BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 489|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 489
Author: Huffman (D)
Amended: 7/14/09 in Senate
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE : 7-3, 7/6/09
AYES: Pavley, Kehoe, Leno, Padilla, Simitian, Wiggins,
Wolk
NOES: Benoit, Hollingsworth, Huff
NO VOTE RECORDED: Cogdill
SENATE APPROPRIATIONS COMMITTEE : 8-5, 8/17/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Yee
NOES: Cox, Denham, Runner, Walters, Wyland
ASSEMBLY FLOOR : 44-31, 6/2/09 - See last page for vote
SUBJECT : Commercial fishing
SOURCE : Author
DIGEST : This bill replaces the existing system of
species-specific landing taxes for commercial fish with an
ad valorem landing fee.
ANALYSIS : Under Article 7.5 of the Fish and Game Code
(commencing with Section 8040), a landing tax is charged on
commercial catch of fish. The tax is either charged on the
commercial fish receiver (wholesaler or processor) or on
CONTINUED
AB 489
Page
2
the commercial fisherman selling directly to the consumer.
The amount of the landing tax is determined by multiplying
the weight of the catch by a species-specific rate set in
Section 8051. Revenues for the landing tax are deposited
into the Fish and Game Preservation Fund to be used for
various activities, including the regulation, management,
and oversight of commercial fishing by the Department of
Fish and Game (DFG).
Section 711(a)(2) states the Legislature's intent to fund
the costs of DFG's commercial fishing programs from
commercial fishing taxes, license fees, and other revenues,
from reimbursements and federal funds received for
commercial fishing programs, and from other funds
appropriated by the Legislature.
Section 15003 allows DFG to assess a fee on persons growing
aquaculture products on public lands and waters based on
the price per pound of the products sold.
This bill calculates the landing fee based on the ex-vessel
price instead of a statutorily-set per pound rate.
Specifically, this bill:
1. Defines the ex-vessel price as the price a fish receiver
or processor pays the commercial fisherman for fish.
2. Requires that beginning January 1, 2011, the landing fee
be 1.5 percent of the average ex-vessel price for any
species of fish. On January 1, 2013, the landing fee
shall be raised to three percent of the average
ex-vessel price.
3. Specifies that the landing fee revenues be used by DFG
for commercial fishing management.
4. Deletes the landing tax rates established in Section
8051.
5. Requires DFG to report to the Legislature by January 1,
2012, with a summary of state regulations related to
imported fish that are sold in the state but are not
subject to the commercial landing fee, the cost of
enforcing those regulations, and an estimate of the
AB 489
Page
3
landing fee that would need to be assessed on imported
fish to cover those costs.
6. Prohibits the fee assessed on aquaculture products grown
on public lands and water from exceeding the rates
assessed on commercial catch.
7. Labels landing charges as "landing fees" rather than
"landing taxes."
8. Make findings regarding DFG's responsibilities in
regulating, managing, and overseeing commercial fishing,
and makes findings regarding the insufficiency and
inequality of the current landing tax.
Comments
Are the state's commercial fisheries pulling its own weight
in fiscal support of DFG ? In 2007, DFG sent a memo to the
Fish and Game Commission in response to the Commission's
request for DFG to estimate all of its current expenditures
on commercial fishery monitoring, management, enforcement,
and assessment programs. The Commission's intent was to
adjust commercial permit fees so that DFG could be in
compliance with the statutory requirement that commercial
fishing programs be funded through fishing taxes, license
fees, from reimbursements and federal funds, and other
funds appropriated by the Legislature. Findings in the
memo include:
1. Approximately 90 percent of the commercial licenses and
permits issued by DFG have fees that were established by
statute and cannot be adjusted by the Commission.
2. In 2005, the total ex-vessel value of the state's
commercial fisheries was approximately $109 million.
That year, DFG received $1.13 million in landing tax
revenues from all commercial fisheries, or about one
percent of the ex-vessel value of commercial catch. DFG
also received $3.68 million in permit fees in 2005.
3. DFG estimates that it spends approximately $22.3 million
annually for commercial fishing programs. Commercial
fisheries are paying for 22 percent of these costs
AB 489
Page
4
through the landing tax and permit fees.
