BILL ANALYSIS Ó ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2013-2014 Regular Session | | | ----------------------------------------------------------------- BILL NO: AB 2105 HEARING DATE: June 10, 2014 AUTHOR: Frazier URGENCY: No VERSION: April 2, 2014 CONSULTANT: Toni Lee DUAL REFERRAL: No FISCAL: Yes SUBJECT: Big game mammals: bighorn sheep. BACKGROUND AND EXISTING LAW Existing law defines "taking" as hunting, pursuing, catching, capturing, killing, or attempting to accomplish those actions (Fish and Game Code (FGC) §86). The taking or possessing of fully protected mammals or parts thereof is prohibited (FGC §4700). While the list of fully protected mammals generally includes bighorn sheep (Ovis canadensis), the Nelson (also referred to as the desert bighorn) subspecies (Ovis canadensis nelsoni) may be taken under specified circumstances (FGC §4902(b), Ch. 745, Stats. 1986). California is home to two distinct subspecies of bighorn sheep: the Sierra Nevada (Ovis canadensis sierrae) and the Nelson. Nelson bighorns are charismatic mammalian megafauna found in the dry desert mountains of southeastern California. Due to conservation measures initiated in the 1960s, total Nelson bighorn populations doubled to about 4,000 individuals by 1993 (the historical number of bighorn sheep is unknown). Conversely, the peninsular population of Nelson bighorns has experienced declines. Because peninsular Nelson and Sierra Nevada bighorns are protected under both the federal and state Endangered Species Acts, only a certain portion of the Nelson subspecies is available for taking. Exiting law grants the Department of Fish and Wildlife (DFW) authority to issue for a fee a certain number of tags specified by the California Fish and Game Commission (CFGC) that serve as a license to take a game animal including pronghorn antelope (FGC §331 et seq.), elk (FGC §332 et seq.), mule deer (FGC §4330 et seq.), and Nelson bighorn sheep (FGC §4902 et seq.). DFW and CFGC are required to analyze all fees for tags every five years 1 and recommend to the Legislature adjustments to reflect inflation (FGC §713). Fees are deposited into the Big Game Management Account (BGMA) within the Fish and Game Preservation Fund (FGPF), unless otherwise provided. The process for obtaining a big game tag differs depending on the species and type of tag. An individual may acquire up to two deer tags per year through outright purchase or through entering drawings for special tags. Antelope, elk, and bighorn sheep tags are primarily allocated via a drawing system and purchased for a set amount. In addition, CFGC must direct DFW to annually reserve a specified amount of deer, antelope, elk, and bighorn sheep game tags for fundraising auctions that are often executed through nonprofit conservation groups supporting the interests of hunters. Statute limits the number of available auction tags for antelope, elk, deer, and bighorn sheep to a maximum of 1% of total available tags, 3, 10, and 3 tags respectively. The actual number issued depends on conservation status of each species. Each fall, DFW requests proposals from interested conservation nonprofit organizations to auction these tags. Auction tags are not subject to fee limits and have typically sold for around $50,000-100,000 per bighorn sheep tag or $5,000-20,000 for other tags. During the most recent auction period, a coveted bighorn tag sold for $170,000. License fees available from non-government agents include a 5% license agent handing fee levied on the base fee. In addition, license fees also include a 3% nonrefundable application fee ($7.50 maximum per item) on the base fee. 2014 base tag prices are: ------------------------------------------------------------------ | Animal | Resident | Nonresident | |------------+--------------------------+--------------------------| | Antelope | $136.75 | $424.00 | |------------+--------------------------+--------------------------| | Elk | $411.50 | $1,272.50 | |------------+--------------------------+--------------------------| | Deer | $24 (first), $31.25 | $248.50 (first), $248.50 | | | (second) | (second) | |------------+--------------------------+--------------------------| | Bighorn | $388.00 |$500 | | Sheep | | | ------------------------------------------------------------------ With the exception of bighorn sheep tag fees, all of the above values are adjusted for inflation. In other states, prices for resident and nonresident bighorn sheep tags range from $30-$513 and $507.50-$3,180, respectively. 