Prop. 87 Redux in Bill Form: Research for Cleaner Fuels

Speaker Nunez has resurrected Prop. 87 as AB 118, which quietly passed the Assembly last week and is now in the hands of the Senate. The bill would raise fees on motorists to fund the development of cleaner fuels. The lack of a tax increase means that the bill can pass without a 2/3rds vote, which could not have happened with the original provisions of Prop 87. The tax payers groups are not happy, but this bill seems headed for Arnold's desk.

The goals of AB118 are similar to those of the failed Prop. 87. The bill would provide funds for alternative fuel research in universities and private firms; give grants or loans to help companies produce and distribute new fuels that would cut greenhouse gases; and provide subsidies to consumers to buy alternative fuel vehicles. Under AB118, the California Air Resources Board and the California Energy Commission would be responsible for doling out the funds. Prop. 87 would have created a new state agency for that task.

The bill would help California reach the goals of AB 32 of reducing carbon emissions by 25% by 2020. AB118 has the support of a wide range of organizations, from the Alliance of Automobile Manufacturers to the Sierra Club to the Western States Petroleum Association. There is a pretty compelling reason for Arnold to sign this legislation and the fee increases are pretty modest. You can read the bill analysis here.