BILL ANALYSIS
AB 489
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 489 (Huffman) - As Amended: April 20, 2009
Policy Committee: WPW Vote:8-4
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill converts the landing fees paid by commercial fishermen
from the current per-pound tax rates set in code to an ex-vessel
price based on the landed value of the fish. Specifically, this
bill:
1)Provides the amount of the landing tax shall be a percentage
of the average ex-vessel price for that species or group of
fish species managed under the same fishery management plan.
2)Provides that beginning January 1, 2011, the landing tax shall
be 1.5% of the landed value of the fish, and beginning January
1, 2013, shall be 3% of the landed value.
3)Requires the Fish and Game Commission (FGC) to establish the
average ex-vessel price for each species or group of fish
based on the prior year statewide average ex-vessel price.
4)Defines ex-vessel price as the price paid at the time the fish
are delivered by the commercial fisherman to the fish receiver
or processor.
FISCAL EFFECT
1)Start-up costs of between $300,000 and $600,000 in 2010-11 and
2012-13 to establish average ex-vessel prices, develop
materials, update systems and regulations, and outreach to
stakeholders. (GF or Fish and Game Preservation Fund (FGPF))
2)Potential revenue in 2011-12 and 2012-13, possibly in the
hundreds of thousands of dollars, resulting from imposition of
the 1.5% landing tax. (FGPF)
AB 489
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3)Potential ongoing annual revenue starting in 2013-14, possibly
in the millions of dollars, resulting from imposition of the
3% landing tax. (FGPF)
COMMENTS
1)Rationale. The author contends AB 489 would more equitably
distribute the financial responsibility of the industry,
generate additional revenue, and implement existing law which
calls for the costs of commercial fishing programs to be
provided from commercial fees and other appropriate sources.
A 2005 report by DFG found that revenue from the commercial
fishing industry covers only 22 % of DFG's costs to administer
commercial fishing laws, and the commercial landing tax only
contributes 5%. The result, the author claims, is a subsidy
for those who profit off the sale of California's marine
resources, 75% of which, by weight, is exported. The Pacific
Coast Federation of Fishermen's Association (the bill's
sponsor) also notes that the fee assessment method required by
the bill is followed in Oregon and Washington and has proved
successful and fair.
2)Background . Existing law imposes commercial license and permit
fees on commercial fishermen and requires payment of a landing
tax by fish receivers and processors who receive fish from
commercial fishermen. The landing taxes (which meet the legal
test for a user fee) are deposited in the Fish and Game
Preservation Fund and used for the administration of laws
relating to the commercial fishing industry.
The landing taxes are set in code for each species based on a
set rate per pound that varies by species. Only the
Legislature can change landing taxes. The majority of the
landing taxes have not been adjusted since 1986 and they are
not automatically adjusted for inflation.
A 2005 report by DFG found that revenue from the commercial
fishing industry covers only 22 % ($4.8 million) of DFG's
costs to administer commercial fishing laws, and the
commercial landing tax covers only 5% ($1.3 million) of those
costs. That report suggested that the Legislature evaluate
alternative taxing mechanisms, such as ad valorem taxes.
3)Supporters, such as the Pacific Coast Federation of
AB 489
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Fishermen's Association and the Natural Resources Defense
Council, note that DFG has insufficient funding that impairs
its ability to manage and protect the state's fish and
wildlife, including commercial fisheries. They claim AB 489
would more equitably distribute the financial responsibility
of the industry, generate additional revenue for DFG, and
implement existing law which calls for the costs of commercial
fishing programs to come from commercial fees and other
appropriate sources.
4)Opponents from certain industry groups registered opposition
to a prior version of this bill, which would have authorized
DFG to increase the landing tax. These groups contended that
fisherman would not be able to pass on the cost of the
increased landing tax and would therefore lose income at a
time of dire economic prospects.
It is unclear whether those groups maintain their opposition
to the bill as currently drafted, which instead shifts the
landing tax to an ad valorem tax, based on the ex-vessel value
of the fish. The percentage rate would be set in statute and
the price would be based yearly on the prior year statewide
average ex-vessel price for that fish or group of fish.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081