BILL ANALYSIS Ó
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: SB 198 Hearing Date: March 24, 2015
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|Author: |Morrell | | |
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|Version: |February 10, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|William Craven |
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Subject: State responsibility areas: fire prevention fees
BACKGROUND AND EXISTING LAW
1. In 2011, AB X1 29 directed the California Board of Forestry and
Fire Protection (Board) to assess a fee on structures in state
responsibility areas (SRA) for the purpose of helping defray the
enhanced costs of fire suppression in wildland and watershed areas
that, over the years, became increasingly populated and developed.
From 2000-2010, for example, the number of houses in SRA grew by 16%
according to census numbers.
2. State responsibility areas are those areas of the state
designated by the Board of Forestry where the State of California is
financially responsible for the prevention and suppression of
wildfires. SRA does not include lands within city boundaries or in
federal ownership.
3. The Board is required 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.
4. Existing law requires the Board to include within SRA all of the
following lands: (a) lands covered wholly or in part by forests or
by trees producing or capable of producing forest products; (b)
lands covered wholly or in part by timber, brush, undergrowth, or
grass, whether of commercial value or not, which protect the soil
from excessive erosion, retard runoff of water, or accelerate water
percolation, if such lands are sources of water that is available
for irrigation or for domestic or industrial use; and (c) lands
principally used or useful for range or forage purposes that are
SB 198 (Morrell) Page 2 of ?
contiguous to the lands described in "(a)" and "(b)."
5. Existing law prohibits the Board from including within SRA any of
the following: (a) lands owned or controlled by the federal
government or any agency of the federal government; (b) lands within
the exterior boundaries of any city, except a city and county with a
population of less than 25,000 if, at the time the city and county
government is established, the county contains no municipal
corporations; and (c) any other lands within the state that do not
come within any of the classes that are described above in "4."
6. The Board has on its website a "viewer" that can identify whether
a parcel is or is not within a state responsibility area. SRA lands
have important watershed values for the entire state. On the other
hand, structural fire suppression is supposedly handled by local
agencies or through reimbursements (via contracts or other
agreements) to the California Department of Forestry and Fire
Protection (CDF) for its costs associated with structural fire
suppression. There are numerous agreements and contractual
arrangements that exist among fire agencies across the state.
7. In a rulemaking procedure, the Board established a rate of $150
per habitable structure, which is defined as a building that can be
occupied for residential use. Owners of habitable structures who are
also within the boundaries of a local fire protection agency will
receive a reduction of $35 per habitable structure. The fee will be
paid by approximately 800,000 landowners who own structures in state
responsibility areas. Recent legislation exempted landowners whose
homes were destroyed by wildfires.
8. According to the findings and declarations in AB X1 29 as well as
the regulations adopted by the Board, this fee will fund a variety
of important fire prevention services within the SRA including
defensible space inspections around structures, fuelbreaks for
staging firefighting equipment, public education, brush clearance
around communities, along roadways and evacuation routes; and
activities to improve forest health to improve resiliency to
wildfires.
9. An appeals process has been established for landowners who wish
to contest the fee. About 19,000 appeals have been filed, far fewer
than when the fee was first established when the total number of
appeals was nearly 85,000.
10. The Howard Jarvis Taxpayer Organization has filed suit against
the state alleging that the fire prevention fee is a tax, not a fee.
That case is not moving rapidly.
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PROPOSED LAW
This bill would repeal the SRA fire fee in its entirety.
ARGUMENTS IN SUPPORT
The author objects to the SRA fire fee first because it was adopted
as a budget trailer bill, and second because he believes that the
fee is a tax (not a fee) that should have faced a 2/3 vote in the
Legislature. He also objects that the revenues from the fee are used
for prevention, not suppression of fires.
According to the Rural County Representatives of California (RCRC)
the fee is inequitable, and hurts the state's mutual aid fire
suppression system of interlocking agreements among fire agencies
who respond to severe fires. RCRC seems to indicate its preference
for a statewide fee that would cover all disasters.
The Southwest California Legislative Council and the California Farm
Bureau both contend that the SRA fee is a tax.
The Farm Bureau is also concerned about the apparent lack of an
ongoing commitment that some of the funds be returned to the source
from which they were collected and it also argues that the fee
adversely affects local fire districts' ability to raise funds.
San Diego County does not believe the fee has resulted in greater
fire protection.
ARGUMENTS IN OPPOSITION
None received.
COMMENTS
1. There have been perhaps 10 bills since 2011 to repeal the SRA
fire fee. This year, of the five SRA bills that were introduced,
two make procedural changes to the fee collection or appeals
mechanism, two have not been referred (spot bills), and SB 198 is
the only bill thus far that would outright repeal the SRA fee.
2. If this bill is enacted, ABX1 29 and its fire prevention fee will
be repealed on January 1, 2016. The fee, according to the Governor's
Budget, generates $76 million although approximately $10 million is
not collectable by the Board of Equalization. For the budget year,
the department estimates the fee will generate $65 million for its
base fire prevention activities.
