BILL ANALYSIS Ó AB 301 Page 1 Date of Hearing: April 13, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 301 (Bigelow) - As Introduced February 12, 2015 SUBJECT: State responsibility areas: fire prevention fees SUMMARY: Requires the state responsibility area fire prevention fee to be prorated for an owner that owns the habitable structure for only a portion of the year for which the fee is due. EXISTING LAW: 1)Requires the Board of Forestry (Board) to classify all lands within the state for the purpose of determining areas in which the financial responsibility of preventing and suppressing fires is primarily the responsibility of the state (these areas are known as "state responsibility area" or "SRA.") 2)Declares that it is necessary to impose a fire prevention fee to pay for fire prevention activities in the SRA that specifically benefit owners of structures in the SRA. 3)Requires the Board to adopt regulations to establish a fire prevention fee in an amount not to exceed $150 (which must be adjusted every year for inflation) to be charged on each "structure" on a parcel that is within the SRA. Defines AB 301 Page 2 "structure" as a building used or intended to be used for human habitation, including a mobile home or manufactured home. Reduces the fire prevention fee by $35 if the structure is also within the boundaries of a local agency that provides fire protection services (this reduction applies to most structures). Defines "owner of a habitable structure" as the person that is the owner of record of a habitable structure in the county tax assessor rolls or as recorded in the records of the Department of Housing and Community Development (HCD) on July 1 of the state fiscal year for which the fee is due. 4)Requires the fee be levied upon the owner of a habitable structure if that person owns the habitable structure on July 1 of the year for which the fee is due. 5)Requires the fire prevention fees to be deposited in the State Responsibility Area Fire Prevention Fund, which is available to the Board and the Department of Forestry and Fire Protection (CAL FIRE) to expend for fire prevention activities that benefit the owners of structures within the SRA. Limits fire prevention activities to the following: a) local assistance grants established by the Board; b) grants to Fire Safe Councils, the California Conservation Corps, or certified local conservation corps for fire prevention projects and activities in the SRA; c) grants to a qualified nonprofit organization with a demonstrated ability to satisfactorily plan, implement, and complete a fire prevention project applicable to the SRA; d) inspections by CAL FIRE for compliance with defensible space requirements around structures in the SRA; e) public education to reduce fire risk in the SRA; f) fire severity and fire hazard mapping by CAL FIRE in the SRA; and, g) other fire prevention projects in the SRA that are authorized by the Board. 6)Allows a person to petition CAL FIRE for a redetermination of whether the fire prevention fee applies to him or her within 30 days after being served with a notice of determination (i.e., the notice from CAL FIRE stating that a person must pay the fire prevention fee). AB 301 Page 3 7)Imposes a 10% penalty for each 30-day period in which the fee remains unpaid after the fee becomes final. 8)Allows the Board to exempt from the fee any habitable structure that is subsequently deemed uninhabitable as a result of a natural disaster during the year for which the fee is due, as well as one subsequent year if the habitable structure has not been repaired or rebuilt. FISCAL EFFECT: Unknown COMMENTS: 1)Author's statement. Currently if a habitable structure changes ownership, the owner of the structure on July 1 must pay the entire fee for the year. AB 301 aims to change that by requiring that the fee be prorated for an owner, if the owner owns a habitable structure for only a portion of the year for which the fee is due. This proration of the fee would ensure that all parties are contributing the correct amount and not over paying. 2)Fire Prevention Fee (ABX1 29). In early 2011, the state was facing a $25.4 billion budget deficit (which grew to $26.6 billion after the governor cancelled the sale of several state buildings) and an annual structural deficit of up to $21.5 billion was projected into the future. In March 2011, the Legislature passed $13.4 billion in "solutions" (consisting mostly of spending cuts) to address the deficit; however, there was still a shortfall of $10.8 billion. To help address the budget shortfall, the Legislature passed, among other bills, ABX1 29, which required the Board to adopt emergency regulations to establish a "fire prevention fee" not to exceed $150 for each structure on a parcel that is within the SRA. The fee was intended to fill a hole created by a $50 million AB 301 Page 4 General Fund cut to CAL FIRE in the 2011 budget bill. The 2014-15 Budget appropriated $76.3 million from SRA revenues to enhance statewide fire prevention work including, for the first time, $10 million for local assistance grants to be used in locations where the effects of drought, fuel loading and structure development converge. 3)Billing. CAL FIRE contracts the job of identifying fee payers to a Designated Fee Administrator (DFA). The DFA contacts tax assessors in all of the counties with SRA and contacts HCD to get a list of habitable structures and their owners on July 1. The DFA then overlays the list of habitable structures with the SRA boundaries that CAL FIRE provides. The DFA develops a list of fee payers and provides that list to the Board of Equalization (BOE) for them to bill. The DFA also runs the call center that answers calls from fee-payers and also processes petitions for redetermination (appeals) from fee-payers. BOE does not receive the list of fee payers until January and when taking into account the appeals process, the billing process can take until the next fiscal year to fully complete. This process represents a significant portion of the $15.5 million in administration costs that was budgeted for 2014-15. If the fee was prorated the billing process would be more costly, complicated and time consuming. 4)Owner of a habitable structure. Statute defines "owner of a habitable structure" as the person that is the owner of record of a habitable structure in the county tax assessor rolls or as recorded in the records of the HCD on July 1 of the state fiscal year for which the fee is due. This bill requires prorating the fee for the owner of a habitable structure, but does not change the definition of owner of a habitable structure. Therefore, a new owner who bought the habitable structure after July 1 would not have to pay the fee until they owned the property on July 1. The author's office indicates this was not their intent and they would want the new owner to pay their share of the prorated bill. 5)Allowing owners to work it out. Rather than requiring CAL FIRE AB 301 Page 5 and BOE to track all fee payers home or mobile home sales, which would dramatically increase the cost of administering the fire prevention fee, and therefore reduce how much fire prevention work could be done, it might be more prudent to allow buyers and sellers to work out who pays what portion of the fee during the sales transaction of the habitable structure. The author and the committee may wish to consider removing the requirement that the fee be prorated and instead require CAL FIRE to notify fee payers that they may negotiate the apportionment of the fee between the parties. 6)Prior legislation. AB 2048 (Dahle, Chesbro, and Gordon), Chapter 895, Statutes of 2014 reduced the penalties for each 30 day period the fee is unpaid, simplified the appeals process and authorized the Board to exempt from the fee any habitable structure that is subsequently deemed uninhabitable as a result of a natural disaster. 7)Related legislation. AB 203 (Obernolte) extends the deadline to file a petition for redetermination of the SRA fire prevention fee from 30 to 60 days. This bill was heard by this committee on March 23rd and is awaiting hearing in Assembly Appropriations Committee. AB 1202 (Mayes) requires the Board to reduce the fee to be charged on a habitable structure by an amount equal to the amount paid by the owner of the structure to a local fire district for fire prevention services. This bill is in Assembly Natural Resources Committee. REGISTERED SUPPORT / OPPOSITION: AB 301 Page 6 Support California Taxpayers Association (Cal Tax) California Farm Bureau Federation Howard Jarvis Taxpayers Association San Diego County Board of Supervisors Opposition None on file Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092