Supes Talk Fire Insurance, Cannabis Tax Collection and Auctioning Off a Pistol 

The Humboldt County Board of Supervisors moved forward Oct. 24 with a plan to collect a combined $16.3 million in past-due cannabis excise tax bills and permit fees.

County Planning Director John Ford explained the county is owed about $14.2 million in overdue taxes and another $2.1 million in permit fees. He recommended a different collections plan for each.

On the fees side of things, Ford said nearly $830,000 of the outstanding fees are related to 568 approved cannabis permits, while $140,000 is connected to 62 interim permits. Of the $2.1 million that's owed, Ford said $1.6 million is more than 90 days past due. Moving forward, he proposed that staff will not work on pending applications unless there is a deposit in hand. Then, he said applications that are delinquent by more than 90 days will be informed they have 90 days to pay their bills in full or face permit denial by the zoning administration. Further, he said, interim permits will not be extended beyond Dec. 31 unless the applicant is current on permitting fees, while all current permit holders will be given 90 days to pay their fees in full or face suspension, after which they would be given another 90 days to pay or face permit revocation.

The tax side of things is more complicated, with Ford saying that a total of 962 permit holders owe $14.2 million, but he added that the list has not been "thoroughly examined" and it is believed many of these bills were associated with cultivation sites that are now inactive. As an example, he pointed to a $481,000 tax bill that he said was associated with an interim permit holder who illegally expanded their operation, was fined by the county, continued to cultivate, was raided by law enforcement and, ultimately, left, with the property reverting to a lien holder.

"This is a tax that is owed but is unlikely to be paid," Ford said in the staff report, which tallies just $5.2 million in unpaid taxes connected to currently approved permits or interim permits, meaning the other $9 million owed is likely associated with cultivators with pending permits or who simply abandoned the process.

For permit applicants that have been inactive for some time, Ford said he was recommending they be given a 30-day notice that unless they enter a payment plan to have all taxes paid by Dec. 31, 2024, their application would be recommended for denial. Applicants with approved permits or those actively in process, Ford said, would be given until Dec. 31 to commit to a payment plan to have all taxes paid by Dec. 31, 2024.

During public comment, Humboldt County Growers Alliance Executive Director Natalynne DeLapp thanked staff for its work on the issue and said she generally supported the plan, but requested the dates be pushed back to March 31, 2024, and March 31, 2025. She said the 90-day extensions would be helpful because cultivators are still "deep" in harvest season and a lot of county offices close for stretches between now and Dec. 31.

When the matter came back before the board — operating without Second District Supervisor Michelle Bushnell, who "abstained" from the discussion, leaving the room after saying she didn't believe she had a conflict of interest but wanted to operate under an abundance of caution but did not elaborate — there seemed to be a consensus in support of staff's plan.

But Fifth District Supervisors Steve Madrone said he'd done some research on overdue tax payments and learned that only 1 percent of farmers with overdue bills had approached the county about making payment plans.

"Frankly, at this point in time, I don't think we're going to collect a whole lot of this money," he said, later adding that he was concerned giving farmers until Dec. 31, 2024 — or March 31, 2025 — would allow some to cultivate for another season before skipping out on their bill. "Enough is enough."

Ultimately the board voted 3-1, with Madrone dissenting, to follow Ford's recommendation with DeLapp's suggestion of changing the compliance dates to March 31, 2024, for farmers to enter into payment plans and March 31, 2025 for them to pay off their balances.

A Gun in the Basket

After a lengthy and contentious discussion of whether to reappoint First District Supervisor Rex Bohn as its delegate to Rural County Representatives of California (RCRC, a lobbying association of more 40 California counties that advocates for rural policies), the board voted unanimously to stay the course.

Two issues gave a majority of the board pause about keeping Bohn in the role he's held for more than a decade: the inclusion of a handgun in an auction basket representing Humboldt County at a recent RCRC event and the organization's involvement in the affiliated Golden State Finance Authority's plans to build wood pellet manufacturing facilities that would export the biomass fuel product overseas.

