Existing law requires the Department of Forestry and Fire Protection to establish a local assistance grant program for fire prevention activities, defined to include grazing activities, and home hardening education activities. Under existing law, eligible grant activities include public education outreach activities, as provided. Under existing law, the Director of Forestry and Fire Protection may, until January 1, 2024, authorize advance payments from a grant program award, not to exceed 25% of the total grant award, except as specified.

This bill would change the definition of fire prevention activities to include prescribed grazing, as defined. The bill would expand allowable public education outreach activities to include training on prescribed grazing. The bill would also indefinitely extend the directors authority to authorize advance payments from a grant program award, as provided, and conform a cross-reference to existing law.

Existing law requires the Department of Forestry and Fire Protection to establish a local assistance grant program for fire prevention activities, defined to include grazing activities, and home hardening education activities. Under existing law, eligible grant activities include public education outreach activities, as provided. Under existing law, the Director of Forestry and Fire Protection may, until January 1, 2024, authorize advance payments from a grant program award, not to exceed 25% of the total grant award, except as specified.

This bill would change the definition of fire prevention activities to include prescribed grazing, as defined. The bill would expand allowable public education outreach activities to include training on prescribed grazing. The bill would also indefinitely extend the directors authority to authorize advance payments from a grant program award, as provided, and conform a cross-reference to existing law.

Existing law requires the Department of Forestry and Fire Protection to establish a local assistance grant program for fire prevention and home hardening education activities, including public education outreach activities, as provided. Under existing law, the Director of Forestry and Fire Protection may, until January 1, 2024, authorize advance payments from a grant program award, not to exceed 25% of the total grant award, except as specified.

This bill would expand the definition of fire prevention activities to include prescribed grazing, as defined. The bill would expand allowable public education outreach activities to include training on community-supported prescribed grazing. The bill would also indefinitely extend the directors authority to authorize advance payments from a grant program award, as provided.

Existing law requires the Department of Forestry and Fire Protection to establish a local assistance grant program for fire prevention and home hardening education activities. activities, including public education outreach activities, as provided. Under existing law, the Director of Forestry and Fire Protection may, until January 1, 2024, authorize advance payments from a grant program award, not to exceed 25% of the total grant award, except as specified.

This bill would expand the definition of fire prevention activities to include prescribed grazing, as defined. The bill would expand allowable public education outreach activities to include training on community-supported prescribed grazing. The bill would also indefinitely extend the directors authority to authorize advance payments from a grant program award to January 1, 2034. award, as provided.

Existing law requires the Department of Forestry and Fire Protection to establish a local assistance grant program for fire prevention and home hardening education activities. Under existing law, the Director of Forestry and Fire Protection may, until January 1, 2024, authorize advance payments from a grant program award, not to exceed 25% of the total grant award, except as specified.

This bill would extend the directors authority to authorize advance payments from a grant program award to January 1, 2034.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 297

Author:(Vince Fong)

As Amended Ver:September 8, 2023

Majority vote

SUMMARY

Recognize prescribed grazing as a fire prevention activity eligible for the Department of Forestry and Fire Protection's (CAL FIRE) local assistance grant program for fire prevention and home hardening education activities.

Senate Amendments

1. Amend the bill, to avoid chaptering out with SB 675 (Limón) of the current legislative session, to recognize prescribed grazing, as defined, as a fire prevention activity eligible for CAL FIRE's local assistance grant program.
2. Delete the sunset date on the authority for the director of CAL FIRE to provide advance payments from a local assistance grant for fire prevention and home hardening education activities.

COMMENTS

CAL FIRE administers Wildfire Prevention grants to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones that focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement activities that address the hazards of wildfire and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

Prescribed grazing is a well-used and successful fire prevention activity. Goats, sheep, and other grazing animals can help to mitigate the devastation caused by wildfires by consuming fuels with their specific grazing/browsing habits and reduce horizontal and vertical growth of fuels. Targeted grazing, also known as prescribed grazing or managed grazing, is the "application of a specific kind of livestock at a determined season, duration, and intensity to accomplish defined vegetation or landscape goals." This is different from conventional grazing in that the primary goal is landscape or vegetation management, not livestock weight gain and reproduction.

This bill recognizes prescribed grazing as a fire prevention tool under CAL FIRE's local assistance grant program.

According to the Author

Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and advanced payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.

Arguments in Support

Pacific Forest Trust writes, "Advance payment is essential to make this grant program accessible to undercapitalized applicants and historically underserved communities. Many of the fire prevention activities eligible for funding from this program require significant upfront investment that vulnerable communities often lack. Without advance payment of a portion of the award, many rural communities who would stand to benefit most from the grant may be discouraged from applying. Moreover, those who do apply may then find themselves spending the limited resources they have on fundraising. Advance payment will help fire-threatened communities implement prevention projects sooner and more efficiently, and it will make the program far more accessible to undercapitalized applicants."

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Senate Appropriations Committee, CAL FIRE does not anticipate any new costs as a result of this bill. However, CAL FIRE is aware of one local assistance grantee that did not spend or liquidate their advance funds before their grant expired, and CAL FIRE is still working with the grantee on the return of these funds. If CAL FIRE is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.

To the extent this bill results in additional projects and activities that increase the protection of people, structures, and communities or reduce the occurrence or severity of catastrophic wildfires from what otherwise would have occurred, potentially significant savings due to avoided fire suppression and other costs (General Fund).

VOTES:

ASM NATURAL RESOURCES: 11-0-0

YES: Luz Rivas, Flora, Addis, Friedman, Hoover, Mathis, Muratsuchi, Pellerin, Ward, Wood, Zbur

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 80-0-0

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones‑Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

UPDATED

VERSION: September 8, 2023

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0001967

 THIRD READING  

Bill No: AB 297

Author: Vince Fong (R)

Amended: 9/8/23 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 11-0, 6/27/23

AYES: Min, Seyarto, Allen, Dahle, Eggman, Grove, Hurtado, Laird, Limón, Padilla, Stern

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 80-0, 5/31/23 - See last page for vote

SUBJECT: Wildfires: local assistance grant program: prescribed grazing: advance payments

SOURCE: Author

DIGEST:

This bill eliminates the sunset on the authority of the director of the Department of Forestry and Fire Protection (CalFire) to authorize advance payments under the Fire Prevention Grants Program and makes other changes to that program related to prescribed grazing, as defined.

Senate Floor Amendments of 9/8/23 remove some of the amendments adopted on 9/5/23. In particular, they remove “community-supported” from the term “prescribed grazing” under the Fire Prevention Grant Program’s public education outreach funding category. Further, they remove “infrastructure, including, but not limited to, fencing and watering improvements for prescribed grazing” from the costs eligible for advance payment under this grant program.

Senate Floor Amendments of 9/5/23 address a code conflict with SB 675 (Limón). Both bills amend the same section: Public Resources Code Section 4124.5 in different ways. The amendments harmonize AB 297 with SB 675.

