BILL NUMBER: SB 557 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 28, 2004
AMENDED IN ASSEMBLY JUNE 30, 2004
AMENDED IN ASSEMBLY JUNE 23, 2004
AMENDED IN ASSEMBLY JUNE 15, 2004
AMENDED IN SENATE JANUARY 7, 2004
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, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 557, as amended, Kuehl. Forest practices: timber products
excise tax.
Existing law provides for the regulation of forest practices.
Under existing law, money in the Forest Resources Improvement Fund
may be expended, upon appropriation by the Legislature, for specified
purposes relating to forest resources and to reimburse the General
Fund for the costs of operation of state forests administered by the
Director of Forestry and Fire Protection.
This bill would impose on and after July 1, 2005, an
excise tax on a distributor, as defined, of a timber product, as
defined, in the amount of 2 cents 1 cent
per board foot or board foot equivalent. The bill would create
the Timber Harvest Review, Fire Protection, and Forest Restoration
Account in the General Fund. The moneys in the fund would be
required to be spent, upon appropriation by Legislature, to pay for
the costs of administering and collecting the tax; to administer and
review operations directly connected with the review of timber
harvesting plans; for transfer to the Forest Resources Improvement
Fund; and to provide grants to local agencies and voluntary
associations to undertake hazardous fuel reduction projects on forest
lands to reduce the costs of wildland fire suppression, improve
forest health, and protect homes and communities. The bill would
require the hazardous fuel reduction funds to be appropriated to the
Department of Forestry and Fire Protection to operate a grant program
to fund hazardous fuel reduction projects that meet specified
requirements.
The bill would appropriate an unspecified sum from the Timber
Harvest Review, Fire Protection, and Forest Restoration Account to
the State Board of Equalization to implement the bill in the 2004-05
fiscal year.
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: yes. 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 that the public through the most broadly
based system that is practicable, support the timber harvesting plan
review process, contribute to the existing Forest Resources
Improvement Fund at the Department of Forestry and Fire Protection
that enhances the timberland environment, protects wildlife habitat
and provides incentives for timberland owners to improve their
environmental performance in harvesting timber, and help fund the
reduction of wildland fires in California that threatens the economic
base of the timber industry as well as numerous rural communities.
(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 also inequitable to impose an increase in the yield tax
on timber producers that is not broadly based and that will further
add to costs of production in California that could potentially make
the price of California timber products less competitive in the
global marketplace.
(h) 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 forest
lands, as well as assist in the development of new and creative
techniques to protect those forest lands now and in the future.
(i) The Legislature has concluded that broadly based public
financial support for the review of timber harvest plan applications,
support of the Forest Resources Improvement Fund, and fuel reduction
efforts to protect timberlands and communities is a fair and
equitable approach given the state's budget crisis and given that
this approach will result in significant savings to the General Fund.
(j) As an alternative to a direct fee or tax on landowners and
industrial timberland owners who apply for timber harvest plan
permits, a timber products user fee for timber restoration and fire
risk reduction could generate sufficient funds to adequately review
timber harvesting plan applications, fund the removal of dead and
diseased trees that pose significant fire risks to California
timberlands, and fund the Forest Resources Improvement Fund.
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 Harvest Review, Fire Protection, and Forest
Restoration Account
4629. Unless the context requires otherwise, the following
definitions apply to this article:
(a) "Account" means the Timber Harvest Review, Fire Protection,
and Forest Restoration Account.
(b) "Board" means the State Board of Equalization.
(c) "Board foot" means the cubic volume of sawn lumber equal to
144 cubic inches. For purposes of calculating the tax pursuant to
this article, nominal size dimensions shall be used to calculate the
board foot volume.
(d) "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.
(e) "Distributor" means a person who acquires title to and
possession of a timber product for the purpose of selling that
product in a transaction that is a retail sale pursuant to Chapter 1
(commencing with Section 6001) of Part 1 of Division 2 of the Revenue
and Taxation Code.
(f) "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.
(g) "Nominal size" means the dimensions used within the forest
industry by which lumber volume is calculated and sold and not
necessarily the exact dimensions of a product.
(h) "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) "Principal component part" means ____
33.3 percentage of total content by ____
volume .
(j) "Purchaser" means a person who acquires title to and
possession of a timber product for storage, use, or other consumption
under either of the following circumstances:
(1) In a transaction that is subject to use tax pursuant to
Chapter 3 (commencing with Section 6201) of Part 1 of Division 2 of
the Revenue and Taxation Code.
(2) For the purpose of incorporating the timber product into a
manufactured article that is excluded from the definition of a timber
product.
(k) "Timber product" means a product 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. The term "timber product" does not include a product sold
at wholesale or at retail that requires no further manufacturing.
(l) "Timber product tax" or "tax" means an excise tax on timber
products calculated at the rate of two cents ($0.02)
one cent ($0.01) per board foot or board foot
equivalent.
4629.1. The Timber Harvest Review, Fire Protection, and Forest
Restoration Account is hereby established in the General Fund.