On the handgun front, Third District Supervisor Mike Wilson said he wasn't sure he was comfortable voting on the matter and felt he needed additional information after seeing a message on social media from a gun-control advocate expressing concern over the auction basket, specifically the inclusion of a 9 mm Smith & Wesson handgun.

"That was promoting firearms and the distribution of firearms in an auction item," Wilson said, later adding that Bohn should have known inclusion of the item would be controversial and upsetting to some county residents, especially given the ongoing epidemics of gun violence and mass shootings. "It's not a party favor and it's not a door prize. It's a firearm."

Bohn was defensive — initially saying he felt "like a merchant of death," noting that he regularly auctions off firearms for a host of charities, as well as cases of wine and bottles of liquor — and said the item was "perfectly legal."

Bohn explained that he puts together an auction basket as a part of an annual fundraiser that sees participating RCRC counties submit donated baskets that are then auctioned off, with proceeds — $63,000 — going to charities selected by RCRC's current chair.

"We've had the No. 1 basket for a few years in a row," Bohn said, noting this year's included items like $500 worth of Humboldt grass-fed beef, two redwood benches, a custom firepit and a host of stuff made in Humboldt County. "I tried to promote local."

As to the gun, Bohn said he won another gun — a shotgun — at raffle, "didn't want it, traded it in for the pistol and added it to the basket." He noted he checked with "RCRC legal" about it, which expressed some concerns, so he agreed to hold onto the pistol until after the auction, after which he would take it to a federally licensed dealer to have it transferred to the new owner, who would have to pass a background check and go through the mandatory 10-day waiting period. (He said he intended to take it to the dealer Oct. 30.)

"This isn't the first time I've had a gun in my basket, so the timing of this is," Bohn said before a lengthy pause, "wonderful." He would go on to imply several times that this was only a matter of discussion at the meeting because he's up for re-election next year. "Hopefully you can find someone to run against me and use this against me," he said later.

On the biomass front, Wilson, Madrone and Fourth District Supervisor Natalie Arroyo indicated they have questions or concerns, though none were expressed in detail. Ultimately, a majority of the board agreed that Bohn generally has been a strong advocate for rural issues with RCRC and the board voted unanimously to re-appoint him as the county's delegate, though Bushnell, reappointed as the county's alternate, stepped in and volunteered to handle the auction baskets moving forward.

The consensus of the board was also that it would like to have a policy discussion surrounding biomass generally, and the Golden State Finance Authority specifically. Bohn indicated he would ask the authority's subsidiary handling the proposed biomass project to come present to the board after the full project environmental impact report is done.

Fire Insurance

Before talking cannabis tax collection or the appropriateness of guns in auction baskets, the board heard a lengthy presentation from Julia Juarez, the deputy commissioner of community relations and outreach for the California Department of Insurance about fire insurance at the request of Bushnell, who noted many of her constituents were having problems finding affordable fire insurance policies.

Juarez said the state is currently taking action to increase accessibility to insurance throughout the state, but first she explained the driving forces behind the problem.

Insurance companies are global corporations, she said, and are deeply affected by not just "catastrophes" in California but throughout the world, which have become more frequent as the climate crisis deepens. Inflation, meanwhile, is causing "unprecedented financial stress," Juarez said, noting that companies increase costs of materials and labor when rebuilding communities.

As a result, she noted that seven of the 12 largest insurance companies operating in California have paused or restricted new policies, despite having increased rates, noting that while nationwide these companies have seen profits of 3.6 percent, policies in California have seen a loss of 13.1 percent.

To address the problem, Juarez said the Department of Insurance is looking at a number of reforms that reward fire safe communities and property owners, change companies' approaches to catastrophic modeling and increase coverage limits.

She encouraged anyone having trouble finding a homeowner's or fire insurance policy to reach out to her office at insurance.ca.gov or (800) 927-4357.

Thadeus Greenson (he/him) is the Journal's news editor. Reach him at (707) 442-1400, extension 321, or [email protected].