Proposed Amendment to Cultivated Oyster Mariculture Fee Rules

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CULTIVATED OYSTER MARICULTURE FEE REVISIONS

PROPOSAL PREAMBLE

1. Introduction.

        The Texas Parks and Wildlife Department proposes an amendment to 31 TAC §53.13, concerning Business Licenses and Permits (Fishing). The proposed amendment would reduce the annual fees for both types of Cultivated Oyster Mariculture (COM) permits issued by the department. The amendment is intended to encourage the development and maturation of a commercially viable oyster mariculture industry that could provide relief to native natural oyster reefs and associated ecosystems.

        The 86th Texas Legislature in 2019 enacted House Bill 1300, which added new Chapter 75 to the Texas Parks and Wildlife Code and delegated to the Parks and Wildlife Commission the authority to regulate the process of growing oysters in captivity. In turn, the Texas Parks and Wildlife Commission in 2020 adopted regulations governing oyster mariculture (45 TexReg 5916), which included various fees.

        At the direction of the commission, the department has reviewed all department data relative to the costs of implementation and operation of the COM program, similar fees for oyster mariculture in other Gulf states, cooperated extensively with the regulated community, and determined that a reduction in fees could result in more rapid maturation of the industry in Texas and the realization of attendant resource and ecosystem benefits. The department notes that the Texas General Land Office (GLO) recently reduced surface lease fees for COM operations. In 2024, the GLO lease fee was reduced to $500 per acre per year from $1,500 per acre per year.

        In Fiscal Year (FY) 2024, the average fee for a COM Grow-Out permit was $3,495.46 (range $900 — $13,500 per year) and for a Nursery-Hatchery it was $1,805.55 (range $79.05 — $3,943.69 per year) (fees are dependent on the acreage of the operation and thus vary from permit to permit).

        With respect to an analysis of similar fees in other states, the department concludes that while fee structures vary from state to state, in the states of the Gulf region Texas appears to have the highest fees for oyster mariculture operations. Mississippi and Florida charge an annual flat fee of $50 and $100, respectively. Louisiana requires cultivated oyster operators to have a commercial fishing license ($100) and harvester license ($96), in addition to which a fee of $2 per-acre-per-year is imposed. Alabama charges a $300 per-acre easement fee. The current Texas rate for a Grow-Out facility is $450 per acre. Staff has determined that a rate reduction of approximately two-thirds would make Texas rates more comparable to other states. The proposed amendment would therefore alter subsection (d) to reflect the reduction in fees and to update permit types to accurately reflect the terminology employed in the regulations contained in Chapter 58, Subchapter D, that regulate COM operations.

        With respect to the COM Grow-Out Permit, the fee for any portion of a site located in public water would be reduced to $150 per-acre-per-year from $450 per-acre-per-year and the fee for any portion of a site on private property would be reduced to $57 per-acre-per-year from $170 per-acre-per-year.

        With respect to fees for the COM Nursery-Hatchery Permit, the current fee is $170 per-acre-per-year, with a $0.010 per-square-foot-per-year surcharge for the portion of a site in public water, and $170 per-acre-per-year for the portion of a site located on private land. The proposed amendment would reduce the public water fee to $150 per-acre-per-year and the private land fee to $57 per-acre-per-year, or a minimum fee of $150 per year, whichever is greater. The minimum fee is necessary to recoup costs incurred by the department to conduct required annual inspections, as some Nursery-Hatchery operations occupy much less than an acre but still require a site inspection.

2. Fiscal Note.

          Dr. Lindsay Glass Campbell, Policy and Education, Cultivated Oyster Mariculture Program Coordinator, Coastal Fisheries Division, has determined that for each of the first five years that the rule as proposed is in effect, there will be fiscal implications to the department a result of administering or enforcing the rule as proposed. The department estimates that there will be a revenue reduction of approximately $32,276.63 per year resulting from the fee reductions, assuming the number of permits issued remains unchanged (the department has no method for predicting how many additional permits might be issued in the future). This estimate was derived by taking the total fee amounts collected in FY2024 ($48,183.32) and subtracting from that value the amount of fee revenue that would have been realized had the proposed fees been in effect for that fiscal year ($15,906.69). The department has determined that because of the low number of permits currently issued, the rules as proposed can be effectively administered and enforced using existing personnel as part of their current duties under existing budgets; however, there could be additional fiscal implications to the department if permit demand increases significantly.