ANALYSIS:

Existing law:

1. Establishes CalFire within the California Natural Resources Agency (CNRA) under the control of the director. (Public Resources Code (PRC) §701)
2. Directs CalFire to establish a local assistance grant program for fire prevention and home hardening education activities in California. This program, known as the Fire Prevention Grants Program in the code and as the Wildfire Prevention Grants Program at CalFire, is under the direction of Deputy Director of Community Wildfire Preparedness and Mitigation within the Office of the State Fire Marshal. (PRC §4124.5 and §4209.1, respectively)
   1. Authorizes the director, until January 1, 2024, to authorize advance payments for program grants, as specified. (PRC §4124.5.)
   2. Defines “fire prevention activities” to mean those lawful activities that reduce the risk of wildfire in California, including mechanical vegetation management, grazing, prescribed burns, creation of defensible space, and retrofitting of structures to increase fire resistance. (PRC §4124.)
   3. Establishes a list of activities eligible for funding, including fire prevention activities, community planning, public education and outreach, technical assistance, workforce recruitment and training, and equipment purchases. (PRC §4124.5.)
3. Authorizes, until January 1, 2024, the CalFire director to authorize advance payments to specified entities for grants associated with certain budget items, including for the Fire Prevention Grants Program. (PRC §705.5.)
4. Authorizes, until January 1, 2025, a state agency that administers a grant program to advance a payment to a recipient entity according to the rules specified, including, that the advance payment may not exceed 25 percent of the total grant award unless specified conditions are met. (Government Code (GOV) §11019.1.)
   1. Authorizes the agency to only apply and utilize this advance payment authority if the program administered by the state agency expressly authorizes the use of that section. (GOV §11019.1.)
   2. Authorizes CalFire, until July 1, 2025, to authorize advance payments pursuant to (4) on a grant awarded under the Fire Prevention Grants Program. (PRC §4124.5.)
5. Requires CalFire to provide a report to the Legislature on or before January 1, 2023, on the outcome of CalFire’s use of advance payments for these programs. PRC §§705.5 and 4799.05.

This bill eliminates the sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program and makes other changes to that program related to prescribed grazing. Specifically, this bill:

1. Defines “prescribed grazing” to mean the lawful application of grazing by a specific kind of livestock at a determined season, duration, and intensity to accomplish defined vegetation or conservation goals, as specified. Prescribed grazing may involve any or multiple kinds of livestock.
2. Provides that under the Fire Prevention Grants Program:
   1. Clarify that the public education outreach funding category includes prescribed grazing.
   2. Eliminate the January 1, 2024 sunset on the director’s authority to authorize advance payments.
   3. Expand the list of costs eligible for advancement payment of up to 50 percent of either the total grant award or the cost of the equipment to include supplies.
3. Makes other minor technical, conforming, and non-substantive changes.

Background

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Fire Prevention Grants Program. As established pursuant to AB 1956 (Limón, Chapter 632, Statutes of 2018), CalFire administers the Fire Prevention Grants Program to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones. The program focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement actions that address wildfire hazards and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

The program is designed to complement the 2018 Strategic Fire Plan for California, the Wildfire and Forest Resilience Task Force Action Plan, and the Natural and Working Lands Climate Smart Strategy, which propose to protect lives, property, and resources, and increase the ability of natural and working lands to survive and mitigate the effects of climate change. The program is primarily funded from the Greenhouse Gas Reduction Fund and has awarded more than $457 million to grantees since 2017. In December 2022, CalFire announced the availability of up to $120 million for the program.

Prescribed grazing. Prescribed grazing for hazardous fuel reduction is the intentional use of domestic livestock to remove, rearrange, or convert vegetation to reduce the costs and losses associated with wildfires and to enhance the condition of forests, rangelands, and watersheds. In addition to fire prevention benefits, carefully managed grazing can provide important environmental benefits such as increased soil organic matter, control of invasive species, and improved habitat.

Comments

CalFire has authority under multiple statutes to offer advance payments for grants. For the Fire Prevention Grants Program, this authority comes directly from the program’s authorizing statute (PRC §4124.5) and from a reference in that statute to the state’s general advance payment law. The program also has authority to offer advance payments associated with certain budget items through January 1, 2024.

The authority from PRC Section 4124.5 allows the director, until January 1, 2024, to authorize advance payments for up to 25 percent of the grant award and, for the purpose of purchasing necessary equipment, up to 50 percent of either the total grant award or the cost of equipment, whichever amount is less. Generally, the grantee must spend the advanced funds within six months and must file accountability reports with CalFire every four months. This bill extends the sunset on the director’s authority to authorize advance payments by 10 years, to January 1, 2034.

Under the state’s general authority to offer advance payments (GOV §11019.1), which expires July 1, 2025, and which CalFire is authorized to use for the Fire Prevention Grants Program in PRC Section 4124.5, CalFire may advance payments under the following rules:

• CalFire must prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems.
• CalFire must stipulate an advance payment structure and request process within the grant agreement or contract.
• CalFire must ensure the advance payment does not to exceed 25 percent of the total grant award. However, CalFire can increase this amount if it determines that the project requires a larger advance and the recipient entity provides sufficient justification and documentation to the administering state agency.

The advance payment recipient is also subject to certain rules, including that it must provide an itemized budget, spending timeline, and work plan; submit documentation to support the need for advanced payment, demonstrate good standing with the Internal Revenue Service; deposit advanced funds into a federally insured, interest-bearing account; establish procedures to minimize the amount of time that it takes to spend the advanced funds; and provide progress reports, as specified.

This bill does not touch CalFire’s authority under GOV Section 11019.1, which sunsets on July 1, 2025. However, AB 590 (Hart, 2023) creates a new general advance payment authority for all state agencies that mirrors the authority in GOV Section 11019.1, but without a sunset or a requirement that the state agency have separate approval in its program statutes to use this advance payment authority. If that bill passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending on the Senate Floor. At some point, the Legislature may wish to consider whether the various advance payment authorities should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

Related/Prior Legislation

SB 675 (Limón, 2023) eliminates the January 1, 2024 sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program. The bill is pending on the Assembly Floor.

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified. The bill is pending on the Senate Floor.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorized CalFire, until July 1, 2025, to authorize advance payments under the Fire Prevention Grants Program pursuant to the general authority provided to state agencies to make advance payments provided in the Government Code.

AB 211 (Committee on Budget, Chapter 574, Statutes of 2022) deleted the sunset date for advance payments under CalFire’s Forest Health Grants Program.

SB 63 (Stern, Chapter 382, Statutes of 2021) authorized the CalFire director to authorize an advance payment under the Fire Prevention Grants Program for an amount greater than 25 percent of the total grant award, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.

AB 1956 (Limón, Chapter 632, Statutes of 2018) established the Fire Prevention Grants Program at CalFire and authorized, until January 1, 2024, the CalFire director to authorize advance payments for a grant not exceed 25 percent of the total grant award.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• CalFire does not anticipate any new costs as a result of this bill. However, CalFire is aware of one local assistance grantee that did not spend or liquidate their advance funds before their grant expired, and CalFire is still working with the grantee on the return of these funds to the department. If CalFire is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.
• To the extent this bill results in additional projects and activities that increase the protection of people, structures, and communities or reduce the occurrence or severity of catastrophic wildfires from what otherwise would have occurred, potentially significant savings due to avoided fire suppression and other costs (General Fund).

SUPPORT: (Verified 9/8/23)

American Property Casualty Insurance Association

Association of California Water Agencies

California Farm Bureau Federation

California Fire Chiefs Association

California Forestry Association

California Special Districts Association

California State Association of Counties

County of Napa

County of Placer

El Dorado County Water Agency

Fire Districts Association of California

Humboldt Redwood Company, LLC

Mendocino Redwood Company, LLC

Pacific Forest Trust

Rural County Representatives of California

Sierra Business Council

Upper San Gabriel Valley Municipal Water District

OPPOSITION: (Verified 9/8/23)

None received

ARGUMENTS IN SUPPORT: According to the author, “Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and [advance] payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.”

ASSEMBLY FLOOR: 80-0, 5/31/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

Prepared by: Catherine Baxter / N.R. & W. / (916) 651-4116

9/11/23 13:39:59

**** END ****

 THIRD READING  

Bill No: AB 297

Author: Vince Fong (R)

Amended: 9/5/23 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 11-0, 6/27/23

AYES: Min, Seyarto, Allen, Dahle, Eggman, Grove, Hurtado, Laird, Limón, Padilla, Stern

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 80-0, 5/31/23 - See last page for vote

SUBJECT: Wildfires: local assistance grant program: prescribed grazing: advance payments

SOURCE: Author

DIGEST:

This bill eliminates the sunset on the authority of the director of the Department of Forestry and Fire Protection (CalFire) to authorize advance payments under the Fire Prevention Grants Program and makes other changes to that program related to prescribed grazing, as defined.

