Gov. Jerry Brown 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 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 pitched the ideas as ways to help the state's timber industry provide jobs after a construction downturn and fierce competition with 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 contend Brown is giving the industry too much.
Brown's legislation addresses wildfire lawsuits filed by government agencies. It would more narrowly tailor criteria for calculating wildfire damages and seeks to focus awards on restoration costs. Federal courts generally rely on state laws to determine wildfire damages.
U.S. prosecutors suggested the proposal could affect 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 next fiscal year, right 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.
Brown says in his budget that current law "leads to claims far exceeding restoration costs." Federal prosecutors have won unprecedented amounts lately, such as $102 million from Union Pacific Railroad Co. for a 2000 fire in Plumas and Lassen national forests, far above the previous $14 million record. That included money for firefighting and timber loss, plus impacts on recreation, habitat and public scenery. Much of the money pays for U.S. Forest Service restoration work.
The governor's proposal could slice wildfire liability damages by 75 percent or more, according to two experts who did not want to be named because of pending litigation. Resources Agency spokesman Richard Stapler said his office believes the proposal would not affect the 2007 Moonlight fire case, contrary to what the U.S. attorney's office said.
Brown's resources secretary, John Laird, said he has heard complaints from smaller timber companies about the potential for large payouts should a wildfire start on their property.
"I think they're just looking for predictability, and this allows small and midsized timber companies to stay in business," Laird said.
Industry officials say federal prosecutors have gone overboard.
"We feel the current law is so ambiguous that it leaves wide open the possibility of government entities making very large claims not based on any scientific foundation for what the value of the land and resources is," said Sierra Pacific Industries spokesman Mark Pawlicki.