With just days remaining before the Legislature adjourns on August 31, lawmakers are focused on moving bills through floor votes and resolving final budget and funding negotiations. While most policy committee work has concluded for the year, significant discussions continue regarding the future of Greenhouse Gas Reduction Fund (GGRF) spending and several high-profile climate and energy measures.

Earlier this year, CRTA successfully resolved or defeated most of its priority legislative issues, leaving SB 1359 (Stern) as the association’s primary bill focus during the final weeks of session. Earlier versions of the bill raised concerns regarding the future of the natural gas distribution system by expanding CPUC review requirements for certain gas infrastructure investments while failing to recognize the important role renewable natural gas (RNG) can play in achieving the state’s greenhouse gas and Short-Lived Climate Pollutant (SLCP) reduction goals. Following extensive negotiations with the author and multiple rounds of amendments, many of the most significant concerns were addressed, leading CRTA to eventually shift its position from Opposed to Neutral, and we appreciate the author’s attention to our concerns. The bill passed the Assembly Floor this week and is expected to return to the Senate for a concurrence vote before being sent to Governor Newsom.

At the same time, negotiations continue over the future of GGRF spending. The discussion took on added significance this week following the release of results from California and Québec’s 48th joint cap-and-trade auction. The auction produced the strongest results since 2024, with all current-vintage allowances selling and settlement prices reaching $32.48 per allowance. While a single auction does not resolve the broader GGRF funding debate, the stronger-than-expected results provide an encouraging data point as lawmakers evaluate future revenue projections and spending priorities.

The auction results arrive as competing views emerge on how GGRF revenues should be evaluated. The Senate Democrat Caucus has advanced a proposal to backfill approximately $1.1 billion for priority programs facing reduced GGRF support, including affordable housing, public transit, community air protection, safe drinking water, and wildfire resilience efforts. The proposal would utilize reserve funds from the state’s Budget Stabilization Account (Rainy Day Fund) and Special Fund for Economic Uncertainties to help preserve funding commitments made during prior climate and transportation budget negotiations. The plan reflects growing concern among lawmakers that declining GGRF revenues could jeopardize several long-standing state climate and clean transportation programs.

Meanwhile, members of the bipartisan California Problem Solvers Caucus have argued that Cap-and-Invest was never intended to be a revenue generation program. In a letter released this week, Caucus members emphasized that the program’s purpose is to deliver cost-effective greenhouse gas reductions (GHG) while protecting affordability, minimizing leakage, and limiting impacts on ratepayers, describing auction revenue as a byproduct of the program rather than its primary objective. Stronger auction performance could help ease some of those concerns, although it remains unclear whether the latest auction reflects a longer-term revenue trend or a one-time improvement.

With only a few days remaining in the legislative session, negotiations over GGRF allocations, climate spending priorities, and final bill approvals remain highly fluid, but more clarity is expected before the adjournment deadline.