Senate Floor Amendments of 9/5/23 address a code conflict with SB 675 (Limón). Both bills amend the same section: Public Resources Code Section 4124.5 in different ways. The amendments harmonize AB 297 with SB 675.

ANALYSIS:

Existing law:

1. Establishes CalFire within the California Natural Resources Agency (CNRA) under the control of the director. Public Resources Code (PRC) §701.
2. Directs CalFire to establish a local assistance grant program for fire prevention and home hardening education activities in California. This program, known as the Fire Prevention Grants Program in the code and as the Wildfire Prevention Grants Program at CalFire, is under the direction of Deputy Director of Community Wildfire Preparedness and Mitigation within the Office of the State Fire Marshal. PRC §4124.5 and §4209.1, respectively.
   1. Authorizes the director, until January 1, 2024, to authorize advance payments for program grants, as specified. PRC §4124.5.
   2. Defines “fire prevention activities” to mean those lawful activities that reduce the risk of wildfire in California, including mechanical vegetation management, grazing, prescribed burns, creation of defensible space, and retrofitting of structures to increase fire resistance. PRC §4124.
   3. Establishes a list of activities eligible for funding, including fire prevention activities, community planning, public education and outreach, technical assistance, workforce recruitment and training, and equipment purchases. PRC §4124.5.
3. Authorizes, until January 1, 2024, the CalFire director to authorize advance payments to specified entities for grants associated with certain budget items, including for the Fire Prevention Grants Program. PRC §705.5.
4. Authorizes, until January 1, 2025, a state agency that administers a grant program to advance a payment to a recipient entity according to the rules specified, including, that the advance payment may not exceed 25 percent of the total grant award unless specified conditions are met. Government Code (GOV) §11019.1.
   1. The agency may only apply and utilize this advance payment authority if the program administered by the state agency expressly authorizes the use of that section. GOV §11019.1.
   2. Authorizes CalFire, until July 1, 2025, to authorize advance payments pursuant to (4) on a grant awarded under the Fire Prevention Grants Program. PRC §4124.5.
5. Requires CalFire to provide a report to the Legislature on or before January 1, 2023, on the outcome of CalFire’s use of advance payments for these programs. PRC §§705.5 and 4799.05.

This bill eliminates the sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program and makes other changes to that program related to prescribed grazing. Specifically, this bill:

1. Defines “prescribed grazing” to mean the lawful application of grazing by a specific kind of livestock at a determined season, duration, and intensity to accomplish defined vegetation or conservation goals, as specified. Prescribed grazing may involve any or multiple kinds of livestock.
2. Provides that under the Fire Prevention Grants Program:
   1. Clarify that the public education outreach funding category includes community-supported prescribed grazing.
   2. Eliminate the January 1, 2024 sunset on the director’s authority to authorize advance payments.
   3. Expand the list of costs eligible for advancement payment of up to 50 percent of either the total grant award or the cost of the equipment to include supplies or infrastructure, including fencing and watering improvements for prescribed grazing, as specified.
3. Makes other minor technical, conforming, and non-substantive changes.

Background

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Fire Prevention Grants Program. As established pursuant to AB 1956 (Limón, Chapter 632, Statutes of 2018), CalFire administers the Fire Prevention Grants Program to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones. The program focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement actions that address wildfire hazards and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

The program is designed to complement the 2018 Strategic Fire Plan for California, the Wildfire and Forest Resilience Task Force Action Plan, and the Natural and Working Lands Climate Smart Strategy, which propose to protect lives, property, and resources, and increase the ability of natural and working lands to survive and mitigate the effects of climate change. The program is primarily funded from the Greenhouse Gas Reduction Fund and has awarded more than $457 million to grantees since 2017. In December 2022, CalFire announced the availability of up to $120 million for the program.

Prescribed grazing. Prescribed grazing for hazardous fuel reduction is the intentional use of domestic livestock to remove, rearrange, or convert vegetation to reduce the costs and losses associated with wildfires and to enhance the condition of forests, rangelands, and watersheds. In addition to fire prevention benefits, carefully managed grazing can provide important environmental benefits such as increased soil organic matter, control of invasive species, and improved habitat.

Comments

Advance payments. CalFire has authority under multiple statutes to offer advance payments for grants. For the Fire Prevention Grants Program, this authority comes directly from the program’s authorizing statute (PRC §4124.5) and from a reference in that statute to the state’s general advance payment law. The program also has authority to offer advance payments associated with certain budget items through January 1, 2024.

The authority from PRC Section 4124.5 allows the director, until January 1, 2024, to authorize advance payments for up to 25 percent of the grant award and, for the purpose of purchasing necessary equipment, up to 50 percent of either the total grant award or the cost of equipment, whichever amount is less. Generally, the grantee must spend the advanced funds within six months and must file accountability reports with CalFire every four months. This bill extends the sunset on the director’s authority to authorize advance payments by 10 years, to January 1, 2034.

Under the state’s general authority to offer advance payments (GOV §11019.1), which expires July 1, 2025, and which CalFire is authorized to use for the Fire Prevention Grants Program in PRC Section 4124.5, CalFire may advance payments under the following rules:

• CalFire must prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems.
• CalFire must stipulate an advance payment structure and request process within the grant agreement or contract.
• CalFire must ensure the advance payment does not to exceed 25 percent of the total grant award. However, CalFire can increase this amount if it determines that the project requires a larger advance and the recipient entity provides sufficient justification and documentation to the administering state agency.

The advance payment recipient is also subject to certain rules, including that it must provide an itemized budget, spending timeline, and work plan; submit documentation to support the need for advanced payment, demonstrate good standing with the Internal Revenue Service; deposit advanced funds into a federally insured, interest-bearing account; establish procedures to minimize the amount of time that it takes to spend the advanced funds; and provide progress reports, as specified.

This bill does not touch CalFire’s authority under GOV Section 11019.1, which sunsets on July 1, 2025. However, AB 590 (Hart, 2023) creates a new general advance payment authority for all state agencies that mirrors the authority in GOV Section 11019.1, but without a sunset or a requirement that the state agency have separate approval in its program statutes to use this advance payment authority. If that bill passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending on the Senate Floor. At some point, the Legislature may wish to consider whether the various advance payment authorities should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

CalFire advance payment report. Existing law requires CalFire to report to the Legislature on the outcome of the department’s use of advance payments. The report covers the Fire Prevention Grants Program and the Forest Health Grant Program from 2017 to 2022. Table 1 below shows a history of the Fire Prevention Grants Program’s advance payments by fiscal year.

Table 1. Fire Prevention Grants Program Awards and Advances by Year of Award

According to the report, more than 30 percent of awardees have received at least one advance payment. The advances allowed 169 grantees to expand cash flow for projects and activities, allowing the grantees to pay staff, utilities, contractors, and other costs as they arose instead of 45 days after CalFire received a complete and valid invoice. CalFire reported feedback from grantees stating that they would be unable to operate without grant advances. The use of grant advances helped to provide access to funding to communities who likely would not have been able to afford to fund the work without them. Justification for advance payment range from deposits needed to start contracting work to funds needed to buy tools ahead of time. These advances can be critical to performing work in a timely manner.

