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  • Archive for July 14th, 2017

    Jul 14


    Posted by Crystal Whitfield | No Comments

    Governor Jerry Brown spent five hours in a committee testifying about his proposal to extend California’s Cap-and-Trade program to the year 2030.  This is unheard of and showed the Governor’s commitment to the issue as he had to sit through several hours of public testimony for and against the proposal.

    Both bills, AB 617 by Assemblymembers Cristina Garcia (D-Bell Gardens), Eduardo Garcia (D-Coachella) and Miguel Santiago (D-Los Angeles) and AB 398 by Assemblymember Eduardo Garcia (D-Coachella), passed out of committee on a party line vote.

    At the hearing, the Governor adamantly advocated for his GHG reduction plan, stating at one point, “We’re not going to pull back — the only question is how to go forward.  Are we going to do that by an extensive, massive, intrusive regulatory burden that will be three to five times more expensive? That is not the way to go.”

    According to the Governor’s Office, the legislative package will “launch a landmark program to measure and combat air pollution at the neighborhood level, in communities most impacted, and extend and improve the state’s world-leading cap-and-trade program to ensure California continues to meet its ambitious climate change goals.”

    Initially, a vote was scheduled for yesterday on the package, but strong opposition from the far-Left, led by environmental groups that do not want to see any market-based programs and by Environmental Justice groups that want to see more resources directed to certain neighborhoods, has stalled the vote.  Rumor is that amendments are being crafted to both bills now.

    Additionally, it is being reported that some legislators are stating they will not vote for the Cap-and-Trade bills unless a package of bills addressing the Affordable Housing crisis in California is also put together (more on this to follow).

    So, negotiations are still seemingly fluid and at this point not many people are willing to place a bet on what happens.

    Here is a good news account about the craziness that’s happening on this topic right now. Click here to read the full article.

    Jul 14


    Posted by Crystal Whitfield | No Comments

    After several weeks of working closely with our supply chain partners/members as part of the Goods Movement Coalition on cap-and-trade issues, we are happy to report that they have successfully been able to keep an issue out of the discussion.

    AB 617, noted above, is the follow-on bill dealing with Air Quality issues above and beyond Cap-and-Trade reauthorization.  It is this bill that has made us the most nervous, as there have been some indications it potentially would carry language pertaining to a new Indirect Source Review (ISR) rule which could wreak havoc on the supply chain and regulate individual buildings as well as discrete neighborhood areas, in a manner that could stop building and/or growth of existing facilities.

    After reviewing the final language in the measure, and receiving feedback from many of our members we believe the language is as good as it is going to get and has no specific ISR authorization.

    Here is the official statement from the Goods Movement Coalition on AB 617 (C. Garcia, E. Garcia, Santiago):

    For years, the goods movement industry has worked in partnership with the administration, the Air Resources Board, and local air districts on emission reduction measures that balance emission reductions, efficiency and jobs and will continue to do so. 

    In recognition that Cap and Trade is such an important piece of the State’s GHG policy, we are neutral on Sec. 8 of the July 10th draft of AB 617 but would have concerns with any further amendments which tip the delicate balance between further emission reductions, efficiency and jobs. 

    We remain vigilant and are watching closely to make sure the language does not get changed in a manner that backslides on our hard work.

    Jul 14


    Posted by Crystal Whitfield | No Comments

    As we reported last week, the SB 2 (Atkins; D-San Diego), a bill that will authorize a tax on almost every recorded real estate document, was brought up with no notice and passed with all Democrat Senators voting for the new tax, lobbing the bill over to the Assembly.  Less than a week later the bill was heard in the Housing Committee and passed on a party line vote.

    Now, as tense negotiations are happening on reauthorization of California’s Cap-and-Trade program, it is reported that several progressive members of the Legislature are pushing to have this bill be on the table as part of any a final deal on Cap-and-Trade.

    How taxing our documents has anything to do with greenhouse gas trading markets is a bit baffling, but hey, its Sacramento.

    However, if the legislature does want to connect the two issues, we believe there is an easy path forward as there are a list of 10-15 bills that would make sense to consider and adopt – but SB 2 is not one of them.  And we believe that inclusion of SB 2 would be a poison bill that would make any such deal unsuccessful.

    In order to move the bill forward, it has been amended to exempt building sales but keep every day document recording, which makes the bill an incredibly regressive tax.  Our position has long been, apply the tax to all transactions in a smaller amount, but the bill has actually been changed to move away from that.

    According to the Senate Appropriations committee analysis, this bill will result in a $200 million to $300 million tax on commercial and residential property owners and tenants.  These funds will be redirected to a number of government programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) focusing on affordable housing.

    While we are sympathetic to the need for more affordable housing, and support many policies that will actually produce rooftops by addressing the underlying issues that are real impediments to building housing.

    We are asking that if SB 2 were to move forward, it be amended to focus on Governor Brown’s stated goals to address affordable housing of cutting red tape, delays, and unnecessary expenses to housing construction that would make housing more affordable to all Californians.  We also call on the legislature to address the thicket of environmental law known as CEQA which quashes many projects through cost and delays and unnecessary lawsuits, before a shovel is ever put in the ground.

    If more funds are needed, our industry is willing to accept a new tax as long as it is applied evenly, fairly, and transparently across the board and is accompanied by some of the reforms supported by Governor Brown.

    California needs more housing.  But simply creating a new tax and new government programs is not going to produce rooftops as it does not address the impediments to building more housing.

    Hopefully a package of bills will move forward that addresses the affordable housing crisis.  This bill, however, should not be one of them.

    Jul 14


    Posted by Crystal Whitfield | No Comments

    David Bahr, Communications Manager for R-Street has penned an op/ed explaining how the Border-Adjustment Tax would add nearly $2B to the cost of property insurance in California:

    “As the nation’s most populous state, among the wealthiest states and a state that is vulnerable to the catastrophic effect of earthquakes, floods, wildfires and other natural catastrophes, California relies heavily on insurance to manage its significant risk. As Congress prepares to consider structural changes to the U.S. tax code, a new R Street Institute policy study warns that making it more difficult for insurers to buy international reinsurance will have adverse consequences on Californians’ ability to obtain coverage affordably”.

    “Applying a destination-based cash flow tax—better known as a “border-adjustment tax,” or BAT—to the import of reinsurance will, authors Lars Powell, Ian Adams and R.J. Lehmann note, cost California consumers an additional $1.91 billion in higher property-casualty insurance premiums over the next decade….”

    Click here to read the rest of the story.