BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 345 (Berryhill) - The Sport Fishing Stimulus Act of 2015. ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 5, 2015 |Policy Vote: N.R. & W. 8 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 28, 2015 |Consultant: Marie Liu | | | | ----------------------------------------------------------------- SUSPENSE FILE. AS AMENDED. Bill Summary: SB 345 would require that sport fishing licenses be valid for 12-months instead of a calendar year, lower the annual license cost for residents, and create a reduced-fee junior fishing license. Fiscal Impact (as approved on May 28, 2015): One-time costs less than $150,000 from the Fish and Game Preservation Fund (special fund), likely in FY 2016-17, for programming costs of the Automated Licensing Data System. These costs may be offset by increased license fees. Annual revenue reductions of approximately $660,000 to the Fish and Game Preservation Fund as a result of lower fishing license fees for 16- and 17- year olds. Background: Sport fishing licenses are generally required to take fish, mollusks, crustaceans, invertebrates, amphibians or reptiles in the state. Additional validations and report cards are required for certain species and areas. Existing law specifies that licenses are only valid for the calendar year for which they are SB 345 (Berryhill) Page 1 of ? bought. DFW is issues fishing licenses through an automated system called the Automated License Data System (ALDS) that allows for licenses to be purchased at any time online or over the telephone in addition to in-person purchases. Proposed Law: This bill would make several changes to the sport fishing licenses that would valid between 2018 and 2023. Specifically, during that period, this bill would: Make sports fishing licenses valid for 12 consecutive months beginning on the date specified on the license. Set the base fee for a residential 12-month permit at $42.50 for the 2018 license year, which may be adjusted for inflation in subsequent years. Raise the age requirement for a sports fishing license from age 16 to 18. Allow a resident or nonresident that is between 16 and 18 at the time of purchase, to purchase a 12-month license at the same costs as a single day license ($10 base fee to adjusted for inflation since 2004). This bill would also exempt charitable organizations and donor intermediaries from the fish possession limit under a sport fishing licenses and directs the Fish and Game Commission to develop regulations or recommendations to the Legislature to clarify how processed fish should be treated for the purposes of the possession limit. Related Legislation: SB 583 (Berryhill, 2013) and AB 1786 (Mansoor, 2012, June 18 version) would have made fishing licenses valid SB 345 (Berryhill) Page 2 of ? for 12-months instead of the calendar year. SB 583 was held in submission by the Senate Appropriations Committee and AB 1786 was amended to address another issue. Staff Comments: This bill would require DFW to make significant programming changes to ALDS in order to offer a second type of sport fishing license at an estimated cost of $150,000. These costs might be reduced since the 2018 effective date of the license provisions of this bill would align with an update of ALDS. This bill would require that a fee be added to the 12-month license to recover the administrative costs of issuing the 12-month license. DFW estimates that around 580,000 of the approximately 1 million licenses sold annually would choose to purchase a 12-month license. If this estimate is correct, the administrative fee would be about 25 cents per license for one year. Change from the calendar to 12-month license: Staff notes that while this bill would allow for the sale of 12-month fishing licenses, any validations, such as enhancement stamps, will remain based on calendar year as required by statute. Thus, should this bill become law, the valid dates for the base sport fishing license will likely not align with the valid dates for the associated validations. The lack of alignment between the license and enhancement stamps is likely to cause consumer confusion. In 2012, slightly more than half of the fishing licenses sold, or about 580,000 licenses, were bought without any additional enhancement stamps. This bill may also have an impact on sport fishing licenses fee revenues by reducing the number of licenses sold. DFW has surveyed other states that have shifted to a 12-month license. Georgia, Virginia, and Alabama all saw a decline in revenue and sales by 9 to 31% subsequent to changing their licensing terms. Texas also saw a reduction in annual license sales, but as license fees were increased, there were no lost revenues. Alabama reverted to a calendar year license after using 12-month licenses for over a decade. Switching back to a calendar year license coincided with a subsequent increase in license sales. Based on other state's experience, DFW estimates a 20% reduction in sports fishing licenses. Given that sport fishing license revenues have ranged in the low- to mid-40 million dollar range in the past three years, such a reduction would result in $8 to SB 345 (Berryhill) Page 3 of ? $9 million in lost revenues. DFW notes that the state receives federal grant funds as part of the Sport Fish Restoration Program. The amount the state receives is based on land area and the number of licensed anglers. Should this bill decrease the number of licenses sold, it would correspondingly decrease the amount of federal grant funds received by the state. Currently California receives the maximum state apportionment of the funding of 5% or approximately $18 million. DFW estimates that a 20% reduction in fishing licenses sold could result in a loss of $2.7 million to $4.5 million in federal Sport Fish Restoration Act funding. Creation of the Junior Sports Fishing license: Based off information from ALDS, DFW estimates that approximately 22,000 16- and 17- year olds purchase residential licenses and 100 non-residential licenses. Given the 2015 fees are $43.50 and $117, respectively, but would be lowered to $14, the current cost for a day-use license, under this bill, DFW estimates that there will be a loss of approximately $660,000 in revenues annually. Staff notes that the intent of the author is to stimulate license purchases of youth who have the potential to become life-long participants in the sport. To the extent that this bill spurs additional interest in sports fishing, the increased sales could offset the revenue losses from the reduced fee. However, whether there will be a change in license sales is uncertain. Staff also notes that the number of fishing licenses sold each year has been on a steady decline. Impacts of changes made by this bill would be additive to any other trends in sport fishing participation. Lowering of fee for the Residential calendar year license: The sections of the bill that are effective until 2018 and after 2023 (Sect 5 and 7) use 2004 as the reference base year for all license fees as these fees may be adjusted for inflation. But for the section that is valid between 2018 and 2023 (Sec 6), the bill switches the reference year to 2018 for the resident adult annual license and sets the base amount to $42.50. However, the base license fee in 2015 is $43.50 and by 2018, staff estimates that the base fee would be $45 based on inflation rates for the past five years. Thus, this bill is reducing the base fee from $45 to $42.50. Given that there are approximately 1 million calendar-year residential licenses sold each year, this change will result in a reduction of $2.5 million in annual license SB 345 (Berryhill) Page 4 of ? revenue. Staff notes that this change might not have been intentional by the author. Other provisions relating to the possession limit: DFW estimates the other changes proposed by this bill in regards to the possession limit and requirements of the Fish and Game Commission would be minor and absorbable. Committee amendments (as adopted on May 28, 2015): Amend to delete creation of 12-month license, delete obsolete sections, and to add Asm. Olsen as a co-author. -- END --