Legislative Analyst's Office

Analysis of the 2002-03 Budget Bill

Department of Fish and Game (3600)

The Department of Fish and Game (DFG) administers programs and enforces laws pertaining to the fish, wildlife, and natural resources of the state. The Fish and Game Commission sets policies to guide the department in its activities and regulates fishing and hunting. The DFG currently manages about 850,000 acres including ecological reserves, wildlife management areas, hatcheries, and public access areas throughout the state.

The budget proposes total expenditures of $257.1 million from various sources, mainly for support expenditures ($251.5 million). This is a decrease of about $20 million (7 percent) from the estimated current-year level. The decrease mainly reflects the elimination of one-time expenditures that occurred in the current year of $15.4 million. Major budget proposals include: (1) a reduction of $2.1 million for review of projects pursuant to CEQA; (2) a reduction of $1.2 million for various CALFED Bay-Delta program activities; (3) a reduction of $1 million for local assistance grants under the Natural Community Conservation Planning program; and (4) $8 million from Proposition 40 (on the March 2002 ballot) to replace funding from the Salmon and Steelhead Restoration Account due to a decline in tidelands oil revenues.

Budget Proposes to Significantly Reduce DFG's CEQA Review Efforts

The budget proposes to reduce the Department of Fish and Game's (DFG's) California Environmental Quality Act (CEQA) review activities by $2.1 million from the General Fund. We find that the proposed reduction will result in few CEQA documents being reviewed by DFG. This would limit opportunities for cost-effective project revisions that would serve to reduce a project's adverse impacts on fish and wildlife. If the Legislature wishes to provide additional funding for CEQA review, a portion of the fund balance of the Environmental License Plate Fund could be used. We also discuss the potential for increasing revenues from DFG's environmental filing fees in order to fund CEQA review, and recommend that the department submit the statutorily required annual review of these fees.

The DFG's Role Under CEQA. The California Environmental Quality Act (CEQA) requires agencies approving projects which may impact fish and wildlife to both notify and consult with the Department of Fish and Game (DFG), as the "public trustee" of fish and wildlife resources. As part of the notification and consultation process, agencies approving such projects must send their environmental documents to DFG for review and comment.

The DFG Entitled to Collect Fees for Projects Subject to CEQA. Chapter 1706, Statutes of 1990 (AB 3158, Costa) requires DFG to collect environmental filing fees for projects subject to CEQA. The fees are intended to defray a portion of the costs incurred by DFG in meeting its environmental review obligations under CEQA and the Forest Practice Act, as well as cover a variety of DFG's costs associated with habitat management. Fees are paid to the county clerk at the time of filing the final CEQA documents. Fees are then remitted monthly to DFG. For 2000-01, the department collected $1.8 million in environmental filing fee revenues. These revenues are not dedicated to a specific activity, but are instead used for general support for the department, including habitat restoration and environmental review activities.

Statute establishes the amount of the fee paid to DFG (currently, either $850 or $1,250) based on the "type" of CEQA document (such as environmental impact report) prepared for the project. All CEQA "lead" agencies (the agencies approving projects) can exempt a project from the fee by finding that the project has a minimal impact on wildlife. In addition, statute requires the department to submit an annual review of these filing fees to the Legislature, including any recommendations that it may have for statutory changes to the fee structure.

Budget for CEQA Review Increased in 2000-01. Prior to 2000-01, the department's CEQA review efforts constituted the equivalent of nine personnel-years and about $767,000. In response to findings that the department's activities related to CEQA were not being conducted at an adequate level, the Legislature augmented DFG's budget for CEQA review in 2000-01 by $2.1 million (ongoing) from the General Fund and redirected 25 positions to CEQA review efforts. With the increased resources, DFG estimates it was able to increase the proportion of documents reviewed from aproximately 10 percent to 40 percent.

Budget Proposes to Significantly Reduce DFG's CEQA Activities. The budget proposes to reduce DFG's CEQA review activities by $2.1 million, in effect returning DFG's CEQA review efforts to the level prior to the 2000-01 augmentation. The department estimates that 10 percent of the documents it receives will be reviewed, but it is not able to report on the level of review those documents will receive.

Potential Alternative Funding Sources to Continue CEQA Activities. The DFG's review of CEQA documents provides DFG the opportunity to comment early in the development process on the potential adverse impacts of proposed projects on fish and wildlife. In some cases, DFG's CEQA comments contain recommendations for project changes that may be required subsequently as part of other environmental approvals. As a result of DFG's comments, lead agencies may make better-informed decisions in approving the projects and projects may be changed to minimize the adverse impacts on fish and wildlife. In addition, to the extent that DFG is able to make comments early in the project development process, project developers may be able to avoid higher costs and time delays if obligated to make project revisions late in the process due to environmental permitting or litigation issues.

Based on our analysis, we conclude that the level of staffing proposed in the budget will result in most CEQA documents sent to the department not being reviewed. If the Legislature wishes to provide for a higher level of departmental review in the budget year, one option would be to transfer a portion of the ELPF balance (projected to be $9.6 million at the end of 2002-03) to the department for CEQA review. Monies in ELPF are available to the department for the review of the potential impact of development activities and land use changes.

Potential for Increased Revenues for CEQA Review. We also find that there is a potential for additional revenue for the CEQA review program by improving the structure and administration of the environmental filing fees. For example, many of the lead agencies we interviewed felt that the current fee structure (established in statute) is not equitable because project proponents are required to pay the same fee regardless of the project's size and environmental impact (as long as the same "type" of CEQA document is filed). This perceived inequity in the fee structure may result in lead agencies trying to fit a project within the fee exemption, despite the project requiring a fee as defined by statute. To the extent that lead agencies are granting exemptions when they should not, the department is not collecting the fee revenues accorded it by law. Therefore, developing a more equitable fee structure may result in fewer exemptions being granted and, thus, more revenue generated.

To assist the Legislature in its evaluation of this fee and to determine what changes to the fee might be appropriate, we recommend that DFG submit to the Legislature the annual review required by statute of these filing fees. As required by statute, the report should include any recommendations for adjustments to the fee. To date, the department has not submitted this report. The Legislature could encourage the department to submit this report by making the expenditures of the filing fees in the budget year contingent on the submittal of the report.

Return to Resources Table of Contents, 2002-03 Budget Analysis