BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1148
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          (  Without Reference to File  )

          SENATE THIRD READING
          SB 1148 (Pavley)
          As Amended  August 30, 2012
          Majority vote 

           SENATE VOTE  :24-14  
           
           WATER, PARKS & WILDLIFE      8-2APPROPRIATIONS      10-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Huffman, Blumenfield,     |Ayes:|Gatto, Blumenfield,       |
          |     |Campos, Fong, Gatto,      |     |Bradford,                 |
          |     |Roger Hernández, Hueso,   |     |Charles Calderon, Campos, |
          |     |Yamada                    |     |Davis, Fuentes, Hall,     |
          |     |                          |     |Hill, Cedillo             |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Bill Berryhill, Beth      |Nays:|Harkey, Donnelly,         |
          |     |Gaines                    |     |Nielsen, Norby, Wagner    |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           WATER, PARKS & WILDLIFE  8-0                                
           
           -------------------------------- 
          |Ayes:|Hueso, Blumenfield, Fong, |
          |     |Gatto, Roger Hernández,   |
          |     |Huffman, Lara, Yamada     |
          |     |                          |
           -------------------------------- 
           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 








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            responsibilities, its conservation programs, and enhancing the 
            scientific basis of DFG's decisions.

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

             a)   States legislative findings 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 DFG's inventory of California trout 
               streams.

             c)   Requires DFG every 5 years to update the state Strategic 
               Plan for Trout Management, and specifies objectives, 
               including providing angling opportunities, conserving wild 
               and native trout, and ensuring environmental sustainability 
               and ecosystem watershed health. 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 ecologically and 
               environmentally sustainable hatchery and stocking practices 
               for native trout.

             d)   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.

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








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             f)   Requires DFG to form a Strategic Trout Management Team 
               to oversee trout management statewide.  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.

             g)   Deletes obsolete provisions relating to state hatchery 
               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.

             h)   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.

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

             j)   Authorizes 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.








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             aa)  Appropriates $1 million from the HIFF  to DFG for 
               capital outlay expenditures necessary for improvements to 
               state hatcheries to achieve hatchery fish production goals. 
                

          3)Establishes a program for review, approval and oversight of 
            mitigation and conservation banks, including a fee structure 
            and provisions governing the application, review and approval 
            process.  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, the need for greater 
            transparency, and the need to fund the regulatory costs of DFG 
            related to mitigation and conservation banks. (See Assembly 
            Water, Parks & Wildlife Committee policy analysis for further 
            detail.)

          4)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 linked to DFG's website, 
            which allows bank sponsors to update mitigation and 
            conservation bank information.

          5)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. 

          6)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 








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               licenses that the FGC adjust the license fees to recover, 
               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 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 DFG's authority to adjust fees for CEQA 
               filings, streambed alteration agreements and scientific 
               collector permits.  Requires that the fees be sufficient to 
               recover reasonable administrative and implementation costs 
               and authorizes fee adjustments to be phased in to provide 
               for full cost recovery within 5 years.

           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, 
            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 








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            be used to attain 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 cost in the tens of thousands of dollars to DFG to 
            support the strategic trout management team (special fund).

          3)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.

          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 








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          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 three major themes: it modifies various fee 
          authorities of DFG and the FGC to allow for but not exceed 
          recovery of administrative and implementation costs; establishes 
          a process for review, approval and oversight of mitigation and 
          conservation banks; and updates California's hatcheries and wild 
          trout program.  

          This bill creates a program for review, approval and oversight 
          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 








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          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 
          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.








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          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 
          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.  Most of the articulated 
          opposition to this bill was removed with amendments taken in the 
          Assembly Appropriations Committee and the Assembly Water, Parks 
          & Wildlife Committee which reheard this issue on August 29, 
          2012.  Opponents had objected to provisions included in prior 
          versions of this bill 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. 
           Opponents also objected to legislative intent language which 
          was added articulating principles for mitigation, and to 
          provisions shifting responsibility for implementation of certain 
          aspects of the Marine Life Protection Act to the Ocean 
          Protection Council (OPC).  The Assembly Water, Parks & Wildlife 
          Committee reheard this bill on August 29, 2012, and additional 








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          amendments were taken to delete the legislative intent on 
          mitigation principles and the OPC provisions.  Opponents who 
          testified at the hearing indicated they were removing their 
          opposition with the adoption of these amendments.


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


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