CA fire fees to be challenged as illegal tax

Aug 24, 2012

Even as wildfires rage in California, the newly-implemented fire fee is igniting tempers and legal action.

The first of many bills for the state’s new fire fees have been sent out to rural California residents. The proceeds of the fee go to California Department of Forestry and Fire Protection (Cal- Fire), but opponents say the fee is an illegal tax and it will soon be challenged in court.

California residents living in State Responsibility Areas (SRAs) will be receiving their new $150 fire fee bills for the 2011/2012 fiscal year in the mail going alphabetically by county. Bills for those living in counties like Alameda and Alpine have been sent out while those living in counties like Yolo and Yuba could wait a few months before getting their bills.

Kris Vosburgh, executive director of the Howard Jarvis Taxpayer Association (HJTA)—a California tax watchdog and legal group— said the organization should be filing suit against the fee in the next few weeks. Though he could not identify a date more specifically, he said it would neither be days nor months and that plaintiffs were being organized currently.

The challenge to the fees stems from the claim that the fee is a tax, and as such was illegally passed. Under California’s Proposition 13—now Article 13A of the California state constitution—new taxes cannot be imposed on taxpayers without first being approved by an at least two-thirds vote of both the state House and Senate. The fire fee however was passed by a simple majority vote along strictly partisan lines.

One issue HJTA attorneys may face lies with the wording of one detail of the article’s definition of tax. According to section 3, subsection B of the article, the definition of “tax” does not include charges imposed for a specific benefit or government service “provided directly to the payor that is not provided to those not charged.”

According taxpayer information available on the website of Fire Tax Protest, an organization and outreach effort of HJTA centered specifically on the matter of the fire fee, the difference between a tax and a fee stems from the use of the funds collected.

“Fees are charged to recover the government’s cost to provide some service to the person paying the fee, or to regulate the activities of a business. Taxes, on the other hand, are revenueraising devices and need not be related in any specific way to benefits received by, or risks posed by the payer.”

The group and other opponents to the fire fee such as the California Cattleman’s Association (CCA) claim that it fits this latter description rather than the former. This is despite the apparent resemblance of the fee to the he-who-benefitspays definition of a non-tax according to the language of Proposition 13.

When questioned on this topic, Vosburgh spoke in no uncertain terms.

“They are not providing any services to these lands,” referring to CalFire and the usual claim by fire fee supporters that the fees will benefit those people living in SRAs. According to the wording of the bill itself, the fees will go to fund fire prevention and fire education, though detractors claim that is a cover and the funds will likely be redirected to try to fund deficit reduction efforts.

“The California Cattlemen’s Association believes [the fee]’s a tax,” Kevin Kester, president of CCA, told WLJ back in the beginning of the year when emergency regulations were put in place anticipating the official enforcement of the fee taking place now.

At the time Kester also voiced worry that the fee, if it survives legal challenge, may set a precedent for fire fees assessed by the acre. Such a thing would be a massive financial blow to California’s already regulation- and tax-beleaguered cattlemen.

History suggests, however, that this fee will not survive litigation. Past relatives to the current fire fee were all dropped in the face of or during court battles if they even made it that far. In the more recent iterations by past California Govs. Arnold Schwarzenegger and Gray Davis before him, fire fee proposals didn’t even see a court room.

According to information on the HJTA website, the situation in the California legal scene is an unfortunate one with more bureaucracy than practicality.

“And here’s the real tragedy: State law makes it virtually impossible to challenge the levy until it has been paid under protest,” pointed out Coupal. “Thus, while the suit will far more than likely be successful, property owners will still have to pay and then file a ‘claim for refund.’ So, in true California fashion, everyone loses.”

Coupal went on to specify those losses, particularly for the rural residents forced to first pay the fee then take the time to claim the refund, the state and the taxpayers for the time and money set up the program, and for local fire districts who will allegedly have a more difficult time fundraising.

“The only winners here are late night talk show hosts who will be given one more nugget with which to make fun of California and its systemically dysfunctional government.”

Additional fee information

In July 2011, California Gov. Jerry Brown signed Assembly Bill X1 29 into law which will impose an annual $150 fire fee on rural residents. The fee would apply to anyone owning one or more “habitable structures” within the state’s SRAs with additional, though reduced, fees for additional habitable structures owned. For those already paying into local fire districts, there is a $35 discount.

HJTA warns that residents must pay the fee even if they plan to contest it and hope to receive a refund. Residents receiving fire fees must pay the bill within 30 days from the date the bill was mailed—not received— or else face additional fines and even liens against their property. For late-paid bills, there is a 20 percent penalty plus interest. For every 30 days payment is late, an additional 20 percent penalty is added.

For anyone in California who wishes to contest their fee, the Fire Tax Protest group has a resource online, including forms and information necessary to submitting them, on their website at firetaxprotest. org/?page_id=13. HJTA can be reached for further assistance by phone at 916/444-9950 in northern California or at 213/384- 9656 in southern California. — Kerry Halladay, WLJ Editor