BILL NUMBER: SB 557 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 5, 2003
AMENDED IN SENATE APRIL 29, 2003
AMENDED IN SENATE APRIL 7, 2003
INTRODUCED BY Senator Kuehl
FEBRUARY 20, 2003
An act to add Article 10 (commencing with Section 4629) to Chapter
8 of Part 2 of Division 4 of the Public Resources Code, relating to
forest practices.
LEGISLATIVE COUNSEL'S DIGEST
SB 557, as amended, Kuehl. Forest practices: timber products
user forest restoration.
Existing law provides for the regulation of forest practices.
This bill would establish a timber products user forest
restoration fee on timber products sold for consumption in California
by levying an excise tax in the amount of 1
per board foot or board foot equivalent on specified
timber products. The bill would create the Timber Products User
Forest Restoration Fund in the State Treasury. Moneys in the fund
would be available for appropriation for, among other things,
restoration of the environment and habitat related to the effects of
timber harvesting, protection of forested watersheds, and assistance
to timber industry workers. This bill would result in a change
in state taxes for the purpose of increasing state revenues within
the meaning of Section 3 of Article XIII A of the California
Constitution, and thus would require for passage the approval of 2/3
of the membership of each house of the Legislature.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Forested lands in California provide significant environmental
benefits, including serving as the source of more than half the
state's supply of drinking water, habitat for numerous wildlife and
plant species, some of which are rare, threatened, or endangered, the
source of raw materials for the timber products industry, and a
source of jobs for those who are employed in that industry.
(b) Regulation of timber harvesting practices, including timber
harvesting plans, nonindustrial timber management plans, exemptions,
and emergency notices has become increasingly complex and expensive,
even given the fact that some reviewing agencies review less than 20
percent of the proposed timber harvesting plans presented to them.
(c) The current budget crisis presents an opportunity to
reevaluate financing of the timber harvesting plan review process
that currently draws approximately twenty-one million dollars
($21,000,000) annually from the General Fund.
(d) It is appropriate to support the timber harvesting plan review
process through user fees.
(e) The economic pressures faced by the timber industry, caused by
globalization and imported timber products, is likely to mean a
protracted period of low prices that have already reduced the margin
of profitability of timber companies and the harvests of private
landowners in California.
(f) Under those conditions, it is inequitable to add twenty
million dollars ($20,000,000) or more in timber harvesting plan
review costs to applicants, many of whom are individual landowners.
If the approximately twenty million dollars ($20,000,000) were evenly
divided among the approximately 1,000 timber harvesting plans
applied for annually, the increase in review costs would be twenty
thousand dollars ($20,000) per timber harvesting plan application,
which is too onerous a burden.
(g) It is fair and equitable to require purchasers of timber
products to contribute to the public cost of reviewing timber
harvesting plan applications and further to contribute to the
watershed and habitat restoration that are vital public trust
resources that will also serve to rehabilitate California's
forestlands, as well as assist in the development of new and creative
techniques to protect those forestlands now and in the future.
(h) It is also fair and equitable that purchasers of timber
products be directly linked to the restoration of the stability of
the lives of workers and working families whose lives have been
disrupted by economic fluctuations within the timber products
industry. Restoring jobs, retraining workers, and providing new
opportunities for workers are legitimate objectives for the use of
funds obtained by a user fee on timber products. It is fair and
equitable that purchasers of timber products recognize that a small
fraction of their timber product purchases will contribute to the
stability of the timber products industry for the benefit of the
entire state.
(i) The Legislature has concluded that a user fee on timber
products is an equitable way to fund watershed and wildlife
restoration projects and economic development projects that are
closely associated with timber harvesting activities in California.
(j) As an alternative to a direct fee on landowners and industrial
timberland owners who apply for timber harvest plan permits, an
excise tax in the amount of one cent ($0.01) per board foot or
board foot equivalent on timber products could generate
sufficient funds to replace the general fund outlay for timber
harvest plan review, and generate additional funds to help restore
the forest practices industry in California, mitigate the effects of
historic logging practices on watersheds and wildlife, and protect
drinking water supplies for millions of Californians.
