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California Proposition 70, Vote Requirement to Use Cap-And

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California Proposition 70, Vote Requirement to Use Cap-And California Proposition 70, Vote Requirement to Use Cap-and-Trade Revenue Amendment (June 2018) California Proposition 70: Vote Requirement to Use Cap-and- Trade Revenue Amendment Election date June 5, 2018 Topic State and local government budgets, spending and finance and Energy Status On the ballot Type Origin Constitutional State amendment legislature California Proposition 70, the Vote Requirement to Use Cap-and-Trade Revenue Amendment, is on the ballotin California as a legislatively referred constitutional amendment on June 5, 2018.[1] A "yes" vote supports this amendment to require a one-time two-thirds vote in each chamber of the state legislature in 2024 or thereafter to pass a spending plan for revenue from the state's cap-and-trade program for greenhouse gases. A "no" vote opposes this amendment to require a one-time two-thirds vote in each legislative chamber in 2024 or thereafter to pass a spending plan for revenue from the state's cap-and-trade program. Overview What would Proposition 70 require? Proposition 70 would require a one-time two-thirds vote in each chamber of the California State Legislature to use revenue from the State Air Resources Board's auctioning or sale of greenhouse gas emissions allowances under the state's cap-and- trade program. To make sure no revenue is spent without the two-thirds vote, the measure would place all revenue from the cap-and-trade program in a Greenhouse Gas Reduction Reserve Fund beginning on January 1, 2024. The vote would take place anytime on or after January 1, 2024. Revenue would collect in this reserve fund until the one-time two-thirds vote occurred. If legislators failed to secure a two-thirds vote, revenue would keep collecting in the reserve fund and the state would be unable to spend the revenue. Between January 1, 2024, and the passage of the spending bill, the measure would also suspend a sales tax exemption for manufacturers, increasing tax revenue about $260 million per year. If legislators succeed at securing a two-thirds vote, revenue would begin to fill the non-reserve Greenhouse Gas Reduction Fund, which requires a simple majority vote to use funds from.[1][2][3] How is Proposition 70 tied to cap-and-trade negotiations in California? Rep. Chad Mayes (R-42) designed Proposition 70.[4] The amendment resulted from negotiations between Gov. Brown (D), legislative Democrats, and legislative Republicans over the future of the state’s cap-and-trade program. The negotiations resulted in three bills passing on July 17, 2017―an extension of cap-and-trade until 2030 (AB 398), new air pollution regulations (AB 617), and Proposition 70 (ACA 1). As Proposition 70 would require a two-thirds (66.6 percent) vote of the state legislature to spend revenue from the program, members of the minority party may be needed to pass a spending plan.[5][6][7] As of January 2018, Democrats were the majority party and controlled two-thirds of the seats in both the state Senate and state Assembly. Republicans were the minority party in both chambers. Text of measure Ballot title The ballot title is as follows:[8] Requires Legislative Supermajority Vote Approving Use of Cap-and-trade “ Reserve Fund. Legislative Constitutional Amendment.[9] ” Ballot summary The ballot summary is as follows:[8] ∑ Beginning in 2024, cap-and-trade revenues will accumulate in a reserve “ fund. ∑ These cap-and-trade revenues cannot be used unless the Legislature authorizes such use by a two-thirds majority. ∑ On the effective date of any such authorization, the requirement that new revenues accumulate in this reserve fund will expire. ∑ Suspends certain tax exemptions, including for equipment used in manufacturing and research and development, beginning in 2024, until the effective date of any such authorization.[9] ” Fiscal impact statement The fiscal impact statement is as follows:[8] ∑ Potential temporary increase in state sales tax revenue from the sale of “ manufacturing and certain other equipment beginning in 2024. Amount could range from no increase to a few hundred million dollars annually. ∑ Possible change in the mix of cap-and-trade funding provided to state and local programs.