BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1148
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          Date of Hearing:   August 29, 2012

                   ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
                                  Ben Hueso, Chair
                   SB 1148 (Pavley) - As Amended:  August 24, 2012

           SENATE VOTE  :   24-14
           
          SUBJECT  :   Fish and Game Commission: Department of Fish and Game 


           SUMMARY  :  Makes numerous changes to implement policy 
          recommendations arising out of a Strategic Vision process for 
          the Department of Fish and Game (DFG) and the Fish and Game 
          Commission (FGC) in order to improve the effectiveness of these 
          entities in protecting and managing state fish and wildlife 
          resources.  Specifically,  this bill  : 

          1)States legislative findings and declarations regarding the 
            Strategic Vision process that was initiated as a result of the 
            passage of AB 2376 in 2010 and the need for reforms to improve 
            and enhance the capacity of DFG and FGC.  States legislative 
            intent to focus more of the work of the FGC on implementing 
            state hunting and fishing laws, and to enhance DFG's ability 
            to focus on managing its lands, its enforcement 
            responsibilities, its conservation programs, and enhancing the 
            scientific basis of DFG's decisions.

          2)Requires the Office of Planning & Research (OPR) to include 
            trustee agencies such as DFG in developing the state 
            Environmental Goals and Policy Report.

          3)Modifies and updates requirements related to sustainable 
            management of the state's hatchery program and native 
            fisheries, including the following:

             a)   States legislative findings and declarations regarding 
               the role of hatcheries and the importance of genetic 
               diversity in managing California native trout species, and 
               that DFG seek to provide diverse recreational angling 
               opportunities.

             b)   Requires DFG to make publicly available on its Internet 
               website information on the inventory of California trout 
               streams maintained by DFG.








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             c)   Requires DFG every 5 years to update the state Strategic 
               Plan for Trout Management adopted in 2003, and specifies 
               objectives the plan shall be intended to ensure, including 
               providing angling opportunities, conserving wild and native 
               trout, and ensuring environmental sustainability and 
               overall ecosystem watershed health.

             d)   Requires the plan to be guided by specified 
               considerations including adaptive management of trout 
               populations to be self-sustaining, increasing angler 
               satisfaction, ensuring appropriate age distribution of wild 
               trout, and establishing ecologically and environmentally 
               sustainable hatchery and stocking practices for native 
               trout.

             e)   Requires DFG to prepare trout management plans 
               consistent with the Strategic Plan for Trout Management, 
               for all wild trout waters within three years following 
               designation of a wild trout water by the FGC, and to update 
               the plans every 5 years.

             f)   Requires priority to be given for stocking native 
               hatchery-produced species where stocking is determined 
               appropriate by DFG.  Provides that waters where stocking is 
               not appropriate include waters where stocking would 
               adversely affect species listed under state or federal 
               endangered species acts.  Requires hatchery-produced trout 
               to be stocked to support sustainable angling opportunities 
               and fishing access, including urban fisheries.

             g)   Requires DFG to ensure that trout stocked for 
               recreational purposes are unable to reproduce, with 
               specified exceptions.

             h)   Requires DFG to form a strategic trout management team 
               to oversee trout management statewide pursuant to the 
               Strategic Plan for Trout Management.  Requires DFG's 
               Strategic Plan for Trout Management to be reviewed by the 
               Strategic Trout Management Team, the hatchery operations 
               committee, and an ad hoc peer review committee to ensure 
               sound management, improved genetic diversity, and best 
               available science.

             i)   Deletes obsolete provisions relating to state hatchery 








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               production goals and clarifies that the state hatchery 
               production goal is 2.75 pounds of released trout per sport 
               fishing license sold, and that a predominant number of 
               released fish be catchable size or larger.

             j)   States that at least $2 million dedicated under existing 
               law to the Heritage and Wild Trout program from the 
               Hatcheries and Inland Fisheries Fund (HIFF) may be used for 
               development of trout management plans, and that up to 25% 
               may be expended for watershed restoration projects, 
               resource assessment and scientific inquiry.  Clarifies that 
               funds from the HIFF may be used for development of the 
               state Strategic Plan for Trout Management, and states that 
               funding for Heritage Trout Waters is a priority for the 
               HIFF.

             aa)  Requires DFG on an annual basis to invest in hatchery 
               facility improvements and rehabilitation to ensure progress 
               towards achieving hatchery production targets.