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

        The rules will not result in adverse economic impacts to persons required to comply with the rule as proposed.

3. Public Benefit/Cost Note.

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

        (A) The public benefit anticipated as a result of enforcing or administering the proposed rules will be the enhancement and further development of a growing industry, the ecological benefits provided by oysters in public waters, the possible reduction of harvest pressure on natural oyster reefs, and the production of oysters for public consumption.

        (B) 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, micro-businesses, or rural communities. 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 and microbusinesses and rural communities. Those guidelines state that an agency need only consider a proposed rule’s “direct adverse economic impacts” to determine if any further analysis is required. 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.

        To ensure that this analysis captures every small or microbusiness affected by the proposed rule, the department assumes that most, if not all persons who hold a COM permit qualify as small or microbusinesses. Department data indicate that there are currently 19 fully permitted and 38 conditionally approved cultivated oyster mariculture sites.

        The department has determined that because the rule as proposed would reduce the fee amounts currently in effect by approximately two-thirds, the rule will not result in direct adverse economic impacts to small businesses, microbusinesses, or rural communities; therefore, neither the economic impact statement nor the regulatory flexibility analysis described in Government Code, Chapter 2006, is required.

        (C) 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 exert a direct economic impact on local economies.

        (D) The department has determined that Government Code, §2001.0225 (Regulatory Analysis of Major Environmental Rules), does not apply to the proposed rule.

        (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.

        (F) In compliance with the requirements of Government Code, §2001.0221, the department has prepared the following Government Growth Impact Statement (GGIS).  The rule as proposed, if adopted, will:

        (1) neither create nor eliminate a government program;

        (2) not result in an increase or decrease in the number of full-time equivalent employee needs;

        (3) not result in a need for additional General Revenue funding;

        (4) affect the amount of a fee (by reducing annual fees for COM permits);

        (5) not create a new regulation, but modify existing regulations;

        (6) not expand an existing regulation;

        (7) neither increase nor decrease the number of individuals subject to regulation; and

        (8) not positively or adversely affect the state’s economy.

4. Request for Public Comment.

        Comments on the proposal may be submitted to Dr. Lindsay Glass Campbell (Coastal Fisheries), at (512) 389-8575 (email: cfish@tpwd.texas.gov). Comments also may be submitted via the department’s website at http://www.tpwd.texas.gov/business/feedback/public_comment/

5. Statutory Authority.

        The amendment is proposed under the authority of Parks and Wildlife Code, §75.0103, which requires the commission to adopt rules to establish a program governing cultivated oyster mariculture, which may establish requirements for the taking, possession, transport, movement, and sale of cultivated oysters; the taking, possession, transport, and movement of broodstock oysters; fees and conditions for use of public resources, including broodstock oysters and public water, and any other matter necessary to implement and administer Parks and Wildlife Code, Chapter 75.

        The proposed amendment affects Parks and Wildlife Code, Chapter 75.

6. Rule Text.

        §53.13. Business License and Permits (Fishing).

                 (a) – (c) (No change.)

                 (d) Cultivated Oyster Mariculture Fees.

                         (1) Application fee — $200.

                         (2) Cultivated Oyster Mariculture Grow-Out Permit [(COMP)].

                                  (A) Portion of site [For a COMP] located in public water — $150[$450] per acre per year.

                                  (B) Portion of site [For a COMP] located on private property—$57 [$170] per acre per year.

                         (3) Cultivated Oyster Mariculture Nursery-Hatchery Permit: the greater of[- Nursery Only (nursery permit) — $170 per acre per year, $0.010 per square foot per year, if the nursery facility is located in public water.]

                                  (A) $150 per year; or

                                  (B) The total of $150 per acre per year for portion of site in public water and $57 per acre per year for portion of site on private property.

        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