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SB 193: Public resources: Greenhouse Gas Reduction Fund: programs.

California · Senate · 2025–2026 Regular Session · last verified September 20, 2026

What SB 193 does, verified September 20, 2026

This bill expresses the intent of the legislature to enact statutory changes. It aims to make changes to the budget act, but the specific details of these changes are not provided in the introduction. The bill is introduced by the Committee on Budget and Fiscal Review and was introduced on January 23, 2025. The purpose of this bill is to facilitate the enactment of statutory changes, but the exact nature of these changes is not specified at this time.

Bill journey

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Last action: Chaptered by Secretary of State. Chapter 259, Statutes of 2026. (2026-09-18)Alert me

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Budget & Fiscal Review CommitteeAuthor · California State Senate

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Sep. 18, 2026	Chaptered by Secretary of State. Chapter 259, Statutes of 2026.
Sep. 18, 2026	Approved by the Governor.
Sep. 09, 2026	Enrolled and presented to the Governor at 2 p.m.
Aug. 31, 2026	Assembly amendments concurred in. (Ayes 30. Noes 10.) Ordered to engrossing and enrolling.
Aug. 31, 2026	Unanimous consent granted to take up without reference to file.

Full action history, 14 earlier actionsConnect Plus

Latest bill textEnrolled version, September 4, 2026 · 9,866 words

Enrolled September 04, 2026

Passed IN Senate August 31, 2026

Passed IN Assembly August 31, 2026

Amended IN Assembly August 28, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 193

Introduced by Committee on Budget and Fiscal Review

January 23, 2025

An act to amend Section 16428.8 of the Government Code, to amend Section 39719.3 of, and to amend, repeal, and add Sections 39710 and 39719.4 of, the Health and Safety Code, to amend Sections 75200.1, 75220, 75230, and 75231 of the Public Resources Code, and to amend Sections 1615 and 1640 of the Public Utilities Code, relating to public resources, and making an appropriation therefor, to take effect immediately, bill related to the budget.

LEGISLATIVE COUNSEL'S DIGEST

SB 193, Committee on Budget and Fiscal Review. Public resources: Greenhouse Gas Reduction Fund: programs.

The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to adopt regulations for greenhouse gas emissions limits and emissions reduction measures to achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions, as provided. The act authorizes that state board to include in those regulations the use of a market-based compliance mechanism to comply with those regulations. Existing law requires moneys collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund. Existing law allocates moneys in the fund in a specified priority and continuously appropriates a certain amount of moneys in the fund for certain purposes.

This bill would require interest income earned on those moneys to be deposited into the fund. By depositing additional moneys into a continuously appropriated fund, the bill would make an appropriation.

Existing law requires that moneys in the Greenhouse Gas Reduction Fund be allocated based on 4 priority levels with the first priority level being certain amounts, including amounts to replace revenues generated by the State Responsibility Area fire prevention fee, the 2nd priority level being certain amounts, including $1,000,000,000 that is continuously appropriated to the High-Speed Rail Authority for certain purposes, the 3rd priority level being certain amounts, including $800,000,000 that is continuously appropriated to the Strategic Growth Council for the Affordable Housing and Sustainable Communities Program and $200,000,000 that is continuously appropriated to the Department of Forestry and Fire Protection with 82.5% of that amount for health forest and fire prevention programs and projects and 17.5% of that amount for the completion of prescribed fire and other fuel reduction projects, as provided, and the 4th priority level being any amount not needed to fully fund the first 3 priority levels being available for appropriation by the Legislature.

This bill would include in the first priority level for allocation from the fund any state operation costs, as proposed by the Department of Finance, appropriated in the annual Budget Act or other statute and certain administrative costs. The bill would authorize the use of moneys continuously appropriated to the High-Speed Rail Authority under the 2nd priority level for state operations costs for the High-Speed Rail Authority. The bill would instead specify the allocations of $800,000,000 continuously appropriated for the Affordable Housing and Sustainable Communities Program, with $560,000,000 continuously appropriated to the Housing Development and Finance Committee for affordable rental or owner-occupied housing projects, thereby making an appropriation, and $240,000,000 continuously appropriated to the Strategic Growth Council for, among other things, projects or programs designed to reduce greenhouse gas emissions and other criteria air pollutants by reducing automobile trips and vehicle miles traveled, as specified. The bill would repeal the 82.5% and 17.5% allocation requirements for the amount continuously appropriated to the Department of Forestry and Fire Protection for the healthy forest and fire prevention programs and projects and the completion of the prescribed fire and other fuel reduction programs, respectively.

Existing law establishes the Transit and Intercity Rail Capital Program to fund transformative capital improvements that will modernize California’s intercity, commuter, and urban rail systems and bus and ferry transit systems to achieve certain policy objectives. Existing law creates the Low Carbon Transit Operations Program to provide operating and capital assistance for transit agencies to reduce emissions of greenhouse gases and improve mobility.

This bill would authorize the Department of Transportation to provide administrative support for those 2 programs.

Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law requires the PUC to require those electrical corporations with 250,000 or more customer accounts in the state, and those gas corporations with 400,000 or more customer accounts in the state, to fund as part of their energy efficiency portfolios the joint School Energy Efficiency Stimulus Program, which consists of the School Reopening Ventilation and Energy Efficiency Verification and Repair Program (SRVEVR Program) and the School Noncompliant Plumbing Fixture and Appliance Program (SNPFA Program). Existing law requires that the School Energy Efficiency Stimulus Program be a joint program among all the participating utilities, be consistent across the utility territories, and be designed, administered, and implemented by the State Energy Resources Conservation and Development Commission (Energy Commission) as the program administrator. The Energy Commission administratively established the School Energy Efficiency Stimulus Program Fund and existing law continuously appropriates moneys in the fund to the Energy Commission for purposes of the program. Existing law requires all allocated funds to be spent or returned to each electrical corporation or gas corporation by December 1, 2026.

