chamber of commerce appeals decision
TRANSCRIPT
-
8/18/2019 Chamber of Commerce appeals decision
1/72
C
AL
I
FO
R
N
IA A
IR
RE
S
OU
R
C
E
S
B
O
A
RD
,
et
aL
,
D
ef
en
da
nt
s a
nd R
es
po
nd
e
nts
N
A
T
IO
N
AL AS
S
OC
I
AT
IO
N
O
F
M
A
N
U
F
AC
T
U
RE
R
S,
I
nte
rv
en
e
r
a
nd A
p
pe
ll
an
t;
E
N
VI
R
ON
M
E
N
T
L
D
EF
E
N
SE
F
U
ND
,
et al
.,
In
te
rv
en
er
s
a
nd
Respondents.
C
a
se
N
o.
C
o
75
93
o
Sa
cr
am
e
nto
C
ou
n
ty
N
o
.
3
42
12
8
1
31
3
C
U
W
M
G
D
S
H
o
n. T
im
o
thy
M
.
F
ra
w
ley
NIELSEN
MERKS MER P RRINELLO
G
R
O
SS
L
E
O
NI
LL
P
*
JA
M
E
S
R
P
R
R
IN
E
LL
O
SB
N
6
34
15
2
35
0
K
er
ne
r
B
lv
d. ,
Su
ite
2
5
S
an
Ra
fa
el
C
A 9
49
1
T
el
ep
ho
ne
:
4
15
3
89
-6
80
0
F
ax
:
41
5
38
8-
68
7
4
jp
ar
rin
el
lo c
ä
nm
g
ov
la
w
.
c
o
rn
C
a
se
N
o.
C
o7
59
5
4
S
ac
ra
m
en
to
Co
un
ty
N
o
. 3
4
2
12
8
1
46
4
CU
W
M
G
D
S
H
on
.
T
im
o
th
y
M
.
F
ra
wl
ey
NIELSE
N
MERKSA
M
E
R P
R
RI
N
EL
L
O
GR
O
S
S
L
E
ON
I
, L
L
P
S
T
EV
E
N A
M
ER
K
SA
M
E
R
S
BN
6
68
38
K
U
R
T R
O
N
E
TO
SB
N
2
48
3
1
1
41
5 L
S
tre
et
S
u
ite
1
2
00
Sa
cr
am
e
nto
C
A
95
81
4
T
ele
ph
o
ne
:
91
6
) 4
46
-6
75
2
F
ax
:
91
6)
44
6-
61
0
6
C
O
U
R
T O
F
P
P
E
L
O
F
C
L
IF
O
R
N
I
T
H
I
R
D
P
P
E
L
L
T
E D
IS
T
R
I
C
T
C
A
LI
FO
R
N
IA
C
HA
M
B
E
R
O
F
C
O
M
M
ER
C
E,
e
t
a
l.
,
P
lai
nt
iff
s a
nd Ap
pe
ll
an
ts
M
O
R
N
IN
G
ST
A
R P
A
CK
I
NG
C
O
M
PA
N
Y
,
et
al
.,
P
la
in
tif
fs
an
d
A
pp
el
la
nt
s
C
A
L
IF
OR
N
IA
A
IR
R
ES
O
U
R
CE
S
B
O
A
RD
, e
t a
l.
,
De
fe
nd
an
ts
an
d R
e
sp
on
de
nt
s
EN
V
IR
O
N
M
E
NT
L D
E
FE
N
S
E
F
U
N
D,
e
t
a
l.
,
In
ter
ve
n
ers
an
d R
es
po
nd
e
nts
.
C
L
I
F
O
R
N
I
C
H
M
B
E
R
O
F
C
O
M
M
E
R
C
E
a
l
P
P
E
L
L
N
T
S
’
O
P
E
N
IN
G
B
R
IE
F
Attorneus
for Plaintiffs
and
Appellants
CALIFO
R
NI
A
C
H
AM
B
E
R
’
O
F CO
M
M
E
R
CE
,
et
a
.
[A
d
dit
io
na
l c
ou
n
se
l lis
te
d
on
f
oll
ow
in
g
p
ag
e]
-
8/18/2019 Chamber of Commerce appeals decision
2/72
C
O
U
R
T
O
F
A
P
P
E
A
L
O
F
C
A
L
I
F
O
R
N
I
A
T
H
I
R
D
A
P
P
E
L
L
A
T
E
D
I
S
T
R
I
C
T
CA
L
IF
O
RN
I
A
C
HA
M
B
E
R
O
F
C
O
M
M
E
RC
E
e
t
a
l.,
Pl
ain
ti
ffs
an
d
A
pp
e
lla
nt
s
C
A
L
IF
OR
N
IA
A
IR
R
ES
O
U
RC
E
S
B
O
A
R
D,
et a
l.
,
D
ef
en
da
n
ts
a
nd
R
e
sp
on
de
nt
s
N
A
T
IO
N
AL
A
SS
O
CI
A
TI
O
N
O
F
M
A
N
U
FA
C
T
U
RE
R
S,
I
nt
e
rv
e
n
er
an
d
A
pp
e
lla
nt
;
EN
V
IR
O
N
M
EN
T
A
L
D
E
F
EN
S
E
F
UN
D
e
t aL
,
I
nte
rv
en
er
s
a
nd
R
es
po
n
de
nts
.
M
O
R
N
IN
G
S
T
AR
PA
C
K
IN
G
CO
M
P
A
N
Y,
e
t
a
l.,
P
la
int
iff
s
an
d
A
pp
ell
an
ts
C
AL
IF
O
R
N
IA
A
IR
R
ES
O
U
R
CE
S
BO
A
R
D
,
et al
.,
De
fe
nd
an
ts
an
d
R
es
po
nd
en
ts
EN
V
IR
O
N
M
EN
T
A
L
D
EF
E
NS
E
FU
N
D
et al
.,
In
te
rve
n
ers
an
d
R
e
sp
on
de
nt
s.
C
as
e
N
o.
C
o
75
9
3o
S
a
cra
m
en
to
C
ou
nt
y
N
o.
3
42
1
28
13
13
C
U
W
M
G
DS
H
o
n
Ti
m
oth
y
M
.
F
ra
w
le
y
C
a
se N
o
.
Co
75
9
54
S
ac
ra
m
en
to
Co
u
nty
N
o.
3
42
1
2
8
14
6
4
CU
W
M
G
D
S
Ho
n
.
T
im
o
th
y
M
.
Fr
aw
le
y
C
A
L
I
F
O
R
N
I
A
C
H
A
M
B
E
R
O
F
C
O
M
M
E
R
C
E
,
e
t
a
l.
A
P
P
E
L
L
A
N
T
S
’
O
P
E
N
I
N
G
B
R
I
E
F
NIELSEN
MERKSAMER
PARRINELLO
G
R
O
SS
L
E
O
NI
,
LL
P
*
JA
M
E
S
R
.
PA
R
R
IN
E
LL
O
S
B
N
6
34
15
23
50
K
er
ne
r
B
lv
d.
,
S
uit
e 25
Sa
n
Ra
fa
el
C
A
9
49
1
T
e
le
ph
on
e:
41
5
38
9
6
8
Fa
x
:
41
5
3
88
-6
87
4
j
pa
r
ri
n
el
lo
@
n
m
go
vl
aw
co
rn
NIELSEN
MERKSAMER PARRINELLO
GR
O
S
S
L
E
ON
I
,
L
L
P
S
T
EV
E
N
A
.
M
ER
K
S
AM
E
R
SB
N
6
68
38
K
U
RT R
.
O
NE
T
O
S
B
N
24
8
3
1
14
15
L
St
ree
t
S
ui
te
12
00
Sa
cr
am
e
nt
o
C
A
9
58
14
T
ele
ph
o
ne
:
9
16
)
44
6
-6
75
2
F
a
x:
91
6
)
4
46
-6
10
6
A
tt
or
rze
us
fo
r
P
la
in
tif
fs a
n
d
Ap
p
ell
an
ts
CALIFORNIA
CHAMBER’
OF
COMMER
CE,
et
a .
