Gretchen Schaefer
202.833.7311
CSPA Opposes “Fees” on Consumer Products Manufacturers “Fees” mandated by Assembly Bill 10X constitute an illegal tax
Sacramento (July 24, 2003) – The Consumer Specialty Products Association (CSPA) testified at today's hearing of the California Air Resources Board in opposition of a rule that would impose “fees” on consumer products manufacturers. CSPA strongly objects to the imposition of the proposed “fees” since this could constitute an illegal tax on certain CSPA member companies.
Assembly Bill No. 10x authorizes the Air Resources Board (ARB) to assess and collect a fee for any consumer product sold in the state, if the manufacturer's total sales in California result in the emission of 250 tons or more per year of volatile organic compounds (VOCs). This bill passed both chambers of the legislature by a simple majority vote. CSPA actively opposed AB 10x when the measure was debated in the California Legislature. CSPA intends to exhaust all available options to challenge the Legislature's action.
During the past 14 years, CSPA has worked cooperatively with ARB staff in helping improve California 's air quality through reductions in VOC content of consumer products, while maintaining safe and effective products. The consumer products industry expended hundreds of millions of dollars to reformulate its products to meet the ARB's current stringent technology-forcing standards. These efforts continue today as companies work toward meeting VOC limits coming into effect through 2005.
As recently stated by the ARB, "…emissions for regulated categories have been reduced 50 percent, and in total, consumer product emissions have been reduced by over 130 tpd ROG by 2005…." CSPA has serious concerns that proposed the “fee” will have the perverse effect of imposing a substantial economic burden on those companies that have already paid the largest portion of the significant costs to achieve these significant emission reductions.
CSPA's testimony and comprehensive written comments on the proposed rule to implement “fees” on consumer products manufacturers also made the following points:
- The “fees” represent hidden “taxes” on California consumer and do not represent prudent public policy.
- The expedited rulemaking process by which AB10X is being implemented is inappropriate and does not provide necessary due process protections.
- The legislatively required “nexus” between the proposed “fees” and consumer products emissions control has not been appropriately or reasonably established.
- ARB's air emissions inventory assessments clearly demonstrate that consumer products manufacturers would be required to pay an unfairly large share of “fees.” ARB is proposing to collect 25.2 percent of all “fees” from consumer product manufacturers that represent 4.0 percent of all stationary source emissions.
- The proposal for an equal tonnage “fee” for all pollutants and sources is particularly unfair for the low-reactivity VOCs used in consumer products, which have minimal impacts on ozone formation.
- Significant problems exist with the process that the ARB uses to establish the “VOC emissions” which form the basis of the proposed VOC tax on consumer products manufacturers.
- Legislative authority does not exist for the future “fees” on consumer products to be adjusted automatically to the California Consumer Price Index.
- Legislative authority does not exist for the ARB's three percent “adjustment” in “fees” to cover any potential “underpayment.”
- CSPA believes that the “potential impacts” on consumer products companies are underestimated and cannot be assessed using industry averages.
The consumer specialty products industry has worked constructively and cooperatively with ARB staff for more than a decade to lower VOC emissions from consumer products in California . CSPA representatives hope to continue to work in a cooperative manner with the ARB to improve air quality in California while maintaining our industry's ability to supply effective products that consumers can rely upon to contribute positively to their health, safety, and quality of life.
The Consumer Specialty Products Association is a non-profit national trade association representing approximately 220 companies engaged in the manufacture, formulation, distribution and sale of hundreds of familiar consumer products. It is organized into seven divisions: Aerosol Products, Air Care, Antimicrobial Products, Cleaning Products, Pest Management Products, Industrial & Automotive Specialty Chemicals, and Polishes & Floor Maintenance Products.