This bill would extend the operation of the School Energy Efficiency Stimulus Program to January 1, 2031. The bill would instead require all non-committed funds to be spent or returned to each utility by December 1, 2026. The bill would require any funds committed as of August 31, 2026, to be encumbered by December 1, 2028, liquidated by December 1, 2029, and returned to each utility by January 30, 2030. By extending the term of a continuous appropriation, the bill would make an appropriation.

This bill would make various cross-reference and other nonsubstantive changes.

This bill would incorporate additional changes to Section 39719.3 of the Health and Safety Code proposed by AB 1608 to be operative only if this bill and AB 1608 are enacted and this bill is enacted last.

This bill would incorporate additional changes to Section 75230 of the Public Resources Code proposed by SB 741 to be operative only if this bill and SB 741 are enacted and this bill is enacted last.

This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Vote: MAJORITY Appropriation: YES Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 16428.8 of the Government Code is amended to read:

16428.8.

(a) The Greenhouse Gas Reduction Fund, hereafter referred to in this article as the fund, is hereby created as a special fund in the State Treasury.

(b) Except for fines and penalties, all moneys collected by the State Air Resources Board from the auction or sale of allowances, pursuant to a market-based compliance mechanism established pursuant to Division 25.5 (commencing with Section 38500) of the Health and Safety Code and specified in Sections 95800 to 96022, inclusive, of Title 17 of the California Code of Regulations, and any interest income earned from those moneys shall be deposited in the fund and available for appropriation by the Legislature.

(c) All moneys deposited in the fund shall be appropriated and shall be separately identified in the annual Budget Act. No moneys from the General Fund or any other fund shall be deposited in the fund.

(d) Notwithstanding any other law, the Controller may use the moneys in the fund for cash flow loans to the General Fund as provided in Sections 16310 and 16381.

(e) Any technical amendments made by the State Air Resources Board to the regulations established under Sections 95800 to 96022, inclusive, of Title 17 of the California Code of Regulations to conform that regulation to this article shall be exempt from the provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3) and from the review and approval of the Office of Administrative Law.

SEC. 2.

Section 39710 of the Health and Safety Code is amended to read:

39710.

(a) For purposes of this chapter, “fund” means the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code.

(b) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 3.

Section 39710 is added to the Health and Safety Code, to read:

39710.

(a) For purposes of this chapter, the following definitions apply:

(1) “Fund” means the Greenhouse Gas Reduction Fund, created pursuant to Section 16428.8 of the Government Code.

(2) “Moneys in the fund” include all auction proceeds, interest income, and any other moneys deposited into the fund. It also includes any entering fund balance for the fund.

(b) This section shall become operative on July 1, 2027.

SEC. 4.

Section 39719.3 of the Health and Safety Code is amended to read:

39719.3.

(a) For purposes of this section, the following definitions apply:

(1) “Fully funded” means the High-Speed Rail Authority has secured funding to complete the Merced to Bakersfield segment within the timelines identified in the most recent business plan prepared pursuant to Section 185033 of the Public Utilities Code or project update report prepared pursuant to Section 185033.5 of the Public Utilities Code and the High-Speed Rail Authority Office of the Inspector General has confirmed that the High-Speed Rail Authority has secured that funding.

(2) “Merced to Bakersfield segment” means a 171-mile electrified dual-track segment that is usable for high-speed rail service in the central valley from Merced to Bakersfield, with a new combined station in downtown Merced, and connections to the Amtrak San Joaquins and the Altamont Corridor Express.

(b) Notwithstanding paragraph (2) of subdivision (b) of Section 39719 or paragraph (1) of subdivision (b) of Section 39719.4, beginning with the 2022–23 fiscal year, it is the intent of the Legislature that the High-Speed Rail Authority prioritize use of the funds provided pursuant to Section 39719 or Section 39719.4 to complete the Merced to Bakersfield segment.

(c) Beginning with the 2022–23 fiscal year, the High-Speed Rail Authority shall not enter into new funding commitments with funds provided pursuant to paragraph (2) of subdivision (b) of Section 39719 or paragraph (1) of subdivision (b) of Section 39719.4 for activities outside the Merced to Bakersfield segment, except for the following purposes:

(1) Completion of environmental clearance activities and planning activities required by federal grant agreements or other existing agreements.

(2) State operations activities related to construction management and project development and enterprisewide capital expenditures.

(3) (A) Additional activities, not to cumulatively exceed five hundred million dollars ($500,000,000), that maximize the efficiency of delivering the project, excluding paragraphs (1) and (2).

(B) The High-Speed Rail Authority shall provide advance notification of work described in subparagraph (A) to the High-Speed Rail Authority Office of the Inspector General (OIG) and the chairs of the relevant committees of both houses of the Legislature. The OIG shall conduct a cost-benefit analysis of the proposed work outside the Merced to Bakersfield segment within 60 days of notification and make a finding as to whether or not expenditure of funds for the proposed work will result in a delay in the completion of the Merced to Bakersfield segment. After that time, the OIG shall provide its analysis to chairpersons of the committees of both houses of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees of both houses of the Legislature that consider the State Budget before contracts for projects outside of the Merced to Bakersfield segment are considered by the High-Speed Rail Authority for approval.