[A
d
di
tio
na
l
co
un
se
l li
ste
d
o
n f
oll
ow
i
ng
p
ag
e]
-
8/18/2019 Chamber of Commerce appeals decision
3/72
R
og
er
R.
M
a
rte
lla
p
ro
h
ac
v
ic
e
*T
h
eo
do
re
H
ad
zi
-A
n
tic
h
S
B
N
2
64
66
3
*p
au
l
J
•
Zi
dl
ick
y
pr
o
ha
c vi
ce
J
am
e
s
S.
B
ur
lin
g
S
BN
1
13
01
3
E
ric
M
c
Ar
th
ur
p
ro h
ac
vic
e
P
ac
ifi
c Le
ga
l F
ou
nd
at
ion
S
id
le
y A
us
tin
L
L
P
93
0 G
Str
ee
t
1501
K
Street
NW
Sacramento,
CA
95814
W
as
hi
ng
to
n,
D
C
2
00
05
T
e
l.:
9
16
4
1
9-
71
11
p
zi
dli
ck
y
si
dl
ey
.
co
rn
th
a
@
p
ac
if
ic l
eg
al
.
o
rg
A
t
tor
ne
y
s fo
r In
te
rv
en
er
Ap
p
ell
an
t
A
t
tor
ne
ys f
or P
lai
nt
iff
s
A
pp
el
lan
ts
Na
ti
on
al
As
so
el
ati
on
of
M
a
nu
fa
ct
ur
er
s
M
o
rn
in
g
S
ta
r P
ac
ki
ng
C
o
m
pa
ny
,
et
a .
*
Se
an
A.
C
o
m
mo
n
s
SB
N
21
7
60
3
R
ob
er
t
E A
sp
er
ge
r S
B
N
11
6
31
9
S
id
ley
A
us
tin
L
L
P
D
e
pu
ty A
tt
or
ne
y G
en
er
al
55
5
W
e
st Fi
fth
S
tr
ee
t
13
0
0 I
St
re
et
L
o
s
A
ng
e
les
,
C
A
90
01
3
Sa
cr
am
e
nt
o,
CA
95
81
4
Tel:
213
896-6600
Tel
916
32
7-
75
8
2
s
co
rn
mo
n
s
sid
le
y.
co
m
B
ob
.A
sp
e
rge
rd
oj
ca
.go
v
A
tt
or
ne
ys
fo
r
In
te
rv
en
er
A
pp
el
lan
t
A
t
tor
ne
ys fo
r
D
e
fen
d
an
ts
R
esp
o
nd
en
ts
N
a
tio
n
alA
s
so
ci
ati
on
o
f
M
an
u
fa
ctu
re
rs
C
a
lif
or
niaA
ir
R
es
ou
rc
es
B
o
ar
d,
et a
*
D
av
id
A.
Z
o
na
na
S
BN
1
96
02
9
*M
a
tth
ew
D
. Z
in
n
S
B
N 21
45
87
M. E
la
in
e
M
e
ck
en
st
oc
k
S
B
N
2
68
86
1
Jo
se
p
h D.
P
ett
a
S
BN 2
86
6
65
B
ry
a
nt
B.
C
an
no
n
S
B
N 28
4
49
6
S
h
ute
, M
ih
al
y
W
e
inb
e
rg
er,
L
LP
e
pu
ty
A
tto
rn
e
ys
Ge
n
era
l
6 H
a
e
s S
tr
ee
t
al
ifo
rn
ia
D
epartment
of
Justice
C
la
y
S
tre
et
, Su
it
e 20
0
0
S
an Fr
an
ci
sco
,
CA
9
41
0
2
P
.O
.
Bo
x
7
0
55
0
T
el
.: 4
15
5
52
-7
27
2
O
a
kl
an
d, CA
9
4
61
2
05
50
Z
in
ns
m
wl
aw
.c
om
Te
l.:
5
1
0
6
22
2
14
5
Da
v
id.Zo
n
an
a
ä
d
oj
c
a.g
o
v
A
tto
rn
ey
s fo
r
In
te
rv
en
er
s
R
es
po
nd
en
ts
E
nv
iro
n
me
nt
al
D
ef
en
se Fu
n
d
A
tto
rn
ey
s
fo
r
D
ef
en
da
n
ts
Re
sp
on
d
en
ts
C
ali
fo
rn
iaA
ir R
e
so
ur
ce
s Bo
a
rd, et
a
l.
*Erica
Morehouse
Martin
SBN
David
Pettit
SBN
067128
2
74
9
88
*M
e
xa
nd
e
r
L
. J
ac
ks
on
SB
N 2
6
70
99
T
im
ot
hy
J.
O
’C
o
nn
or
S
BN
2
50
4
90
N
at
ur
al
R
e
so
ur
ce
s D
e
fe
ns
e C
ou
n
cil
En
v
iro
nm
e
nt
al D
efe
ns
e F
un
d
1
3
14
’
S
tre
et
11
0
7
S
tr
ee
t, S
uit
e
10
70
Sa
nt
a M
o
nic
a, C
A
9
0
40
1
Sa
cr
am
e
nto
,
CA
9
58
14
T
e
l.:
31
0
43
4
23
00
T
e
l.:
91
6
49
2-
46
80
a
ja
ck
so
n@
n
rd
c.
org
e
m
or
eh
ou
se e
df
.o
rg
A
tt
or
ne
ys fo r
Int
er
ve
ne
rs
Re
sp
on
d
en
ts
At
to
rn
ey
s f
or In
ter
ve
ne
rs
N
a
tur
al
R
e
so
urc
es
D
ef
en
se
C
ou
nc
il
R
e
sp
on
de
nt
s
Environmental
Defense
Fund
-
8/18/2019 Chamber of Commerce appeals decision
4/72
TO BE
FILED
IN
THE
COURT
OF APPEAL
APP 008
Court of Appeal Case
Number.
COURT
OF
APPEAL
THI
RD
APPELLATE
DISTRICT,
DIVISION
ATTORNEY
OR PARTY
Vu1THOUT
ATTORNEY
(Name,
State
Bar
number and
address :
Supedor
Court
Case
Number
James
R.
Parrinello,
State
Bar
063415
—Nielsen
Merksamer
Parrinello
Gross
Leoni,
LLP
2350
Kerner Blvd.,
Suite 250
FOR COURTUSE
ONLY
San
Rafael,
CA 94901
TELEPHONE
NO
415
389
68
FAX
NO (Optional).
4
5 38
8 68
74
E.MAIL
ADDRESS
(Optional):
jp
arrin
ello@
nm
gov
law co
rn
ATTORNEY
FOR
(Name):
App
ellan
ts Cali
forni
a Cha
rnbe
r of
Com
mer
ce
et
l
APPELLANT/PETITIONER:
Ca
lifo
rnia
Cham
ber of
Com
mer
ce
et a
RESPONDENT/REAL
PARTY
IN INTEREST:
C
alifo
rnia
A
ir
Re
sour
ces Bd
e
t
a
CERTIFICATE
OF
INTERESTED
ENTITIES
OR PERSONS
(Check
one):
INITIAL CERTIFICATE
SUPPLEMENTAL
CERTIFICATE
Notice:
P
leas
e
read rules
8.208
and
8.488
befo
re co
mple
ting th
is
form.
