California Air Resources Board

Would have required, to the extent that funding is appropriated by the Legislature, each large and medium local air district, by January 1, 2028, to implement and maintain a commercial voucher program to support the transition to zero-emission small off-road equipment consistent with specified requirements. The bill would have provided that a violation of an ordinance adopted by a local government governing the use of any small off-road engine landscaping equipment can only be punishable by a warning or an administrative fine imposed in accordance with specified requirements.

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Governor’s Veto Message

To the Members of the California State Assembly:

I am returning Assembly Bill 2635 without my signature.

This bill requires local air districts to implement a commercial voucher program to support the transition to zero-emission small off-road equipment.

Small off-road engines are a significant source of harmful air pollution, particularly in communities already burdened by poor air quality. While I share the author's goal of helping marginalized communities transition to zero-emission equipment, this bill duplicates existing state and local air district programs. Under my administration, in partnership with the Legislature, we provided $30 million to incentivize the purchase of nearly 30,000 pieces of zero-emission landscape equipment. Additionally, zero-emission landscape equipment is now widely available from many manufacturers, which will further increase market competition.

For these reasons, I cannot sign this bill.

Sincerely,

Gavin Newsom

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Would have required a State agency providing a grant or contract to a federally recognized tribe or private nonprofit, under certain conditions, to pay a portion of the money to the grantee in advance. The bill would have required State agencies to state the percentage that may be given in advance in the solicitation for the grant or contract. This bill requires, by July 1, 2027, the Strategic Growth Council to develop a Statewide Advance Funds and Reconciliation Guide (Master Guide), as specified. The bill requires every State agency to adopt the Master Guide as its standard operating procedure for the disbursement, tracking, and reconciliation of advance payments, as provided.

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Governor’s Veto Message

To the Members of the California State Assembly:

I am returning Assembly Bill 1039 without my signature.

This bill would require state agencies to provide advance payments for certain grants and contracts awarded to eligible nonprofit organizations and federally recognized tribes, and establish a statewide3 framework to administer and reconcile those payments.

While I appreciate the author's goal of reducing financial barriers for nonprofits and tribes, imposing a new statewide requirement would severely limit the state's oversight and protection of public funds. I signed AB 590 in 2023 and AB 3017 in 2024, which provided agencies with authority to process advance payments for these entities. It is important to ensure agencies maintain discretion to evaluate the financial and programmatic risks of each request for advance payments. I encourage the author and stakeholders to continue engaging with administering agencies to help ensure they are utilizing the existing authorization to the fullest extent possible when appropriate.

For these reasons, I cannot sign this bill.

Sincerely,

Gavin Newsom

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Would have provided a partial sales tax exemption for qualified tangible personal property used in producing hydrogen or electricity in the fueling of zero-emission vehicles and required CARB to review and report on the effectiveness of the tax exemption. Held on suspense in the Assembly Revenue and Taxation Committee.

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Requires CARB and the California Energy Commission (CEC) to condition the inclusion of any vehicle model in an incentive program funded through the Greenhouse Gas Reduction Fund (GGRF) or the Clean Fuel Reward program or the Clean Transportation Program on certain transparency requirements, as specified. CARB and CEC must post the aggregated data on their websites. The bill also requires CARB to annually reevaluate the cap on the purchase of unredeemed vouchers in the Clean Truck and Bus Vouchers program (HVIP). Lastly, it would require CARB, in coordination with the Governor’s Office of Business and Economic Development (Go-Biz) and the Infrastructure and Economic Development Bank, to report on alternative financing opportunities that encourage deployment of zero-emission (ZE) medium and heavy-duty vehicles and retrofitting of internal combustion trucks to ZE to decrease costs by January 1, 2028, as specified.

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Would have extended sales and use tax exemptions to January 1, 2028 for zero-emission transit buses sold to public agencies that are eligible for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program. Held on suspense in the Senate Appropriations 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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Would have specified that any schoolbus that is replaced pursuant to the Hybrid and Zero-Emission Truck and Bus Voucher Initiative Project (HVIP) was to be excluded from the scrapping requirement for a frontier Local Educational Agency or small school district. Held on suspense in the Senate Appropriations Committee.

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Requires CARB to add a due date of December 31, 2026, for the first biennial report following the full implementation of the Clean Truck Check program. Moved to the Senate Inactive File.

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Appropriates $132 million from the Hino Motors Ltd. Settlement to the Heavy-Duty Vehicle Incentive Program and authorizes CARB to adopt fees to cover reasonable costs for deficiencies of off-road or nonvehicular engines and equipment, aftermarket parts, and emissions control components sold in the State.

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Makes appropriations for the support of the State government for the 2025-26 fiscal year including Includes an appropriation for $19.8M to regional Clean Cars 4 All programs.

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