State lawmakers tie new tax to repeal of fire fee

By Karen Brainard

California legislators opposing the state’s $150 fire prevention fee for rural homeowners received a compromise offer on Friday: support a corporate tax bill and the fire fee will be repealed.

Senate Bill 1040, the bill that offers this compromise, came just a week before the legislative session adjourns and on the last day to amend bills. It came attached to Assembly Bill 1500, authored by Assembly Speaker John A. Pérez who needs two Republicans in the Senate to vote with the Democrats to pass his bill.

For SB 1040 to go forward, it will have to pass the assembly and the senate by midnight on Friday, Aug. 31.

State Sen. Joel Anderson of the 36th District that includes Ramona has been against the fire prevention fee from the beginning, but said he will not vote for SB 1040.

“The fire tax is bad public policy and should be repealed or overturned,” he stated in an email.

“However, tying two unrelated measures (SB 1040 and AB 1500) together to pressure for votes is best described as extortion.”

Assemblyman Brian Jones of the 77th District supports a repeal of the fire tax but will not support SB 1040 as long as it is double-joined with AB 1500 or tied to the single-sales factor, said his chief of staff, Laurie Paredes. AB 1500 proposes that out-of-state corporations would only be able to base taxes on sales in California — the single-sales factor — instead of choosing between two tax formulas as currently allowed.

Perez’s goal of AB 1500 is to generate $1 billion in tax revenues from out-of-state corporations to fund middle class scholarships, according to his website. If SB 1040 is approved, about $90 million of those tax revenues would reportedly replace the losses from the fire fee repeal.

The fire fee was signed into law in July 2011 and imposes a $150 per habitable structure fee on properties in rural areas known as state responsibility areas (SRAs). Homeowners in SRAs who also pay a fire protection district will receive a $35 discount. For fiscal year 2011-12, the fee was estimated to bring in $84.4 million for CalFire, with that money only to be used for fire prevention, as stated in the law.

The Howard Jarvis Taxpayers Association stated its opposition to SB 1040 and contends the fire fee is a tax that was imposed without a two-thirds vote and is therefore unconstitutional and violates Proposition 13. The Howard Jarvis Taxpayers Association is preparing to litigate on behalf of affected homeowners.

The County of San Diego has also threatened to sue the state.

Meanwhile, the California Board of Equalization began sending out fire fee bills this month, mailing them in groups, alphabetically by county. According to the board of equalization, it has identified 825,488 fee payers in the state with 100,814 of those in San Diego County.