You may use this
form
for the initial
ce
rtific
ate
in
an
ap
pea
l
whe
n
you file
yo
ur
brie
f
or
a
p
rebr
iefin
g
moti
on
a
ppli
catio
n
or
op
posi
tion
to
s
uch
a
motion
or
a
pplic
atio
n
in
the Co
urt
of
ppe
al
and
when you
file
a
peti
tion for an ex
trao
rdina
ry writ. You
may
a
lso
us
e
th
is
form
as
a
sup
plem
ent
al
c
ertif
icate w
hen
you learn
of chan
ged
o
r add
ition
al info
rmat
ion
th
at mus
t
b
e discl
osed
This form
is
being
submitted
on
behalf
of
the
following
party
(name):
Cali
forn
ia
Cha
mbe
r o
f
Co
mme
rce
an
d
La
rry D
icke
2.
a.
There
are
no
interested
entities or
persons that
must b e listed
in
this certificate
under rule
8.208.
b
Interested
entities
or
persons
required
to
be
listed
under rule
8.208
are
as follows:
(1)
(2)
(3)
(4)
(5)
Full
name
of
interested
entity
or
person
Nature
of interest
Explain :
Continued
on
attachment
2
The
undersigned
certifies
that the
above-listed
persons or entities corporations,
partnerships,
firms,
or
any
other
association,
but
not
including government
entities
or
their
agencies have either
(1)
an
ownership
interest of
10
percent
or
more
in
the party
if it
is
an
entity; or (2) a
financial
or other interest
in the
outcome of
the
proceeding
that
the
justices
should
consider
in determining
whether
to
disqualify
themselves,
as
defined
in
rule
8.208 e 2 .
Form Approved for Optional
use
Judicial Council of
California
APP 008
(Rev January 1
2009]
Cal.
Rules
of
Court,
rules 8.209.
8
488
www
Courtinfo cv
gnu
Date:
Octo
ber
7 2
014
JAM
ES R PA
RRI
NEL
LO
(TYPE
OR PRINT
NAME)
CERTIFICATE
OF
INTERESTED ENTITlES OR
PERSONS
TURE
OF PARTY OR ATTORNEY(
Page
of
-
8/18/2019 Chamber of Commerce appeals decision
5/72
TAB
LE
O
F
CO
NTE
NTS
Pag
e
CE
RT IF
IC
TE
O
F IN
TE
RES
TED
P R
TIE
S
i
IN
TRO
DU
CTI
ON
A
ND
SU
MM
R Y
OF
R
GUM
EN
T
II
P
ROC
ED
URA
L
CK
GR
OUN
D
N
D
S
T T
EM
ENT
O
FT
HE
C
ASE
4
P
roce
dura
l
His
tory
4
Fact
ual
Bac
kgro
und
6
III
.
ST
ND
RD
O
F
REV
IEW
IV
ARG
UM
ENT
A
The
L
egis
latur
e
Did Not
Aut
horiz
e
Th
e A
RB
To
Ra
ise
Bill
ions
of D
olla
rs
In R
even
ue
Had Tha
t
Be
en
AB 3
2’S
Inte
nt T
here W
oul
d Have
een
A
Hu
ge
n
d B
itter F
ight
In
T
he
Leg
islat
ure
The
Le
gisla
ture
pas
sed AB
t
o
red
uce
gree
nhou
se
gas
emi
ssion
s; no
thin
g
in
th
e
s
tatut
e
men
tion
s
crea
ting
a
mu
lti b
illion
dol
lar
r
even
ue r
aisin
g
p
rogra
m
A
B
32
’s leg
islat
ive
hi
story
m
akes
no
me
ntion of
a
utho
rizin
g
a mu
lti b
illion
dolla
r
re
ven
ue r
aisin
g
pr
ogra
m
4
3
The
ARB’s
Enrolled
Bill
Report
to
the
Gov
erno
r
ma
kes no m
entio
n
o
f
any
g
rant
of
auth
ority
to
cre
ate
a m
ulti
billio
n d
olla
r
re
venu
e
rais
ing
pro
gram
to th
e
con
trary
th
e A
RB
con
cede
d
AB
a
llow
ed
it
to
im
pos
e
onl
y f
ee s
limi
ted to
the
di
rect
cos
ts
of
i
mple
men
ting
the
p
rogra
m
a
utho
rize
d
by
the
bill
i6
-
8/18/2019 Chamber of Commerce appeals decision
6/72
4
Fl
oor
d
eba
te
sho
ws
tha
t
th
e
Sp e
aker
of
th
e
A
ssem
bly
as
sured
leg
islato
rs
that A
B
32
di
d
not
auth
orize
th
e
AR
B
to
im
pos
e an
y
cost
s
othe
r
tha
n
fe
es
fo
r
pro
gram
adm
inist
ratio
n
19
5
The
fa
ct
t
hat
secti
on
8
97
of
AB
32
exp
ress l
y
gran
ted
the
ARB a
utho
rity
to
impo
se
f
ees
on
the
s
ou rc
es
of
G
HG
em
issi
ons
s
how s
that
t
he
L
egisl
atur
e
k
new
how
to
m
ake
its
inte
nt cle
ar
wh e
n it
inten
ded
t
o a
utho
rize AR
B
to rai
se
rev
enue
t
he
abse
nc e
of
suc
h aut
hori
zing lan
guag
e
fo
r
a
mu
lti b
illion
dol
lar rev
enue
rai
sing
program means the
Leg islature did
not
int
end
to
gra
nt
s
uch a
utho
rity
to th
e
A
RB
21
6
T
o
in
terpr
et
A
B
3
2
othe r
wise
vi
olate
s
ca
non
s
of st
atuto
ry
co
nstru
ction
2
2
Be
caus
e
the A
RB’
s mas
sive
reve
nu e
ra isi
ng
p
rogr
am is
no
t es
sent
ial
to
the
purp
ose
of
AB
32
the
leg
islat
ion
ca
nno
t be
inte
rpre
ted
to i
mpl
iedly
co
nfer
upo
n
the A
RB
th
e
power
to
implement
that
pro
gra
m
and
no
defe
renc
e is
acc
orde
d to th
e A
RB’
s
co
ntra
ry
self
s erv
ing
inter
pret
ation
of
th
e
sc
ope of
A
B3
2
4
a N
o
de
fere
nce is giv
en
to the
ARB
’s
contr
ary
i
nter
preta
tion
of the
s
cope
o
fAB
3
6
8
Statutes enacted
in
2 12
do
not
purport
to
con
strue
or
a
men
d
A
B
32 a
nd
pro
vide
no
gu
idan
ce
as
to
th
e
i
nten
t
of
the
6
Legi
slatu
re
29
9
T
he
legi
slati
ve hi
stor
y of
AB
3
2
doe
s no t
sup
port
th
e
AR
B’s
cla
im
th
at th
e
L
eg isl
atur
e i
nten
ded
the
vag
ue
p
hras
e
“dist
ribu
tion
of
em
issio
n
al
lowa
nce
s”
to
a
utho
rize a
mul
ti bil
lion
do llar
revenue
rais
ing
pro
gram
3
1
-
8/18/2019 Chamber of Commerce appeals decision
7/72
B
T
he
Cha
lleng
ed
Reg
ulati
ons
mpo
se
An
Ille
gal
T
ax
6
Th
e
t
rial
co
urt
c
orre
ctly
r
ecog
nize
d t
hat
Sinclair
Paint
controls but
failed to
p
rope
rly
a
pp ly
th
e S
incl
air P
aint te
st
6
Th
e
tr
ial
co
urt e
rred
by
co
nclu
ding
th
e
auct
ion
r
even
ues
we
re reg
ulat
ory
fee
s
befo
re app
ly in
g
the
Sin
clai
r
Pa
int
t
est
7
T
he
tr
ial
cou
rt m
issta
ted
and m
isap
plied
th
e
Sinc
lair
P
aint
test
8
4
P
rope
r
desc
ript
ion
an
d a
ppl i
ca tio
n
of
the
Si
ncla
ir
Pai
nt te
st
dem
onstr
ates
th
at
the
au
ction
of
GHG
allow
anc
es r
esul
ts
in
an
ill
egal
ta
x
9
a
Th
e ch
arge
s
fo
r the
pu
rcha
se
o
f t
he
GH
G a
llow
ance
s
be
ar
no
r
elati
onsh
ip
to
t
he
bu
rden
s
im
pose
d
b
y
t
he
pu
rcha
sers’
op
erati
ons
9
b uct i
on
p
roce
eds
ar
e
be i
ng
impe
rmis
sibly
u
sed fo
r
“ge
nera
l
g
ove
rnm
ent
pu
rpos
es”
4
i
The t
rial
co
urt’
s
“p
rim a
ry
pu
rpos
e”
te
st
com
plet
ely
evi
scer
ates
Sinc
lair
P
aint ’
s
s
econ
d pron
g
d
oes
th
e
revenue program
raise
more
m
oney
tha
n
n
eces
sary
to
p
ay
the
cost
s
o
f
a
fixe
d
a
nd
d
eterm
ina
ble
regu
lato
ry
pro
r m
4
c T
he
auct
ion
an
d
re
serv
e
s
ale
cha
rges
hav
e
rio
“c
ausa
l
co
nne
ction o
r
nex
us
to the
fe
e
payer’s
operations”
46
i
v
-
8/18/2019 Chamber of Commerce appeals decision
8/72
Si
nc
la
ir
P
ai
nt’
s
3
p
ro
ng te
st
p
ro
pe
rl
y
ap
pl
ie
d
co
n
tro
ls
th
is
c
as
e an
d in
va
lid
a
tes
th
e
a
uc
tio
n
r
eg
ul
ati
on
s
a
Although correctly
finding
Sinclair
P
a
in
t
co
nt
ro
ls
th
e tr
ia
l
co
ur
t’s
m
is
ap
pl
ic
ati
on
of
Si
nc
lai
r
P
a
in
t
ef
fe
ct
ive
ly
gu
ts
th
at
u
na
ni
m
ou
s
S
up
re
m
e
C
o
ur
t de
ci
sio
n
an
d m
us
t
be
ov
er
tu
rn
ed
5
V
C
O
NC
L
U
SI
ON
5
C
ER
T
IF
IC
A
TI
O
N OF
R
IE
F
L
ENGTH
52
..
