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.
          
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          |Version: May 5, 2015            |Policy Vote: N.R. & W. 8 - 0    |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 28, 2015      |Consultant: Marie Liu           |
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          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  







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          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  








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          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  








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          $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  








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          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.



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