Measure GG

Berkeley Ordinance to Adopt a Special Tax on Natural Gas Consumption

Would adopt a tax of $2.9647/therm of natural gas consumed annually in buildings of 15,000 square feet or larger except government buildings, single-family residences, and residential buildings with at least 50% affordable units, adjusted annually for inflation plus 6%; allocating revenues to building decarbonization programs, and administration; and establishing an oversight committee, generating an estimated $26.7 million the first year and more thereafter until its expiration in December 31, 2050. Measure GG  requires a majority vote for passage. 

Fiscal Impact: This would raise approximately $26.7 million in the first year alone, and would incur administrative costs.

Next Alameda County Measure: Measure HH

This measure would impose a new special tax on natural gas consumption in buildings of 15,000 square feet or larger that are actively heated or cooled.   

The tax rate would be roughly $2.9647 per therm (a unit of energy) of natural gas consumed in a building during the tax year. It would be calculated as the sum of the following:

  1. The product of $382 X [total therms] X [natural gas carbon emissions factor of 0.0053] 

  2. The product of $10,044 X [total therms] X [natural gas leakage factor of 0.04] X [natural gas methane content factor of 0.9] X [natural gas therm to metric ton factor of 0.0026] 

The City estimates this tax would generate annual revenues of roughly $26.7 million per year. The tax would be charged to building owners, who would be prohibited from passing the tax onto tenants in residential or mixed-use buildings in the form of increased rent or costs.  The tax would not apply to 1-to-4 unit residential buildings, residential buildings where more than 50% of the units are deed-restricted to be affordable to households making less than 80% of the Area Median Income, or government-owned buildings. The City Council could exempt 501(c)(3) tax-exempt organizations with annual revenues under $1,000,000, provided certain conditions are met. The measure prohibits the City Council from adopting other exemptions. 

The measure would take effect January 1, 2025, and expire December 31, 2050. The tax would be due February 28, 2026, and annually thereafter, subject to a penalty of 10% of the amount due plus interest of 1% per month for delinquent payments. The base tax rates would be adjusted every year, beginning January 1, 2026, by the sum of the percentage increase in the Consumer Price Index plus 6%. The measure would prohibit the City Council from reducing the tax rates or otherwise reducing the tax absent a finding, supported by substantial evidence, that doing so is necessary to temporarily address unusual circumstances, such as a natural disaster, and that the reduced tax will nevertheless achieve the measure’s purposes. 

All tax proceeds would be deposited into a special purpose fund to be used for administering the measure (up to 3%); any refunds; a program of natural gas conversions and building decarbonization retrofits (90% of the remainder); and permanent unionized City staff for this program (10% of the remainder). In using the proceeds, the City would be required to prioritize tenant protection and impact on communities identified by the state as vulnerable to effects from pollution, as well as natural gas conversion and decarbonization retrofits in low-rise residential buildings and restaurants. 

The City’s Environment and Climate Commission would oversee administration of the fund, conduct an annual needs assessment regarding retrofitting existing buildings in the City, and make recommendations to City Council.  

Source: City of Berkeley Ballot Measure Documents

City of Berkeley Voter Information

Alameda County Election Resources