A
:
..
V
-
8/18/2019 Chamber of Commerce appeals decision
9/72
TABLE
OF
AUTHORITIES
r
Page s
CASES
[
Addison
v.
Department
ofMotor
Vehicles
1977
69
Cal.App.3d
486
24, 26
[
Ailarito
Properties,
Inc.
v. City
of
Haf
Moon
Bay
2006
142
Cal.App.4th
572
28
American
Federation
ofLabor
v.
Unemployment
Ins.
Appeals
Bd .
1996
13
Cal.4th
1017
1, 24
Assn.for
Retarded
Citizens
ii.
Dept. of
Devp. Svcs.
r
1985)
38 Cal.3d
384
26
Calif
Assn.
of
Prof
Scientists
v.
Dept.
of
Fish
Game
[
2000
79
CaI.App.4th
9 5
44,
9
Calif
Building
Industry Assn.
v.
San Joaquin
Valley
Air
Pollution
Control
District
2009 178 Cal.App.4th
120
j
Calif Farm Bureau
Federation
v. State
Water
Resources
Control Bd.
2011
51
Cal.4th
421
passim
Cal.
Redevelopment
Assn. v.
Matosantos
2011 53 Cal.4th
231
22
Citizens Assoc.
of
Sunset
Beach
v.
Orange
Co. LAFCO
2012 20 9 Cal.App.4th
1182
23
Citizens
to
Save California
v.
California
Fair
Political
Practices Commission
]
2006
145
Cal.App.4th
7 6
11, 26, 27
Collier
v.
City
and
County
ofSan
Francisco
2007
151
Cal.App.4th
1326
43 ,
Conservatorship
of
Whitley
2010
50
Cal.4th
1206
i6, 19
[
vi
-
8/18/2019 Chamber of Commerce appeals decision
10/72
C
urti
s
v. C
oun
ty
o
f Los
A
ngel
es
1985
172
Cal.A
pp.
3d
12
43
D
iag
eo G
uine
ss
US
A
Inc.
v.
B
d.
of
Eq
ualiz
atio
n
201
2
2
05
C
al.A
pp.4
th
907
24
Dol
an
v.
Post
al
S
ervic
e
20
06
54
6 U.s
. 4
81
3
1
D
yna
Med
I
nc.
v
. F
air
Em
p.
Ho
usin
g
Co
rn.
1987
43
C
al.3d
13
79
28
29
E
nvir
onm
enta
l De
fens
e
Pr
ojec
t o
fSie
rra C
oun
ty v. C
ount
y
of
Sier
ra
20
08
15
8
Ca
l.Ap
p.4t
h
877
10
Eq
uilon
E
nterp
rise
s
v.
Bd
.
o
f
E
qua
lizat
ion
201 0
i8
g Cal.A
pp.
4th
8
65
44
49
FCC
v
. A
T T
Inc.
201
1 131
5.Ct
. 1177
,
17
9
L
.
Ed.
2d
132
31
Harr
ott
v
.
Co
unty
of
K
ings
20
01 2
5
Ca
l.4th 1
138
Henderson
v.
Mann
Theatres
Corp.
19
76 6
5
Cal
.App
.3d
39
7
23
I
-less
Co
llec
tion W
inery v.
AL
RB
200
6 , 1
40
C
al.A
pp.4
th 15
84
27
In re
Lu
ke
W.
20 0
1
8
8
CaI
.App
.4th 65
0
24
In H
ome S
uppo
rtive
S
ervi
ces
v.
W
ork
ers’
rom
p.
App
eals B
d.
1984
152
Cal.App.3d
720
35
K
auf
man
Br
oad
C
om
mun
ities
I
nc.
v.
Pe
rfor
man
ce
Pl
aster
ing
In
c.
2
00 5 1
33
C
al.A
pp.4
th
2
6
35
M
iller v.
Mu
nicip
al Ct.
of the
Cit
y of
Lo
s An
gele
s
194
3
22 Cal
.2d 8i8
Mo
ran v
.
M
urtau
gh
Mil
ler Me
yer N
els
on
L
LP
2007
4
0
Cal.4th 780
31
, 3
2
-
8/18/2019 Chamber of Commerce appeals decision
11/72
Mo
rnin
g
S
tar
C
o v
Bd
ofEq
ualiz
atio
n
20
11 20
1
Ca
l.Ap
p.4th
7
37
4
9,
50
M
orris
v
Wi
lliam
s
1967
67
Cal 2d
73
3
2
6
Mu
tual
Lif
e
I
ns. C
o
v C
ity
o
fLos
A
nge
les
19
90
50
Ca
l.3d
40
2
22
Nati
onal
R.V.
, Inc.
v
Fo
rema
n
‘9
95
Cal
.App
.4th
1
072
5
P
alos Ver
des F
acult
y
Ass
oc .
v
Pal
os
V
erde
s
U
nW
ed
Sch
.
Dis
t.
19
78 2
1
C
al.3
d
65
0
People
v
Allen
200
7
42 CaL
4th
9
1
22
Peo
ple
v
Cr
uz
1996
1
3
C
al.4t
h
7
64
3
0,
31
Per
alta
C
omm
uni
ty
Col
lege Dist
.
v
F
air
Em
plo
yme
nt
H
ous
ing Cor
n
1
990
52 C
al.3
d
40
30
Professional
Engineers
in
California Government v
Kernpton
20 0
7 4
0
Cal
.4th
10
16
Reg
ents
o
f Un
iv.
o
fCa
lif v
E
ast B
ay
Mun
. Util
ity Dis
t.
