Fiscal Note & Local Impact Statement
126 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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STATE FUND |
FY 2007 |
FY 2008 |
FUTURE YEARS |
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General Revenue Fund |
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Revenues |
- 0 - |
- 0 - |
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Expenditures |
Increase of $4 million |
- 0 - |
- 0 - |
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Wildlife Fund (Fund 015) |
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Revenues |
- 0 - |
- 0 - |
- 0 - |
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Expenditures |
Potential one-time savings
of $380,000, more or less |
- 0 - |
- 0 - |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2007 is July 1, 2006 – June 30, 2007.
·
New GRF appropriation to buy back commercial fishing licenses. The bill adds a new GRF line item, 725-503, Commercial Fishing
Buy-Out Program, in the Department of Natural Resources (DNR) and appropriates
$4 million to it in FY 2007. The $4
million will be used by the Division of Wildlife to provide compensation to the
commercial fishing industry. This
amount equals approximately one year of gross revenue to commercial fishing
license holders.
·
Savings to the Division of Wildlife. Since the bill requires the commercial fishing industry in Ohio to
cease prior to the 2007 commercial fishing season, the Division of Wildlife may
experience savings in the Wildlife Fund (Fund 015) from management and
enforcement costs related to commercial fishing industry. These savings will result after accounting
for the Department's total annual costs for management and enforcement less
annual commercial fishing license fees and royalties. These savings are estimated to be $380,000 when the ban takes
effect.
·
No
direct fiscal effect on political subdivisions.
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The bill
The bill amends two sections
of Am. Sub. H.B. 66 (biennial operating budget for FYs 2006-2007, Sections
209.18 and 209.18.09) to create the Commercial Fishing Buy-Out Program and to
make a GRF appropriation of $4 million for FY 2007 to fund it. Under the program the Division of Wildlife
in the Department of Natural Resources must acquire all commercial fishing
licenses currently issued and in reserve, including the rights to renew such
licenses. The Division must use the
appropriated money to buy back the licenses and renewal rights from the
licensees as soon as practicable after the bill's effective date. The bill provides formulas to determine the
amount paid to each licensee for yellow perch and all other species. Under the buy-out program all commercial
fishing must cease prior to the 2007 season.
The commercial fishing season is generally from March 1 to December 10
of each year.
Details of the buy-out
The $4 million GRF
appropriation will be used to give each licensee about one year of gross
revenue based on the value of the commercial harvest in Ohio over the last six
years. The DNR reports that this
buy-out will affect roughly 40 commercial fishing licensees, primarily for trap
net and seine license holders.
The amount paid to each
licensee is based on formulas in the bill which multiply the average number of
pounds per year of fish caught (either yellow perch or other species) times a
specific price per pound ($1.94 per pound for yellow perch and $.28 per pound
for all other species). For both
calculations the average is to be determined by dividing by six the total of
six years of largest reported catch during the 2000-2005 calendar year
period. Each person holding a license
is to be paid at least $100. DNR
reports that this formula is similar to the formula used for the gillnet buy-out
program in 1984.
DNR reports that the
estimated dockside value of the commercial harvest from Lake Erie in calendar
year (CY) 2005 was $4.1 million. Over
the past ten years, the estimated value has ranged from a low of $2.2 million
in CY 1998 to a high of $4.2 million in CY 2005, with an average value of
approximately $3 million.
State fiscal effects of the bill
Department of Natural
Resources. DNR incurs annual costs of approximately
$250,000 to enforce the commercial fishing law and incurs costs of
approximately $150,000 for commercial fishing population and harvest assessment. In total, the Division of Wildlife incurs
costs ranging between $400,000 - $500,000 per fiscal year to manage the
commercial industry. These enforcement and management costs are paid from the
state Wildlife Fund (Fund 015).
Also, as part of the buy-out
the Division of Wildlife would presumably lose the annual revenue generated
from commercial fishing licenses and commercial fishing royalties. In FY 2005, DNR collected $28,700 in
commercial fishing license fees and $90,669 in commercial fishing royalties. In total, the Wildlife Fund (Fund 015)
receives approximately $120,000 in commercial fishing license fees and
royalties.
Taking into account both
DNR's current expenditures and current revenues related to the commercial
fishing industry, if commercial fishing ceases prior to the 2007 season the
Wildlife Fund (Fund 015) may experience savings in the range of $380,000 once
the ban is in place. It is unknown
where and how these savings will be distributed within the Department's budget
and which programs will be affected.
Indirect fiscal effects
Based on the
highly speculative nature of whether the state and/or local governments may
experience an increase or decrease in sales and income tax revenue as a result
of the bill (particularly as it relates to either jobs, fish price adjustments,
state enforcement and management costs, sport fishing, local tourism, local
business, etc.) LSC cannot accurately predict how such potential indirect
fiscal effects could impact the state and/or local governments.
LSC fiscal staff: Jonathan Lee, Senior Budget Analyst