             bb)  Authorize DFG, beginning January 1, 2015, to obtain 
               hatchery-produced fish from any California-based hatchery 
               if all of the following criteria are met:

               i)     The hatchery production goal of 2.75 pounds of 
                 released trout per sport fishing license sold is not met;

               ii)    DFG, following an inspection, determines the 
                 hatchery is in compliance with standards that are as 
                 stringent as those in effect at state hatcheries in order 
                 to minimize the risk of the spread of disease or invasive 
                 species; and,

               iii)   The cost per pound of the fish provided by the 
                 hatchery does not exceed the cost of state hatchery fish 
                 calculated equivalently, including transportation costs.

             cc)  Appropriates $1 million from the Hatchery and Inland 
               Fisheries Fund to DFG for capital outlay expenditures 
               necessary for improvements to state hatcheries to achieve 
               hatchery fish production goals.  Requires DFG to prioritize 
               capital outlay investments based on expected improvements 
               in hatchery egg and fish production.

          4)Establishes a program for review, approval and oversight of 








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            mitigation and conservation banks as follows:

             a)   States legislative findings and declarations regarding 
               the values and importance of conservation and mitigation 
               banks in providing habitat lands which are managed to 
               fulfill mitigation requirements, and the need for greater 
               transparency to ensure mitigation requirements are fully 
               met and to fund the regulatory costs of DFG related to 
               mitigation and conservation banks.  States legislative 
               intent that conservation banking, mitigation banking, and 
               other forms of mitigation for impacts to fish and wildlife 
               species comply with applicable law and are consistent with 
               specified principles, including that the mitigation should 
               be proportional to the quantified impact, whenever feasible 
               be based on landscape scale conservation planning and the 
               ecological needs of impacted species, be based on best 
               available science, include monitoring for effectiveness, be 
               transparent to the public and participants, and that 
               mitigation costs for landowners to participate should be 
               reasonable and flexible.

             b)   Requires any person seeking to establish a mitigation or 
               conservation bank to submit a bank prospectus to DFG with a 
               fee of $10,000 to cover the costs of DFG's review.  
               Specifies what must be included in a bank prospectus.  
               Establishes procedures for DFG's review and approval of a 
               bank prospectus.

             c)   Authorizes any person interested in establishing a bank 
               to submit an optional draft prospectus for review by DFG, 
               accompanied by a fee of $1,500 to cover DFG's costs, with 
               total review fees for a prospectus not to exceed $10,000.

             d)   Once the bank prospectus is approved, allows the 
               applicant to submit a bank agreement package to DFG 
               consistent with the prospectus and include specified 
               information. Requires payment of a $25,000 fee to cover 
               DFG's review.  Establishes procedures for DFG's review and 
               approval of the package, including authority for assessment 
               of additional fees if necessary to cover DFG's review of 
               new information or substantial changes requested by the 
               applicant.

             e)   Provides similar procedures and fee requirements for 
               amendments to approved banks.








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             f)   Prohibits any bank from being operative, vested or 
               final, and prohibits any bank credits from being issued, 
               until DFG has provided written approval of a bank and a 
               conservation easement has been recorded on the site.

             g)   Requires DFG after a bank is approved to conduct 
               compliance review and to establish and maintain a database, 
               available on DFG's website or another website that is 
               linked to DFG's website, which allows bank sponsors to 
               update information about mitigation and conservation banks.

             h)   Requires DFG to provide an annual report to the 
               Legislature on the mitigation and conservation bank 
               program.

             i)   Requires DFG to collect a total payment of $60,000 per 
               bank to cover all or a portion of DFG's bank implementation 
               and compliance costs, with payments due following credit 
               releases.

             j)   Requires DFG to annually adjust mitigation and 
               conservation bank fees to reflect changes in the Implicit 
               Price Deflator, and requires DFG to adopt guidelines and 
               criteria to implement mitigation and conservation bank 
               requirements.  The guidelines shall incorporate information 
               from a 2011 Memorandum of Understanding the state entered 
               with federal agencies for purposes of jointly establishing 
               a coordinated approach to mitigation and conservation 
               banking in California. 