(C) Before expenditure of funds pursuant to this paragraph, the High-Speed Rail Authority shall provide notification of grant applications to the chairpersons of the committees of both houses of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees of both houses of the Legislature that consider the State Budget. Approval of the grant application by the Department of Finance may be authorized no sooner than 30 days after notification in writing to the chairpersons of the committees in each house of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees in each house of the Legislature that consider the State Budget.

(d) (1) This section shall become inoperative on June 30, 2030, or when the Merced to Bakersfield segment is fully funded, whichever is sooner, and shall be repealed on January 1 of the following year.

(2) The High-Speed Rail Authority shall inform the Legislature when the Merced to Bakersfield segment is fully funded in compliance with Section 9795 of the Government Code.

SEC. 4.5.

Section 39719.3 of the Health and Safety Code is amended to read:

39719.3.

(a) For purposes of this section, the following definitions apply:

(1) “Fully funded” means the High-Speed Rail Authority has secured funding to complete the Merced to Bakersfield segment within the timelines identified in the most recent business plan prepared pursuant to Section 185033 of the Public Utilities Code or project update report prepared pursuant to Section 185033.5 of the Public Utilities Code and the Office of the Inspector General, High-Speed Rail has confirmed that the High-Speed Rail Authority has secured that funding.

(1) Completion of environmental clearance activities and planning activities required by federal grant agreements or other existing agreements.

(2) State operations activities related to construction management and project development and enterprisewide capital expenditures.

(3) (A) Additional activities, not to cumulatively exceed five hundred million dollars ($500,000,000), that maximize the efficiency of delivering the project, excluding paragraphs (1) and (2).

(B) The High-Speed Rail Authority shall provide advance notification of work described in subparagraph (A) to the Office of the Inspector General, High-Speed Rail (OIG) and the chairs of the relevant committees of both houses of the Legislature. The OIG shall conduct a cost-benefit analysis of the proposed work outside the Merced to Bakersfield segment within 60 days of notification and make a finding as to whether or not expenditure of funds for the proposed work will result in a delay in the completion of the Merced to Bakersfield segment. After that time, the OIG shall provide its analysis to chairpersons of the committees of both houses of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees of both houses of the Legislature that consider the State Budget before contracts for projects outside of the Merced to Bakersfield segment are considered by the High-Speed Rail Authority for approval.

(2) The High-Speed Rail Authority shall inform the Legislature when the Merced to Bakersfield segment is fully funded in compliance with Section 9795 of the Government Code.

SEC. 5.

Section 39719.4 of the Health and Safety Code is amended to read:

39719.4.

Beginning with the 2026–27 fiscal year, moneys in the fund shall be allocated in the following priority:

(a) (1) Amounts described in Sections 4210 to 4214, inclusive, of the Public Resources Code to replace the revenues generated by the State Responsibility Area fire prevention fee authorized by Section 4212 of the Public Resources Code.

(2) Amounts appropriated by subparagraph (A) of paragraph (3) of subdivision (g) of Section 6377.1 of the Revenue and Taxation Code.

(3) The sum of three million dollars ($3,000,000) for the establishment of the Legislative Counsel Climate Bureau.

(4) Any state operations costs appropriated in the annual Budget Act or other statute, as determined by the Department of Finance.

(5) Administrative costs pursuant to Article 2 (commencing with Section 11270) of Chapter 3 of Part 1 of Division 3 of Title 2 of the Government Code.

(b) After the amounts specified in subdivision (a) are fully allocated, as determined by the Department of Finance, the remaining moneys in the fund shall be allocated as follows:

(1) Notwithstanding Section 13340 of the Government Code and subject to Section 39719.3 of this code, the sum of one billion dollars ($1,000,000,000) is continuously appropriated without regard to fiscal year to the High-Speed Rail Authority for the following components of the initial operating segment and Phase I Blended System as described in the 2012 business plan adopted pursuant to Section 185033 of the Public Utilities Code:

(A) Acquisition and construction costs of the project.

(B) Environmental review and design costs of the project.

(D) Repayment of any loans made to the authority to fund the project.

(E) State operations costs, including administration for the High-Speed Rail Authority.

(2) (A) The sum of one billion dollars ($1,000,000,000) is reserved for appropriation by the Legislature in the annual Budget Act or other statute.

(B) It is the intent of the Legislature that the amount reserved pursuant to subparagraph (A) is allocated in the following amounts for the 2026–27 fiscal year:

(i) The sum of one hundred twenty-five million dollars ($125,000,000) for transit passes.

(ii) The sum of twenty-five million dollars ($25,000,000) for seed funding for a University of California Climate Research Center.

(iii) The sum of fifteen million dollars ($15,000,000) for rebuilding Topanga Park.

(iv) The sum of eighty-five million dollars ($85,000,000) for an entity chosen by the Legislature to support climate-focused technological innovation, related research, and the deployment of climate solutions identified in the scoping plan prepared pursuant to Section 38561.

(c) (1) After the amounts specified in subdivisions (a) and (b) are fully allocated, as determined by the Department of Finance, the remaining moneys in the fund, notwithstanding Section 13340 of the Government Code, are continuously appropriated, without regard to fiscal year, as follows:

(A) The sum of eight hundred million dollars ($800,000,000) for the Affordable Housing and Sustainable Communities Program created by Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code. This appropriation shall be allocated as follows:

(i) The sum of five hundred sixty million dollars ($560,000,000) to the Housing Development and Finance Committee for purposes of paragraph (1) of subdivision (b) of Section 75212 of the Public Resources Code.

(ii) The sum of two hundred forty million dollars ($240,000,000) to the Strategic Growth Council for purposes of paragraph (2) of subdivision (b) of Section 75212 of the Public Resources Code.

