Consumer Federation of California

Nearly 800,000 rural homeowners may not receive refunds if the state’s disputed $150 annual fire prevention fee is eventually declared illegal.

That’s because those homeowners failed to immediately file an important form along with sending their checks to the state last year.

Sacramento County Superior Court Judge Eugene Balonon made that determination this week, but nevertheless ruled that a legal challenge to the fire fee could proceed as a class-action lawsuit for now.

The outcome will have consequences in San Diego County, where some 66,000 homeowners received bills.

The amount of money those property owners may lose if the fee is tossed out has not been calculated. The state estimates $77 million was collected in the first year of billings. An estimated 15,000 homeowners did file the proper forms needed to qualify to get their money back.

The ruling underscores the importance of complying with the state’s paperwork demands as a new round of bills are now being put in the mail, said Tim Bittle, a lawyer for the Howard Jarvis Taxpayers Association challenging the constitutionality of the fee.

“Most people will not be able to seek refunds for that first round (of payments),” Bittle said. “We estimate that only about 15,000 were savvy enough and acted quickly enough” to file the proper forms.

Bittle is referring to the “petition for redetermination” that must be submitted to the state as part of the administrative appeals process.

Those who skipped that step did not exhaust their administrative remedies and thus may have no standing in court to receive refunds if the state is later required to return the money, Bittle explained.

Bittle said the correct forms and instructions are available online at www.firetaxprotest.org. But property owners must act fast. The petition for redetermination must reach the state within 30 days of the date stamped on the bill. Invoices from the state will also include information and the forms related to the appeals process.

Bittle is representing 14 homeowners who paid the fee but believe it is unconstitutional because the levy is really a “tax” that required a two-thirds vote of the Legislature to be adopted. A fee requires only a simple-majority vote of lawmakers because there is a direct nexus between the charge and service provided. It was passed in 2011.

Four of those homeowners joining the litigation did not send in the paperwork, prompting the judge to agree with the state that they — and thousands of others — should not be entitled to refunds.

The $150 bills are being sent to rural homeowners whose property is in “state responsibility areas” defended by Cal Fire. Those who are already are part of a fire protection district qualify for a $35 deduction.

The invoices are being mailed out in stages and in alphabetical order by county. The first batch was sent July 19. Invoices for San Diego County homeowners are scheduled to arrive at the end of September.

In response to the ruling, Cal Fire spokeswoman Janet Upton said: “This fund is vital to our fire prevention efforts and we are committed to working through the judicial process in order to maintain it.”

The Board of Equalization, a tax collecting agency in charge of the bill mailings, declined to comment because of the ongoing litigation, as did the state Attorney General’s office, which represents both agencies in court.

Bittle said there is still some hope that everyone to be awarded a refund. “Our theory is that if the (legislation) imposing the fee is invalid because it never got a two-thirds vote then everything is invalid, including the administrative remedy rule,” he said.

But that possibility remains distant. A court hearing to answer the constitutionality question is not expected until early 2014. Appeals are likely from there.