          5)Makes the following changes relating to fees charged for fish 
            and game activities:

             a)   Requires FGC to adjust license, stamp, permit and tag 
               fees for inflation based on changes in the Implicit Price 
               Deflator, pursuant to Section 713 of the Fish and Game 
               Code, at least every 5 years.

             b)   Requires, with regard to the fees for lifetime 
               sportsmen's licenses, sport and commercial fishing 
               licenses, commercial fish business and vessel licenses, 
               hunting licenses, ocean sport fishing enhancement stamps, 
               commercial fishing enhancement stamps, and trapping 
               licenses that the FGC adjust the license fees to recover, 








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               but not exceed, all reasonable administrative and 
               implementation costs of DFG and the FGC relating to those 
               licenses. 

             c)   Provides that except where the Fish and Game Code 
               expressly prohibits the adjustment of statutorily imposed 
               fees, the FGC may establish a fee or the amount thereof by 
               regulation.  Requires that fees established by the FGC 
               shall be in an amount sufficient to recover all reasonable 
               administrative and implementation costs of the FGC and DFG 
               relating to the program for which the fee is paid.  
               Authorizes the FGC to establish a fee structure to phase in 
               fee adjustments to provide for full cost recovery within 5 
               years.
           
             d)   Clarifies the DFG's authority to establish and adjust 
               fees for CEQA filings, streambed alteration agreements, and 
               scientific collector permits.  Requires that the fees be 
               sufficient to recover all reasonable administrative and 
               implementation costs and authorizes DFG to establish a fee 
               structure to phase in fee adjustments to provide for full 
               cost recovery within 5 years.

          6)Shifts responsibility from the FGC to the Ocean Protection 
            Council (OPC) for future modifications and updates to Marine 
            Protected Areas (MPAs).  Requires the OPC to act on petitions 
            for modifications every 3 years.  Requires DFG prior to OPC's 
            decision to review the petition and make recommendations to 
            the OPC, to consult with other agencies with responsibility 
            for ocean activities, including the FGC, the Regional Water 
            Quality Control Board, the State Lands Commission, and the 
            Coastal Commission.  Requires establishment of a scientific 
            peer review process and requires the OPC to establish a 
            process for public participation in the OPC's decisions.  
            Authorizes the DFG to establish a unit or division of 
            ecosystem-based management within DFG to facilitate this 
            review and to further conservation of marine resources under 
            DFG's jurisdiction.

           EXISTING LAW  :

          1)Establishes DFG in the Natural Resources Agency and provides 
            that wildlife resources are held in trust by DFG for the 
            people of the state, and generally charges DFG with 
            administration and enforcement of the Fish and Game Code, 








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            along with the FGC.

          2)Establishes the FGC in the Constitution and authorizes the 
            Legislature to delegate to the FGC powers relating to the 
            protection and propagation of fish and game.  

          3)Provides in the Fish and Game Code for various licenses and 
            permits with some fees set statutorily, others set by DFG or 
            the FGC, and many, but not all, adjusted for inflation.

          4)Establishes a state policy to maintain wild trout fisheries 
            and discourages artificial planting of hatchery raised 
            nonnative fish in wild trout waters.  Provides for designation 
            of Heritage Trout Waters containing indigenous native trout 
            species. Requires that one third of sport fishing license fees 
            be used for attaining specified production goals for state 
            hatcheries by certain dates, and designates $2 million of 
            those funds for the Heritage and Wild Trout program.

          5)Directs DFG to establish and update a database of wetlands 
            mitigation banks.  Establishes a state policy to preserve 
            wetlands habitat and requires DFG to develop and administer a 
            program for wetlands mitigation banks in the Sacramento/San 
            Joaquin Valley.

          6)Requires the FGC every three years after MPAs are established 
            to receive and consider petitions for modifications to the 
            MPAs.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee:  

          1)Unknown workload costs to DFG and the commission to review and 
            adjust fees as needed (special funds).  These costs should be 
            covered by fee revenue, which DFG and the commission can set 
            to ensure they do so.  However, there may be a lag between the 
            time DFG and the commission develop and adopt fees and the 
            time any resulting revenue increase is realized.  It is not 
            clear DFG or the commission has the resources to cover these 
            activities from other funds until they receive additional fee 
            revenue.

          2)Ongoing costs of an unknown amount, but potentially exceeding 
            $1 million dollars annually, to DFG to mark hatchery-produced 
            trout (special fund).








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          3)Ongoing cost in the tens of thousands of dollars to DFG to 
            support the strategic trout management team (special fund).

          4)Significant costs, likely in the low millions of dollars 
            annually, to DFG to plan, review, establish and monitor 
            conservation and mitigation bank programs (special fund).  
            These costs should be fully covered by the fees the bill 
            authorizes DFG to collect from applicants.

          5)Ongoing costs, possibly in excess of $1 million dollars, to 
            the Ocean Protection Council, to regulate commercial fishing 
            in MPAs (special fund).  These costs should largely be offset 
            by savings to the commission, which will no longer regulate 
            fishing in MPAs.

