California Air Resources Board

Eliminates the continuous appropriation of 25% of the annual proceeds of the Greenhouse Gas Reduction Fund (GGRF) to the High-Speed Rail Authority on June 30, 2026, and beginning with the 2026–27 fiscal year, and until December 31, 2030, requires 25% of the annual proceeds of the GGRF to be transferred to the Motor Vehicle Fuel Account (MVFA). Beginning July 1, 2026, and before January 1, 2031, the bill reduces the rate of the tax imposed upon each gallon of fuel by a specified percentage based annually on the amount transferred to the MVFA from the GGRF. Failed passage in the Senate Environmental Quality Committee and was granted reconsideration.

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Extends, until January 1, 2035, existing law that requires the California Transportation Agency, in consultation with the California Transportation Commission, to implement the road usage charge pilot program, as specified, and that currently repeals these provisions on January 1, 2027. Was not heard in the Assembly Committee on Transportation.

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Makes various changes related to the Department of Housing and Community Development (HCD) requirement, in consultation with the council of governments (COG), to determine the existing and projected housing need in each region and makes changes to how the transportation and job projections in a region′s sustainable communities strategy must be incorporated into each COG′s final regional housing needs allocation plan.

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Provides that the allowable expenditure categories for revenues from a tax imposed by the Sacramento Transportation Authority (STA) include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development in areas nominated by local governments, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives, as specified. The bill also authorizes STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements. This bill contains other related provisions and other existing laws. 

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Would have required a lead agency to incorporate appropriate wildlife passage features into a transportation infrastructure project in a connectivity area, as specified, but would exempt a project on the state highway system from this requirement if California Department of Transportation (Caltrans) is the lead agency. The bill would have authorized a lead agency to use compensatory mitigation credits to satisfy this requirement, as specified. Held on suspense in the Senate Appropriations Committee.

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Extends a number of timelines in the process of determining regional housing needs, regional housing needs allocations, and housing element revisions, and requires the Department of Housing and Community Development to provide specific analysis or text to local governments to remedy deficiencies in their draft housing element revisions.

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To the Members of the California State Assembly:

I am returning Assembly Bill 650 without my signature.

This bill would require the Department of Housing and Community Development (HCD), if it finds that a draft housing element is deficient, to provide the specific analysis and the draft text that should be included in the jurisdiction's housing element.

I share the author's interest in improving the housing element process. In partnership with the Legislature, we have enacted numerous reforms to strengthen this process by demanding more rigorous site inventories, enforceable rezoning, and stronger accountability mechanisms to uphold state law.

Although intended to build on these recent efforts, I am concerned that this bill would inappropriately shift responsibility for preparing housing elements from local jurisdictions to HCD. While HCD provides technical assistance when requested and in response to inadequate housing elements, that support is no substitute to the local government's fundamental responsibility to plan for its share of housing needs. Further, shifting these duties to the state would add at least $11 million in new annual costs.

Housing element law has advanced considerably through recent legislation, much of which is now being implemented in the current planning cycle. As these changes take hold, it is critical to preserve the fundamental structure of local planning responsibility under state oversight. However, I look forward to continuing to work with the Legislature on additional opportunities to further improve this process.

For these reasons, I cannot sign this bill.

Sincerely,

Gavin Newsom

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Terminates the 25% continuous Greenhouse Gas Reduction Fund appropriation to High-Speed Rail and instead, beginning in the 2026–27 fiscal year, annually transfers 25% to the General Fund to be used, upon appropriation, to augment funding provided to local governments to improve infrastructure. Was not heard in the Assembly Transportation Committee.

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Suspends the Greenhouse Gas Reduction Fund appropriation to the High-Speed Rail Authority for the 2026–27 and 2027–28 fiscal years and instead requires those moneys to be transferred to the General Fund to be available, upon appropriation by the Legislature, to augment funding for water infrastructure and wildfire prevention. Was not heard in the Assembly Transportation Committee.

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Authorizes the issuance of bonds in the amount of $20,000,000,000 to finance transit and passenger rail improvements, local streets and roads and active transportation projects, zero-emission vehicle investments, transportation freight infrastructure improvements, and grade separations and other critical safety improvements, including $3 billion for ZEVs and $2.5 billion for transportation freight infrastructure improvements. Remains in the Assembly Transportation Committee.

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Permanently exempts active transportation plans, pedestrian plans, and bicycle transportation plans for the restriping of streets and highways, bicycle parking and storage, and signal timing to improve street and highway intersection operations from CEQA. This bill expands the project types applicable for the CEQA exemption of certain transportation-related projects and extends the exemption from January 1, 2030, to January 1, 2040. The bill extends and expands other CEQA exemptions for public projects related to transit and requires certain CEQA-exempt projects that exceed a specified dollar amount to meet certain criteria.

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