Governor signs cap-&-trade revenue bills

By CMTA Staff

Capitol Update, Oct. 12, 2012 Share this on FacebookTweet thisEmail this to a friend

Governor Brown signed two bills directing how revenue from the cap-and-trade program will be spent. The revenue will be derived from a series of state-run auctions of greenhouse-gas emissions allowances, the first of which is set for November 14.

AB 1532 by Assembly Speaker John Perez (D-Los Angeles) requires that the funds be spent on environmental purposes with an emphasis on improving air quality. SB 535 by Senator Kevin De Leon requires at least 25 percent of the funds be used for projects that help “disadvantaged communities,” the intent largely focusing on more economically challenged communities.

CMTA does not believe that AB 32 (the 2006 Global Warming Act) grants authority for revenue-raising auctions and that litigation could undermine the entire program. In the best case scenario for auction proponents, all revenue may only be spent on programs to promote the goals of AB 32.  Therefore, despite the serious budget deficits being suffered by the state, funds may not be directed to the General Fund.  Only a two-thirds vote of the legislature for new taxes would authorize such a use.

While the business community continues to voice strong opposition to the program, most recently at the California Air Resources Board’s September Board meeting, CARB representatives continued to defend the program suggesting it is a reasonable, market-based approach to fighting global warming.

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