Protecting California's Timber Industrry - Governor Signs AB 1492 Fire Liability Reform

By Thomas L. Sheehy

For the first time in more than a decade a significant piece of forest legislation has been enacted that enjoys both industry and environmental community support.  This thanks to Governor Brown signing AB 1492 today in Sacramento. The legislation provides critical relief for all private landowners from excessive liability claims made by the federal government for wildfires.   The legislation is a package deal, forged through a collaborative process with compromise from all parties – environmentalists as well as timber industry interest. It is has been controversial because it makes significant reforms to fire liability provision in current law, changes to timber harvest plan (THP) regulations and includes a stable funding source to pay for the regulatory structure. The funding source is a 1% levy on timber products sold in California estimated to raise up to $30 million annually (50 cents on the average lumber ticket at a big box retailer in the state, and less than $150 on a new $300,000 house).

This reform package has been desperately needed. California is subject to substantial forest fire threat and when public lands are damaged through negligence occurring on private lands, the damage liability under current law is eight to ten times the actual commercial value of the property. No other state in the country has such a fire liability scheme.  The result of this is that California timber operators are facing a terribly difficult time getting liability insurance, and when they do; it costs more and covers less. Inability to get liability insurance will simply put many family companies and other operators out of business. And with them, thousands of good paying jobs with benefits that are highly coveted in the rural areas of the state. Indeed, the cost of the current regulatory structure and cost of liability insurance has made California lumber less competitive. Today, up to seventy percent of lumber consumed in this state is imported from the Pacific North West, Canada and other areas. California is exporting thousands of good paying jobs to other areas as our friends and families in the industry suffer and lose their livelihoods.

Some opponents to this reform package expressed concerns over limiting fire liability to a more reasonable approach like all the other states have. Others made a major issue out of the one percent timber fee to pay for forestry regulation.  The fact is, this new funding source will provide a stable stream of revenue to pay for THP review, allow the state to eliminate highly regressive regulatory fees now being paid, and will level the playing field so that all producers of lumber selling into California have skin in the game. For smaller timber producers in rural California, it gives them a better opportunity to compete with large out-of-state producers and to create good jobs in Northern California. Many politicians and policy makers constantly repeat that they want to help the state’s economy and create jobs. Well this THP reform legislative package is ground zero in job creating and economic development. With it, we can expand California’s share of timber production and consumption in the state and create thousands of new jobs. Without it, more producers would have been forced out of the business causing California to import thousands more truckloads of lumber from out of state and send our coveted jobs across the state’s border.