BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 250 |Hearing |4/8/15 |
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|Author: |Gaines |Tax Levy: |No |
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|Version: |2/18/15 |Fiscal: |Yes |
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|Consultant|Grinnell |
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STATE RESPONSIBILITY AREAS: FIRE PREVENTION FEES
Extends deadlines from 30 to 60 days for the state
responsibility area fire fee.
Background and Existing Law
The California Department of Forestry and Fire Protection
(CALFIRE) provides wildland fire protection on non-federal lands
outside cities. To meet this duty, the State Board of Forestry
and Fire Protection designates the State Responsibility Area
(SRA) every five years. In 2010, the Legislature imposed the
fire prevention fee on owners of structures in SRAs to pay for
the state's costs of protecting them against fires, and directed
the State Board of Equalization (BOE) to collect it (ABx1 29,
Blumenfield). Owners of structures in SRAs must pay the fee
within 30 days of receiving BOE's assessment, which totals
$152.33 per structure in 2014.
While BOE collects the fee, CALFIRE determines who must pay it.
Fee payers can petition CALFIRE for redetermination within 30
days of BOE's assessment notice if they don't believe they're
subject to it; current law explicitly prohibits BOE to
redetermine the fee, or accept any claim for refund unless the
determination has been set aside by CALFIRE or a reviewing
court. BOE's collection efforts cease when a fee payer files a
reconsideration petition, but if no petition is filed, the fee
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amount becomes final. CALFIRE must respond to a petition for
redetermination in writing, and can eliminate the fee if it
finds the fee doesn't apply, otherwise the fee is then due 30
days from the notice of CAL FIRE's determination.
Proposed Law
Senate Bill 250 extends from 30 days to 60 days:
The period to pay the fee from the date of BOE's
assessment,
To petition CAL FIRE for redetermination, and
To pay the fee after CAL FIRE's determination.
The measure also makes conforming changes.
State Revenue Impact
Pending.
Comments
1. Purpose of the bill . According to the author, "The Fire
Prevention Fee is an annual fee charged to owners of habitable
structures located on State Responsibility Areas (SRA), as
determined by the State Board of Forestry and Fire Protection.
The State Board of Equalization (BOE) collects this annual fee,
and fee payers have 30 days from the date printed on the bill to
dispute the fee or submit payment to the BOE. Many of these
properties are not primary residences or are rural and remote,
making timely receipt of mail more challenging. Also, many
individuals subject to this fee are on fixed incomes, making it
difficult for them to pay their Fire Prevention Fee by the
30-day deadline, especially since this deadline is not from the
postmarked date of the mailing or the date of receipt, but the
printed date on the bill. While extending the response time by
30 days bears little on the state agency's ability to
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efficiently implement the program, it does dramatically improve
an individual's ability to adequately comply with the annual
Fire Prevention Fee in a timely manner. Additionally, it will
give those taxpayers on fixed incomes more time to adjust their
budgets."
2. Timing is everything . BOE administers more than 30 tax and
fee programs, and all of them allow taxpayers 30 days to pay or
petition for determination. As such, SB 250 would create a
precedent by doubling this period, albeit one that conforms with
60-day deadlines to respond to Franchise Tax Board Notices of
Proposed Assessment, and accounts for some of the difficulty BOE
has had contacting rural landowners as part of the SRA fee
collection process. In the fee's first two years, about 68% of
owners of structures paid on time, while 13-15% of fee payers
didn't pay at all. While compliance has shown some improvement,
as those paying after the 30 day deadline but before 60 days
declined from 10.6% in the first year to 6% in 2014, SB 250
would create special treatment for SRA fee payers.
3. You say goodbye, I say hello . The SRA Fee has been
controversial since enactment, and has given rise to several
bills to repeal, reduce, or modify the fee, none of which has
reached the Governor's Desk. Additionally, the Howard Jarvis
Taxpayers' Association (HJTA) filed a lawsuit in 2012
challenging that the fee is a tax, and therefore unlawful
because the Legislature approved ABx1 29 by majority vote, not a
2/3 vote as required by Section Three of Article XIIIA of the
California Constitution. While Courts have yet to rule on the
case, HJTA and others encourage SRA fee payers to file petitions
for redetermination to preserve eligibility for a refund should
the Court rule in their favor, and note on the check that the
fee is paid "under protest." While SB 250 extends the payment
period and the redetermination period by 30 days, likely
increasing the number of petitions for redetermination, it is
part of a broader effort to invalidate a legislatively-enacted
fee, a question currently with the Courts. The Committee may
wish to consider deferring action on SB 250 until the Courts
resolve whether the SRA fee is a fee or a tax.
4. Do it again . SB 250 is largely identical to SB 1413
(Wyland, 2014), which the Committee approved by a 6-0 vote on
April 24th of last year. While the measure was subsequently
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held on the Assembly Appropriations suspense file, the
Legislature did enact AB 2048 (Dahle, 2014), which made several
consensus changes to the SRA fee to improve the fee's
administration.
Support and
Opposition (4/2/15)
Support : State Board of Equalization, BOE Member George Runner,
California Farm Bureau Federation, California Fire Chiefs
Association, California Taxpayers' Association, Fire Districts
Association of California, Howard Jarvis Taxpayers Association.
Opposition : Unknown
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