200
5
13
0
Ca
l.Ap
p.4th
136
1
10
Schr
neer
v Co
unty of
Los
An
gele
s
20
13
213 C
al.A
pp.4
th
13
10
23
S
chne
ider
v
Ca
liforn
ia
Coa
stal
C
orn
2006
140
Cal.App.4th
1339
26
S
haw
v
C
hia
ng
2
009
17
5
Ca
l.Ap
p.4th
577
30
Si
ncla
ir
Pai
nt
C
o
v
S
tate Bd
.
of
E
qua
lizat
ion
1997
5
Ca
l.4th
86
6
pass
im
So C
alif
Gas
Co
v
Pub
lic
Ut
il Co
rn
19
79
24
Ca
l.3d
6
53
5
vii
i
-
8/18/2019 Chamber of Commerce appeals decision
12/72
Ste.
Marie
v.
Riverside
County
Regional Park
and
Open-.
Spa ce
District
2009 46
Cal.4th
282
31
Townzen
v. El
Dorado
County
1998
64
Cal.App.4th
1350
40
Yamaha Corp.
ofAmerica
v.
State
Bd.
of
Equalization
1998 19 Cal.4th
26
CALIFo1uiIA
CoNsmu’rioN
CAL.
C0NsT. art.
XIII
11
CAL.
CONsT. art.
XIIIA
5,
41
CAL. CONsT.
art.
XIIIA,
§
3
37
STATuTEs
Cal.
Stats.
1991,
ch .
799
AB 2038 ,
§
3
43
Cal. Stats. 2005, C.
488
AB 32
passim
Cal. Stats.
2012,
ch .
39
SB ioi8 ,
§
25
9
Cal.
Stats.
2014, ch.
2
SB 103
42
Cal.
Stats.
2014, ch. 25 SB
852
41
Cal. Stats.
2014, ch.
36
SB
862
42
Cal.
Govt.
Code
§
16428.8 a
b
9
Cal.
Health
Saf
Code
§
25205.6
50
Cal.
Health
Saf. Code
§
38500
38599
6
Cal.
Health
Saf.
Code
§
38501
13
Cal.
Health
Saf.
Code
§
3850 1 a
4
Cal.
Health
Saf.
Code §
3850
i b
4
x
-
8/18/2019 Chamber of Commerce appeals decision
13/72
lean
Air
ct
42
U.S.C.
765
lo d 2
33
42
U.S.C.
765
lo d 3
33
Cal.
Health
Saf.
ode
38501 c
14
Cal. Health
Saf.
Code
38501 d
14
Cal.
Health
Saf.
ode
3850
1 e
14
Cal. Health
Saf.
ode
3850 1 h)
14
Cal.
Health
Saf.
ode
38505 a
8
Cal.
Health
Saf.
ode
38505 k
7
Cal.
Health
Saf.
ode
38530
6
Cal.
Health
Saf.
Code
38550
6,
7
Cal.
Health
Saf.
Code
38560
7
Cal.
Health
Saf.
ode
385
61 b)
7
Cal. Health
Saf.
Code
38562
7,
20 ,
22
Cal.
Health
Saf.
ode
385
62 a
8
Cal.
Health
Saf.
Code
38562 b 1 passim
Cal.
Health
Saf.
Code
38562 b 5
7
Cal. Health
Saf. ode
38562 b 7
7
Cal.
Health
Saf. ode
38562 c
23
Cal. Health
Saf.
Code
38597
passim
Cal.
Health
Saf.
ode
57001
8
Cal.
Health
Saf.
ode
105310 f
former Health
Saf.
Code372.7 f
43
-
8/18/2019 Chamber of Commerce appeals decision
14/72
REGULATIONS
Cal
C
ode Regs
Ti
t 17
Div
3
Ch 1
Sub
ch.
10 Art
8
17C C R
95
801
et
seq
8
17
C C R
95
802
a
8
17C C R
95
802
a 8
8
17
C C R
95
802
a 4
1
8
17
C C R
9
5802
a
55
8
17 C C R
95
810
-958
14
8
17
C.C
.R.9
5811
8
17 C C R
9581
2
8
17 C C R
95
830
95
834
5
17 C C R
9584
0
8
17
C C R
95856
8
17
C C R
958
70
pass
im
17 C C R
9
5890
-958
92
10
17 C C R 95
9
959
5
9
17 C C R
9
59
10
17
C C R
95912 k
9
17 C C R i
9
17
C C R
9
592
9
17 C C R
959
2
9
xi
-
8/18/2019 Chamber of Commerce appeals decision
15/72
OTHER
AuTH01UTIES
58
Cal.Jur.3d
564 Statutes
135
31,
32
76
Ops.Cal.Atty.Gen. 11
1993
25
Cal.
Air
Resources
Bd.
Archived Auction
Information
Results
Sept. 18
2014 ,
available
online
at
http
//www.
arb.
ca.gov/cc/capandtrade/auction/auctio
n_archive.htm
10
Cal.
Air
Resources
Bd.
California Greenhouse
Gass
Inventory
for
2
000-2012
By
Category
as
Defined
in
the
2008
Scoping
Plan
Mar.
24, 2014 ,
available
online
at
http //www.
arb . ca.gov/cc/inventory/data/tables/ghg_i
nventory_scopingplan_00-12_2014-03-24.pdf
47
Cal. Legislative
Analyst’s Office
The
2012-13 Budget:
Funding
Requests for
High-Speed
Rail
Apr.
17, 2012 ,
available online
at
http
//www.lao. ca.gov/analysis/2o12/transportation/hi
gh-speed-rail-o41712.aspx
42
Clerk of the California
Assembly,
Assembly
Handbook
2005-2006 ,
available online
at
http://clerk.assembly.
ca.gov//clerk/billslegislature/doc
uments/Asm_Handbook_2005-o6.pdf
30
Clerk of the California
Assembly,
Assembly
J-Iandbook
2011-2012 ,
available
online
at
http
//www.leginfo.ca.gov/pdf/2011_12_Legi_HandBo
ok.pdf
30
Regional Greenhouse Gas
Initiative, Inc.,
RGGI
States’
First
CO
Auction
Off
to
a Strong
Start Sept.
29,
2008 ,
available
online
at
http
/ /w .rggi .org /docs/ rggpress929
2008
.pdf
34
xi i
-
8/18/2019 Chamber of Commerce appeals decision
16/72
U.S.
Environmental
Protection
Agency Sources of
Greenhouse
Gas Emissions
Apr.
17
2014
available
online
at
http
//www
epa gov/climatechange/ghgemissions/sour
ces/lulucf html
47
XII’
-
8/18/2019 Chamber of Commerce appeals decision
17/72
I.
INTRODUCTION
AND
SUMMARY
OF
ARGUMENT
This
lawsuit
addresses
only one
component
of the regulatory
program
adopted
by California’s
Air Resources Board
following
the
Legislature’s
enactment
of
Assembly
Bill 32 to reduce
greenhouse
gas
GHG emissions.
The
lawsuit
does
not
challenge the
merits
of
climate change science;
it
does
not
challenge
the Legislature’s
authority
to
regulate
GHG
emissions in California;
and it
does not
challenge
the
Board’s decision
to
use a “cap and
trade”
method
of
reducing GHG emissions
by
placing a limit on the
aggregate GH G
emissions
of covered
entities,
then issuing
an emissions
allowance
for each
covered
entity
but
allowing
an entity to
increase
its
GHG
emissions
by
acquiring additional allowances from other entities that
“trade” part
of their allowances
for
compensation.
The only
thing
challenged is the part of the
Board’s
regulatory program that
allows
the Board
to
allocate
GH G
allowances
to
itself and then sell
the
allowances to
GHG
emitters, thereby
raising
tens
of billions
of
dollars
of revenue
for
the
state
Th e challenged action by an unelected,
politically-appointed
state
board
to
engraft into
a
regulatory
program
a
massive
revenue
raising
device is
unlawful
because
i t exceeds the
authority granted
to
the
Board by
AB 32 and it
imposes
what is
an
invalid
tax.
