The Overview

If you rent a home or drive to work in California, a new law just changed where $800 million in climate money goes. Gov. Gavin Newsom (D) signed SB 193 on Sept. 18, and the law restructures how Greenhouse Gas Reduction Fund money is allocated. California's cap-and-trade auctions generate money for climate programs, and CalMatters reported that a debate has arisen over how much of that money will remain for transit and housing after budget choices about high-speed rail and firefighting. ​

What the Law Does

The bill splits the $800 million continuously appropriated for the Affordable Housing and Sustainable Communities Program: $560 million (70 percent) goes to the Housing Development and Finance Committee for affordable rental or owner-occupied housing, and $240 million (30 percent) goes to the Strategic Growth Council for projects that reduce greenhouse gas emissions by cutting automobile trips.

The law also adds state operations costs to the first priority level for fund allocations, lets the High-Speed Rail Authority use its continuously appropriated funds for state operations, and removes the fixed 82.5/17.5 percent split governing forestry and fire prevention money.

The School Energy Efficiency Stimulus Program, which covers ventilation and plumbing fixtures in schools, now runs to Jan. 1, 2031. Funds committed as of Aug. 31, 2026, must be encumbered by Dec. 1, 2028, liquidated by Dec. 1, 2029, and returned to utilities by Jan. 30, 2030, while non-committed funds must be spent or returned by Dec. 1, 2026.

Interest income earned on Greenhouse Gas Reduction Fund money must be deposited back into the fund.

Legislative Status

The Committee on Budget and Fiscal Review sponsored the bill. The Senate passed it 28-10 on March 20, 2025. The Assembly passed the amended bill 60-17 on Aug. 31, 2026, and the Senate concurred the same day, 30-10.

California Environmental Voters said the law protects funding for neighborhood projects including transit, affordable housing, clean air, safe drinking water, and resilient landscapes and communities.

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