California Proposition 7, Tax Credits for Emission Reductions (1998)

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California Proposition 7, also called the Air Quality Improvement Initiative, was on the November 3, 1998 election ballot in California as an initiated state statute, where it was defeated.

Proposition 7 would have provided tax credits to individuals and corporations for certain expenditures they made that would have reduced emissions of pollutants into the air. Under Prop 7, a total of $218 million in tax credits would have been available for award each fiscal year until January 1, 2011.

Election results

Proposition 7
Defeatedd No4,283,97056.37%
Yes 3,315,267 43.63%

Of voters who cast a vote in this election, 1,021,884 or 11.85% did not cast a vote on Proposition 7.

Text of measure


The ballot title was:

Air Quality Improvement. Tax Credits. Initiative Statute.


Proposition 7.PNG

The official ballot summary said:

  • Authorizes State Air Resources Board and delegated air pollution control districts to award $218 million in state tax credits annually until January 2011, to encourage air-emissions reduction through acquisition, conversion, and retrofitting of:
  • vehicles, buses, and heavy-duty trucks;
  • hearth products;
  • construction vehicles and equipment;
  • lawn and garden equipment;
  • ambient air pollution destruction technology;
  • off-road, nonrecreational vehicles;
  • port equipment;
  • agricultural waste and rice straw conversion facilities;
  • and through research and development.
  • Requires study of air quality market-based incentive program for prescribed burning projects.
  • Establishes local transportation funds as trust funds.

Fiscal impact

The California Legislative Analyst's Office provided an estimate of net state and local government fiscal impact for Proposition 7. That estimate was:

  • Annual net state revenue loss due to new tax credits, averaging in the range of tens of millions to over a hundred million dollars, from 1999 to beyond 2010. Increase in local sales tax revenues, potentially in the millions of dollars annually through 2010-11.
  • State costs of up to $4.7 million annually through 2010-11 to administer new tax credit program.
  • Potential long-term savings to state and local governments, of an unknown amount, in health care expenditures.

Campaign spending


Supporters of Proposition 7 spent $2,719,571. The top contributors to pass the measure were:

  • NO on 9 Coalition: $695,000
  • Thermo Ecotek Corporation: $503,244
  • Engelhard Corporation: $300,000
  • Planning and Conservation League: $243,352
  • Rio Bravo Fresno/Rio Bravo Rocklin: $110,000
  • Northern California Nevada Hearth Products Association: $100,000
  • E3 Ventures: $50,000
  • Waste Management, Inc., Affiliated Entities: $42,766
  • Wheelabrator Technologies, Inc.: $32,500
  • Pacific Gas & Electric: $30,000


Opponents of Proposition 7 spent $0, although $11,806 was raised. The top contributors against the measure were:

  • California Tax Reform Association: $10,979
  • Service Employees International Union AFL-CIO (SEIU): $826

See also

External links