(B) The sum of four hundred million dollars ($400,000,000) to the Transportation Agency for the Transit and Intercity Rail Capital Program created by Part 2 (commencing with Section 75220) of Division 44 of the Public Resources Code.

(C) The sum of two hundred fifty million dollars ($250,000,000) to the state board for community air protection programs and allocated for financial incentives to reduce mobile and stationary sources of criteria air pollutants or toxic air contaminants consistent with community emissions reduction programs developed pursuant to Section 44391.2 and for support for local air districts’ implementation of Chapter 136 of the Statutes of 2017.

(D) The sum of two hundred million dollars ($200,000,000) for the Low Carbon Transit Operations Program created by Part 3 (commencing with Section 75230) of Division 44 of the Public Resources Code. Moneys shall be allocated by the Controller, according to requirements of the program, and pursuant to the distribution formula in subdivision (b) or (c) of Section 99312 of, and Sections 99313 and 99314 of, the Public Utilities Code.

(E) The sum of two hundred million dollars ($200,000,000) to the Department of Forestry and Fire Protection for any of the following activities:

(i) Healthy forest and fire prevention programs and projects that improve forest health and reduce emissions of greenhouse gases caused by uncontrolled wildfires.

(ii) The completion of prescribed fire and other fuel reduction projects through proven forestry practices consistent with the recommendations of the California Forest Carbon Plan, including the operation of year-round prescribed fire crews and implementation of a research and monitoring program for climate adaptation.

(F) The sum of one hundred thirty million dollars ($130,000,000) is transferred to the Safe and Affordable Drinking Water Fund established pursuant to Section 116766 for the purposes of Chapter 4.6 (commencing with Section 116765) of Part 12 of Division 104.

(2) (A) Moneys appropriated pursuant to paragraph (1) shall be used for the purpose of facilitating the achievement of reductions of greenhouse gas emissions in this state in accordance with the requirements of Section 39712 or to improve climate change adaptation and resiliency of disadvantaged communities or low-income households or communities, consistent with Division 25.5 (commencing with Section 38500).

(B) For purposes of the moneys appropriated pursuant to paragraph (1), a state agency may comply with the requirements of paragraphs (2) and (3) of subdivision (a) of Section 16428.9 of the Government Code by describing how each proposed expenditure will improve climate change adaptation and resiliency of disadvantaged communities or low-income households or communities.

(3) If, for any fiscal year the Department of Finance determines that, after fully allocating the amounts pursuant to subdivisions (a) and (b), there are insufficient annual proceeds to fully provide for the appropriations specified in paragraph (1), the amounts specified in paragraph (1) shall be proportionally reduced as determined by the Department of Finance.

(d) Any amounts from the annual proceeds of the fund not needed to fully fund the amounts pursuant to subdivisions (a), (b), and (c) in a fiscal year, in addition to any interest earnings from the fund, are available to be appropriated by the Legislature in the annual Budget Act or other statute.

(e) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 6.

Section 39719.4 is added to the Health and Safety Code, to read:

39719.4.

Beginning with the 2027–28 fiscal year and annually thereafter, moneys in the fund shall be allocated in the following priority:

(2) Amounts appropriated by subparagraph (A) of paragraph (3) of subdivision (g) of Section 6377.1 of the Revenue and Taxation Code.

(3) The sum of three million dollars ($3,000,000) for the establishment and operations of the Legislative Counsel Climate Bureau.

(4) (A) Any state operations costs, as proposed by the Department of Finance pursuant to subparagraph (B) and appropriated in the annual Budget Act or other statute. For the purposes of this subdivision, state operations costs shall not include local assistance.

(B) No later than January 10, 2027, and annually thereafter, the Department of Finance shall provide the relevant budget subcommittees of the Legislature and the Legislative Analyst’s Office with a detailed list of any new or increased state operations activities the administration proposes to fund in the budget pursuant to this paragraph. This list shall identify the (i) department, (ii) proposed funding amount, (iii) number of positions proposed to be funded, (iv) any contracts proposed to be supported by the proposed funding, and (v) the name of the budget change proposal.

(5) Administrative costs pursuant to Article 2 (commencing with Section 11270) of Chapter 3 of Part 1 of Division 3 of Title 2 of the Government Code.

(b) After the amounts specified in subdivision (a) are fully allocated, as determined by the Department of Finance, the remaining moneys in the fund shall be allocated as follows:

(A) Acquisition and construction costs of the project.

(B) Environmental review and design costs of the project.

(D) Repayment of any loans made to the authority to fund the project.

(E) State operations costs, including administration for the High-Speed Rail Authority.

(2) The sum of one billion dollars ($1,000,000,000) is reserved for appropriation by the Legislature in the annual Budget Act or other statute.

(ii) The sum of two hundred forty million dollars ($240,000,000) to the Strategic Growth Council for purposes of paragraph (2) of subdivision (b) of Section 75212 of the Public Resources Code.

(E) The sum of two hundred million dollars ($200,000,000) to the Department of Forestry and Fire Protection for any of the following activities:

(i) Healthy forest and fire prevention programs and projects that improve forest health and reduce emissions of greenhouse gases caused by uncontrolled wildfires.

(3) If, for any fiscal year the Department of Finance determines that, after fully allocating the amounts pursuant to subdivisions (a) and (b), there are insufficient moneys in the fund to fully provide for the appropriations specified in paragraph (1), the amounts specified in paragraph (1) shall be proportionally reduced as determined by the Department of Finance.

(d) Any moneys in the fund not needed to fully fund the amounts pursuant to subdivisions (a), (b), and (c) in a fiscal year are available to be appropriated by the Legislature in the annual Budget Act or other statute.