(k) Through cost-share programs, the user fee could fund projects
that do all of the following:
(1) Alleviate erosion and sedimentation problems caused by road
building activities on public and private timberlands, which is the
major source of impairment of rivers and streams in those areas and
the major reason virtually all of the rivers and streams on the North
Coast are listed as impaired pursuant to the Clean Water Act.
(2) Undertake the restoration of salmon and steelhead streams that
have been damaged by historical and present day logging activities.
(3) Develop enhanced protections for forested watersheds that
provide drinking water to millions of Californians.
(4) Assist in the retraining of workers displaced by the economic
transformations within the timber industry and the economic
development activities of rural communities that have been adversely
affected by environmental and economic activities of the timber
industry.
(l) Additionally, the user fee could do all of the following:
(1) Create financial incentives for landowners and timber
companies to harvest timber sustainably.
(2) Pay for conservation easements that would protect sensitive
watersheds, rivers, or streams.
(3) Help defray the costs to landowners of preparing programmatic
timber environmental reports that will ensure adoption of
environmentally sustainable logging activities.
(m) It is the intent of the Legislature that the fee-based funding
of the review of timber harvest plans and the administrative
processes associated with those reviews will result in improved
environmental protections and in administrative improvements that
will benefit permit applicants.
SEC. 2. Article 10 (commencing with Section 4629) is added to
Chapter 8 of Part 2 of Division 4 of the Public Resources Code, to
read:
Article 10. Timber Products User Forest Restoration Fund
4629. The following definitions apply to this article:
(a) "Board" means the State Board of Equalization.
(b) "Board foot" means the cubic volume of sawn lumber equal
to 144 cubic inches.
(c) "Board foot equivalent" means the calculated board foot volume
of wood fiber within various nonsawn wood products.
(1) For an engineered wood product, the board foot equivalent is
calculated based on the cubic volume of the product using its nominal
size calculated by multiplying its length, width, and thickness.
(2) For a nonsawn post, pile, pole, or other similar product, the
board foot equivalent is equal to the average cross-sectional area
times its length.
(3) For a nonuniform solid wood product, the board foot equivalent
is equal to the cubic volume calculated from the exterior dimensions
of a solid packed unit.
(d) "Consumer" means a person who purchases for consumption
timber products provided by a timber product supplier.
(c)
(e) "Consumption" means the purchase of a timber product by
an end user. An end user includes a person who purchases a timber
product for use in manufacturing, including the manufacturing of
prefabricated rafters, walls, cabinets, or furniture. The term does
not include the storage or use of timber products that will be resold
without incorporation into a manufactured product.
(d)
(f) "Department" means the Department of Forestry and Fire
Protection.
(e)
(g) "Director" means the Director of Forestry and Fire
Protection.
(f)
(h) "Engineered wood product" means a product, including, but not
limited to, veneer-based sheeting material, plywood, laminated veneer
lumber (LVL), parallel-laminated veneer (PLV), laminated beams,
I-joists, edge-glued material, or composite material, as cellulosic
fiberboard, hardboard, particleboard, waferboard, flakeboard,
oriented strandboard (OSB), or any other panel product where wood is
a component part.
(i) "Fee" means the timber products user forest restoration
fee.
(g)
(j) "Fund" means the Timber Products User Forest Restoration
Fund.
(h)
(k) "Nominal size" means the dimensions used within the
forest practices industry by which lumber volume is calculated and
sold and not necessarily the exact dimensions of a product.
(l) "Person" means an individual, firm, partnership, joint
venture, association, social club, cooperative organization,
fraternal organization, corporation, limited liability company,
limited liability partnership, estate, trust, business trust,
receiver, trustee, syndicate, this state, any county, city, city and
county, municipality, district, public agency, or subdivision of this
state, or any other group or combination acting as a unit.
(i) "Timber product" means a wood product, and all similar
products, described in subdivisions (a), (b), and (c) of Section
4629.3, unless specifically excluded from the application of the fee.
(j)
(m) "Timber product" means a product sold in California in which
wood or wood fiber is a principal component part, including, but not
limited to, a solid sawn board, an engineered wood product, or a
nonuniform solid wood product.
(n) "Timber product supplier" means a person that sells
timber products to consumers.
4629.1. The Timber Products User Forest Restoration Fund is
hereby established in the State Treasury. Moneys in the fund may be
appropriated only for the uses set forth in this article.
