(August 19, 2008) A California Chamber of Commerce-opposed bill that will lead to fuel price increases is awaiting action on the Senate floor.

The “job killer” bill, AB 2558 (Feuer; D-Los Angeles), increases the price of doing business in the Los Angeles and Bay Area regions by assessing an unfair tax on vehicle fuel or vehicle registration. It also proposes a gas tax of up to 3 percent of the retail sales price, or up to $90 per vehicle based on its emissions.

Such taxes, combined with rising energy prices due to existing environmental initiatives, are making it difficult for California’s small businesses to remain in the state.

Disregards ARB

AB 2558 disregards the multiple levels of work being done at the state Air Resources Board (ARB) to reduce the state’s greenhouse gas emissions. ARB already is working on the scoping plan that will be the guidebook for putting AB 32 into motion and developing the regulations.

Instead of working on a comprehensive, state approach to combating climate change, this bill would set up a climate change mitigation and adaptation expenditure plan funded by a new gas tax or tax on vehicles.
Lastly, all state taxes should require a two-thirds vote. AB 2558 proposes a special tax for a specific purpose and therefore should be subject to a two-thirds vote for approval.

The CalChamber is encouraging the business community to contact senators to urge them to oppose AB 2558.

A sample letter is available at www.calchambervotes.com.

Restrictive Fuel Standard Dead

A former “job killer” bill, SB 1240 Kehoe (D-San Diego), has been amended to deal with another subject.
Before amendments, the bill would have interfered with the development of a competitive alternative fuels market and threatened job creation in California by creating a costly Low Carbon Fuel Standard that conflicts with the existing standard created by Governor’s Executive Order S-7-04.

The CalChamber believes that to meet increasing consumer demand, the fuels market needs to be full of options and represent a mix of alternatives.

Staff Contact: Amisha Patel