BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 1413 HEARING: 4/24/14
AUTHOR: Wyland FISCAL: Yes
VERSION: 4/10/14 TAX LEVY: No
CONSULTANT: Grinnell
STATE RESPONSIBILITY AREAS: FIRE PREVENTION FEES
Extends from 30 to 60 days the period of time owners of
structures have to pay or request redetermination of the
fire prevention fee.
Background and Existing Law
The California Department of Forestry and Fire Protection
(CALFIRE) provides wildland fire protection on non-federal
lands outside cities. To meet this duty, the State Board
of Forestry and Fire Protection designates the State
Responsibility Area (SRA) every five years. In 2010, the
Legislature imposed the fire prevention fee on owners of
structures in state responsibility areas to pay for the
state's costs of protecting SRAs against fires, and
directed the State Board of Equalization (BOE) to collect
it in accordance with the state's Fee Collection Procedures
Law (ABx1 29, Blumenfield). The fee totals $152.33 per
structure in 2014, and is due and payable 30 days from the
date of assessment from BOE. A 20% penalty applies for
each 30 days that pass without payment.
While BOE collects the fee, CALFIRE determines who must pay
the fee, and the fee amount. BOE can neither redetermine
the fee, nor accept a claim for refund unless the
determination has been set aside by CALFIRE, or a court
reviews CALFIRE's determination. Currently, owners of
structures in SRAs can petition for redetermination within
30 days after service of notice of determination; after
that, the amount becomes final. If the owner petitions for
redetermination within the 30 day period, CALFIRE must make
a determination in writing, and can eliminate the fee if
finds the fee doesn't apply.
Proposed Law
SB 1413 (Wyland) - 4/10/14 -- Page 2
Senate Bill 1413 extends the time period that property
owners have to pay the fire prevention fee from 30 to 60
days. The measure also extends the time period for
property owners to request redetermination from CALFIRE
from 30 to 60 days, and makes a conforming change.
State Revenue Impact
According to BOE, SB 1413 results in revenue losses of
$460,827 annually from lower interest charges resulting
from the longer repayment period.
Comments
1. Purpose of the bill . According to the author, "More
than 800,000 rural Californians receive a yearly Fire
Prevention Fee bill, due 30 days from the date on the
notice. However, taxpayers often do not receive their bills
in a timely manner. Many of these individuals are also on
fixed incomes, making it nearly impossible for them to pay
their Fire Prevention Fee by the 30-day deadline. SB 1413
will increase compliance with the law by giving all owners
of habitable structures in an SRA more time to pay and, if
need be, dispute their bill. It will also give those
taxpayers on fixed incomes more time to adjust their
budgets."
2. Timing is everything . Generally, taxpayers have 30
days to pay or petition for determination to BOE under its
more than 30 tax and fee programs. As such, SB 1413 would
create a precedent for BOE-administered programs, albeit
one that conforms with deadlines to respond to Franchise
Tax Board Notices of Proposed Assessment, and reflects the
difficulty BOE has had contacting rural landowners as part
of the SRA fee collection process. For the first two
years the fee's been in place, about 68% of owners of
structures are paying on time, and 13-15% aren't paying at
all. Compliance has shown some improvement, as those
paying after the 30 day deadline, but before 60 days
declined from 10.6% in the first year to 6% this year;
that's the population would benefit from the bill's
extended deadline, as interest would no longer accrue for
that month should the measure be enacted.
SB 1413 (Wyland) - 4/10/14 -- Page 3
3. You say goodbye, I say hello . The SRA Fee has been
controversial since enactment, with several legislative
efforts to repeal, reduce, or modify the fee stalling in
committee for policy reasons. The Howard Jarvis Taxpayers'
Association filed a lawsuit in 2012 challenging that the
fee is indeed a tax, and is invalid because the Legislature
approved ABx1 29 by majority vote, not 2/3 vote as required
by Section 3 of Article XIIIA of the California
Constitution. Courts have not yet make a ruling on the
lawsuit.
Support and Opposition (04/21/14)
Support : California Taxpayers Association; Howard Jarvis
Taxpayers Association.
Opposition : None received.