On November 6, 2012, California voters closed a corporate tax loophole that was costing the state $1 billion each year, giving our state the rare opportunity to invest $2.5 billion in energy reducing projects and 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. From closing the tax loophole, California is now generating 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 of the program. For these initial years, half of the Prop 39 funds will be invested in a program designed by the Legislature (SB 73) to invest in cost-effective energy projects. These projects will 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, gave the Legislature the responsibility to implement the Clean Energy Jobs Act. Taking the voters’ directive, the Legislature passed implementing legislation (SB 73) in June 2013 to invest the majority of Prop 39 funds in energy efficiency and clean energy projects for K-12 schools and community colleges. State agencies are now tasked with developing and administering these programs, so that schools and colleges can begin implementing energy saving measures as soon as possible.
When will voters see energy projects on the ground?
Schools and community colleges are beginning the process of identifying their energy needs while state agencies develop the Prop 39 program infrastructure and guidelines. The California Department of Education has already announced how much funding each school district is eligible to apply for, and that list is available here. Once the California Energy Commission releases the final Prop 39 guidelines in December 2013, school districts can apply for funding for their chosen projects and begin implementing them in 2014. Community colleges are similarly prioritizing their energy projects and will also begin implementation in 2014.