(e) This section shall become operative on July 1, 2027.

SEC. 7.

Section 75200.1 of the Public Resources Code is amended to read:

75200.1.

For purposes of this part, the following definitions apply:

(a) “AHSC Housing Allocation” means the funding allocation described in clause (i) of subparagraph (A) of paragraph (1) of subdivision (c) of Section 39719.4 of the Health and Safety Code for the purposes of affordable housing and administered by the Housing Development and Finance Committee.

(b) “AHSC Sustainable Communities Allocation” means the funding allocation described in clause (ii) of subparagraph (A) of paragraph (1) of subdivision (c) of Section 39719.4 of the Health and Safety Code for sustainable communities’ investments and administered by the Strategic Growth Council.

(c) “Committee” means the Housing Development and Finance Committee established pursuant to Section 54925 of the Health and Safety Code.

(d) “Council” means the Strategic Growth Council established pursuant to Section 75121.

(e) “Disadvantaged communities” means communities identified as disadvantaged communities pursuant to Section 39711 of the Health and Safety Code.

(f) “Legacy agreement” means any award, agreement, contract, or other legally binding commitment made under funding notices of the program issued before July 1, 2026.

(g) “Program” means the Affordable Housing and Sustainable Communities Program established pursuant to Section 75210.

(h) “Program administrator” means either the committee or the council responsible for administering an allocation.

SEC. 8.

Section 75220 of the Public Resources Code is amended to read:

75220.

(a) The Transit and Intercity Rail Capital Program is hereby created to fund transformative capital improvements that will modernize California’s intercity, commuter, and urban rail systems and bus and ferry transit systems to achieve all of the following policy objectives:

(1) Reduce emissions of greenhouse gases.

(2) Expand and improve transit service to increase ridership.

(3) Integrate the rail service of the state’s various rail operators, including integration with the high-speed rail system.

(4) Improve transit safety.

(b) The Transportation Agency shall evaluate applications consistent with the criteria set forth in this part and approve a multiyear program of projects for funding pursuant to Section 75224, which may be revised as necessary.

(c) The California Transportation Commission shall allocate funding to applicants pursuant to the program of projects approved by the Transportation Agency.

(d) The Department of Transportation may provide administrative support for the program.

(e) For purposes of this section, “transformative capital improvement” means a rail, bus, or ferry transit project that will significantly reduce vehicle miles traveled, congestion, and greenhouse gas emissions by creating a new transit system, increasing the capacity of an existing transit system, or otherwise significantly increasing the ridership of a transit system.

SEC. 9.

Section 75230 of the Public Resources Code is amended to read:

75230.

(a) The Low Carbon Transit Operations Program is hereby created to provide operating and capital assistance for transit agencies to reduce the emissions of greenhouse gases and improve mobility, with a priority on serving disadvantaged communities.

(b) Funding for the program is continuously appropriated pursuant to Section 39719.4 of the Health and Safety Code from the Greenhouse Gas Reduction Fund established pursuant to Section 16428.8 of the Government Code. The Department of Transportation may provide administrative support for the program.

(c) (1) Except as provided in paragraph (2), funding shall be allocated by the Controller on a formula basis consistent with the requirements of this part, upon a determination by the Department of Transportation that the expenditures proposed by a recipient transit agency meet the requirements of this part and guidelines developed pursuant to this section, and that the amount of funding requested is currently available.

(2) For the portion of funding allocated pursuant to paragraph (1) under the formula set forth in Section 99314 of the Public Utilities Code, the Controller shall allocate that funding for the 2019–20 to 2025–26, inclusive, fiscal years based on the individual operator ratios described in Section 99314.10 of the Public Utilities Code.

(d) A recipient transit agency shall demonstrate that each expenditure of program moneys allocated to the agency reduces the emissions of greenhouse gases.

(e) A recipient transit agency shall demonstrate that each expenditure of program moneys does not supplant another source of funds.

(f) Moneys for the program shall be expended to provide transit operating or capital assistance that meets any of the following:

(1) Expenditures that directly enhance or expand transit service by supporting new or expanded bus or rail services, new or expanded waterborne transit, or expanded intermodal transit facilities, and may include equipment acquisition, fueling, and maintenance, and other costs to operate those services or facilities.

(2) Operational expenditures that increase transit mode share.

(3) Expenditures related to the purchase of zero-emission buses, including electric buses, and the installation of the necessary equipment and infrastructure to operate and support these zero-emission buses.

(g) (1) For a recipient transit agency whose service area includes disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, at least 50 percent of the total moneys received pursuant to this part shall be expended on projects or services that meet the requirements of subdivisions (d), (e), and (f) and benefit the disadvantaged communities, as identified consistent with the guidance developed by the State Air Resources Board pursuant to Section 39715 of the Health and Safety Code.

(2) The requirement of paragraph (1) is waived if the recipient transit agency expends the funding provided pursuant to this section on any of the following:

(A) New or expanded transit service that connects with transit service serving disadvantaged communities, as identified pursuant to Section 39711 of, or in low-income communities, as defined in paragraph (2) of subdivision (d) of Section 39713 of, the Health and Safety Code.

(B) Transit fare subsidies and network and fare integration technology improvements, including, but not limited to, discounted or free student transit passes.

(3) Expenditures made pursuant to paragraph (2) shall be deemed to have met all applicable requirements established pursuant to Section 39713 of the Health and Safety Code.

(4) This section does not require a recipient transit agency to provide individual rider data to the Department of Transportation or to the State Air Resources Board.

