BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 557|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 445-6614 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 557
Author: Kuehl (D)
Amended: 1/7/04
Vote: 21
SENATE NATURAL RES. & WILD. COMMITTEE : 5-3, 4/22/03
AYES: Kuehl, Alpert, Ortiz, Sher, Torlakson
NOES: Oller, Denham, Hollingsworth
SUBJECT : Timber products user fee
SOURCE : Author
DIGEST : This bill states legislative intent to establish
a timber products use fee for timber restoration and fire
risk reduction and to fund the review of timber harvesting
plan applications, the removal of dead and diseased trees
in southern California, and the Forest Resources
Improvement Fund.
This bill requires the Legislative Analyst's Office to
report on and recommend to the Legislature options to
collect, at the point of purchase, a timber user fee
imposed on consumers of sawn lumber and unsawn wood
products.
ANALYSIS : 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
CONTINUED
SB 557
Page
2
Fund for the costs of operation of state forests
administered by the Director of Forestry and Fire
Protection.
This bill:
1. Contains findings that (a) delineate the economic and
environmental importance of forest stewardship, discuss
the high costs associated with Timber Harvest Plan (THP)
review, and conclude that a user fee on timber products
is an equitable way to fund forest management, and (b) 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 in southern California, and fund
the Forest Resources Improvement Fund. These funds might
also be used 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.
2. Requires the Legislative Analyst's Office to report on
and recommend to the Legislature one or more options to
collect, at the point of purchase, a timber products
user fee imposed on consumers of sawn lumber and unsawn
wood products and to be collected and administered by
the State Board of Equalization.
3. Specifies the intent of the Legislature that the timber
products user fee shall be deposited in a special fund
and shall be appropriated only for the following
purposes:
A. To fund the complete administrative review of
timber harvesting plans and other harvesting
procedures by the appropriate departments within the
Resources Agency and the appropriate regional water
board.
B. To reduce the risk of catastrophic wildfire in
southern California by measures that include, but are
SB 557
Page
3
not limited to, the removal and disposition of dead,
diseased, or hazardous trees in high- or very high
fire severity zones in the Counties of Los Angeles,
Orange, Riverside, San Bernardino, San Diego, or
Ventura.
C. Expenditures authorized by the Forest Resources
Improvement Fund as set forth in Section 4799.13 of
the Public Resources Code.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 1/14/04) (Support as reflected on
previous version.)
Californians Against Waste
Defenders of Wildlife
Forest Landowners of California
Harwood Products
Planning and Conservation League
OPPOSITION : (Verified 1/14/04) (Opposition as reflected
on previous version unless otherwise noted.)
American Forest and Paper Association (1/21/04)
California Alliance For Consumer Protection
California Building Industry Association (1/21/04)
California Business Properties Association (1/21/04)
California Chamber of Commerce (1/21/04)
California Forestry Association
California Manufacturing and Technology Association
(1/21/04)
California Retailers Association (1/21/04)
California Taxpayers' Association (1/21/04)
Champion Lumber
Crenshaw Lumber Company
Economy Lumber
Lumber Association of California and Nevada (1/21/04)
Mead Clark Lumber Company, Inc.
Pacific Do-At-Home Center
Pacific Wood Pacific Preserving Companies
Reliable Wholesale Lumber, Inc.
The Terry Companies
SB 557
Page
4
Visalia Lumber Co.
Western Wood Preservatives Institute (1/21/04)
ARGUMENTS IN SUPPORT : According to the author's office,
this bill calls upon the Legislative Analyst to study
whether a fee should be imposed on purchasers of timber
products in order to fund three things: (1) the removal of
dead trees in Southern California that are dying because of
a bark beetle infestation, (2) the review of timber harvest
plans by agencies, and (3) the Forest Resources Improvement
Fund at the Department of Forestry that funds a number of
projects including urban forestry, the state's research
forests, and fish and wildlife habitat improvements
undertaken by private landowners. The author's office
points out that, except for the removal of dead trees in
southern California, which is an attempt to avert crisis,
the funds would be spent on existing programs.
The author's office states that the removal of dead trees
in Southern California is particularly important in light
of last season's wildfires. Those fires were mainly in the
chaparral areas and did not involve many of the dead trees
in nearby areas to where last year's fires burned. In
fact, 90 percent of the dead trees were not burned, and
southern California faces a very severe fire threat in the
next several years until these trees are removed.
The author's office also states that the penny per board
foot fee has been removed from this bill in order to
continue bipartisan negotiations. The author's office has
committed that if an acceptable arrangement is worked out
with the administration, all relevant policy committees
will have an opportunity to hear and review this bill if it
comes back from the Assembly.
ARGUMENTS IN OPPOSITION : According to the Lumber
Association of California and Nevada,
"Such a tax would be devastating to lumber dealers in
California. They would be forced to compete with
out-of-state dealers and mills that ship directly to a
jobsite in California. The out-of-state competition would
enjoy a significant advantage in both not having to collect
the tax and not having to account for it and remit it to
SB 557
Page
5
the State.
"While a tax such as a penny per board foot, as proposed in
the previous version of the bill, seems like a small
amount, it would add significantly to the cost of new
housing. Any new tax on timber products will have a
negative impact on providing affordable housing.
"SB 557 states the intent of the Legislature to fund new
programs with the revenue generated by this new tax. With
government having to cut back drastically because of
California's financial situation, this is not the time to
be creating new programs."
CP:nl 1/21/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****