Ag Today July 11, 2017

Halt to California fire prevention fee part of new climate change plan


Gov. Jerry Brown and legislative leaders have released legislation to extend the state’s climate-change-fighting system for another decade, setting off a scramble for votes amid concerns that the compromise will not do enough to address the problem.

“The Legislature is taking action to curb climate change and protect vulnerable communities from industrial poisons,” Brown said.

The legislation, published in tandem with a separate measure addressing air quality, continues the program through 2030. The cap-and-trade bill includes a suspension of the state’s fire prevention fee, a controversial charge on thousands of property owners who live in rural areas, as of July 1, 2017. It also exempts electric power companies from paying the sales and use tax on equipment purchases, certain construction-related costs and other expenses.

The language surfaced hours after Senate leader Kevin de León told The Bee that he’s aiming for the Legislature to vote on the program’s extension Thursday. A ballot measure voters approved in November requires bills to be in print for 72 hours before the Legislature can vote.

California’s cap-and-trade program requires polluters to obtain permits for the greenhouse gases they emit as an incentive for companies to reduce their carbon footprint. Emissions are capped, and companies can trade for more capacity through a state-run auction or on the private market.

The bill tasks the State Air Resources Board with making decisions on the maximum cost of emissions, known as a price ceiling, and auction reserve prices. The program would allow companies to continue to use offset credits to meet their total compliance obligations. It also allows some businesses to seek free allowances to pollute.

The fire fee, part of the 2011 budget package, was championed as a way to beef up fire prevention activities in the state’s fire-prone wildland areas. Yet it quickly became a focus of attack from opponents who called it an unconstitutional tax on rural residents.

More than 800,000 property owners in 31 million acres where the state has the primary firefighting responsibility – roughly one-third of California – are subject to the $152.33 charge. Most people pay about $117 annually, after a $35 deduction for living in local fire districts.

Money raised by the fee has paid for tree chipping projects, grants to fire safe councils and other projects. Tens of millions of dollars also has been held in budgetary reserves.

Critics call the fee illegal, and a lawsuit continues to make its way through the court system. In addition, local fire district officials have complained that the state fee undermines their budgets by making it more difficult to pass local funding measures.

Republicans and Democrats representing districts with large numbers of fee payers have carried legislation over the years to repeal or scale back the fee, with no success.

The new cap-and-trade legislation is not the first time Democrats have floated eliminating the prevention fee to win Republican support for a controversial proposal.

In 2012, to gain backing for legislation repealing a tax break for multi-state corporations, majority Democrats included language eliminating the charge. The measure passed the Assembly with a two-thirds vote, but fell a handful of votes short in the state Senate.

Amid fever-pitch negotiations at the Capitol, Brown’s office has been racing to meet a July 21 recess deadline to boost confidence in the system ahead of the August auction.

Brown, who has traveled the world evangelizing about the perils of climate change, last week invited global leaders to a San Francisco conference on the subject next fall. He’s argued alongside industry groups that cap-and-trade’s market approach was the most prudent, cost-effective way to meet the state’s aggressive targets.