BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Tom Torlakson, Chairman

                                           1617 (Kehoe)
          
          Hearing Date:  5/5/08           Amended: 4/24/08
          Consultant:  Miriam Barcellona IngenitoPolicy Vote: NR&W 5-2 ;  
          Rev&Tax 5-3
















































          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 1617 would require (1) the Board of Forestry  
          and Fire Protection (BOF) to establish a benefit fee for fire  
          protection and prevention and other related emergency services  
          that are attributable to the presence of structures within a  
          state responsibility area (SRA); (2) the Department of Forestry  
          and Fire Protection (CDFFP) to inspect structures in the SRA and  
          determine the structure specific fee; (3) the county auditors to  
          collect the benefit fee; and (4) establish and appeal process. 
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2008-09      2009-10       2010-11     Fund
           Emergency regulations  $1,120                           General
          Parcel mapping         $315       $630        $630      General/
                                                                  Special*
          Inspections            unknown, potentially in excess of  
          $50,000General/
                                                                  Special*
          Collection costs       unknown, potentially millions    Special*
          Appeals process        unknown, potentially millions    Special*
          Fee revenue            (unknown, potentially millions starting  
          in                     Special*   
                                 (2010-11)
          _______________                               
          *State Responsibility Area fire Protection and Prevention Fund,  
          established in this bill.
          _________________________________________________________________ 
          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense file.
          
           Background and existing law
          Under existing law, CDFFP is required to provide fire protection  
          on lands that are deemed to be in the "state responsibility  
          area" (SRA). SRAs are generally lands that are (or were, prior  
          to development) largely covered by trees, brush, and grass and  
          other undeveloped lands. SRAs cannot include federal owned or  
          controlled land, or land within a city. Existing law requires  
          CDFFP to provide wildland fire prevention and firefighting  
          personnel and equipment. Existing law authorizes CDFFP to  
          provide rescue, first aid, and other emergency services to the  
          public in the SRA if the activity does not require additional  







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          funds.  

          According to the Legislative Analyst's Office, in its Analysis  
          of the 2008-2009 Budget Bill, "Over the last several decades,  
          the state has experienced significant housing development at the  
          boundary between wildlands and urban areas, known as the  
          wildland urban interface. In particular, significant development  
          has occurred in the Sierra Nevada foothills and the interior  
          ranges of Southern California?. [W]hile the total acreage in SRA  
          has remained stable over the last 15 years, the number of  
          housing units in SRA has increased by 15 percent over this  
          period-despite changes in SRA designations which have moved fire  
          protection responsibility for significant numbers of houses from  
          SRA to local responsibility areas. As development increases in  
          previously undeveloped-and often fire prone-areas, fire  
          protection costs increase for several reasons. First, the  
          presence of more people increases the incidence of wildland  
          fires, as fires from human-caused activities spread to wildland  
          areas. Second, protecting people and homes often requires  
          greater fire suppression effort than would typically be used on  
          forests or rangelands. Finally, the presence of people and  
          structures can sometimes limit the techniques used for fire  
          prevention or suppression. For example, the use of prescribed  
          burning to reduce available fuel loads or the use of aircraft to  
          suppress fires may be limited by the presence of homes in a  
          formerly wildland area. The inability to use these kinds of fire  
          suppression tactics increases the need for more labor-intensive  
          firefighting methods to protect people and homes." 

          According to a report found on the department's Internet Web  
          site, people cause over 95 percent of the fires in the SRA. 

          The total number of structures in the SRA is unknown. According  
          to the Legislative Analyst's Office, as of 2005 there were in  
          excess of 850,000 residences in the SRA. For the purposes of  
          this analysis, staff assumes that for every ten residential  
          structures there is a non-residential structure (85,000).  
          Additionally, the number of structures in the SRA that are  
          sufficiently covered by a structural fire department is unknown.  
          For the purposes of this analysis, staff assumes that 75 percent  
          of structures in the SRA have sufficient structural fire  
          protection provided by a non-CDFFP entity.

           Regulations and establishment of fee
           SB 1617 would require BOF to adopt emergency regulations to  
          establish a benefit fee to be charged to any owner of a  







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          structure within a state responsibility area. BOF would be  
          required to establish the fee in consultation with CDFFP,  
          including the Office of the State Fire Marshall (SFM). The fee  
          would begin to be collected in fiscal year 2010-11.

          SB 1617 specifies that the fee shall be established based on the  
          fire hazard severity zone level, proximity to fire stations and  
          other criteria that may be determined by BOF, with respect to  
          where the structure is located. The fee shall also be set in an  
          amount sufficient to reimburse each county's actual and  
          reasonable costs for levying and collecting the benefit fee  
          consistent with a cost recovery agreement entered into by the  
          department and each county. SB 1617 would require that the base  
          benefit fee be updated at least every two years.  

          SB 1617 also provides that BOF must include criteria by which an  
          owner of a structure can qualify to receive a reduction in the  
          base benefit fee by meeting guidelines that reduce the  
          structure's potential fire risk. Compliance with the criteria is  
          determined by CDFFP, after an inspection. SB 1617 specifies  
          items (such as compliance with defensible space requirements or  
          using building materials that are fire resistant) that BOF must  
          consider when establishing the benefit fee reduction criteria,  
          but authorizes BOF to include other items as well.  

