Industry Groups Concerned by Greenhouse Gas Rules

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The battle lines are already being drawn as the state takes the first steps to implement AB 32, the landmark greenhouse gas reduction bill signed by Gov. Arnold Schwarzenegger.


The state Air Resources Board listed three actions this month that the agency could adopt by July 1: passing a low-carbon fuel standard; mandating reductions of hydrofluorocarbon refrigerants from vehicle air conditioning systems; and requiring all landfill operators including Waste Management Inc. and Browning Ferris Industries facilities in L.A. County to boost their methane capture systems.


Dozens of other proposed regulations ranging from limiting hydrofluorocarbons from foam manufacturing to requiring the replacement of diesel engines with electric ones at construction sites also could be enacted by 2010.


The moves have generated concern from a coalition of some two dozen industry groups, led by the California Chamber of Commerce and the California Manufacturers & Technology Association. The coalition has voiced concerns about higher costs and the impacts on energy supplies.


In particular, the Alliance of Automobile Manufacturers and the Western States Petroleum Association, which represents refinery operators in L.A. County, may file a legal challenge to any low-carbon fuel standard.


One industry did not show up on the early action list: cement makers, which generate carbon emissions as part of the manufacturing process. When AB 32 was being debated last year, Glendora-based California Portland Cement Co. vigorously opposed the bill, threatening to leave the state. But the reprieve for cement makers may only be temporary: the air board is proposing to turn the duty of regulating them over to the state Business Transportation and Housing agency.



Stormwater Runoff Regs


The eyes of L.A. developers and builders are turning northwest to Ventura County, where the Los Angeles Regional Water Quality Control Board is preparing to enact sweeping changes to the storm water permit system aimed at reducing debris and pollution draining into the ocean.


Among the steps the board unveiled at a workshop this month: banning the grading of slopes on construction and public works projects during the six-month rainy season and requiring more water to percolate through the ground onsite.


Why are L.A. developers so interested? In two years’ time, the water board is likely to propose very similar regulations for L.A. County. And that has local developers very worried.


“Banning construction in large areas of the county for six months would have devastating impacts on the economy,” said Holly Schroeder, chief executive of the Greater Los Angeles/Ventura chapter of the Building Industry Association, which represents home builders. “Making it even worse is that such drastic action isn’t even necessary. The technology already exists to take extra actions to limit runoff on days that it rains.”


The water board is expected to enact the Ventura County regulation by the end of this year, with some revisions to take into account developer concerns. Then board staff will begin work on the L.A. regulation.



Tax Crackdowns


A hot topic in Washington and Sacramento these days is “closing the tax gap,” or trying to collect on billions of dollars of unpaid taxes. At the federal level, the gap is estimated to be around $300 billion, while California officials estimate the state loses out on at least $2 billion just in sales and use taxes.


Over the next few weeks, Congress will be debating a series of proposals from the Internal Revenue Service and the U.S. Treasury Department aimed at increasing tax collections, viewed as vital during this era of budget deficits.


Several of these proposals target small businesses, including one requiring the businesses to collect and confirm the taxpayer identification number of employees paid more than $600 in a given year and to stop withholding payroll taxes on anyone found to provide an incorrect identification number. Also, all small businesses would be required to report to the IRS all payments of at least $600 made to vendors.


Predictably, small business groups are up in arms over these proposals and they have banded together under the banner “Prevent IRS Abuse.”


“We feel very strongly that the withholding, record-keeping, reporting and general compliance burden the tax code imposes on small businesses is already too great,” said Cap Willey and Paul Hense of the National Small Business Association.


Meanwhile, the California Board of Equalization last week released a draft plan to collect more sales and use taxes. State officials would identify and go after service sector businesses that have not registered with the state and obtained seller’s permits. Board staff would cull through federal income tax records and other data to identify scofflaws. The draft plan is expected to go out for public comment in a few weeks, with a final version being brought back before the board in July.



Staff reporter Howard Fine can be reached at

[email protected]

or (323) 549-5225, ext. 227.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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