2 The total number of tags purchased for 2013 are: ------------------------------------------------------------------ | Animal | Resident | Nonresident | |------------+--------------------------+--------------------------| | Antelope | 199 | 0 | |------------+--------------------------+--------------------------| | Elk | 410 | 4 | |------------+--------------------------+--------------------------| | Deer | 143,697 (first), 40,172 | 946 (first), 56 (second) | | | (second) | | |------------+--------------------------+--------------------------| | Bighorn | 18 |4 | | Sheep | | | ------------------------------------------------------------------ Although populations of antelope, elk, and deer have somewhat increased since the Gold Rush (1848-1855), current numbers are far lower than historical values. For example, deer populations peaked in the 1960s at 700,000-1,000,000 individuals and have since slowly declined. DFW scientists attribute this trend to long-term habitat degradation. In 2012, SB 1166 (Berryhill) contained nearly identical language allowing nonprofits to recoup their costs or up to 10% of the sale price. DFW opposed this legislation due to concerns that federal entities might see this retention as a diversion of funds, placing $10 million in federal funding in jeopardy. The bill was amended against the wishes of the author to change the vendor fee to a flat 2% in the Assembly Appropriations Committee. PROPOSED LAW This bill: 1.Makes various legislative findings and declarations related to wildlife-dependent recreation. 2.Authorizes a nonprofit organization selling fundraising tags designated by DFW to assist in the sale of big game auction tags to retain 5% of the sale price of each tag and applicable credit card fees as a reasonable vendor fee. 3.Requires the nonprofit organization to send DFW within 30 days of the tag sale date: A check for 95% of the total auction sale price An itemized receipt showing the tag sale price and the 5% reduction and credit card fees retained as a vendor fee 1.Sets the fee for a Nelson bighorn ram tag at $400 for residents and $1,500 for nonresidents, adjusted annually to 3 reflect changes in the Implicit Price Deflator. ARGUMENTS IN SUPPORT The California Chapter of the Wild Sheep Foundation (CA WSF) state that the price of a non-resident sheep tag has been set in statute at $500 and has not been allowed to increase with inflation or demand since 1986. This bill would "bring the cost of a non-resident sheep tag current with inflation, in-line with the cost of similar non-resident sheep tags in other states, and allow it to adjust annually with inflation and demand." In addition, CA WSF asserts that DFW looks to hunting-related nonprofit conservation organizations to partner in the sale of tags within the community having the greatest interest to generate the absolute highest return. Rising costs of this partnership are an increasing disincentive for these nonprofits to partner with DFW. The California Sportsman's Lobby, Outdoor Sportsmen's Coalition of California, and Safari Club International (SCI) argue that allowing a non-profit organization selling a deer, elk, antelope, or bighorn sheep fundraising tag to keep 5% of the sales price as a vendor fee, plus credit card costs, is "appropriate." They contend that, "the ability to recover tag sales overhead costs will encourage more qualified SCI chapters to participate in this fundraising program for the department and to expend a maximum effort to realize the most revenue possible." ARGUMENTS IN OPPOSITION The Public Interest Coalition argues that this bill will wrongly reduce California government's revenue streams with sales commissions and fees. If private vendors sell tags, then commissions and applicable credit card fees must be added to the final cost to ensure no net loss in fees to the state. The coalition also questions the findings and declarations, stating that they rely on a suspect survey that was coordinated by the U.S. Fish and Wildlife Service, but was requested by the Association of Fish and Wildlife Agencies, rendering the results biased. In addition, they note that the percentage of Californians purchasing hunting licenses and tags is less than 1%. COMMENTS 1.The 5% vendor fee is unrelated to the cost of the auction. Because tags are often auctioned at events serving multiple purposes, the financial impact on nonprofit organizations remains unclear. The Assembly Appropriations Committee 4 analysis of SB 1166 from 2012 notes that non-profit vendors were willingly selling the tags, often at events requiring an admission fee. A system wherein DFW reimburses non-profits for their actual expenses may be more prudent, but practically difficult. 