Action Needed to Keep Illegal Tax Holding in Legislative Fiscal Committees

(May 21, 2012) A California Chamber of Commerce-opposed “job killer” bill that will increase energy costs, including fuel prices on consumers and businesses will be considered in the Senate Appropriations Committee today.

Two other similar bills were placed on the Assembly Appropriations Committee Suspense file last week pending a review of their fiscal impact.

The bills are AB 1532 (J. Pérez; D-Los Angeles), AB 2404 (Fuentes; D-Los Angeles) and SB 1572 (Pavley; D-Agoura Hills).  All three allocate funds from an illegal tax to various programs that are not necessary to cost-effectively implement the market-based trading mechanism under AB 32, the 2006 climate change law.

In opposing the bills, the CalChamber has pointed out that the California Air Resources Board (ARB) lacks authority and has been unable to justify the need to raise billions of dollars in revenue for the purposes anticipated in the bills.

ARB’s plan to impose a “cap-and-tax”  will hurt jobs, and increase costs to the state and consumers. AB 32 was not intended to be a revenue source. If the state moves forward with a billion-dollar auction, the impacts on the state’s economy would be devastating.

Entities subject to the illegal tax include manufacturers, public agencies, universities, refineries, food processors and others. The impact on these entities will be severe and on top of the higher fuel and energy costs due to other climate change regulations.

Not only is an auction unnecessary for a successful cap-and-trade program, but the planned collection and distribution of auction revenues raises legal uncertainties.
Action Needed

The CalChamber is asking members to contact their legislators to urge them to keep AB 1532 and AB 2404 on the Assembly Appropriations Suspense File and to put SB 1572 on the Senate Appropriations Suspense File.

Easy-to-edit sample letters are available at