SB 147 Senate Bill - Bill Analysis

BILL ANALYSIS �

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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
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BILL NO: SB 147 HEARING DATE: January 14,
2014
AUTHOR: Gaines URGENCY: Yes
VERSION: January 31, 2013 CONSULTANT: Bill Craven
DUAL REFERRAL: Rules FISCAL: Yes
SUBJECT: State responsibility areas: fire prevention fees.

BACKGROUND AND EXISTING LAW
1. In 2011, AB X1 29 directed the California Board of Forestry
and Fire Protection (Board) to assess a fee on structures in
state responsibility areas (SRA) for the purpose of helping
defray the enhanced costs of fire suppression in wildland and
watershed areas that, over the years, became increasingly
populated and developed. From 2000-2010, for example, the number
of houses in SRA grew by 16% according to census numbers.

AB X1 29 directs that the fire prevention fees must be deposited
in the SRA Fire Prevention Fund (Fund), which is available to
the Board and the California Department of Forestry (CDF) to
expend for fire prevention activities that benefit the owners of
structures within the SRAs who are required to pay the fire
prevention fee. These fire prevention activities are limited to
the following: (a) local assistance grants established by the
Board; (b) grants to Fire Safe Councils, the California
Conservation Corps, or certified local conservation corps for
fire prevention projects and activities in the SRAs; (c) grants
to a qualified nonprofit organization with a demonstrated
ability to satisfactorily plan, implement, and complete a fire
prevention project applicable to the SRAs; (d) inspections by
the department for compliance with defensible space requirements
around structures in the SRAs; (e) public education to reduce
fire risk in the SRAs; (f) fire severity and fire hazard mapping
by the Department in the SRAs; and (g) other fire prevention
projects in the SRAs that are authorized by the Board. The
amount expended to benefit the owners of structures within an
SRA shall be commensurate with the amount collected from the
owners within that SRA. These activities are funded by the SRA
1

fire fee according to the 2013 Budget Act and budget projections
for the next several fiscal years.

2. State responsibility areas are those areas of the state
designated by the Board where the State of California is
financially responsible for the prevention and suppression of
wildfires. Structural fire suppression has become an issue as
California's population has increased and local governments
permitted development in lands that were historically
undeveloped and were watershed or forestlands. Traditionally,
structural fire suppression is supposedly handled by local
agencies or through local reimbursements or contracts with CDF
for its costs associated with structural fire suppression. SRA
does not include lands within city boundaries or in federal
ownership. The Board has on its website a "viewer" that can
identify whether a parcel is or is not within a state
responsibility area. There are numerous agreements and
contractual arrangements that exist among fire agencies across
the state.

3. In a rulemaking procedure, the Board established an annual
rate of $150 per habitable structure, which is defined as a
building that can be occupied for residential use. Owners of
habitable structures who are also within the boundaries of a
local fire protection agency will receive a reduction of $35 per
habitable structure. The fee will be paid by approximately
800,000 landowners who own structures in state responsibility
areas.

4. An appeals process has been established for landowners who
wish to contest the fee. About 87,000 appeals have been filed.

5. The Howard Jarvis Taxpayer Organization has filed suit
against the state alleging that the fire prevention fee is a
tax, not a fee.

PROPOSED LAW
This bill would exempt from the SRA fee those structures on
parcels owned by property owners who have an income of less than
200 percent of the federal poverty level as determined by the
U.S. Department of Health and Human Services Poverty Guidelines.

ARGUMENTS IN SUPPORT
El Dorado County supports the bill noting that there are 12,000
families earning less than 200% of the federal poverty level and
2

that a financial burden would be removed from whatever portion
of these families own structures in SRA.

Former Senator George Runner, now an elected member of the Board
of Equalization, supports the bill as a way to ensure that
low-income Californians are not forced to pay a tax, as he
frames it, that they cannot afford.

The County of Nevada considers the fee a tax that, regardless of
who wins the lawsuit about whether the fee is a tax or a fee,
should be reduced on the poor. Sacramento County supports the
bill but does raise the issue of whether the fee is a tax or a
fee.

ARGUMENTS IN OPPOSITION
None received

COMMENTS
1. The U.S. Department of Health and Human Services poverty
guideline figures for 2012 establish that for one individual in
the lower 48 states, the poverty level is $11,170. Doubling that
figure would result in an income level for the purposes of this
bill of $22,340.

These minimum incomes increase based on family size. For
example, corresponding numbers for a family of four are $23,050
and $46,100 if one doubles the amount to achieve the 200% of
poverty level suggested by the SB 147.

2. El Dorado County acknowledges that the 12,000 families in
that county whose incomes are at or below 200% of the federal
poverty level may not own parcels that are subject to the fee or
may not live in SRA at all. The county also does not indicate
the family size of these 12,000 families.

3. While in no way discounting the issues of rural poverty in
California, the author and supporters have not provided adequate
information or data on how the bill would be implemented. One
cannot reasonably assess the number of properties covered by the
bill, the size of those families, determine how CDF would
identify each year the families whose income qualifies them for
the exemption, or determine the cost of administering the bill.
While there are census estimates of the total population in
California that is at or below federal poverty levels, those
statistics do not distinguish between property owners, renters,
or whether any of those residences are or are not in SRA.

In its current form, the department would face an additional
administrative hurdle to identify property owners whose income
makes them eligible for the proposed exemption. Presumably there
is movement in or out of poverty status on an ongoing basis.
Would tax returns be sent to the CDF on an annual basis?

To accommodate those who can't pay this fee in one payment, the
Board of Equalization allows land owners to make small monthly
payments for this fee. Because many homes in SRA also have some
sort of local fire agency coverage, most property owners are
being billed $115 per year and not $150.

4. The committee may choose to consider this bill premature
until the lawsuit brought by Howard Jarvis Association is
determined. That lawsuit contends that the fee is an illegal
tax.

5. Although more likely to be considered in Appropriations, the
Committee may also wonder whether as a fiscal matter the loss of
these fee revenues would likely be backfilled by restoring
revenues from the state general fund.

6. In 2013, three bills that would repeal the SRA fee failed
passage. They were AB 124 (Morrell) and AB 23 (Donnelly) and SB
17 (Gaines).

Related legislation (SB 125) by Senator Gaines would have
repealed the SRA fee on parcels also covered by local fire
agencies. That legislation also failed.

7. The most recent legislation on this topic by Senator Gaines
is SB 832 introduced last week. It would exempt from the SRA fee
property owners whose homes in SRA were destroyed by a wildfire.

SUPPORT
County of Sacramento
County of El Dorado
County of Nevada
George Runner
Central Coast Forest Association

OPPOSITION
None Received