An Express Article from the California Land Title Association
Bulletin 11/12-24 - August 30, 2011
As part of a last-minute budget fix, the California Democratic Leadership passed controversial legislation that will become effective on September 1, 2011. AB X1 29, signed by the Governor in July, will assess up to $150 per structure for property in certain designated high-risk fire prevention areas. The legislation was enacted with less than a two-thirds vote with most Republicans voting against the measure and little time for public or association input.
Since the measure did not pass with a two-thirds margin, it is arguably in violation of the recently enacted Proposition 26. The Howard Jarvis Association has stated publicly that it will sue for injunctive relief to keep this program from being enacted.
While the legality and effectiveness of this program may be in question, CLTA strongly advises its member companies to check with your local assessors, county recorder, and tax collector to determine if the fee will be imposed in your area, and if so, when it becomes effective. The vast majority of affected properties are likely to be in rural or high-desert areas; exact areas are determined by the State Board of Forestry and Fire Prevention (CALFIRE).
CLTA also advises member companies to double check all tax statements following the effective date of this program (9/1/11), as the fee may be assessed as a supplemental tax.
This bill requires that on or before September 1, 2011 the State Board of Equalization (BOE) adopt emergency regulations establishing the fee on each structure within a state responsibility area. To date, those regulations are not yet available. The Department of Forestry and Fire Protection (CALFIRE) is also required to assist in administering this program. CALFIRE has already developed regulations regarding who is subject to these fees, the amount of the fees, and an appeal process relating to its implementation. These regulations can be found on the CALFIRE website.
AB X1 29 was a trailer bill to the Budget Act of 2011. The fee will be collected by the BOE in accordance with the California Fee Collection Procedures Law. The new law does permit a petition for redetermination as to whether the fee applies to a particular property.
The Natural Hazards Disclosure Act already requires that sellers and their agents provide any prospective buyer with a "Natural Hazard Disclosure Statement" when the property being sold lies within one or more state-mapped hazard areas. These areas include “Very High Fire Severity Zones” and “Wildland Fire Areas.”
Under existing law in effect prior to the passage of this bill, the BOE determines areas in which the financial responsibility of preventing and suppressing fires is primarily the responsibility of the stateCopies of maps identifying the boundaries of lands classified as state responsibility are sent to the county assessors.
An unpaid fee can become an enforceable state tax lien but it is not effective against persons acquiring an interest prior to recording of the notice of state tax lien in the office of the county recorder of the county in which the real property is located. To what extent the state will record county-by-county tax liens for the $150 fee is unknown.
Additionally, a notice must be posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the map, and of any information received by the county subsequent to the receipt of the map regarding changes to state responsibility areas within the county.
CLTA is monitoring this issue and has been told that the Governor’s office is considering enactment of further legislation, within the next week or so, that addresses some of the perceived flaws within the bill. For the time being, the Governor’s Office has not shared the contents of the bill and if it will be enacted.