(h) The Department of Transportation, in coordination with the State Air Resources Board, shall develop guidelines that describe the methodologies that a recipient transit agency shall use to demonstrate that proposed expenditures will meet the criteria in subdivisions (d), (e), (f), and (g) and establish the reporting requirements for documenting ongoing compliance with those criteria.

(i) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to the development of guidelines for the program pursuant to this section.

(j) A recipient transit agency shall submit the following information to the Department of Transportation before seeking a disbursement of funds pursuant to this part:

(1) A list of proposed expense types for anticipated funding levels.

(2) The documentation required by the guidelines developed pursuant to this section to demonstrate compliance with subdivisions (d), (e), (f), and (g).

(k) For capital projects, a recipient transit agency shall also do all of the following:

(1) Specify the phases of work for which the recipient transit agency is seeking an allocation of moneys from the program.

(2) Identify the sources and timing of all moneys required to undertake and complete any phase of a project for which the recipient transit agency is seeking an allocation of moneys from the program.

(3) Describe intended sources and timing of funding to complete any subsequent phases of the project, through construction or procurement.

(l) Except as specified in subdivision (m), a recipient transit agency that has used program moneys for any type of operational assistance allowed by subdivision (f) in a previous fiscal year may use program moneys to continue the same service or program in any subsequent fiscal year if the agency can demonstrate that reductions in the emissions of greenhouse gases can be realized.

(m) A recipient transit agency using program moneys for the continuation of a free or reduced fare transit program shall not be subject to subdivision (l) and may continue to use program moneys for that purpose without any restriction to length of time. The recipient transit agency shall submit an initial allocation request to the department and meet all requirements of this section, except subdivision (l). After the initial allocation for a recipient transit agency’s free or reduced fare transit program is funded pursuant to this subdivision, the recipient transit agency shall not be required to submit an additional allocation request for the next three fiscal years, but instead shall provide documentation necessary to meet the requirements of subdivision (s) and for the free or reduced fare transit program to maintain compliance with this section as detailed in the initial allocation request submitted to the department. A recipient transit agency using funds for a free or reduced fare transit program funded pursuant to this subdivision shall submit the reports required by subdivision (s).

(n) Before authorizing the disbursement of funds, the Department of Transportation, in coordination with the State Air Resources Board, shall determine the eligibility, in whole or in part, of the proposed list of expense types, based on the documentation provided by a recipient transit agency to ensure ongoing compliance with the guidelines developed pursuant to this section.

(o) The Department of Transportation shall notify the Controller of approved expenditures for each recipient transit agency, and the amount of the allocation for each agency determined to be available at that time of approval.

(p) A recipient transit agency that does not submit an expenditure for funding in a particular fiscal year may retain its funding share, and may accumulate and use that funding share in a subsequent fiscal year for a larger expenditure, including operating assistance. The recipient transit agency shall first specify the number of fiscal years that it intends to retain its funding share and the expenditure for which the agency intends to use these moneys. A recipient transit agency may only retain its funding share for a maximum of four fiscal years.

(q) A recipient transit agency may, in any particular fiscal year, loan or transfer its funding share to another recipient transit agency within the same region for any identified eligible expenditure under the program, including operating assistance, in accordance with procedures incorporated by the Department of Transportation in the guidelines developed pursuant to this section, which procedures shall be consistent with the requirement in subdivision (g).

(r) A recipient transit agency may apply to the Department of Transportation to reassign any savings of surplus moneys allocated under this section to the agency for an expenditure that has been completed to another eligible expenditure under the program, including operating assistance. A recipient transit agency may also apply to the Department of Transportation to reassign to another eligible expenditure any moneys from the program previously allocated to the agency for an expenditure that the agency has determined is no longer a priority for the use of those moneys.

(s) A recipient transit agency shall provide annual reports to the Department of Transportation, in the format and manner prescribed by the department, consistent with the internal administrative procedures for the use of the fund proceeds developed by the State Air Resources Board.

(t) The Department of Transportation and recipient transit agencies shall comply with the guidelines developed by the State Air Resources Board pursuant to Section 39715 of the Health and Safety Code to ensure that the requirements of Section 39713 of the Health and Safety Code are met to maximize the benefits to disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code.

(u) A recipient transit agency shall comply with all applicable legal requirements, including the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000)), and civil rights and environmental justice obligations under state and federal law. This section does not expand or extend the applicability of those laws to recipient transit agencies.

(v) The audit of public transportation operator finances already required under the Mills-Alquist-Deddeh Act (Chapter 4 (commencing with Section 99200) of Part 11 of Division 10 of the Public Utilities Code) pursuant to Section 99245 of the Public Utilities Code shall be expanded to include verification of receipt and appropriate expenditure of moneys from the program. Each recipient transit agency receiving moneys from the program in a fiscal year for which an audit is conducted shall transmit a copy of the audit to the Department of Transportation, and the department shall make the audits available to the Legislature and the Controller for review on request.

SEC. 9.5.

Section 75230 of the Public Resources Code is amended to read:

75230.

(b) Funding for the program is continuously appropriated pursuant to Section 39719.4 of the Health and Safety Code from the Greenhouse Gas Reduction Fund established pursuant to Section 16428.8 of the Government Code. The department may provide administrative support for the program.

(c) (1) Except as provided in paragraph (2), funding shall be allocated by the Controller on a formula basis consistent with the requirements of this part, upon a determination by the department that the expenditures proposed by a recipient transit agency meet the requirements of this part and guidelines developed pursuant to this section, and that the amount of funding requested is currently available.

