BILL ANALYSIS Ó
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: SB 1347 Hearing Date: April 12,
2016
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|Author: |Nielsen | | |
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|Version: |February 19, 2016 Introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Matthew Dumlao |
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Subject: Fire prevention fee: administration
BACKGROUND AND EXISTING LAW
In July 2011, the Legislature passed and the Governor signed
Assembly Bill X1 29 that established the State Responsibility
Area (SRA) fire prevention fee. A SRA is defined as an area of
the state in which the financial responsibility of preventing
and suppressing fires primarily rests with the state. The fee is
used to pay for fire prevention services within the SRA. The fee
is applied to all habitable structures within the SRA and
generates on average $74 million per year.
Effective July 1, 2014, the fee is levied at the rate of $152.33
per habitable structure, which is defined as a building that can
be occupied for residential use. Owners of habitable structure
who are also within the boundaries of a local fire protection
agency will receive a reduction of $35 per habitable structure.
Just over 98% of all fee payers throughout the state receive
this fee reduction.
According to the Department of Forestry and Fire Protection
(CDF), the fire prevention fee funds a variety of important fire
prevention services in the SRA. Such activities include fuel
reduction projects that lessen the risk of wildfire to
communities, evacuation routes, and infrastructure. Other
activities include defensible space inspections, fire prevention
engineering, emergency evacuation planning, fire prevention
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education, fire hazard severity mapping, implementation of the
State and local Fire Plans, and fire-related law enforcement
activities such as arson investigation.
An annual report on SRA fire fee expenditures is required by
law. The sunset date on these reports is January 31, 2017. In a
recent informational report from last year, CDF summarized
expenditures for the three fiscal years 2012-15. That report is
available on the CDF website. For the most recent year, total
expenditures for fire prevention activities were $76.9 million
and total administrative costs were $16.0 million. Approximately
20% of total expenditures went toward paying administrative
costs.
Administrative costs fall under two categories: (1) costs
associated with collecting the fee and (2) costs associated with
administering the fire prevention programs. The State Board of
Equalization is tasked with collecting the fee and dispersing
refunds to property owners who successfully dispute a claim that
he/she must pay the fee. CDF is responsible for carrying out
the fire prevention services in the SRA.
The legality of the fee is being challenged in court, and it is
not clear when the trial will occur. The argument is that the
fee should have been enacted as a tax and, therefore, subject to
a 2/3 vote.
Since its adoption, the Legislature has considered many bills to
repeal the fee, none of which were passed. It also passed bills
allowing a landowner to apportion the fee with a prospective
buyer, to index the fee for inflation, and to exempt structures
destroyed by natural disasters from the fee.
Some legislators were concerned that they (and the public) were
not getting adequate information about SRA fire fee expenditures
despite this report and other information provided to them by
CDF.
PROPOSED LAW
This bill would limit the total costs of administering the SRA
fire prevention fee to no more than 5% of the total money
collected by the SRA fee. The administrative costs consist of
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the costs incurred by the State Board of Equalization in
collecting the fee as well as the costs to CDF for implementing
the fire prevention activities.
This bill extends the sunset on the requirement to submit an
annual report until January 31, 2022.
ARGUMENTS IN SUPPORT
The author of the bill argues that the current administrative
costs are too high, and the money spent on administrative costs
would be better served directly providing fire prevention
benefits to the payers of the fee. Also, the author states the
sunset should be extended "so that the Legislature may continue
receiving this valuable information for a least five additional
years."
According to the Howard Jarvis Taxpayers Association (HJTA), "SB
1347 would cap the annual administrative costs of the fire
prevention fee at five percent. Today administrative costs are
roughly 20 percent. This issue is currently the subject of
litigation advanced by the HJTA that attempts to show that this
fee is in fact a tax that should have required a two-thirds vote
of the Legislature. While this lawsuit continues to work its
way through the court, and the fee continues to be collected,
this Legislature owes it to taxpayers to ensure that the revenue
raised is spent in the most prudent way possible."
ARGUMENTS IN OPPOSITION
None received.
COMMENTS
SB 1347 calls for a seventy five percent reduction in
administrative costs. This bill makes an implicit assumption
that reducing administrative costs will free up more money to be
spent directly on fire prevention projects. However, the
magnitude of the reduction in administrative costs might
actually result in less fee money collected and fewer fire
prevention projects. If extra money from the General Fund is not
available to CDF to conduct fire prevention projects, the risk
of fires will increase.
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Related legislation.
AB 2035 (Bigelow): This bill would add local government entities
to the list of potential recipients of SRA fire prevention fund
money, as long as they reach an agreement with the board and
they conduct fire prevention activities in a state
responsibility area.
SB 1136 (Morrell): This bill extends the sunset for submitting
an annual report until January 31, 2021. It also increases the
level of detail required in the report, including reporting on
equipment expenditures and personnel positions for each program
and subprogram paid for by fire prevention fees.
SB 1293 (Tom Berryhill): This bill makes a minor, nonsubstantive
change.
SUGGESTED AMENDMENTS
None.
SUPPORT
California Fire Chiefs Association
Fire Districts Association of California
Howard Jarvis Taxpayers Association
OPPOSITION
None received.
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