Assembly subcommittee debates giving CARB authority to propose regulatory fees

The Assembly Budget Subcommittee No. 4 heard testimony on a trailer bill proposal to grant the California Air Resources Board statutory authority to propose and assess fees on emitters to recover its costs of developing, implementing and enforcing pollution regulations.

Supporters argued the change would allow a “polluter pays” approach and help CARB match regulatory costs to the entities that create them. David Garcia, legislative director for CARB, told the committee, “we would not be able to levy fees until we'd gone through the BCP process and the legislature actually approved the fee.” Brandon Merritt of the Department of Finance described the proposal as an enabling statute — not a fee in itself — that would let CARB recover costs through individual regulatory processes.

But the Legislative Analyst’s Office recommended rejecting the proposal as written. Helen Kerstein told the panel the request is “very broad,” covering an entire CARB division and potentially allowing the agency to craft new regulations and then impose fees to fund them. She said the breadth makes it difficult for the Legislature to evaluate future applications: “Setting fees, like setting taxes, is a core responsibility and role for the legislature,” Kerstein said.

Several members of the committee echoed the LAO’s concern that the language delegates too much of the state’s power of the purse. Assembly members repeatedly pressed CARB staff to explain when a board-approved fee would become legally effective and what safeguards would prevent a fee from being collected before the Legislature approved the associated budget change proposal. CARB officials said the agency would set implementation dates out far enough that fee collection would not begin until after the budget process concluded; CARB also said its regulatory process and economic impact analysis provide public opportunities for scrutiny before a fee is implemented.

Outside stakeholders were sharply divided. Environmental and public‑health groups testified in favor of the authority as a way to make polluters, rather than taxpayers, fund regulatory implementation. Industry groups warned the trailer bill’s language is open-ended and could allow broad enforcement and fee assessments, and urged the Legislature to retain its tax-setting role.

Committee members and staff said they intended to continue negotiations with CARB and other parties to identify guardrails and narrower language, with several members asking staff to return with amendments that limit scope and strengthen legislative oversight.

The subcommittee did not take a vote; members asked agency and legislative staff to continue work on the language and return with proposals addressing the committee’s concerns.