The Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection, and Energy convened on May 1, 2025, to discuss critical issues surrounding regulatory fee authority for the California Air Resources Board (CARB). The meeting focused on a proposed trailer bill that would expand CARB's authority to impose fees on regulated entities, aiming to alleviate the financial burden on California drivers and taxpayers.

Ajay Mangat, filling in for Richard Boyd, presented the rationale behind the proposed regulatory fee authority. He explained that the intent is to allow CARB to recover reasonable costs incurred in regulating entities, thereby shifting the financial responsibility from the public to the polluters. Historically, CARB has managed to fund its regulatory activities through existing sources, but these funds are now strained, necessitating the need for alternative funding mechanisms.

Mangat cited the example of the transport refrigeration unit (TRU) regulation, which included fees for owners and facilities. However, a recent court ruling has prevented CARB from collecting these fees, leading to funding challenges for ongoing regulatory work. He emphasized the importance of the proposed authority to ensure sustainable funding for CARB's operations.

Elliot, representing the Legislative Analyst's Office (LAO), expressed concerns regarding the broad nature of the proposed trailer bill. She argued that the language could allow CARB to assess fees across a wide range of activities without sufficient justification. Elliot recommended rejecting the proposal, suggesting that a more narrowly tailored approach would be more appropriate. She highlighted the legislative responsibility of imposing fees and cautioned against delegating such authority too broadly.

Senator Blakeser sought clarification on the broadness of the proposal, prompting a response from David Garcia, CARB's legislative director. Garcia defended the need for broad authority, stating that as CARB moves towards zero-emission technology, traditional funding sources may diminish. He argued that the proposed authority would provide the legislature with enhanced oversight of CARB's fee structures, ensuring transparency and accountability.

The discussion underscored the tension between the need for sustainable funding for environmental regulations and the legislative oversight of fee imposition. The subcommittee's deliberations concluded without a definitive resolution, leaving the future of the proposed regulatory fee authority in question. Further discussions and potential revisions to the proposal may be necessary to address the concerns raised by the LAO and other stakeholders.