Recent amendments eliminate conflict with SB 675. The September 5, 2023 amendments eliminated the conflict between this bill and SB 675 (Limón) related to the director’s authority to offer advance payments under the Fire Prevention Grants Program. The amendments ensure that the bill’s proposed changes to PRC Section 4124.5 now match SB 675’s proposed changes to that section. In the process, the September amendments also added a new topic to this bill: prescribed grazing.

Related/Prior Legislation

SB 675 (Limón, 2023) eliminates the January 1, 2024 sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program. The bill is pending on the Assembly Floor.

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified. The bill is pending on the Senate Floor.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorized CalFire, until July 1, 2025, to authorize advance payments under the Fire Prevention Grants Program pursuant to the general authority provided to state agencies to make advance payments provided in the Government Code.

AB 211 (Committee on Budget, Chapter 574, Statutes of 2022) deleted the sunset date for advance payments under CalFire’s Forest Health Grants Program.

SB 63 (Stern, Chapter 382, Statutes of 2021) authorized the CalFire director to authorize an advance payment under the Fire Prevention Grants Program for an amount greater than 25 percent of the total grant award, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.

AB 1956 (Limón, Chapter 632, Statutes of 2018) established the Fire Prevention Grants Program at CalFire and authorized, until January 1, 2024, the CalFire director to authorize advance payments for a grant not exceed 25 percent of the total grant award.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• CalFire does not anticipate any new costs as a result of this bill. However, CalFire is aware of one local assistance grantee that did not spend or liquidate their advance funds before their grant expired, and CalFire is still working with the grantee on the return of these funds to the department. If CalFire is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.
• To the extent this bill results in additional projects and activities that increase the protection of people, structures, and communities or reduce the occurrence or severity of catastrophic wildfires from what otherwise would have occurred, potentially significant savings due to avoided fire suppression and other costs (General Fund).

SUPPORT: (Verified 9/6/23)

American Property Casualty Insurance Association

Association of California Water Agencies

California Farm Bureau Federation

California Fire Chiefs Association

California Forestry Association

California Special Districts Association

California State Association of Counties

County of Napa

County of Placer

El Dorado County Water Agency

Fire Districts Association of California

Humboldt Redwood Company LLC

Mendocino Redwood Company LLC

Pacific Forest Trust

Rural County Representatives of California

Sierra Business Council

Upper San Gabriel Valley Municipal Water District

OPPOSITION: (Verified 9/6/23)

None received

ARGUMENTS IN SUPPORT: According to the author, “Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and [advance] payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.”

ASSEMBLY FLOOR: 80-0, 5/31/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

Prepared by: Catherine Baxter / N.R. & W. / (916) 651-4116

9/6/23 13:17:10

**** END ****

 THIRD READING  

Bill No: AB 297

Author: Vince Fong (R)

Introduced: 1/26/23

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 11-0, 6/27/23

AYES: Min, Seyarto, Allen, Dahle, Eggman, Grove, Hurtado, Laird, Limón, Padilla, Stern

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 80-0, 5/31/23 - See last page for vote

SUBJECT: Wildfires: local assistance grant program: advance payments

SOURCE: Author

DIGEST:

This bill extends the sunset on the authority of the director of the Department of Forestry and Fire Protection (CalFire) to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034.

ANALYSIS:

Existing law:

1. Establishes CalFire within the California Natural Resources Agency (CNRA) under the control of the director. Public Resources Code (PRC) §701.
2. Directs CalFire to establish a local assistance grant program for fire prevention and home hardening education activities in California (Fire Prevention Grants Program or program). The program must establish a robust year-round fire prevention effort in and near fire threatened communities, as defined, which focuses on increasing the protection of people, structures, and communities. PRC §4124.5.
3. Authorizes, until January 1, 2024, the CalFire director to authorize advance payments from a grant awarded under the Fire Prevention Grants Program. Further, provides that:
   1. The advance may not exceed 25 percent of the total grant award; however, the director may authorize a greater amount, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.
   2. The grantee must expend the funds from the advance payment within 6 months of receipt, unless CalFire waives this requirement.
   3. The grantee must file an accountability report with CalFire four months from the date of receiving the funds and every four months thereafter. PRC §4124.5.
4. Authorizes, until January 1, 2024, the CalFire director to authorize advance payments to specified entities for grants associated with certain budget items, including for the Fire Prevention Grants Program. PRC §705.5.
5. Authorizes, until January 1, 2025, a state agency that administers a grant program to advance a payment to a recipient entity according to the rules specified, including, that the advance payment may not exceed 25 percent of the total grant award unless specified conditions are met. Government Code (GOV) §11019.1.
   1. The agency may only apply and utilize this advance payment authority if the program administered by the state agency expressly authorizes the use of that section. GOV §11019.1.
   2. Authorizes CalFire, until July 1, 2025, to authorize advance payments pursuant to (4) on a grant awarded under the Fire Prevention Grants Program. PRC §4124.5.
6. Requires CalFire to provide a report to the Legislature on or before January 1, 2023, on the outcome of CalFire’s use of advance payments for these programs. PRC §§705.5 and 4799.05.

This bill extends the sunset on the CalFire director’s authority to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034.

Background

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Fire Prevention Grants Program. As established pursuant to AB 1956 (Limón, Chapter 632, Statutes of 2018), CalFire administers the Fire Prevention Grants Program to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones. The program focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement actions that address wildfire hazards and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

The program is designed to complement the 2018 Strategic Fire Plan for California, the Wildfire and Forest Resilience Task Force Action Plan, and the Natural and Working Lands Climate Smart Strategy, which propose to protect lives, property, and resources, and increase the ability of natural and working lands to survive and mitigate the effects of climate change. The program is primarily funded from the Greenhouse Gas Reduction Fund and has awarded more than $457 million to grantees since 2017. In December 2022, CalFire announced the availability of up to $120 million for the program.

Comments

Advance payments. CalFire has authority under multiple statutes to offer advance payments for grants. For the Fire Prevention Grants Program, this authority comes directly from the program’s authorizing statute (PRC §4124.5) and from a reference in that statute to the state’s general advance payment law. The program also has authority to offer advance payments associated with certain budget items through January 1, 2024.

The authority from PRC §4124.5 allows the director, until January 1, 2024, to authorize advance payments for up to 25 percent of the grant award and, for the purpose of purchasing necessary equipment, up to 50 percent of either the total grant award or the cost of equipment, whichever amount is less. Generally, the grantee must spend the advanced funds within six months and must file accountability reports with CalFire every four months. This bill would extend the sunset on the director’s authority to authorize advance payments by 10 years, to January 1, 2034.

Under the state’s general authority to offer advance payments (GOV §11019.1), which expires July 1, 2025, and which CalFire is authorized to use for the Fire Prevention Grants Program in PRC §4124.5, CalFire may advance payments under the following rules:

• CalFire must prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems.
• CalFire must stipulate an advance payment structure and request process within the grant agreement or contract.
• CalFire must ensure the advance payment does not to exceed 25 percent of the total grant award. However, CalFire can increase this amount if it determines that the project requires a larger advance and the recipient entity provides sufficient justification and documentation to the administering state agency.

The advance payment recipient is also subject to certain rules, including that it must provide an itemized budget, spending timeline, and work plan; submit documentation to support the need for advanced payment, demonstrate good standing with the Internal Revenue Service; deposit advanced funds into a federally insured, interest-bearing account; establish procedures to minimize the amount of time that it takes to spend the advanced funds; and provide progress reports, as specified.

This bill does not touch CalFire’s authority under GOV §11019.1, which sunsets on July 1, 2025. However, AB 590 (Hart, 2023) would create a new general advance payment authority for all state agencies that mirrors the authority in GOV §11019.1, but without a sunset or a requirement that the state agency have separate approval in its program statutes to use this advance payment authority. If that bill passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending on the Senate Floor. At some point, the Legislature may wish to consider whether the various advance payment authorities should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

CalFire advance payment report. Existing law requires CalFire to report to the Legislature on the outcome of the department’s use of advance payments. The report covers the Fire Prevention Grants Program and the Forest Health Grant Program from 2017 to 2022. Table 1 below shows a history of the Fire Prevention Grants Program’s advance payments by fiscal year.