(d) (1) Program funds shall be expended only on the following services and programs:

(A) Maintenance or expansion of bus, rail, or ferry services, including, but not limited to, equipment acquisition, vehicles, fueling, maintenance, and other costs to operate bus, rail, and ferry services. The expenditure of program funds on buses shall be in accordance with the State Air Resources Board’s Innovative Clean Transit Regulations (Article 4.3 (commencing with Section 2023) of Chapter 1 of Division 3 of Title 13 of the California Code of Regulations).

(B) Transit fare subsidies, including, but not limited to, discounted and free student transit passes.

(2) An expenditure made pursuant to paragraph (1) shall be deemed to reduce greenhouse gas emissions.

(e) (1) For a recipient transit agency whose service area includes disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, at least 50 percent of the total moneys received pursuant to this part shall be expended on projects or services that meet the requirements of subdivision (d) and benefit the disadvantaged communities, as identified consistent with the guidance developed by the State Air Resources Board pursuant to Section 39715 of the Health and Safety Code.

(2) The requirement of paragraph (1) is waived if the recipient transit agency expends the funding provided pursuant to this section on any of the following:

(A) New or expanded transit service that connects with transit service that serves disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, or in low-income communities, as defined in paragraph (2) of subdivision (d) of Section 39713 of the Health and Safety Code.

(B) Transit fare subsidies and network and fare integration technology improvements, including, but not limited to, discounted or free student transit passes.

(3) Expenditures made pursuant to paragraph (2) shall be deemed to have met all applicable requirements established pursuant to Section 39713 of the Health and Safety Code.

(4) This section does not require a recipient transit agency to provide individual rider data to the Department of Transportation or to the State Air Resources Board.

(f) (1) Before receiving an allocation of funds pursuant to subdivision (c) from the Controller in a fiscal year, a recipient transit agency shall submit to the department a list of services or programs proposed to be funded with the funds. The list of services or programs proposed to be funded by the program may be for a single year or for multiple years. The list of services or programs proposed to be funded with the funds shall include a description and location of each proposed service or program. The list of services or programs submitted to the department shall not limit the flexibility of a recipient transit agency to fund services or programs in accordance with local needs and priorities if the services or programs are consistent with subdivision (d).

(2) The department shall report to the Controller a recipient transit agency that has submitted a list of services or programs as described in this subdivision and that is therefore eligible to receive an allocation of funds for the applicable fiscal year. The Controller, upon receipt of the report, shall allocate funds consistent with subdivision (c).

(g) For each fiscal year, a recipient transit agency receiving an allocation of funds pursuant to subdivision (f) shall, upon expending those funds, submit documentation to the department that includes a description and location of each completed service or program, and the amount of funds expended on the service or program.

(h) A recipient transit agency that has used program moneys for any type of service or program allowed by subdivision (d) in a previous fiscal year may use program moneys to continue the same service or program in a subsequent fiscal year.

(i) A recipient transit agency that does not submit a list pursuant to paragraph (1) of subdivision (f) in a particular fiscal year may retain its funding share, and may accumulate and use that funding share in a subsequent fiscal year for a larger expenditure. The recipient transit agency shall first specify the number of fiscal years that it intends to retain its funding share and the program or service for which the agency intends to use these moneys. A recipient transit agency may only retain its funding share for a maximum of four fiscal years.

(j) A recipient transit agency may, in any particular fiscal year, loan or transfer its funding share to another recipient transit agency within the same region for any identified eligible program or service under the program, in accordance with procedures developed and adopted by the department.

(k) A recipient transit agency may apply to the department to reassign any savings of surplus moneys allocated under this section to the agency for a program or service that has been completed to another eligible program or service under the program. A recipient transit agency may also apply to the department to reassign to another eligible program or service any moneys from the program previously allocated to the agency for a program or service that the agency has determined is no longer a priority for the use of those moneys.

(l) A recipient transit agency shall comply with all applicable legal requirements, including the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000)), and civil rights and environmental justice obligations under state and federal law. This section does not expand or extend the applicability of those laws to recipient transit agencies.

(m) The audit of public transportation operator finances already required under the Mills-Alquist-Deddeh Act (Chapter 4 (commencing with Section 99200) of Part 11 of Division 10 of the Public Utilities Code) pursuant to Section 99245 of the Public Utilities Code shall be expanded to include verification of receipt and appropriate expenditure of moneys from the program. Each recipient transit agency receiving moneys from the program in a fiscal year for which an audit is conducted shall transmit a copy of the audit to the department, and the department shall make the audits available to the Legislature and the Controller for review on request.

(n) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to the development of guidelines or procedures for the program pursuant to this section.

(o) For purposes of this section, “department” means the Department of Transportation.

SEC. 10.

Section 75231 of the Public Resources Code is amended to read:

75231.

(a) A recipient transit agency under the program created pursuant to Section 75230 may apply to the Department of Transportation for a letter of no prejudice for any eligible expenditures under the program, including operating assistance, for which the department has authorized a disbursement of funds. If approved by the department, the letter of no prejudice shall allow the recipient transit agency to expend its own moneys for the expenditures and to be eligible for future reimbursement from moneys available for the program.

(b) The amount expended under subdivision (a) shall be reimbursed by the state from moneys available for the program if all of the following conditions are met:

(1) The expenditures for which the letter of no prejudice was requested have commenced, and any regional or local expenditures, if applicable, have been incurred.

(2) The expenditures made by the recipient transit agency are eligible under the program. If expenditures made by the recipient transit agency are determined to be ineligible, the state has no obligation to reimburse those expenditures.

(3) The recipient transit agency complies with all applicable legal requirements for the expenditures, including the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000)), and civil rights and environmental justice obligations under state and federal law. Nothing in this section shall be construed to expand or extend the applicability of those laws to recipient transit agencies.

