California Passes Environmental ‘Sleeper Threat’

California voters on Tuesday resoundingly struck down a bid to suspend the state’s climate change law, but they passed another lesser-known measure that could make it harder for the state to carry out that law.

In a wave of anti-tax sentiment, voters pushed through Proposition 26, which imposes a two-thirds vote on new fees, retroactive to the beginning of the year. Pre-election ads marketed Prop 26 as a way to close a tax loophole, and many voters bundled it with another ballot measure having to do with a supermajority vote. (Prop 25 lowers the vote required to pass a budget to a simple majority.) But Prop 26 may have been the stealth environmental initiative. That’s because the state mainly uses the fees to fund environment and public health programs, including children’s lead screening and old spill clean-up.

A UCLA Law School study dubbed Prop 26 a “sleeper threat,” and said it could jeopardize funding for a host of health and environment programs, and cause “wide-ranging impacts on implementation of the state’s health, safety and environmental laws,” including AB 32, the state’s global warming law.

Could Prop 26 present a serious hurdle in carrying out AB 32?

“It’s fair to say that that question is up in the air,” said study co-author Cara Horowitz, who directs UCLA Law School’s Emmett Center on Climate Change and the Environment.

Horowitz says Prop 26 specifically applies to fees that were imposed by the legislature, retroactive to Jan. 1, 2010. AB 32, which was adopted by the legislature in 2006, allows an administrative body, the California Air Resources Board (CARB) to adopt fees as a part of implementing the law. The question, Horowitz says, is whether the fees adopted going forward by an administrative body (CARB) apply under Prop 26.

CARB spokesperson Stanley Young provided the following statement by Mary Nichols, chairwoman of the state Air Resources Board: "Proposition 26 does not impair the AB32 scoping plan adopted in 2008 or any regulations developed under that plan."

Responding to reporters' questions on the matter, however, Nichols said issues could still arise on a case-by-case basis, according to the San Francisco Chronicle.

Environmental advocates expect court challenges to define the boundaries of Prop 26.

“There will be a lot of litigation about the definition of a fee,” said Pamela King Palitz, a staff attorney for Environment California. “The new attorney general — whether it’s Harris or Cooley — will be asked to do a lot of interpretation over what is a fee? There could be endless legal challenges on this that could slow down all kinds of processes of government.”

Bill Allayaud, California director of governmental affairs for the Environmental Working Group, says Prop 26 transforms some fees into taxes, by requiring a higher threshold to pass in the legislature. The greatest impact, he says, will be on regulatory fees that state and local agencies impose on polluters to mitigate environmental and health impacts. He said voters rejected a similar initiative (Prop. 37) in 2000.

The two biggest funders of Prop 26 were Chevron and the California Chamber of Commerce, which poured millions into the initiative.

Prop 26’s impact on AB 32 is murky at present and may need to be sorted out in court, but UCLA Law School’s Horowitz says there are better examples of how Porp 26 could hinder environment and health programs in the state.

As an example, Horowitz points to a fund that would help clean up coastal oil spills, an issue that gained more urgency after the BP oil disaster in the Gulf. This year, California’s legislators sought to beef up the fund, which Horowitz described as “on the brink of bankruptcy,” by increasing the fee on every barrel of oil offloaded at terminals in the state by one cent to six cents a barrel. The legislature passed the increased fee, which would have generated about $6 million, by a majority vote, but it was vetoed by the governor.

In future years, she says, it will be tougher to increase the fee to bolster the oil spill prevention fund to keep up with inflation. In a similar way, it will be harder to charge oil companies for pollution.

“There’s a reason way, the yes campaign came up with a lot of oil company funders,” Horowitz said.