SB 535 - California Global Warming Solutions Act of 2006: Greenhouse Gas Reduction Fund

In 2012, the California Legislature passed Senate Bill 535 for the California Global Warming Solutions Act of 2006 Greenhouse Gas Reduction Fund (GGRF) directing that, in addition to reducing greenhouse gas emissions, a quarter of the proceeds from the GGRF must go to projects that provide a benefit to disadvantaged communities. Specifically, SB 535 requires that at least 25% of California’s GGRF go to projects that benefit disadvantaged communities, with at least 10% going to projects located within these communities. This law was amended in 2016 by AB 1550 to increase the percent of proceeds in the GGRF that must be directed to disadvantaged communities from 10% to 25%.

Under this approach, all of California’s most environmentally impacted communities are eligible for targeted funding. It also ensures that State agencies concentrate funding to reduce greenhouse gas emissions in those communities. This means the potential of hundreds of millions of dollars in investments that promote, clean air, jobs, transportation and energy efficiency, all aimed at benfitting those often hit the hardest by climate change.

Communities throughout California have begun receiving investments from the GGRF as of 2014. GGRF funds must be allocated (a) only to projects that reduce greenhouse gases and provide maximum feasible co-benefits while (b) ensuring that SB 535’s mandates are met. The first round of SB 535 funding allocates $272 million for investments in public transit, affordable housing near transit, weatherization for homes, renewable energy, cleaner vehicles and urban forestry.

This law requires the California Environmental Protection Agency (CalEPA) to identify disadvantaged communities for investment opportunities. CalEPA has developed a tool called CalEnviroScreen 2.0 to determine the communities most impacted by poverty and pollution.

Additionally, SB 535 requires the State Air Resources Board to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020. The law requires the state board to adopt regulations to require the reporting and verification of emissions of greenhouse gases and to monitor and enforce compliance with the reporting and verification program. 

California’s groundbreaking Global Warming Solutions Act of 2006 (AB 32) charges polluters for their GHG emissions, and the money goes into the Greenhouse Gas Reduction Fund. (AB 1532 created the GGRF.) AB 32 requires all moneys, except for fines and penalties, collected by the State Air Resources Board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the GGRF and to be available upon appropriation by the Legislature.




Publication Date: September 30, 2012

Related Organizations:

  • State of California
  • California Environmental Protection Agency (CalEPA)

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  • Laws

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