4. The difference between the landing tax revenues and
DFG's commercial fishing activities costs is bridged by
DFG's non-dedicated Fish and Game Preservation Fund and
some General Fund monies.
5. DFG's commercial fishery programs and activities are
becoming increasingly costly. At the same time,
California's commercial fishery industry is declining
both in participation and overall production.
The memo gave several general suggestions for future
actions to make DFG's commercial fishery activities more
self-funding, including a suggestion to adopt an
alternative taxing method to the landing taxes, such as an
ad valorem tax.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Fish and Game $50 $350 $300
Special*
implementation
Additional revenues ($250)
($500) Special*
* Fish and Game Preservation Fund
SUPPORT : (Verified 7/6/09) (per Senate Natural Resources
and Water Committee analysis)
Natural Resources Defense Council
Pacific Coast Federation of Fishermen's Associations
The Sportfishing Conservancy
AB 489
Page
5
OPPOSITION : (Verified 7/6/09) (per Senate Natural
Resources and Water Committee analysis)
California Fisheries and Seafood Institute (to introduced
version of the bill)
California Sea Urchin Commission (to introduced version of
the bill)
California Wetfish Producers Association (to introduced
version of the bill)
ARGUMENTS IN SUPPORT : The author states, "The Department
of Fish and Game (DFG) suffers from a critical lack of
funding that has seriously impaired DFG's ability to
effectively manage and protect the state's fish and
wildlife resources, including management of commercial
fishing. AB 489 revises one of the commercial fishing fees
- the landing tax- to more equitably distribute the
financial burden on the commercial fishing industry and
generate additional revenue to fund the commercial fishing
program." The author further notes that the majority of
the landing taxes have not been adjusted since 1986 and
there is no required adjustment for inflation."
The Pacific Coast Federation of Fishermen's Associations
states in support of the bill, "California's current fee
structure of a fixed amount per species or group of species
is antiquated, dating back 50 years or more and has little
relationship to either the amount of effort the department
expends on a particular species or its value. Our sisters
states to the north, Oregon and Washington, have both
adopted an ad valorem schedule, i.e., based on the
ex-vessel (price paid to the fisherman) value of the fish,
for the collection of commercial landing fees. This has
been successful and is a much fairer method for assessment
of fees."
ARGUMENTS IN OPPOSITION : The California Sea Urchin
Commission, in opposition to the bill, states, "AB 489
would increase landing fees on sea urchin by approximately
1,800%. The impact of this could devastate an industry
comprised mostly of independent fishermen and small
businesses already struggling from recent tax increases and
an economy in deep depression. Unfortunately, the major
burden of recent tax increases will be borne by
AB 489
Page
6
Californians, including sea urchin divers, through
regressive structures like sales taxes and vehicle license
fees. To add to these burdens a tax increase of 1,800% on
an industry where the typical fisherman lost over $2,000 in
2006, especially during such difficult economic times, is
too much to ask."
The California Fisheries and Seafood Institute, in
opposition to the introduced version of the bill states,
"Our Primary Receiver members do not support allowing the
Fish and Game Commission to increase landing tax rates
which could make some fisheries even less competitive than
they are now. Increases in lading taxes would fall very
hard on a sector of the industry that has already seen
shrinking numbers, less product availability, increased
costs associated with wages, plant food safety
modernizations and compliance, and especially in the worst
economic climate that the industry has seen in
generations?Tax increases cannot simply be passed onto the
consumer as some have suggested."
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Blumenfield, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Hall, Hayashi, Hernandez, Hill, Huffman,
Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma, Monning,
Nava, John A. Perez, Portantino, Price, Ruskin, Saldana,
Skinner, Solorio, Swanson, Torlakson, Torres, Torrico,
Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman,
Harkey, Huber, Jeffries, Knight, Logue, Miller, Nestande,
Niello, Nielsen, V. Manuel Perez, Silva, Smyth, Audra
Strickland, Tran, Villines
NO VOTE RECORDED: Block, Furutani, Galgiani, Mendoza,
Salas
JJA:mw 8/19/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
AB 489
Page
7
**** END ****