DNR Letterhead

BILL ANALYSIS

BILL NUMBER:	HOUSE BILL 4624, AS INTRODUCED
TOPIC:	Increase Hunting License Fees
SPONSOR:	Representative Matthew Gillard
CO-SPONSORS:	NA
COMMITTEE:	Appropriations
Analysis Done:	May 4, 2007

POSITION

The Department of Natural Resources (DNR) supports this legislation.

PROBLEM/BACKGROUND

The current license fee structure was signed into law in 1996, at a time when the DNR was provided more General Fund support in the state budget. Additionally, license fees that are set in statute and do not allow for inflationary increases, have a finite fiscal lifetime. 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 resources including hatcheries, and a host of other services that benefit hunters, anglers and trappers.

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. Over the past 20 years, the cost of a deer hunting license has gone up only $2.15; the cost of a bear license only $0.65.

In addition, new public land uses, users, and a growing number of adjacent landowners 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 hunting licenses contained in HB 4624 begin in 2007 and would be phased in gradually over four years until 2010. 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. Hunting licenses included in HB 4624 are: small game, wild turkey, waterfowl, combination deer, firearm deer, archery deer, bear, elk, gamebird preserve, and fur harvester.

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.

Junior licenses for those ages 10-16 will be discounted 50 percent over the cost of regular licenses.

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

SUMMARY OF ARGUMENTS

Pro

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

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 DNR.

FISCAL/ECONOMIC IMPACT

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

(a) Department

Budgetary:

The revenue generated by the implementation of HB 4624, along with the revenue generated by SB 406, will allow the DNR to restore its levels of effort to those experienced in FY 2005.

Revenue:

Assuming an August 1, 2007 implementation and five percent resistance and sales decline each year, in FY 2007, the DNR can expect to receive approximately $1,937,900 over FY 2006 revenues.

In FY 2008, revenues are expected to increase by an additional $7,919,500, bringing the revenue increase over FY 2006 levels to $9,857,400 from hunting license fee increases and $1,368,200 from fishing (SB 406) for a total of $11,225,600. The revenue is substantial this year because the full impact of the one-time, non-resident fee increases are captured along with another increase to the resident hunting fees on top of the increase from August 2007.

In FY 2009, revenues can be expected to rise by an additional $4,039,300, bringing the total increase to $13,896,700.

FY 2010, revenues can be expected to rise by an additional $3,753,100, bringing the total increase to $17,649,800.

FY 2011, FY 2012, and FY 2013 will bring in revenues of $18,674,900, $17,259,600, and $17,077,300, respectively over FY 2006 revenues.

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

Comments:

None

(b) State

Budgetary:

Revenue:

Comments:

(c) Local Government

Comments:

OTHER STATE DEPARTMENTS

None

ANY OTHER PERTINENT INFORMATION

This bill should be tie-barred with SB 406.

Minor technical changes are needed to HB 4624. On page two, line 15, 2010 should be changed to 2011. Due to the delay in implementing the fishing fees to FY 2008, the four years of increases will not be complete until 2011 and the inflationary adjustment of five percent should occur after that year. Language to round the license prices to the nearest $0.25 after the five percent increase should be added to page two, line 15 and line 18.

The NRC formed a 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 in license fees.

ADMINISTRATIVE RULES IMPACT

None

_______________________________

Rebecca A. Humphries

Director

_______________________________

Date

WLD/LED/BSS