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Assembly leader offers repeal of fire fee as part of tax compromise

August 24, 2012 |  4:20 pm

Assembly Speaker John Pérez (D-Los Angeles) offered Friday to repeal an unpopular fire prevention fee in a bid to get Republicans to support his proposal to eliminate tax breaks for out-of-state corporations.

The offer is Pérez’s latest effort to win support for a bill that would close what he sees as a corporate tax loophole to raise $1 billion for scholarships for middle-class college students in California.

The Assembly voted last week to approve Pérez’s AB 1500, which eliminates a provision of tax law that allows out-of-state corporations to pay less in taxes than businesses based in California by letting them be taxed based on the portion of their property and hiring they have in the state. His bill would base corporate taxes just on sales, bringing in $1 billion for college students.

But to get the two-thirds vote his bill needs in the Senate, he needs at least two Republicans to join Democrats. Republicans, many representing rural districts, have been flooded with angry calls from constituents about a new $150 fire prevention fee the state began charging this month for properties in brushy areas prone to wildfires.

Pérez is amending a bill to repeal the fire fee and make up for the loss of revenue with a portion of the money from the corporate taxes.

"The Republicans have been very clear that they don’t like the fire fee," said John Vigna, a spokesman for Pérez. "We feel this is a good faith effort to bring relief to areas that are going to be paying the fire fee, and students.'' 

Senate Republican Leader Bob Huff of Diamond Bar was not impressed, said spokesman Bill Bird, who said Perez is offering to repeal ``a tax that was illegal to begin with'' in exchange for a billion-dollar tax increase. ``That, in the opinion of the Republican leader, doesn't even pass the giggle test,'' Bird said.


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-- Patrick McGreevy in Sacramento