          SB 1617 would prohibit the fee from being reduced to below $100,  
          except if the structure in question is sufficiently protected by  
          a county, special district or volunteer fire department directly  
          or through a contract. SB 1617 would authorize a local agency to  
          request a review of sufficiency of their structural fire  
          protection at any time, and the board shall review the request  
          at its next regularly scheduled meeting. If a local agency  
          requests more than one review in any given year, the board is  
          authorized to charge a review fee.  

          CDFFP estimates it would require six new positions at the board  
          to develop the regulations and fee, and additional costs of  
          about $250,000 for board hearings.  Costs to BOF to adopt the  
          fee and corresponding regulations would be about $1.1 million.  

          CDFFP estimates another $630,000 for development and maintenance  
          of parcel maps to be used in inspections and charging the fee to  
          structural owners.  

           Inspections and charging the individual fee 
           CDFFP estimates it would require 250 to 600 field inspectors to  







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          conduct the inspections that would qualify owners for a  
          reduction in the benefit fee. CDFFP estimates it would also need  
          additional staff to contact all 56 of the counties that are  
          within the SRA; work with county representatives, including  
          assessors and fire officials in order to develop underlying data  
          needed to assess the fee; various other support positions to  
          develop the inspection program. Costs associated with staff for  
          the inspection program could be in excess of $37 million

          Additionally, CDFFP estimates it would require 377 new vehicles,  
          of which 356 would be equipped with a GPS vehicle computer. The  
          department's estimated cost for these items is $12.1 million.

          SB 1617 would require CDFFP to provide the county auditor, by  
          August 10 each year, with the appropriate benefit fee to be  
          included as a direct charge in the annual secured property tax  
          bill. CDFFP would be required to provide a telephone number to  
          be included with the direct charge.


           Collection of fee and deposit of fee into fund
           SB 1617 would require local governments to collect the benefit  
          fee at the same time and manner as secured property tax bills.  
          SB 1617 would require that the fee be collected starting with  
          the 2010-11 fiscal year. The Legislative Analyst's Office  
          estimates that the costs to counties to collect the fee would be  
          about 5 to 10 percent of the revenues generated.

          The county collecting the benefit fees would be authorized to  
          retain the portion of the benefit fee authorized by the BOF to  
          cover the actual and reasonable costs associated with the  
          collection of this benefit fee.

          The county auditor would be required to remit the fee revenues  
          to the State Treasurer for deposit into the State Responsibility  
          Area Fire Protection and Prevention Fund, established in the  
          bill. 

          The amount of revenues that would be generated by the fee are  
          unknown because the number of structures is unknown, the number  
          of fire departments that provide sufficient structural fire  
          protection in the SRA is unknown, the amount of reductions in  
          the fee due to owners reducing fire risk is unknown, and the  
          ultimate level the fee is set is unknown.  However, if there  
          were 935,000 structures in the SRA and about 150,000 of those  
          with no structural fire protection being provided, the minimum  







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          fee of $100 would generate $15 million dollars. 

           Appeals Process  
          SB 1617 establishes a two-level appeal process. SB 1617 would  
          authorize a person from whom the benefit fee is determined to be  
          due to petition, in writing, for a re-determination of that  
          benefit fee within 30 days after receipt of the secured property  
          tax bill. The petition would be sent to both CDFFP and BOF. The  
          notice of the determination by CDFFP would be required to be  
          served to both the BOF and the petitioner on the same date.  

          Within 30 days of being served with the notice of determination  
          by CDFFP, a second appeal may be filed with the BOF. The BOF  
          would be required to grant the petitioner an oral hearing.  

          All benefit fees determined to be due by the BOF are due at the  
          time they become final.  If not paid when due, a penalty of 10  
          percent shall be added to the amount due and payable.  

          CDFFP did not provide a separate estimate for these provisions;  
          costs would be significant, potentially in the millions.

           State Responsibility Area Fire Protection and Prevention Fund 
           SB 1617 establishes the State Responsibility Area Fire  
          Protection and Prevention Fund in the State Treasury. Monies in  
          the fund would be available upon appropriation by the  
          Legislature for structural fire protection and prevention and  
          other emergency services that are attributable to the presence  
          of structures in SRAs, which services benefit owners of  
          structures in those SRAs, and for administration of this  
          chapter. At least 50 percent of the moneys appropriated from the  
          fund would be required to be allocated for fire prevention  
          activities. Staff recommends amending the bill to specify that  
          the monies in the fund are available to the department upon  
          appropriation by the Legislature.
           
          Other comments
           CDFFP's statutory purpose is to protect wildlands. It is not a  
          structural fire department. SB 1617 may inadvertently create a  
          structural fire department in CDFFP. Staff recommends that the  
          legislative findings and declarations be amended to clarify that  
          the state only provides this protection when no other entity  
          can; when a local agency or special district is able to provide  
          that service, CDFFP will cease providing that service.  
          Additionally, staff recommends authorizing and giving priority  
          to the use of the fee revenues to help local agencies become  







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          self-sufficient. 

          Staff notes that CDFFP provided an estimate higher than the one  
          reflected in this analysis.