Earlier this week, NFIB filed a lawsuit against the California Air Resources Board (CARB) challenging CARB’s decision to promulgate regulations that are not authorized by the Global Warming Solutions Act (“AB 32”). The challenged “auction regulations” impose greater burdens on the regulated community and will ultimately impose higher costs on small businesses who must pay higher costs for essential goods and services.

The California Air Resources Board, consisting of appointed bureaucrats, decided to auction emission allowances as part of its cap-and-trade program (AB 32), legislation that set a goal of reducing greenhouse gas (GHG) emissions statewide to 1990 levels by 2020. However, as NFIB’s motion argued, CARB had no authority to auction off emission allowances because AB 32 says nothing about auctions. NFIB’s motion also stated that the act of auctioning off allowances and generating auction proceeds violates Proposition 13 of California’s constitution that requires two-thirds of the state legislature to approve all new taxes.

AB 32 continues to strangle California’s small businesses.  This is not “free money” – it was taken from Californians, and California’s working families are paying for this in higher energy and utility costs and higher costs for almost every product we use.  What mom and pop businesses need now is certainty so they can rebuild and grow jobs, not new costs that will push them further down the road to ruin.

This is an onerous regulation that requires small business owners to bid significant amounts of money for “carbon emission credits” in order to keep operating.  If they do not bid or if they are not the highest bidder, employers are then faced with closing their doors in California and laying off their employees.

NFIB is fighting this both in the courts and the Capitol hoping to slow down the implementation process so that we can provide our members a more stable and conducive environment to do business in.  And really that is all our members want – no surprises and a promise to “first do no harm” to small business owners here in the Golden State.  Then they are free to create jobs, support their communities and get the economy moving again.