BILL ANALYSIS Ó AB 865 Page 1 ASSEMBLY THIRD READING AB 865 (Eggman) As Amended April 24, 2013 Majority vote WATER, PARKS & WILDLIFE 10-4 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Rendon, Blumenfield, |Ayes:|Gatto, Bocanegra, | | |Bocanegra, Fong, Frazier, | |Bradford, | | |Gatto, Gomez, Gray, | |Ian Calderon, Campos, | | |Yamada, Bloom | |Eggman, Gomez, Hall, | | | | |Rendon, Pan, Quirk, Weber | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Bigelow, Allen, Beth |Nays:|Harkey, Bigelow, | | |Gaines, Patterson | |Donnelly, Linder, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Allows the Department of Boating and Waterways (DBW) to set licensing fees for brokers and salespersons of ships and yachts through regulation. Specifically, this bill : 1)Amends existing law requiring DBW to issue an annual list of licensed brokers and salespersons of ships and yachts, and requires DBW to instead post this directory on its Internet Web site. 2)Repeals requirement for DBW to detail its activities regarding the brokerage and sales of ships and yachts as part of a biennial report. 3)Repeals the fee schedule set by statute for brokers and salespersons of ships and yachts. 4)Requires DBW to set by regulation a new fee schedule for brokers and salespersons of ships and yachts. Provides that the current statutory fees shall apply until such time as DBW adopts the new fees by regulations. 5)Requires DBW to adopt rules and regulations to carry out provisions of existing law regarding for-hire vessel operators, including adopting a fee schedule for examinations, AB 865 Page 2 licensing, renewals, and other services. EXISTING LAW : 1)Establishes DBW in the Natural Resources Agency and charges DBW with duties related to beach erosion, harbors, and recreational boating and boat trails. Establishes the Boating and Waterways Commission, which provides advice to DBW on matters within DBW's jurisdiction and approves certain transfers, loans, and grants proposed by DBW. 2)Requires DBW to publish an annual directory of licensed brokers and salespersons of ships and yachts. Permits DBW to issue a periodical bulletin concerning brokerage and sale of yachts and ships. 3)Requires DBW to publish a full and accurate account of its activities regarding brokerage and sales of ships and yachts, including all receipts and expenditures during the preceding two years, and requires this account is to be included in a biennial report prepared pursuant to a section of the Harbors and Navigation Code that has been repealed. 4)Establishes by statute a fee schedule for the licensing of brokers and salespersons of ships or yachts. Requires a criminal records investigation fee, as set by the Department of Justice, for license applicants. 5)Grants authority to DBW to establish rules and regulations necessary to carry out provisions of law regarding the licensing of for-hire vessel operators. 6)Transfers DBW to the Department of Parks and Recreation (DPR) as the Division of Boating and Waterways, pursuant to the Governor's Reorganization Plan No. 2, effective July 3, 2012, and operative July 1, 2013. FISCAL EFFECT : According to the Assembly Appropriations Committee, potential increased annual fee revenue (Harbors and Watercraft Revolving Fund) estimated to be in the range of $85,000- $350,000, depending on the rulemaking outcome. Minor and absorbable costs for rulemaking to establish new fee schedule AB 865 Page 3 COMMENTS : This bill authorizes DBW to establish license fees for brokers and salespersons of yachts and ships by regulation. The regulatory fee schedule would replace the statutory license fees currently in effect. This bill provides that the existing statutory license fees would remain in effect until the regulations establishing the new fee schedule are adopted. This bill also removes an obsolete provision requiring DBW to include certain accounting information in a biennial report that is no longer required by law. The provision of the Harbors and Navigation Code that previously required DBW to make a biennial report to the Boating and Waterways Commission, the Legislature and the Governor covering DBW's operations was repealed in the 2011-12 Session. The author of this bill notes that the current license fees date back to 1990 and are much lower than contemporary fees for comparable industries. The author also notes that the current revenues from the licensing program for yacht and boat brokers and salespersons are not sufficient to self-fund the program. Finally, the author states that an amendment to the statute allowing DBW to adopt rules and regulations regarding for-profit vessel operators is needed because DBW does not currently have explicit authority to establish fees for its related services. As noted above, the Governor's Reorganization Plan No. 2, which goes into effect on July 1, 2013, eliminates the DBW and transfers the functions of the DBW to a new Division of Boating and Waterways within DPR. The Division of Boating and Waterways will be the successor agency to DBW and assume additional specified powers, functions, and jurisdiction from the following state agencies: 1)All of the powers, functions, and jurisdiction previously vested in the Division of Small Craft Harbors of DPR. 2)All of the powers, functions, and jurisdiction of the State Lands Commission with respect to the acquisition, construction, development, improvement, maintenance, and operation of small craft harbors. 3)All of the powers, functions, and jurisdiction of DPR with respect to boating facility planning, design and construction, except as specifically provided in the California Recreational Trails Act for boating trails. AB 865 Page 4 4)All of the powers, functions, and jurisdiction of the Office of Architecture and Construction in the Department of General Services with respect to boating facility planning and design. 5)All of the powers, functions, and jurisdiction of the Department of Water Resources with respect to beach erosion control. Under the Governor's Reorganization Plan No. 2 as introduced, the Division of Boating and Waterways would also have absorbed the regulatory powers, functions, and jurisdiction of the Boating and Waterways Commission. However, AB 737 (Buchanan), Chapter 136, Statutes of 2012, retained the Boating and Waterways Commission within the new Division of Boating and Waterways. AB 737 repealed Chapter 3 of the Harbors and Navigation Code relating to the Commission and added a new Chapter 3 prescribing the membership, functions, and duties of the Commission. Other related legislation includes AB 1317 (Frazier) of this session, which would enact the statutory changes necessary to reflect the changes in law made by the Governor's Reorganization Plan No. 2, and would also make additional changes to properly reflect the assignment and reorganization of the various functions of state government. Supporters of this bill include organizations involved in many aspects of boating in California. The California Yacht Brokers Association, which represents the brokers who would be subject to the licensing fees at issue in this bill, approves allowing DBW to set licensing fees by regulation at levels appropriate to protect consumers and to ensure the ongoing professionalism of the yacht brokering and sales industry. Analysis Prepared by : Diane Colborn/ W., P. & W. / (916) 319-2096 FN: 0000592 AB 865 Page 5