BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1589| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1589 Author: Huffman (D), et al. Amended: 7/6/12 in Senate Vote: 27 - Urgency SENATE NATURAL RESOURCES AND WATER COMM. : 9-0, 6/26/12 AYES: Pavley, La Malfa, Cannella, Evans, Fuller, Kehoe, Padilla, Simitian, Wolk SENATE GOVERNANCE & FINANCE COMMITTEE : 8-0, 7/3/12 AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe, La Malfa, Liu NO VOTE RECORDED: Yee SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12 AYES: Kehoe, Alquist, Lieu, Price, Steinberg NOES: Walters, Dutton ASSEMBLY FLOOR : 78-0, 5/30/12 - See last page for vote SUBJECT : State parks: sustainability and protection SOURCE : Author DIGEST : This bill requires the Department of Parks and Recreation (DPR) to develop a plan to increase revenues at state parks, appropriates $10 million in Proposition 84 general obligation bond funds for the installation of revenue collection equipment and other improvements at state parks, and authorizes taxpayers to voluntarily CONTINUED AB 1589 Page 2 contribute to the state park system through the income tax system. ANALYSIS : Existing law: 1. Establishes the California State Park system and vests DPR with control of the state park system and responsibility for administering, protecting, developing and interpreting state parks for the use and enjoyment of the public. Requires DPR to protect the state park system from damage and to preserve the peace therein. 2. Authorizes DPR to enter into agreements with private entities to assist DPR in securing long-term private funding sources for units of the state park system, and to ensure that the parks are preserved and open to the public for their use and enjoyment. DPR's authority includes but is not limited to securing donations, memberships, corporate and individual sponsorships, and marketing and licensing agreements. 3. Authorizes DPR to collect fees, rents and other returns for the use of state parks with amounts to be determined by DPR. 4. Authorizes DPR to enter into operating agreements with qualified nonprofit entities that will enable DPR to keep parks open that would otherwise be subject to closure. 5. Requires DPR to achieve required budget reductions by closing, partially closing, and reducing services at selected units of the state park system based on specified factors. This bill: 1. Requires the DPR to develop a plan to generate additional revenues at state parks, with specific revenue generation strategies (such as better fee collection technology, demand-based pricing, and offering more fee-funded amenities at state parks). The AB 1589 Page 3 report will be due to the Legislature by July 1, 2013. 2. Specifies that revenues generated at a park under the management of a nonprofit organization, that are in excess of the revenues needed to operate the park, may be used for the support of other parks. 3. Creates a new program to allow taxpayers to voluntarily contribute to the state park system, through the income tax system. 4. Requires the DPR to provide a free annual park pass to a taxpayer who makes a contribution in excess of the price of an annual parks day use pass. 5. Provides that a taxpayer is only eligible for a charitable income tax deduction for the amount contributed in excess of the price of a park pass received. 6. Requires the Franchise Tax Board (FTB) to remove the contribution line from income tax forms if the annual revenues from the program fall below $250,000 (adjusted for inflation). Background The Legislative Analyst's Office (LAO) released a report on March 9, 2012, entitled "Strategies to Maintain California's Park System." Among other things, the LAO recommended increasing park user fees and shifting toward entrance fees rather than parking fees, and increasing the number of parks subject to operating agreements. The LAO estimated that if just an eighth of the people that currently visit day-use parks for free were charged an entrance fee this would increase revenues by the low tens of millions of dollars annually. Similarly, the LAO estimated that raising the amount of fees that current visitors pay by $1 could also increase revenues by the low tens of millions of dollars annually. The LAO report noted the lack of certainty as to how much funding can actually be saved from closing a given number of state parks, noting that DPR is unable to provide information on the cost of operating an individual park, and the various costs AB 1589 Page 4 associated with closure. The LAO also noted that since the closure list was released, DPR has concluded that some parks on the closure list are too costly to close because it would cost more to close them in the near term because of the one-time costs associated with closures. They further noted that since DPR will only minimally maintain closed parks, the cost to reopen these parks in the future will likely be substantial because the infrastructure would not have been sufficiently maintained. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: One-time costs to the DPR prepare a report on revenue generation possibilities. The DPR has hired a consultant to conduct a study on similar topics at 50 state parks, at a cost of about $200,000. The DPR indicates that expanding that study or contracting for an additional study will result in costs up to $800,000 (California State Park Enterprise Fund). One-time costs to the FTB of about $50,000 (General Fund) to modify tax forms and computer systems to allow taxpayers to donate to state parks when they pay their state income taxes. Ongoing loss of tax revenue to the state in the tens of thousands of dollars, based on the FTB's experiences with other similar programs to allow tax-free donations to state programs (General Fund). Unknown revenues to the State Park System from donations through the tax system (California State Park Enterprise Fund). Because this is a new program, the DPR does not have an estimate of the potential revenues the program may generate. It is important to note that this bill requires the DPR to provide an annual day use parks pass to taxpayers that donate an amount in excess of the cost of such a pass (currently priced at $195). To some extent, people who would otherwise have purchased an annual pass may do so through the tax system, in which case donations received by the DPR will AB 1589 Page 5 be offset by reduced fee revenues. SUPPORT : (Verified 8/21/12) Born Free USA California Hotel and Lodging Association California Outdoor Recreation Partners California State Parks Foundation California Travel Association County of Mendocino County of Santa Cruz, Supervisor Neal Coonerty Family Winemakers of California Golden Gate Audubon Humane Society of United States PawPac Sierra Club California State Controller John Chiang State Parks Partners Coalition Trust for Public Lands ARGUMENTS IN SUPPORT : According the author's office, General Fund support for DPR has decreased 37% in the last seven years. In the past two budgets DPR faced $11 million reductions in general fund support. The administration proposed complete closure of 70 state parks effective on July 1, 2012, a process that DPR is continuing to implement. To date, DPR has indicated that as many as 16 of the 70 parks proposed for closure will remain open at least temporarily through operating agreements negotiated with nonprofits or local governments, donor agreements, concession contracts, and other partnership arrangements. The author's office indicates the purpose of this bill is to enhance the capacity of the state to protect its valued state parks and the natural and cultural resources they contain, and to keep the parks open and accessible to the people of the state. To make progress toward the long-term goal of a more sustainable and well-maintained state park system, this bill promotes new revenue enhancement opportunities, including enhanced fee collection and other revenue generating opportunities at state parks, a new state park environmental license plate, and tax incentives for purchase of state park annual access passes. This bill also creates a state park enterprise fund and requires DPR AB 1589 Page 6 to develop a revenue enhancement plan for state parks. ASSEMBLY FLOOR : 78-0, 5/30/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Fletcher, Valadao CTW:k 8/21/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****