Illegal Tax Hike "Job Killers" Await Action by Governor, Unnecessary New Heat Illness Mandate Also Pending

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As reported in the Sept. 14th CalChamber Alert Newsletter, three illegal tax increases, all "job killers" that will boost energy costs, are awaiting action by the Governor after passing the Legislature on the closing day of the session. Also on the Governor's desk is a costly workplace mandate "job killer" that could increase the price of food. The four California Chamber of Commerce-opposed "job killer" bills were among 32 identified this year.

Fuel Price Increases

Just days before the end of the session, amendments to CalChamber-opposed AB 1186 (Skinner; D-Berkeley) turned the bill into a "job killer."

Like AB 1532 (J. A. Pérez; D-Los Angeles) and SB 535 (De León; D-Los Angeles), AB 1186 aims to use revenue from an illegal tax in the cap-and-trade program.

The program will increase energy costs, including fuel prices, on consumers and businesses by imposing a multibillion-dollar auction that is not necessary to cost-effectively implement the market-based trading mechanism under AB 32, the 2006 climate change law.

AB 1186 creates an unfunded program, the School Energy Efficiency and Greenhouse Gas Reduction Fund, with the expectation of accessing revenue from the cap-and-trade program. The bill also is duplicative of existing programs currently funded by ratepayers, including energy efficiency programs that fund retrofitting school buildings.

AB 1532 and AB 535 specify other uses for the auction revenues and both bills must be signed in order to go into effect.

'Cap-and-Tax'

In opposing AB 1186, AB 1532 and SB 535, the CalChamber has pointed out that the plan of the California Air Resources Board (ARB) 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. The decision to move forward with a multibillion-dollar auction will have devastating impacts on the state's economy.

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.

Imposing an auction goes well beyond the ARB's authority and runs contrary to the requirements expressly stated in AB 32, which is that of maximizing benefits and minimizing what the ARB describes as leakage risks and costs—the potential for businesses and jobs to move out of state.

Costly Workplace Mandate

On August 29, legislators sent to the Governor AB 2346 (Butler; D-Los Angeles). The bill could increase the price of food and force growers to move their crop production to other states and countries, thereby hurting California exports, by creating unprecedented and excessive consequences for perceived and actual violations of heat illness prevention regulations.

Among the onerous provisions of AB 2346 is one creating a broad new private right of action even when Cal/OSHA has found no violation.

Cal/OSHA attests to the success of California's first-in-the-nation heat illness prevention regulations in attaining increased compliance in outdoor places of employment throughout the state. Agricultural employers have made enormous strides in compliance and created unprecedented public-private partnerships. There is no reason for AB 2346. Action Needed

The CalChamber is urging its members to contact the Governor and ask him to veto AB 1186, AB 1532, SB 535 and AB 2346.

Sample letters are available at www.calchambervotes.com.