DNR Letterhead

BILL ANALYSIS

BILL NUMBER: SENATE BILL 406, AS INTRODUCED

TOPIC: Fishing license fees

SPONSOR: Senator Liz Brater

CO-SPONSORS: Senator Michael Switalski

COMMITTEE: Appropriations

Analysis Done: May 3, 2007

POSITION

The Department supports this legislation.

PROBLEM/BACKGROUND

The current license fee structure was signed into law in 1996, at a time when the Department of Natural Resources (DNR) was provided more General Fund support in the state budget. Today, the DNR receives only nine percent of its budget from the General Fund, and one half of those funds are for payment in lieu of taxes (PILT) that pass through the agency and go directly to local units of government. Approximately 76 percent of the DNR’s budget is restricted funds, which are limited by law as to how they can be spent.

Hunting and fishing license fees are placed in a restricted fund called the Game and Fish Protection Fund, which provides one-third of the total state restricted funds used to operate the DNR. The Game and Fish Protection Fund provides funding for conservation officers, state game and wildlife area management, management of the fisheries resource including hatcheries and a host of other services that benefit hunters, anglers and trappers.

Over the past 20 years, the number of licensed anglers in our state has dropped 21.7 percent. The number of hunters has dropped 14.3 percent in the same period. There are many reasons people stop participating in hunting and fishing, and the DNR is launching new efforts to retain current hunters and anglers and recruit new ones.

As the amount of revenue the DNR has collected has steadily decreased, the cost of doing business has gone up. Inflation results in an annual four percent increase in costs for items such as gasoline, vehicles, utilities and trash disposal. License fees have not kept pace with inflation.

In addition, new public land uses, users, and a growing number of neighbors have increased management responsibilities of the DNR. There also are new threats to natural resources such as invasive species, fish and wildlife diseases, and habitat loss that the DNR must address.

DESCRIPTION OF BILL

The proposed increases for fishing contained in SB 406 begin in 2008 and would be phased in gradually over four years until 2011. The legislation also authorizes a five percent inflationary increase in license fees for 2012 and 2013. Nonresident license increases will take full effect the first year of the license package and will not be phased in like the Michigan resident licenses. Licenses included in SB 406 are: youth fishing, restricted fishing, all-species fishing, limited duration fishing, and senior fishing licenses. All-species licenses allow anglers to fish for all species, including salmon, trout, lake sturgeon, lake herring, amphibians, reptiles and crustaceans.

The current 60 percent discount that anglers age 65 and older receive remains at that rate until 2010, when the amount of the discount is reduced by 5 percent each year until 2013, at which time senior licenses will be discounted by 40 percent from the corresponding cost for a resident license.

The age at which an angler would be required to have a fishing license drops from age 17 to 16.

A youth angler less than 16 years of age can keep the fish he/she catches as part of the limit of one or more accompanying adult licensed anglers. In addition, a youth angler can purchase a voluntary youth fishing license which would allow him or her to keep their own limit of fish without the need for an accompanying adult licensed angler.

A new 72-hour all-species fishing license will be offered to residents and nonresidents. This will allow infrequent or visiting anglers to fish over a 3-day period, such as a holiday weekend, without purchasing multiple licenses, and at a cost below what three 24-hour licenses or an annual all-species license would cost.

The Natural Resources Commission will have the authority to discount any license.

SB 406 also creates a new possession limit of fish that is two times the daily bag limit if those fish are canned, smoked or frozen.

SUMMARY OF ARGUMENTS

Pro

These license fee increases are critical if the Department is to be able to continue current levels of fisheries and wildlife management and conservation law enforcement activities.

Con

Without a license fee increase, the DNR will face an $8 million projected shortfall in the Game and Fish Protection Fund in 2008. The deficit increases to more than $40 million by 2010, which would result in significant cuts in staff and programs for the department.

FISCAL/ECONOMIC IMPACT

Are there revenue or budgetary implications in the bill to the --

(a) Department

Budgetary:

The revenue generated by the enactment of SB 406 in conjunction with the revenue generated by HB 4624, will allow the Department to restore its levels of effort to those experienced in Fiscal Year (FY) 2005.

Revenue:

Assuming an August 1, 2007 enactment of SB 406, along with a five percent resistance and sales decline each year, the DNR can expect to receive approximately $168,800 more in revenue during FY 2007 as compared to FY 2006.

In FY 2008, revenues are expected to increase by an additional $1,199,400, bringing the revenue increase over FY 2006 levels to $1,368,200 from fishing license fee increase and $9,857,400 from hunting license fee increases (HB 4624) for a total of $11, 225,600.

In FY 2009, revenues can be expected to rise by an additional $616,600, bringing the total increase to $1,984,800.

In FY 2010, revenues can be expected to increase by an additional $663,200 bringing the total increase to $2,648,000.

Fiscal Years 2011, 2012 and 2013 will bring in revenues of $3,203,100, $3,112,200, and $2,981,900, respectively over FY 2006 revenues.

Revenue amounts may shift somewhat between FY 2007 and FY 2008 due to the expectation that some anglers will purchase their FY 2007 licenses in advance of any price increases. Revenues may also fluctuate if resistance levels or sales declines deviate from the expected five percent level.

Comments:

None

(b) State

Budgetary:

None

Revenue:

None

Comments:

None

(c) Local Government

Comments:

None

OTHER STATE DEPARTMENTS

None

ANY OTHER PERTINENT INFORMATION

This bill should be tie-barred to House Bill 4624. Senate Bill 406 alone will not provide the necessary revenue to allow the Department to restore its levels of effort to those experienced in FY 2005.

The Natural Resources Commission (NRC) formed a citizen’s work group to study license fees for the DNR. The work group, comprised of representatives from many of the major conservation groups in the state, recommended to the NRC and continues to support the proposed restructuring of license fees.

ADMINISTRATIVE RULES IMPACT

None

_______________________________

Rebecca A. Humphries

Director

_______________________________

Date

FI/LED/BSS