BILL ANALYSIS
AB 489
Page 1
ASSEMBLY THIRD READING
AB 489 (Huffman)
As Amended April 20, 2009
Majority vote
WATER, PARKS & WILDLIFE 8-4APPROPRIATIONS 12-5
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|Ayes:|Huffman, Arambula, |Ayes:|De Leon, Ammiano, Charles |
| |Blumenfield, Caballero, | |Calderon, Davis, Fuentes, |
| |Krekorian, | |Hall, John A. Perez, Price, |
| |Bonnie Lowenthal, John A. | |Skinner, Solorio, |
| |Perez, Yamada | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+----------------------------|
|Nays:|Fuller, Anderson, Tom |Nays:|Nielsen, Duvall, Harkey, |
| |Berryhill, Fletcher | |Miller, |
| | | |Audra Strickland |
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SUMMARY : 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 the term ex-vessel price to mean the price paid for fish
at the time the fish are delivered by the commercial fisherman to
the fish receiver or processor.
5)States various legislative findings and declarations, including
that the revenue received from the commercial fishing industry by
the Department of Fish and Game (DFG) only covers 22% of DFG's
costs to regulate, manage and oversee commercial fishing
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operations, and states legislative intent to more equitably
distribute the financial burden on the commercial fishing
industry, and generate additional revenue, by establishing a
landing fee based on the ex-vessel value of the fish, as is done
in Washington and Oregon.
EXISTING LAW :
1)Imposes commercial license and permit fees on commercial
fishermen.
2)Requires payment of a landing tax by fish receivers and processors
who receive fish from commercial fishermen. The landing taxes are
set in code for each species based on a set rate per pound that
varies by species. The landing taxes (which meet the legal test
for a user fee) are deposited in the Fish and Game Preservation
Fund (FGPF) and used for the administration of laws relating to
the commercial fishing industry.
FISCAL EFFECT :
1)Start-up costs, likely from special funds, 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 (General Fund or 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).
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 : This bill seeks to more equitably distribute the
financial burden for payment of landing fees on the commercial
fishing industry and generate additional revenue to fund the
regulation, management, and oversight of commercial fishing. 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 fee only contributes 5%.
DFG spends approximately $22.3 million on commercial fishing
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activities annually, while revenues from commercial fishing total
only $4.81 million. Of that $4.81 million, only $1.3 million comes
from landing tax revenue, and $3.68 million from licensing and
permit fees. Commercial landing taxes are currently set in statute
as a specified price per pound for each species of fish. The
majority of the fees have not been adjusted since 1986, and there is
no required adjustment for inflation. Unlike California, both
Oregon and Washington have adopted an ad valorem tax, based on the
ex-vessel value of the fish. The author believes that an ad valorem
tax would more equitably distribute the cost by basing the fee on
the value and price of the fish. A landing fee based on the
ex-vessel value of the landings also allows the fee to rise and fall
with the income generated, making it more equitable and predictable.
Fishing businesses are also familiar with this approach, since it
is already followed in other pacific states.
A 2007 report from DFG to FGC noted the desire but lack of authority
of DFG or FGC to address commercial fishing permit fees in a
comprehensive manner, due to the fact that so many of the fees are
set in statute and can only be adjusted by the Legislature. That
report also suggested that the Legislature might evaluate
alternative mechanisms such as ad valorem taxes.
Supporters note DFG suffers from a critical lack of funding that has
impaired it's ability to manage and protect the state's fish and
wildlife, including commercial fishing. They assert 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.
Supporters also note that current fee rates result in a subsidy for
those who profit off the sale of California's marine resources,
while more than 75% of resources landed in California, by weight,
are exported. Supporters also notes that the ad valorem method
followed in Oregon and Washington has proved successful and a fairer
method of fee assessment.
The opposition asserts that increases in landing taxes will
negatively impact an industry that is already in decline and make
them less competitive. They assert increases in landing taxes or
fees cannot be passed on to the consumer, and will hurt the
profitability of fishermen, processors or other related businesses,
at an uncertain economic time when other fees are also being
increased.
AB 489
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Analysis Prepared by : Diane Colborn / W., P. & W. / (916)
319-2096 FN: 0001169