Table 1. Fire Prevention Grants Program Awards and Advances by Year of Award

According to the report, more than 30 percent of awardees have received at least one advance payment. The advances allowed 169 grantees to expand cash flow for projects and activities, allowing the grantees to pay staff, utilities, contractors, and other costs as they arose instead of 45 days after CalFire received a complete and valid invoice. CalFire reported feedback from grantees stating that they would be unable to operate without grant advances. The use of grant advances helped to provide access to funding to communities who likely would not have been able to afford to fund the work without them. Justification for advance payment range from deposits needed to start contracting work to funds needed to buy tools ahead of time. These advances can be critical to performing work in a timely manner.

Code conflict. This bill and SB 675 (Limón) amend the same section. This bill extends the sunset by 10 years whereas SB 675 would eliminate the sunset. SB 675 also provides additional clarity on the use of advance payments for supplies. Should the bill move forward, the author may wish to coordinate with Senator Limón to harmonize the two bills.

Related/Prior Legislation

SB 675 (Limón, 2023) eliminates the January 1, 2024, sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program. This bill is pending on the Assembly Floor.

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified. This bill is pending on the Senate Floor.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorized CalFire, until July 1, 2025, to authorize advance payments under the Fire Prevention Grants Program pursuant to the general authority provided to state agencies to make advance payments provided in the Government Code.

AB 211 (Committee on Budget, Chapter 574, Statutes of 2022) deleted the sunset date for advance payments under CalFire’s Forest Health Grants Program.

SB 63 (Stern, Chapter 382, Statutes of 2021) authorized the CalFire director to authorize an advance payment under the Fire Prevention Grants Program for an amount greater than 25 percent of the total grant award, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.

AB 1956 (Limón, Chapter 632, Statutes of 2018) established the Fire Prevention Grants Program at CalFire and authorizes, until January 1, 2024, the CalFire director to authorize advance payments for a grant not exceed 25 percent of the total grant award.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• CalFire does not anticipate any new costs as a result of this bill. However, CalFire is aware of one local assistance grantee that did not spend or liquidate their advance funds before their grant expired, and CalFire is still working with the grantee on the return of these funds to the department. If CalFire is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.
• To the extent the bill results in additional projects and activities that increase the protection of people, structures, and communities or reduce the occurrence or severity of catastrophic wildfires from what otherwise would have occurred, potentially significant savings due to avoided fire suppression and other costs (General Fund).

SUPPORT: (Verified 9/1/23)

American Property Casualty Insurance Association

Association of California Water Agencies

California Farm Bureau Federation

California Fire Chiefs Association

California Forestry Association

California Special Districts Association

California State Association of Counties

County of Napa

County of Placer

El Dorado County Water Agency

Fire Districts Association of California

Humboldt Redwood Company LLC

Mendocino Redwood Company LLC

Pacific Forest Trust

Rural County Representatives of California

Sierra Business Council

Upper San Gabriel Valley Municipal Water District

OPPOSITION: (Verified 9/1/23)

None received

ARGUMENTS IN SUPPORT: According to the author, “Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and [advance] payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.”

ASSEMBLY FLOOR: 80-0, 5/31/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

Prepared by: Catherine Baxter / N.R. & W. / (916) 651-4116

9/2/23 12:38:36

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 297 (Vince Fong) - Wildfires: local assistance grant program: advance payments

Bill Summary:

This bill would extend the sunset date for the director of the Department of Forestry and Fire Protection (CalFire) to authorize advance payments from a local assistance grant for fire prevention and home hardening education activities.

Fiscal Impact:

• CalFire does not anticipate any new costs as a result of this bill. However, CalFire is aware of one local assistance grantee that did not spend or liquidate their advance funds before their grant expired, and CalFire is still working with the grantee on the return of these funds to the department. If CalFire is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.
• To the extent the bill results in additional projects and activities that increase the protection of people, structures, and communities or reduce the occurrence or severity of catastrophic wildfires from what otherwise would have occurred, potentially significant savings due to avoided fire suppression and other costs (General Fund).

Background:

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Fire Prevention Grants Program. As established pursuant to AB 1956 (Limón, Chapter 632, Statutes of 2018), CalFire administers the Fire Prevention Grants Program to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones. The program focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement actions that address wildfire hazards and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

The program is designed to complement the 2018 Strategic Fire Plan for California, the Wildfire and Forest Resilience Task Force Action Plan, and the Natural and Working Lands Climate Smart Strategy, which propose to protect lives, property, and resources, and increase the ability of natural and working lands to survive and mitigate the effects of climate change. The program is primarily funded from the Greenhouse Gas Reduction Fund and has awarded more than $457 million to grantees since 2017. In December 2022, CalFire announced the availability of up to $120 million for the program.

CalFire advance payment report. Existing law requires CalFire to report to the Legislature on the outcome of the department’s use of advance payments. The report covers the Fire Prevention Grants Program and the Forest Health Grant Program from 2017 to 2022. Table 1 below shows a history of the Fire Prevention Grants Program’s advance payments by fiscal year.

Table 1. Fire Prevention Grants Program Awards and Advances by Year of Award

According to the report, more than 30 percent of awardees have received at least one advance payment. The advances allowed 169 grantees to expand cash flow for projects and activities, allowing the grantees to pay staff, utilities, contractors, and other costs as they arose instead of 45 days after CalFire received a complete and valid invoice. CalFire reported feedback from grantees stating that they would be unable to operate without grant advances. The use of grant advances helped to provide access to funding to communities who likely would not have been able to afford to fund the work without them. Justification for advance payment range from deposits needed to start contracting work to funds needed to buy tools ahead of time. These advances can be critical to performing work in a timely manner.

Proposed Law:

This bill would extend the sunset on the CalFire director’s authority to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034.

Related Legislation:

SB 675 (Limón) would eliminate the January 1, 2024, sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program.

AB 590 (Hart) would authorize a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorizes CalFire, until July 1, 2025, to authorize advance payments under the Fire Prevention Grants Program pursuant to the general authority provided to state agencies to make advance payments provided in the Government Code.

AB 211 (Committee on Budget, Chapter 574, Statutes of 2022) deleted the sunset date for advance payments under CalFire’s Forest Health Grants Program.

SB 63 (Stern, Chapter 382, Statutes of 2021) authorizes the CalFire director to authorize an advance payment under the Fire Prevention Grants Program for an amount greater than 25 percent of the total grant award, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.

AB 1956 (Limón, Chapter 632, Statutes of 2018) established the Fire Prevention Grants Program at CalFire and authorizes, until January 1, 2024, the CalFire director to authorize advance payments for a grant not exceed 25 percent of the total grant award.

Staff Comments:

This bill does not touch CalFire’s authority under GOV §11019.1, which sunsets on July 1, 2025. However, AB 590 (Hart, 2023) would create a new general advance payment authority for all state agencies that mirrors the authority in GOV §11019.1, but without a sunset or a requirement that the state agency have separate approval in its program statutes to use this advance payment authority. If that bill passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending in the Senate Governmental Organization Committee. At some point, this Committee may wish to consider whether the various advance payment authorities for programs under this Committee’s jurisdiction should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

Potential Savings on Fire Suppression. CalFire spends roughly $1 billion annually (General Fund) on “emergency fire suppression” – additional fire suppression resources needed when a fire continues to spread after the “initial attack” or about the first 24 hours. Landowners and government agencies can take certain steps to improve the likelihood that fires are contained during the initial attack, and are much less likely to become catastrophic wildfires that require emergency fire suppression resources. The Fire Prevention Grants Program funds fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones. The program focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement actions that address wildfire hazards and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

Therefore, to the extent the bill increases these projects and activities, this bill would result in potentially significant savings from avoided wildfire suppression costs (General Fund).

