The Assembly passed hotly contested legislation Tuesday to regulate and restrict how money generated by California's new "cap-and-trade" program of marketing carbon emissions can be spent.

Assembly Speaker John A. Pérez carried the measure, Assembly Bill 1532, which passed by a vote of 47-26.

The bill marks a major step toward implementing cap and trade, which places a limit on various pollution generators but allows that cap to be exceeded through the purchase of credits from businesses that fall below their cap.

The program stems from Assembly Bill 32, pushed in 2006 by then-Gov. Arnold Schwarzenegger and former Assembly Speaker Fabian Núñez to require California to reduce greenhouse gas emissions to 1990 levels by 2020.

AB 1532 would apply to an estimated $1 billion expected to be generated from cap-and-trade auctions in 2012-13.

Read more in the Sac Bee.