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Commission Agenda Item No. 7
Presenter: Justin Halvorsen

Action
Federal Duck Stamp Fees
August 20, 2015

I.          Executive Summary: Staff recommends and increase of $1.50 (to a total of $2.50) for the administrative fee on the purchase of a federal duck stamp.

II.        Discussion: With the passage of the Federal Duck Stamp Act of 2014 (P.L. 113-264), the United States Congress amended the Migratory Bird Hunting and Conservation Stamp Act to increase the price of the duck stamp and associated federal fulfillment and cost recovery fees from $16 to $26.50. The current $1 administration fee charged by the department is insufficient to recover the transaction, license agent, and agency administration costs. Staff recommends an increase of $1.50 (to a total of $2.50) for the Texas Parks and Wildlife Department administrative fee.

The proposed rules appeared in the July 17, 2015 issue of the Texas Register (40 TexReg 4530).  A summary of public comment on the proposed rules will be presented at the time of the hearing.

III.       Recommendation: The staff recommends the Texas Parks and Wildlife Commission adopt the following motion:

“The Texas Parks and Wildlife Commission adopts amendments to 31 TAC §53.5, concerning Recreational Hunting License, Stamps, and Tags, with changes as necessary to the proposed text (located at Exhibit A) as published in the July 17, 2015, issue of the Texas Register (40 TexReg 4530).”

Attachments – 1

  1. Exhibit A – Proposed Rule

Commission Agenda Item No. 7
Exhibit A

FEES – FEDERAL MIGRATORY BIRD HUNTING AND CONSERVATION STAMP

PROPOSAL PREAMBLE

1. Introduction.

         The Texas Parks and Wildlife Department proposes an amendment to §53.5, concerning Recreational Hunting License, Stamps, and Tags. The proposed amendment would increase the fee for the Federal Migratory Bird Hunting and Conservation Stamp, commonly referred to as the “federal duck stamp,” to reflect federal action and increase the fee charged by the department to recover the administrative expenses of selling the stamp.

         Under federal law, no person 16 years of age or older may hunt waterfowl in the United States without having acquired a federal duck stamp. For many years the federal duck stamp had to be physically purchased at certain federal offices and department law enforcement offices. In 2008, the U.S. Fish and Wildlife Service (Service) made it possible for individual states to enter into agreements with the federal government to sell the federal duck stamp electronically (Electronic Duck Stamp Act of 2005, P.L. 109-266). To provide the convenience of one-stop shopping for waterfowl hunters in Texas, the department entered into an agreement with the federal government to sell the federal duck stamp through the department’s license deputies and website beginning with the 2007-2008 license year at a cost of $17, which represented the $15 federal stamp fee, a $1 federal fulfillment fee for the cost of mailing a physical stamp to the customer, and a $1 fee to cover the department’s transaction costs and commissions to license deputies.

         With the passage of the Federal Duck Stamp Act of 2014 (P.L. 113-264), the United States Congress amended the Migratory Bird Hunting and Conservation Stamp Act to increase the price of the duck stamp to $25. The Service has also increased the federal fulfillment fee to $1.50. These fees are imposed by the federal government and are not subject to change by the state. The current $1 fee charged by the department to offset transaction costs and license deputy commissions has been insufficient to recover the department’s costs for providing those services. The department’s third-party license vendor charges a per-transaction fee of $0.67 and the department pays license agents a commission of 5% of the purchase value per transaction. Using Fiscal Year (FY) 2014 sales data, the department estimates a loss of approximately $153,497 in FY2016 unless the transaction/commission fee is increased. Therefore, the proposed amendment would replace the current federal duck stamp fee of $17 with “all applicable federal fees, plus $2.50” to reflect the federal stamp fee increase (to $25), the federal fulfillment fee increase (to $1.50), and a department transaction/commission fee increase (to $2.50).  Therefore, the total cost of acquiring a federal duck stamp in Texas would be $29.

2. Fiscal Note.

         Mr. Justin Halvorsen, Revenue Director, has determined that for each of the first five years that the rule as proposed is in effect, there will be fiscal implications to state government as a result of enforcing or administering the rule.

