The business organization maintains that when the Air Resources Board adopted the fee program, which is expected to raise billions of dollars, it violated a constitutional provision, passed in 1978 as part of Proposition 13, that requires two-thirds legislative vote on new taxes.
It maintains that fee revenue in excess of that needed to administer the state's greenhouse gas reduction program are illegal taxes and is taking that contention to the 3rd District Court of Appeal in response to Sacramento County Judge Timothy Frawley's ruling in November. He declared that Assembly Bill 32, California's anti-greenhouse gas law, was sufficient authority for the fees.
"We stand by our belief that the Legislature in passing AB 32 did not authorize the ARB to raise revenue for the state beyond those costs necessary to administer the program," said Allan Zaremberg, the chamber's president, said in a statement. "We also believe the ARB's auction violates Proposition 13, because it imposes a new tax that did not receive two-thirds approval by the Legislature."
Gov. Jerry Brown is counting on the fees for variety of spending, including drought relief and a proposed bullet train system linking the northern and southern halves of the state.
"We believe that the judge inappropriately created a new category of regulatory fees," said Zaremberg, "in order to avoid ruling that the revenues came from an illegal tax -- not approved by two-thirds of the Legislature. The judge himself called this a close question.'"