(4) There are moneys in the Greenhouse Gas Reduction Fund designated for the program and from the recipient transit agency’s formula allocation share as determined pursuant to subparagraph (B) of paragraph (1) of subdivision (b) of Section 39719 of, or subparagraph (D) of paragraph (1) of subdivision (c) of Section 39719.4 of, the Health and Safety Code that are sufficient to make the reimbursement payment.

(c) The recipient transit agency and the Department of Transportation shall enter into an agreement governing reimbursement as described in this section. The timing and final amount of reimbursement shall be dependent on the terms of the agreement and the availability of moneys in the Greenhouse Gas Reduction Fund for the program.

(d) The Department of Transportation, in consultation with recipient public transit agencies, may develop guidelines to implement this section.

SEC. 11.

Section 1615 of the Public Utilities Code is amended to read:

1615.

(a) (1) The commission shall require each utility to fund the School Energy Efficiency Stimulus Program by allocating their energy efficiency budgets for program years 2021, 2022, and 2023, in both of the following amounts:

(A) An amount equal to the applicable percentage of the difference between the budget contained in each utility’s 2020 annual budget advice letter approved as of July 1, 2020, and the annual portfolio funding limitation for program year 2020 as set forth in the 2018–2025 business plan of each utility as approved and modified in ordering paragraph 45 of the commission’s Decision 18-05-041 (May 31, 2019) Decision Addressing Energy Efficiency Business Plans, as modified by Decision 20-02-029 (February 6, 2020) Order Modifying Decision (D.) 18-05-041 and Denying Rehearing of Decision, as Modified. The applicable percentage is 80 percent for program year 2021, 70 percent for program year 2022, and 60 percent for program year 2023.

(B) Any carryover amount from unspent and uncommitted energy efficiency funds for program year 2020, 2021, or 2022 to the School Energy Efficiency Stimulus Program for the following year’s budget.

(2) Funding allocations required by this subdivision shall only apply to program years 2021, 2022, and 2023.

(3) Any funds allocated towards the School Energy Efficiency Stimulus Program pursuant to this section that remain unspent by the end of each program year may be carried over and contribute to the next year’s budget for the School Energy Efficiency Stimulus Program until the end of the 2023 energy efficiency program year.

(b) (1) This section does not authorize the levy of a charge or any increase in the amount collected pursuant to an existing charge beyond the amounts authorized by the commission in Decision 18-05-041, or as modified by Decision 20-02-029, nor does it add to, or detract from, any existing authority of the commission to levy or increase charges.

(2) This subdivision does not change the commission’s authority to determine revenue allocation and rate design, including its ability to prioritize customers participating in the California Alternative Rates for Energy or Family Electric Rate Assistance programs when considering appropriate revenue allocation for energy efficiency programs.

(c) The Energy Commission shall ensure that moneys from each utility for the School Energy Efficiency Stimulus Program are used for projects located in the service territory of that utility from which the moneys are received.

(d) The Energy Commission may use no more than 5 percent, not to exceed five million dollars ($5,000,000) per year, of the SRVEVR Program and the SNPFA Program funds for administrating the programs, including providing technical support to program participants. The commission shall ensure that funds allocated to the Energy Commission pursuant to this section are transferred to an account specified by the Energy Commission within 60 days after the completion of the prior energy efficiency program year.

(e) (1) The School Energy Efficiency Stimulus Program Fund was administratively established for the Energy Commission to receive funds allocated pursuant to this chapter.

(2) Notwithstanding Section 13340 of the Government Code, the moneys in the School Energy Efficiency Stimulus Program Fund are hereby continuously appropriated to the Energy Commission without regard to fiscal years for the purposes of the School Energy Efficiency Stimulus Program established pursuant to this chapter, including, but not limited to, paying the costs of program administration.

(f) (1) Notwithstanding all funds allocated in subdivision (d), all non-committed funds allocated in subdivision (a) shall be spent or returned to each utility by December 1, 2026.

(2) Any funds committed as of August 31, 2026, shall be encumbered by December 1, 2028, liquidated by December 1, 2029, and returned to each utility by January 30, 2030.

(g) The Energy Commission may set application and encumbrance deadlines to ensure that the reversion of funds is consistent with subdivision (f).

(h) The Energy Commission shall take steps, consistent with Section 25230 of the Public Resources Code, to ensure that a diverse group of contractors are aware of funding opportunities available through the School Energy Efficiency Stimulus Program.

SEC. 12.

Section 1640 of the Public Utilities Code is amended to read:

1640.

This chapter shall remain in effect only until January 1, 2031, and as of that date is repealed.

SEC. 13.

(a) Section 4.5 of this bill incorporates amendments to Section 39719.3 of the Health and Safety Code proposed by both this bill and Assembly Bill 1608. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, but this bill becomes operative first, (2) each bill amends Section 39719.3 of the Health and Safety Code, and (3) this bill is enacted after Assembly Bill 1608, in which case Section 39719.3 of the Health and Safety Code, as amended by Section 4 of this bill, shall remain operative only until the operative date of Assembly Bill 1608, at which time Section 4.5 of this bill shall become operative.

(b) Section 9.5 of this bill incorporates amendments to Section 75230 of the Public Resources Code proposed by both this bill and Senate Bill 741. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, but this bill becomes operative first, (2) each bill amends Section 75230 of the Public Resources Code, and (3) this bill is enacted after Senate Bill 741, in which case Section 75230 of the Public Resources Code, as amended by Section 9 of this bill, shall remain operative only until the operative date of Senate Bill 741, at which time Section 9.5 of this bill shall become operative.

SEC. 14.

This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

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