prudent fund reserve; see staff comments
** Ocean Ranger Program Fund; to the extent special funds are
insufficient to offset programmatic requirements, the General
Fund would bear them
*** Peace Officer Training Fund
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STAFF COMMENTS: SUSPENSE FILE
California ports embarked more than 1.2 million passengers in
2006 via San Francisco, Los Angeles, San Diego and Long Beach.
For purposes of developing a fee revenue estimate for this
measure, staff estimated this number would grow to 2 million
annually by the time SB 1582 would go into effect January 1,
2009, and that each embarking passenger would spend two days in
California waters, thereby yielding $2 each in fee assessments
pursuant to the bill. For the first six months of 2008-08, staff
estimates SB 1582 would generate $2 million in fee revenues.
These revenues would be deposited into the Ocean Ranger Program
Fund, which is established in the bill and continuously
appropriated. Staff recommends the bill be amended to delete the
continuous appropriation and make the program subject to review
in the annual budget act, thus allowing oversight and monitoring
of the program (see last page of analysis). Staff notes DOJ is
authorized by SB 1584 to collect the fees created, not required
to do so. Staff recommends amending the bill to require the
department to assess the fee (see last page of analysis).
The Board of Equalization (BOE) is responsible for the
collection and deposit of the fees into the special fund created
in this bill, and its ongoing costs for doing so are covered
through the Fee Collection Procedure Law; however, staff notes
as currently drafted, fees would begin to be collected at the
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end of January 2009 and there is no mechanism in the measure for
BOE to have any up-front money to fund the start-up duties it
will need to conduct likely prior to the end of 2008. The author
may wish to consider adding an appropriation to the bill
specifically to fund BOE's start up costs (see last page of
analysis).
SB 1582 would require, on or before January 1, 2010, its fee to
be revised by the Department of Finance (DOF) as part of its
review and approval of an annual work plan. DOF would establish
the passenger fee and revise it biennially thereafter. Costs for
DOF to review the department's work plan for the ocean ranger
program but staff notes DOJ's overhead and administrative costs
associated with the ranger program would be capped at 3 percent.
Staff was unable to determine from DOF a projected cost for its
review of the ranger work plans, but they are likely to be less
than $150,000 annually. Staff notes there is no mechanism in the
measure to permit DOF to recoup its costs from the Ocean Ranger
Program Fund. In either case, the fee should be adjusted
annually. Staff recommends either amending the bill to permit
DOF to do so or striking this requirement and instead permitting
DOJ to set the fee itself annually through regulation (see last
page of analysis).
DOJ provided cost estimates for the implementation phase of the
bill, from January 1 through August 31, 2009. The department
estimated it would initially contract for 26 ocean rangers at an
annual salary of $108,000 each, including benefits; three
supervising rangers at $123,329 per year; and a special agent in
charge at $148,738. DOJ would be required, in consultation with
the Commission on Peace Officer Standards and Training POST), to
develop a training course for nonenvironmental rangers. POST
estimates costs of $100,000 to develop a new curriculum, conduct
subject matter research, prepare the certified course and for
instructor development. Staff notes these costs would be borne
by the Peace Officer Training Fund because there is no mechanism
in the bill for POST to recoup its costs from the Ocean Ranger
Program Fund. Staff recommends amending the bill to permit the
commission to do so (see last page of analysis).
With cruise ships disembarking in Alaska, British Columbia,
Washington, Oregon, California and Baja California, DOJ
estimates it will be required to complete eight MOUs to comply
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with SB 1582. To do so in the narrow time frames specified in
the bill it anticipates requiring two additional deputy
attorneys general, a legal secretary and a staff services
analyst for a staff cost of $416,000. Additional travel costs to
the eight MOU destinations are projected at $36,000.
Staff notes many of the DOJ's implementation phase costs are
high due to the short time frame the bill provides vis-?-vis its
many significant requirements. There are currently as many as 52
cruise ships operating in California waters with hundreds of
port visits and millions of passengers annually. Giving the
department eight months to negotiate eight MOUs - four with
foreign governments - contract for and train at least 30
rangers, hire administrative staff and project ongoing need is a
substantial amount of work. Additionally, the revenue generated
by the January 1 through August 31 fee is insufficient to offset
the program's start-up costs; therefore, staff recommends
delaying implementation of the fee and placement of rangers
onboard vessels to January 1, 2010 to permit the department
sufficient time to staff up, determine a sufficient fee (or let
DOF do so) and negotiate the required MOUs (see last page of
analysis). Staff also recommends adding a sunset date and a
report to the Legislature on specified information about the
program, its finances and the conduct and benefits of the
rangers.
It is unknown how many rangers the department will need to fully
implement this program; its staff was unable to provide an
estimate. With 52 cruise ships in California, however, assuming
some staff overlap to allow for vacation, sick time and days
off, the total needed could be double that of the initial
phase-in period. If so, ongoing staff costs alone would be in
$6.7 million range annually.
Staff recommends the following amendments:
Delete the Ocean Ranger Program Fund's continuous
appropriation;
Require (rather than permit) the fees in the bill to be
assessed by DOJ;
Add an appropriation for BOE to fund its start-up costs;
Either add language to specify the Controller's
authority to disburse money from the Ocean Ranger Program
Fund to DOF to reimburse its costs associated with the
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program OR require DOJ to establish the fee annually via
regulation to ensure all administrative and programmatic
costs are offset;
Add language to specify the Controller's authority to
disburse money from the Ocean Ranger Program Fund to POST
to reimburse its costs associated with the program;
Delay implementation of the bill and the placement of
rangers onboard vessels to January 1, 2010; and
Add a sunset date for the program of January 1, 2015,
with a report due to the Legislature in January 1, 2014
from DOJ outlining; yearly breakdown of costs of the
program; fee revenues generated, number of rangers hired;
ranger turnover; number of incidents in which vessels have
been out of compliance with the water quality laws outlined
in SB 1582; number of criminal incidents in which rangers
have been involved; and number of complaints filed by
passengers and cruise lines against rangers.