It could also reduce or mitigate other state costs such as recovery costs. Recovery costs for debris removal and cleanup, social services (such as shelters and social services), and local assistance (including rebuilding public infrastructure and backfilling property tax losses) can also be significant. For example, the administration estimates that state expenditures on wildfire and recovery activities for the 2017 wine country fires have totaled about $1.5 billion. While costs associated with these fires are eligible for federal reimbursement, the administration estimates that the state General Fund share of these costs will be roughly $400 million.

In addition to state savings, increasing the protection of people, structures, and communities could also mitigate property losses from wildfire.  Property losses from the October 2017 “wine country” fires in Sonoma, Napa, Solano, Lake, and Mendocino Counties—which included the Tubbs Fire—are expected to add up to between $6 billion and $8 billion. According to the California Department of Insurance, more than 14,000 homes were damaged or totally destroyed, along with nearly 4,000 commercial buildings, 3,200 cars, and 111 boats. These totals understate the total damage, as they do not include uninsured properties or vehicles.

Recommended Amendments:

This bill and SB 675 (Limón) amend the same section. This bill would extend the sunset by 10 years whereas SB 675 would eliminate the sunset. SB 675 also provides additional clarity on the use of advance payments for supplies. Should the bill move forward, the author may wish to coordinate with Senator Limón to harmonize the two bills.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Dave Min, Chair

2023 - 2024 Regular

Bill No: AB 297 Hearing Date: June 27, 2023

Subject: Wildfires: local assistance grant program: advance payments

BACKGROUND AND EXISTING LAW

Existing law:

1. Establishes the Department of Forestry and Fire Protection (CalFire) within the California Natural Resources Agency (CNRA) under the control of the director. Public Resources Code (PRC) §701.
2. Directs CalFire to establish a local assistance grant program for fire prevention and home hardening education activities in California (Fire Prevention Grants Program or program). The program must establish a robust year-round fire prevention effort in and near fire threatened communities, as defined, which focuses on increasing the protection of people, structures, and communities. PRC §4124.5.
3. Authorizes, until January 1, 2024, the CalFire director to authorize advance payments from a grant awarded under the Fire Prevention Grants Program. Further, provides that:
   1. The advance may not exceed 25 percent of the total grant award; however, the director may authorize a greater amount, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.
   2. The grantee must expend the funds from the advance payment within 6 months of receipt, unless CalFire waives this requirement.
   3. The grantee must file an accountability report with CalFire four months from the date of receiving the funds and every four months thereafter. PRC §4124.5.
4. Authorizes, until January 1, 2024, the CalFire director to authorize advance payments to specified entities for grants associated with certain budget items, including for the Fire Prevention Grants Program. PRC §705.5.
5. Authorizes, until January 1, 2025, a state agency that administers a grant program to advance a payment to a recipient entity according to the rules specified, including, that the advance payment may not exceed 25 percent of the total grant award unless specified conditions are met. Government Code (GOV) §11019.1.
   1. The agency may only apply and utilize this advance payment authority if the program administered by the state agency expressly authorizes the use of that section. GOV §11019.1.
   2. Authorizes CalFire, until July 1, 2025, to authorize advance payments pursuant to (4) on a grant awarded under the Fire Prevention Grants Program. PRC §4124.5.
6. Requires CalFire to provide a report to the Legislature on or before January 1, 2023, on the outcome of CalFire’s use of advance payments for these programs. PRC §§705.5 and 4799.05.

Background

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Fire Prevention Grants Program. As established pursuant to AB 1956 (Limón, Chapter 632, Statutes of 2018), CalFire administers the Fire Prevention Grants Program to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones. The program focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement actions that address wildfire hazards and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

The program is designed to complement the 2018 Strategic Fire Plan for California, the Wildfire and Forest Resilience Task Force Action Plan, and the Natural and Working Lands Climate Smart Strategy, which propose to protect lives, property, and resources, and increase the ability of natural and working lands to survive and mitigate the effects of climate change. The program is primarily funded from the Greenhouse Gas Reduction Fund and has awarded more than $457 million to grantees since 2017. In December 2022, CalFire announced the availability of up to $120 million for the program.

PROPOSED LAW

This bill would extend the sunset on the CalFire director’s authority to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034.

ARGUMENTS IN SUPPORT

According to the author, “Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and [advance] payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.”

ARGUMENTS IN OPPOSITION

None received.

COMMENTS

Advance payments. CalFire has authority under multiple statutes to offer advance payments for grants. For the Fire Prevention Grants Program, this authority comes directly from the program’s authorizing statute (PRC §4124.5) and from a reference in that statute to the state’s general advance payment law. The program also has authority to offer advance payments associated with certain budget items through January 1, 2024.

The authority from PRC §4124.5 allows the director, until January 1, 2024, to authorize advance payments for up to 25 percent of the grant award and, for the purpose of purchasing necessary equipment, up to 50 percent of either the total grant award or the cost of equipment, whichever amount is less. Generally, the grantee must spend the advanced funds within six months and must file accountability reports with CalFire every four months. This bill would extend the sunset on the director’s authority to authorize advance payments by 10 years, to January 1, 2034.

Under the state’s general authority to offer advance payments (GOV §11019.1), which expires July 1, 2025, and which CalFire is authorized to use for the Fire Prevention Grants Program in PRC §4124.5, CalFire may advance payments under the following rules:

• CalFire must prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems.
• CalFire must stipulate an advance payment structure and request process within the grant agreement or contract.
• CalFire must ensure the advance payment does not to exceed 25 percent of the total grant award. However, CalFire can increase this amount if it determines that the project requires a larger advance and the recipient entity provides sufficient justification and documentation to the administering state agency.

The advance payment recipient is also subject to certain rules, including that it must provide an itemized budget, spending timeline, and work plan; submit documentation to support the need for advanced payment, demonstrate good standing with the Internal Revenue Service; deposit advanced funds into a federally insured, interest-bearing account; establish procedures to minimize the amount of time that it takes to spend the advanced funds; and provide progress reports, as specified.

This bill does not touch CalFire’s authority under GOV §11019.1, which sunsets on July 1, 2025. However, AB 590 (Hart, 2023) would create a new general advance payment authority for all state agencies that mirrors the authority in GOV §11019.1, but without a sunset or a requirement that the state agency have separate approval in its program statutes to use this advance payment authority. If that bill passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending in the Senate Governmental Organization Committee. At some point, this Committee may wish to consider whether the various advance payment authorities for programs under this Committee’s jurisdiction should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

CalFire advance payment report. Existing law requires CalFire to report to the Legislature on the outcome of the department’s use of advance payments. The report covers the Fire Prevention Grants Program and the Forest Health Grant Program from 2017 to 2022. Table 1 below shows a history of the Fire Prevention Grants Program’s advance payments by fiscal year.

Table 1. Fire Prevention Grants Program Awards and Advances by Year of Award

According to the report, more than 30 percent of awardees have received at least one advance payment. The advances allowed 169 grantees to expand cash flow for projects and activities, allowing the grantees to pay staff, utilities, contractors, and other costs as they arose instead of 45 days after CalFire received a complete and valid invoice. CalFire reported feedback from grantees stating that they would be unable to operate without grant advances. The use of grant advances helped to provide access to funding to communities who likely would not have been able to afford to fund the work without them. Justification for advance payment range from deposits needed to start contracting work to funds needed to buy tools ahead of time. These advances can be critical to performing work in a timely manner.

