BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 203


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          Date of Hearing:  April 15, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          203 (Obernolte) - As Amended March 17, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:


          SUMMARY:


          This bill extends the period of time owners of structures have  
          to pay or request redetermination of the fire prevention fee  
          from 30 days to 60 days.









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          FISCAL EFFECT:


          1)Annual revenue loss (special fund) in the $375,000 to $500,000  
            range.



            Annual fee assessments are due and payable to the Board of  
            Equalization (BOE) 30 days from the date of assessment.   
            During FYs 2011-12, 2012-13 and 2013-14, interest and  
            penalties paid totaled $4,617,894..  Of that amount,  
            $1,493,882 in interest and penalties was remitted on fees paid  
            between 31 and 60 days from the date of assessment.  Under  
            this bill, this amount would not have been paid.  Assuming  
            delinquencies were the same over those three years, the annual  
            average revenue loss is therefore computed as: $1,493,882 / 3  
            = $497,961. 


            However, BOE staff notes that the payments made after 60 days  
            continues to decline, at an average annual rate of two  
            percent. Meanwhile, timely payments made within the 30-day  
            period have improved, in part due to BOE outreach efforts.  
            Given the continued improvement in timely payments, BOE staff  
            estimates the annual average revenue loss attributable to  
            penalties and interest at $382,700.


          2)Unknown, likely minor, one-time costs (special fund) for BOE  
            to reprogram computers and revise information and  
            publications.

          3)No additional costs to CALFIRE



          COMMENTS:








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          1)Purpose.  This bill is sponsored by BOE Member George Runner  
            to provide additional time for feepayers to review their  
            assessments and either dispute the fee or adjust their budgets  
            and pay their fees in a timely manner.

          2)Background.   The state is responsible for wildland fire  
            protection in state responsibility areas (SRA) which are  
            generally defined to include most nonfederal timberlands,  
            rangelands and watersheds thinly populated and not within the  
            boundaries of a city.  Over 31 million acres, much privately  
            owned, are located in SRA.  In the past, SRA lands were  
            largely unpopulated.  In recent years, however, local  
            governments have allowed increased housing development in SRA  
            but at a level of density that maintains the state's  
            obligation to provide wildland fire protection.     



            As housing development in SRA increased, so did state fire  
            protection costs.  In 1996-97, the department spent $475  
            million on fire protection; in more recent years, CALFIRE's  
            annual fire protection costs neared or surpassed $1 billion.


            The Legislative Analyst's Office (LAO) attributes much of the  
            increase in CALFIRE's fire protection costs to increased  
            housing development in SRA.  The LAO notes that as housing  
            development in SRA has increased, the department has spent  
            greater resources responding to events other than wildfires  
            for which the state is not legally responsible, such as  
            structural fires and medical emergencies.  Because the LAO  
            concludes that much of CALFIRE's nonwildfire activities  
            provide private benefits, LAO has long recommended a fee on  
            owners of private land in SRA to pay for a portion of  
            CALFIRE's fire protection costs.










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          3)SRA Fire Protection Fees.  In 2011 the Legislature passed ABx1  
            29 (Blumenfield), requiring the Board of Forestry and Fire  
            Protection to adopt emergency regulations to establish a fire  
            prevention fee. The fee, not to exceed $150 on each structure,  
            was to raise $50 million to fund CALFIRE fire prevention  
            activities.  In January 2012, the board issued its regulation,  
            establishing a fee of $150 per habitable structure on a parcel  
            located within SRA, with a $35 reduction for each habitable  
            structure that is also within the boundaries of a local agency  
            that provides fire protection services.  Revenues from the fee  
            are to be used exclusively for fire protection.  In  
            authorizing the fee, the Legislature recognized that  
            individual owners within SRA received a disproportionately  
            larger benefit from fire prevention activities than realized  
            by the state's residents generally.  

            As required by law, the fee was adjusted for inflation and is  
            currently $152.33 per habitable structure outside a fire  
            protection district and $117.33 for habitable structures  
            within a fire protection district.


          4)BOE Tax and Fee Programs.  The BOE administers more than 30  
            tax and fee programs, none of which provides a 60-day period  
            to pay the tax or fee or file a petition for redetermination.   
             
                                           


          5)Previous Legislation. Last year a similar measure, AB 1413  
            (Wyland) was held on suspense in the Assembly Appropriations  
            Committee.    


           
          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081










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