Absent
from
AB
32
is
any
language
giving
the
Air
Resources
Board
the
unprecedented
authority
to
raise
tens of
billions
of
dollars
of state
revenue
by
withholding and auctioning
off
a
percentage of
the statewide GH G
emissions
allowances
adopted
by
the Board.
See
American Federation of
Labor
v.
Unemployment
Ins.
Appeals
Bd.
1996 13 Cal.4th
1017,
42
[an administrative agency
ha s only
the powers
conferred
on it
by
statute or
by
the
Constitution].
The
oniy
money-making
power
that
AB 32
conferred
on
the Board
is the
-
8/18/2019 Chamber of Commerce appeals decision
18/72
au
thor
ity t
o c
harg
e
a
r
egul
atory
fee
lim
ited to
c
over
ing
the or
dina
ry
a
dmin
istra
tive
co
sts
of im
ple
men
ting
the
GH
G
em
iss i
ons r
egula
tory
pro
gram
.
H
ealt
h
S
afet
y Cod
e
3859
7
The fact
that
B
explici tly allows
the
Board to
impose
a
lim
ited re
gula
tory
fee
f
or
or
dinar
y
ad
mini
strat
ive co
sts
bu
t
con
tain
s
no
la
ngu a
ge
expl
icitl
y au
thor
izing
t
he
Boa
rd
to
with
hold
an
d the
n
a
uctio
n off GH
G
emi
ssion
s
allo
wan
ces
for
b
illion
s
o
f
dolla
rs
indi
cate
s
t
he
Leg
isla
tu re
did n
ot
i
nten
d
to
g
ive t
he Bo
ard
the no
vel
an
d
inc
redib
le
p
owe
r
t
o ad
opt r
egul
ation
s
to
raise
mas
sive
reve
nu e
for
purposes other than the ordinary
costs
of
administering
the
r
egul
atory
prog
ram.
And
th
e
leg
islati
ve
h
istor
y o
f
B
re
flect
s
not
hing
that
cou
ld
be
co
nstru
ed to
supp
ort
the
gran
ting of suc
h mas
sive
r
even
ue
ra
ising
auth
orit
y.
The bil
l’s fi
ndin
gs a
nd
dec
lara
tions
,
an
d
t
he
seve
n
leg
islat
ive r
epor
ts an
d ana l
yses
of th
e
bi
ll
ma
ke
no
me
ntion o
f any
suc
h au
thori
ty.
To
the
co
ntra
ry,
the enro
lled bill r
epor
t
pre
pare
d
by
the A
ir Re
sou
rce
Bo
ard
e
xpli
ci tly
note
d B
aut
horiz
es onl
y
fees
nec
essa
ry
to
sup
port
e
ssen
tial,
d
irect p
rogr
am
c
osts
. Lik
ewis
e the
bil
l sig
ning lett
er
the
B
oard pre
pare
d for
the
G
ove
rnor
’s sig
natu
re
em
pha
size
d
t
hat
any fe
es
c
olle
cted
f
rom
s
ourc
es
of G
HG
em
issi
ons
wou
ld
be
use
d
on ly
to
s
uppo
rt e
ssen
tial an
d d
irec
ts prog
ram
cos
ts
asso
ciate
d with
the
bill.
E
qua
lly
te
lling
is
th
e
fa
ct
tha
t
w
hen
duri
ng
f
loor
d
ebate
legis
lator
s ask
ed
wh
ethe
r B w
ould
give
the
Bo
ard
unli
mite
d
auth
ority
to
im
pose a
bro
ad rang
e of
c
harg
es
the
Spe a
ker
o
f the
A
ssem
bly
an
d
the bi
ll’s
au
thor
em
phat
icall
y
as
sure
d the
m
that
t
he
b
ill au
thori
zed
t
he Bo
ard to
im
pos
e
only a
lim
ited n
arro
w
char
ge fo
r
prog
ram
adm
inis
tratio
n
an
d co
sts . At this
p
oint
deb
ate
ende
d
and
the
bill was
passed.
-
8/18/2019 Chamber of Commerce appeals decision
19/72
Anyone
remotely
familiar
with
the Legislature
knows
that
if
AB
32
was intended
to allow
the Board
to
raise
tens of
billions of
dollars
of
state
revenue
on
the backs of
a small
sector
of
California’s
business community,
there
would
have
been more vigorous
legislative
debate
and
substantial
opposition
to
AB 32. Yet,
after
legislators
were
assured
the
bill
authorized
only
a
limited
administrative
fee,
debate
ceased
obviously because it was
understood that
AB 32
was
not intended
to
allow
the Board
to
implement
the
unprecedented
billions
of doll ar s
revenue-raising
program it
later
did.
There
is
another separate
and
independent
reason why
AB
32
cannot
be
read
to authorize the
Board to
raise
billions
of dollars of
state
revenue
by
withholding
for
itself
a
percentage
of the
GHG
emissions
allowances
and
then
auctioning
them
off
to
the
highest
bidders. Such
a
charge
for
emission
allowances
constitutes
a tax that
is
unconstitutional
because
it
was
not passed
by
a two-thirds vote in
each
house
of
the
Legislature
and
courts must
presume that the
‘Legislature
did
not intend
to
violate the
Constitution
The California
Supreme’s Court’s
decision
in Sinclair Paint
Co.
v.
State
Bd .
of
Equalization 1997
15
Cal.4th
866 sets forth
the
test whether
a
charge
imposed by
the
state
as
part
of
an
environmental
regulatory
program
is
a
fee or
a
tax.
If
the
charge
i
bears
a
reasonable relationship between
the amount
charged and the
burdens imposed
by
the
fee
payer’s
operations,
2
the
charge
is
not
used for unrelated revenue
purposes, and
3
the
remedial
measures
funded
with the
charge
have
a
causal connection
or
nexus to
the fee
payer’s operations,
then
the charge
is
a regulatory
fee.
If
the
charge
is
lacking
in
any of
those respects,
it is
a
tax.
-
8/18/2019 Chamber of Commerce appeals decision
20/72
As
ex
p
lai
ne
d in
de
ta
il
i
n
th
is
br
ie
f,
th
e
ch
ar
ge
a
G
HG
em
it
ter
co
ve
re
d
by
t
he
ad
m
in
ist
ra
tiv
e
p
ro
gr
am
m
u
st
p
ay to
th
e
B
oa
rd
t
o
a
cq
uir
e
a
dd
iti
on
al
G
H
G
e
mi
ss
io
ns
a
ll
ow
a
nc
es d
oe
s
n
ot
me
et
the
requirements
to
be
a
law ful
regulatory
fee.
Simply
stated the
a
mo
u
nt of
th
e a
uc
ti
on
c
ha
rg
es
l
ac
ks a r
ea
so
na
b
le
re
la
tio
n
sh
ip
to th
e
b
urd
e
ns
po
se
d
b
y the
pa
ye
rs
’
o
p
era
ti
on
s th
e
c
ha
rg
es
a
re
us
ed
for
u
nre
la
te
d
r
ev
en
ue
pu
rp
os
es
an
d
the
b
roa
d
pr
og
ra
m
s
f
un
de
d
h
av
e
no
ca
us
al
co
nn
ec
ti
on
to
th
e
bu
si
ne
ss
ac
ti
vit
ie
s
o
f t
he
p
ay
er
s.
C
on
se
qu
en
tl
y
th
e
c
ha
rg
es c
on
sti
tu
te
t
ax
es
t
ha
t a
re
un
la
wf
ul
be
ca
us
e
th
e
y
w
er
e no
t
passed by
a
two thirds
vote in
each
house
of
the
L
eg
is
la
tur
e.
