Rep. Drazan on Revenue from Proposed Cap and Trade Bill: ‘This Money Belongs in Our Classrooms’

New information has come to light about the difficulty of implementing House Bill 2020, the so-called “cap and trade” bill that is aimed at lowering carbon emissions, may be harder than lawmakers originally thought, thanks to Canby’s state representative.

Rep. Christine Drazan had asked Legislative Counsel, the Legislature’s nonpartisan legal services agency, to research and answer two questions regarding how HB 2020, if passed, would interact with existing laws. The bill would increase prices consumers pay for fossil fuels — primarily gasoline and natural gas — and direct the bulk of the revenues toward investments in energy efficiency upgrades and alternate energy sources.

At least, that was the idea. But, according to the opinion by Legislative Counsel, it may not be possible. Citing prior case law, they held that the penalties enacted by HB 2020 would be treated as a tax, meaning the revenue it generates is more restricted than its sponsors might have thought.

Revenue generated from taxes on natural gas, for example, is meant to be dedicated to schools, according to existing law.

“Any revenues from the taxation of natural gas in Oregon must be deposited into the Common School Fund and cannot be used to mitigate climate change,” Rep. Drazan said in a statement released Tuesday afternoon. “HB 2020 spends millions, but certain natural gas taxes are constitutionally protected. This money belongs in our classrooms.”

Legislative Counsel went on to voice the opinion that the tax on natural gas may not exceed 6 percent, which could also be a problem for HB 2020.

Rep. Drazan said the opinion makes it clear that the Legislature can’t move forward with adoption of what she called “California’s cap-and-trade scheme.” (California was the first U.S. state to adopt a cap and trade plan, in 2016.)

“Given what we now know, HB 2020 is not ready for adoption,” she said. “I encourage my colleagues to take the time necessary to get this right.”

A public hearing and work session on HB 2020 is scheduled for 5 p.m. today before the Joint Committee on Natural Resources.

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