BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1114 (Allen) - Commercial fishing: swordfish ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 11, 2016 |Policy Vote: N.R. & W. 7 - 2 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 16, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1114 outlines timelines for phasing out drift gill nets, and authorizes the California Department of Fish and Wildlife (DFW) to issue deep-set buoy gear or similar gear to take swordfish when that gear is authorized pursuant to federal law. The bill also establishes a protocol and incentives for the issuance of the new permits. Fiscal Impact: Approximately $2.2 million (special fund) for the Ocean Protection Council. (See staff comments). Unknown, but significant costs, to the Department of Fish and Wildlife. (See staff comments). Background: The Fish and Game Code, beginning at section 8561, contains the existing provisions of law regarding the drift gill net shark SB 1114 (Allen) Page 1 of ? and swordfish fishery. Those provisions establish criteria for permits, transfers of permits, the information required for permits, size of nets and other gear restrictions, restricted areas for gill net fishing, as well as additional provisions. In addition, the State of California has fishery policies to protect endangered sea turtles and other marine life by prohibiting commercial swordfish shallow-set longline fishing within state waters and federal regulations currently prohibit commercial longlining for swordfish within 200 miles of the coast. The California Ocean Protection Council has supported the research and development of alternatives for catching swordfish, most notably deep-set buoy gear. The gear works by dropping weighted hooks as deep as 1,200 feet below the surface, where swordfish tend to stay during the daytime. When an indicator float drops below the surface, fishermen immediately pull in the line. According to the DFW, the DFW issued 71 drift gill net permits and 42 harpoon permits in 2015. It considers 26 fishermen to be active drift gill net fishers, and 5 harpoon fishers are also considered to be active. In 2015, the fleet landed approximately 132 metric tons of swordfish, shark and other marketable species, valued at just under $800,000. Of that, 72.5 metric tons were swordfish, with a value of $630,000. In comparison, the US imported nearly 11,000 metric tons of swordfish valued at nearly $90 million in 2015. There are provisions under federal law for what are called federal exempted fishing permits (EFP). These allow activities that may otherwise be prohibited and in the case of California swordfish, these permits allow the use of modified drift gill net gear in the Pacific Leatherback Turtle Conservation Area. Proposed Law: This bill: 1.Makes findings and declarations outlining the environmental damage caused by drift gill nets. 2.Repeals, as of March 31, 2017, the existing section on transferring drift gill net swordfish permits and replaces it SB 1114 (Allen) Page 2 of ? with a new section that establishes conditions for transfers that would become effective on the same date: The permittee permanently retires the permit by transferring the permit to an entity engaged in retiring permits, or the permittee exchanges the permit for deep set buoy gear permit. (Note: The entity engaged in retiring permits is likely a nonprofit.) 3.Sunsets the current fee for drift gill net permits ($330) and increases it to $1500. 4.Prohibits DFW from issuing new drift gill net shark and swordfish permits after March 31, 2017. Permits for which the DFW has not been notified of any landings for two successive fishing seasons would be revoked. Permits that have been revoked or surrendered or exchanged would not be transferred or re-issued. Additionally, the bill defines "latent drift gear net permit" as one for which no swordfish or thresher shark landings were reported in at least 3 years between 2010 and 2015. 5.Defines an actively fished drift gill net permit as one under which swordfish or thresher shark landings were reported in at least 3 years between 2010 and 2015. It also establishes thresholds of risk and acceptable take and provides options to the DFW to assess the risk to protected marine wildlife based on available information. 6.Authorizes the DFW to adopt regulations for a deep-set buoy gear fishery for swordfish consistent with the terms of the bill and federal law. 7.Authorizes the DFW to issue deep-set buoy gear or similar gear to take swordfish pursuant to federal law when that gear is authorized pursuant to federal law. 8.Establishes a protocol and incentives for the issuance of the new permits, as follows: a) To an active drift gill net permit holder pursuant to Article 16 of the Fish and Game Code. b) To a person who has fished with deep set buoy gear under a federal exempted fishing permit since January 1, 2010. c) To a person who holds a valid swordfish permit pursuant to Section 8394. SB 1114 (Allen) Page 3 of ? d) Two additional deep-set buoy gear permits may be issued to each actively fished drift gill who fished pursuant to a federal