Gov. Jerry Brown has tucked provisions into his budget that would limit payouts in wildfire liability cases, potentially saving timber companies and other major California landowners hundreds of millions of dollars as federal prosecutors pursue record-high damages in court.
The Democratic governor also has asked lawmakers to impose a 1 percent lumber tax to fund forestry oversight while reducing industry costs. And he wants to reduce the frequency with which California reviews tree-cutting plans for environmental impacts.
Brown has pitched the ideas as ways to help the state’s timber industry provide jobs in the wake of a construction downturn and fierce competition with lumber producers from the Pacific Northwest. He also highlights $30 million in new lumber tax funding for environmental reviews that have gone missing due to budget cuts.
But the plan has drawn strong opposition from the Sacramento-based U.S. Attorney’s Office, which is aggressively pursuing wildfire negligence cases, as well as some environmentalists who believe Brown is giving the industry too much.
Brown’s draft legislation addresses wildfire lawsuits filed by government agencies. It would more narrowly define what courts can consider when calculating wildfire damages and tie awards to the “prefire fair market value” of property, intended to limit variables such as aesthetic or habitat losses. Federal courts generally rely on state laws to calculate wildfire damages.
U.S. prosecutors suggested the proposal could impact their pending case against the state’s largest landowner, Sierra Pacific Industries, and other defendants for a 2007 fire in Lassen and Plumas Counties where damages could reach $600 million.
The case is slated for trial two days into the new fiscal year, after Brown is expected to sign the budget.
“This proposed legislation appears to be a fairly cynical attempt by Sierra Pacific Industries to undermine the federal government’s position in our pending lawsuit against that company,” said U.S. Attorney Benjamin B. Wagner in a statement. “…I hope that members of the Legislature see this measure for what it is: not a solid policy proposal, but an attempt by one party to a lawsuit to tilt the playing field in its favor after three years of litigation in federal court.”
Brown says in his budget summary that current state law “leads to claims far exceeding restoration costs.” Federal prosecutors in recent years have won unprecedented amounts, such as a $102 million settlement from Union Pacific Railroad Co. for a 2000 fire in Plumas and Lassen National Forests, far above the previous $14 million record. That award included money not only for firefighting and commercial timber loss, but also impacts on recreation, habitat and public scenery.
Timber companies, environmentalists and Brown officials have met for several months to draft the proposal that ended up in Brown’s May budget proposal. On April 21, Brown received three contributions from the timber industry toward his November tax initiative. Those include $10,000 from Sierra Pacific Industries, $10,000 from Green Diamond Resource Company and $5,000 from the California Forestry Association.
Sierra Pacific Industries also gave $46,800 toward Brown’s 2010 gubernatorial campaign.