Moneys in the account may be appropriated only for the uses set forth
in this article.
4629.2. On and after July 1, 2005, the timber product tax shall
be imposed:
(a) On a distributor at the time the distributor acquires title to
and possession of a timber product.
(b) On a purchaser at the time the purchaser acquires title to and
possession of a timber product.
4629.3. The board shall collect and administer the timber product
tax in accordance with the Fee Collection Procedures Law Part 30
(commencing with Section 55001) of Division 2 of the Revenue and
Taxation Code).
4629.4. (a) The following persons who have paid the tax imposed
pursuant to Section 4629.2 directly to the board, shall be refunded
those amounts:
(1) A distributor of a timber product that ultimately sells the
timber product at a sale other than retail.
(2) A purchaser of a timber product to which the exclusion
provided in Section 6009.1 of the Revenue and Taxation Code applies.
(b) In lieu of collection and refund of the tax on the timber
products acquired by the taxpayer in the manner as would entitle the
taxpayer to claim a refund under this article, credit may be given to
the taxpayer upon the taxpayer's tax return, and the determination
of the amount of the tax shall be in accordance with rules and
regulations that the board may prescribe.
4629.5. (a) The tax imposed pursuant to Section 4629.2 is due and
payable to the board quarterly on or before the 25th day of the
calendar month following the quarterly period for which the tax is
due. A taxpayer, 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.
(b) All taxes imposed shall be paid in the form of remittances
payable to the State Board of Equalization. The board shall transmit
the payments to the Treasurer for deposit in the Timber Harvest
Review, Fire Protection, and Forest Restoration Account.
4629.6. Money in the account shall, when appropriated by the
Legislature, be spent solely for the following purposes:
(a) To pay for board administrative costs for administering,
collecting, auditing, and making refunds associated with the
administration of the tax program.
(b) To pay for refunds pursuant to Part 30 (commencing with
Section 55001) of Division 2 of the Revenue and Taxation Code.
(c) (1) To administer and review operations directly connected
with the review of timber harvesting plans of a department, board, or
commission that reviews timber harvesting undertaken pursuant to
this chapter, or pursuant to any regulation of the department or the
State Board of Forestry and Fire Protection.
(2) For purposes of this paragraph, a reviewing department, board,
or commission means the Department of Forestry and Fire Protection,
the Department of Fish and Game, the Department of Conservation, and
certain California regional water quality control boards.
(d) For transfer to the Forest Resources Improvement Fund within
the Department of Forestry and Fire Protection.
(e) To provide grants to local agencies responsible for fire
protection and to voluntary associations, including fire safe
councils, to undertake hazardous fuel reduction projects on forest
lands to reduce the costs of wildland fire suppression, improve
forest health, and protect homes and communities.
(1) The Legislature shall appropriate the funds specified in this
subdivision to the Department of Forestry and Fire Protection to
operate a grant program to fund hazardous fuel reduction projects and
may reserve no more than 4 percent of the total appropriation for
its administrative costs.
(2) The department shall ensure that all grants made pursuant to
this subdivision fund only hazardous fuel reduction projects and
shall give first priority, in issuing these grants, to projects in
the urban-wildland interface that will help implement the California
Fire Plan.
(3) A hazardous fuel reduction project funded pursuant to this
subdivision shall meet all of the following requirements:
(A) The project shall result in the application of management
practices to wildlands in which the primary impact to the vegetation
is the reduction of surface and ladder fuels.
(B) The management practices that are applied by the project shall
include, but are not limited to, prescribed fire, machine or hand
piling for burning, pruning and thinning.
(C) The tree removal shall be by the method known as thinning from
below, and shall be limited to trees that are 16 inches or less in
diameter at breast height.
(D) The treatments that reduce crown densities on timberlands
shall be included only for the purpose of affecting fire behavior,
and where it is reasonably demonstrated that the likelihood of crown
fire is reduced.
(E) A registered professional forester with the department or on
behalf of a private landowner shall do both of the following:
(i) Certify that the fuel reduction objectives were achieved for
removal of surface fuels, brush, and ladder fuels and were
accomplished by means that are consistent with this subdivision.
(ii) Certify that 80 percent or more of the treated landscape will
have a posttreatment fuel load that will result in a flamelength of
4 feet or less and a minimum of 8 feet separation from the ground to
the crown of live trees.
4629.7. (a) Notwithstanding any other provision of law, the
revenues in any fiscal year may be accounted for on an accrued basis.
The department may borrow against anticipated revenues to the
Timber Harvest Review, Fire Protection, and Forest Restoration
Account to meet cashflow needs.
(b) Notwithstanding any other provision of law, a loan obtained
pursuant to subdivision (a) shall be interest free. The department
shall repay the loan in a timely manner from revenues received into
the account.
4629.8. To implement this article in the 2004-05 fiscal year,
____ dollars ($____) is hereby appropriated from the Timber Harvest
Review, Fire Protection, and Forest Restoration Account to the State
Board of Equalization.