4629.2. The State Board of Equalization shall collect a user fee
on all the timber products described in Section 4629.3 that are sold
for consumption in California and deposit in the fund all fees that
are collected. The board shall administer the fee imposed pursuant to
this article in accordance with the Fee Collection Procedures Law
(Part 30 (commencing with Section 55001) of Division 2 of the Revenue
and Taxation Code).
4629.3. The fee is shall be imposed
on the consumer at the time of the purchase of a timber product for
consumption in this state. The fee shall be an excise tax in the
amount of one cent ($0.01) per board foot imposed on lumber
and related products listed in subdivisions (a), (b), and (c). A
user fee on of one cent ($0.01) per board foot or
board foot equivalent imposed on a timber product. A user fee on
composite products manufactured from various wood and nonwood
materials shall conform to the appropriate following subdivision that
most closely applies to the product that is sold:
(a) Solid wood products , including, but not limited
to, dimension lumber, posts and beams, boards, laminated beams, edge
glued materials, and timbers.
(b) Veneer-based and sheeting materials, including, but not
limited to, plywood, laminated veneer lumber (LVL),
parallel-laminated veneer (PLV), and composite materials such as
cellulosic fiberboard, hardboard, particleboard, waferboard,
flakeboard, oriented strandboard (OSB), and com-ply.
(c) Poles and pilings, including, but not limited to, posts and
similar products.
4629.4. (a) A timber product supplier shall collect the fee from
a consumer at the time it sells a timber product to the consumer.
The fee required to be collected by the timber product supplier shall
be added to and stated separately in its billing to the consumer.
The fee required to be collected by the timber product supplier, and
any amount unreturned to the consumer which is not a fee, but was
collected from the consumer as representing a fee, constitute debts
owed by the timber product supplier to the state.
(b) The timber product supplier shall collect the fee from a
consumer at the time of sale and may retain 3 percent of the fee as
reimbursement for any costs associated with the collection of the
fee. A timber product supplier shall remit the remainder to the
state on a quarterly schedule for deposit in the fund.
(c) A consumer in this state is liable for the fee until it has
been paid to the state, except that payment to a timber product
supplier that is registered with the board pursuant to Section 55021
of the Revenue and Taxation Code is sufficient to relieve the user
from further liability.
(d) The fee is due and payable to the board monthly on or before
the 25th day of the calendar month following the quarterly period for
which the fee is due. A feepayer pursuant to subdivision (b), on or
before the 25th day of the month following each quarterly period,
shall make out a return for the preceding quarterly period, in the
form prescribed by the board.
(e) All fees imposed shall be paid in the form of remittances
payable to the State Board of Equalization. The board shall transmit
the payment to the fund and reimburse its administrative costs for
collecting, auditing, and making refunds associated with the fund,
not to exceed 3 percent of the fund per fiscal year. The board
shall prescribe by regulation a method by which a timber product
supplier shall provide to a consumer the board foot content or the
board foot equivalent content for each timber product sold by that
timber product supplier.
4629.5. Money in the fund shall, when appropriated by the
Legislature, be spent solely for the following purposes:
(a) To pay for refunds pursuant to Part 30 (commencing with
Section 55001) of Division 2 of the Revenue and Taxation Code.
(b) To assume, in its entirety, the existing General Fund
appropriations as they existed on December 31, 2002, for the
administration and review of all operations directly connected with
the review of timber harvest plans of all departments, boards, and
commissions that review timber harvesting undertaken pursuant to this
chapter, or pursuant to any regulations of the department or the
State Board of Forestry and Fire Protection. The reviewing boards,
commissions, and departments are the department, the Department of
Fish and Game, the Department of Conservation, the California Coastal
Commission, and the regional water quality control boards. This act
may not affect the personnel practices of, the status of any
employees of, or the compensation or benefits of any current or
future employees of, any reviewing board, commission, or department.
(c) To provide increases above the former General Fund
appropriations for the maintenance of existing operations of the
reviewing agencies described in subdivision (b), and to provide
increases that result in programmatic improvements to the operations
of the reviewing agencies, or for any other appropriate increases.
The reviewing agencies, after receiving approval pursuant to their
internal procedures, shall apply for increases above the baseline
established in subdivision (b) in a coordinated fashion coincident
with the annual budget process.