exempted fishing permit if that federal permit is surrendered within two years of a future federal authorization to use deep-set buy gear or similar gear. e) One additional deep-set buoy gear permit may be issued to each actively fished drift gill net permit holder and each person who fished under a federal exempted fishing permit if the drift gill permit is surrendered within 4 years of the upcoming federal authorization to use deep set buoy gear or similar gear. f) One permit may be issued to a person who held a latent drift gill permit prior to January 1, 2017. g) No additional permits other than those mentioned in (b)-(f), above, may be granted until 5 years after deep set buoy hear or similar gear is authorized under federal law. The DFW would be able to issue additional permits to accommodate additional fishing effort and demonstrated demand if no more than a negligible risk to protected marine wildlife is shown. 1.Charges DFW creating measures and incentives to avoid and minimize the incidence of derelict deep-set buoy gear left at sea which may include provisions for registration and labeling gear as well as incentives for the retrieval and retention of gear. 2.Requires the DFW to establish a new fee at or below a rate sufficient to cover the costs of the DFW and to transfer the new permits. 3.Directs the Ocean Protection Council (OPC) to provide funding for the innovation and adoption of sustainable commercial fishing methods in the swordfish fishery which may include assistance in purchasing deep-set buoy gear for persons with an exempted fishing permit as of January 1, 2016, issued by the National Marine Fisheries Service and for the first 10 persons who exchange their drift gill net permits for deep-set buoy gear. The OPC is also directed to develop marketing and propose business structures to support a high and stable price for swordfish landed pursuant to these new provisions. Staff SB 1114 (Allen) Page 4 of ? Comments: Staff notes that the OPC would have to fund this bill from remaining Proposition 84 funds. All Proposition 84 funds have been appropriated to date. Non awarded funds have been designated for various purposes by the OPC. Of those funds, up to $3 million has been identified to support sustainable fisheries. OPC notes that, of those remaining funds, urgent and high priority topics continue to significantly impact California communities including advancing research behind harmful algal blooms and the impacts to the marine ecosystem (such as domoic acid and Dungeness crabs), ocean acidification impacts to fisheries and coastal communities; and creating an electronic database for our fisheries information in the state. OPC costs include: $306,000 pilot observer program (assuming cost estimates from the Pfleger Institute of Environmental Research (PIER) EFP of $612 per day, 5 day average trip, for approximately 100 trips in each of two years. $140,000 for gear for 10 additional fishermen. This bill sets the expectation that the first 10 fishermen to transfer their permits would receive funding to change to deep set buoy gear. PIER cites a cost of $4,000 per set of 10 buoys and it could up to $10,000 per boat in retrofits to allow for the new gear. This funding estimate would provide equipment and retrofits for 10 license holders. Beyond the first 10 SB 1114 (Allen) Page 5 of ? applicants, this program would have cost pressures for upwards of 15 active license holders and 50 non-active license holders. $40,000 for training. PIER and CDFW have recommended new entrants be trained similar to how EFP participants were initially trained in the use of the gear. $1.5 million for marketing. The bill calls for a marketing program to sustain a high price for swordfish caught under this program. The OPC does not have expertise in creating nationwide marketing programs for sustainable fisheries and would have to contract out this activity. $200,000 for OPC to manage the grant program, training program, and marketing contract. DFW's costs include: Outreach regarding new rules. Implementation of new permitting structure. This will require detailed analysis by the Department's Marine Region, License and Revenue Branch and Law Enforcement Division, and investigations similar to other limited entry permit changes. Enforcement activities necessary to implement the new fishery and enforce accordingly. This will likely include increased workload due to increased permit appeals through the administrative hearing process. Rulemaking proceedings. Staff notes that the bill increases the baseline drift gill net renewal fee (from $460.50 to $1,500 annually) and authorizes CDFW to establish fees for deep-set buoy gear permits to recover costs. However, it is unclear whether this authority can be practically applied. This bill removes the $1,500 transferability fee and requires CWFW to revoke latent permits (approximately 2/3 of current permits). To fully recover costs SB 1114 (Allen) Page 6 of ? from the remaining drift gill net and buoy gear permits, the fees would have to be set at a level that could render the fisheries economically unprofitable. -- END --