Code conflict. This bill and SB 675 (Limón) amend the same section. This bill would extend the sunset by 10 years whereas SB 675 would eliminate the sunset. SB 675 also provides additional clarity on the use of advance payments for supplies. Should the bill move forward, the author may wish to coordinate with Senator Limón to harmonize the two bills.

Related legislation

SB 675 (Limón) would eliminate the January 1, 2024, sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program. This bill is pending review in the Assembly Appropriations Committee.

AB 590 (Hart) would authorize a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified. This bill is pending review in the Senate Governmental Organization Committee.

Prior legislation

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorizes CalFire, until July 1, 2025, to authorize advance payments under the Fire Prevention Grants Program pursuant to the general authority provided to state agencies to make advance payments provided in the Government Code.

AB 211 (Committee on Budget, Chapter 574, Statutes of 2022) deleted the sunset date for advance payments under CalFire’s Forest Health Grants Program.

SB 63 (Stern, Chapter 382, Statutes of 2021) authorizes the CalFire director to authorize an advance payment under the Fire Prevention Grants Program for an amount greater than 25 percent of the total grant award, not to exceed 50 percent of either the total grant award or the cost of equipment, whichever amount is less, for the purpose of purchasing necessary equipment.

AB 1956 (Limón, Chapter 632, Statutes of 2018) established the Fire Prevention Grants Program at CalFire and authorizes, until January 1, 2024, the CalFire director to authorize advance payments for a grant not exceed 25 percent of the total grant award.

SUPPORT

American Property Casualty Insurance Association

Association of California Water Agencies

California Farm Bureau Federation

California Fire Chiefs Association

California Forestry Association

County of Napa

County of Placer

Fire Districts Association of California

Humboldt Redwood Company LLC

Mendocino Redwood Company LLC

Pacific Forest Trust

Rural County Representatives of California

Sierra Business Council

Upper San Gabriel Valley Municipal Water District

OPPOSITION

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 297

Author:(Vince Fong)

As Introduced Ver:January 26, 2023

Majority vote

SUMMARY

Extends the sunset date from January 1, 2024, to January 1, 2034, for the director of Department of Forestry and Fire Protection (CAL FIRE) to authorize advance payments from a local assistance grant for fire prevention and home hardening education activities.

Major Provisions

COMMENTS

CAL FIRE administers Wildfire Prevention grants to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones that focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement activities that address the hazards of wildfire and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

Current law allows the Director of CAL FIRE to provide advance payments, up to 25% of the total Wildfire Prevention grant, to help the grantees start work on a fire prevention projecting instead of waiting for the grant funding to come in or using their own funds until the state pays them back. According to CAL FIRE, this authorization has been widely utilized since 2018 by the CAL FIRE Director to provide advance payments to 342 grantees. Of those, 174 had requested at least two advance requests, 49 had three requests, 26 had four requests, 8 had 5 and only 1 had 6 requests. All of the requests were approved. Justification for advance payment range from deposits needed to start contracting work, to funds needed to buy tools ahead of time. These advances are critical to performing work in a timely manner.

This bill will extend the sunset date by ten years for CAL FIRE's authority to provide advance payments, from January 1, 2024, to January 1, 2034. According to the author, extending the sunset supports the state's goals to expand its fuels management crews, grant programs, and partnerships to scale up fuel treatments to 500,000 acres annually by 2025; support communities, neighborhoods, and residents in increasing their resilience to wildfire; and, improve and align forest management regulations.

According to the Author

Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and advanced payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.

Arguments in Support

Pacific Forest Trust writes, "Advance payment is essential to make this grant program accessible to undercapitalized applicants and historically underserved communities. Many of the fire prevention activities eligible for funding from this program require significant upfront investment that vulnerable communities often lack. Without advance payment of a portion of the award, many rural communities who would stand to benefit most from the grant may be discouraged from applying. Moreover, those who do apply may then find themselves spending the limited resources they have on fundraising. Advance payment will help fire-threatened communities implement prevention projects sooner and more efficiently, and it will make the program far more accessible to undercapitalized applicants."

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Assembly Appropriations Committee, this bill would not likely result in any new costs for CAL FIRE. However, if CAL FIRE is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.

VOTES

ASM NATURAL RESOURCES: 11-0-0

YES: Luz Rivas, Flora, Addis, Friedman, Hoover, Mathis, Muratsuchi, Pellerin, Ward, Wood, Zbur

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: January 26, 2023

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0000773

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 297

Author:(Vince Fong) – As Introduced Ver:January 26, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill extends the sunset date, from January 1, 2024, to January 1, 2034, for the director of the Department of Forestry and Fire Protection (CAL FIRE) to authorize advance payments from a local assistance grant for fire prevention and home hardening education activities.

FISCAL EFFECT:

CAL FIRE does not anticipate any new costs as a result of this bill. However, CAL FIRE is aware of one local assistance grantee that did not spend or liquidate their advance funds before their grant expired, and CAL FIRE is still working with the grantee on the return of these funds to the department. If CAL FIRE is unable to recover advanced funds from other grantees, this bill would result in losses of bond or General Fund monies, potentially in the hundreds of thousands of dollars.

COMMENTS:

1) Purpose. According to the author:

Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and advanced payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.

2) Local Assistance Grants. CAL FIRE’s Wildfire Prevention Grants (WPG) program (referred to in this bill as “local assistance grants”) provides funding for fire prevention projects and activities in and near fire-threatened communities, including hazardous fuels reduction, wildfire prevention planning, and wildfire prevention education. The WPG program receives funding from both the Greenhouse Gas Reduction Fund (GGRF) and the General Fund. The program received and fully committed $123 million in fiscal year (FY) 2020-21 and approximately $118.3 million in FY 2021-22. The FY 2022-23 budget allocated $115 for the program. The solicitation period for this funding closed on March 15, 2023, and CAL FIRE anticipates announcing grant awards this summer. The Governor’s January budget for FY 2023-24 proposes an additional $117 million for this program and does not propose any budget solutions or cuts to this funding at this time.

3) Advance Payments. Current law allows the director of CAL FIRE to provide advance payments of up to 25% of the total Wildfire Prevention Grant, to allow grantees to pay for staff, contractors, and other costs associated with a fire prevention project as they arise, instead of having to wait 45 days for CAL FIRE to receive and validate an invoice. CAL FIRE notes this advance payment authority is especially important because grantees are nonprofit organizations, local agencies, special districts, private forest landowners, or Native American tribes that may not have the cash reserves to begin project work without an advance payment. According to CAL FIRE, the department has provided advance payments to 342 grantees since 2018. As noted above, CAL FIRE is aware of and working to recover funds from one grantee that did not spend or liquidate their advance funds before their grant expired. CAL FIRE notes this is likely an isolated incident and that approximately 40% of all grant recipients receive some form of advance payment.

SB 901 (Dodd), Chapter 626, Statutes of 2018, authorized CAL FIRE to provide Forest Health Grants to specified eligible entities for the implementation and administration of projects and programs to improve forest health and reduce greenhouse gas emissions, and authorized advance payments of up to 25% of the total grant award. SB 901 requires CAL FIRE to report to the Legislature on the outcome of the department’s use of advance payments for Forest Health Grants. According to CAL FIRE, this report has been completed, but has not yet received final approval for legislative distribution. While this report specifically relates to advance payments for Forest Health Grants, it might have information germane to the WPG program that could further inform this bill.

