What is Prop 39?

On November 6, 2012, California voters closed a corporate tax loophole that was costing the state $1 billion each year. Now, Californians have a rare opportunity to invest $2.5 billion in projects that will reduce energy costs and create thousands of clean energy jobs.

What is Prop 39?

Prop 39 closed an unfair corporate tax loophole that gave corporations a tax break for moving their jobs and investments to other states. This tax policy discouraged out-of-state companies from locating jobs here and gave them an unfair tax advantage over businesses that employ more Californians. Prop 39 fixed this problem by requiring multi-state companies to pay taxes based on their sales in California (the “single sales factor”).

The passage of Prop 39 brought California’s tax policy in line with many large states, including New York, Texas, Michigan, and Wisconsin. By closing the tax loophole, California will also generate over $1 billion in new tax revenue each year, part of which will be dedicated to clean energy and energy efficiency projects. For the first five years, half of the Prop 39 funds will be invested in a program designed by the Legislature to invest in cost-effective energy projects. These projects will not only train an entire clean energy workforce, but also reduce public energy costs and save taxpayers money for years to come.

The measure passed. Now what?

Proposition 39, endorsed by 60 percent of the state’s voters and supported by hundreds of coalition members, gives the Legislature the responsibility to implement the Clean Energy Jobs Act. Now, back at the Capitol, the Governor and State Legislature are working up proposals on how best to invest the billions in Prop 39 revenue over the next five years. Stay up to date, read the most recent Prop 39 news, and stay involved by learning more about the current proposals.