(d) To provide necessary additional support to the reviewing
agencies described in subdivision (b), in order to comply with
changes in statutory law passed by the Legislature and approved by
the Governor or to comply with regulations that are adopted by any of
the reviewing agencies.
(e) To create opportunities for cross-training among reviewing
agencies described in subdivision (b), in order to educate these
agencies about the responsibilities, perspectives, and analytical
issues faced by the other reviewing agencies.
(f) In conjunction with other appropriate state agencies, to
establish a worker retraining program and develop other economic
opportunities for timber workers who have been displaced by changes
in the industry, including downsizing, consolidation, and the closing
of mills in California.
(g) At the request of the State Board of Forestry and Fire
Protection, to hire professional policy staff for the State Board of
Forestry and Fire Protection.
(h) To undertake a public education effort with forestland owners
that recommends future timber harvests be conducted pursuant to a
programmatic timber environmental impact report (PTEIR) or pursuant
to the sustainability standards of the Forest Stewardship Council or
another certification organization as described in paragraph (5) of
subdivision (J), and providing an incentive of half the cost of a
PTEIR for landowners who voluntarily agree to develop a PTEIR on or
before January 1, 2005. The Secretary of the Resources Agency shall
first certify that the regulations establishing the PTEIR process
meet the requirements for a certified regulatory program under
Section 21080.5. In the event that certification does not occur
during the 2004 calendar year, the incentive to landowners shall be
extended one day for every day after January 1, 2005, until the
certification is completed and any necessary changes, if any, to the
PTEIR process that are recommended by the Secretary of the Resources
Agency are implemented.
(i)
(h) To study other efforts to reduce regulatory costs to the
state and to forested landowners that are consistent with the
principles of the Forest Stewardship Council.
(j)
(i) To create within the department, a cost share program
with a minimum contribution of matching funds of 20 percent from any
project that is funded. Eligible applicants for funds include state
departments, boards and commissions, local governments and special
districts, and nonprofit organizations. Landowners and other private
entities are also eligible to apply. All applicants shall
demonstrate the capability to design, implement, and monitor the
projects funded pursuant to this section and to provide an accounting
for all funds received pursuant to this section. The matching fund
requirement does not apply to state departments, boards and
commissions, or local governments and special districts. The
director may waive the matching fund requirement to accommodate
applicants facing demonstrated economic hardship. Funds may not be
used to implement any mitigation project required by the forest
practices laws or regulations in effect on January 1, 2004. By rule
and regulation, the department may determine the minimum contribution
for all eligible projects. Eligible projects include all of the
following:
(1) Decommissioning roads on timberlands, so that the risk of
sedimentation into rivers and streams is minimized and protections to
wildlife and watersheds are enhanced.
(2) Maintaining roads through timberlands, including those owned
by public agencies, so that the risk of sedimentation into rivers and
streams is minimized and protections to wildlife and watersheds are
enhanced.
(3) Restoring wildlife habitat and providing watershed restoration
grants that protect water supplies, endangered and threatened
species, or other environmental benefits that are in compliance with
the state endangered species act and the California Environmental
Quality Act, if appropriate. Funds associated with the department's
recommendations to restore wildlife habitat shall be reallocated to
existing programs within the Department of Fish and Game. Funds
associated with watershed restoration shall be reallocated to
existing programs within the State Water Resources Control Board.
(4) Expanding timber harvesting plan reviews by the reviewing
agencies described in subdivision (b) and increasing inspections of
ongoing timber harvesting plans to ensure compliance.
(5) Purchasing fee title, conservation easements, or other
interests in land from willing sellers who agree, if less than fee
title is purchased, that future timber harvest and forest management
activities will be conducted in a sustainable manner as certified
under the principles of the Forest Stewardship Council or another
certification organization that considers the same parameters
assessed by the Forest Stewardship Council and that the Secretary of
the Resources Agency finds is equivalent to the Forest Stewardship
Council guidelines in effect on January 1, 2004. The purchase of
conservation easements or fee title from willing sellers shall
initially prioritize lands near watercourses in order to minimize the
future risk of sedimentation into rivers and streams or to restore
endangered species, especially salmon and steelhead. Any purchase of
fee title to lands shall also include sufficient funds to manage
that land. Any purchase of conservation easements shall also include
sufficient funds to enforce the easements. The department shall
allocate funds for the purchase of fee title or conservation
easements to the Wildlife Conservation Board and the Coastal
Conservancy.
