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 in furtherance of achieving the statewide greenhouse gas emissions limit, as defined. The act authorizes the state board to revise regulations or adopt additional regulations to further the act. 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 the state board, in regulations implementing the market-based compliance mechanism to, among other things, establish limits on the use of offset credits as a means for a covered entity to meet its compliance obligations. 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 and continuously appropriates a portion of the moneys in the fund for various purposes.
This bill would state the intent of the Legislature to direct specific percentages of the revenues deposited into the Greenhouse Gas Reduction Fund to individual funds dedicated to funding clean transportation, housing and community investment, clean air and water, wildfire prevention and resilience, agriculture, clean energy, and climate-focused innovation. The bill would make the continuous appropriations from the fund inoperative on July 1, 2026. The bill would, beginning with the 2026–27 fiscal year, allocate moneys in the fund in a specified priority and would continuously appropriate a certain amount of moneys in the fund for certain purposes.
This bill would require the state board, no later than December 31, 2026, to conduct a study and report to the Legislature evaluating and making recommendations on the use of offsets. The bill would require the state board, no later than January 1, 2029, to update all existing compliance offset protocols to reflect the best available science. The bill would require the state board, no later than January 1, 2034, and every 5 years thereafter, to evaluate all compliance offset protocols and to consider whether updates are necessary to ensure the protocols reflect the best available science.
This bill would declare that it is to take effect immediately as an urgency statute.

Statutes affected:
03/26/25 - Amended Senate: 38591.2 HSC, 38591.2 HSC, 38592.6 HSC, 38592.6 HSC
09/10/25 - Amended Assembly: 39719 HSC, 39719 HSC, 38591.2 HSC, 38592.6 HSC
09/15/25 - Enrolled: 39719 HSC