Capitol Alert: Forestry bill with lumber tax emerges in California Legislature

Gov. Jerry Brown's proposal to impose a 1 percent lumber tax and limit wildfire liability awards formally surfaced in the Legislature this week amid heavy lobbying from the timber industry.

The wide-ranging forestry package that has drawn mixed reviews from environmentalists was amended Tuesday into Assembly Bill 1492. Environmentalists generally like the fact that money will be raised for regulating the industry but are concerned about other provisions that reduce the frequency of environmental reviews and limit how much landowners will pay if they spark wildfires.

The bill is no slam dunk since it requires a two-thirds vote of the Legislature as a tax. Republicans were opposed to the bill earlier this year, but they are facing new pressure from high-powered lobbyists in the Capitol representing forestry interests. Forest Landowners of California issued an "Action Alert" last week asking its members to specifically call Sen. Ted Gaines, R-Roseville, and Sen. Doug LaMalfa, R-Richvale, who represent large swaths of forest land.

According to the alert, the backing coalition includes forestry groups and the California Farm Bureau Federation. California timber companies say they need the changes to overcome a market disadvantage against competitors in the Pacific Northwest and overseas who now supply most wood sold in the state.

AB 1492 would require retailers to impose a 1 percent tax on lumber sold in California to raise an estimated $30 million annually that would pay for regulatory oversight. Environmentalists have long complained that the state has underfunded state regulators and hampered their ability to ensure that proper wood-cutting occurs in California. The bill specifically provides $1.5 million for the Department of Fish and Game, whose forestry-related funding was previously line-item vetoed by Gov. Arnold Schwarzenegger.

California timber firms support the tax because it relieves them of regulatory fees they must currently pay - and additional fees that Democrats have long wanted to impose on them to fund state forestry oversight. Shifting the tax to consumers means that wood from outside California will also face the new 1 percent charge.

The bill is expected to be heard next week in the Senate Budget and Fiscal Review committee.

Earlier this year, the Sacramento-based U.S. Attorney's Office and Obama administration officials lobbied legislative leaders to douse the bill, which Brown initially wanted as part of the budget he signed in June. They specifically opposed the limit on wildfire liability damages after winning a string of record awards in cases against timber companies for past fires.

U.S. Attorney Benjamin B. Wagner was concerned that legislation could interfere with a then-pending case against Sierra Pacific Industries and other major landowners over the 2007 Moonlight Fire. Wagner settled with defendants in July for more than $100 million in cash and land. AB 1492 has language specifying that it will only apply to lawsuits filed after its enactment.