Thursday, December 1, 2022

CalChamber Backs Constitutional Changes on Cap-and-Trade, Transportation Funds

Two proposed constitutional amendments that will appear on the June 2018 ballot are being supported by the California Chamber of Commerce in accordance with a vote of its Board of Directors.

ACA 1: Cap-and-Trade

This constitutional amendment requires that beginning January 1, 2024, revenues from the cap-and-trade auctions be deposited into the Greenhouse Gas Reduction Reserve Fund. ACA 1 requires a one-time legislative supermajority approval of the cap-and-trade expenditure plan before the funds can be returned to the Greenhouse Gas Reduction Reserve Fund to be appropriated.

Upon the effective date of the two-thirds vote appropriation, monies from the sale of cap-and-trade allowances will return to being subject to a majority vote of the Legislature.

The one-time supermajority vote will provide additional negotiation and bipartisan support for the expenditure plan, with the negotiation process allowing time to evaluate which programs funded by the spending plan are operating as intended.

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.

ACA 5: Transportation

ACA 5 is a constitutional amendment to restrict the expenditures of motor vehicle taxes and fees.

It is a companion measure to CalChamber-supported SB 1 (Chapter 5, Statutes of 2017), which enacted the Road Repair and Accountability Act of 2017.

This constitutional amendment will protect funds raised by the Act so that the money can be used only for transportation purposes. The constitutional amendment specifically identifies the two funding sources in SB 1 that are not currently protected by the Constitution: revenue derived from the diesel sales tax and the Transportation Improvement Fee.

If approved by the voters, ACA 5 would amend the California Constitution in the following ways:

• Exempt appropriations of revenues generated from the Road Maintenance and Rehabilitation Account created by SB 1, or any other revenues deposited into the account pursuant to that measure, from counting toward the state appropriations limit.

• Require revenues derived from the sales tax on diesel fuels to be deposited into the Public Transit Account, and prohibit the Legislature from temporarily or permanently diverting or appropriating those revenues for purposes other than researching, planning, constructing, improving, maintaining, and operating public streets and highways and transportation systems.

• Require that revenues derived from SB 1’s proposed Transportation Improvement Fee on vehicles, except for specified administrative expenditures to collect the revenues, be used solely for transportation purposes. These revenues would not be used for debt service on any existing state transportation general obligation bonds, but only for future bond debt service, if specifically authorized in a future general obligation bond. The Legislature would be prohibited from borrowing those revenues or using them for unauthorized purposes.

The CalChamber Board voted to endorse this measure to add additional protections for the new transportation revenues approved under SB 1.

The California Chamber of Commerce is the largest, broad-based business advocate to government in California, working at the state and federal levels to influence government actions affecting all California business. As a not-for-profit, we leverage our front-line knowledge of laws and regulations to provide affordable and easy-to-use compliance products and services.

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