          Amendments adopted on the Assembly Floor also appropriate $1 
          million from the HIFF for capital outlay expenditures necessary 
          to improve and rehabilitate state hatchery facilities.

           COMMENTS  :  This bill implements numerous changes designed to 
          implement broad policy recommendations arising out of a 
          Strategic Vision process conducted this past year to improve the 
          capacity of DFG and the FGC to carry out their public trust 
          mandates for protection and management of fish and wildlife.  AB 
          2376 (Huffman), Chapter 424, Statutes of 2010, directed the 
          Secretary of Natural Resources to appoint a state executive 
          committee, blue ribbon citizen commission (BRCC), and 
          broad-based stakeholder advisory group to engage in a public 
          deliberative process and develop recommendations to improve the 
          effectiveness of DFG and the FGC.  The groups met for several 
          months and released a final report in April 2012.  The report 
          includes broad recommendations on such issues as mission, scope 
          of responsibilities, scientific capacity, principles to guide 
          natural resources management, permitting and enforcement.  

          This bill contains four major themes: it modifies various fee 
          authorities of DFG and the FGC to allow for recovery of 
          administrative costs; establishes a process for review, approval 
          and oversight of mitigation and conservation banks; updates 
          California's hatcheries and wild trout program; and shifts 
          responsibility for certain aspects of MPA adaptive management 
          from the FGC to the OPC.  

          This bill creates a program for review, approval and oversight 








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          of mitigation and conservation banks.  These changes facilitate 
          private sector participation in providing necessary mitigation 
          opportunities and are supported by many participants in the 
          mitigation and conservation bank industry.  Mitigation and 
          conservation banks are entities established by private firms to 
          offer mitigation to project proponents for projects requiring 
          permits from DFG.  Conservation banks are generally understood 
          to provide mitigation for species, while mitigation banks are 
          generally understood to provide mitigation for wetlands losses.  
          DFG has found that mitigation and conservation banks can provide 
          more effective habitat conservation than piecemeal per project 
          mitigation, but available information on the status of banks has 
          been limited.  Although mitigation and conservation banks have 
          been an ongoing activity for many years, the policy has for the 
          most part not been codified.  In the absence of an established 
          funding source, DFG has also suspended approval of any new 
          mitigation banks at this time.  This bill provides the fee 
          revenue to cover DFG's program costs, which promotes the 
          Strategic Vision goal of ensuring that programs have identified 
          funding sources.  The database requirements also further the 
          goals of increased transparency and accountability.  The option 
          allowing an applicant to submit a draft prospectus for 
          pre-review seeks to meet the goals, identified in the Strategic 
          Vision, of providing assistance to applicants with pre-project 
          planning and making the application review process more 
          consistent and transparent to applicants.

          This bill makes numerous reforms to update DFG's hatcheries and 
          wild trout programs.  Among other things, it reflects 
          advancements in the scientific understanding of the impacts of 
          hatchery practices on native fish populations, and the 
          importance of genetic diversity in maintaining wild 
          self-sustaining populations.  This bill seeks to balance the 
          goal of providing quality outdoor recreational opportunities for 
          fishermen who pay license fees that support fishery programs, 
          with the goal of sustainable ecosystem-based management.  The 
          Strategic Vision placed a priority on science-based 
          decision-making and overall ecosystem health.  Regular updates 
          to the existing Strategic Plan for Trout Management are proposed 
          to provide an overarching systematic framework for the 
          management of all trout species. This bill also seeks to 
          incorporate best practices into hatchery production.  
          Maintaining and promoting genetic diversity in hatchery fish is 
          recognized as critical to producing robust and resilient fish 
          and a healthy fishery.  Existing policy and numerical goals on 








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          stocking to promote angler opportunities, established through AB 
          7 (Cogdill), Chapter 689, Statutes of 2005, are retained, and 
          program goals are clarified to align with current practice and 
          scientific understanding.  DFG is specifically authorized to 
          purchase trout from private hatcheries to meet trout stocking 
          goals, if specified conditions are satisfied.  This bill also 
          appropriates $1 million from the HIFF for improvements to state 
          hatcheries needed to help meet state hatchery production goals.  


          The hatchery and wild trout reforms in this bill seek to promote 
          the goals identified in the Strategic Vision of maintaining 
          healthy ecosystems, promoting public outdoor recreation 
          opportunities, practicing adaptive management, ensuring 
          science-based decisions, and promoting ecosystem based 
          management informed by credible science.  The requirement for 
          DFG to make information on trout inventories available on DFG's 
          website also promotes the Strategic Vision's goal of providing 
          timely access to data collected or used by DFG and the FGC.  
          These provisions recognize the changing diversity of California 
          by requiring that areas where hatchery-produced trout are 
          stocked to provide angling opportunities and fishing access 
          include urban fisheries.
         