Once the fee is repealed, and assuming that there is no extra
General Fund money to transfer to CDF, there could be major
SB 198 (Morrell) Page 4 of ?
disruption to the state's fire prevention program that would also
place a larger burden on some local firefighting agencies, the cost
of which could pass down to property owners by way of increased
local assessments. Similarly, without CDF's fire prevention program,
many property owners with structures in the SRAs could face higher
property insurance premiums because there would be a higher fire
risk against which to insure. Lastly, if the state compromises its
fire prevention program, the risk of fires will increase and the
state, as well as local governments, could be faced with greater
firefighting costs.
3. The basic reason Legislative Counsel designated AB X1 29 a fee,
not a tax, was because of the findings in that legislation that
declared: (1) that the presence of structures within SRA can create
an increased risk of fire within these regions that threaten state
watershed values which are the reason for the SRA designation in the
first place. (2) The firefighting techniques used to suppress
structural fires are often different than techniques used to
suppress wildland fires, and often more expensive. One frequently
hears from state fire professionals that the costs of wildland fire
suppression increase dramatically when state engines and crews
literally must be parked in driveways to protect homes that
otherwise have inadequate local fire protection. (3) That
legislation also stated that those who live in SRA receive greater
benefits from the state's fire suppression activities than citizens
generally and that this greater economic benefit should be partially
recouped from them through this fee. All of these statements are
included in the findings of AB X1 29.
4. It is clear that there is a lack of awareness that a portion of
the fee will be returned to local jurisdictions. This is easiest to
demonstrate in contract counties, which are the six counties paid by
CDF to assume its initial attack obligations for wildland fires in
SRA. These counties are Kern, Los Angeles, Marin, Orange, Santa
Barbara, and Ventura. In addition to these contracted amounts, these
counties have received approximately $4.8 million in SRA fees. The
fee revenues that are returned to these counties are for the
activities authorized by the legislation, including fire prevention
activities, defensible space inspections, and vegetation management
projects. The breakdown for the contract counties is as follows:
Los Angeles, $1,055, 465; Kern, $694,505; Marin, $669,499; Orange,
$672,897; Santa Barbara, $860, 341; and Ventura, $866,676.
For other counties, the department last week awarded 83 grants to
local jurisdictions in a total amount of $9.5 million. At least one
project in every county that applied for grants was awarded a grant.
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The Senate Budget Subcommittee on Resources is considering extending
the local grants process for the SRA fire fees which was not
recommended for continuance by the administration.
5. The Legislature has wrestled with aspects of this issue for
years. The Legislature has increased the defensible space zone
around structures, and adopted more fire-resistant building
standards. Most recently, in SB 1241 (Kehoe), local governments were
directed to address specific fire safety issues in their housing
elements of their general plans.
6. Another avenue of inquiry that has not generated much traction
has been to ask the Board to exclude from SRA those rural
subdivisions that may not be in incorporated areas but that are
nevertheless sufficiently "urban" that they should no longer be
considered SRA. The Board has the legal responsibility to update the
SRA designations every 5 years. While numerous, modest changes are
made from time to time, the Board has never seriously proposed
excluding larger, low-density developments from SRA which would
effectively shift those structural fire protection costs to the
local governments which permitted those developments. In such
circumstances, CDF and other departments would respond to such
structural fires pursuant to the state's mutual aid and other
existing contractual relationships.
However, it may be difficult to quantify any savings to CDF from
such a result given the many contractual arrangements and
interagency agreements that could sometimes require CDF involvement
in fires in these districts in any event. On the other hand, the
Legislature may which to clarify, prospectively, that local
governments must provide for fire suppression, or contract for fire
suppression, for new developments and housing in SRA that they
approve.
7. What has become clear is the current SRA fee statute clearly
demonstrates that a fee based on the current boundaries of SRA does
have administrative shortcomings at least until the fee becomes more
familiar to the public. SRA boundaries are unknown to most
homeowners, some of whom have discovered that their home is in SRA
but their neighbor's house is not. This has made for some awkward
moments in explaining this circumstance to homeowners. In addition,
some homeowners who believe that fire services are provided by their
familiar local agencies are not convinced that they are receiving
any additional services from CDF that is traceable to the new SRA
fee. This latter issue may fade over time as the CDF grants to local
agencies receive more publicity and the work undertaken pursuant to
these grants becomes more well-known. But it is still a perception
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in these early years of implementation.
8.The fiscal implications of this bill are significant, although not
addressed by the bill and not a policy matter for this committee to
consider. However, the loss of fee revenues to the department would
likely necessitate an increase in general fund revenues to CDF or
some other way to replace the lost fee revenues. This is clearly a
large sum of money that would not go unnoticed in the Senate
Appropriations Committee.
Double-referral The Rules Committee referred this bill to both the
Committee on Natural Resources and Water and to the Committee on
Governance and Finance. Therefore, if this bill passes this
committee, it will be referred to the Committee on Governance and
Finance, which will consider the issues within their jurisdiction.
SUPPORT
California Association of Realtors
California Farm Bureau
CalTax
Howard Jarvis Taxpayers Association
Southwest California Legislative Council
San Diego County Board of Supervisors
Rural County Representatives of California
OPPOSITION
None Received