4) Advance Payment Pilot. AB 156 (Committee on Budget), Chapter 569, Statutes of 2022, establishes, until July 1, 2025, a new pilot program to explore possible improvements to the state’s existing advance payment practices for state-funded local assistance grants. Advance payments may be provided if specified criteria are met. For example, recipient entities must, among other things, provide an itemized budget, spending timeline, and workplan; submit documentation to support the need for an advance payment; demonstrate good standing with the Internal Revenue System; establish procedures to minimize the amount of time that elapses between the transfer of funds and the spend down of those funds; and provide ongoing progress reports on the spend down of advanced funds.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: March 27, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 297 (

Author:Vince Fong) – As Introduced Ver:January 26, 2023

SUBJECT: Wildfires: local assistance grant program: advance payments.

SUMMARY: Extends the sunset date from January 1, 2024, to January 1, 2034, for the director of Department of Forestry and Fire Protection (CAL FIRE) to authorize advance payments from a local assistance grant for fire prevention and home hardening education activities.

EXISTING LAW:

1. Requires CAL FIRE to establish a local assistance grant program for fire prevention and home hardening education activities. (Public Resources Code (PRC) § 4124.5 (a))
2. Authorizes the director of CAL FIRE, until January 1, 2024, to authorize advance payments from a grant program award, not to exceed 25% of the total grant award, except as specified. (PRC § 4124.5 (e)(1))
3. Require the State Fire Marshal to classify lands within state responsibility areas into fire hazard severity zones based on fuel loading, slope, fire weather, and other relevant factors present, including areas where winds have been identified by the CAL FIRE as a major cause of wildfire spread. (PRC § 4201)
4. Define “fire prevention activities” as those lawful activities that reduce the risk of wildfire in California, including, but not limited to, mechanical vegetation management, grazing, prescribed burns, creation of defensible space, and retrofitting of structures to increase fire resistance. (PRC § 4124)
5. Requires CAL FIRE to provide a report to the Legislature on or before January 1, 2023, on the outcome of CAL FIRE’s use of advance payments for forest health local assistance grants. (PRC § 4799.05 (a)(2)(C))
6. Authorizes a state agency that administers a grant program to advance a payment to a recipient entity and requires the state agency to prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems, and ensure the advance payment to the recipient entity does not to exceed 25% of the total grant amount awarded to that recipient entity. (Gov Code § 11019.1)

FISCAL EFFECT: Unknown.

COMMENTS:

1. Need for the bill. According to the author,

Wildfire seasons are unpredictable, and the severity of the fires are ever-increasing. The 2020 wildfire season was the most destructive in California history. CAL FIRE estimated 4.3 million acres burned across 8,648 incidents, destroying 11,116 structures and resulting in the deaths of 33 people. The cost to residents in the state is tremendous and tragic. Shovel-ready projects across the state are ready to break ground to keep vulnerable communities safe, and advanced payments from CAL FIRE will provide needed flexibility to local agencies and organizations to implement critical wildfire prevention projects. AB 297 bridges the wildfire prevention goals of the state with the readiness of locals to harden their communities.

1. Wildfires. Wildfires have been growing in size, duration, and destructivity over the past 20 years. Growing wildfire risk is due to accumulating fuels, a warming climate, and expanding development in the wildland-urban interface. The 2020 fire season broke numerous records. Five of California’s six largest fires in modern history burned at the same time, destroying thousands of buildings, forcing hundreds of thousands of people to flee their homes, and exposing millions of residents to dangerously unhealthy air. Managing forest health and efforts to restrict fire spread is vital to wildfire prevention.
2. Local assistance grants. As established pursuant to AB 1956 (Limón, Chapter 632, Statutes of 2018), CAL FIRE administers Wildfire Prevention grants to fund robust year-round fire prevention efforts in and near fire threatened communities in high and very high fire hazard severity zones that focuses on increasing the protection of people, structures, and communities. The grants enable local organizations, like fire safe councils, to implement activities that address the hazards of wildfire and reduce wildfire risk to communities. Funded activities include hazardous fuel reduction, wildfire prevention planning, and wildfire prevention education.

Last year, the San Gabriel Valley Council of Governments received grant funding to work towards developing a Regional Wildfire Protection Plan that will help to protect 31 cities and communities, 22 of which are identified as “communities at risk.”

In Lake County, the Robinson Rancheria Band of Pomo Indians received a grant for a hazardous fuels reduction project in the wildland-urban interface that will incorporate professional training as well as a community outreach and education campaign to increase awareness of defensible space and fuels management.

In El Dorado County, the El Dorado Fire Safe Council received a grant for a project to assist residents with hazardous tree removal to slow the spread of the bark beetle infestation. The project will also assist with removing stressed and injured trees damaged by the Caldor Fire.

The Wildfire Prevention grants are funded as part of the State’s Wildfire and Forest Resilience Strategy, in part with Cap-and-Trade auction proceeds administered by the California Climate Investments Greenhouse Gas Reduction Fund. In December 2022, CAL FIRE announced the availability of up to $120 million for Wildfire Prevention grants.

1. Advance payments. Current law allows the Director of CAL FIRE to provide advance payments, up to 25% of the total Wildfire Prevention grant, to help the grantees start work on a fire prevention projecting instead of waiting for the grant funding to come in or using their own funds until the state pays them back.

According to CAL FIRE, this authorization has been widely utilized since 2018 by the CAL FIRE Director to provide advance payments to 342 grantees. Of those, 174 had requested at least two advance requests, 49 had three requests, 26 had four requests, 8 had 5 and only 1 had 6 requests. All of the requests were approved. Justification for advance payment range from deposits needed to start contracting work, to funds needed to buy tools ahead of time. These advances are critical to performing work in a timely manner.

SB 901 (Dodd, Chapter 626, Statutes of 2018) authorized CAL FIRE to provide Forest Health grants to specified eligible entities for the implementation and administration of projects and programs to improve forest health and reduce GHG, and authorized, until January 1, 2024, advance payments up to 25% of the total grant award. That law requires CAL FIRE to report to the Legislature on the outcome of CAL FIRE’s use of advance payments for Forest Health local assistance grants. That report has been completed, but has not yet received final approval for legislative distribution. While the report will only be related to the advance payments for the Forest Health grants, it might have information germane to the Wildfire Prevention grant program that could inform this bill.

1. Sunset extension. This bill will extend the sunset date by ten years for CAL FIRE’s authority to provide advance payments, from January 1, 2024, to January 1, 2034.

According to the author, extending the sunset supports the state’s goals to expand its fuels management crews, grant programs, and partnerships to scale up fuel treatments to 500,000 acres annually by 2025; support communities, neighborhoods, and residents in increasing their resilience to wildfire; and, improve and align forest management regulations.

1. Related legislation.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorized advance payments pursuant to the Wildfire Prevention grant program until January 1, 2025, for grants that are awarded in accordance with a new state pilot program to explore possible improvements to the state’s existing advance payment practices for state-funded local assistance grants.

AB 1956 (Limón, Chapter 632, Statutes of 2018) established the Local Assistance grant program for fire prevention and required CAL FIRE to prioritize local assistance grant funding applications from local agencies based on the “Fire Adapted Community” list.

AB 211 (Committee on Budget, Chapter 574, Statutes of 2022) deleted the sunset date for advance payments pursuant to the Forest Health grants established by SB 901 (Dodd).

AB 901 (Dodd, Chapter 626, Statutes of 2018) authorizes CAL FIRE to provide Forest Health grants to specified eligible entities for the implementation and administration of projects and programs to improve forest health and reduce GHG, and authorized, until January 1, 2024, advance payments up to 25% of the total grant award.

REGISTERED SUPPORT / OPPOSITION:

Support

American Property Casualty Insurance Association
Association of California Water Agencies
California Forestry Association
Pacific Forest Trust
Rural County Representatives of California
Sierra Business Council
Upper San Gabriel Valley Municipal Water District

Opposition

None on file.

Analysis Prepared by: Paige Brokaw / NAT. RES. /