BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 749 (Wolk) - Habitat protection: endangered species. Amended: April 16, 2013 Policy Vote: NR&W 9-0 Urgency: No Mandate: No Hearing Date: April 29, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 749 would allow lease revenues generated on lands managed by the Department of Fish and Wildlife (DFW) to be used to manage those lands, make changes to the procedures for listing threatened and endangered species, extend the sunset date on accidental take provisions, and encourage the enhancement of upland nesting cover and associated habitat. Fiscal Impact: Cost pressure of up to $1.7 million for lost revenues to the Wildlife Restoration Fund. Ongoing costs approximately in the low hundreds of thousands of dollars from the Fish and Game Preservation Fund (special fund) for increased DFW responsibilities when reviewing whether a candidate species should be listed under the California Endangered Species Act. Ongoing costs approximately in the tens of thousands of dollars and cost pressures in the hundreds of thousands of dollars to the Upland Game Bird Account (special fund) in the Fish and Game Preservation Fund. Background: Lease Revenues- Existing law allows DFW to lease department-managed lands for certain activities. Lease revenues are required to be deposited in the Wildlife Restoration Fund, which is managed by the Wildlife Conservation Board, where it may be used to acquire lands and construct facilities suitable for recreation and adaptable for conservation, propagation, and utilization of fish and game resources. The Wildlife Restoration Fund cannot be used for land management. Endangered Species Act- Existing law establishes numerous procedural provisions in the California Endangered Species Act SB 749 (Wolk) Page 1 that pertain to the scientific review, the contents of the administrative record, ground rules for public participation, and the conduct of public hearings that may be involved in a decision by the California Fish and Game Commission (FGC). Existing law allows "accidental take" of a candidate, threatened, or endangered species that occurs in the course of routine and ongoing agricultural activities until January 1, 2014. Upland game birds: Existing law requires a hunter to obtain an upland game bird stamp before taking any upland game birds, such as doves, sage grouse, wild turkeys, and quail. Stamp revenues are deposited into the Upland Game Bird Account and are available for expenditure, upon appropriation by the Legislature, for the acquisition of land and projects that will benefit upland game bird species and expanding public hunting opportunities. An advisory committee exists to review and provide comments to DFW on all proposed projects to be funded by upland game bird stamp revenues. For the past three years, stamp revenues have been approximately $1.4 million annually. Proposed Law: Lease revenue- This bill would allow, but not require, DFW to use lease revenues for the operations and maintenance of the lands which the lease revenues were generated. Endangered Species Act- This bill would: Require DFW to seek independent scientific peer review of the status report it prepares in order to indicate whether a listing is warranted. This provision would sunset on January 1, 2017. Extend the sunset date on the allowance of accidental take of listed species in the course of routine and ongoing agricultural activities until January 1, 2020. Allow the FGC to close the public hearing and administrative record of a hearing to consider a petition to list a species, except under specified circumstances. Upland game birds- This bill would: Require DFW to identify which department-managed lands should be managed for the purpose of restoring and enhancing upland nesting cover and associated habitat. The upland game bird advisory committee would be required to SB 749 (Wolk) Page 2 annually solicit comments and recommendations from the public regarding management of these lands. Prohibit a state agency from penalizing a landowner or imposing conditions on a water transfer because of evapotranspiration by vegetation that grows naturally without irrigation. . Staff Comments: Lease revenues- In December 2012, the Bureau of State Audits (BSA) found that a supervisor with DFW improperly implemented an agricultural lease agreement. The supervisor directed the lessee to use state funds derived from the lease to purchase $53,813 in goods and services that did not provide the improvements and repairs the lease required. In addition, the supervisor required the lessee to provide the State with $5,000 in Home Depot gift cards. This finding triggered a broader review by DFW of its agricultural leases and grazing permits that found "systemic violations of the law" with the grazing and agricultural program. The review is still underway. According to the director of DFW, lease revenues should have generated $1.7 million. However, lease revenues deposited in the Wildlife Restoration Fund were less than $300,000 in FY 2011-12. Both the Assembly Budget Sub-committee #3 and Senate Budget Sub-committee #2 have identified that the statutory requirement for lease revenues to go to the Wildlife Restoration Fund have fueled the inappropriate actions in the grazing and agricultural program because DFW is severely underfunded for their land management costs. Both subcommittees have directed DFW to provide a proposed statutory amendment to allow lease revenues to be used directly for management of leased lands. Should final budget action be taken on this matter, this portion of the bill will either need to be removed or amended in a manner consistent with the budget action. Staff notes that lease revenues are considered General Funds. Endangered Species Act- This bill would add a requirement that DFW's status report to inform the listing of species under the Endangered Species Act be subject to independent peer review. This requirement would create additional workload to receive the peer review then to modify the status report based on the peer review. Given that there are five candidate species as of January 2013 and assuming that the peer review requirement would require at least the workload equivalent of a 0.25 PY, staff estimates that the increased workload will likely have costs in SB 749 (Wolk) Page 3 the low hundreds of thousands of dollars. Staff notes that last year the Legislature passed AB 2402 which among other things, created the Science Institute within DFW. One of the purposes of the Science Institute is to promote peer review. It is unclear whether the Science Institute can help reduce the costs associated with this peer-review requirement. Upland Game Birds - DFW would incur costs under this bill to identify which department-managed lands should be managed for the purpose of restoring and enhancing upland nesting cover and associated waterfowl habitat. Once these lands are identified, there would be additional cost pressures for providing those management costs. Staff estimates that identifying the appropriate lands would cause a one-time work load increase in the high tens of thousands to low hundreds of thousands and ongoing cost pressures in the hundreds of thousands.