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  ****