(6) Assuming the funding for all aspects of the following programs
as they are implemented on timberland by the departments currently
responsible for their implementation:
(A) California Forest Legacy Program (Division 10.5 (commencing
with Section 12200)).
(B) California Forestry Incentive Program.
(C) Salmon and Steelhead Trout Conservation and Restoration
Program administered by the Department of Fish and Game pursuant to
Section 6217.1.
The department may also apply to obtain funding to administer the
timberland and oak woodlands conversion program.
(7) Funding for fuel reduction efforts assigned by the director to
the California Conservation Corps, private contractors, or to the
conservation camps of the Department of Corrections. Priority for
fuel reduction projects shall be given to the urban-wildland
interface areas.
(8) Funding for a point-of-sale public education campaign at
timber product retail facilities that explains the variety of
forestry management, watershed, and habitat restoration uses for
which the restoration funds may be spent.
4629.6. After all appropriate expenditures under Section 4629.5
have been appropriated, any moneys remaining in the fund may be used
for any project eligible under subdivision (j) of Section 4629.5.
The director may waive the requirement of cost-share funds contained
in subdivision (j) of Section 4629.5 for projects of extraordinary
importance that are consistent with the purposes of this chapter or
where the applicant shows significant economic hardship. Any
remaining moneys may also be used for projects that fund public
education activities, including, but not limited to, grants for
natural resource education, natural resource research, watershed
studies, botanical studies, and wildlife surveys. The department, in
conjunction with the Secretary of the Resources Agency, shall
develop protocols for eligible projects and applications for these
funds on or before January 1, 2005, and the fund shall reimburse the
agency and department costs for developing the protocols.
Notwithstanding any other provision of
4629.6. Notwithstanding any other provision of law, the
department, in consultation with the Department of Fish and Game, the
State Water Resources Control Board, and any other state department,
county, special district, or nonprofit organization with a
demonstrated interest in forestry policy that requests to
participate, shall develop a draft expenditure plan for the fund that
prioritizes its recommendations for a five-year period. On or
before January 1, 2005, and every two years thereafter, the
department shall report to the Legislature on its plan.
4629.7. (a) The fund shall reimburse the necessary and reasonable
travel costs and provide a per diem to the department and the State
Board of Forestry and Fire Protection to create a broad-based
stakeholder group that shall do all of the following:
(1) Explore the suitable reuse and conversion of closed mills and
other timber industry facilities in California to productive uses.
(2) Recommend ways to develop new milling and processing capacity
in California that may be chain-of-command certified under the
principles and criteria of the Forest Stewardship Council or another
certification organization, as defined in paragraph (5) of
subdivision (j) of Section 4629.5.
(3) Make recommendations that will develop and maintain more
"value-added" timber processing and manufacturing facilities in
California to benefit the economic status of rural communities and
workers.
(4) Report on the social, economic, or resources-based trends and
activities that affect the sustainability of the forest practices
industry and its dependent communities.
(b) The stakeholder group shall elect its own chair and shall be
comprised of no more than 18 individuals consisting of
representatives from the timber industry, including labor
organizations that have collective bargaining agreements with the
timber industry, an equal number of landowners and an equal
number of or representatives of landowners, an
equal number of elected officials from city and county governments
containing timberland, and an equal number of representatives
from conservation groups with an expertise in statewide or
regional forestry policies. All relevant state and federal agencies
shall be invited to participate in this stakeholder process as ex
officio participants. The members shall be appointed jointly by the
State Board of Forestry and Fire Protection and the director.
(c) Notwithstanding any other provision of law, the initial
report of the stakeholder group shall be submitted to the Senate
Committee on Rules and the Speaker of the Assembly on January 1,
2005. A followup report shall be submitted two years later, at which
point the stakeholder group shall cease to exist unless it is
reauthorized by the Legislature.
4629.8. Notwithstanding any other provision of law, on or before
January 1, 2005, and on or before January 1 every two years
thereafter, the department shall file a report with the Legislature
that documents all the receipts and expenditures associated with the
fund and includes any recommendations pertaining to the expenditures
of the fund.