I
n
su
m
b
ec
au
se
th
e
m
a
ss
iv
e
sta
te
r
ev
en
ue
r
ais
in
g
de
vi
ce
th
e
B
o
ard en
gr
af
te
d i
nt
o
t
he
r
eg
ul
at
ory p
ro
gr
am
ex
ce
ed
s t
he
au
th
or
ity
g
ra
nt
ed
to
th
e
B
oa
rd
b
y
B
32
a
nd
/o
r b
e
ca
us
e it im
p
os
es
an
inv
al
id
ta
x, th
e
jud
g
me
nt
o
f th
e
Su
pe
ri
or C
o
ur
t up
ho
ld
in
g th
e
ch
ar
ge
s
m
u
st
b
e rev
e
rse
d.
II.
PR
O
C
ED
U
R
A
L B
A
C
KG
R
O
U
N
D
AN
D
S
T
AT
E
M
EN
T
O
F
TH
E
CA
S
E
P
ro
ce
d
ura
l Hi
st
or
y.
Ca
li
for
ni
a
C
h
am
b
er
o
f Co
m
m
er
ce
, e
t al
. v
C
a
lif
or
nia
r
R
es
ou
rc
es
B
o
ard
, et
a
l.,
a
ct
io
n
n
o.
34
2
O
12
8
OO
0
1U
.
A
p
pe
ll
an
ts
California
Chamber
of Commerce
a
nd
Larry
Dic
ke
“
C
aiC
h
am
b
er
”
fi
le
d t
he
ir v
e
rif
ied co
m
pl
ain
t
o
n N
o
ve
m
be
r 13
20
12
T
he
C
ali
fo
rn
ia
r
Re
so
ur
ce
s
B
oa
rd
“A
RE
”
a
nd
it
s ex
ec
ut
iv
e d
ire
ct
or a
n
d
b
oa
rd
m
em
b
er
s
w
er
e
n
am
e
d a
s
re
sp
on
de
n
ts
so
me
ti
me
s
c
ol
le
cti
ve
ly
re
fer
re
d
to
as “A
RB”
.
T
he
co
m
pla
in
t
ch
a
lle
ng
ed
t
he
le
ga
lit
y o
f
RB
reg
u
lat
io
ns
CCR
sections
9 87
and
95910
95914
which
impose massive
-
8/18/2019 Chamber of Commerce appeals decision
21/72
finan
cial
b
urde
ns
on
a
s
mall
se
gme
nt
o
f Cali
forni
a’s b
usin
ess
co
mmu
nity
an
d ra
ise
tens o
f
bil
lion
s
of
dol
lars o
f
st
ate
rev
enue
.
The
petit
ion
alleg
ed
the
reg
ulat
ions
w
ere
u t
r
vir
es
and
not a
utho
rized
by
AB
32;
and the regulations
impose
a
tax
not
enacted
by
a
2/3
vote
in
ea
ch
ho
use of
the
Le
gisla
ture
, in
vi
olati
on o
f
Cal
.
Con
st.
arti
cle
X
IIIA
.
J
oint
Ap
pend
ix
file
d
here
with
“J
A”
o
oo
i o
o
io.
A
RB
’s
ans
wer
gene
rally
de
nied
th
e a
llega
tion
s.
JA 02
48-
02
55 .
T
he
Nat
iona
l
A
ssoc
iatio
n o
f
Man
ufac
turer
s
“
NA
M”
intervened
on
behalf
of
petitioners and the
Environmental
Defense
Fund
“ED
F”
and
Natu
ral
R
esou
rces
D
efen
se
C
oun
cil
“N
RD
C”
int
erven
ed
on
b
eha
lf of
resp
onde
nts.
J
A 030
7-03
24;
JA 02
62-
0
294
.
M
orn
ing
Star
Pa
ckin
g
Co
., et al
v
AR
B,
acti
on N
o.
4
2
1
80
0014
64.
A
ppe
llant
s
Morn
ing Star
Pac
king
Co
et
aL “
orni
ng
S
tar”
file
d
th
eir
ve
rifie
d
com
plain
t o
n
A
pril
1
6 201
3
n
ami
ng
the
s
ame
re
spon
den
ts,
a
nd
cha
lleng
ing
AR
B
regu
latio
ns
17
C
CR s
ectio
ns
958
30
95
834
,
9
5870
and
959
10 959
14
on
s
ubst
antia
lly
the
sa
me
g
roun
ds
as
C
alC
ham
ber. J
A
054
9-05
72.
Th
e
Cai
Cham
ber
and
M
orn
ing
Sta
r case
s
we
re d
eem
ed
relat
ed
and
assi
gned
to
Judg
e
Tim
oth
y
F F
rawl
ey .
J
A
0
579-
058 1.
T
he
CalC
ham
ber an
d Mor
ning
St
ar c
ases
w
ere
a
rgue
d
t
ogeth
er
in
a
se
vera
l
hou
r
h
earin
g
in
th
e
Su
peri
or
C
our
t
on
Au
gus
t 28
,
201
3.
R
epo
rters Tran
scrip
t
date
d
8
/28/1
3 “R
T”
at
pp
.
1
-75.
Th
e
Sup
erior
Cou
rt
iss
ued its
Jo
int
R
ulin
g
o
n
Su
bmit
ted
M
atter
s
“Ru
ling
” on
N
ovem
ber
12
2013
up
hold
ing
the
re
gula
tion
s. JA
15
66 -1
588
.
-
8/18/2019 Chamber of Commerce appeals decision
22/72
Jud
gme
nt
w
as
enter
ed
in
bot
h
ca s
es
o
n
Dec
embe
r
20,
201
3;
the R
ulin
g
w
as
atta
ched
an
d
its
rea
son
ing
ad
opte
d.
J
A
158
9-16
17;
JA
1
618
-164
5.
Notices of
Entry
of
Judgment
were served
in
both
cases on
Jan
uary
9,
20
14.
JA
164
6-16
80;
JA
168
1-17
14.
Tim
ely
n
otice
s
o
f
ap
peal
w
ere
filed
.
JA
17
38-1
741;
JA
174
2-
17
45;
JA
1746
-177
9.
T
his
Cou
rt
c
onso
lidat
ed
the
Cai
Cha
mbe
r
an
d
Morn
ing
S
tar
case
s.
JA
19
53-1
983
.
Th
e
p
artie
s
stipu
late
d
to the
JA
.
JA
1
953-
1983
.
Fac
tual
B
ack
grou
nd.
AB
3
2 wa
s
a
ppro
ved
by
maj
ority
v
ote
in
b
oth
ho
uses
of
the
Leg
islat
ure
in
Aug
ust
200
6.
JA
1
07.
O
n
Se
ptem
ber
2
7, 20
06 ,
t
he
Gov
erno
r
si
gned
A
B
3
2 in
to
law
.
Sta
tute
s 20
06,
c
hapt
er
488
,
He
alth
and
S
afety
Cod
e secti
ons
385
00
385
99.
A
B
32’
s
sta
ted
o
bjec t
ive
is
t
o redu
ce
GHG
e
miss
ions
in t
he
stat
e to
19
90 lev
els
b
y
20
20.
Se
ctio
n
385
50. 1
T
he L
egi
slativ
e
Co
unse
l’s
D
iges
t
sta
tes: “Th
e
bi l
l w
ould
req
uire
th
e
s
tate
bo
ard
[AR
B]
to
adop
t
a state
wide
gree
nho
use
gas
emis
sion
s
li
mit
equ
ival
ent
to
t
he
sta
tewi
de
g
reen
hous
e
gas
emis
sion
s le
ve ls
in
199
0
to be
achiev
ed
by
2
020 ,
as
s
pec i
fied .