[9] ” Constitutional changes See also: Article XX, California Constitution The measure would add a Section 24 to Article XX of the California Constitution. The following language would be added:[1] SEC. 24. (a) The Greenhouse Gas Reduction Reserve Fund is hereby created as a special fund in the State Treasury. (b) For the time period specified in subdivision (d) only, all moneys collected by the State Air Resources Board from the auction or sale of allowances pursuant to a market-based compliance mechanism established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) shall be deposited in the Greenhouse Gas Reduction Reserve Fund. (c) Notwithstanding any other provision of this Constitution, moneys in the Greenhouse Gas Reduction Reserve Fund shall be available upon appropriation by the Legislature by rollcall vote entered in the journal, two-thirds of the membership of each house concurring, for the same purposes applicable on January 1, 2024, to the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code. (d) Subdivision (b) shall apply beginning January 1, 2024, and until the effective date of legislation that contains an appropriation from the Greenhouse Gas Reduction Reserve Fund. After the effective date of that legislation, all new moneys collected pursuant to a market-based compliance mechanism shall be deposited in the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code. (e) Section 6377.1 of the Revenue and Taxation Code shall not apply to sales that occur while the moneys specified in subdivision (b) are being deposited in the Greenhouse Gas Reduction Reserve Fund, but shall resume on the effective date of legislation identified in subdivision (d).[9] Support Supporters Officials ∑ Gov. Jerry Brown (D)[8] ∑ State Rep. Chad Mayes (R-42)[1] Organizations ∑ California Chamber of Commerce[10] Arguments ∑ California Chamber of Commerce said, "The CalChamber Board voted to support this measure because ACA 1 will encourage bipartisan support for an expenditure plan and allow for a process to negotiate expenditures that furthers the goals of the Legislature as a whole. The pause on expenditures will allow time to evaluate the efficacy of programs that are being continuously funded."[10] Official arguments Gov. Jerry Brown (D), Rep. Chad Mayes (R-42), and Allan Zaremberg, president of California Chamber of Commerce, wrote an official argument in support of Proposition 70:[8] VOTE YES ON PROPOSITION 70 TO PROTECT TAXPAYERS AND OUR ECONOMY AND ENSURE CALIFORNIA CONTINUES ITS LEADERSHIP ON CLIMATE CHANGE. California’s ambitious plan to reduce statewide greenhouse gas emissions PASSED WITH SUPPORT FROM DEMOCRATIC AND REPUBLICAN LAWMAKERS and more than 150 organizations representing agriculture; environment; clean energy and technology; business; labor; firefighters; public health professionals; economists; and newspaper editorial boards from across the state. PROPOSITION 70 HELPS ENSURE THAT MONEY FOR PRIORITY PROGRAMS IS NOT DIVERTED BY POLITICIANS FOR PET PROJECTS. It is essential that future climate change revenues continue to reduce emissions and provide benefits to all Californians. Proposition 70 provides a strong safeguard against any effort to undermine this goal. It forces two-thirds of the legislature to come together in 2024 to evaluate if the money has been spent wisely and beneficially for the good of all Californians. PROPOSITION 70 SAFEGUARDS CALIFORNIA’S HISTORIC CLIMATE CHANGE PROGRAM WHICH PROTECTS OUR ENVIRONMENT, ENHANCES OUR ECONOMY, AND CREATES JOBS. The future of California’s signature climate change program depends on demonstrating that we can protect our environment while growing our economy. To accomplish this goal Proposition 70 helps ensure that the money to reduce greenhouse gases is spent in the wisest and most cost effective way; that protects taxpayers and our most polluted communities. VOTE YES ON PROPOSITION 70 Proposition 70 is part of a historic bipartisan effort to achieve our climate goals, retain good paying jobs to sustain our growing economy, and protect air quality and public health. Opposition Opponents Officials ∑ Sen. Ben Allen (D-26)[8] ∑ Rep. Todd Gloria (D-78)[8] Parties ∑ California Democratic Party[11] Organizations ∑ Coalition for Clean Air[12] Individuals ∑ Tom Steyer[8] Arguments Chris Chavez, Deputy Policy Director for the Coalition for Clean Air, said the amendment "could create major gridlock for California’s climate investment." He stated:[12] Supposedly, ACA 1’s two-thirds vote requirement in 2024 is to ensure “ that cap and trade allocations maintain support from the state Legislature. We agree that it makes sense for the program’s allocations to be reviewed, but the Legislature should do that every year through the budget process, and there’s no valid reason to set up an anti- democratic two-thirds hurdle. ... A two-thirds vote gives polluters more leverage in how cap-and-trade funding is spent after 2024. The fact is, ACA 1 itself was a part of a deal to get a two-thirds vote for the cap-and-trade extension. When a two- thirds vote was required to approve California’s budget, legislative hostage-taking, gimmicks and pork barrel spending were part and parcel of the process.[9] ” Official arguments Sen. Ben Allen (D-26), Rep. Todd Gloria, and Helen L. Hutchinson, president of the League of Women Voters of California, wrote the official argument against Proposition 70 found in the state's voter guide: NO ON PROPOSITION 70 Proposition 70 grew out of an oil industry-backed effort to derail the state’s premiere program to curb harmful air pollution.
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