2.It is not clear whether the 5% vendor fee would be calculated before or after deducting any credit card fees. An amendment is needed to specify that credit card fees will be deducted from the sale price before calculating the 5% vendor fee. 3.In an opposition letter to SB 1166 from 2012, DFW recommended reducing the 10% vendor fee to 5%. Allowing nonprofits to retain credit card fees would potentially increase this percentage above 5%. For example, assuming the current 1.51% Visa processing fee plus a base of $0.10 applies, the recent $170,000 bighorn sheep tag sale would allow the nonprofit organization to retain about $2,600 in credit card fees plus about $8,400 in vendor fees (assuming credit card fees are deducted before calculating the vendor fee). 4.As of 2012, Alaska, Colorado, Idaho, Montana, Nebraska, New Mexico, Oregon, Texas, Utah, Washington, Wyoming, numerous Native American Nations, and several areas in Canada and Mexico allow nonprofits to retain 5-25% of the tag sale price. States that do not allow nonprofits to retain any portion of big game animal fundraising auction proceeds include Arizona, Nevada, and New Mexico. 5.Several of the legislative findings require amendments to improve accuracy and formatting. For example, the legislative finding in Section 1(b)(3) of the bill erroneously states that wildlife viewers spent $45.7 billion dollars in 2011 (the actual amount was $55 billion). 6.This bill requires nonprofits to send money to DFW, specifically by check. The reasoning behind this specificity is unclear and the committee may wish to delete this requirement. 7.Currently, Alaska allows nonprofits to retain 10% of an auction game tag as a vendor fee. HB 161, a 2013 bill that would have increased this value to 100%, but was amended down to 30%, has already passed through the Alaskan legislature and is awaiting approval from the governor. The sponsors of that bill argue that increasing the vendor fee is necessary to encourage nonprofits to participate in the auction process. 5 Should interested parties continue to advocate for increasingly high vendor fee percentages, the legislature may choose to reevaluate the benefits of the fundraising game tag auction. 8.California's pronghorn antelope historically exceeded 500,000 individuals and ranged throughout the Central Valley. Today 4,000 individuals these animals remain and are found in the northeastern corner of the state. California's three elk subspecies historically occupied much of the central and northern parts of the state with populations of tule elk estimated at 500,000 individuals. Due to the expansion of settlements, the Roosevelt and Rocky Mountain elk range has diminished to the northern areas of the state (estimates of 6,500 and 1,500-2,000 individuals, respectively), while the tule elk is now isolated within small pockets in the Coast Mountain Ranges with 4,000 individuals statewide. SUGGESTED AMENDMENTS AMENDMENT 1 In the legislative findings, delete paragraphs 5, 6, 7, 8, and 17 and make minor changes to paragraphs 3, 4, 10, 11, 13, 14, 15, and 19 to improve the accuracy of these statements. AMENDMENT 2 In the legislative findings beginning with paragraph 4, change all paragraphs to subsections. AMENDMENT 3 In FGC §3953(b) strike out the phrase "a check for," delete all text after "sale price of the tag," and insert, "less any applicable credit card fees with an itemized receipt showing the sale price and the 5-percent reduction and any reimbursement for credit card fees retained by the nonprofit organization as a vendor's fee." SUPPORT California Chapter of the Wild Sheep Foundation (Sponsor) Black Brant Group California Deer Association California Sportsman's Lobby California Waterfowl Association Gaines & Associates Mule Deer Foundation Outdoor Sportsmen's Coalition of California Safari Club International 6 OPPOSITION Public Interest Coalition 7