SACRAMENTO — California consumers will pay a new tax to fund government oversight of the state’s vast timber industry under a bill signed by Gov. Jerry Brown on Tuesday, relieving logging companies of the cost.
The measure also benefits the industry by restricting how much money government agencies can seek when suing for damages in wildfires caused by negligent practices. Federal prosecutors and members of President Obama’s cabinet had fought the bill, which tightens the rules for tallying damages.
Timber company officials said the new arrangement would prevent the industry from being squeezed by government fees, onerous regulations and overzealous prosecutors.
They hope the new 1% tax on lumber sales, which takes effect Jan. 1 and is expected to raise $30 million a year, will lower their costs and make it easier to compete with out-of-state firms.
California timber companies have funded industry regulation through fees that weren’t charged to their out-of-state competitors. Now, regulation will be funded by a tax applied to all lumber sold in California, whether it’s harvested in or outside of the state.
“This bill makes our company more competitive with out-of-state businesses and strengthens our industry,” said a statement from Red Emmerson, president and chairman emeritus of Sierra Pacific Industries, the state’s largest timber company. “Gov. Brown’s leadership brings California the first major reform to the timber industry in decades, improving California’s business climate for years to come.”
The measure also allows companies to harvest timber for longer without resubmitting their plans for environmental analysis.
Retailers opposed the new tax, saying their customers should not have to “shoulder the burden of funding regulatory activities.”
Brown’s signature on AB 1492, by the Assembly Budget Committee, comes after a long battle and a dramatic finish. It was pushed through the Legislature after midnight on the last day of the legislative session almost two weeks ago after Brown’s top aides scrambled for votes. Because the bill creates a new tax, it needed a two-thirds vote to pass, requiring some Republican support.
“This legislation enacts serious bipartisan reform to even the playing field to protect California’s timber-industry jobs,” Brown said in a statement Tuesday.