(April 29, 2008) A California Chamber of Commerce-opposed bill that taxes motor vehicles and vehicle fuels is being heard by the Assembly Local Government Committee tomorrow.

AB 2558 (Feuer; D-Los Angeles) assesses an unfair tax on businesses and consumers by authorizing the Los Angeles County Metropolitan Transportation Authority to impose a tax on either motor vehicles or vehicle fuel.

California’s energy prices are already among the highest in the nation. AB 2558 proposes either a gas tax of up to 3 percent of the retail sales price of fuel or a tax on motor vehicles of up to $90.

The CalChamber pointed out that taxes such as proposed in AB 2558, in addition to the rising energy prices due to existing environmental initiatives, are making it more and more difficult for California’s small businesses to remain in the state.

The state Air Resources Board (ARB) is already working on the scoping plan for AB 32 (Núñez; D-Los Angeles), the Global Warming Solutions Act of 2006. This plan will be the guidebook for putting AB 32 into motion and developing the regulations. Since AB 32 gives the ARB the ultimate authority to regulate the state’s greenhouse gas emissions, it is important that local and regional entities refrain from setting up duplicative requirements. 

AB 2558 disregards the multiple levels of work being done at the ARB to reduce the state’s greenhouse gas emissions. 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. The CalChamber believes AB 2558 should also be subject to a two-thirds public vote. 

Similar Legislation Already Defeated

On April 14 the Assembly Transportation rejected similar legislation that sought to increase transportation costs in the Bay Area region by creating a new fuel tax to pay for a regional climate plan.

AB 2744 (Huffman; D-San Rafael) fell one vote short of passing the Assembly Transportation Committee, 7-6.

Action Needed

AB 2558 will be heard by the Assembly Local Government Committee on April 30.

Contact your Assembly representative and members of Assembly Local Government and urge them to oppose AB 2558. For a sample letter, visit www.calchambervotes.com.

Staff Contact: Amisha Patel

Video Library

CalChamber Policy Analyst Robert Callahan talks about AB 2558

Additional Materials

Climate Change