          The proposed transaction/commission fee is expected to result in annual revenue to the department of approximately $77,521 per year. This figure was derived by multiplying the FY2014 sales volume (161,000) by the $2.50 proposed in this rulemaking for a total of $402,500, and then subtracting the third-party vendor transaction fee of $0.67 per transaction ($107,870 in total) and the estimated 5% license agent commission fees of $217,109.  The $217,109 in license agent commission fees was determined by TPWD estimating, based on previous sales, that approximately 93% (149,730) of the duck stamps will be sold through retail agents with a commission fee of approximately $1.45 per stamp (5% of $29) The remaining 7% of sales (11,270) are via the department’s website and therefore not subject to agent commission fees.  The $77,521 in revenue will help defray the department’s costs of issuing this license, including staff time required for reporting and issuing the licenses.  It should also be noted that the above calculation is based on the full transaction fee of $2.50.  Since the current transaction fee is $1.00, the department would only realize additional revenue based on the $1.50/transaction increase.

Although the federal duck stamp and federal fulfillment fees will increase by a total of $10.50, those fees are imposed by the federal government, not the department, and therefore are not applicable to this analysis because the state retains none of the federal revenue.

         There will be no fiscal implications to other units of state or local governments as a result of enforcing or administering the rule.

3. Public Benefit/Cost Note.

         Mr. Halvorsen also has determined that for each of the first five years the rule as proposed is in effect:

         (A) The public benefit anticipated as a result of enforcing or administering the rule as proposed will be the availability of the federal duck stamp at approximately 1,800 retail outlets and department offices.

         (B) There will be an adverse economic effect on persons required to comply with the rule as proposed. A person who purchases a federal duck stamp will pay $1.50 more in state fees per duck stamp compared to last year.

         (C) Under the provisions of Government Code, Chapter 2006, a state agency must prepare an economic impact statement and a regulatory flexibility analysis for a rule that may have an adverse economic effect on small businesses and micro-businesses. As required by Government Code, §2006.002(g), the Office of the Attorney General has prepared guidelines to assist state agencies in determining a proposed rule’s potential adverse economic impact on small businesses. Those guidelines state that an agency need only consider a proposed rule’s “direct adverse economic impacts” to small businesses and micro-businesses to determine if any further analysis is required. For that purpose, the department considers “direct economic impact” to mean a requirement that would directly impose recordkeeping or reporting requirements; impose taxes or fees; result in lost sales or profits; adversely affect market competition; or require the purchase or modification of equipment or services.

         The department has determined that there will be no adverse economic effects on small businesses or microbusinesses because the proposed rule will not directly affect small businesses or micro-businesses.  The proposed rule affects the regulation of recreational stamp privileges that allow individual persons to pursue and harvest migratory game birds. Therefore, the department has not prepared the economic impact statement or regulatory flexibility analysis described in Government Code, Chapter 2006.

         (D) The department has not drafted a local employment impact statement under the Administrative Procedures Act, §2001.022, as the agency has determined that the rule as proposed will not impact local economies.

         (E) The department has determined that there will not be a taking of private real property, as defined by Government Code, Chapter 2007, as a result of the proposed rule.

4. Request for Public Comment.

         Comments on the proposed rule may be submitted to Michael Hobson, Texas Parks and Wildlife Department 4200 Smith School Road, Austin, Texas, 78744; (512) 389-4477 (e-mail: michael.hobson@tpwd.texas.gov) or via the department website at http://tpwd.texas.gov/business/feedback/public_comment/.

5. Statutory Authority.

         The amendment is proposed under Parks and Wildlife Code, §12.701, which authorizes the issuance of a license, stamp, permit, or tag by a license deputy; §12.702(a), which authorizes the department to contract with a county clerk or another person to issue and collect money for a license, stamp, permit, tag, or other similar item as a license deputy; §12.702(b), which authorizes the commission to by rule set collection and issuance fees for a license, stamp, tag, permit, or other similar item issued under any chapter of the Parks and Wildlife Code; §12.703(a), which authorizes the department to issue a license, stamp, tag, permit, or another similar item authorized by the parks and Wildlife Code or federal law through the use of automated equipment and a point-of-sale system; and §12.703(c), which authorizes the commission to establish by rule the amount of compensation for a point-of-sale entity, including an amount to be retained by the entity from the fee collected for each item issued by the entity.

         The proposed amendment affects Parks and Wildlife Code, Chapter 12.

6. Rule Text.

         §53.5. Recreational Hunting Licenses, Stamps, and Tags.

                 (a) – (b) (No change.)

                 (c) Hunting stamps and tags:

                         (1) – (3) (No change.)

                         (4) Federal Migratory Bird Hunting and Conservation Stamp — all applicable federal fees, plus $2.50[$17].

         This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency’s authority to adopt.

         Issued in Austin, Texas, on