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: 8/29/12 in Senate
Vote: 21
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.
Senate Floor Amendments of 8/29/12 delete the urgency
clause.
Senate Floor Amendments of 8/24/12 create provision for
nonprofits that property taxes are not paid on state park
lands. The Legislature has encouraged nonprofit
organizations to enter into agreements with the DPR to help
keep state parks open. Most such agreements are for five
years or less. The DPR does not pay property taxes on state
park lands. In the absence of this amendment, nonprofits
that agree to help operate state parks and enter into
contracts with the DPR may find themselves liable for
property taxes. This amendment allows nonprofits that
operate parks to be an agent of the state for purposes of
taxation.
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
AB 1589
Page
3
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
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).
Existing law authorizes the DPR to enter into an operating
agreement with a qualified nonprofit organization for the
development, improvement, restoration, care, maintenance,
AB 1589
Page
4
administration, or operation of a unit or units, or portion
of a unit, of the state park system, as identified by the
Director of DPR, as provided.
Existing property tax law requires that all property
subject to tax be assessed at its full value, and includes
certain possessory interests among those property interests
subject to tax. The California Constitution exempts
certain property from property taxation, including property
owned by the state.
This bill provides that a qualified nonprofit corporation
that has entered into an agreement with the DPR is deemed
to be an agent of the state for purposes of property
taxation, and that any state-owned property, including
possessory interests in that property, used or possessed by
the qualified nonprofit organization for the development,
improvement, restoration, care, maintenance,
administration, or operation of a unit or units, or portion
of a unit, of the state park system would be exempt from
taxation under the exemption for property owned by the
state.
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
associated with closure. The LAO also noted that since the
closure list was released, DPR has concluded that some
AB 1589
Page
5
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
be offset by reduced fee revenues.
AB 1589
Page
6
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
to develop a revenue enhancement plan for state parks.
AB 1589
Page
7
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/DLW:k 8/29/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****