          This bill includes provisions allowing DFG and the FGC to adjust 
          various licensing fees to achieve cost recovery, with direction 
          to phase in fee increases as necessary for various programs.  
          These changes apply to both sport and commercial fishermen and 
          to hunters.  Inadequate funding was identified in the Strategic 
          Vision process as one of the greatest barriers to implementation 
          of DFG's mission, and it was acknowledged that meaningful change 
          must include fiscal reforms. The provisions in this bill giving 
          DFG and the FGC authority to adjust fees as necessary to recover 
          program costs is consistent with recent legislative actions 
          giving more fee setting authority for fishing and hunting to the 
          FGC which would set the fees through a regulatory process under 
          the Administrative Procedures Act (APA).  Information provided 
          by DFG and FGC staff early on in the Strategic Vision process 
          emphasized the need for financial stability, and the difficulty 
          both entities face with unfunded mandates.  In particular, DFG 
          and the FGC noted that 57% of the fees for licenses and permits 
          in the Fish and Game Code require legislative action in order to 
          adjust fees to bridge the gap between revenues and operational 
          costs.  The Legislature has frequently imposed new statutory 
          mandates on DFG without providing the funding necessary for 








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          implementation.  This bill begins the process of correcting that 
          problem by shifting authority from the Legislature to the FGC 
          and DFG to make adjustments in fees as necessary to recover but 
          not exceed reasonable administrative and implementation costs 
          relating to the particular license or permit.

          Supporters of this bill note the long overdue need for reform of 
          the state's wildlife management and in particular highlight 
          support for the provisions transferring responsibility for 
          ongoing management of California's MPAs, now that the network of 
          MPAs has been established, to the OPC.  Opponents in particular 
          objected to provisions included in prior versions clarifying 
          strict liability for fish and game code violations and creating 
          a private cause of action.  The private cause of action and 
          strict liability provisions were deleted from this bill in the 
          Assembly Appropriations Committee.  As a result of the 
          amendments taken, opposition was removed by the Realtors, 
          Western Growers, California State Association of Counties, 
          Regional Council of Rural Counties,  Civil Justice Association, 
          California Central Valley Flood Control Association, El Dorado 
          County Irrigation District, Valley Ag Water Coalition which are 
          now neutral. 

          The remaining opposition is focused primarily on two provisions 
          of the bill, a section which states legislative intent regarding 
          mitigation principles, and the section of the bill which shifts 
          responsibility for some MLPA related functions to the OPC. 

           Proposed Amendments  :   The author is proposing amendments to 
          delete legislative intent on mitigation principles, to restore a 
          consultation role for the FGC for future revisions to MPAs, and 
          technical clean-up amendments to the mitigation banking 
          proposal.

           REGISTERED SUPPORT / OPPOSITION  :

           Support  


          Audubon California
          California Coastkeeper Alliance
          California Trout
          Defenders of Wildlife
          Endangered Habitats League
          Environmental Defense Fund








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          Green California
          Humane Society of United States
          Monterey Bay Aquarium
          Natural Resource Banking Coalition
          Natural Resources Defense Council 
          Ocean Conservancy
          Paw Pac
          The Nature Conservancy
          The Wildlands Conservancy
          Trout Unlimited
          Wildcoast

           Opposition 
           
          American Council of Engineering Companies of California
          California apartment Association
          California Aquaculture Association
          California Association for recreational Fishing
          California Bean Shippers Association
          California Building Industry Association
          California Cattlemen's Association
          California Chamber of Commerce
          California Construction and Industrial Materials Association
          California Farm Bureau Federation
          California Fisheries and Seafood Institute
          California Grain and Feed Association
          California Lobster and Trap Fishermen's Association
          California Outdoor Heritage Alliance
          California Pear Growers Association
          California Sea Urchin Commission
          California Seed Association
          California Waterfowl Association
          California Wetfish Producers Association
          California Wheat Growers Association
          Carmichael Water District\
          Pacific Egg and Poultry Association
          Partnership for Sustainable Oceans
          Placer County Water Agency
          Reeb Governmental Relations
          Western Plant Health Association
          Western States Petroleum Association

           Analysis Prepared by  :    Diane Colborn / W., P. & W. / (916) 
          319-2096  
           








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