”
A
B 32
re
quir
es th
e
AR
B
to:
i
im
ple
men
t
a
GHG
em
issi
ons
m
oni
torin
g
p
rogr
am Se
ction
385
30 ;
2
dete
rmin
e
wh
at
th
e
stat
ewid
e
G
HG em
issio
ns leve
l
was
in
199
0,
an
d
th
en
ach
ieve
th
at
U
nles
s
ot
herw
ise
i
ndic
ated,
“
sect i
on s
”
refe
rs
to
th
e
H
ealt
h
Sa fety
Code.
AR
B’s
A
dmi
nistr
ative R
eco
rd
“A
R”
a
t
A
-o0
00oi
.
-
8/18/2019 Chamber of Commerce appeals decision
23/72
lev e
l
by
20 2
0
S
ectio
n
38
550
;
and
3
ad
opt a
reg
ulat
ory pro
gram
to ach
ieve
th
e
requ
ired
G
HG
re
duct
ions in
t
he
“ma
xim
um
tec
hnol
ogic
ally fe
asibl
e a
nd
co
st-e
ffect
ive”
wa
y.
Sec
tio n
s 3856
0
38562.
In
d
esig
ning
re
gula
tions
,
t
he
A
RB
was
auth
oriz
ed
to
c
onsi
der
“d
irec t
emis
sion
re
duc
tion
m
eas
ures, al
tern
ative
com
plian
ce
m
echa
nism
s, ma
rket
-bas
ed
co
mpli
ance mech
anis
ms,
and
po
tenti
al
mon
etar
y
and
non
mon
etary
in
cent
ives for
s
ourc
es”
in
orde
r ach
ieve
“th
e m
axi
mum
fe
as ib
le
and
cost
-effe
ctive red
uctio
ns
of
gree
nhou
se
gas
emissions
by
20
20 .”
Section
38561 b .
A
“ma
rket
-bas
ed com
plian
ce
me
chan
ism
”
mean
s
eith
er:
i
A
syste
m
o
f
m
ark
et-ba
sed de
clin
ing ann
ual
ag
greg
ate
em
issi
ons
limi
tatio
ns fo r s
ourc
es
o
r categ
or ie
s
of so
urce
s
th
at
em
it
gr
eenh
ouse
g
ases.
2
G
reen
hou
se g
as
e
miss
ions
exc
hang
es ,
ba
nkin
g,
cred
its,
and
o
ther
trans
acti
ons,
gove
rned
by
rul
es and
pro
toco
ls
established
by
the state board,
that
result
in
the
same
gree
nhou
se
gas emi
ssion
red
uctio
n, ove
r the sam
e
tim
e
pe
riod,
as
d
irec
t com
plia
nce
w
ith
a gree
nhou
se
ga
s
e
miss
ion
lim
it
or
e
miss
ion
red
uctio
n mea
sure
ad
opte
d
by the
sta
te
bo
ard p
ursu
ant
to
th
is div
isio
n.
S
ec ti
on 385
05
k .
32 re
quire
d
t
he reg
ulati
ons to be
op e
rativ
e by
Janu
ary
2
012
. S
ec ti
on 385
62
a .
In ado
ptin
g
reg u
latio
ns,
the A
RB
w
as
direc
ted t
o
min
imiz
e co
sts,
c
onsi
der the c
ost
e
ffec
tiven
ess
of
the
regu
latio
ns
an
d
m
inim
ize th
e
adm
inis
trati
ve bu
rden
of
com
plyin
g
w
ith t
he reg
ulati
ons.
S
ec tio
ns
3
856
2 b
1 ,
5
7 .
Th
e o
nly
r
even
ue-r
aisin
g
a
utho
rity m
ent
ioned
i
n
32
is
in
sec
tion
385
97 ,
wh
ich
au
thori
zes
th
e
A
RB to
ado
pt “a
sch
edule of
fee
s
-
8/18/2019 Chamber of Commerce appeals decision
24/72
to
be
paid
by
th
e
sou
rces o
f
g
reen
hous
e
gas emis
sion
s”
to
pay
pro
gram
a
dmin
istra
tion
ost
s
The
R
egu
latio
ns
In
i
sput
e
O
n Ja
nua
ry
1
2
12
the ARB
’s
regulations went into
effect.
Cal. Code Regs.,
Tit.
7
Div.
3
Ch.
1
Sub
ch . 10,
Art
.
5
958
01
et s
eq].
The
regu
latio
ns
im
pose
a
“cap a
nd tr
ade”
syst
em ,
pl
acing
a
ca
p
o
n GH
G
em
issio
ns
fro
m enti
ties
t
hat emit
at
least 25
,000
metr
ic
ton
s o
f
GH
G p
er
yea
r.
17
CCR
,
958
10-9
581
4.
Thes
e en
titie
s
are
“c
over
ed en
tities
.”
17
CC
R,
95
802
a ; 9581
1;
958
12.
Un
der the regulations, the
ARB
issues
“allowances,” each of
whi
ch
giv e
s
the h
olde
r the
righ
t
to
em
it
on
e
ton
of
ca r
bon
diox
ide
eq
uiva
lent. 17 C
CR,
95
802
a 8
,
41 ,
;
see
also
sec
tio n
3
850
5 a .
A c
ov e
red
ent
ity mu
st
pos
sess
,
a
nd then su
rren
der
back
to
the
AR
B,
on
e
a
llow
ance
for e
ach ton
of
car
bon
d
ioxi
de em
issio
ns
i
t
p
rodu
ces
w
ithin
a
give
n
com
plia
nce pe
riod.
17 C
CR,
95
856.
T
he re
are
th
ree
c
omp
lian
ce per
iods
:
201
3-14
, 20
15-1
7, an
d
2
018
-20.
1
7
CC
R,
958
40. T
he cap
d
ecli
nes
du
ring
eac
h
c
om p
lianc
e per
iod,
r
educ
ing
stat
ewid
e emis
sion
s.
17
C
CR
,
958
11-1
2;
95
841
;
95
850-
58.
G
HG a
llow
anc
es
are not
“pr
oper
ty or a
pro
pert
y
rig
ht”
but are
trad
able
.
17
C
CR,
958
02 a
8 ;
958
20 c
;
959
21. A
c
over
ed
en
tity
m
ay in
creas
e
its G
HG em
issio
ns by
acq
uirin
g
a
ddit
iona
l
The
c
osts
ar
e
li
mite
d and
mus
t be
con
sist
ent
w
ith
He
alth
and
Sa
fety C
ode sec
tion
5
700
1,
th
e
C
ali fo
rnia
EPA
’s fee
acc
oun
tabil
ity
pro
gram
.
Co
vere
d
indu
strie
s
incl
ude
pe
trole
um ref
inin
g,
cem
en t
p
rodu
ction
, co
gene
ratio
n,
gl
ass prod
ucti
on, h
yd r
ogen
pr
oduc
tion
,
iron
and s
teel prod
uctio
n, petro
leum
and
na
tura
l
g
as sys
tem
s,
elec
trici
ty
g
ener
ating
f
ac ili
ties, pu
lp
an
d pap
er
ma
nufa
cturi
ng,
a
nd
other consumers and suppliers
of
electricity,
natural
gas,
and
pe
trol
eum
.
1
7 C
CR,
95
811.
-
8/18/2019 Chamber of Commerce appeals decision
25/72
allowances from
other
covered
entities without
increasing
overall
statewide GHG
emissions
since the
total number
of allowances is
capped.5
This
declining
“cap” on the
allowances
in circulation, along
with the
ability
to
“trade” allowances among covered
entities,
are
features
of
a
cap
and trade
program.
Greatly
expanding
authority
granted
to it by
AB 32 , the AR B
adopted
additional
regulations empowering itself
to
undertake
an
unprecedented,
multi-billion dollar revenue-generating program. It
allocated
to itself
a
substantial portion
of
the allowances in order
to
sell
them
to
the highest
bidders
to
generate
state revenue.
17
CCR,
§
95870,
95910-95914.
The regulations
initially
directed
the
revenue
to
the Air Pollution Control Fund and