BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 865 (Eggman) - Yacht and Ship Brokers Act: licensing.
          
          Amended: April 24, 2013         Policy Vote: NR&W 7-2
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                     Consultant:  
          Marie Liu     
          
          This bill does not meet the criteria for referral to the  
          Suspense File.
          
          
          Bill Summary: AB 865 would allow the Department of Boating and  
          Waterways (DBW) to establish fees for exams, licensing,  
          renewals, and other services provided by DBW for for-hire  
          vessels and to establish fees for salesperson's and broker's  
          license.

          Fiscal Impact: 
              Minor and absorbable costs to the Harbors and Watercraft  
              Revolving Fund (special) to adopt regulations to establish  
              fees.
              On-going increased revenues, likely between $85,000 and  
              $350,000 to the Harbors and Watercraft Revolving Fund from  
              increased fees.

          Background: Under the Yacht and Ship Brokers Act (Harbors and  
          Navigation Code §700 et seq.), a license from DBW is required to  
          sell or rent boats that are more than 16 feet long but less than  
          300 gross tons. There are various requirements for licensure  
          including bonding, passing an examination, and undergoing a  
          criminal records investigation. DBW annually publishes a list of  
          licensed brokers and salespeople. DBW is required to investigate  
          written complaints against brokers and salespersons.

          Existing law specifies license fees for broker's and  
          salesperson's licenses, renewals, license transfers, and exams. 

          Proposed Law: This bill would allow DBW to establish reasonable  
          fees for exams, licensing, renewals, and other services  
          regarding for-hire vessels and licensure of brokers and  
          salespersons. This bill would specify that the existing  
          statutorily set fees would continue until DBW establishes  








          AB 865 (Eggman)
          Page 1


          regulations to establish those fees.

          Staff Comments: DBW, now the Division of Boating and Waterways,  
          intends on establishing fees that would fully cover the costs of  
          operating the program in approximately one year, should this  
          bill become law. According to DBW, the cost of adopting the  
          regulations will be minor and absorbable and will result in  
          increased annual revenues between $85,000 and $350,000.

          The bill also requires DBW to collect a criminal records  
          investigation fee for a salesperson's and broker's license in an  
          amount determined by the Department of Justice. This fee is  
          already determined by the Department of Justice and therefore  
          this provision does not have any cost implications.

          Recommended Amendments: This bill requires that the regulations  
          establish "reasonable" fees. However, reasonable fees do not  
          necessarily mean sufficient to cover DBW's cost. Staff  
          recommends that the bill specify that the fee schedule should be  
          sufficient to cover DBW's cost in implementing the programs,  
          which is consistent with DBW's intent. 

          As of July 1, 2013, DBW is now the Division of Boating and  
          Waterways in the Department of Parks and Recreation. This bill  
          should be amended to reflect this reorganization.